This Is The Mindset Shift Needed To Retire Early With CONFIDENCE!

They said Ari , risk means that my money doesn't go up and down a whole bunch , because once I retire I don't have as much time for that money to recover , so I just would prefer less fluctuation . I said , hey , that's pretty good . I asked another client . I go hey , what does risk mean to you ?

They said risk means that I'm not unnecessarily leaving money on the table . I don't wanna see my money go up and down a whole bunch . At the same time , I do recognize that there is value to being invested in a very specific allocation and I don't wanna be in my 80s going . Why don't I have millions of more dollars if they're not investing well ?

And I said , wow , that's another really good definition . It's not that one's right or one's wrong , but it's the same reason that I tell everyone you cannot have a cookie cutter approach . And if you're watching this on YouTube , you may have seen this ahead of time and if you're just listening on the podcast app , I'll explain .

Someone sent me this anti-cookie cutter jar and I'm zooming in on it on my camera right now and it was sent to me and I just think it's awesome because I often say it , but I didn't know .

I said it this much where someone sent me a jar and it's because I don't believe in the cookie cutter approach , I don't believe in what's your age and risk tolerance . I don't think that's gonna help you retire a whole lot with a whole lot more confidence . Should I say ? Let's assume I say , hey , what's your risk tolerance ?

Like I'm a two to day and a 10 tomorrow , that's not really helping me retire . I don't really do the scale to me . I think you have to be a whole lot more intentional and that creates confidence , because a lot of people come to me and they go all right , I've ran some projections on my own .

I'm pretty confident with my planning and it says I have a 99% chance of success . I go . Why don't you go retire then ? And they go . Well , what if something's wrong ?

What if I'm in that 1% and I'm finding a lot of people are going hey , I wanna make sure I'm doing the right things , and if I miss one thing , does that mean I'm gonna have to go back to work ?

And there are instances where exactly that happens , and I talked about it last week on my sequence of return risk episode , which is the concept that you get unlucky and now , because markets didn't perform well in the same years , you're trying to travel and spend more on health insurance before Medicare kicks in , that your portfolio is being drained too quickly .

So what I want you to do today is , if any of you are going hey , I've ran some projects on my own . Looks like I'm in a good spot . I also don't want you to be mad at me when you're in your 80s and 90s going hey , ari , or whoever your advisor is , I've got a ton of money .

Why didn't you tell me I could have spent more if I was in a good spot to spend ? I don't want to overspend , but I tell everyone in retirement there's a cheat code and you're like what's the cheat code ?

The cheat code is it says if you're going bowling Now , I'll always start my episodes when I say always , mainly if I have a story that could come to mind that I think would be helpful .

I like to start with a story , a quick one , and then I want to go through a financial example with you and then I want to go through the logic behind that and I try to keep these 10 to 15 minutes . Sometimes I go 20 , 25 . I do outline all of these , but sometimes I just think it makes sense to go with my story .

So hopefully you've enjoyed the format of the show . I'll go through a few reviews in just a moment . But just too excited so I want to tell you guys this . So when someone comes to me I'll say , hey , are you a big bowler ? And , by the way , no one's ever said yes to that , so I could pick a new analogy at this point . But I just find this works .

And so they're like no . Has anyone ever said yes ? I'm like no , but regardless I say well , what if you go into retirement and you're bowling and you hit a few pins over just when you're throwing the bowl down the lane ? That's great . I mean , that's the point . The point is to hit pins over .

Pretty simple , you could even do really well , you could hit a strike , or you could do unlucky , get unlucky , or maybe you should have really bad form and you could throw that , and all of us have thought of it . One point when you've gone to the bowling alley , maybe you hit a gutter ball .

Maybe you even had a gutter ball on the person's lane next to you . So what I want you to do is understand that a cheat code to all of this , which is going into retirement with the bumpers up .

That's what it's like when you have an advisor or someone that's implementing dynamic withdrawal strategy to say , hey , here's the most you can spend , meaning here are the guardrails I want you to be within . Here's the minimum where , if you don't spend this , you're gonna be on track for $5 , $10 million and you're gonna be upset with us later .

