1 00:00:06,200 --> 00:00:09,520 Speaker 1: Welcome to Trillions. I'm Joel Webber and I'm Eric Beltonis. 2 00:00:09,640 --> 00:00:12,320 Speaker 1: We talked a lot about all the variety of etf 3 00:00:12,440 --> 00:00:14,880 Speaker 1: that are out there, but we haven't talked about how 4 00:00:14,880 --> 00:00:17,840 Speaker 1: to put all of things together. Yeah, I mean the 5 00:00:17,840 --> 00:00:19,759 Speaker 1: e t f s are like the ingredients. You throw 6 00:00:19,800 --> 00:00:22,320 Speaker 1: them together and you have a dish, and that's called 7 00:00:22,320 --> 00:00:24,320 Speaker 1: the portfolio. And how do you do that? That's a 8 00:00:24,360 --> 00:00:26,000 Speaker 1: big open and question for a lot of people. I 9 00:00:26,000 --> 00:00:28,639 Speaker 1: love that we're already talking about food because really this 10 00:00:28,680 --> 00:00:31,440 Speaker 1: episode is gonna be a little bit about recipes. Oh god, 11 00:00:31,480 --> 00:00:34,560 Speaker 1: all right, you can't eat yet, okay, but three hours 12 00:00:34,560 --> 00:00:37,320 Speaker 1: to launche Let me have some food. But joining us 13 00:00:37,320 --> 00:00:43,360 Speaker 1: today is a guy named Dan Egan who works at Betterment. Betterment, Eric, 14 00:00:43,880 --> 00:00:46,400 Speaker 1: you know a lot about this is a robot advisory. 15 00:00:46,560 --> 00:00:50,760 Speaker 1: So robo advisors they use ETFs to build portfolios. And 16 00:00:50,920 --> 00:00:52,880 Speaker 1: what they do is they get you know, they ask 17 00:00:52,960 --> 00:00:55,080 Speaker 1: you a couple of questions, you fill it out, they 18 00:00:55,120 --> 00:00:58,080 Speaker 1: determine your risk tolerance, and boom, you're in a portfolio 19 00:00:58,160 --> 00:01:01,200 Speaker 1: of say four to ten et fs. They charge you 20 00:01:01,360 --> 00:01:04,040 Speaker 1: twenty five basis points, which is more than half as 21 00:01:04,120 --> 00:01:06,880 Speaker 1: cheap as an average advisor. They do some rebalancing, some 22 00:01:07,000 --> 00:01:09,839 Speaker 1: tax laws, harvesting, and there's no minimum, So robo advisors 23 00:01:09,840 --> 00:01:13,200 Speaker 1: are very popular with millennials and people just getting started 24 00:01:13,280 --> 00:01:16,640 Speaker 1: who don't have other sort of life things and build 25 00:01:16,720 --> 00:01:19,160 Speaker 1: up of wealth that requires maybe more of a human touch, 26 00:01:19,240 --> 00:01:21,600 Speaker 1: although Betterman starting to do that too. But the thing 27 00:01:21,640 --> 00:01:23,920 Speaker 1: about Dan is he does that so he puts the 28 00:01:23,959 --> 00:01:26,640 Speaker 1: portfolios together, but he also does a lot with behavior 29 00:01:27,000 --> 00:01:31,040 Speaker 1: and Betterman exclusively uses e t F. Yes, so Dan 30 00:01:31,760 --> 00:01:34,040 Speaker 1: part of his job and the and the company as 31 00:01:34,120 --> 00:01:35,480 Speaker 1: a whole is to go through the e t F 32 00:01:35,640 --> 00:01:37,680 Speaker 1: and decide which ones who want to use and in 33 00:01:37,760 --> 00:01:41,679 Speaker 1: what percentage to make this portfolio a K the dish. 34 00:01:42,240 --> 00:01:45,040 Speaker 1: By the way, this week Eric Me and our producer 35 00:01:45,160 --> 00:01:48,800 Speaker 1: Jordan's went on the road down to Betterman's office, So 36 00:01:48,960 --> 00:01:51,720 Speaker 1: you're gonna hear a little bit of an office vibe 37 00:01:51,880 --> 00:01:53,720 Speaker 1: at this episode because of the show on the road. 38 00:01:53,880 --> 00:01:58,640 Speaker 1: That's code for not great audio, so enjoy Anyway. This 39 00:01:58,720 --> 00:02:04,480 Speaker 1: week con Trillions meet a master chef. So we're here 40 00:02:04,480 --> 00:02:10,240 Speaker 1: at Betterment with Dannygand who are you? So? I am 41 00:02:10,480 --> 00:02:14,160 Speaker 1: the director of behavioral Finance and investing in Betterment. Betterment 42 00:02:14,320 --> 00:02:17,760 Speaker 1: is a what we're called a robo advisor, so we're 43 00:02:17,880 --> 00:02:22,600 Speaker 1: predominantly online financial advisor and investment manager. We were the 44 00:02:22,680 --> 00:02:27,160 Speaker 1: original so we started taking client money back in two 45 00:02:27,240 --> 00:02:30,239 Speaker 1: thousand and ten. So yeah, we're actually getting to be 46 00:02:30,639 --> 00:02:33,240 Speaker 1: old and tenured. So a lot of times people will 47 00:02:33,240 --> 00:02:37,080 Speaker 1: associate robo advisors as a disruptor. What are you disrupting? 48 00:02:37,120 --> 00:02:39,440 Speaker 1: We'll talk about the traditional advisor and how you're different 49 00:02:39,520 --> 00:02:42,120 Speaker 1: and why this is catching on. A lot of the time, 50 00:02:42,880 --> 00:02:45,520 Speaker 1: the seeds of our our own destruction in businesses are 51 00:02:45,560 --> 00:02:47,840 Speaker 1: seven by choices that we make or choose to not make. 52 00:02:47,919 --> 00:02:51,240 Speaker 1: And I think if you go back to when Betterment 53 00:02:51,360 --> 00:02:53,799 Speaker 1: was founded, it was right after the financial crisis, and 54 00:02:54,000 --> 00:02:56,720 Speaker 1: there was a lot of lack of faith about their 55 00:02:56,800 --> 00:02:59,800 Speaker 1: being good financial advice being distributed. It was high cost, 56 00:03:00,280 --> 00:03:02,320 Speaker 1: despite the fact that a lot of it was pretty 57 00:03:02,440 --> 00:03:07,640 Speaker 1: consistent and systematizeable. People had gotten comfortable with the Internet. 58 00:03:08,160 --> 00:03:09,760 Speaker 1: So I think if you if you went back in time, 59 00:03:09,800 --> 00:03:12,160 Speaker 1: you could say, actually, a lot of the established players 60 00:03:12,280 --> 00:03:15,600 Speaker 1: very much could have dumbness themselves, but it would have 61 00:03:15,720 --> 00:03:20,239 Speaker 1: meant cannibalizing revenues um and a really big I T investment. 