No Need To Win A Financial Argument, Just Win By Getting Rich Instead

After my post, The Proper Withdrawal Rate: 4 Percent Rule Is Outdated, ruffled some feathers, I began to wonder why people argue so much on the internet.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. That, or you miss out on multi-bagger opportunities. 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.

Financial Argument: Low Interest Rates For Life

A big part of my Financial Samurai safe withdrawal thesis (80% X the 10-year bond yield) was that interest rates will stay low for a very long time.

Given risk asset returns are intertwined with risk-free rates of return, it would be wise to increase your net worth target, lower your safe withdrawal rate, and earn supplemental retirement income. My mistake was assuming people understood the relationship with the risk-free rate of return and risk asset returns.

On Thursday, August 27, 2020, nine days after my “Proper Safe Withdrawal Rate” post was published, the Federal Reserve announced a major policy shift. Fed Chair Jerome Powell said the Fed is now willing to allow inflation to run hotter than normal in order to support the labor market and broader economy.

In other words, the Federal Reserve will keep its Fed Funds rate at or near zero percent for a long time. In the past, to ward off inflation down the road, the Federal Reserve would consider raising interest rates whenever the unemployment rate fell below the natural rate of unemployment (NARU). The implications of this policy shift are big.

A Coincidence?

It seems as if Jerome Powell had read Financial Samurai's “Proper Safe Withdrawal Rate” post days earlier.

He must have realized, Oh crap! The secret is out. The public is getting smart about our intentions for keeping interest rates low. We need the public to work longer to eventually pay back all the debt we created. Let's come clean and make an announcement!

It is too soon to tell whether risk assets like stocks, bonds, and real estate will see lower returns in the future. Right now, we are witnessing a pile on into stocks and real estate given the opportunity cost to hold a risk-free asset is so low and the Fed stimulus is so great. Investors are searching for yield.

However, as we saw in the stock market performance by President post, there have been two lost decades in history: the 70s and the 2000s. Therefore, please prepare for a scenario where stocks or real estate don't always go up. In such a scenario, even withdrawing 0.5% doesn't feel good when your investments are losing money.

Lost decades in history - Financial Argument

Everything Is Rational In Finance

The financial arguments against my FS Safe Withdrawal Rate guide are as follows:

  • I don't have children
  • I don't have a desire to give to charity after I'm gone
  • I'll never retire if I follow your 0.5% Rule
  • I want to spend all my money before I die
  • The 0.5% Rule is too demoralizing so I'm not willing to do more reading
  • Inflation will take care of everything
  • I'm not willing to earn supplemental income in retirement, unlike William Bengen, the creator of the 4% Rule, who mentioned in the comments section he is making supplemental retirement income writing books and consulting
  • I'll be relocating to a lower cost area in retirement
  • I'd rather listen to an old rule popularized by working professors than someone who has been living the early retirement lifestyle since 2012
  • Stocks only go up
  • I'll easily be able to shift from aggressively saving for decades to withdrawing
  • I'm not willing to adjust to the changing times

All these arguments are absolutely fine. All of us are rational. We keep doing things to our benefit and stop doing things to our detriment.

Only a fool would keep doing something that continues to harm their finances. And in this world, there are no fools. Only ignorant people.

The key is to generate supplemental retirement income from something you enjoy doing. Once you do, you can more comfortably live off the Financial Samurai Safe Withdrawal Rate guide.

Examples Of Everything Is Rational

If you don't believe everything is rational in finance, let me profile several stories of people I've encountered who made rational changes to improve their financial lives. Having a financial argument about these things is a waste of time.

Geo-arbitrage Bob

After the stock market sell-off in 4Q2018, Bob realized his $3.5 million net worth was not enough to provide for a comfortable lifestyle in a big city like San Francisco. Bob had retired from his job at 46 a year earlier. As a result, Bob, his wife, and his daughter moved to a much lower cost part of the country.

Bob realized what I've been trying to say to many, that going from saving and investing to withdrawing is extremely difficult. Old habits die hard.

Bob could not bear to withdraw more than 2% of his portfolio to live. Therefore, he relocated. Not only that, he decided to make some supplemental income online.

Below is not a chart of Tesla stock. It is a chart that shows how much more capital we quickly now need since 2019 thanks to the rapid decline in interest rates. Pay attention. Hold onto your cash cows for dear life!

How much capital you need to generate $50,000 / year in 2020 - Financial Argument
A $3.5 million net worth can't provide $50K/year safely

Frustrated Jennifer

Jennifer got her Masters of Arts degree in Broadcast Journalism from an expensive private school. She began covering money topics for some major financial publications.

Over time, she became very dissatisfied because while she was making a healthy $90,000 a year, the successful entrepreneurs and executives who she constantly covered were making millions. She wanted more.

Instead of using her journalism expertise as a substitute for her lack of financial expertise, Jennifer decided to get an MBA to bolster her financial knowledge. Once she graduated, she decided to go out on her own and be a personal finance consultant and speaker about money.

