Speaker 1: Welcome too, had a money I'm Joel and I am Matt.
Speaker 1: Today we're talking about teaching and retiring rich with Dan Otter.
Speaker 2: Yeah.
Speaker 3: So teaching is not typically synonymous with accumulating vast quantities
Speaker 3: of wealth, but our guest today, Dan Otter, he is
Speaker 3: here to say otherwise. And actually it turns out that
Speaker 3: teachers might have a way to totally supercharge their retirement
Speaker 3: by investing even more money than they otherwise thought it
Speaker 3: was possible or excited to get to that. But Dan Otter,
Speaker 3: he is an elementary school teacher turned for a three
Speaker 3: B hero in the world of teachers. He is the
Speaker 3: founder of the much referenced site for threebys dot org.
Speaker 3: And we are pumped to discuss the different ways that
Speaker 3: teachers can financially prepare for their futures. Teaching, by the way,
Speaker 3: an incredibly underrated profession. I'm sure you would agree, Dan.
Speaker 3: But we're excited to talk about four three bes, four
Speaker 3: fifty sevens, pensions, all of that and more today. Thank
Speaker 3: you for joining us today on the podcast.
Speaker 4: Oh it's my pleasure. I'm very happy to join you guys.
Speaker 1: We're excited to have you Dan. And the first question
Speaker 1: we got to ask you, We ask everybody who comes
Speaker 1: on is what's your craft beer equivalent? Which means what
Speaker 1: is it that maybe you spend more on than some
Speaker 1: people would think of sane, But hey, it's okay because
Speaker 1: you're still doing the smart things with your money. You're
Speaker 1: still saving and investing for the future.
Speaker 4: Well, if you'd asked me this question three years ago,
Speaker 4: I probably would have said craft beer. I have been
Speaker 4: a long time craft beer fan. I mentioned before we
Speaker 4: started recording how I came to our town. It was
Speaker 4: to work at a university here, at the University of
Speaker 4: Redlands in Redlands, California, southern California, and I ran something
Speaker 4: called the School of Continuing Studies. I was an associate
Speaker 4: dean and I had to come up with classes that
Speaker 4: would be interesting to the public. And I started a
Speaker 4: class called From Beer to Eternity. It was the history
Speaker 4: of beer and we would hold it at the local
Speaker 4: breweries and it was super, super popular. It was like
Speaker 4: one day, like I think, three hours, a lot of tasting,
Speaker 4: but there's the custory. Yeah, people loved it, and there's
Speaker 4: some interesting history around the development of civilization in beer,
Speaker 4: you know.
Speaker 2: Oh yeah.
Speaker 4: One of the readings was a New York Times article
Speaker 4: that made the case that beer helped advance society, creativity,
Speaker 4: socialization kind of sounds like college right.
Speaker 2: Not to mention safe drinking water safe.
Speaker 1: We're also firm believers that it accelerates your finances.
Speaker 4: So yeah, the right. But you're absolutely right about the health.
Speaker 4: You know, the safety. You know you could you could die,
Speaker 4: you know, drinking the wrong thing, whereas beer had been
Speaker 4: fermented and you know, pretty healthy. But that was what
Speaker 4: I would answer three years ago. I have to tell you, guys,
Speaker 4: I'm not drinking as much as I used to. But
Speaker 4: I will tell you what I will gladly spend money on,
Speaker 4: and that is experiences I will upgrade for better concert seats. Now,
Speaker 4: we just went, my wife and I just went to
Speaker 4: Vegas to the Sphere to see Las, to see Las Vegas,
Speaker 4: to see you too. And I'm like, this is not
Speaker 4: a brag, but tickets were five hundred dollars apiece and
Speaker 4: they were worth every single penny. I cannot recommend the Sphere.
Speaker 2: Specifically you too.
Speaker 3: I'm not gonna lie. I've got a little bit of
Speaker 3: regret not having missed out on that. And yeah, I
Speaker 3: don't know if ph'll be another opportunity to go see
Speaker 3: you t specifically, but I'm like, oh, dang it, I
Speaker 3: kind of feel like I.
Speaker 1: Should have I should spend that's wait for Hanson to
Speaker 1: come to the Sphere someday.
Speaker 2: Remember it haught my way over there. Maybe you can
Speaker 2: join me.
Speaker 4: Dan Well, I think you guys should go easier on
Speaker 4: yourselves because you're in your early forties, late thirties. I
Speaker 4: think I heard and I was there, not that well now,
Speaker 4: it's like eighteen years ago, but I was there and
Speaker 4: I said no to a bunch of things. I went
Speaker 4: to San Diego State and I think it was maybe
Speaker 4: twelve thirteen years ago. They were in the I think
Speaker 4: it was the final eight or sixteen or something. You know.
Speaker 4: I know they got to the final, you know, year ago,
Speaker 4: which was a massive deal, but they finally got passed.
Speaker 4: I think it was the thirty two got to the sixteen,
Speaker 4: and I was living in New Mexico at the time,
Speaker 4: and they were playing in California, and my buddy's like,
Speaker 4: let's go, and I said no. It's a little bit
Speaker 4: like your Sphere story. I don't regret saying no, because
Speaker 4: it would have been too much financially at that time.
Speaker 4: But now that I'm fifty nine, you know, we still
Speaker 4: have a kid in college, a pretty pricey college, and
Speaker 4: then a daughter who's living on her own. She's young professional.
Speaker 4: I am willing to spend money on that kind of stuff,
Speaker 4: and I am willing to spend money on travel. My
Speaker 4: wife and I went to Paris and Katar. Not many
Speaker 4: people make that combination unless they're going to watch soccer.
Speaker 4: But we did that in December. And I would say
Speaker 4: one of my sneaky travel tips, which might not be
Speaker 4: you know that much of a sneaky tip, is to
Speaker 4: travel into December to Europe. It is less crowded. People
Speaker 4: are happier to see you. They are frankly overseeing Americans
Speaker 4: in the summer. At least five different people told me that.
Speaker 1: Plus you're not running into a million Americans who July
Speaker 1: just overrun travel when everybody else isn't.
Speaker 3: Yeah, thanks for sharing, dan Zag. Yeah yeah, okay, can
Speaker 3: you kick it off? Tell us the personal store like
Speaker 3: your own experience. Essentially that kicked off the obsession for
Speaker 3: you with the which I have a lot of obsessions.
Speaker 3: The four three journey specifically is what we want to
Speaker 3: talk about now.
Speaker 4: Absolutely, so, you had mentioned I was an elementary school teacher.
Speaker 4: So we're going back to the early nineties, first year
Speaker 4: on the job, maybe my third month on the job.
Speaker 4: I know very little about saving for retirement, but I'm
Speaker 4: thrilled because I know I have a pension. I don't
Speaker 4: even know how it works, but I've been told, look,
Speaker 4: you work X number of years, when you retire, you'll
Speaker 4: get a percentage of your final paycheck until you pass away. Boy,
Speaker 4: that sounded really great after working in journalism for three
Speaker 4: years and having no retirement benefits or health benefits. But
Speaker 4: one day, the kids had left for the day. It
Speaker 4: was about four o'clock. I'm at my desk desperately trying
Speaker 4: to get ready for the next day's instruction. Any teacher
Speaker 4: listening to this understand the terror of being a first
Speaker 4: year teacher, where every day is a massive challenge, and
Speaker 4: that first year is a challenge. And so I've got
Speaker 4: my head down and there's a knock at my classroom door.
Speaker 4: Woman opens the door, pokes her head in and says
Speaker 4: a rather jarring comment, do you care about your financial future?
Speaker 2: Wow?
Speaker 4: Okay, you're so busy with your work and you hear
Speaker 4: this question. I think there's only one answer, right, I think,
Speaker 4: especially the kind of podcast you guys have. Well, yes,
Speaker 4: So she takes as an invitation to come in my
Speaker 4: room and she starts talking about these investments. And again
Speaker 4: I have some vague idea of my life pension, but
Speaker 4: I have no idea what she's talking about. And she
Speaker 4: said she helps the teacher next door, the teacher down
Speaker 4: the hall, and she had the paperwork. Guys, paperwork filled out.
