PODCAST

Afford Anything

Paula Pant

You can afford anything, but not everything. We make daily decisions about how to spend money, time, energy, focus and attention – and ultimately, our life. Every decision is a trade-off against another choice. But how deeply do we contemplate these choices? Are we settling for the default mode? Or are we ruthlessly optimizing around a deliberate life? Host Paula Pant interviews a diverse array of entrepreneurs, early retirees, millionaires, investors, artists, adventurers, scientists, psychologists, productivity experts, world travelers and regular people, exploring the tough work of living a truly excellent life. Want to learn more? Download our free book, Escape, at http://affordanything.com/escape

Ask Paula: How to Optimize Your Investments Along the Efficient Frontier (If You Dare!)Invest Anywhere: 4 Benefits and 5 Challenges of Long-Distance Real Estate InvestingAsk Paula: Should I Take a Higher-Paying Job if I Can’t Save As Much for Retirement?How I Discovered The 4 Percent Retirement Rule, with Bill Bengen
#377: Today’s episode is sheer retirement nerd bliss. We talk to the creator of the 4 percent retirement safe withdrawal rule, Bill Bengen. If you’re new to retirement planning, you might not yet grasp the gravity of this. Let’s cut to the chase: the 4 percent rule is one of the most revolutionary, groundbreaking insights in the field of retirement research in the past 30 years. To understand why, let’s climb in our time machines and return to 1994. Back then, many financial advisors were telling their clients that they could safely withdraw 7 percent of their retirement portfolio each year. After all, the simplistic logic went, the stock market has historically yielded between 7 to 9 percent returns, so that type of withdrawal rate shouldn’t dwindle the principle … right? ⠀ Bill Bengen, an MIT graduate and former rocket scientist, decided to build a better model. He looked at the performance of investment portfolios across 30-year time horizons, beginning in 1926. Under the assumption that the portfolio is invested 50 percent in an S&P 500 Index and 50 percent in intermediate-term bonds, in a tax deferred account, he found that retirees could only withdraw 4.2 percent of their portfolio in the first year of retirement, and that amount adjusted for inflation each subsequent year. He called this the “safe withdrawal rate” that gave people a reasonable chance of not outliving their money, based on historic performance. He published the results in the Journal of Financial Planning and caused a stir. This was revolutionary. It upended the assumptions that dominated the field at the time. And it remains a cornerstone of retirement planning to this day. We talk to Bill Bengen about his discovery – and his latest research – in today’s episode. For more information, visit the show notes at https://affordanything.com/episode377 Learn more about your ad choices. Visit megaphone.fm/adchoices
Apr 26 2022
1 hr 2 mins
Ask Paula: How Should My 64-Year-Old Mom Handle a Toxic Boss?The 2X Rule (and Other Wealth-Accelerating Advice), with Nick Maggiulli
#375: Here’s the deal: The majority of people who write about personal finance repeat the same tired aphorisms and cliches. “Millennials aren’t investing enough,” they’ll lament. “Millennials are amassing wealth at a slower pace than previous generations!” But when you ask for their source, they turn up blank. Each writer points to a headline, which sources another headline, in a neverending circular secondary-source-citation that fails to point to any primary data source. Nick Maggiulli doesn’t play that game. If you haven’t heard the name Nick Maggiulli yet, prepare to meet one of the most original, insightful voices in the media landscape of personal finance and investing. (His last name is pronounced “ma - julie,” and his godfather refers to him as “paper hands,” but that latter point is a different story for another day.) Nick is a data scientist with a knack for clear written communication, a rare Venn Diagram intersection of skill sets. He holds a laser-focused interest in the arenas of personal finance and investing, and he’s eager to share fresh, nuanced, evidence-backed takes about savings, spending and investing with anyone who will listen. He recently released his first book, Just Keep Buying; the title reflects a user-friendly reminder to continue dollar-cost averaging. It also speaks to the main idea behind wealth creation: accumulate income-producing assets, consistently, for as long as you possibly can. It’s an honor to welcome Nick Maggiulli onto the Afford Anything podcast for what I hope is the first of many appearances. In today’s episode, we discuss actionable strategies for managing your money, including assessing your spot along the save-invest continuum, implementing the 2X rule into your spending decisions, and saving half of your inflation-adjusted future raises. Enjoy! For more information, visit the show notes at https://affordanything.com/episode375 Learn more about your ad choices. Visit megaphone.fm/adchoices
Apr 13 2022
1 hr 4 mins
Ask Paula: How Can I Minimize My Taxes?Invest Anywhere: The 5 Ways Real Estate Makes MoneyAsk Paula: I’m 33 and Want to Retire at 45 – What Should I Do?What’s the Point of Happiness, Anyway?, with Dr. Bill Von HippelAsk Paula: My Income Is Dropping From $190,000 to $40,000; What Should I Do?Why Does the Stock Market Crash? | Stocks 101 Explained, with Brian FeroldiAsk Paula: Talk Crypto To MeThe Roots of Procrastination, Inattention and Anxiety, with Dr. Ellen Vora, M.D.Ask Paula: How Do I Invest For My Parents' Retirement?Inflation, ExplainedAsk Paula: No Spouse, No Family - How Do I Financially Prepare For Care Later In Life?Two Types of Intelligence, with Harvard Professor Arthur BrooksAsk Paula: Okay Seriously, Why Hasn’t Anyone Solved the Budgeting Issue?The GameStop Revolution, One Year Later — with Spencer Jakab