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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (40499)	3/16/2001 9:22:21 PM
From: Mike Buckley	Read Replies (3) \| Respond to of 54805

Thoughts about determining the "magic number:" Earlier in the week there was a short discussion in response to Apollo's question about how to determine the "magic number" at which a person can quit working. I don't think there is a simple answer that applies to everyone. Among some of the factors are: 1) Is the person willing to take on the distinct possibility of returning to the work force five, ten or X years later if the portfolio doesn't perform as required to stay out of the work force? If the answer is "yes," the magic number is lower than it otherwise would be. 2) Are there any other goals the person's assets need to support other than being able to live happily without holding a day job? Some examples: people not in the immediate family that need financial support, a desire to support charities at an increasing level, a desire to leave an estate of a particular size. To the extent that goals exist above and beyond merely paying the bills needed to live happily and depending upon the answer to the question #1 above, the magic number becomes higher and higher. 3) Does the person decide to pull years' of living expenses out of the invested portfolio or does s/he decide to pull one year out at a time? Conventional wisdom might be that the latter choice lowers the magic number, but my thinking is that it neither lowers or raises it. In the end, none of us ever knows that retirement for life is a sure thing unless we are totally insured for all potential financial debacles no matter how remote and have enough capital to purchase a U. S. Treasury security that expires well beyond our life expectancy, throwing off enough interest to pay for expenses including those increased by inflation over decades. Using my particular situation as an example, I knew when I tossed the day job that it wasn't a forgone conclusion that I would never have to work again. It was only a probability (and still is) that I'd never have to return to the work force. If my portfolio doesn't perform over the years, I'll eventually have to return to the work force. At that time, I might enjoy it more than in the recent past or less. But for now, I'm having the time of my life and won't regret my decision for a minute if some day I do indeed need to return to work. --Mike Buckley