This is something I noticed too: basing retirement plans off dividends is much easier due to the more steady nature. However, I still haven’t figured out:
I skimmed the previous posts and stumbled on this from early 2023:
Did you reach a conclusion on that?
I’d be thinking of options like taking it a bit longer, setting even clearer boundaries and see what happens, or just leave right away?
Congrats and all the best for the future!
I have a practical question: how do you balance the timing of dividend payments with cashflow needs, if at all?
FX-risk: just do as I do, spend all over the world many currencies.
Tax: Tax efficiency: the taxman wants his part, anyhow, forever. If you do not have taxable income they probably tax you as professional what would be even worse.
Check my mechanical dividend strategy: the market dividend part gets me more or less half of my cash flow tax free.
For my gusto there is too much money or money-like investments in Goofys portfolio. That helps to lower the volatility but loses value as money is guaranteed by state to lose value. I prefer the risk of falling stock markets every 4-6 years with a big chance to get back the value to the risk of inflation with no way to get it back. But then I own some real estate and therefor may stand the risk.
Ask Alpha Architects to create one, should be right up their alley. Perhaps mirroring the low-vol/high-dividend ETFs already available.
Move to Greece, 0% tax for UCITS ETF cap gains and their dividends, 5-15% flat tax on other dividends (depending on country of origin).
Classy n quality update and post as always, thanks and love ya Goof!
Any feelings/tinge of regret at this point that you pulled the trigger ~5 years “late”, according to the title of this thtread? 
Sort of 6 months in, and maybe you can feel that the freedom gained is so valuable or something. As I understand, it was not a financial necessity the last years, to attain a sensible SWR or similar.
To share my experience, I know the OMY (one more year) syndrome well, but only had about 2x OMY, and have no regrets, as it gave a better safety on the SWR and I can sleep better thanks to it.
Indeed, this seems like a conundrum.
As mentioned, part of my portfolio consists of dividend growers (the stock picking part of my portfolio has grown dividends 25% since 2021, which is a fair bit more than the USD has fallen against the CHF in that period).
My other strategy that I’ve only implemented in CAD and GBP (those are fast appreciating currencies for those not in the know … ) is to diversify into companies across the globe. It’s just damn harder to find an as investor friendly market as the US.
I’ve mentioned this elsewhere before on this forum (and admittedly perhaps it’s a little easier to embrace the thought with a large enough portfolio/cash flow): I feel very privileged given my financial situation and living in Switzerland. I’m thus ok paying part of my (dividend) income as taxes to help those less fortunate.[✱]
Funny you’re asking …
I reached the conclusion last year. A much admired (by me) co-worker retired and a new hire introduced corporate drama that contributed significantly to my decision to pull the trigger. It was either the full trigger or the 90% trigger that I am on right now, where fully remote work shields me from 95% of the new drama introduced. Almost seven months into this experience I’d say that this is what I can sustainably bear going forward.
Thanks!
This is the bright side of investing in US (and CAD and UK) companies: they pay their dividends quarterly (instead of yearly, like most CH companies), resulting in a steady cash flow over the quarters, with some variance through the months of the quarter.[$]
Here’s what the monthly dividend cash flow looks like:
I agree with my brain, I don’t agree with my gut. Maybe I’ll reach your level with a couple more years of steady cash flows steadily financing the cash flow needs of my family.
BTW, no personal ownership of any property (which, IMO, is kind of the ultimate bond?).
Awww … thanks!
Goofy blushes and tries to hide that tear creeping up in his left eye by seemingly scratching his cheek and stealthily wiping away the tear.
What a great question!
I actually had to think about this for a bit.
Like a long bit.
I believe with complete hindsight I regret not having pulled the – at least part time – trigger earlier. My son was entering his teenage phase relatively early, and it would have been beneficial for him if I was already more relaxed in my late years at Google and in my early years in my then 50% gig at my current employer.
However, admitting to myself that I am the risk adverse being that I am – ask me what could go wrong and I’ll give you 100 answers – I probably could not have walked this path any differently.
I guess: for people less chicken-hearted than me, pull the trigger as early as you feel comfortable? For the dark doubters in my alley: run the numbers one more time. Look at how the past few “recessions” have really dented returns (spoiler: they have not), ask yourself whether the next GFC is really around the corner (rare Goofy prediction: it is not).
