Retirement Security: Exceptional Times Call For Exceptional Measures

Summary

• Take a ride with me in the “way back” machine if you dare.
• An introspective review can point out mistakes we can learn from.
• A retrospective treatment might point the way forward.
• Each stage of our investment careers represents an exceptional time calling for exceptional measures.

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Taking a ride in the “way back” machine is frightening for some folks. Some reflect on that “F” they got in math in third grade when the rigors of multiplication and division seemed just too much to absorb and process. Others reflect on the frustration and rejection of not getting invited to the high school prom, or are still upset about getting invited but not finding the perfect dress for the occasion.

Investors who experienced the fright of losing half the investment value of their portfolio at the depths of the 2008-2009 financial crisis have yet another reason they’d prefer not to revisit the past. It’s a form of denial, to guard the psyche against traumatic events that would cause more emotional trauma if we reflected upon them now.

However, if we can summon the courage, maturity and responsibility to revisit the various life stages of our investment careers, there is much we can learn. And once we confront these issues and use our own personal information and experience for our personal benefit, our investment outcomes can improve.

Think Back To When You Started Investing For Retirement

(Thinking Man - Rodin)

I don’t know about you, but as far back as the age of 11, I've been investing for retirement. For years before that, I sat beside my dad on Saturday mornings and entered closing prices on his stocks into an accounting book as he dictated them to me from the New York Times financial listings.

From these early beginnings, my interest in the markets was kindled and I religiously invested money earned every weekend playing in a rock 'n' roll band I formed with buddies called “The Islanders." Yes, this was before the Islanders Hockey team existed and stole our moniker.

Exceptional Times Call For Exceptional Measures

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I like to think of investing in behavioral terms. As a retired clinical psychologist, it comes easy to me. Now that behavioral finance has become a respected niche in the academic and finance worlds, some of my early thinking has gone mainstream.

The behavioral terms I refer to have to do with what I like to call the three phases of investing.

Phase 1

In the initial phase, when we're young, full of ourselves and think of ourselves as invincible and invulnerable, we also think like the folks in Lake Wobegon, created and popularized by Garrison Keillor. In this mythical town, "All the women are strong, all the men are good looking and all the children are above average."

Each of us thinks of himself as smarter than the other guy. We're all-knowing. When it comes to investing, investors just starting out are always looking to hit it out of the ballpark. Each investment starts with the hopes of it becoming the next Apple (AAPL), Google (GOOG, GOOGL), Facebook (FB) or even Amazon (AMZN). All we need to do is pick the right one and we'll have riches beyond measure. Unencumbered by any responsibilities except to ourselves, many of us invest large percentages of disposable income in the markets without a care in the world. And often this is done with very little, if any, time spent on researching the company itself. As a counter to this bravado, "Retire Smarter: FTG Portfolio Gets Defensive For The Next Big Crash, Part 2" is instructive.

Phase 2

Midlife brings a new set of challenges. Most of us marry, buy a home, start a family and take on the large responsibilities that go with them. The recklessness we exhibited in phase 1 transforms to a more sober assessment in phase 2. We've got to pay the rent (mortgage), have to feed a growing family, buy new clothes each month as the kids grow, earn enough to pay for gas, utilities, car payments, cable bills and the rest. And then there's the college tuition we need to save for, to help our kids have a better life than we had. Investing needs to take a backseat for a while, and any investing that we do starts to turn to more recognizable companies that provide the goods and services we use every day. No more dot-com eyeball counting fly-by-night companies for us.

This article extols the virtues of one such telecommunications giant we all grew up with and my response to a year-long downward spiral in price. (Spoiler alert: It goes into some detail of my analysis of why AT&T (NYSE:T) made for a good investment, down 22% from its 52-week high and yielding over 6% at the time.)

Phase 3

Before the final curtain comes down, the final phase seems to hit us over the head. All the questions come flooding in and keep us up at night. Have I saved enough for retirement? Will I run out of money? Will I go from a comfortable middle class existence to living in the gutter? How will I earn money in retirement to pay the bills when I'm too old or sick to work ever again?

Would You Do Anything Differently?

When I began investing my hard-earned rock 'n' roll money for retirement, I didn't know what I know now. Now that I've gone through phase 1 and phase 2, I'm solidly in phase 3. March 9, 2009, the bottom of the market crash in the financial crisis, represented a definite turning point in my investing career.

