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Episode #562 - Think Smart, Retire Smarter: Circle of Competence

Roger: This show is dedicated to helping you not just survive retirement, but rock it.

 “The size of the circle is not very important. Knowing its boundaries, however, is vital.”

- Warren Buffet on the circle of competence.

Welcome to the show dedicated to helping not just survive retirement, but to have the confidence because you're doing the work, to really lean in and rock it. 

I'm excited about today's show. We have two great topics. 

Topic number one is we're going to continue building our mental mindset arsenal and talk about the circle of competence, one of the more important ones. 

In addition to that, we're going to hear a retiree story from Karen on the importance of decumulation. She's walked a journey over a number of years of accumulation to decumulation and has had a mental shift that has changed everything and her having a great retirement. It's a wonderful story. I've been blessed to be a small part of it.

Before we get started with the circle of competence, I want to invite you to join me for a live online meetup on November 7th at 07:00 p.m. central. We're going to do two things. 

One is we're going to answer the question to convert or not to convert when it comes to Roth conversions, and we're going to approach it through. How we need to think through this in an organized way. We're going to use some of these mental models to build a framework so you can think through it, to feel confident in the answer you come to.

Second, I'm going to invite you to join the Rock Retirement Club. We're going to have an open house at that same meeting where I'm going to show you how the Rock Retirement Club has everything you need to create a retirement plan you can have confidence in and access experts and others that are on the journey. So, you can focus on your journey of rocking retirement, not just planning for it. You can sign up for this at livewithroger.com.

With that said, let's get to the circle of competence.

PRACTICAL PLANNING SEGMENT

Before we talk about the circle of confidence, I just want to share something personal and some things I think are important. 

For a while now, I have been a private pilot. I'm really excited because it's going to help me get to Colorado more quickly and more and more people are interested in or are becoming private pilots to have more mobility. I think it's a great idea. But there are five tips I would suggest given the experience that I have of doing this, definitely in my circle of competence, that I want to throw out there for those of you that are either flying or thinking about this. 

Number one is you really have to stay current on your aircraft proficiency, which means you have to fly and practice different maneuvers to improve your skills. This is really important because you never know what could happen up there. The more skills you have, the better equipped you will be. I've seen so many pilots go out on the weekends and just sort of do the same thing over and over again, and when life throws them a curveball, they may not be prepared, and you are hundreds, thousands of feet in the air. That could be problematic. 

Number two is understanding the weather. Develop a strong understanding of weather patterns and how they impact flying. If you think about it, you go out on a sunny day, which is sort of what I see a lot of pilots do. What happens if a storm comes in? Weather patterns can change that sunny day very quickly. You have to know how to read forecasts and interpret meters and tafts to make more informed decisions. If you don't do that, it's all great until it's not. You have to understand weather patterns and how that impacts how the plane is going to act. 

The third one is you have to plan thoroughly. Always prepare detailed flight plans, including your route, fuel requirements, alternate airports. Again, you get up there, it's a sunny day, I see these weekend pilots, something happens. What if they have to go to another airport? Do they even know where one is? That's not the time to go be figuring that out.

Okay, wait a second. I got to stop here, because the truth is, I am not a private pilot. I don't know the first thing about flying. These five tips that I was going through are probably very accurate. I literally put it together in about two minutes. I don't know what I'm talking about. I'm sure they're great tips, but I have no knowledge, no web of knowledge related to them, but I could parrot them confidently. This is what I'm talking about in the circle of competence and why this is so important, because we live in an age with the internet where almost anybody can sound smart on a topic very quickly, and that's good. It's great to have access to information, but it's also dangerous if you're out there trying to navigate real information and real wisdom through the sea of knowledge and marketing messages that we get. 

On your journey to retirement, you get one shot at this. You want to do it right. You don't want to be led astray with bad or incomplete information. This is going to get even worse. 