At the same time , what we don't want you to do is overspend . That's not the goal of retirement planning . But I also don't want you to underspend . I want you to become a successful spender .

So I want you to change your investment perspective in retirement , because too many people say you know what , ari , I've been a great saver and if I stay a good saver , I know I'm not gonna run out of money . I say you're right , I'll even do you one better , what you can do if you wanna have a great investment plan is go work 30 more years .

Your plan will look amazing , but your life won't , and no one ever comes to me and goes . I'm so glad my Roth conversion strategy , you know , took me to the point where I now have $600,000 tax-free dollars when I'm 95 .

They say I'm glad I did Roth conversions so that my children , when they inherit these dollars , aren't in a really healthy tax bracket and decide to not take a job because if that job , if they really enjoy it but it pays them a lot , their second guess in taking the job , because I invested well , I'm now gonna have to get taxed on those dollars .

Now , this is a real story . A client came to me and , specifically a child of a client said Ari , I'm thinking about no longer being a doctor . I'm like what do you mean ? Because I know the last example I just gave you . It's a mouthful , so I'm gonna give you a real story to illustrate this Client came to me and said Ari , I am once again .

There's the child of the client thinking about no longer being a doctor . I said why ? They said well , my dad's invested really well . I go , that's true , and they go well . I heard your podcast and you said at some point that if I inherit these dollars , I get taxed on them . I go . That's true because they're pre-tax dollars and they go well .

Here's what I'm thinking . I'm thinking about quitting my job and , as you know , my dad's not in the best health and his their dad is my client .

He said my dad's not in the best health and so what I don't want to happen is my dad passes away and now I'm a physician and I'm in really healthy tax bracket and now I'm taxed at 35 , 40 plus percent on everything he works so hard for . So I'm now thinking about no longer being a doctor .

I said let me make sure I have this straight Are you saying that you're considering altering your future of becoming a physician Just because your father invested really well ? They go exactly that , I go well . This is the risk of poor planning .

The risk of poor planning is that now your child no longer takes a position they otherwise would have loved and helped thousands of people , just because you invested really well . Now that sounds really weird , but these are examples that I'm seeing consistently where , if you invest really well , there are different issues that you face .

My parents and a lot of you know this were burned by multiple financial advisors . It's why I became an advisor . There were four specific advisors , and so they're still working in their 70s , but luckily they love what they do .

The premise of the story is I saw the risk of bad planning , which can lose millions , and the value of good planning , which can add millions and cause a lot of you to pay 0% in taxes if you're really efficient . So how am I changing your investment perspective ? I don't want you to be an amazing saver . I don't want you to be an overspender .

I want you to be a successful spender and I want you to know if you're still working today when you can stop saving , because what I don't want you to do is go wait a second . I've maxed out my 401k for the last 20 years . I'm just gonna keep doing that because it's what you've done . And you see , you log in and you have $2 million Great .

But then there comes a point where , if you have $2 million and you get a 10% rate of return on that , that's $200,000 . Good luck beating that by adding $30,500 into your 401k . You can't . So there becomes a point where it's a whole lot more impactful to invest well , as opposed to simply say I'm gonna add new dollars . So why am I bringing this up ?

I'm bringing this up because I want to change your investment perspective , like I mentioned at the beginning , to something that's gonna let you sleep better at night . And here's my final example here . Client came to me . They said , ari , I really want to pay off my mortgage . I said why ?

They said , well , I'm just gonna sleep a whole lot better and I know also right now I'm spending 8,000 a month . In the future , if I had this mortgage gone , I'd only need 5,000 from my portfolio , not 8,000 , I would sleep better . I said great , here's the alternative is we don't pay off the mortgage and instead we just keep paying the minimum down .

And in this particular client case , they were gonna yield $400,000 more from doing that , and so we went through it . They said I get it , I'm not paying off the mortgage , but I also understand there's real financial benefits from not doing that , based on my interest rate and my other financial goals . I said , great .

