Monthly Archives: September 2013

A Safe Rate

bengen

 

You will see lots of pontification on the internet about safe withdrawal rates from a wealth reserve over the course of retirement.  Bla, bla, bla.  Most of them reference the 4% withdrawal rate  and then debate it’s use.  But they don’t reference the  originator of this groundbreaking paper.

William Bengen wrote the paper that has led to the 4% safe withdrawal rate discusssion.  I get the feeling that many of his detractors haven’t even read it.   It makes alot of sense if one reads it.

The paper has a pdf link here: www.retailinvestor.org/pdf/Bengen1  .

The upshot for the Independent Penguin is that if the iceberg is equal to 25X (annual expenses) then he will never have to work for cash again.

As an independent thinker you will appreciate the chance to read the original paper.

Riddle me this

retro moneybag

David and Charles Koch are brothers.  They run Koch industries and are incredibly wealthy and powerful.  They can buy anything they want.

And yet, the Independent Penguin has something they can’t get!  What is it?

Answer: Enough

A Secret

secret1

 

SHHH.

I’m going to tell you a secret.  You don’t have to act on it – but you can.

Mike Caro told it to me.  He’s pretty famous, although only in his circle.  He has written some books, is a regular contributor to magazines, and runs  a website http://www.poker1.com/  .  He didn’t tell me in person, but he told me through some of his articles.

Mike is a poker player and teacher.  One thing he has discovered is that most serious poker players have a pretty good idea of how to play.  But they don’t play their best all the time.  They get tired, or bored, or emotional.  That’s when they make mistakes they know they shouldn’t make.

There is something similar that happens in the daily transactions people make.  They know what they SHOULD do, but they do something they SHOULDN’T do.  Buy the Starbucks coffee or make their own.  Get take-out or make dinner at home.  Grab that candy bar in the checkout line or not.  Buy a book or get it at the library.  They deviate because they are tired, or bored, or emotional.  They are making mistakes they know they shouldn’t make.

Mike told me the secret.  And now I will tell you.

It’s OK to do your best and make the decisions that you know you should make.  Every time.  You can just pass on the chance to make mistakes that you know you shouldn’t make.

It’s simple and profound.  But few people do it.  Very, very few people do it.

But the Independent Penguin makes it a habit.