I love the final chart in this video. There is a POWERFUL message hidden in that chart. It does a great job of demonstrating just how much of an impact an individual's savings rate really has on their retirement during their working years. You can CLEARLY see how retirement success rate and time to FI pretty much even out as the savings rate increases, no matter which portfolio you choose to use.
Salary is irrelevant. Savings rate is the percentage of your total income that you invest. Since it's a percentage it doesn't matter if you earn 10k or 100k a year.
That is an interesting analysis. During accumulation years I always had about 20% allocation of small cap value index. Having 70% would have required iron balls to manage through that volatility. Maintaining that allocation into distribution years, wow I’m not sure I could sleep! Makes me wonder if I should have not abandoned small caps completely though -especially for my long range bucket.
Thanks for going over your Max Fi portfolio in more depth. I've been looking forward to this review. It is definitely an interesting strategy that produces great withdrawal rates, but personally I prefer my own Max Fi strategy for more diversification. Although with the current market situation it looks like I'll be able to see it's max downturn sooner rather than later.
Yes, I agree. The combination of lacking international diversification (and even notable areas of domestic diversification) and the elevated volatility levels it experiences in the short term make it a pretty tough sell for most investors, even if its historical SWR was very respectable :)
Do you actually have "total bond market" data (Barclays AGG or similar) going back to 1927 or are you using the 10-year treasury? I would think a long-term treasury would work better in this portfolio than a total bond market fund.
Can we get more growth-focused thoughts? I assume much of your audience trends younger, and may not yet be in a position where *any* allocation towards bonds, gold, or other traditionally safe investments are needed.
*Pay yourself FIRST. *Save 20% of your income-> put this into low cost S+P 500 etf... such as VOO. *Live below your means. *Keep investing whether stock market is going up or down. (Dollar cost average) You will retire a multi millionaire and may even retire early. You're welcome.
Way too much risk. You're taking too much risk and you're only going by past performance. Yes this is has worked fine many times in the past Unfortunately past performance is not guaranteed.
He did mention in the video that this is not his personal portfolio, it was only ever meant to be used as an example for a what if situation to try maximizing withdrawal rates.
I love the final chart in this video. There is a POWERFUL message hidden in that chart. It does a great job of demonstrating just how much of an impact an individual's savings rate really has on their retirement during their working years. You can CLEARLY see how retirement success rate and time to FI pretty much even out as the savings rate increases, no matter which portfolio you choose to use.
Totally agree! One of the biggest reasons why I always made sure to illustrate different savings rate results in this series :)
On the saving rate what’s the starting salary you’re using? Thanks
Salary is irrelevant. Savings rate is the percentage of your total income that you invest. Since it's a percentage it doesn't matter if you earn 10k or 100k a year.
Very true!
Great content creating your own hypothetical portfolio based around FI, it's very interesting to learn the numbers.
That is an interesting analysis. During accumulation years I always had about 20% allocation of small cap value index. Having 70% would have required iron balls to manage through that volatility. Maintaining that allocation into distribution years, wow I’m not sure I could sleep! Makes me wonder if I should have not abandoned small caps completely though -especially for my long range bucket.
It would take a steely investor to maintain that much weight into the small cap space, that's for sure!
I have a question about savings rate. What income is being assumed when applying savings rates to time required to reach FI calculations?
Why dont you start a podcast? I would happily listen to you
Thanks for going over your Max Fi portfolio in more depth. I've been looking forward to this review. It is definitely an interesting strategy that produces great withdrawal rates, but personally I prefer my own Max Fi strategy for more diversification. Although with the current market situation it looks like I'll be able to see it's max downturn sooner rather than later.
Yes, I agree. The combination of lacking international diversification (and even notable areas of domestic diversification) and the elevated volatility levels it experiences in the short term make it a pretty tough sell for most investors, even if its historical SWR was very respectable :)
Do you actually have "total bond market" data (Barclays AGG or similar) going back to 1927 or are you using the 10-year treasury? I would think a long-term treasury would work better in this portfolio than a total bond market fund.
Can we get more growth-focused thoughts? I assume much of your audience trends younger, and may not yet be in a position where *any* allocation towards bonds, gold, or other traditionally safe investments are needed.
Could you maybe do a video on what a 20 year old 16$ hour should be doing with money? I'm very new to all of this
*Pay yourself FIRST.
*Save 20% of your income-> put this into low cost S+P 500 etf... such as VOO.
*Live below your means.
*Keep investing whether stock market is going up or down. (Dollar cost average)
You will retire a multi millionaire and may even retire early.
You're welcome.
@@Dsgn7 ... Lol.
Give him a better message than that.
Way too much risk. You're taking too much risk and you're only going by past performance. Yes this is has worked fine many times in the past Unfortunately past performance is not guaranteed.
He did mention in the video that this is not his personal portfolio, it was only ever meant to be used as an example for a what if situation to try maximizing withdrawal rates.
Small cap value. Yuck.
Your content is valuable, but using random vague illustrations is killing the value.