Let’s discuss the Trinity Study / 4% Rule – what it means for investing your money for early retirement and financial independence – and why it changed. Enjoy! Add me on Instagram: GPStephan

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Here’s why the 4% rule was such a big deal. It was “invented” back in 1994 and used as a method of calculation to make sure you NEVER run out of money in retirement…or basically, if you want to have endless amounts of passive income forever…this tells you how much you need, and how much you can spend.

But now…according to the INVENTOR of the rule itself…he says the 4% rule is no more…and instead, he’s recommending a change.

He says, NOW, that “he no longer sticking to 4%, and that that number was always treated too simplistically.” Because of that, he says 5% is still pretty safe….if anything, 4.5% is now the new “Worst case scenario” and 7% can be safe for the AVERAGE 30 year retirement.

One is from the popular finance blogger, Financial Samurai…he’s outspoken in his claims about the legitimacy of spending 4% per year, and says it was established at a time when the 10-year bond yield averaged 5%.

So, I THINK…in fairness here, I’ll break down my OWN calculations independent from everyone else…and I’ll give my thoughts, as someone who makes YouTube videos from their home all day.

So, first…in order to do this, we’ve gotta take a look at what’s called a “rolling 30 year return” of the SP500…this is basically the AVERAGE return that you’re going to get, over any 30 year timeframe, and by doing this, we’ll be able to find the best and worst case scenarios for your money.

We’ll start with this chart, they found that a 20-year stock market has NEVER ONCE produced a negative result, adjusted for inflation, in HISTORY…and the WORST CASE SCENARIO, EVER REALIZED…was a .5% average return adjusted for inflation.

Stock Market Returns Over Different Time Periods (1872-2018)

Another chart found that, on a 30 year rolling period, the WORST CASE SCENARIO was an 8% annual return, before inflation, and the best case was nearly 15% before inflation.

And a third chart shows the worst possible 30-year rolling period was 4.3% after inflation – again, that would’ve been during the 1960’s.

Given all of this information…if you’re looking at a 30 year retirement and you want to be 100% safe in the worst possible case scenario given ALL of the historical data we have available to us over 130 years…spending 4% annually would be okay.

Although my BIG CRITIQUE here is that, IF you want to retire early, and have LONGER than a 30-year retirement…then you’re probably safest to aim closer to 3%-4% withdrawal rate because you’ll need that money to last you a lot longer. That way, even IF the market doesn’t return as much as it did historically…you’d be able to budget appropriately so you don’t run out.

The metric we should use is that it’s OKAY to spend 3-6% of your portfolio annually, IF you’re willing to cut back on your spending in the event the market goes down, or if the markets aren’t producing as much as you thought it would.

And really, all of this should be used as purely a rule of thumb, and by understanding the math behind what this is and what it does…you’ll be able to better budget how much you’ll need to save and invest.

For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at

*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.

135 thoughts on “STOP USING THE 4% RULE

  1. Arup Bhanja Reply

    4%is actually 2% due to tax and fees

  2. Mike Damazo Reply

    If McDonalds can do a collab with Travis Scott. There’s a chance for a Dennys x Graham collab

  3. Jacob Day Reply

    NYSEARCA: SSO (ProShares Ultra S&P500) has returned 15-17%PA historically for the last 14 years… It’s a much smaller sample size than the S&P500, however it’s just the S&P500 but leveraged, so I can’t imagine it’ll be much worse than 15%PA.

  4. Simon Fiala Reply

    Please name a good broker for european investors!!

  5. marco trev Reply

    Could you run a Novacyt analysis? It is one of the few companies that manufacture virus detection tests. And I‘ve heard it’s going to grow a lot, but I would like to know your opinion.

  6. Brent Talbert Reply

    get mr. money mustache on your show!

  7. Melissa Smith Reply

    Real estate investment could be considered real deals and sure brings forth larger profit but as much requires a huge capital to start

    • Tessy Queen Reply

      I have met persons who claimed to have working method to get profit from bitcoin mining but they were all false.Maxtrade has a consistent method that pays off via bitcoin mining.

