Always Come Back to the Why | Alan and Katie Donegan | Ep 569

What It Covers

Alan and Katie Donegan from Rebel Finance School discuss their financial independence journey, revealing they retired in 2019 with $1 million invested and now have $2.6 million after six years of traveling and spending. They share their monthly finance meeting process, withdrawal strategies, and how they maintain flexibility while living off their portfolio.

Key Questions Answered

• •Monthly Finance Meetings: Track net worth and spending on the last day of each month using a Google Sheet and digital notebook. Answer consistent questions about good spends, bad spends, and areas to adjust. Make it enjoyable with breakfast burritos and coffee rather than treating it as a chore to maintain consistency over their ten-year tracking streak.
• •Flexible Withdrawal Strategy: Calculate spending based on 5% of current portfolio value rather than the original retirement amount, adjusting the baseline as the portfolio grows. This approach restarts the sequence of returns risk period but provides flexibility to reduce spending through geographic arbitrage if markets decline, such as moving from expensive cities to lower-cost countries like Vietnam at $100 daily.
• •Geographic Arbitrage for Spending Control: Daily cost tracking across countries reveals dramatic differences, from $84 per day in Vietnam to significantly higher amounts in Palm Springs or Los Angeles. This flexibility serves as a backup plan if markets crash, allowing immediate spending reductions by relocating to lower-cost countries for extended periods without sacrificing quality of life.
• •Portfolio Growth Despite Withdrawals: Starting with $1 million in 2019, their portfolio grew to $2.6 million by 2025 while funding six years of travel and living expenses. This demonstrates compound growth can outpace withdrawals even during spending years, with their current net worth exceeding total lifetime earnings despite consistent portfolio withdrawals for living expenses.
• •Adult Friendship Building: Make friends by lowering the definition barrier of what constitutes friendship and taking initiative to invite people for specific activities like hikes or coffee. Reach out via Facebook Messenger or WhatsApp without overthinking response times, accepting that busy adults may take weeks to reply without it reflecting on the friendship quality.
• •Index Fund Strategy Over Market Timing: Maintain a globally diversified simple index fund portfolio regardless of market predictions or concentration concerns about top companies. Fear-based content typically ends with pitches for stock-picking courses, while historical data shows even professional active managers cannot consistently beat index returns over decades, making passive investing the only replicable strategy for most investors.