When you win the game... quit playing

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Hooked
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When you win the game... quit playing

Post by Hooked »

Hello Bogleheads Community,

When you win the game... quit playing.

What does that mean to you?

When you win the game, do you go 100% total bond index and no longer have anything in the total stock market index? Do you put everything into CDs? Or, do you keep X years of expenses in the total bond index, and leave the rest in total stock market index?

Or something different?

Thank you.

Hooked... On bogleheads.org!!
jarjarM
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Re: When you win the game... quit playing

Post by jarjarM »

There were many threads on this. You can quickly search for one.

Here is one
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Hooked
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Re: When you win the game... quit playing

Post by Hooked »

jarjarM - Thanks!
protagonist
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Re: When you win the game... quit playing

Post by protagonist »

For me it means not risking any more than I am willing to lose without causing me stress about the future.
Any amount above that is play money that I keep in the market.

btw "100% bond index" would be far from risk-free.
john0608
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Re: When you win the game... quit playing

Post by john0608 »

to me it means 5 years living expenses in fixed and the rest in the stock market.
i don't like bond funds so most of my fixed is now in CDs and banks......not getting much but a small positive beats any negatives.
AQ
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Re: When you win the game... quit playing

Post by AQ »

But what does it mean by 'win the game'?

Many threads discuss SWR and some argue if one has 50X annual expense in assets, it's 'bullet-proof', and should be considered to be 'won'. But then if a bit market move reduce assets to only 25X (a timely topic with current market volatility), do we still consider it's a game 'won', or one needs to restart the game?
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Re: When you win the game... quit playing

Post by AlohaJoe »

Hooked wrote: Thu Jan 20, 2022 6:23 pm When you win the game... quit playing.
How do you know you've won?
Doctor Rhythm
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Re: When you win the game... quit playing

Post by Doctor Rhythm »

AlohaJoe wrote: Thu Jan 20, 2022 7:06 pm
Hooked wrote: Thu Jan 20, 2022 6:23 pm When you win the game... quit playing.
How do you know you've won?
When the Fidelity rep said, “You should save less and spend more money.”
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Re: When you win the game... quit playing

Post by Jack FFR1846 »

I have my own definition of when I've won. But I haven't done anything different. Let me explain.

I have always been a "safety net" guy. For example, when working on my Masters degree, paid by my employer with a set date to return, I wanted to be able to be absolutely, positively sure I could return and have that degree. (2 people before me in my group returned without it). So I worked on a thesis but also took extra courses so I could take a graduate exam (the PhD entrance exam), either of which would allow me to graduate. I did with a passed exam and then my thesis work became simple fun.

Ok, now with that long story, how does this relate? My safety net in all this was a padding of the famous 25X spending in savings. I multiplied that 25 by my safety factor. That's 2. So when I reached 50 times my calculated "in retirement" spending (ignoring social security), I decided that I had won and that if I wanted to, I could financially not work.

From an investment perspective, years ago, I set my AA at 50/50 stocks and bonds. I have leftover international from when I included that in rebalancing. But it's now frozen. I don't buy any more of it. That's just me. Sort of my agreement with Jack Bogle that we don't need Int, but not willing to sell it off.
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Peter Foley
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Re: When you win the game... quit playing

Post by Peter Foley »

OP's question
Win the game. When you can create a non equities portfolio that will support your current lifestyle and provide for "some" level of increased expense as one ages and becomes less able to take care of themselves.

What do you do? Allocate sufficient assets to your non equities portfolio when you have won the game. Sufficient is the key word here. You don't have to stop investing in equities - you may want additional funds to support charities, children, grandchildren, etc.

For many, a lifetime of living below one's means and investing roughly in an age in bonds approach can provide a retirement allocation of 40% to 50% stocks.
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Re: When you win the game... quit playing

Post by AlohaJoe »

Doctor Rhythm wrote: Thu Jan 20, 2022 7:09 pm
AlohaJoe wrote: Thu Jan 20, 2022 7:06 pm
Hooked wrote: Thu Jan 20, 2022 6:23 pm When you win the game... quit playing.
How do you know you've won?
When the Fidelity rep said, “You should save less and spend more money.”
How does the Fidelity rep know?
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climber2020
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Re: When you win the game... quit playing

Post by climber2020 »

AQ wrote: Thu Jan 20, 2022 6:57 pm But what does it mean by 'win the game'?

