Some thoughts before we begin today’s Rant:
I’d rather take a chance and be free than stay chained to my desk in the name of safety.
I’d rather play with FIRE than live a conventional life.
If you ever see a Komodo dragon in the wild, run like hell.
The 4% Rule
If you’re going to quit the workforce early, I’ll bet that the 4% Rule is one of the cornerstones of your planning. If you’ve never heard of the 4% Rule, it refers to a study that was done to determine the maximum safe withdrawal rate in retirement over a 30 year time period. Basically, it states that if you can live off of 4% of your investments in the first year, you are ready to retire. I will spend $40,000 in my first year of retirement, so I need to accumulate $1,000,000 before I can tell my boss what to do with my job.
Mainstream Media Nonsense
If you read the mainstream media, you’ll notice that approximately 99.746% of the articles about the 4% Rule are negative. Here are some that I’ve read recently:
- Why you’ll go broke, catch an STD and live in a box if you abide by the 4% Rule
- Why dinosaurs will eat you if you follow the 4% Rule
- How the 4% Rule drove your spouse to Ashley Madison
- Why the 4% Rule keeps your husband from replacing the toilet paper roll and putting the seat down
- Why following the 4% Rule will cause the band KISS to reunite for the 736th time and play a concert in your backyard
I can’t seem to find links to any of these journalistic masterpieces now, but you get the picture; the mainstream media wants you to fear the 4% Rule.
Why you’ll probably be OK
I’m not an economist or a financial planner, but I play one on TV. Continue reading