Although she still sometimes feels like an impostor because she is not financially independent, she nevertheless feels like she has much more credibility after getting her MBA. Further, by starting a business, she's finally doing instead of just covering.

Get Ahead Joe

Joe used to get angry at his peers who got paid and promoted faster than he. He would always talk bad behind their backs. Eventually, his boss caught wind of his negativity and pulled him into his office to have a chat.

His boss told Joe that he could either work harder and build a strong network of supporters to help him get promoted or leave in six months. Joe was nervous because this was the first time he had received a work ultimatum.

Because he wanted to propose to his girlfriend and to buy a house, Joe decided to stop bad-mouthing his peers. He also decided to build strategic relationships with three senior colleagues.

After six months, Joe not only landed more business for his firm, he was promoted to VP. His disdain for other VP promotees immediately went away.

Nervous Pete

Pete retired from his $250,000 tech sales job at the age of 32. He was burned out and hated corporate politics. People said he should have sucked it up for several more years, but Pete refused.

Although Pete proudly proclaimed he was an early retiree, deep down he was nervous about his financial situation. He retired a year before the pandemic hit and realized his backup plan of going back to work was no longer there. His old employer was downsizing.

Therefore, Pete decided to drive 20 hours a week for Uber to supplement his $10,000 a year in dividend income until rides started to disappear. Then he decided to focus all his attention on delivering groceries.

Pete became frustrated at anybody who generated enough passive income to not have to work. He was risking his health during a pandemic for close to minimum wage pay.

Then one day, a competitor of his old employer shot him an e-mail and asked if he wanted a job. Pete immediately said yes, even though the offer was for $100,000, or 60% less than he used to make. Better to make $100,000 safely from home. Finally, Pete felt more confident about his finances.

How much income is generated by $1 million - financial argument

WiFi Carlton

Carlton retired and promised that if all went well, within two years, his wife could also join him in retirement. Six years have gone by and his wife has still not retired because Carlton is not confident enough in his finances.

Due to ego, instead of saying he is a stay at home dad, he tells his friends he is retired. In actuality, he is WiFi, or Wife Financial Independence. WiFi is gaining steam as more women become breadwinners.

Due to Carlton's financial worries, he's figured out a way to keep encouraging his wife to work longer to help provide for their family. Carlton gives her regular pep talks once a month and highlights other women who are doing well in their careers.

What do these five people have in common? They used to all argue incessantly with people over financial matters. Once they “got rich” by fixing what was going on with themselves, they no longer felt the need to impose their will on others. No need for a financial argument!

Legacy Sam

The one great thing about critical feedback is that you might learn something about yourself too. What I realized from all the pushback against the FSSWR guide is that many people don't have thee default assumption of leaving a legacy for children or organizations.

Instead of adopting my legacy retirement philosophy, there's a lot more YOLO retirement philosophy going on in America. As someone who grew up in Asian for 13 years and spent 13 years working in Asian equities, my cultural views on money and life are different from western culture. Having a financial argument with me about my culture won't get you anywhere.

Try And Find Balance In Your Financial Views

In addition to the Federal Reserve finally coming clean about keeping interest rates lower for longer, I'm pleased to report at least one reader has found more balance in his viewpoints.

Here is his comment.

Hi Sam

I’m the Dan that previously stated your article was a “bit of clickbait”.
Maybe slap in the face would be a better way to put it, as in you were looking to make sure the message got out there by invoking a provocative title.

I’m commenting again because I agree with your assessment. Maybe not to the degree, but certainly in the current environment it’s prudent to be more conservative with one's Safe Withdrawal Rate.

Powell’s speech yesterday should be a further wake-up call that long term interest rates will be lower for longer. It's time to accept we will be more like Japan and EU than the USA circa 1998.

A more pragmatic approach is to save FU money and then design a lifestyle that includes a lower income job that offers more flexibility and time to do other things. This will hedge against lower returns while still allowing one to realize the benefits of FI.

Thanks for throwing a little cold water at us…

No problem Dan. However, I don't believe the U.S. will get stuck in the muck like Japan or the EU. We're too hard-working and capitalistic not to innovate our way through difficult times.

Old things, like malls, will be repurposed into new things, like distribution centers for Amazon. I just have my doubts that continuing to model a 10% annual return for stocks is a good idea.

When you reach your financial destination, it is also better to have a little too much money than too little.

Taking Feedback In And Adjusting

I'm not sure if commenter Dan knows what “clickbait” means. Having a title that starts with “Proper Safe Withdrawal Rate” is the most non-clickbait, descriptive title you can find. If there was such a thing as Clickbait University, I would flunk out.

A clickbait title would be something like:

“Why You'll End Up Broke And Alone Following The 4 Percent Rule”

“A Retiree Mistakenly Followed The 4 Percent Rule, You Won't Believe What Happens Next!” BuzzFeed style

“The 4 Percent Rule Caused Me To Get A Divorce And Something Even Worse…”

Other dissenters of the 0.5% Rule also mentioned the post had a clickbait title. Therefore, as a rational writer, if people think my boring titles are clickbait, then I might as well start spicing them up!

