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Title: How to Retire Early and Live Well With Less Than a Million Dollars
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Manufacturer: Adams Media Corporation
List Price: $14.95
Our Price: $5.99
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| Customer Reviews: |
| How to Retire Early and Live Well With Less Than a Million Dollars by Adams Media Corporation A valuable addition to your retirement library | I read some of the other reviews but to me this is a 5 star read.
Covers in simple and understandable terms the common mistakes that most retirees make.
Asset allocation is the biggest mistake that retirees make!!! It doesn't take a rocket scientist to know that speculation in unsuitable to those retiring.
If you cannot afford to lose capital, then don't play the game.
Laddered municipal bonds, treasuries, cd's and money markets are my preferred investment model.
Laddering will provide you with steady monthly income and all of these will provide safety.
A book well worth having. | | How to Retire Early and Live Well With Less Than a Million Dollars by Adams Media Corporation Interesting Read and Predictions | This book was written in 1999 and published in 2000. My hat is off to the author for retiring at age 29 back in 1981 and living off his investments.
The first thing that surprised me about this book was the author's acceptance and recommendations for using 8, 10, and even 12% SWR's (Safe Withdrawal Rates).
Bengen's and Bierwirth's studies back in 1994 were seminal events in financial planning in that they found 4% was the maximum SWR. If the stock market experiences a prolonged drop early in a retirement period, SWR's higher than 4% will cause the retiree to exhaust his portfolio before this death.
In 1998, the Trinity Study also found the same basic results as Bengen and Bierwirth.....and recommended a maximum SWR of 4%.
The author retired in 1981, so these studies were not yet done. Conventional wisdom back in 1981 was that if the stock market returned 10% per year on average, then you could withdraw up to 10% per year and not exhaust your portfolio.
It is puzzling to me why the author ignores the 1994 and 1998 studies since his book was written in 1999. Conventional financial planning practices today would frown upon a financial advisor recommending any SWR greater than about 4%.
I did enjoy the accuracy of most of the author's predictions back from 1999:
Foreign stocks will do well......U.S. stocks will not do well..................Correct
REIT's are a good investment.....................................................Correct
Housing prices will decline due to aging Baby Boomers.....................Incorrect
The author also suggests that U.S. bonds are too correlated to U.S. stocks and therefore bonds should not be in a portfolio. I checked the long term and short term correlations using Callan's Periodic Table of Returns:
1991 to 2006 correlation of U.S. Stocks to U.S. bonds......R squared = 3%, R=17%
2000 to 2006 correlation of U.S. Stocks to U.S. bonds......R squared = 66%, R=-81%
Defining correlation as R, the long term correlation of U.S. bonds to stocks was relatively low at 17%. From the time the author's book was published in 2000 thru 2006, there was a negative 81% correlation. This data disagrees with the author's comments that you should not use bonds because they are too well correlated to stocks.
The author recommends using 3 to 5 asset classes.....and advocates the use of index funds. I interpreted the author's writings to indicate he holds zero percent bonds.
I was a little surprised at the author suggesting for the first year or two, it will take you 100 man-hours per every 10% of asset allocation to get your finances in order. After the first year, he says 10 hrs/week is enough. I use mostly index funds, so it took no where near this many man-hours for me to set up my asset allocation and investments.
The author suggests that the dollar will continue to decline against both foreign and emerging markets. He advocates up to 33% of your portfolio be invested in foreign or emerging market stocks. He rationalizes that foreign investors are more likely to buy stocks in their own country. He predicts Baby Boomers will be able to find buyers for their foreign stocks much easier than for buyers of their U.S. stocks.
The epilogue section is a good example of Socrates' famous quote "Know Thy Self". It is extremely difficult for us humans to understand what drives us and how we can make more rational decisions.
The writing style in this book is of medium quality with some annoying grammatical errors, but it was not a major distraction.
I found the book an interesting read.....primarily because it was written from the viewpoint of someone who has "walked the talk" and lived off his investments since 1981.
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The Bogleheads' Guide to Investing | | How to Retire Early and Live Well With Less Than a Million Dollars by Adams Media Corporation Disappointed | This book is clearly intended for East-Coasters or, more specifically, people who have lived their adult lives in New York City. Believe me, you cannot sell your home in rural Iowa and take the proceeds to buy another house in a cheaper, but fun, retirement area with the bonus of having money left over to invest and live on. I was disappointed that most of the suggestions in this book assume that the reader is currently spending like a madman and not too bright about ways to save. Also, for those of us living a conservative lifestyle, the savings he outlines are nonexistent.
Oh well, no book is completely bad... | | How to Retire Early and Live Well With Less Than a Million Dollars by Adams Media Corporation Not the Only Investment Book You Need, But in the Top 3 | I decided to give this book 5 stars because I decided it was worthwhile enough to buy, even after I'd already read a library copy. I usually don't re-read books. This one I have.
The main strength of this book is that it ties a lot of things together. It gives you a realistic way of developing a plan for the amount you need to retire. It then walks you through the amount of risk you need to take to achieve this amount, and realistic asset allocation to reduce the risk. He recommends keeping no more than 1/3 in US stocks, and having 1/3 in foreign stocks. As the world is becoming increasingly globalized, this is important advice. It was also pretty good advice since it was written right before the US market crash in 2000.
I agree with people who gave the book a lower rating. There are plenty of holes, and there are parts I don't agree with. This is not the only book you need to read. I recommend Bernstein's Intelligent Asset Allocator in addition to this book. Bernstein's book will help with the details. Edmund's book will give you practical advice to implement the details into a plan.
And if you don't have enough to meet your goals - Edmunds tells you to go back to work. | | How to Retire Early and Live Well With Less Than a Million Dollars by Adams Media Corporation Well worth it! | | I have read a lot of books on retirement. This one is definitely one of the better ones. There are many new ideas in it and some "worth it" charts. We are already retired...going on four years...and already doing the things that the author suggests, but the hard data behind his ideas gave us more confidence in our approach. | | How to Retire Early and Live Well With Less Than a Million Dollars by Adams Media Corporation Book Description | | In 1981, at the age of 29 the author of HOW TO RETIRE EARLY AND LIVE WELL WITH LESS THAN A MILLION DOLLARS (February 15, 2000; $12.95 trade paperback; 256 pages) began living off his investments of just several hundred thousand dollars. In the intervening years, Gillette Edmunds has made more than $5 million in investment profits. Edmunds was not an investment advisor or a commissioned mutual funds sales representative: he was a financial journalist and an individual investor. HOW TO RETIRE EARLY AND LIVE WELL WITH LESS THAN A MILLION DOLLARS describes step by step how a retiree can live comfortably on $500,000 or less. Americans will discover that they can walk away from work in less than five years. This is the first book to tackle these topics that is written by an actual retiree. Using simple, original investment strategies and formulas, the book shows how to assemble your nest egg and achieve steady, tax-advantaged returns every year for the rest of your life. In Part One, the reader is shown step by step how to determine if they have enough money to retire, and if not, how to get enough. For those that have enough, Part Two shows how to divide their money into different asset classes like stocks, bonds, real estate, foreign stocks, and small business interests so they will achieve steady high returns every year. Then for each asset class, they are shown how to get the highest returns with the lowest taxes. Part Three shows those still saving for retirement how to quickly amass their nest egg. Finally, for the rare years when all asset classes go down, The Epilogue shows the reader how to prosper emotionally while waiting for the markets to come back. |
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