are gold iras worth it a gold ira can be a good option for investors who want to diversify their retirement accounts and also take advantage of the hedging benefits that the yellow metal offers against other financial assets like paper currency and stocks many financial experts recommend keeping five percent to ten percent of a portfolio in gold how to invest in a gold ira if you want to hold physical gold in an ira the first step is to open a self-directed ira styra one that you manage directly with a custodian the custodian is an irs approved financial institution bank trust company brokerage but many financial services and mutual fund companies who handle regular iras don't do the self-directed version you also need to select a precious metals dealer that will make the actual gold purchases for your ira your custodian may be able to recommend one keep in mind that not every self-directed ira custodian offers the same investment choices so make sure physical gold is one of their offerings before you open an account you can set up the stira as either a traditional ira tax-deductible contributions or a roth ira tax-free distributions the next step is to fund the account with a contribution subject to contribution limits of course a transfer or a rollover from a qualified plan such as 401k 403b or 457 plan after that you can select investments for the account and your custodian and metals dealer will complete the transactions on your behalf what's the difference between gold iras and physical gold gold iras enable investment in physical gold as an asset class rather than physical gold in the investors direct possession is a gold ira for seniors worth it if you're looking to invest your funds in a safe low-risk way gold iras can be a great way to do it not only can they protect your retirement savings from market swings seen with stocks and other common investments but they can offer the chance at a slow and steady growth too how does a gold ira for seniors work for seniors gold iras work much as they do for younger investors the only difference you can contribute more annually as a senior or anyone over the age of 50 you can contribute 1 000 more than those on the younger end for a comparison of the best gold ira companies visit https colon slash slash www.buldera401convesting.com gold ira company slash click link in the description below
Canada is getting older in 1980 less than 2 A5 million Canadians were over the age of 65 around 9% of the Canadian population recently that number was over 7.3 million almost 19% of the population in 1980 the average 65-year-old could expect to reach 81 now the average 65-year-old can expect to reach 86 and there are almost 50% more Canadians aged 100 or older than there was two decades ago basically more Canadians are getting older and living longer which poses a significant challenge for retirement funding traditional retirement savings have relied on withdrawing from a fixed amount of capital with some cash flow from CPP OAS and fixed income Investments like bonds and gic's however as Canadians live longer they may expect significant costs down the road such as long-term care at the same time most of these fixed income Investments are paying at rates below current inflation levels and what about running out of capital some Canadians are faced with the difficult and complex choice of delaying retirement or going back to work compromising the retirement lifestyle dreams or passing on the cost of care to the Next Generation attractive and steady monthly income can help simplify things for retirees Harvest Equity income and enhanced Equity income ETFs pay consistent monthly income at rates above inflation they are RSP and riff eligible they hold portfolios of established companies that remain exposed to market growth High income from Harvest Equity income ETFs can help retirees offset their Rift payments supplement income and Live Well into retirement visit our website for more information on harvest income ETFs for retirement Harvest income happens [Music] here
you can't really fail at it unless you buy the wrong stock or just get excited at the wrong time and i would like to just spend just a couple of minutes uh giving you a little perspective uh on how you might think about about uh investments as opposed to the uh tendency to focus on what's happening today or even this minute as you go through and to help me in doing that i'd like to go back through a little personal history and uh and we will start i have here up here in new york times of march 12 1942 and i'm a little behind on my reading and if you go back to that time it it was about what just about three months um since we got involved in a war which uh we were losing at that point uh the newspaper headlines were filled with bad news from the pacific and i've taken just a couple of the headlines from the days preceding march 11th which i'll explain it's kind of a momentous day for me and so you can see these headlines we've got slide 2 up there i believe and uh we were in trouble big trouble in the pacific uh it was only going to be a couple months later that the philippines fell but here we were getting bad news we might go to slide three for march 9th uh uh i hope you can read the headlines anyway the price of the paper is three cents incidentally um the uh and uh uh let's see we've got march 10th up there a slide i'm i want to get to where there's advanced technology of slides i want to make sure i'm showing you the same thing that i'm seeing in front of me so anyway on march 10th uh when again the news was bad full clearing path to australia and it was like it the stock market had been reflecting this and i'd been watching a stock called city service preferred stock which had sold at 84 dollars the previous year it had sold at 55 the year before early in the in january two months earlier and now it was down to forty dollars on march 10th so that night despite these headlines i said to my dad i said i think i'd like to pull the trigger and i'd like you to uh buy me three three shares of city certified the next day and that was all i had i mean that was my capital accumulated