I should even host a competition to see who can come up with the most clickbait titles for my boring titles. It'll be fun!

Embrace Criticism To The Max

Some good can come out of a financial argument. Embracing your critics is a great strategy for personal and professional growth.

For example, after I announced that I was going to focus more on entrepreneurship and less on retirement in 2018, a number of people said I was an early retirement failure.

One of the main reasons why I decided to focus on entrepreneurship is because I received poor feedback on a personal milestone article. I figured, what's the point of sharing personal thoughts with no feedback when I could just follow most of my peers and publish money making articles with no feedback?

Instead of being disappointed that I was called an early retirement failure, I decided to embrace my failure and write, Why I Failed At Early Retirement: A Love Story. The article turned out to be incredibly popular.

Using criticism helped me take Financial Samurai in a new direction with a plethora of new topics to explore. Further, if someone in the media is looking to highlight an early retirement failure, who better to come to than the biggest failure of them all?

But most importantly, I've used the criticism to build more passive income in order to take care of my family.

My number one goal as a father of two young children is to ensure my wife and two kids are taken care of. My second goal is to spend as much time with my family as possible. Finally, a big continuous goal is to enable my wife to be a stay at home mom for however long she wants.

Stop Arguing, Get Rich Instead

If you're trying to change someone's mind about a financial belief, chances are high you're wasting your time. You can certainly have a rational discussion. However, if you find yourself calling people names and getting emotional, you should take a step back and look within at what's going on.

The one barometer you should follow is your net worth. You will find that the more your net worth grows or outperforms, the less you will find a need to argue with anybody about a financial topic.

Therefore, in a very real way, money does buy happiness. The more satisfied you are with your finances, the less things that go counter to your beliefs will upset you.

Get rich. It's the best way to cure your propensity to get into financial arguments. If you can't get rich, then at least learn how to feel rich.

Personally, I'm investing in real estate crowdfunding and rental properties to ride the inflation wave post-pandemic. My goal is to continue building as much passive income as possible to stay free.

Keep Track Of Your Finances

Stay on top of your Roth IRA and overall finances by signing up with Personal Capital. PC is a free online tool I've used since 2012 to help build wealth. Before Personal Capital, I had to log into eight different systems to track 35 different accounts. Now I can just log into Personal Capital to see how my stock accounts are doing. I can easily track my net worth and spending as well.

Personal Capital's 401(k) Fee Analyzer tool is saving me over $1,700 a year in fees. Finally, there is a fantastic Retirement Planning Calculator to help you manage your financial future.

I've been using Personal Capital since 2012 to manage my finances. Since that time, my net worth has skyrocketed partially thanks to better financial optimization.

Personal Capital Retirement Planner Free Tool - financial argument
Personal Capital's Free Retirement Planner


When People Doubt You, Just Keep On Winning

Solving The Happiness Conundrum In Five Moves Or Less

Readers, do you believe everything is rational in finance? If not, why would someone keep on doing something that is harmful to their finances? What type of financial argument have you gotten into? Did you win the financial argument? What is the point of trying so hard to change someone's way of life?

59 thoughts on “No Need To Win A Financial Argument, Just Win By Getting Rich Instead”

  1. What if instead of having a 0.5% withdrawal rate, you just lived off what was made the year before. The year before retirement, see what you are making passively and use that as your budget for the next year.

    Then after 1 year, see what you made the year before and adjust. That way you are always 1 year ahead. This would be a good year to use this technique given COVID.

  2. Great article Sam. As a working woman, I find your perspective and the perspective of a lot of male personal finance bloggers super interesting. Your goal is to enable your wife to be a stay at home mother. I think this works for a lot of families and kids totally need a lot of parental involvement. Mr. Plastic Picker’s (my also physician husband) has had the complete opposite goal which has been 100% to keep me in the work-force , even part-time. For us that has been the key to our Financial Independence. My earning potential as a pediatrician is actually very decent, and I’ve seen many of my female colleagues who went the part-time route or gig economy/shift route essentially trade off their own financial independence. One of the best books ever given to me as a young mother was the “Ten Year Nap.” It’s an old book and somewhat outdated, but it talks about the trap of middle-class and upper-middle-class motherhood. Now that my kids are teenagers/tween, I am glad I made it through and I am in a much better position to help my children through their lives being pretty far advanced in my career and national pediatric leadership. My sister who is an attorney almost left the work force too and she is a military spouse, which makes it even harder. But as an older sister, I told her to stick through it. She went to top 10 law school and Yale as an undergrad. Anyway, she continued working even just part-time through the military moves and now she makes a decent amount and gives her a lot of life satisfaction. Anyway, just writing from the perspective of a woman. The stay-at-home mother world at least when I was more part-time was not all that it was cracked up to be. Girl Scout and PTA drama can be as intense as work-drama, but at least with work-drama – you are paid for it! LOL. Love this blog post.

  3. I don’t understand why my withdrawal rate (4%) should be affected by interest rates? I don’t hold my money in the bank and I’m not planning to live off interest once I retire, that’s crazy. My savings are mostly in assets (stocks, real estates, businesses, etc…) whose appreciation is not (directly) related to bank interest rates. Even more, real estate values will appreciate more if bank loan interest rate goes down as more people will be buying real estate and thus their value will increase.

