Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:
So you consider it a higher priority to keep Posting on the internet versus providing financial security for your family.
I’m doing both at the same time, Sammy.
People love learning more about how stock investing works. Shiller’s “Irrational Exuberance” was a best-seller. The man was awarded a Nobel prize. On the day when I put forward my first post on the Valuation-Informed Indexing topic (this was before I even had a name for the new investing model), there were hundreds of posters saying that that was the most exciting post that they had seen in years at the Retire Early board at Motley Fool.
So there is huge interest. And there i virtually no competition. We are 35 years down the road from when Shiller published his “revolutionary” (his word) research. Yet we have not until today settled the most basic questions. The question of what the safe withdrawal rate is is pretty darn basic. But I put up my post questioning the validity of the Buy-and-Hold retirement studies on the morning of May 13, 2002, and no one has a found a valuations adjustment in those studies for all these years and yet not one of the studies has yet been corrected. There’s a goldmine here waiting for anyone with the courage to pick up the hunks of gold and carry them home.
The only reason why I am not a multi-millionaire today is that this is such a huge advance that we are having a hard time as a society making the transition. Change is hard and this one means rewriting the textbooks that people use to advise people how to invest for their retirements. People are today afraid to discuss the most basic questions because they know that it will hurt the feelings of lots of good and smart people for them to do so in a clear and convincing way.
I am doing that. I am doing it in as kind a way as I possibly can. But I am also trying to be as clear and convincing as I can. And every sign that I have seen has told me that there will be a pile of gold waiting for me on the other side of the rainbow. We all benefit from making it to the other side of the rainbow. My Buy-and-Hold friends more than anyone. These are good and smart and hard-working people. They want to be giving sound investing advice. They are trapped in unfortunate circumstances at the moment. But that is very much what they want. I know because I have talked to a good number of them re how they feel about all this.
There is only one way to jump into a pool, Sammy. You have to make the jump. I have made the jump. That’s what we all need to do, When we all do that, there will be no problems anymore. We just need to work up the courage. I believe that the next price crash will scare us enough that a sufficient number of us will work up the courage. But we will have to wait to see how it all plays out to know for sure, you know?
I reject out of hand your idea that moving from a discredited model for understanding how stock investing works to the first true research-backed model is a bad financial move. I feel that I was blessed with an amazing opportunity. I have not earned a dime from this for 15 years now. So in a surface sense you certainly are right. But people were right in a surface sense to tell Steve Jobs not to drop out of college to make computers. Sometimes there is more than a surface story to be told. I believe strongly that this is one of those times.
I hope that helps a bit, my good friend.