uh uh over the previous five years or thereabouts and so my dad the next morning um bought three shares well let's take a look at what happened the next day let's go to the next slide please and it was not a good day the stock market the dow jones industrials broke 100 on the downside now they were down 2.28 as you see but that was the equivalent of about a 500 point drop now so i'm in school wondering what is going on of course uh incidentally you'll see on the left side of the chart the new york times put the dow jones industrial average below all the averages they calculated they had their own averages which have since disappeared but the dow jones has continued so the next day uh we can go to the next slide and you will see what happened the stock that was in 39 my dad bought my stock right away in the morning because i'd asked him to my three shares and uh so i paid the high for the day that 38 and a quarter uh was my tick which is the high for day and by the end of the day it was down to 37 uh which was really kind of characteristic of my timing in stocks that was going to appear in future years uh um but uh uh it was on the what was then called the new york curb exchange then became the american stock exchange but things even though the war until the battle of midway looked very bad and if you'll turn to the next slide please you'll see that the stock did rather well you can see where i bought at 38 and a quarter and then the stock went on actually to eventually be called by the city service company for over 200 dollars a share but this is not a happy story because if you go to the next page you will see that i well as they always say it seemed like a good idea at the time you know uh so i sold those i made five dollars on it it was it was again typical of behavior but when you watch you go down to 27 uh you know it looked pretty good to get that profit well what's the point of all this well we can leave behind the city service story and i would like you to again imagine yourself back on march 11th of 1942 and as i say things were looking bad in the european theater as well as what was going on in in the pacific but everybody in this country knew uh america was going to win the war i mean it it was you know we'd gotten blindsided but but we were we were going to win the war and and we knew that the american system had been working well since 1776.
So if you'll turn to the next slide i'd like you to imagine that at that time uh you had invested ten thousand dollars and you put that money in an index fund we didn't have index funds then but but you in effect bought the s p 500 now i would like you to think a while and don't do not change the slide here for a minute i'd like you to think about how much that 10 000 would now be worth if you just had one basic premise just like in buying a farm you buy it to hold throughout your lifetime an independent and you look to the output of the farm to determine whether you made a wise investment you look to the output of the apartment house to decide whether you made a wise investment if you buy an apartment small apartment house to hold for your life and let's say instead you decided to put the ten thousand dollars in and hold a piece of american business uh and never look at another stock quote never listen to another person give you advice or anything of the sort i want you to think how much money you might have now and now that you've got a number in your head let's go to the next slide and we'll get the answer you'd have 51 million dollars and you wouldn't have had to do anything you wouldn't have to understand accounting you wouldn't have to look at your quotations every day like i did that first day i'd already lost 3.75 by the time i came home from school uh all you had to do was figure that america was going to do well over time that we would overcome the current difficulties and that if america did well american business would do well you didn't have to pick out winning stocks you didn't have to pick out a winning time or anything of the sort you basically just had to make one investment decision in your life and that wasn't the only time to do it i mean i could go back and pick other times that uh would work out even greater gains but as you listen to the questions and answers we give today just remember that the over the overriding question is how is american business going to do over your investing lifetime uh i would like to make one other comment because it's it's a little bit interesting let's let's say you're taking that ten thousand dollars and you listen to the profits of doom and gloom around you and and you'll get that constantly throughout your life and instead you use the ten thousand dollars to buy gold now for your ten thousand dollars you would have been able to buy about 300 ounces of gold and while the businesses were reinvesting uh in more plants and new inventions came along you would go down every year into your look in your safe deposit box and you'd have your three ounce 100 ounces of gold and you could look at it and you could fondle it and you could i mean whatever you wanted to do with it but it didn't produce anything it was never going to produce anything and what would you have today you would have 300 ounces of gold just like you had in march of 1942 and it would be worth approximately four hundred thousand dollars so if you decided to go with a non-productive asset goal instead of a productive asset which actually was earning more money and reinvesting and paying dividends and maybe purchasing stock whatever it might be you would now have over 100 times uh the value of what you would have had with a non-productive asset in other words for every dollar you have made in american business you'd have less than a penny by of gain by buying in the store value which people tell you to run to every time you get scared by the headlines or something disorder it's it's just remarkable uh to me that we have operated in this country with the greatest tailwind at our back that you can imagine it's an investor's i mean you can't really fail at it unless you buy the wrong stock or just get excited