The Secret to a 5% Safe Withdrawal Rate | Frank Vasquez | Bigger Pockets Video

Episode #658
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In this episode of the BiggerPockets Money Podcast, hosts Mindy Jensen and Scott Trench are joined by Frank Vasquez, host of the Risk Parity Podcast. Frank introduces the concept of a Risk Parity portfolio. Rather than relying on traditional stock-heavy portfolios, Frank reveals how strategic diversification across asset classes can potentially support higher withdrawal rates while actually reducing your risk of running out of money.

They dive into the ideal portfolio composition, including equities, bonds, and alternative assets, and the importance of transitioning investment strategies as one approaches retirement. Frank also emphasizes the shift from focusing solely on accumulating wealth to maximizing life quality, relationships, and giving back once financial independence is achieved. This episode is packed with actionable insights for those on the journey to financial independence and early retirement.

00:00 Risk Parity Portfolio
00:47 Contradictions in the FIRE Community
02:04 Building a Diversified Portfolio
04:47 Understanding Bonds in Your Portfolio
07:13 Alternative Assets and Their Role
13:25 Transitioning to a Retirement Portfolio
22:16 Real Estate in Your Retirement Strategy
24:51 Challenges of Real Estate Investment
25:27 Understanding Home Equity in Retirement
27:33 Spending in the FIRE Community
28:05 Overcoming Frugality Inertia
45:15 Connect with Frank!