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Speaker 1: Welcome to Had of Money. I'm Joel and I am Matt,

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Speaker 1: and today we're asking the question how complicated should investing be? Yeah, So,

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Speaker 1: speaking of investing, did you realize I didn't realize this

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Speaker 1: until recently, until a couple of weeks ago, but we

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Speaker 1: just exited the longest bear market since nineteen forty eight?

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Speaker 1: Oh wow, isn't that crazy? That is crazy to think

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Speaker 1: about it. So here's fail that long Agough ultimately it

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Speaker 1: really did.

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Speaker 2: And this is so the reason I'll bring this up

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Speaker 2: is because I love the fact that we didn't even

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Speaker 2: really notice that, and hopefully listeners didn't notice that either,

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Speaker 2: because they were just continuing to invest like clockwork, continuing

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Speaker 2: to plug money into the market. But oftentimes folks aren't

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Speaker 2: doing that because they are over complicating things. They're making

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Speaker 2: it a little too complex, is keeping them from their

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Speaker 2: financial goals. And so we're going to try to make

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Speaker 2: sure that does not happen from here on out if

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Speaker 2: you're listening to this podcast. Yeah, and there's a couple

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Speaker 2: things I think that might make sense to complicate a

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Speaker 2: little bit on the investing front. But how complex you

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Speaker 2: get and what you you know, what you choose to investor.

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Speaker 2: We're going to talk about a bunch of different ways

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Speaker 2: you can complicate things and maybe it's good, and then

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Speaker 2: other ways in which you can overdo it. So that's

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Speaker 2: the that you should completely avoid. That's the theme of

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Speaker 2: this of this combo in this episode. What's this You

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Speaker 2: wanted to talk about getting beers last night or something? Okay,

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Speaker 2: So we got beers with a friend last night, Uh huh.

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Speaker 2: And there's free parking all around where we hang but

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Speaker 2: there's also a paid parking lot when all the free

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Speaker 2: parking's taken really close to this particular establishment. Yes, And

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Speaker 2: I was driving from across town and they were I

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Speaker 2: couldn't find a free parking spot, and I did want

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Speaker 2: to be a jerk and be late when when we'd

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Speaker 2: had this hang plan for a little while. So I

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Speaker 2: paid five bucks for parking.

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Speaker 1: And I hate that. There's like not much I hate

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Speaker 1: more than that. And so, but then we were walking

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Speaker 1: to the car after hanging out, and he pointed out

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Speaker 1: a couple of free spots. I didn't know about it.

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Speaker 1: He's like, these are the this is the low hanging fruit.

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Speaker 1: No one's ever spots. So hopefully I'll never have to

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Speaker 1: do it again.

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Speaker 2: Okay, So I got a couple of follow ups and okay,

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Speaker 2: so when you were meeting up, yeah, like with a

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Speaker 2: friend for beers, how late is too late because there's

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Speaker 2: like a certain amount of window unless like you're it's

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Speaker 2: a business meeting and like you're meeting a client. Obviously,

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Speaker 2: if you're if you're on time, you're late, Like basically

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Speaker 2: you need to get there early. But when it comes

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Speaker 2: to like friend hangs, what's your window of time.

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Speaker 1: I'd be in past ten minutes late, feels just oh yeah, rude, Okay,

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Speaker 1: I totally if you're like three to five minutes late,

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Speaker 1: it's it's probably not.

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Speaker 2: A three to five which is why because I saw

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Speaker 2: you walking into the place last night and I was like,

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Speaker 2: oh crap, do I need to go ahead and pay

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Speaker 2: for parking as well? And it was it was like

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Speaker 2: four or five minutes after and so I was like,

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Speaker 2: all right, I'm gonna circlecle the blog more time. And okay,

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Speaker 2: so so you found a free spot five spot I

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Speaker 2: paid like an idiot. So okay, what are your thoughts

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Speaker 2: on how do you feel about questionable parking spots like

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Speaker 2: spots that obviously if something is marked and it says

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Speaker 2: no parking. I don't. You're not gonna park there. There's

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Speaker 2: a good chance you might get towed whatever. Make somebody upset.

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Speaker 2: But I guess I mentioned this because I feel like

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Speaker 2: for years I have parked in spots that are like, oh,

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Speaker 2: I'm not totally sure this is a legit spot. It

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Speaker 2: doesn't say no parking, it's not right in front of

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Speaker 2: a fire hydrant, there's no red curb that kind of thing.

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Speaker 2: And I can't remember the last time I got a

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Speaker 2: parking ticket.

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Speaker 1: Yeah, it's a you gotta know what you're risking, right,

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Speaker 1: and exactly I think I talk a risk I'm willing

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Speaker 1: to take. A couple of years ago, when I was

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Speaker 1: meeting a friend down by the airport, he was in

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Speaker 1: town for a second. We grab beers and I parked

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Speaker 1: in I think where like they the valet would park cars.

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Speaker 1: But it was raining super hard, there was nobody out there,

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Speaker 1: and there were plenty of spots, and so I risked

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Speaker 1: it and I didn't get a ticket, which is great,

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Speaker 1: but I also knew I might get a ticket or

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Speaker 1: somebody might say something to me.

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Speaker 2: Did you had you said something to the valet was there?

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Speaker 2: When they're like a valet there and you're like.

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Speaker 1: Hey, or is this an So I don't think there

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Speaker 1: was anybody there, which is why I was like, all,

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Speaker 1: I'm just gonna give it a shot. But yeah, well,

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Speaker 1: paying for parking is a pet piat of mine. Every

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Speaker 1: once in a you gotta know what you're willing to risk. Yeah,

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Speaker 1: all right, let's mention the beer we're having on this episode.

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Speaker 1: This one's called Symptom of Progeny. It's a golden sour

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Speaker 1: ale that you picked up Matt at burial.

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Speaker 2: So and not only did I pick one up for us,

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Speaker 2: I actually picked up three additional bottles for Kate and

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Speaker 2: I because we held this at the brewery and we

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Speaker 2: liked it that much. At the time, I was thinking,

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Speaker 2: this is a perfect barrel aged golden ale. So I'm

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Speaker 2: looking forward to sharing it with you today.

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Speaker 1: Same here. All right, Well, let's get to the subject

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Speaker 1: of hand. Matt. We're talking about how complicated investing should be,

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Speaker 1: and it just made me think back when we were

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Speaker 1: renovating our home before we made the move to the Burbs,

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Speaker 1: and I'd never really done that massive of a renovation

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Speaker 1: and it was kind of fun to pick out specific

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Speaker 1: finishes for all the stuff we were doing like the tile.

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Speaker 2: Yeah, the tile in particular was top yea, and.

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Speaker 1: It was just it was a fun endeavor up until

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Speaker 1: a point, and then it started started to kind of

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Speaker 1: get old after a while. Right, there were endless options

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Speaker 1: of everything, and even picking out that tile, it took

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Speaker 1: a lot of searching and looking to find the exact

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Speaker 1: kind that we wanted. Then, so at a certain point

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Speaker 1: in the process I kind of got decision fatigue, right,

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Speaker 1: discussing paint colors and toilets even which who knew that

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Speaker 1: you could really go down a rabbit hole of toilets,

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Speaker 1: but yes you can, especially these days online. There's so many,

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Speaker 1: so many different toilets you could get, and at some

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Speaker 1: point you just stop caring which toilet suit your vibe

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Speaker 1: the best right and investment choices I think can be

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Speaker 1: similar to that kind of process of when you're renovating

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Speaker 1: and all the choices you have, the choice overload. There's

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Speaker 1: so many directions you can go in on the investing front,

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Speaker 1: all sorts of options that you can consider, and I

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Speaker 1: do think it for some things in life, more can

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Speaker 1: be merrier, right, but it can also backfire, and things

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Speaker 1: that could be fun or could be energizing ways in

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Speaker 1: which more choice can be beneficial well as possible for

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Speaker 1: it to go too far, especially especially when we're talking

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Speaker 1: about building wealth. And so we would say, and something

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Speaker 1: we talk about on the show regularly is that complicating

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Speaker 1: things doesn't always make them better, and in fact, the

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Speaker 1: opposite is typically true, and especially on the investing front.

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Speaker 1: That's right.

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Speaker 2: Yeah, So you even said the term decision fatigue, and

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Speaker 2: that's when basically you are spending an inordinate amount of

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Speaker 2: time trying to decide which of the many, many options

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Speaker 2: you have available to you is going to suit you best.

