4% retirement rule - valid in HK

[shri]

here's the guide for those interested.

https://am.jpmorgan.com/blob-gim/138...=en_US?noembed

[shri]

Started looking at the guide and got turned off with the sheer amount of data, little narrative and excessive fine print.

[huja]

Started looking at the guide and got turned off with the sheer amount of data, little narrative and excessive fine print.

Those are issues for the man in the White House as well. You might like Twitter better.

[traineeinvestor]

Original Post Deleted

Probably the most useful pages are the ones dealing with sequence of return risk and durability of different equity/bond mixes.

[huja]

So how are we all doing?

[shri]

So how are we all doing?

Thanks for bringing this up as I start doing an end of year review of things.

Have a lot to post and update.. Will do this in a bit.

[SirNotAppearing]

Is it 5% now?

[huja]

Thanks for bringing this up as I start doing an end of year review of things.

Have a lot to post and update.. Will do this in a bit.

Where's your homework, @shri?

[shri]

Where's your homework, @shri?

The taper ate my homework. Soon.. I promise.

[shri]

@huja - So here is an unstructured view of where I stand today - which is "we are ok".

- 4% rule is a guidance, a lot depends on the stage of life you're in and possible outcomes. Almost pointless coming up with a fixed safe withdrawal rate on investments. What is more important is to have a good view of what cash you need yearly, and over the next say 3 years for any major expenses.

Non-emergency expenses can be controlled a lot more easily than total return on portfolios.

- What matters the most is having conviction on what you do in life and in investments.

Important for mental health and filtering day to day / seasonal noise - which might result in trading. Very very close to a point where pretty much anything that is of low/no conviction in life and in investments has been reduced. Sold down a lot of low conviction investments (legacies) over the last 2 years which were just causing mental grief.

- Three bucket strategy works fine for me. Important to have some sort of non-investment (i.e. stocks, real estate etc) income stream - say from consulting, side business etc.. The longer you keep this, the longer you can compound your investments without withdrawing. No matter how small it is, as long as it pays a few bills it is important.

Short term or "near cash" bucket which is roughly 4-6% works fine for us. This is probably excessive, but it is a small price to pay for mental health.

Medium term 50-60% which is a mixture of high income/dividend ETFs and CEFs. This produces more than enough income for our day to day budgeted needs. Any overflow from this goes into short term or long term buckets. I expect this will not need any f'ing around with over the next 3+ years. Happy with what it has morphed into after a fair bit of tweaking and reducing the number of tickers / instruments involved. Ideally this should result in 3-5% distribution income and about 10-15% total return on an annual basis.

Long term 30-40%ish which is again a mixture of ETFs / couple of senior growth (new term I learnt..) and a couple of very high conviction growth stocks. No expectations of income from here but have expectations of 20-25% TR here.

Another important thing that I have changed my mind about recently is to have flexible leverage on investments available where you can borrow cash and not have to pay monthly / fixed installments. Low cost revolving / secured credit is now available at retail levels - keep it handy. For us this is useful not for investments but to avoid cashing out investments for large life expenses.

- Most important things that have come out these "strange times" as friends describe 2019-2021 to me, has been having a diverse group of inputs some of which I take seriously, some of which I filter out for mental health.

- Portfolio simplification took about a year / 18 months. Down from 25-30 mostly individual stocks to 12 tickers. But the underlyings pretty much cover the investable universe that I understand. Lots of areas I don't understand and am not bothered with. The single country risk in terms of liquid investments has been mostly eliminated.

- We once discussed forming a "kibbutz" as you called it - that has all been put on hold because of current life, social and covid issues. Will regroup in a year or two or three and see where we are. The big lesson from this is to be flexible and deal with shit as it happens. Not being able to travel without investing a minimum of six weeks is one of those "shit happens" things.

Bottom line .. the one thing that stands out for me is conviction - this comes over time and differs from person to person.

Once you have conviction in what you're doing .. 3%, 4%, 5% ... can all be managed.