Many threads discuss SWR and some argue if one has 50X annual expense in assets, it's 'bullet-proof', and should be considered to be 'won'. But then if a bit market move reduce assets to only 25X (a timely topic with current market volatility), do we still consider it's a game 'won', or one needs to restart the game?
Anyone with a reasonably constructed, diversified portfolio will not lose half their assets from "a bit" of market move. Usually that big of a change requires a significant stock crash.

If you still have 25x at the bottom of a major market crash (by either having way more than 25x prior to the crash, getting lucky and timing the market correctly twice, or having a very conservative asset allocation), then you're good to go.
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retired@50
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Re: When you win the game... quit playing

Post by retired@50 »

climber2020 wrote: Thu Jan 20, 2022 7:32 pm
AQ wrote: Thu Jan 20, 2022 6:57 pm But what does it mean by 'win the game'?

Many threads discuss SWR and some argue if one has 50X annual expense in assets, it's 'bullet-proof', and should be considered to be 'won'. But then if a bit market move reduce assets to only 25X (a timely topic with current market volatility), do we still consider it's a game 'won', or one needs to restart the game?
Anyone with a reasonably constructed, diversified portfolio will not lose half their assets from "a bit" of market move. Usually that big of a change requires a significant stock crash.

If you still have 25x at the bottom of a major market crash (by either having way more than 25x prior to the crash, getting lucky and timing the market correctly twice, or having a very conservative asset allocation), then you're good to go.
I suspect AQ meant to type "big market move", but it came out as bit.

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Re: When you win the game... quit playing

Post by willthrill81 »

While Bernstein has done some great work, this pithy statement is one of the worst I've ever heard in the investing community.

Just a couple of days ago, he explicitly said on the forum that he advocates a liability matching portfolio plus risk portfolio strategy (many past threads on this concept). I believe this strategy makes sense for those not planning on longer than a 30 year retirement and who are also quite risk averse, but I don't believe that it should be the default strategy for retirees.

I don't believe that there even is a default strategy for retirees.
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Re: When you win the game... quit playing

Post by jjj_22 »

I find this statement silly too. You haven’t won the game until you’ve died with money still in the bank. Everything up to then requires thoughtfully balancing risk against your preferred lifestyle.
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Re: When you win the game... quit playing

Post by 9-5 Suited »

jjj_22 wrote: Thu Jan 20, 2022 8:52 pm You haven’t won the game until you’ve died with money still in the bank.
Bogleheads really have some big dreams - a casket full of cash, lol :) My friend who is very Un-Bogleheadish had a different take - he wants his tombstone to say “here lies X, he owed a lot of money.”

The Bernstein quote gets dissected pretty deeply and I understand why, but I take the soft version of his point to mean don’t be too proud to dial back your risk level once you have sufficient assets to fund retirement. Many people display “100% equities” as a sort of badge of honor or macho statement that they are beyond worry. Bernstein’s comments ring as a warning against that type of thinking, to me.
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Re: When you win the game... quit playing

Post by Normchad »

9-5 Suited wrote: Thu Jan 20, 2022 9:00 pm
jjj_22 wrote: Thu Jan 20, 2022 8:52 pm You haven’t won the game until you’ve died with money still in the bank.
Bogleheads really have some big dreams - a casket full of cash, lol :) My friend who is very Un-Bogleheadish had a different take - he wants his tombstone to say “here lies X, he owed a lot of money.”

The Bernstein quote gets dissected pretty deeply and I understand why, but I take the soft version of his point to mean don’t be too proud to dial back your risk level once you have sufficient assets to fund retirement. Many people display “100% equities” as a sort of badge of honor or macho statement that they are beyond worry. Bernstein’s comments ring as a warning against that type of thinking, to me.
That’s how I take it as well. You can nit pick any rule of thumb or aphorism…. Take it in the spirit intended.
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Re: When you win the game... quit playing

Post by Wiggums »

We are retired and lowered our AA to 65/35. We will always have equities as part of our plan to beat inflation.
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Re: When you win the game... quit playing

Post by Wannaretireearly »

The way I internalize this is: markets will generally always go up.
However when they are down & you need the money (ER, house etc) than you need a better balance than 100% equities to use $.

