BiggerPockets Money Podcast

In this episode of the BiggerPockets Money podcast, hosts Mindy Jensen and Scott Trench welcome Frank Vasquez [https://www.riskparityradio.com/about] back on to challenge everything you thought you knew about safe withdrawal rates. Frank reveals how a properly constructed risk parity portfolio can support a 5% withdrawal rate—meaning you could comfortably pull $125,000 annually from a $2.5 million portfolio without the traditional fear of running out of money. This isn't theoretical; it's a practical strategy that sophisticated investors have been using for decades. Frank takes listeners step-by-step through building this portfolio on Fidelity [https://www.fidelity.com/go/join-fidelity-investments?imm_pid=58700007877883966&immid=100742_SEA&imm_eid=ep71500665667&utm_source=GOOGLE&utm_medium=paid_search&utm_account_id=700000001008875&utm_campaign=BRD&utm_content=58700007877883966&utm_term=fidelity&utm_campaign_id=100742&utm_id=71700000096184654&gclsrc=aw.ds&gad_source=1&gad_campaignid=17391917029&gbraid=0AAAAAD7OUhJL-t0AhQ0LDe4LT7N459BII&gclid=CjwKCAjwvuLDBhAOEiwAPtF0VnAu5cvJzUWqKa2yuJSHmeoR385CXwoJ17he4mOdfSsYf2P72LusHRoCfM4QAvD_BwE], demonstrating real-world implementation rather than just concepts. You'll discover how mathematical principles like the Fibonacci sequence can guide your allocation decisions, why traditional diversification falls short, and how to rebalance effectively without overthinking the process. Most importantly, Frank shows how to customize this approach to your specific situation, making risk parity accessible whether you're approaching FIRE or already financially independent. This Episode Covers: * Risk parity fundamentals - Understanding true diversification beyond stocks and bonds * Asset class breakdown - Specific investments across equities, bonds, commodities, and alternatives * Rebalancing strategies - When and how to adjust your portfolio without constant tinkering * Withdrawal techniques - Practical methods for taking income from multiple asset classes And SO much more! Learn more about your ad choices. Visit megaphone.fm/adchoices [https://megaphone.fm/adchoices]

In this episode of the BiggerPockets Money Podcast, hosts Mindy Jensen and Scott Trench are joined by Frank Vasquez, host of the Risk Parity Radio Podcast. Frank introduces the concept of a risk parity portfolio. Rather than relying on traditional stock-heavy portfolios, Frank reveals how strategic diversification across asset classes can potentially support higher withdrawal rates while actually reducing your risk of running out of money. The conversation covers the nuances of structuring a portfolio with equities, bonds, and alternative assets like gold and managed futures. They also explore the implications of real estate investments and the timing of transitioning from an accumulation to a decumulation strategy. Frank shares insights on the importance of balanced withdrawals, the challenges of adhering to conventional investment philosophies, and the need to move towards a holistic view of financial independence that includes well-being and responsible spending. We Discuss:  * Why the standard 60/40 portfolio may be failing FIRE investors * Optimal allocation strategies across equities, bonds, and alternative assets * The critical timing of portfolio transitions as retirement approaches * Strategic withdrawal approaches that prioritize longevity over accumulation * The psychological shift from wealth accumulation to wealth optimization And SO much more! Learn more about your ad choices. Visit megaphone.fm/adchoices [https://megaphone.fm/adchoices]

What’s your financial independence number (FI/FIRE number)? Are you being too conservative, or are you cutting things close? Do you even have one? Today, we’re taking a deep dive into this hotly debated topic to help you build a nest egg that will support your early retirement! Welcome back to the BiggerPockets Money podcast! How much money do you actually need to retire? For years, the four-percent rule has been the “official” stance of the FI community. But why is it, then, that so many people continue saving and investing when they can comfortably retire? In this episode, Scott and Mindy talk about their own FI numbers, how they calculated them, and how their financial positions have evolved over time. You’ll learn whether the four-percent rule still works today or if you need a larger buffer! If you’re worried about inflation, one of the best things you can do is keep your living expenses in check. This might seem out of your control, but there are several ways to either lock in certain costs or eliminate them entirely. We’ll discuss the many advantages of a paid-off house, self-managing your rental properties in retirement, and a one-time investment that could help you save thousands of dollars over your lifetime! In This Episode We Cover * How to calculate your financial independence number (and when to adjust it!) * The four-percent rule explained (and whether it still works in 2024) * Why most people chasing FIRE don’t retire on the four-percent rule * How to control your expenses and protect against inflation in retirement * The “home run” investment that could save you thousands of dollars And So Much More! Learn more about your ad choices. Visit megaphone.fm/adchoices [https://megaphone.fm/adchoices]

In this episode of the BiggerPockets Money Podcast, hosts Mindy Jensen and Scott Trench discuss the order of operations for investing your money to achieve FIRE. They outline the steps for both traditional early retirees and those looking to invest in real estate (or start a business).  If you’re a beginner in the FIRE movement, start here and work through these steps to FIRE the fastest. If you’re close to FIRE already or at a significant financial milestone, don’t worry. We have tips you can use right now to retire earlier and avoid the “middle-class trap” that kills so many FIRE dreams.The episode dives deep into why each step is essential and provides actionable tips for maximizing your investment strategy based on your personal goals. What We Discuss: * Investing Order of Operations for FIRE * Invest Order of Operations for Real Estate Investors * Why we prioritize a Fully Funded 401(k) over a Roth IRA And SO much more! Learn more about your ad choices. Visit megaphone.fm/adchoices [https://megaphone.fm/adchoices]

Want to access your IRA before turning 59½ without paying the brutal 10% early withdrawal penalty? You're not alone, and there are completely legal ways to do it that most people never learn about. In this comprehensive guide, John Bowens from Equity Trust will walk us through the exact strategies that allow you to tap into your IRA funds for early retirement, major expenses, or financial emergencies while staying on the right side of the IRS. This episode delves into the serious considerations and potential consequences of accessing IRA funds before retirement age. It highlights the penalties and tax implications of early withdrawals, emphasizing the disruption to the growth of retirement savings. The discussion includes valid exceptions for penalty-free withdrawals, such as higher education expenses and first-time home purchases, while stressing the importance of evaluating all options and consulting with a financial advisor. Listeners are encouraged to weigh the immediate need against long-term financial health to make informed decisions. What You'll Learn in This Episode: * Legal penalty-free withdrawal strategies that bypass the 10% early withdrawal penalty * IRS-approved exceptions including first-time home purchases, higher education costs, and medical expenses * Tax implications of early IRA withdrawals and how they affect your overall financial picture * Long-term impact analysis of early withdrawals on your retirement savings growth * Alternative funding sources to consider before tapping into your IRA * When to consult a financial advisor and what questions to ask * Step-by-step evaluation process for weighing immediate needs against future financial security * Documentation requirements and proper procedures for penalty-free withdrawals And SO much more! Learn more about your ad choices. Visit megaphone.fm/adchoices [https://megaphone.fm/adchoices]