Just the other day, I received a marketing email from a company that was offering artificial intelligence products that would create content for me. I could put in the topics what I wanted, and it would send me blog posts, social media posts, outlines on any topic I wanted, say, in retirement. Then I could tweak those, or I could just simply publish them out there to the world as mine without ever actually doing any actual thinking. That's powerfully efficient, but very scary. In fact, I know this could happen. I could take those outlines and then I could put that into an AI engine and create a podcast in my actual voice and publish it without me ever actually having to stand in front of this microphone. This technology is out there and already being used. So, as you're working on building your competence in retirement planning so you can create a great life, you're likely going to go to the Internet or a podcast and it's likely that a lot of the information that you're going to get is this surface level information, not from someone that necessarily has depth and experience in actually doing it. AI is just going to make this worse because we won't even know if who we're talking to is AI or not pretty soon. So, the circle of competence suggests that individuals should focus their efforts and decision making within areas where they have a deep understanding or expertise. 

What is a circle of competence versus surface knowledge? 

Well, a depth of understanding based off of lots of experience and we're going to go into some examples of this. 

We used a Warren Buffett quote at the beginning. Warren Buffett owned zero technology stocks before the bubble burst in 2000So, let's start with Warren, who is a master at staying right within his circle of competence. 

I started in the industry in 1990, right near the beginning of the technology boom, the new economy. It was so fun. It was so easy to make money back then. I thought I was so smart and I didn't know anything. Well, from 1987 to 2000, the S&P 500 generated 582% cumulative return before the bubble burst in 2000. Just between 1995 and 2000, the NASDAQ index, which is mainly technology stocks, just in those five years, it rose 400%. This was a new economy. People were making money left and right. I felt really, really smart as a young planner. 

During that entire time, Warren Buffett owned zero technology stocks and I can recall articles and CNBC talking about these dinosaurs, Warren being one of them, that didn't understand the new economy, didn't understand the Internet, and they were antiquated and they should be put out to pasture. Even after the technology bubble burst in 2000, Warren Buffett still didn't buy technology stocks. In fact, his first major stake in a technology stock, it might have been his first technology stock purchase ever, wasn't until 2011. It wasn't Facebook, or Amazon. It was IBM, one of the oldest blue-chip companies in America. That was his first technology stock buy. His next major buy wasn't until 2016, and that was Apple. He believes in sticking with what you know, understanding the boundaries, and not getting overconfident. 

Now, he had valuation models that he could have tweaked to go into technology earlier, but he was very clear. I know what my sweet spot is, and I'm going to respect those boundaries and not try to stretch into things I don't quite understand, even if I could talk smart about them. That's the difference between having a depth of knowledge and surface knowledge and where that circle of competence is. 

A book that I'm going to recommend to you is called Great Mental Models, Volume 1: General Thinking Concepts. We'll have a link to it in our 6-Shot Saturday email. A while ago, I started to research and build a library of mental models, and during that research came upon this book. We did this book as a book study internally, and now they have a four-volume set. Great, great set. Well worth it. When they outlined the circle of competence, they used an example of climbers versus sherpas. Let's think about this. There's a great book called Into Thin Air by John Krakauer. Wonderful book that documented his expedition to climb Mount Everest, and everything went wrong. It was a disaster. People died. He chronicles that expedition. In fact, the subtitle to the book, Into Thin Air is a personal account of Mount Everest Disaster, published in 1999. Great book.

 Now he's climbed Mount Everest. Is he an expert on climbing Mount Everest? Is that in his circle of competence? He definitely has experience doing it and has something to share in the real world that is truly important. But he had a particular experience with another climber, which there have been many that climbed Mount Everest successfully and didn't have a disaster. In fact, everything went right. They had great weather, they summited early. They definitely have some expertise in climbing Mount Everest, but they're informed by their particular experience. They're an N of one example of climbing Mount Everest, and there's a lot of value in that experience. But if I were to go look for someone, an expert, to climb Mount Everest. I might talk to these two people, but I need to make sure I understood that their experience informs their counsel on whether I should do it or not. I don't know. John Krakauer might say, heck no, don't go do that. Whereas the other guy was like, oh, yeah, it was simple, man. It's awesome. You need to do it.

Your competence in retirement is informed by your experience and research. Let's think about that when it comes to retirement. 

Let's say you're in a coffee shop or you're reading a blog online and you're talking to somebody, and it's their experience retiring that's really helpful. It's good to learn from people that are ahead of us. But the first person you talk to is a lady that has an amazing pension, and that plus Social Security covers most of their bills. They retired at the beginning of a bull market, and they're eight, nine years in, and they have more money than they began with. What is their counsel to you on retirement? It's going to be informed by their experience plus whatever research they've done, but it's going to be pretty good. 

