After my post, The Proper Withdrawal Rate: 4 Percent Rule Is Outdated, caused a ruckus, I began to wonder why people argue so much on the internet. Arguing is exhausting and pointless. There’s no need to win a financial argument. Just get rich instead.

The last time I got into a financial argument must have been when I was in my early 30s. I thought I knew so much after only 10 years of working in finance. I was willing to battle with people who saw the world differently. How naive.

But as I’ve gotten older, I now just shrug my mental shoulders when there’s a financial disagreement. I do try my best to understand the person’s point of view. Goodness knows I have many blind spots. However, if I still disagree, then I move on. No big deal.

In the professional investment world, we are taught to always entertain the possibilities. As soon as you ossify your way of thinking, you expose yourself to tremendous potential loss. To get rich, you must try and see opportunity before others.

In personal finance land, the main thing you must focus on is whether your views and actions are making you richer or poorer. If you disagree with someone’s financial point of view, yet are getting poorer or are not keeping up with everybody else, then you should consider changing your ways.

Be flexible in thought. Otherwise, you’re just going to get angry as the world passes you by.

If you’re still apoplectic that I challenged the sacred “4% Rule” from the 1990s and introduced the new Financial Samurai Safe Withdrawal Rule, do not fret! Just because you can’t save 200X your annual expenses or don’t want to only withdraw 0.5 percent a year in retirement doesn’t mean you’ll never be rich. Let me share with you how to feel rich instead.

To feel rich consistently is even better than actually being rich. In fact, learning how to feel rich might be the biggest wealth hack of them all.

I define rich as earning a top one percent income of $1+ million or having a top one percent net worth of over $11 million. You may disagree, but if you make more or have more than 99% of the population, you are rich.

However, you can be rich and still be miserable because your spouse left you. You can be rich and still feel terrible because your children hate you for neglecting them growing up. Making $3 million a year is great, but due to tremendous job stress you hate your life. You may have a $20 million net worth and never feel rich because you sacrificed your health to amass your fortune.

Obviously, if you can consistently feel rich and actually be rich, then you’ve got the best of both worlds. But sometimes, we can’t have everything we want.

This article will share my ideas on how to feel rich even if you can’t get rich.

For those of you without cushy pensions, I’m sorry folks. The 4 percent rule is outdated. It is now unwise to follow the 4 percent rule as a proper safe withdrawal rate in retirement.

The Federal Reserve and the Central Government have made reaching financial independence and living off only retirement income more difficult. We should consider following the 0.5 percent rule instead. Let me explain why.

After sending out my weekly newsletter saying we should all be thankful to the Federal Reserve for bailing us out, a number of readers sent angry responses. Here is one of the more lengthy ones.

The Evil Fed And Government

The Fed is terrible.

They create debt, they print money, they weaken the dollar, and they create socialism. They also ensure there is an unhealthy power grab at the central government. We now accept that the central government is the babysitter, mother, and protector of us when we stub our toes financially, physically, or by other means such as a national disaster. 

The Fed has NEVER been audited. I’m sure you know that. It’s also a private business made up of private bankers that control our money supply.

Need some QE? Here comes the Fed with their massive printing press and voila! We have more money in the system. Need to artificially support the stock market? Voila! Here comes the Fed with massive money pumping and now we have industries that are protected by US tax dollars. 

So to me, this isn’t positive news because the elephant in the room needs to be fed. We are simply kicking that can down the road so we can continue buying all our toys, big homes, and make believe that everything the US government and the Fed are doing is good for us.

It’s only good for bankers. We are the sorry fools who have to pay the tax bill on 27 trillion in debt….and it’s still growing.

The median net worth for the middle class hasn’t changed for decades. Conversely, the median net worth for the top one percent has performed extraordinarily well during the same time period. Let’s explore the differences further.

Although making a high income is nice, having a high net worth is more important. High incomes come and go. They are also taxed aggressively. In contrast, a properly managed net worth could last forever.

One of the best incentives to get rich today is the record-high estate tax limit of $11.58 million per person in 2020. In other words, Americans can all pass down up to $11.58 million to our heirs tax-free.

We can create a generation of adult kids who end up having zero motivation or self-pride to make something of themselves! Whoo-hoo!

$11.58 million is an incredible amount to pass on tax-free given the estate tax exemption amount was only $1 million in 2003.

