tag:blogger.com,1999:blog-2875915890415125655.post7270154026359384622..comments2023-05-18T10:37:34.608+01:00Comments on <a href="http://www.retirementinvestingtoday.com">Retirement Investing Today</a>: Sobering retirement income drawdown demonstrations – 11.5 years inRetirementInvestingTodayhttp://www.blogger.com/profile/03088383743670046657noreply@blogger.comBlogger54125tag:blogger.com,1999:blog-2875915890415125655.post-10483000252822249972018-08-19T16:02:24.211+01:002018-08-19T16:02:24.211+01:00Perhaps the main thing to consider from today forw...Perhaps the main thing to consider from today forwards is that, whereas in the quoted examples above it was the case that interest rates dropped from a significant level to next to nothing (and therefore Stocks were able [on a capital basis] to act as a balance against the fall in Shares), the opportunity for this to repeat is, because interest rates today remain at a very low level, just not Oldyhttps://www.blogger.com/profile/13269722588002713961noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-23863752355861212632018-07-28T18:57:07.513+01:002018-07-28T18:57:07.513+01:00A cynic might wonder whether the lyric 'time i...A cynic might wonder whether the lyric 'time in the market rather than market timing' is from a song sung by investment managers who make no income from the customer while his money is stored as cash.<br /><br />The only profound problem with market timing that I can see is that a wonderful opportunity might be so rare as not to occur in someone's investing lifetime.deariemenoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-37356991175330557792018-07-28T13:32:49.382+01:002018-07-28T13:32:49.382+01:00A cynic might wonder whether the lyric 'time i...A cynic might wonder whether the lyric 'time in the market rather than market timing' is from a song sung by investment managers who make no income from the customer while his money is stored as cash.<br /><br />The only profound problem with market timing that I can see is that a wonderful opportunity might be so rare as not to occur in someone's investing lifetime.deariemenoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-32735589583833849062018-07-28T12:32:17.688+01:002018-07-28T12:32:17.688+01:00Interesting, 700k vs 15.6k pa...that’s a 44:1 rati...Interesting, 700k vs 15.6k pa...that’s a 44:1 ratio. I’d take the money ! I took £99k in lieu of £3k pa fully index linked, so far so good. Advice cost £700, so far so good 😊 <br />I retired at 49 with a 3 to 4% target swr. In November 2007, sequence of returns was unkind ! I had a 95% Equity to 5% cash with a duversified portfolio and a share of a directly held commercial property. <br />SharesAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-73595788306727349852018-07-28T12:16:22.727+01:002018-07-28T12:16:22.727+01:00@ Paul Foster. Will your children really enjoy th...@ Paul Foster. Will your children really enjoy the fruits of your hard won wealth ? I suspect not very much if they are already expecting it ! Maybe you need to disavow them of that expectation , give yourself a break , stop worrying about restricting yourself to living off the dividend income and allow yourself to spend some of the capital as well .<br /><br />Having most of your ( joint ) stringvestnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-58919837057392430292018-07-27T21:54:13.434+01:002018-07-27T21:54:13.434+01:00Nice yields on those funds. But its expensive - t...Nice yields on those funds. But its expensive - the Aberdeen Asian one has a management fee of 2.04% which is almost 50% of the yield. Henderson Far East costs 2.2% annually. Even the Vanguard one is almost 1%. Rather pricey diversification. Anonymoushttps://www.blogger.com/profile/15800206204739403867noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-61498187585023865662018-07-27T17:11:14.377+01:002018-07-27T17:11:14.377+01:00Hi Dearieme,
There are plenty of good quality US ...Hi Dearieme,<br /><br />There are plenty of good quality US dividend stocks. Have a look at this article: https://www.simplysafedividends.com/intelligent-income/posts/4-warren-buffett-s-dividend-portfolio<br /><br />It highlights some of the big US dividend payers that Warren Buffett has invested in - like Heinz and Verizon. <br /><br />But you don't need to stick to the US for internationalFozziehttps://www.blogger.com/profile/03978625490662729828noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-20514413246293726352018-07-27T15:02:04.835+01:002018-07-27T15:02:04.835+01:00my approach now is to build up the dividend paying...my approach now is to build up the dividend paying ETFs in my non-Pension related accounts (ISA/non-ISA) to mean that dividends become part of the cashflow in retired years - short-term cashflow can be stored/released from Ratesetter/similar and reinvestment into ETFs can be made by discretion.