62 00:03:20,600 --> 00:03:22,959 Speaker 1: So let's talk about that. User experience. So when someone 63 00:03:23,040 --> 00:03:26,519 Speaker 1: comes to the Betterman dot com website, where do you 64 00:03:26,560 --> 00:03:29,600 Speaker 1: go from that? So I think the first most important 65 00:03:29,639 --> 00:03:32,560 Speaker 1: thing is that we need to make it easy for 66 00:03:32,639 --> 00:03:35,000 Speaker 1: a wide variety of people to get to the point 67 00:03:35,040 --> 00:03:37,760 Speaker 1: where they understand what Betterment is doing for them. And 68 00:03:38,440 --> 00:03:42,240 Speaker 1: that involves allowing the client to both see how we 69 00:03:42,360 --> 00:03:45,280 Speaker 1: believe we have value, so focusing them on we're going 70 00:03:45,320 --> 00:03:48,360 Speaker 1: to build you a diversified portfolio. We're going to recommend 71 00:03:48,480 --> 00:03:51,480 Speaker 1: risk level and allow you to have multiple portfolios depending 72 00:03:51,560 --> 00:03:55,040 Speaker 1: upon the goal that you're investing for. And we're gonna 73 00:03:55,080 --> 00:03:57,080 Speaker 1: talk about the value to you in terms of tax 74 00:03:57,160 --> 00:04:00,280 Speaker 1: efficiency or getting your time back or get a better 75 00:04:00,360 --> 00:04:03,720 Speaker 1: financial plan to set up for yourself. That experience is 76 00:04:04,200 --> 00:04:06,240 Speaker 1: really dependent upon the customer and how they choose to 77 00:04:06,280 --> 00:04:09,240 Speaker 1: interact with us. So we sometimes have what's interesting is 78 00:04:09,360 --> 00:04:12,520 Speaker 1: um how much selling we really don't do on the website. 79 00:04:12,560 --> 00:04:14,640 Speaker 1: I would say it's some very large percentage of our 80 00:04:14,680 --> 00:04:18,360 Speaker 1: clients show up, spend no time on any of our 81 00:04:18,440 --> 00:04:21,280 Speaker 1: marketing pages. They've heard about us through a friend or 82 00:04:21,400 --> 00:04:23,960 Speaker 1: through some other um sort of medium where the site 83 00:04:24,040 --> 00:04:26,920 Speaker 1: I'm in and they you know, they hit our website, 84 00:04:27,000 --> 00:04:28,920 Speaker 1: they open an account and all of a sudden, there's 85 00:04:28,920 --> 00:04:30,960 Speaker 1: a hundred thousand dollars coming in in the next week, 86 00:04:31,720 --> 00:04:36,280 Speaker 1: So why use a robot solution out? Yeah, and let 87 00:04:36,320 --> 00:04:38,600 Speaker 1: me jump in on that, because I think a real 88 00:04:38,680 --> 00:04:41,520 Speaker 1: advisor at this point and say, that's great, you're doing 89 00:04:41,560 --> 00:04:44,040 Speaker 1: as allocation for me, But what about some of the 90 00:04:44,080 --> 00:04:48,120 Speaker 1: more human things that I provide. Yeah, it always sounds 91 00:04:48,200 --> 00:04:50,960 Speaker 1: so much like somebody trying to convince themselves as much 92 00:04:51,000 --> 00:04:53,960 Speaker 1: as anything, or a little bit of fear in their voice. 93 00:04:54,320 --> 00:04:57,960 Speaker 1: So I worked in wealth management with high night Re 94 00:04:58,040 --> 00:05:00,720 Speaker 1: financial advisors before, and the thing that kept striking me 95 00:05:01,200 --> 00:05:04,040 Speaker 1: was what percentage of what they do could be done 96 00:05:04,120 --> 00:05:07,719 Speaker 1: systematically by a computer? And if you think about inputs 97 00:05:07,760 --> 00:05:09,719 Speaker 1: in my background and behavioral thing, I look at people 98 00:05:09,720 --> 00:05:11,479 Speaker 1: and I say, we have this this brain, this little 99 00:05:11,600 --> 00:05:14,200 Speaker 1: chunk of meat between our ears, and it takes inputs 100 00:05:14,440 --> 00:05:16,960 Speaker 1: from our eyes and from our ears, and then it 101 00:05:17,080 --> 00:05:19,280 Speaker 1: runs little algorithms, then it decides what to do, which 102 00:05:19,320 --> 00:05:22,120 Speaker 1: are its outputs. You can do a lot of that 103 00:05:22,279 --> 00:05:24,080 Speaker 1: kind of mimicry of saying I'm going to talk to 104 00:05:24,120 --> 00:05:27,360 Speaker 1: a financial planner and I'm gonna say somebody wants to 105 00:05:27,400 --> 00:05:29,320 Speaker 1: open an I RA, what do you need to know 106 00:05:29,480 --> 00:05:31,040 Speaker 1: we're going to give them good advice about that? What 107 00:05:31,200 --> 00:05:33,560 Speaker 1: questions do you ask? How do you use that information? 108 00:05:33,640 --> 00:05:36,719 Speaker 1: And what's the output? And I would say, like version 109 00:05:36,839 --> 00:05:40,320 Speaker 1: one point of rogue advising is just the picking off 110 00:05:40,400 --> 00:05:42,839 Speaker 1: of whatever is the lowest hanging fruit that is easiest 111 00:05:42,880 --> 00:05:46,680 Speaker 1: to do. The advisors do like say, you know, should 112 00:05:46,720 --> 00:05:48,359 Speaker 1: I use a wall for a traditional ira A? How 113 00:05:48,400 --> 00:05:50,000 Speaker 1: much should I contribute to my four O one kit? 114 00:05:50,400 --> 00:05:53,680 Speaker 1: These are things that is very apparent how you would 115 00:05:53,720 --> 00:05:55,560 Speaker 1: make this decision and how you give this advice. And 116 00:05:56,120 --> 00:05:58,440 Speaker 1: I think as that people confuse the advice from the 117 00:05:58,640 --> 00:06:03,480 Speaker 1: distribution mechanism. I think that take good advice and you 118 00:06:03,520 --> 00:06:05,640 Speaker 1: can think about like did the advisor send it over 119 00:06:05,760 --> 00:06:08,520 Speaker 1: email or did they use and excel? You know, there 120 00:06:08,520 --> 00:06:10,440 Speaker 1: are these things that are like the medium through which 121 00:06:10,480 --> 00:06:13,400 Speaker 1: you give the advice. We effectively just said we are 122 00:06:13,440 --> 00:06:15,240 Speaker 1: going to do this through medium where we can give 123 00:06:15,279 --> 00:06:18,119 Speaker 1: it to everybody through a website, and we're gonna invest 124 00:06:18,160 --> 00:06:21,560 Speaker 1: heavily in writing the algorithms correctly knowing what questions we 125 00:06:21,600 --> 00:06:23,720 Speaker 1: should ask, and then it's simply a matter of you know, 126 00:06:23,880 --> 00:06:28,480 Speaker 1: scaling it up very quickly. So let's talk about I've 127 00:06:28,560 --> 00:06:31,000 Speaker 1: just put a hundred dozen dollars because hey, let's make 128 00:06:31,080 --> 00:06:33,200 Speaker 1: up a number. Right, you're gonna put me. You're gonna 129 00:06:33,279 --> 00:06:36,160 Speaker 1: basically do ask that allocation for me, and you're gonna 130 00:06:36,160 --> 00:06:38,080 Speaker 1: do that based on of series of questions that I 131 00:06:38,200 --> 00:06:42,000 Speaker 1: basically answer, Right, are all those solutions and those portfolios 132 00:06:42,480 --> 00:06:45,920 Speaker 1: straight out the shelf or are their custom options as well? 133 00:06:46,600 --> 00:06:49,480 Speaker 1: So it's interesting, Uh there, I forget what the number is. 134 00:06:49,520 --> 00:06:51,840 Speaker 1: There are literally thousands of different end states that you 135 00:06:51,880 --> 00:06:53,880 Speaker 1: can end up in. The First thing we do is 136 00:06:53,920 --> 00:06:56,920 Speaker 1: I like to think about we talk about your circumstances 137 00:06:57,320 --> 00:06:59,640 Speaker 1: and your goals where you want to be in the future. 138 00:06:59,720 --> 00:07:02,840 Speaker 1: So there are facts about you. Um, let's use, for 139 00:07:03,040 --> 00:07:05,720 Speaker 1: example of the fact that we're in New York City. Now, 140 00:07:05,800 --> 00:07:07,920 Speaker 1: if you live in New York City and you're making 141 00:07:08,040 --> 00:07:10,720 Speaker 1: a pretty serious income, you're gonna pay both federal high 142 00:07:10,760 --> 00:07:14,080 Speaker 1: federal tax rates and high state and limberal taxes. So 143 00:07:14,200 --> 00:07:16,280 Speaker 1: there's an interesting piece of tax information in terms of 144 00:07:16,360 --> 00:07:18,720 Speaker 1: how you learn and how much you learn that actually 145 00:07:18,920 --> 00:07:22,360 Speaker 1: feeds through into the investment process, which is that if 146 00:07:22,400 --> 00:07:24,960 Speaker 1: you're using a taxable account with us, you're probably going 147 00:07:25,000 --> 00:07:27,920 Speaker 1: to push you towards using New York State municipal bonds 148 00:07:28,320 --> 00:07:30,320 Speaker 1: because there's so much tax savings in it for you. 149 00:07:31,080 --> 00:07:33,880 Speaker 1: So one element is who you are, your circumstances. The 150 00:07:33,920 --> 00:07:37,000 Speaker 1: other element is um your future. You know, are we 151 00:07:37,080 --> 00:07:39,640 Speaker 1: talking about opening up a roth IRA, a traditional ira, 152 00:07:39,640 --> 00:07:42,720 Speaker 1: a taxable account? How much risk should we take? How 153 00:07:42,840 --> 00:07:45,360 Speaker 1: long should we be investing for? How are you going 154 00:07:45,400 --> 00:07:49,880 Speaker 1: to withdraw that money? So strangely that like the foundation 155 00:07:50,040 --> 00:07:52,520 Speaker 1: on which the allocation and the advice is built isn't 156 00:07:52,560 --> 00:07:56,240 Speaker 1: about investments. It's about the investor, and from there we 157 00:07:56,320 --> 00:07:58,480 Speaker 1: start thinking about how we can match and tailor the 158 00:07:58,560 --> 00:08:01,680 Speaker 1: investments to serve the investor. So in this case, you 159 00:08:01,800 --> 00:08:05,000 Speaker 1: might say, I'm looking to put my kids through college 160 00:08:05,200 --> 00:08:07,200 Speaker 1: in New York State in a few years. I've already 161 00:08:07,240 --> 00:08:08,640 Speaker 1: done the five twenty nine, I want to do things. 162 00:08:08,640 --> 00:08:10,440 Speaker 1: I'm want to save some more. We would put you 163 00:08:10,560 --> 00:08:13,360 Speaker 1: into a portfolio that had less risk because it's a 164 00:08:13,400 --> 00:08:16,040 Speaker 1: short time horizon, and also there would be a higher 165 00:08:16,080 --> 00:08:18,520 Speaker 1: weighting towards New York State municipal bonds. So that's not 166 00:08:18,680 --> 00:08:21,640 Speaker 1: like a very specific example, but just how do you 167 00:08:21,680 --> 00:08:24,880 Speaker 1: think about asset allocation in general? On a more metal level. 168 00:08:25,640 --> 00:08:30,240 Speaker 1: So we kind of simplify things down to generally speaking 169 00:08:30,320 --> 00:08:33,679 Speaker 1: the stock versus bond allocation. So if you are in 170 00:08:33,840 --> 00:08:37,840 Speaker 1: our bond allocation, we basically think that means a fine site, 171 00:08:37,920 --> 00:08:40,600 Speaker 1: no risks. In that case, you are a hundred percent 172 00:08:40,720 --> 00:08:44,439 Speaker 1: in sh V, which is a ultra short treasury. That's 173 00:08:44,480 --> 00:08:47,000 Speaker 1: like putting your money magic exactly right. It is is 174 00:08:47,120 --> 00:08:48,640 Speaker 1: is close as you gonna get to a money market 175 00:08:48,720 --> 00:08:50,760 Speaker 1: fund in the e t F world, Which leads to 176 00:08:50,800 --> 00:08:54,160 Speaker 1: another question, which is is everything you guys do E 177 00:08:54,280 --> 00:08:56,800 Speaker 1: t F it is to pick up and keep talking 178 00:08:56,840 --> 00:09:02,559 Speaker 1: about it with this basic poor close and how do 179 00:09:02,600 --> 00:09:06,839 Speaker 1: you pay? So in every case we are looking at 180 00:09:07,160 --> 00:09:11,599 Speaker 1: maximizing the customer's takeover trends. So we generally think that 181 00:09:11,760 --> 00:09:16,000 Speaker 1: it is unlikely that any fund that is actively manage 182 00:09:16,040 --> 00:09:19,119 Speaker 1: and that includes active in disease is going to outperform 183 00:09:19,240 --> 00:09:22,319 Speaker 1: or at least there's a really significant headwind, and so 184 00:09:22,440 --> 00:09:24,360 Speaker 1: we tend to look at funds that have very low 185 00:09:24,440 --> 00:09:28,199 Speaker 1: expense ratios, that are large hand liquid so that we 186 00:09:28,360 --> 00:09:30,760 Speaker 1: can buy them and sell them there's a lot of 187 00:09:30,800 --> 00:09:36,400 Speaker 1: outstanding interest without the customer paying significant