Earlier phases have taught me that capital gains can be extremely ephemeral. Here today, gone tomorrow. I've had my share of double baggers and triple baggers pricked just as quickly by market contractions, corrections and crashes. When all the air was let out of them, capital gains turned astonishingly quickly into capital losses. I have several lifetimes of capital loss carryforwards on my books from multiple crashes throughout the decades. It would have been helpful if the recent tax reform bill had raised the cap of allowable deductible losses from a measly $3000.00 per year above capital gains. Because they didn’t do that, I’m stuck with multiple lifetimes of deductions.

Knowing What I Now Know, What Would I Do Differently?

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I like to think of myself as someone who tries, whenever possible, to learn from my mistakes. But learning from them is just the first step. Applying those lessons in a proactive fashion is where the payoff really lies.

Hindsight is twenty-twenty. But here is what I did, and what I'd do differently 50 years ago if I knew back then what I know now.

As retirement came into my sights, it was apparent I needed a better method. I began to experiment at a propitious time - at the bottom of the last crash - with dividend growth investing. I needed a way to generate income from my assets to pay retirement expenses in the future, in a way that was more reliable and dependable than depending upon the daily whims of investors pricing stocks based on irrational exuberance, fear or panic, up one day, down the next.

It turns out that buying companies most of us are familiar with, like AT&T, that have long histories of paying and increasing dividends, is a very viable way to dependably fund our retirements. Knowing that it has shared a growing stream of dividends to shareholders for 34 consecutive years conveys a certain amount of assurance that this company is no fly-by-night. AT&T has proven its ability to transform from an old-line telephone company to an advanced telecommunications company that has its hand in almost everyone’s daily activities, from wireless phone services to internet provider to entertainment provider. Especially when stocks of companies like this are bought on sale.

AT&T is but one of many examples of stocks I bought at the depth of the financial crisis whose dividend yields had shot up way past their historical yield levels. Buying T in the low $20 range allowed me to capture what is now a 10% yield on cost because the company just raised the dividend to $2.00 annually per share. Sometime in the future, the companies I bought when no one else wanted them will be paying me 100% of my investment back, each and every year, in dividends alone.

Doing so brings the benefits of capital appreciation when the dust clears and markets recover, as well as accidentally high yield and income. The lower the price, the higher the income. It’s basic math, so simple even a gorilla could invest like this. A recent article, read by over 160,000 Seeking Alpha readers, illustrates this well: "Retire Smarter: Big Social Security Changes For 2018 And FTG Portfolio Supplements."

Have Your Cake And Eat It, Too

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I like cake. More than that, I like to have it and eat it, too.

I also discovered that the tail of these companies usually wags the dog. That is, strong companies that fit this profile will inevitably confer large capital gains as a side benefit to the income investor. So, even though my main focus is always first on the company's ability to pay and grow the dividend, the added benefit of capital appreciation always comes along for the ride, eventually.

In the case of AT&T, for instance, we bought more shares at $32.60 several weeks ago, and it rose from there to above $39.00, a rarefied range it had not visited in some time. Aside from the exceptional 6.01% yield we captured, that tail-wagging brought us over 18% capital appreciation as well.

This is a simple truth to understand as well. The dividends can't exist unless the company earns the money to pay them. The exception, of course, is miscreant companies that borrow too much in order to pay the dividend. With growing earnings comes a growing ability to not only pay the dividend but also to pay a growing stream of dividends. With higher earnings come higher dividends and higher stock prices. They are really the left hand and right hand of the handshake the markets offer us. In other words, you can have your cake and eat it, too.

Strategic Ideas For 2018

As the New Year begins, we'll be keeping our eye on many important developments that will surely have an effect on the markets and the stocks we all keep on our watch lists for opportunistic pricing.

The tax cut bill was signed by the president before he left for Mar-a-Lago for his Christmas break. It is widely recognized that it will positively impact stocks in several major ways:

• The reduction in the corporate tax rate, from 35% to 21%, will leave corporations with lots of extra cash. Some of the more solid companies will be able to pass some of those tax savings along to investors in the form of increasing dividends. There are several stocks on our watch list that stand to benefit. How about yours?
• This same infusion of cash from money not spent on corporate taxes will be available to companies, should they be so inclined, to buy back some of their shares on the open market. This will have two major impacts. With extra buying pressure, stock prices will rise. After shares are bought back, there will be fewer shares outstanding. Less shares outstanding means more earnings and dividends to go around for those smaller amounts of shares remaining. Those higher earnings per share will boost stock prices, and higher dividends per share will put more money into investors' hands.
• As consumers and ordinary workers, many of us will see little to no benefit from the tax cut. However, the silver lining for us is the plain and simple fact that as small investors, we stand to gain from increased stock prices and increased dividend growth.
• What's on your watch list to take advantage of these developments?

