Since 2009, I’ve encouraged readers to practice Stealth Wealth instead of flaunting luxuries. You don’t want to attract unnecessary hate and scrutiny on your journey to financial independence.
But one example last week caught me by surprise. Senator Amy Klobuchar, while defending the extension of enhanced healthcare subsidies, tweeted in support of a couple featured by CNBC who would supposedly be hurt by the loss of these subsidies. The twist? The couple earns $127,000 a year in lifetime pension income—adjusted for inflation!
Only about 19% of American workers have a defined-benefit pension, and even fewer receive six-figure lifetime payouts. To generate $127,000 a year from investments, you’d need roughly $3.2 million earning a 4% return.
So I couldn’t help but wonder: is love for the wealthy back? Or perhaps Senator Klobuchar simply misread the room—championing people who resemble her own demographic, as human nature tends to do.
What do you think? Is it time to lean into our wealth again or blend in as much as possible? Check out my new post: Millionaire Early Retirees Probably Shouldn’t Receive Healthcare Subsidies.
Inflation In Line, Back To Bull Markets
Core inflation (CPI excluding food and energy) for September came in at 3%, slightly below expectations. Partly as a result, there’s now a 95% probability the Fed will cut rates next week and likely again in December.
Historically, November and December are among the strongest months for the stock market, so I’m holding onto my richly valued stocks in hopes of more gains.
Perhaps I'm being greedy, but I still remember the 1999 stock market mania like it was yesterday. There are shades of that era returning, though we’re not quite there yet. Valuations remain within the historical range, just at the high end.
A big part of my confidence in letting equities ride comes from a recent deep-dive analysis of my finances. After reviewing everything, I realized my situation would be fine even under several downturn scenarios. On your FI journey, you want to build financial buffers for your financial buffers.
If you’re curious what it’s like to sign up for a free financial review through Empower, I put together a detailed post about my experience. Overall, I found it worthwhile. It helped me better understand the risks and strengths of my portfolio composition.
Read: How Empower's Free Financial Review Helped Me Rethink Retirement
Empower is a long-time affiliate of Financial Samurai. I've used their free tool since 2012 and even consulted with them in person and received shares in the company in 2014 and 2015.
You Will Likely Have Way More Money Than You Think
As part of my recent financial review, I spoke again with Bill Bengen, the father of the 4% Rule for retirement withdrawals. Based on his latest research, he’s now upgrading his recommended safe withdrawal rate to 5%.
Naturally, I decided to run the numbers and so should you. If I had been withdrawing 4% a year since I retired in 2012, my portfolio today would still be 4.5X larger. Even using a 5% withdrawal rate, my portfolio would still be worth about 70% more, assuming no additional contributions.
The takeaway is simple: you’re either spending too much of your life working to accumulate money you’ll never use, or you’re being overly conservative in retirement and missing out on what you’ve already earned.
While rummaging through old photos from high school and college for an upcoming video interview, I was reminded how quickly life passes. Please, run your own numbers and don’t waste another minute doing something you don’t enjoy, if you don’t have to.
Read and listen to my new post: Permission To Live It Up In Retirement Granted
A Small Departing Tip
Besides doing a financial checkup, change your car’s in-cabin air filter if you haven’t done so in the last 15,000 miles. It’s usually located behind the glove compartment. I hadn’t changed mine in nine years and 55,000 miles, because I had no idea it even existed, until an Uber driver in San Diego clued me in.
While you’re at it, don’t forget to replace your home’s furnace filter every six months. You’ll feel oddly satisfied once you do. The air we breathe is precious, after all.
So the next time you think, “Sam hasn’t done anything for me lately,” despite my writing this free newsletter for over a decade to help you build wealth and find peace of mind, remember this:
I may have just saved your family’s lungs and health!
To Your Financial Freedom,
Sam
Subscribe To Financial Samurai
Pick up a copy of my USA TODAY national bestseller, Millionaire Milestones: Simple Steps to Seven Figures. I’ve distilled over 30 years of financial experience to help you build more wealth than 94% of the population—and break free sooner.
Listen and subscribe to The Financial Samurai podcast on Apple or Spotify. I interview experts in their respective fields and discuss some of the most interesting topics on this site. Your shares, ratings, and reviews are appreciated.
To expedite your journey to financial freedom, join over 60,000 others and subscribe to the free Financial Samurai newsletter. You can also get my posts in your e-mail inbox as soon as they come out by signing up here.