    • Ashley Tom Reply

      When i heard of Maxtrade,i was skeptical to trade btc with her strategy but eventually did. Started off with btc worth 500 usd, now i have btc worth 7230 usd. Maxtrade is the best

    • Peter Dunseath Reply

      You know what they say about ‘A trial will convince you’’.Well my trial Maxtrade method convinced me that there is profit in trading bitcoin after i gave up due to previous losses.

    • Pedro Danilo Reply

      I agree with you on that. With my experience from my mining my bitcoin with Maxtrade and her strategy,it’s been profits upon profits.

    • Anthony Walter Reply

      How can i reach her? Any help

  8. Brian Nelson Reply

    Interesting looks like i will be working for 100 years

  9. CARROT Reply

    Hey can I suggest you a book called “Rich dad and poor dad” by Robert T. Kiyosaki. Which is a great book to read and I can say that it will really improve your already- great wisdom into much grater wisdom!

  10. LetsJazzItUp Reply

    Move somewhere with a lower cost of living. That’s my plan. Moving to Costa Rica one day after retirement

  11. Rogue Reply

    An issue I noticed is that us as people tend to think we HAVE to spend at a certain number. Just adjust as needed between 3-5% depending on your situation.

  12. 53philp Reply

    Retire on $40,000 a yr.? Where?? The wife and I are both retired and that’s about what our income is, we have no mortgage or car payments and no debt at all except living expenses. Vacation’s? HA! We might go to play bingo on half price night, that’s our vacation. Thank god we live in a small mid western town.

  13. Andrew Graff Reply

    I keep some emergency money in worthy bonds its a 5% yield 10 dollar bonds free account and no commission I know this is possibly up your ally so could you do a video on it?

  14. Eric Alex Anderson Reply

    Been doing 6-7% so guess I’m good! By my costs of living I already know between 750k-1mil is my goal (no kids and I rent).

  15. craig taylor Reply

    When you say spend, are you assuming all these are dividend stocks, or are you saying closing 3% of stocks per year??

  16. Sean A. Reply

    Hey Graham! I am 17 and I have been working for a little bit over a year now doing billing and coding at my Father’s home health business, but I don’t work there anymore. I was wondering if I should invest in a Roth IRA, IRA, or solo 401k? Trying to get this sorted out as early as possible honestly

    Edit: Not 18 yet but when I am, I’ll get my stocks on Webull I promise;)

    • Sean A. Reply

      @Graham Stephan nah I’ll take advice from the real Graham

  17. funkmasterron Reply

    Is the annual spending amount to use for this calculation a pre tax or post tax amount?

    • Graham Stephan Reply

      Well Why don’t I show you some secrets to trade that you don’t know about remember they are more secrets to trading you don’t know about hmu on W h a t a p p + 1. 8. 5. 6. 3. 7. 6. 0. 3. 4. 4

  18. Rob Bowman Reply

    I am not doing all this investing to pass it all to my kids. Some maybe, yes but not all. If i can burn through 75% by the time i die, id say that was a retirement well planned and lived. This concept of leaving a golden parachute to your heirs is BS. Call me selfish but, im doing this for me, not them. Hopefully, i can teach them how to do the same things for themselves. The estate i leave for them should be gravy on top of what they have earned themselves.

  19. Broadsword Calling Reply

    Achieving 25X your annual spending at age 50 is the ideal.
    Even if you average a 3% loss you would run out of money at 83.
    If you still happen to be alive apply smith and Wesson retirement plan.

  20. brianmcg321 Reply

    You can completely negate any negative in the market by having 2-3 years in cash case the market crashes once you retire. You would be able to let your investments recoup their value before having to dip into it.