<br /><br />If dividends fall (or spending goes up) you can start selling - but the first rule should beGentleman's Family Financeshttps://wordpress.com/view/gentlemansfamilyfinances.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-60900484322397011352018-07-27T12:23:51.458+01:002018-07-27T12:23:51.458+01:00Would living off dividends work as well if your ha...Would living off dividends work as well if your had more international diversification? I understand that US dividends tend often to be miserly or zero. Yet if you don't have plenty of overseas exposure are you taking unnecessary risks?<br /><br />I don't know the answer. Maybe a big Wall St crash would show that international equities are highly correlated - at least in a crash - and deariemenoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-9792731013027014472018-07-27T12:13:49.109+01:002018-07-27T12:13:49.109+01:00Thanks again. Now all I need to do is a bit of ma...Thanks again. Now all I need to do is a bit of market-timing, and wait to buy it after the forthcoming Wall St crash.deariemenoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-13230759969110831362018-07-26T22:38:27.888+01:002018-07-26T22:38:27.888+01:00That's an absurd approach - no healthy person ...That's an absurd approach - no healthy person in their 50's has a clue when they'll die. Only safe assumption is 100+, which in withdrawal rates is near enough assuming forever.Fozziehttps://www.blogger.com/profile/03978625490662729828noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-14161323620303311382018-07-26T15:52:00.498+01:002018-07-26T15:52:00.498+01:00Because Safe Withdrawl Rates people worry over lik...Because Safe Withdrawl Rates people worry over like to tell you how much you can spend from a pot, so as not to run out before death. So like mortgages its mostly dividends to start, capital at the end, to give you a figure comparable to inflation-uprated annuity, but without the certainty, or the life company costs.vicaragehttps://www.blogger.com/profile/13615013686081830604noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-21860331160927747732018-07-26T13:52:50.041+01:002018-07-26T13:52:50.041+01:00Why would you be spending capital fast in the last...Why would you be spending capital fast in the last 5 years of retirement? How would you even know if you were in the last 5 years??? My dividend based plan assumes I live forever :-) (Well - at least my kids will enjoy the income after I'm gone)<br /><br />Cheers,<br />PJFozziehttps://www.blogger.com/profile/03978625490662729828noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-77802918666651863372018-07-26T08:22:26.495+01:002018-07-26T08:22:26.495+01:00Dividends don't drop much in cash terms during...Dividends don't drop much in cash terms during crashes. See http://siblisresearch.com/data/ftse-all-total-return-dividend/ and try to imagine the 2009 surge to 5.3% mediated by the fall in asset value. So if you are a buy and hold investor, your income is robust even if the capital values aren't. Where you are exposed is if a crash occurs in your last 5 years of retirement, where you are vicaragehttps://www.blogger.com/profile/13615013686081830604noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-29225280892441855282018-07-25T13:10:31.636+01:002018-07-25T13:10:31.636+01:00Hi diy investor,
The point is income. If I model...Hi diy investor,<br /><br />The point is income. If I model a FTSE100 tracker fund of the same value and I withdraw the same amount on the first year and then increase the withdrawal each year in line with inflation, then after the 11th year the fund is worth £117,536.62 and my drawdown is £4,701.38<br /><br />Using the example portfolio above - same initial value and income. After 11 years it&Fozziehttps://www.blogger.com/profile/03978625490662729828noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-71399188836028399612018-07-25T11:45:20.177+01:002018-07-25T11:45:20.177+01:00So, just looking at the 10 yrs for ISF - which tak...So, just looking at the 10 yrs for ISF - which takes in the period just before the crash- the annualised returns are 6.8%. Looks like your returns for the 10 yr period may have been in the region of 5.5%. <br /><br />It just looks like a lot of work for less return compared to the FTSE 100 index.Getting to Net Zerohttps://www.blogger.com/profile/05649975918886866788noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-52036856557785822982018-07-25T10:41:20.370+01:002018-07-25T10:41:20.370+01:00You're