Sound advice?

I stumbled on this advice on a blog from a couple who retired at age 38, live around the world and now sell advice to others on retirement planning and living.

Have you ever heard that your income in retirement can be drawn from your net worth? I haven’t and when you think about it, it makes no sense. Your net worth includes the value of your house, your car and your wife’s jewelry . . . your collection of Beanie Babies too.

Assets minus Liabilities equals Net Worth. Place a value on everything you own and subtract what you owe. This figure is your net worth. Now divide how much you spent last year by your net worth number and you will have your percentage of spending to net worth. If you are spending 4% or lower, congratulations, you are in great shape financially. If your percentage is higher, then adjustments need to be made to your balance sheet. Increase your net worth, lower spending or employ some combination of the two.

Retire Early Lifestyle Newsletter  Source: 5 Things

If you plan on following the 4% “rule” for retirement income, what you can take for your income each year is not based on your net worth, but on your investment assets – either your dedicated retirement funds or your total investments including those not part of a retirement plan such as a 401(k) or IRA.

That is unless you are planning on selling your wife’s jewelry.


  1. Checked out their site and it looks like all they want to do is sell, sell, sell you something. If they are writing books and running a website did they really retire in 1991. I fell if you are doing anything that takes time out of your retirement life to make extra money, you are semiretired. I retired at age 50 with only a military pension. I started Social Security at age 62. At age 64 I was debt free. My current net worth is just $65,000, and my retirement income is $40,000 per year, inflation adjusted every year. No 4% rule for me, I try and save 30% of my income every month. Living in Montana makes it easy. I paid $23 in state income tax and zero federal income tax for 2021. No sales tax in Montana. I am leasing a 2020 Ford Edge for $351 per month, that I will purchase for $19,800 at lease end in April 2023. I did not have a car payment from 1986 until 2020, always saving up cash to purchase cars. I have always been low income and I pinch pennies like I only have $20,000 per year income. I now have an emergency fund and just purchased $10,000 in I-Bonds currently paying 7.12% and it will go to 9.62% once I have owned the bonds for 6 months. I always do all car maintenance and home repairs myself. Just installed a new kitchen sink faucet $32 from Amazon. Installing a new bathtub faucet when it gets here next week cost $25 from Amazon. Walmart wants $85 for almost the exact same faucet. I purchased 6 WIX oil filters for my car from for $6.50 each. O Reilly auto parts wants $14.99 for the same filter. I am now able to help my 44 year old son move from Pittsburgh, PA to Everett, WA to start a new job. Retirement can be carefree if you live within your monthly income and never pay interest on credit cards.


  2. I was a little befuddled after reading the blog so I reread it and still don’t know whether they mean use the 4% of net worth as a guide while accumulating or for a guide for retirement income. I suppose that if one is going to live country to country and only occasionally come back for short visits it makes sense to cash out everything. Sell house, cars, furniture, jewelry, what have you. Not my choice but some folks do it.
    I read a few more of their blog posts and their finance advice is slim to none.


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