    1. Julian Thompson

      ALL asset prices are affected by risk free interest rates. This includes the prices of real estate, stocks, bonds, even gold, etc. etc.

      1. Yeah but in a positive way – availability of free money makes things that you can buy with that money (real estate, stocks, etc…) more expensive so if you own those assets you get appreciation.

  4. So, by that first graph, a couple that expects pensions coming to 100k a year suddenly has the equivalent of an extra 15 million in the portfolio? Throw in Social Security and they are up to an imaginary 20 million or so? In addition to whatever they have in their real portfolios?

    But they shouldn’t count on their portfolio earning much more than one half of one percent above inflation?

    Should they perhaps go more aggressive on their real portfolio holdings?

  5. Dingo8myBaby

    Beyond the quantitative reason for seeking other forms of passive income, when I retired early at 35 my goal was to do nothing because after working like a mad man for 15 years I thought that is making it. It was the most miserable year of my life.

    I then started a much lower paying side hustle that I already enjoyed doing, which covered my cost of living (and way more at this point). But more importantly it gave my day to day quantitative meaning. I think this happens naturally for the go-getters that seek FIRE out; we quickly find work is meaning, but we want the freedom of to ‘work’ on our own term. Not by a bosses, customer, or societies terms. Is it retired? To Sam’s point not interested in the argument, it the best version of retirement for me.

  6. Fabulous article! And I look forward to your “spicing up” those article titles. Way to fight back, Sam, and give us a good chuckle. Thank you.

  7. I think there’s another argument that some of us had with the premise of the 0.5% withdrawal rate idea (and to be clear, when I say “I” or “you” I’m speaking collectively and not about you or me).

    Let’s look at your 2nd chart in the article above, and let’s assume the magic retirement income number for a person was $50k/year. As recently as just two short years ago it would have taken someone less than $2 million to generate $50k/year according to the chart. Now, two years later it takes more than $8.3 million.

    If the idea is that it takes that same person more than 4X the amount of savings to not run out of money, then I’d just say that this person and the rest of us got screwed–but there’s little choice we have beyond just working longer. However, it’s simply not true. The rationale for drastically lowering the withdrawal rate (and the corresponding need to drastically increase the retirement account balance) is to maintain 100% of the retirement assets for heirs.

    I have several issues with that premise, but one of them is simply this: if two years ago I was prepared to retire in 2020 and live off $50k per year from a $2M portfolio, this new plan requires me to QUADRUPLE my account size for the sole purpose of allowing my heirs to inherit 100% of my portfolio–but that goal fails to take into consideration the size of the portfolio to be inherited.

    Said differently, I would ask this simple question: why would an heir who stood to inherit, theoretically, $2M from me based on my 2018 plan now need to inherit more than 4 times that amount? More importantly, why would I have to substantially delay my own retirement merely to allow an heir to inherit four times what I’d planned on leaving to them just two years ago? Because interest rates are low right now and for the foreseeable future? Aren’t we talking about a planned retirement of three or four decades (or more)? Why are we worried about interest rates 40 years from now, and why should we presume we have any idea what they will be at that point?

    I understand the desire to leave money (to kids, other loved ones, charities, etc). But what I don’t understand is why a person would feel compelled to leave those heirs SO MUCH MORE MONEY simply because we are in a low interest rate environment today. If those heirs were to be accounted for with $2M, I’m not sure why it makes sense for me to delay my own retirement for as long as would be necessary to 4X my account balance only because of an always-fluctuating interest rate number.

    If we’re talking about an early retirement of, say, age 50, then consider how long it took this investor to accumulate $2M in savings. Now that same person is going to have to double that amount TWICE, then add another 16.5% on top of that. Given the projected returns in the coming years, it sounds like that individual is not likely to get to $8.3M without working and saving A LOT longer. Just so heirs can inherit more than four times what this investor previously (2 years earlier) thought was sufficient?

    That’s the real issue I see. No reasonable person can argue against the merits of increasing cash flow or working part-time in retirement where that is necessary. I just think a lot of the blowback to the 0.5% withdrawal rate concept was not only that it represented a dramatic increase in a person’s working years but that it was all predicated on an idea that makes very little sense (to me), which is that heirs should not only receive 100% of my starting retirement account balance, but that this balance needs to be increased massively to boot.

    1. Yes, you’ve got to do what’s right for you. Instead of using 0.5% as a guide to accumulating more wealth, what about using it as simply a SWR once you retire? Supplement it with some active retirement income.

      Where are you currently on your financial journey?

  8. I think people keep doing things that harm their finances because they get too emotional. My dad has lost money in penny stocks and I am slowly getting him to become interested in established blue chips stocks. I think making a pretty consistent 10% annual return is better than having a “chance” of buying a stock at $0.20/share and selling it at $10/share a few years later!

  9. I enjoyed how the different examples of real people and how they became financially successful. No two paths were the same. Nor did everyone define success in the same way.

