Bill Bengen (4% rule) interview with Michael Kitces

jamesd

#FASuccess Ep 198: How The Creator Of The 4 Percent Rule Applied It For His Clients And His Own Retirement, With Bill Bengen from 13 October 2020. Likely to be of interest to anyone interested in safe withdrawal rates.

cfw1994

Fascinating read, thanks!
For those who think about 'timing the market', it is also interesting to read how he proudly managed to get all his clients out before the 2008 crash....but then found it hard to get back in at the right time 🤪

Also personally interesting that he felt the post-2000 crash wasn't as bad as 2008-9.   True on a broad scale, but the tech company I was in went from a price of $150 to $6 at one point 😱  
In fairness, it had started that quite obvious bubble from a steadily climbing $17 before spiking up, and was back at over $17 a year later.....but we did have plenty of paper millionaires for a brief point in time 👀

For those not reading the transcript or listening....when asked where he thinks we are today with "the 4% rule", his answer is this:
     I think somewhere in 4.75%, 5% is probably going to be okay
He does temper it with:
     We won't know for 30 years, so I can safely say that in an interview

I also like his quote:

  "Leap and a safety net will appear." 
  In many things in life, you just need to take a leap, because if you don't take the leap, you'll never take the risk, you'll be frightened of things. 

Please note, he was not talking about investing with this, but life opportunities.     
In many ways, that was my thinking on stepping away from the salaried wage 3 months ago.   I could, of course, have done "one more year" (although in some ways, thanks to COVID, I feel I already had).   Make the decision to break away and get on with LIFE!

Good read: thanks for posting, @jamesd, deserves more than the two 👍I see so far 😎 

coyrls

cfw1994 said:

I also like his quote:

  "Leap and a safety net will appear." 
  In many things in life, you just need to take a leap, because if you don't take the leap, you'll never take the risk, you'll be frightened of things. 

Please note, he was not talking about investing with this, but life opportunities.    

I hope he wasn't talking about leaping because it's not an approach that I would recommend.

cfw1994

coyrls said:

cfw1994 said:

I also like his quote:

  "Leap and a safety net will appear." 
  In many things in life, you just need to take a leap, because if you don't take the leap, you'll never take the risk, you'll be frightened of things. 

Please note, he was not talking about investing with this, but life opportunities.    

I hope he wasn't talking about leaping because it's not an approach that I would recommend.

Any major change requires a leap of some sort 😳
Remember he was not talking about an investing leap, but an opportunity one 😉
When I moved to the "small start-up", it was a huge leap of faith (for me) from a 'safe' job in a Big Company.
When I decided to ditch the day job and move on to RandomOtherThingsOfMyOwnChoosing, it was a big leap 🤪

Obviously a calculated leap, as any should be, with a huge amount of planning done over several years, but a leap nonetheless. 
It is obviously easier to plod on 🧐

We will have to disagree: I thoroughly recommend the occasional leap 😎👍

coyrls

cfw1994 said:

coyrls said:

cfw1994 said:

I also like his quote:

  "Leap and a safety net will appear." 
  In many things in life, you just need to take a leap, because if you don't take the leap, you'll never take the risk, you'll be frightened of things. 

Please note, he was not talking about investing with this, but life opportunities.    

I hope he wasn't talking about leaping because it's not an approach that I would recommend.

Any major change requires a leap of some sort 😳
Remember he was not talking about an investing leap, but an opportunity one 😉
When I moved to the "small start-up", it was a huge leap of faith (for me) from a 'safe' job in a Big Company.
When I decided to ditch the day job and move on to RandomOtherThingsOfMyOwnChoosing, it was a big leap 🤪

Obviously a calculated leap, as any should be, with a huge amount of planning done over several years, but a leap nonetheless. 
It is obviously easier to plod on 🧐

We will have to disagree: I thoroughly recommend the occasional leap 😎👍

I wasn't talking about a metaphorical leap; I was talking about an actual physical leap.  If you make a physical leap off a cliff, the chances of a safety net appearing are pretty slim.  I know what he was trying to say but as a metaphor it fails.

cfw1994

coyrls said:

cfw1994 said:

coyrls said:

cfw1994 said:

I also like his quote:

  "Leap and a safety net will appear." 
  In many things in life, you just need to take a leap, because if you don't take the leap, you'll never take the risk, you'll be frightened of things. 

Please note, he was not talking about investing with this, but life opportunities.    

I hope he wasn't talking about leaping because it's not an approach that I would recommend.

Any major change requires a leap of some sort 😳
Remember he was not talking about an investing leap, but an opportunity one 😉
When I moved to the "small start-up", it was a huge leap of faith (for me) from a 'safe' job in a Big Company.
When I decided to ditch the day job and move on to RandomOtherThingsOfMyOwnChoosing, it was a big leap 🤪

Obviously a calculated leap, as any should be, with a huge amount of planning done over several years, but a leap nonetheless. 
It is obviously easier to plod on 🧐

We will have to disagree: I thoroughly recommend the occasional leap 😎👍

I wasn't talking about a metaphorical leap; I was talking about an actual physical leap.  If you make a physical leap off a cliff, the chances of a safety net appearing are pretty slim.  I know what he was trying to say but as a metaphor it fails.

I think as a metaphor for a metaphorical leap, it is 100% successful 🤣   
(relax: I understand what you mean 😉)

Malthusian

coyrls said:

I wasn't talking about a metaphorical leap; I was talking about an actual physical leap.  If you make a physical leap off a cliff, the chances of a safety net appearing are pretty slim.  I know what he was trying to say but as a metaphor it fails.

I think it's clumsily expressed but can see what he's driving at. Have you seen the short film consisting of 20 minutes of Swedish people of all ages attempting to jump off a 10m diving platform? Few of them manage it and those who do agonise over it for aeons, purely because instinct tells them that jumping into thin air is a bad idea, even though it's 100% safe and easily verifiable as safe.

In the context of the podcast, the difficulty in taking a leap is not whether a safety net exists but allowing yourself to believe the evidence of your own eyes that it does.

cfw1994

That is a good film! 
https://digg.com/video/ten-meter-tower-psychology-experiment, for anyone who hasn't seen it!

Terron

cfw1994 said:

Fascinating read, thanks!
For those who think about 'timing the market', it is also interesting to read how he proudly managed to get all his clients out before the 2008 crash....but then found it hard to get back in at the right time 🤪

Also personally interesting that he felt the post-2000 crash wasn't as bad as 2008-9.   True on a broad scale, but the tech company I was in went from a price of $150 to $6 at one point 😱  
In fairness, it had started that quite obvious bubble from a steadily climbing $17 before spiking up, and was back at over $17 a year later.....but we did have plenty of paper millionaires for a brief point in time 👀

The one I was in dropped from $41 to $8 despite our business not changing. I think it annoyed our boss (Larry Elison) who had just overtaken Bill Gates to be the richest man in the world for about 6 months.

cfw1994

Ellison was a very odd one, for sure.   Did quite a bit with the big O over many years.....

MallyGirl

cfw1994 said:

Ellison was a very odd one, for sure.   Did quite a bit with the big O over many years.....

it was odd seeing him in the Avengers movie I rewatched the other day. He used to be everywhere and then he wasn't. Elon, another weird one, was in it too.