The Myth of Market Averages
You can’t pay your mortgage with a 30-year historical average.
The industry’s obsession with '8% returns' ignores the reality of sequence risk. If the market drops the year you need liquidity, the average becomes irrelevant.
The S3 approach to variance:
- Ignore the Mean: Focus on the 'worst-case' sequence of returns for your specific retirement date.
- Manage the Variance: Build buffers that allow you to ignore short-term market dips.
- Focus on Cash Flow: A sound plan prioritizes the availability of funds over the theoretical growth of a chart.
Watch the full podcast episode for more details: https://youtu.be/7tpYnkjtH5Q
DISCLAIMER: This content is for educational purposes only and should not be considered personalized financial advice. Always consult with a qualified financial professional before making financial decisions.