welcome. Yes, there's an iShares ET...You're welcome. Yes, there's an iShares ETF (ticker: EMIM). It tracks the MSCI EM index (rather than FTSE like Vanguard) so it's not exactly the same. OCF is 0.18%.YoungFiGuyhttp://youngfiguy.comnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-7278196823492072702018-07-25T10:05:09.579+01:002018-07-25T10:05:09.579+01:00I don't know if it's typical - certainly t...I don't know if it's typical - certainly the shares in the example portfolio were a mixed bag - all the following cut dividends at some point: BP; BLND; CNA; HSBA; RIO; SLI & TSCO. Worst of the bunch were HSBA, TSCO & SLI where both value of holding and the dividend produced are less now than 11 years ago. But the majority have increased their div each year. <br /><br />Fozziehttps://www.blogger.com/profile/03978625490662729828noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-1086353040415298662018-07-25T08:58:26.258+01:002018-07-25T08:58:26.258+01:00I see that your dividend income in cash terms incr...I see that your dividend income in cash terms increased during the years when the market was going down. Thats interesting. Is this typical of dividend payments when markets crash? What was the estimated management fees during this time? Anonymoushttps://www.blogger.com/profile/15800206204739403867noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-42284814660414269592018-07-24T23:36:16.989+01:002018-07-24T23:36:16.989+01:00But the point of this example is that it's buy...But the point of this example is that it's buying shares just before a stock market crash. The fact that it can continue to generate an income that grows at a rate beating inflation, is the thing that encourages me. In fact, in this example, the capital HAS NOT kept pace with inflation - but seeing as I'm a buy and hold forever kind of investor, that doesn't overly bother me.<br /><Fozziehttps://www.blogger.com/profile/03978625490662729828noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-72597159197536926932018-07-24T20:18:04.047+01:002018-07-24T20:18:04.047+01:00Your sample period from Dec 2006 isn't that be...Your sample period from Dec 2006 isn't that bearish a scenario. In sequence of return terms, your sensitivity to returns tend to be driven more by the first decade more than the first few years. So the massive equity collapse followed by rapid bounceback wasn't as damaging as it may seem. Government bonds, especially linkers, produced positive returns over both the bearish and bullish Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-51929648567362906482018-07-24T19:46:16.321+01:002018-07-24T19:46:16.321+01:00If my calculations are correct, this gives an aver...If my calculations are correct, this gives an average total return (cap + divis) of 4.9% p.a over the 12 years. As RIT pointed out in an earlier comment, a simple 50:50 index strategy has provided 7% p.a return over a similar period. 2% may not sound a lot but that would be a loss of £20,000 on £1m EVERY YEAR...Getting to Net Zerohttps://www.blogger.com/profile/05649975918886866788noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-66875178959542819172018-07-24T16:31:43.274+01:002018-07-24T16:31:43.274+01:00Hi RIT,
Very interesting post and prompted me to ...Hi RIT,<br /><br />Very interesting post and prompted me to do a similar model/illustration for something matching my approach.<br /><br />Quick background: I'm planning to stop working on May 31st 2019 (ten months to go) and then live on the income from my investments. I've been saving hard since 2010 (prior to that was saving half-heartedly) and have built up a portfolio of equities Fozziehttps://www.blogger.com/profile/03978625490662729828noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-45615252169004148902018-07-24T14:58:52.265+01:002018-07-24T14:58:52.265+01:00Thanks. So is there an Emerging Markets ETF that&...Thanks. So is there an Emerging Markets ETF that's cheaper than Vanguard's held in a Vanguard ISA (0.25% + 0.15%) but likely to be as good?deariemenoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-7152854581897120762018-07-24T00:28:04.968+01:002018-07-24T00:28:04.968+01:00Some great points in these comments. The FX risk o...Some great points in these comments. The FX risk of EUR spending and GBP income is return-free. Rit, if there's a 50% chance come back to England then the risk neutral allocation is 50% EUR. I'd guess you knows this but some bias is stopping you.<br /><br />It would be nice if mortgage rates were bad so a cash purchase would be the correct decision. But rates are the best they've everJdhttps://www.blogger.com/profile/17049872043697302100noreply@blogger.com