Having lots of money in the bank is never a bad thing. But once you’ve built up a sizable amount in savings — say, $50,000 — it’s time to ask: Is some of that money better off elsewhere?

Once you’ve built up an emergency fund (enough to cover three to six months of expenses), keeping additional cash in your savings account means you’re missing out on chances to grow your money. Here’s where to move that extra cash instead.

Make more by moving your money

Here are a few strong options for earning on your excess savings:

• Certificates of deposit (CDs): With CDs, you’ll lock up your money for a given term — months or even years — but in return you can get a high APY that won’t change. Current CD rates are as high as 4.55%.
• Individual retirement accounts (IRAs): IRAs let you invest for retirement with tax advantages. A Roth IRA, for example, grows tax-free and allows tax-free withdrawals in retirement. Through IRAs, you can purchase stocks, bonds, or funds that grow much faster than cash over time.
• Brokerage accounts: Just like IRAs, brokerage accounts allow you to invest in stocks, bonds, and funds. They don’t offer tax breaks, but anybody can open one and invest as much as they want. It’s a smart place to grow extra savings that you don’t need in the short term.

CDs are great for getting a guaranteed return on your money. And by investing in index funds, like one that tracks the S&P 500, you can safely assume that your money will grow steadily over time — at a much better rate than a savings account.

When to hold on to your cash

There are a few good reasons to hold a big cash cushion. If you’re planning a large purchase or foresee a financial emergency of some kind, a larger savings account makes sense.

But beyond that, holding $50,000 or more in a basic savings account is usually more of a missed opportunity than a smart strategy.

Also, most traditional savings accounts offer interest rates below 1.00% APY. For short-term savings and emergency funds, a high-yield savings account (HYSA) is a better option. Right now, the best HYSAs are offering 4.00% APY or higher. That’s still not as high of a return as you could get elsewhere.

Put your money to work today

Lots of cash is never a bad thing, but letting your excess savings sit in a low-interest account means you’re probably missing out on long-term growth.

Once you’ve covered your emergency needs, consider shifting extra funds into CDs, IRAs, or brokerage accounts. You’ve worked hard to save up — now let that money work for you.

After doing my first free Empower financial professional review back in 2014, I decided to do another investment portfolio review with them. Given the portfolio review is free for anyone with over $100,000 in investable assets, and my financial situation has changed so dramatically since then, I figured, why not spend a little time uncovering potential optimization opportunities?

I also wanted to experience the process firsthand again, in case any of you want to take advantage of their free financial review as well. Overall, I found it to be a worthwhile and educational experience. You can sign up here if interested once you’ve opened up a free account and linked your assets.

For background, I’ve been using Empower’s free wealth management tools since the end of 2012. I even consulted with them part-time in their San Francisco office in 2013 and 2014. Finally, Financial Samurai is a long-time affiliate partner.

Empower’s Free Professional Review of My Retirement Portfolio

Once you sign up for a free Empower account and link at least $100,000 in investable assets, you can schedule a free financial review. The process includes two calls – a short discovery call, followed by a recommendations call.

The First Call: A 17-Minute Discovery Chat

After scheduling my appointment, an Empower professional called to verify my identity and gain a basic understanding of my financial situation, goals, and desires. Note: you must have linked at least $100,000 in investable assets to qualify for the call.

The conversation lasted about 17 minutes. I told him my age (48), my plan to start withdrawing from my rollover IRA after 60, and my goal of maintaining a comfortable retirement with about $60,000 a year in gross income/withdrawals, supplemented by Social Security.

I didn’t tell the Empower professional that I run Financial Samurai or that I’m a personal finance junkie. This way, things were more realistic for retirement to help more people.

For the purpose of the review, I only shared my rollover IRA with about $1.5 million. This was my 401(k) that I maxed out from 1999 to 2012 before leaving my job. I converted it to have more flexibility in my investments and reduce fees. Since the conversion, I haven’t contributed a single dollar.

I was curious to hear whether their recommendations were similar to how I invest my overall public investment portfolio.

The Second Call: A 40-Minute Recommendation Session

A week later, we had the follow-up phone call. I logged into my Empower dashboard where I linked my IRA so he could walk me through his recommendations via slides. No video or in-person meeting was needed, which was convenient.

Based on my $1.5 million in assets, he introduced Empower’s Private Client service, for those who have a minimum of $1 million in investable assets. As a Private Client, you get two dedicated advisors, priority access to their Investment Committee, retirement and wealth planning specialists, and even private equity investment options.

My Rollover IRA’s Current Asset Allocation

The next slide broke down my IRA allocation. I learned that 99.6% of my holdings are in U.S. assets, complete home-country bias. About 97.5% is in U.S. stocks, with the rest in cash, alternatives, international stocks, and bonds. I thought I was 99.9% in stocks.

Sector-wise:

• 34.4% in Communication Services (Google, Meta, Netflix)
• 35.2% in Tech (mostly Apple)
• 12.2% in Consumer Discretionary
• 5.5% in Financials
• 3.9% in Health Care
• 3.7% in Industrials
• 2.1% in Consumer Staples

In my mind, I just lump Google, Meta, and Netflix into “Tech,” but technically they’re Communication Services. So, my IRA is roughly 70% tech-heavy, a concentration I’m comfortable with given my outlook.

Personal Strategy Allocation Recommended By Empower

Empower recommended a portfolio of:

• 75.6% Stocks
• 10.1% Alternatives
• 13.6% Bonds

Within stocks:

• 69.9% U.S.
• 21.8% Developed International
• 8.3% Emerging Markets

Although I worked in international equities for 13 years, I’ve avoided them for years due to corporate governance concerns and political risks. Except for Taiwan Semiconductor (Ticker: TSM), I’ve stayed U.S.-focused. Fortunately, that worked out well. U.S. stocks have outperformed for over a decade (though 2025 has been a rare year of international outperformance).

Within Alternatives, about 64% was in real estate (including foreign real estate), which caught my eye since ~40% of my overall net worth is already in real estate. I didn’t ask which foreign markets they meant. Worth asking if you take the review.

A 20.9% gold allocation would’ve been nice, given gold’s record 2025 performance.

At only 13.6%, the bond allocation seemed light for someone retiring in 12 years. However, if you view real estate as bonds-plus type of investment, the overall portfolio roughly resembles a 75/25 stocks/bonds mix, which feels right for someone in my position. That’s about my allocation in my taxable accounts too, so Empower’s recommendation made sense.

Smart Weighting: Empower’s Core Strategy

Empower’s Smart Weighting strategy has been around since my consulting days there. It’s their proprietary method of constructing portfolios by evenly weighting across style, size, and sector, instead of following a market-cap index dominated by the biggest names.

The idea: diversify away from bubbles and reduce concentration risk. You end up with a more balanced portfolio that doesn’t lean too heavily on a single sector like tech.

Smart Weighting is a rational, disciplined approach. However, I’m based in San Francisco and am a strong believer in tech, so I’m fine staying overweight. Still, if this were my only portfolio at age 48, having 70% in one sector would be considered excessive.

For instance, my IRA fell from $1,115,000 to $827,000 in 2022, a 26% drop. That’s nearly five years of living expenses gone in one year, if my $60,000 annual living expenses are true. If the exuberance of 1999 is truly back, my tech-heavy portfolio could easily lose 40% of its value during the next bear market.

Therefore, getting a professional review of your investments might be more important than ever.

Smart Weighting May Outperform The S&P 500 During Difficult Times

This below chart tries to emphasize how Smart Weighting outperformed the S&P 500 during two difficult time spans (12/31/1999 – 12/31/04 and 12/31/07 to 12/31/12). However, in a raging bull market, Smart Weighting would underperform given Empower would sell your winners in order to maintain their target weightings.

The closer you are to traditional retirement and the more cautious you are about the stock market, the more Smart Weighting makes sense. Personally, I think the ideal return scenario in retirement is slow and steady returns. I do not like to see more than a 10% downward swing in my net worth in a year, which is why my net worth is so diversified.

On your call with the Empower professional, ask:

• What is the drift threshold (%) per sector / style / size that triggers a rebalancing trade in Smart Weighting?
• How do you balance tax consequences vs. drift correction (especially in taxable accounts)?
• Is there a grace band or “buffer zone” to prevent constant churning?

Holistic Financial Planning

Of course, for most people, a retirement portfolio like an IRA is just one piece of the financial puzzle. Nor is optimizing it the only goal. The slide below shows how Empower can help with broader savings and withdrawal strategies, an area even the most disciplined FIRE enthusiasts often struggle with. Having professional guidance here can make a meaningful difference.

Determining how much to save for your children’s education is another big challenge, especially given the relentless rise in college costs and the uncertain impact of AI on future careers. I’ve explored this in detail in my post on 529 plan savings amounts by age and whether or not to superfund the 529.

For those working in tech with a large portion of compensation tied to stock options, consulting with an advisor on tax-efficient selling strategies can be invaluable. Proper timing and diversification can help reduce tax drag and lower overall portfolio risk.

Estate Planning Is Important But Often Neglected

Finally, estate and legacy planning may be the most overlooked yet essential area of financial management. Most of us don’t like thinking too far ahead, let alone contemplating our own mortality. But having an estate planning specialist walk you through different scenarios can help you minimize estate taxes and ensure your wealth is distributed as intended.

If you’re fortunate enough to die with an estate worth more than the federal estate tax threshold (set to return to around $15 million per person in 2026), you’ll want to plan carefully to reduce the 40% estate tax on every dollar above that limit. One way is through an irrevocable life insurance trust.

Being able to talk to an Empower estate planning professional as part of its service is a big value add.

A Retirement Forecast

Finally, we wrapped up the call by reviewing what my retirement could look like starting at age 60, just 12 years from now, if I followed Empower’s recommendations. You can model similar scenarios yourself using their free wealth management tools by adjusting your own input assumptions.

In general, you want to target at least a 90% probability that your portfolio will support your retirement goals. Ideally, you aim for 99% to build in an extra cushion for unexpected events or lower-than-expected returns.

Based on my assumptions – spending $60,000 a year, receiving $37,416 annually in Social Security, and having ~$1,500,000 in my IRA invested per Empower’s recommendations – I’m comfortably on track.

In fact, if I live to age 92, the projection shows I’d pass away with nearly $4 million left over. This result, ending up wealthier in death than at retirement, is actually quite common when following the 4% safe withdrawal rule.

That’s why, once you officially retire, it’s well worth conducting a detailed financial analysis of your situation and running multiple withdrawal rate scenarios. Doing so can help ensure you strike the right balance between living well today and not running out of money tomorrow.

A More Luxurious Retirement Assumption

Given I don’t want to die with a net worth 2.5X higher than when I retired, I decided to bump up my annual spending from $60,000 to $96,000 and YOLO a little. Even at that level, $96,000 still represents just a 4% safe withdrawal rate if I retire at 60 with a $2.35 million portfolio.

In other words, I’d still be projected to die with around $2.4 million left over. This is plenty of cushion to sleep well at night while enjoying life more along the way. That said, my probability of this retirement scenario coming to fruition is only 81%. So maybe I “only” die with $1-$2 million instead of $2.4 million. That’s fine by me.

The Process Of Hiring Empower

Overall, I thought the 40-minute free financial consultation was worthwhile for understanding where my IRA portfolio stood. It feels great knowing that if I can make it to age 60, I should have no problem spending at least $96,000 a year from my IRA portfolio alone. The projection assumes I rebalance my current highly aggressive portfolio, but since I’ve been semi-retired since 2012, I’m not too worried.

Empower uses BNY Pershing as its custodian, so if you decide to have them manage your money, you’ll simply fill out a transfer form and move your existing assets to Pershing. Having transferred over $1 million portfolios before to get a better mortgage rate, I know the process is straightforward. You just fill out a permission form online and it takes at most two weeks.