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Speaker 2: And when it comes to investing specifically, there are so

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Speaker 2: many options, so many distractions that can keep us from

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Speaker 2: investing the way that we should with the vast majority

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Speaker 2: of our money. And you know, when there is that

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Speaker 2: much noise, which is often coming from the talking heads

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Speaker 2: in financial media, it is no wonder that we start thinking,

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Speaker 2: Like we start asking ourselves, well, maybe I should be

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Speaker 2: investing internationally, right, Like I should probably diversify more value

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Speaker 2: stocks in my portfolio, invest in wine and art as well.

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Speaker 2: I've heard that the returns on ESG funds they're pretty solid,

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Speaker 2: So maybe that's the direction I should be going. But

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Speaker 2: many of those questions and considerations, they don't actually help

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Speaker 2: all that much, and in fact, they end up distracting

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Speaker 2: us from from doing what it is that we should

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Speaker 2: be doing. But that doesn't necessarily mean that we should

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Speaker 2: barrier bury our heads in the sand. We think it

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Speaker 2: is important to know what the other options out there

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Speaker 2: are and then why it is that we should either

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Speaker 2: consider them or ignore them all together.

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Speaker 1: That's part of the reason we like Aldi Matt is

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Speaker 1: because there's just fewer things, fewer choices right at your disposal.

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Speaker 1: There's like one ketchup and so you just get the

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Speaker 1: ketchup as you're walking by, and the simplicity, even though

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Speaker 1: is it Berman's right, I think it's right lines yeah,

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Speaker 1: And it's just nice to know, okay, cool, I need

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Speaker 1: ketchup and I don't have to look at the price

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Speaker 1: pronounce and different brand names and which one's on sale

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Speaker 1: right now. You just grab the ketchup and it's so easy.

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Speaker 1: So I think, yeah, we could stand to have a

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Speaker 1: little more like al They in the way we think

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Speaker 1: about investing. And part of the reason we're talking about

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Speaker 1: this today is because when market conditions are good, there's

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Speaker 1: even more of an inclination to shake things up, to

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Speaker 1: start overthinking things. And you mentioned, hey, guess what, now,

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Speaker 1: we've we've ended that longest bear run and we're in

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Speaker 1: a bowld market right now. When we are in that

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Speaker 1: bear market, though, when things are going badly, when the

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Speaker 1: stock market is performing poorly, nobody wants to discuss smart

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Speaker 1: investing methods. Everyone's just kind of like covering their head.

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Speaker 1: They're grinning and bearing it. The assumption is that the

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Speaker 1: market is going to continue to drop, and so why

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Speaker 1: would you start investing if things are going to continue

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Speaker 1: along the same path. Yeah, but then again, when things

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Speaker 1: are going gangbusters, everybody's got an opinion, right. And so

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Speaker 1: now that we are officially in this bowl market, we're

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Speaker 1: up twenty percent from from those lows. We're seeing certain

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Speaker 1: stocks popping in a big way, and I think more

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Speaker 1: people are more inclined to start fiddling with their portfolio.

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Speaker 1: It holds a greater allure right now when things are

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Speaker 1: going up up into the right and the boring index

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Speaker 1: fund route, it seems more intelligent, I think when the

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Speaker 1: market is going down, but on the way up, it

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Speaker 1: just it feels kind of like you should be making

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Speaker 1: moves to amplify those gains, right, Why settle for average

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Speaker 1: when certain things are popping off to greater degrees. But

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Speaker 1: just because it's more exciting or just because it's more enticing,

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Speaker 1: that doesn't mean it's the direction you should be heading in.

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Speaker 2: That's right. Yeah. And also we're not just talking about

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Speaker 2: the you know, that part of your portfolio that you

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Speaker 2: want to speculate with that five percent or less that

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Speaker 2: you'll hear us mention here on the show as a

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Speaker 2: pressure relief valve. Now, we still think that this is

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Speaker 2: a good rule of thumb, good thing to maintain. And

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Speaker 2: for a lot of folks who do like to tinker,

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Speaker 2: I think having a negligible amount of money that you

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Speaker 2: can trade just for funzis helps them to stay the

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Speaker 2: course and to keep doing the boring, old standard, bland

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Speaker 2: thing with the bulk of their investment dollars. So eat

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Speaker 2: your heart out with that small percentage of play investment dollars, go.

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Speaker 1: To town, do the funkiest things you can.

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Speaker 2: Think of the money though, that you're willing to completely lose. Right,

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Speaker 2: But what we're talking about today is the other ninety

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Speaker 2: five percent of your portfolio. A few specific temptations and

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Speaker 2: then why it is that most of them should probably

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Speaker 2: be avoided.

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Speaker 1: Yeah, it's not that we have a problem with folks

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Speaker 1: getting a little wild and a little speculative. It's just

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Speaker 1: like five percent wild exactly. You just can't let it

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Speaker 1: infect all the other areas that you're trying to do

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Speaker 1: the boring, proven method of building wealth, right, and so

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Speaker 1: totally if you leg it out of hand, I feel

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Speaker 1: like it can kind of tank the majority of what

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Speaker 1: of your assets that are going to be doing just

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Speaker 1: the standard normal thing, which is investing in a total

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Speaker 1: overall stock market kind of thing. Right, And we're also

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Speaker 1: we're not going to focus too much on timing today, right,

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Speaker 1: whether now is a good time to start investing if

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Speaker 1: you haven't already, because for most people, dollar cost averaging

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Speaker 1: is the best approach, right sticking your money into your

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Speaker 1: four one K, your IRA, or your HSA your Health

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Speaker 1: Save mus account, which we always talk about as being

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Speaker 1: an awesome investment vehicle. Most people don't think of it

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Speaker 1: that way.

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Speaker 2: Talked about it on Monday. Yeah, we've been hitting it

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Speaker 2: more lately. Yeah, Yeah, it's a good thing. It is

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Speaker 2: because people need to know that. And if you're investing

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Speaker 2: in each of those vehicles like clockwork. Every time you

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Speaker 2: get paid without giving in a second thought. This is

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Speaker 2: the best way to go, right. And so when it

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Speaker 2: comes to timing, it's not something that we're fans of,

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Speaker 2: and in fact, it's really easy to screw that up

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Speaker 2: and actually shoot yourself in the foot as you're trying

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Speaker 2: to time your entrance into the market in a given

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Speaker 2: through year. But this strategy, the dollar cost averaging strategy,

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Speaker 2: it works because you're able to remove your emotions from

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Speaker 2: the equation, and our emotions can get the best of us.

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Speaker 2: But that being said, if you really want to optimize

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Speaker 2: for the highest returns, the data show that lump some

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Speaker 2: investing at the beginning of the year or as soon

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Speaker 2: as you're able to fund a retirement account is the

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Speaker 2: way to go. And I guess the reason we talk

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Speaker 2: about dollar cost averaging is and not lump some, it's

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Speaker 2: just because that's how most people get paid. That's the

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Speaker 2: way it makes most sense. But most folks aren't sitting

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Speaker 2: on like a massive.

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Speaker 1: Pile, you know. But if you are, if you do

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Speaker 1: have the money in January to fully fund your roth

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Speaker 1: IRA or something like that, go for it. Go to town.

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Speaker 1: That's a better thing. To do than do the doing

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Speaker 1: the dollar cost averaging approach. It's just that specifically, with

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Speaker 1: something like a four toh one K, it makes sense

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Speaker 1: to deploy it every single paycheck. So really the timing

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Speaker 1: that we're talking about is the sooner the better, and

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Speaker 1: the more regular the better too.

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Speaker 2: Yeah, and I mean, I do think it's worth maybe

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Speaker 2: trying to work towards that lump some kind of mindset

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Speaker 2: if you're able to slowly over time over the years,

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Speaker 2: kind of get ahead of it, right, So as opposed

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Speaker 2: to you get paid, do you invest a portion of

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Speaker 2: that but stockpiling that ahead type, So if you're able

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Speaker 2: to max that out, make that payment that year, but

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Speaker 2: then slowly over time you build up essentially like a

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Speaker 2: little war chest, so that when the new year does

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Speaker 2: hit and you are able to invest in those retirement

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Speaker 2: accounts for the next year. The ability to make that

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Speaker 2: happen sooner rather than later, it does over the long

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Speaker 2: haul return you higher returns. But then when it comes

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Speaker 2: to the actual securities or the actual investments that we're making,

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Speaker 2: there's also a lot of nuance involved. Some things are

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Speaker 2: going to be more negotiable than others, and some of

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Speaker 2: the things we're going to mention today might actually be

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Speaker 2: worth considering. So we'll talk about some of those alongside

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Speaker 2: some ways that folks are attempted to invest their money

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Speaker 2: right now that we think are going to be a

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Speaker 2: distraction at best, but it actually could be damaging your

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Speaker 2: future returns at worst.

