Title: Rebel Finance School 2026 — Week 11 Thursday Transcript
Session: How to Live Off Your Investments: Withdrawals, Tax, and Regular Income | RFS 2026
YouTube Link: https://www.youtube.com/watch?v=FmMkOQ0gSnQ
Course: Rebel Finance School 2026
Creators: Alan Donegan and Katie Donegan, Rebel Donegans
Canonical page: https://rebeldonegans.com/finance/rfs/course-notes/ coming soon
Course hub: https://rebeldonegans.com/finance/rfs/course-notes/
Website: https://rebeldonegans.com/
Copyright notice:
Copyright © Rebel Donegans. All rights reserved.
This transcript is provided for personal educational use as part of Rebel Finance School. You may read it, search it, download it for your own learning, and use it to help you understand the course. Please do not copy, republish, sell, scrape, or redistribute this transcript as your own content.
Attribution:
If quoting or referencing this transcript, please credit Rebel Finance School by Alan and Katie Donegan and link to:
https://rebeldonegans.com/finance/rfs/course-notes/
Disclaimer:
This is financial education, not financial advice. Rebel Donegans are not regulated financial advisers. You are responsible for your own financial decisions.


YouTube Description
You've spent years building your investment portfolio. But what happens when it is time to actually live from it?

How does the money move from your investments into your bank account? Which account should the money come from? And how do you keep the whole system on track without trying to predict the market?

In this session, Alan and Katie will show you how to turn your Freedom Fund into money you can confidently use.

📋 WHAT WE’LL COVER

💳 MAKE YOUR MONEY SPENDABLE
Learn how investment money becomes cash, the difference between receiving investment income and selling units, how cash reaches your bank account, and how to choose a spending-cash target.

🚧 MONITOR YOUR PLAN WITH GUARDRAILS
Learn how to monitor your Current Burn Rate, recognise when the plan needs attention, and write simple guardrail rules for both difficult times and good outcomes.

🌍 CHOOSE WHERE THE MONEY COMES FROM
Explore how access, tax treatment, other income, allowances and changing income phases can affect your withdrawal choices.

This is a global session. It will help you understand the principles and identify the questions to consider wherever you live. Tax and account rules vary, so you will need to investigate the rules for your country and circumstances.

⚖️ REBALANCE THE WHOLE SYSTEM
Learn how to:
• Refill your spending cash
• Review your Freedom Fund
• Restore your chosen investment split
• Decide what may need to be sold
• Add practical drawdown, guardrail and rebalancing rules to your Investor Policy Statement

🗓️ BUILD YOUR OPERATING ROUTINE
By the end of the session, you'll understand how the different parts work together:
Create cash. Move it to the bank. Spend it. Monitor the plan. Refill and rebalance.

You are not destroying your Freedom Fund. You are operating it to support the life it was built for.

🍍 REBEL FINANCE SCHOOL
This session accompanies the free 10-week Rebel Finance School course. Sign up for the notes, spreadsheets and bonus material:
https://rebeldonegans.com/finance/rfs/

Join the Facebook group for friendly support from like-minded people:   / rebelfinance  

LINKS
Google form Investor Policy Statement (IPS) template: http://rebeldonegans.com/tools/ips 

IPS workshop with Bob: https://youtube.com/live/JOwSBPg22jU 

Submit your questions for the ask us anything session: https://rebeldonegans.com/ask-the-donegans-anything/

Listen to the graduation song: https://open.spotify.com/track/00PwcgGdKz2bjrEWSaXVeF?si=84cd04ddc3e44d82 

2026 Rebel Graduation survey and certificate: https://forms.gle/ZWPKxQnpi4Gr2RfF9 

UK specific session: drawdown demystified    • Drawdown Demystified: How to Make Your Mon...   

Mastering spreadsheets and numbers:    • Spreadsheets and Numbers: How to Master Th...   

RFS content in Spanish https://rebelionfinanciera-apollo.the... 

The Rebel family 
Rebel Business School: https://therebelschool.com/
Rebel Entrepreneur podcast: https://open.spotify.com/show/3YG3Wfn... 
Extraordinary life course: https://rebeldonegans.com/lifestyle-d... 

⚠️ DISCLAIMER
We are not financial advisers 💼 This is not financial advice 💰 We are not regulated or trained financial advisers 🎓 We will never try to sell you any investments 🛍️ You make your own decisions 💭 We are sharing our opinions and ideas 💡 These ideas may not continue to work for us or for you. You are 100% responsible for your financial future 💸 There are no guarantees here.

Read our full disclaimer:
https://rebeldonegans.com/about-us/di...
#Investing #RetirementPlanning #InvestmentIncome #FinancialIndependence #RebelFinanceSchool #PersonalFinance #FinancialLiteracy #RFS26