What if the retiree has no pension? They retired during a bear market and they had some big spending shocks, and you're talking to them about retirement. What are they going to say to you? 

Both of them have experience of one, and that is going to inform their decision making and their level of competence in the journey. Very valuable. But compare that to a sherpa. We go back to the Mount Everest example. A sherpa in Nepal, is a person that guide others up the mountain and down. They carry all the stuff, and they do this multiple times a year, year after year. They're going to have a detailed web of knowledge that the one-time climber is not going to have so they're likely going to be more in the circle of competence when it comes to climbing Mount Everest and the kind of people that you want to talk to in addition to the people that have maybe done it once. 

This is important as you access information to improve your competency here. So how do you know if you or someone else is in their circle of competence? Well, you're going to be much more aware of knowing what is knowable and what is unknowable, which is important. You're going to have a good sense of what you don't know and what you can't quite figure out that you have to navigate or make judgment calls. It's going to be harder for someone that has limited experience to really understand the things that they don't know. In fact, if you look at a chart of a mastery journey, someone building competence in a topic. You go from having none and really knowing nothing, but very quickly, you can move up to feeling like, okay, I got a sense for this. I researched it. I've talked to a lot of people. I feel like I know this topic. Your confidence actually goes up pretty quickly. Then if you continue on that mastery journey over years to build that web of knowledge, your competence goes up because you have that web of knowledge, but your confidence actually goes down because you're much more aware of the known unknowns. It's weird that a lot of people that are extremely competent are humbler and have less confidence than those earlier on the journey. In addition to knowing the unknowable’s or having a sense of that, someone that is in their circle of competence can much more easily anticipate second and third order consequences on decisions. Wow. If I do that, that seems like the best thing to do, but I know from experience that this, that, and the other thing could result around that. So, you have more informed decision making.

I think somebody who is definitely in their circle of competence is Dr. Bobby DuBois. When it comes to health and research, especially when he reads a study about supplements, he has a greater appreciation because of the work that he's done over decades of, Well, what does it really say? Is that the right kind of study? Is it really indicating what it says it does? To what level can I have confidence in that? He is actually very comfortable in those nuances, whereas if I read a study that says I should take the supplement, oh, that guy sounds smart. Okay, I'll try it. Very different. Not in my circle of competence there.

How do you know who is competent at some level in retirement planning? Let's use another example of somebody who is outside their circle of competence. We'll use me. I feel that way all the time in some areas. 

About a year and a half ago, I talked about doing a series on expat retirement, people retiring overseas, and I didn't do anything on it for over a year and a half. Sorry about that. That was the result of a couple of things. One is just busyness, lots of topics. I realized as I started to do basic research on expat retirement, that there was a lot more that I didn't know that I didn't know, which is important to know. There was a lot more to it. I could have very easily created a month-long episode, created an outline, similarly, that I did to flying an aircraft, and talk relatively intelligently about the aspects of an expat retirement. That might be helpful, but it sure felt fake to me because I knew there were so many things I didn't even understand, I didn't know, which means it was going to take a lot more time to build some level of competence before I felt comfortable telling you how to do it. As a result, what I did, which is a good strategy, is I did basic research, and then I talked to people that were more in the center of their circle of competence when it came to expat retirement. We had Jane on the show who works with people that retire overseas. She's an expat herself to the United States, much more in the center of her circle. So, I brought her on, and we brought on the gentleman from Thailand who is wonderful, who lived overseas his entire life as an expat and has retired in Thailand in the center of his circle in order to serve you better. That helped you, hopefully, because I realized that I could fake this and I could sound smart, but I didn't know what I didn't know. 

A couple examples. So, if you're not in your circle of competence, what do you do? Well, you learn the basics. You definitely do research. You start to talk to people whose circle of competence is strong in that area, and then you actively think about the topic. Maybe you write, maybe you keep a log, and you work on your mastery journey in order to improve and over years, maybe decades, you will slowly work up to being an expert or competent in that topic. Know your boundaries, expand gradually, keep score and improve. That is a good structure for you. 

