The Financial Samurai Podcast

I had the pleasure of speaking with Bill Bengen, creator of the "4% Rule" for retirement planning. Bill has been a reader of Financial Samurai for many years and has always been courteous in the comments section when I write about safe withdrawal rates. So, I figured it was time we had a chat to clear up some misconceptions.

For those unfamiliar, the 4% Rule, developed by Bill in the 1990s, suggests that traditional retirees (around age 65) can safely withdraw 4% of their retirement portfolio in the first year—adjusted for inflation in subsequent years—without running out of money over a 30-year period.

Here’s what I learned from Bill that helped clarify the 4% Rule:

1. Not a Hard “Rule”: Bill considers the 4% Rule more of a guideline than a strict rule. He encourages flexibility with withdrawal rates, though it’s often treated as a rigid rule in the public eye.
2. 4% Isn’t Actually Aggressive: Contrary to popular belief, Bill’s data shows that 4% is actually conservative. In his study of 400 retirees since 1926, only one retiree (who retired in 1968) had to stick to a 4% rate to avoid running out of money. The rest withdrew an average of 7% without depleting their portfolios.
3. Adjusting for Inflation: The 4% Rule isn’t static; it adjusts with inflation. For instance, if you start with a $1 million portfolio and withdraw $40,000 one year, you would adjust that amount by inflation the next year to $44,000. This means your withdrawals fluctuate with your financial needs and economic conditions.

You can e-mail bill at [email protected] if you have any questions. 

Posts mentioned:

Misconceptions About The 4% Rule With Bill Bengen

The Proper Safe Withdrawal Rate

Finishing Rich In A Low Return Stock Market Environment

If you enjoyed this episode please rate, share, and susbscribe. Every review means a lot as every episode takes hours to record, edit, and produce. Thank you!

To expedite your journey to financial freedom, join over 60,000 others and subscribe to the free Financial Samurai newsletter. Financial Samurai is among the largest independently-owned personal finance websites, established in 2009.

Donald Trump will be the 47th President of the United States, this time with JD Vance as his Vice President. Let’s explore how this new Trump presidency might impact your finances.

We’ll look at how Trump’s policies could affect stocks, real estate, bonds, venture capital, and even our careers. Overall, Trump's return is generally seen as positive for investors.

However, since investing in risk assets always carries uncertainty, it's essential to align your investments with your personal goals and risk tolerance.

Related posts:

What Trump Means For Your Finances

Financial Planning Through Changing Presidencies

Being Even Greedier While Others Are Greedy

Stock Market Performance Under A Democratic Or Republican Presidents

Suggestions:

If you’re looking to diversify your investments beyond stocks, check out Fundrise. Fundrise manages over $3 billion in private real estate investments, with a primary focus on the Sunbelt region, where valuations are generally lower and yields tend to be higher.

As the Fed enters a multi-year cycle of interest rate cuts and with Trump as president, real estate demand may increase in the coming years. Given Trump’s background and success in real estate, I wouldn’t be surprised if he introduces buyer incentives and policies to support heartland regions, which were key in his election victory.

I’ve personally invested over $270,000 with Fundrise, and they are a long-time sponsor of Financial Samurai.

Finally, you can join 60,000+ readers and sign up for my free weekly newsletter here.

Investing in alternative assets has become an increasingly popular way to diversify beyond traditional stocks and bonds. Wine and whiskey, in particular, are gaining traction due to their potential for strong returns, resilience during economic downturns, and rising demand.

In this episode, I speak to Anthony Zhang, CEO and Founder of Vinovest, a platform that enables individuals to invest in fine wine and whiskey. We'll talk about why wine and whiskey have performed well and why they are a growing asset class. 

I also talk to Anthony Zhang about bringing awareness to spinal cord injuries, after his own accident, and how we can help. 

If you'd like to explore Vinovest's offerings, you can sign up here. 

Related post: Sip, Savor, Profit: Investing In Fine Wine And Whiskey

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If you enjoyed this episode, please rate, share, and review. Every podcast takes hours to produce. Your support means a lot!

Finally, if you want to achieve financial freedom sooner, join 60,000+ readers and sign up for my free weekly newsletter. Everything I write is based off firsthand experience because money is too important to be left up to pontification.