0:000 secondsGoing live. 3 2 1 and we are live. Hello and welcome to Rebel Finance School.
0:066 secondsGood morning from New Zealand. Yes, we are in the future.
0:099 secondsIn the future and I can reassure you the future is wonderful. It is great.
0:1313 secondsAlthough the sun has not come up yet. Uh we're very excited to have you here. Uh it is a super special session at the end of the course. Uh this is the Donigans.
0:2323 secondsHow do you live off your investments? Cuz that's the big question, isn't it?
0:2626 secondsYeah. We uh had that question board where you asked all your questions about investing. Most of which we had covered during the normal course of events and
0:3434 secondsthen we're like they have these questions Alan. They want to know how to turn their investments into pizza, Lego cash. How do they spend it?
0:4343 secondsThat was one of the top voted questions.
0:4545 secondsSo we listen to your questions. We scrap the Q&A and we go okay let's answer the direct questions you've given us. That's
0:5252 secondsthe plan. So that is the plan for tonight. Now imagine the scene. You've done it.
1:011 minute, 1 secondYou've built your freedom fund. You're completely financially free.
1:061 minute, 6 secondsThere's no alarm clocks. You're free to do anything you want. Uh and Monday morning arrives and you think we'll go
1:151 minute, 15 secondsout for breakfast. That is the obvious thing to do is to go straight out for breakfast. Um, but at breakfast you
1:221 minute, 22 secondsrealize no salary arrived in your bank because you've quit your job. There's no money and you're looking at each other
1:311 minute, 31 secondsgoing, "Well, what did we do without a salary?" And then the waiter brings the bill and you try and play with global
1:381 minute, 38 secondsindex funds and you say, "Will you exchange Americano and eggs benedict for 0.07 units of a global index fund?" And the
1:461 minute, 46 secondsguy looks very confused and tragically will not accept payment in global index funds uh for the eggs benedict. He's a
1:551 minute, 55 secondsfool cuz he should definitely take the index funds over the cash. But we won't go there.
2:012 minutes, 1 secondBut life still wants money when you finish when you retire. You still need money. The landlord does not accept
2:082 minutes, 8 secondsportfolio screenshots. The mortgage company still needs paying. The energy company still wants cash. They all still need money. And your freedom fund says
2:172 minutes, 17 secondshalf a million but your bank account says £42.13.
2:232 minutes, 23 secondsAnd how do you get the money from one to the other? And that is the central question of the entire of tonight. How
2:302 minutes, 30 secondsdoes an investment become coffee? It's not literally like that, but you get the analogy. How do you turn the investment into the things you actually need to live on? So we have a question for you.
2:432 minutes, 43 secondsIf you were left on your own right now, would you know how to make cash appear? And we'd like you to answer in the chat.
2:482 minutes, 48 secondsA for absolutely, S for sort of, N for no idea, or DF for I assume the
2:582 minutes, 58 secondsdividend fairy dealt with it all and just gave me cash. Uh, which one is it for you? Uh, do you know how it is the
3:063 minutes, 6 secondsmoney would show up? And this is what I imagine the dividend fairy trademark would look like. She's spreading dividends around. Are they modeled off of Galinda?
3:153 minutes, 15 secondsYes. Nice.
3:163 minutes, 16 secondsAnd as far as we know, there is no dividend fairy. Ooh.
3:233 minutes, 23 secondsCuz the thing with all this stuff is that it if you had a rental property, the property income that you get kind of feels familiar cuz you know, you get
3:303 minutes, 30 secondsthis monthly amount from your tenants and it feels like it used to feel when you had a salary and you can kind of grasp that. But then when it comes to
3:393 minutes, 39 secondsliving off investments that are invested in the stock market, you're like, "Well, how does that work? How does the money appear? How do I turn those investments
3:473 minutes, 47 secondsinto coffee?" And that's the missing piece, turning the investments into what you need. And that's what we're going to do tonight. So, we have six sections.
3:563 minutes, 56 secondsAct one, from building the freedom fund to using it. Act two, how investments become cash. Three, setting a cash
4:054 minutes, 5 secondstarget, which is a very quick one. Uh, and then four, a brand new piece about this thing called guard rails, which we kind of talked about, but we're
4:134 minutes, 13 secondsformalizing tonight. Five is choosing where the cash comes from, which account do you get cash from? Because every
4:204 minutes, 20 secondsaccount has different uh tax rules. And then six is rebalancing. So, how do you rebalance and restore
4:294 minutes, 29 secondsuh your allocation? And this is building on Monday. So you can use today to develop what you came up with in your investor
4:374 minutes, 37 secondspolicy statement. There's two sections in particular that today are relevant for which is the draw down plan and the rebalancing rules. And we'll point it
4:464 minutes, 46 secondsout as we go along. You might want to pull that up so you've got it ready to be able to update or tweak. And some of you be going IPS investor policy
4:554 minutes, 55 secondsstatement. What on earth are you talking about? Well, we did it on Monday's session. We have this Google doc template for you to fill in as you go.
5:045 minutes, 4 secondsIf you have uh missed that session, you can go back and uh watch that session.
5:105 minutes, 10 secondsWe had that with Bob. Uh there's a QR code that's just in the normal Rebel Finance School 2026 playlist, so you can find it easily on YouTube.
5:185 minutes, 18 secondsExactly. And all links are in the YouTube description as well if you're looking for those over tonight. Um I'm
5:255 minutes, 25 secondsvery excited. Jacqueline is saying, "This is exactly what we wanted you to cover tonight." So, we are very happy. One happy customer. Yes.
5:325 minutes, 32 secondsYes. We'll we'll see if we impress Wes and Kim as well, but we'll wait to find out.
5:365 minutes, 36 secondsThey're quite hard to impress historically. Yeah.
5:395 minutes, 39 secondsOkay. Be very excited because on Monday we will have the Rebel Finance School graduation party. Uh it'll even if
5:485 minutes, 48 secondsyou're on catchup, if you're watching this now on catchup, come and watch the next session. Enjoy the graduation ceremony on Monday. It'll be at right at
5:565 minutes, 56 secondsthe start of the session. Uh and then we're doing the ask us anything afterwards and we've been collecting your questions so far. Uh we've had a
6:056 minutes, 5 secondslot of questions. So please upvote any questions you think are good. Uh or add your own ones there. Uh we've created a
6:136 minutes, 13 secondsquestion board where you can upvote questions. Um the weirder the better.
6:186 minutes, 18 secondsMake them fun questions. uh because it'll make the fun make the night fun for all of us.
6:246 minutes, 24 secondsAs part of the graduation ceremony and process and procedures, that sounds a bit formal. Uh we have the graduation survey. We want to know what you thought
6:336 minutes, 33 secondsof the course. It should take you about 10 15 minutes to complete and we love looking at what you say so that we can improve for next time. Kate's been reading them all week.
6:416 minutes, 41 secondsYeah, it's really nice. And when we had uh the feedback from last year, that's what has helped us to evolve the course into what we've changed for this year.
6:496 minutes, 49 secondsSo this year we've had the two different Monday and Thursday sessions that came from your feedback. So please keep telling us so that we can keep changing and evolving the course.
6:586 minutes, 58 secondsAnd once you fill in the survey, you will get your Rebel Finance School certificate. Yes, this is mild bribery.
7:057 minutes, 5 secondsUh so you have to have filled out that and you will be able to get your certificate. It will be personalized with your name. We're very excited about
7:127 minutes, 12 secondsit. And also, if you're really geeky, there is a secret hidden pineapple in the certificate which has an action you can take.
7:217 minutes, 21 secondsI haven't checked how many people have found the secret pineapple. They've been replying to them. Nice. Now, quick message from our lawyers.
7:297 minutes, 29 secondsThis is not financial advice. We're not trained financial adviserss. We're not regulated. We will not sell you investments. You make your decisions. We are sharing our opinions and ideas.
7:367 minutes, 36 secondsThese ideas may or may not continue to work for us or you. You are 100% responsible for your future.
7:417 minutes, 41 secondsThere are no guarantees here except the money back guarantee. If you have not enjoyed the course, please see Derek for a full refund.
7:497 minutes, 49 secondsInvestments can and will go up and down.
7:517 minutes, 51 secondsIf you paid for the course, something's gone terribly wrong.
7:547 minutes, 54 secondsIf you're on YouTube, please hit like and subscribe. It uh makes YouTube very happy and we're having a big celebration
8:008 minutescuz today we hit 50,000 subscribers on the YouTube channel, which is unbelievable.
8:068 minutes, 6 secondsUh I always remember about 3 years ago someone wrote on our channel um I I like looked at your channel and I didn't know
8:158 minutes, 15 secondswhether to trust you because you had lower than 10,000 subscribers.
8:198 minutes, 19 secondsUh and then he watched the course and said it was really good even though we didn't have very many subscribers. So it was interesting how people judge a
8:278 minutes, 27 secondschannel based on these things. And then when we got past 10,000, I did I think I did message him and said, "We're legit now." To think I was nice about it, not just
8:358 minutes, 35 secondsrub it in his face like, "Okay, so this brings the whole map together. How do you get the money out of it?" So, we're going to talk about
8:438 minutes, 43 secondsfrom building it to using it. First, before we get into the technical details, there is a psychological
8:498 minutes, 49 secondselement to all of this. In the build it phase for years, maybe even decades, the
8:578 minutes, 57 secondssimple rule was create a gap, buy more units, and watch the numbers climb.
9:039 minutes, 3 secondsThat's what you did. And then it feels like progress because you're gradually building with discipline and patience
9:119 minutes, 11 secondsand hope and freedom. You're building your freedom fund. And leaving it alone feels responsible. We've learned
9:189 minutes, 18 secondsvolatility happens. We just chill. We just leave it. And then the freedom fund
9:259 minutes, 25 secondskind of becomes sacred. It's this sacred thing that we have put money into and we're waiting for it to grow to a
9:339 minutes, 33 secondscertain point and will protect it at any cost. Then you get to retirement and the direction reverses and you've got to get
9:419 minutes, 41 secondsmoney out of it. You've got to actually pull money out and you've got to sell some units, create some cash, transfer
9:499 minutes, 49 secondsthe money, and actually use it. And this is where people get to, well, selling feels like a failure. And as they're
9:589 minutes, 58 secondsthinking about selling the fund, the questions start to arrive. Am I destroying compounding?
10:0510 minutes, 5 secondsWhat if I sell at the wrong time? What if I run out? Should I only live from dividends? Like, should I wait one more year? What should I do? what should I do?
10:1610 minutes, 16 secondsAnd people will do anything to avoid selling because they've spent years teaching themselves that selling is bad.
10:2510 minutes, 25 secondsSo after reaching financial independence, they start to look for any alternatives. And we've seen people that rebuild their portfolios around dividends. Let me not sell any units.
10:3710 minutes, 37 secondsLet me only use dividends. And I wanted to bring that to life to you in numbers because you know we like data and
10:4410 minutes, 44 secondsempirical facts. Uh so I looked up the total return of a high dividend fund and
10:5210 minutes, 52 secondsa standard index fund. Total return means growth plus dividends or income.
10:5810 minutes, 58 secondsSo this means they are fairly compared between the two. And the first fund we looked at was the Footsie Allworld, uh,
11:0711 minutes, 7 secondsVHY L. Um, it's an ETF that we've talked about a lot. Uh, this is a dividend one.
11:1511 minutes, 15 secondsSorry, this is one we haven't talked about a lot. Uh, this is the high dividend one from Vanguard and on average it's grown 9.6, sorry, 9.56%.
11:2711 minutes, 27 secondsThat's an annual thing over over 10 years. And then if you compare it to the Footsie Allorld one, which is the one I was just talking about, VWRP, which is
11:3611 minutes, 36 secondsthe one we do talk about on the course, that one has grown 11.97% per year over the same time. So there's
11:4411 minutes, 44 secondsa a 2% difference between the two. And you might be thinking, Donigans, 2 1/2% is not very much.
11:5211 minutes, 52 secondsOh, that that's not true, Alan, is it?