Capital Gains Taxes Due To Rebalancing

My main concern was the tax hit from rebalancing. Paying capital gains on roughly $1.2 million of a $1.5 million portfolio would sting. Thankfully, the Empower advisor reminded me that because this was my IRA, there are no tax consequences from buying or selling positions within it.

Therefore, if you are considering hiring Empower, I recommend starting with your tax-advantaged accounts. Alternatively, you could have them manage a smaller taxable brokerage account, ideally close to the $100,000 minimum. This approach helps minimize your tax liabilities.

Empower Management Fees

Empower’s fees are competitive for a full-service wealth management firm.

• 0.89% AUM for investment or wealth management clients with less than $1 million
• Private Clients:
  • 0.79% on the first $3 million
  • 0.69% on the next $2 million
  • 0.59% on the next $5 million
  • 0.49% on assets over $10 million

While nobody enjoys paying management fees, these rates are lower than big names like Goldman Sachs or JP Morgan, which typically charge over 1%, on top of the fees from the funds they invest your capital in.

I know this firsthand because I help manage a close relative’s account for free. She moved her seven-figure portfolio from Goldman to an online brokerage account for me to manage. She was paying over 1% but was unhappy with their service and also wanted to part ways with her ex-husband’s money management firm.

Who Benefits Most From a Financial Advisor

If you don’t like managing your portfolio, aren’t confident in investing, don’t have the time, and want holistic financial guidance, Empower is worth considering. You can try them for a year, learn from their approach, and then decide whether to continue paying or return to managing your money yourself.

Many investors have missed out on huge gains this cycle because they kept too much in cash, paralyzed by indecision. I’ve met many of them and were always shocked to see how much cash they had relative to their net worth. Hiring a disciplined advisor could’ve helped them steadily invest and build wealth.

On the flip side, some investors are too aggressive, trading too often, selling near the bottom, and leveraging near the top. These folks could also benefit from Empower’s structured, unemotional approach to portfolio management.

For those of us who are personal finance fanatics, we can manage our own money just fine. But it’s still smart to get a professional check-up every year or two to ensure we’re on track. Markets change, risk tolerances evolve, and it’s easy to lose perspective during bull and bear cycles alike.

A free Empower financial consultation is a low-effort way to get that second opinion, and maybe uncover a few ways to optimize your wealth along the way.

Thankful For My Free Financial Analysis

Even after decades of managing my own money, I found value in getting a fresh, professional perspective. Empower’s free financial review gave me greater clarity about my retirement plan and confidence that my current strategy still aligns with my long-term goals. Sometimes, an outside set of eyes helps you see what you’ve been overlooking.

It’s funny to think back: when I started Financial Samurai at 32, traditional retirement at 60 or 65 felt like a lifetime away. Now at 48, it suddenly feels right around the corner.

My energy isn’t what it used to be, but my responsibilities have only grown with two young kids and a stay-at-home wife depending on me. The pressure to get our finances right has never been greater. That’s why I’m grateful I went through another free financial review with Empower. It gave me peace of mind and I hope it does the same for you.

Readers, if you’ve had your own free financial review, what are some things you discovered about your portfolio and your overall finances? When was the last time you had a review of your finances and what did you change as a result?

The statement is provided to you by Financial Samurai (“Promoter”) who has entered into a written referral agreement with Empower Advisory Group, LLC (“EAG”). Click here to learn more.

Ten percent? Twenty percent? More?

I’ve written a lot about the benefits of both 401(k)s and IRAs. We’ve also looked at the emerging Roth 401(k) option and when it makes sense for young investors.

But everybody’s next question is: “Okay, okay, but how much should I put into my 401(k)?”

One of the most popular posts in this blog’s ten-year archives is “How Much Should Be In Your 401(k) At 30?”

I was 25 when I wrote it, trying to decide how much to contribute to my own 401(k).

But what I learned from over 200 (sometimes nasty) comments is that setting a savings benchmark by age alone is silly; no two savers are the same. You can’t compare the engineer who graduated at 22 into a $65,000-a-year job with no student loan debt to a doctor who starts practicing at 29 and has $200,000 in loans. Or the social worker earning $35,000 a year and needing all of it just to eat.

You can use this basic 401(k) calculator to estimate how much you will save on your 401(k) based on your personal status:

retirement age – age
 


Your current yearly income (before tax):
 


How much have you already saved in your 401(k) account?
 


Monthly 401(k) contributions
 


Limit on matching contributions
 


401(K) savings summary

 


401(K) Balance at retirement (age 67)
 


Your 401(k) will contribute:
in retirement at your current savings rate
 


Based on your current income, you will need about:
to maintain a similar income in retirement
 


Cost of fees
The total amount of fees you will pay over time until your retriement. If you see 0, please re-calculate
 


401(K) Balance at retirement (inc. fees)
 


Tip: You can optimize your 401(k) to reduce fees with blooom Learn more
 


Assumes 6% annual rate of return on your 401(k) investment.
401(k) fee of 0.05%.
Retirement age of 67 and life expectancy of 95.

 

 


 

 


Today I want to provide slightly more tactical advice. As a percentage of your income, how much should you contribute to your 401(k)?

If you’re in debt?
If you can also do a Roth IRA?
If your employer does not match funds?

The two fundamental rules of retirement savings
Here are two rules that will apply to almost everyone:

If your employer matches 401(k) funds, contribute enough to get the full match. Do this first. Even if you’re in debt. Even if you don’t put in a penny more. It’s free money, and you should take it.
Next, if you can contribute to a Roth IRA, work on contributing the full annual limit a year to that account before you contribute any extra to your 401(k) (aside from what’s necessary to get the employer match). This will give you a nice cushion of tax-free cash in retirement.

Figure out the ratio you’re the most comfortable with—but keep upping your savings
There are lots of ratios out there recommending how to divide up your income. Some are as simple as spend 50%, save 50%. Although an admirable goal, most people will have a hard time with this. Especially in your twenties. I like 75/20/5.

Spend 75%
Save 20%
Give 5%

But figure out the ratio you’re comfortable with. You may want to defer charitable giving until you’re debt-free. If you need most of your income to eat, it might be spend 90, save 10 or even 95/5. That’s okay. But you should reevaluate this as your financial situation changes and aim to get to at least 80/20.
In this example (75/20/5), if you earn $40,000, you would spend $30,000 or $2,500 a month, save $8,000 a year, or $667 a month, and—if you want—set aside $2,000 a year for your chosen causes. Note that we’re working off of before-tax income, so that $2,500 a month for spending might be more like $2,000 after taxes).
Working backwards from this, let’s say your employer will match up to half of a 6% contribution to your 401(k). So 6% of your pre-tax income is $3,000. Your employer throws in $1,500. You put that in, and you have $3,500 left in your savings budget.
If you don’t have a fully funded emergency fund, this comes next. Open a simple online savings account—they’re boring, but safe—and load it with cash.
If you have plenty for a rainy day, then you return to your retirement options. If you qualify for a Roth IRA, that’s probably where the $3,500 should go. If you don’t qualify or have more than that max left to spend, return to your 401(k) and up your contributions.
The four levels of retirement savings
The lesson is: Figure out what percentage of your income you can save in total, and allocate it appropriately:
Level 1: Max out your employer match in your 401(k). (Free money!)
Level 2: Max out your emergency savings (about six months’ living expenses).
Level 3: Max out your Roth IRA (up to the annual cap).
Level 4: Max out your 401(k) (up to a total limit for employee contributions).
This flowchart will also help.

If you’re in debt, focus on high-interest balances while you save
If your employer matches 401(k) contributions, put in enough to get that match, even if you’re in debt.
Next, if you’re in credit card debt, stop. Put your extra money towards paying that off before making additional retirement contributions. Focus first on getting out of credit card debt and then come back.
Got student loans? Follow the above schedule anyway. Unless your private loans have double-digit interest rates, I don’t recommend repaying student loans early.
It never hurts to save more
Twenty percent is a great goal, but some retirement experts actually suggest saving more like 25% or even 30. Why?
You know that saying, “Past returns are no guarantee of future performance”? That’s why. It’s true that the annual average return of the S&P 500 between 1928 and 2014 was 10%, for example. But that doesn’t mean anything for future returns.
We have no way of knowing what future returns will be—they could be 8%, they could be 4%. But the only way to hedge against an uncertain future is to save more money. The more you have, the less you need jaw-dropping returns to meet your goals.
Get help with your 401(k)
Already have a 401(k)? While you’re researching contributions, take a minute to analyze your current holdings too—there could be big savings to be found.
Check out Empower for a free app that creates easy-to-understand visuals of the investments you own in your 401(k), IRA, and other investment accounts. There’s also Wealthfront for a great all-in-one financial app that allows account holders to take control over their finances, automate saving and investing, and manage their accounts all in one place.
Summary
Everyone’s financial situation is different, and thus everyone’s retirement contributions will also be different. The key is to find a ratio you’re comfortable with, but that also encourages you to save a little extra than you might otherwise. We suggest aiming for a ratio of 80/20 to start with, and upping as you can.

The government has shut down again, this time mostly over healthcare subsidies. We’ve seen shutdowns before, and we’ll see more in the future.

As frustrating as they are, shutdowns remind us that uncertainty is the only constant. Instead of just surviving, I want to show you how to thrive during and after one. Out of the 750,000 federal employees furloughed, surely some of you read Financial Samurai—and believe it or not, this could be one of the best things that’s ever happened to you.

For everyone else—the non-federal workers—the impact is usually minor: no Blue Angels rattling windows and terrifying pets, or limited access to a national park. But Uncle Sam will still collect your taxes while “essential” employees keep the machine running without pay.

Three Groups, Three Approaches To The Shutdown

Shutdowns split people into three groups:

• The furloughed (~750,000) — suddenly free from work, but also free from pay. Ironically, this group has the most flexibility and opportunity.
• The essential (~420,000) — the unsung heroes keeping the system going without a paycheck. They deserve far more recognition.
• Everyone else — private-sector workers, taxpayers, the self-employed. Even if you’re not directly affected, this is a good moment to stress-test your finances.

Each group can either dwell on frustration or get stronger. Given there’s nothing any of us can do to prevent a shutdown or open the government back up, let’s choose stronger.

Never Let a Government Shutdown Go to Waste

I’ve lived through enough setbacks to know everything, good and bad, is temporary. Shutdowns included.

When I walked away from my finance job in 2012 with a severance, I went from a multiple six-figure income to $0. No biweekly paycheck. No health benefits. No year-end bonus. Just silence.

The first three months were tough. I had spent my entire adult life tied to a paycheck, and suddenly the rope was cut. But once the fear wore off, the joy of freedom outweighed the loss of income. The uncertainty, instead of crushing me, became fuel. I built something more secure than my old job ever was.

A government shutdown is the same. One day the paycheck’s there. The next, it isn’t. There’s an uneasiness if you’re living paycheck-to-paycheck. But if you play it right, this temporary disruption can spark something lasting – resilience, new income streams, and maybe even a better life.

And when the government inevitably reopens, you’ll get back pay for all the time you didn’t work. Not bad!

So let’s talk about how to make the most of this moment so you can not only survive, but thrive.

1. Understand the Past: Everything Is Temporary

Not knowing how long a shutdown or downturn will last is what makes us anxious. But uncertainty is also what creates opportunity. The longest shutdown in history dragged on for 34 days in 2018.

If you can handle the idea of a month without pay, you’ll already feel stronger. If you can mentally prepare for two months, you’ll turn fear into confidence and come out ahead no matter what.

2. Finally Explore Different Money-Making Opportunities

Furloughed employees are in a non-pay, non-duty status, which means you can work elsewhere. Some drive for Uber, deliver for DoorDash, tutor, freelance, or do handyman jobs.

Back in 2014 and 2015, I gave over 500 Uber rides to write about the experience. I earned $20–$38 an hour, and if I had really needed the money, I could have cleared close to $4,000 a month. Even at half that today, that’s still almost $2,000, plenty to pay for groceries, utilities, and a portion of rent.

