In the FIRE community, one of the most frequently asked questions is, what is your FI number? I’ve asked this a ton of times. It’s one of my go-tos. It’s a great icebreaker. Everyone wants to know if their FI number is too low, too high, too conservative, or hopefully, just right. More often than not, people are too conservative. Have you inflated your FI number just to be a little too high? And could this be impacting your retirement today?
We’re going to talk about that in just a few minutes. Hello, hello, hello and welcome to the BiggerPockets Money podcast. My name is Mindy Jensen and with me as always is my knows-his-own-risk-tolerance co-host, Scott Trench.
Scott:
I don’t think you could have come up with a beta introduction for me if you tried, Mindy. BiggerPockets has a goal of creating 1 million millionaires. You are in the right place if you want to get your financial house in order because we truly believe financial freedom is attainable for everyone, no matter when or where you’re starting. As long as you actually know what your number is. Today, we are going to discuss how to calculate your FI number and what you may be doing wrong. We’re gonna talk about why your FI number may be too high, too conservative, and why that may be costing you a number of years. And why the traditional ways of calculating your FI number, the 4% rule, are already baking in most conservative assumptions that you probably need to plan out for your portfolio. Excited to get into this today.
Mindy:
I am too, Scott. Let’s jump right in. I’m going to put you on the hot seat. Can you give us a refresher for our audience how you calculate your FI number?
Scott:
First of all, this is such an issue because it’s the whole game, right? The question is, how much do I need to retire? Everyone who is ever exploring the concept of financial independence/retire early, the FIRE movement, has to have an opinion on this number. The official stance of the FIRE community, I say that a little bit in jest, is the concept of the 4% rule.
There is a large body of research, starting with the Trinity Study, uh, uh, and work developed by William Bengen, who we’ve had here on BiggerPockets Money, and followed up and expanded on by Michael Kitces, who we’ve also had here on BiggerPockets Money, supports generally the conclusion that the 4% rule is the answer to, how much do you need in order to retire early? The 4% rule states that if you have a portfolio and withdraw, with a 60/40 stock-bond portfolio, and you withdraw 4% of that portfolio or less, you never in history would run out of money over a 30-year period. And, it goes further than that and explains that in most cases, you end up with more money at the end of 30 years than in retirement. Um, that then you began your, your retirement with.
Now, this sparks the debate in the FIRE community, well, if I’m retiring at 30 and I want to live to be 100, that 30-year component of the Trinity Study and all this work really gives me the, uh, heebie-jeebies here. And as a result, while we generally all agree on the math and that the 4% rule is a great answer to the question, how much do you need to retire, we never, never, never find anybody in this entire industry doing this for years who has actually retired permanently on the 4% rule in a 60/40 stock-bond portfolio in an early capacity with no other side bets, cash position, pension, jobs, whatever. So, how did I do there? Is that answering the question, framing it right?
Mindy:
I think you are correct with, I have two little changes. You said never has anybody run out of money in history retiring on the 60/40 within with a 30-year horizon. And it’s actually 96% success rate. So there are a couple of times, uh, when you retired into a period of high inflation, prolonged high inflation. So you’re retiring in the 60s into the 70s hyperinflation. That was a time where when you ran out the money, year 30… you know what, you might have actually been correct. Year 31, I think, is when the, the, uh, bank account dipped below zero. So you said 30 years, you’re correct. Um, but I know somebody’s going to send it out there, send us a note, so I jumped there in advance.
Scott:
Ending 30 years with next to nothing is not an acceptable FIRE plan. So the, the point either way is the same when it comes to thinking about the 4% rule as the iron law of can you retire early?
Mindy:
Yes. However, I will argue back against people who are like, well, you know, we’re in a period of high inflation now. First of all, inflation is already coming down. It wasn’t a prolonged period like in the 70s. And second of all, if you got yourself to the position of being financially independent, chances are really good you’re checking in on your finances at least somewhat. Um, I don’t personally do it, but my husband does it every single day, which is way too much for me. Um, but I know that I don’t have to because he’s doing it every single day.