Another client came to me and it was very similar , but they just said , ari , I just I know , maybe I'm losing money on the table , I don't care , I am going to sleep better with that mortgage gone . That debt is over my head . I want it gone .

I said great , and I showed them the trade off and it was about $80,000 of a difference over the long term versus investing it , based on their rate and different factors . And they go wow , it doesn't really make a huge difference over the next 30 years . I go you're right , please go pay off the mortgage and please go throw a party , excuse me .

So the reason I'm bringing this up is yes , there's the financial answer to everything , then there's the real life answer and what I want you to do is quantify all of these decisions so that you can go make an awesome decision on your own . A good advisor shouldn't say go pay off the mortgage or go invest .

A good advisor should say what's gonna help you sleep better at night ? Okay , good to know . Am I gonna educate my client on why this is a no-brainer and why they shouldn't pay off the mortgage , and am I gonna illustrate to them why this is something that they think for the next 20 years they could be going ?

I know maybe I should pay off my mortgage , but I know I should invest when , in reality , maybe they shouldn't invest it . Maybe they have a 7% mortgage interest rate and the point is they're close to paying off their mortgage and it should make sense to go pay it off .

So it's about saying how can I really create a custom approach so that you are sleeping well ? This ties all these little stories and examples I just went over . These tie back to the very first example I gave today , which is the client that said I don't want my money to go up and down a whole bunch .

And then the other client that said I wanna make sure that I don't leave anything on the table , yet I still don't want it to go up and down a whole bunch . So what we always need to do is go hey , what's the risk , return that we're comfortable with . And I'll show clients if markets went down 30% , would you be able to sleep at night ?

And if they go , no , I just couldn't stomach it . That whole concept would cause me to lose sleep . I'd say , great , then we're not doing it . Here's the trade-off . The trade-off is , instead of spending 10,000 a month , you're gonna spend 8,000 a month and they might go . I don't wanna spend eight , I wanna spend 10 , I say , great . Here's the other trade-off .

You can work a little bit longer , they go . I don't wanna work longer , I hate my job . And I say great , you can take this other job and it's gonna pay a whole lot less . But I need to do it for more years and you might go . Well , maybe I'd enjoy that , you know , maybe .

Yeah , maybe I didn't bring in 150,000 a year , but if I bring in 70,000 a year and I enjoy it and I'm working three days a week instead of five days a week , that's more of what I'm looking for . I say great . You might say you know what I'm so comfortable with investing .

But I don't love my current job and I wanna make sure that I'm doing everything in my power to optimize what I've worked so hard for . I have clients , guys , that have 100% equities and you're going well . How on earth could you recommend that ? That just doesn't make any sense . Someone's getting older . I go , you're right , it's a horrible recommendation .

And they're like oh , what did you just say ? I go , it's horrible If they don't also have a spouse that's still working , if they don't also have medical that's being taken care of , if they don't also have rental income or a pension . So you have to layer on all of these different things .

Because there are clients that it makes total sense to have 100% equities for Now we'll show them here's 100% equities and they go all right , that looks like my money could be down 45% at some point . I go , that's true , that could happen and we're gonna be doing tax planning when that does happen to take advantage of it .

But you're right , that could happen and if you're not comfortable with it , we don't have to do it . And they go .

Yeah , but you also said before even though this kinda looks scary , that if I was ever down 45% , that I'd still be okay because I have my pension that covers All of my needs and I have potential inheritance , even though we're not relying on that . True , but are you still gonna lose sleep at night ? And they go ?

You know , I thought I would lose sleep but , to be honest , now that I understand that , I'd still be okay either way , I'm not saying to be happy and call you up over the moon when I'm down 30% . As long as we have tax strategy to take advantage of these things , I'll be happy with it .

And then I'll take it a step further and show my clients the benefits of doing a roth conversion , which don't make sense for everyone , but for those it does make sense for . Think about it like this assume you buy apple stock for $1 and it grows to $5 . That's awesome , that's what you want to have happened .