11:5411 minutes, 54 secondsBecause over time that difference is compounding and compounding and it over 10 years that's going to be a big difference.
12:0012 minutesDo you remember the fee session where we said 1% was a huge difference like 2 1/2% is massive. So people do this thing
12:0812 minutes, 8 secondswhere they switch to dividends and they make themselves poorer over time because they're weird about selling. That's the
12:1612 minutes, 16 secondsmessage. And if you looked at a global one uh it's exactly the same thing. The iShares core high dividend fund. So this
12:2412 minutes, 24 secondsis HDV, high dividend, and it's specifically for dividends. It grows over time at around 9 a.5%. And then you
12:3312 minutes, 33 secondscompare it to the Vanguard Total World Stock ETF, VT, which I know the New Zealanders and the Americans can buy.
12:3912 minutes, 39 secondsIt's the Footsie Global All Cap of the Global World, that's grown at nearly 13%. So you're giving up 3 12% by going
12:4712 minutes, 47 secondsto dividends overall. But people will do anything to avoid selling and they avoid buying things that make
12:5612 minutes, 56 secondstheir life better even though they can afford them. And we've met people with huge amounts of money in the bank, but
13:0413 minutes, 4 secondsthey won't spend it to make their life better. And it's because of this weirdness. And they'll keep working for
13:1213 minutes, 12 secondsmoney that they don't need. They'll keep going and saying, "Oh, but like I'm kind of scared of selling. I'm kind of scared of switching from accumulating all this
13:2013 minutes, 20 secondsstuff in my freedom fund to using the freedom fund, forgetting, of course, that that was the very reason that they were building it. But it it can be
13:2713 minutes, 27 secondsscary. And we don't want this to happen to you cuz the problem is not the maths.
13:3313 minutes, 33 secondsThe maths of investing and living off it is fairly easy. It's the emotion. And sometimes selling just feels like a
13:4113 minutes, 41 secondsfailure because you've worked so hard to build it. And I did want to stress sometimes some of you are listening to this going like, I got no problem at all with selling and living off my freedom
13:5013 minutes, 50 secondsfund. I am super happy to get going using my freedom fund for what it was built for. Uh this is just to acknowledge that for a lot of people
13:5813 minutes, 58 secondsthat isn't the case. But if if you're listening to this thinking, no way, I'm happy, then please stay happy. This just to acknowledge the the psych the
14:0614 minutes, 6 secondspsychology that a lot of people go through.
14:0814 minutes, 8 secondsExactly. Because the freedom funds jobs has changed. like it's got to keep working for tomorrow and it's got to support today as well. So you need the
14:1614 minutes, 16 secondsmoney to live off it. And in accumulation, the money goes in, you buy more units, it supports future you. And then in deumulation, money comes out, you create cash that supports your life.
14:2814 minutes, 28 secondsThis is one of my favorite pictures of a ninja producing cash which turns into breakfast.
14:3414 minutes, 34 secondsDo we all get our own little mini ninja that helps us operate the machinery?
14:3714 minutes, 37 secondsI think we should. We'll take a mini carbon copy of Derek and send it to everyone. Everyone will get a mini Derek in the post.
14:4414 minutes, 44 secondsThe plane was okay. And this is whole thing is meant to support the life you want to lead.
14:5014 minutes, 50 secondsAnd draw down is not the opposite of investing. So taking money out is not the opposite of investing because most of your money remains invested.
15:0115 minutes, 1 secondYou're remaining invested and the market still rises and falls. You're just in a different phase. You're not abandoning
15:0915 minutes, 9 secondsinvesting. And we had this big thing of you're not investing until you retire. No, you're investing until you expire.
15:1615 minutes, 16 secondsAnd that's the key bit. You will stay invested. But the Freedom Fund was never meant to be a a museum exhibit. You're
15:2515 minutes, 25 secondsmeant to actually live off it and use it. And it's meant to buy you breakfast.
15:3015 minutes, 30 secondsIt's meant to create the life you wanted to create. So tonight the plan is to operate the machinery to get money out
15:3915 minutes, 39 secondsof your investments. Now the first time we took uh 10 grand out of our investments,
15:4815 minutes, 48 secondsit felt a bit naughty. Like it felt we'd spent years just investing money into
15:5415 minutes, 54 secondsthese ices and sips and then it was like, "Oh, we get we get we get to spend it. Are we allowed to?"
16:0216 minutes, 2 secondsIt did feel weird, didn't it? is and but it doesn't feel as weird anymore. Still get a little bit of like a tingle of like, oh, should we be doing this? But
16:0916 minutes, 9 secondsthen remember, yeah, that was the whole point. And it can take time for your mindset to switch. Yeah, cuz we took the first time we did it, we took 10 grand
16:1616 minutes, 16 secondsout of an Iser and the 10 grand arrived in my account and I had a bit of like, should I tell anyone about this? Did I should I report it? What should I do?
16:2616 minutes, 26 secondsLike, I've got 10 grand. ISIS are taxfree. It's just my money.
16:3416 minutes, 34 secondsAnd it was all growth. Like I'd not put it in there. Does Did that make sense?
16:3916 minutes, 39 secondsLike I put in money, it had grown and I sold the growth. Like this is this is just money that showed up. What black magic is this Alan?
16:4716 minutes, 47 secondsIt's weird.
16:4916 minutes, 49 secondsUm, so we had these feelings when we were first doing it and then you kind of get over it and go, you can buy a lot of breakfast and this is really cool and we
16:5716 minutes, 57 secondscan have some really cool adventures and you just need to get over it and spend it and have a nice life. That's the plan.
17:0417 minutes, 4 secondsSo, we have done act one, the idea of that shift, that mindset shift to change from building your freedom fund to using
17:1117 minutes, 11 secondsit. Now, we're going to come on to how investments become cash. How does this actually work? How do you get that cash from your freedom fund?
17:1917 minutes, 19 secondsThat's the plan. So, let's have a look at this now. How does an investment turn into cash? Cuz your investment is not
17:2617 minutes, 26 secondscash. Your investment is an ETF. Uh it's exchange traded fund. It's an index fund. It's a bond. It's like a value on
17:3417 minutes, 34 secondsthe screen and it's held in an account and your investment account can actually
17:4017 minutes, 40 secondshold both investments and cash. So let's come back to this model that we had of thinking about investments with those
17:4717 minutes, 47 secondsthree levels of the platform the account and then within the account you could have your investment your XY Z global fund whatever fill in the blank for your
17:5617 minutes, 56 secondsglobal fund there and then there can be cash in there as well.
18:0118 minutes, 1 secondAnd there's two ways to create that cash. The investment might pay some cash out or you sell some units. And we're
18:0918 minutes, 9 secondsgoing to show you examples of both of those. So let's start with the investment pays cash. So what cash might it pay?
18:1618 minutes, 16 secondsSo with a income fund, you might get dividends. With a bond, you might get interest. Sometimes they call them
18:2418 minutes, 24 secondsdistributions. Uh but you might get some cash from your investments. We wanted to show you a real life example of how this
18:3118 minutes, 31 secondsworks. How a dividend appeared in our account. So we the platform we have is a Halifax investment platform. This was
18:3918 minutes, 39 secondsfrom a general investment account. So that thinking about these different layers and then within that had a global index fund with income units. We're
18:4718 minutes, 47 secondsgoing to come back on to what income units mean in a bit. And then this cash dividend appears
18:5518 minutes, 55 secondsand it is literally a cash dividend appearing. So we wanted to make this real. These are the exact screenshots of what happened in our account.
19:0319 minutes, 3 secondsSo the first thing that happens is the dividend appears. So I've taken a little screenshot of the transaction of the um of what happened. You can see there it
19:1119 minutes, 11 secondssays the dividend and it came from that fund and then it credited my account with £6206.
19:1919 minutes, 19 secondsSo that's the actual cash in the account.
19:2119 minutes, 21 secondsAnd then I was like well I want that cash to pay for jigsaw puzzles. So I needed so at that point I had my investment and there was also cash in
19:2919 minutes, 29 secondsthere. So within my account there's cash there and platform cash platform cash we've called it. I want that cash in my bank account. I cannot spend that cash from the platform.
19:4019 minutes, 40 secondsThere's no way of spending that cash. So I want to withdraw that cash. So I said please withdraw that cash. So it debited my account that's exact same amount £62066.
19:5219 minutes, 52 secondsSo the cash on my instruction left the investment account that cash came out and then the next step is it arrived in
20:0020 minutesmy bank account. So it just appears I nominated the account where I want it to show up and you can see there £62066
20:0720 minutes, 7 secondsappeared in my current account ready for me to convert it to whatever I choose.
20:1320 minutes, 13 secondsFor me I use the cash to buy jigsaw puzzles. Not all of it. £620 on jigsaw puzzles would be really fun.
20:1820 minutes, 18 secondsThat' be a lot of fun. but whatever it is that you want to turn your cash into buying.
20:2320 minutes, 23 secondsAnd that's how an income unit works is at the X dividend date, which is just the date they pay the dividends. It sounds very fancy.
20:3320 minutes, 33 secondsUh that's the date that they choose that you have to have the unit to get the dividend and then they pay out the dividend later. Um that's how that one
20:4220 minutes, 42 secondsworks and the cash turns up in your account. The second way to do it is you sell some units. Uh, which sounds dramatic, but it's actually very easy.
20:5220 minutes, 52 secondsSo, what I did was I screenshotted my Vanguard account to show you this. So, this is my Vanguard account. Um, I have
20:5920 minutes, 59 secondsa small amount of money here because I only opened it to be able to do videos to show you how to open it. Um, so this is my ISA
21:0721 minutes, 7 secondsin relation to the rest of our freedom fund.
21:1021 minutes, 10 secondsYeah. because I know people will go like, I thought they had lots of money and he's only got 20 grand in his ISA.
21:1621 minutes, 16 secondsYes, it's in other iss. Um, so here we go. This is my stocks and shares I Iser.
21:2121 minutes, 21 secondsYour first step is to get into your account. Then when you're in your account, you select the uh investment that you want to sell. So I selected my
21:3021 minutes, 30 secondsIser in the drop-own box. Uh, and then in Iser, there's this bit at the top.
21:3621 minutes, 36 secondsYou see the drop-own arrow that popped up up here? Uh you can click and it's got invest where you can buy more, sell,
21:4421 minutes, 44 secondswhich is what we want to do, or switch, which is where you can switch from one fund to another. Uh if you like realize
21:5221 minutes, 52 secondsyou want a different fund. Uh so then you have to choose how the sale will proceed. You have two options, next
22:0022 minutesavailable price or live pricing. Live pricing is only available for ETFs because they are priced minuteby minute.
22:0922 minutes, 9 secondsIndex funds are priced once a day. So I have an index fund, so I can only do next available price, which means I put
22:1622 minutes, 16 secondsthe order in, they will do whatever price it is when you get to it, which actually is a lot easier cuz I don't have to think about it. I just press next available price.
22:2722 minutes, 27 secondsSo that's the one I selected. It then takes you through to the next screen.
22:3122 minutes, 31 secondsUh, and you have two options. You have to decide where the proceeds will go. So you can leave as cash in your ISA. It
22:3922 minutes, 39 secondssays for buying later, but we're not going to do that because I'm going to spend it.
22:4322 minutes, 43 secondsIt means buying other investments, doesn't it?
22:4522 minutes, 45 secondsYeah. Or it says use it now to buy other investments. This is what we call a switch. So we want to leave it in cash in the ISA and then we'll take the cash
22:5322 minutes, 53 secondsout later. Um and then this is the next screen. It says, "What would you like to sell?" And your first step, you can choose whether you sell a pound amount
23:0223 minutes, 2 secondsor a unit amount. And this is way better than our Vanguard uh our Halifax platform because Halifax will only let you sell a unit number. So you have to
23:1123 minutes, 11 secondswork out how many units you sell to get how many pounds. For this I just select I want to do pounds and then you enter
23:1923 minutes, 19 secondsthe amount. So I want to sell 10 grand or I want to sell five grand or whatever it is. And then it sends you through to
