Mad Money Machine

Spring is Here! Show 61 delayed

From winter straight into summer we have finally arrived at spring here in Northern Virginia. That means I am spending a little more time enjoying the outdoors and slightly less time working on things like, uh, podcasts. Show 61 will be out when it is good and ready. Keep checking.

But more importantly, I am working on a special feature for show 61. It is all about “SWR” which some refer to as Safe Withdrawal Rate and others as Sustainable Withdrawal Rate. But either way, it is all about how much you can take out of your investments annually and still keep enough in your account for all the other years you need to take out money too. When you consider factors such as the stocks vs. bonds mix, the rate of return on stocks, the inflation rate, the maximum drawdown, starting time and your longevity, etc, the SWR turns out to be much more complicated than simply saying “4%.”

For folks approaching or in retirement, the SWR is a critical piece of info to know in order to not run out of money and end up eating dry cat food (see below).

Even if you are nowhere near retirement, contemplating your SWR is a worthwhile exercise because, as Steven Covey of the 7 Habits of Highly Effective People fame puts it, we should “begin with the end in mind”. Young folks will understand the importance of saving and investing in concrete terms when they can figure their SWR. It can be a shocking exercise.

And finally, I will be taking our cat to the vet today to be, how shall I say, retired from his life on this earth. He has been with us for almost 15 years and in recent months has gone from being overweight to underweight; from being well trained in the scatological arts to being poorly behaved; from being frisky and athletic to being lethargic and crippled. He has been a good companion for us and we will miss him.

The Boyer Cat three years ago.
The Boyer Cat today