How to have
10 Million By Retirement
Don't Retire Until You Have $8 MILLION!!! 😂😂
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you now need eight million saved for a
modest retirement jeez my goodness
i love these articles i have not read it
yet i haven't read it yet so we're going
to read it together here a number of you
have sent this to me
oh sean langlois voice whatever that
guy's name is
um i guarantee you all sean's big lip
guarantee i've uh
on occasion i'll follow some of his
posts and uh
anyway so let's read this from market
watch the dateline uh but let's say the
17th day the 18th so yesterday
all right let's see who we got here you
might want to hold off on winnebago
the four percent rule has long been used
as a guideline to determine how much you
should be able to
withdraw from your retirement account
but there's a stark
uh reality check for the man behind the
popular
financial samurai blog oh i did a video
on him
a long time ago um
oh boy all right so let's keep reading
this we'll read that article let's uh
read what market watch says and uh we
might jump into another video for the
financial samurai
i kind of look at the video i did on
that because i took it to task because
it was bad
uh he explained to marketwatch that the
outdated rule was established back
in 1998 by a group of professors at the
time of the 10-year bond yielded five
percent
it did not establish in 1998 dude it was
in 1994 by bill banging come on
i went to dunkin donuts uh he's gonna
say the trinity study well that the
predecessor to the trinity study was
bill bennett at least a credit
a tribute to the right guy that actually
takes me off um
you know bill banging is the author of
the four percent rule
not sorry about my hair i haven't
showered yet haven't shaved haven't done
nothing
not to attribute the right person uh for
the for the uh
the initial thought process a whole idea
of safe withdrawal rates
uh that bothers me quite a bit actually
because you know i talk about my man
uh ty bernicki uh over and i can't
remember but he had written the article
in the journal for financial planning in
uh 2005 about the reality retirement but
he attributed that to
some professors from 1999 off top man i
can't remember their name
who is the first to expose what happens
to retirees as they age that they spend
less
uh so i attributed to tae bernicki who
attributed it to these professors but
either way tiber nicu is the first
person to engage
to get into the mainstream jonathan
clements from the wall street journal
took that and tried to bash ty bernanke
over the head and
look i'm not saying like jonathan
clements was being that punk he was just
saying
well most likely coronavirus most likely
uh
this is a because thai is that because
people are running out of money
unless they consume less just without
any evidence at all it's just
speculation but you know jonathan
clements was the wall street journal
has a british accent so ty bernicki some
dude out of milwaukee wisconsin
who's the uh who are you gonna believe
of course everyone's gonna believe the
british guy from the wall street journal
unfortunately
uh fast forward 15 years and tybernicki
has uh without question been proven
correct
and jonathan clements is now making
money i don't know if he still is
uh being on the board of directors for
uh creative planning making one percent
of
who charges one percent a year i like
creative planning i want to be very
clear
as a registered investment advisor
creative planning is one of the better
ones
by far and away by far and away i have
friends over at creative planning well
what was my friends
who say you're bashing i said no i'm not
i'm not i don't think people should pay
for asset under management fees i think
that you should charge a financial
planning fee
you got to do what you got to do but
that's not gonna make me put my
handcuffs on and say
i don't think people should pay a fee
even if the way you guys are doing it is
right and you what you offer
the end of the day though paying an
asset under management fee is a
significant destruction of wealth to the
clients that
is just is no debate on that you should
not do that
and i will continue to say that as long
as i have a mic
and a bill to talk shaved unkempt or not
anyway so let's go back to this so um
all right here we go so not to attribute
the four percent rule to bill banging
ticks me off
uh and i'm i wonder if that's due to
ignorance and if it's due to ignorance
of
uh how this rule came to be uh i find
that frightening frankly all right
uh so therefore you could withdraw four
percent without any fear
of running out of money uh when you
could earn
therefore of course you could draw four
percent therefore of course you could
draw four percent without any fear of
running out of money
when you could earn one percent more
risk-free okay so you're talking about
the bond average the 10-year bond
average okay gotcha well i agree with
that but
but now that interest rates are hitting
rock bottom man they're just
do these people not know blanchett
weight foul
hell back in 2015 wade fowler was
