Sam Dogen, founder of the popular personal finance blog Financial Samurai, shares his journey to financial freedom. He critiques the traditional 4% rule and introduces a new income-focused model for retirement. The conversation dives into the FIRE movement and strategies for navigating U.S. health insurance as an early retiree. Sam discusses negotiating severance packages and running his blog as a lifestyle business, emphasizing the importance of passion and strategy in personal finance. He also reveals insights from his Wall Street Journal bestselling book.
Sam Dogen critiques the 4% Rule and advocates for a personalized approach to financial independence based on actual living expenses.
The podcast emphasizes the evolution of the FIRE movement, introducing terms like 'fat FIRE' and 'barista FIRE' to showcase various financial lifestyles.
Deep dives
Microconf Europe 2022 Details
Microconf Europe 2022 is scheduled for November 15th to 17th at the Intercontinental in Malta. This year’s event will have limited capacity, making it smaller than previous editions, due to several factors. Attendees interested in participating should visit microconf.com/Europe for more details and ticket purchases. Notable speakers will include Rob Walling and Guillaume Mubech, the founder of Lemlist, which has achieved considerable success through bootstrapping.
Insights from Sam Dogan on Personal Finance
Sam Dogan, founder of The Financial Samurai, shares valuable perspectives on financial freedom and personal finance in a conversation about his writing journey. Over his career, Sam has written about 2,500 blog posts while emphasizing relentless execution in his work. He also discusses his book, 'Buy This, Not That,' which offers unique insights that differ from conventional financial advice found in typical personal finance literature. The conversation covers important mindset shifts in relation to money management and achieving financial independence.
Critique of the 4% Rule
The podcast delves into the 4% rule, originally established by Bill Bengen in the 1990s, suggesting that retirees can withdraw 4% of their savings annually without running out of money. Sam expresses skepticism regarding this rule, stating it does not account for changes in the investment landscape over decades, such as declining risk-free rates and new economic realities. Instead, he recommends a more individualized approach based on a multiple of one's income, advocating for financial independence built on genuine living expenses as opposed to artificially slashed budgets. This perspective promotes continuous saving and investment, acknowledging the dynamic nature of financial needs.
Financial Independence and the FIRE Movement
Sam discusses the nuances of the Financial Independence, Retire Early (FIRE) movement, emphasizing its evolution and various interpretations over time. He identifies the challenges faced by certain demographics and the misconceptions around achieving financial independence by drastically lowering living expenses. Sam introduces terms like 'fat FIRE' and 'barista FIRE,' explaining their relevance to different lifestyle choices people make while pursuing financial freedom. The discussion encourages listeners to focus on sustainable financial practices that align with their personal values and long-term goals.
In episode 618, join Rob Walling as he chats with Sam Dogen, the founder of Financial Samurai, which is one of the longest-running and most popular personal finance blogs. Over the last 13 years, Sam has personally written over 2,500 essays along with a Wall Street Journal Bestselling book. We talk about achieving financial freedom, money mindsets, and relentless execution.
Topics we cover:
3:12- The 4% Rule
4:40- Sam’s alternative approach to the 4% Rule
7:25- The FIRE Movement
10:16- How to navigate the US health insurance system as an early retiree
12:10- Sam’s relentless execution when it comes to running Financial Samurai
17:40- How Sam learned about personal finance
18:47- How Sam negotiated a severance package despite quitting his investment banking job
22:47- Why he runs Financial Samurai as a true lifestyle business
26:07- Would Sam sell Financial Samurai for $20 million?
27:35- The premise of Sam’s new book
28:46- Sam’s mental model for allocating financial assets to generate passive income
If you have questions about starting or scaling a software business that you’d like for us to cover, please submit your question for an upcoming episode. We’d love to hear from you.