Speaker 4: All I had to do was sign it, and I
Speaker 4: think one hundred dollars a month would have gone to
Speaker 4: this investment. I'm a very skeptical person. I don't like
Speaker 4: the hard sell, and so I just said, look, if
Speaker 4: I'm interested, i'll get back in touch, thank you for
Speaker 4: your time. Lucky for me, I did not get back
Speaker 4: in touch with her, because I started asking questions of
Speaker 4: my colleagues. I started self educating myself about saving for retirement,
Speaker 4: and guys, this is pre podcast era, pre internet, just
Speaker 4: you couldn't get that information. I mean, I started subscribing
Speaker 4: to magazines like Money magazine, and what I started to
Speaker 4: learn was, yes, teachers had a pension, but they also
Speaker 4: had not one, but two supplemental retirement plans. And at
Speaker 4: the time I learned about the four H three B,
Speaker 4: the oldest retirement plan available to teachers. It actually surprisingly
Speaker 4: to people when they hear this. It predates the four
Speaker 4: one K by twenty years. So the four H three
Speaker 4: B was created nineteen fifty eight. So and teachers can
Speaker 4: also contribute to a four to fifty seven B, but
Speaker 4: it wasn't as common at that time, the early nineties.
Speaker 4: And we'll get into the fourty seven because I actually
Speaker 4: think it's a better plan than the four H three B.
Speaker 4: But I started researching the four oh three B, and
Speaker 4: I was horrified when I found out because I had
Speaker 4: learned you wanted to save in low cost funds. Vanguard
Speaker 4: is the company I kept hearing about when I would read,
Speaker 4: you know, money magazine Kiplinger Personal Finance. But that wasn't
Speaker 4: the case for teachers. Listen to this, guys. I taught
Speaker 4: in a school district called Corona, Norco Unified School District
Speaker 4: in nineteen ninety two. They had, I'm not kidding you,
Speaker 4: one hundred different financial companies available.
Speaker 2: Could you talk about choice overload?
Speaker 4: Oh my god? And then imagine each company might have
Speaker 4: let's just say modestly six different investment choices which we
Speaker 4: know is on the very, very very low end. So
Speaker 4: you're talking it's almost like the number of combinations of
Speaker 4: Starbuck drinks, right, what is that ten thousand? I don't know,
Speaker 4: So it is overwhelming. And then the thing you find
Speaker 4: out is it's mostly a sales army that is selling
Speaker 4: these products. They're going into classrooms, they're going into staff lounges,
Speaker 4: they're providing so called free lunch. And so now we're
Speaker 4: like three four years from this encounter, and I'm getting
Speaker 4: angry and angrier because I'm sitting in my staff lounge
Speaker 4: and I'm hearing my colleagues say, oh, my guy or
Speaker 4: my woman, Oh yeah, I'm all set up. And now
Speaker 4: I was a little bit savvy. I could ask questions,
Speaker 4: what do you know what you're paying in fees? Oh,
Speaker 4: there's no fees, right, That's like the funny thing. As
Speaker 4: soon as you hear that, you know, the BS detector
Speaker 4: goes off. And so with one colleague, I said, well,
Speaker 4: I can almost bet my life that you're paying some
Speaker 4: type of fee. Why don't you your statement and I'll
Speaker 4: take a look, And she did, and I was able
Speaker 4: to show her where she was paying. I think it
Speaker 4: was over two percent. Not only that, there was a
Speaker 4: fifteen year surrender penalty. Oh my gosh, so she wanted
Speaker 4: to move hers too. And actually, here's what's crazy. Vanguard
Speaker 4: was actually available. So of those one hundred vendors, you
Speaker 4: go down the list, oh my god, there's Vanguard. So
Speaker 4: I signed up with Vanguard, and I admit I felt
Speaker 4: kind of smug. I had yet to meet anyone at
Speaker 4: this point in my district who had contributed to Vanguard,
Speaker 4: because I had to open it myself. They had all
Speaker 4: gone with the sales agent who had come to the room,
Speaker 4: to their staff lounge. But this colleague I helped. She said,
Speaker 4: Oh my gosh, you should put on workshops. So now
Speaker 4: we're getting to like nineteen eighty ninety eight, ninety nine,
Speaker 4: and the internet's becoming a thing. People are starting websites.
Speaker 4: I mean, it was very very raw back then. And
Speaker 4: I started four or three BIS with a fellow teacher
Speaker 4: who's no longer in. And I have to tell you, guys,
Speaker 4: I kind of think part of our secret sauce is
Speaker 4: our name. We initially had an absurdly long name like
Speaker 4: teacher financial Information dot com, and we just knew that
Speaker 4: was a loser of a name, and my buddy and
Speaker 4: I was really a perfect collaboration because he said, I've
Speaker 4: heard that you want to have the name of what
Speaker 4: you're doing in the title, So you want four to
Speaker 4: oh three B. At the time was I had a
Speaker 4: young child and we were reading a book called baby Wise.
Speaker 4: I don't even know if that's a thing anymore. It's
Speaker 4: this whole philosophy around raising kids, and so I think
Speaker 4: that's what was in my mind, and it just seemed
Speaker 4: to make sense. Four to oh three be wise, and
Speaker 4: we think that's kind of a little bit of it. Yeah,
Speaker 4: it works, It's so simple, and so we launched it
Speaker 4: in two thousand and all of a sudden, a teacher
Speaker 4: from LA who had been advocating for four oh three
Speaker 4: b's before me, gentleman named Steve Shuloh, who I call
Speaker 4: the godfather of four oh three B reform, he heard
Speaker 4: about our website and he started promoting it, and then
Speaker 4: he contacted me and said, hey, listen, there's a reporter
Speaker 4: from US News and World Report coming out to LA
Speaker 4: to interview me about the K twelve four oh three B.
Speaker 4: I'll see if he wants to talk to you, and
Speaker 4: he did. So we were living. I was living in
Speaker 4: Orange County at the time. So he came and we
Speaker 4: met at a restaurant, and you know, I think it
Speaker 4: was just a little blurb in a story, but he
Speaker 4: put our website four oh threebwis dot org, and all
Speaker 4: of a sudden, you know, you could track your visitorship.
Speaker 4: It started spiking. And I used to listen to this
Speaker 4: NPR show called Sound Money. It was out of Minneapolis,
Speaker 4: and again no podcast back then, so if you want
Speaker 4: to listen to this radio program, you are at the
Speaker 4: radio at the designated time, and I think it was
Speaker 4: like eleven am on Saturdays. I would usually be in
Speaker 4: my yard working on my vegetable garden, and it was
Speaker 4: something I look forward to all week. So I emailed
Speaker 4: them and I said, oh, I love what you guys do.
Speaker 4: I would love if you covered the four oh three
Speaker 4: b oh By the way, I have this website four
Speaker 4: oh three be wise, and we were just mentioned in
Speaker 4: US News and World Report almost immediately, probably like within
Speaker 4: two hours. This is on a Saturday. They emailed me
Speaker 4: back and they said, oh, that sounds like a great topic.
Speaker 4: Would you like to be on our show in like
Speaker 4: two weeks And immediately Guys, my fingers got moist, and
Speaker 4: because of life nerves, I'm like, oh my god, I'm
Speaker 4: going to be on this radio show. And so I
Speaker 4: somehow survived, and boy did our visitorship spike so much
Speaker 4: so that someone from TIA Kraf reached out to me
Speaker 4: and said, hey, we love what you're doing. We've been
Speaker 4: wanting to help reform the four h three BE market
Speaker 4: in California. Guys, in California, we have this insane insurance
Speaker 4: code from when Nixon was the president that says if
Speaker 4: a school district offers one four to oh three B vendor,
Speaker 4: they have to open it up to all vendors. That's
Speaker 4: why we had one hundred vendors. That's why LA had
Speaker 4: two one hundred and fifty vendors. Can you imagine aggregating
Speaker 4: that money?
