#558: What happens when you spend three decades talking to retirement experts? You learn that most of what people think they know about retirement planning is oversimplified or wrong.

Christine Benz, director of personal finance and retirement planning at Morningstar, joins us on the Afford Anything podcast to share what she's discovered after 31 years of interviewing experts across personal finance, tax planning, and Social Security.

One key insight: The standard advice about withdrawing 4 percent of your portfolio annually in retirement misses the mark. Real-life spending isn't that simple. In your 60s, you might spend more on travel. By your 80s, healthcare costs often rise.

Benz suggests creating separate "pots" of money for different purposes - like a travel fund you aim to deplete within your first decade of retirement.

Want to protect against market crashes early in retirement? Benz recommends keeping 5-8 years of planned withdrawals in cash and high-quality bonds. This prevents having to sell stocks during downturns.

We talk about why retirement doesn't need to be all-or-nothing. Instead of going from 40 hours to zero, Benz describes how many people benefit from a phased approach. This might mean keeping the parts of your job you enjoy while dropping the rest, or finding new ways to use your skills.

The conversation shifts to housing choices. While many assume retirees move to Florida or Arizona, the data shows most stay put. Those who do move often end up near their oldest daughter. And while single-family homes tend to make people happier until around age 75, apartment dwellers report more satisfaction after that — largely due to increased social interaction.

Benz shares her own retirement planning process. Despite being a retirement expert herself, she works with an hourly financial planner who tells her she'll likely struggle to spend as much as she could in retirement. It's a common problem — after decades of saving habits, many retirees find it psychologically difficult to spend their money.

The interview wraps up with a discussion about relationships in retirement. Research shows that while older adults often have smaller social circles, these relationships tend to be deeper and more meaningful. They've pruned away the "good enough" friendships to focus on their closest connections.

Benz's insights come from her new book "How to Retire" and her work at Morningstar, where she creates free model portfolios and hosts The Long View podcast. Beyond the financial aspects, she emphasizes that successful retirement planning involves thinking about purpose, relationships, and how you want to spend your days — not just your money.

Timestamps:

Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths.

0:00 What 30 years of retirement expert interviews reveal

1:34 Why spending in retirement is harder than saving for it

3:12 Beyond money: need purpose, not just leisure

4:00 The challenge: planning for an unknown time horizon

8:52 Should market fears delay your retirement?

13:42 How much cash and bonds to keep safe

15:49 When bonds don't protect against stock crashes

18:33 Phased retirement: keep what you love, drop what you don't

29:24 Take mini-retirements throughout your career

33:20 Spending shifts: from travel to healthcare costs

46:14 Why most retirees don't actually move

57:31 After 75, apartment living beats houses

1:00:42 Friendship patterns change: quality over quantity

1:04:58 Virtual vs real-life connections

1:06:25 Where to find more info

For more information, visit the show notes at https://affordanything.com/episode558

Learn more about your ad choices. Visit podcastchoices.com/adchoices

#557: Imagine saving nearly your entire paycheck while your rental properties cover your bills. That's exactly where real estate investor Andrew finds himself — and yet he's at a crossroads. 

At FinCon, a personal finance conference, former financial advisor Joe Saul-Sehy and I sit down with Andrew and another attendee who bring their money dilemmas live on stage.

Andrew's question seems simple at first: should he sell his index funds to pay off his rental mortgages? But the real story runs deeper. 

He feels called to entrepreneurship and wants to quit his corporate job to pursue it full-time. He could achieve minimal financial independence (lean-FIRE) if he pays off the properties, but that might limit his options.

Next, Chris, a Gen X dad, opens up about his Gen Z kids' gloomy money outlook. His 22 and 24-year-old children, especially his daughter, believe their generation "will never retire." They see high inflation, expensive housing, and low wages as insurmountable obstacles.

This sparks a deeper conversation about generational perspectives. We note that similar fears existed 15 years ago when millennials entered the workforce during the Great Recession. Joe shares how he helped his own kids develop healthier money mindsets by introducing them to financial voices they could relate to, like Broke Millennial author Erin Lowry.

