The Great Safe Withdrawal Rate Debate--
Banned at Motley Fool!

The Great Safe Withdrawal Rate Debate has proven itself the most controversial series of investing discussions ever held on the internet.

It also has proven itself the most exciting and the most important series of investing discussions for those seeking financial freedom early in life.

The question at the center of the raging debate is -- Do changes in valuations affect long-term stock returns? The answer to that question, beyond any reasonable doubt, is--an emphatic "Yes!"

That's important news to the middle-class investor. Why? Because it changes everything we have been told over the past 20 years about how to invest successfully for the long term. If the long-term income stream provided by a stock purchase varies with changes in valuation levels, then stocks do not always represent the best value proposition.

The findings of The Great Safe Withdrawal Rate Debate led to development of the Valuation-Informed Indexing approach to investing, described in articles posted to another section of this web site. The articles in this section chronicle the debate itself.

You can't read about Valuation-Informed Indexing at Motley Fool--discussion of it there has been banned! You can't read about Valuation-Informed Indexing at the Early Retirement Forum--discussion of it there has been banned! You can't read about Valuation-Informed Indexing at the Morningstar.com site--discussion of it there has been banned!

Why is this approach so controversial? Because it is rooted in the common sense idea that stocks, like all other assets, offer a better long-term value proposition when purchased at reasonable prices than they do when purchased at extremely high prices. At every place at which I have discussed Valuation-Informed Indexing (which I developed with the help of the hundreds of Financial Freedom Community members who offered constructive input during The Great Safe Withdrawal Rate Debate before further discussions were banned), I have seen two reactions to it. Ordinary investors see quickly the merit of the idea of taking valuations into account, and are eager to learn more. Big Shots who have written books or published studies or calculators or web sites see this new approach as a threat to their status as Grand Poohbahs and cannot stand the idea of others talking about it and learning about it and further developing the concept by doing so.

This is a learning site. We are interested in learning what it takes to win financial freedom early in life, and we are not worried about offending the Grand Poohbahs by exploring new ideas, especially ideas holding as much promise as this one. From what we have learned about Valuation-Informed Indexing over the course of the past four years, it appears that this investing approach can help the typical middle-class worker to win his or her financial freedom years sooner than would otherwise be possible.

Interested in learning more about what we have learned and about how we came to learn it? Please read on. This page provides brief descriptions of and links to articles at the PassionSaving.com site relating to The Great Safe Withdrawal Rate Debate.

Overview of the Great Safe Withdrawal Rate Debate
Article #1 on The Great Safe Withdrawal Rate Debate -- The article provides background on the investing discussions that were held in the Financial Freedom Discussion-Board Community in recent years and that led to development of the Valuation-Informed Indexing investing strategy.

20 Insights from the First 54 Months
Article #2 on The Great Safe Withdrawal Rate Debate -- Brief descriptions of the major insights developed during the early chapters of our investing study, with some jokes mixed in to make it all go down nice and smooth.

Investing Discussion Boards Ban Honest Posting on Valuations!
Article #3 on The Great Safe Withdrawal Rate Debate -- Thousands of community members have expressed a desire that honest posting on the safe withdrawal rate topic and on other valuations-related topics be permitted at the various Retire Early boards.

Retirement Planning Tools Don't Work
Article #4 on The Great Safe Withdrawal Rate Debate -- This article explains why many retirement planning tools provide dangerously flawed numbers because they fail to make adjustments for changes in retirement-start-date valuation levels.

Why Knowing the True Safe Withdrawal Rate Matters
Article #5 on The Great Safe Withdrawal Rate Debate -- The Financial Freedom Community has devoted close to four years of effort to study of the question of how properly to calculate the safe withdrawal rate and how to make use of our findings to develop insights into how to invest more successfully for the long term. The purpose of this article is to explain to newcomers to our movement why so many of us view it as so important to calculate the safe withdrawal rate accurately.

What Scott Burns Says About Safe Withdrawal Rates
Article #6 on The Great Safe Withdrawal Rate Debate -- Dallas Morning News columnist Scott Burns was one of the first personal finance journalists to dare to tell the truth about safe withdrawal rates, noting in a column that "a growing school of thought believes future withdrawal rates [for portfolios with high stock allocations] should be reduced to reflect expected lower future returns" and that adjusting for the effect of valuations would "knock another 1.5 to 2 percentage points off the safe withdrawal rate," frequently quoted as being 4 percent in now-discredited conventional methodology safe withdrawal rate (SWR) studies.

Community Comments on The Great Safe Withdrawal Rate Debate
Article #7 on The Great Safe Withdrawal Rate Debate -- What folks were saying at the Motley Fool board in the early days of our historic investing discussions.

Does John Greaney Believe His Own Safe Withdrawal Rate Claims?
Article #8 on The Great Safe Withdrawal Rate Debate -- The Financial Freedom Community discredited the safe withdrawal rate claims put forward in the study published at the RetireEarlyHomePage.com site during the investing discussions collectively referred to as The Great Safe Withdrawal Rate Debate. Yet John Greaney to this day has not corrected the study. Does Greaney himself believe that the safe withdrawal rate always remains 4 percent regardless of how high or low stock valuations go?

Warning: I Talk to Goons
Article #9 on The Great Safe Withdrawal Rate Debate -- A doctor needs to get his hands bloody dealing with disease to come to know what he needs to know to treat it.

Does Mel Lindauer Run Vanguard?
Article #9 on The Great Safe Withdrawal Rate Debate -- When will John Bogle pick up the telephone?