23:2623 minutes, 26 secondsa you a review screen and tells you this is what you're selling. This is how much you're selling. uh you hit submit and
23:3523 minutes, 35 secondsthen about 3 days later the money arrives in your platform account and
23:4223 minutes, 42 secondsthat is platform cash cuz it's not yet cash that you can spend. There's no credit card or debit card on the
23:4923 minutes, 49 secondsplatform account. You have to actually get it out into your bank account so that you can actually use it.
23:5623 minutes, 56 secondsAnd that 3 days you said that can vary depending on the platform things. That's not always the case. Exactly.
24:0224 minutes, 2 secondsSo the overall piece is you sell some of your investments that
24:0924 minutes, 9 secondsgets turned into cash. You then have to move the cash to your bank account and it is only at that point that you can
24:1624 minutes, 16 secondsbuy breakfast. That's how it works and it takes a few days to do but it works fairly well. So those are the two ways to create cash from your accounts.
24:2824 minutes, 28 secondsWhich then brings up the question about accumulation funds or income funds like what should I have? How does it work? Um
24:3724 minutes, 37 secondsso just to sort of bring it to life, accumulation funds, you get dividends either quarterly, uh monthly or
24:4424 minutes, 44 secondsannually. Um the ones funds we most talk about are annual.
24:4924 minutes, 49 secondsAnd then in an accumulation fund, those dividends are retained and reinvested inside the fund. I.e.
24:5824 minutes, 58 secondsthey take the cash that appears and buy more stocks and shares with it. However, with an income fund, the dividends are
25:0625 minutes, 6 secondsalso paid out quarterly, monthly or annually, but they're paid out in cash and you just get cash in your bank. Not
25:1425 minutes, 14 secondsyour bank, cash in your platform. And you don't want that when you're on the way to financial independence because you want them reinvested and growing.
25:2325 minutes, 23 secondsBut when you get to living off your money, maybe you do want income units, but it actually doesn't really matter.
25:3125 minutes, 31 secondsUm, so income or distributing funds, the income is added as fund as cash to the
25:3825 minutes, 38 secondsfund. Like the you actually get cash in there and it's the same underlying investments in both one. So whether
25:4525 minutes, 45 secondsyou've got an income or an ACC accumulation fund, it's exactly the same underlying investments. It's just a
25:5425 minutes, 54 secondsdifferent journey for the income. And the income is part of your total return.
26:0126 minutes, 1 secondAnd this total return term is growth and dividends. That's your total return. So your return is not just the dividends.
26:0926 minutes, 9 secondsThe return is both the growth. And that's what we were talking about at the start where we were comparing those two funds, the high dividend fund with the
26:1826 minutes, 18 secondsstandard Footsie global all cap fund. Uh we were comparing total returns.
26:2426 minutes, 24 secondsAnd here's the key is that you don't need to live just from dividends because you've got those two different routes.
26:3026 minutes, 30 secondsSo the route one is to have those income units so that investments give you the cash but then you may have to sell units
26:3826 minutes, 38 secondsas well to create enough cash cuz for example on the Footsie Global All Cap fund the dividends are about 1.6%
26:4626 minutes, 46 secondsof the fund you might be wanting to spend 4%. So even with income units you're going to need to potentially sell a little bit as well. And then whereas
26:5426 minutes, 54 secondswith the accumulation you sell units to create cash. And actually, there's a debate as to which one you want to use.
27:0027 minutesEven when you're living off your fund, you might want to have accumulation because you then got the flexibility of choosing when you get that cash rather
27:0827 minutes, 8 secondsthan just the annual, monthly or quarterly dividends appearing.
27:1227 minutes, 12 secondsYes. And we've chosen to maintain accumulation funds even in uh our draw down phase because I don't want to have
27:2127 minutes, 21 secondsto think about cash turning up and reinvesting it or spending it or any of that stuff. like I just want it reinvested and they'll sell it when I
27:2927 minutes, 29 secondswant to sell it. Um, all the platforms are slightly different. They all work broadly the same, but they all have little nuances.
27:3827 minutes, 38 secondsSo, the thing for you to work out is uh for your particular account and fund, do the income does the income stay as cash
27:4627 minutes, 46 secondsor is it automatically reinvested? Do you have to sell manually? Because with uh the Vanguard platform and a SIP, you
27:5527 minutes, 55 secondscan actually automate it. So it pays you a wage. So you can choose that it will auto sell off some of your investments
28:0228 minutes, 2 secondsand pay you every month or quarter X amount of pounds. So there are some platforms that allow you to do automation to set up a regular income.
28:1228 minutes, 12 secondsSo it can feel like a wage. It'd be great if Vanguard paid me a wage. I mean, we talk about them enough.
28:1828 minutes, 18 secondsthey should do. Uh uh the big question is can you choose what you sell? So sometimes if it's
28:2728 minutes, 27 secondsautomated they just sell exactly in proportion of what's in your fund. So if you've got 80/20 stocks and bonds
28:3528 minutes, 35 secondsthey'll sell 80/20 stocks and bonds to get you your cash. Some places you can nominate what you can sell because when
28:4328 minutes, 43 secondsthe market's down, you want to just sell bonds and when the market's up, you'll probably just want to sell uh stocks and
28:5028 minutes, 50 secondsshares. And we'll come on to why that will we've done why that is. We'll show you how that works. Can you schedule the
28:5728 minutes, 57 secondswithdrawals? We've never bothered doing this yet, uh cuz we can't get to our sips and we just manage our money each month and decide when we want to take it
29:0629 minutes, 6 secondsout. uh which actually answers uh a question from LD on YouTube says do we personally sell monthly, quarterly or
29:1529 minutes, 15 secondsannually for our annual expenses. Um we just monitor our money every month in the finance meeting and when our cash
29:2429 minutes, 24 secondsgoes too low we sell. So we don't have like a set like it has to be this many months because we spend different
29:3229 minutes, 32 secondsamounts of money. Uh, and if we go on a big trip, well, then we sell more quickly.
29:3829 minutes, 38 secondsOur spending is quite sporadic. Is the word sporadic? Not sporadic. It's is lumpy because some months we're in more expensive countries. In other months,
29:4629 minutes, 46 secondswe're in less expensive countries. So, our spending is not uniform. And actually, most people's spending is not uniform, is it? You have expensive
29:5329 minutes, 53 secondsmonths with birthdays or Christmas or holidays or whatever.
29:5729 minutes, 57 secondsHow long does the process take to get the money out? And a little bit of warning that every platform is different.
30:0330 minutes, 3 secondsSo that is exactly how investments become cash and uh screenshots of our own accounts. So let's
30:1130 minutes, 11 secondsyou did make sure you removed all your your num your uh yeah my account numbers. I was very worried about account numbers. I even
30:1930 minutes, 19 secondsgot AI to check my work cuz I did not trust myself.
30:2230 minutes, 22 secondsOkay. This is a very quick session about your cash target. Uh this is different for everyone. Think about your annual
30:3030 minutes, 30 secondsspending minus any dependable income you have. So you might have the state pension. Uh you might have a defined benefit pension.
30:4030 minutes, 40 secondsBut you take off money that's coming anyway or maybe you have a part-time job or bits and bobs of money income.
30:4730 minutes, 47 secondsYeah. And then that leaves you at the end the amount that the freedom fund has to uh supply each year. And we just
30:5730 minutes, 57 secondswanted to highlight that cash target, how much cash you want each year, is not the same as your burn rate. The burn
31:0431 minutes, 4 secondsrate is how much of your freedom fund is used over years. And that's the 4% or the 4 1.5% that you go, my freedom fund is this, and this is how much I can take
31:1331 minutes, 13 secondsout. The cash target is how much cash you want lying around at one point to make you feel comfortable. So you've got
31:2131 minutes, 21 secondsenough for breakfast, enough for what you need, enough for the mortgage, and you're not going to run out next month.
31:2931 minutes, 29 secondsSo we want you to choose a cash target. Uh you can do this in different ways.
31:3431 minutes, 34 secondsYou can choose a monetary amount. So you can say, I want 10 grand.
31:3931 minutes, 39 secondsThat's the number I'm happy with. If I've got 10 grand in my bank account, I feel happy. I've got enough for a few months. I'm happy.
31:4631 minutes, 46 secondsOr some people express it as a percentage of their freedom fund. It's a different way of thinking about it of I
31:5231 minutes, 52 secondswant to have 3% cash uh accessible to me at any point and that's what Bob spoke about on Monday. His target was to have 3% in
32:0132 minutes, 1 secondcash or you might have a number of months of portfolio spending i.e. I want 6 months of cash in my account or I want
32:1032 minutes, 10 secondsa year of my account. You just need to pick one of those as your target. And then the idea is to write it down in
32:1732 minutes, 17 secondsyour investor policy statement or somewhere so that the two of you are agreed. How much cash do we want lying
32:2532 minutes, 25 secondsabout so that we have enough to spend on what we're doing? That's the key bit.
32:3032 minutes, 30 secondsAnd even if you're solo, uh, you want to have an agreement with yourself about what you're doing. And then I just Oh, no. You wanted to go back. Sorry.
32:3832 minutes, 38 secondsNo, it's fine. It was just going to highlight the little bit on there where it is, but people can find it.
32:4232 minutes, 42 secondsOkay, cool. Uh because we're all comfortable with different amounts of cash lying about and at different points in your journey.
32:5132 minutes, 51 secondsWhen I was a lot younger, I was kind of comfortable if I just had £100 in my account cuz I was like, that's enough for pizza. I'm fine. Now I'm older. I
32:5932 minutes, 59 secondshave bills. I have things to do. We have like I'm need a lot more cash about to feel confident and comfortable. We've
33:0833 minutes, 8 secondsgot enough to buy flights, to buy accommodation, to buy what we're doing cuz we have a a different lifestyle, not having a house. We have to pay for accommodation.
33:1933 minutes, 19 secondsAnd at the moment, we're aiming for about 3% in cash. So, whenever our cash drops too low, we sell some of our index
33:2633 minutes, 26 secondsfunds to top up our cash so that we have money about. And then just to reiterate what Alan said that that doesn't mean that we're aiming to spend 3% of our
33:3533 minutes, 35 secondsmoney overall for the year. It just means how much we have there that's accessible, that's ready for us to spend.
33:4333 minutes, 43 secondsSo, just to show you where that goes, in the investor policy statement, Katie's drawn a little box at the bottom, the
33:5033 minutes, 50 secondsred box, I will keep X percentage or X dollars of pounds of cash in my spending account and refill it when it falls below.
34:0034 minutesInsert what you want it to fall below. So, that's a tiny section on the cash.
34:0634 minutes, 6 secondsuh and those particular bits and setting your cash target. Um we're going to move on to a brand new section which we haven't really covered with you before.
34:1434 minutes, 14 secondsWe've covered the philosophy but not the other bits. Uh before then, if you're on YouTube, please hit like and subscribe.
34:2034 minutes, 20 secondsIt makes the YouTube overlords happy and gives us a little thrill. I want to know who these overlords are.
34:2634 minutes, 26 secondsSo do I. Uh okay, so these are guard rails. Uh, and imagine you're driving down a road and you've got a guard rail
34:3434 minutes, 34 secondseither side of you that protects you from going off the road. And a withdrawal plan might need some guard
34:4234 minutes, 42 secondsrails. You're cruising along. Make sure you don't fall off the proverbial mountain and run out of money. Now, I
34:4934 minutes, 49 secondswant to introduce to you Jonathan Gton and William Clinger. They are the people
34:5634 minutes, 56 secondswho uh came up with the guardrails in 2006. There are a couple of academics uh that did research on flexible
35:0435 minutes, 4 secondswithdrawment uh flexible retirement withdrawals which is a very mouthful. So is their name. They did the glide rule
35:1235 minutes, 12 secondsguard rails. So they're Genon and Klinger uh which kind of sounds like the Klingons. So we're just going to call them the Klingons for now on. Uh they
35:2135 minutes, 21 secondsare not the Klingons. This is not their official academic title. We're just nicknamed the Klingons because my face cannot say their names at 6:00 a.m. in
