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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Chris J. Horne who wrote (12727)	3/23/2000 9:56:00 PM
From: sea_biscuit	Read Replies (1) \| Respond to of 15132

I am told that you can take out between 4% and 5% safely year after year. Anything higher than that can deplete your principal. So, if 1.6m is your critical mass, are you targeting for income between 64k and 80k a year?

To: Chris J. Horne who wrote (12727)	3/24/2000 8:12:00 AM
From: J. M. Blackburn	Read Replies (2) \| Respond to of 15132

Chris & Kirk: I have some experience in what is CM, at least concerning my circumstances. The figures you are talking about (1.6-2.0) are right on target, I believe, if you don't live outrageously and have have few bills to begin with you will not have a problem growing your money slightly faster than inflation. This is with about a 5 to 6 % withdrawal rate and can be adjusted up if the Market Gods are good to us. In 1990 at 45 years old I decided to do something different. My family and I went off traveling for 5 years until I was bored with the whole thing and went back to work. I adjusted your numbers for 1990. After 5 years of working I?m ready to do it again. What worries me slightly is that I have raised our standards in the last 5 working years. An excellent market climate plus work income, you just have to spend some money. Now we must maintain a new standard but with small adjustments or maybe doing a little work for extra income there should be no problems. I'm presently 5% equities, 5% REITS and 30% GNMA?s. Slipping below CM is the LAST thing I want to do so I will heed Bob's warning and stand by with my dry powder. Reading every post on this tread helps tremendously. Don't forget, all we have is time so use it efficiently and wisely. Greed is our enemy.

To: Chris J. Horne who wrote (12727)	3/24/2000 8:15:00 AM
From: MrGreenJeans	Read Replies (3) \| Respond to of 15132

Chris I would also be interested in hearing what others consider to be critical mass...and at what age that is...and how they determined the number. My critical mass number was determined by doing the following calculations. Assuming $2 million dollars is the number $1,000,000 would be place in bonds at 6% yielding $60,0000 annually and the other $1,000,000 would be placed in equities yielding, assuming an 10% average yield, $100,000 or $160,000 on average annually. Since my tastes are simple this is enough for me. (Kirk, I don't need no stikin' Lear Jet.<g> Not my style.) I also place into my calculation mortgage payments being paid on a home from the interest earned on the aforementioned as well as the cost of health insurance assuming one was going to retire from the workforce. The bigger issue in my mind would be what you would do with your time if you retired from the workforce? I feel at my age, late thirties, retiring on the job, retiring while still working, is an attractive option. I often hear others say I can find plenty to do if I retired at a young age but I am not convinced that is really the case since most of us want to be productive. In some sense your critical mass number is a psychological number. What dollar amount would you be comfortable with that gives you peace in your life? What dollar amount gives you piece of mind, financial security, the security to not care if you were laid off or fired from a job, the security that comes with not kissing the boss's ass, the security that comes with not being a brown noser, to say what you feel, to live the life you want to live not the one you have to live in order to receive your next paycheck to place food on the table. At critical mass, you don't have to worry about pay raises, the nonsense you hear from others, and you don't have to worry about placating others because they have leverage over you. Is the boss giving you pressure about an assignment? Hey don't sweat it his job is on the line but yours...makes no difference...the bottom line is you are a conglomerate with a ton of money...you don't feel his pressure...plus with critical mass you have unlimited options open to do what you want to do. At critical mass you are free from the matters that enslave others. Enough for now.