BiggerPockets Money Podcast
Has the FIRE Formula Changed? Why 100% Index Funds Isn’t the Answer
Feb 14, 2025
The discussion dives into whether relying solely on index funds is still a viable strategy for financial independence. As prices soar and market conditions shift, one host shares his bold choice to sell a significant portion of his index funds in favor of real estate. The contrasting views highlight the risks of 100% index fund investments and the diminishing certainty of FIRE assuredness. They also weigh the benefits of real estate, including cash flow stability and taxing strategies, as they navigate this evolving financial landscape.
39:15
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Quick takeaways
- Scott's decision to sell 40% of his index fund holdings underscores the importance of adapting investment strategies to current market conditions and personal situations.
- The discussion contrasts Scott's shift towards real estate with Mindy's commitment to index funds, highlighting how financial strategies should be tailored to individual life stages and goals.
Deep dives
Reevaluating Investment Strategies
The podcast discusses the growing trend within the FIRE (Financial Independence, Retire Early) community to challenge traditional strategies such as investing solely in index funds. Scott shares his experience of reevaluating his investment portfolio after ten years in the FIRE journey, revealing that he had 80% of his wealth concentrated in index funds. He emphasizes the importance of adapting investment strategies based on one's current life situation, stating that he is now uncomfortable maintaining such a high allocation in passive stock market investments. This led him to sell 40% of his index fund holdings to invest in rental properties, which he believes will better serve his financial goals at this stage of his life.
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