Speaker 1: Bad laws essentially create a terrible system.
Speaker 4: It's incentives, right, people respond to incentives. You're going to
Speaker 4: allow two hundred and fifty vendors? Think of all the
Speaker 4: sales agents. It was insane. It's a little bit better now.
Speaker 4: So we got involved with TIA Craft to push this
Speaker 4: legislative effort and I'm so naive. I'm like, who could
Speaker 4: be against this? Well, I'll tell you what a one
Speaker 4: hundred million billion dollar industry. These set of guns bought
Speaker 4: the domain name four oh threebis dot net, which I
Speaker 4: now own, But they bought that and they had the
Speaker 4: opposite message.
Speaker 1: So dirty, it was so dirty, especially with so hard.
Speaker 1: It's a labor of love. It's passionate, it's it's it's
Speaker 1: looking over individual teachers, your friends who you work with
Speaker 1: their statements, and then it turns into this mission that's
Speaker 1: not profit oriented to educate people. I'm curious. I want
Speaker 1: to talk. We want to talk a lot about four
Speaker 1: or three bees and get into kind of some of
Speaker 1: the nitty gritty, but I want to zoom out real quick.
Speaker 1: I want to hear you wrote a book called Teach
Speaker 1: and Retire Rich, which sounds like an oxymoron. Most teachers
Speaker 1: aren't like, oh, what's the greatest path to wealth. Let
Speaker 1: me go into K through twelve education. But like you know,
Speaker 1: and you mentioned the pension. A lot of teachers across
Speaker 1: the country they get summers off. They might get a
Speaker 1: good pension, but yeah, talk to me about the smaller paycheck.
Speaker 1: Can teachers retire comfortably with the right know how and
Speaker 1: the right follow through? Why do you believe that teachers
Speaker 1: can retire wealthy.
Speaker 4: Yeah, we need to start with the definition of rich.
Speaker 4: Now if you're talking about having like an island house
Speaker 4: and fifteen cars. No, When I think about teaching, I
Speaker 4: think of the intrinsic rewards. While it is an unbelievably exhausting,
Speaker 4: difficult job that has only got harder, I believe the
Speaker 4: job today is almost twice as hard as it is
Speaker 4: that when I was teaching. There is you are the
Speaker 4: target on so many fronts. You've got email. It is
Speaker 4: a very difficult job. I could only do it for
Speaker 4: twelve years. But I've already talked about it. We've touched
Speaker 4: on it. You have a pension. Not many professions provide
Speaker 4: a pension anymore, and you have not one but two
Speaker 4: to find contribution plans similar to the four to oh
Speaker 4: one K two four to one K like retirement plans
Speaker 4: the four oh three B and the four to fifty
Speaker 4: seven B. And again, I think teacher salaries should be
Speaker 4: much higher, there is no doubt about that. But if
Speaker 4: you can be diligent with starting a four oh three
Speaker 4: B early in your career, assuming you've got good choices,
Speaker 4: and that's not always the case, and that's what our
Speaker 4: mission is with you four oh three B. Wise, we're
Speaker 4: now a nonprofit dot org and we'll probably get into that.
Speaker 4: But you have your pension, you have your four oh
Speaker 4: three B. You can also do a four to fifty
Speaker 4: seven B. But my message to any educator listening is,
Speaker 4: especially young ones, start with the wroth Ira. The reason
Speaker 4: is you get to have a low cost company like
Speaker 4: a Vanguard, a Fidelity. These are the companies we want
Speaker 4: teachers to have in their four oh three B and
Speaker 4: four fifty seven B, and often they don't and they
Speaker 4: have to fight to get those at it. And again
Speaker 4: that's what our website's about. But I would say anyone
Speaker 4: listening at a minimum have a roth Ira to start then.
Speaker 1: So even even just a roth Ira at a low
Speaker 1: cost provider that you have maxed out over a working
Speaker 1: lifetime in combo with the pensions, that in and of
Speaker 1: itself can be set you up for a significantly NXE retirement.
Speaker 2: Yeah.
Speaker 3: Well, not to mention too, just the ability to contribute
Speaker 3: both to a four to three B and a four
Speaker 3: to fifty seven maxing both of those out having separate,
Speaker 3: separate contribution limits. But it's interesting too. I guess Dan,
Speaker 3: like you're you're talking. I feel like we can have
Speaker 3: a whole conversation about how teaching has become harder. I
Speaker 3: feel like we could have a whole discussion about like
Speaker 3: social media and parents maybe seeming like that they're on
Speaker 3: your side, but advocating for their students, for the kids,
Speaker 3: it's yeah, incredibly difficult. And because of that, it seems
Speaker 3: like most teachers, they don't stick with a profession, yes, right,
Speaker 3: like like much less.
Speaker 2: With a specific school district.
Speaker 3: How should the different stats out there about teachers leaving
Speaker 3: the profession impact, you know, how it is that they
Speaker 3: approach their investments. Should it be more of a let's
Speaker 3: focus on an individual, my individual contributions and being able
Speaker 3: to have my retirement essentially migrate with me, no matter
Speaker 3: what industry I'm in, no matter what job I should have.
Speaker 4: Well, you've just touched on an issue that's gotten even
Speaker 4: more challenging in the wake of COVID, and that is
Speaker 4: teacher attrition. And when I was a teacher, you know,
Speaker 4: five the five year mark was the big one many
Speaker 4: I think it was forty percent. I think was the
Speaker 4: statistic I recall from my time teaching that people left
Speaker 4: the profession, and I would guess it's even a little
Speaker 4: bit higher now. So again I'm not trying to get
Speaker 4: people out of the classroom. I always say that when
Speaker 4: we talk on this topic. But if you're a first
Speaker 4: year teacher, you know have that roth IRA for sure.
Speaker 4: Because it's so flexible. It's not tied to your employer,
Speaker 4: so if you leave your employer, you don't have to
Speaker 4: do anything with it. You can keep doing that. But
Speaker 4: let's say you start teaching, you think you're going to
Speaker 4: do it for a while or not even sure. I
Speaker 4: would say do a four to fifty seven B first.
Speaker 4: And the reason is it has this huge advantage over
Speaker 4: to the four oh three B. One. There's a little
Speaker 4: bit more fiduciary protection than afforded in a four to
Speaker 4: oh three B see the four oh three B. The
Speaker 4: reason it's so awful is it's not subject to ARISSA,
Speaker 4: the Federal Employee Retirement Income Security Act. That the four
Speaker 4: to oh win K is. The four to win K
Speaker 4: employer who offered the terrible products that a K twelve
Speaker 4: employer does would be sued. But because the K twelve
Speaker 4: four to oh three B governmental four oh three b's
Speaker 4: fall outside of Arisa, they are awful. Forty seven b's
Speaker 4: have two advantages. There's a little bit more fiduciar requirement.
Speaker 4: It's usually at the state level. But the big one
Speaker 4: is when you separate service, when you leave your employer,
Speaker 4: if you have a four fifty seven B, you will
Speaker 4: and you leave so you're no longer employed. You can
Speaker 4: take that four fifty seven B money and you can
Speaker 4: access it penalty free. You'll still owe taxes on it,
Speaker 4: but you will not be penalized. With the four h
Speaker 4: three B. You have to wait until your age fifty
Speaker 4: five to do that. So if you're one of these
Speaker 4: fire people and you think you might want to retire
Speaker 4: at fifty forty five, and you're an educator, maximize the
Speaker 4: four fifty seven B. If you're one of these people,
Speaker 4: aren't sure you're going to stay in the profession, and
Speaker 4: you already maximize your wrath, do the four fifty seven
Speaker 4: B again, assuming you've got a decent vendor.
Speaker 2: Yeah.
