Dave Chilton

You probably should count that in the math.

Yeah, no, I think you, you said all that very well.

Okay.

You tweeted out yesterday, a little piece on the 4% rule.

And I want to talk a little bit about that because a lot of our listeners are early retirement or within five to seven years of retirement, they're thinking a lot about retirement income, et cetera.

Talk to us about what the rule is.

And then both you and I are going to come at the rule a little bit and talk about some of the negatives and how it's overused and abused.

You did a great job yesterday, I thought.

I really liked your tweets yesterday.

I thought you summarized some of the key aspects of the way he put that together that don't get enough attention.

You talked about, you have to know the portfolio construction, which was 50% US big cap, large cap stocks and 50% bonds.

And, you know, he's trying to make it last at least the 30 years.

But one of the things that I've been astonished, never got attention with his original work is he didn't include any ongoing costs to have the money managed.

And at the time he did it, of course, nobody was in low cost index funds and ETFs.

You were in actively managed funds or you had a portfolio manager often charging one to 2%.

That's part of the withdrawal.

So, I mean, if you're taking out four and only matching market returns, and then the manager was taking an additional one to two, then obviously that changes the math dramatically.

Are you not surprised that nobody talks about that part of it?

Yeah, what Mark means by that is if you think you're going to need $100,000 in today's dollars, just multiply by 25, right?

To get to the 2.5 million, then the 4% takes you back to the 100,000, et cetera.