Today I’m introducing something new for Investing For A Living. Screencasts. I love writing the blog. I love doing the research that goes into the blog posts as well. But I realize it is for a small audience. Especially with some topics like quant investing. Over time I’ve received more and more requests to discuss a variety of basic and fundamental investment topics. After considering many of the options available I’ve settled on screencasts. It’s relatively easy for me to put together and gives me flexibility to go over many subjects. Also, the people I’ve discussed this with think the screencast format is good for getting basic concepts across. So, here it goes….I will try and keep them short with each screencast focused on a vary narrow and fundamental topic.

For my first screencast, I went back to my very first post on this blog. That was way back in September 2010. The topic; How much does it take to retire?

Enjoy! Let me know what you think. Also, if you have requests for any screencast topics post them in the comments.

Post edit: There was a good article in the New York Times on May 8th about the 4% rule. Worth a read and quite timely I must say. Read the comments section to get a feeling as to some of the confusion and issues around this topic.

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49 thoughts on “ Introducing investing for a living screencasts

  1. Nice screencast Paul. Appreciate the effort you put into your site/blog and now the screencasts.

  2. Hi Paul, great topic. I retired early at 58 from the sale of a company my partners and I built over 10 years. We will likely not go full time on the road as you both did, but plan to spend several months a year traveling, perhaps more as we finish our home renovation. I think we may have run into you both in Oregon last year.

    The pebble in my shoe has to do with when to take social security, that is at age 62 or when the full amount hits at 66. The quick calculation, and conversation with our advisor says 62 with a break even point around 80. The incremental income would certainly help, especially with the run up of additional costs on the home, but I’m also cognizant of the fact once taken, that’s it.

    I suspect the question really is, do we need it. We will likely return to some part time work in the future when not traveling, but that would not generate substantial income.

    Would you have any thoughts on the matter, and might this make a decent partial topic for a future edition.

    Enjoying your work, thank you.

    1. Kevin,

      IMO the best bet is to wait until 70. Barring that then full retirement age. I think breakeven analysis is a poor way to look at the social security decision. For me, it’s more about longevity insurance than anything else. Also, waiting does not just represent an increase in income for you but for all who could be eligible for your social security, mainly your spouse.
      Obviously, this is a minority opinion since only about 2% of retirees waited to 70 to take social security but I bet most of those did not have a choice.

      Anyway, there is a new must read book on this topic, “Get What’s Yours” by Lawrence Kotlikoff. I would not make a decision without reading this book. It has changed what I will do regarding SS in the future.


  3. Paul,

    Thanks for all you do on your blog and now the screencast. I one uses the “25 times annual spending” rule for the amount of retirement savings necessary, is that based on retirement savings that are in a tax deferred account where ~20% of the savings will go toward paying taxes?

    1. Kirk, the 25 times is just what it means, 25 times the desired annual spending. Desired annual spending needs to include whatever taxes you would need to pay.


  4. Hey Paul – I appreciate the financial fundementals of your screencast. Thanks putting the cookies down on the lower shelf. Jeff

  5. Good stuff Paul. Many of us are at different places in our investing knowledge/experience. A fundamental overview of the how’s and why’s of investing is a great foundation to build on. Have you given enough thought to your screencasts “roadmap” to share a preview of topics you want to cover? Maybe a syllabus of what the casts are going to cover. 🙂


    1. Thanks Mark.

      Well, my roadmap so far is to cover the retirement topics I listen in the last slide of the screencast. My other thought was wow, I could do a million of these and still never be close to done.

      Any recommendations?


      1. Paul,
        Assuming one is fully invested in, say, SP 500 at 60%, US Bonds at 40%, it seems the 4% rule does not mean total depletion of your assets in 25 years if your stocks and bonds returns are close to historical returns, even adding in dividends. Correct?

        Total depletion I think would imply taking 4% of your cash out from under the mattress every year.


        1. Hey Don,

          No, not correct. The 4% rule means the ‘possible’ depletion of all your assets. Someone retiring in 1966, using the 4% rule, would have ended up with zero dollars 30 years later. But on average, all retirees in history, using the 4% rule ended up with way more than zero. Of course, you can’t know this beforehand. Every retiree has a unique series of portfolio returns, and inflation outcomes that determines their success or failure. I’ll cover this more in my next screencast.


  6. Enjoyed the webcast ..
    We’ve been buy and hold investors for many years. Always buying, rarely selling and focusing on index and dividend mutual funds and ETFs. I’m a big proponent of dividends as in: why touch the principal if you can live off the earnings? In theory we could live off the earnings in perpetuity. While dividends did ‘take a hit’ in the credit crisis they didn’t get hurt as bad as valuations..

    Love to hear your thoughts on dividends…

    Ps you lovely site would be enhanced by an index by topic (or did I miss it?)