Speaker 1: Do you think that too many teachers avoid investing in
Speaker 1: these accounts because they're assuming they're going to work for
Speaker 1: thirty years and get that sweet pension, and they're like,
Speaker 1: I don't need to and plus I mean, let me
Speaker 1: be honest, we touched on the fact that pays not incredible,
Speaker 1: So our teachers just less likely to invest because they're
Speaker 1: like resting on their laurels of that pension. And then
Speaker 1: the teachers who don't invest for ten twelve years and
Speaker 1: then leave that profession and their pension is not nearly
Speaker 1: as good as they thought it was going to be
Speaker 1: or potentially non existent, then they're like, at the biggest disadvantage.
Speaker 1: It's like going to college for four years but not
Speaker 1: getting the degree, getting a degree to pay for it.
Speaker 4: Yeah. No, it's such a good question, and it's a
Speaker 4: good comparison. And what makes it even worse in a
Speaker 4: state like California is you don't contribute to Social Security
Speaker 4: And many teachers don't even know this. You know. We
Speaker 4: do these free zoom events once once a month where
Speaker 4: we call it office hours, where we take questions for
Speaker 4: an hour, and my partner is a fiduciary advisor, and
Speaker 4: so I always joke it's actually not us taking questions,
Speaker 4: it's him, because he's so good. But we find a
Speaker 4: lot of people who attend these say, oh, I left
Speaker 4: teaching and I found out I hadn't been contributing to
Speaker 4: social Security for all those years teaching. So I think
Speaker 4: there's about a dozen a dozen states where that's not
Speaker 4: the case. So I don't know, you know, teacher by teacher,
Speaker 4: it's only anecdotal. What I will say is school districts
Speaker 4: are not teaching teachers about their retirement plans. Our dream
Speaker 4: is that every school district would put on an unbiased
Speaker 4: retirement plan workshop that says, here's your pension, here's how
Speaker 4: it works, here's the four oh three B, here's the
Speaker 4: four fifty seven. But what's happening is sometimes the vendors,
Speaker 4: the high cost vendors like Equitable, one of the worst
Speaker 4: of the worst, they have somehow made inroads with school
Speaker 4: districts and they're putting on so called financial workshops, often
Speaker 4: at new teacher orientations. They were doing this at San
Speaker 4: Francisco Unified. I had a friend of a friend who
Speaker 4: worked there and she told me this is what was happening.
Speaker 2: A school of fish. Man.
Speaker 1: It is.
Speaker 4: It's almost it's frankly, it's worse than doing nothing at all,
Speaker 4: or they'll have a benefits fair and who has who
Speaker 4: has booths? So something we do and I'll make this
Speaker 4: offer to your audience. We put on three one hour
Speaker 4: zoom sessions. We will do it for any school district
Speaker 4: in the country. I think we've already done about twenty
Speaker 4: five to thirty so far this year. Yes, they're super popular.
Speaker 4: And what we hear again and again it ties back
Speaker 4: to your question, is people saying I've been teaching twenty years,
Speaker 4: no one told me about this. So I think a
Speaker 4: lot of it is just they don't know what they
Speaker 4: don't know.
Speaker 2: Yeah, yeah, so yeah.
Speaker 3: In a lot of cases though, it sounds like, yeah,
Speaker 3: avoiding the four to three B altogether, maybe focusing on
Speaker 3: the four fifty seven because of those fiduciary protections. Do
Speaker 3: you also have four fifty seven B wise, Well, we do, yeah.
Speaker 4: Because of our experience being you know, with those that
Speaker 4: nefarious approach all those years ago. And yeah, and the
Speaker 4: big thing is, you know something I think one of
Speaker 4: our best resources we have on four oh threebwis dot
Speaker 4: org is we are attempting to upload every school district
Speaker 4: four oh three B and four fifty seven B. Wow.
Speaker 4: What an undertaker? Yeah, undertaking. I feel like I'm gonna
Speaker 4: need an undertaker if I actually.
Speaker 1: By the end of it, actually you'll get an undertaker
Speaker 1: by Dan at Costco Casket just in case you know.
Speaker 4: Well by now right, that's a smart financial move.
Speaker 3: Well least, like you said, these big names are probably
Speaker 3: coming after you because you are keeping their.
Speaker 2: I don't want to call them.
Speaker 3: Their customers, but you know how it is that they've
Speaker 3: view they see them as no exactly, it's it's a
Speaker 3: way for them to to line their pockets. But we
Speaker 3: actually do we do have a lot more to get
Speaker 3: to with you, Dan. We do have some specific questions
Speaker 3: about the four to three B. We'll get to all
Speaker 3: that right after this. All right, we're back to the break.
Speaker 3: We're still talking about how you can teach.
Speaker 1: You can be a teacher, you can work in K
Speaker 1: through twelve education, and you can still retire rich, which
Speaker 1: is I think a great message and not one that
Speaker 1: most people think lines up with reality. But our guest,
Speaker 1: Dan Honor has done a good job of filling us
Speaker 1: in on why that is the case. But you have
Speaker 1: to know the pitfalls to avoid, and we were talking
Speaker 1: about how kind of the foxes in the henhouse here
Speaker 1: when it comes to the retirement. The companies out there
Speaker 1: trying to lure teachers into investing with them. Dan you
Speaker 1: mentioned how I guess you had like one hundred plus
Speaker 1: options too, of places you can invest with your four
Speaker 1: or three B. And it makes you think of why
Speaker 1: Matt and I like the store Aldi to shop back
Speaker 1: because it's like there's two catchups or one like there's
Speaker 1: not much choice in Supermans. It's fine, right, yeah, And
Speaker 1: we know that it's star cheap because that's just what
Speaker 1: ALDI prioritizes. They don't prioritize lots of choice. So how
Speaker 1: do teachers How can they know if their four H
Speaker 1: three B is a good one, if they have good choices,
Speaker 1: if they have solid options or not when it comes
Speaker 1: to the investments that are being offered to them.
Speaker 4: Well, that is the question we have gotten the most
Speaker 4: over the years. So we finally decided to do something
Speaker 4: about it. And I would say two or three years
Speaker 4: ago we started a database of K twelve four H
Speaker 4: three B vendorless. Now, guys, they are close to fourteen
Speaker 4: thousand school districts in the country. So what we've done
Speaker 4: is we've created something called the Rating Project, the Planned
Speaker 4: Rating Project. In what we do, it's two steps. We
Speaker 4: rate the vendors. First using a simple traffic light system
Speaker 4: red bad, yellow, caution green good. So we take about
Speaker 4: the fifty most popular four or three B vendors. And
Speaker 4: when I say popular, I don't mean good because most
Speaker 4: of them are bad, and we give them a color
Speaker 4: rating and the overwhelming majority of them are red. So
Speaker 4: then when we get a school district vendor list, so
Speaker 4: we will take a look at it. We will list
Speaker 4: all of the vendors and if they have a green
Speaker 4: vendor available, we will give a check. And to date,
Speaker 4: we have got over forty six hundred districts in our
Speaker 4: vendor database. And because we've focused on big school districts,
Speaker 4: we think that we have the data covering close to
Speaker 4: two million educators and we believe we have about fifty
Speaker 4: five percent of all participants. Now, there's a lot of
Speaker 4: districts that are very small. So if you want to
Speaker 4: see if we have your information your school district's information,
Speaker 4: from the top of our homepage, there's a state you'll
Speaker 4: see the tool. You select your state and then it'll
Speaker 4: populate with the school district and you click that and
Speaker 4: if we have your information, you'll see the vendors, you
Speaker 4: will see an overall grade, you'll see a link to
Speaker 4: an explanation of the grade. And if you have a
Speaker 4: green vendor, a good vendor like a Fidelity, a Vanguard,
Speaker 4: that will be a green check. Now, if you search
Speaker 4: and we don't have your information, there'll be a prompt
Speaker 4: for you to submit the information. And all you need
Speaker 4: to do is just go on maybe a website at
Speaker 4: your school district or contact your benefits officials and say, hey,
Speaker 4: who are our four or three B vendors? Guyschool districts
Speaker 4: make it so difficult. I spent too much time in
Speaker 4: my life looking at school district websites trying to find
Speaker 4: the four H three B information. It is maddening. And
Speaker 4: this sort of goes back to the question teachers don't
Speaker 4: know because we make it so hard for them.