The discussion evolves into how today's young people actually have more opportunities than previous generations — they can work remotely, start online businesses with minimal capital, and create multiple income streams through platforms that didn't exist before. Chris's daughter, for instance, sometimes makes $35/hour driving for DoorDash during peak times.

We wrap up by talking about the importance of focusing on what you can control and finding purpose beyond just retirement planning. As Andrew points out, it might be worse to spend the best years of your life doing work you don't care about than to face uncertainty in retirement. The key is taking action on the things within your control while building toward long-term security.

Throughout the conversation, both guests share personal stories that illuminate their situations - from Andrew's experience at an oil refinery that pushed him toward entrepreneurship to Chris's daughter storing cash for taxes from her DoorDash earnings, showing she's more financially aware than she might think.

Timestamps:

Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths.

1:50 Andrew asks about index funds vs real estate allocation

4:04 Could Andrew reach lean-FIRE by paying off rentals?

5:00 Joe suggests keeping investments flexible vs mortgage payoff

8:05 Debate over HELOC vs index fund liquidity

10:10 Andrew's bigger dreams beyond real estate investing

17:40 Choosing between W2 security and entrepreneurial freedom

19:20 Andrew saves nearly entire salary while rentals cover bills

24:20 Chris worried about Gen Z kids' financial pessimism

28:40 How Joe helped his kids find relatable money role models

33:40 Millennials faced similar fears post-Great Recession

37:20 Today's expanded opportunities vs previous generations

43:20 Andrew's wake-up call at oil refinery job

49:20 Chris's daughter earning $35/hour on DoorDash

52:00 Finding meaning beyond retirement numbers

For more information, visit the show notes at https://affordanything.com/episode557

Learn more about your ad choices. Visit podcastchoices.com/adchoices

#556: An anonymous caller was raised to work hard, live below his means, and save. He feels undeserving of his recent $1,000,000 inheritance and struggles to spend it. What should he do?

Jack bought a house with a seven-year adjustable-rate mortgage. He’s confused about when and how he should refinance out of it. What should he do?

Jack is also wondering how to do the breakeven calculation between contributing to a Traditional IRA with upfront income tax savings versus a Roth IRA with deferred savings on investment gains.

Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.

Enjoy!

P.S. Got a question? Leave it at https://affordanything.com/voicemail

For more information, visit the show notes at https://affordanything.com/episode556

Learn more about your ad choices. Visit podcastchoices.com/adchoices

#555: Brandon Ganch (known online as MadFientist) joins us from Scotland to share how his life has transformed since retiring in 2016 at age 34.

“I thought retirement was an age, not a function,” he said. “And when I realized it was just a math function, it changed my entire life.”

Eight years into retirement, Brandon talks about how his spending and lifestyle have evolved. While his investment portfolio has grown "exponentially," he's had to push himself to spend more money. He and his wife have doubled their spending in the last three years, yet still haven't reached the 4 percent withdrawal rate that's common in early retirement.

Having two young kids (a two-year-old son and one-month-old daughter) has changed their spending patterns. Restaurant bills and craft beer costs have dropped significantly, while they've invested in a house — their third, but the first one Brandon says he actually enjoys owning since he's no longer "hyper-frugal."

Brandon shares his few regrets from his journey to financial independence, mainly missing friends' bachelor parties in his twenties because he didn't want to pay for two transatlantic flights in one month. The book "Die with Zero" has shifted his perspective on spending, making him realize there are "seasons in life" for certain experiences.

Brandon suggests trying to live your "post-FI life" before actually reaching financial independence. By traveling for three months straight, he learned that constant travel wasn't actually what he wanted.

He emphasizes that financial independence isn't just about early retirement — it's about having choices and power in your career.

You can find Brandon at madfientist.com or listen to his music at madfientist.com/album.

