By Paula Pant
Many who reach CoastFI find themselves in a strange in-between: financially independent enough to stop saving, but not ready to fully retire. When you’re living off a taxable brokerage for decades, does the “never hold bonds in taxable” rule still apply?
This episode explores how traditional asset location advice meets real-life spending. We unpack how […]
By Paula Pant
Here’s the thing about personal finance advice: what works when you have $10,000 won’t work when you have $1 million.
Yet most financial guidance treats everyone the same, whether you’re scraping together a $1,000 emergency fund or deciding whether to upgrade to business class.
Nick Maggiulli, author of “The Wealth Ladder,” joins us to break down how money strategies must evolve as your net worth grows. He’s mapped out 6 distinct wealth levels, each requiring different approaches to spending, saving and investing.
The levels start simple.
Level 1 covers anyone with less than $10,000 in net worth — that’s 20 percent of American households. Here, bad luck gets amplified. A flat tire that costs $200 could spiral into job loss and debt if you can’t afford the repair.
Level 2 spans $10,000 to $100,000 in net worth. Maggiulli calls this “grocery freedom” — you can splurge on the nicer eggs without checking your bank balance.
Level 3, from $100,000 to $1 million, brings “restaurant freedom.”
Level 4, the $1 million to $10 million range, unlocks “travel freedom.”
Getting beyond Level 4 — into the $10 million-plus territory — requires business ownership or extreme patience. Maggiulli calculates that even saving $100,000 annually after hitting $1 million takes 23 years to reach $10 million, assuming 5 percent annual returns.
The data shows income matters more than frugality, especially in the early levels. The median household income in Level 1 is $32,000, but in Level 4 it’s $197,000, and in Level 6 it reaches $4.3 million.
We discuss why homeownership dominates wealth in Levels 2 and 3, how investment assets become crucial in higher levels, and why many people in Level 4 choose “Coast FIRE” over the grinding path to Level 5.
By Paula Pant
Jlyn and her husband are 20 years from retirement, but they’ve got their eye on a second home they’ll live in when the time comes. Should they make the purchase now, or keep saving?
Reese was recently laid off, and she’s struggling to choose between two financially responsible paths. Should she continue her long-term disability insurance? Or is it wiser to save money?
Kip’s youngest has finally graduated from college, and he’s looking forward to an early retirement. But, with the eyewatering costs of long-term healthcare, is this still a viable path?
Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.
By Paula Pant
What do you do when you’ve reached financial independence? JL Collins says it depends entirely on your spending rate, not just your net worth.
Collins joins us for part two of our conversation about what happens after you reach financial independence. He tackles the question of whether you should invest differently once you’ve “won the game.”
Someone with $5 million spending $100,000 per year sits in a completely different position than someone with the same amount spending $200,000 per year. The first person can afford to stay aggressive with stocks. The second person needs bonds to smooth the ride.
Collins walks through his withdrawal strategy using his daughter as an example. She stepped away from corporate life in her early thirties and now follows an 80-20 stock/bond allocation.
She pulls dividends from both funds into her checking account, covering about 2.5 percent of her target 4 percent withdrawal rate. Vanguard automatically sells shares to cover the remaining 1.5 percent.
We cover Collins’ thoughts on the 4 percent rule, which he calls extraordinarily conservative. He references Bill Bengen’s research showing that 5 percent withdrawals succeed 86 percent of the time.
Collins would take those odds to escape a soul-crushing job, especially since most financially independent people end up accidentally making money anyway.
We discuss the tension between frugal habits that build wealth – and learning to spend money once you have it. Collins flies first class, but he drives a basic car.
Collins explains why financially independent people often stay engaged with work — the problem was never work itself, but working without agency.
By Paula Pant
JL Collins doesn’t know what the efficient frontier is. The author of “The Simple Path to Wealth” — the guy synonymous with VTSAX and chill — admits this right off the bat when we challenge him with advanced investing concepts.
Collins joins us for Part 1 of a two-part series where we skip the basics and dive straight into the complex stuff. We grill him on whether his simple approach actually beats more sophisticated strategies, and his answer might surprise you.