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Speaker 1: Yeah, and it feels like we have more investment options

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Speaker 1: at our disposal than ever before. So it's like the

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Speaker 1: opposite of all the like I was talking about, Matt. Now,

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Speaker 1: it's just like plethora of this range, and not just

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Speaker 1: inside of our four oh one K, but then even

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Speaker 1: all of these exterior alternative investment possibilities that we could

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Speaker 1: partake in that we're getting pitched right and left in

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Speaker 1: different places, whether it's a newsletter that you read, or

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Speaker 1: whether it's commercials that you see or social media advertisements.

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Speaker 2: Just talking with friends. I feel like it's a conversation

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Speaker 2: I have more often as I've gotten older. Folks, and

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Speaker 2: rightly so, are more interested in investing. But just because

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Speaker 2: folks are talking about it doesn't mean that it's something

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Speaker 2: that you that you should be considering, because but it's.

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Speaker 1: All enticing and it's like, yeah, your eyes can get

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Speaker 1: as wide as saucers. You're like, wait, I can't invest

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Speaker 1: in that or this or that. That's amazing, But then

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Speaker 1: you I think a lot of people lose the plot

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Speaker 1: if they start to go down that rabbit hole, and

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Speaker 1: maybe they miss out on the main course. So yeah,

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Speaker 1: let's talk about some of those added investing complications, when

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Speaker 1: to say yes, when to say no. We'll get to

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Speaker 1: more on that right after this.

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Speaker 2: All right, we are back and we're talking about the

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Speaker 2: many different forms that investing can take. And we're gonna

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Speaker 2: kick this off with international stocks, because this is one

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Speaker 2: I feel like it's kind of gained some steam lately. Joel.

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Speaker 2: Neither you nor I have much exposure to international stocks ourselves,

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Speaker 2: and we actually feel pretty good about our decision. But

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Speaker 2: there are a lot of smart folks out there who

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Speaker 2: have a different take. And again, yeah, it's a topic

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Speaker 2: worth discussing because we get the question from listeners sometimes

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Speaker 2: as well. But Jack Bogel, he's the founder.

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Speaker 1: Of Van Guard.

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Speaker 2: He's a pretty brilliant dude.

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Speaker 1: Passed away what a year or two ago, Yeah.

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Speaker 2: Went all that long ago. But he was famously not

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Speaker 2: a big fan of international diversification for a number of reasons,

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Speaker 2: and the truth is, so many of the companies that

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Speaker 2: you own in either a total stock Market index fund

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Speaker 2: or an SMP five hundred index fund, they do business overseas.

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Speaker 2: And that was, honestly, that was Bogel's main argument. Something

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Speaker 2: like forty percent of s and P five hundred revenues

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Speaker 2: come from other countries come from overseas, and so folks

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Speaker 2: who have diversified to more international holdings they haven't done

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Speaker 2: as well.

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Speaker 1: But of course past results.

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Speaker 2: Are not indicative of future returns, and so we're not

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Speaker 2: saying that like, oh, yeah, things, you should only be

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Speaker 2: investing in US companies. This isn't like a Even though

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Speaker 2: we love America for many reasons, we think that our

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Speaker 2: country is a very fertile ground that comes to starting

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Speaker 2: new industries and the ability for companies to get ahead,

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Speaker 2: that doesn't necessarily mean that over the long haul that

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Speaker 2: international stocks may not do better than the total US

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Speaker 2: stock market. Yeah.

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Speaker 1: Well, and the truth is our country is really only

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Speaker 1: four percent of the world's population, but we have our

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Speaker 1: stock market. The global wealth is something close to a

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Speaker 1: quarter of it. So it turns out then when you

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Speaker 1: look at the numbers, international stocks are relatively inexpensive these days.

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Speaker 1: Which is part of the reason we're probably seeing more

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Speaker 1: headlines about them in front of the show. Ben Carlson

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Speaker 1: Matt who's just a brilliant mind of love reading his blog,

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Speaker 1: he recently articulated his use on why folk should have

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Speaker 1: more international stock exposure, and he said, global diversification is

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Speaker 1: about accepting good enough returns to avoid the potential for

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Speaker 1: terrible returns at an inopportune time. And I think it's

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Speaker 1: a really good way of thinking about it. You're not

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Speaker 1: necessarily if you do choose to invest internationally, doing it

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Speaker 1: because you're looking for outsized mega returns or anything like that,

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Speaker 1: and you might see better returns over the next decade,

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Speaker 1: who knows, But yeah, I think investing internationally it's not

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Speaker 1: a necessity. But given the outperformance that the US stock

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Speaker 1: market has seen recently in the past decade plus, international

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Speaker 1: stocks do look cheaper and more attractive right now. This

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Speaker 1: is one of those things where I think you can

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Speaker 1: complicate your life a little bit and add international stocks

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Speaker 1: to your portfolio. But it's also not a have to.

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Speaker 2: Yeah. I think Ben's argument it's more from like a

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Speaker 2: wealth preservation standpoint, as opposed to him saying that like

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Speaker 2: oh things are going to be gangbusters overseas in the

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Speaker 2: coming decade.

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Speaker 1: And some folks would point to Japan, whose stock market

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Speaker 1: was rocket and rolling in the nineteen eighties, and I

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Speaker 1: think finally just got to nineteen eighty levels like in

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Speaker 1: recent weeks. So multiple decades, yeah, so like last decades really,

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Speaker 1: which you know could happen if you're too heavy into

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Speaker 1: one country.

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Speaker 2: Yeah. But so even if you do want some international exposure,

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Speaker 2: don't go overboard and don't make massive changes quickly, like

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Speaker 2: all at once. I would consider keeping your portfolio as

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Speaker 2: it is, keep it intact, but then start investing any

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Speaker 2: new dollars into either target date funds or into another

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Speaker 2: international fund like Vanguard's Total World Market Fund. That ticker

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Speaker 2: symbol for that one is VT. And what's great about

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Speaker 2: those two, well, especially Vanguards, the costs are so incredibly low.

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Speaker 2: That's one of the things you get with Vanguard.

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Speaker 1: You get that international international exposure, but you're barely paying

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Speaker 1: more than what you pay for just an S and

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Speaker 1: P five hundred andX fund.

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Speaker 2: It is a little bit more on the target date funds,

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Speaker 2: but they're I think it's fair because you are getting

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Speaker 2: an added benefit with those target date funds as it's

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Speaker 2: changing its allocation over the years.

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Speaker 1: And this is and it truly is the most set

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Speaker 1: it and briget it approach.

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Speaker 2: Yeah, well exactly, because I mean, I don't know if

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Speaker 2: we were planning even to talk about bonds, but a

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Speaker 2: big part of that too is it changes how much

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Speaker 2: of its holdings are in bonds, because when you're looking

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Speaker 2: really really far out, like bonds are more conservative and

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Speaker 2: so they're there oftentimes is a hedge two stocks. But

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Speaker 2: then especially with the target date funds that are that

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Speaker 2: we're quickly approaching, say like at twenty thirty fund, you're

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Speaker 2: going to see a much higher percentage of the allotment

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Speaker 2: of the portfolio towards bonds. But that doesn't necessarily mean

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Speaker 2: though that you should be going out and also buying

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Speaker 2: a bond index fund, because, especially if you are earlier

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Speaker 2: on in the wealth building stage of your investing life,

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Speaker 2: you can afford you can handle to weather out those

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Speaker 2: the volatility, those storms of ups and downs, and in fact,

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Speaker 2: you can't afford to not be investing in actual stocks

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Speaker 2: over the long haul. The closer you get to retirement, yeah,

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Speaker 2: maybe you do want to de risk a little bit

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Speaker 2: and see more consistent returns, but you just need to

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Speaker 2: know that those returns are going to be slightly less

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Speaker 2: than if it was fully in stocks, but.

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Speaker 1: It's going to smooth out the bumps, which, yeah, especially

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Speaker 1: as you're getting closer to withdrawing those funds, you want

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Speaker 1: those moms to be smoothed out, because it's going to

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Speaker 1: be really disheartening and potentially destroying to your lifestyle if

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Speaker 1: you're let's say your portfolio declined twenty percent or something

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Speaker 1: in a year you had a twenty twenty two style

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Speaker 1: year as you are leaving employment. That's a tough pill

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Speaker 1: to swallow. But let's talk about another thing mat that

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Speaker 1: can complicate people's portfolios, and that's investing in a socially

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Speaker 1: responsible way, opting for ESG funds, which is becoming more

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Speaker 1: and more popular. We're seeing a lot of people kind

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Speaker 1: of start to sock more of their money into these

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Speaker 1: kinds of funds. And there's ESG.