Other options: TaskRabbit, Rover, Craigslist gigs. Assemble furniture, walk dogs, teach guitar or pickleball. Every one of you has a monetizable skill. The shutdown is your permission slip to use it. Frankly, I’m shocked pickleball instructors are now charging up to $140/hour.

3. Discover Your Entrepreneurial Dreams

With a full-time job, it’s hard to pursue anything entrepreneurial. But now you’ve got time and mental bandwidth.

Start that website. Create the online course. Draft the business plan. You’ll eventually get back pay when the government reopens, so you can take a swing now with little downside.

Financial Samurai was born in July 2009 during the financial crisis. Fear of layoffs pushed me to stop making excuses and start writing. When I negotiated my severance in 2012, I took some time off and then began to focus. That decision not only gave me purpose, but also created financial stability years later that I never would have imagined.

The lesson? Fear is fuel. Uncertainty can be the push you need. A shutdown is just another nudge.

4. Treat the Shutdown as a Mini-Retirement or Sabbatical

One of my biggest regrets in finance was never taking a sabbatical. I was too worried about falling behind and missing out on a decent year-end bonus. Looking back, a break would’ve extended my career and maybe even changed the timing of starting a family. Oh, to be able to have paid parental leave to raise my children would have been the best benefit.

Instead, my “mini-retirement” began only after I permanently left my job in 2012. It was a shock at first, but it also opened up space to think about what really mattered. I wrote more. I got healthier. I spent more time with my parents and eventually started my family in 2017. If you have children, what a wonderful opportunity to spend more time with them!

So think of this shutdown as your sabbatical. Experiment with what early retirement feels like. Maybe you’ll discover you love the freedom. Maybe you’ll crave the stability. Either way, you’ll learn something invaluable about yourself.

When the government reopens, there’s a good chance they will offer severance packages again. If you felt great during the furlough period, I’d strongly consider accepting the government buyout. It’s clear the current administration wants to shrink the size of the government. So if your finances are strong enough, you might as well oblige and go where you’re more appreciated.

5. For Essential Employees: Stay Grounded and Strategic

If you’re still working without pay, thank you. It’s a tough spot, but you’re not powerless.

• If necessary, negotiate deferred payments with landlords, lenders, and utilities. Many are surprisingly flexible if you ask.
• Tap your emergency fund – this is what it’s for.
• Journal or write about your experience. There’s value in your story.
• Protect your health – stress is the real danger.

When this is over, you’ll feel good knowing you kept the system alive when it mattered. That kind of grit has value not only in the workplace, but also in building your own financial fortress. You may even start appreciating your paycheck even more once it resumes.

6. Take Care of Your Body and Get Everything Checked Out

One of the underrated perks of FIRE is being able to get things done during the week — no crowds, easier scheduling, and more availability everywhere. Use the government shutdown the same way. Book those doctor and dentist appointments you’ve been putting off. Get your annual physical, schedule that specialist visit, or finally take care of a filling or minor procedure. If you’ve been considering surgery, cosmetic or otherwise, now’s the time to plan and recover without using vacation days.

While you’re at it, treat this furlough like a personal health bootcamp. Exercise more, cook your own meals, and focus on resetting your habits. The longer the shutdown lasts, the longer your bootcamp — and the more likely you’ll come out of it stronger, leaner, and healthier. Who knows, this unexpected pause might be exactly what you needed to build lasting routines that improve your quality of life for years to come.

7. For Everyone Else: Observe and Prepare

Even if you’re not directly affected, use this as a stress test. Ask yourself:

• How long could I go without income?
• Do I have at least six months of expenses saved?
• Am I overly dependent on a single job or contract?

Shutdowns prove that nothing is guaranteed, not even a government paycheck. Build a redundancy of side incomes, cash buffers, strong relationships.

When I first left my job, I thought my passive income streams were enough. They were until our son was born five years later while both of us didn’t have jobs. During this time, some tenants moved out, while some investments underperformed. That reality check forced me to get more serious about saving more and generating extra income. It was uncomfortable, but it made me stronger.

Perspective Is Everything

Shutdowns come and go. What lasts is how you respond.

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In this podcast, Motley Fool co-founder David Gardner talks about a listener who says he invests $100 for each of his daughters’ birthdays, positioning them for success in their financial futures, and another listener who follows David’s advice to add up; don’t double down. David also shares some memories and reminds us that the math is always against you when it comes to sports betting. Plus, listener and host swap stories on selling Netflix (years ago) to build and buy their homes.

To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. When you’re ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on Sept. 24, 2025.

David Gardner: One hundred and nineteen. That’s the magic number this week, 119. Because this is the 119th consecutive Rule Breaker Investing monthly mailbag. That’s nearly ten years of unbroken exchange, the final Wednesday of every month between you, my dear listener, and me the fool who gets to sit on the other end of the exchange marveling at your stories, your questions, your challenges, your inspirations, the sharing that comes my way from around the world for nine years and 11 months as of today, thank you, and thank you is going to be a recurring theme for this particular mailbag, only on this week’s Rule Breaker Investing.

Well, it’s not every week or month a new book comes out by me. Understandably, a lot of this week’s mailbag is going to be focused there. I also am guessing we might have some new listeners, an unusually high number of new listeners this week. I should explain that sound that some people love and some people don’t like at the start of my podcast. The one with the window breaking. Well, that’s not really a window breaking, that’s the sound of rules being broken. That was put in place by my original producer, Rick Engdahl. Yeah, July 2015, and we’ve been publishing a fresh new weekly podcast every week since going for the Cal Ripken streak here, never taking a week off. Yeah, that’s the sound of rules being broken. If you become a regular listener, I hope you’ll come to love it. Well, yeah, Rule Breaker Investing. The book came out just last week. It’s been a lot of fun doing media, some of it in New York City, a lot of it just sitting at my desk at home, being on people’s podcasts. We’ll talk about that a little bit this week. I’ve had a lot of fun reading reviews and if you do read the book and love it, I would even say if you hate it, I would love for you to leave a review anywhere where reviews are read. Amazon is where most people leave reviews, but I’ve read some really lovely reviews on Audible for those enjoying the audio book. But reviews help people discover books and with this, my final stock market book, I’m hoping as much of the world will discover it as possible, which means more and more people will be playing the only game that counts the long game with a strong long game. That’s my hope for my fellow humans and that’s the promise of Rule Breaker investing the book.

Thank you again for those who have already left reviews and I would love it, especially if you love it, if you’d think to leave a review somewhere online about Rule Breaker investing. This is also a fun day for me because Readwise, which is an app I’m going to explain a little bit more about in a minute, something I first started talking about a few years ago, just like Duolingo, the language learning gamified app, Readwise lives in streaks. Readwise, let me explain it now and then say why today is special. Readwise is an app, especially for those who love eBooks. I think two in 10 purchasers of books these days, nonfiction any by the eBook. Still the vast majority preferring hardback or paperback books. But for those like me who love their eBooks, as we highlight as lines jump out to us off the electronic page and you highlight it in pink or yellow or whichever color you choose, Readwise saves that. If you’re using the Readwise app, it uploads all of your highlights across all of your eBooks into the Cloud.

Then it brings those back to you ever after. You can get it as a morning newsletter, five of your favorite past quotes randomized and you can add more information or more thoughts to them. You can connect them together with other quotes from other books. It is an amazing resource, the Readwise app, and it really helped me write Rule Breaker Investing because it enabled me to save a lot of my favorite lines from books I’ve read and then bring them back into my book Rule Breaker Investing. I had a friend say, hey, David, really enjoy that. You must have used AI to source a lot of your quotes. I said back, no I didn’t use AI to source any of those quotes. It was all Readwise. I guess in a sense, Readwise, you could claim is AI, but the ability to hold and save forever the things that jump out to you in a book is such a powerful thing and my fun day to day is that I’ve now been using Readwise 999 days in a row here on Tuesday, September 23rd, 2025. When I first started talking about this app a few years ago on this podcast, you should know, I’ve stuck to my knitting. I’m eating my own dog food. I really love Readwise, clearly, because I’ve used it 999 days in a row. Shout out to Tom, Francis, Khalid, Arcia, Simon, and Mick because they are the seven other people who are tied with me at the 999 day mark because on Readwise, Lightly gamified, you can see who else has long streaks and Tom, Francis, Khalid, Arcia, Simon, and Mick. I don’t think any of you is listening to me right now, but you should know, I’m right there with you. I’m in quotes David with a little fool Imogi next to me on the Readwise standings. As this podcast comes out Wednesday, September 24th, will be my Readwise 1,000th day. But who’s counting? Before we get into our, I would say shortish mailbag this week, I want to mention there’s a bonus chapter that I’m writing for Rule Breaker Investing. If you’ve been to Rule Breaker Investing.com, you’ll see that it’s a free downloadable bonus chapter. It’s not pinned up there yet. It will by early October. But just to give you my dear listener a little inside window into what we’re doing with that, I’m basically going to make that chapter a mailbag. I’m going to take in some of the best most thoughtful questions and comments that I’ve gotten about the book and the bonus downloadable chapter will be my answers back, basically an FAQ to the book itself.

That’s where the bonus chapter is headed. I’ve already written much but I would appreciate your questions, especially next month on next month’s mailbag, [email protected] is our email address, and I would love some questions or thoughts back based on your reading of the book, because I’ll probably pull a few of the best ones and add those into the bonus chapter as well. In fact, just like software releases updated editions, I’ll probably add a little bit more into that bonus chapter over the course of the coming months version 1.1, 1.2, 1.3. Again, great questions, thoughtful challenges, anything that you enhance the experience. If you felt like the books missing something and you’d like something more, I’d love to hear from you [email protected]. We’ll talk about it on next month’s mailbag, but it might well end up in the Bonus Chapter itself. I see five mailbag items today, but first hot takes from Twitter. First one, at Sam Horn Intrigue. My author in August Sam horn Tweeting out. I am still hearing from people, Sam writes, who enjoyed that rock ‘n roll conversation as much as we did at David G Fool. Thank you for your perfect questions and for setting up that rising tide lightning round of what to say when. That was a lot of fun. Thank you, Sam horn. It was a delight to introduce you to my audience. Gotten so much good feedback. So many people have enjoyed reading your book already. Let’s do it again sometime, Sam. Thank you. matthard@307fool. Thank you, Matt. You said, love the 10 year look back. Lots will change for the companies you own, but the most important lessons are still true. Winners win, and they carry the build of your outperformance as long as you can hold on, and Matt writes hold with about 10 letter Os.

As long as you can hold on. Yeah, thank you, Matt. I’m really glad you enjoyed the 10 year look back. Again new listeners, years ago, I picked every 10 weeks on this podcast, I picked what I called five stock samplers. I’d pick five stocks to a theme. The aim was to beat the market with that sampler, and we’re now hitting the 9 year mark for the very first one. The first of those, well, that was this month’s first podcast. September 3rd, 10 years later, five stocks for the next five years. That was the first five stock sampler I ever picked. It was called Five Stocks for the next five years, and we’re reviewing those 10 years later. It does remind me that usually I go back over what we did this month. I’ll just mention, that was the first podcast this month. Then we had a Rule Breaker investing highlight reel putting together all my page Breaker previews on September 10th. We had an audio book sneak peek for anybody who might be interested in the audio book. That was an eight minute extra podcast, one of my shortest podcasts ever done just 10 days ago or so. Then of course, last week’s Market Cap Game Show Planes Stakes and automobiles with Andy Cross and Yasser El Shimi. That is the month that has been for this podcast. Matt Hard, thank you for writing in with your appreciation of the 10 year look. Every 10 weeks going forward, we’re going to go back 10 years and we’re going to learn together how those five stocks have done, why they did what they did, and let’s hope we’re beating the market. Pretty sure we will be, but not with every one of them. Well, there was one other theme to Twitter X hot Takes this month, and that was, yeah Book. I’m just going to read several off because it’s a motley array. When I said, there’s a lot of thank you this particular podcast, that’s what I want to do again. I want to thank each of you for taking the time to tweet out what you did. Happy to share some of my favorites here at the start of this month’s mailbag. Jean Marc Aas Jean Marc, you wrote, I’m going to wait to see if the reviews are good on David G Fool’s new Rule Breaker Investing book before I buy it. Said nobody ever can’t wait to crack open my new copy.