  10. Please do the click bait headline contest!! That would be fun.

    “ There’s no such thing as a stupid question, just stupid people asking questions.”

  11. 4% SWR is too risky, but it’s a good starting point. It’ll take 10+ years for most people to even get to that point. 0.5% is just too daunting for most people. It’s more realistic to reach 25x then figure out the next step. Supplemental income comes in handy at that point.

    So I guess the 0.5% makes sense that way. Supplemental income can cover 3.5% and your portfolio can cover 0.5%. This’s a good rule when you’re young. IMO, you can withdraw 4% once you’re 65. Social Security will help after that, hopefully.

    1. Curious to know what percentage withdrawal rate you’ve conducted since you retired? I’m assuming it is close to 0% given your wife still works and your online income. But correct me if I’m wrong!

  12. Paper Tiger

    I think what drove people nuts about the .5% SWR is when you talked about needing something like 20-40M to make that work. Since 20-40M is probably out of reach for 99+% of the population, you just drilled nearly everyone who felt they were doing alright into feeling somewhat hopeless. I’m sure you wanted people to feel uncomfortable with the changing financial circumstances so they would begin to look at the world as it is today and begin to deal with a new reality around SWR but obviously, you wound up scaring the crap out of a lot of folks and when folks are scared they tend to lash out at the person who is making them scared.

    I actually think you might have taken less flack if you told people to set a goal of ZERO withdrawal rate. Focus on your spending needs and build a budget that can be supported by other income streams rather than your investments and simply look at your investments as one big security net if the worst circumstances happen to come your way. In reality, to me that is what you were trying to tell them but they got radically focused on the numbers rather than the message.

    My personal goal actually is a ZERO SWR and it is simply based on the fact that both my wife and I have held long corporate careers so we are maxed out on both pension plans and future social security payments to the point that if both of those hold up through our lifetimes, we should be able to cover our living expenses just fine. Our savings serve as security if either or both of those fail. I could easily spend more if I wanted but I feel like I’ve done a lot in my life as far as travel and other pursuits and I did enjoy a lot of things as part of my jobs that others may have pushed off waiting until retirement to do.

    There were a lot of critical life decisions along the way to get to this point of not really having to rely on savings to cover our future. Too many to list here. I think what worked for us is really having a decent handle on things we could control and planning a financial future around money we could generate apart from savings to allow us to solely rely on that income rather than investment income.

    As someone smarter than me said, “start with the end goal in mind and work backwards to develop a plan to achieve it.” There are many ways to skin the cat so no one should get to hung up on individual opinions; just figure out what you want and work hard to achieve it. Learning from others is worth the effort but take only what applies to your goals and objectives and discard the rest.

    1. You may be right about the 0% withdrawal rate receiving less flack.

      I do mention this rate twice in the original post, and I do emphasize earning supplemental retirement income.

      But these points were overwhelmed.

      I’ve been at a 0% SWR since 2012 and will likely stay there for a while. But this is a problem bc it is better to consumption smooth.

      I am pretty sure that you will succeed in a 0% safe withdrawal rate as well with your pensions and your goal of doing so.

      It is extremely hard to go from saving to withdrawing. Once you retire, please let me know how it goes.

      1. Paper Tiger

        Yes, I don’t have a fair test yet until we both retire for good. I retired 5 years ago but my wife still has a great job and benefits and plans to work another 5 years or so. If she really does continue to work that amount of time, it will really help solidify the plan for a 0% SWR and increase the likelihood that we can maintain it throughout our joint retirement.

        Life is full of uncertainties so clearly, no guarantees but we can only plan for the known and hope it is enough to cover for the unknowns as well.

        1. Having a working spouse is huge for having a low withdrawal rate. Just the healthcare benefits alone provide a tremendous amount of relief.

          It is only when both spouses stop working where you may have this “uh oh,” or “It’s game time!” moment.

          I know when my spouse was working for several years after I retired, I didn’t have too much trepidation. I had a severance, passive income, and some online income. It was only when she negotiated her severance in 2015 that I finally felt there was no more safety net. Retirement suddenly became “real.”

          Just check out my buddy Joe @ Retire By 40. He retired in 2012 as well, but they can’t pull the trigger on his wife retiring even though they’ve been talking about it for years.

          1. You are correct on your comments. 2021 is a big year for us. I collect a full pension now that began 3 years ago at age 60 and in April, 2021 my wife will turn 60 and also begin to collect her full pension on top of her current job income. Our daughter will graduate from college in May, 2021 and will hopefully be gainfully employed shortly thereafter. This is a double blessing in 2021 because we will see a rise in income and a drop in expenses almost simultaneously. In 2 more years I move to Medicare so if my wife decides to quit or gets laid off at that point we should be in good shape because our daughter should be on her own healthcare insurance and with me on Medicare, we would only have to cover my wife until she turns 65. We should also have the house paid off by then which is our only remaining debt so that just seems like a great time for her to retire, if she chooses not to slog on for another 5 years.