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Speaker 2: Stands for Environmental, social and governance, so the way a

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Speaker 2: company is run.

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Speaker 1: Yeah, and there's just a lot more interest now in

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Speaker 1: these funds, and there's kind of a push to get

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Speaker 1: people to stick their money into these funds which claim

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Speaker 1: to be investing in ways that are better for the

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Speaker 1: environment and for other social reasons. But our take really

434
00:19:47,760 --> 00:19:50,560
Speaker 1: is that ESG is largely in the eye of the beholder,

435
00:19:51,040 --> 00:19:52,760
Speaker 1: and you can't make this up, Matt. But something I

436
00:19:52,840 --> 00:19:56,439
Speaker 1: saw last week Philip Morris, which is a company that

437
00:19:56,520 --> 00:20:00,000
Speaker 1: makes cigarettes that have killed so many people, millions of people,

438
00:20:00,400 --> 00:20:03,600
Speaker 1: They're scoring higher in the ESG ratings than TESLA, like

439
00:20:03,680 --> 00:20:07,280
Speaker 1: significantly higher ESG, I know. And so it's just like,

440
00:20:07,359 --> 00:20:10,200
Speaker 1: what in the world is ESG trying to accomplish? And

441
00:20:10,480 --> 00:20:13,479
Speaker 1: a similar thing, right, companies who are hijacking our attention,

442
00:20:13,480 --> 00:20:17,240
Speaker 1: they're making products with slave labor overseas, Like many of

443
00:20:17,240 --> 00:20:20,200
Speaker 1: those companies are also ESG darlings. They score well on

444
00:20:20,240 --> 00:20:23,280
Speaker 1: these ESG fronts. So I think the lack of defineability

445
00:20:23,320 --> 00:20:26,040
Speaker 1: is a massive problem on the ESTREE front. And it's

446
00:20:26,040 --> 00:20:27,760
Speaker 1: been sold is this way to do good with your

447
00:20:27,760 --> 00:20:30,359
Speaker 1: investment dollars, But that's not necessarily the way it shakes

448
00:20:30,359 --> 00:20:31,160
Speaker 1: out in reality.

449
00:20:31,280 --> 00:20:33,840
Speaker 2: Yeah, And ESG funds they actually so they not only

450
00:20:33,840 --> 00:20:37,520
Speaker 2: perform more poorly in a financial sense, offering worse returns

451
00:20:37,520 --> 00:20:40,560
Speaker 2: to investors, which is the main goal of investing, but

452
00:20:40,560 --> 00:20:44,280
Speaker 2: they're also actually worse on these ESG metrics than what

453
00:20:44,359 --> 00:20:46,200
Speaker 2: it does these funds say that they're trying to achieve.

454
00:20:46,480 --> 00:20:49,560
Speaker 2: This is according to research out of Columbia University. We'll

455
00:20:49,560 --> 00:20:51,199
Speaker 2: linked to that in the show notes, but there are

456
00:20:51,200 --> 00:20:53,960
Speaker 2: other studies as well that have come to similar conclusions.

457
00:20:54,359 --> 00:20:58,600
Speaker 2: Opting for these ESG funds, it's not doing anything much

458
00:20:58,600 --> 00:21:02,439
Speaker 2: for the environment or to change corporate governance. And these

459
00:21:02,560 --> 00:21:06,200
Speaker 2: these funds, again, you know, they perform more poorly because

460
00:21:06,240 --> 00:21:09,639
Speaker 2: they come with higher fees oftentimes not to mention worse results.

461
00:21:09,680 --> 00:21:11,240
Speaker 2: So for a while there it seemed like ESG funds

462
00:21:11,240 --> 00:21:13,359
Speaker 2: were actually performing better and it's just like, all right,

463
00:21:13,480 --> 00:21:15,639
Speaker 2: if that's the direction you want to go based on

464
00:21:15,720 --> 00:21:19,159
Speaker 2: past performance. But we're actually seeing that shift recently. But

465
00:21:19,320 --> 00:21:22,240
Speaker 2: all of those things are eating into your returns significantly

466
00:21:22,280 --> 00:21:24,400
Speaker 2: over time, and we think that most most folks should

467
00:21:24,440 --> 00:21:27,720
Speaker 2: actually avoid some of these newer ESG funds and instead

468
00:21:27,760 --> 00:21:30,720
Speaker 2: stick to traditional index funds. It's so difficult to define

469
00:21:30,760 --> 00:21:33,360
Speaker 2: what it is that these different ESG funds are trying

470
00:21:33,359 --> 00:21:37,200
Speaker 2: to achieve. So much of it it's not objective, it's subjective.

471
00:21:37,240 --> 00:21:39,600
Speaker 2: And so again for you as an individual, you might

472
00:21:40,280 --> 00:21:43,840
Speaker 2: hold different values than what it is that Meta is

473
00:21:43,880 --> 00:21:47,399
Speaker 2: trying to accomplish, or Microsoft or or any company regardless

474
00:21:47,400 --> 00:21:49,560
Speaker 2: of where they are on the ESG scale. And it's

475
00:21:49,600 --> 00:21:52,240
Speaker 2: my subjective view that electric cars are better than cigarettes

476
00:21:52,400 --> 00:21:55,840
Speaker 2: for people over time. So I'm just it's I'm curious.

477
00:21:55,920 --> 00:21:58,480
Speaker 2: I don't really know how. It feels like there's like

478
00:21:58,520 --> 00:22:01,360
Speaker 2: the Wizard of Oz making these decisions about behind some

479
00:22:01,359 --> 00:22:04,000
Speaker 2: sort of curtain about which of these companies qualify for

480
00:22:04,040 --> 00:22:06,479
Speaker 2: their funds and which ones don't. And until we get

481
00:22:06,520 --> 00:22:08,680
Speaker 2: more clarity on that, and until I don't know, it

482
00:22:08,720 --> 00:22:11,159
Speaker 2: seems like the funds that actually at the companies that

483
00:22:11,160 --> 00:22:14,760
Speaker 2: actually get included in some of those funds are companies.

484
00:22:14,520 --> 00:22:17,480
Speaker 1: That are doing more good. And even then it might

485
00:22:17,520 --> 00:22:21,480
Speaker 1: not be in people's best interest as from.

486
00:22:21,440 --> 00:22:23,520
Speaker 2: Financially, like they might be checking all the boxes from

487
00:22:23,720 --> 00:22:27,000
Speaker 2: from an ESG standpoint, like maybe Philip Morris doesn't get

488
00:22:27,040 --> 00:22:29,960
Speaker 2: to did they not change their name to Atria or whatever.

489
00:22:30,080 --> 00:22:30,600
Speaker 1: That might be Peru.

490
00:22:30,920 --> 00:22:33,639
Speaker 2: I don't know, But regardless, I would say good for

491
00:22:33,680 --> 00:22:35,920
Speaker 2: them because somehow they were able to kind of greenwash

492
00:22:36,000 --> 00:22:40,200
Speaker 2: their way onto one of these funds. And unfortunately, that's

493
00:22:40,200 --> 00:22:42,000
Speaker 2: what it seems like a lot of these companies are

494
00:22:42,000 --> 00:22:42,399
Speaker 2: trying to do.

495
00:22:42,480 --> 00:22:45,040
Speaker 1: Yeah, so when we're talking about complicating your investments, there's

496
00:22:45,040 --> 00:22:47,360
Speaker 1: some things that might be worth it. Maybe you're saying, oh,

497
00:22:47,400 --> 00:22:49,680
Speaker 1: the international stocks thing, that makes sense, and over time,

498
00:22:49,760 --> 00:22:51,600
Speaker 1: I do think I want a little more exposure there,

499
00:22:51,760 --> 00:22:54,440
Speaker 1: But on the ESG front, I don't think there's really

500
00:22:54,840 --> 00:22:58,320
Speaker 1: any reason to complicate things further and basically sign yourself

501
00:22:58,400 --> 00:23:00,720
Speaker 1: up for higher fees by stocking more of your money

502
00:23:00,960 --> 00:23:04,880
Speaker 1: into these ESG style index funds. Let's talk about something

503
00:23:04,880 --> 00:23:08,639
Speaker 1: else that people might do to complicate their investing strategy,

504
00:23:08,680 --> 00:23:11,399
Speaker 1: and that would be to incorporate more real estate into

505
00:23:11,680 --> 00:23:16,120
Speaker 1: their investing plan. And that's certainly a more complicated form

506
00:23:16,160 --> 00:23:19,199
Speaker 1: of investing that you know, we get asked about fairly regularly,

507
00:23:19,280 --> 00:23:22,399
Speaker 1: especially because you and I we are real estate investors.

