February 2018–Best of the Web

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It’s time to explore the best items from the internet from the past month that will help you save more, invest smarter, and retire sooner.

Volatility has made a return to the markets, which has a lot of people thinking about risk management. Risk management is easy to underestimate when planning your retirement.

Yet poor risk management can destroy the wealth you have worked so long and hard to build.

We’ll start this month’s selections by looking at what others are doing to manage risks. Our selections also look at the math behind retirement. They reinforce some timeless principles. And they explore the power of creating your own story.

Assessing and Managing Risks

Todd Tresidder writes Bubbles, Bubbles Everywhere – How to Protect Yourself. He examinines the investing challenges presented by simultaneous bubbles in stocks, bonds, and real estate accompanying the massive speculative frenzy around cryptocurrencies.

Morgan Housel explains that It’s Hard to Predict How You’ll Respond to Risk. He dives into research that shows we are terrible at predicting our future emotions and behaviors.

Financial Samurai discusses How Much Investment Risk to Take in Retirement: Various Portfolio Compositions to Consider, sharing his personal philosophy.

The next post demonstrates a completely different type of risk, protecting your assets in our litigious society. I struggled over whether I should include this article. It’s important for retirees, and especially those of us fortunate enough to be on the path to early retirement, to serve others and give back to our communities. I don’t want to cause fear and dissuade people from doing what is right. At the same time, we can’t bury our heads in the sand. We need to consider the potential liabilities and take appropriate precautions as the Physician on FIRE learned and shared in I Volunteered for the Hospital Board and Was Sued for Millions.

Earning Money in Retirement

I frequently write about the advantages of a non-traditional approach to retirement which incorporates flexibility and ongoing income. Two excellent articles look at the math of making money in retirement.

Early Retirement Now’s Ultimate Guide to Safe Withdrawal Rates continues with Part 23: Flexibility and its Limitations.

Four Pillar Freedom writes How Active Income in Retirement Impacts When You Can Retire.

New Retirement Calculator

For those of you interested in looking at the math behind your specific retirement scenario, The Pralana Gold Retirement Calculator was released this month. This advanced calculator was developed by Stuart Matthews, Darrow’s friend and frequent collaborator. It aims to be the most advanced retirement calculator and personal financial model available. Key changes for 2018 are the new federal tax code, detailed state tax calculations, tax-optimized Roth conversions, enhanced annuity modeling and improved printable reports.

A Couple of Reminders

It’s important to constantly learn, grow and improve. However, in the process it is easy to forget basic foundational principles. These four articles should serve as important reminders of things that you hopefully already know.

Megan McArdle set the internet on fire with After 45 Years of Birthdays, Here are ’12 Rules for Life.’

The White Coat Investor shares 10 Reasons I Invest in Index Funds. It’s an excellent primer for those new to index investing and a great reminder for the rest of us.

The Vanguard blog shared Performance report: Vanguard funds outperformed over long run. We are not paid cheerleaders for Vanguard. This is simply a demonstration of the impact of fees over time. The lesson applies to any low-fee, index dominated investing approach that limits management fees, turnover costs, and taxes.

Mark Trautman deconstructs the 8th wonder of the world in the article Harness the Power of Compounding.

The Power of A Good Story

I’ve been studying the stories of a variety of people who have achieved financial independence quickly.  The biggest difference between those that pursue financial independence and retiring early (FIRE) and those that follow the standard path is the story we tell ourselves. An upcoming documentary, “Playing With FIRE,” hopes to introduce the concept of FIRE to a wider audience. Creator Travis Shakespeare shares a desire to change the world by inspiring more people to create a different narrative in this Choose FI podcast interview.

Mr Money Mustache shared the story of software engineers doing good (and still getting paid) in public service with An Interview with Matt Cutts: Can the Government Grow a Money Mustache?

Finally, I had the opportunity to share my own early retirement story in a fun interview with Joe Anderson and “Big Al” Clopine on the Your Money, Your Wealth podcast.

[Contributing Editor Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. Now he draws on his experience to write about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? You can reach him at]

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Disclosure: Some links on this site, like the Amazon links, may be affiliate links. If you click on one of these links and buy from the affiliated company, then we receive some small compensation. The modest income helps to keep this blog going. Affiliate links do not increase your cost, and we only use them for products or services that we're familiar with and that we feel may deliver value to you.

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Note: Stuart Matthews of Pralana Consulting and Can I Retire Yet? are engaged in an informal technical collaboration aimed at raising general standards for accuracy in retirement modeling. We have no business relationship, no compensation arrangements, and no commercial intentions together.

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  1. Kevin Knox says:

    Hi Chris –

    Great resources as usual – thanks!