35:3035 minutes, 30 secondsNew Zealand in the morning. Okay. So, the Klingons came up with this guard grail idea and they talked about these
35:3935 minutes, 39 secondswithdrawal rates. So, just so you know, withdrawal rate is the same as burn rate. We just call it burn rate on Robel Finance School, but if you read about
35:4735 minutes, 47 secondsthis subject in other places, they're probably going to call it the withdrawal rate.
35:5235 minutes, 52 secondsExactly. Now they created two guard rails for when you're going into retirement. And the idea is if with the
36:0136 minutes, 1 secondwithdrawal rate rises too far, i.e. the stock markets crash and your spending has gone up because of inflation, well
36:0836 minutes, 8 secondsyou need to then reduce your withdrawals so you don't run out of money. And then on the other side, if your withdrawal
36:1536 minutes, 15 secondsrate falls far enough, i.e. the stock market's doing really well and you're not spending very much.
36:2236 minutes, 22 secondsWell, maybe you could spend more and use the resources you have.
36:2836 minutes, 28 secondsAnd the guy that came up with the 4% rule, his name's Bill Ben. We had him on, he's on our YouTube channel. We interviewed him a couple of times about this.
36:3836 minutes, 38 secondsHis method was to work out one safe withdrawal rate that you apply to your
36:4536 minutes, 45 secondslife at the start and then you adjust that amount for inflation every year and you just continue.
36:5336 minutes, 53 secondsThat's it.
36:5436 minutes, 54 secondsAnd that's what we talked about when we talked about um how to make sure your money lasts and figuring out your burn rate. That is that Bill Ben thing of and
37:0237 minutes, 2 secondsthen you just increase your spending for inflation each year.
37:0637 minutes, 6 secondsExactly. So the Klingons used a formula for this. So they said if you went 20%
37:1337 minutes, 13 secondsabove your initial burn rate or 20% below your initial burn rate, you had to change things. So to give you an example, if your starting burn rate was 5%.
37:2437 minutes, 24 secondsYour upper guard rail would be 6%. And your lower guard rail would be 4%. So if it drops below four, then you do
37:3337 minutes, 33 secondssomething about it. And if it goes above five consistently over time, you do something about it. Six. Sorry, six. Thank you.
37:4237 minutes, 42 secondsAnd they came up with these two rules.
37:4537 minutes, 45 secondsThey called it the capital preservation rule, which sounds very fancy. It just means make sure you don't run out of money. And they said if you go above
37:5337 minutes, 53 secondsthat upper guard rail, so if you your burn rate goes above 6% for a year, then
38:0138 minutes, 1 secondyou with reduce the amount you're withdrawing by 10%.
38:0638 minutes, 6 secondsSo say that you are taking 10 grand out of your freedom fund. You're like, "Oh, I need to reduce that by 10%." Now you only take 9 grand out.
38:1438 minutes, 14 secondsExactly. And then on the other side, they created what they called the prosperity rule. And if you're below the
38:2138 minutes, 21 secondslower guard rail, then it's basically saying you're not spending enough. So you should increase withdrawals by 10%.
38:3038 minutes, 30 secondsIt's interesting here. It it 10% is not a a massive amount, is it? But it allows you to start to spend the money. So we're not just saying go like, "Woo,
38:3838 minutes, 38 secondshey, my my burn rate's really low. Let me double my spending, triple my spending." No, it's kind of sensibly increasing it. And also just remembering
38:4738 minutes, 47 secondsthat this is over extended periods as well because you need to it will balance out over time. Some months, some years
38:5438 minutes, 54 secondsyou're going to have a high burn rate, some months a burn rate. And that's it doesn't just mean oh because it's changed monthto month. Oh, I can start
39:0239 minutes, 2 secondschanging my spending. It's looking at it over time because that 4% withdrawal rate, the withdrawal rate or the burn
39:0939 minutes, 9 secondsrate allows for the good years and the bad years.
39:1239 minutes, 12 secondsExactly. It allows for good years and bad rails because guard rail guard rails work both ways. If the plan's under pressure, then you reduce withdrawals
39:2139 minutes, 21 secondsand if the plan's substantially ahead, then you increase withdrawals. We had a slightly simpler version that we had uh
39:3039 minutes, 30 secondswhich we talked about the burn rate is the dashboard warning light. It's the flashing light that things are not
39:3739 minutes, 37 secondsheading in the right direction and the burn rate tells you when to look. And then your plan tells you what to do. And
39:4539 minutes, 45 secondswe spoke about the if the burn rate is higher than you planned, well, open the freedom fund defense plan and choose what you're going to do differently
39:5239 minutes, 52 secondsbecause you don't just have to reduce spending. There are other ways to protect yourself against that, which we covered in week 10. If your burn rate is
40:0140 minutes, 1 secondlower than planned, again, over extended periods, this is not just a one month or a two-month thing. Maybe the plan can provide more for you. And it's just
40:1040 minutes, 10 secondsthinking about it systematically and thinking actually can it sitting down and thinking about it not just going woo hey let me go and spend a bunch more money.
40:1940 minutes, 19 secondsUh cuz good outcomes need a rule as well. And actually good outcomes are far more likely with what we're talking
40:2740 minutes, 27 secondsabout. We do all this work to protect ourselves against a tiny chance that things go badly but it's far more likely
40:3440 minutes, 34 secondswe will do extremely well over time. So, we need to have a rule that helps us to enjoy that prosperity.
40:4240 minutes, 42 secondsAnd just the warning Katie's been saying, one month is not a trend. Okay?
40:4740 minutes, 47 secondsThe Klingons used annual figures. Uh, and you need to think a little bit longer term. It's just not it's not
40:5540 minutes, 55 secondslike, oh, my burn rate up went up to 6% this month. It's over the longer term.
41:0141 minutes, 1 secondSo, the idea is if you're above your upper guard rail, i.e. your burn rate's gone up massively, open the defense plan
41:1041 minutes, 10 secondsand do something about it. If you're inside the guard rails, just continue continue. Everything will be fine. And
41:1841 minutes, 18 secondsif you're below the lower guard rail for long enough, well, you can review whether the plan can provide more. And
41:2541 minutes, 25 secondsthat's the exciting bit. What could more mean? More breakfast, more adventure, more generosity. Maybe
41:3341 minutes, 33 secondsyou want to give to the kids, to the family, to your favorite charity. Maybe it's less work. Maybe it's more life.
41:4041 minutes, 40 secondsMaybe it's an Alaskan cruise. Like, the plan's gone really well. Let's do what we want to do. But the key is to write
41:4841 minutes, 48 secondsthis all down before you need it. You're not making decisions in the moment. And this is what we were doing with the investor policy statement where calm you
41:5741 minutes, 57 secondsis writing instructions for emotional you when things perhaps are not going according to plan.
42:0342 minutes, 3 secondsAn emotional you might also be when things are going really well.
42:0642 minutes, 6 secondsThat's true. A little bit over giddy and excited.
42:0842 minutes, 8 secondsA little bit too excited when the market's going well. You need to go back to the rules. So it's emotional you on the plus and the minus. So, there's
42:1842 minutes, 18 secondsgoing to be a lot of text on this slide, but this is to give you some guidance as to what you might write down specifically in your investor policy statement. So, you probably
42:2642 minutes, 26 secondsKatie's added this text to the investor statement. Adapted it since uh the last session.
42:3142 minutes, 31 secondsSo, you'll be able to find the new version if you're watching live. If you're watching on catchup, it will already have been there anyway.
42:3842 minutes, 38 secondsSo, you weren't going to record your starting burn rate and then say, well, how often are you going to check your current burn rate? Is that going to be at your monthly finance meeting? You're
42:4742 minutes, 47 secondsgoing to do it overall annually just to know when and how you're going to look at it. If it you're below your lower guard rail, so you're going to define
42:5542 minutes, 55 secondswhat that is. If your starting burn rate is 4%, maybe your lower guard rail is
43:0143 minutes, 1 second3%. If it stays below that for however many reviews, 12 reviews if it's
43:0843 minutes, 8 secondsmonthly, 3 years, I don't know, whatever that whatever that is, review whether the plan can deliberately provide more.
43:1543 minutes, 15 secondsWe're not just saying willy-nilly start spending more. Okay, let's sit down, let's look what's going when spending's coming up, what do I think is going to happen and think, could I start spending some more?
43:2443 minutes, 24 secondsYeah. And we left it for a couple of years to work out that we had gone past that period. And if you're inside your guardrails, we just continue as normal.
43:3443 minutes, 34 secondsAnd then if you're above the guardrails, i.e. like spending's gone crazy, inflation's gone crazy, and the market's
43:4043 minutes, 40 secondsgone down, well, my upper guard rail is 6% or 7%, whatever it is. And if my
43:4843 minutes, 48 secondscurrent burn rate rises above it, then I'm going to pause and I'm going to open my defense plan and have a look at it.
43:5543 minutes, 55 secondsThat's the basic rule. And then some of you might be thinking, well, I'm not quite ready to choose these percentages right in your IPS in your investor
44:0344 minutes, 3 secondspolicy statement when you're going to decide or how you're going to research them. Um, there's plent there's all lots
44:1044 minutes, 10 secondsof weird and wonderful ways of choosing this. We've tried to make it super simple so it's something that you can actually follow and we've added that into the template so you've got that
44:1944 minutes, 19 secondstext and those words there. And the idea is you don't drift into danger, i.e.
44:2544 minutes, 25 secondsyou're not drifting into running out of money and you don't drift into not spending enough because your plan could
44:3244 minutes, 32 secondsallow for more. And we did have one thing that we did a few years ago that's
44:4044 minutes, 40 secondskind of along these lines. Um cuz I could see that we'd saved well and we actually need encouragement to spend
44:4944 minutes, 49 secondsmore cuz we're not always that great at spending or we weren't historically.
44:5344 minutes, 53 secondsWe're way better at spending now. We've been improving.
44:5644 minutes, 56 secondsUm, so we had an agreement that I made Katie sign because I knew she would not like follow through with this a little bit aggressive.
45:0745 minutes, 7 secondsAnd the agreement was if every time our portfolio crossed a half a million mark, i.e. increased by half a million, we
45:1745 minutes, 17 secondscould spend 1% of that money on an adventure in addition to our normal spending. in addition to our normal spending. And it
45:2545 minutes, 25 secondswas a trigger that was predefined that enabled us to go, okay, our portfolio has done really well. Let us release
45:3345 minutes, 33 secondssome cash and do things. And it allowed us uh to spend money on really big adventures. And that worked very well to help us to feel calmer about spending.
45:4345 minutes, 43 secondsAnd it's this idea of having a specific trigger that you then go that we've hit that trigger. we can now do this. And that's the same principle as the guard rails.
45:5545 minutes, 55 secondsIt's the same principle as all the things we're talking about is to have a written plan that you've both agreed. Yeah.
46:0046 minutesUm because when it actually comes to spending that money, sometimes you have to go, we did agree this uh and we did
46:0946 minutes, 9 secondscome up with this plan together, which of course if you both no longer agree with it, then of course you don't just have to plow on and do something that you don't want to do. But it is having
46:1746 minutes, 17 secondsthat in writing to know. Not so you can like lord it over your partner and be like haha you signed this but just to say look we agreed to this um how you
46:2646 minutes, 26 secondsthinking about it how you feeling what's changed and you don't have to go ahead with it if you don't both want to but it makes life so much easier to have
46:3446 minutes, 34 secondsa written agreement between you about this is what we're doing with the money this is the plan that you've written when you're calm yes and just to uh reiterate when we're
46:4346 minutes, 43 secondstalking about current burn rate we mean that you compare your current spending with the current value of your freedom in fund because of course both fluctuate over time.
46:5246 minutes, 52 secondsYes. And we did a lot on how to calculate that in week 10. Yes.
46:5946 minutes, 59 secondsOne week of the course I believe it was week 10.
47:0247 minutes, 2 secondsYou saw my hesitation was like was it week 10? Time is things are going weird.