Thank you, Jean Marc. Nick Sipel at Investing Nick. In an era of fake gurus, David G is the real deal with real results delivered publicly over decades. More admirable than David’s returns though, is his work to teach investors how they can invest better. I’ll be reading David’s book next week. You should too. Thank you very much at Investing Nick. Always a pleasure, Nick. A thanks to you for helping the world invest better for making all of us smarter, happier, and richer. Thank you, Nick. At anendkatri. Anand, you kindly wrote. It feels like the best player of the game won the championship and announced the retirement and put everything in the last Masters stroke in this book. Thank you at David G Fool and at RBI Podcast, receive my copy and can’t wait to start. That’s very kind. Thank you, Anand. This is obviously somewhat embarrassing for me to read. Not every mailbag sounds like this. Otherwise, they could be cloying, but this is a special week. Carrie Huntley @chuntley1234, really appreciated. This one, Care at David G Fool. Since my Amazon pre order is on Ba Order, I decided to take a trip to a couple of Barnes and Noble locations. I was able to score a copy for myself. That preorder will be a Christmas gift for my niece and nephew. I can’t wait to get started, I especially appreciate Carrie that you took the time to take a photo, Carrie of you holding the book up in the Barnes and Noble. I see the intelligent investor hiding on a shelf just behind it. Anyway, a lot of fun to see that picture. Thanks for taking the time. I’m glad you had a Barnes and Noble near you and you could pick the book up there. I’ve been a little frustrated to see that the book sold out on Amazon the very first morning it came out.

There are more copies coming though. Everybody should know that and I guess it’s a good problem to have if you’re going to have a problem. I also want to mention how much I’m enjoying seeing the book in different places. Gilbert, another Twitter friend of mine, took a picture of Rule Breaker Investing sitting there on his chessboard. It was very artistic. I thought it made a good visual point. I just want to let all my readers know if you want to take a picture of the book in some fun, crazy place or making a fun visual point really plays well with me on social media. It is a treat to retweet those out and see that trusty little green side kick, that book appear at all kinds of different places. I’d love to see it on a ski lift here as we hit winter in the northern hemisphere. Just a couple more @emmett L Savage. Emmett Savage, David G Fool has been the most inspiring investor in my life and his new book will inspire the next generation of investors. Thank you very much, Emmett. I truly hope that is the case. That’s why I wrote it, and those words coming from you mean a lot. Finally, @raulseti, Raul, you said, My Rule Breaker investing pre order came in the mail yesterday, and I read it, cover to cover within a couple of hours. Beautiful and timeless investing wisdom in an easy to digest way, distilled differently than anyone else can. My biggest surprise was reading that David does sell underperforming businesses or for opportunity cost reasons. All this time, Raul concludes I thought he had never sold anything ever. I’m glad that you were disabused of that notion, Raul. Certainly, I’ve sold in the past. Most of the selling I’ve done, I’ve ended up regretting and I’ve certainly made that point. I once wrote a column for Motley Fool Stock Advisor members pointing out that if we at Motley Fool Stock Advisor had never once sold any of the picks that we’d made and just held every single one of them, every bad pick and every good pick right through two today, we would be ahead of where we are today and I’m still quite happy with where we are today.

There can be lots of reasons for selling. Sometimes I sell to harvest tax losses to net out a capital gain at the end of year. Sometimes I have to sell because one of my big winners just gets too big for my portfolio. It exceeds my sleep portfolio principle Number 4, and that’s the best reason of all to sell. When a stock like Amazon or Netflix blows up in your portfolio so much that you’re going to need to sell or maybe just give those shares away, which by the way, the best charitable way to give is shares of appreciated stock. I’ve done that. I bet many of you have done that too. It’s a neat trick if you can pull it. That wraps up my Twitter X Hot Takes. Let’s get in to the Mailbag now five items. Here comes Mailbag item Number 1. Thank you, Kevin McMahon. Hello, David. I recently listened to your audio book and thought it was excellent. Baseball played such a big role throughout your story. That really resonated with me since my dad and I have always shared a love for Strat-O-Matic baseball. The games and the statistics behind them have been a lifelong passion of ours. I was so excited about the book that I even became one of the first people to leave a review of it on audible. That being said, I’d like to pivot to your recent appearance on Chris Hill’s podcast Money Unplugged. As a longtime listener of Rule Breaker Investing, I was surprised by how much more I learned about you through that conversation. Highlights for me included your first memory of money, your family background, your early computer experience, your schooling, both high school and college, your journey toward a career, and of course, Kevin goes on more baseball. I especially want to call out your time in Rochester, New York. I grew up in the Finger Lakes region, Penn Yan near Rochester, so that really resonated with me. I would highly recommend not only your episode, but also the other conversations on money Unplugged. Chris Hill’s podcast is fantastic and your appearance made it even better.

Thanks again to you and the Motley Fool team for continuing to share your stories and your wisdom. Fool on. Kevin McMahon. Well, fool on back to you, Kevin. I, of course, loved reading your note. I played Strat-O-Matic baseball all throughout my youth. My brother Tom and I ran a whole league at our school. We had 11 year olds coming over to our house on weekends to bring out their Strat teams and play head to head. It was a league. We had about 20 people in it. It’s a very fond memory. I do remember my first copy of Strat-O-Matic baseball. I believe it was 1974, and two teams came in it. I got the 1974 Chicago White Sox and my younger brother, Tom, got the 1974 Atlanta Braves. He had Hank Aaron on his team. I didn’t. But I did have Dick Allen, who was just recently recognized as a Hall of Famer himself. Had a lot of fun just Tom and me playing those two teams. We had no other connection to them. We’re lifetime Minnesota Twins fans, but that is such a fun memory for me, and Strat-O-Matic baseball runs all throughout my youth. I eventually decided that pursue the pennant, which was a competing baseball product was even better, a little bit thinkier with a little bit more variety and fun. But I love dice sports games. I grew up playing all of the Strat-O-Matic games. I think at this point, Kevin, my listenership this week, maybe down to just you and me because I’m not sure anybody cares that much more about Strat-O-Matic than I do. But this is an opportunity for me to thank you for your note and to say that Chris Hill has a wonderful podcast and he sent the questions over ahead of time for his money plug podcast, and they were different from the types of questions I usually get if I’m going to be on somebody’s podcasts. I’m happy to answer investing questions all day long. Clearly, witness this podcast. But I also had a lot of fun because Chris’s questions, a lot of them are who you were and where you grew up and what you thought about things as you grew up. I think that’s why you were encountering some new biographical learnings about me, and it was my pleasure to share and keep up the great work Chris Hill with Money unplugged. Mailbag item Number 2. This one from Peter Pastrel DMD. That means, Peter, you are a dentist.

Thank you for taking the time to write in. “Dear, Motley fool”. You write, “I just received the new Rule Breaker Investing book, very excited to read it. Another point for David on Chapter 2 about not adding to your weeds and watering the roses,” Peter writes. Peter is, of course, referencing habit Number 2 of the Rule Breaker investor, which is to add up, don’t double down. I think part of the fun of this podcast going forward is, I can all of a sudden now be relating to the book itself, the six habits, the six traits of stocks, the six portfolio principles, haven’t been able to do that until now, but I think a lot of the questions and the conversation will often be about those six habits, those six traits, those six principles. Peter, you’re doing it right here. I think this is a new wave of mailbag item, and I really enjoy your thinking here. You go on. I used to always average down on my stocks that were down until I started listening to the Motley Fool around 2014. Here are two points, Peter writes. When people average down on their stock cost basis, they are basically saying, Peter writes two things. One, the market, which is generally efficient has this stock wrong. In my wisdom, this stock will go back up, so let me buy more. Not even the most seasoned investment professionals know for sure if this stock will go back up. Then Peter goes on to his point Number 2. What I’m saying by buying more of this down stock is that I’m smarter then the other billion investors that are saying this stock should be down 40% and I’m saying it will go back up a fools small F, Peter writes errand. I totally agree with David in that we should add to our winners and let the down stock go up on its own merit and not my feeble thoughts. Anyway, I bought three copies of the book, one for my son, one for myself, and one for my father for his birthday, 89 years-old today. What a great birthday present.

The Motley fool has made me wiser, happier, and richer. Thank you. Peter D Pastoral DMD. Peter, thank you. I really appreciate you sharing your thinking back. The concept of adding up is against most people’s instincts. It’s certainly, as I point out in the book, against what mutual really that they legally have to do, which is to rebalance to sell off their winners in order to add back to their losers. The idea being, of course, that those losers will come back. At least for Rule Breaker stocks, Peter, in my experience, a lot of my broken bad Rule Breaker stock picks never really do come back in any meaningful way. Rarely is there a remarkable comeback where a horse that was 15 lengths back all of a sudden comes out of nowhere with me adding to it all the way through the finish line. No, most of the time, the horses like secretariat, they get out front. They’re the ones who win the race, they win for us investors, and I’ve been trying to add to it along the course of the race. If you’ve read the book, I’m alluding to you get to invest the whole race, which is portfolio principle Number 5. Very rarely do Rule Breaker stocks make great comebacks. I think the only way really to get poor if you actually try to get poor investing in the stock market, which rises 9-10% annualized. The only real sure way to actually play that into poverty is to become hell bent on adding to a stock that’s down. As it goes down more, you add more. At that point you think, well, if I liked it at 20, I have to like it at 10, and then when it hits six, it’s a combination feeling. It’s on the one hand if I liked it at 20, and if I liked it at 10, I must love it here at six, but it also starts feeling a little bit desperate like I’m going to add money to this because if it just gets back to even, I’ll make money. I don’t think that’s a great set of investing habits. I don’t think that’s the right Rule Breaker mindset. That’s why we much prefer Peter to add up don’t double down and what you’re saying, your two points I agree with. In general, I think the market is generally efficient near term. The market has a very hard time factory in value over the long term, which is where our Alpha sits and why we beat the market and why we beat the pants off the market the longer we hold our stocks if they’re great Rule Breaker stocks. But I do think that you are going against a lot of wisdom if you start saying the market is wrong as your stock declines and you add to it on. That’s where I’ll leave it, wrapping up Mailbag item Number 2. But I have to say in conclusion, Peter, thank you so much for making a gift of my book to your dad. Happy 89 years, Mr. Pastrel.

