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.
https://testfol.io/?s=c6cZviUhnZ2 (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