Speaker 1: What was it? Some of it seems like purposely hidden almost, Yeah,
Speaker 1: it's it's it's like hospitals who are supposed to federally
Speaker 1: I believe new law means they have to declare certain
Speaker 1: prices on their website, and they just they put it
Speaker 1: in like an unindexible spot. There's like they get paid
Speaker 1: for that. We're compliant, but we don't want anybody to
Speaker 1: see this information.
Speaker 3: Well, I'm curious, like you're talking about some of the
Speaker 3: different benefits fairs and how some like a player like Equitable,
Speaker 3: they might have the premier spot, like right when you
Speaker 3: enter in, they got the big table, the cool slanners. Yeah,
Speaker 3: the awesome swag because they can afford it. Because but
Speaker 3: I guess I'm curious, are there other incentives? Like are
Speaker 3: there other ways that some of the different school districts
Speaker 3: are How are these bigger players, I guess swaying some
Speaker 3: of these different school distric to go with them as
Speaker 3: opposed to something like a fidelity or a Vanguard, some
Speaker 3: of our favorite low cost options.
Speaker 4: Yeah. Well, there's something called the Association of School Business
Speaker 4: Officials asbo okay, which you know, again you work as
Speaker 4: a benefits official. It's really nice to be connected to
Speaker 4: a professional organization that could help you with the latest rules,
Speaker 4: because the rules and regulations. I went to one of
Speaker 4: these events and it was held at Disney World, and yeah,
Speaker 4: I was a guest of TIA craft because I spoke
Speaker 4: to some superintendents and a sort of small meeting about
Speaker 4: the importance of the four H three B and guys.
Speaker 4: I was grossed out by the opulence in the just
Speaker 4: gross amount of money there was, like ice sculptures, but
Speaker 4: even worse. Who were the main advertisers equitable? I think
Speaker 4: American Fidelity. I think Security Benefit the worst of the worst.
Speaker 3: American Fidelity, by the way, no investments American Fidelity. They're
Speaker 3: the ones putting on the ice luge, and we.
Speaker 4: Call them American infidelity. So they are terrible. Yeah, so
Speaker 4: this is these are the things. That's how they're mined.
Speaker 4: And the NEA, the National Education Association, we are pro union,
Speaker 4: but when it comes to the four oh three B
Speaker 4: most unions are awful. The NEA has what we call
Speaker 4: an unholy alliance with Security Benefit. Security Benefit has a
Speaker 4: product that has a five percent load. Shameful, shameful gentlemen
Speaker 4: that they're doing this. But some unions are good, so
Speaker 4: I don't want to say all, but that's a big
Speaker 4: national union. The ATC much better on this.
Speaker 1: We talked and Dan, you know this quite well. And
Speaker 1: this is something we talk about baking on the show.
Speaker 1: The fee that you pay dramatically is impacts what your
Speaker 1: nest egg is going to like in retirement. So if
Speaker 1: you're paying a five percent load, and that's on top
Speaker 1: of an annual fee, a fun fee, you might have
Speaker 1: less than half as much in retirement with the fee
Speaker 1: that large, is my guest. I mean, I'm sure you
Speaker 1: know the numbers on that.
Speaker 2: Yeah.
Speaker 4: Absolutely, you're already like negative seven in the hole, right,
Speaker 4: five five percent to the load and then two percent
Speaker 4: in fees. Man, that makes a difference over time.
Speaker 2: Yeah.
Speaker 3: So let's say some of the logs on and they're
Speaker 3: you know, they're looking up their district. They don't see
Speaker 3: it up there. You solicit them for the name of
Speaker 3: their providers, so that maybe y'all can do some more digging.
Speaker 3: But for the other individuals, individuals out there, is that
Speaker 3: what they should be looking at? Are they looking at
Speaker 3: their annual fees? You mentioned earlier some of the surrender fees,
Speaker 3: some of the surrender charges that accompany these different planes.
Speaker 2: As well, right, and oh they're terrible.
Speaker 3: I guess what are some of those factors that folks
Speaker 3: should be looking out for as they're trying to evaluate
Speaker 3: on their own whether or not they've got a good
Speaker 3: four or three B or not.
Speaker 4: Well, you mentioned the f word, right, fees And it
Speaker 4: is very difficult to find the fees because these these
Speaker 4: documents are just insanely.
Speaker 2: Long and they're legallyes.
Speaker 4: Basically, what I would say is, go to our homepage,
Speaker 4: and at the top you will see our district rating tool.
Speaker 4: How good or bad are your district's four h three
Speaker 4: B four fifty seven B vendors. Click that and what
Speaker 4: you're gonna see are a list in boxes green, yellow,
Speaker 4: and red. Ignore all the red. See if you've got
Speaker 4: the green or yellow. You're gonna want to look at that.
Speaker 4: And there's a little info button and if you hit that,
Speaker 4: it'll show why these are considered good vendors. You know,
Speaker 4: you don't have to use a salesperson, there's no surrendered charges,
Speaker 4: there's no revenue share. You can get index funds for
Speaker 4: under zero point two percent. Those are the metrics you
Speaker 4: want to pay attention to when selecting nice who to
Speaker 4: invest with.
Speaker 1: Okay, let's say there's a teacher listening out there, or
Speaker 1: a friend who knows somebody who's teached been a teacher
Speaker 1: for a decade or longer, and they've been investing in
Speaker 1: their four or three B and they're starting to scratch
Speaker 1: their head. Oh my gosh, what have I been investing in?
Speaker 1: I don't think I have being fidelity. Maybe I'm investing
Speaker 1: in a way that's really bad. Maybe I am investing
Speaker 1: in one of these red companies. You mentioned surrender charges
Speaker 1: being a reality. What do teachers need to know if
Speaker 1: they have been investing in their four or three v
Speaker 1: regularly before they try to pull their money out of
Speaker 1: that red investment, if they look it up on your
Speaker 1: website before they make any changes, Like, how do they
Speaker 1: know how to proceed.
Speaker 4: It's such a good question, and it's heartbreaking because we'll
Speaker 4: hear from teachers that say something in along lines of
Speaker 4: I thought I was doing the right thing. I thought
Speaker 4: I was ensuring my financial future. I thought this person
Speaker 4: was endorsed by the school district. Why would the school
Speaker 4: district let someone from Equitable come onto my campus if
Speaker 4: this was not a quality vendor, Folks, I don't know
Speaker 4: if you know this or not. A couple of years ago,
Speaker 4: Equable got fined fifty million dollars by the SEC for
Speaker 4: hiding certain fees. Why any school district in the country
Speaker 4: would continue to allow that company to sell to their
Speaker 4: most valuable resource employees is beyond me. I think it's malpractice.
Speaker 4: So that what we always say to these teachers. First
Speaker 4: of all, it's not your fault. You didn't know what
Speaker 4: you didn't know, but now you do. You've got a
Speaker 4: couple options. Here's the best option. Stop contributing. You have
Speaker 4: to go fill out a new salary reduction agreement. So
Speaker 4: you go to your benefits office, fill out it out
Speaker 4: a new salary reduction agreement. This just directs how much
Speaker 4: money per paycheck into what company? Zero that out? Hopefully
Speaker 4: you have one of the green vendors available. So let's
Speaker 4: take the good scenario.
Speaker 2: First.
Speaker 4: Look, you have Fidelity available, and increasingly they are being
Speaker 4: added to vendorless. Go ahead, contact Fidelity. Your district should
Speaker 4: have that information. You have to do it yourself. You
Speaker 4: know you're not going to use a financial salesperson for this.
Speaker 4: You do it yourself. Very simple process. You open an account,
Speaker 4: you go back to your school district, you sign a
Speaker 4: new sire reduction agreement. You choose Fidelity. Let's say it's
Speaker 4: two hundred dollars per paycheck. Okay, you've solved half your problem.
