#121: After Liz Thames graduated from college, she couldn't find a job. "Nowhere would hire me," Thames says. "I had what I thought was this nice resume, and I sent out over 50 applications. Nowhere called me back." She took a temporary job at a document-scanning agency, then joined Americorps to serve as a full-time volunteer in a low-income neighborhood in Brooklyn. She lived on a stipend of $10,000 annually, plus food stamps and a transit pass. She saved $2,000 from her $10,000 stipend, while paying rent in New York. To say that Thames is a natural saver is an understatement. Her frugality stayed intact throughout her twenties. She got married, earned a free masters degree and advanced into higher-paying roles. But she and her husband, who was equally frugal, continued saving as much as possible -- at times pushing their savings rate to as high as 70 percent of their income. When they were 30, they decided to shoot for financial independence. They shared a dream of moving to a rural farm, where they could raise children and spend everyday outdoors. By age 32, they achieved financial independence. Their investment portfolio is robust enough that they could draw down, in perpetuity, for the rest of their lives. They rented out their home in Cambridge, quit their office jobs, and moved to a 66-acre farm in Vermont. These days, they live on a combination of their rental income and 'side hustle' income from their blog, Frugalwoods. They have two children. Today, Liz joins me on the Afford Anything podcast to share the story of how she and her husband achieved financial independence by age 32. Resources Mentioned: Book: Meet the Frugalwoods Website: Frugalwoods.com   For more information, visit the show notes at http://affordanything.com/episode121 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#119: Once upon a time, in southern California in 1994, there lived a man named William Bengen. He read many claims, widespread at the time, that said that since the markets return at least 7-9 percent compounding rates on average, retirees could withdraw and spend 7 percent of their portfolio. William had a hunch that this was misguided. He decided to prove it. He looked at 30-year timespans in U.S. history, starting from 1926. The first timespan ranged from 1926 to 1955. The second timespan ranged from 1927 to 1956. And so forth. He assumed that the retiree held 50 percent stocks, in the form of an S&P 500 Index, and 50 percent bonds, in the form of intermediate-term government bonds. Then he asked two questions: First, what was the worst-case scenario? Retiring in 1966. The 16-year timespan from 1966 to 1982 was extra-rough, and experiencing this sequence of returns at the start of retirement made for one sad, sad puppy. Second, how much could an investor sustainably withdraw from her portfolio during that worst-case scenario? The answer was 4.15 percent in the first year, and 4.15 percent, adjusted for inflation, every subsequent year. And thus, the 4 percent rule-of-thumb was born. And we all retired happily ever after. ____ Or did we? This week's episode features an interview with Dr. Wade Pfau, who offers counterintuitive ideas about retirement income. Dr. Pfau is a Professor of Retirement Income at The American College of Financial Services. He holds a Ph.D. in economics from Princeton. He's a chartered financial analyst. He won two awards for "most outstanding contribution" from the Journal of Financial Planning. He won another award for "best paper in retirement planning" from the Academy of Financial Services. This guy knows his stuff. And he's ... *cautious* ... about the 4 percent rule of thumb. What are his concerns? What can we expect? And how much money can we spend in retirement -- whether we enjoy a traditional or early retirement? Find out in today's episode. ____ For resources mentioned, visit https://affordanything.com/episode119 Learn more about your ad choices. Visit podcastchoices.com/adchoices