    Todd Tresider does an outstanding job of cutting through the frothy hype about both the stock market and cryptocurrencies but I was more-than-a-little disappointed that you have to sign up for a paid course with him that isn’t even available yet to get access to his solutions to the pending crisis. At least he’s well-aware that it’s going to be decisive to have assets outside of plain vanilla stock/bond/real estate allocations; the same cannot be said of the Financial Samurai post which at the end of the day isn’t much more useful than filling out the standard brokerage risk assessment questionnaire.

    Far more valuable than either of these sites – and this is a site that I’ve made Darrow aware of but that you may not know about – are the portfolios and other tools found on the Portfolio Charts web site. It is a quite amazing one-of-a-kind resource for looking at how portfolios have actually fared over time – i.e. not just Sharpe ratios and drawdowns but how it would have been to actually live with various allocations through market crises and peaks. For early or conventional retirees there’s an especially valuable feature where you can look at maximum safe withdrawal rates and drawdowns over any time frame.

    One thing that is abundantly clear in looking at these allocations is the most successful ones include either a significant allocation to gold (20-25%) or achieve favorable risk:return ratios through high allocations to treasury bonds coupled with a smaller slice of the most volatile (and highest return) equities a la Larry Swedroe. The Golden Butterfly, Larry Portfolio and Paul Merriman’s Ultimate Buy & Hold are good places to start on this site, and I should also warn that many people (including more than a few savvy investors on the Bogleheads) have gone down the rabbit hole (fruitfully, mind you!) for hours playing around with the data here. Have a look – perhaps an interview with Trevor or at least a feature on this site could be a future feature here.

    • Kevin summed up my exact thoughts on Todd Tresider’s article! Don’t make me read 1,000’s of words about how the market is overvalued only to then ask me to sign up for a course to get your thoughts on what to do about it. That was pretty frustrating. (BTW, I generally agree with his points about the value of the market.)

      • Chris Mamula says:

        Kevin & Matt,
        Thanks for reading and providing your feedback. I personally think that both Todd and Sam are really smart guys and I’ve been reading their stuff for years. I don’t always agree with either of them (or anyone for that matter), but I find that each of them challenge me to think at a higher level in general and I thought each article had interesting insights. The reason that I like Todd’s work in particular is that he generally doesn’t try to give simple answers and tell you what to do. Instead, his work challenges me to think for myself and think at a higher level than I had before. Different strokes for different folks. Again, thanks for reading and providing your feedback.

  2. Todd Tresidder’s article on bubbles was very interesting and it reinforced my wariness of investing my accumulated cash in stock funds at this time. Have you altered your investment portfolio at all based on his opinion and his statement that “…the conventional investment approach to FI (low cost passive index asset allocation in paper assets) lacked adequate investment risk management for the current market environment.”?

    • Chris Mamula says:


      This is an interesting question. I think that many people agree that markets are overpriced. The $1,000,000 question then is what to do about it.

      For me personally, I have not altered the allocation of funds within my portfolio. However, I am taking efforts outside of my paper portfolio to start branching out into real estate investments (physical property, not REITs), investing in developing skills and a completely uncorrelated business income stream by working on this website, and keeping options open to return to work if needed as a physical therapist (as well as my wife continuing to earn some income) to help mitigate sequence of return risk and lower than normal future investment returns that I think are fairly likely due to the circumstances Todd laid out in his article.

      I don’t think there is a single one size fits all “right answer”. Every person has to make their own decision about how great risks are and what to do about them. Hope that helps.

  3. I will offer up another vote for best of the web in February-a series of posts by Dirk Cotton at the Retirement Café on the market, safe/constant/variable withdrawal rates and variable spending which is still ongoing. Dirk has done great writing on risk management in retirement, in my opinion, last year.

  4. Robert Nicholson says:

    Physician on FIRE hit the nail on the head. My daughter lightly rear-ended a medical van. There was $500 damage to the van. We were sued for over $150,000 by one person because my daughter was a college student on my insurance. I only carried $100K coverage so I went through POF’s pain for a long time until the insurance company settled. Like him, I could not get umbrella coverage during the suit. You need umbrella insurance.

    • Chris Mamula says:

      Agree 150% Robert. It does not protect against everything, but it is cheap, simple and goes a long way. Sorry to hear your family had to go through that situation.

  5. It was a pleasure to have you on YMYW, Chris. Let’s do it again for new perspectives after you’ve been retired for a while! And thank you for the great web-roundup. Kevin mentioned Larry Swedroe – he always offers well-researched best-of-the-web contenders on risk and returns too: (one of the reasons he’s a regular guest on our show!)

    • Chris Mamula says:

      Happy to talk anytime. It was a fun interview and I’ve since become a listener. Just heard Larry on recently and enjoyed his perspectives.

  6. Thanks for the highlight Chris!