A Sampling of MadFientist Articles:

Retirement withdrawal strategies: https://www.madfientist.com/discretionary-withdrawal-strategy/

Baseline portfolio vs. optimized portfolio:

https://www.madfientist.com/guinea-pig-experiment/

FI spreadsheets:

https://www.madfientist.com/financial-independence-spreadsheet/

FI laboratory:

https://www.madfientist.com/resources/

How to use an HSA as a Super IRA:

https://www.madfientist.com/ultimate-retirement-account/

How to Stack Tax Benefits:

https://www.madfientist.com/stack-tax-benefits/

And of course, his passion project in retirement — the album:

https://www.madfientist.com/album/

Timestamps:

Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths.

0:00 - Paula opens with a Guy Fawkes Day reference and historical background

2:06 - Brandon Ganch (MadFientist) introduces himself as having retired in 2016 at age 34

4:09 - Brandon explains how HR discovering his Scotland location led to his early retirement

7:01 - Discusses the "power of quitting" and how having FI helped him negotiate better work terms

11:26 - Explains how spending habits changed post-retirement, especially around house ownership

13:37 - Talks about having kids and how that decreased spending on travel, restaurants and beer

19:27 - Shares his only regrets about the FIRE journey, including missing friends' bachelor parties

26:58 - Discusses the "Die with Zero" book and its impact on his financial philosophy

33:32 - Explains why optimization and hyper-frugality are no longer priorities in his life

40:06 - Updates on his music passion project and performing live with his brother

44:21 - Advises people to start living their post-FI life before reaching financial independence

48:36 - Explains why FI might not be for everyone but financial security matters for all

51:28 - Shares thoughts on AI's impact on software development jobs and being glad he's already FI

For more information, visit the show notes at https://affordanything.com/episode555

Learn more about your ad choices. Visit podcastchoices.com/adchoices

#554: The U.S. jobs market hit a surprising speed bump in October, adding just 12,000 new jobs — way below the expected 100,000. 

A mix of natural disasters and labor unrest explains the slump. Recent hurricanes in the Southeast wiped out somewhere between 40,000 to 70,000 jobs, while strikes at Boeing and other companies added to the slowdown. Against this backdrop, the Federal Reserve looks ready to cut interest rates next week by 0.25 percent.

Meanwhile, gold is having its biggest moment since 1979, but not for reasons you might expect. Central banks, especially in China and India, are loading up on physical gold like never before. Poland's central bank has grabbed 167 tons of gold and wants to keep 20 percent of its reserves in gold — a move that hints at banks preparing for possible global shake-ups.

Remember when I-Bonds were the hot ticket in 2022, paying out 9.6 percent? Those glory days are gone. The new rate has dropped to 3.1 percent, making your standard high-yield savings account look pretty good in comparison.

In the stock market, it's all about the "Magnificent Seven" — Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla. These tech giants account for 62 percent of all S&P 500 gains over the past year. The other 493 companies aren't doing too shabby either, with profits expected to grow 13 percent next year.

As for the upcoming election, both presidential candidates' economic plans would push the federal deficit higher. The Wharton School of Business says Trump's proposals would add $5.8 trillion to the deficit over 10 years, while Harris's would add $1.2 trillion. There's also talk about tariffs that could spark inflation and maybe even kick off a global trade war.

Here's the kicker: during the 2016 election, a 24-year-old Sam Bankman-Fried correctly predicted the outcome before anyone else and made $300 million in a single night trading on that information. But by morning, the markets had swung so wildly that he'd lost $600 million. 

The lesson? Even if you guess the election right, predicting how markets will react is a whole different ball game — one that you should avoid. Think long-term, buy-and-hold. 

Timestamps:

Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths.