  21. Joseph Douglas Reply

    The rich see economic crisis as a garage sale, that’s why investing right now will be the best decision…

    • Smith Price Reply

      I met Mr Strait last year for the first time at a conference in London, I invested £25,000 and traded in one  month making close to £200,000

    • Rabail Baila Reply

      Yes I can believe that, I got victory with him. I was so sad after receiving the first pay knowing I invested so low with fear and doubt

    • Sam rick Reply

      Expert Strait has brought me out of the wrenches and to a better living through trading options, I encourage newbies to trade with him

    • Silvia Berdun Reply

      Believe he’s the best when it comes to cryptocurrency trading, your profit is assured

    • Silvia Berdun Reply

      Without the help of Mr Strait McLean of financial education I would still been in abject poverty struggling with life, that’s the best testimony gotten so far after years of great loss here on YouTube, I do thank him and is grateful and recommended him for those out there who’re confused about forex too or make very low profit

  22. Daedalus Creative Reply

    I retired in October of 1968 and struggled for decades until I found Graham’s videos and started SMASHING THE LIKE BUTTON

  23. Michael Taylor Reply

    x33….Illuminati confirmed

  24. Scott Nutter Reply

    Does this factor in Social Security?

  25. Motivated Matthew Reply

    WHATSUPYOU GUYS. Its graham here

  26. AJC4866 Reply

    Or buy great cash flowing real estate and spend less than your cash flow and have money for generations

  27. NetiNeti_Inquire Reply

    That karen orman diss tho

  28. BeingGood Reply

    Omg Karen 🔥🔥🔥
    Have mercy Graham

  29. Werex Zenok Reply

    Hey guys.
    The 4% rule is too simplistic.
    Let’s correct that.
    Now lest call it the 5% rule.

  30. Fribit LoveLoad Reply

    I watch graham for the plot

  31. Cody Reply

    Karen got my like

  32. Valentin A. Reply

    Speculations can occur very easily especially when currency is electronic.
    Andrei Jikh said in recent video, major banker individuals are entering BTC market. Interesting how far it can go.
    In Bulgaria, when we adopted US free market plan in 1996 1 лв inflated to 1000 лв. Foreign profiteers definitely got what they wanted.

  33. aditya Reply

    Hi you are using yt right now😂

  34. Clinton Hampson Reply

    I happen to be one of the persons benefiting from Mr Patrick Richard Denis help on trades. He is really good at it. I got my first payout this week ..I started with $1000 and I got $7500 in two weeks. I am putting down $4,000 in my next trade. Binary Options is brilliant when you get the right help

    • James Chase Reply

      @Belinda carol please how do I reach him

    • Belinda carol Reply

      You can reach him👇👇

    • Belinda carol Reply

      + .1 .2 .1 .3. 8. 1 .4 .4 .5 .8 .8 on What’s’App

    • James Chase Reply

      Ok thanks alot

    • Roberto Carlos Reply

      I will try him too thanks too👍

  35. Red H Reply

    I’m just here for the humor

  36. Military Bottom Line Reply

    Your videos get better and better.
    Always impressed with the amount of thorough research put into these! Keep it up!

    • Military Bottom Line Reply

      @Graham Stephan scams

  37. Muhammad Ahsan Reply

    According to new studies a picture of two cute turtles is better than a picture of a single turtle.

  38. Chase Swerdlick Reply

    Can you do a video on Oxygen Banking???? 5-7% cashback!!!!

  39. Andriy Lapitskyy Reply

    I’m giving you a like just for calling Suze Orman a Karen :’D :’D :’D

  40. Ayden Shank Reply

    Where did you get the posters in the background?

  41. Joker Reply

    when you mock the fans typing complaints i was laughing so hard 😂😂

  42. Alex Gronseth Reply

    Financial Samurai is a troll.

  43. Mitchell Geogia Reply

    I’ve always wanted to invest in forex/stock trading, after a few trials I realized that trading without a good mentor and guidance is a waste of time and money.

  44. Patrick Squires Reply

    Anyone here figure out that early withdrawal penalty for early retirement is no big deal. I mean it – it really does not matter – no like for real if you did not plan your early retirement perfectly to not pay early withdrawal penalty and was using 401k for entire early retirement… it mostly means that you need to wait – hold onto your seat – 4 more months before you retire.