You may be like Roger, this is great, but I care about retirement planning. I'm looking for experts. That's why I'm probably listening to this retirement podcast. How do I know who I listen to or who I engage is competent at some level in retirement planning? That's the issue before the house for you. Whether it's listening to a podcast or reading articles, it's more helpful for you, I would think, to read and listen to people that have actual experience doing it or people that have researched and thought on this topic for decades. W

What I hear often, especially with people that have advisors, is, yeah, I have an advisor. They're super nice. We've known them for years. They've helped us accumulate assets, are really smart, and they've shown me retirement calculations, and it says I'm at 99%. They say that I'm fine, and they say they'll help with tax management. But when I ask questions, it never really gets below the surface. It never gets specifically, like, how am I actually going to pay for my life? They continue to talk in general terms and they never tell me specifically how am I going to do it? Or perhaps they say they help with tax management, but when I want to get into Roth conversions, and whether I do one or nothing, it never gets deep, it never gets specific, it always stays at the same level. I hear that a lot, and that actually makes sense, because the vast majority of practitioners in our industry and other industries are generalists, and we know a lot about topics. That is an indication when people are getting to the edges of their circle of competence, or maybe outside of it. I would listen to that feeling, because it may mean you need to do more work, or perhaps it's not the right match. 

How do you gauge someone's circle of competence? 

I think one is asking probing questions that force them to go beyond the surface level knowledge. Can they communicate it clearly? Which is definitely an indication of deep knowledge. When you can communicate something clearly, that's an indication of deep knowledge. Another tactic when you're talking with someone is just ask them, what are your known unknowns? You were talking about retirement planning or Roth conversions. Okay, you're telling me all the reasons I should do a Roth conversion, but what are the unknowns here? There are things we just know we can’t know and see how they answer questions about that. If they can answer that specifically or with confidence, maybe they have thought about this. If they can't, that might be an indication that they're at the edges of their competence. 

Ask specific questions on topics, and this can be hard, but asking detailed, specific questions that probe the edge of someone's knowledge can be very helpful. Both what they answer, and how they answer are important for you to know. Are they dancing around it? Are they not actually answering the question and acknowledging that they have a gap there? If they do, that can tell you a lot of whether they're just not willing to admit their gaps, or indeed, they have specific answers to the questions. If we don't ask specific questions and ask the follow up questions to probe, it's going to be very easy for someone to dance around the topic at a high level. So, the outcome we want is to have people around us that have a circle of competence, but they know their limits, and they're comfortable admitting when they don't know something. 

Oftentimes, overconfidence is a red flag because there are nuances when you really get deep into a subject. This is important for you as you build your competence in retirement planning and navigate, whether it's blogs or podcasts or advisors, because you only get one shot at doing this, retirement planning and making decisions. 

Karen is a good example. We're going to speak with her in a second. She had the perspective of how decumulation works, which created a limiting life from a finance perspective, that didn't allow her to do certain things. It was only her getting perspective from someone that had competence. I'm using myself in this example, that was sort of arrogant, but, you know, that helped her see things differently, because you only get one shot. She did this in her early sixties. She's in her late sixties now. If she hadn't had that perspective, her life would have been different and that's why this is so important. It's harder than ever, because the internet and everything on it is a sales cycle just trying to get you to do things. It's hard to find safe education made by real experts.

With that said, let's go chat with Karen and hear her story and her journey to understanding decumulation.

INTERVIEW WITH KAREN ABOUT DECUMULATION

Roger: Karen, you and I missed each other having this chat while at the roundup, so I'm glad you were able to hop on. How are you doing?

Karen: I'm doing great now.

Roger: You just came back from the northeast?

Karen: I spent a week in Vermont in the fall. Just enjoying the leaves and the apples and the crisp air.

Roger: Your first non-Texas fall, I believe it is.

Karen: I recommend it highly.

Roger: So, let's start with the basics. Roughly how old are you?

Karen: I'm 68.

Roger: 68. And what was your profession when you worked?

Karen: I taught pediatrics and I did some government related research work on the side.

Roger: Okay. When did you retire from that career?

Karen: Well, I became a widow five years before I retired. I retired at 62 when I then had health insurance from my work, I was fed up to the teeth with the committee work that goes with teaching and the paperwork that goes with teaching. I liked my job, but half of it was paperwork, and that wasn't fun.

Roger: I've heard that before. How was that journey from a retirement perspective of losing your husband and then recreating yourself on your own.

Karen: I was so busy surviving. I had young children, and we just were paddling. I don't think I really thought about anything more than just keeping them stable and me going.