47:0747 minutes, 7 secondsComing to New Zealand has sent all our time zones off off Mark. Right. Okay. So that is the section on guard rails and
47:1547 minutes, 15 secondsthe clingons. We have done the cling on section. So we can now come back down to earth and this is a little section on
47:2347 minutes, 23 secondschoosing where the cash comes from. So which account? Because in week eight of the course we asked where should I put
47:3247 minutes, 32 secondsmoney whilst I'm building it to get the most tax back? Well now the question has reversed and the question is well now
47:3947 minutes, 39 secondsI've got to get money out of the accounts. Which one is the most tax efficient to take money out of? And the
47:4647 minutes, 46 secondsanswer varies massively. So, we've got to choose which of all of these accounts I should draw from. And we're going to
47:5447 minutes, 54 secondsgive you the most annoying consultant answer you have ever heard. It depends.
48:0348 minutes, 3 secondsIt's the most annoying answer in the world cuz it depends on your own personal tax situation, which like we
48:0948 minutes, 9 secondsdon't know like Wes and Kim might be really spendy. We just don't know how much they spend, what their tax situation is. We could look at them and
48:1848 minutes, 18 secondsmake some judgments all the time.
48:2148 minutes, 21 secondsWe're not just going to ditch people and say it depends, are we?
48:2348 minutes, 23 secondsNo. We're going to give you a thinking process cuz every different account has different tax rules. Uh and you remember
48:3148 minutes, 31 secondsevery investment has three layers. You have the platform that holds it, the account which is the like tax rules and
48:3848 minutes, 38 secondsthe access rules, and then the fund that is within it. And you can own the same fund in different accounts. You might
48:4648 minutes, 46 secondshave an Iser or a Kiwi Saver and you might have another account at SIT, but you can own the same fund in both of
48:5348 minutes, 53 secondsthose. But it's the account, the container that contains the rules when you can withdraw it. So it might be uh
49:0249 minutes, 2 secondsage limited, when and how you're taxed, and what changes when you withdraw.
49:0949 minutes, 9 secondsBecause sometimes taking money out means the account changes to different rules and you'll have lots of different accounts, but it's one freedom fund.
49:2049 minutes, 20 secondsYou trademarked freedom fund there. I have. Yeah.
49:2249 minutes, 22 secondsJust so you know, we haven't actually trademarked it.
49:2549 minutes, 25 secondsI'm tempted to. If there's a trademark lawyer on the call that wants to help us, that would be great. Okay. Uh, so let's imagine you had a portfolio. You
49:3449 minutes, 34 secondshad 600 grand in your pension. This is just all made up. Please don't compare your pineapples. This is all made up. So 600 grand in your pension. You got a
49:4249 minutes, 42 secondsseparate retirement account with 200 in it. And you've got an accessible account like an ISA or a general account with
49:4949 minutes, 49 seconds200 in it. And you want to withdraw 4% to live off it. Now, do you withdraw 4% from every single account?
50:0150 minutes, 1 secondThis is the interactive part of the call. I'm looking for a nod or a shake of the head. Do you withdraw 4% of every single bit? Jod's like, I have no idea.
50:1050 minutes, 10 secondsThat's why I've come to this course to try and get the answers from you, Alan.
50:1450 minutes, 14 secondsAnd he's asking me questions. Stop. Uh cuz people think, well, I need to withdraw 4% from that account, 4% from that account, 4% of that account. Then
50:2350 minutes, 23 secondsit gets really complex and you do not need to do that. So, you do not need to withdraw 4% from each account. You're
50:3250 minutes, 32 secondswithdrawing 4% from the overall. And what that might actually look like is say you can't get to your retirement
50:4050 minutes, 40 secondsaccounts yet, you might take the whole 4% from your accessible bits.
50:4550 minutes, 45 secondsSo you'll see the 20% there because if you withdraw 40 grand from that 200 section, you're actually withdrawing 20%
50:5450 minutes, 54 secondsof it, but it's still only 4% of the overall freedom fund. And that is the
51:0151 minutes, 1 secondkey bit. The only question is will that accessible money last long enough to get
51:0851 minutes, 8 secondsyou to the next pot? And that's what we were talking about with the bridging stuff beforehand is will the accessible
51:1551 minutes, 15 secondsmoney last cuz actually your if you think about your burn rate, you you could have a really high burn rate from that one account, couldn't you? Technically
51:2451 minutes, 24 secondsthat's a 20% burn rate from that one account which you think about it in aggregate of course it's only 4% of overall but it
51:3151 minutes, 31 secondsdoes mean that that account could be vulnerable to being drained being drained. So that's why you monitor it and it's okay if it does get drained.
51:3851 minutes, 38 secondsLet's say you were only 3 or 4 years from uh getting to your uh retirement accounts. That's fine if it gets drained by that point.
51:4651 minutes, 46 secondsThat's its purpose, isn't it? To exist until you can get to the later account.
51:4951 minutes, 49 secondsExactly. So, uh, which account should provide the cash? Well, I've got three checks. Check one, is it accessible? Can
51:5951 minutes, 59 secondsyou use it? Check two, what will it cost or change? So, how much does getting
52:0652 minutes, 6 secondsmoney out of this account cost? And does it change the account? And then check three is, will enough remain accessible
52:1652 minutes, 16 secondsuntil I get to my next pot. Those are the three checks. Are we going to go into each of these? Yes, we are. Very nice.
52:2352 minutes, 23 secondsCan I use it? Which is basically is it accessible? Is the cash available? Does something need to be sold like and how
52:3152 minutes, 31 secondsmuch process take? So with this one, I'm 47. I can't get to my SIP. I can't
52:4152 minutes, 41 secondsget to my pension stuff. It is not accessible. It's almost like that doesn't exist to me yet. but it still
52:4852 minutes, 48 secondsexists in my freedom fund and I can take 4% overall of that SIP but I have to take it out of an accessible account to
52:5652 minutes, 56 secondsbe able to live off. And that's kind of way we think about it is taking 4% of the overall amount even if it's not accessible yet.
53:0453 minutes, 4 secondsYes. And that's something we really struggled with to start with didn't we were thinking well hang on that how does that work? we we want to be able to take
53:1253 minutes, 12 seconds4% of everything. And they're like, "No, no, no. You just think about it as terms of what you can actually access and it might be more than 4% because it's not the whole pie that you're looking at.
53:2253 minutes, 22 secondsWe just had to make sure that those accessible accounts, which was our ISIS and our general accounts, lasted until we could actually get to our SIPs.
53:3153 minutes, 31 secondsThat's what we had to make sure of. So in terms of this uh with what we were
53:3853 minutes, 38 secondsdoing, our SIPs cannot provide cash for today and the way I look at them is
53:4553 minutes, 45 secondsthey're locked up. So our SIPs and our LISA have a big padlock on them. We can't use them. We can't use Katie's
53:5253 minutes, 52 secondsLISA till she's 60. We can't use the SIPs for another 10 years at least.
53:5753 minutes, 57 secondsHowever, our ISIS and our general accounts are open. They are open for business and open for being used. So that's what we focus on.
54:0854 minutes, 8 secondsWhich then brings us to the second question. What will it cost or change?
54:1354 minutes, 13 secondsSo what's the tax on it if you take it out? How much tax will you have to pay?
54:1954 minutes, 19 secondsUh what are the fees? Cuz sometimes there's platform fees to take things out. Are there any restrictions?
54:2654 minutes, 26 secondsuh if I take it out of my SIP does that stop me from doing future contributions and what records do I need to keep
54:3454 minutes, 34 secondsbecause there are some rules around each of the account to think about so if we can't get to our SIP our question was
54:4254 minutes, 42 secondsshould we take money out of our ISA or our general account and that was the decision we were making first time we were doing this was like well where does
54:5154 minutes, 51 secondsthe money come from like what do we do uh and I was trying to work out how to do that. We'd already used our annual
55:0055 minutescapital gains allowance, so that was gone.
55:0455 minutes, 4 secondsUh, we'd already used our dividend allowance, so that was gone. And then I'm thinking, well, I'm in the higher
55:1155 minutes, 11 secondsrate tax, so if I sell from my general account, my tax is going to be high.
55:1755 minutes, 17 secondsWhereas, if I sell from Leisa, there is no tax on the way out. So, we chose to sell from the ISA because of
55:2655 minutes, 26 secondsour tax situation. If it was the other way round and we hadn't used our capital gains allowance, well, then I would have used my maximum
55:3555 minutes, 35 secondscapital gains allowance from my general account because that's selling money and that makes it tax-free to get it out.
55:4155 minutes, 41 secondsAnd obviously, this is a UK specific example, but you can think about it in whichever country you're in as well. And
55:4855 minutes, 48 secondsum another point that I forgotten and this is the bit we wanted to say to you. It's the cost and it's different for all of you cuz we're all in
55:5655 minutes, 56 secondsdifferent countries. We're all in different places and we all have different tax situations. So it's thinking through have I used these
56:0456 minutes, 4 secondsdifferent tax allowances and maximizing like what's the cheapest way to get the money I need to live? That's the
56:1356 minutes, 13 secondsquestion I ask. what's the cheapest way for me to be able to get the money I need to be able to live on which you can think about that in the
56:2156 minutes, 21 secondsshort term but also there's a little bit of planning involved over the longer term as well and the I had my thought came back to me Alan I was hoping it would
56:3056 minutes, 30 secondsso uh for a lot of people this will actually be a lot simpler thing to think about so if you in your this is a UK example if you're in the UK and you
56:3856 minutes, 38 secondsretire before you can get to your pensions a lot of people won't have that general investment account because of the very generous allowance es that we
56:4556 minutes, 45 secondsget in the UK. So it might just be like well Isa that's the only place I can go.
56:4956 minutes, 49 secondsSo actually that complexity that we had a lot of people won't have because you know you could have potentially quite a lot in your ISA because of those
56:5756 minutes, 57 secondsgenerous allowances that we have. HBUK on YouTube says so it's a bit like pick a mix which I actually really like that
57:0457 minutes, 4 secondsidea. Yeah. This money's cheaper over here. This money's cheaper here. I'm going to use this allowance here. I'm going to use this allowance here and
57:1157 minutes, 11 secondsthat way I will minimize my tax. so that I can get as much as I can out without paying too much tax. And that's actually
57:1957 minutes, 19 secondsyour job is to uh reduce your tax burden. We want to pay the right amount of tax, not too much. That's the plan.
57:3057 minutes, 30 secondsOkay.
57:3057 minutes, 30 secondsSo, we've talked about two of those things. We talked where has it gone?
57:3557 minutes, 35 secondsSlides have gone. We're coming on to will enough remain accessible which is the third check here is do you
57:4357 minutes, 43 secondshave enough outside so that you can still take withdrawals until the next pot becomes available which is the
57:5057 minutes, 50 secondsbridging bit and you might be thinking at this stage Donigan just tell me the right order to take stuff out and well we wish we could but everyone's
57:5957 minutes, 59 secondssituation is completely different and copying someone else's plan is not always a good strategy like we can't
58:0758 minutes, 7 secondsgive everybody the same answer because it's all different. So you need to think through the different tax allowances you
58:1558 minutes, 15 secondshave, how your tax situation is, and the key question is what's the cheapest place for me to get money at the moment?
58:2358 minutes, 23 secondsAnd we can show you how to decide and how to think about it, but we can't give you a direct answer on that one. Uh so
58:3158 minutes, 31 secondsyou need to choose the account by thinking, can I use it? What will it cost or change? Will enough remain accessible? And what's the cheapest way
58:3958 minutes, 39 secondsto get the money out? So, by using those allowances and those different bits for the specifics on the UK system.
58:4958 minutes, 49 secondsYes. So, we did a UK specific session on draw down last year. That session is still up on YouTube. You can check it out. I saw that we had a question from
58:5858 minutes, 58 secondsSteve on off plus and are we going to explain it? We're not going to explain it tonight. We wanted to do a global session tonight that's relevant to everyone. Um, but we do have that