If I never quit work, and have a narrow range of very low stable expenses, I don’t need to quit equities. However, for most people this statement is not true.

On up days I wish I had a bit more equities, on low days I’m glad I have some non-equities in my AA. I guess that means I’m within the comfortable range? I’m around 75-80% equities. I don’t think I want to go lower than 70% equities ever. Especially once I’ve built a decent sized taxable non-equity account (3-5X).
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Re: When you win the game... quit playing

Post by 22twain »

AlohaJoe wrote: Thu Jan 20, 2022 7:06 pm
Hooked wrote: Thu Jan 20, 2022 6:23 pm When you win the game... quit playing.
How do you know you've won?
That depends on which game you're playing. :wink:
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Re: When you win the game... quit playing

Post by sperry8 »

climber2020 wrote: Thu Jan 20, 2022 7:32 pm
AQ wrote: Thu Jan 20, 2022 6:57 pm But what does it mean by 'win the game'?

Many threads discuss SWR and some argue if one has 50X annual expense in assets, it's 'bullet-proof', and should be considered to be 'won'. But then if a bit market move reduce assets to only 25X (a timely topic with current market volatility), do we still consider it's a game 'won', or one needs to restart the game?
Anyone with a reasonably constructed, diversified portfolio will not lose half their assets from "a bit" of market move. Usually that big of a change requires a significant stock crash.

If you still have 25x at the bottom of a major market crash (by either having way more than 25x prior to the crash, getting lucky and timing the market correctly twice, or having a very conservative asset allocation), then you're good to go.
Agree with this. And that's what I have... can take a 50% haircut and still be about 23-24x. However, OP, although I've won the game by these metrics, I still haven't sold my equities as the tax hit would be way too much. Since I can take the 50% haircut (since I currently have more than I need), I just let it ride. What winning the game means to me is that I do not re-invest dividends or capital gains into equities and instead hold them in alternate safer investments. During a bull this has still resulted in NAV growth, but over time it's less than it would be (especially once bears come along). If ever the 50% drop comes, I will modify things to re-invest dividends, and when they return, capital gains.
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deltaneutral83
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Re: When you win the game... quit playing

Post by deltaneutral83 »

Dr. Bernstein recently wrote that 20x in safe assets is pretty much what he means by "stop playing." I don't think it means stop playing with equities completely once you have enough to maintain lifestyle in fixed income, etc. Hypothetically, if you have 40x, and you are 50/50 with equities/bonds, you're pretty much subscribing to Bernstein's notion I would think.

I also think there is a case to be made that "stop playing" is in conjunction with no more human capital. I don't think many households under the age of 45 who enjoy working and have plenty of human capital left should necessarily make the shift to 20x safe assets. There are always risks and circumstances beyond our control with health, economy, etc. etc. When you're 65+ though, it is a statistical fact that you have less human capital than when you were 45. Whether you have no human capital left or voluntarily give it up, that's when I assume the theory of "stop playing" becomes valid.
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Re: When you win the game... quit playing

Post by Dandy »

For me it meant moving enough fixed income to "safe" products to fund drawdown needs for about 20 years. "safe" fixed income products for me are FDIC products, money markets and short term bond funds. That and a moderate overall allocation of about 50/50 seems to work for me.

I don't view the "safe" fixed income as an ATM i.e. only draw down from it. I draw from a mix of equities and all my fixed income unless equities have a bad year. Then I would use only or mostly the "safe" fixed income. So the "safe" fixed income is more like retirement funding insurance.
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Re: When you win the game... quit playing

Post by Outer Marker »

Hooked wrote: Thu Jan 20, 2022 6:23 pm When you win the game, do you go 100% total bond index and no longer have anything in the total stock market index? Do you put everything into CDs? Or, do you keep X years of expenses in the total bond index, and leave the rest in total stock market index?

Or something different?
100% bonds is more risky and produces less expected return than a 20/80 or 30/70 portfolio. It is not on the "efficient frontier." https://www.youngresearch.com/authors/e ... -frontier/

Vanguard's Target Retirement Income is 30/70 and is effectively their recommendation for maximum return as the second priority with maximum emphasis on capital preservation as the first priority. https://investor.vanguard.com/mutual-fu ... olio/vtinx
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Re: When you win the game... quit playing

Post by MathWizard »

I remember the 2008/9 experience where I had a paper loss of over 50% , so I look at what the I would have after a market crash of 50% ,and whether I could live on that + 75% of estimated SS benefits.

