Retiree Spending Patterns and the 4% Rule

Are your financial decisions evolving as your wealth grows? In this episode of the Rational Reminder Podcast, we welcome back Nick Maggiulli to unpack his approach to climbing the wealth ladder and creating the life you want. Nick is the Chief Operating Officer at Ritholtz Wealth Management, the author of The Wealth Ladder and Just Keep Buying, and creator of the blog Of Dollars and Data. He is renowned for his ability to take the complexity out of finance and for his deep knowledge of investing. In our conversation, Nick explains his new framework for building wealth in his new book, The Wealth Ladder, and he unpacks how spending, income, and investing should change from one level to the next. He breaks down his .01% and 1% rules for spending and income, how the opportunity cost of time changes with wealth, and what the data reveals about income, wealth, and asset composition between different levels. Nick also shares strategies to progress between levels, insights on the challenges of extreme wealth, and why focusing on non-financial forms of wealth is important. Join us for a practical, data-driven framework for thinking about financial decisions and what truly constitutes ‘enough’ with Nick Maggiulli!

Key Points From This Episode:

(0:00:00) Nick Maggiull, his new book, and his background at Ritholtz Wealth Management.

(0:03:48) The Wealth Ladder, its different levels, and why he thinks the concept is important.

(0:06:59) Hear about the 0.01% rule for spending, and examples of The Wealth Ladder levels.

(0:12:09) Unpack the 1% rule and how the opportunity cost of time changes up the ladder.

(0:15:00) Explore how income determines wealth and how to move up and down the ladder.

(0:19:47) Which level is the most common to fall, and how wealth changes up the ladder.

(0:22:34) What shifting wealth composition indicates and how to move from level one to two.

(0:25:48) When education should be the focus, and what it takes to move out of level three.

(0:29:41) Discover the pros and cons of a side hustle and why controlled spending is crucial.

(0:33:32) Learn the key to reaching level five and why people fall out of levels four and five. 

(0:39:20) Insights on the downsides of extreme wealth and how it impacts lifestyle. 

(0:42:54) How long it takes to climb the ladder and the correlation between age and wealth.

(0:46:10) Why financial persistence is vital and what a typical millionaire household looks like.

(0:49:00) Find out what constitutes ‘enough’ financially and examples of other forms of wealth.

(0:51:56) Nick shares what he hopes readers will take away from the book and how it impacted his view of success.

Links From Today’s Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemindRational Reminder on TikTok — www.tiktok.com/@rationalreminder

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca

Benjamin Felix — https://pwlcapital.com/our-team/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://pwlcapital.com/our-team/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Nick Maggiulli — http://ofdollarsanddata.com/

Nick Maggiulli on LinkedIn — https://linkedin.com/in/nickmaggiulli/

Nick Maggiulli on Twitter — https://twitter.com/dollarsanddata 

Nick Maggiulli on Instagram — https://instagram.com/nickmaggiulli

Ritholtz Wealth Management — https://www.ritholtzwealth.com/

Episode 145: Jennifer Risher: Talking About Money — https://rationalreminder.ca/podcast/145

Episode 255: Structured Products — https://rationalreminder.ca/podcast/255

The Panel Survey of Income Dynamics (PSID) — https://www.bls.gov/cex/cecomparison/psid_profile.htm

Preston Holland on X — https://x.com/prestonholland6

Books From Today’s Episode:

Just Keep Buying — https://www.amazon.com/Just-Keep-Buying-Proven-wealth-ebook/dp/B09FYHZXBN

The Wealth Ladder — https://www.amazon.com/dp/0593854039

Portfolios of the Poor — http://www.portfoliosofthepoor.com/

The 5 Types of Wealth — https://www.the5typesofwealth.com/

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)