Back To Basics

It is this set of principles and a combination of methods and strategies that I employ for subscribers to my Seeking Alpha newsletter. My mission is to help followers, readers and subscribers to build, grow and protect dividend income for retirement, one dividend at a time, just as I've succeeded in doing for my own future retirement.

In order to share the methods and strategies I’ve learned with readers, I began writing a series on Seeking Alpha several years ago to publicly demonstrate the process of building, constructing and shaping a portfolio of dividend growth stocks. It has been my hope that it would serve as a model that readers could refer to in order to transition their own portfolios to an asset class of equities that could serve as the engine of income growth in their own phase 3.

Only 24% Of Workers Have Pensions Today

Today, only 24% of workers are covered by traditional, defined benefit pensions at work. The rest of us must fend for ourselves. Big corporations which used to provide pensions now save enormous sums by no longer offering them. Instead, the other 76% have been encouraged to find ways to fill the gap between the meager amounts we’ll receive from Social Security and the actual spending needs we’ll all have in retirement. This was the genesis of the Fill-The-Gap Portfolio.

The Fill-The-Gap Portfolio

The FTG Portfolio contains a good helping of dividend growth stocks, like AT&T. It was built with the express purpose of benefiting from this and other strategies.

Three years ago, I began writing a series of articles on December 24, 2014, to demonstrate the real-life construction and management of a portfolio dedicated to growing income to close a yawning gap that so many millions of seniors and near-retirees face today between their Social Security benefit and retirement expenses.

The beginning article was entitled "This Is Not Your Father's Retirement Plan." This project began with $411,600 in capital that was deployed in such a way that each of the portfolio constituents yielded approximately equal amounts of yearly income.

The FTG Portfolio Constituents

Constructed beginning on 12/24/14, this portfolio now consists of 21 companies, including AT&T Inc., Altria Group, Inc. (MO), Consolidated Edison, Inc. (ED), Verizon Communications (NYSE:VZ), CenturyLink, Inc. (NYSE:CTL), Main Street Capital (MAIN), Ares Capital (ARCC), British American Tobacco (BTI), Vector Group Ltd. (VGR), EPR Properties (EPR), Realty Income Corporation (O), Sun Communities, Inc. (SUI), Omega Healthcare Investors (OHI), W.P. Carey, Inc. (WPC), Government Properties Income Trust (GOV), The GEO Group (GEO), The RMR Group (RMR), Southern Company (SO), Chatham Lodging Trust (CLDT), DineEquity (DIN) and Iron Mountain, Inc. (IRM).

Because we bought most of these equities at cheaper prices since the inception of the portfolio, and because most of our stocks have increased their dividends regularly, the yield on cost that we have achieved is 7.67% since launch on December 24, 2014. Current portfolio income, including recent dividend raises by AT&T and Realty Income, and our newest addition of AT&T shares, now totals $33,187.86, which is $1750 more annual income than the previous month. This represents a 5.6% annual income increase for the portfolio.

When added to the average couple's Social Security benefit of $32,848.08, the $33,187.86 of additional supplemental income brings this couple annual income to $66,035.94. This far surpasses the original goal set to achieve a total of $50,000.00, which is accepted as a fairly comfortable retirement income in many parts of the country. That being said, this average couple now has the means to splurge now and then on vacation travel, dinners out, travel to see the kids and grandkids and whatever else they deem interesting.

Taken all together, this is how the FTG Portfolio generates its annual income.

FTG Annual Dividend Income

(Chart source: Author)

Your Takeaway

As discussed in “Even A Cloudy Crystal Ball Comes Into Focus Twice A Year,” paying too much attention to the everyday price swings, even with stodgy stalwarts like AT&T, can drive investors to drink. But for those investors willing to be more proactive in their investing, there is a lot to be said for putting favored stocks on a watch list and exercising the patience to wait, and then pouncing when others have thrown the stock out with the bathwater. Great capital gains and enormous growth of portfolio income can be accomplished. When AT&T’s yield shot up from its usual 5% range to 6.01%, we could not stand by passively and look that gift horse in the mouth. We acted, for ourselves, our readers who follow me and subscribers.