508
00:23:22,440 --> 00:23:24,199
Speaker 1: We're mom and popular estate investors. We each own a

509
00:23:24,200 --> 00:23:27,520
Speaker 1: handful of properties in the Atlanta area. And the thing

510
00:23:27,600 --> 00:23:29,720
Speaker 1: is we're kind of mostly talking about the passive style

511
00:23:29,760 --> 00:23:32,120
Speaker 1: investing on this episode, and you and I we think

512
00:23:32,119 --> 00:23:34,439
Speaker 1: of real estate investing is more like taking on a

513
00:23:34,440 --> 00:23:38,000
Speaker 1: part time job, because it kind of is right not

514
00:23:38,040 --> 00:23:40,720
Speaker 1: only in the identifying and purchasing of that property, but

515
00:23:40,800 --> 00:23:42,959
Speaker 1: in the managing of that property too. And so if

516
00:23:42,960 --> 00:23:45,200
Speaker 1: you're not up for that, if you're not up for

517
00:23:45,680 --> 00:23:47,680
Speaker 1: all of the extra work that it's going to take

518
00:23:47,760 --> 00:23:50,720
Speaker 1: to own and manage that rental property, that fixes the

519
00:23:51,280 --> 00:23:52,879
Speaker 1: calls that you're going to have to get from the tenant,

520
00:23:52,880 --> 00:23:55,199
Speaker 1: the things you're gonna have to do to keep up

521
00:23:55,200 --> 00:23:58,200
Speaker 1: with that property, you should avoid becoming a landlord. And

522
00:23:58,840 --> 00:24:00,640
Speaker 1: you know, like I said this, so we're mostly talking

523
00:24:00,680 --> 00:24:02,840
Speaker 1: about the simple forms of investing that most people are

524
00:24:02,880 --> 00:24:06,760
Speaker 1: doing with every paycheck. So buying real estate is just

525
00:24:06,800 --> 00:24:09,320
Speaker 1: this other ball of wax altogether. It's not a bad one.

526
00:24:09,400 --> 00:24:11,399
Speaker 1: It's not something we would necessarily steer people away from.

527
00:24:11,440 --> 00:24:13,080
Speaker 1: And in fact, we've done episodes in the past. We'll

528
00:24:13,080 --> 00:24:14,560
Speaker 1: link to one or two in the show notes if

529
00:24:14,560 --> 00:24:16,840
Speaker 1: you want about investing in real estate and how it

530
00:24:16,840 --> 00:24:20,040
Speaker 1: can be a powerful wealth builder. We're happy real estate

531
00:24:20,080 --> 00:24:22,840
Speaker 1: investors ourselves. But the truth is there are other more

532
00:24:22,920 --> 00:24:25,560
Speaker 1: passive ways to invest in real estate besides buying a

533
00:24:25,600 --> 00:24:27,400
Speaker 1: duplex down the street in the town where you live

534
00:24:27,480 --> 00:24:29,800
Speaker 1: or whatever. And so if you do want to add

535
00:24:29,840 --> 00:24:33,280
Speaker 1: real estate exposure to your investments and you don't want

536
00:24:33,320 --> 00:24:35,600
Speaker 1: to go with the part time job route, Matt, you

537
00:24:35,640 --> 00:24:37,240
Speaker 1: want to talk about maybe kind of some other ways

538
00:24:37,240 --> 00:24:37,560
Speaker 1: to do that.

539
00:24:37,720 --> 00:24:39,840
Speaker 2: You can do that by investing in reates.

540
00:24:40,080 --> 00:24:41,159
Speaker 1: So that's how you say it.

541
00:24:41,160 --> 00:24:44,679
Speaker 2: But it stands for real estate investment trusts, and so

542
00:24:44,720 --> 00:24:47,919
Speaker 2: there are the public rates, there are private rates, and

543
00:24:48,160 --> 00:24:50,040
Speaker 2: so we're not completely against the private ones, but they

544
00:24:50,080 --> 00:24:53,640
Speaker 2: do come with higher fees unless liquidity. Oftentimes your money

545
00:24:53,680 --> 00:24:55,840
Speaker 2: is locked up for years at a time. So because

546
00:24:55,840 --> 00:24:59,240
Speaker 2: of that we avoid them ourselves. But even publicly traded

547
00:24:59,240 --> 00:25:01,160
Speaker 2: reads they're kind of cool. They can give you some

548
00:25:01,320 --> 00:25:04,080
Speaker 2: diverse exposure to real estate that you can easily dollar

549
00:25:04,160 --> 00:25:06,800
Speaker 2: cost average into. You don't have to plunk down a

550
00:25:06,880 --> 00:25:09,480
Speaker 2: large amount of cash, like twenty five thousand dollars is

551
00:25:09,520 --> 00:25:12,560
Speaker 2: oftentimes sort of like the minimum amount required to go

552
00:25:12,680 --> 00:25:13,320
Speaker 2: into some of.

553
00:25:13,280 --> 00:25:15,480
Speaker 1: These private routs. During like a cocktail hang or something,

554
00:25:15,520 --> 00:25:17,159
Speaker 1: you can tell people, oh, I own an apartment building in

555
00:25:17,160 --> 00:25:18,600
Speaker 1: New York City, or I own this with that because

556
00:25:18,600 --> 00:25:22,520
Speaker 1: you have like this small small sliver, but you do

557
00:25:22,600 --> 00:25:24,760
Speaker 1: I've investment in that project, Like yeah, I own some

558
00:25:24,800 --> 00:25:28,960
Speaker 1: of Tesla because I own right Boo. But some of

559
00:25:28,960 --> 00:25:32,639
Speaker 1: the other reut funds, like Vanguard's V and Q, they

560
00:25:32,800 --> 00:25:36,920
Speaker 1: are attractive because they're incredibly low cost. But still even

561
00:25:36,960 --> 00:25:40,359
Speaker 1: still most folks they don't need real estate exposure because

562
00:25:40,400 --> 00:25:43,120
Speaker 1: the average American homeowner, they have most of their net

563
00:25:43,160 --> 00:25:46,120
Speaker 1: worth tied up in their home, in their primary residence.

564
00:25:46,160 --> 00:25:48,960
Speaker 1: And guess what last I checked, that's real estate. Yeah,

565
00:25:49,000 --> 00:25:49,800
Speaker 1: and so we would.

566
00:25:49,600 --> 00:25:52,040
Speaker 2: Rather see that kind of person more focused on investing

567
00:25:52,240 --> 00:25:55,040
Speaker 2: within stocks via index funds. And even if you don't

568
00:25:55,240 --> 00:25:57,240
Speaker 2: own your own home, and you're like, well, maybe I

569
00:25:57,240 --> 00:26:00,360
Speaker 2: should be investing within a read, I don't own my

570
00:26:00,119 --> 00:26:03,080
Speaker 2: my own property. Reads, they actually make up about five

571
00:26:03,119 --> 00:26:06,200
Speaker 2: percent of the total stock market. And so guess what,

572
00:26:06,480 --> 00:26:08,400
Speaker 2: if you own a total stock market index fund, you're

573
00:26:08,400 --> 00:26:10,880
Speaker 2: probably invested in a red but boom, you just didn't

574
00:26:10,880 --> 00:26:11,680
Speaker 2: even even realize it.

575
00:26:11,760 --> 00:26:13,440
Speaker 1: Yeah, you have you own real estate.

576
00:26:13,480 --> 00:26:14,000
Speaker 2: You didn't know it.

