Elements of Success

I have had a tremendous amount of success. Why me? Why weren’t all of my findings discovered years ago?

Factors

1. The Problem

I have focused on early retirement and safe withdrawal rates. Surprisingly, this gives me two important advantages:

a) I had the right timeframe for the data. Traditional safe withdrawal rates depend primarily on what happens in the first 10 to 15 years. This is the intermediate term. This is in sweet spot between the dominating randomness of the short term and the dependability of the long term (30 years or more).

b) I have focused on real rates of return, not equity premiums. Recent calculations verify that the equity premium should be considered as a tradeoff after the fact, not as part of an original calculation. I look at real, annualized, rates of returns over specified time periods. My calculations provide excellent visibility.

2. The Technical Background

a) Most of what you see is typical of a system engineering product. This includes a relentless search for hidden flaws, the continual translation of technical findings into plain English, the identification of commonsense explanations, a continual effort to look at an issue from many vantage points, the establishment of baselines and alternatives, an emphasis on the reliability of conclusions and the comfortable application of probability and statistics with real life data.

b) My unique background, especially during my earliest years, gives me one strong advantage: I am not intimidated by nonstandard statistical problems. I was never impressed with the technical issue of overlapping data. Those who are happiest with never observing anything in the historical record latched on to this issue. There are more than enough data to draw statistically significant conclusions. All that it takes is a careful reflection about the degree of randomness, its sources and a reasonable analogy to standard statistical tests.

c) My background in electronics engineering fits in well with the kind of number crunching that is needed for my research.

3. My Customer

If it were not for Rob Bennett, I would not have done any of this research. I would not have built this site. Rob Bennett is my customer.

Rob Bennett is a real person with real needs who asks questions that are important in real life. He asks good questions. He asks useful questions. He provides the feedback that I need. He is a surrogate for others. He provides balance, emphasizing (correctly) the human element.

Having a customer gives me a tremendous advantage. Finding something that works is important. This separates me from those indifferent researchers who mindlessly report not seeing anything and who are satisfied to conclude that nothing works. If something doesn’t work, I want to know why it doesn’t work. I make the effort. I want to correct it.

Have fun.

John Walter Russell
December 13, 2006