Roger: When did you process for yourself, or have you?

Karen: I'm working on it.

Roger: Okay.

Karen: I think from retirement on, we had so many dreams together, and I'm now going through those dreams and doing things that we had planned to do together. It's a little bittersweet, but it's still a whole lot of fun.

Roger: Before we hopped on, you said, “I have one thing I'd like to accomplish in this chat”. Why don't you articulate that?

Karen: I learned from you and the RRC about the concept of decumulation, and that's huge. I had run all the Monte Carlos. I had everything planned from 70 on. But it sounds weird, it never occurred to me that I could spend principle.

Roger: So, in decumulation, your concept was only off of the interest that it might generate the 4%. Okay. Whatever interest you got. So, talk to me about your understanding of what it was before and what it is now for you.

Karen: Well, first of all, when I retired, I retired to a second job. The research stuff. I worked on research oversight. It was a wonderful job with great people. I got to do really cool stuff. I was involved very peripherally in the research that cured sickle cell. I've been involved in a bunch of new drug developments. It's been really fun. I had planned for that to go on into my eighties. Then the lady that owned the company sold it to a large conglomerate across the nation, and everybody in Texas got dropped and that was half my salary.

Roger: Yeah.

Karen: Six months after, I fully retired.

Roger: If you think of decumulation as the interest or the 4%, you probably felt somewhat constrained.

Karen: A lot constrained. The boys were coming up on college. I had set aside four years of college at a state level, and each of them had a functional car. They were pretty much taken care of. But my plans had included that money that no longer existed.

Roger: When you re-ran your scenarios, did it say you were okay from a high level?

Karen: It did, at a Monte Carlo level, but I didn't understand the idea of setting aside four years of actual cash. I didn't understand that it was okay to break into the big pile of money. I just didn't know how to separate it. I don't think a lot of people know that.

Roger: Did it feel wrong to touch principle?

Karen: It still feels wrong. I've been doing it for seven years, and it still feels wrong.

Roger: What was the second order consequence of not feeling you could touch principle from a life perspective?

Karen: It meant I didn't do things I now realize it's possible to do, and I could do them when I was young and able and flexible. Honestly, I'm healthier now than I was at 62.

Roger: I've seen that journey a lot.

Karen: I regained a lot of flexibility, a lot of stamina. I no longer have the lung disease I had. Life is much better.

Roger: But denying yourself doing those things had an impact?

Karen: Oh, yeah. I had a base great life. I had a good life, but it was the base great life, and that's all I really allowed myself to dream.

Roger: Do you regret that? Do you wish you would have known sooner?

Karen: Well, sure, but I probably would have spent a lot more and wouldn't have quite as much to flex with. Well, you know, I would have loved to have traveled a little more while it was two of us instead.

Roger: When we first really interacted. I have my frame of how that conversation went, and it was around travel, and you hadn't done a lot of it.

Karen: I talked to you six months after the company was sold, about six months after retirement, when I went into it, talking about, was I going to be safe? Was I going to be okay even planning base great life? I had budgeted for a trip to Europe when I was 70, when Social Security turned on and my cash flow improved.

Roger: To be clear, Karen is not a client. She's just a club member. So, I came in without having a lot of context. It was very acute, this worry about, am I okay?

Karen: For me, it was very real, because all I had was the Monte Carlos from Fidelity. I didn't believe it, and I think that's normal. It's just some number, and you can't see specifics.

Roger: I don't know. Yeah, that was a long time ago, so I forgot which we were using at the time. Conceptually, the computer, the model says, you're okay.

Karen: I think you asked, somebody asked, could it go higher than 99%? It was that idea.

Roger: Yeah. Oftentimes, I think in financial planning, or retirement planning, we do relatively good on feasibility, which is what software is good for, but it still is not detailed enough to give any confidence in exactly how it will work.

Karen: There are a lot of us who simply don't have spreadsheet skills.

Roger: Yeah. You don't need sophisticated ones. You have one now, I assume, at some level. 

From a pie cake standpoint, what I recall about that conversation related to being okay, I had a little bit of context was, yes, you were financially, but also you had thrown out there that in six or so years, you want to go to Europe. I went from, yes, you're okay to, you really want to go to Europe. I didn't have the whole story about your husband and some of that weaved into the motivation.