    Prove me wrong.

  45. Michael Huebner Reply

    Haha Graham doesn’t thin that runaway inflation that we had in the late 60s and early 70s is likely to happen again.  Graham my dude what do you think all this stimulus is?  Stimulus is inflation and government is handing out stimulus like candy.  There will soon be no way for governments around the world to pay interest on their debts and this will cause currencies to become worthless.  I know you don’t like gold, but it’s time you start to learn about the history of money before it’s too late for you.

  46. The Exhaust Note Reply

    Hey Graham, really love the content. Trying to get some passive income to add to my retirement plan and putting your advice to work. Also I see a lot of info on survey apps or website testing for some small passive income. Would love to know your thoughts on those and if they are viable for 5,10, or even 15 bucks a day.

  47. Algorritem Reply

    Hey Graham! thanks for your videos and inspiring me to create my own personal finance channel. Tomorrow I’m dropping a new vid on “10 rules to build a billionaire mindset” and I am so so so curious to find out what you think, especially about rule 1 where I talk about something contradictory to some of your ideas, but really interested to hear your opinion. I truly believe this rule 1 is working well for me and I am sure you will be like: da hell are you doing kid, but still hope to receive your feedback and maybe discuss about it. To all readers, if you wish to find out my top 10 rules building a “Time is money” mindset, join in tomorrow when the video drops! Have a wonderful week ahead, Alex

    • Ranger Media Admin Reply

      Ok got me interested

  48. Jessica Hicks Reply

    Oh no! Did 2020 break the 4% rule too!?!

    • Graham Stephan Reply

      Why don’t I show you some secrets to trade that you don’t know about remember they are more secrets to trading you don’t know about hmu on W h a t a p p + 1. 8. 5. 6. 3. 7. 6. 0. 3. 4. 4

  49. Awareness Feed Tv Reply

    Lol This Video Is Sponsored by The like button

  50. Exauce Mayunga Reply

    These people only want to remind us of how broke we are

  51. Awareness Feed Tv Reply

    Ooou Spooky Going Back to Work!! 😂😂😂

  52. Yu Ka Reply

    Can you make a video for how cash back works for Chase Freedom Flex? They offer a 5% category (PayPal and Walmart) this quarterly October through December. The statement on the reward summery said, “5%,” but I just got 4%. I posted it on Reddit and people told me I lose 1% if the purchase is qualified others like grocery, drugstores, etc….

  53. tyler keogh Reply

    Thank god I’m not the only one who got stuck in Denny’s.

  54. Conor Q Reply

    8 000 000 / 40 000 = 200 years, no need to invest lol

  55. kingmichaeln1 Reply

    I thought the goal is to make enough money to give to your kids and grandkids one day

  56. Johnny Guitar Reply

    This video only applies to men. Women can marry a man, spend all his money and then when it’s gone she can marry another man and spend all of his money.

  57. Sebastian Avelar Reply

    Do a video of show how to get credit fast at 18 years and buy a house at 18

  58. Richard Thomas Reply

    Spend not more than 5% until you reach that big like button in the sky.
    Graham Stephan

  59. Eddy Diaz Reply

    Make a video for young sales men and how to sale !!

  60. Os P Reply

    That scary Suzy face

  61. jathu Reply

    “Low inflation” what?

  62. Ask Neilly Reply

    No Graham, not Karen 😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂

  63. Bavan Nanth Reply

    03:44 The 4% rule says: If you want to live off an income of $40K a year without working, all you need is $1m invested in Stock markets.
    05:29 The 4% rule might have changed to 5% rule considering the current low inflation.
    06:24 However, Famous blogger Financial Samurai says, the 4% rule is now more or less the 0.5% rule, because the original was created when a 10 Yr bond came with 8% coupon, whereas it is now < 1%. 06:34 So, Financial Samurai says that you need $8m in stock market to consume $40K/yr for 30 yrs. 06:55 Suze Orman - a Financial Expert - says you will need $5m to retire safely. 08:06 But, a 20 Year Rolling Return of S&P 500 Index fund averages at 6.7%. And, 08:33 30 Year Rolling Return for S&P 500 is min 4.3% with an average of 13%. 08:47 Graham says, if you are flexible with spending between 3%-5% of the savings, you are good. 10:21 And You can always go back to work if things go south. 10:36 Also he suggests to have 33 times of your expected annual expenditure as savings before you retire for 30 years.