transaction costs. Also, 188 00:09:36,520 --> 00:09:39,240 Speaker 1: where if there is a big move, We as a 189 00:09:39,720 --> 00:09:41,280 Speaker 1: sort of trader are not going to have a lot 190 00:09:41,320 --> 00:09:43,680 Speaker 1: of impact on those markets because there are so many 191 00:09:43,720 --> 00:09:47,080 Speaker 1: other people trading. So all of it comes down to cost, 192 00:09:47,200 --> 00:09:50,360 Speaker 1: either the expense ratio of the fund, the bid ask 193 00:09:50,520 --> 00:09:53,280 Speaker 1: spread of the fund, the depth of market of the fund, 194 00:09:53,960 --> 00:09:56,760 Speaker 1: just trying to keep all of those costs, both sort 195 00:09:56,760 --> 00:10:00,120 Speaker 1: of ongoing and liquidity related as low as possible. And 196 00:10:00,240 --> 00:10:03,520 Speaker 1: for the any international section of the portfolio, what what 197 00:10:03,600 --> 00:10:05,319 Speaker 1: do you use for that view? Do you know, is 198 00:10:05,400 --> 00:10:10,200 Speaker 1: it something that is uh international developed or something that's 199 00:10:10,240 --> 00:10:13,520 Speaker 1: total international or do you ever do single countries? Great questions, 200 00:10:13,800 --> 00:10:17,280 Speaker 1: So we do on the stock side. We use our 201 00:10:17,400 --> 00:10:19,480 Speaker 1: primary ticker, and I'll get back to what I mean 202 00:10:19,559 --> 00:10:23,599 Speaker 1: by that is v A, which is the Vanguard International 203 00:10:23,720 --> 00:10:27,120 Speaker 1: Developed Fund. Believe it costs something like eight basis points. 204 00:10:27,640 --> 00:10:31,600 Speaker 1: And then we also have the International Merchant Market Fund 205 00:10:31,640 --> 00:10:35,880 Speaker 1: VWO and the key there it's really interesting in the 206 00:10:36,040 --> 00:10:39,400 Speaker 1: field that it is sometimes cheaper to use more funds 207 00:10:39,440 --> 00:10:42,880 Speaker 1: than to use just one fund um. So our portfolio 208 00:10:43,200 --> 00:10:46,000 Speaker 1: as a whole cost I believe about nine or ten 209 00:10:46,040 --> 00:10:48,400 Speaker 1: basis points once you take into account all of these 210 00:10:48,480 --> 00:10:51,400 Speaker 1: fund costs. If you were to use the all Country 211 00:10:51,480 --> 00:10:53,960 Speaker 1: World Index et F, which is provided by black Rock. 212 00:10:54,000 --> 00:10:56,520 Speaker 1: I believe it costs thirty three basis points and they 213 00:10:56,559 --> 00:10:59,560 Speaker 1: have asset allocation funds UM that can do someone I finast. 214 00:10:59,600 --> 00:11:02,400 Speaker 1: Vanguard has bt BT that's the whole lenge, a lot 215 00:11:02,480 --> 00:11:05,320 Speaker 1: of it, that's twelves. Yeah, it's interesting. Yes, you've got 216 00:11:05,440 --> 00:11:08,000 Speaker 1: cheaper using a couple of products instead of the whole 217 00:11:08,040 --> 00:11:10,079 Speaker 1: lenge a lot of one exactly, even if it's even 218 00:11:10,440 --> 00:11:13,319 Speaker 1: And it's Vanguard to boot, which is interesting exactly. And 219 00:11:13,400 --> 00:11:16,280 Speaker 1: it also allows us to manage risk at different levels. 220 00:11:16,360 --> 00:11:18,719 Speaker 1: So imagine that you're a customer who comes in with 221 00:11:19,080 --> 00:11:21,200 Speaker 1: a long time horizon. We give you a knight fetures 222 00:11:21,240 --> 00:11:23,520 Speaker 1: in stock portfolio. But then as your time arts and 223 00:11:23,600 --> 00:11:25,559 Speaker 1: gets shorter and shuter, you get closer and closer to 224 00:11:25,640 --> 00:11:27,760 Speaker 1: needing to spend the money. We want to decrease the risk. 225 00:11:28,559 --> 00:11:31,599 Speaker 1: We want to be able to change the proportion that 226 00:11:31,800 --> 00:11:34,920 Speaker 1: vw A emerging markets makes odds. We don't want to 227 00:11:34,960 --> 00:11:38,160 Speaker 1: be stuck into one just one allocation. So there's a 228 00:11:38,280 --> 00:11:41,080 Speaker 1: level of granularity that allows us to take on more 229 00:11:41,840 --> 00:11:44,599 Speaker 1: emerging market risk, more small cap value risk at the 230 00:11:44,679 --> 00:11:46,400 Speaker 1: high end, and we want to be able to tourne 231 00:11:46,440 --> 00:11:50,720 Speaker 1: that down at the low end. So by having these slices, 232 00:11:51,240 --> 00:11:54,120 Speaker 1: we couldn't go much simpler. But by having these slices, 233 00:11:54,160 --> 00:11:57,000 Speaker 1: it's actually less expensive to clients and it gives us 234 00:11:57,080 --> 00:12:00,800 Speaker 1: more control. The more granular you cut something, the more 235 00:12:00,920 --> 00:12:03,480 Speaker 1: you can tax lost honest and so we actually wanted 236 00:12:03,559 --> 00:12:06,839 Speaker 1: to have things that were sufficiently unlike each other that 237 00:12:06,960 --> 00:12:10,679 Speaker 1: we would maximize tax lost honesting opportunities. And of course 238 00:12:10,720 --> 00:12:12,840 Speaker 1: this question we talked about, you know, you talked about VW. 239 00:12:13,400 --> 00:12:15,160 Speaker 1: That's the being guard emerging markets. Now there is a 240 00:12:15,280 --> 00:12:18,199 Speaker 1: cheaper one in schwab, you don't always go for the 241 00:12:18,800 --> 00:12:20,520 Speaker 1: one that's the cheapest, because you could have a new 242 00:12:20,559 --> 00:12:23,640 Speaker 1: issuer come out and be say zero fees, but you 243 00:12:23,640 --> 00:12:26,040 Speaker 1: would necessarily go for that. So is there a liquidity 244 00:12:26,080 --> 00:12:28,959 Speaker 1: threshold you look at like how many what's the volume 245 00:12:29,000 --> 00:12:30,480 Speaker 1: have to look like for you to buy it? But 246 00:12:30,800 --> 00:12:34,800 Speaker 1: so I love Mexican food, So we use a measure 247 00:12:34,840 --> 00:12:38,560 Speaker 1: called the tact the total annual cost of ownership, which 248 00:12:38,640 --> 00:12:42,319 Speaker 1: includes both the expense ratio that the fund charges but 249 00:12:42,440 --> 00:12:44,840 Speaker 1: also the cost of getting in and out of the