We all have mistakes we’ve made that we can learn from. The key is having the courage to look back upon them, learn from them and then act upon the information learned.

When we say “woulda, coulda, shoulda,” it means that we wish we would have acted, that we had the means and could have acted and that we understand, in retrospect, that we should have acted.

In regard to our recent successful AT&T trade, this learning translates into, “If AT&T trades down to a point where it yields 6%, I will buy it, I can buy it and I did buy it.”

At each phase of my investing career, I’ve learned many lessons and have tried to apply those lessons in the next phase. Now I try to share them with you.

Your Engagement Is Appreciated

As always, I look forward to your comments, discussion and questions. Have you been able to recognize discernible differences in your investment style as you’ve aged? Did you notice a transition from invincible investor to one with more patience, given to carefully researching your prospective investments? Do you occasionally contemplate taking a quick profit, or do you now understand that taking that profit will cut off your income? Please let me know in the comment section how you approach these situations in your own portfolio and how you arrive at your decisions.

Author's note: Should you be interested in reading any of my other articles detailing various strategies to enhance your returns on a dividend growth portfolio, you will find them here.

If you'd like to receive immediate notifications as soon as I write new content, simply click the "Follow" button at the top of this article next to my picture or at the bottom of the article, then click "Get email alerts."

Disclaimer: This article is intended to provide information to interested parties. As I have no knowledge of individual investor circumstances, goals and/or portfolio concentration or diversification, readers are expected to complete their own due diligence before purchasing any stocks mentioned or recommended.

Analyst’s Disclosure: I am/we are long ALL FILL-THE-GAP PORTFOLIO STOCKS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Comments

[Mary531]

good question.

[MissG808]

I have seen some negative articles about GOV and a potential dividend cut. Any concerns?

[Retired at 50]

I agree with you on all but 2 things:
1. On $3k deduction: You can deduct as much as capital gain from your capital loss carryover, not just $3k. If you do not have capital gain to deduct from, then it is correct that you can only deduct $3k.

2. On AT&T: I worked for T and its subsidiaries until I took my early retirement in 2012. T was a great company, but today is in a very difficult business. It won't go away anytime soon, but will to gnot rise to glory with its current businesses. Its businesses are very cap-ex (and even op-ex) intensive... it had been trying to grow by acquiring other telecoms service companies, but add more debt to its balance sheet in the process... The businesses that it acquired or in the process of acquiring are not growing businesses, but have their own problem. Sell some covered calls, if I were you.

[vantuckman]

Wurlitzer: Thank you for your service. Sincerely, V. Tucker Kirk

[Wurlitzer]

Van, I appreciate your comment..........

[Wurlitzer]

Many Americans ignore a military career because of its obvious drawbacks such as 1) long separations from family which severely strain marriages for many, 2) having trained killers with highly lethal weapons placing you in your sights, 3) possibility of crippling wounds, 4) public thinking most military are dumbbells who couldn't do anything else, 5) frequent moves making it very difficult to build up equity in a house and for the kids to develop friendships, 6) degradation of benefits when the shooting stops.

BUT

1) You have a reliable retirement system which can start after 20 years service, 2) increased retirement pay tied to cost of living increases, 3) medical and pharmacy benefits following you after retirement, 4) continual education opportunities while on active duty, 5) the pride of doing something for your country, 6) commissary and exchange benefits forever, 6) meeting and establishing relationships with a lot of very smart people throughout active duty and after retirement, 7) gaining an understanding of what the world is like by being assigned through the US and overseas - much better than watching "news" on the tube.

My 26 years in the Army were sometimes difficult but often filled with wonderful experiences I would never have been able to get in any other career. And, I have a secure retirement.

[jeteske]

Wurlitzer, I admire ground pounders who were always willing to step in front of a bullet - you have my vote and appreciation. I got to run and hide for 20 years in the submarine force - my family and I experienced your first 6 issues, and are enjoying the benefits of the last 7 issues. Very articulate description of our service. The good news is at 20 years plus one day I retired from the Navy and was lucky enough to have remained in one place (Charleston, SC) for the last 8 years of service...so we at least got started on paying down the house! I just transitioned to Tricare for Life, we live about 10 minutes from the local air force base and its wonderful facilities. I applaud your service...it's much harder to stand in front of bullets than it is going down a hatch and disappearing for months at a time.