at the wrong time but if you if you owned a cross-section of america and you put your money in consistently over the years there's just there's no comparison against owning something that's going to produce nothing and there frankly there's no comparison with trying to jump in and out of stocks and and pay investment advisors if you'd followed my advice incidentally or this retrospective advice which is always so easy to give uh if you'd follow that of course you're there's one problem buddy your your friendly stock broker would have starved to death i mean you know and you could have gone to the funeral to atone for their fate but the truth is you would have been better off doing this than than a very very very high percentage of investment professionals have done or people have done that are active that it's it's very hard to move around successfully and beat really what can be done uh with a very relaxed philosophy and you do not have to be you do not have to be you do not have to know as much about accounting or stock market terminology or whatever else it may be or what the fed is going to do next time and whether it's going to raise rates three times or four times or two times none of that counts at all really in a lifetime of investing what what counts is is having a a philosophy that you've that you stick with that you understand why you're in it and then you forget about doing things that you don't know how to do
[Music] hi i'm marcela i am currently a banker analyst in the jpmorgan private bank brazil team in the new york city office i work in the private banking team we help manage our clients wealth when we do like the most basic things that you know credit cards and helping with their daily needs as well as to section planning um structure and like complex lending operations what i like the most about my role clients recognize me they call me and you can have a conversation as if you've known them for years my manager is constantly giving me feedback being our voice giving us plenty of opportunities i did a presentation on my summer internship and this slide went to mary erdos the ceo of acid and wealth management she emailed me saying it was like a great deck and like i still have that email saved in my folder my day is intense busy and unpredictable practicing yoga helps you deal with these emotions in the sense of try to stay calm born and raised in sao paulo brazil i studied economics in the university of michigan in ann arbor i feel like i'm a really like extrovert individual advice i've been giving is feedback is always good even if it's bad networking is your number one tool are we good thank you [Music]
This whole idea of financial independence retire early doesn't work. Let me tell you why. It happened to me. On the sale of my first company, I achieved great liquidity and I thought to myself, "Hey. I'm 36. I can retire now." I retired for three years. I was bored out of my mind. Working is not just about money. People don't understand this very often until they stop working.
Work defines who you are. It provides a place where you're social with people. It gives you interaction with people all day long in an interesting way. It even helps you live longer and is very, very good for brain health. Staying stimulated is how people live into their 90s. I'm not kidding. So when am I retiring? Never. Never. I don't know where I'm going after I'm dead, but I'll be working when I get there too..
Retirement is a big deal for anybody, and that's especially true for single people who may be retiring with just one income and who may have built up a nest egg solely off their own savings. So, we know that single people can and do retire comfortably. In fact, one quarter of people over age 60 are living alone in their household, and that number is slightly higher for women, and that's, of course, due to women's longevity. So what we're going to talk about here is retirement for single people. First, we'll go over some averages to give you a rough idea of what the landscape looks like for single people, then we'll get into how much money you might need as you go into retirement, then we'll talk about some tips that can help improve the chances of retiring comfortably.
Let's start with the average retirement income for single people. So it's $42,000 on average for an individual in retirement, and that comes from the US Census Bureau. The median is a little bit lower at $27,000. So a friendly reminder of how this works: The median is the middle, so if you line up all of the survey results, people telling you what their income is, for example, that arrow points at the middle observation, which would give us the median down at the bottom.
But if we go to the average, that is going to get skewed by, in this case, wealthy people, for example, they have a very high income. When it comes to Social Security, the average is about $1,500 a month or $18,000 per year.Your level depends, of course on your earnings, if you had higher earnings during your working years, then you tend to potentially have a bigger benefit than that, and it could be lower, and then of course, your claiming age is also an important thing. If you claim early at age 62, you get a reduced benefit. That's likely to bring down the amount you get. Next, we have pensions, some people get an income from a job they worked at. That might be in the public sector as a teacher, a firefighter, that sort of thing, or even in the private sector, you could have a pension from your job, and those incomes just are all over the board, it could be high, it could be low, but these are different sources of income that people might have in retirement.
This is just a friendly reminder that this is just one video and it may cover some interesting information, but it's not specific to you so I hope you'll do a lot more research, hopefully check with some professionals and get some individualized advice, and that way you can improve the chances of things going well for you. So now let's talk about how much you might need as you go into retirement. Unfortunately, there's no single answer on what you need because it depends.