  64. Raquel Rocky Britton Reply

    Why do I queued to thumbs up the video when I see the turtle? I do it EVERY video, but now it’s the turtle that reminds me HAHA

  65. Thomas Henry Reply

    It is not all about watching videos and wasting your time on strategies,i was I ignorant doing so all till I was introduced to the stock market investment

    • Jacob Christopher Reply

      @Michael Bryan text him on watsapp

    • Jacob Christopher Reply

      +1 9 1 6 2 3 8 0 2 3 6

    • Pedro ricca Reply

      If you’ve started trading with this man then you’re not far from making profits

    • Zita Nancy Reply

      @Jacob Christopher thanks for the info

    • Martin Brown Reply

      I think am interested and I will give it a try

  66. Kelton Johnson Reply

    What I think is interesting about withdrawal rates is to look at what annuity companies do. As in if you buy an annuity how much will they withdraw each year to pay you. Clearly it’s a shared risk pool and they take a cut so that’s a little bit different but it’s a pretty good benchmark for what a good withdrawal rate would be

  67. da ne Reply

    I’m happy I am building a legal size shed then graham does YouTube video on a new house in Nevada lol oh man I feel old oh yeah I am I just turned 50.

  68. roxascloud101 Reply

    Something that wasn’t mentioned by Graham is that you could also take 1 extra year to work and put all that money you took from stocks into a high yield savings account so you can take from that instead of your stocks in a bad year for the market… 1 extra year of work for that peace of mind is more than worth it imo

  69. Rebecca Allyne Reply

    Can you make a video explaining how beginners can make huge profit within a short period of time? I mean i was at a seminar recently and the host spoke about making well over $650,000 within 5 months of investing with a capital $260,000 i just need to know how i can achieve that.

    • Shondrella Avery Reply

      I suggest you consult an investment mentor who would guide you through in your investments, that way you will avoid running losses as a newbie

    • Rachael B Reply

      Getting ready for 2021 starts now. I believe that if we correct the mistakes we made this year we can achieve something great in 2021.that’s why investing remains one of the best ways to go about it.

    • Rebecca Allyne Reply

      @Shondrella Avery Got the same advise about consulting an investment adviser from a friend but have no idea how and where i can find one, Can you direct me the right way?

    • Shondrella Avery Reply

      @Rebecca Allyne Agatha Christine Robinson is the licensed mentor I have been working with in the past few years, she knows how best to deal with whatever market situation. You can look her up on google to know more about her.

    • Rebecca Allyne Reply

      @Shondrella Avery Thanks for sharing, will look her up immediately i get home as i am eager to make some profit off this.

  70. Jimbo Slice Reply

    The market is an equal opportunity dream killer. Y’all haven’t seen a bear market yet

  71. quietsignal Reply

    Millennials just can’t realize their low IQ. YouTube sensation makes millions. YouTube sensation moves into his new 6×8 apartment.

  72. Bellefeu Reply

    Just a reminder that this is 4% of the CURRENT value of the account. This means that if your account goes down, so does your monthly spending. If your account goes up, so does your monthly spending. The best thing to do is to decrease monthly spending when the account is in a down year, appropriate to the account value, but NEVER increasing your total monthly income beyond what you set for yourself. This means if your account is worth 800k, you only get 32k per year, if it’s 1m you get 40k, but if it’s 1.5m, you still only get 40k not 60k. The issue arises when people pull the 60k, then the 70k, then the 90k, etc. Just stay frugal, and you’ll be fine.

