No. of Recommendations: 2
I remember Jim posting about a safe withdrawal rate based on book value. All those links are now dead, which is a real shame. The Fool lost something quite valuable there.
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%
Currently, that would be 324 * 5% = $16.20 per share
500/16.20 = 3.2% withdrawal rate on current share price
Probably a bit conservative. I get 10-year nominal growth of 12%, 15-year of 11%, 20-year of 11%.
Thoughts? Jim?
And to remind myself:
Rich, Broke or Dead? Post-Retirement FIRE Calculator: Visualizing Early Retirement Success and Longevity Risk
https://engaging-data.com/will-money-last-retire-e... 