  13. It seems kind of crazy that I get more out of your writing (and therefore have this site on my Quicklinks bar) than any other financial news site besides Bloomberg.

    Thank you.

    1. You’re welcome. Perhaps the difference is that I’m not a journalist but a finance person first who likes to write and share firsthand experience?

      I am constantly investing and making moves Around what I’m writing. Money is very important and a little too dangerous to be left up to too much pontification.

      1. I agree. It is always surprising how little thought some people give to how to manage money, but how much stress they are willing to take on when they don’t have enough.

  14. Canadian Reader

    I like this post. Its entertaining to read the back- and- forth sometimes in an argument online.

    I used to try really hard to help a couple of friends live more financially secure lives, but stopped doing this when I realized they would never go to the lengths I would to save money or work more. Ultimately they were unwilling to give up the things they waste money on in spite of non-stop complaining about being broke. So, yes, it is a waste of time. And can damage relationships, even if they explicitly ask for financial advice. I really would love to help my friends do better because I grew up in serious poverty and understand that stress so well. My hat is off to you for continuing to try and help people, because it can feel really thankless.

    I still agree with ultra conservative SWR of 0.5%. If we are wrong, then there is a lot of upside!

    1. Indeed, better to be wrong and have plenty of upside band be wrong and then have plenty of downside.

      But if I’m able to flip this type of mentality in my country or around the world, I believe there would be much less financial pain and suffering. It would be much less stress and anxiety. As a result, people would be happier and children would receive more love.

      Maybe these are idealistic and naïve thoughts. But overtime, I’ve definitely received some good feedback from people who have made huge progress. And that makes me so happy.

  15. I love this article. I’ve tried to find other financial blogs just to read more about the subject but no one comes close to FS.

    Arguments in general are useless, and you’re better off focusing your energy elsewhere.

    Keep ‘em coming Sam!

  16. I have to admit I enjoy going straight to the comments and arguments sometimes while reading your blog. It’s actually quite fun! Wouldn’t be the same without the occasional folks trying to win arguments with strangers on the internet.

  17. Arguing about finance is a waste of time and energy unless you can financially benefit from engaging in the argument (ie a short seller looking to convince the market that the stock is worthless).

    From observation, financially comfortable people don’t tend to argue about finance.

    So if you encounter someone who wants to argue about finance, that person is probably not doing well financially.

    If you want to engage in arguments about finance, then your time is probably better spent improving your financial position as opposed to wasting time arguing.

    1. Maybe I should write a story about the world of hedge funds and short-sellers and how rumors are often created to induce panic selling. It’s an amazing world full of FUD.

      There is no benefit to me encouraging people to save more, withdraw less, and earn supplemental retirement income.

      Well I think people will be thankful that they did if rough times in the markets return.

    2. That is so true! Someone was asking me about some made-up real estate investing term. We have been investing in real estate for decades, and my entire family is in the real estate/construction/property management business. I had no idea what the dude was talking about. I was like, okay I’m just going to go buy another property while you sit an overanalyze something that is not that complicated.

  18. And that’s what you’ve done, gotten rich. Or at least you are on the high end of the net worth scale for bloggers in this space. I’ve always thought that people who do things deserve the right to be heard while people who just talk and have done nothing maybe haven’t earned the right yet? I like reading your stuff because you have a proven record of past accomplishments. And you’re a freaking 5.0 tennis player! I’d kill to be a 4.5! Nobody gets to that level without a tremendous amount of hard effort.

    1. Hi Steve,

      I think people are free to say and do whatever they want. And if what they’re doing is not working, then they will rationally make a change.

      How’s your tennis game going?

      I’m sure you can continue to get better if you just practice one shot over and over again per month. It eventually becomes second nature. Let me tell you a story.

      About five years ago I came down with a difficult case of tennis elbow. As a result, it was very painful to hit my one-handed backhand.

      Not one to give up, I decided to try a two-handed backhand. It was so awkward at first. But I kept on practicing and practicing. Once my tennis elbow healed, I kept on going with the 2-hander. Now, I can comfortably whack a two-handed backhand cross court when I’m receiving on the deuce side. And, if you give me enough time, I can still hit my one handed backhand no problem. Learning a two-handed backhand really got me excited about tennis again.

      Hitting a cross court backhand on the deuce side was always the toughest shot, especially in doubles with my one hander. And at the 5.0 level, it is brutal to get around bc a lot of the serves are big. But now, with a two hander, it’s much easier to semi-swing back. Now it’s second nature.

      If someone can go from a one handed back into a decent two handed backhand at the age of 38, I think now anything is really possible. You just have to work at it over and over again.


      1. Well, I’m 64, and while I’m very fit for my age its pretty hard to migrate up because speed and agility begin to decline a little each year. My marathon race times really showed me that. But I like your story, I have a similar one. I injured my right wrist skiing into a tree ten years ago. I was unable to hit a hard forehand for months due to the pain, but my two handed backhand did not hurt. I could hit powerful backhands but I had never been consistent or accurate. Over the months with no forehand power I focused on the backhand and learned control and consistency. When my wrist finally healed my backhand was much stronger, years later it still is. Hitting that tree was the single best thing that ever happened to my game.

