You've heard them all over social media: the 50/30/20 budget, the "100 minus your age" investing rule and the 4% retirement rule. They're great starting points, but they were built for median earners. Once your income grows, following them blindly can cost you millions. In this episode, I break down all three rules, show why they work at an average income, and explain how to adjust them (or break them) once you're earning six figures and beyond. I use a real-world example: Joe, a Canadian making $120k who jumps to $500k. In this episode: (00:00) Why personal finance rules of thumb aren't one-size-fits-all (00:37) Rule 1: The 50/30/20 budget, and why high earners should flip it (06:26) Rule 2: "100 minus your age" and what really drives your asset allocation (11:13) Rule 3: The 4% rule and the taxes, pensions and time horizon it ignores (14:05) The big takeaway: learn when to break the rules Want a plan built for your situation instead of a rule of thumb? Work with Sam: https://mwadvisors.ca/?utm_source=podbean&utm_medium=podcast&utm_campaign=money-rules Watch on YouTube: https://youtu.be/gjOQg8RHERk Sources Statistics Canada, Quarterly Rent Statistics (Q1 2026): https://www150.statcan.gc.ca/n1/daily-quotidien/260609/dq260609c-eng.htm Statistics Canada, Survey of Household Spending (2023): https://www.statcan.gc.ca/o1/en/app/8094-survey-household-spending-2023 Statistics Canada, SHS 2023 (The Daily): https://www150.statcan.gc.ca/n1/daily-quotidien/250521/dq250521a-eng.htm Brinson, Hood & Beebower (1986), "Determinants of Portfolio Performance": https://www.tandfonline.com/doi/abs/10.2469/faj.v42.n4.39 Fama & French (1993), "Common Risk Factors in the Returns on Stocks and Bonds": https://www.bauer.uh.edu/rsusmel/phd/Fama-French_JFE93.pdf Bengen (1994), "Determining Withdrawal Rates Using Historical Data": https://web.archive.org/web/20120417135441/http://www.retailinvestor.org/pdf/Bengen1.pdf Important disclosures This episode is produced by Sam Lichtman for educational and informational purposes only. Nothing in it constitutes investment, tax, legal, insurance, or financial advice, an offer or solicitation, or a recommendation to buy, sell, or hold any security or to adopt any investment strategy. Information is general in nature, may not apply to your circumstances, and should not be relied upon as advice. Consult a qualified professional about your own situation before making any decision. Investing involves risk, including possible loss of principal. Mutual funds are offered through Portfolio Strategies Corporation ("PSC"), a member of the Canadian Investment Regulatory Organization (CIRO). Sam Lichtman is an Approved Person of PSC. Financial planning and insurance services, where mentioned, are business activities separate from PSC. Commissions, trailing commissions, management fees, and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed and their values change frequently, and past performance may not be repeated. Any planning illustrations use FP Canada's Projection Assumption Guidelines and are hypothetical illustrations, not a guarantee or prediction of future results. Any opinions expressed are those of the speaker as of the date of recording and are subject to change. This communication is intended for residents of the Canadian provinces in which Sam Lichtman and Portfolio Strategies Corporation are registered.
