The Lemon Fool

Hi,

I came across this https://blackandwhitefire.com/ and had not seen it mentioned on here so thought I would pass it on. I am not affiliated with it.

I quite like how you can plug in an inflation rate.

Interesting calculator but like all such calculations, they are of little use… you can imagine a scenario where you are say 15 years away from FIRE and with the aid of a Time Machine from your death bed are able to go back and fill in the numbers with inflation figures, the correct saving ratios, investment returns etc and the results will still likely to be way out.

It’s the volatility of returns that matter, they are unknown and the exact sequence of returns that matter.

Knowing all that, as a mathematician I spent a lot of time doing such calculations during my working life !!!!!

In real life the periodic market knock backs wreck the ‘plan’ but of course turbo charge the reality , (provide you remain committed to a high equity portfolio allocation).

Hariseldon58 wrote:Interesting calculator but like all such calculations, they are of little use….

Exactly - I've said it before that whilst some of the tools and publications launched by the Fire movement may be well meaning and informative, their primary impact is to generate retirement income for the people that wrote them. I've seen people stop full time work with the flimsiest of asset backing, as little as 5 x pre tax income. It scared me, but they've cut their cloth to suit and managed with a bit of casual/part time work and a lot of leisure time.

There is no myth, no magic. Spending hours poring over simulations, websites, or Lifestyle articles makes not one jot of difference to your savings amount. Simply..
1) Work out how much you want to spend
2) deduct any guaranteed income (eg DB schemes, annuities, SP, stable income from a rental).
3) multiply the shortfall by your chosen security factor (eg 33 for a 3% withdrawal rate, 25 for a 4% withdrawal rate, 20x for a 5% withdrawal rate etc), and perhaps have a couple of years of 'shortfall' in cash to cover a market 'correction'.
4) Save up the amount calculated in 3) (allowing for tax, which can take a bit of working out, but then who predicted the slashing of CGT allowances 18 months ago?).

The only 'tool' we use is Excel/Libre Office, for complexities such as if you wish (like we have) to allocate a separate 'pot' to fill the gap between retirement and SP - in our case a ringfenced unshelterd GIA that we sell off each month at approaching 10% which will drop when MrsFs SP kick in.

Paul.

Hariseldon58 wrote:It’s the volatility of returns that matter, they are unknown and the exact sequence of returns that matter.

I've played with this a few times on that front:

https://www.firecalc.com

BTW it's a bit odd in the sense that it relies on two browser tabs, one for the conditions (set across the top of the home page) and the other for the results.

Gilgongo wrote:https://www.firecalc.com

Good share, thank you. I also found https://cfiresim.com/ , which seems to be a derivative of firecalc.

Firecalc has a nice feature where it runs different equity:bond ratios and then plots success rate with the different mixes. Handy for me as I think that's my central question atm.

My future-looking assumptions always seem to be worse than the historic market, even when compared to the dreaded 1966 retirement date. I'm pessimistic about inflation.

Thanks for sharing your thoughts on the FIRE movement and retirement planning. It's true that while some tools and publications within the movement can be informative, they may also serve to generate income for their creators.

MysainsburysUK wrote:Thanks for sharing your thoughts on the FIRE movement and retirement planning. It's true that while some tools and publications within the movement can be informative, they may also serve to generate income for their creators.

You're right, it's true that some within the movement create content that serves two purposes: informing the audience and generating income for the creators. This potential dual purpose does raise important questions about objectivity and potential bias.

Here are some points to consider:

Transparency is key: Creators should be transparent about their sources of income and any potential conflicts of interest. For example, if a blogger recommends a specific investing platform, they should disclose whether they receive financial compensation from that platform.

Evaluate the information critically: Just like any online content, it's essential to assess FIRE-related tools and publications with a critical eye. Consider the author's expertise, the quality of the information presented, and any potential biases that might influence their recommendations.