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It’s time to explore the best items from the internet from the past month that will help you save more, invest smarter, and retire sooner.

Volatility has made a return to the markets, which has a lot of people thinking about risk management. Risk management is easy to underestimate when planning your retirement.

Yet poor risk management can destroy the wealth you have worked so long and hard to build.

We’ll start this month’s selections by looking at what others are doing to manage risks. Our selections also look at the math behind retirement. They reinforce some timeless principles. And they explore the power of creating your own story.

Assessing and Managing Risks

Todd Tresidder writes Bubbles, Bubbles Everywhere – How to Protect Yourself. He examinines the investing challenges presented by simultaneous bubbles in stocks, bonds, and real estate accompanying the massive speculative frenzy around cryptocurrencies.

Morgan Housel explains that It’s Hard to Predict How You’ll Respond to Risk. He dives into research that shows we are terrible at predicting our future emotions and behaviors.

Financial Samurai discusses How Much Investment Risk to Take in Retirement: Various Portfolio Compositions to Consider, sharing his personal philosophy.

The next post demonstrates a completely different type of risk, protecting your assets in our litigious society. I struggled over whether I should include this article. It’s important for retirees, and especially those of us fortunate enough to be on the path to early retirement, to serve others and give back to our communities. I don’t want to cause fear and dissuade people from doing what is right. At the same time, we can’t bury our heads in the sand. We need to consider the potential liabilities and take appropriate precautions as the Physician on FIRE learned and shared in I Volunteered for the Hospital Board and Was Sued for Millions.

Earning Money in Retirement

I frequently write about the advantages of a non-traditional approach to retirement which incorporates flexibility and ongoing income. Two excellent articles look at the math of making money in retirement.

Early Retirement Now’s Ultimate Guide to Safe Withdrawal Rates continues with Part 23: Flexibility and its Limitations.

Four Pillar Freedom writes How Active Income in Retirement Impacts When You Can Retire.

New Retirement Calculator

For those of you interested in looking at the math behind your specific retirement scenario, The Pralana Gold Retirement Calculator was released this month. This advanced calculator was developed by Stuart Matthews, Darrow’s friend and frequent collaborator. It aims to be the most advanced retirement calculator and personal financial model available. Key changes for 2018 are the new federal tax code, detailed state tax calculations, tax-optimized Roth conversions, enhanced annuity modeling and improved printable reports.

A Couple of Reminders

It’s important to constantly learn, grow and improve. However, in the process it is easy to forget basic foundational principles. These four articles should serve as important reminders of things that you hopefully already know.

Megan McArdle set the internet on fire with After 45 Years of Birthdays, Here are ’12 Rules for Life.’

The White Coat Investor shares 10 Reasons I Invest in Index Funds. It’s an excellent primer for those new to index investing and a great reminder for the rest of us.

The Vanguard blog shared Performance report: Vanguard funds outperformed over long run. We are not paid cheerleaders for Vanguard. This is simply a demonstration of the impact of fees over time. The lesson applies to any low-fee, index dominated investing approach that limits management fees, turnover costs, and taxes.

Mark Trautman deconstructs the 8th wonder of the world in the article Harness the Power of Compounding.

The Power of A Good Story

I’ve been studying the stories of a variety of people who have achieved financial independence quickly.  The biggest difference between those that pursue financial independence and retiring early (FIRE) and those that follow the standard path is the story we tell ourselves. An upcoming documentary, “Playing With FIRE,” hopes to introduce the concept of FIRE to a wider audience. Creator Travis Shakespeare shares a desire to change the world by inspiring more people to create a different narrative in this Choose FI podcast interview.

Mr Money Mustache shared the story of software engineers doing good (and still getting paid) in public service with An Interview with Matt Cutts: Can the Government Grow a Money Mustache?

Finally, I had the opportunity to share my own early retirement story in a fun interview with Joe Anderson and “Big Al” Clopine on the Your Money, Your Wealth podcast.

[Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. Now he draws on his experience to write about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. You can reach him at chris@caniretireyet.com.]

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Note: For many years, Pralana Consulting and Can I Retire Yet? were engaged in an informal technical collaboration aimed at raising standards for accuracy in retirement modeling, with no business relationship. However, as of January 2020 we have an affiliate relationship. That means, if you purchase a Pralana product here, a portion of the sale goes to support this site.


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