The next thing I recall was you talking about a degenerative issue from a vision standpoint in your family.

Karen: Yeah, my mother, my family has a gene for progressive blindness. But in the next generation, nobody had any problems, and it was recessive, so we didn’t know if it would affect us. Then around the time I talked to you, I had retired, I had lost my second job, and my sister developed vision problems. That made it real that this really was genetic and it was part of our generation, and it might be part of me.

Roger: How's she doing, by the way?

Karen: She's doing okay. It's stabilized.

Roger: It's stabilized. Okay. I remember you explaining this to me in this order. I think this is the value of understanding specifically how to do decumulation beyond software so you can have confidence.

The other part is you're in your own bottle and you don't have perspective on all the different pieces because you're living it.

Karen: You’re just living because I didn’t understand that a portfolio is designed to be in pieces in retirement, for sure.

Roger: What I recall, and we misremember things because we create our own frameworks around them. But what I recall is, okay, here's this lady, Karen. She's very nice. Based on what she told me, she's worried, but, oh, yeah, she is totally fine financially for her base great life and probably a little bit more. That's what I heard first. 

The second thing I heard was, I really want to go to Europe. Maybe you said something about your husband, I don't recall, and I'll probably do that in five or six years. I was like, okay, I get that. Wants to wait a little bit.

Then the next thing I heard was, oh, there's this issue with vision that my mom had, and I didn’t think my siblings and I had it, but my sister just started to develop problems and I don’t know if I have it or not.

In my head, bluntly, I was like, well, what the hell is this lady waiting for to travel? I think I said something to that effect, pretty much.

I forgot the rest of the conversation, but we had a little bit of a light bulb moment and talking through, oh, maybe I can do that. You just sort of changed in a paradigm of possibility. Now, I'm not taking credit for that. I just gave perspective to what it was

Karen: I gave you credit for that.

Roger: Well, okay. You asked club members for recommendations on where to go, what to do. Had you traveled a lot prior to that with your husband?

Karen: I've done a lot of car travel in the U.S., but I really hadn't even flown very much.

Roger: Then in the club anonymously, I explained your situation in a live meetup with club members and asked them for recommendations on where to go, what to do.

Karen: Wonderful ideas flowed in. People were so generous. They had restaurants, they had ideas for how to fly. They had guides. They had places to make sure I went to. People were just incredibly kind.

Roger: This was some years ago now, but we took all the suggestions and made them into a PDF, we'll share that in 6- Shot Saturday. Yeah. I don't even know if you used any of those suggestions.

Karen: I used a bunch of it.

Roger: I would imagine the other thing that flowed from that was even more perspective of encouragement.

Karen: Yes, because my people don't do those things.

Roger: When you say my people, what does that mean?

Karen: My folks didn't travel. I come from people who are blue collar and we went to the coast in Galveston. That was a big trip.

Roger: You live in Texas so that was in the state. Four months after those recommendations came, you sent me a photo from Munich.

Karen: I sent you a couple of them. I sent you a couple from London, and I had decided to do London because I could speak English and I was comfortable there. I wanted to see the Globe theater. Then I took the Eurostar on recommendation from somebody in the club, and I went to my dream, which was Paris, and I spent a week and a half in Paris.

Roger: It's a great walking city.

Karen: Oh, it was marvelous. It was pouring rain. I sent you a drowned rat picture of me standing in front of the Eiffel Tower, and I was grinning like a fool.

Roger: How many years ago was this?

Karen: That was in 2018.

Roger: 2018. So, very early in the club. What have you done since?

Karen: Once I understood decumulation, and particularly since Money Guide Elite, where you could put in dreams and wants and wishes. I have done a lot more European travel. I've been back and forth to England again. I've taken a mediterranean cruise with some friends, and we started in Barcelona and ended in Turkey. That was just before COVID and I had actually gotten sick on the cruise, so I missed a little bit of Italy, and I went back and did another three weeks in Italy. I did a Rick Steves tour in Rome, and then I took a bunch of guidebooks, and I spent a lot of time in Florence and Sienna, and then I went down to Pompeii. I've been back to France, and I'm planning to go on a German and Austrian trip, or at least a German, Swiss, Austrian trip. I'm not sure.

Roger: Now, you are a single. I'm going to use a word that I don't need to use in a bad way. Single elderly lady traveling the world pretty much by yourself with friends and learning groups.