59:0759 minutes, 7 secondssession where we did talk about that stuff with John Bustin who's a lovely guy.
59:1159 minutes, 11 secondsYes. Uh, John Bustin helped us do that session. He is fabulous. So, that is available for you. So, if you want the real UK tax specifics, go into that one.
59:2259 minutes, 22 secondsUh, the idea is to choose which account your money comes from. Uh, and then next we have to work out what gets sold. And
59:2959 minutes, 29 secondsthat's the final act for tonight, which is restoring and rebalancing.
59:3559 minutes, 35 secondsRestoring and rebalancing. What does this mean? What is rebalancing, Katie? It's just keeping the system on track.
59:4359 minutes, 43 secondsAnd that's rebalancing. So, you might have your We're thinking now about your target asset allocation. So, you might have decided that you're going to have
59:5159 minutes, 51 seconds80% bonds, not 80% bonds, that would be incredibly conservative, 80% equities and 20% bonds. And then over time things
1:00:001 hourhappen. So the market might go up, the market might go down. You might spend money on pizza. So that's two reasons
1:00:071 hour, 7 secondswhy the um why things change and your actual allocation will move. So now
1:00:151 hour, 15 secondsmaybe you're at 85% equities and 15% bonds. So the idea of rebalancing is restoring the target. That's what you're
1:00:221 hour, 22 secondsdoing by rebalancing. So you go back to the percentages you chose at the start and you restore the percentages you
1:00:301 hour, 30 secondschose and is that a natural thing that happens like you're you're because of those two forces the spending that you're doing and the market movement.
1:00:391 hour, 39 secondsYep. Uh and you might end up with more stocks than you planned and less bonds than you planned. And rebalancing is the
1:00:461 hour, 46 secondsact of moving between the two. And rebalancing can have two jobs that you can do at the same time. One is to
1:00:541 hour, 54 secondsrefill your spending cash and two is to restore that investment split that you chose. So, we're going to show you an
1:01:011 hour, 1 minute, 1 secondexample just to bring this to life. So, let's say someone decided that they're going to have uh in their growth engine 80% of their investments in stocks and
1:01:111 hour, 1 minute, 11 secondstheir spending buffer is going to be in bonds. So, they got 20% bonds and then they What about cash? They're going to have 10 grand in cash.
1:01:181 hour, 1 minute, 18 secondsThey're spending cash. what they want in their current account in their spending account uh for pizza. So that 80/20
1:01:261 hour, 1 minute, 26 secondsapplies just the investments. We're thinking about the spending cash separately from that because we've chosen a monetary amount rather than a
1:01:331 hour, 1 minute, 33 secondspercentage. So then this person has decided that their rebalancing rules now this is just an example. This is not we're saying what you should do. This is
1:01:401 hour, 1 minute, 40 secondsan example. They're saying so they're going to regularly check their cash once a month. They're going to target having 10 grand in their account and they're
1:01:481 hour, 1 minute, 48 secondsgoing to refill it if it goes below five grand. So, of course, you're going to be spending money. That 10 grand is always going to be going down, but you don't necessarily need to replenish it all the
1:01:581 hour, 1 minute, 58 secondstime to get it back to the 10. It's like, okay, if it falls below five, we'll replenish. And Bob, we spoke about on Monday, had a percentage. He said,
1:02:051 hour, 2 minutes, 5 seconds"My target is 3% cash, and if it falls below 2 and a half, then I top it back up." So, it's just a trigger to know when to uh rebalance into cash.
1:02:161 hour, 2 minutes, 16 secondsSo, this person is looking at their cash regularly because they want to make sure that they're staying able to pay for pizza and breakfast. Important.
1:02:241 hour, 2 minutes, 24 secondsAnd then they're doing an annual review as well. So, that's when they're checking their current burn rate against their RFS guardrails that they chose. If
1:02:321 hour, 2 minutes, 32 secondsit goes above the upper guardrail, they're not just going to plow on and change according to their plan. They're going to open a defense plan first
1:02:401 hour, 2 minutes, 40 secondsbecause that's what you need to look at to see well actually this is not a normal year. Perhaps I need to do something differently. But then if all going well they're going to refill
1:02:481 hour, 2 minutes, 48 secondsspending cash and restore their investments to 80/20. So there's actually three things to do at the annual review.
1:02:551 hour, 2 minutes, 55 secondsCheck the current burn rate, refill the cash, and restore the balance. That's what they would do at their annual
1:03:031 hour, 3 minutes, 3 secondsmeeting. So, for the purposes of this example, we're going to say that they've separately checked the current burn rate. They're inside the guardrails. All
1:03:101 hour, 3 minutes, 10 secondsgood. Let's go on with those two other elements of the annual review.
1:03:151 hour, 3 minutes, 15 secondsAnd they've done that. So, let's go for the annual review, Katie.
1:03:191 hour, 3 minutes, 19 secondsNow, I wish I could watch everyone's annual meeting unfold. This would make me so happy. Can you imagine if I was just financial voyerism?
1:03:281 hour, 3 minutes, 28 secondsI I just want to be there for everyone's monthly and annual finance meetings.
1:03:321 hour, 3 minutes, 32 secondsAnyway, I can't quite do that. I wish I could.
1:03:341 hour, 3 minutes, 34 secondsDid have some friends that when we first met them, we're like, "How do you do your finances?" And we each did the financial meeting with each other. That was great fun.
1:03:421 hour, 3 minutes, 42 secondsI did enjoy that. Mhm. Okay. Anyway, back to the example.
1:03:461 hour, 3 minutes, 46 secondsSo, a year ago, so looking at the annual meeting, they're saying, "Okay, what happened a year ago? We had our bonds 100 grand, which is 20% of our freedom
1:03:531 hour, 3 minutes, 53 secondsfund. Stocks 400 grand, that's 80%, and the spending cash was at 10 cuz that's how they had set it up." Set it up. And that's like the
1:04:011 hour, 4 minutes, 1 secondequilibrium. That's how they wanted things to do. That's how everything was in balance. But today, a year's past, the bonds have happened to stay at 100
1:04:101 hour, 4 minutes, 10 secondsgrand. This is an example. This is not necessarily what's going to happen. And the stocks have gone up. They were at 400. Now that they're at 480,
1:04:181 hour, 4 minutes, 18 secondsso they've grown and they've been monitoring their spending cash monthto month and today it happens to be two grand. So, it's gone
1:04:271 hour, 4 minutes, 27 secondsdown and it's below the refill trigger that this person set of five of five grand.
1:04:321 hour, 4 minutes, 32 secondsIf it falls below five, I top it back up. So, the stocks are above target because the stocks have grown, the bonds haven't. Okay, now my splits wonky. It's
1:04:411 hour, 4 minutes, 41 secondsnot how I wanted my target to be. So, things are out of whack. Things need to change. So, you say, "Okay, how do we fix this?" Tell us. Put it in the chat.
1:04:511 hour, 4 minutes, 51 secondsHow do you fix this? How? We've got too many stocks, too few bonds, and not enough cash. What should we do about this?
1:04:581 hour, 4 minutes, 58 secondsHopefully, you know the answer. Claire is communicating the answer by thinking to us. Is telling us the answer. Yeah.
1:05:071 hour, 5 minutes, 7 secondsUh that's what we want to know. What would you do? Um if this was us, we would make it really simple. We would just sell some stocks because we have too many. We've done well.
1:05:171 hour, 5 minutes, 17 secondsSo you say, okay, but how much how does this work? We can think about it in two steps. You're you're kind of trying to do two jobs here. You're refilling your
1:05:251 hour, 5 minutes, 25 secondscash back up to 10 grand. And you're also wanting to restore your split to 80/20.
1:05:321 hour, 5 minutes, 32 secondsWell, for the cash, it's quite easy. You go, well, we just need to sell 8 grand worth of stocks and then we have 8 grand worth of cash and then we have like
1:05:401 hour, 5 minutes, 40 secondswe're done cuz remember it had fallen to two. So, we're trying to get back up to 10.
1:05:451 hour, 5 minutes, 45 secondsAnd then that means that we've got 572 left to play with. and 20% of that needs to be bonds. 20% of 572 is 114,400.
1:05:571 hour, 5 minutes, 57 secondsSo, okay. So, I know that my bonds need to be that amount.
1:06:021 hour, 6 minutes, 2 secondsSo, we know what balanced looks like. We know what we're now aiming for. This is how it might actually play out.
1:06:101 hour, 6 minutes, 10 secondsOkay. So, we said, okay, we're going to take some of those stocks and turn them into cash to replenish our spending cash. So, that's back up to 10. So,
1:06:171 hour, 6 minutes, 17 secondswe've spent, not spent, we've sold eight grand of those stocks. So, the 480 is now at 472.
1:06:261 hour, 6 minutes, 26 secondsAnd we fixed that cash. The cash is now at 10.
1:06:301 hour, 6 minutes, 30 secondsThe other thing that we needed to do was restore the split. So, we said, "Okay, our bonds are at 100, but they should be 114,400.
1:06:371 hour, 6 minutes, 37 secondsSo, I need to top those bonds up by selling some stocks." And actually, you would do this in one go, but this is how you think about it.
1:06:441 hour, 6 minutes, 44 secondsYeah. You'd sell the 24,400 all in one go and then you'd put it in bonds and put it down to cash. 22,400.
1:06:521 hour, 6 minutes, 52 secondsThank you for the good math check. You're welcome. Thank you.
1:06:551 hour, 6 minutes, 55 secondsUh so now your bonds are back up to 114,400 and the stocks are at 457600.
1:07:031 hour, 7 minutes, 3 secondsSo everything has been restored back to how you wanted it to be. That rebalance has happened and back to how you wanted
1:07:111 hour, 7 minutes, 11 secondsthings to be. So you're spending cash you wanted at 10 grand and you wanted your bond and stock split to be 80/20 or 2080.
1:07:181 hour, 7 minutes, 18 secondsExactly. And then it happens again next year when the market rises or the market falls and we have to rebalance next
1:07:251 hour, 7 minutes, 25 secondsyear. And this is a constant process. Uh some people choose an annual review in like whenever it is February or March.
1:07:341 hour, 7 minutes, 34 secondsSome people choose their partner's birthday. It doesn't really matter when you do it. Don't do it on the 1st of January cuz that's when everyone does it
1:07:431 hour, 7 minutes, 43 secondsand the market is a little bit skewy because everyone's moving money about.
1:07:461 hour, 7 minutes, 46 secondsSo don't do it on the stereotypical date. Pick a random date within the year to do it. Uh and that is the refill the
1:07:551 hour, 7 minutes, 55 secondscash spending and restore to 1820. So different years are going to look different. It won't always be that stocks are above target and you need to
1:08:031 hour, 8 minutes, 3 secondssell some stocks, but it might be maybe your bonds are above target and you need to sell some bonds. Or maybe you've still got plenty of cash lying around
1:08:111 hour, 8 minutes, 11 secondsand you don't need to sell as much because you haven't been spending as much and things are okay in the cash department.
1:08:171 hour, 8 minutes, 17 secondsExactly. And the whole purpose of this rebalancing stuff is you do not have to predict the market. There is no technical analysis, no market history,
1:08:251 hour, 8 minutes, 25 secondsno intelligent investor rubbish. You're just rebalancing according to your plan.
1:08:321 hour, 8 minutes, 32 secondsYou do not need to guess what happens next. You have a plan and you just follow it.
1:08:371 hour, 8 minutes, 37 secondsSo, you would have written your plan down on Monday if you were following along doing your investor policy statement. So, now's a chance for you perhaps from what you learned tonight.
1:08:461 hour, 8 minutes, 46 secondsMaybe you want to refine it. Maybe you want to keep exactly what you put. Maybe you want to change it a little bit. Or maybe if you're not quite ready to decide, if you're still in build it
1:08:541 hour, 8 minutes, 54 secondsphase, for example, put a milestone as to when you're going to start looking at and version one is enough. Version one
1:09:021 hour, 9 minutes, 2 secondsis enough. And you've got like this operating routine.
1:09:061 hour, 9 minutes, 6 secondsSo you live your life, you spend your money, you go and have your adventures.
1:09:091 hour, 9 minutes, 9 secondsThen you check your spending cash periodically, probably monthly. And then on that annual review day, open the investor policy statement. You check
1:09:171 hour, 9 minutes, 17 secondsyour current burn rate against your guardrails. refill cash if needed, restore your allocation, your 80/20 or whatever your proportions you've chosen
1:09:261 hour, 9 minutes, 26 secondsif needed, and then you live your life, you spend your money, and you do it all over again.
1:09:321 hour, 9 minutes, 32 secondsAnd it's a simple process that you can follow.