So the first step is to figure out what sort of income you're going to need, and I've got other videos on that, I'll put links in the description to get you some more information, but you can look at replacing a portion of your income, or you can just say, I want X amount of dollars per year, or you can go with other approaches, but first we need to know how much income you are hoping for. Next, we tally up your income sources, so that might be some guaranteed income that comes in from Social Security, for example, or from your pension at your workplace, but that forms a base of income and that might or might not cover what you need. But it gives us a base and then if we need to fill that in, we can supplement withdrawals from your retirement savings, so that might be out of your IRA, your 401, 403, these accounts that you have built up over time can provide supplemental income to help fill the gap between that guaranteed income you get and the amount you actually want to spend. There are a number of ways to figure out how much to withdraw and to set up different strategies, there might be bucking strategies, there might be withdrawal strategies like the 4% rule.
Or if you don't like that, make it the 3% rule to be safer, or take out more if you think that's not enough and you're selling yourself short. Ultimately, there are a number of ways to approach this, so you just pick one that works well for you, and again, I can point you to some resources on figuring that out. And finally, you will want to look at taxes and inflation, so during your retirement years, it's reasonable to assume that prices may increase on many of the things you buy, so we want your income to be able to increase as well, Social Security typically does rise, but maybe not at the same rate as the things you're buying, so your withdrawals may need to account for that. Plus we've got taxes. You typically will owe taxes if you're taking distributions or you're taking withdrawals from pre tax retirement accounts. If you have a pension that might be taxable as well. We just want to look at all of these things and figure out what your ultimate money left over to spend each month is going to be.
For an over simplified example, let's just look at Jane Doe. She's 60 years old, she's single, she wants to retire in about five years, she makes about 80,000 a year and has 700,000. A lot of people retire with less than that, a lot of people retire with more. I'm going to bring up my financial planning software that I use with clients, and we'll just go over kind of why there's no single answer on how much you need. Now, if you can tell me exactly how long you'll live and what the markets will do and what inflation will look like, we can tell you exactly what you'll need. But there are a lot of unknowns, so a lot of times we start with a probability of success and I'll go over what that means, and then we look at little tweaks and how different changes might affect that probability of success, so working an extra year might bring her from…
Let's say 75% to 84% likely to succeed. Now, success and failure are pretty complicated. They don't necessarily mean that you go completely broke, but you may need to make some adjustments, so let's talk about what does the success mean? We, again, cannot predict the future, so we say, Let's look back and say, You get dealt 1,000 hands. You're playing a game of cards and you get 1,000 hands. Some of those are good and some of those are bad, so the very good ones tend to be up here, near the top. And you actually end up with a lot of money left over. Some of them are not as good and you end up running out of money early. The median is, again, that one that's right in the middle when we line them up in order for best to worst. And so you might say, you're probably not going to get the best, you're probably not going to get the worst, although anything is possible.
So that's how we go with this likelihood of success. Now, maybe she doesn't want to work an extra year, so we can look at different ways of accomplishing things here. By the way, we've built in some long term care in case she does get sick and needs that at the end of life. She's looking to spend about 4,000 a month, that's after some health care costs that are going to inflate each year, and she's saving a decent amount in some 401K and taxable accounts.
Let's say she goes ahead and maxes out that Roth, is it going to make a big difference? Not really, 'cause she only has five years left. So what we do here is we start looking at all of these different variables and playing with the pieces and figuring out what does it take to make her successful at her retirement, or at least successful enough that she's comfortable making that transition. So here are some tips to improve your chances.
The first is to plan for long term care. If you're living on your own, you don't have somebody in the house who can help you do things, and it's arguable if even a couple is capable of managing this on their own… I mean, if you think about a couple, is one of the people physically able to move the other person around and do they have the skills to provide health care, and the time and the energy, frankly, to provide all that type of care? So it's important for everybody, but it's especially important for single people to plan for this care.
So you can look at getting insurance, you can look at budgeting for some costs, like we showed you in the software, you might want to budget for a much bigger number if you go into memory care or something like that with 24 hour supervision, it can get really expensive quickly. And you can explore different living arrangements, maybe doing things with friends or certain communities that might be a good fit for you. Next is to avoid leaving money on the table so if you were previously married and your spouse passed away or you've been divorced, you may be eligible for benefits. That's maybe from Social Security, you can potentially get a survivor's benefit, or if you were married for at least 10 years and you've been divorced, you can potentially get spousal benefits on your ex spouse's work record.