Karen: There is a podcast on what to travel with called The History Chicks.

Roger: I love it.

Karen: It's a podcast that features women's history, and they had just done a trip to Austria focused on Maria Theresa and they go periodically, and I want to join them. There are all sorts of these groups. Overseas Adventure Travel is another that I've used, which is, you don't have to be by yourself. You don't have to figure it all out in a foreign language. You can have guides and sherpas to be there. Sherpas are good. Sherpas are very good.

Roger: Sherpas are very good. In fact, we talked about sherpas at the beginning of this episode.

I'm thinking of you in decumulation, that change in concept of not just seeing, oh, the software says I'm okay, but seeing in detail that it's okay to spend this amount of money this year on this thing.

Karen: It's okay to break into your principles for frivolous things.

Roger: I might amend that. Correct me, Karen, if you think I'm wrong, it is mentally okay to do that, assuming you do the work, to see that it's okay by getting a little bit more detailed. You don't have to be a spreadsheet geek, but just to realize it's not just about the interest, which is how our parents and grandparents did it.

We talked a lot about the club. The club was just a vehicle to help give you perspective. The two things that I think really come to mind is one is having people around you to give perspective because you're in your own life, and that's your ground zero, number one. 

Number two, to find and connect with people that are similar to you but ahead of you on the trail. This is what you get to do now, is meet a ten year younger or 15-year younger man or woman that can't imagine themselves traveling or that it's so safe and say, be an exemplar.

Karen: Go for it, go for it, go for it.

Roger: Look at me. I'm a single, elderly lady, and I'm doing it. They'll like, oh, well, she's doing it. You can share that you are like them. That's the value of having people around you that think like that.

Karen: The other value is there are a lot of different levels of security in the club. There are some extremely wealthy people, but there are a lot of people who are constrained.

Roger: Yeah, I think that's normal. They're not the loudest in meetups, but they're the majority. This isn't about the club. This is about your story and understanding the change of decumulation and what an exemplar you've been. You always make me smile.

Karen: This is a blast. This is just so much fun.

Roger: Okay, well, we're going to check in with you again.

Karen: Absolutely. I will have gone to Greece again and spent some more time on the islands the next time we talk.

TODAY’S SMART SPRINT SEGMENT

Roger: On your marks, get set,

Now it's time to set a baby step you can take in the next seven days to not just rock retirement, but rock life.

All right. 

In the next seven days, I want you to think about the distinction between accumulation, growing assets, and decumulation, and evaluate yourself. Do you understand that it is okay to spend principle in order to harvest the resources to live a great life? Where is your mindset in that? 

Just do some self-evaluation, because that distinction, done within reason, can help you create a better life. 

For those of you that want to become more competent in a particular topic, I came across a technique in Dan Crosby's book, The Soul of Wealth, the Feynman Technique, which is Richard Feynman, who I'm a big fan of. He created a technique for building competence in a particular topic. What he says is, take a concept that you want to learn, write down everything you know about it, and find out what there is to know about it. Do a lot of research, and just write down everything you know and all the research and create an outline of the topic. Break it down by its components to understand. That's step one. 

Step two is to teach it to a novice. They will give you feedback and ask questions, which is going to help you identify gaps in your knowledge, either in your knowledge or in how you explain it. Go through the process of reviewing and filling those gaps.

Step three, simplify and reduce the clutter. He says it's crucial that we can teach the concept to a five-year-old. You can follow those steps on any subject, how to tie knots, how to change oil in the car, or how to retire. Go through, do the research, then try to teach it to somebody and let them ask tons of questions, and then you identify your gaps. 

This is essentially how I go through the podcast. 

I bring up a topic, I walk through it in an organized way, and then I get tons of emails and questions asking, what about this, what about that, what about that? How do I fill that gap? How do I make this simple? How do I declutter it? It's a wonderful technique. It's outlined in one of the chapters of Dan's book. It's called the Feynman Technique.

The opinions voiced in this podcast are for general information only. Hope you all have a great, well, what today? Whatever day it is, the opinions voiced in this podcast are for general information only and not intended to provide specific advice or recommendations for any individual. All, performance reference is historical and does not guarantee future results. All indices are unmanaged and cannot be invested in directly. Make sure you consult your legal, tax, or financial advisor before making any decisions.