  19. re: “my goal is to enable my wife to be a stay at home mom for however long she wants.”

    Glad to see you are no longer actively trying to talk your wife into going back to work outside the home so that you can remain successfully early retired. LOL

    Of course, if she WANTED to leave home to go to work, that is a different story. ;)

    And to have her take a more active role on the Financial Samurai blog is most appreciated by this reader. :)

    Oh, I do like the idea of click bait title contests. LOL

    1. Ah, i’m biding my time and will try to do more convincing in due time. I got to make sure the environment is safe first of all.

      As of now, we’ve got her hands full with our little ones. Oh my goodness oh I love my baby daughter so much. Whenever I feel stressed, I just go over and hold her and snuggle with her. She is the best!

  20. A friend I met 28 years ago who is 5 years older than me. He worked hard, saved hard.

    Ten years after I met another friend through work related connection who is 10 years older than me. He has millions, but he is failing in relationship with his blood related families
    and having superficial relationships with everyone else including his soon to be ex-wife.

    Due to my early circumstances, I did not have any good financial model or relationship model.
    I was genetically wired to look for good personal relationships more so than financial peaks.

    Here is an updated resulted from my relationships with both of them.

    Financially I followed the first friend’s footsteps by watching from the distance. Whenever he
    bought a home, I pushed for a home on my end. Whenever he bought a stock, I acquired the same stock.

    I did not realize then, but the second friend was watching me from a distance.
    After his bitter divorce from the first wife, I encouraged him to have faith and fall in love again.
    He was committed and remarried at the age of 50. He is 60 now and I firmly believed he would not have live this long if he had not made an investment of his time and resource in the second marriage.

    The majority of your readers are watching you from a distance. The respect your financial insight, but at the same time they recognized the stupidity in 0.5 percent idea. They are watching your back to make sure you are not killing yourself.

    Since finance is not my major so I won’t be able to articulate the detail of stupidity in the 0.5 percent withdrawal rate – but here it is…

    Humans are seeking to fulfill their biological needs in the following order: food, water, sex, safety and relationship.

    You are stuck at the “Safety” huddle and somehow you are successfully convinced yourself that your net of safety must be greater than the survival of the United States of America. The only way that you feel safe if the good old USA is your debtor.

    Most of your readers care for you more than you perceived – a side effect of financial success…the entire world don’t care about me, everyone is taking advantage of me!

    Post this comment even if you don’t find it useful, give your follower a chance to find a sensible financial path!

    1. I never quite understand what you’re trying to say, but thanks for your comment. Hopefully you can continue to help other people see the light in your own way. I also hope that you find happiness and what you’re looking for.

      1. What is this engineer guy smoking? Makes no sense.

        FS please don’t waste your and your reader’s time by trying to make sense of this incomprehensible trash. Don’t approve these junk comments. This dude is not American for sure. Hater and probably a lonely 50-year old living in his parent’s basement or car garage.

      2. Thanks. I’m still not quite sure what you’re trying to say. Given I’m at the gym trying to get fitter, I would go to the buff guy and ask him for some exercise pointers instead of chastise his physique, especially if he’s a nice guy open to helping others.

        Thanks for trying!

      3. Actually “Engineer” I get you. What he is saying Sam is that he cares about you the person and not your financial health. That rather than no need to win a financial argument, look at the person you are arguing with openness and setting an example and listening to them. The end game is not who wins the argument, is that the health of the community. You can BOTH WIN. I’m totally into personal finance, but I’m also in the environmental movement and this love, light, bethechange, community – is what we are all about. Anyway. I think Engineer is a real person. You guys aren’t as used to hearing this perspective as much. Super interesting thread! Totally helps to be a pediatrician who is in tune with my feelings! LOL

  21. I’ve never understood why some people are so set in their views and think everyone else is wrong. PF is personal, duh.

    Great advice in your post and love how you encourage people to think outside the box!

  22. Right. So we shouldn’t let comments from ignorant people bother us.

    Wittgenstein’s Ruler: Unless you have confidence in the ruler’s reliability, if you use a ruler to measure a table, you may also be using the table to measure the ruler.

    1. Indeed. Nothing matters except for if you are taking steps towards financial freedom or not. Try to convince someone that your way is the right way is a waste of time.

  23. Good point about financial journalist thinking they are experts on financial topics when they are simply journalists. I wonder how many journalist confuse their expertise with what they are covering.

    I bet many, especially in finance!

    If you’ve got a low net worth and a low income as a financial journalist, maybe you’re not the best person to get financial advice from.

    1. The good thing is that finance doesn’t care if you are a journalist pretending to be a financial expert or not. You’re finances are either outperforming or underperforming.

      It’s why there are so many personal finance bloggers without any financial backgrounds. Free markets!

  24. Unclear on the 0.5% withdrawal strategy as many equities have a 3%+ yield and grow the dividend each year. Use equities. In place of a majority of the previous fixed income exposure and use cash as the place holder. With rates so very low, Long dated fixed income has much more risk perhaps.