Speaker 4: What do you do with the existing four h three
Speaker 4: B If it's one of these red vendors, guys, chances
Speaker 4: are there's going to be a surrender penalty, and even worse,
Speaker 4: companies like an Equitable have something called rolling surrender charges.
Speaker 4: So because a.
Speaker 1: Lot so not just one penalty. It's like a penalty,
Speaker 1: like a recurring penalty.
Speaker 4: Well, so what it is is typically if you've been
Speaker 4: contributing for five to seven years, you can move that
Speaker 4: money penalty free. And a lot of people will say, Oh,
Speaker 4: I've been contributing for ten years, so this is great,
Speaker 4: all my money is not subject to a penalty. Well
Speaker 4: that's not the case. Every new contribution to Equitable starts
Speaker 4: like a seven year window, so that contribution June first
Speaker 4: or whatever, at the beginning of the month, it's locked in.
Speaker 4: So what you want to do is you want to
Speaker 4: contact Equitable and say, if I take my money out,
Speaker 4: how much of it is subject to penalty. So let's
Speaker 4: say they say, you know, let's let's say you have
Speaker 4: twenty five thousand dollars and they say ten thousand is
Speaker 4: move the fifteen thousand dollars to Fidelity. And this is
Speaker 4: not an easy process. This is where probably our most
Speaker 4: valuable resource comes in. I'm not a big Facebook fan,
Speaker 4: but I will tell you the four oh three buis
Speaker 4: Facebook group is amazing. Guys, we just hit sixteen thousand members.
Speaker 4: The number one question how do I get out of Equitable?
Speaker 4: That is the number one reason people join this. So
Speaker 4: what that also means, though, is there are thousands of
Speaker 4: people in our group who successfully got out of Equitable
Speaker 4: or in the process of trying to. We have this
Speaker 4: amazing guy on our board, Dan Dues, who puts in
Speaker 4: three to four hours a day or more helping people
Speaker 4: get out of Equitable or American Fidelity. So I would say,
Speaker 4: as much as I love four oh threebwis dot Org,
Speaker 4: go to our Facebook group three b wise Facebook group
Speaker 4: and you have to answer three questions. Do you sell
Speaker 4: financial products? And it better be no. Are you an
Speaker 4: education if not, why are you interested in this? And
Speaker 4: how did you hear about us? So once you do that,
Speaker 4: we'll approve you because it is very overwhelming to try
Speaker 4: to do this stuff yourself. Also, under our education section
Speaker 4: on four oh three B WISE, we have three main sections.
Speaker 4: We have education, advocacy, and community. Go to the education
Speaker 4: tab and you'll see stories on how to get out
Speaker 4: of a four h three B. If you go to
Speaker 4: our homepage, it's the top story under education. Stuck in
Speaker 4: a bad four oh three B Click that. So we've
Speaker 4: got web resources and we've got the Facebook group to
Speaker 4: help you get out.
Speaker 1: Now, let's does it ever make financial sense by the way,
Speaker 1: to pay a surrender feed so you can get out
Speaker 1: of high cost investments.
Speaker 4: So my partner Scott has done some sort of data
Speaker 4: digging on this, and there's sort of like a break
Speaker 4: even amount that you want to just rip that band
Speaker 4: aid off, And I forget exactly what that is. I
Speaker 4: don't know if you maybe like five or six thousand,
Speaker 4: just do it. But I also hear from people that
Speaker 4: say the following, I am so pissed off. I don't
Speaker 4: want that company to have my money because I'm twenty
Speaker 4: five years old or thirty years old. I'm going to
Speaker 4: teach twenty more years. I'm going to make it up.
Speaker 4: So in many cases it's worth it. But I'm not
Speaker 4: a financial advisor. Every situation is personal. But everybody listening
Speaker 4: to this who decides to go down this road, be
Speaker 4: loud with your school district and say, why are you
Speaker 4: subjecting us to this? Because not only do I have
Speaker 4: to be an expert in history, math, what you know
Speaker 4: young working with younger children, Now I have to be
Speaker 4: an expert in you know, the financial services world, the
Speaker 4: byzantine world of the K twelve four or three B.
Speaker 3: No, it's true, I think one of the solutions might be,
Speaker 3: like you mentioned y'all's office hours, do you mind sharing
Speaker 3: like is that the same? Is that the same hour
Speaker 3: every single month? Where can folks learn about that so
Speaker 3: that they could potentially talk with y'all and actually ask
Speaker 3: some specific questions, maybe give y'all for specific numbers to
Speaker 3: figure out that break even point.
Speaker 4: Absolutely, what we usually do is we take July off,
Speaker 4: So our next one is August twenty first. If you
Speaker 4: go to the Hope page four oh three b wis
Speaker 4: dot org right in the middle under advocacy, you'll see
Speaker 4: August twenty first, live event. Click that register there and
Speaker 4: it's awesome. We all we often get like repeat people
Speaker 4: who just want to come in and listen, and so
Speaker 4: he has become a little bit of a community. Some
Speaker 4: people have big a beer glass.
Speaker 2: That's awesome.
Speaker 4: It's a fun thing. If you are fired up by
Speaker 4: what I'm telling you, you want to get more fired up.
Speaker 4: On our home page you can access a special short
Speaker 4: podcast that we've created called learn by Being Burned. It's
Speaker 4: not me, it's not my partner Scott talking. We are
Speaker 4: in it a little bit, but it's teachers from across
Speaker 4: the country talking about how they got burned, how they
Speaker 4: were sold the terrible plans, but then how they learned
Speaker 4: and how they're advocating change. Because we meet guys a
Speaker 4: lot of the lone wolf in the school district. I'm
Speaker 4: the only one talking about this when I go to
Speaker 4: the school benefits office. They don't want to hear me.
Speaker 4: We say, you want to. This is a war, folks.
Speaker 4: I hate to use a bad metaphor, but you need
Speaker 4: more soldiers. The way you get more foot soldiers is
Speaker 4: you get them tuned into the problem and they will
Speaker 4: by listening to learn by being burned. Now you're going
Speaker 4: to the school board meeting and it's ten of you,
Speaker 4: twenty of you. You're going to the district, it's ten
Speaker 4: of you, twenty of you, thirty of you. Be the
Speaker 4: squeaky wheel because it could meet half a million more
Speaker 4: dollars in retirement.
Speaker 1: Yeah yeah, I mean, like, what's the Superhero crew with
Speaker 1: Superman and all those guys called the Justice League? Yeah, yeah,
Speaker 1: like Superman a team. Yeah, he's like awesome, but he
Speaker 1: can't do it all by himself either. He's the help
Speaker 1: of his palace. And so yeah, I think you're right, Dan,
Speaker 1: Like you might be the superman leading the charge, the
Speaker 1: first one to kind of sound the alarm and create
Speaker 1: such a buzz around them. But we need a lot
Speaker 1: of other people out there doing the same thing and
Speaker 1: helping in their communities. Speaking of which, we want to
Speaker 1: talk about advocacy. We'll get to just a few more
Speaker 1: questions with you on that topic when we come back
Speaker 1: from the break.
Speaker 3: All right, we are back from the break speaking with
Speaker 3: Dan Otter, founder of four three bys dot org. And Dan,
Speaker 3: just before the break, you mentioned learned by being burned,
Speaker 3: and I think the ability for teachers out there to
Speaker 3: get fired up because they might be thinking, yeah, like
Speaker 3: I think that that's a problem in our district, but
Speaker 3: I'm not totally sure. I feel like when you hear
Speaker 3: some of these narratives like that, like that's the fire,
Speaker 3: that's the fuel that you need poured on the fire
Speaker 3: to really get you fired out righteous anger.
Speaker 2: To make some changes.