He’s keeping an eye on it. If there was a downturn, if there was a prolonged downturn, we would do something to right the ship. We wouldn’t just be like, well, it says we’re going to have to be withdrawing 4% every year, so that’s what we’re going to do. And even if we run out of money, there’s a way to change it. I mean, just a little bit of difference will change your whole financial outlook. You could stop spending money for a year, go get a job or a part-time job or something for a year. So I think that not only is this the most common question, what’s your FI number, but this is also a really big source of debate between people who say 4% isn’t conservative enough. So I, uh, hope to dive into that a little bit with you today, Scott. Have you calculated your FI number based on your spending and the 4% rule?
Scott:
You know, I, I have, and I’m way past it at this point, frankly, which is a really interesting position to be in because I’m in the same bucket as essentially every other person who, you know, uh, uh, well, I haven’t left my job, but every, every person who has actually left their job and retired early finds themselves in my experience in this position of having well beyond that number, um, from a FIRE planning perspective.
Mindy:
Yes, and I think that our current timeline is part of the reason for it. We started, my husband and I started pursuing financial independence about 11 years ago. We reached it fairly quickly, although a were halfway there. I continued to work, he continued to work. Our nest egg has grown and doubled and doubled again, and then a little bit more. So we are not in a position to worry about our finances, but I can see how somebody who is listening to this in 25 years is like, oh, well, you know, she did it with a huge stock market tailwind. We’ve had a crazy market for the last, what, 20 years? 15 years, 20 years? Oh, I’m sorry, I’m forgetting about 2008. How could I forget about 2008? For the last 10 or 15 years, we have had a, a crazy market. So I think that there’s a lot of things to consider, but also overwhelmingly people are too conservative with their original FI number.
Scott:
Let’s first step in the shoes of someone listening. And, and you, if you’re listening, let us know in the comments or on on Facebook if you disagree. But if I’m, if I’m going back five, six, seven, eight years ago, and I’m thinking about the journey to financial independence, the target is a net worth of between one and a half and two and a half million dollars, inflation adjusted, for the vast majority of people listening to this podcast. That will be the target. Right? And when you’re on, on the journey there, that backs into a 4% number. I think that most people who are on the journey to FIRE back into a 4% rule number.
And what we see is when people approach or even surpass that number, they’re not actually able then to retire. And that’s where the conservativeness comes in, right? Because people listening to the podcast who are on that journey are like, I’m totally with the 4% rule. I get the math and I’m still shooting for it. But what we’re, I think, addressing here is that the reality of once you get there is that most people tend to go way beyond it or have backup plan after backup plan after backup plan for it. And so that brings up the two, I think, conflicting problems or the big argument in the FIRE community about this number.
One is, hey, there are a number of cases in history where you will a up with less money at the end of 30 years than you started with on a nominal basis, which is an unacceptable outcome, um, for, for a lot of people in the FIRE community because they’re planned to live more than the 30 years of traditional retirement planning.
And the second is that the 4% rule assumes, and Mr. Money Mustache put this beautifully in a 2012 article called “How Much Do I Need for Retirement?” It assumes that the retiree will never e any more money through any part-time work or self-employment projects for the rest of their lives. It assumes that they’ll never collect a single dollar from social security or any other pension plan. It assumes that they’ll never adjust their spending to account for any economic reality like a huge recession. It assumes that they will never substitute goods to compensate for inflation or price fluctuations, like taking a vacation in a cheaper area one year versus doing something different another year. It assumes that they’ll never collect any inheritance. It includes that they will never spend less as they age, which is a typical pattern that we see in a lot of retirees. So those assumptions are also not baked into this 4% rule analysis. And so those are the two tug, tug and pulls on there. But I think that it doesn’t change the reality that every case of FIRE that I have come across to this point has involved someone starting with this goal of the 4% rule and going beyond it before actually pulling the trigger and quitting.
