What’s the Safe Withdrawal Rate for Retirement?

Ben Carlson (0:01)

Welcome to Ask The Compound, the show where you ask and we answer. I am Ben Carlson. The hyperscalers are expected to spend more than $1 trillion annually, from now until the end of the decade, building out the infrastructure for AI. It's a lot of money. They burned through all their free cash flow, so now they're forced to take on debt to fund this build out. AI-related debt issuance could reach as high as $570 billion this year alone. Also a lot of money. Debt will likely keep rising unless they get a very fast ROI on all these catbacks. Those debt levels are ballooning while interest rates are rising. That makes for a higher hurdle rate to create God inside of a computer. So will AI debt destroy the stock market and the economy? We're going to answer these questions and more on today's show.

Our email here is askthecompoundshow.gmail.com. Keep those emails coming. New all-time highs and questions about bonds this week.

Bonds, bonds, bonds. For like two to three weeks in a row, it's been all bonds. That 5% yield, something about round numbers, I think, that just gets people going.

Duncan Hill (1:03)

And that's always consistent with a bubble in the market, right? People talking about bonds.

Ben Carlson (1:08)

Yeah, it's a bond bubble, right? It's got to be. Hey, thank you from the chat. Nice jacket, Ben. Thank you. I told the guys before we got on here, bomber jacket. It's not a season. It's a lifestyle.

Today's show is sponsored by Fitnexa.

Fitnexa SomniPods 3, which I'm wearing right now. I love these earbuds. Duncan, last week, you said that you give us a Paul McCartney song to test sound quality. I want to know if you have any other songs that test sound quality that people can try them on.

Duncan Hill (1:34)

I have an album, Dark Side of the Moon.

Ben Carlson (1:37)

Okay.

Duncan Hill (1:37)

I always test out. Yeah, listen to it.

Ben Carlson (1:39)

Play it in reverse, and it says Paul is dead.

Duncan Hill (1:41)

Okay.

Ben Carlson (1:41)

I was on a plane yesterday, and beautiful city in Montreal. On the way home, I had two business traveling guys that you see on every flight who talk very loudly about all the cities they go to on business trips, right? Your favorite airports, the least favorite airports, the guys that love to talk on the plane. Well, I can't stand when people have a conversation so loud that everyone else can hear them. So what did I do? I just want to read my book in peace, peace and quiet. So what did I do? I took my Fitnexa, SomniPod 3, put them in, put on some music, and I drown out the noise, right?

It was lovely. I avoid listening to any more of their conversation.

Perfect. They fit in nice and easy. Great for airport because I love to also put in my earbuds in the airport while I'm walking around listening to a podcast, getting some steps in because you're sitting for so long in an airplane. These are great. Perfect for this. And right now, if you go to fitnexa.com, you can get $10 off your first pair by using ATC 10 at checkout. Just put an ATC 10 at checkout, fitnexa.com.

Duncan Hill (2:37)

When I mentioned to you on the way back from Future Proof, I used them on the plane to edit some audio, which is something you usually can't do on a plane.

It's not advisable. Because you got to hear it. Good, right? Yeah.

Ben Carlson (2:48)

Yeah.

Duncan Hill (2:48)

Yeah, but it worked well.

Ben Carlson (2:50)

All right. In the chat, they're saying, Ben, coach from Stitch Fix? This is from Stitch Fix.

Duncan Hill (2:53)

It is. Oh, my God.

Ben Carlson (2:56)

My own personal. That's like my AI.

Duncan Hill (2:58)

You love Stitch Fix.

Ben Carlson (3:00)

Yeah, I do. I'm the only one who uses them. The stock is still down 90 percent.

Duncan Hill (3:03)

All right. Call us Stitch Fix. All right.

Ben Carlson (3:07)

Let's do it.

Duncan Hill (3:08)

Up first today, we got one from Mikhail, I think. Is that how you say it?

Ben Carlson (3:13)

Yeah, I think this must be a foreign one.

Duncan Hill (3:15)

Yeah, Mikhail. I'm going to go with Mikhail. I always hear about the 4 percent rule and how you should take 4 percent from your portfolio each year and add for inflation going forward. Would it be better to start at 4 percent and just take 4 percent of the existing portfolio going forward with maybe a limit to the upside in really good years?