That calculation led me to an AA which would satisfy that.
Last I checked I was at 33/67 not counting about 5% cash .
I am slowly moving towards heavier stock allocation with each new contribution back to 60/40 AA for retirement.
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Hooked
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Re: When you win the game... quit playing

Post by Hooked »

Hello again Everyone,

OP here.

Thank you for all of the great responses! I greatly appreciate your comments and feedback.

Hooked... On the wisdom of the Boglehead community! :sharebeer
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Re: When you win the game... quit playing

Post by dbr »

Hooked wrote: Sun Jan 23, 2022 9:38 am Hello again Everyone,

OP here.

Thank you for all of the great responses! I greatly appreciate your comments and feedback.

Hooked... On the wisdom of the Boglehead community! :sharebeer
Good. I think a final comment on this sort of thing is to read in detail what the author in question has actually written and dismiss the pithy comments like that one, which are useless to the investor.* Maybe it helps if it gets people to read Bernstein, who does have useful things to say, though I personally don't relate very well to his approach to retirement investing. It is still much worth thinking about.

*In fact anything said about investing that can be expressed in one sentence should be discarded instantly, except this sentence.
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Re: When you win the game... quit playing

Post by AnnetteLouisan »

Where X is residual expenses in retirement not covered my pension or SS, right? Or is X total annual expected expenses in retirement including taxes?
dbr
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Re: When you win the game... quit playing

Post by dbr »

AnnetteLouisan wrote: Sun Jan 23, 2022 9:51 am Where X is residual expenses in retirement not covered my pension or SS, right? Or is X total annual expected expenses in retirement including taxes?
That choice is an exercise in detail that has to be done self-consistently according to the situation. I think in reading Bernstein you have to go through a process of separating necessary from discretionary spending, subtract income streams and come up with necessary spending not covered by pensions and SS and then put 20 times that, or whatever it is, in "safe" assets, whatever that is. In my book the only true candidate for a safe asset would be an inflation indexed annuity that would cover the expense, but I think Bernstein is happy with 20x that expense in bond funds, or CDs, or something. You would have to read his books and articles in detail.

You might note that if you were funding $50,000 a year, inflation indexed, from a $1M nest egg and trying to last 30 years, that your chances of doing this successfully using only bonds is about 45% in Firecalc, and the earliest year of failure in that model is 17 years out. But to be fair, I would spend a lot more time reading Bernstein if this is of interest.

A different possibility is to do this with a 30 year TIPS LMP. At 0% real such an LMP can support a 3.3% withdrawal rate for 30 years so that $50,000 payout, inflation indexed, would require a holding in TIPS of 33X or $1,515,000. Today at -2% real return you would need to buy a holding of $2,083,000. I like the idea of the TIPS LMP because it puts on the line in detail exactly what is involved to do things like this. Of course, such a TIPS ladder could be constructed for shorter times. There is a practical problem that not enough TIPS maturities have been issued to create an exact ladder, but that can be finessed.
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Re: When you win the game... quit playing

Post by RubyTuesday »

AnnetteLouisan wrote: Sun Jan 23, 2022 9:51 am Where X is residual expenses in retirement not covered my pension or SS, right? Or is X total annual expected expenses in retirement including taxes?
The former, generally X would be income the portfolio needs to generate after other sources (pension, SS, annuities, etc.)
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Re: When you win the game... quit playing

Post by AnnetteLouisan »

dbr wrote: Sun Jan 23, 2022 10:05 am
AnnetteLouisan wrote: Sun Jan 23, 2022 9:51 am Where X is residual expenses in retirement not covered my pension or SS, right? Or is X total annual expected expenses in retirement including taxes?
That choice is an exercise in detail that has to be done self-consistently according to the situation. I think in reading Bernstein you have to go through a process of separating necessary from discretionary spending, subtract income streams and come up with necessary spending not covered by pensions and SS and then put 20 times that, or whatever it is, in "safe" assets, whatever that is. In my book the only true candidate for a safe asset would be an inflation indexed annuity that would cover the expense, but I think Bernstein is happy with 20x that expense in bond funds, or CDs, or something. You would have to read his books and articles in detail.

