This article was first posted April 6, 2006.
Morningstar's "Diehards" board is one of the legendary personal finance forums on the web. It was chartered to host discussions about Vanguard founder Jack Bogle's approach to investing using low-cost index funds. Several published authors like Larry Swedloe (The Only Guide to a Winning Investment Strategy You'll Ever Need and Rick Ferri (All About Asset Allocation) regularly post there. The esteemed Dr. William Bernstein (The Four Pillars and The Intelligent Asset Allocator) even makes an occasional appearance. Three laymen with a long history on the board (Taylor Larimore, Mel Lindauer, and Michael LeBoeuf) recently published a well-reviewed book describing the Vanguard-centric index investing style favored by most board participants (The Boglehead's Guide to Investing)
Passion Saving author Rob Bennett came to the Morningstar boards several months ago to promote his vanity published book. Forum moderators quickly removed these commercial links to the Passion Saving web site since they were in violation of Morningstar rules. Chastened, but not deterred, Mr. Bennett stuck around to promote his ideas on stock market timing as an investing strategy and the merits of retiring with a 100% fixed income portfolio. Posting under the screen name "hocus", Bennett filled the Morningstar boards with long-winded posts devoid of logic or meaningful content for several months until he was exposed as a fraud in this groundbreaking thread. Here are a few highlights:
post #19. Why It Matters
I handed in a resignation from a six-figure paycheck at age 43 so that I could pursue my dream of living the life of a freelance writer of non-fiction books. My wife is a stay-at-home mom. Timothy is six and Robert is four. I'm counting on the long-term returns on my savings (supplemented by the small earnings that I believe it is realistic to expect from my writing and publishing work) to finance a nice middle-class lifestyle for four people for some time to come.
26. Reply to hocus
"Resigning" with a stay-at-home wife and two small children to pursue a pipe dream without having sufficient assets hardly seems like something a rational "cautious" person would do.
34. The Cowboy Wore Suspenders hocus| 03-31-06 | 03:43 PM
It sounds to me that you are at the same time both too cautious and too much of a risk-taker, Mel.
I'm entirely different. I aim to be at the same time both too much of a risk-taker and too cautious.
40. Rob's Mystical Musings (#34)
After seeing your flurry of lengthy posts with silly titles the past few weeks, which make interpreting the Bible look like a walk in the park, I guess I shouldn't be surprised by your "mystical mystery" #34 post, which says absolutely nothing. Is there a prize to the Diehard who first figures out what your posts are supposed to be saying? I give up on the guessing game; I'll leave that to others whose plain English questions you don't even seem to want to address. You're very close to having the dubious dinstinction of being the first (and only) person on my "Ignore" list.
46. This was the first mistake
Rob, I hope you have a boatload of money saved up, win the lottery or hit it big as a writer. As a guy who's been kicking around the publishing world almost 30 years, I can tell you that the odds are clearly not stacked in your favor.
Walking away from a six-figure paycheck with financial responsibilites such as yours doesn't impress me as being so much lightweight as insane. Dreams have their place but dreams don't pay bills. I've read a lot of self-help books and written a few. I get the impression you've been reading authors who tell you to throw caution to the winds and live your dreams because life is short. The authors I know who practice that philosophy fall into two categories: the very few who are lucky and the very many who are broke. Being broke isn't a sin, but it's damn sure no virtue either.
As for staying out of the stock market for long periods of time, that just compounds the risk of running out of money. You've already taken one bad risk by quitting your day job prematurely. I think an intelligent asset allocation plan and the discipline to stick with it is what you need.
56. False Reports Don't Help Anyone
One of the things I have planned for when some time opens up is to write a Research Report that will go through my plan line by line and through my budget item by item. I'll start with the first budget that I ever wrote (January 1992) and go through the changes that Boo and I made on a year-by-year basis, what sorts of expectations we employed and how those worked out and all that sort of thing.
I think there's benefit in that sort of thing. But it has to be done properly.
There have been lots and lots and lots of false reports of what is in my plan and what is in my budget and what my withdrawal rate is and what I am invested in and all other sorts of things. I don't see how spreading false information helps anyone at all.
61. Rob belisama| 04-01-06 | 10:48 PM
I tried to be accurate. I used figures from a post I saw and it had quotes from you.
Some of the links don't work but the ones that do seem accurate.
It was clear that you started with $400,000 and a house paid off. You say in your My Plan post that you need $10,000 every year to make the plan work. You say by early 2003 you will be one year behind on the $10,000.
Two simple questions. 1-How much have you made from your writing since 2001 when you say Soapbox "went under". 2- In the My Plan post you say you need $30,000 a year but then in the 2005 update, you say it is $38,000. Does that mean that you need $18,000 now from writing?
If you call yourself an expert, you have to be willing to explain your plan so that there is some sense to it. Especially if you say there is bad information out there. Correct it. You have time to write a lot of words here, so give us something that shows how your plan is successful.
64. Rob, I thought you forgot
Interesting that you just decline to clarify what was supposed to be wrong with the characterization of your investment situation. I am more of a "buy and hold" guy but I am interested in "dump and wait" especially if it safely allows you to take a 7-10% withdrawals as a young retiree.
71. Answers we won't get from Rob
You got out of stocks in 1996 and seem to be quite proud of some message about financial freedom that you are bringing to millions of middle class workers. But you retired at 43 with $400,000 in CDs and tips, an amount inadequate to sustain financial independence. You talk about withdrawing value from your $300,000 house as it appreciates but I can't see how you can do that. Also you had a budget of $30,000 when you retired and planned to earn $10,000/year from writing but now you have a budget of $38,000 with the same assets. I think Belisama has had some good questions about how this is supposed to work. You have failed to answer them and it turns out that there is a board devoted to questions that you failed to answer at John Greaney's web site. You claim misrepresentation of your personal finacial situation but you are the one who brought it up (as an example of new thinking?) and you are the one who declines to specify the natureof the error.
-------------------------------End of excerpts from Morningstar Diehards thread--------------------------------
If you spend a few minutes reviewing this thread, you'll get a good idea of the credibility that Passion Saving author Rob Bennett has as a self-proclaimed financial advisor and career counselor. There's a reason that most people in the 'Retire Early' community regard Bennett as "irresponsible and a persistent liar."