But if that's all in your eye array , when you take the money out it's ordinary income . Let's assume you buy apple stock for $1 and it goes up to $5 and you're like okay , I bought it for $1 , it's now with $5 , but that's in my eye array .

So like cost basis and what you purchased it for and all that stuff doesn't really matter , because when you take the money out it's all taxes if it's just ordinary income . So what we want to do is say wait a second .

Let's assume we bought apple stock for $1 and now it's worth $5 and it's just crushing it and it's all in your eye array and it keeps going and now apple stocks worth $10 . Well , what some people do is they go . Apple stocks done really well for me . I'm gonna hold on to that . When I need income , I'm gonna withdraw from it . Nothing wrong with that .

But the next level of planning is saying okay , I've got my good investment allocation , I'm comfortable with the ups and downs of the market . Now that apple stock I bought for one went to five . Now it's worth 10 . At some point that apple stock is gonna go back down to one . Maybe it's even go to 50 cents .

And once it's at that $1 or 50 cents , you can implement what's called a Roth conversion , moving the money from that eye array where your apple stock is owned to a Roth eye array . Now you , for example , you bought it at one . It goes up to five . It goes back up to 10 . Now maybe it comes down to five . At five .

You do a Roth conversion , move that $5 from your eye array to your Roth eye array . Stick with me here and now , when that $5 that's now your Roth eye array grows back to 10 , because it will at some point . That's all tax free growth . So too many people say I'm gonna be a good long term investor .

They kind of sit on their hands and markets go down and say , yep , I'm gonna just buy and hold . Nothing wrong with that , especially if you're building up in your 20s and 30s and 40s .

But then there comes a point where it actually makes a whole lot of sense to say I'm not gonna sit on my hands , I'm gonna implement Roth conversions or these other strategies that people do when they try to retire early , because it can add a whole lot more value over the long term . So hopefully I buy .

No means overwhelmed you today a lot of stories , hopefully changing your perspective a little bit when it comes to what the allocation should be retirement planning , roth conversions . I wanted to kind of make this a mail bag episode , but really I want you successfully spending , not looking back mad going why didn't I spend more ?

Because I don't want to have $10 million when I'm 80 and maybe I have children , only a million to each . Maybe you don't have any child and you're like , hey , that changes my whole plan . Can retire earlier and more often , not ? The answer is yes , by a number of years if you don't want to leave $3 million to a certain child .

So these are the pro strategies that I help my clients with for those that want to retire early . If you listen to this and go to my advisor does exactly this , then great , don't hire us and it's not worth the hassle if you go hey , now this is what I'm looking for .

I just didn't know it existed someone that specifically does early retirement holistic planning . That's why we exist . So hopefully this was helpful . Love you guys , as usual . I know I said I was going to go over review the week , so I'm gonna go over it right now , just at the end .

This comes from Robert 2025 recently started listening to our podcast , find extremely informative , very concise and easy to understand . In addition , I reached out to arie in an email and very helpful with a timely response . Thank you for such an informative , educational podcast . I look forward to listening to it every week . Keep up the good work . Best wishes .

So glad that this episode was helpful and , robert , you've enjoyed the show . I know I'm not gonna work with all of you , so my only request is , if you're not working with me , if any of this has been helpful , please do drop a comment on youtube or leave review on itunes and let me know how I've helped you . I love hearing all of your stories .

It's what makes this job fun . So thank you guys , love you see next week . Thank you for listening to another episode of the early retirement show .

If you have a question that you want answered in a future episode , you can always go to my website , early retirement podcastcom that's early retirement podcastcom and you can go ahead and submit a question that I'll look to answer in a future episode . Thank you all for listening .

Please do rate it , review it and share it with someone who you think would benefit from this information . If there's anyone out there that you know , I certainly appreciate it and I will see you all each week . Hey guys , it's me again . Please be smart about this . Nothing in this podcast should be construed as financial , tax or legal advice .

Consult with your tax preparer or financial advisor before taking any action . This podcast is for informational purposes only .