Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

by Kristy Shen

And this brings me to a process I like to call raising the Yield Shield. Raising the Yield Shield is the process of temporarily pivoting your portfolio into higher-yielding assets. Note the key word “temporarily.” Long-term, your investment portfolio should be a low-cost, index-tracking portfolio. Why? Because those are the conditions under which the Trinity study was conducted. If you stray too far, the 4 Percent Rule no longer applies. But creating a Yield Shield for the first five years of retirement can counteract the biggest problem with the 4 Percent Rule. First, pick higher-yielding assets that are similar to the assets that are already in your portfolio. Then, strategically swap them out to increase your portfolio yield. This will have the effect of increasing your portfolio’s volatility, and I’ll explain why, but what we’re doing here is taking on higher volatility for higher yield.