[User 51425]

Speaking of Taxes:
Consider retiring in a "community property" state. If one spouse passes away the living spouse gets a 100% step up in basis on all co-owned assets (as in a revocable Trust). Residents of other states get a step up basis of only 50%.

Since I don't need all my dividends for living expenses, I have a large portion of my investment in Berkshire Hathaway (BRK.B) which pays no dividend to pay tax on, but instead increases in price.
When both spouses have passed away your children inherit at 100% step up in basis in all states.

[LD7071]

AZ Bill

Yes, BRK.B does keep the dividends. But as I learned the hard way, I don't
have any access to my share of the dividends. BRK.B does report the
dividends under intrinsic value but I am only eligible to get the
market price of BRK.B.

When the market price is up I like it a lot and I dont sell, In hard times
i.e. 2009 if I need my dividends I need to sell at rock bottom prices and
permanently leave behind my divis.

I have since bought underlying high yield public holdings of BRK.B.

[NorthStarAlpha]

George, I originally bought 50 shares of SO because you pointed it out. It now has a yield over 5%. I figure the business model of SO is stable and I can count on the dividend if not the share price. So I may add to my core holdings. The payout ratio is high. I will check on growth stability as part of my decision. Do you really have only 62 shares? T, otoh, is pivoting to entertainment, and this pivot strategy is too complex to ponder, so I shed 1000's of shares at 39. I might add some T back after their crystal ball clarifies. Or if T goes below 32.

[faradvisor]

Great article! Quite helpful I gotta say...

[faradvisor]

Great article! Quite helpful I gotta say...

[ricerokt69]

George. a fun story on ftg holding wpc, bought a1000 shares a16 and a 1000 at 17 plus 6000 more along the way , at $4,00 per year i know the current yield but dont have the skill set or time to figure the yield on cost but assume its nice , now hoping for a big bump when cpa 17 is merged into the reit, 10 11 12 14 15 and 16 all were a fun experience to watch unfold, What do you expect the increase to be when the next merge takes place perhaps this year, thanks if you see the question and have an opinion.

[Buddhasmiles]

George - are you holding on to GOV?

[Cuip99]

I have many of your selected issues but not all of them. All of my investments produce cash dividends like XOM, KO, BP, F, GE, JNJ, NYLD, VLO plus a few preferreds. The point is they produce cash income. And I am retired but unlike a lot of others I have two pensions, Military and SSN plus I get VA Compensation. So most of my dividends get reinvested in selected stocks. I am well diversified with annuities, paid of up house, real estate fam income and mineral investments. Life insurance is paid up participating. I am at relatively low risk and thus concentrate on cash income from investments.

[Neil 81]

George, I hold OHI in my monthly based income profile which has st of the stocks that is recommended by FTG. I am concerned for OHI. I am confused as it is not doing good based on the issues of the tenants. The dividend has been frozen for a year . Things are not looking good . I have been holding OHI for long time . But want to have your advice before I make my own choice.

[RamblingMad]

I think the most difficult part with investing is figuring out what to buy. As the market has become more and more expensive, the margin of safety has shrunk. It’s much more difficult to make gains with more recent purchases.

I could buy the index, but it’s already at ridiculous highs. How much of a future return can I expect?

What I have found is that the more I invest the more I realize what I don’t know.

I do expect gains to be down for the next decade, but I’m not sure how to adjust for that reality. We seem to have good decades followed by bad ones. And I’m really bad at timing.

The problem today is finding adequate margin of safety, where it’s likely rates will go up 2pts.

[Wurlitzer]

To me, the most difficult part of investing is figuring when to sell. As a result, I have held some real clunkers which would have brought a profit had I not procrastinated, and sold some which had been vacillating wildly when they recovered to their peaks - and then rose substantially more after I sold them. At times, I have thought that the best strategy is to sit on one's hands. At times.

Now when a stock seems to have made a better-than-expected price, I won't liquidate most or all of the position, just take some off the table.

[RamblingMad]

Selling is easier for me, but I do make mistakes.

When I look at my positions, I think about the future cash flow those stocks will generate. As long as I feel good about their ability to generate good growth relative to price and interest rates, I stick with them.

