In researching for a video for 2021 I revisited the data for the all-stock strategy as presented in this video and noticed a mistake. I'm not entirely sure how it happened as upon running the simulations again all the other metrics still come out accurately, but it seems that something wonky happened with the financial independence accumulation metrics specifically. In the video I mention that based on the data someone investing in a large cap blended index fund similar to what the S&P 500 is would've achieved financial independence in 45 of the 93 scenarios using a 15% savings rate. This group of FI accumulations metrics is incorrect as are the average Time to FI that are related to them. Below are the correct metrics: 15% Savings Rate Achieved FI: 23/93 (25%) AVG Time to FI: 63 Yrs 30% Savings Rate Achieved FI: 59/93 (63%) AVG Time to FI: 42 Yrs 50% Savings Rate Achieved FI: 76/93 (82%) AVG Time to FI: 22.5 Yrs 70% Savings Rate Achieved FI: 86/93 (92%) AVG Time to FI: 12 Yrs As I said I'm not sure what happened to throw this group of metrics off without affecting the rest (all return figures, crash figures, and even the safe/perpetual withdrawal rate figures came out the same as I laid out in the video so I'm pretty certain they are accurate), but I wanted to let you guys know the correct figures once I found out there was an error.
Thank you for your videos! I spend most of my time on UA-cam watching your playlist! Is it possible to start a playlist on how to read companies financial statements/reports to be able to understand and analyze the best investment?
I have a long enough time horizon so I'm comfortable having just about 100% in index funds. I think as I get older and closer to REAL retirement and not just quasi-early retirement/self employment I'd probably start looking into a bit of a different asset allocation. Great video as always!
Only thing I would point out is this assumes a single deposit and not dollar cost averaging throughout down periods. So even if a new ath isn’t hit, there is still gains to be made while buying in at the lows
Great video! Curious to know if you're using tax sheltered accounts like a Roth IRA during these simulations and if it makes a difference in the outcome on the average years to financial independence?
Is the historical data in the video based on a pure SP500 portfolio? You say a 'large cap blend index fund similar to SP500' around 1:30, but just wanted to clarify. Thanks
70% savings rate is not crazy. I save 75 to 80% and live a "comfort mode" life - I'm still an employee, I live in South East Asia but earn my salary in Euro. However I just started in the accumulation phase. If I knew about this earlier in my life then it's a different story :)
James, I'm currently in the process of making them more user-friendly and uploading them to my Patreon page (www.patreon.com/NextLevelLife). They aren't all there quite yet, but that's where they will be made available for download. They will be available for the investor tier and above.
I watched a video that talked about how investors aren’t bad stock pickers that it’s actually the negative behavior that leads to underperforming the market which video is it I can’t find it
I started doing the all stock strategy with all new money Though I do have some bonds in a mixed mutual fund I will not be adding anything more to it. Unless I have some physical problem the provents me from working I don't really intend to fully retire. I intend to keep working so I have something to do between vacation trips. People who keep working a job that they enjoy on average live a lot longer than people who retire and do nothing. Since I will have an income I will be able to ride out any bad times in the market by just cutting my spending.
Sounds like a good plan! I'm glad to hear that you've found something you enjoy doing enough to do it even after reaching an FI target. That's what we all should strive for :)
@@NextLevelLife not everyone goes into a profession that they would not mind doing for the rest of their life. Most people just do what will pay the bills best.
Bitcoin is a zero sum game. It's speculation that people will pay more in the future. It's actually worse than zero sum if you include taxes and fees. That is not to say that the Bitcoin craze won't continue. Stocks are not a zero-sum game. They have real sales and real assets. Stocks are investments not speculation as a whole.
In researching for a video for 2021 I revisited the data for the all-stock strategy as presented in this video and noticed a mistake. I'm not entirely sure how it happened as upon running the simulations again all the other metrics still come out accurately, but it seems that something wonky happened with the financial independence accumulation metrics specifically. In the video I mention that based on the data someone investing in a large cap blended index fund similar to what the S&P 500 is would've achieved financial independence in 45 of the 93 scenarios using a 15% savings rate. This group of FI accumulations metrics is incorrect as are the average Time to FI that are related to them. Below are the correct metrics:
15% Savings Rate
Achieved FI: 23/93 (25%)
AVG Time to FI: 63 Yrs
30% Savings Rate
Achieved FI: 59/93 (63%)
AVG Time to FI: 42 Yrs
50% Savings Rate
Achieved FI: 76/93 (82%)
AVG Time to FI: 22.5 Yrs
70% Savings Rate
Achieved FI: 86/93 (92%)
AVG Time to FI: 12 Yrs
As I said I'm not sure what happened to throw this group of metrics off without affecting the rest (all return figures, crash figures, and even the safe/perpetual withdrawal rate figures came out the same as I laid out in the video so I'm pretty certain they are accurate), but I wanted to let you guys know the correct figures once I found out there was an error.