3:15 October jobs report falls short: only 12,000 new jobs added

7:45 Gold prices surge to 45-year high

11:30 Central banks lead global gold buying spree

16:20 The end of the gold standard

20:45 I-Bond rates plummet from 9.6 to 3.1 percent

24:03 The Magnificent 7 create most S&P 500 gains

28:58 US deficit hits 6 percent, tops G7 countries

33:31 Inflation risks and tariff concerns ahead of election

40:10 Why you shouldn't trade the upcoming election

Resources Mentioned

Wharton’s Trump Campaign Economic Analysis:

https://budgetmodel.wharton.upenn.edu/issues/2024/8/26/trump-campaign-policy-proposals-2024

Wharton’s Harris Campaign Economic Analysis:

https://budgetmodel.wharton.upenn.edu/issues/2024/8/26/harris-campaign-policy-proposals-2024

The Economist, Editorial Board Endorsement:

https://www.economist.com/in-brief/2024/10/31/why-the-economist-endorses-kamala-harris

Bloomberg Endorsement:

https://www.bloomberg.com/opinion/articles/2024-10-31/michael-bloomberg-why-i-m-voting-for-kamala-harris

The Financial Times endorsement, which is unfortunately behind a paywall:

https://www.ft.com/content/3db1db35-f536-4efc-b463-a1fc98a785b0 

For more information, visit the show notes at https://affordanything.com/episode554

Learn more about your ad choices. Visit podcastchoices.com/adchoices

#553: This is the third and final episode in a three-part series. Dr. Brad Klontz and Adrian Brambila join us to share 21 harsh truths about building wealth. 

This episode focuses on the final 11 harsh truths, following up on their previous conversations about the first 10 harsh truths.

The conversation begins with a key distinction: poor people buy stuff, while rich people buy time. They explain how wealthy people focus on building passive income streams rather than trading hours for objects. Brambila shares how he learned this lesson personally, discussing his pickleball court purchase through investment income rather than active work hours.

The duo challenges common assumptions about luxury brands, arguing that people who constantly show off designer items are usually compensating for insecurity. Klontz shares his own experience of buying an expensive watch early in his career to prove his success.

They examine whether college, marriage, and homeownership are necessary for wealth building. While data shows these traditional paths often lead to higher net worth, they acknowledge these aren't the only routes to financial success.

On the topic of retirement, both guests argue that completely stopping work can be psychologically harmful, sharing examples of successful people who stayed active well into their later years.

They break down specific money-saving strategies like getting roommates, using public transportation, and cutting your own hair. Brambila demonstrates how women can cut their own hair during the interview.

The discussion covers specific side hustle opportunities, with detailed explanation of how to make money doing Amazon product reviews. Brambila shares how his videos have generated significant income, including $2,000 in a single day during Black Friday.

They address money myths about credit cards, particularly the misconception about carrying balances to improve credit scores.

Real examples and personal stories illustrate their points. Klontz shares how his 11-year-old son is making $5,000 monthly doing Amazon reviews, while Brambila discusses living in a van while earning six figures to demonstrate that wealth isn't about outward appearances.

The episode concludes by connecting financial security to Maslow's hierarchy of needs, explaining how building wealth enables higher-level personal growth and positive impact.

Timestamps:

Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths.

0:00 Introduction

2:02 Poor people buy stuff, rich people own time

13:20 Wealth mindset invests in passive income vs trading time

21:20 Only insecure people flex luxury brands

30:00 Debating necessity of college, marriage, homeownership

38:20 Why retirement can harm mental health

48:40 Wealthy people aren't afraid to ask for help

54:40 Don't rely on politics for financial freedom

1:03:20 Complaining keeps you poor

1:05:20 Alternative saving strategies: roommates, bus, sobriety

1:15:20 Netflix binging vs side hustles

1:19:40 Making money with Amazon product reviews

1:28:20 Credit cards must be paid in full monthly

1:31:00 The importance of thinking rich

1:33:30 Where to find more resources and bonuses

For more information, visit the show notes at https://affordanything.com/episode553

Learn more about your ad choices. Visit podcastchoices.com/adchoices

#552: In this special three-part series, we discuss some of the 21 Harsh Truths About Money. 

For more information, visit the show notes at https://affordanything.com/episode552

Learn more about your ad choices. Visit podcastchoices.com/adchoices

#551: Financial psychologist Dr. Brad Klontz and Youtuber Adrian Brambila join us to talk about money psychology, starting with a dark but revealing story about an experiment with dogs. 