You might note that if you were funding $50,000 a year, inflation indexed, from a $1M nest egg and trying to last 30 years, that your chances of doing this successfully using only bonds is about 45% in Firecalc, and the earliest year of failure in that model is 17 years out. But to be fair, I would spend a lot more time reading Bernstein if this is of interest.

A different possibility is to do this with a 30 year TIPS LMP. At 0% real such an LMP can support a 3.3% withdrawal rate for 30 years so that $50,000 payout, inflation indexed, would require a holding in TIPS of 33X or $1,515,000. Today at -2% real return you would need to buy a holding of $2,083,000. I like the idea of the TIPS LMP because it puts on the line in detail exactly what is involved to do things like this. Of course, such a TIPS ladder could be constructed for shorter times. There is a practical problem that not enough TIPS maturities have been issued to create an exact ladder, but that can be finessed.
Fortunately I have a small cola’d pension coming that, coupled with SS, should cover 75 percent of expenses in retirement. Most of my TSP is in the G Fund. I can increase the size of that pension by working until 60 or 62, god willing I live that long. There is also likely to be rental income but I never rely on anything related to potential inheritance. I’m hoping my parents will be interviewed at age 105 for their longevity secrets. I doubt I will be.
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Re: When you win the game... quit playing

Post by bikechuck »

willthrill81 wrote: Thu Jan 20, 2022 8:47 pm While Bernstein has done some great work, this pithy statement is one of the worst I've ever heard in the investing community.
His "worst" comment has generated numerous, helpful and rich discussions which might have been his objective.

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Re: When you win the game... quit playing

Post by Tatala »

john0608 wrote: Thu Jan 20, 2022 6:46 pm to me it means 5 years living expenses in fixed and the rest in the stock market.
i don't like bond funds so most of my fixed is now in CDs and banks......not getting much but a small positive beats any negatives.

When you have a CD lets say at 1% and rates go up .50%, well you just lost .50%. Which means you ROR is .50%. With Inflation at 7% you are loosing money. CD's dont save you from rate increases you just get your principal back MINUS the new interest rate. It might be a feel good moment but you loose just like the bond funds. IMHO
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Re: When you win the game... quit playing

Post by Mando19 »

I leave my AA at 60/40, but continue to buy Ibonds and do Roth conversions to reduce my future RMDs
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Re: When you win the game... quit playing

Post by dbr »

AnnetteLouisan wrote: Sun Jan 23, 2022 10:20 am
dbr wrote: Sun Jan 23, 2022 10:05 am
AnnetteLouisan wrote: Sun Jan 23, 2022 9:51 am Where X is residual expenses in retirement not covered my pension or SS, right? Or is X total annual expected expenses in retirement including taxes?
That choice is an exercise in detail that has to be done self-consistently according to the situation. I think in reading Bernstein you have to go through a process of separating necessary from discretionary spending, subtract income streams and come up with necessary spending not covered by pensions and SS and then put 20 times that, or whatever it is, in "safe" assets, whatever that is. In my book the only true candidate for a safe asset would be an inflation indexed annuity that would cover the expense, but I think Bernstein is happy with 20x that expense in bond funds, or CDs, or something. You would have to read his books and articles in detail.

You might note that if you were funding $50,000 a year, inflation indexed, from a $1M nest egg and trying to last 30 years, that your chances of doing this successfully using only bonds is about 45% in Firecalc, and the earliest year of failure in that model is 17 years out. But to be fair, I would spend a lot more time reading Bernstein if this is of interest.

