(12-13-2018, 10:29 AM)Otter Wrote: It's a mental thing for me. The thought of selling the principal gives me extreme anxiety. I get the statistics and understand the 4% rule, but it's just not for me. If I needed to, I could live off of the dividends generated by my DGI portfolio today. It would be a bare subsistence sort of Lean-FIRE existence, and not really pleasant or what I'm aiming for long-term. So, I have every expectation that in 20-30 years' time, when I am contemplating a proper "retirement," the income stream will be sufficient to meet my goal of living off the eggs and leaving the golden goose alone.

(12-13-2018, 01:33 PM)crimsonghost747 Wrote:

(12-13-2018, 10:29 AM)Otter Wrote: It's a mental thing for me. The thought of selling the principal gives me extreme anxiety. I get the statistics and understand the 4% rule, but it's just not for me. If I needed to, I could live off of the dividends generated by my DGI portfolio today. It would be a bare subsistence sort of Lean-FIRE existence, and not really pleasant or what I'm aiming for long-term. So, I have every expectation that in 20-30 years' time, when I am contemplating a proper "retirement," the income stream will be sufficient to meet my goal of living off the eggs and leaving the golden goose alone.

Well, we all have our own little quirks and we definitely need to adjust to those. I do know how you feel like, I've always been a bit skeptical about butchering that golden goose. But I've run all sorts of calculations (monte carlo simulation is a good one to play around with) and quite frankly it just makes sense to withdraw a little when you need it. Or constantly, it's up to you. Personally I wouldn't go as far as the 4% but rather stick to 2% or 3% and adjust as necessary.

The s&p 500 div yield is currently around 2%. We mostly tend to leave out the non-divi payers so how about we say that our portfolios are expected to generate around 3% div yield? If you add withdraws of 2%, you basically add 67% more income. And with 2% withdrawal, unless something terrible happens, your portfolio will still, on average, keep growing faster than inflation.

It's a win-win. But again, if it makes you uncomfortable then there is no point doing it. But at least consider it as an option, a lot of things (including you) might change in the next 20-30 years.

(12-13-2018, 01:19 PM)fenders53 Wrote:  Or are crackers properly called biscuits Crimson?  You English folks have really screwed up our language lol.  

(12-13-2018, 01:33 PM)crimsonghost747 Wrote:

(12-13-2018, 10:29 AM)Otter Wrote: It's a mental thing for me. The thought of selling the principal gives me extreme anxiety. I get the statistics and understand the 4% rule, but it's just not for me. If I needed to, I could live off of the dividends generated by my DGI portfolio today. It would be a bare subsistence sort of Lean-FIRE existence, and not really pleasant or what I'm aiming for long-term. So, I have every expectation that in 20-30 years' time, when I am contemplating a proper "retirement," the income stream will be sufficient to meet my goal of living off the eggs and leaving the golden goose alone.

Well, we all have our own little quirks and we definitely need to adjust to those. I do know how you feel like, I've always been a bit skeptical about butchering that golden goose. But I've run all sorts of calculations (monte carlo simulation is a good one to play around with) and quite frankly it just makes sense to withdraw a little when you need it. Or constantly, it's up to you. Personally I wouldn't go as far as the 4% but rather stick to 2% or 3% and adjust as necessary.

The s&p 500 div yield is currently around 2%. We mostly tend to leave out the non-divi payers so how about we say that our portfolios are expected to generate around 3% div yield? If you add withdraws of 2%, you basically add 67% more income. And with 2% withdrawal, unless something terrible happens, your portfolio will still, on average, keep growing faster than inflation.

It's a win-win. But again, if it makes you uncomfortable then there is no point doing it. But at least consider it as an option, a lot of things (including you) might change in the next 20-30 years.

(12-13-2018, 02:15 PM)crimsonghost747 Wrote:

(12-13-2018, 01:19 PM)fenders53 Wrote:  Or are crackers properly called biscuits Crimson?  You English folks have really screwed up our language lol.  

Actually I'd go with cracker. I know what proper food is like, I do not enjoy spending 95% of my life standing in the rain and I've also figured out things such as insulation and a tap (or is it a faucet?) which combines the hot and cold water for me. Thus, I'm not English! :p

However one thing that I'm sure of: when you order biscuits in the USA you will most definitely get bread, not biscuits.

Yes we use faucets in "new" England, but we understand what tap water is   And an order of biscuits here will likely be drowned in gravy. The southern half of our citizens demand they die early and happy lol.

(12-13-2018, 02:22 PM)fenders53 Wrote: That absolutely applies to me Crimson.  I don't look at this the same as I did when I was your age and I am monetarily better off for it.  My opinion evolves over time and your's will too if your mind is open, which I believe it truly is.

Otter, you gotta have some faith and patience in  core positions longterm , but I find flaw in the attitude that I researched in once and my work is done forever.  I don't think you really believe that.  Feel free to dissent.  That's we are here  trading experiences and thoughts.

• As to living exclusively off the dividends versus selling off a portion of the assets, all I can say is that I hope this is a decision I’ll have to wrestle with one day. I save and invest aggressively, but my monthly expenses are really high (largely due to daughter’s medical condition). So even rosy projections don’t show me being able to live exclusively off dividends, unless circumstances change dramatically. I did a thread on this a long time ago, complete with tables, arguing that a willingness to sell assets allows you to aim at a lower total savings target, and that can free up time and resources for other important things in your life. There is a danger to over-saving!
  
• Incidentally, I’m with fenders about driving the older cars. If you saw my apartment, you’d probably think I’m living paycheck to paycheck. I love the stealth approach to affluence!
  
• Here are my thoughts on equal weightings, with more illustrations! In short, I’ll worry about that much closer to retirement. For now, I’ll buy the best opportunities as they present themselves.
  
• I don’t have a strong opinion as to the appropriate number of stocks in a portfolio. I think we all agree that past some point, the diversification value decreases. But there isn’t much harm there, except for each individual’s ability to manage and track the portfolio. To each their own. For me, I’ve held as many as 30, but I’m in a long, slow process of winnowing that down. As I’ve gained experience, I’m focusing more and more on only the highest-quality companies I can find…
  
• …and waiting for the market to present good entry opportunities into them. I completely agree that your fate in holding a stock is largely baked into the moment of purchase. 
  
• (And with great trepidation, I’ll mention that I have some qualms with the “Chowder Rule.”)