fund. Right, 250 00:12:45,000 --> 00:12:47,280 Speaker 1: so it's a little bit like my parents live on 251 00:12:47,360 --> 00:12:50,760 Speaker 1: a barren island and their house might be really cheap, 252 00:12:50,840 --> 00:12:52,480 Speaker 1: but it's going to cost you a pretty big toll 253 00:12:52,520 --> 00:12:54,640 Speaker 1: to get onto that island. And the toll in this 254 00:12:54,760 --> 00:12:58,160 Speaker 1: case is the bitest spread, right, the okay, And that's 255 00:12:58,280 --> 00:13:00,440 Speaker 1: you just put that into percentage terms and it's usually 256 00:13:00,520 --> 00:13:03,880 Speaker 1: and then you put that into the taco because tacobou 257 00:13:04,000 --> 00:13:08,320 Speaker 1: it's healthy and delicious. Um. So yeah, that that measure 258 00:13:08,400 --> 00:13:11,559 Speaker 1: guides us. And in a lot of cases, Uh, a 259 00:13:11,760 --> 00:13:14,000 Speaker 1: new fund will come out that doesn't have a lot 260 00:13:14,080 --> 00:13:18,120 Speaker 1: of existing people training it. Um, it doesn't have very 261 00:13:18,640 --> 00:13:21,839 Speaker 1: m good spreads, and so we'll watch it. This is 262 00:13:21,840 --> 00:13:23,480 Speaker 1: actually a big part of what we do. We actually 263 00:13:24,080 --> 00:13:27,560 Speaker 1: revisit what funds we purchased on behalf of clients every 264 00:13:27,640 --> 00:13:30,320 Speaker 1: quarter and so every quarter we can say, oh, there's 265 00:13:30,320 --> 00:13:32,440 Speaker 1: a new fund out here. Um, it has a really 266 00:13:32,559 --> 00:13:35,760 Speaker 1: good sort of prospective. It's not ready for showtime yet. 267 00:13:36,280 --> 00:13:49,040 Speaker 1: Is that a taco party? Yes? It is. So you 268 00:13:49,120 --> 00:13:52,880 Speaker 1: also have this really unique background because you have an 269 00:13:52,920 --> 00:13:56,559 Speaker 1: expert decent behavioral science. Talk about that. How did you 270 00:13:56,760 --> 00:14:03,400 Speaker 1: acquire that by being decisive? So quick step back? What 271 00:14:03,720 --> 00:14:06,160 Speaker 1: is behavioral science I mean? And how does it plan 272 00:14:06,240 --> 00:14:09,439 Speaker 1: to investing was what is that? So a lot of 273 00:14:10,160 --> 00:14:12,959 Speaker 1: the economics and finance profession, when when it was really 274 00:14:12,960 --> 00:14:15,520 Speaker 1: starting out and starting to get very rigorous and empirical, 275 00:14:16,080 --> 00:14:18,920 Speaker 1: you need to make assumptions about how people behave, and 276 00:14:19,320 --> 00:14:21,440 Speaker 1: the math is a heck of a lot easier if 277 00:14:21,480 --> 00:14:24,040 Speaker 1: you assume people are rational and make good decisions and 278 00:14:24,080 --> 00:14:27,840 Speaker 1: don't have biases. So for years a lot of models 279 00:14:27,880 --> 00:14:31,080 Speaker 1: were built up on the idea that on average, you know, 280 00:14:31,240 --> 00:14:33,400 Speaker 1: people are kind of smart, or they figure things out 281 00:14:33,440 --> 00:14:36,640 Speaker 1: and they're not making systematic mistakes. I remember, so I 282 00:14:36,800 --> 00:14:40,840 Speaker 1: was a sophomore in college and underground and starting to 283 00:14:41,000 --> 00:14:44,640 Speaker 1: read some papers about how people made systematic errors and 284 00:14:44,720 --> 00:14:48,200 Speaker 1: probability or in investing, or how they thought about money, 285 00:14:48,240 --> 00:14:50,720 Speaker 1: and thinking, you know what, this is really interesting. I 286 00:14:50,760 --> 00:14:52,680 Speaker 1: think I could like have a career as an academic 287 00:14:52,760 --> 00:14:55,200 Speaker 1: in it. And then I continue to read and realize 288 00:14:55,240 --> 00:14:57,040 Speaker 1: that like all of my ideas had already been done 289 00:14:57,040 --> 00:15:00,600 Speaker 1: in the nineteen seven years of academics. Um So I realized, actually, 290 00:15:00,640 --> 00:15:01,720 Speaker 1: I'm going to have to have some kind of a 291 00:15:01,760 --> 00:15:04,560 Speaker 1: different career and the idea of actually applying it in 292 00:15:04,640 --> 00:15:07,520 Speaker 1: the real world and saying, okay, people think about money 293 00:15:07,560 --> 00:15:11,320 Speaker 1: differently than economists. Do they make specific errors? What are that? 294 00:15:11,560 --> 00:15:13,920 Speaker 1: And as there an opportunity to help people have better 295 00:15:14,000 --> 00:15:16,560 Speaker 1: outcomes if we work with them as real human beings 296 00:15:16,720 --> 00:15:19,920 Speaker 1: rather than is perfectly rational agents. So that's a large 297 00:15:19,960 --> 00:15:21,960 Speaker 1: part of it is saying like, how do people actually 298 00:15:22,040 --> 00:15:25,080 Speaker 1: make decisions if they knew better, how would they make decisions? 299 00:15:25,120 --> 00:15:27,080 Speaker 1: And how do we close the gap between those? So 300 00:15:27,320 --> 00:15:29,640 Speaker 1: can I go to an example of this? So and 301 00:15:29,720 --> 00:15:32,960 Speaker 1: everybody's wondering about this when the next market downturn happens, right, 302 00:15:33,120 --> 00:15:36,400 Speaker 1: or a correction or a bear market, talk about what 303 00:15:36,640 --> 00:15:39,480 Speaker 1: you would do for clients who are scared and want 304 00:15:39,520 --> 00:15:43,560 Speaker 1: to sell everything. I tend to think that a vaccine 305 00:15:43,640 --> 00:15:47,120 Speaker 1: is way better than are here. Um, this is tough. 306 00:15:47,200 --> 00:15:48,920 Speaker 1: So this is one of the toughest things we've strung with. 307 00:15:50,680 --> 00:15:55,360 Speaker 1: Generally speaking, we are boring. We are not here to 308 00:15:55,400 --> 00:15:57,200 Speaker 1: help you out perform. When we talk to you about things. 309 00:15:57,240 --> 00:15:58,800 Speaker 1: We talked to you about goals and whether or not 310 00:15:58,840 --> 00:16:01,040 Speaker 1: you're on track to hit goals and how are you 311 00:16:01,320 --> 00:16:04,120 Speaker 1: situated today for what you need to achieve in the future. 