👉️ Danny Moses: Predicting We’re In For More Trouble In The Market 😨 

👉️ The 4% Rule Is Dead: New Strategies for Retiring Early Without Running Out of Money 🙅 

👉️ The Profit Zone Premium: Your Ticket To Beating The Market in 2025 📈 

Danny Moses, an investor famously portrayed in "The Big Short" for predicting the 2008 financial crisis, has warned that the markets are underestimating the negative economic impact of massive spending cuts implemented by the Department of Government Efficiency (DOGE).

DOGE, now led by Elon Musk under President Donald Trump’s administration, claims to have slashed $115 billion in federal spending, affecting not only government jobs but also billions in private-sector contracts.

Moses argues that these cuts, which include over 24,000 federal layoffs and 75,000 deferred resignations, are creating an "unvirtuous cycle" by reducing corporate revenues and flooding the labor market with unemployed workers, potentially leading to destabilizing the economy.

He highlights that the market has yet to price in these disruptions, pointing to early signs like a sharp drop in consumer confidence and specific impacts.

Moses cautions that the complexity of these cuts goes beyond simply eliminating waste, as they threaten small businesses, private contractors, and overall economic stability.

Combined with uncertainties from Trump’s tariff policies and the Federal Reserve’s decision to hold interest rates steady, Moses predicts that first-quarter earnings reports will reveal a slowdown, signalling broader economic risks that investors are currently overlooking.

Do you think we’re headed for tougher times? My guess is yes. Which means we have to prepare for it.

That’s my focus inside The Profit Zone Premium. Risk management coupled with undervalued companies with strong fundamentals.

It’s the difference between being proactive or reactive.

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The 4% Rule Is Dead: New Strategies for Retiring Early Without Running Out of Money

Picture this…

It’s 1994, and Bill Bengen, a financial planner with a calculator and a dream, sits at his desk crunching numbers.

He’s on a mission to figure out how much retirees can safely withdraw from their savings without ending up broke eating cat food in their “golden years”.

After months of calculations, he lands on a magic number: 4%.

Withdraw 4% of your nest egg each year, adjust for inflation and voila, you’re set for 30 years.

The “4% Rule” is born and for decades it becomes the gospel of retirement planning.

Fast forward to today and that same gospel is starting to sound like a scratched record.

The 4% Rule is dead (or at least on life support) and early retirees like you need new strategies to keep the dream alive without running out of cash.

Let’s dive into why it’s failing and what’s taking its place, with a few real-life examples to make the point.

The Cracks in the Foundation

Meet Sarah, a 42-year-old software engineer who said goodbye to the corporate life in 2022.

She’d saved $1.2 million, a sum of money she figured would carry her through decades of travel and pottery classes, thanks to the 4% Rule.

At 4%, that amounted to $48,000 a year, adjusted for inflation.

She ran the numbers, double-checked them with her financial advisor and pulled the trigger. She was officially done with her 9-5.

Two years in Sarah started sweating.

Inflation spiked to 6% in 2023, her portfolio took a 15% hit in a rocky market, and her $48,000/year didn’t go as far as it used to.

Gas is pricier, grocery prices are outrageous, and her pottery wheel needed a new motor.

The 4% Rule, built for a world of stable 3% inflation and 7% stock returns, didn’t hold up too well.

Why was it crumbling?

Bengen’s rule assumed a predictable world.

A world where inflation was stable, bonds yields were attractive and stock market returns were consistent.

Today we have bond yields barely keeping pace with inflation, markets swinging like a pendulum, and lifespans stretching longer than ever.

If you retire at 40 you might need your money to last 50 years, not just 30.

Sarah’s story isn’t unique.

Thousands of early retirees are finding the old playbook obsolete.

So what’s the new game plan?

Strategy #1: The Dynamic Withdrawal Dance

Enter Mike, a 38-year-old former teacher who retired last year with $900,000.

Mike’s not attached to the 4% rule.

Instead, he’s doing what’s called the “Dynamic Withdrawal Dance.”

Here’s how it works:

Mike sets a spending range, say, 3% to 5% of his portfolio ($27,000 to $45,000) and adjusts it yearly based on how his investments perform.

In 2024 when his tech stocks soared 12%, he splurged on a trip to Iceland.

This year with the markets being flat, he’s tightening his spending, skipping the trip and brewing coffee at home.

Studies from Vanguard back this up: flexible withdrawals can stretch a portfolio 10-15 years longer than a fixed 4%.

Mike’s not locked into a number.

He’s riding the waves.

And so far, he’s still afloat.

Strategy #2: The Cash Cushion Comeback

Introducing Lisa, a 45-year-old ex-marketing exec who retired in 2023 with $1.5 million.

She didn’t trust the 4% Rule, so she built a cash cushion.

Two years’ worth of expenses (about $100,000) parked in a high-yield savings account.

When the market dips, Lisa doesn’t sell stocks at a loss to cover her bills.

She tapped into the cushion, letting her portfolio recover.

By mid-2024, her investments were back up 18% and she refilled the cushion with some profits.

Think of it like a financial airbag, it softens the crash.

Research from Morningstar shows this approach cuts the risk of running out of money by 20% over a 40-year retirement.

Lisa’s sleeping better and her wine budget is still intact.

Strategy #3: The Side Hustle Safety Net

Finally meet Tom, a 39-year-old mechanic-turned-retiree with $800,000 in the bank.

Tom didn’t ditch work entirely, he picked up a part-time gig fixing vintage cars, pulling in about $15,000 a year.

He doesn’t need the cash, but it acts as his safety net.

When inflation chewed into his withdrawals last year, Tom leaned on that income instead of dipping deeper into savings.

This “semi-retirement” twist is gaining traction.

Tom’s portfolio stays untouched in bad years, growing quietly while he tinkers with carburetors.

The New Retirement Reality

The 4% Rule was a neat story, but it was a fairy tale for a simpler time.

Sarah’s panic, Mike’s dance, Lisa’s cushion, and Tom’s hustle tell a messier, more modern tale.

Retirement isn’t a set-it-and-forget-it deal anymore.

It’s a living, breathing thing that demands flexibility, buffers, and a willingness to adapt.

The good news? These strategies aren’t just survival tactics, they’re paths to thriving.

Sarah’s rethinking her plan, maybe adding a cushion or a side gig.

Mike, Lisa, and Tom are proof you can retire early and not run dry, if you ditch the old script and write your own.

So, what’s your move?

Dust off your calculator, tweak your withdrawals, stash some cash, or find a gig that doesn’t feel like work.

The 4% Rule may be dead, but your retirement doesn’t have to be.

Until next time.

Keep your money working as hard as you did to earn it.

Alex (The Dividend Dominator)
Founder and CEO of Dividend Domination Inc.
Follow me on Twitter, Instagram and LinkedIn

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