Rule Breaker Investing Mailbag item Number 3. This one from Michael Baldwin. Thank you, Michael. You write, Hi, there. Was listening to the latest mailbag today. That would be last month, by the way, and thought I might be able to help read the question of share tracking tool. I’ll pause it there for sec. In last month’s mailbag, one of the questions was, how do you actually track your portfolio in a professional manner that is easy and enables you to know exactly how you’re doing compared to the market averages. Including complexities like adding in dividends, maybe even accounting for the implications of taxes on your portfolio performance as well. That was the question. Chief Investment Officer of the Motley Fool Andy Cross and I spoke to that a little bit. We both felt like there wasn’t a great answer, and that’s why Michael Baldwin is coming in with this note. I’ve been using Michael write share site. That’s share as in shariff stock and sight as in your eyesight, sharesight.com for many years. Michael writes, it includes pretty much all indices. It includes dividends, and has various performance tracking metrics, reports, etc. Whilst this is a dead giveaway that Michael is not writing from the United States of America. Whilst it is an Australian/New Zealand based tool for tax tracking purposes, it has taken the process of manually updating spreadsheets and trying to figure out formulas for compounding, while adding to or selling down positions, etc, completely away. I can focus on more important things. I hope this helps Michael Baldwin. First of all, Michael, yes, it does. Thank you. Thank you for sharing that. I love sharing out good solutions that fellow Fools are using and finding helpful. In particular, I think this no can help my Australian and New Zealand listeners because it sounds like that is where Sharesight comes from. Sharesight is a global tool, and anybody can go to sharesight.com and take a look at it, but it does sound like the tax tracking, if somebody wanted to do that is maybe more geared toward the other side of the planet from many of us here in the good old US of A. But it looks like a very clean tool. Clearly, it has a lot of fans, and I will say, having clicked into the pricing, the pricing is a little bit questionable to me as a capital F Foolish investor. First of all, for people who are serious, I do think it sounds pretty good. Not everybody is necessarily looking for professional level tracking of their portfolio and just noticing their pricing and plans. Anybody can use it for free. You get one portfolio that can have 10 holdings. If you pay $7 a month, that’s Australian. I think their listing is $9.33 US dollars per month, billed monthly.

Basically, pay nine bucks a month, you can track one portfolio with 30 holdings. If you pay $18 Australian, that would be $24 a month. You can track four different portfolios with unlimited holdings, and if you pay up a few more dollars than that, you get even more than that. I think in particular, what I’m looking at is paying $9 a month to track one portfolio. I’d probably be OK with that if I’m quite serious about this. My problem is you can only have 30 holdings in that portfolio. I would suggest to Sharesight that if somebody wants to track their portfolio, and I’m really speaking as an armchair investor to a lot of armchair individual investors out there, lot of us are going to have more than 30 holdings. If you’re paying attention to your GKC and I’m just going to leave that acronym there and wink at those who know what I’m talking about, you probably are going to have a growing number of holdings. You might even have well more than 30 when you start your portfolios, so you’d have to go from that $9 up to $24 monthly just to track a portfolio with more than 30 holdings. That would be my only misgiving, Michael Baldwin, but thank you for bringing Sharesight to our awareness. You concluded your note by saying, hope this helps. It did. Fool on, my friend. Let’s move on to mailbag item Number 4. Mailbag item Number 4 is from Joe. Last month’s mailbag began with this note from Joe. It was short, so I’m just going to read it again. This is what kicked off August. Hi, David. In February of this year, I turned all of my focus from sports betting to investing. I grew up in a house where we didn’t talk about money and I was clueless on the stock market. I knew I was missing something, so I decided that at the age of 43, it was time to get serious about planning for retirement. What a mistake waiting this long, but I’m glad I at least found my path now, and I’ve gotten my 10-year-old started off on the right path. Motley Fool Money and the Rule Breaker Investing podcasts were the first two that I started listening to in order to learn more. I’ve learned so much from you and your team. Thank you. Joe concluded his note shared last month with this. My question is this, he wrote, “If you were a new investor starting with your first $1,000 today, would you be more likely to invest in Rule Breaker style exchange-traded funds, ETFs, rather than in individual stocks?” Fool on.

Joe. That was the note last month, and I’m not going to re answer that. But if you’re a new listener, that conversation I had with Motley Fool Chief Investment Officer Andy Cross. Andy and I just kicking around Joe’s question, I think that’s worth listening to if you didn’t get a chance. It let off last month’s Mailbag. It was Mailbag item number 1 in fact. In fact, the podcast title of that whole mailbag was Sports Better Turned Investor. Well, let’s now get to this month’s mailbag item number 4, this one from Joe. Hi David, I just wanted to thank you and Andy for fielding my question and all of the discussion around it. I really appreciate your help and support. The book is on pre-order. I’m excited to dig more into all of it, especially the portfolio management piece. Thank you yet again and Fool on Joe. Well, I just wanted to share that Joe because I really appreciate you closing the loop. I love the journey that you’re on. My friend Alicia Aldrich here who runs Motley Fool PR. She’s been doing a lot of booking. Thank you, Alicia, for the work you’ve been putting in yeoman’s work here over the last few weeks, booking me on different shows and podcasts and that’s going to continue. Alicia dropped me a short note this week and she said, just for fun, think about sports betting versus investing because she knows I’m passionate on this topic. Alicia said Americans wagered $150 billion in 2024 on sports betting. Joe, it wasn’t just you.

Alicia went on projection show that there will be a record $30 billion in wagers just on this year’s National Football League season alone. I did include a couple of pages in Rule Breaker Investing about sports betting. I always want to point out two things. First of all, I think betting is fine. I’ve made bets myself. I think speculating is a great thing to do in life, just in moderation, of course, and also math, which is my main point about sports betting. The math is completely against you. Every sports bet is generally a 50/50 prospect. Let’s say you put down $100 with your friend. The house is going to take five or 10%, so five or 10 of your dollars just disappear, and let’s say with the $90 left, one of you is going to beat the other and walk away with their 100 plus the 90 from their friend. But if you just notice $10 disappeared from the $200 that were wagered. If you just do that for, let’s say, 20 consecutive sports bets, well, that $10 is disappearing each time, so those original 200 that were wagered are basically wiped out altogether by the house, and you’re likely to have lost money. In fact, anybody who consistently bets on sports is very likely to run an expected negative return. That means you’re losing money, not making it in volume over time. I had a lot of fun from my hotel room in New York City watching the Detroit Lions take on the Baltimore Ravens on Monday Night Football this week. It was a great game. I really enjoyed watching that game, and I really appreciate not betting on it because I didn’t have to sweat out my bet. I have had bets on games, and I often don’t enjoy the game that much because I’m just hoping that, in this case, a lot of people were hoping that the Ravens would cover their 4.5 point favorite. The Baltimore Ravens playing at home last night were a 4.5 point favorite. Half the people betting on Monday night expected the hometown Ravens to win by five points or more, half the people. History will show the Ravens did not. They lost by eight and a lot of money just disappeared overnight. Those who were betting for the lions against the spread, they’re happy, but they also paid five or 10% for the privilege of winning that bet. These days, if you invest in the stock market, commissions are down to about $0 per share, and Joe, you already know this. I’m speaking to those who may not. The stock market averages a 9-10% annualized gain. The opportunity cost that anybody in volume is paying for the privilege of getting to bet the Lions or the Ravens or whoever you’re betting on next week.

Again, if it’s all good and this is with a friend and it’s not a big amount of money for you, I’m totally fine with that, but anybody who’s taking this seriously, and I realize the whole sports media world and a lot of advertisers take betting very seriously these days, they’re really steering many people down the wrong track. If you care about your money, if you want to retire, especially if you want to retire early, I think, well, let’s just put it this way. I think you should be like Joe. Joe, thanks for your note. Fool on. Closing out this week, Rule Breaker Investing Mailbag item number 5, this one from Gorov Kumar. Gorov thank you for this wonderful note. Hello, David, and the Rule Breaker Investing team. I’ve been thinking about writing a post for the Mailbag, Gorov writes for quite some time. When I heard David on the Money and Plug podcast with Chris Hill this past week, I decided to do so and he numbers his points. One, a while back, David did a couple episodes with Jason Moser about getting kids started with investing. After listening to that episode, I decided to start investing for my girls, eight and four at the time in a custodial brokerage account. I decided at random to invest $100 for every year at their birthday in that account. $800 at their eighth birthday, 900 at their ninth, etc, and I’ve kept that going so far. The stocks that I bought in those two accounts were all Motley Fool recommendations, such as Netflix, Amazon, the Trade Desk, Mercado Libre, Starbucks, etc. I have not sold a single share in those two accounts since then. My kids accounts have done way better than my personal accounts where I’m a little more aggressive. Gorov goes on when I heard in the money unplugged episode that David, when you were managing your wife’s portfolio and your wife’s account was performing better than your account, I could totally relate to that. I want to thank you and Jason Moser for those episodes to help me get started investing for my girls.

Those accounts have turned a few hundred dollars into a substantial sum for my girls, and I’ve told them that as long as they don’t sell, I will keep investing $100 for every year on their birthday for as long as I can. I’m just going to pause it there for a sec. What a great dad. Gorov you go on. I recently asked my 17-year-old daughter because yeah, those who may not be familiar with this, that Jason Moser etc podcast that we did years ago was about nine years ago. Gorov’s eight-year-old is now 17, I want to thank Jason as well, again, and anybody who’d like to Google Rule Breaker Investing, get your kids started investing. You will find my two-part series dedicated to getting your kids started investing. Gorov, I think you’ve started to establish some of your own best practices. I love how you’ve gamified it. I love what you’ve done here. You close out point number one with this. I recently asked you write my 17-year-old daughter to calculate how long it will take for her account to turn into $1 million if we don’t invest a single cent at this pace. When she calculated that, her eyes lit up and she said something that was music to my ears. She said, Gorov writes, “Hide the username and password of this account from me and don’t give it to me when I turn 18.” Well, that was the first of Gorov’s two points. I think one of the things I love about this podcast and especially my mailbags is just getting to share other people’s great ideas, your inspirations, what you do for yourself, what you do for your kids. In this case, Gorov, I think you’ve opened some eyes and probably raised some smiles this month and probably there will be some other parents who start to do exactly what you did nine years ago.

They’ll start this week because they heard your story through this podcast. This podcast mailbag is only as good as the mail that comes in and the mail that comes in is often so very good. Let’s go on to Gorov’s second concluding point. You’re right. I’ve been investing with The Motley Fool since 2012 and done decently. In 2021, we decided to build a new house and we use proceeds from some of my winners like Netflix to build the new house. When you said on the Money Unplugged episode, don’t sell Netflix to build your house, Gorov writes my jaw hit the floor because that’s exactly what I did. I was initially very happy that I sold Netflix in 2022 when it dropped from $700 a share to $250 a share. Yeah, that happened, 2022, not so long ago. But not so happy you write now seeing it cross $1,200 a share. However, I was talking to my wife the other day and we both agreed that the new house has brought us immense happiness, and we’ve been able to create so many good memories in this house. We don’t regret the house at all, but selling winners like Netflix and Amazon, that does hurt some. Just wanted to send this note and share my gratitude for sharing your thoughts so freely. I look forward to the new episodes every week. I just received your book, Rule Breaker Investing earlier this week, finished the first two chapters. It’s a great read so far. This will make a great gift to anyone interested in learning about investing. PS Gorov writes, “My daughter, who is a high school senior is also reading this book and actually she shared a quote from this book in her college essay, which is related to investing in financial literacy.

She’s also applying to UNC Chapel Hill for the Moorhead Kane scholarship program. It was such a happy coincidence hearing on the Money Unplugged episode that you were also a Moorhead Kane scholar.” Thank you, Gorov Kumar. Thank you, Gorov. I saved this one to last because there’s a real connection across multiple dynamics here, synchronicity happening with this note, whether it was that you and I both sold some Netflix to buy our houses, and yet while that was a horrible mathematical move, neither of us regrets it because why do we invest in the first place? To buy a house, to build a house, or to put a kid through school, or to retire early. That’s why we invest. While I don’t think I’ve ever been a good real estate investor, I’ve never once regretted any house. I’ve only bought a few that I’ve ever lived in because I love living in that house. That’s why we invest. My house is much more meaningful to me than the invisible shares that I see on my brokerage statement, whether it’s printed out on paper or I’m viewing it on a glowing screen, why we invest is exactly what you shared this week. It’s not just about a house or Netflix. It’s also about a child, in this case, more than one of them and turning them on to investing. One of the main points I’ve been trying to make as I do media around New York City and the Internet’s writ large, maybe my main point is, this is what investing is. Rule Breaker Investing is just one form of it and we practice other forms just at the Motley Fool. We’re motley.