✱ And yes, I am aware, the profits of companies (and therefore dividends) have already been taxed and producing cash flow by realizing capital gains would be much more tax efficient (but psychologically a lot more stressful).
$ March/June/Sept/Dec are the tides of dollars rolling in, Feb/May/Aug/Nov are the ebbs. Remaining months are somewhat in between.
I wouldn’t say I am risk-averse, but I am very sensitive to risks and manage to envisage 100s of things that can go wrong. Combine that with being a complete control freak, and I find myself ‘over-saving’ to take into account the worst of the worst case scenario.
But with recent health reality checks from friends, I had to acknowledge the more unpredictable health risks were much greater than the predictable financial risks which are not only less serious, but more easily dealth with.
Having real estate helps in that housing costs are already covered and real estate income is relatively stable - this reduces the income that is needed to be generated from the stock portfolio.
After trimming my more extreme positions, my dividend profile is remarkably stable:
Combine this with the real estate portfolio and it is more stable than expenditure profile and should look more like this:
And then think: you anyway have a salary while working and probably lumpy expenditure so some smoothing already happens.
I suppose normally, you keep a cash buffer and or credit buffer and as long as on average, the income coming in exceeds the expenditure going out, it will work out fine.
I was looking at a chart of USDCHF. Over 35 years it lost over 40% of its value against CHF:
That’s about 1.5% per year.
I think it’s even worse if you look at longer term charts.
However, as discussed elsewhere on the forum, I’m mainly[$] holding assets, not the currency.
Here’s what Gemini whips up when asked to draw a graph of the S&P in CHF since 1970:
Inflation adjusted:
See the disclaimer in the graphs produced. When looking at the Python code Gemini created to paint the graphs, it assumes a 4.3 CHF per USD rate for 1970, a CHF inflation of 1.5%, and then throws some random (small) deviations at the calculated data points to make the graph look slightly more wiggly.
Probably not entirely accurate, but directionally feels about right.
$ Though, admittedly, to the dismay of @cubanpete_the_swiss I also hold some money like assets denominated in USD.
Actually for the comparison the dollar did not even exist until 1971… it was just gold.
But anyhow, the currency fluctuation is minimal compared with the price fluctuation. Tradingview does not have that much data, but the trend is the same, 1:10:
The cliff-drop at the start is related to the Nixon shock. At first, I dis-regarded this as a one-off historical artefact, but then the more I think about it, the more I wonder whether what is happening today has similarities including:
What we are seeing with Trump could be as impactful as the Nixon shock: it’s practically a complete re-ordering of the financial/political/economic status-quo.
As such it wouldn’t surprise me to see:
We’re a little off topic to this … ahem, topic, … but anyway, I was tempted to reply with this meme
but I’ll restrain myself.
Not targeting you specifically, of course, but the fears you list and the suggested potentially “not surprising” consequences.
Narrator: "Famous last words by Goofy as the Tsunami described by @PhilMongoose is building up in the ocean out there while Goofy is sunbathing on the beach in his flip flops, still sipping on his Old Fashioned Nuclear Ice Tea[
] while the tide is rolling in, slowly picking up noise as the waves breaking seem to be accelerating …
Nuclear Iced Tea (according to Gemini):
Instructions:
Note:
Be warned, this is a very strong drink. It’s named “Nuclear” for a reason!
Warning supplied by Gemini.
At least for now, I would be really careful with LLM-generated graphs, even with the warning attached.
As you said, it’s simulated data, so there’s pretty much no value.
In case someone has any doubts, that plot is imagined bullshit.
For lazy people an approach is to buy multiple world ETFs with different dividend payment schedules. For example, buying the following three ETFs would give you monthly payments:
Link to screen: ETF Suche: ETFs finden & filtern
In another thread, you wrote
In your 2019 post, it’s some 4M of assets and expenses of 130k.
Serious question, did the expenses creep up that much? Or is it just spending more because you can?
And maybe that’s rounding errors, or your dividend strategy, but how do 4M in 2019, incl. additional income end up in only 5M now?
I’m curious if you could share what changed in your expense side and investment strategy.
only? expenditure at 180 per year is 4.5% withdrawal rate. assuming you get another few percent on top might get you up to 5M.
