Episode 447: The OG Cowbell, Some Dueling Blog Posts, Spending And Enjoying More With Bill Bengen, And Musings About Gold 'N Bitcoin
In this episode we answer emails from Evan, James and Brandy. We discuss the joys of more cowbell from first principles and its origin story, a recent back-and-forth between Karsten and Tyler, the inherent problems with trying to massage data with crystal balls and what it's really revealing about the shortcomings of a basic 75/25 portfolio, some nuggets from Bill Bengen's new book, and some musings about bitcoin and gold.Links:Early Retirement Now Article: Can we increase the Safe Withdrawal Rate with Small-Cap Value Stocks? – SWR Series Part 62 - Early Retirement NowPortfolio Charts Response: The Human Complexities of Correcting the Record – Portfolio ChartsBill Bengen's New Book | A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More.Lyn Alden Talk: Nothing Stops This Train w/ Lyn Alden | Bitcoin 2025RSSX Fund: ReturnStacked® U.S. Stocks & Gold/Bitcoin ETFBreathless Unedited AI-Bot Summary:What makes a truly optimal retirement portfolio? The conventional wisdom suggesting a simple 75% S&P 500 and 25% bond allocation deserves serious reconsideration according to mounting evidence from multiple sources.Bill Bengen, creator of the original 4% withdrawal rule, has published a groundbreaking new book that challenges long-held assumptions about retirement spending. By incorporating a more diversified approach—including US large, small, mid-size, and micro-cap stocks alongside international equities and treasury bonds—Bengen demonstrates that safe withdrawal rates could potentially reach 4.7% or higher. When accounting for current inflation levels, he suggests rates between 5-5.5% might be sustainable with properly diversified portfolios.The historical data speaks volumes. When examining performance during the worst possible retirement starting years (1929, 1960s, 1972-73, 1999-2000, 2008-09), portfolios with value tilts or alternative assets consistently outperformed simple index-based approaches. This critical finding undermines the narrative that concentration in broad market indexes represents the safest approach for retirees who actually need to spend from their portfolios.We also explore Bitcoin's potential role in modern portfolios, examining its correlation with technology stocks and questioning whether it functions as a true diversifier. Unlike gold, which maintains near-zero correlation with equity markets, Bitcoin increasingly moves in tandem with growth stocks as institutional adoption increases. This distinction matters significantly for investors seeking stability rather than speculation. New financial products like RSSX are emerging to capitalize on this dynamic, combining stocks, gold, and Bitcoin with adjustments based on relative volatility.The fundamental question isn't about maximizing theoretical returns or terminal wealth, but about constructing portfolios that reliably provide income through various market conditions. A well-diversified approach has historically delivered better outcomes for those spending from their portfolios than simple stock/bond splits—aligning with Bengen's philosophy of spending more and enjoying retirement rather than dying with maximum wealth.Looking to refine your retirement strategy? Send your questions to
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