The holy grail of personal finance is to amass a large enough net worth which spits out enough income to fully fund your desired lifestyle. If you can’t generate enough passive income to do so, sorry, but you are not yet financially independent.

On your journey to the promised land, it’s a good idea to gauge how you compare to others. After all, everything is relative when it comes to money. If we all have a $5 million net worth, being a multi-millionaire wouldn’t improve the quality of our lives at all.

Everybody wants to become a millionaire. Unfortunately, not everybody’s chances of becoming a millionaire are the same as the playing field is not even. This article looks at historical data on your chances of becoming a millionaire by race, age, and education.

Getting to at least one million dollars in net worth is a nice milestone to achieve. I firmly believe the majority of people reading Financial Samurai and other personal finance sites will be able to achieve millionaire status.

If I were to guess the exact percentage of Financial Samurai readers who become millionaires in their lifetimes, I would say 60 percent. This doesn’t seem like a particularly high percentage. But once you’ve read the statistics below, you’ll come to agree that 60 percent is a home run figure.

For the remaining 40%, even if you don’t become millionaires, you’ll likely still build way more wealth if you keep on reading Financial Samurai and other finance sites than the average person who does not.

Since 2009 I’ve received dozens of e-mails from readers saying they’ve busted through the $1 million net worth figure thanks to aggressive saving and investing. Many have mentioned they wish they had discovered the personal finance world sooner. But better late than never I say!

So what about the rest of the 330+ million Americans who were fortunate enough to be born or gain citizenship to our great country? What are their chances of living the champagne dream and caviar lifestyle? Let’s have a look.

Thanks to the unrelenting rise in the stock market since 2009, there’s now a trend on social media to share your 401k balance, especially if it’s over a million bucks. Yes, being a 401k millionaire is now a real status thing!

Despite the distastefulness of bragging, just the fact that more people are talking about saving for retirement via their 401k is a good thing.

Make no doubt about it, being a 401k millionaire is very impressive given the maximum contribution limit has never been higher at $19,500 for 2020 and likely more in coming years.

When I was first able to contribute to a 401k in 1999, the maximum contribution limit was only $10,000. Check out the chart below for details.

In the good old days, several friends and I liked having beers after each softball game. We got to discussing what is the one ingredient necessary for achieving financial independence at a relatively early age.

Here were some of their responses:

• Saving aggressively
• Investing in stocks
• Investing in real estate
• Earning side income
• Taking bigger risks in our careers
• Leveraging the internet
• Working ungodly long hours
• Relocating to areas with huge job growth despite the higher cost of living
• Starting a business

Many of these ingredients are great for helping all of us achieve financial independence.

However, the #1 ingredient that drove me, which nobody mentioned, was FEAR. More specifically, the fear of failure.

Let me share some examples to explain what I mean. Then perhaps you can share your own in the comments section below. 

Do you want to learn how to build passive income for financial independence? Creating genuine passive income is the holy grail of personal finance. Once you have enough passive income or semi-passive income, you are more free to do what you want.

Not all passive income is created equal. Some streams take much more initial effort to start, such as saving enough to buy your first rental property. But once you start it’s very difficult not to gain momentum.

Everything passive first takes active energy. The time to put in the effort is when we are young and not ravaged by disease or burdened by family obligations.

I remember being able to snowboard from 9am until 4pm every day for a year. Now, I’m lucky to last from 11am until 2pm without wanting to go to the hot tub and drink a bucket full of beer!

If we can appreciate how lucky we are when we are young, we’ll be able to maximize our vitality and live financially freer when we are older.

With sustainable passive income you can do the following:

• Retire early and travel the world once the pandemic ends.

• Start a business in a field you are passionate about.

• Find a job that pays less, but is more interesting.

• Stay at home to take care of your family without having to worry about money.

• Volunteer for causes you truly care about.

• Be a big brother or big sister.

• Spend more time with your parents.

• Sit in a coffee shop on a 80 degree day in Paris for hours on a Wednesday afternoon.

• Write the next great novel on the balcony of a cruise in the Mediterranean.

• Eat tapas and drink sangria until 1am on a Monday evening.

• Potentially live longer due to much less stress.

• Experience perfect endless summers over and over again.

There is so much you can do once you generate enough passive income to pay for all your living expenses. I highly encourage everyone to at least try. This post will provide you the framework for passive income success.