312 00:16:05,200 --> 00:16:07,240 Speaker 1: If you log onto your betterment account, we don't talk 313 00:16:07,240 --> 00:16:09,600 Speaker 1: about what the market did yesterday. Or the past month, 314 00:16:09,680 --> 00:16:12,040 Speaker 1: or really at all. We talked to you about are 315 00:16:12,120 --> 00:16:13,800 Speaker 1: you on track to hit your goals? And where does 316 00:16:13,840 --> 00:16:15,480 Speaker 1: it look like you're going to be in five years? 317 00:16:15,560 --> 00:16:17,840 Speaker 1: And is your portfolio drifted and what should you do 318 00:16:17,960 --> 00:16:21,840 Speaker 1: about that? So the experience of being a Betterment customer 319 00:16:22,000 --> 00:16:25,200 Speaker 1: is very different than going to an online worker site. 320 00:16:25,880 --> 00:16:28,960 Speaker 1: And I think that shift of focus from what happened 321 00:16:29,040 --> 00:16:31,120 Speaker 1: recently to what I need to know about the future 322 00:16:31,160 --> 00:16:34,280 Speaker 1: and what can I change it's a dramatic driver of 323 00:16:34,360 --> 00:16:38,120 Speaker 1: differences in behavior. So when we use red and green 324 00:16:38,200 --> 00:16:39,920 Speaker 1: on our site, it has nothing to do with what 325 00:16:40,000 --> 00:16:41,520 Speaker 1: the market did and has to do with whether or 326 00:16:41,520 --> 00:16:44,440 Speaker 1: not you're on track for the future green, or whether 327 00:16:44,560 --> 00:16:46,600 Speaker 1: or not there you need to make some actions to 328 00:16:46,640 --> 00:16:49,000 Speaker 1: get back on track. I think part of it is 329 00:16:49,120 --> 00:16:52,880 Speaker 1: that we get very smart clients to UM. There's been 330 00:16:53,400 --> 00:16:55,480 Speaker 1: a number of different pieces of research I've been involved 331 00:16:55,520 --> 00:16:59,640 Speaker 1: with or other people have that clients very strongly self 332 00:16:59,680 --> 00:17:03,480 Speaker 1: select to something that they that is what they want. 333 00:17:04,119 --> 00:17:08,200 Speaker 1: So if you want gambling and get rich quick, you're 334 00:17:08,200 --> 00:17:10,240 Speaker 1: gonna be in some kind of an easy, low cost 335 00:17:10,359 --> 00:17:12,560 Speaker 1: direct brokerage where you get to come in and buy 336 00:17:12,600 --> 00:17:14,560 Speaker 1: your apple and sell it and shorten and do all 337 00:17:14,600 --> 00:17:18,239 Speaker 1: these cilienings. Our customers, we don't. We don't have UM. 338 00:17:18,400 --> 00:17:20,040 Speaker 1: You you come in and we talked to you about 339 00:17:20,119 --> 00:17:23,600 Speaker 1: goals and plans and taxes and finance, UM, and we 340 00:17:23,680 --> 00:17:26,000 Speaker 1: never talked about single stocks. We don't. We don't have 341 00:17:26,080 --> 00:17:27,880 Speaker 1: anything that shows you in a single stock that you're 342 00:17:27,880 --> 00:17:32,920 Speaker 1: invested in. So we have customers who that works. We 343 00:17:33,040 --> 00:17:35,119 Speaker 1: have people who are interested in the long run and 344 00:17:35,280 --> 00:17:38,480 Speaker 1: planning and making smart decisions, not in short term market 345 00:17:38,520 --> 00:17:40,560 Speaker 1: timing anything. So I actually I think there's gonna be 346 00:17:40,600 --> 00:17:44,080 Speaker 1: a really interesting sort of shift for you know, people 347 00:17:44,119 --> 00:17:46,159 Speaker 1: ask what's gonna happen to the instus Number one, I 348 00:17:46,280 --> 00:17:48,399 Speaker 1: don't need to do too much because the customers who 349 00:17:48,440 --> 00:17:50,880 Speaker 1: are our customers are already heading the game. They're already smart, 350 00:17:50,920 --> 00:17:53,960 Speaker 1: they know what's going on. We're building interfaces and services 351 00:17:54,160 --> 00:17:57,040 Speaker 1: in a way that helps reinforce that by helping them 352 00:17:57,119 --> 00:17:59,960 Speaker 1: focus on the future and not the past. And finally, 353 00:18:00,040 --> 00:18:03,639 Speaker 1: there is some elements we actually have been through. I 354 00:18:03,680 --> 00:18:08,040 Speaker 1: think there was a draw down in early Every time 355 00:18:08,160 --> 00:18:09,800 Speaker 1: we have these little I sort of think of them 356 00:18:09,840 --> 00:18:12,680 Speaker 1: as dress rehearsals for the big thing. We run small 357 00:18:12,720 --> 00:18:15,040 Speaker 1: experiments about how much do we you know, if we 358 00:18:15,160 --> 00:18:17,239 Speaker 1: do this on our mobile phones, does that help? If 359 00:18:17,280 --> 00:18:20,280 Speaker 1: we do this kind of intervention on the level, how 360 00:18:20,359 --> 00:18:22,240 Speaker 1: effective is it? You know, like should we use people 361 00:18:22,359 --> 00:18:24,880 Speaker 1: or should we make it be more anonymous. We're constantly 362 00:18:25,000 --> 00:18:28,600 Speaker 1: learning and really systematically learning about what works at scale 363 00:18:29,040 --> 00:18:32,800 Speaker 1: for improving behavior. UM, and it works on our client base. 364 00:18:33,040 --> 00:18:37,680 Speaker 1: When you think about that proactivity from your perspective, it's 365 00:18:37,680 --> 00:18:41,240 Speaker 1: also do in all disaster. I guess from a from 366 00:18:41,280 --> 00:18:44,280 Speaker 1: an investining same point for an investor, what's the single 367 00:18:44,320 --> 00:18:48,080 Speaker 1: biggest investment think that people meant there? Oh, it's it's saving. 