Scientists put dogs in electrified cages from which they couldn't escape. Eventually, the dogs stopped trying to escape and just lay down, even when later moved to cages where escape was possible. This 'learned helplessness' mirrors how people can get trapped in negative beliefs about money when they grow up with financial hardship.

The conversation explores four main "money scripts" - deep beliefs about money that shape our behavior:

1. Money Avoidance: Thinking money is bad and rich people are evil

2. Money Worship: Believing more money will solve all problems

3. Money Status: Equating net worth with self-worth

4. Money Vigilance: Being careful and anxious about money (this one actually leads to the best financial outcomes)

Adrian shares his journey from making $27,000 at a call center in Iowa to becoming successful through YouTube, explaining how he had to find mentors online since no one around him understood his goals. He talks about feeling like a "lone wolf" with uncommon aspirations in a small town.

Dr. Brad reveals some surprising findings - like how meditation is linked to lower net worth (because being present-focused can work against future planning). His solution? "Automate before you meditate" - set up your savings and investments first.

They discuss how your friend group shapes your money views. The FIRE (Financial Independence Retire Early) movement, for example, creates status around having high savings rates instead of fancy cars. But they note some FIRE followers end up "FIRED" - Financially Independent Retire Early Depressed - because they never learned to enjoy spending money.

Dr. Brad shares a personal story about realizing in couples therapy that his fear of becoming poor was causing harmful stress, even though he was financially secure. This highlights a key theme: money scripts affect both rich and poor, and having more money doesn't automatically fix unhealthy money beliefs.

All these insights come from Dr. Brad and Adrian's research and personal experiences, which they've collected in their book "Start Thinking Rich." The core message? Your money beliefs probably came from your childhood and culture, but you can change them once you understand them.

Timestamps:

Note: Timestamps will vary on individual listening devices based on dynamic advertising run times.

0:00 Intro to 3-part series on thinking rich

3:01 Psychology experiment reveals how learned helplessness affects money habits

8:12 Adrian's journey from call center worker to YouTuber

14:16 How friend groups sabotage financial success

19:52 Brad's struggle sharing book-writing aspirations

29:30 Being the lone ambitious person in a small town

40:24 Introduction to the concept of money scripts

48:20 Money script #1: avoiding wealth and villainizing rich people

56:52 American consumerism vs other cultures

1:02:40 Money script #2: believing money solves everything

1:09:20 Money script #3: equating net worth with self-worth

1:16:40 Money script #4: vigilance leads to better money outcomes

1:20:40 Why meditation correlates with lower wealth

1:22:48 When parents can't enjoy their retirement money

1:29:44 Overcoming the fear of becoming poor again

For more information, visit the show notes at https://affordanything.com/episode551

Learn more about your ad choices. Visit podcastchoices.com/adchoices

#550: Paul Merriman, a former wealth manager turned financial educator, joins us to share investing wisdom that could reshape how you think about your money.

We kick things off talking about portfolio diversification. Paul suggests a simple four-fund strategy that includes large cap, small cap, and value stocks. He says this mix has historically beaten the S&P 500 with lower risk.

We then dive into international investing. Paul explains that while adding international stocks doesn't necessarily boost returns, it can help smooth out the ride. He keeps half his equity portfolio in international stocks, even at age 81.

Got kids? Paul's got some advice for you too. He tells us about putting money aside for his new granddaughter, aiming to fund her Roth IRA as soon as she can earn income. He breaks down how investing just a dollar a day from birth to age 21 could turn into millions by retirement age. It's a powerful lesson in starting early and the magic of compound interest.

We also chat about some common investing mistakes. Paul stresses that young investors often underestimate the power of stocks over bonds for long-term growth. He shares some eye-opening numbers: $100 invested in bonds since 1928 would have grown to about $12,000, while the same amount in small cap value stocks would be worth nearly $15 million.