writing about this saying the 3.2
percent rule
now you can use a 0.5 rule as a safe
withdrawal rate once you've reached
retirement or financial
independence uh he said drawing more
than a few virtual spit takes from
readers the financial
samurai laid out in this table uh five
percent bond yield four percent
uh say withdrawal rate four percent
three point two three percent okay uh
here's a ten year bond right here at
point
well it's actually point seven so point
five six
um the four percent rule in 1998 was
around eighty percent of the ten-year
bond rule so that's what he's still
using he's still
saying the 10-year bond uh if you're
going to use about 80 percent of that
um that's what you get for your ability
to withdraw
all right whatever or you can use 0.5 as
a stretched net worth target to find out
how much net worth and what if i got
that other financial samurai article
from old sean here over at
financial samurai yeah
it was uh i i want to we'll go back to
that let's tell you what hold on just a
second well let's keep reading this then
we'll go back to the article
i did on financial samurai it was about
these people in new york city that's
what it was
um who didn't i remember that now like
okay i don't know if i still have access
it's gonna be tough to find that video
all right let's keep going sorry
ah let's see to find out how much net
worth you need to declare financial
independence multiply your desired
annual expenses by 200 if you want to
live off 40 000 then
then your stretch net worth goal is 8
million
he also took a deep dive into the
numbers in a recent blog post
although the 0.5 rule may sound extreme
it's based on financial reality reality
today
2020 is very different than 1998
inflation is much lower and risk asset
returns will structurally be lower for a
while as well
further you've got to account for a
potential bear market when that's what
the freaking
the whole point about the safe
withdrawal rate already accounts for the
bear market dude
it's already in there
he went on to apply the unsettling rule
to his own situation
and as he's aiming to generate 300 000 a
year in passive income
as two unemployed parents uh amassing 30
million to 40 million net worth
appears next mission impossible however
the four the point five percent rule has
provided a new net worth target to shoot
for
all right that's just stupid all right
for more check out slip blog along with
all the moons and grooms in the comment
section when one reader
pretty much summed it all and said no
never could retire at the 0.5 percent so
why read your red page anymore we just
work till we die
uh this guy's responses that might be
the point to pay for the massive
stimulus
the federal and the central government
want americans to work longer and deport
and pay more taxes all right well
whatever
um let me see if i can't find that
dude's article hold on
that's the whole thing silly let's see
what kind of comments we got here
silly is silly does uh laugh a lot if
you have 8 million why would you
own 10-year bonds well that doesn't i
don't think having 8 million
would discount your ability to own bonds
if he plans to 100 move to 10-year bonds
on the day he retires and his numbers
might make sense of course that'd be
okay uh 8 million divided by 25 years is
320 000 a year exactly
another 30 000 for social security and
be forced to live on only 350 000 a year
um this is like your this is like your
christmas articles of how much you
should tip your doorman
um that's a good way to put my man john
here
says uh 8 million divided by 25 is 325
to 320 000 a year that that's a good way
to look at but you're fake you're not
factoring inflation
who needs 320 000 a year to live on uh
just come on
um eight million effing ridiculous get
out of here yeah that's that's just a
weird
weird this guy um
all right so let's see if i can't find a
critical what is the inflation rate
we're reviewing bond usa
okay let's let's see if i can't find my
art my uh video i did hold on a sec
there's no way i'm going to find that
video because i've done so many and i
i just i can't remember how i titled
this too bad but uh it was about this
new york couple
who who was um i remember the lady was
like working
in the hedge fund or something like that
and i can't remember what it was but
it's just the whole thing was nuts man
if i can find it i'll put a link into
the show notes i'm just not going to
spend
i think i did in july of 2018. hold on
let me go back hold on a second i'm not
gonna
find it there was a uh one video i did
it says i call bs
on this article that might be it but i
just at this stage i have so many videos
to look through them all it takes too
much time so
anyway uh you don't need 8 million bucks
retire this whole 0.5
thing is stupid again remember safe
withdrawal rates
oh my goodness safe withdrawal rate
simply means that is the maximum you
could take out without ever having run
out of money
um why would you ever do that
it doesn't make sense to me i'd love to
hear your comments we'll see you
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