Speaker 3: Yeah, and we've kind of been talking about four to
Speaker 3: three B stuff specifically, and let's just zoom out for
Speaker 3: maybe a second. I've heard you say that many teachers
Speaker 3: choose their investments, like their funds, based on maybe some
Speaker 3: of the different highlighted recent returns that those funds have experience,
Speaker 3: but you call that a fool's errand can you speak
Speaker 3: to that for a moment.
Speaker 4: Yeah, I did this myself when I first started investing.
Speaker 4: I would get Money magazine and what was the hot
Speaker 4: fund that was on the cover. I would invest in that.
Speaker 4: And then I started listening to someone named John Bogel,
Speaker 4: the late John Bogel, who I actually met. Guys, I
Speaker 4: got invited to the campus and I got to I'll
Speaker 4: just tell you about the experience real quick, because that's awesome.
Speaker 4: They wanted to talk to me about the four oh
Speaker 4: three B personal finance issues and when I got there,
Speaker 4: and what's cool is the campus outside of Philadelphia in
Speaker 4: Valley Forge. The buildings, at least the original ones are built.
Speaker 4: They look like ships, so if you had like a
Speaker 4: drone that's flying over it. Because he was enamored with ships, right,
Speaker 4: vanguard leading ship. And so anyway, I get this like
Speaker 4: agenda and it says, oh, meet with these people, these people,
Speaker 4: meet with John Bogel, And I'm like, I'm going to
Speaker 4: meet with John Bogel because he still had an office
Speaker 4: there when he was retired. And guys, I gotta tell you,
Speaker 4: it was so cool outside of his office. There was
Speaker 4: a poster and it was a post or run by
Speaker 4: the financial service industry who were threatened by the introduction
Speaker 4: of index funds, right low cost way to invest. These
Speaker 4: guys tried to attack John Bogel, one of the greatest
Speaker 4: capitalists ever, by calling index funds an American. Think about that.
Speaker 4: So he's read about that poster. It was it was great.
Speaker 3: So yeah, it's it's anti American to think that somebody
Speaker 3: should be investing just like everybody else. No, we're Americans.
Speaker 3: We rise above everybody else. We're heading shoulders better.
Speaker 4: So bad, it's so bad. But you know, obviously he
Speaker 4: got the last laugh. So my philosophy is low cost
Speaker 4: index funds. Do that and forget about it. Go on
Speaker 4: about your life. Think about a teacher. You've got a
Speaker 4: pension that could be like, consider your fixed asset portion
Speaker 4: of your portfolio. And again I'm not giving financial advice
Speaker 4: because I'm not a financial advisor, but here's how I
Speaker 4: thought about it. When I was teaching. My pension is
Speaker 4: my fixed assets. I'm going one hundred percent into the
Speaker 4: Vanguard SMP five hundred. I would probably do the total
Speaker 4: stock market index. Now, if I was teaching because you
Speaker 4: know it's it's you know, it's more more stocks. But
Speaker 4: come on, folks, right now, there's three or four companies
Speaker 4: that are driving the market right and I'm not smart
Speaker 4: enough to pick those four or five. I'd rather take
Speaker 4: the whole basket, as John Bogo always said. And eventually
Speaker 4: every year there's going to be a few driving the market.
Speaker 4: And yes, the market goes down, folks, if you're young,
Speaker 4: you should be celebrating the market going down. A couple
Speaker 4: of years ago it was down. I took my daughter's like,
Speaker 4: oh my my Vanguard fund is going down. I go, Lily,
Speaker 4: you are buying shares on sale. Yes, as a guy
Speaker 4: that's fifty nine now who's lived through a bunch of
Speaker 4: ups and downs, I'm going to be able to retire
Speaker 4: on the money I put into the market in the
Speaker 4: mid well, the late two thousands, right, two thousand and eight,
Speaker 4: two thousand and nine, that's when I really made money
Speaker 4: because I continued.
Speaker 2: To ap preach it.
Speaker 1: Dan Otter, I think the point too about teachers should
Speaker 1: be investing again, not specific financial advice, but they have
Speaker 1: the ability to invest in a more aggressive manner because
Speaker 1: they have that backstop of the pension that most people
Speaker 1: don't have. So most people they have to be a
Speaker 1: little more thoughtful potentially about their fun choices, especially the
Speaker 1: closer they get to retirement. But teachers have the ability
Speaker 1: to load up more on assets like stocks because over
Speaker 1: the long haul those will perform better. So, especially if
Speaker 1: you're a teacher in your thirties and four ers, you
Speaker 1: might say, oh, I need to kind of mix this out.
Speaker 1: I need to balance. But you have that balance with
Speaker 1: the pension. You might not need to do that inside
Speaker 1: of your actual investments in a four or three B
Speaker 1: or four to fifty seven.
Speaker 4: Absolutely, And the one thing we do here consistently, guys,
Speaker 4: is that a lot of teachers say, I don't know
Speaker 4: how to do this myself. I can't do this as
Speaker 4: someone who taught. Teaching is complex. If you can teach,
Speaker 4: you can do this yourself. But let's say you are
Speaker 4: someone listening saying there's no way I can do this.
Speaker 4: I feel like you have two options. Just get a
Speaker 4: target date retired fund from a company like Vanguard, one
Speaker 4: of the green vendors. Pick a date in the future
Speaker 4: you think you might retire. The farther you are from
Speaker 4: that date, the more it's allocated to stocks. It automatically
Speaker 4: gets less risky the closer you get to retirement. I
Speaker 4: know you guys know all about that. If you're someone
Speaker 4: that wants to talk to someone, we are not against that.
Speaker 4: We're against you talking to the sales agents and the
Speaker 4: staff lounge, the sales agent who comes into your classroom.
Speaker 4: You want to use a fiduciary advisor, and we have
Speaker 4: a resource on that. You would click the education section
Speaker 4: and then you under managing your four H three B.
Speaker 4: You would click a resource called working with a professional
Speaker 4: with a financial professional. It talks about you want to
Speaker 4: use a CFP, You want your advisor to sign a
Speaker 4: fiduciary pledge. We have a printable fiduciary pledge that you
Speaker 4: can use. We have twenty questions you should ask any
Speaker 4: advisor you might use. And we also have organizations where
Speaker 4: you can find a fiduciary advisor. X Y Planning Network,
Speaker 4: Garrett Planning Network, the National Association of Personal Financial Advisors.
Speaker 4: There is nothing wrong with using a financial professional, but
Speaker 4: only use a fiduciary. Guys, you probably know this. Here's
Speaker 4: the big thing. They have to be a fiduciary. All
Speaker 4: the time we're hearing about equitable salespeople with cfps who
Speaker 4: are fiduciaries some of the time, big, big difference. You
Speaker 4: must be a fiduciary all the time.
Speaker 3: You got to make sure those incentives are aligned as well.
Speaker 3: Stand on your site. I mean, y'all even say this,
Speaker 3: you say that part of your goal for for three
Speaker 3: of you wis is to not even exist anymore. Exactly,
Speaker 3: like you are trying to help folks put me out
Speaker 3: of business, which is eventually going to put you. It's
Speaker 3: going to like, yeah, it cause you to be fired
Speaker 3: and you can right off into the sunset, Dan, exactly.
Speaker 3: I mean that being said, We've covered a lot of
Speaker 3: ground here, But do you have any final advice for
Speaker 3: any teachers out there or folks who might who might
Speaker 3: have teachers in their lives that they love.
Speaker 4: Sure? Absolutely, and guys, thanks for the time to talk
Speaker 4: about this issue. You can probably see I'm super passionate about.
Speaker 4: One thing I didn't mention is we're a nonprofit, so
Speaker 4: we sell nothing. Okay, we are blessed to be funded
Speaker 4: by Tim Ranzetta, who runs the amazing nonprofit. I don't
Speaker 4: know if you guys heard of next Gen Personal Finances.
Speaker 1: Yeah, oh, personal Finance classes across America are springing up
Speaker 1: because of them.
Speaker 4: And right now, twenty five stays across the country are
Speaker 4: going to guarantee personal finance to graduates of American high schools.
