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Touching The Principal!
#21
I'm thinking along similar lines, except I think by the time I'm 60 my portfolio will be 80% dividend producing growth stocks, and 20% pure growth stocks and ETFs, and it is from that latter 20% that I will trim from during up markets. So in a good year, I'll have my full income and enjoy a nice lifestyle, and in a down year, provided dividends aren't cut as well, I'll still have most of my income but will have to cut back a bit; maybe one vacation instead of two and less dining out.
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#22
You shouldn’t account for only regular living expenses. Once in retirement, a healthy buffer in either cash reserve or additional income stream will be needed for emergencies. What if you need to replace a car or you or spouse gets sick and need a special treatment? There may be a need to cover long term care expenses in either a facility or by hiring nurse.
These costs will quickly drain your portfolio if they come from principal.
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#23
(03-03-2021, 08:55 AM)MikeWa Wrote: You shouldn’t account for only regular living expenses. Once in retirement, a healthy buffer in either cash reserve or additional income stream will be needed for emergencies. What if you need to replace a car or you or spouse gets sick and need a special treatment? There may be a need to cover long term care expenses in either a facility or by hiring nurse.
These costs will quickly drain your portfolio if they come from principal.
Good points.  Just for this reason I intend to start retirement with a newish vehicle and a couple more things I know I will "need" for the quality retirement I've always planned. 

A few more considerations.....

-If you have another income source such as pensions, rental income, or even an intermittent part-time job, best to plan your budget so these sources could get you by for a few years early i retirement if the market goes to hell.  I'd like to believe widespread dividend cuts could never happen, but we can't know that for sure.  If your port goes 40% off that would be a horrible time to be selling off shares to live.      

-It's likely I will have good enough health at age 60 to fully enjoy retirement life.  Health at age 70 is far less certain, and even being alive at age 80 might be in question.  I'm not planning to leave this world with all my capital.  I'll make sure my heirs have some assets, and now and then I will take a chance and spend a little money while I can enjoy it.  I gave up a lot of luxuries in life to be in my current financial situation.  A long way around saying "you can't take it with you".
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#24
(03-03-2021, 08:55 AM)MikeWa Wrote: You shouldn’t account for only regular living expenses. Once in retirement, a healthy buffer in either cash reserve or additional income stream will be needed for emergencies. What if you need to replace a car or you or spouse gets sick and need a special treatment? There may be a need to cover long term care expenses in either a facility or by hiring nurse.
These costs will quickly drain your portfolio if they come from principal.

Great point.  The ideal state is probably:

1) A dividend growth portfolio that takes care of 100% of your income needs (or if it doesn't, you also have say rent coming in)
2) A pure growth portfolio that is just allowed to grow, but can be tapped when the need arises
3) A healthy cash reserve
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#25
(03-03-2021, 09:29 AM)ken-do-nim Wrote:
(03-03-2021, 08:55 AM)MikeWa Wrote: You shouldn’t account for only regular living expenses. Once in retirement, a healthy buffer in either cash reserve or additional income stream will be needed for emergencies. What if you need to replace a car or you or spouse gets sick and need a special treatment? There may be a need to cover long term care expenses in either a facility or by hiring nurse.
These costs will quickly drain your portfolio if they come from principal.

Great point.  The ideal state is probably:

1) A dividend growth portfolio that takes care of 100% of your income needs (or if it doesn't, you also have say rent coming in)
2) A pure growth portfolio that is just allowed to grow, but can be tapped when the need arises
3) A healthy cash reserve
I just did #3.  Slowly accrued portfolio income for a two year supply off all the dividend income I planned to have.    It's getting an annoyingly low interest rate, but I now have a two year buffer for market foolishness to work itself out.  More often than not a recession isn't much longer than that.
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#26
(03-03-2021, 10:07 AM)fenders53 Wrote:
(03-03-2021, 09:29 AM)ken-do-nim Wrote:
(03-03-2021, 08:55 AM)MikeWa Wrote: You shouldn’t account for only regular living expenses. Once in retirement, a healthy buffer in either cash reserve or additional income stream will be needed for emergencies. What if you need to replace a car or you or spouse gets sick and need a special treatment? There may be a need to cover long term care expenses in either a facility or by hiring nurse.
These costs will quickly drain your portfolio if they come from principal.

Great point.  The ideal state is probably:

1) A dividend growth portfolio that takes care of 100% of your income needs (or if it doesn't, you also have say rent coming in)
2) A pure growth portfolio that is just allowed to grow, but can be tapped when the need arises
3) A healthy cash reserve
I just did #3.  Slowly accrued portfolio income for a two year supply off all the dividend income I planned to have.    It's getting an annoyingly low interest rate, but I now have a two year buffer for market foolishness to work itself out.  More often than not a recession isn't much longer than that.

Nice; I'll take note of your two year supply idea.  What vehicle do you have that cash reserve in?  Bank account?  CD?  Bond?  Money Market?
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#27
I haven't visited for a while, but check out my post on comparing JNJ to BRK-A over a 14-year period:
https://risingyieldoninvestments.blogspo...sting.html
and a lump sum investment:
https://risingyieldoninvestments.blogspo...ng_12.html
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