368 00:18:48,640 --> 00:18:53,760 Speaker 1: It is not saving enough and usually in the right way. 369 00:18:54,480 --> 00:18:58,119 Speaker 1: So UM, if you're saving in a taxable cash account 370 00:18:58,240 --> 00:19:00,560 Speaker 1: before you're saving in your fraual on ky where your 371 00:19:00,560 --> 00:19:03,400 Speaker 1: employer notches, you're literally missing out on a hundred percent 372 00:19:03,480 --> 00:19:07,080 Speaker 1: returns immediately in a tax advantage of vehicle. Again, this 373 00:19:07,280 --> 00:19:09,840 Speaker 1: is where I think what we do is incredibly sexy 374 00:19:10,040 --> 00:19:12,240 Speaker 1: because we help you avoid those mistakes that cost you 375 00:19:12,320 --> 00:19:14,879 Speaker 1: the most money, making sure that you're hitting the company 376 00:19:14,960 --> 00:19:17,760 Speaker 1: match or that you're using the tax advantage vehicle and 377 00:19:17,920 --> 00:19:22,359 Speaker 1: which was et cetera. UM. On the other hand, so 378 00:19:22,520 --> 00:19:24,320 Speaker 1: I think that saving and saving the right amount in 379 00:19:24,400 --> 00:19:26,879 Speaker 1: the right way and for the right things, like, um, 380 00:19:27,720 --> 00:19:31,680 Speaker 1: how much do I wish that five years ago the 381 00:19:31,760 --> 00:19:35,480 Speaker 1: future Dan went to like pasted Dan and said, you're 382 00:19:35,480 --> 00:19:38,199 Speaker 1: going to have a kid. Like you are a married, 383 00:19:38,400 --> 00:19:41,000 Speaker 1: twenty nine year old guy, You're gonna have a kid. 384 00:19:41,280 --> 00:19:44,920 Speaker 1: Start saving today. That kind of foresight is very valid. 385 00:19:45,200 --> 00:19:49,399 Speaker 1: People people's biggest mistake is not thinking about their saving 386 00:19:49,480 --> 00:19:51,639 Speaker 1: in the right way and making it effortful. People like, 387 00:19:52,359 --> 00:19:54,080 Speaker 1: the more that you're not thinking about you're saving it, 388 00:19:54,119 --> 00:19:55,639 Speaker 1: you're doing it any way. The more good, the better 389 00:19:55,680 --> 00:19:59,720 Speaker 1: you're gonna be at it. So help me better understand 390 00:20:00,040 --> 00:20:04,600 Speaker 1: my own brain. And what games do you guys play 391 00:20:05,320 --> 00:20:09,040 Speaker 1: to help me help myself? Sure, I love this because 392 00:20:10,200 --> 00:20:12,240 Speaker 1: there's a lot of a lot of jobs in life 393 00:20:12,280 --> 00:20:14,159 Speaker 1: where like when you do good at it, people know. 394 00:20:14,960 --> 00:20:16,639 Speaker 1: And actually, in my job, if I'm really good at 395 00:20:16,680 --> 00:20:18,879 Speaker 1: our clients have no idea that I've kind of like 396 00:20:19,000 --> 00:20:22,520 Speaker 1: Jedi mind tricked now, which is gonna say, I mean tricky, 397 00:20:22,520 --> 00:20:24,600 Speaker 1: It's just that it's it's part and parcel of the experience. 398 00:20:24,800 --> 00:20:27,800 Speaker 1: So a good example is the use of color. It's 399 00:20:27,840 --> 00:20:29,800 Speaker 1: not that we don't use color it's that when we 400 00:20:29,960 --> 00:20:32,840 Speaker 1: use color, we're gonna give you the impression of everything 401 00:20:32,920 --> 00:20:35,480 Speaker 1: being okay unless it isn't. And red is going to 402 00:20:35,600 --> 00:20:38,560 Speaker 1: draw your attention into something that you can fix. So 403 00:20:39,480 --> 00:20:42,240 Speaker 1: if you aren't saving enough, or if your portfolio is 404 00:20:42,320 --> 00:20:44,200 Speaker 1: drifted and it's something that you need to take care of, 405 00:20:44,640 --> 00:20:46,720 Speaker 1: that's gonna show up red when you log in, and 406 00:20:46,800 --> 00:20:49,640 Speaker 1: our eyes naturally gravitated the contrast, you're gonna be pull 407 00:20:49,720 --> 00:20:52,040 Speaker 1: to that you're gonna spend time and it's like, I've 408 00:20:52,080 --> 00:20:54,120 Speaker 1: seen this. It's really annoying to have a little red 409 00:20:54,160 --> 00:20:56,200 Speaker 1: pop up on your thing and you want to resolve 410 00:20:56,240 --> 00:20:58,240 Speaker 1: that you hit done with, And the resolution of that 411 00:20:58,400 --> 00:21:00,760 Speaker 1: isn't going to be you know, body apple, it's going 412 00:21:00,800 --> 00:21:02,720 Speaker 1: to be figure out how to say it. Twenty more 413 00:21:02,800 --> 00:21:05,359 Speaker 1: honors a month and you'll be fine. Other elements of 414 00:21:05,440 --> 00:21:10,320 Speaker 1: it is kind of making things be interesting or move 415 00:21:10,440 --> 00:21:13,320 Speaker 1: or attention grabbing that again, you can control the outcome 416 00:21:13,359 --> 00:21:16,240 Speaker 1: of rather than the past. So imagine if you are 417 00:21:16,280 --> 00:21:17,800 Speaker 1: a weather app that kind of showed me what the 418 00:21:17,840 --> 00:21:19,960 Speaker 1: weather was the past week, you look at it and go, 419 00:21:20,119 --> 00:21:22,080 Speaker 1: this is the dumbest app in the world, And yeah, 420 00:21:22,160 --> 00:21:25,320 Speaker 1: that's what must investing in finance apps, They're like, it 421 00:21:25,520 --> 00:21:27,960 Speaker 1: used to be worth more, now it's worth less, and 422 00:21:28,000 --> 00:21:31,200 Speaker 1: you're like, well thanks, that's not really useful information. So 423 00:21:31,280 --> 00:21:33,720 Speaker 1: a lot of our apples focused on you know, we 424 00:21:33,760 --> 00:21:36,000 Speaker 1: don't have a crystal ball, but we're pretty sure this 425 00:21:36,119 --> 00:21:38,280 Speaker 1: is what the future holds, and we're going to give 426 00:21:38,359 --> 00:21:40,080 Speaker 1: you the kind of guidance that you might want to 427 00:21:40,160 --> 00:21:42,359 Speaker 1: change your route or aut on some more time to 428 00:21:42,480 --> 00:21:44,960 Speaker 1: your journey. And do you do you have anything to 429 00:21:45,119 --> 00:21:49,399 Speaker 1: appease somebody who just feels like I gotta sell something 430 00:21:49,520 --> 00:21:53,240 Speaker 1: like is there I think I quality a conference one's 431 00:21:53,240 --> 00:21:55,760 Speaker 1: talking about this where you get you let them do 432 00:21:55,800 --> 00:21:57,720 Speaker 1: a little something to get out of their system. What's 433 00:21:57,760 --> 00:21:59,960 Speaker 1: that like? Absolutely? So, the way I think about it 434 00:22:00,240 --> 00:22:03,520 Speaker 1: is that you never stop a river. You can redirect it, 435 00:22:03,840 --> 00:22:06,080 Speaker 1: you can use a f irrigation, you can use it 436 00:22:06,119 --> 00:22:07,960 Speaker 1: to generate electricity, but you're never gonna be able to 437 00:22:08,000 --> 00:22:10,840 Speaker 1: stop the river. Um, So you have to take whatever 438 00:22:10,960 --> 00:22:16,040 Speaker 1: sort of momentum and real underlying emotional issue that they 439 00:22:16,080 --> 00:22:21,000 Speaker 1: have and redirect or make them think about it slightly differently. 