No. of Recommendations: 10
If I remember correctly, and I'm sure Jim will chime in, the idea was book value tends to grow at x% above inflation, and one could withdraw the growth % less a safety factor.
The numbers I had written down were:
Nominal Growth 8.5%
Inflation 2.5%
Safety 1%
Withdrawal Rate 5%Here's a great backtest.
BRK-A since 3/17/1980, 5% annual withdrawal.
testfol.io: Portfolio Backtester for ETFs and Asset Allocation (click the Logarithmic scale box)
Zoom up from 1980 to 1999.
Price essentially flat from 1999 to 2015.
Very slow climb up from 2015 to 2026.
Initial $10,000, ending value on 2/3/2026 $2,400,000
Total withdrawals $2,000,000
