Today’s Prep:
What financial rules are worth following and which ones need an update? On this episode, we discuss several known financial rules to see which ones are dated and which ones stand the test of time.
(Click the featured times below to jump forward in the episode)
Equipping Points:
Just like your cell phone or other technology, things get outdated over time. What kinds of financial rules have gotten dated and unusable over time? What has held true?
How does the four percent rule hold up? Eric reviews where this rule came from and how it was applied in the 1980s. Some of the question comes down to how long you want your retirement to last? What kind of success are you aiming for?
Where is the market today? Does the 10-5-3 rule fit in today’s market? If things stay the way they are today, ask yourself how can you retire? How can you generate the income that you need? There are different tools that can make it happen, but relying on the 10-5-3 rule just doesn’t work.
Should you transition from stocks to bonds as you get older? It’s been done to transition from high risk to lower risk. Remember though that bonds still have risk, it just looks different. What are bonds and how do they gain value? Consider what alternatives there are to bonds to that provide you with a sense of safety and security.
Is your goal to save a million dollars for retirement? Is this a worthwhile goal or should you focus on what you already have? Instead of getting caught up on a particular number, look at your plans to make sure you get to enjoy the retirement lifestyle you want.
Listen the full episode or click on the timestamps below to hear what financial rules might be outdated today.
1:38 – Should you follow the four percent rule?
4:36 – What is the 10-5-3 rule?
5:55 – Does it make sense to change from stocks to bonds as you age?
8:30 – Are you following the million-dollar rule?
Related Resources:
Defining Dividend-Paying Stocks
Finding Predictable Income Sources In Retirement
Today’s Takeaway:
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