I think one fundamental misunderstanding is this: "You spend $50k on living expenses from equities."marcopolo wrote: ↑Tue Jul 05, 2022 5:27 pmThen what does your WR have to do with replenishing your cash portion? Once you have spent the money, you have affected your WR. How you choose to balance your AA within in your portfolio does not affect your WR.Marseille07 wrote: ↑Tue Jul 05, 2022 5:09 pmCash is part of my AA, I thought I made this clear multiple times.
You have repeatedly made statements that imply you believe only selling equities counts towards your WR. So, maybe that is the misunderstanding I am having.
Perhaps you could clear that up. Do you consider cash as part of your portfolio? Does spending the cash count as a withdrawal from your portfolio that contributes to your WR?
Let say you have $900k in equities and $100k in cash.
1) What is your AA?
You spend $50k on living expenses from equities.
You spend $40k on a new car from the cash, and do not replenish it from equities.
So, you now have $850K in equities and $60k in cash
2) What is your AA now?
3) What was your WR?
Let's say instead you did replenish half the money spent fir the car, selling $20k of equities to partially refill cash.
So, now you have $830k in equities and $80k in cash
4) What is your AA?
5) What was your WR?
No, you *never* spend $50K of living expenses from equities unless you have credit card bills payable by equities. That's what the cash is for.
Besides, I don't know why you come after me when personal finance is personal. I know what I'm doing, but you don't have to understand what I do.