William Bengen first wrote about the 4% rule in a 1994 research paper for the Journal of Financial Planning called Determining Withdrawal Rates Using Historical Data. He proposed a safe withdrawal rate of 4% of a portfolio’s value in the first year of retirement, an amount which is used as a baseline for spending going forward….
Ben Carlson
Animal Spirits Episode 55: How to Create the Perfect Fund
On this week’s Animal Spirits with Michael & Ben we discuss: Is universal basic income feasible in the US? How much would it cost to give everyone aged 18-65 $1,000/month? What does the perfect hedge fund look like? What do investors expect from their liquid alts & hedge funds anyways? Why isn’t the language of money…
What If You Retire At a Stock Market Peak?
Meet Sam. Sam’s entire family has terrible luck when it comes to the timing of their retirement. Sam’s great-grandparents retired at the end of 1928. Over the ensuing three years or so the stock market would drop close to 90% while the U.S. economy would contract nearly 30% in the Great Depression. In 1937, the…
Trends & Time Lapses
One of the reasons the fire-hose of information can actually make it harder to analyze the state of the world is because many people simply use point in time data instead of taking time to look at the overall trend. Current data tells you very little unless you’re able to provide context about where it’s…
Asset Allocation For Investors With an Appetite For Risk
A reader asks: I recently started my first real job, and I am currently setting up my 401k. I am selecting my asset allocation. Using the website portfolio visualizer, I have been back testing different allocations. I came across an interesting portfolio that beats most of the allocations on the website (Sharpe ratio and CAGR)….
Things You See During Every Market Correction
From the peak close in late-September through the week before Halloween, the S&P 500 fell around 10% for a quick little correction. Over the ensuing 10 trading days stocks have now bounced 6%. Does this mean the correction is now over? Was it simply another flash correction? I don’t know and neither does anyone else…
Animal Spirits Episode 54: Spirit Animal
On this week’s Animal Spirits with Michael & Ben we discuss: How long until the next bear market hits? Can you quantify recession predictions? What impact do the mid-term elections have on stocks? How often do bonds outperform stocks over 30 year periods? How many Americans consider themselves “financially healthy”? Should you combine your finances…
Under Pressure
It’s estimated 44% of eligible voters didn’t fill out a ballot for the 2016 elections. That amount of people vastly outnumbered those who voted for Trump, Clinton or any of the third party candidates. Here’s the data courtesy of The Big Picture: Trump and Clinton were both in the 60 million range while the number of…
Tiny Improvements, Big Results
“Habits are the compound interest of self-improvement.” – James Clear I hear from young people on a regular basis who complain that it’s impossible for them to save money. The list holding them back is a long one — student loans, low wages, rent, the high cost of avocado toast, and the desire to actually enjoy…
How Much Should You Charge?
I was having dinner with a group of friends when someone asked what I thought the key to a happy marriage was. My tongue-firmly-in-cheek response was “a king-sized bed.” My wife and I bought a memory foam bed a number of years ago and there’s no way we could ever go back to a regular…