Anybody who’s been a member of ours for a long time knows not everybody at my own company would agree with me on any given stock pick or on any single page of my book. We are Motley. But I think one thing that is true of the Motley Fool and I think always will be, is that we’re there to invest. As I say habit number 3, invest for at least three years. That’s right. It’s very strange for me to do a lot of financial media when most people are traitors giving advice in the very near term about what’s going to happen this fall or in the next earnings quarter. It’s such a foreign language, I’m often speaking when I speak the language of investing, but I really hope that this book helps turn the tide for many Americans and many people living worldwide because investing is such a better practice than trading. Investing is a way better practice than sports betting, investing starting with its etymology, which I break down in the book and provide some visuals and I hope some inspiration investing is a very powerful act. It’s a beautiful word. It’s obviously one of my favorite words. Your note, Gorov Kumar is replete with investing in more than one form. I also wish the very best to your daughter as she applies for a scholarship program at UNC Chapel Hill, which improved my life in a way that I will always be grateful for. Thank you for all the tweets.

Thank you for all the mailbag items. I really appreciate. It’s obviously a special week for me. I obviously appreciate. That’s why I let off with a thank you and I’m going to close with a thank you. This is an unusual mailbag because it feels self-indulgent at different points, and I apologize if it ever did Chloe. Yeah, I hadn’t written a book though for 15 years and I’d been anticipating some of you had to all year long this past week in the book coming out. It’s understandable the mailbag would be dominated by it. By the way, just to mention something at close here that I mentioned early on, I would love for you to send me any questions that you have aroused from reading the book because I’m going to keep building out a mailbag, giving answers to the most frequently asked questions. A reminder, the Rule Breaker Mailbag happens every month thanks to this email address, [email protected]. Of course, you can also tweet us on Twitter X @rbipodcast. I want to thank my compadre, Brian Richards at the Motley of our top leaders at the Motley Fool, who has recently taken control of the @rbippodcast account. It really had been sitting dormant there for some years now, and he’s very actively using it. It’s a good follow too for Rule Breaker fans. Let’s bring on October. Shall we? Fool on.

The other evening, I went to a school reception held for parents and alumni who donated at least a certain amount in the calendar school year. It was a warm, intimate gathering where I mingled with other parents, shared stories, and listened to the head of school and a couple of trustees talk about the importance of giving. The event was not only a thoughtful way to acknowledge contributors but also a chance to learn about new school initiatives.

As I stood there, I realized just how powerful the act of giving is. When you give, you become part of something bigger than yourself. You contribute to the collective well-being of a community. You see tangible evidence of your support in the smiling faces of children, in the opportunities created, and in the positive changes made possible.

Giving Feels Better Than Receiving

One of the main reasons Financial Samurai has remained free since its inception in July 2009 is because it feels incredible to help others solve their financial problems.

Over the past 16 years, I’ve received thousands of messages from readers who’ve built more wealth than they thought possible, found the courage to negotiate better jobs, or even retired early to pursue their passions. That, in itself, has been the greatest reward for me, far greater than any subscription fee or paywall could have provided.

But here’s the rub: when your household consists of dual unemployed parents, donating any significant amount of money can feel daunting. As I listened to the head of school thank the donors, I couldn’t help but wonder: can my wife and I really afford to donate another significant amount to the school next year?

Since our wealth isn’t unlimited, we also want to set aside a similar donation for the Pomeroy Rehabilitation Center, which supports individuals with injuries and disabilities. At the same time, we’re still about $30,000 a year short of reaching our ultimate passive income number.

The Delicate Balance Of Remaining Unemployed And Giving

When you are unemployed or FIRE, every dollar you give slightly increases your chances of having to go back to work or running out of money before you die. Giving while unemployed is, in many ways, an act of faith: faith that your investments will hold steady, faith that your expenses won’t balloon, and faith that your calculations about your safe withdrawal rate are correct.

Add in the responsibility of raising children in an uncertain world—especially one being reshaped by artificial intelligence—and the decision to give becomes even more complex. It’s not just about you anymore. It’s about ensuring your children have opportunities and will be safe.

We spend endless time debating safe withdrawal rates and the 4% Rule in personal finance circles. So when you give, that money really should come out of your withdrawal rate budget. If you’re nearing your safe limit yet still want to give, the prudent move is to trim your spending elsewhere. Otherwise, your generosity could come at the cost of your financial freedom.

And yet, even with all these considerations, the act of giving still calls to us. Why? Because the returns on giving—emotional, psychological, even spiritual—are often greater than anything you could get in the stock market.

Solutions To Giving When Unemployed

If you’re unemployed or FIRE, here are four solutions that can help you still give.

1) Replace your expenses

Because my wife and I donated X amount in 2025, we agreed to cut back on other expenses by the same amount. The easiest area to slash was travel. Renting a vacation home in Hawaii for five weeks would have cost us $16,000–$26,000, depending on size and location. Instead, we stayed with family, my parents for four weeks and my aunt’s beach home for one week, and saved the difference.

That savings went straight into remodeling my parents’ in-law unit. Was it the same as sipping mai tais on the lanai of a $26,000 rental? Not even close. But it still felt meaningful. By redirecting money we would have spent on lifestyle luxuries, we were able to both give to the school and help improve my parents’ property.

2) Earn side income to give away

If cash flow is tight, create income streams specifically earmarked for giving. I did a stint in a fintech startup but quickly realized it wasn’t for me. Afterward, I turned to personal finance consulting, helping individuals with one-on-one sessions. These not only promoted my book, Millionaire Milestones, but also generated extra income that I could donate.

Even a modest side hustle can fund meaningful donations. For someone who’s FIRE, this is an empowering way to stay engaged, sharpen skills, and still make a difference. My wife also contributes by donating her time at our children’s school, a reminder that giving isn’t always about money.

3) Donate appreciated investments

A tax-savvy way to give is by donating appreciated stock through a Donor-Advised Fund. You avoid capital gains taxes while the organization receives the full market value.

For example, suppose you bought Amazon stock for $10,000 a decade ago and it’s now worth $50,000. If you sold it, you’d owe over $13,000 in taxes if you live in California, leaving just $36,800 to donate. By donating the shares directly, the full $50,000 goes to the nonprofit, and you also receive a tax deduction. That’s a win-win.

This method is particularly attractive when you’re living off your portfolio. It allows you to be generous without putting additional strain on your withdrawal rate.

4) Donate your time

Finally, when money feels too tight, don’t discount the value of your time. In fact, time is often the most precious resource you can give. Volunteering at your child’s school, mentoring young professionals, or lending your expertise to a nonprofit board can create ripple effects far larger than a check ever could.

My wife is Girl Scouts troop leader at our school and is volunteering in various other ways as well. I see the greater purpose and joy she has by being more involved. She also gets to interact more with the teachers and school administrators.

I’ve noticed that the times I’ve felt most connected to my community weren’t necessarily when I wrote a donation check, but when I was physically present—meeting people, sharing knowledge, and helping solve problems in real time. Money supports causes. Time transforms them.

Practice The Mindset Of Giving

One downside of FIRE is that it can make you overly cautious and stingy. You’re so conditioned to preserve your nest egg that generosity feels risky.

If you feel you can only live off $30,000 a year and ride a bicycle, then there’s certainly not much room in your budget to give. But ironically, giving often multiplies your returns in ways you can’t predict.

Not only does it feel fulfilling, but it can also open doors you never saw coming—new friendships, opportunities, even investments.

A friend of mine once met a venture capitalist at a charity function. That connection led to an early-stage investment in Anthropic, which 12X’d in value in less than two years. Sure, that’s luck. But it’s luck that wouldn’t have happened without showing up, giving, and engaging.

The truth is, you never know who you might inspire—or who might one day lend a hand to you or your children. Maybe one of you readers will become a bigwig 15 years from now, and if my kids are ever struggling to find work, you’ll remember the value you got from Financial Samurai and give them a chance. That would be amazing.

You just never know.

The Ripple Effect Of Generosity

At the end of the day, the exact dollar amount doesn’t matter. What matters most is participation. Giving is a practice, just like investing. You may never feel like you have “enough,” but if you can find a way to give—even a little—you’ll almost always end up richer in spirit.

Generosity is also contagious. When others see you give, they’re inspired to give too. At the event, I learned some parents contributed multiple times more than we did. I felt awe at both their generosity and their good fortune. Their example reminded me that giving is a spectrum, and we all have a role to play.

Financial independence gives us freedom. But true wealth comes from using that freedom to help others. You don’t need to be a billionaire philanthropist to make a difference. You just have to show up, contribute what you can, and keep practicing the habit of generosity.

And that’s exactly what I plan to do—with both money and time—for the rest of my life.

Readers, what are your thoughts on continuing to donate money while unemployed or FIRE? Is it irresponsible if you already feel on edge financially, or is giving still worth prioritizing? How do you personally find ways to keep giving when your active income dries up or becomes minimal?

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If you want to FIRE, one of my regrets was pulling the ripcord too early at age 34 in 2012. Even though I started writing about FIRE in 2009 with the launch of Financial Samurai—trying to uncover as many blind spots as possible before taking the leap—I still feel like I made a mistake. In hindsight, I should have worked at least five more years until age 39, or even 40 before retiring.

At the time, I didn’t know I’d have a kid five years later, let alone two. Fast forward more than a decade, and with tremendous inflation, skyrocketing college costs, and never-ending healthcare expenses, the squeeze is real. If I had worked a few more years, I probably could have generated at least $60,000 more in passive income into perpetuity.

Although I’m confident I’ll build enough wealth so my two children will never go hungry, I’m not certain I’ll ever reach true multi-generational wealth. To me, that means having enough so that three generations—my family, my children’s families, and my grandchildren’s families—would never have to work soul-sucking jobs to survive.

Multi-Generational Wealth Is Not Necessary (But It’s Nice To Have)

Of course, multi-generational wealth isn’t a necessity. Neither is the need to Fat FIRE. Our baseline expectation should be that our children grow up, achieve financial independence, and learn to take care of themselves.

But after living in San Francisco for 25 years, I’ve seen the opposite play out repeatedly. Every single neighbor I’ve ever had either still has an adult son living at home, or the son lives in a house purchased by his parents.

I’ve gotten to know many of these families. The sons all went to college and worked hard. Yet, despite their education, none of them could land jobs that paid enough to live independently with middle-class comfort. Instead, they’ve relied on ongoing financial support from their parents to make life in San Francisco work.

Given this reality, I’m pragmatic enough to expect that the same dynamic could affect my kids. The world is only getting more competitive, with AI threatening jobs and international students filling up top university spots at the expense of Americans. Getting ahead will become increasingly difficult for the next generation.

Hence, the solution: attempt to build multi-generational wealth.

If my children don’t end up needing financial support because they find well-paying jobs, build businesses, or otherwise thrive, then great. The extra wealth will simply serve as a cushion or be redirected to charity. But if they do need help, I’d rather already have that “insurance policy” in place than scramble later.

Other Reasons To Amass Multi-Generational Wealth

Here are some reasons why you may want to build multi-generational wealth beyond simply wanting to give your kids and grandkids a head start:

• Severe disability or health challenges. You, your spouse, or your child may require extraordinary financial resources to maintain a decent quality of life—think 24/7 caretakers, modified vehicles for mobility, custom housing, or lifelong occupational therapy. A responsible parent’s worry is never ending.
• Genetic risks. If you or your spouse carry recessive genes that could appear in future generations—causing loss of mobility, senses, or cognitive functioning—you might want to build a bigger financial safety net.
• Historical inequities. You may come from a community that has been historically marginalized and denied equal opportunities. Even though progress has been made, you may not trust that your children and grandchildren will ever be given a fully fair shake. Generational wealth becomes both protection and empowerment.
• The loud “provider’s clock.” Some people feel an unusually strong responsibility to take care of their family members. Maybe you were the first in your family to attend college, or you lucked into a life-changing opportunity like joining a startup before it IPO’d. Whatever the case, you feel compelled to leverage your luck into a lasting legacy.
• Volatility of opportunity. Opportunities come and go, and not every generation will be fortunate enough to catch a financial tailwind. Future generations may face bigger systemic risks than we did. By building more than you personally need, you’re smoothing the path for your heirs when they face tougher times.
• Philanthropic leverage. For some, it’s not just about family. A dynasty-level fortune allows you to create family foundations, endow scholarships, or shape institutions that last long after you’re gone.