Thank you for your videos! I spend most of my time on UA-cam watching your playlist!
Is it possible to start a playlist on how to read companies financial statements/reports to be able to understand and analyze the best investment?
Interesting video and a great analysis 😀
Thanks! 😃
I have a long enough time horizon so I'm comfortable having just about 100% in index funds. I think as I get older and closer to REAL retirement and not just quasi-early retirement/self employment I'd probably start looking into a bit of a different asset allocation. Great video as always!
Do you mean 100% stock instead of index funds?
@@soymaxxing equities in general. Mostly index funds but individual stocks as well
Only thing I would point out is this assumes a single deposit and not dollar cost averaging throughout down periods. So even if a new ath isn’t hit, there is still gains to be made while buying in at the lows
Can you do a US Total Market Index all stock strategy video?
All in on Stocks, I Like that.
It definitely has a solid track record for returns over the long haul :)
Great video! Curious to know if you're using tax sheltered accounts like a Roth IRA during these simulations and if it makes a difference in the outcome on the average years to financial independence?
Great information, but I really recommend that you slow down the information rate per second, to allow for better information digest.
You can slow down the play back speed yourself. Very simple on the 3 dots upper right, select speed.
Fascinating work and analysis on this one - thanks for the video 🙌
My pleasure!
I know it’s been a year since this came out but would you do the same thing for a small cap value us index?
I love potatoes p.s.for the alghorithm
Could you discuss and critique the Relative Strength strategy?
Can you analyze the Golden butterfly portfolio? Really curious about how this fares vs these other portfolios, thanks!
Golden butterfly is on my list of strategies to analyze!
hey I wonder if you can add guard rails to the old stock portfolio.
You certainly could!
Is the historical data in the video based on a pure SP500 portfolio? You say a 'large cap blend index fund similar to SP500' around 1:30, but just wanted to clarify. Thanks
Diversifying to global stocks would stabilize the portfolio
70% savings rate is not crazy. I save 75 to 80% and live a "comfort mode" life - I'm still an employee, I live in South East Asia but earn my salary in Euro. However I just started in the accumulation phase. If I knew about this earlier in my life then it's a different story :)
Geographic and factor diversification smooths out the results.
How do I get access to the spreadsheets you mentioned in your videos
James, I'm currently in the process of making them more user-friendly and uploading them to my Patreon page (www.patreon.com/NextLevelLife). They aren't all there quite yet, but that's where they will be made available for download. They will be available for the investor tier and above.
I watched a video that talked about how investors aren’t bad stock pickers that it’s actually the negative behavior that leads to underperforming the market which video is it I can’t find it
Great video
Thanks, Dave! I'm glad you enjoyed it :)
I'm usually fine watching videos on 2x speed, but this is a little hard to follow even at 1x. Quality content though.
I started doing the all stock strategy with all new money Though I do have some bonds in a mixed mutual fund I will not be adding anything more to it. Unless I have some physical problem the provents me from working I don't really intend to fully retire. I intend to keep working so I have something to do between vacation trips. People who keep working a job that they enjoy on average live a lot longer than people who retire and do nothing. Since I will have an income I will be able to ride out any bad times in the market by just cutting my spending.
Sounds like a good plan! I'm glad to hear that you've found something you enjoy doing enough to do it even after reaching an FI target. That's what we all should strive for :)
@@NextLevelLife not everyone goes into a profession that they would not mind doing for the rest of their life. Most people just do what will pay the bills best.
Really appreciate it if you wanna the camel
What about Bitcoin? It outperformed the stock market and any other asset class.
Bitcoin is a zero sum game. It's speculation that people will pay more in the future. It's actually worse than zero sum if you include taxes and fees. That is not to say that the Bitcoin craze won't continue.
Stocks are not a zero-sum game. They have real sales and real assets. Stocks are investments not speculation as a whole.