Mindy:
While we’re away on a quick break, we want to hear from you. Do you know what your FI number is? Submit your answer in the Spotify or YouTube app. Okay, we’ll be back right after these quick few ads.
Mindy:
All right, let’s FI-nally jump back in. And I think you’re correct, Scott, we haven’t found anybody who is solely living off of their 4% rule withdrawals and not having any other side businesses. However, I do want to call out Millennial Revolution. They have their portfolio that they retired on and all of their additional income that is coming in now is going into a different bucket. They are pulling out of this main bucket, uh, their 4% rule retirement bucket. They are only spending the money that they’re pulling out of there and they are living well within their means off of this money. They said that they have been doing this for 10 years and they have more money now than they did 10 years ago while continuing to withdraw 4% every year.
Scott:
Think about that example though. That’s the part of it, right? Bryce and Kristy, we’ve had them on the show here at BiggerPockets Money too, right? When they were starting this journey. And they’re like, they’re geniuses. They, they get all this. They, they know all the math behind this. They wrote a book called “Quit Like a Millionaire” in this, in this space that’s really popular. You should go check it out if you haven’t read it yet. They’re, they know what they’re talking about. And they can’t even do it. They have to have this side income stream just in case their experiment doesn’t work out on traditional financial independence. And that’s the conundrum. That’s like, that’s the topic today, right? Is, yes, that number that that is too conservative. It’s too much. They didn’t need the other other side of things there because the math generally works. It’s got a real high enough hit rate that if people did it, they would retire on time and spend a minimum amount of time working and the maximum amount of time in retirement on that. But nobody can actually mentally do that without some sort of side bet.
Mindy:
Well, I don’t know that they have a side bet on purpose. I think their blog just started generating income and they wrote a book and that generated income and, you know, little other things generated income. I don’t think they set out to say we don’t believe in the 4% rule so we’re going to make extra money. I think it just happens that they’re making extra money. Um, the same has happened for my husband who has been retired for seven or eight years, I can’t remember now. Um, it has happened for like, I am making more money now than I have ever done before, although I do have a job.
Um, which is one source of income. I have a real estate agent license, that’s another source of income. We have, uh, dividends from index funds. We have dividends from stocks that weren’t started out as dividends. We’ve, there’s all these little buckets that start coming in and it just, it feels like…
Scott:
The plan is too conservative.
Mindy:
It almost feels like you can’t stop it. Our original number was $1 million. And I think that that might have been a little aggressive for us because we have started spending more money. But also, we have started spending more money because our nest egg has grown so much. So it’s kind of a chicken and an egg thing.
Scott:
Well, well look, we have this dynamic and we have, we have wonderful math, and we’ve had the people who do this research on the show. And, and one other call out about Bill Bengen is Bill Bengen did this research and then like, maybe it was, maybe a month or two after he was on the show, maybe even a month or two before he was on BiggerPockets Money, he went 70% to cash with his own personal position, um, because he feared market correction. And it, and he, he didn’t use his rule to, to do that. And he was totally that, and that’s, that’s a psychological, you know, and, and personal preference for all of this. It’s not necessarily good retirement planning or a way to maximize wealth necessarily. But this, the guy who did, who did the original study couldn’t even adhere to it, or didn’t adhere to it. Maybe it’s the different word. Chose not to adhere to it, um, for what I’m sure are great reasons for him. But that’s, that’s the conundrum. So we have great math and we have no, literally zero examples in six years and 550 plus, um, episodes here of people who have actually done this.
Mindy:
And if you have, email us Scott@biggerpockets.com, Mindy@biggerpockets.com and let’s tell your story because we do truly want to tell your story, we just haven’t found you yet.
Scott:
Let’s take that and say like, how does this factor into the plan here? Well, the plan should be to amass 25 times your annual spending, right? Um, that that’s where we we things start. And know, know just that you are going to want to to go beyond that, unless you are the person who we’ve been looking for for years, who will actually pull the trigger at the 4% rule with nothing else on top of that. And again, we would love to have you on the BiggerPockets Money podcast when you do that, uh, at that point, or within a percent or percentage, uh, one percent or so of that, of that inflection point. So, that’s the plan. The plan is get there and know that that’s the beginning of the end.