  25. My Dear Sam – I read this comment on another blog website about a week ago – don’t know if it was the same Dan – but basically he wrote that Financial Samurai was just trying to generate internet traffic to his blog website by posting the 0.5% Rule in Proper Safe Withdrawal Rate. This guy is so wrong on so many levels. I have been in finance and banking for over 20 years and this is by far the best blog site on personal finance I have found. Not that I have visited that many. Perhaps the mustache guy and few other FIRE ones. You provide your readers with straight up advice and knowledge from your experience. No strings attached. Heck, you have inspired me to start my own finance blog this year in 2020. I don’t have even 1% of your traffic but will get there eventually (I publish a post a week for now). Plus, you replied to my email within hours with good info asking nothing in exchange. God bless you and your family for that buddy!

    We will always have haters and non-believers. I call them the “victim” class. A class that is unfortunately growing in our country. Everyone is to blame except them. Like I say, don’t hate the player hate the game. And you hate the game, learn to play it instead of trying to change the rules.

    Again, love this post. I learned a long time ago to just stop arguing with people. It is a complete waste of time. I just learned to listen and say “that is a good point,” and move on. Move on to making money. Those who argue all day are the ones who are buying the products and services the stocks I own are selling and paying me dividend.

    The Economy Chief

  26. “If you’re trying to change someone’s mind about a financial belief, chances are high you’re wasting your time.” Same can be said about politics. I loved this article. As my Networth has grown and I’ve gotten older, I find myself increasing disinterested in trying to convince/debate/argue with anybody about finance or politics. What do I care? My focus is on achieving 2 million Networth by Dec 31,2021 just before turning 47 years old. 10 years beyond that, the goal is to create $10,000 / month passive income from the wife’s pension, rental income and dividends/interest income. .5 withdrawal or 4%, either way, it won’t matter if my passive income surpasses my monthly expenses.
    So, while the occasional Facebook comment section brawl can be entertaining, I’ll just go about my mission of working part time, growing my passive income and Networth and enjoying my life.

  27. I may not always agree with you, but you always make me think.

    That is success on your part.

    I strongly believe in the “find something that brings in some income in retirement” school of thought. Not only does it bring in (needed) money, it also gives you reason to get up and get going in the mornings.

  28. I’m still 20+ years from retirement, but without an extreme stroke of luck, there’s no way I’ll hit the new target under the 0.5% rule. I think it’s time to start thinking of contingencies to the ol’ passive withdrawal strategy.

    Before retirement, I’ll need to use my savings to A) take more risk to get better returns, B) buy a business, C) buy a farm in a state with low property tax and live off the land, D) retire abroad, E) sell my body to science.

    Any other ideas?

    1. The key is to generate supplemental retirement income from something you enjoy. Once you do, you can more comfortably live off 0.5% of your nest egg or less.

      Finding something you would do for free that makes money is the #1 solution. Bill Bengen, the creator of the 4% Rule in 1994 said he is on his 4th career as a consultant and author.


      1. I write this because I want to share my experience, even though I know no one really cares. The writing is for me
        Sunday, August 30th i check this one account and I have millions more than I had on Friday. I looked at the number and thought this is fun.
        I own Tesla and Apple. My account picked up my post split number of shares at Friday’s stock price. Monday morning I will lose those millions, but for a few hours it is fun.
        I always wanted to be rich since my parents were poor. Getting socks and underwear for Christmas was not fun for a young boy. I know. Someone out there wants to write “i should be grateful I had clothes.”
        Drop dead.
        Having those pretend millions for a few hours taught me a lesson. Rich people aren’t special. They just own more shares than I do. If I owned 10,000 shares of Amazon, I would be rich. I wouldn’t be special, but I’d be rich.
        I am going to forget about being rich. I am going to figure out how to get more money so I can buy more shares. Once, I have enough shares, I will also be rich. That’s it.

        1. Sorry you lost those millions. But it was fun while it lasted right?

          I hope you can spend more time focusing on family and friends. That’s where true richness lies IMO.

    2. Great clickbait title there! “Build Passive Income or Donate Your Body to Science? Click Here to Find Out More!”. :-)

      In all seriousness, I fully agree with Sam’s points in this article and the Proper Withdraw Rate article. I’ve always assumed my retirement accounts were an emergency fund in retirement for when/if I have turbulence with my passive income, recognizing that I’ve been investing and maxing it out since I was an intern in college.

      Piling on blind agreement with the author generally doesn’t make for a fun forum however so I figured why not have some fun with the implication of making some fun clickbait titles for financial topics instead!

  29. The Fed’s announcement is definitely a game changer. I’m glad they are going to risk letting inflation increase stronger and faster than in the past. Our economy needs inflation to get going, not deflation thanks to depressed unemployment figures.

    People who argue in the comments section and on Twitter provide endless entertainment. They remind me of all the kids who fail the marshmellow test or maybe just 3-year-old toddlers in general. I say let them get all huffy and puffy. Better entertainment than my favorite Neflix show!

Leave a Comment

Your email address will not be published. Required fields are marked *