4% rule



Video Set

Dave Ramsey has this fake studio kind of area.  Other people have a sports car or a mansion in the background.  Some people use marble kitchen table type of things.  I’ve also seen white boards and move of a school type of setting.  What kind of background should I use?

Realistically, I want to be doing this at home, and I want it to be convenient and comfortable if I’m going to be doing it a lot.  I don’t want a window in the background b/c that will mess up the lighting.  The bedroom is too crowded (and that’s weird).  I could use my desk, but if I’m going to do that I need to be able to do some screencasting as I’m recording.  I could do it in my kitchen with two cat trees in the background.  I think the desk with screencasting is probably the best bet.  I need to look up the right software.  There’s one called open broadcaster that seems popular.

Ok, I setup a test recording and it seemed to work pretty well.  I should probably limit myself to 1080P resolution, so I may need to use a different monitor, and for sure the mic could be improved, but for now this is okay.  Mic could be better.  I tried finding my old mic from a few years ago, but no luck yet.

I found the old mic, but the quality isn’t great and the cord is too short.  I’m thinking about dropping $150 on a decent USB mic [Spent $130 on a mic and pop filter].  Need to listen to some YouTube reviews…

Summary of Bay Area Housing

Why bay area housing?  Because I wanted to cover a specific topic, a scenario that I had experienced, and people in the bay area often discount regular financial advice because the housing prices here blow up many budgets.  On top of that, the incomes are high, so people tend to think they’ll magically be able to make up their choices later.

  1. We start by recognizing up front that we must pay for ourselves.  We assume that we will live 90 years and work from age 30 to 60.  To have enough money for old age, we must save 28% of income.  There will be a separate video discussing this.
  2. We assume an income of $60k.  We use a take home pay calculator to find the monthly income ($3484), then we subtract out 28%.
  3. After that, we look at a reasonable budget and subtract additional expenses (food, cell phone, electricity, Internet, gas, etc.) from the budget.
Housing $1294 $800 rented room + $500 lifestyle
Retirement $1000
Food $500
Car $300
Health Insurance $200
Electricity $75
Cell Phone $50
Internet $50
Netflix $15

4.  We discover we can spend $1300 on housing.

5.  But if we spend $1300 on housing, we will likely misbehave and spend money we should be saving.  If people had so much discipline, we wouldn’t be in such a mess.

6.  So instead we drop the housing by $500 to $800.  That $500 is a cushion between our necessities and paying for our future.

7.  For $800, you’ll be renting a room… you’ll be sharing housing.

In summary, at $60k, this is the financial life of a relaxed person.  A person who knows when they retire, who will retire well, and isn’t living on the edge.

Future videos:

  • why 28%?
  • can i buy a home?
  • what if i make $100k?
  • what about student loan debt?

Bitcoin thoughts

Why is Bitcoin the popular bubble?

  • A large number of people don’t trust the US dollar / US government.  I’ve come to believe this is the single biggest factor.  People tell me bitcoin is best as a “store of value” rather than as a currency they’d want to frequently transact (where is has technical challenges).
  • The technology looks cool (anonymous, easy to launder / move)
  • It’s easy to buy
  • Can’t be inflated (Even if you think the government is stable, inflation is still an annoying tax.)

Will holders of bitcoin need to sell when a recession hits? When they all sell, will the price fall? Will merchants want to accept a falling currency? Who will want to acquire bitcoin during a recession if merchants don’t accept it? If it can’t be used to pay debts?

How can one gauge the financial security of bitcoin holders? Can you analyze the block chain for transaction patterns that indicate stability?