When the price gets too expensive relative to the cash flow, I will sell. For example, I held NVDA for a little over a month. It went up over 20%. That irrational bidding made no sense to me, so I sold. I had originally bought them because I liked their moat around machine learning.

I also bought DIS around the same time I bought NVDA. I’m down about 6%. However, I think, when you take into consideration their future cash flow post the tax cut, the valuation looked ridiculously cheap. Now, I know they’re having problems with ESPN, but I have to think this company can figure it out. And I’ll give them a year or two to do it. If they don’t, then I’ll exit my position.

I also have a huge position in MO, which is down 10% YTD. They have a lot of regulatory headwinds and a business model that is slowly shrinking its volume. I’d like to exit half of my position, but right now it’s actually priced at near the discount dividend model price. I should be adding, but my position is already too big. I could have sold some early last year, but I’m not in any rush.

However, I really don’t know what I want to buy now, so I’m slowly accumulating cash on the sidelines.

What’s your criteria to sell?

[#CloudsOFLie]

T is a terrible stock

[Mr. Money]

At 12/31/17, T had cash of $50 billion to debt of $165 billion

[Mr. Money]

That is my metric for telecom stocks. T’s dividend is safe. Verizon is under stress with a low cash to debt ratio. I own T and sold Verizon.

[champfully]

your article analyzing your long term experience is a welcome breath of fresh air in an industry with hot air guidance. .. your not fickle but the market is... since we are all smarter than each other we believe in cheerleading our hopes and insightfulness to validate our brilliance by immediate hyper preformance...pointing this physcology out highlights that the majority of small investors are missing discipline that is more certain than market fear n euphoria cycles... I know too like you cause we are smarter, good looking, funny and scared of the reality of out living our money!

[trevcast]

I am approaching retirement in about 5 years and have just sold off one of my small companies for good money, retirement money. I do not know how so many live off of a 4 or 5% Dividend!! Remember , it is taxable income so that does not work for me. Yes, the stratedgy depicted here is sound enough, but looking forward with real estate prices historically high and the market historically high, we all know we are near the top and the Fed is rising rates! All these stocks will fall in pricing and did anyone ever think that GE would stop paying a dividend? Yes, there is risk in everything we invest in today, but i feel Treasuries, corporate bond and even munis in the years to come will be paying alot better yields. At 8-10% I can retire comfortably and the key is being able to lock into those yields. Yes, you will have to wiat and in the meantime there are many good investment options that historically that have done well [ eaton vance tax managed call writing funds ] look at this fund what it did for return in the WORST OF TIMES [ 2008 ] and it's consistency. I dont know about all ofm you but 5% doesnt cut it for me and I certainly am not going to chase ATT etc... here at their all time highs etc..... Bottom line, there are many options present to us all and the market and our economics are changing rapidly. The good old ways are no longer secure and dependable looking forward.........Give me a long term 8- 10% treasury and that is fine with me. By the way, when inflation gets ugly as it will soon, you can buy non callable bonds...........it is all a waiting game and its time to look at investing for rising interest
rates...........my two cents!

[User 46598876]

why on God's green earth would you want to invest in GEO group? How do you sleep at night? I ask that not only ethically due to the company being one of the largest operators of private prisons with a reputation for some of the worst and most unsanitary conditions, but financially since said terrible and unsanitary conditions have led and continue to lead to massive multi-million dollar lawsuits and judgements against the company and the forced removal of the company from several jurisdictions in which it operates...

[TGC004]

I enjoy reading your articles and learning from your insight. While about 10 years from retirement, I have been saving since I was about 8 and investing since I was 24 or so.

Once my wife and I started a family (3 children 4 years apart each) we really started socking it away. 401k, Keogh, IRA, 529s and also taxable investments that generate income. The goal was to produce an income stream in our taxable accounts that would pay for college for each of the kids solely from income so as not to deplete any of the corpus. This way when we were done paying for their education, we would still have the core investment and the future income !!!

Something I never heard from any investment professional that I talked to and I talked with many.

So while our oldest child attends a very expensive private college, and the income stream only covers about 85% of the $65k/yr tuition bill, the whole experience isn't going to put us in the poor house. Our next child who goes to school in 2019 will most likely be at a less costly place which will let us reinvest some.

End of the day - I think we share some common themes and goals. Keep up the great work!