It's just important to explore all of these to see if there are any resources available for you. Next is to make a plan, and I am of course biased as a financial planner, but I think it is really helpful to go through the process, and the main goal isn't to get a big document that tells you what your financial plan is. Instead, really, the benefit is going through that process and learning a lot about your finances as you do it, and in that process, you get an idea of what the risks are, how you're doing, you might get confidence and clarity on whether or not you can go ahead and retire, if you should do certain things or not.
It's just a very valuable process for a lot of people, but I'll leave that for you to decide. If you found this video helpful, please leave a quick thumbs up. That gives me feedback that this is something you might enjoy more of, so thanks for watching and take care..
this is the netherlands a picturesque nation filled with windmills tulip fields and coffee shops the nation is looked to by many as an extremely forward-thinking place that practices some pretty progressive policies the nation has an incredibly strong social security system with universal health care robust retirement pensions as well as allowances for maternity leave and these kinds of policies are mirrored in other areas as well the nation is home to some relatively high tax rates and the predictions for employees are very strong almost to the point that people joke it's impossible to be fired in the netherlands so this kind of looks like a liberal paradise right well it would be if it were not hiding a dirty little secret this postcard perfect little nation is according to the world bank the most unequal place on earth and the extent of the inequality is simply staggering we have explored south africa on the channel before which normally gets this less than desirable title and if you would oppose this question to google it's what you would walk away thinking but it isn't the whole story in terms of wealth inequality in recent years south africa has been pretty tame the netherlands by contrast is the only country on earth that is more unequal than the world itself so what is going on here similar policies to the ones that have been commonplace in the netherlands for decades are being proposed by politicians in places like the united states as a way to curb the issue of wealth inequality but if we look at the results it doesn't look like they'll do that at all so to really understand what is going on here as always we have to look at a few key issues how did the netherlands of all place become the land of inequality what does this teach us about the nature of wealth in the modern world and how can this help us create more robust economic policies that will work to benefit everyone oh and of course while we're here we will call this a country video and put the netherlands on the economics explained leaderboard this episode of economics explained was made possible by our fans on patreon if you would like to gain early access to these videos before they're uploaded to youtube as well as participate in exclusive q a sessions which are now held every saturday at 9 30 eastern standard time please consider supporting our channel at patreon.com economics explained now inequality is a strange thing there are many different ways to quantify it and metrics that we use to make sense of it but outside of the figures there is no getting around the fact that it is a controversial issue the last time we explored wealth inequality on this channel we attempted to objectively explore if it was something that had negative impacts on long-term growth in the economy our conclusion was yes maybe depending on a set list of factors and conditions so basically the most fenced city answer we could have possibly given based on existing research and it is still the most disliked video on the channel by a fair margin to say people take this topic seriously is a bit of an understatement but fair enough it is a real issue that deserves proper attention by government all around the world but the key to getting that attention is to understand what these decision makers will be looking at the equality of countries is measured with something called the genie coefficient now people might have heard this term before or seen graphs like these ones but still not truly understand what it actually shows so to keep it simple let's imagine an economy with three people and three dollars to be gained in income each year a perfectly even system would have each of those participants earn one dollar each year and if we looked at that cumulative total for each person we would have a perfect y equals x line the income of person one is one dollar the second person plus the first person is two dollars and the income of the third person plus the second person plus the first person is three dollars mind-blowing stuff i know this perfect world of equality would have a genie coefficient of zero meaning that everybody earns exactly the same amount cool but now let's look at the opposite where all three dollars go to just one of the three people well this hypothetical economy would have a genie coefficient of one meaning the system could not get more unequal because one person controls all of the income now in reality real economies have a lot more people and a lot more dollars to go around so the actual figure normally has a lot more decimal places but will always be somewhere within this range of zero to one cool so that's the genie coefficient and for most people watching i'm sure there were no huge surprises there but this figure can be used to measure two things income equality and wealth inequality naturally income inequality tends to get a lot of the attention people riling over how a ceo has earned 300 times more than their average worker or whatever but if anything income inequality is just the driver of wealth inequality people who earn more can naturally save more and their savings compound over time if well invested but if incomes were