A different possibility is to do this with a 30 year TIPS LMP. At 0% real such an LMP can support a 3.3% withdrawal rate for 30 years so that $50,000 payout, inflation indexed, would require a holding in TIPS of 33X or $1,515,000. Today at -2% real return you would need to buy a holding of $2,083,000. I like the idea of the TIPS LMP because it puts on the line in detail exactly what is involved to do things like this. Of course, such a TIPS ladder could be constructed for shorter times. There is a practical problem that not enough TIPS maturities have been issued to create an exact ladder, but that can be finessed.
Fortunately I have a small cola’d pension coming that, coupled with SS, should cover 75 percent of expenses in retirement. Most of my TSP is in the G Fund. I can increase the size of that pension by working until 60 or 62, god willing I live that long. There is also likely to be rental income but I never rely on anything related to potential inheritance. I’m hoping my parents will be interviewed at age 105 for their longevity secrets. I doubt I will be.
I think the whole thing too much ignores the practical reality that withdrawing a reasonable amount from a portfolio of stocks and bonds actually works just fine to support all spending basic and discretionary. It certainly works just fine for people who already have inflation indexed income streams for half their needs. I think people overlook the significance of Bernstein assigning a risk portfolio to discretionary expenses. Consider that if you have 20x needed expenses after income streams in fixed income and also discretionary expenses are the same in stocks then you have a portfolio of 40x and a 50/50 asset allocation. A 4% SWR from a 50/50 asset allocation only needs 25x altogether. A different example would perhaps be that your discretionary expenses are an additional 25% spending, a total portfolio of 25x but held at 20/80 asset allocation. A problem there is that a 20/80 portfolio is less secure of supporting a 4% SWR. You are better off if you make sure you have high discretionary expenses and the wealth to cover them. I think a possible generalization of Bernstein is to be sure you are plenty wealthy so that you can afford to not take risk.

One of the things about reading Bernstein is that the thought process is disconnected from using what we know about how portfolios function. I wouldn't say that this is wrong, but I personally don't relate very well to it. Among other things I have never been able to arrive at an understanding of what expenses are necessary and which are discretionary. Those also change over time or can be intentionally changed.
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Re: When you win the game... quit playing

Post by AnnetteLouisan »

AlohaJoe wrote: Thu Jan 20, 2022 7:06 pm
Hooked wrote: Thu Jan 20, 2022 6:23 pm When you win the game... quit playing.
How do you know you've won?
If you don’t know you’ve won, you’ve won.
Because when you’ve lost, you know it for sure every day.

I once wondered whether I’d made it. First I figured if I had to ask, I hadn’t. Then I came up with, if I had to ask, I had, because if I hadn’t that fact would stare me in the face every day.
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Re: When you win the game... quit playing

Post by abuss368 »

AnnetteLouisan wrote: Sun Jan 23, 2022 10:49 am
AlohaJoe wrote: Thu Jan 20, 2022 7:06 pm
Hooked wrote: Thu Jan 20, 2022 6:23 pm When you win the game... quit playing.
How do you know you've won?
If you don’t know you’ve won, you’ve won.
Because when you’ve lost, you know it for sure every day.

I once wondered whether I’d made it. First I figured if I had to ask, I hadn’t. Then I came up with, if I had to ask, I had, because if I hadn’t that fact would stare me in the face every day.
Hi Annette -

That is an interesting perspective and one I had not considered previously.

I like that.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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AnnetteLouisan
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Re: When you win the game... quit playing

Post by AnnetteLouisan »

abuss368 wrote: Sun Jan 23, 2022 10:52 am
AnnetteLouisan wrote: Sun Jan 23, 2022 10:49 am
AlohaJoe wrote: Thu Jan 20, 2022 7:06 pm
Hooked wrote: Thu Jan 20, 2022 6:23 pm When you win the game... quit playing.
How do you know you've won?
If you don’t know you’ve won, you’ve won.
Because when you’ve lost, you know it for sure every day.

I once wondered whether I’d made it. First I figured if I had to ask, I hadn’t. Then I came up with, if I had to ask, I had, because if I hadn’t that fact would stare me in the face every day.
Hi Annette -

That is an interesting perspective and one I had not considered previously.

I like that.
Tony
It’s helpful to spend time with those who are differently situated (clerical staff, the trades, police and fire, military moms, other). Puts things in perspective. Not trying to be lectury at all but getting to know people very well from all walks of life was very illuminating for me personally. Not always fun to learn of their battles (and not always easy to understand their approaches to some subjects) but definitely put things in perspective for me. I’m sure many of us have benefitted from that. I was in a bubble and hadn’t realized it. Cut Adrift is a great book on how different economic strata handle economic change. Another interesting book on living in a bubble without knowing it is Coming Apart.

