As you may recall, 2000 was not an opportune time to invest.
I also assumed that you committed to either of the two basic Couch Potato portfolios and that you started with a 4% withdrawal and adjusted that dollar figure for inflation each year. Starting with $100,000, your first withdrawal after a year would have been a bit over $4,000.
Did you go broke?
In this scenario, you’d be:
- Retiring just as the Internet bust was starting.
- Getting run over by the 2008-09 financial crisis.
- And ending with the coronavirus crash through the end of March.
In spite of all that, you wouldn’t be broke.
Neither would you have become fabulously rich. But that isn’t the goal of Couch Potato investing. The goal is to do better than the vast majority of managed portfolios by being simple and having dramatically lower costs.
Here are the dollar results. Invested in the most basic Couch Potato portfolio allocation, 50% total U.S. stock market and 50% total U.S. bond market, $100,000 provided a rising…