And you’re going to move on to other, other parts of the process here. Then we can get into talking about more nuances from FIRE. And what’s kind of been interesting to me is these concepts of lean FIRE, regular FIRE, chubby FIRE, fat FIRE, and all of the things in between. And one of the things, Mindy, that I have been thinking about is, is inflation and the, the you know, protecting against this desire to maybe sort of, sort of want to spend more as life progresses rather than keep spending flat. And how to plan for that, right? And so, do you have any ideas around how someone who’s preparing for FIRE can lock in core expenses so that they’re protected from rising costs and inflation as much as possible?
Mindy:
Well, there’s always going to be things that you cannot control. The cost of food is going to continue to go up. The cost of gasoline a going to continue to go up. You can hedge your bed by having an electric vehicle and solar panels on your house and then you’ve mitigated your gasoline cost. You’ve mitigated some of your heating costs, some of your working around your house costs, assuming that the sun doesn’t go out, of course. Um, you can buy a car with cash so you don’t have a car payment. You will have some repairs and you’ll need to be saving for those, but that’s not the overwhelming majority of your vehicle expenses. It’s the payment itself, the gasoline, a and a little bit of upkeep.
You can buy a house and not be tempted to move and move and move again. Get a fixed rate mortgage, pay it off completely. Either way, your, your annual expenditures are going to be far less with a fixed rate mortgage and predictable. Uh, taxes are always going to go up, property insurance is always going to go up. So if you have a principal, interest, taxes, insurance mortgage, then your mortgage is never going to be a fixed cost, but the principal and interest part will be a fixed cost. Um, and that doesn’t change if you’re all paid off. You still have to pay property taxes. You still have to, you don’t have to pay property insurance, but I highly recommend it. Um, getting your costs fixed with either fixed rate interest rates, uh, fixed rate loans, or removing that cost altogether while you’re on your FI journey so you have the paid off everything. I think would be the best choice. But there are some things that are not going to be predictable. Um, when you are operating under a, I am spending X per year, you still need to pay attention to what you’re spending. It’s so easy for your spending to go up. So if you think you’re spending $50,000 a year, check in on yourself. Loosely, if you’re on track to spend $50,000 a year, but tighten up a little bit if you’re not on track or rethink your FI number. There’s a lot of ways to lock in your expenses on most things so that the fluctuating expenses like food aren’t going to derail your whole, your whole budget.
Scott:
Let’s talk about some of these items here because I think that as you think about planning for FIRE, right? The, the expense side is so much more important in a lot of ways than the asset base or even the income on it because you, you know, if, if you need to spend a lot, you need to realize a higher income, which puts you in a higher tax bracket, which puts a pressure that compounds the whole way up the stack on the net worth side, right? You need a lot more net worth to spend $300,000 a year comfortably in retirement than you do $50,000 a year in retirement, right? And it’s a compounding set. So the difference between 50 and 60 is not that large, you know, in terms of tax consequences. But every little bit counts. And so when you think about the way to protect your FIRE planned from inflation, you know, I, I, I think that that’s right, right? You just, you just went down the stack and I just want to repeat some of them with here and think through them. The home.
Right? If you have a paid off, what percent of people who actually retire with something closer to the 4% rule do you think pay off their mortgage, Mindy, if you had to guess?
Mindy:
Ooh, paying it off before the 30 years is up? Wow. I would say that’s pretty low, like 20, 30%.
