T/RL features useful and provocative links curated from Tiller’s favorite publications and newsletters, as well as Twitter, Reddit, and our internal Reading List on Slack.
Suze Orman Isn’t FI/RE’d Up
We’ve previously written about the rapidly-increasing visibility and trendiness of the FI/RE (financial independence / retire early) movement.
FI/RE lit up Twitter and became a top article on Marketplace this week when Paula Pant interviewed personal finance guru Suze Orman and asked if she had heard of the FI/RE movement.
“Yes, of course I have,” Orman said. “And I hate it. I hate it. I hate it. I hate it.”
She went on to says that early retirement is “the biggest mistake you will ever make, and “if you play with fire, you will get burned.” Orman said she didn’t think people should retire until they have “at least 10 million.”
While some personal finance writers and enthusiasts were offended by her tone, many agreed that she was making a valid point: for many people, early retirement is an expensive mistake.
Paula quotes Orman on her blog: “$2 million isn’t enough for early retirement. At a 4 percent withdrawal rate, that’s $80,000 per year, which she says isn’t enough to protect you ‘when the floods come.’”
And FI/RE enthusiast @gregch) Tweeted “I enjoyed the interview. She does seem to approach FIRE like a concerned parent. But after she makes her points, it sounds like she’d approve of FIRE with sufficient buffer, uninflated standard of living, and willingness to work for lower wages.”
A Slightly More Advanced Personal Finance Manifesto
On Quartz, Allison Schrager writes:
“Personal finance is the ugly step-child of finance. Most of Wall Street’s resources are geared toward helping institutional investors get richer. The rest of us get watered-down versions of their advice and insights.
This is not what we need. A trust fund or endowment has a fairly simple objective: build up as much wealth as possible. The average household… is a complex financial puzzle. It is harder, in fact, than what the average institutional investor deals with. That’s because there are more sources of risk and regular people have less money to go around, giving them less margin for error in their financial decisions.”
Just because you’ve graduated from the “spend less, save more” stage of the financial journey, doesn’t mean there’s more to learn and consider. Read the five-point manifesto for “thinking about personal finances, telling good advice from bad, and judging what is worth paying for.”
Why You Should Probably Focus on Earning More
For Motley Fool, Christy Bieber writes that “Earning more money is the best way to become wealthy. There’s no limit to how much you can increase your income, but there’s a hard limit to how much you can cut spending.” Read the rest: “Want to Become Wealthy? Do This 1 Thing”
New rules for wedding spending?
Financial Samurai wonders “what is going on with couples who are willing to spend roughly 70% of their annual after-tax income” on their wedding, which is “such an ephemeral pleasure?”
His harsh but provocative advice? Spend no more than 1% of your combined income on your wedding:
“If he makes $60,000 and she makes $80,000, then they should spend no more than $1,400 on a wedding.”
Meet the Rich Uncles
REITs (Real estate investment trusts) are a popular way to invest in real estate equity. You buy into REITs just as you’d buy shared of stocks. Read “How to invest in real estate without buying a home” for a succinct overview of how they work.
Jim Wang at Wallet Hacks reviews a REIT platform called Rich Uncles which has two funds. One focuses on commercial properties and the other on student housing. (Imagine investing in college housing but without the empty beer cans.) Read the review here.
Your wallet is a tech startup
The Latest episode of the Stacking Benjamins Podcast focuses on “What Innovations Are Coming To Your Wallet?” It features a chat with USAA about their fintech lab and a conversation about how Grove is working to simplify working with an online financial advisor, and others.