more even then this should stop the process at the beginning it should cut off the flow of money building this wealth divide right well maybe but that theory may need to hold up to the lessons of the dutch the netherlands is very similar to nations like sweden denmark finland and yes of course norway in the sense that social policies are quite strong and are funded by taxes that are quite high that is why if we look at the world bank's records on income inequality all of these nations rank very low yet despite the obvious connections between income and wealth all of these nations have very high wealth inequality of course none quite to the extent of the netherlands but even a nation like sweden the poster child of democratic socialism has a higher level of wealth inequality than the united states brazil or india so how is this possible how are rich people hoarding such a huge share of the nation's wealth despite sharing in a comparatively modest portion of the nation's total income well to answer that question we actually have to look at the side that normally gets the least attention the poorest households unlike income where the least you can earn in a given year after taxes is zero dollars your net worth can be negative for example someone with huge student loan debts that doesn't own a house or a car or has minimal savings might have a negative net worth now in the netherlands this isn't so much of an issue schooling is heavily subsidised but that doesn't mean that people don't take on other types of debt in fact they seek out debt on an even larger scale through a home loan now to viewers in most countries getting a home loan requires saving up a deposit so that you own a portion of the property most banks around the world would like you to put at least 20 or at a bare minimum 5 down so that you have skin in the game and will be more likely to pay back that mortgage this means that if you own a home even if you have a big mortgage on it you still probably have a positive net worth because your house is an asset and it is worth more than the liability of the home loan so as long as you don't have any other debts or the value of the property hasn't depreciated you should be in the green this is not the case in the netherlands though where borrowers can and in fact are encouraged to borrow over 100 of the value of their home as a mortgage the national mortgage guarantee is a government program that ensures bank loans on homes so if the borrower doesn't repay the bank and the bank can't make all of the money it needs back from repossessing the home oh well it can just get a check from the government for the difference essentially making home loans completely risk-free this is actually accelerated by the fact that mortgage repayments in the netherlands are tax-deductible what that means is that if you earn 100 000 euros in a year but you are paying 40 000 euros in interest to the bank on your home loan you would only pay tax as if you were earning 60 000 euros this does two things to our wealth inequality metric for starters it skews the influence of those high taxes if people can claim significant deductions on high incomes by having large mortgages then it doesn't really matter what the tax rate is because it can just be redirected into building up a real estate portfolio the other thing it does is encourage people to take on debt up until recently people were able to borrow as much as 110 of the value of their house as a mortgage that means if a young couple was just starting out with a brand new 300 000 euro family home they could borrow an extra 30 000 euros on top of it and suddenly find themselves with a negative net worth of 30 000 euros this means that a good chunk of the population is under water on their homes and that's perfectly fine this is one of the failings of the genie coefficient as a simple metric dutch people even the dutch people who might find themselves with a negative net worth all live very comfortable lives and yet the figures by themselves would suggest that this is some kind of tyrannical dystopia with a population of peasants struggling to get by with a class of billionaire overlords watching over them but of course simply isn't the case credit and access to it for responsible purposes can actually be one of the greatest determinants of social mobility in an economy but it can at the same time be something that accelerates wealth inequality metrics beyond the control of regular government intervention like we see here for an extreme example donald trump once joked that a homeless man on the street was 900 million richer than he was because at the time he was in crippling debt despite this his lifestyle was obviously far more comfortable than the homeless man's and no rational economist would call him the poorest man in america although i'm sure the comments section will and i already regret using this example but anyway the takeaway here is that negative net worth does not necessarily mean poor but it does make figures look that way cool so does that solve the riddle of dutch inequality well no it's certainly a contributing factor but it's not the whole story in fact this extreme wealth inequality might actually be the outcome of matured capitalism the netherlands was the first nation in history that economists could really point to and say this is capitalism as we know it in the modern day and yes there were systems of trade that stretched back thousands of years throughout human history but most of those societies still had productive potential decided on by rulers rather than consumers in our video on the dutch east india company we found that the netherlands pioneered incredibly modern ideas like stock markets limited liability companies and speculative assets as far back as the 1600s beyond this the netherlands has not really experienced much in the way of a shake-up of this system in the past 400 years that's not to say that there wasn't wars and coups and all of that good stuff this is modern history europe we're talking about i mean come