Quote:
Originally Posted by Enoch Root
Definitely, but 1982 was the bottom, so that doesn't seem like a very good comparison. Better to use long term historical averages. And by that metric, the US market - specifically the S&P500 - is quite high as you say, but not as insane as it would look against 1982.
The rest of the market, BTW, and the rest of the world equity markets, are not at all expensive, by way of their multiples. It's just those damn 100 or so, ridiculously priced tech stocks.
Anyway, sorry, back to retiring on $40k/year.
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Oh for sure, it just happens that 40 years ago was 1982. I completely agree there are bargains elsewhere, even extreme bargains (Hong Kong has profitable businesses trading less than net cash).
However since firecalc uses US market data, coming at what could be the end of a 40 year period of significant multiple expansion will skew the results, as more of the periods in the simulation end at high multiples.
I also completely agree with ggg. $40k pretax with a paid off house is probably comfortable. It's not around the world first class caviar and champagne, but you could probably swing a shoulder season cruise every year or two if that was a priority. (Or golf regularly, or whatever)
But if rent or a mortgage is coming out of that $40k it's a different story, and things would be very tight.