Scott:
I would bet you that the own, I, so I think there’s a carve out here. I think for people like yourself who have much more than you need for FIRE, the, and a low interest rate mortgage, they’re not paying that off because it’s an investment decision at that point. But for people who are somewhat close to that bubble, I think that they’re paying it off. I think you’re going to find that, that paying off the, the home mortgage is very popular in the actual, I actually retired and left my job before the age of, you know, 60 in this country. I wonder how we can poll that, but I’d love to have that discussion going there and see how people think about it. And, and who’s, who’s fired and has not way beyond the 4% rule, but it’s just a little bit beyond this 4% rule. And if you did, did you pay off your mortgage first or do you still have it?
Mindy:
Okay, we have to, I have to write down these questions because I’m going to poll our audience in the Facebook group, which is facebook.com/groups/bpmoney.
Scott:
If folks are interested in learning more, Mindy and I had a very spirited debate about this on episode 554, um, where we talk about the math of paying off a mortgage early. Um, and we really nerded out on a lot of the pre and post tax consequences of that. But I think that that’s a really good way. Like, okay, you have a paid off house, your rent, you’re not exposed on the rent side to inflation for the next set, for for as long as you live in that property. You are exposed on the costs of home maintenance. You’re exposed in the cost of utilities. You’re exposed in the cost of, uh, insurance and property taxes or your HOA if you have one. Um, and so those, those are things that are are in there, but you can control the fact that rent is not going to grow. And I think that, you know, despite, um, you know, some folks in the space like Ramit Sethi, who very rightfully talk about how a lot of millionaires should rent and that renting is a, is a in many cases a better alternative. If you’re planning for a 30-year retirement and actually want to pull the trigger, I think a paid-off house is a pretty helpful way to think about it for a lot of folks because you just know that expense is not locked is, is is not going to to grow with inflation on it. So I think that’ll be a popular move and that’s something I chose to do. I like, I like that not have to worry about that expense rising, um, over time on except my real estate portfolio.
Mindy:
Yes, and I chose to get a mortgage when I bought this house, we actually had to, uh, pay cash for it in order to be able to close quickly. And then as after six months, we chose to get a mortgage on it because rates were so low and because I want to take a money that is uh for lack of a better word, sitting in my house and put it to use in the stock market.
Scott:
We should take one FI-no break, but stick around for more on adjusting your FI number when we’re back.
Scott:
Welcome back to the show. Let’s talk about solar panels next. So this is, you know, this is one in there, right? Yeah. Like, okay. Like here’s the thought process that I would go through, right? Okay, my energy bill is 150 bucks a month, or whatever it is, right? And I can get solar panels and that knocks out an $1,800 to $2,000 a year expense, um, on my, my life that I’ve just permanently knocked out. What’s that going to cost me like, 25, 30 grand, something in there, much, you know, much more? A, great. What do I have to, so that, let’s, what do you think it will cost me to get solar panels like that?
Mindy:
Okay, so I put solar panels on my house. I say I, my husband did it, I didn’t do it. He would love to talk to you about it ad nauseum forever. Uh, but we put solar panels on the house. We did a DIY installation. We got quotes from other companies. The least expensive quote that we got for half of the amount of panels that we ended up putting on was $37,000. This was unacceptable. So Carl started looking into DIY. We’ve got some friends who are electrical engineers, we’ve got some friends who are electricians. We’ve got uh some contractor friends, and he’s just really handy. So we installed the panels ourselves. We did end up paying a, an electrician to come and change out the panel, which has to be done.
Um, and all in it was $13,000 for us to put in twice as many panels as the original $37,000 quote. We got a tax credit, so our net cost was something like $9,000 out of pocket. We live in Colorado where they, they advertise it’s 330 days of sun every year. That’s not quite accurate, but it’s close enough. Uh, we get a lot of sun here. So in a place that doesn’t get a lot of sun, like your, uh, you know, northern states, I wouldn’t even consider putting on solar panels.
Scott:
Wait, wait, wait, wait though, we were so close. What, what did your energy costs go from and to?
