In case you aren’t familiar with the Trinity Study, here is some background. A few professors from Trinity University, Philip Cooley, Carl Hubbard and Daniel Walz, got together to see how asset allocation and withdrawal rates effect long term success of a portfolio. The original study is where the fabled ‘4% safe withdrawal rate’ comes from. This study uses past results with a Monte Carlo simulation to determine success rates of various strategies over a 20 to 30 year time frame. If you would like to check out the original study than head over here and download the pdf. The conclusion we can draw is using the data presented in the study anything larger than 4% withdrawals adjusted for inflation will result in risk and disaster. I want to use this historical data to create a plan today for creating future income.

The Magical Forever Dollar or 25 = 1

If we are concerned about creating future income then we need to figure out what the 4% withdrawal means to us. For me the easiest way to gamify this in my mind is to think of every $25 invested is $1 forever. This can work two ways. If you want to spend $100 on dinner than that means $4 for every year for the rest of your life that you are giving up. If you want $40,000 every year in income from your portfolio than you need $1,000,000 in there. I not only use this to rationalize purchases that I make but also to gamify putting extra dollars into my investments.

When I began investing I measured my balance in future dollars it would provide. When I hit $800 balance, that means $32 a year forever, or dinner at Applebees getting the 2 for $20 and leaving a tip. The moment I hit $5,000, that meant that my natural gas bill was paid for the year(at my current house of course). Then when my balance reached $21,000 my internet bill was paid for in full. My next big target is achieving 25 times my property tax bill.

Creating Future Income with Other Options

If you are concerned about having enough money in your portfolio to create the income you need then you need to explore other options. One thing that people assume is that they can not make any more money in retirement, which isn’t true. There are millions of retirees that pick up part time jobs to make up portfolio shortfalls. If you can make $10,000 a year working a part time job that is equal to $250,000 in your portfolio.

Another option is starting a side a business doing something you are passionate about. If you want to be able to take long walks on the beach, why not start a dog walking business and combine the two. Interested in making soaps or candles? Try selling them on Etsy. Do you have an eye for valuable items and love going to estate sales? Try flipping items on Ebay. There are plenty of ways to make some side income.

You don’t have to wait until retirement to start these side hustles either. If you are able to make an extra $10,000 and save it all then you are creating 400 magical forever dollars. The best part about doing this earlier rather than later is those $400 are creating an additional $16 every year after that. Compound interest is one of the most useful tools for building a prosperous future.

Preparing for Retirement

The most important thing you can do when you move into retirement is to reduce your expenses. The lower your annual expenses the less money you need to have on a reoccurring basis. It is important to look at how many of your annual expenses are related to working. While these expenses will be cut out other expenses may arise. Such as health care or extended vacations. Either way, the sooner you can calculate your annual expenses in retirement, the quicker you can figure out your needed portfolio.

It also important to remember as we advance towards retirement we need to enjoy today as well. Write down a list of everything you want to do in retirement, with their cost next to them. Then see if the experience of having it sooner is greater than the return of the compounding interest. I have made a commitment to do at least one thing on my retirement list every year. This ensures that I enjoy the journey just as much as the destination.


The Trinity Study is one of the most recognized measurements of a portfolio needs in retirement. There have been some updates to the study over the year but between 3 and 4 percent remains true for most portfolios for creating future income. The sooner you can start investing, the longer you have compound interest on your side to reach your nest egg number. If you are looking to start creating some future income now, check out our post on avoiding online distractions.

How do you gamify your investments? Do you have any mental tricks that help you? Let us know in the comments below!