“We Are All Part of the Lucky Generation That Happened to Be Walking the Planet When the Last Big Piece of the Stock Investing Puzzle Snapped Into Place.”

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

It makes perfect sense. You despise Greaney. You just won’t say that, so you blindly attack his work.

Do you know how many Google hits there are out there for “rob bennett” “millions of busted retirements”? Lots. And the cause of all those busted retirements? The 4% rule. Now, magically, you have no problem with it. 4%, 4.5%, whatever, it’s all good, let’s just get along.

Today you say “Greaney has destroyed millions of middle-class lives with his insanely abusive behavior.” Which is absurd, but it clearly shows your problem with him is personal. Until someone says it’s personal. Then the problem is back to the 4% rule.

I don’t despise John as a person even a tiny bit. I had a lot of good times with the guy. I never would have had those times if he had not started that Retire Early board. When I was starting work on the book that became “Passion Saving,” I asked John to be my co-author. Why would I do that if I despised him? This claim makes no sense.

And it’s not right to say that I blindly attack his work. I reviewed his retirement study when he published it as a report at the Soapbox.com site. I gave it a five-star review. I felt a little funny about doing that because I knew at the time (but had not come out publicly and said so) that he got the numbers wrong in his study. I rationalized what I did on grounds that his study was a significant advance on the retirement literature that was in place before he came on the scene. I still believe that to be the case. Peter Lynch was the manager of the Magellan fund. He was a pretty big deal. Lynch said that the safe withdrawal rate was 7 percent. Greaney said it was 4 percent. Greaney was a lot closer to the mark than Lynch was. Not bad for a guy whose only qualifications to write about the subject were that he (like me) had figured out how to get his words posted to an internet site.

So I like the guy as a person and I admire his work.

But, yes, you are right that I believe that Greaney has caused millions of failed retirements. And that’s a big deal in a negative way jheust as the other stuff is a big deal in a positive way. What would you have me do, keep quiet about it? If Greaney were thinking clearly, he would want me to make that claim at every site on the internet. Once upon a time, he tried to help people achieve early retirements. If he knew that there was a study that was in the process of causing millions of failed retirements, he would want the flaws of that study exposed. The only reason why he doesn’t want that in this case is that the study in question has his name on it. That’s not a good reason.

We all make mistakes, Anonymous. I do. You do. Bogle does. Shiller does. Greaney does. Everybody does.

And we all live in communities. Different people have different sets of life experiences. And so they see things that we are not able to see ourselves. If they are our true friends, they help us to see our mistakes earlier than we would otherwise see them so that we can correct them sooner and cause less harm with them. That’s what I did with my friend John Greaney. I pointed out his mistake while also noting his good work, giving him an opportunity to correct the error before it caused him any significant embarrassment. And I did it in the most gracious way possible. I suggested that John and I work together developing what became The Retirement Risk Evaluator, the first safe-withdrawal-rate calculator that contains an adjustment for the valuations level that applied on the day the retirement began. John could have had his name on that calculator. His site could be the most popular and most important personal finance site on the internet today. He chose to get on this dark path that he is on today instead. I advised him against that choice. In the strongest language possible.

I like the guy. I appreciate his contributions. I 100 percent oppose the acts of self-destruction and the acts of destruction of millions of other middle-class people.

Do I have a problem with someone saying that the safe withdrawal rate is always 4 percent or always 4.5 percent or whatever? I have an INTELLECTUAL problem with it. I don’t believe it’s accurate. I believe that the 36 years of peer-reviewed research showing that valuations affect long-term returns is legitimate research. So I believe that claims that the safe withdrawal rate is always the same number are false claims. False claims about a number that many, many people are using to plan their retirements do serious, serious damage in this world. I don’t like to see millions of people suffering failed retirements. So, yes, I make it my business to speak out about those false claims. I would like to see the entire world move on to Valuation-Informed Indexing, so that we would never again have to worry about people making those false claims or falling for those false claims and ruining their financial futures by doing so.

But none of that changes the reality that those false claims are being put forward by human beings and that human beings make mistakes from time to time and that the people making these false claims have also helped us all in very important ways and that they have earned our respect and affection by doing so. Am I a perfect being? I was a Buy-and-Holder on the morning of May 13, 2002. I now say that Buy-and-Hold is a big pile of smelly garbage. I was either very, very wrong on the morning of May 13, 2002, or I am very, very wrong today. So I think it would be fair to say that it is a logical impossibility that I have gotten them all right. If I get some of them wrong, it might be a good practice for me to evidence a measure of charity toward the good and smart people whom I come to conclude are getting some of them wrong in this realm. You think?

I think Greaney is wrong. I think Bengen is wrong. I think that I have a responsibility to say so. Partly to myself. Partly to the millions of middle-class people who are in the process of seeing their lives destroyed. And partly to my friends Bill Bengen and John Greaney. So I say what I believe. And I offer precisely zero apologies for doing so. The one time during this saga where I did something wrong was in those three years from May 1999 through May 2002 when I did not possess the courage to speak out even though I suspected that the numbers in Greaney’s study were in error.

We all should be saying what we truly believe in the discussions that we hold on the internet about how stock investing works. That’s how we learn together. Learning together is a wonderful and amazing thing. It is the entire freakin’ purpose of our boards and blogs. If we truly have reached a point where our mistakes are so horrible to contemplate that we just cannot bear to permit honest discussions anymore, we should just shut down every investing discussion board and blog. Any discussion board or blog that does not permit honest posting is a corrupt enterprise. I want no part of such boards or blogs. Not this boy. I would be truly grateful if you could try to find somebody else.

The human race was not put on Planet Earth knowing everything there is to know about how stock investing works. We figured out some things over the years. By the time that 1981 came around, we knew a lot but we were missing one huge piece to the puzzle — it hadn’t yet clicked for us that valuations affect long-term returns. Now we know. We are all part of the lucky generation that happened to be walking the planet when the last big piece of the stock investing puzzle snapped into place. My job is to spread the word. Knowing for the first time how stock investing works in the real world helps every last human being on the planet. It is a win/win/win/win/win, with no possible downside. I am going to get the job done. I pledge you that much. As Elvis once put it, if you don’t believe I’m going , you can just count the days I’m gone.

My preference is to do this wonderful work in union with my many Buy-and-Hold friends, good and smart people for whom I feel much respect and affection and gratitude. But you know what? I don’t make decisions for my Buy-and-Hold friends. They have free will. They get to make their own decisions. I will accept with sadness the reality if they elect to follow a darker path. These sorts of things happen in this big old goofy world of ours from time to time, I have been told. I cannot force you to do anything that you do not care to do, Anonymous. I wish you well in all your travels, in any event.

Love is the answer. Re that one, I am 100 percent sure.

Take good care, man.

Rob