Paul wants you to think of investing as a partnership with businesses. When you buy a mutual fund, you're becoming a senior partner in thousands of companies. At first, your contributions drive most of the growth. But over time, market returns take over, and you become the junior partner to a much larger fortune.

We wrap up with Paul sharing his excitement about a 40-hour financial education program he helped create at Western Washington University. It's designed to teach students essential money skills throughout their college years, from budgeting as freshmen to understanding 401(k)s as seniors.

Throughout our chat, Paul's message is clear: start early, stay diversified, and think long-term. He believes that with the right education and mindset, anyone can build a solid financial future.

4 Fund Combo Guide

https://www.paulmerriman.com/4-fund-combo#gsc.tab=0

Table Numbers

https://soundinvesting.com/wp-content/uploads/2020/04/Table-Numbers.pdf

Quilt Charts

https://soundinvesting.com/wp-content/uploads/2021/01/2020-Year-End-Podcast-Charts.pdf

Historical Risk and Return Tables

https://www.paulmerriman.com/historical-risk-and-return-tables#gsc.tab=0

Portfolio Configurator

https://lookerstudio.google.com/u/0/reporting/a941a5d4-0929-45ea-b22e-3bb82dc334ff/page/99wxc?s=hqmha3-AK5k

Timestamps:

Note: Timestamps will vary on individual listening devices based on dynamic advertising run times.

0:00 Intro to Paul Merriman and podcast topic

0:57 Two-fund portfolio strategy

3:55 Four-fund portfolio strategy explained

5:31 Large cap performance concerns

7:06 S&P 500 vs Total Market Index

10:59 AI impact on large companies

14:43 Market trends and historical performance

20:41 International equity in portfolios

25:26 ETFs vs index funds

29:41 Non-US investor asset allocation

38:41 Setting up kids financially

43:57 Early investing importance

48:37 Common investor mistakes

50:25 Investing as business partnership

52:51 Evolving financial education landscape

For more information, visit the show notes at https://affordanything.com/episode550

Learn more about your ad choices. Visit podcastchoices.com/adchoices

#549: Steven is stuck on the question of financial stability. How do you know if you have it? Is there an objective answer based on net worth? Or is it a calculation relative to your income and age?

Jack isn’t sure how to factor his house into his net worth. It’s an asset, but he has a mortgage against it, and there are transaction costs associated with selling it. How should he frame it?

Patricia and her husband are debt-free with a $2.2 million net worth, but she’s constantly stressed about their finances. Are her concerns valid? Or is she a financial hypochondriac?

Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.

Enjoy!

P.S. Got a question? Leave it at https://affordanything.com/voicemail

For more information, visit the show notes at https://affordanything.com/episode549

Learn more about your ad choices. Visit podcastchoices.com/adchoices

#548: Economist Dr. Karsten Jeske talks with us about the current economic landscape. Karsten, who retired at 44, breaks down the Fed's recent decisions and how they might affect our finances.

He explains how markets often anticipate interest rate changes before they happen. Karsten challenges traditional views on inflation and unemployment, telling us that textbook models don't always match reality.

Karsten shares his personal investing experiences, covering both market highs and lows. He emphasizes the value of consistent investing regardless of market conditions.

For those eyeing retirement, Karsten dives into safe withdrawal rates. He advises paying close attention to current market valuations when planning. On the topic of mortgages, he offers clear guidance on when refinancing makes sense.

We also touch on economic history, discussing the Weimar Republic's hyperinflation. Karsten uses this to critique modern monetary theory, expressing skepticism about unrestricted money printing.

Throughout our conversation, Karsten explains complex economic concepts in accessible terms. He draws on his background as both an academic and a Wall Street professional to provide well-rounded insights.

Karsten, also known as Big ERN, is the author of EarlyRetirementNow.com, where he writes about safe withdrawal rates and personal finance while enjoying his retirement.

For more information, visit the show notes at https://affordanything.com/episode548

Learn more about your ad choices. Visit podcastchoices.com/adchoices