If you have children, you likely want to provide them with the best education possible, which may include helping them get into a top college. Along the way, you may come across college consulting services and wonder how beneficial they really are.

In today's episode, I speak with Alice Chen, Founder of BrightStory Admission Consulting, to find out more about the service. 

Alice is a daughter of immigrants and grew up in the Boston area. Alice’s father was a research scientist and her mother an auditor, so Alice grew up thinking that those who studied and worked the hardest would succeed.

But after attending Stanford and working in TV journalism, Alice quickly learned that IQ was not the most important factor for workplace (and life) success.

Alice created BrightStory to offer the mentoring she wishes she had as a teen. Alice also created Happy Asian Woman, a newsletter focused on wellness and living a meaningful life, and she incorporates these values into her coaching work.

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If you enjoyed this podcast, I'd appreciate a share and a positive review. It helps keep me motivated to finding new guests to share with all of you. Every podcast takes hours to record and produce.

To expedite your journey to financial freedom, join over 60,000 others and subscribe to the free Financial Samurai newsletter. Financial Samurai is among the largest independently-owned personal finance websites, established in 2009.

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Related posts:

The Wide Implications Of The College Admissions Scandal

An Asian American's View On Affirmative Action

Is Private K-12 Worth It?

What If You Go To Harvard And End Up A Nobody?

After four years, the Federal Reserve has finally cut the Fed Funds rate by 50 basis points, bringing the target range to 4.75% - 5%.

Expectations point to another 50 basis points in cuts for 2024 and a total of 100 basis points by 2025. Fed Chair Powell remains optimistic, stating the economy is 'very solid' and sees no elevated risk of a downturn.

In this episode, I'll break down what this rate cut means for real estate, stocks, and—most importantly—your retirement, focusing on the impact to your safe withdrawal rate.

Get A Free Financial Checkup Of Your Investment Portfolio

If you have over $250,000 in investable assets, take advantage and schedule an appointment with an Empower financial advisor here. Complete your two video calls with the advisor before October 31, 2024, and you'll receive a free $100 Visa gift card. 

After a great run in stocks, another recession could hit. It's always a good idea to get a second opinion about how your investments are positioned, especially from a professional who sees other people in your situation all the time. 

Related posts:

Maximizing Real Estate Returns In A Multi-Year Interest Rate Cut Cycle

Increasing The Safe Withdrawal Rate For Retirement At The WRONG Time

Join 60,000+ others and subscribe to the free weekly Financial Samurai newsletter here. This way, you'll never miss a thing. 

I speak to Ben Miller, CEO of Fundrise about investing in real estate during a multi-year rate cut environment. With the Federal Reserve finally cutting rates in September 2024 after raising them in 2022, real estate should have a nice tailwind for a couple of years. 

Main Theme: Interest rates are the most significant driver of real estate prices, surpassing operational improvements. Apartments are likely to benefit the most by the end of 2025.

Diversify Your Real Estate Investments 

If you're considering investing in private real estate, take a look at Fundrise. They manage private real estate funds focused on the Sunbelt region, where valuations are lower, and yields are higher. Fundrise specializes in residential and industrial real estate, offering investors diversification and passive income potential.

Currently, Fundrise manages over $3 billion for nearly 400,000 investors. I've personally invested over $270,000 with Fundrise, and they’ve been a proud sponsor of Financial Samurai for years.

Related post: Maximizing Real Estate Returns In A Rate Cut Environment

Join 65,000 others and subscribe to the free weekly financial Samurai newsletter here. 

I speak with Khe Hy, who spent 15 years on Wall Street and became one of the youngest Managing Directors at BlackRock at just 31. He earned up to $2 million a year—then he quit!

His journey mirrors mine in many ways, though he earned significantly more. I thought it would be fascinating to understand why he chose to walk away from such wealth.

Could you give up $1-2 million a year in your mid-to-late 30s? I don't think I could. But then again, I sometimes forget just how miserable and unhealthy I felt working on Wall Street.

He now spends time with his family, writing his Radreads newsletter and recording The Examined Life podcast.

→ The RadReads email newsletter and blog http://radreads.co/join → The Examined Life Podcast https://pod.link/1692585605

If you enjoyed this conservationed, I'd love a share and a positive review. Every review counts!