on but it's more so that if you were wealthy in the nation you could continue to pass this money down and down generations without the same fear of it being guillotined somewhere in the family tree that's why the money in the netherlands is old money the people that are rich are to be honest not that rich not compared to american chinese or russian billionaires anyway but if we were to look at the nation's wealthiest person charlene de cavallo heineken we can learn a lot about the nature of wealth in the country this lady is 66 years old and his surprise surprise in the beer business although she didn't found the company neither did her father or his father and in fact even her great-grandfather didn't actually found the heineken brand as we know it today he simply convinced his already wealthy parents to buy a brewery with a family fortune that he just slapped his name on that family fortune dated back to the dutch east india company what this means is that income taxes will do absolutely nothing to control this wealth income this family hasn't earned an income since napoleon was in diapers wealth begets wealth and the most powerful variable in compounding money is time normally this is controlled by having to split wealth between multiple heirs who will inevitably squander the family fortune but european elites tend to do things a little bit differently this is a massive generalization of course but a majority of the family fortune will be left to a selected child who will be trained in keeping the family's assets as protected and low-key as possible the other children will still live a very comfortable lifestyle but the fortune does not get split up equally like it did with the waltons let's say this family structure combined with a massive time frame can generate some pretty funky results consider this would you rather get 100 returns on your portfolio that is doubling it every year for 10 straight years or just 10 returns which is closer to the market rate of return over the last century for 100 years let's assume that these are all compounded annually and both examples are starting with 10 000 for simplicity's sake well our investor with a 10 year outlook turned that 10 000 into 10 million 240 000 those are some serious attendees but our more conservative investor with a 100 year outlook will be walking away with 137 million eight hundred and six thousand one hundred and twenty three dollars and forty cents which even accounting for inflation is significantly better than that first portfolio who had an unrealistic return expectation anyway time in the markets beats timing the market and when you have had 400 years in the market well it's going to create some serious wealth concentrations so does this mean that capitalism is inevitably going to grow more and more unequal as time passes well yeah probably this effect will be less severe in countries that don't quite have the same dynastic inheritance scheme and things like the giving pledge amongst big ticket billionaires will certainly make a difference but as we've seen with the netherlands it's not the top 10 on the forbes list that is going to change these figures it's the hundreds of other families that intentionally slip below the radar that will now is this a problem well maybe but maybe not i would much rather be in the bottom 10 of the netherlands than the bottom 10 of ethiopia which is comparatively a far more equal country by genie coefficient metrics in fact i would rather be in the bottom 10 of the netherlands than the top 10 of ethiopia but that goes to show that inequality doesn't always cause issues so long as there are equitable systems in place to make sure that everyone genuinely has the ability to rise up and that comfort safety and the well-being of average people is not sacrificed in the name of the profits for a few i think i somehow managed to make everybody on the left and right angry with that sentence please like the video i feel like i'm gonna need it to balance out the dislikes okay the fun stuff time to put the netherlands on our economics explained national leader board but before that i'm going to take california off here because american states are getting their own list also our video on texas was one of the worst performing videos we have ever released this year so don't go recommending your home state for a video until that one reaches 200 000 views i gotta follow market demand here okay self-pity aside the netherlands has a large advanced economy with a gdp of 914 billion us dollars it gets a seven out of ten falling just short of the trillion dollar club gdp per capita is very impressive at just under sixty thousand dollars per person as of 2019.
what's more is that the income is actually spread very evenly it's within the top 15 countries in the world for income equality which makes the wealth inequality all the more interesting either way it gets an 8 out of 10. in the weekend category stability and confidence well that's a no-brainer 10 out of 10 any economy that has harbored wealth for over 400 years is obviously doing something right growth is a bit meh like most european nations it has not really made much progress since 2008 and the eurozone crisis i can't imagine the fallout of the coronavirus is going to do the many failures either so it gets a two out of ten because at least it hasn't gone backwards finally industry well the nation is quite impressive here it has always been on the cutting edge of capitalism and even today it's the center of advanced financial services that are used all over the world it gets a 9 out of 10.
altogether it gets an average score of 7.2 out of 10 only really been bought down by lackluster growth even still very impressive and it claims a solid spot on the economics explained leaderboard hi guys i hope you enjoyed the latest video if you did please consider liking and subscribing this video is made possible by our patrons over on patreon so if you enjoy this video please consider supporting the channel like these awesome people did thanks guys bye.
