BiggerPockets Money Podcast

The Mad Fientist’s New Rule To Retire Early Even Sooner

Dec 24, 2024

Brandon, known as the Mad Fientist, is an early retiree and financial independence advocate. He shares his decade-long experiments in early retirement strategies and discusses updating the outdated 4% rule for a smoother early retirement journey. Brandon reveals you might need less savings than previously thought and emphasizes the importance of flexible spending. He also explores how to navigate market crashes and the balance between enjoying life and saving for the future, urging listeners to rethink financial priorities.

01:10:18

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Brandon

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Quick takeaways

The Mad Fientist challenges the rigidity of the traditional 4% rule, suggesting a more flexible approach to early retirement withdrawals based on market conditions.

Tracking spending is essential for early retirees, as distinguishing between essential and discretionary expenses enables informed financial decisions during market downturns.

The journey to financial independence involves a mindset shift, emphasizing the importance of enjoying wealth rather than solely focusing on frugality and savings.

Deep dives

Understanding the 4% Rule

The 4% rule, a common guideline used for financial independence, suggests that retirees can withdraw 4% of their initial retirement portfolio annually without running out of money for at least 30 years. This rule is typically based on historical data from market performance, indicating that a $1 million portfolio allows for a $40,000 annual withdrawal. However, nuances arise when considering discretionary versus non-discretionary spending. By categorizing expenses, individuals can potentially retire early with a lower initial portfolio if they can adjust their discretionary spending during market downturns.

Intro

2min

Navigating Early Retirement with the 4% Rule

11min

The Importance of Flexible Spending in Early Retirement Planning

5min

Rethinking Retirement Expenses

25min

Journey to Financial Independence

12min

Finding Balance on the Path to Financial Independence

12min

Embracing Abundance After Financial Independence

2min

If you want to retire early, the Mad Fientist is your guide. For over a decade, Brandon, more commonly known as the “Mad Fientist,” has been running simulations, experiments, and exercises to discover which road to early retirement is the fastest. Now, in his forties, Brandon has time to reflect on what worked, what didn’t, and his regrets on the sprint to early retirement and financial freedom. And he’s also got a new update that’ll make your early retirement journey smoother.

After tinkering with the beloved and rarely challenged 4% rule, Brandon decided it was time to sit down and calculate how much you really need to retire early. For decades, financial freedom chasers have been breaking their backs, trying to have as much stashed away as possible to enjoy their well-earned time off from work. But, it turns out that this number might be overinflated, and you can retire with much less than you think. That means your early retirement timeline just got a LOT shorter.

In this episode, Brandon will describe why the 4% rule may be a bit too rigid, how to ensure you’ll have enough during early retirement, what to do during a market crash or correction, and why spending thousands of dollars on a coffee machine isn’t such a bad idea. If you want to maximize enjoyment in early retirement, instead of building a big bank account you probably won’t use, stick around!

In This Episode We Cover

Early retirement rules of thumb you MUST know when on the path to FIRE

The 4% rule and why you DON’T need to follow it to a tee

Retirement withdrawal rules and how much to spend during a crash/correction

The skill of spending and what Brandon regrets most from pre-FIRE life

Tracking your expenses and why knowing your costs is CRUCIAL to early retirement

And So Much More!

Links from the Show

Mindy on BiggerPockets

Scott on BiggerPockets

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