Think Smart, Retire Smarter: Circle of Competence
Retirement Answer Man
Roger Whitney, CFP®, CIMA®, RMA, CPWA®
4.7 • 1.1K Ratings
🗓️ 23 October 2024
⏱️ 46 minutes
🧾️ Download transcript
Summary
In this episode, we delve into the concept of the Circle of Competence, a key principle in the mental mindset arsenal. We also feature Karen's inspiring story of transitioning from accumulation to decumulation, redefining her retirement journey. Join us as we explore the importance of deep knowledge versus surface understanding, and how you can apply these insights to your life. Also, don't miss our upcoming live online meetup on November 7, where we'll discuss Roth conversions and introduce the Rock Retirement Club. Sign up at livewithroger.com and take the first step towards rocking your retirement!
PRACTICAL PLANNING SEGMENT
(00:00) This week we will talk about the Circle of Competence and decumulation
(01:05) Live online meet up 11/ 7 at 7pm central about Roth conversions and RRC Open House
(04:33) The internet creates false competence and internet experts
(07:05) Circle of competence says individuals should focus their efforts within areas where they have a deep understanding or expertise
(07:32) Warren Buffett is a master at staying within the Circle of Competence
(12:10) Your competence in retirement is informed by your experience and research
(14:00) How do you know who is competent at some level in retirement planning?
(15:10) As competence goes up, sometimes confidence can diminish
(18:40) If you’re not in your Circle of Competence, what should you do?
(21:30) How do you gauge someone's Circle of Competence?
INTERVIEW WITH KAREN ABOUT DECUMULATION
(24:27) Karen shares her story and journey to understanding decumulation
(25:20) Karen became a widow five years before she retired from pediatrics at age 62
(26:50) Karen learned from the RRC about the concept of decumulation
(29:30) Second Order consequence of not touching principal
(33:00) Karen talked about a degenerative issue from a vision standpoint in your family
(35:56) I asked RRC members for recommendations on where to go, what to do
(38:00) Karen recaps her travels as a single elderly lady traveling alone and with groups
(40:29) So I'm thinking of you in decumulation, that change in conception and seeing in detail that it’s okay to spend x amount of money on various things.
SMART SPRINT
(43:11) In the next seven days, I want you to think about the distinction between accumulation and decumulation.
REFERENCES
Great Mental Models- Rhiannon Beaubien Shane Parrish
Into Thin Air- Jon Krakauer
Live Long and Well with Dr. Bobby
The Soul of Wealth- Dr. Daniel Crosby
Transcript
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| 0:00.0 | When it comes to the Circle of Competence, Warren Buffett said, |
| 0:04.0 | the size of the circle is not very important. |
| 0:07.0 | Knowing its boundaries, however, are vital. |
| 0:11.0 | Welcome to the show dedicated to helping you not just survive retirement but to have the confidence |
| 0:18.4 | because you're doing the work to really lean in and rock it. |
| 0:23.2 | I'm excited for today's show. |
| 0:25.8 | We got two great topics. |
| 0:27.8 | Topic number one is we're gonna continue building |
| 0:30.0 | our mental mindset arsenal and talk about the circle of competence, one of the more |
| 0:37.1 | important ones. In addition to that we're going to hear a retiree story from |
| 0:41.3 | Karen on the importance of |
| 0:44.4 | accumulation. She's walked a journey over a number of years of |
| 0:49.6 | accumulation to accumulation and has had a mental shift that has changed everything and her |
| 0:58.3 | having a great retirement. It's a wonderful story. I've been blessed to be a small part of it so we're going to hear from |
| 1:03.5 | Karen. Before we get started with the Circle of Competence I want to invite you to |
| 1:09.2 | join me for a live online meet-up on November 7th at 7 PM Central. |
| 1:16.2 | We're gonna do two things. |
| 1:17.3 | One is we're going to answer the question |
| 1:20.3 | to convert or not to convert when it comes to Roth conversions. |
| 1:25.0 | And we're going to approach it through how do we think through this in an organized way. |
| 1:30.0 | So we're going to use some of these mental models to build a framework so you can |
| 1:34.7 | think through it to feel confident in the answer you come to. And then second I'm |
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