440 00:22:21,040 --> 00:22:24,800 Speaker 1: So really a good example, here's an incredibly irrational thing. 441 00:22:25,280 --> 00:22:28,320 Speaker 1: People market time in their taxable accounts more than they 442 00:22:28,400 --> 00:22:31,359 Speaker 1: do in their tax advantage accounts. So you look at 443 00:22:31,400 --> 00:22:33,480 Speaker 1: your retirement account and you're like, no, that's long term, 444 00:22:33,520 --> 00:22:36,400 Speaker 1: I'm not going to touch it. But I'm worried about 445 00:22:36,440 --> 00:22:38,080 Speaker 1: the election. I think the market is going to go down, 446 00:22:38,240 --> 00:22:40,199 Speaker 1: so I'm going to market time in my taxible account. 447 00:22:40,480 --> 00:22:42,520 Speaker 1: This is incredibly dull, you know, like the market is 448 00:22:42,520 --> 00:22:44,440 Speaker 1: going to have an equal impact on both those accounts. 449 00:22:45,160 --> 00:22:47,280 Speaker 1: But if you market time and you're taxable, you're definitely 450 00:22:47,320 --> 00:22:50,639 Speaker 1: gonna end up owing taxes. So what we did is 451 00:22:50,680 --> 00:22:53,560 Speaker 1: we bel a future called a tax Impact Preview, and 452 00:22:53,880 --> 00:22:56,200 Speaker 1: what it does is just for taxable accounts, before you 453 00:22:56,359 --> 00:23:00,240 Speaker 1: go through with an allocation change, it says donal. We 454 00:23:00,280 --> 00:23:02,160 Speaker 1: find if you want to do this, but you're gonna 455 00:23:02,200 --> 00:23:06,440 Speaker 1: owe five dollars in taxes common at um. People don't 456 00:23:06,480 --> 00:23:08,399 Speaker 1: think about taxes when they're trading. It's hard for them 457 00:23:08,440 --> 00:23:11,919 Speaker 1: to calculate it, and they hate them. People really hate taxes. 458 00:23:11,960 --> 00:23:14,320 Speaker 1: So if you throw up a there is a sticker 459 00:23:14,400 --> 00:23:16,440 Speaker 1: press of five dollars in tax if you go ahead 460 00:23:16,480 --> 00:23:18,920 Speaker 1: with this um. What we have found is that if 461 00:23:19,119 --> 00:23:21,560 Speaker 1: if that number is more than fifty dollars, if they're 462 00:23:21,560 --> 00:23:24,360 Speaker 1: gonna have more than fifty dollars in taxes. There's less 463 00:23:24,359 --> 00:23:26,320 Speaker 1: than one in ten ten chance that they're going to 464 00:23:26,400 --> 00:23:29,520 Speaker 1: go ahead. So give them something else that they hate more. 465 00:23:29,840 --> 00:23:31,920 Speaker 1: Where do they hate more than losing money? They hate 466 00:23:32,040 --> 00:23:35,639 Speaker 1: paying it to the government apparently. So to bring this 467 00:23:35,760 --> 00:23:39,800 Speaker 1: back to the ETF, I want to ask you your 468 00:23:39,800 --> 00:23:43,480 Speaker 1: average customer, do they know that they're actually investing in ETS? 469 00:23:45,160 --> 00:23:47,639 Speaker 1: I would this is the average one does. Yeah, I 470 00:23:47,680 --> 00:23:50,080 Speaker 1: would guess that they would have a hard time explaining 471 00:23:50,119 --> 00:23:51,920 Speaker 1: to you what how an ETF was different than a 472 00:23:52,000 --> 00:23:55,520 Speaker 1: mutual fund and why and so on. But I think 473 00:23:55,560 --> 00:23:58,600 Speaker 1: they have a general understanding that ETS so liquid and 474 00:23:58,640 --> 00:24:01,119 Speaker 1: low costs and tracking disease, and that's the regular for 475 00:24:01,160 --> 00:24:04,439 Speaker 1: them to be a message, damn makes your time? Can 476 00:24:04,680 --> 00:24:06,440 Speaker 1: can we have a taco now? Yeah? I think it's 477 00:24:06,440 --> 00:24:09,240 Speaker 1: time for a taco? Now. You're making me hungry. It 478 00:24:09,440 --> 00:24:11,480 Speaker 1: was the goal. By the way, they're a taco ETS. 479 00:24:12,600 --> 00:24:14,879 Speaker 1: There's a food and Beverage ETF with the ticker PBJ, 480 00:24:15,040 --> 00:24:16,960 Speaker 1: which is pretty good. But I don't there's probably some 481 00:24:17,080 --> 00:24:21,560 Speaker 1: taco company in their baggorite jigger I like Rhoda. I 482 00:24:21,640 --> 00:24:26,760 Speaker 1: will have to do J that bias. But okay, that's 483 00:24:26,800 --> 00:24:30,639 Speaker 1: bies he has to outside of that, Jay nug is 484 00:24:30,680 --> 00:24:34,879 Speaker 1: another j um. That's a good question, Jay Ugg. By 485 00:24:34,880 --> 00:24:36,960 Speaker 1: the way, it's probably the most volatile eca from the 486 00:24:37,000 --> 00:24:39,879 Speaker 1: planet's triple ledgers junior gold miners. I think that's what 487 00:24:39,960 --> 00:24:43,240 Speaker 1: you're using. You're after tax account. Yeah, exactly. Actually, is 488 00:24:43,280 --> 00:24:47,400 Speaker 1: there like that? Not better than it? Portfolio? What would 489 00:24:47,400 --> 00:24:50,200 Speaker 1: that's a really good what would be like the antimatter 490 00:24:50,400 --> 00:24:53,119 Speaker 1: to our portfolio? Yeah, it would be like a triple 491 00:24:53,240 --> 00:25:04,840 Speaker 1: leverage short bigger. Yes. Thanks for listening to Trillions. Until 492 00:25:04,880 --> 00:25:06,800 Speaker 1: next time. We can find us on the Bloomberg terminal, 493 00:25:07,040 --> 00:25:10,560 Speaker 1: Bloomberg dot com, Apple Podcasts, and a bunch of other 494 00:25:10,600 --> 00:25:13,159 Speaker 1: places that probably haven't heard about yet. We'd love to 495 00:25:13,200 --> 00:25:16,359 Speaker 1: hear from you. We're on Twitter, I'm at Joel Webber Show, 496 00:25:17,000 --> 00:25:21,080 Speaker 1: He's at Eric Baltunas. Trillions is produced by Jordan Bell 497 00:25:21,440 --> 00:25:24,679 Speaker 1: with help from Magnus Henrickson. Francesca Levy is the head 498 00:25:24,680 --> 00:25:26,480 Speaker 1: of Bloomberg podcast Bye.