Ep.140 – Rising Dividends

At retirement, your whole financial life essentially collapses down to one binary question: will your money outlive you, or will you outlive your money?

Volatility in the market is often seen as a risk, but it's important to differentiate between the two. The real risk lies in not having a plan that can sustain your financial needs throughout retirement. It's not about meeting a benchmark; it's about developing a plan and staying committed to it.

The dominant factor in long-term financial outcomes isn't just your investment performance – it's your investment behavior.

ADDITIONAL RESOURCES YOU MAY LIKE

1 Big Idea to Think About

  • The critical factor in retirement planning is ensuring that your income keeps pace with rising costs over time due to inflation. Neglecting this aspect can unknowingly lead to a plan that risks running out of money.

1 Way You Can Apply This

  • Develop a retirement plan that accounts for increasing income needs to match inflation rates. Consider investments that offer dividend growth potential to counteract the erosion of purchasing power over a 30-year retirement period.

1 Question to Ask

  • How can I adjust my retirement plan to ensure my income growth keeps up with inflation over a multi-decade period?

Key Moments From the Show 

  • [00:00:00] Introduction: Retirement boils down to one critical question—will your money outlast you or vice versa?

  • [00:01:00] The Impact of Inflation: Inflation raises the cost of living significantly over 30 years; failure to increase income accordingly can lead to financial shortfall.

  • [00:02:36] Compounding and Dividends: Companies in the S&P 500 have raised dividends faster than inflation, aiding retirement income growth.

  • [00:03:45] Equity vs. Bonds: Equities historically outpace bonds due to higher compounding rates, offering a margin of safety over time.

  • [00:05:05] Investment Behavior: Long-term financial success is more about behavior than the actual performance of investments; sticking to a plan through market volatility is crucial.

Resources Featured in This Episode: 

Funded Contentment: Am I Going to Be Okay? 

The New Definition of Family Office 

Your Future Self: How to Make Tomorrow Better Today 

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Ep.141 – Holly Markiecki-Bennetts – Study Skills, Self-Advocacy, and Finding the “Right-Fit” College

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Ep.139 – Neil Dutta – How Mainstream Media Mis-shapes Your View About the Economy