For those with over $250,000 in investable assets who want a free financial checkup, you can schedule an appointment with an Empower financial advisor here (https://www.financialsamurai.com/advisor). If you complete your two video calls with the advisor before October 31, 2024, you'll receive a free $100 Visa gift card.

With stock market volatility returning and a potential recession on the horizon, it’s wise to get a second opinion from a professional. Illuminate financial blindspots you don't know you have and better optimize your finances. The last thing you want is to be misallocated relative to your financial goals and risk tolerance. When you lose money, you ultimately lose precious time. 

Again, you can schedule your free financial consultation here. If you do not see a link copy and paste this URL in your browser: https://www.financialsamurai.com/advisor

The statement is provided to you by Financial Samurai (“Promoter”) who has entered into a written referral agreement with Empower Advisory Group, LLC (“EAG”). Click here to learn more.

Regards,

Sam

You can join 60,000+ others and subscribe to the free Financial Samurai newsletter here. Financial Samurai began in 2009 with the goal of helping readers achieve financial freedom sooner, rather than later. 

After 15 years of experimenting with and living an early retirement lifestyle, I've developed my Minimum Investment Threshold Formula to help determine when you can finally break free from a suboptimal job.

Once you reach this threshold, you'll have the option to find a more fulfilling job that pays less, take a sabbatical, go back to school, stay at home to raise your children, or even retire

Related post: The Minimum Investment Threshold Where Work Becomes Optional 

Recommended Resources:

Read How to Engineer Your Layoff to learn more about negotiating a severance package. When it's time to leave that dreadful job behind, try to negotiate a severance package instead of simply quitting. Since you planned to quit anyway, negotiating a severance only has upside. You could receive a severance check, subsidized healthcare, unvested stock and cash, job search assistance, and more. Plus, you'll likely be eligible for unemployment benefits, which aren't available to those who quit.

To build wealth through real estate, check out Fundrise. Thanks to 11 rate hikes since 2022, there are now more commercial real estate opportunities. With interest rates heading down, pent-up demand for real estate may be unleashed, potentially boosting prices in the future. Since real estate has lagged behind stocks since 2022, I expect its performance to catch up over time.

To achieve financial freedom sooner, join 60,000+ others and sign up for my free weekly newsletter.

In this episode, I speak to Jo Piazza, bestselling author of The Sicilian Inheritance, podcaster, and award-winning journalist. We discuss tradwives and its financial and social implications. 

Given that Financial Samurai is about achieving financial freedom sooner, being financially dependent on someone as an adult is the exact opposite of what I want for readers.

A tradwife typically denotes a woman who believes in and practices traditional gender roles and marriages. Some may choose to take on a homemaking role within their marriage or leave their careers to focus on meeting their family's needs at home.

According to Google Trends, online searches for the term "tradwife" began to rise in popularity around mid-2018 and reached high levels during the early 2020s.

If you enjoyed this podcast episode, please rate, review, share and subscribe. It helps us grow.

Related posts:

Financial Dependence Is the Worst

Not Having Kids Is Your FIRE Super Power

To increase your chances of achieveing financial independence sooner, join 60,000+ others and subscribe to the Financial Samurai newsletter. 

I've decided that my Home-To-Car Ratio guide is the most important pesonal finance guide for everyone to fall. After all, everybody needs a place to live, real estate is the best asset to build wealth for the average person, and America has a love affair with cars.

My Home-To-Car Ratio guide helps personal finance enthusiasts reduce their car spending and maximize their house spending in a practical way. By following my guide, more people will build more wealth than those who don't!

See: The Right House-To-Car Ratio For Financial Freedom

To invest in private real estate, take a look at Fundrise, my favorite private real estate investing platform. Fundrise was founded in 2012 and manages over $3.3 billion with over 500,000 investors. The firm focuses on residential and industrial properties in the Sunbelt, where valuations are lower and cap rates are higher. Take advantage of the demographic shift to lower-cost areas of the country. 

Personally, I've invested $954,000 in private real estate since 2016 to diversify my exposure and earn more passive income. I've invested six figures in Fundrise's Flagship Fund and Fundrise is a sponsor of Financial Samurai. 

Join 70,000 others and sign up for my weekly financial freedom newsletter here. If you do, you'll improve your chances of building more wealth.