Mindy:
Well, so we have twice as many panels as we needed at the time. We also now have two electric vehicles that are charging. We have a swimming pool, we have an air conditioner that all run on electric. Our net is about break even. Like, um, what we are making from the sun and what we are using, but we will have a surplus over the winter months when the air conditioning and the pool aren’t running. And then over the summer, we use up that surplus. My electric company pays me the retail rate for my excess electricity, which is not always something that your electricity company will do. Sometimes they will pay you the wholesale rate. So even though you’re paying, I don’t know what it is, let’s you’re paying a dollar a kilowatt hour and they are paying 20 cents a kilowatt hour for your extra. So there’s not that same break even.
Scott:
But let’s, let’s now let’s take that and put that into the context of FIRE. So you put $9,000 into this project and your electricity costs went on an annualized basis from what to what?
Mindy:
Um, I will say about $200 a month to $20 a month for the connectivity because that charge will never go away.
Scott:
Okay, so we went from $2,400 a month to $250, a, to a year to $250 a year in electricity costs. And let’s also call out the fact that this just move also came with two electric cars, which means no gas. Um, I don’t know how much you drive, but let’s call that another $100 a month for two electric cars at least in cost savings that is are, that is fueled by your solar panels here. And decisions to do other things. Do you have a power bank as well that stores electricity as part of this?
Mindy:
Okay.
Scott:
So we’ve, you know, that that would be another potential one that would, I think those are pretty expensive from like Tesla or whatever, that can bank power for the home. But for this $9,000 investment, you reduced your cash outlay on electricity by $2,000 and maybe by another $1,200. That’s $3,200 a year from when you think about gas savings with the two electric vehicles that you now have. So that break even is closer to three years. And let’s also talk about how now you don’t need to generate, you don’t pay tax on that $3,000 on that return. That is all post-tax that just stays in your account. You don’t have to realize income to do that. And I know or I bet you guys are in a pretty high income tax bracket between all your investments and other things that are going on. So that’s a major savings. So you’d have to generate, that’s like a 20, that’s like a 33% return post-tax per year when you factor in all the other decisions that came from it. And so that is what’s really interesting to me. Now, if it’s $67,000 to get the solar panels in there, you have a, you have a major problem. But that I think is part of the analysis of FIRE that people should be thinking about here is, okay, that’s, and think about all the things that go together. Home, you’re not going to do that on your, on a place you rent, right? You’re, so, you know, this is, this is like, there’s a home factor in here. There’s the, there’s this, there’s, I think that there’s a, there’s a connection here that can be explored when you think about, how do I protect my life from inflation? Well, it’s thinking like that, right? What else can you do along those lines, um, to set up your living environment so that you can make those kinds of decisions. So I think Carl’s math on this and yours, uh, here, I think it’s a home run, this, this investment.
Mindy:
Yes, for sure. We are not at all sad that we have gotten these. Originally when we put them on, we were going to stay here and for another four years and now we may move in a year or so. Um, we’re just moving around the corner, but then we would sell this house and we wouldn’t have the solar panels anymore. Uh, it has been a good choice for us, but again, if you don’t have all of these other factors, it might not be a good choice for you. If you can’t DIY it, 37,000 versus 9,000, that’s a big difference. And that 37,000 was taking into account the credit that we would be getting from, I think the state or the federal, I can’t remember who gives the credit.