577
00:26:14,040 --> 00:26:16,399
Speaker 1: Yeah, that's right. Even even if you're a renter, you

578
00:26:16,480 --> 00:26:21,560
Speaker 1: own some real estate via your other investments. And we

579
00:26:21,960 --> 00:26:24,000
Speaker 1: hung out with somebody recently and he was asking about

580
00:26:24,240 --> 00:26:27,800
Speaker 1: investing in real estate or passive income, and of course

581
00:26:27,800 --> 00:26:29,920
Speaker 1: we try to dispel the myth that passive income it

582
00:26:29,960 --> 00:26:33,280
Speaker 1: is super easy to come by, but we even told yeah, hey,

583
00:26:33,280 --> 00:26:35,040
Speaker 1: investing in real estate might make sense for you and

584
00:26:35,080 --> 00:26:37,040
Speaker 1: we try to go through all the nitty gritty and

585
00:26:37,040 --> 00:26:39,680
Speaker 1: all the details, but it's a harder thing for most

586
00:26:39,680 --> 00:26:41,280
Speaker 1: people to accomplish. You have to save up a ton

587
00:26:41,320 --> 00:26:43,320
Speaker 1: of money, and then numbers don't always make sense, and

588
00:26:43,359 --> 00:26:46,240
Speaker 1: they make sense a lot less in today's environment than

589
00:26:46,240 --> 00:26:48,680
Speaker 1: they have than they did years ago. So it's it's

590
00:26:48,680 --> 00:26:50,440
Speaker 1: harder for people to get into the real estate game.

591
00:26:50,760 --> 00:26:53,040
Speaker 1: But that brings up like one other I guess way

592
00:26:53,080 --> 00:26:55,560
Speaker 1: that you can invest in real estate, and that is

593
00:26:55,600 --> 00:27:00,280
Speaker 1: syndication funds and indication deals. Yeah, so those are interesting too,

594
00:27:00,400 --> 00:27:04,640
Speaker 1: they're sexy, well they're yeah, I think they get some press,

595
00:27:04,720 --> 00:27:07,080
Speaker 1: especially on Instagram. I follow some real estate investors and

596
00:27:07,080 --> 00:27:09,800
Speaker 1: they're talking about syndication deals all the time. But there

597
00:27:09,840 --> 00:27:12,560
Speaker 1: are good syndication deals, a bad syndication deals, and all

598
00:27:12,600 --> 00:27:15,920
Speaker 1: the final realick. They're basically like, just imagine someone buying

599
00:27:15,960 --> 00:27:17,960
Speaker 1: an apartment complex. Well, it's truly hard to do on

600
00:27:18,000 --> 00:27:19,480
Speaker 1: your own. So you get a group of investors to

601
00:27:19,480 --> 00:27:21,919
Speaker 1: pool their money together to buy this apartment complex and

602
00:27:21,960 --> 00:27:25,320
Speaker 1: then you start, you know, paying all the investors out

603
00:27:25,840 --> 00:27:28,840
Speaker 1: as you profit from that apartment complex doing well. And

604
00:27:29,080 --> 00:27:31,920
Speaker 1: so the thing is typically you have to have big

605
00:27:31,920 --> 00:27:33,320
Speaker 1: money to get in the game, and you have to

606
00:27:33,320 --> 00:27:36,000
Speaker 1: be an accredited investor, which means a net worth of

607
00:27:36,040 --> 00:27:38,520
Speaker 1: a million dollars or I think an annual income of

608
00:27:38,560 --> 00:27:40,200
Speaker 1: like two hundred and fifty k or something like that.

609
00:27:40,359 --> 00:27:42,480
Speaker 1: So it's hard to even qualify for that much less

610
00:27:42,520 --> 00:27:44,840
Speaker 1: save up the fifty k that it would take to

611
00:27:44,840 --> 00:27:48,080
Speaker 1: get in on that one syndication deal. And most people

612
00:27:48,359 --> 00:27:51,720
Speaker 1: over complicating their lives and they're probably getting to real

613
00:27:51,800 --> 00:27:56,400
Speaker 1: estate heavy in with their investments by partaking a syndication deal.

614
00:27:56,720 --> 00:27:59,639
Speaker 1: That's unless they have been like maxing out those retirement

615
00:27:59,640 --> 00:28:02,560
Speaker 1: accounts for years and years and years and still they've

616
00:28:02,560 --> 00:28:04,439
Speaker 1: got extra money and they just really want to go

617
00:28:04,480 --> 00:28:07,920
Speaker 1: down this hole. There's also a lot of pitfalls investing

618
00:28:08,040 --> 00:28:10,159
Speaker 1: in the syndication route. We're already seeing some of these

619
00:28:10,160 --> 00:28:14,280
Speaker 1: syndications go bust, a lot of investors losing all their money.

620
00:28:14,400 --> 00:28:17,199
Speaker 1: That doesn't happen in the stock market nearly to the

621
00:28:17,200 --> 00:28:17,720
Speaker 1: same degree.

622
00:28:17,800 --> 00:28:19,480
Speaker 2: That's right, Yeah, I think a lot of folks just

623
00:28:19,520 --> 00:28:21,520
Speaker 2: they just want to be able to refer to themselves

624
00:28:21,560 --> 00:28:25,399
Speaker 2: as syndicates because that has a nice ring to it

625
00:28:25,440 --> 00:28:27,720
Speaker 2: as well. But that is one way that folks could

626
00:28:27,720 --> 00:28:32,200
Speaker 2: potentially overcomplicate their investing lies. But how do you untie that? Knot?

627
00:28:32,800 --> 00:28:35,360
Speaker 2: What is the simplest and easiest way for you to

628
00:28:35,400 --> 00:28:37,680
Speaker 2: invest for your future? We will get to that right

629
00:28:37,720 --> 00:28:38,240
Speaker 2: after this.

630
00:28:47,880 --> 00:28:51,160
Speaker 1: All right, Matt, let's keep talking about simple investing in

631
00:28:51,200 --> 00:28:54,040
Speaker 1: some of the ways, maybe we try to complicate those investments,

632
00:28:54,680 --> 00:28:57,440
Speaker 1: some of which might make sense, in others which don't

633
00:28:57,440 --> 00:28:58,320
Speaker 1: make any sense at all.

634
00:28:58,640 --> 00:28:59,480
Speaker 2: And I don't know.

635
00:28:59,480 --> 00:29:00,880
Speaker 1: It makes me think about the game of life. You

636
00:29:00,880 --> 00:29:02,640
Speaker 1: remember that game back in the day, you spin the wheel.

637
00:29:03,000 --> 00:29:05,320
Speaker 1: You'd like it, never owned it, but I remember playing it, okay,

638
00:29:05,520 --> 00:29:08,240
Speaker 1: And like you got a different job which had a

639
00:29:08,240 --> 00:29:10,560
Speaker 1: different salary. You maybe had a family, or maybe you

640
00:29:10,560 --> 00:29:12,480
Speaker 1: stayed a bachelor. I mean, there's all these different choices

641
00:29:12,480 --> 00:29:13,160
Speaker 1: you make along the way.

642
00:29:13,160 --> 00:29:16,400
Speaker 2: It's like the American rat race. Yeah, exactly, it's the

643
00:29:16,440 --> 00:29:18,200
Speaker 2: negative way to see it.

644
00:29:18,280 --> 00:29:20,400
Speaker 1: Yeah, well, but there were so many different options. And

645
00:29:20,520 --> 00:29:22,040
Speaker 1: the same thing is true in the world investing, like

646
00:29:22,080 --> 00:29:24,080
Speaker 1: you can go down a bunch of different paths. Which

647
00:29:24,080 --> 00:29:26,640
Speaker 1: one makes sense for you might depend on and largely

648
00:29:26,680 --> 00:29:29,920
Speaker 1: does depend on individual circumstances. But I think even still,

649
00:29:30,000 --> 00:29:31,680
Speaker 1: there's a lot of broad based advice that we can

650
00:29:31,680 --> 00:29:35,960
Speaker 1: give simplicity is typically in the investing world, a better

651
00:29:36,040 --> 00:29:38,000
Speaker 1: way to go. And it just makes me think of

652
00:29:38,040 --> 00:29:41,400
Speaker 1: like all these super niche platforms that exist now, like

653
00:29:41,760 --> 00:29:44,280
Speaker 1: you can invest in farmland, you can invest in wine,

654
00:29:44,320 --> 00:29:47,360
Speaker 1: you can invest in whiskey, you can invest in crypto NFTs,

655
00:29:47,640 --> 00:29:49,680
Speaker 1: and I mean think about how the n FT's done

656
00:29:49,960 --> 00:29:52,320
Speaker 1: over the past eight to twelve months. I mean, I

657
00:29:52,360 --> 00:29:55,040
Speaker 1: think that first tweet of Jack Dorsey's went for mega

658
00:29:55,040 --> 00:29:57,400
Speaker 1: dollars and now the guy I can't even resell it, right,

659
00:29:57,760 --> 00:29:59,880
Speaker 1: and so I think he did resell it, but for

660
00:30:00,200 --> 00:30:02,520
Speaker 1: a whole lot less. Yeah, for like pennies on the dollar. Yeah,

661
00:30:02,560 --> 00:30:06,760
Speaker 1: unfortunately lost a lot or fortunately because like if what

662
00:30:06,800 --> 00:30:09,280
Speaker 1: we would not have wanted was for things to continue

663
00:30:09,280 --> 00:30:11,280
Speaker 1: to spiral out of control and continue to but for

664
00:30:11,320 --> 00:30:14,400
Speaker 1: that person, for them, yes exactly. But like conveniently we're

665
00:30:14,400 --> 00:30:17,400
Speaker 1: hearing nothing nothing about some of those categories these days.