As for the quote, it ain’t over til it’s over, I agree and the game has various phases.
Last edited by AnnetteLouisan on Sun Jan 23, 2022 11:16 am, edited 2 times in total.
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Re: When you win the game... quit playing

Post by abuss368 »

AnnetteLouisan wrote: Sun Jan 23, 2022 10:58 am
abuss368 wrote: Sun Jan 23, 2022 10:52 am
AnnetteLouisan wrote: Sun Jan 23, 2022 10:49 am
AlohaJoe wrote: Thu Jan 20, 2022 7:06 pm
Hooked wrote: Thu Jan 20, 2022 6:23 pm When you win the game... quit playing.
How do you know you've won?
If you don’t know you’ve won, you’ve won.
Because when you’ve lost, you know it for sure every day.

I once wondered whether I’d made it. First I figured if I had to ask, I hadn’t. Then I came up with, if I had to ask, I had, because if I hadn’t that fact would stare me in the face every day.
Hi Annette -

That is an interesting perspective and one I had not considered previously.

I like that.
Tony
It’s helpful to spend time with those who are differently situated (clerical staff, the trades, police and fire, military moms, other). Puts things in perspective. Not trying to be lectury at all but getting to know people very well from all walks of life was very illuminating for me personally. Not always fun to learn of their battles (and not always easy to understand their approaches to some subjects) but definitely put things in perspective for me. I’m sure many of us have benefitted from that. I was in a bubble and hadn’t realized it. Cut Adrift is a great book on how different economic strata handle economic change.

As for the quote, it ain’t over til it’s over, I agree and the game has various phases.
Absolutely. It keeps us all grounded and more well rounded.

Best.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: When you win the game... quit playing

Post by Paradise »

Doctor Rhythm wrote: Thu Jan 20, 2022 7:09 pm
AlohaJoe wrote: Thu Jan 20, 2022 7:06 pm
Hooked wrote: Thu Jan 20, 2022 6:23 pm When you win the game... quit playing.
How do you know you've won?
When the Fidelity rep said, “You should save less and spend more money.”
:D Love it. I don’t trust anything these people ever say. It’s the same people who will give you a loan for a house that you clearly cannot afford.

OP:

To me there are 3 phases of life:
1) asset accumulation — go hard on equities, build your nest egg, start phasing in bonds when you’re getting closer and closer to #2
2) financially independent — asset preservation, protect your nest egg (see below)
3) who cares anymore — even with a 50%+ drop in equities, you’re still at #2

I think you’re referencing moving from 1 to 2.

If you truly have no desire to get to #3, you need to find the safest investment vehicle(s) that keeps you at #2 and beats inflation. It’s for that reason that 100% bonds typically doesn’t work. You need some amount of stocks to keep you there and outpacing inflation. Personally, I think that number is between 30 and 40% bonds, rest stocks. If you ask others they would go as high as 70% bonds. It all depends on your specifics and risk tolerance (did you panic sell in 2008 or not).

Another thing: I believe that people who are capable of getting to #3 should do it. We used to think that #2 is enough and racing towards early retirement, but in reality there are so many people who we can help with that kind of money: charity, creating jobs, schools, other opportunities. So, yeah... essentially winning the game but keep playing to better others (or something like that :sharebeer ).
50% VTI | 20% VXUS | 20% BND | 10% QQQ
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Re: When you win the game... quit playing

Post by cegibbs »

I’ve never understood the reasoning for quitting the game once you’ve won. Investing isn’t a game. As a retiree, I continue investing in equities because that is the best way to continue growing wealth which can be used to pay for college education and homes for grandkids as well as supporting charities. I believe in the entrepreneurial spirit of humanity and investing in companies provides necessary capital that will keep improving the lives of others.
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Re: When you win the game... quit playing

Post by bertilak »

Hooked wrote: Thu Jan 20, 2022 6:23 pm What does that mean to you?
Don't take unneeded risk. "Need" needs to be carefully defined. I don't mean it as subsistence level goals. Understand your goals and let that calibrate your risk.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Re: When you win the game... quit playing

Post by bertilak »

Wiggums wrote: Thu Jan 20, 2022 10:12 pm We are retired and lowered our AA to 65/35. We will always have equities as part of our plan to beat inflation.
I am retired and raised my AA from 50/50 to 65/35. We ended up at the same place!
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Re: When you win the game... quit playing

Post by bertilak »