Scott:
Yeah, but this, this is a perfect, but like, this is a perfect example, right? You have, so you’re fired, you’re close, you’re worried about being conservative, right? Go a little bit beyond and consider, how do I create a life situation that costs as little as possible with my newfound time in retirement? Right? I am not going to run BiggerPockets during the day and then get on my roof, DIY installing solar panels a the evenings and weekends at this point. If I was FIRE, I might. And that might, and and that was my day or my plan, that might, that might actually happen on there. And so those are the types of things that you can think about when you’re starting to say, how do I protect my portfolio from inflation? Well, that’s this concept of, you’re retired and you’re not at traditional retirement age, you can develop a lot of skills that can then drive these costs down. Those skills can include solar panels, they can include getting really skilled at shopping and preparing meals for much lower cost that might be, what might be practical or reasonable during your working career, for example. Um, it can include operating parts of your investment portfolio or whatever that can save costs. If I was not, if I was FIRE, my rental property portfolio for example, might not have a property manager, or might not have a property manager for all the portfolio, which generates an increase of 10%. now, I’m now not spending 10% of those rents on property management. And so those are the ways or those are the starter ideas I think to protect against inflation. And then there are certain things you just can’t protect against, like the fact that groceries will spend more, or if you like to eat out, a costs will rise. Um, I was going to say gas, but we’ve covered gas actually. Uh…
Mindy:
I mean, other things like, um, insurance, right? So insurance, like having a paid-off house, you can have different deductibles, for example, that maybe your lender wouldn’t accept, which allows you to have cheaper insurance rates. Um, not moving, right? Uh, when your house is sold, the tax appraiser has a very clear idea of what that house is worth, uh, at that point and can reassess the tax basis on it. If you live in the place for 20 years and the place doesn’t sell and it’s not a direct comp with all the neighbor homes, maybe you’re going to, your tax bill’s going to lag behind other things. So we can’t control those directly, but we can influence them, um, we’re thinking about retirement. And those things add up. When you take all of those ideas, all of these concepts around, you know, solar panels around paid-off home that that is not going to inflate. Over a dozen or, you know, a decade or two into retirement, that will make a major dent in protecting the, in protecting your spending from inflation or huge chunks of it, while your portfolio is very likely outpacing or at least staying in line with inflation. How are we thinking?
Mindy:
I’m wondering how I should be looking at the FI number if I’m not 60/40 stocks bonds, but instead 100% stocks.
Scott:
I’ll tell you this, if nobody, we’re, we’re never, if we’re, if, if we might meet somebody who retires on a 4% rule with 60/40, we will never meet someone who will retire on a 4% rule portfolio with just stocks.
Mindy:
You put me at yourself.
Scott:
But you may be 100% stocks, but it’s because you’re well past the FI number. Nobody is, we’re never going to meet the person, Mindy. I’ll tell this right now. And I will eat my words if it ever comes to pass, but we will never meet the person who will actually retire with no backup plan, with no other items in place at a 4% rule, 100% stock portfolio. It will never happen.
Mindy:
Okay, and his name is Scott. His email is scott@biggerpockets.com if you did in fact retire on a 100% stocks and are withdrawing from your 4% rule.
Scott:
And have no emergency reserve, and no pension, and no side projects, and uh, are not close to traditional retirement age, and going to withdraw social security, and meet no, have no other gotchas or gimmicks in your portfolio that are side bets besides that true reliance on the 4% withdrawal rate from a 100% stock portfolio, I will eat my, my words. I will put these on a cookie and have you eat that.
Mindy:
Sounds good. Scott, I thought this was a very fun conversation. Thank you so much for your points of view. I always learn something when I’m talking to you and now I have to go back and revisit my uh, solar plan, my solar panel plan. Um, maybe even revisit that video because I told people that it was not a break even and I think at the time we didn’t have the electric vehicles, but with the electric vehicle, I think that that’s, uh, that’s a much more viable solution.
Scott:
Mindy, I always learned from you and feel like your bets are though I, I couldn’t make solar panels work. I didn’t consider DIY installing solar panels. There’s no reason not to, uh, consider that as I think about that project. I’ll just do that at some other future point when I have a few weeks off. on there. But that’s, that’s a home run. That’s a, that’s one of the best investments you’ll that that someone, I think, could make in that situation. Although I do have questions about, um, whether rock-sized hail will ever will wipe out that investment.
Mindy:
Ah, well, we did have those hailstorms last year and they’re still standing. Um, Scott, when we move into the new house, we will be putting on solar panels, so come on up for a day and you can learn how to do it yourself.
Scott:
All right, Scott. Should we get out of here? Let’s do it.
Mindy:
That wraps up this episode of the BiggerPockets Money podcast. He is the Scott Trench. I am Mindy Jensen saying toodles, noodles.