666
00:30:17,800 --> 00:30:20,360
Speaker 1: But we actually did a deep dive of some of

667
00:30:20,360 --> 00:30:23,440
Speaker 1: those different online investing platforms back in episode four forty six,

668
00:30:23,480 --> 00:30:25,000
Speaker 1: if you want to go back and listen, and we

669
00:30:25,160 --> 00:30:28,600
Speaker 1: kind of covered the fees but also the returns that

670
00:30:28,840 --> 00:30:30,960
Speaker 1: you're likely to get on some of those things. And

671
00:30:30,960 --> 00:30:34,760
Speaker 1: and uh yeah, for most folks, all of these more vibrant,

672
00:30:34,800 --> 00:30:37,080
Speaker 1: i'll say ways of investing your money, they're just a

673
00:30:37,120 --> 00:30:40,160
Speaker 1: massive distraction from the tried and true investing methods, that's right.

674
00:30:40,200 --> 00:30:42,640
Speaker 2: Yeah, If you're not maxing out your roth IRA, if

675
00:30:42,680 --> 00:30:46,440
Speaker 2: you're not maxing your four ohine k socking away basically

676
00:30:46,520 --> 00:30:50,240
Speaker 2: thirty thousand dollars annually into index funds within those tax

677
00:30:50,240 --> 00:30:52,560
Speaker 2: advantage accounts, then you shouldn't even be considering any of

678
00:30:52,600 --> 00:30:57,080
Speaker 2: these alternative platforms where you can invest in whiskey or wine.

679
00:30:57,760 --> 00:30:59,080
Speaker 1: Like we were just talking about real estate, and I

680
00:30:59,120 --> 00:31:00,840
Speaker 1: think that that's the first thing I would push back

681
00:31:00,880 --> 00:31:02,520
Speaker 1: on somebody who's looking to do that. I would say,

682
00:31:02,560 --> 00:31:04,720
Speaker 1: have you done all the border the low hanging fruit

683
00:31:05,040 --> 00:31:08,200
Speaker 1: of those two accounts. Are you crushing it there? If so,

684
00:31:08,360 --> 00:31:10,600
Speaker 1: we can talk about next steps. But if not, like

685
00:31:10,600 --> 00:31:12,240
Speaker 1: real estate probably shouldn't be a consideration.

686
00:31:12,280 --> 00:31:13,920
Speaker 2: Sure, yeah, I mean, if you've got money left over

687
00:31:14,160 --> 00:31:15,960
Speaker 2: and you just love the novelty of it, then like

688
00:31:16,000 --> 00:31:17,560
Speaker 2: it's not the worst thing in the world that you

689
00:31:17,600 --> 00:31:20,280
Speaker 2: could dip your toes into. But most people who are

690
00:31:20,320 --> 00:31:22,960
Speaker 2: investing in some of these random ways that have popped

691
00:31:23,040 --> 00:31:27,080
Speaker 2: up in the past few years, they're just reducing their

692
00:31:27,200 --> 00:31:29,840
Speaker 2: meat and potatoes style investing, and that's what we are

693
00:31:29,880 --> 00:31:31,520
Speaker 2: trying to make sure that folks aren't taking care of

694
00:31:31,560 --> 00:31:34,480
Speaker 2: first in order to funnel dollars into this direction. That's

695
00:31:34,520 --> 00:31:37,240
Speaker 2: what we don't want folks to do. They're getting distracted

696
00:31:37,280 --> 00:31:41,920
Speaker 2: from the like the bigger prize, and honestly, like this

697
00:31:42,000 --> 00:31:43,120
Speaker 2: is to point out that most of the things that

698
00:31:43,120 --> 00:31:47,360
Speaker 2: we've talked about aren't necessarily inherently bad investments, except for

699
00:31:47,400 --> 00:31:50,480
Speaker 2: like crypto and NFTs, But like some of these other platforms,

700
00:31:50,640 --> 00:31:53,320
Speaker 2: there's still investments. It's not like their MLMs or anything

701
00:31:53,360 --> 00:31:55,080
Speaker 2: like that where you're totally going to get scammed.

702
00:31:55,320 --> 00:31:58,080
Speaker 1: It's just that there are other.

703
00:31:57,920 --> 00:31:59,720
Speaker 2: Priorities that you we want you to focus on first.

704
00:31:59,800 --> 00:32:03,240
Speaker 2: If the alternative is to mindlessly blow that money, is

705
00:32:03,280 --> 00:32:07,120
Speaker 2: to mindlessly consume, then I might even say, okay, well

706
00:32:07,120 --> 00:32:09,320
Speaker 2: make sure, yeah, maybe you should invest in this platform

707
00:32:09,360 --> 00:32:12,440
Speaker 2: if that's if that keeps you from blowing money that

708
00:32:12,480 --> 00:32:15,480
Speaker 2: you otherwise would have invested, I think maybe in that

709
00:32:15,520 --> 00:32:17,680
Speaker 2: scenario it could actually make sense. But we just want

710
00:32:17,720 --> 00:32:19,680
Speaker 2: to make sure that you are eating your veggies, your

711
00:32:19,720 --> 00:32:23,920
Speaker 2: mean potatoes first before you start focusing on the exotic.

712
00:32:23,480 --> 00:32:25,080
Speaker 1: Desserts off to the side. I think that's a good

713
00:32:25,080 --> 00:32:27,560
Speaker 1: way of putting It's not that these things are inherently bad,

714
00:32:27,640 --> 00:32:28,959
Speaker 1: although maybe NFTs are.

715
00:32:29,200 --> 00:32:32,880
Speaker 2: But yeah, but like and crypto Yeah, yet to be determined.

716
00:32:32,920 --> 00:32:36,040
Speaker 1: Some of these sites like I don't mind that their existence, yeah, exactly,

717
00:32:36,080 --> 00:32:38,720
Speaker 1: It's just that they are for investors who are doing

718
00:32:39,040 --> 00:32:42,479
Speaker 1: the right thing with a ton of their income before

719
00:32:42,880 --> 00:32:45,760
Speaker 1: even thinking about crossing the threshold into investing in some

720
00:32:45,840 --> 00:32:48,040
Speaker 1: of the random things you can invest in now online.

721
00:32:48,200 --> 00:32:50,280
Speaker 1: And let's talk about hiring an advisor for a second, man.

722
00:32:50,360 --> 00:32:52,160
Speaker 1: I think that's something that the people might think that

723
00:32:52,240 --> 00:32:55,320
Speaker 1: is either going to help them uncomplicate their finances or

724
00:32:55,360 --> 00:32:57,520
Speaker 1: they think it might bring more complication. But they think

725
00:32:57,560 --> 00:33:00,600
Speaker 1: it might bring some necessary complication their life life. And

726
00:33:01,040 --> 00:33:03,239
Speaker 1: it's not that we think that hiring a human is

727
00:33:03,400 --> 00:33:05,840
Speaker 1: a bad idea, right, that that a financial advisor can't

728
00:33:05,840 --> 00:33:07,520
Speaker 1: stiry in the right direction, can't give you good advice.

729
00:33:07,600 --> 00:33:09,800
Speaker 2: We like humans. We like people. Mostly, it's not all

730
00:33:09,800 --> 00:33:12,200
Speaker 2: about we're not doubling down.

731
00:33:12,400 --> 00:33:16,680
Speaker 1: Right. If human advisors were less expensive, I think it

732
00:33:16,720 --> 00:33:20,400
Speaker 1: can make sense for more people, but for everyday folks. Again,

733
00:33:20,640 --> 00:33:24,640
Speaker 1: I think the hiring an advisor question that pursuit can

734
00:33:24,680 --> 00:33:27,640
Speaker 1: be a deviation from what they should really be focused

735
00:33:27,680 --> 00:33:30,560
Speaker 1: on and focusing on. If you're barely snagging the match

736
00:33:30,720 --> 00:33:32,680
Speaker 1: in your four to one K, you just don't need

737
00:33:32,680 --> 00:33:35,440
Speaker 1: to spend hundreds or thousands of dollars to get advice

738
00:33:35,920 --> 00:33:38,720
Speaker 1: from a professional. That's something that you can do before

739
00:33:38,760 --> 00:33:41,000
Speaker 1: you talk to a profession right, right, It would be

740
00:33:41,000 --> 00:33:43,160
Speaker 1: so much better to funnel that money into those accounts,

741
00:33:43,320 --> 00:33:45,479
Speaker 1: more money into those accounts to grow for your future.

