Well, that was fast! I just finished the second Investing For A Living screencast. In this one I tackle ‘How to Implement the 4% rule’. After publishing the first screencast I quickly realized that there is still quite a bit of misunderstanding when it comes to actually implementing the 4% SWR rule. And I happened to have all the material right at hand. It is not, as many believe, simply taking 4% of your portfolio value every year.

I did tackle this early on in the blog but a screencast is a much better platform to explain more complicated concepts. I can draw diagrams and talk through the specifics in detail. This second screencast turned out longer than I wanted. It’s 10 min. But I think it’s an important topic to understand before moving on to other retirement topics. I also apologize for the couple of cat meows here and there. One of my cats seemed quite interested in the topic this morning. Here it is.

Hope you find it useful. Please post any questions, comments, or suggestions here or on the video and I’ll responds as soon as I can.

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13 thoughts on “ How to implement the 4% rule screencast

  1. Great screencast Paul! Simple and easy to understand. And it’s very generous of you to share your opinions. So many bloggers today need to “monetize” their content so it’s really appreciated that you can share some of your wisdom in this fashion.

    Keep it up!

  2. Paul… these are awesome! Thank you for doing them. You break this stuff down into easy to digest chunks.

    Now, when do you start the cooking casts to go along with it? 🙂 I want to learn how to retire early AND make your killer flan!

    1. Thanks Cherie. Much appreciated.

      Hmm, I need to work on my video production skills before tackling cooking. Maybe…..


  3. GREAT, simple explanation!

    Question: What ‘factors'(?) caused the 1966 portfolio to fail…?

    Was the the overall market ‘high’ (measured by P/E, etc) at that time?

    I know inflation was relatively high during the 70s thus was that the issue?

    Combination of both or something else….?

    Knowing the causes would, hopefully, allow a retiree to mitigate (if not avoid) them.


    1. Thanks David. As you might expect it was not just one factor. It was a combination of high inflation and poor returns, especially early in the retirement period. Stocks were somewhat expensive but nothing extreme.

      I’ll cover this more in a later screencast because it is very important.


  4. Nice work, Paul. I’d want to rephrase or add that even though you remove 4% for the first year, and then add in the CPI per year, that 4% spending number needs to include your State (if any, based on where you and your motorhome call “home” state) and Federal income taxes that you owe. Uncle Sam needs to get his cut. Might also want to cover Tax Free Municipal Bonds being Federal income tax free, but not state tax free.

    1. Thanks Randy. You bring up a good point that many people miss. The withdrawal, your spending, needs to include ALL spending, including federal, state, and local taxes.


  5. Paul,

    Your screencasts are GREAT!

    Your verbal presentation while displaying the written material is very effective in getting across the points. I look forward to more.

    Thank you!

    PS – I’m glad you broke out a new menu item for the screencasts. I was starting to save the links on a word doc on my computer for future reference. However, I like how in the future all of them will be on your blog under the separate menu item.

    PSS – Great timing on your part. The NY Times put out an article today on the 4% Rule. Kinda cool … I noticed the person who developed the 4% Rule, Bill Bengen, has an engineering background like you.

    Here is the link:®ion=Marginalia&src=me&pgtype=article

  6. Excellent…just excellent…I love that you do this in a “language” that is understandable.

    And I agree with Cherie…I would love to see some cooking casts for many of your recipes….

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