Ultimately, the drive to build multi-generational wealth is usually not about greed. It’s often about love, protection, and creating optionality for the people who matter most.

The Math Behind Multi-Generational Wealth

Imagine a upper middle-class lifestyle for a family of four today costing $350,000 a year before taxes. In expensive cities like San Francisco, New York, Los Angeles, Settle, or Honolulu, this level of spending provides comfort, but it’s hardly extravagant once you factor in taxes, housing, childcare, education, and healthcare.

If you happen to live in a lower-cost city, feel free to adjust the numbers to better fit your situation. The country is vast, and the cost of living varies dramatically. This is simply a theoretical exercise to illustrate how much wealth might be needed to support three generations.

Supporting One Family Of Four Today

Using the 4% safe withdrawal rate, here’s how much capital is required: $350,000 ÷ 0.04 = $8,750,000

That means one family of four today needs $8.75 million in investable assets (not including primary residence) today to generate $350,000 in annual gross spending without depleting principal. If you want to build multi-generational wealth, the decumulation of principal is not the way.

In 20 Years (Next Generation)

Let’s assume each of this family’s two kids grows up, starts a family with two kids, and wants to maintain this same lifestyle. Using 3% annual inflation for 20 years: $350,000 × (1.03)˄20 ≈ $632,000

So what costs $350,000 today will cost about $632,000 a year in two decades.

At a 4% withdrawal rate: $632,000 ÷ 0.04 = $15,800,000

Each child will need about $15.8 million in invested capital to sustain a family of four in 20 years.

Total Required For This Family Of Four And Their Two Children’s Families Of Four

• This family of four today: $8.75 million in investable assets
• Child #1 in 20 years: $15.8 million in investable assets (assuming they are a family of four)
• Child #2 in 20 years: $15.8 million in investable assets (assuming they are a family of four)

Grand total = $40.35 million.

And that’s assuming steady markets, no major financial shocks, and no lifestyle creep. To be safe, you’d want a 20–30% buffer, meaning the real target is closer to $50 million+.

In 40 Years (Grandchildren’s Families)

Now that we’ve got the two children’s families and the current family taken care of, it’s now time to think multi-generational and figure how how much we need to save and invest to take care of their grandchildren’s families. Let us assume each grandchild has two kids and a spouse of their own.

Using the same assumptions:

• Base annual spending today: $350,000
• Inflation: 3% per year
• Timeline: 40 years

$350,000 × (1.03) ˄ 40 = $1,141,000

So by the time the grandchildren are adults, an upper middle-class family of four lifestyle could cost $1.14 million per year. Sounds kind of nuts! But the math doesn’t lie.

At a 4% withdrawal rate: $1,141,000 ÷ 0.04 = $28,525,000

Each grandchild’s family of four would therefore require $28.5 million in capital in the future to sustain themselves.

With four grandchildren, the total comes to: $28.5M × 4= $114 million.

The All-In Generational Number

• Family today: $8.75M
• 2 kids in 20 years: $31.6M
• 4 grandchildren in 40 years: $114M

Grand total = $154.35 million.

Add a 20–30% safety buffer for market volatility, higher-than-expected inflation, or health/education shocks, and the real number pushes closer to $200 million.

Holy moly! Coming up with $154 – $200 million is a crazy amount of money. No wonder some high-income earning parents feel the angst of not being rich enough. Only CEOs, unicorn-startup founders, top athletes, or elite hedge fund managers or venture capitalists can amass that type of fortune.

So the sad reality is, even if you don’t FIRE and grind yourself into dust, you still probably won’t amass multi-generational wealth anyway. Hence, think carefully about sacrificing your life to try and achieve an unlikely goal.

Calculating The Amount Needed In Today’s Dollars

But here’s the good news: In this example, you don’t need to save and invest $154 – $200 million today. That figure represents the inflated future capital required to sustain everyone’s lifestyles. What really matters is how much you’d need to set aside in today’s dollars.

• Family today: $8.75M to generate $350,000 a year in gross investment income at a 4% rate of return
• Kids in 20 years (discounted back at 3%): $17.5M instead of $31.6M in the future
• Grandkids in 40 years (discounted back at 3%): $35M instead of $114M in the future
• Grand total = $61.25M instead of $154M in the future

Now, $61 million is still a monster sum, but it feels a lot more approachable than $154+ million. And that’s using a conservative 3% discount rate (equal to the assumed inflation rate).

It gets better when you assume a higher rate of return (discount rate):

Base amount needed today: $8.75 million (no need to discount this number)

Amount needed today based on various discount rates to take care of two more generations, 20 and 40 years in the future:

• 3% (inflation only, base case): ~$52.5M ($61.25M total minus the $8.75M you need today)
• 4% (inflation + 1% real growth): ~$44.7M
• 5% (inflation + 2% real growth): ~$31.9M
• 6% (inflation + 3% real growth): ~$27.6M
• 7% (inflation + 4% real growth): ~$21.6M
• 8% (inflation + 5% real growth): ~$18.9M
• 9% (inflation + 6% real growth): ~$15.5M
• 10% (inflation + 7% real growth): ~$13.8M
• 11% (inflation + 8% real growth): ~$12.1M
• 12% (inflation + 9% real growth): ~$11.3M

Although $20.05 ($11.3 + $8.75 needed today) to $61 ($52.5 + 8.75 needed today) million is still an enormous sum, it’s far easier to wrap your head around than $154 million.

Generating a 5%–8% annual rate of return is quite reasonable. 20-year Treasury bonds yield about 5% risk-free, while stocks have historically returned around 10% per year. My venture capital investments in private AI companies could potentially generate even higher returns.

Working Obviously Helps Increase Your Chances

If you want to build multi-generational wealth by continuing to work, each year of saving and investing will further strengthen your returns. For instance, saving and investing $87,500 in a single year would raise a base of $8.75 million by 1%. That 1% boost can either accelerate your path to the target or provide a valuable buffer during downturns.

Think about this type of calculation as a Coast FIRE calculation for multi-generational wealth creation. You don’t need all the money today. Instead, you need enough money to grow at a reasonable rate of return beyond your consumption rate to support your future indefinitely.

How To Run Your Own Multi-Generational Wealth Calculation

If you’d like to stress-test your own plan, here’s a framework:

1. Start with your desired annual household expenses today.
   Example: $X per year for your current family size.
2. Estimate your children’s timeline to adulthood.
   How many years until your kids have families of their own? Call this N years.
3. Apply an inflation assumption.
   Multiply today’s expenses by (1+i)N(1+i)N, where i = inflation rate.
   • Conservative: 2%
   • Realistic: 3%
   • Pessimistic: 4%+
4. Apply the safe withdrawal rate.
   Divide the inflated annual expense by 0.04 (or your preferred rate). This gives the capital required for one family.
5. Multiply by the number of families you want to support.
   For example, two kids who each have two kids = six families total (including your own).
6. Discount back to today’s dollars.
   Use a discount rate that blends inflation and expected returns:
   • 3% = inflation only (very conservative, “real dollars”)
   • 5% = inflation + 2% real return (reasonable base case)
   • 7–9% = higher real returns (optimistic, but still possible)
7. Add a buffer.
   Because nothing ever goes perfectly, tack on 20–30% to your target.
8. Come up with a realistic number more years you’re willing to work.

This framework lets you plug in your own numbers. If your annual expenses are $80,000 in a lower-cost city, your target will be much smaller. If you think inflation will run hotter than 3%, your target will balloon.

The Most Realistic Way To Build Multi-Generational Wealth

Now that we’ve run the numbers, let me share the most straightforward way of building multi-generational wealth: real estate.

Once you’ve gone “neutral real estate” by owning your primary residence, aim to buy at least one rental property per child. Ideally, you purchase one when they’re born or even years before, giving yourself more time to pay down the mortgage and let the property appreciate as your child grows into adulthood.

The next step is to acquire additional rental properties based on the realistic number of grandchildren you expect. Since the average family has about two children, you can multiply the number of kids you have by two to set this new goal.

With affordable housing locked in, life gets much easier. If you can reduce your housing expense to 10% or less of your income, financial freedom becomes almost inevitable. After all, food, clothing, and shelter are relatively inexpensive compared to housing costs. Here’s my housing expense guideline for financial independence if you want to get more in the details.

Over a lifetime of saving, investing in other risk assets like stocks, and paying off multiple mortgages with leveraged gains, you’ll give yourself a strong chance of creating multi-generational wealth. And even if you fall short, you’ll still leave behind the most important foundation: paid-off shelter so your children and grandchildren will always have a roof over their heads.

Reconciling FIRE With Legacy Building

This is the hard truth: FIRE and multi-generational wealth are competing goals. FIRE is about quitting early to maximize your time. Multi-generational wealth is about working longer and compounding capital across decades.

You can’t maximize both at once unless you’re an ultra-high earner or build a billion-dollar company. For the rest of us, the trade-off is clear:

• Retire early, and you cap your wealth potential.
• Work longer, and you expand your wealth potential but sacrifice time freedom.

I’ve made peace with the fact that I may never hit multi-generational wealth to fully fund my grandchildren’s futures. And that’s OK.

My first job is to provide for my kids and raise them to be financially independent. If I can also build a cushion for my grandchildren, wonderful. If not, I’ll leave behind values like hard work, frugality, and investing – traits that may end up being more valuable than money itself.

After going through this exercise, I’ve realized there’s no way I’d be willing to work another 20 to 30 years just to build multi-generational wealth for my grandchildren’s family. I’ll leave that responsibility for my kids, if that’s what they want to do.

Final Takeaway

FIRE may make building multi-generational wealth impossible. But that doesn’t mean FIRE is a mistake. It just means you need to be clear-eyed about the trade-offs. Retiring too early cuts off the compounding engine that dynasties rely on.

The best we can do is strike a balance: build enough wealth to enjoy freedom today, while still setting up a foundation for the next generation. Anything beyond that is gravy.

Readers, what assumptions do you use for inflation, investment returns, and spending in your financial independence calculations? Do you think about building multi-generational wealth, or do you believe kids should be fully on their own? Why do you think people get upset at others for running financial simulations to see how much wealth they can build over a lifetime?

If you see any math or logic errors with my above calculations, please feel free to point them out and I’ll correct them.

Free Financial Analysis Offer From Empower

If you have over $100,000 in investable assets—whether in savings, taxable accounts, 401(k)s, or IRAs—you can get a free financial check-up from an Empower financial professional by signing up here. It’s a no-obligation way to have a seasoned expert, who builds and analyzes portfolios for a living, review your finances. 

A fresh set of eyes could uncover hidden fees, inefficient allocations, or opportunities to optimize—giving you greater clarity and confidence in your financial plan.

The statement is provided to you by Financial Samurai (“Promoter”) who has entered into a written referral agreement with Empower Advisory Group, LLC (“EAG”). Click here to learn more.

Subscribe To Financial Samurai 

You can learn how to build multi-generational wealth by reading my USA TODAY national bestseller, Millionaire Milestones: Simple Steps to Seven Figures. I’ve distilled over 30 years of financial experience to help you build more wealth than 94% of the population—and break free sooner.

Listen and subscribe to The Financial Samurai podcast on Apple or Spotify. I interview experts in their respective fields and discuss some of the most interesting topics on this site. Your shares, ratings, and reviews are appreciated.

To expedite your journey to financial freedom, join over 60,000 others and subscribe to the free Financial Samurai newsletter. You can also get my posts in your e-mail inbox as soon as they come out by signing up here.