  73. ch3ngg Reply

    is it ok to invest in a fund that currently has a negative annual return for the first year? its a bit more than -9% at the moment.

  74. quietsignal Reply

    This exclusive home tour does not allow video for security reasons. All SS appliances, combination sink and toilet, easy to clean. Luxurious double space saving elevated beds. All utilities included. Professional chef provides 3 meals daily in exclusive dining area. Dining area also serves as recreation area with unlimited entertainment! Unlimited landscaping possibilities! Don’t miss out on this one!

  75. Kevin M Reply

    Or you could own rental properties. Steady, reliable income, and the house isn’t diminished by collecting it.

  76. quietsignal Reply

    Top trading secrets…invest in Bernie ponzi. Your going to prison boy.

  77. quietsignal Reply

    Advertising stock trades you have no broker license Bu Bye you are prison meat now.

  78. quietsignal Reply

    You are no Lori Laughlin or Bernie Madoff. You won’t receive any special treatment when you move into the “Big House”.

  79. mikehoang31 Reply

    My entire portfolio consists of just Bitcoin and Tesla stocks. I’m 20 right now and I plan on retiring at 30. Currently putting 2k in BTC and 2k in TSLA each month and living on the edge from paycheck to paycheck. My monthly grocery budget is $50 and I recycle toilet paper.

  80. Erick Guy Reply


  81. Ruchit Patel Reply

    Hey Graham, wanted to make a suggestion on a video that you can make since I can’t find anyone on youtube that has made a video on this topic. Please make a video of how you actually find the deals on the houses you buy. Like a real step by step process of searching for the house, deciding if its the right price for purchase, and the execution. I know you and others like meetkevin, talk about the process, but no one really talks about the search process which I feel is the actually the CORE skill and lesson that would push everyone to make the first move.

  82. surangasa Reply

    Financial samurai is a jackass who hates early retires like the plague according to his past articles.

  83. quietsignal Reply

    Listening to a 25 yo for investment advice LOL.

  84. Lucas Goge Reply

    Thanks for great content broh. Your videos are quite helpful.

  85. Jim Reply

    I’m disappointed in you Graham. You went to the Oppenheime Halloween party and the lack of social distancing and awareness was down right irresponsible.

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  89. Rayli Nicholson Reply

    Graham is the reason I started my YouTube channel and so far it’s going well!

  90. darekwch89 Reply

    Are there any plans to make an episode about The Great Reset and The 4th Industrial Revolution, promoted and worked out by The World Economic Forum and International Monetary Fund?

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  92. Jennifer Mac Reply

    Bitcoin is the future, Investing in it now will be the wisest thing to do especially with the current rise
    For real it’s very profitable

    • Phyllis Van Reply

      @Jennifer Mac congrats

    • Paula Louis Reply

      @Phyllis Van Bitcoin trading options is just like anyother business but in this case more sophisticated and advanced

    • Paula Louis Reply

      @Jennifer Mac
      I thought of Investing in bitcoin around July Feb 2018 but was discouraged with the rise and fall of bitcoin. I don’t know if it’s still safe and ideal to invest now and what platform is recommended

    • Jennifer Mac Reply

      + 1 ( 3 1 8 ) 7 6 6 – 5 9 7 8

    • Phyllis Van Reply

      @Jennifer Mac Already working with Logan second week was the only week I had issue, ever since then
      about six months of trading with it’s been profitable and life changing

  93. Zhang Chu Reply

    Lovely video,
    i think forex trading and stock market is the best investment in the world

    • Zhang Chu Reply

      @Steven Brown Her name is Carolyn Edward she was a college teach before she left Oakwood University

    • Oliver Harry Reply

      That’s good how much have you made trading with her

    • Zhang Chu Reply

      @Oliver Harry I can’t tell you how much i have made i don’t know you

    • Grace White Reply

      If you went to Oakwood University or Worked there
      you should know her my cousin working there introduced me to her

    • Johnson White Reply

      @Grace White That’s good, people still need a broker to assist them so i think you guys should help out

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