This episode is all about cash flow, which is really all retirement is.

When you think about it, for example, my parents are house rich, cash poor. They have a home worth millions, but they don't want to sell it. It's not generating any cash flow. So it looks good when they look at their net worth, but it doesn't actually mean they're in a good spot to retire. Now, same thing goes if you're going, I have rental income or a pension. Like, all of that could have a lot more weight versus some article you see online that says you need $2 million to retire. You don't. You need enough income to meet your living expenses. That's all retirement comes down to. I have clients that are in a wonderful spot that have $500,000 because they have a pension and Social Security benefits and they don't want to spend near as much as some of my other clients that I'll joke are characters who want to spend $20,000 a month. And they're not right and they're not wrong. It's just what experience are you looking for in retirement? Some people are like, listen, $15,000,000, it doesn't really add to my quality of life. I don't need that.

Other people are like, no, I wouldn't want to retire if I couldn't spend that because I feel

like I wouldn't live my dream retirement. So neither person's right or wrong, but I'm going to walk

you through cash flow so that you can understand the impact it has in retirement. So if you

don't already know, my name is Ari Talbib. I'm a certified financial planner and I'm the host of the early retirement podcast. The quick thing I want to start with before I go to the comments of the week and then give you my kind of real life example is I have a client that is on track for retirement, but I said they couldn't retire. And you're like, oh, you really are like the meanest guy. Did you just say that for fun? I go, no, I don't say it for fun. But right now, they're on track, meaning here they are in their early 50s. They have plenty of money. They've stocked away really well in 401k's, IRAs, even a brokerage account. So some of you, like, oh, you're about to say they have too much in qualified assets like 401ks and IRAs and that's why

they can't retire.

I go, no, they also have a brokerage account, which many of you know I call the superhero

account because it provides financial flexibility.

That's not what I'm saying.

What I'm saying is they have four kids that are still not completely through college.

And so I could tell them to go retire,

but they'd be leaving a lot of money on the table. And by them continuing to work,

it's not them continuing to work that I'm obsessed over. It's by them bringing in some more

income. It helps us during these key years where if, for example, markets go down and now we've

got to withdraw from the portfolio to be able to pay for kids college, and by the way, health care costs, and by the way, you know, we're going to be doing tax planning. And by the way, what if we're doing more travel because they've got their energy in our health? You run a big risk, which is you retire and now you get unlucky. And markets don't perform well. You've got all these expenses.

Well, that's going to change what they can spend for the rest of their lives. So you're like, well, you really are the meanest guy. No, not really. I'm just mean because I care. And I don't want them to essentially retire too early and then not be able to spend what they want the rest of their life. Now, what I do care about is that they understand the earliest time they're working because they want to, not just because they have to. And with this couple, they're like, I completely get it. They were great. They understood the value of continuing to work for cash flow purposes to help get kids through college. They also want to do a home remodel. And for them, they are big spenders. And they're like, we recognize that about ourselves. We want to be able to spend between 12 to 15,000 bucks a month after taxes adjusted for inflation. So if that means I'm working three more years than my coworker, I'm cool with that. Some of you are like, that's not me. I don't need to spend that amount of money. And because of that, I'm going to be totally fine retiring earlier. Great. Like, that's what I like to start a conversation at with my clients, by the way. I'll say, what do you care about most? If I gave you a hypothetical and said, you could work longer. So you could spend 12,000 a month. Would you go, ooh, I kind of like that, or would you go,

I'd rather work less, even if it means I'm only spending $6,000 a month. And then you start to go, okay, what do I care about most? And by the way, it's not some cookie cutter thing. It's, you start to go, well, I'm just going to tell you guys this, because these are the two thoughts that I hear constantly.

Okay.

So just,

I'm going to guess this is what both of you,

if you're listening to this with your partner,

...