    1. Ray or Raymond,

      I used to be a die hard dividend fan. If you look back at my older posts you will see what I mean.
      Over time, I have switched to a total return (dividends + capital gains) approach. The data is pretty clear that using a total return approach leads to superior results over time whether you are building wealth or withdrawing from a portfolio in retirement. Dividend investing, as it turns out, is just value investing in disguise, at least it has been historically. And there are better ways to invest in value than just dividends, like shareholder yield, or value composites, that lead to far superior results.

      Having said all that, there is a powerful behavioral component to dividend investing. In my experience, I have found that dividend investors tend to make less rash decisions in times of crisis because they are focused on that dividend. In the extreme this can also be bad but in many instances helps the investor stick with their strategy through thick and thin, which is the key in the long run. So, even though dividend investing is not as powerful as total return investing, for many individuals that is a false choice. If the choice is a strategy you can stick with vs a strategy you may not be able to stick with, then the choice is clear and it will lead to better returns for those individuals.

      As Yogi Berra would say, ‘in theory there is no difference between theory and practice, in practice there is’


    2. Oh, I do have the big categories on the listed on the top of the blog. That’s about the best you can do with blogs. They are not the best formats for finding information, especially older information. In the modern world, the replacement for indexing is search.


  7. Your screencast is great. I like to review the fundamentals and learn a little more each time. It’s not just the 4% rule we all know but what it is based on. The in-depth explanation is great. My investment group relies on me to provide education. You are a great source. I read all the time but it is nice to hear a voice.
    Thanks again.

  8. I think this is a great idea and look forward to being a regular listener. Thanks Paul for so generously sharing your knowledge. Much appreciated.

  9. Thanks for sharing your knowledge, Paul. I follow Nina’s RV blog and will have to start following yours as well. We are working toward full-timing (we own our own business) and we need to learn more about investing.

  10. Paul, thanks so much for the screencast!
    A couple of thoughts come to mind immediately, and it sounds like you’ll address later. First, it seems I need a good way to estimate spending needs. I get hung up on whether I’m supposed to use today’s dollars to make that estimate or am I supposed to also estimate the future value cost of those expenditures?
    Second, you touched on the fact the total portfolio will be impacted by other income like Social Security. I’m looking forward to figuring out how to make that calculation.

    We have dinner plans this Sat but hoping to make it over to Crux if we have time. 🙂

    1. Hey Mike, yeah, much of this will become clearer in later screencasts. IMO, there is no better way to estimate spending needs than to track all expenses for a while and then try and model what would they change to when you retire. Everybody’s numbers will be different. The general advice is to assume something like 80-85% of pre-retirement spending. For some that will be fine, in my case that estimate would have been way too high. We spend half of what we used to pre leaving the work force. And you should use today’s dollars and let the retirement model do the inflation adjusting.

      Hopefully we’ll see you at Crux. Otherwise, some other time.


  11. Very good. Glad you talked about how it was arrived at. Amount of time spent was good. Not too long of presentation. Thank you. Have you made presentations at FMCA or Escapee rallies?

    1. Thanks Bob. No, never presented at rallies. Rallies aren’t really our thing.


  12. How does the 4% relate to dividends and change in market value? I would expect people to withdraw more in good years, and minimize their lifestyles, expenditures, and withdrawals in bad years.

    1. Hi Craig, the 4% rule takes into account dividends, capital gains, change in market value, inflation, etc…but it assumes constant inflation adjusted spending. There are other flexible spending models, which adjust for good and bad time like you mention, that lead to higher withdrawals in retirement. I’ll cover some of those in a future screencast.


  13. Strong work, Paul. It was enlightening to learn the background behind the 4% rule. Keep these screencasts coming — I want to learn more!

  14. Hi Paul, Thanks for helping educate people on a subject most don’t understand or have much of an interest in until its retirement time. Another “Paul” Paul has some excellent info and talks of some of the same principles you discuss here. Please take a look at his site. He has several free books and he’s not selling anything. I’ve talked to him and exchanged emails. He’s the real deal. The education I have received from his books and site has made our financial life very secure.

    John Giese

  15. Thanks, great! I was about to unsubscribe from your blog because it was all martian speak to me, but I liked it very much, although it’s a little late for us, but I still love the subject. Should have studied Economics instead of Art.

  16. Thanks, Paul! Very well done! I’ve read various explanations of the 4% rule and yours was the first to explain the historical context as well as the simple 25x yearly spending calculation. You have a good way of saying a lot without talking very much – truly a gift!

  17. How do you recommend withdrawing the 4%? 60%from the stock fund and 40% from the bond fund? Or some other way, maybe depending on how each did over the past year?

    1. Hi Stefanie, a general rule of thumb is to start with the income from the portfolio first (bond income plus dividends), then draw on the portion of the portfolio that did the best during the year, then go down the line from there. Post 70.5 yrs of age you also need to make sure to take into account the RMDs from the tax deferred accounts.


  18. I discovered your blog through Seeking Alpha. Where the 4% rule is shouted down over and over by a vocal and misinformed minority who believe that dividends alone are the One True Way. I look forward to more civil and intelligent analysis here. Good job.

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