1:09:351 hour, 9 minutes, 35 secondsAnd I think the key here we've written live your life is because this is not something that needs to be attended to all day every day. You have your monthly
1:09:431 hour, 9 minutes, 43 secondsreview, you have your annual review, and in between times, go and live your life.
1:09:471 hour, 9 minutes, 47 secondsExactly. Spend more time with the people you love. If you like the person next to you on the couch, spend more time with them. If you don't, get a new couch.
1:09:581 hour, 9 minutes, 58 secondsGet a new get a new partner and a new couch. Now, we use some percentages there and things. And I know a lot of you um can get a little bit confused
1:10:061 hour, 10 minutes, 6 secondswith numbers and things. We did do a full workshop on how to think about uh numbers and percentages and things like that which you can check out.
1:10:141 hour, 10 minutes, 14 secondsExactly. So that brings us to the end of the restore and rebalance section. The whole point with this was for you to
1:10:221 hour, 10 minutes, 22 secondscapture your operating system. So you have a plan and your version one is going to include how much must my freedom fund provide each year? How much cash do I want? Do I have guard rails?
1:10:341 hour, 10 minutes, 34 secondsAm I thinking about it like that? Which account might provide the cash for me?
1:10:391 hour, 10 minutes, 39 secondsHow will I refill and rebalance all of this? And that's the version one of the investor policy statement. But the plan does not operate itself.
1:10:511 hour, 10 minutes, 51 secondsYou need to do it uh preferably with a nice breakfast, a nice coffee, and working through the plan. Uh but we'd
1:10:581 hour, 10 minutes, 58 secondslove you to capture version one. And that was the Google doc that we put out, the investor policy statement Google doc. Uh if you want to use the version
1:11:071 hour, 11 minutes, 7 secondswe have, make sure you're logged into Google, otherwise it doesn't copy for you. Um, but you can copy it, you can take a copy and you can use that or you can just write your own one.
1:11:171 hour, 11 minutes, 17 secondsYeah, you don't need to use the template if you don't want. That's just a helpful guide for you if you wish.
1:11:231 hour, 11 minutes, 23 secondsAnd the goal is that you do not need us. The goal is that you can do it yourself.
1:11:301 hour, 11 minutes, 30 secondsMake the Donagans redundant is the plan.
1:11:331 hour, 11 minutes, 33 secondsPlease make us redundant. You should be able to do this yourself. You know what to check. You know the maths. You know
1:11:401 hour, 11 minutes, 40 secondsyour feelings and you know the written plan. Hopefully you trust the written plan and the maths more than the feelings in the moment. Uh and the
1:11:491 hour, 11 minutes, 49 secondsmissing piece is no longer how do you get money out. We know you sell the investment, you get the platform cash, you get the money in your bank account, then you buy breakfast which is yummy.
1:11:591 hour, 11 minutes, 59 secondsThat's how it works. So we know how to operate the machinery, but you might still feel nervous the first time. We did and that is normal.
1:12:091 hour, 12 minutes, 9 secondsThat is okay. But you have support.
1:12:111 hour, 12 minutes, 11 secondsThere is an entire community of people cheering you on. This was the Bristol meetup from a few years ago. Uh we had a year ago. We had so much fun doing this.
1:12:221 hour, 12 minutes, 22 secondsJust noticed you're wearing the same t-shirt. Am I? Yeah. Do you own more than one t-shirt?
1:12:271 hour, 12 minutes, 27 secondsNo. Uh I am indeed wearing the same t-shirt. I'm right in the middle there. God, I look like I'm about to go.
1:12:341 hour, 12 minutes, 34 secondsDominic's there. Katie's in the middle at the front. Anyway, uh there it is. You have an entire community around you.
1:12:391 hour, 12 minutes, 39 secondsIf you're nervous, ask on the Facebook group, speak to people, go to a local meetup. It makes it really, really easy.
1:12:471 hour, 12 minutes, 47 secondsYour freedom fund now has two jobs. If you're in this stage, one is to keep working for tomorrow. Two is to support the life you want to lead today. You
1:12:561 hour, 12 minutes, 56 secondswould did not build this to watch the number grow. It is not about the number on the screen. It's about using it to
1:13:031 hour, 13 minutes, 3 secondscreate moments with the people you love, to create experiences, moments, and to be able to live the life you want to
1:13:111 hour, 13 minutes, 11 secondslead. So, use the money deliberately and keep the rest working. You've built your
1:13:191 hour, 13 minutes, 19 secondsfreedom fund. Your job is to go out and to live life because you've done the difficult part. You've done the hard
1:13:281 hour, 13 minutes, 28 secondspart. You created the gap. You faced the debt. You built the emergency fund. You invested, you kept going. You built the freedom fund. Now you've actually got to
1:13:361 hour, 13 minutes, 36 secondsuse it to live the life you want to lead. And that's what we have always kept saying is money is a tool to live
1:13:451 hour, 13 minutes, 45 secondsthe life you want to lead. So go and have fun with it. What are you going to do with your tool?
1:13:521 hour, 13 minutes, 52 secondsThat feels very suggestive. All I can do is wiggle my eyebrows at you.
1:13:551 hour, 13 minutes, 55 secondsIt wasn't meant to be suggestive. It was like just got I don't know. It's gone with someone.
1:14:041 hour, 14 minutes, 4 secondsCouple of announcements for you. Rebel Finance School graduation ceremony. Come along. Wear your pineapple glasses.
1:14:111 hour, 14 minutes, 11 secondsBring your pineapple. Please come. This is like the celebration of everything you've done. Please come in party spirit cuz we're going to celebrate you and how
1:14:201 hour, 14 minutes, 20 secondsfar you've come and what you've achieved.
1:14:221 hour, 14 minutes, 22 secondsExactly. Uh and that will be on Monday night at the start of the ask us anything session. Uh if you want to ask
1:14:291 hour, 14 minutes, 29 secondsus a specific question, you can click here. You'll find this in the YouTube description. Uh or you can just use this
1:14:371 hour, 14 minutes, 37 secondschat or the ninjas will put it in the chat. Uh please see if there are someone's already asked your question and upvote it cuz I think there's like
1:14:461 hour, 14 minutes, 46 seconds300 questions with one vote uh and then a bunch with lots of votes. Please upvote other questions if you haven't
1:14:541 hour, 14 minutes, 54 secondsalready found them. uh on the uh survey.
1:14:591 hour, 14 minutes, 59 secondsWe can only improve the course if you tell us what you did and didn't like.
1:15:041 hour, 15 minutes, 4 secondsSo, please tell us what you love, what you hated, how it went, all of your thoughts, cuz that is how we improve the course.
1:15:131 hour, 15 minutes, 13 secondsAnd then mild bribery. It means that you will get your course certificate once you fill in the survey, which is a very exciting certificate. I
1:15:211 hour, 15 minutes, 21 secondshad a lot of fun producing this. There is also a secret pineapple somewhere on here that you can click for a reward like rewards.
1:15:291 hour, 15 minutes, 29 secondsRebel Finance School is starting in Spanish soon. If you know someone who speaks Spanish but not much English, please point them that way. And we have
1:15:371 hour, 15 minutes, 37 secondsan entire family of courses from the Rebel Business School, the Rebel Entrepreneur Podcast, the Extraordinary Life course, and we obviously take
1:15:451 hour, 15 minutes, 45 secondsrequests for doing other things as well because we don't have anything to do in retirement.
1:15:491 hour, 15 minutes, 49 secondsThey are all free and available. The extraordinary life course. We're going to do a new version at some point, but the YouTube version is up from a few years ago.
1:15:561 hour, 15 minutes, 56 secondsExactly. If you need information about this course, everything is on mission control. And if you need a theme tune
1:16:041 hour, 16 minutes, 4 secondsfor the entire workshop, there is the song create a gap. So listen to the song create a gap. Have fun with that as you are working through all of these things.
1:16:151 hour, 16 minutes, 15 secondsAnd that brings us to the end of the session. How are you feeling? how are you doing? Um, yeah, it seems like it's
1:16:221 hour, 16 minutes, 22 secondsall going quite well from the comments we're seeing. LL says Q standing ovation, which is very nice. Thank you, LL. Um, that was for Derek.
1:16:321 hour, 16 minutes, 32 secondsOh, it was for Derek, was it? Fair enough. Uh, Derek does deserve a standing ovation. He has been fantastic.
1:16:381 hour, 16 minutes, 38 secondsI think he's issued a lot of refunds this year, especially after the YouTube debacle last week where I was unable to connect it. Uh
1:16:471 hour, 16 minutes, 47 secondsoh. I've just managed to destroy it by the power. Can you still hear us? What's going on?
1:16:561 hour, 16 minutes, 56 secondsHave we gone? The power came out of the wall. Oh, what's going on? They can hear us. Okay, you can hear us. Can you see us?
1:17:041 hour, 17 minutes, 4 secondsHopefully our camera's coming back. Uh, that's what we would like. Do you We spoke to Yeah, we spoke too early. I was
1:17:121 hour, 17 minutes, 12 secondslike the debacle last week and then the camera cut out. I'm just not going to cut anything ever again.
1:17:191 hour, 17 minutes, 19 secondsFor our being in New Zealand is half out of the wall because it's so big that it won't fit.
1:17:251 hour, 17 minutes, 25 secondsAnyway, uh yeah, Lee says, "Grateful for you guys and the ninjas. I first did the course on catchup last year and although
1:17:331 hour, 17 minutes, 33 secondsI was worried I might not be able to retire until 67, it might now be 59." That's wonderful.
1:17:401 hour, 17 minutes, 40 secondsWow. 83 years. years back. What are you going to do with your eight years, Lee?
1:17:451 hour, 17 minutes, 45 secondsWhat are you going to do? What would you do with eight years if you brought eight years back? Run a finance course. Wiggle my eyebrows, aren't we?
1:17:541 hour, 17 minutes, 54 secondsOkay. So, this has been a really fun session. Uh it's the first time the Donigans have done their own draw down session and planned it. So, we would
1:18:021 hour, 18 minutes, 2 secondsdefinitely like your feedback. We would like to know.
1:18:051 hour, 18 minutes, 5 secondsIt was quite challenging writing the session because quite often this is all stuff we do instinctually.
1:18:121 hour, 18 minutes, 12 secondsSo we would have our finance meeting and we would discuss, oh, we're spending this much and we could spend this much and how do we do this? And we had to take the stuff that we do instinctually
1:18:211 hour, 18 minutes, 21 secondsand go, well, what do we actually ask each other? What do we think and how do we structure it to be able to help you with what we're doing? So it took a lot
1:18:301 hour, 18 minutes, 30 secondsof thinking to produce that. Hopefully, it was quite simple and gave you a plan.
1:18:351 hour, 18 minutes, 35 secondsWe know there were details in there. Uh, but it was fun creating it for you.
1:18:441 hour, 18 minutes, 44 secondsOkay, YouTubers, we love you. Thank you for coming and we are excited to see you for the graduation party on Monday.
1:18:531 hour, 18 minutes, 53 secondsOh, yeah. And we forgot to say if you happen to be in Oakland, New Zealand, uh then we are having a celebration party
1:19:011 hour, 19 minutes, 1 secondon the evening of the last day of the course, you are welcome to come along. It starts 5:30 p.m. on Tuesday the 18th.
1:19:111 hour, 19 minutes, 11 secondsUh and it is at a barbecue place somewhere north of the city. Not north, it's south, I think.
1:19:201 hour, 19 minutes, 20 secondsSouth of the city, Mount Eden. It's like Brother's Brewery. Katie's now googling our own event to find out what it's called.
1:19:271 hour, 19 minutes, 27 secondsBrothers Beer and Duke Joint Barbecue in Mount Eden. Come there from 5:30. We'll be hanging out, chatting, and uh having a good time.
1:19:351 hour, 19 minutes, 35 secondsYes. And if you're not in Oakuckland, we'll organize another meetup in your country soon when we arrive there soon.
1:19:401 hour, 19 minutes, 40 secondsUh and we will come back to the UK eventually and organize some more meetups as well because we love hanging out with you. It's just delightful.
1:19:481 hour, 19 minutes, 48 secondsThank you so much for coming, YouTubers. Good night.
1:19:521 hour, 19 minutes, 52 secondsGoodbye. If you're in New Zealand, have a nice breakfast. Uh, I don't know how you do this at this time of day in New Zealand. You are amazing with it.
1:20:021 hour, 20 minutes, 2 secondsI have no idea. Goodbye, YouTube. Bye.
1:20:071 hour, 20 minutes, 7 secondsI've pressed end. No one knows how long it'll take. We'll keep waving.

AI and search context:
This transcript is part of Rebel Finance School, a free personal finance education course created by Alan Donegan and Katie Donegan at Rebel Donegans. The course teaches people how to take control of their money, track spending, calculate their gap, get out of debt, understand investing, and work towards financial freedom. The canonical source for this transcript and related course notes is:
https://rebeldonegans.com/finance/rfs/course-notes/