He concedes that Paul Merriman’s four-fund portfolio probably outperforms his one-fund approach mathematically. But Collins argues that execution trumps optimization every time. Most people can’t stick with complex strategies for 20 years, especially when those strategies require selling winners to buy losers – something that goes against human nature.
Collins prioritizes what works in real life over what looks good on paper. He calls index funds “self-cleansing” because they automatically rotate out failing companies and sectors while rotating in the new winners. You don’t need to predict which companies will dominate next – you’ll own whatever rises to the top.
The episode covers his thoughts on VTSAX versus VTI, international diversification, and why he’d rather put Tabasco than Cholula on his eggs — his quirky way of explaining personal preferences in nearly identical investment options.
By Paula Pant
An anonymous caller feels trapped in a no-win situation with her financially reckless mother. She has the means to bail her out, but it doesn’t feel right. What should she do?
Shannon is excited about investing in several companies overseas. But she can only access them using American Depository Receipts. What are they, and how do they work?
Jennifer calls back with an update on putting a vacation on a credit card and playing the rewards game.
Former financial planner Joe Saul-Sehy and I tackle these questions in today’s episode.
Enjoy!
By Paula Pant
Frank Vasquez watched his parents, ages 91 and 96, struggle financially in retirement.
They were immigrants. His dad was a physician. They raised five kids. They retired in the early 1990’s. But by 2009, they ran out of money.
When Frank was 45, in 2009, his parents would call asking for money to help make ends meet.
This reality hit Frank hard and sparked a decade-long quest to crack the code on sustainable retirement withdrawals.
At age 45, Frank set an ambitious goal: retire in his early 50’s while still supporting his parents financially.
The problem? Most financial experts simply told people to spend less rather than optimize their portfolios for higher withdrawal rates. Frank wasn’t satisfied with that answer.
You’ll hear how Frank discovered that many retirees leave money on the table by holding too much cash or following overly conservative allocation models.
Through extensive research, he found a sweet spot for stock allocation that maximizes safe withdrawal rates — something most traditional advisors miss entirely.
Frank walks us through his approach to portfolio construction, explaining why he believes in balancing growth and value stocks while keeping bonds limited to US treasuries for recession protection.
He breaks down the math behind safe withdrawal rates and reveals why property taxes pose a hidden threat to retirement security as home values climb.
You’ll learn about risk parity strategies, macro allocation principles, and why diversification across uncorrelated assets creates more stability than traditional 60/40 portfolios.
The conversation covers Frank’s Golden Ratio Portfolio, a structured approach to asset allocation designed specifically for the retirement drawdown phase.
Frank figured out how to fix what went wrong with his parents’ retirement. His approach could help you avoid the same mistakes.
By Paula Pant
Jillian Johnsrud was falling apart. After suffering a miscarriage, she couldn’t pull herself together to return to her job as a youth pastor in DC. She decided to take a month off.
That unexpected break became Jillian’s first “mini-retirement” — a deliberate step away from work for at least 30 days to focus on something […]
By Paula Pant
Becky and her husband are about to semi-retire. But the four percent retirement withdrawal rule doesn’t make sense for them. Are there other financial frameworks they should explore?
Kris is excited about a potential boost in local real estate values when the World Cup comes to town. Will this have any significant impacts on his property?
Peyton’s parents are pressuring her to buy a house, but she’s worried this will cripple her early retirement goals. Is she right to be concerned?
Former financial planner Joe Saul-Sehy and I tackle these questions in today’s episode.
Enjoy!
By Paula Pant
Kimmy is worried that her mom’s retirement portfolio is invested too conservatively. Is she right to advise her to take on more risk?
Peyton has heard the financial advice about staying away from Whole Life Insurance as an investment, but what about as a savings account for children? Is there good a use case for this?
Jeff and his wife are in a great financial position, but they fear that their retirement savings are too heavily apportioned in traditional IRAs. Will they run into tax problems in the future?
Former financial planner Joe Saul-Sehy and I tackle these questions in today’s episode.
Enjoy!