I started getting diagnosed with some fairly serious medical ailments. I just began to realize that I had been working for a retirement that I may never enjoy. We just knew we wanted the freedom to make our own choices with our time. And that's where financial independence came in. Then it turned into how fast can we do this? Let's get it done as fast as we can. We started to accumulate real estate in the vein of let's have an additional source of income besides my job. We accumulated 19 units over the span of just from 2016 to 2019. I'm Debbie and I'm Chris. We are 43 and live in Colorado and retired by the age of 40. I never wanted to be a millionaire. That was never a goal, even, you know, now in my forties, I just wanted to have enough money to be able to pay my bills. When I was 21, 22, somewhere in there, I remember reading The Millionaire Next Door. It was eye opening to me because the stories they highlighted in that book were very similar to what we do. Once it became in that realm of reality that I could maybe be a millionaire, then I did become fascinated with the idea of being a millionaire in both healthy and unhealthy ways.
Once Debbie left her job, we're now completely dependent on my job. Honestly, like, I'm sure there was more than this, but I tell the story that basically I just stopped going to Subway. Obviously, that's not the whole case, but that's all it really felt like. Once we started tracking our spending a little bit better with budgeting, I was the guy that was always trying to turn the knob down on our spending. Chris used to think it was fun to like try to spend $100 a month on groceries and just eat what came out of the pantry.
So we both kind of had this thought, what if you want to leave your job someday? That thought easily turned into how can we use our money to buy us more time? I was mainly hearing a lot of stories about rental real estate. Some people were were building mega empires with rental real estate. I wasn't looking to do that. I just wanted to have additional income. And in the in the process of going from we don't know anything about being landlords and real estate owners to let's buy our first property, I scoured the Internet and spent a lot of time listening to podcasts, watching YouTube videos, reading blogs and forums.
And we got this like eight and a half by eleven vision board type of thing. So it was just something that we could write on with chalk that we had in our kitchen that would remind us of our goals. And, and as I was writing those goals down, I believe we had like by the end of 2016, we were going to have two properties and by the end of 2017 we were going to have four properties. We were getting properties that other people didn't want. There was something that was a bit of an ugly duckling about them. For me, a very difficult part of this was a lot of elbow grease, fixing up the ugly things, working on the houses, getting smoke, smells out, painting everything, tearing a bunch of flooring out. I'm spending full days over there. Chris is getting off work. He's spending nights and weekends over at these rental properties to get them ready for tenants and make them nice places to live.
And as we were doing that, I'm still saving 50 to 60% of our income through my paycheck. All the extra money we weren't spending out of your paycheck was going toward buying more rental homes. All of the cash flow we were getting from rentals was going toward buying more rental homes. We accumulated 19 units over the span of just from 2016 to 2019.
So it was a pretty pretty fast and furious four years. We actually ended up reaching fire at least three years earlier than we had projected. So gross income from our rental properties can vary based on vacancy, capital expenditure, rehab, repairs, those kinds of things. But it is between 8 to 10000 per month and our net income from our rental properties is between 4 to 6000 a month. So the money we live off of comes purely from our real estate investments. We do have mortgages on all of our rental properties that we consider business debt. Our tenants pay those mortgages for us essentially, and rents continue to rise as they do so as the mortgage goes down. Right now, our investments look like we have about $350,000 in a combination of traditional IRAs and Roth IRAs and a brokerage account, $35,000 set aside in a 529 account for our girls and another $20,000 in bonds.
The insurance that she sells for one month a year provides that extra cushion of safety or comfort, as well as some other discretionary spending. Our budget now in FIRE, it looks very similar to what it was pre FIRE in that none of our categories really went any different direction except for travel. We usually have about $10,000 in our travel budget over the course of any time, and it's more than we spend. Instead of having a job where I would work 48 weeks a year and have four weeks off, I would say now that I work probably four weeks a year and have 48 weeks off.
And we found in our lives that meaning and purpose are important to our emotional and physical health. And part of that is around work. We are really enjoying having this freedom of time to make connections, to travel and explore. Our daughters are getting older whether we like it or not. They'll be graduating and I'm excited to be a part of of their lives as they move forward into their next chapters and have the abundance of time to be able to be in their lives as much as they will allow us or as much as as feels comfortable.
I think when we were searching for financial independence, what we wanted was freedom and independence from having to go to a place and do with things someone else told us to do. And we still want that and we value that. But I think what we found through it is a much deeper, fuller, richer life..