Speaker 4: Tim's goal by twenty thirty is all fifty. He heard
Speaker 4: about us from the series of articles in the New
Speaker 4: York Times that we help the reporters with. He reached
Speaker 4: out to me and said, what can I do to
Speaker 4: help you? This guy is amazing, So because of his generosity,
Speaker 4: I do this full time. We sell nothing. If you're
Speaker 4: a teacher listening, this can seem overwhelming. It's like anything
Speaker 4: else in life. Go slow, take your time, Spend a
Speaker 4: little time looking at our website. Spend a little time.
Speaker 4: I'm going to the four H three B Wives Facebook group,
Speaker 4: listen to some of our podcasts. Maybe come to our
Speaker 4: next event on August twenty. First, begin to self educate.
Speaker 4: Don't do anything until you're ready. If you're someone who's
Speaker 4: already in a four H three B and you find
Speaker 4: out it's a red vendor, do not beat yourself up.
Speaker 4: You did not know what you didn't know. Now, if
Speaker 4: you listen to this podcast and then go open an
Speaker 4: account with equitable I don't know what to tell you,
Speaker 4: but be kind to yourself because no one taught you this,
Speaker 4: all right, listen to people like Matt and Joel. Okay,
Speaker 4: learn more about John Bogel. Okay. There are so many
Speaker 4: resources out there and teachers, thank you for being teachers.
Speaker 4: You are the real superheroes.
Speaker 1: A lot more resources than when you started. Dan, you
Speaker 1: had to fight, you know, they talk about you know,
Speaker 1: our parents saying I had to walk to school, kill
Speaker 1: both ways in the snow. That's what I felt like.
Speaker 1: Podcasts in the Internet and stuff like that. And now
Speaker 1: it's so much easier to arm yourself with the information,
Speaker 1: with the resources necessary, and in a much shorter timeframe.
Speaker 1: So at the end your your mission is laudable. Resources
Speaker 1: like yours are what are helping thousands and more than that,
Speaker 1: really of teachers make smarter, wiser choices with their money,
Speaker 1: avoid fees so that they can build a healthy financial future.
Speaker 1: Thank you so much for coming on the podcast today.
Speaker 4: It is my absolute pleasure. Thank you for what you
Speaker 4: guys are doing. You guys are killing.
Speaker 3: It nice Joel Man, this has been such a great
Speaker 3: conversation and I'm so glad we were able to have
Speaker 3: Dan on to talk about. I mean to dedicate an
Speaker 3: entire episode basically to teachers. Right, teachers aren't the only
Speaker 3: ones who have four to three bees, but they're the
Speaker 3: I think the vast majority of folks who do have
Speaker 3: four to three bees.
Speaker 1: But plus, Dan's last name is one of the cutest
Speaker 1: animals in the world. Right, otters, everybody loves honors.
Speaker 2: But yeah, do you have a big takeaway from our
Speaker 2: discussion today?
Speaker 1: Okay, So I think my biggest takeaway there was so
Speaker 1: much I learned a lot in this one, just kind
Speaker 1: of not banking on your pension as a teacher, not
Speaker 1: resting on your laurels, and allowing that to be your
Speaker 1: retirement plan in and of itself. Right, I think one
Speaker 1: because you don't know how long you're going to be
Speaker 1: in the profession, like you might think you know you might,
Speaker 1: but things always change. You never know where your life
Speaker 1: is going to take you. So don't bank on I'm
Speaker 1: gonna be here thirty years. I'm going to collect that
Speaker 1: pension if that works out, and you oversaved because you
Speaker 1: also invested in a roth Ira in a four to
Speaker 1: fifty seven b Like, that's not the worst case outcome
Speaker 1: I've heard of worse problems. Yeah, but a worse outcome
Speaker 1: could be I banked on the pension, I didn't invest
Speaker 1: anything else. I left the teaching profession early, now starting
Speaker 1: from scratch again when it comes to retirement saving. So
Speaker 1: I just think that's like high value information. Do not
Speaker 1: let the pension influence your lack of investing in other areas.
Speaker 3: Yeah, And so my big takeaway is going to be
Speaker 3: for all the teachers out there, at the very least,
Speaker 3: make sure you don't have equitable or American infidelity as
Speaker 3: they like to call them. But because there are so
Speaker 3: many folks out there, but it sounds like that they
Speaker 3: have the vast majority of for three b's out there
Speaker 3: and some of the different.
Speaker 2: Days and so kind of a dirty corner on the market.
Speaker 3: Yeah, and it makes it I mean, yeah, them beginning
Speaker 3: hit with like a fifteen million dollar fine for hidened fees,
Speaker 3: Like these are the kind of companies that we don't
Speaker 3: want to be doing business with.
Speaker 2: It might be like a.
Speaker 1: Lah Wells Fargo in the personal banking.
Speaker 3: Space, but but just with four to three bees and
Speaker 3: so yeah, make sure to head over to four to
Speaker 3: threebwys dot org. If you're like, well, I'm pretty sure
Speaker 3: I don't have them, but I'm not sure if I've
Speaker 3: got a green or a yellow or God Forbid or
Speaker 3: red provider, But yeah, make sure to check that out.
Speaker 3: That way you can know whether or not you're paying
Speaker 3: something like two percent a year with fifteen year surrender
Speaker 3: rolling surrender fees.
Speaker 1: And considering the slough of companies you might have available
Speaker 1: to you. You might not recognize the name, you might
Speaker 1: not know what company you're investing in, and hopefully four
Speaker 1: or three b wis can help you kind of uncover
Speaker 1: and figure out whether the current plane you're in is
Speaker 1: good or bad, and then how to shift if it sucks.
Speaker 3: That's right, But uh, all right, buddy, you and I
Speaker 3: enjoyed a Blanche the Nashville.
Speaker 2: This is a beer by Yeah Zoo. This is a wit.
Speaker 2: What were your thoughts?
Speaker 1: Perfect summer beer? It was light, refreshing, it was had
Speaker 1: bright notes, had like like light peachy vibes.
Speaker 3: I thought I was gonna say lemony it was to
Speaker 3: me it was very acidic, kind of lemony, bright out. Yes,
Speaker 3: similar like some wits that you enjoy, and they're more
Speaker 3: like banana wit.
Speaker 2: This is more like light floral wits. But yeah, I
Speaker 2: certainly enjoyed it.
Speaker 1: Yeah, a little of that, like almost like new fruit,
Speaker 1: the light fuzz kind of vibe.
Speaker 2: Barely ripe. Yeah, yeah, that's what I was feeling. Looks
Speaker 2: like this is a collaboration with Brooklyn Brewery, so that's
Speaker 2: pretty cool. Nice. Have you ever had a beer by
Speaker 2: Yazoo a half?
Speaker 3: Yeah, they're out of Nashville. Okay, I believe Yeah I
Speaker 3: said that, but you didn't hear me. But yeah, I
Speaker 3: might need to look into more of their beers. But
Speaker 3: I'm glad you were able to pick this one up
Speaker 3: that we're able to enjoy it today.
Speaker 2: No doubt.
Speaker 1: All right, but that's gonna be it for this episode.
Speaker 1: Will put links to some of this too, four or
Speaker 1: three buy some of the other things that Dan mentioned
Speaker 1: up on our website at how to money dot com.
Speaker 3: Yeah, maybe where it is that you can register for
Speaker 3: their office hours come August twenty first, and we'll link
Speaker 3: to that.
Speaker 1: And if you've been listening and you're like, I'm not
Speaker 1: a teacher, but man, that sure sucks for teachers, We'll
Speaker 1: find a teacher you know, and maybe point them in
Speaker 1: the direction of this episode.
Speaker 3: I guarantee everybody out there and knows at least like
Speaker 3: a couple of school teachers. And I'm guessing you don't
Speaker 3: want them to be destitute and poor. They're old age,
Speaker 3: all right. That's gonna be for this one body until
Speaker 3: next time. Best friends are out, Best friends out,