AnnetteLouisan wrote: Sun Jan 23, 2022 10:49 am How do you know you've won?
If you don’t know you’ve won, you’ve won.
Because when you’ve lost, you know it for sure every day.
[/quote]
Not winning does not mean losing. It just means not won yet.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Re: When you win the game... quit playing

Post by placeholder »

It's meaningless to me because the game doesn't end until you do and the rules can change at any time.
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Re: When you win the game... quit playing

Post by climbingFool »

Checked in recently after a long absence and thought this thread was dead but I'll bite simply to add another viewpoint.
I'm 62 - been retired a few years but I'm still 100 % in stocks via a mix of individual stocks and ETF's as I have been my whole life. Never bonds which I believe dampen volatility but diminish overall returns.
Climbing buddies ask me why I don't quit - I've won.
It's because I have been so aggressive and also timed extra big additions right in big down years that I have no concerns with a big drop - I'll still be financially independent after a huge drop.
The biggest reason is that it's fun and a challenge.
I don't sell that much unless the thesis changes but as an example last Friday I sold a bunch of ATVI (recently bought out by MSFT which I have a bunch of ) at about 2 PM and added to about 20 of my biggest winners in long term growth stocks that were way down and I believed in the most.
I also did my biggest ROTH conversion of the year by far in individual stocks.
Figuring out what to buy was fun (done the days before).
If I ever get to where I'm not beating the S&P 500 over a 5 year average I'll quit individual stocks.
And yes I have huge loss days - I went through the 2000 year in individual stocks also.
But it's FUN!
And economically rewarding.
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Re: When you win the game... quit playing

Post by HomerJ »

jjj_22 wrote: Thu Jan 20, 2022 8:52 pm I find this statement silly too. You haven’t won the game until you’ve died with money still in the bank. Everything up to then requires thoughtfully balancing risk against your preferred lifestyle.
It just means if you're 100/0 or 90/10 stocks and you hit your number (25x-30x expenses), you don't need to keep risking it all anymore.

Nothing wrong with dialing it back a bit at that point, like to 70/30 or 60/40 or something. Whatever.

There's no hard and fast rule. It's just a common sense idea. No need to keep rolling the dice once you're already rich.

It's a risk/reward thing.

Once you have "enough", it's dumb to keep risking it all hoping for more. Since "more" isn't going to change your life that much, but dropping well below "enough" could have a huge impact.
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Re: When you win the game... quit playing

Post by dbr »

HomerJ wrote: Mon Jan 24, 2022 12:50 am
jjj_22 wrote: Thu Jan 20, 2022 8:52 pm I find this statement silly too. You haven’t won the game until you’ve died with money still in the bank. Everything up to then requires thoughtfully balancing risk against your preferred lifestyle.
It just means if you're 100/0 or 90/10 stocks and you hit your number (25x-30x expenses), you don't need to keep risking it all anymore.

Nothing wrong with dialing it back a bit at that point, like to 70/30 or 60/40 or something. Whatever.

There's no hard and fast rule. It's just a common sense idea. No need to keep rolling the dice once you're already rich.

It's a risk/reward thing.

Once you have "enough", it's dumb to keep risking it all hoping for more. Since "more" isn't going to change your life that much, but dropping well below "enough" could have a huge impact.
Yep, it is just that easy to say what you mean if that is the message. People can disagree with the advice, as in the post one more above, but it isn't hard to make the point clear until someone starts talking about winning games and then no one knows what they are talking about.

Note the warning is really only for those entering retirement high in stocks, which is mostly no one or else people who intend to do that no matter what. I guess he is saying the latter are wrong and making a bad decision.
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Re: When you win the game... quit playing

Post by bertilak »

I think the point of Bernstein's little saying is to get you to think about risk. How much? Why? It is not to give you an answer, much less a quantitative answer.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Re: When you win the game... quit playing

Post by willthrill81 »

dbr wrote: Mon Jan 24, 2022 8:27 am Yep, it is just that easy to say what you mean if that is the message. People can disagree with the advice, as in the post one more above, but it isn't hard to make the point clear until someone starts talking about winning games and then no one knows what they are talking about.
Exactly. Rather than trying to couch the metaphor in gambling terminology, Bernstein should have just said something like 'When you reach financial independence, you should set up a liability matching portfolio, and if you have funds remaining after doing so, that will become your risk portfolio" because that's exactly what he meant by his own statement on this forum last week.
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