Retirement planning and the Share Economy

Financial Planning articles are all similar; either how much to save based upon some assumptions. Or once you have saved and are ready to retire, how much one can sell from one's assets. The assumptions vary slightly so we can get slightly different percentages (from four to six percent of one's assets). on Lieber just wrote an excellent, but typical article.

In a share economy, one doesn't sell assets, there is no stock market, stocks or shares don't have a value. Investments return their real returns. If one owned a share of a pistaccio farm, one would look at the revenue and if one wanted to procrastinate, one would talk to a agricultural economist who would go over assumptions based upon the expected prices for pistaccio, water, fertilizer, etc. And, perhaps one might throw in some assumptions for climate change and how that would effect yield.

If one owned a share of an airline, one would make estimates and predictions of the demand for air travel and the cost of fuel, because one's income is a share of that ticket revenue minus the second. (The employees are also on a share economy so they make the same predictions as to their "wages.")

This is because one's pistaccio income is the gross price for the pistaccio's that one sells minus obvious immediate inputs such as the fertilizer, water rights, etc. Obviously, there might be long term investments for either, such as new airplanes, maintenance on the farm shed, etc. These are separate investments which would reduce the share. Of course, many owners of the airline would be familiar with it and plow their income back in increasing their share while those who needed income, or just simply did not think the long term prospects for the airline industry were that goood, would take their share of the gross profit. The difference might be made up by new investors earning cash, assuming indivduals thought the long term prospects for the airline were better than for other possible investments. (That is how capital gets reallocated.) If individuals did not think the long term prospects were good, they would not play income back in or invest, and the buildings on the pistaccio farm would eventually fall down and the planes would be declared not skyworthy by the FAA. That is the market reallocating capital to more productive uses.

But one's decisions, assumptions are based on the real world, not the "market."