Financial Samurai is among the largest independently-owned personal finance websites, established in 2009. Everything is written based on firsthand experience and expertise.

I haven’t checked my net worth for four months until recently. That wasn’t on purpose, because normally, since 2012, I check at least three times a week using Empower’s free app. The only reason I stopped was because I could no longer log in.

One day, I was suddenly locked out of the app. I tried to log in on my laptop instead. Same result. My password, which I hadn’t changed, no longer worked. No big deal, I thought. I’d just reset it. Except every time I went through the reset process, I’d get an email confirming the change, then immediately get a warning that the new password didn’t work and that I’d be locked out for 24 hours after two more attempts. After five rounds of this circus over a month, I gave up.

Although I appreciated the seriousness of Empower’s security, I was frustrated. Life was busy. Summer rolled around. I took the family to Honolulu for five weeks. Once school started for my kids on August 27, I finally decided it was time to call the helpline (1-877-216-4014, for anyone who finds themselves in my shoes).

After a 7-minute call, I was back in action. The support rep explained that Empower had migrated dashboards to a new system, and some accounts like mine got stuck in a loop. All I had to do was unregister, then re-register with my existing Social Security number and zip code, and voilà—I was back in with all my existing linked accounts.

Didn’t Have A Great Urge To Check My Net Worth

What surprised me most wasn’t that it took four months to fix. It was that I didn’t feel a strong urge to fix it right away. If I really wanted to, I could have called the helpline immediately.

It’s not like my net worth was going to vanish just because I wasn’t looking at it. I knew the rough numbers in my head already—my equity exposure, my bond allocation, my real estate value, and so forth. Plus, when the market was tanking in April 2025, I wasn’t itching to see the damage anyway. Sometimes, not looking is the best way to stay calm.

It reminded me of social media: the less time you spend scrolling X, Instagram, or Facebook, the happier you tend to be. Checking your net worth too often can be the same type of mental junk food, so I experimented with staying away. Unless you receive a significant financial windfall, your net worth isn’t changing much from day to day.

That said, the four-plus months off taught me something valuable. There are real benefits to not regularly checking your net worth.

The Five Benefits Of Not Checking Your Net Worth Regularly

Here are five that stood out most.

1. Lower Stress And Anxiety

When markets are down, staring at your net worth daily is like poking at a bruise, it only makes the pain worse.

In March and April, the S&P 500 dropped sharply, and bonds weren’t helping much either. Had I been logging in every morning, I would have watched hundreds of thousands in paper losses pile up. Instead, by not logging in, I avoided the day-to-day sting.

It’s like weighing yourself every day when you’re trying to lose weight. If you fluctuate up and down, it’s demoralizing. But if you only check once a month, you’re more likely to see the real trend and less likely to quit.

Not checking your net worth regularly protects your mental health. You still know roughly where you stand, but you aren’t constantly reminding yourself of volatility you can’t control.

2. More Focus On What Actually Matters

When I wasn’t checking my net worth, I noticed my energy went elsewhere: my kids, my writing, my time in Honolulu visiting my parents. Instead of being distracted by a green or red number on a screen, I was more present. Of course, I still had the urge to check my investment accounts individually from time to time.

Every time you check your finances, you use up some of your limited daily attention. If you check three times a week like I usually do, that’s over 150 mental interruptions a year. Multiply that by decades, and you realize how much headspace you’ve given up.

By not checking, I was forced to focus on what I could control: working on new articles, being with family, and staying healthy. In the end, isn’t that why we’re building wealth in the first place?

3. Helps Break Your Money Addiction

Let’s be frank, tracking net worth can feel addictive. The little dopamine hit from seeing your portfolio go up is real. It’s why some of us like to gamble. But like all addictions, there’s a cost.

When your mood is tied too closely to whether the market is up or down, you’ve given away control of your happiness. That’s dangerous. Unfortunately, I’m always moodier when the stock market is correcting because I’m in charge of the family’s finances. When the finances are going backwards, I can’t help feel like a failure for not better safeguarding our main source of freedom.

By taking four months off, I broke that cycle. I rediscovered that I could go weeks without knowing my “score,” and life went on just fine. My relationships didn’t suffer. My cash flow didn’t dry up. The world didn’t end.

4. Prevents Knee-Jerk Reactions That Could Lose You Money

One of the biggest dangers of constantly checking your finances is the temptation to unnecessarily tinker. You see your portfolio drop and suddenly you want to sell (or buy the dip). You see a hot IPO go up 333% on the first day, and due to intense FOMO, you want to buy at the top.

As the old saying goes, “Time in the market is more powerful than timing the market.” The less you check your net worth and investment portfolios, the less temptation you will have to trade.

This type of overactivity often leads to worse long-term returns. The best investors are usually the ones who set up an allocation and then largely leave it alone.

By not regularly looking for four months, I gave myself a natural “cooling off” period. I wasn’t tempted to make drastic investment decisions. My portfolio allocation stayed largely intact, which is exactly how compounding works best.

Think of it like a farmer. If you dig up your seeds every week to check on them, they’ll never grow. Sometimes, the best move is to leave things buried and let nature do its thing.

5. A Chance To Test Financial Independence

The ultimate goal of financial independence is to not worry about money all the time. You want to money money in the background so you can spend time doing the things you really enjoy. If you need to track your net worth daily just to feel secure, you’re not truly free.

During my four-month break, I got an unfamiliar preview of what it feels like to live without constantly measuring. My bills were still paid. My investments still grew (or shrank). Life speed kept accelerating. Our money was taking care of our family, as intended. The less time I spent managing our money, the more rewarding the money felt.

If you want to know whether you’re really financially secure, try not checking your net worth for at least a quarter. If you find yourself panicking, you may be too dependent on external validation. But if you find yourself relaxed, you’re probably in good shape.

This test is powerful. It shows you whether you’ve built a fortress solid enough that you can step away without fear. That’s real independence.

Striking A Balance When Tracking Your Wealth

When you finally check your net worth months later, you might be pleasantly surprised to see a bigger jump in wealth than you expected. It’s like seeing other people’s kids after summer break. Their growth feels dramatic because you weren’t watching them inch taller every day. Parents, on the other hand, often hardly notice the change.

After four months away, I’m back to tracking my net worth closely. Old habits die hard, and I still believe there’s value in keeping an eye on things, especially for someone like me, who writes about personal finance for a living.

I was happy to finally update the amounts in three private venture capital funds, which had $60,000 worth of capital calls during these four months. I also logged the additional $100,000 I invested in the Fundrise Innovation Fund this year. Private funds are manually tracked in the Empower dashboard.

This time off taught me that balance is key. For most people, checking once or twice a month is ideal. It keeps you informed without letting the numbers dominate your mood.

Personally, I’m aiming to scale back from three times a week to just once a week. One practical trick? Move the Empower app off your home screen and bury it on page three or four of your phone so you’re not tempted to tap it out of habit.

Don’t Let Your Net Worth Control You

If you’re in debt or working toward a savings milestone, you might check more frequently for motivation. If you’re already retired or financially independent, you can afford to check less. The important thing is making sure you control the numbers, not the other way around.

I never planned on taking a four-month break from checking my net worth. But thanks to a stubborn login issue plus my own disinterest, I got the unexpected chance to experience life without my usual financial dashboard. And you know what? It was liberating.

If you’re someone who refreshes your portfolio daily, try taking a step back. Go a week, a month, or even four months without looking.

You may find, like I did, that the less you check, the more you actually enjoy your wealth.

Readers, how often do you check your net worth? Do you believe there’s a strong correlation between frequency and results? After all, people who are obsessed with something often end up getting better at it.

Get A Free Financial Analysis Offer From Empower

If you have over $100,000 in investable assets—whether in savings, taxable accounts, 401(k)s, or IRAs—you can get a free financial check-up from an Empower financial professional by signing up here. It’s a no-obligation way to have a seasoned expert, who builds and analyzes portfolios for a living, review your finances. 

A fresh set of eyes could uncover hidden fees, inefficient allocations, or opportunities to optimize—giving you greater clarity and confidence in your financial plan.

The statement is provided to you by Financial Samurai (“Promoter”) who has entered into a written referral agreement with Empower Advisory Group, LLC (“EAG”). Click here to learn more.

Subscribe To Financial Samurai 

Pick up a copy of my USA TODAY national bestseller, Millionaire Milestones: Simple Steps to Seven Figures. I’ve distilled over 30 years of financial experience to help you build more wealth than 94% of the population and break free sooner.

Listen and subscribe to The Financial Samurai podcast on Apple or Spotify. I interview experts in their respective fields and discuss some of the most interesting topics on this site. Your shares, ratings, and reviews are appreciated.

To expedite your journey to financial freedom, join over 60,000 others and subscribe to the free Financial Samurai newsletter. You can also get my posts in your e-mail inbox as soon as they come out by signing up here.

Financial Samurai is among the largest independently-owned personal finance websites, established in 2009. Everything is written based on firsthand experience and expertise.

I recently got a cool perk from my employer: $1,000 to invest however I want. The idea behind it is to help everyone at our company get familiar with investing, try out our internal tools, and learn about growing wealth with stocks.

I’ve dabbled in stock picking before — and let’s just say my win/loss ratio isn’t exactly Hall of Fame material.

So with this $1,000, I’m not rolling the dice or doing anything risky. I’m going back to the same boring-but-beautiful approach that’s worked for me all along… Index funds.

My “index and chill” strategy

I could spend hours analyzing charts, earnings reports, and news headlines. But I’ve tried that before and never found it either fun nor profitable.

So rather than chase individual stocks, I’m investing my money into a total stock market index fund — something like VTI (from Vanguard) or FZROX (from Fidelity). These index funds own thousands of companies across every sector, giving me instant diversification.

When the stock market goes up, my investment goes up too. When it drops, yeah, mine drops with it. But over time, the market’s gone up more than it’s gone down.

How my $1,000 could grow to $17,449

I’ve got a couple decades left on my investing horizon. So I’m trying to play the long game.

If this $1,000 investment grows at 10% annually (which is in line with the historical average return of the S&P 500) here’s what it could turn into:

Data source: Author’s calculations.

Of course, markets fluctuate and there are no guarantees. But historically, the U.S. market has bounced back from every downturn — and gone on to hit new highs each time.

So while I’m not saying this $1,000 is destined for exactly $17,449 (let’s not jinx it), I like my chances betting on the market as a whole.

This bonus was wired straight into my brokerage account. I keep most of my investments at Fidelity, because it has no account fees, no trade fees, and a massive menu of index funds I can choose from.

Read my full Fidelity review here if you’re curious why I chose it (and how it stacks up for beginners or long-haulers).

Other cool things about index funds

It’s not just this $1,000. I put nearly all my long-term money into index funds.

They’re simple, but also really flexible. Here’s why I love investing in index funds:

• They’re liquid — I can buy or sell anytime the market’s open, and in small or big amounts.
• Easy to hold in any account type — I own index funds in my Roth IRA, my traditional IRA, 401(k), my brokerage account… even my health savings account (HSA).
• Super low cost — With most brokerages, there are no trade commissions and no monthly account fees. Index funds also have low expense ratios.
• No ongoing management — I don’t need to check on anything or do any maintenance.

Another cool thing is I can automate investments. So putting in new money to invest each month can happen automatically on a set schedule. Easy!

Investing is a long game

So that’s what I’m doing with my $1,000 bonus — the most boring thing in the world. Putting it into a low-cost index fund and just… letting it slowly compound.

This strategy has already panned out well for me over the years, and I’ve got no reason to switch it up now.

If you’re thinking about doing something similar with your own money — whether it’s $100 or $1,000 — you don’t need to overthink it. You just need a setup that’s simple, low cost, and built for the long haul.

Check out all our favorite top-rated brokers here, and find the one that matches your investment goals.