It’s All Fugazi
The current model for retirement and personal finance is such trash.
I can barely take another advertisement with some happy 60-year-old on his Harley Davidson or the white-haired couple walking on the beach holding hands.
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Is this really how it works? You just work for 40 years, take 2 weeks off annually, and then one day, you pretend you’re on a permanent vacation.
Oh, and live stress-free while withdrawing chunks of your savings, banking on an orderly death after 30 years…
I don’t think so. The 4% withdrawal rule is just another big lie from Wall Street to make retirement investors feel good about all this money they are throwing at their brokerage accounts.
It’s the strategy that was birthed in the mid-1990s, suggesting that you need a “nest egg” big enough to be able to withdraw 4% a year from during your permanent vacation, riding a bike up PCH in California, holding hands with your high school sweetheart on the beach, and filling in the boredom with the occasional sky diving trip, or maybe a few weeks in Napa.
Let’s think about this 4% safe withdrawal rate that the retirement industry pushes on its victims.
1. You have no idea how long you’ll live.
2. You have no clue what interest rates will be at.
3. There’s zero idea of the stock market volatility or the next deep-dive recession.
4. Your expenses??? Well, it depends, are you healthy or not in 30 years?
5. Any idea on the tax rate for 2035?
6. It also doesn’t take into account the currency and bond risk facing us all.
7. They always assume 100% of our “diversified” portfolio is with a stock broker.
This is why the idea of retirement needs to be canned and completely replaced with the focus on passive income so you can live your life with multiple streams of income and no debt!
Could you imagine the stress? Being 70 years old and destroying the wealth you’ve been building up for the past 3 to 4 decades… Not even knowing how long you need to stretch it out.
Instead of the 4% rule, I want to live by the cash flow rule, where the principal on my savings holds up and my dollar bills birth new dollars.
This is using hard assets like real estate, both direct ownership and non-public REITS, to deliver consistent income into our lives, to be saved or spent without ever worrying about withdrawing from the real wealth you’ve built up.
For passive income ideas, our favorites are PeerStreet.com, FundRise.com, and RealtyShares.com.
I suggest taking the new income and applying it directly into your life, either by rolling it into additional investments or using it to pay a few bills.
It’s important to condition our minds and expectations to have multiple streams of income.
If you want to be rich, then mimic the rich.
Governments Have Amassed ungodly Debt Piles and Have Promised Retirees Unreasonable Amounts of Entitlements, Not In Line with Income Tax Collections. The House of Cards Is Set To Be Worse than 2008! Rising Interest Rates Can Topple The Fiat Monetary Structure, Leaving Investors with Less Than Half of Their Equity Intact!
Protect Yourself Now, By Building A Fully-Hedged Financial Fortress!
This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.