Why did the financial planner cross the road?
… Okay, fine. Humor writing isn’t my strong suit. But speaking of suits (how’s that for a transition?) —
Pete the Planner is my guest in today’s episode. This former comedian is now a financial planner, USA Today columnist, author of 10 books, and a guy who says he’s on a mission to make you a millionaire.
We talk about why millionaire-dom is important (hint: $1 million in a few decades won’t be as much as you think!) and spar over the best way to create it. (He’s in the “save more” camp; I’m on the “earn more” team.)
We also chat about creating a “mock retirement” — the idea of living like you’re retired before you pull the plug on your career. (That’s why I haven’t worked in weeks!)
Pete explains why checking your bank balance too often can be counterproductive. You may think you’re being responsible by checking your accounts, he says, but his habit might make you spend more.
He also describes the importance of tallying up the total number of purchases you make every week.
This is a lighthearted episode with plenty of actionable insight. Check it out!
Marina
Great episode. Very focused and really digs in to how to make better decisions!
Pete
I love this podcast! I did however struggle with the first part of this episode. Why can’t you live on $2,000/ month in post retirement income? I get really frustrated with retirement planners that say you need millions of dollars but never actually touch on the 1 fact about retirement planning. You only need as much money to cover what you’re panning to spend. I don’t exactly consider myself a Mustachian but I sure won’t need to spend more than that. I currently spend about $2,000/month and live pretty amazingly. That include 2 mortgage payments (I have a rental) which total about 1,000/month. Since those will be paid of long before retirement (even my planned early retirement at 35(I’m 27)), I see no need that I can’t live on outlandish budgets as is. It will have almost $1,200 of discretionary spending built in as is not counting the inevitable rental income from multiple rentals.
Katasha
Purchasing power. Because of inflation, $2000 today is not equal to $2000 in the future. In 30 years, $2000 will not be able to cover the same amount as it does today; it will, instead, cover much less.
Joel
This was my favorite episode thus far. Everything flowed well and the content was spot on. I had to pull over during my morning commute so that I could take some notes. Keep up the good work!
Julie
Great episode! Happy to have you back!
Amanda Hauf
There’s an interesting thing here that seems to have been forgotten during this discussion, but was recalled a couple podcasts later. The 4% rule includes inflation protection. The 4% withdrawal assumes there is an average return of 7% with 3% of that going to cover inflation. During the talk it was very clearly stated that this was not there.
In reality, for an average (7%) year, if I have $500k, there will be $35k in growth. I’ll take $20k this year and there will be $15k left for next year. Next year, my withdrawal will be$20,600 (4% of $515k). My spending power has been preserved.