742
00:33:45,760 --> 00:33:48,440
Speaker 1: I think an advisor makes sense for some folks whose

743
00:33:48,480 --> 00:33:52,560
Speaker 1: situation is getting more complicated, but even then, we want

744
00:33:52,560 --> 00:33:55,640
Speaker 1: folks to only consider fee only financial planners. X Y

745
00:33:55,800 --> 00:33:58,240
Speaker 1: Planning Network is probably the best side out there to

746
00:33:58,280 --> 00:34:01,680
Speaker 1: find one of those. But I think people like they

747
00:34:01,760 --> 00:34:03,240
Speaker 1: start to learn about money and they're like, oh, it

748
00:34:03,280 --> 00:34:04,480
Speaker 1: must be time to hire the advisor.

749
00:34:04,560 --> 00:34:05,120
Speaker 2: I need a guy.

750
00:34:05,280 --> 00:34:09,839
Speaker 1: Yeah, girl. The truth is you probably don't unless you're

751
00:34:09,880 --> 00:34:12,160
Speaker 1: crushing it. You've been crushing it for years on end. Yeah.

752
00:34:12,200 --> 00:34:14,759
Speaker 2: And I would say based on the fact that you

753
00:34:15,040 --> 00:34:16,560
Speaker 2: if you are hearing a say this, that means you're

754
00:34:16,600 --> 00:34:18,960
Speaker 2: listening to the podcast, which means like that tells me

755
00:34:19,000 --> 00:34:20,640
Speaker 2: that I think you are the kind of person who's

756
00:34:20,640 --> 00:34:23,759
Speaker 2: going to proactively take charge of your finances. And I

757
00:34:23,760 --> 00:34:25,520
Speaker 2: think that that's a good thing, because what we don't

758
00:34:25,560 --> 00:34:29,360
Speaker 2: want are folks to just by default thinking like, basically,

759
00:34:29,480 --> 00:34:31,160
Speaker 2: I don't want you to be like me when I

760
00:34:31,239 --> 00:34:33,480
Speaker 2: got my first real job and started earning money. I

761
00:34:33,480 --> 00:34:35,239
Speaker 2: don't know if I've ever actually talked about this, sure

762
00:34:35,360 --> 00:34:39,120
Speaker 2: new podcast logan don't be like that. But I went down.

763
00:34:39,320 --> 00:34:41,439
Speaker 2: I was like, oh, man, I'm earning real money now

764
00:34:41,680 --> 00:34:43,880
Speaker 2: I'm gonna go talk to this Edward Jones guy. And

765
00:34:43,920 --> 00:34:46,040
Speaker 2: so I walked down to walked out, you know, and

766
00:34:46,239 --> 00:34:48,399
Speaker 2: drove down the street and went in there and started

767
00:34:48,400 --> 00:34:50,240
Speaker 2: talking to him. But even at that point, I realized,

768
00:34:50,840 --> 00:34:54,640
Speaker 2: this seems pretty expensive, and I think I can do

769
00:34:54,719 --> 00:34:57,319
Speaker 2: what you're talking about with without paying you.

770
00:34:57,600 --> 00:34:59,040
Speaker 1: And I actually just looked this up because I was

771
00:34:59,040 --> 00:35:00,000
Speaker 1: curious what it is that they.

772
00:35:00,120 --> 00:35:03,080
Speaker 2: Charge on the first two hundred and fifty thousand dollars.

773
00:35:03,080 --> 00:35:04,480
Speaker 2: They charge one point.

774
00:35:04,400 --> 00:35:05,320
Speaker 1: Three five percent.

775
00:35:05,480 --> 00:35:09,239
Speaker 2: Wow, that is expensive, man, And especially for somebody who

776
00:35:09,320 --> 00:35:12,160
Speaker 2: is just getting started with their investing, that is not

777
00:35:12,960 --> 00:35:15,040
Speaker 2: a fee that they need to be and they need

778
00:35:15,080 --> 00:35:17,640
Speaker 2: to be paying. But so one of the ways around

779
00:35:17,719 --> 00:35:21,960
Speaker 2: hiring an actual person are is ai it is the

780
00:35:22,320 --> 00:35:25,239
Speaker 2: all the robo advisors out there, and some folks were

781
00:35:25,280 --> 00:35:27,120
Speaker 2: saying that, you know, this is a happy medium for

782
00:35:27,120 --> 00:35:29,360
Speaker 2: a lot of folks, but are those a good choice

783
00:35:29,400 --> 00:35:32,280
Speaker 2: and what would make someone opt to go in that direction.

784
00:35:32,600 --> 00:35:35,560
Speaker 2: And this is the second time we've referenced Monday's episode,

785
00:35:35,600 --> 00:35:39,719
Speaker 2: but we talked about the tax lost harvesting abilities of

786
00:35:39,760 --> 00:35:42,680
Speaker 2: a robo advisor like Betterment, which we would say it's

787
00:35:42,719 --> 00:35:44,480
Speaker 2: it's probably one of the best ones out there. It

788
00:35:44,520 --> 00:35:46,520
Speaker 2: might be the best of the bunch within the robo

789
00:35:46,719 --> 00:35:50,600
Speaker 2: advising category. And this is largely because of the like

790
00:35:50,640 --> 00:35:54,680
Speaker 2: the behavioral finance elements that they've built into the service.

791
00:35:54,600 --> 00:35:56,480
Speaker 1: Where they're able to help folks to stay the course.

792
00:35:56,840 --> 00:35:59,560
Speaker 1: It's not like they offer superior fun choices or anything

793
00:35:59,600 --> 00:36:01,839
Speaker 1: like that. There's no there's no secret sauce, right, It's

794
00:36:01,880 --> 00:36:05,400
Speaker 1: it's those kind of advisory elements that they will they

795
00:36:05,400 --> 00:36:07,799
Speaker 1: help you stay the course, which is really important. That's

796
00:36:07,800 --> 00:36:09,279
Speaker 1: one of the best things an advisor can do.

797
00:36:09,360 --> 00:36:11,320
Speaker 2: Right, Yeah, And well then they actually do have advisors

798
00:36:11,320 --> 00:36:13,399
Speaker 2: and so like their fees range from like zero point

799
00:36:13,520 --> 00:36:16,640
Speaker 2: twenty five percent for kind of like their standard digital plan,

800
00:36:16,719 --> 00:36:19,080
Speaker 2: but if you pay a little bit more point four percent,

801
00:36:19,120 --> 00:36:22,840
Speaker 2: which I don't like seeing. But with that premium service,

802
00:36:22,920 --> 00:36:26,839
Speaker 2: you get access to professional financial planners actual cfps, which

803
00:36:26,880 --> 00:36:28,360
Speaker 2: can go a long way when it comes to, you know,

804
00:36:28,440 --> 00:36:29,400
Speaker 2: planning out your finals.

805
00:36:29,400 --> 00:36:30,879
Speaker 1: When you think about when you compare it to something

806
00:36:30,920 --> 00:36:32,400
Speaker 1: like Edward Jones that you just mentioned.

807
00:36:32,200 --> 00:36:36,280
Speaker 2: That's a third of the price shoving an entire point. Yeah,

808
00:36:36,320 --> 00:36:39,000
Speaker 2: for one hundred points a full percentage point, it seems

809
00:36:39,000 --> 00:36:40,600
Speaker 2: like it seems like a pretty good deal. What do

810
00:36:40,640 --> 00:36:42,440
Speaker 2: you think about on those terms? Yeah, you're paying a

811
00:36:42,480 --> 00:36:45,400
Speaker 2: little more, certainly for a robo advisor than if you

812
00:36:45,440 --> 00:36:49,080
Speaker 2: were to be doing it yourself, but it's still pretty

813
00:36:49,080 --> 00:36:52,560
Speaker 2: inexpensive compared to hiring a traditional human advisor. And no

814
00:36:52,680 --> 00:36:55,080
Speaker 2: hate to all those Edward Jones folks.

815
00:36:54,800 --> 00:36:59,080
Speaker 1: Out there, Yeah no, I mean, I'm some people want that.

816
00:36:59,360 --> 00:37:01,640
Speaker 1: I guess, like that's not our jam, and that's not

817
00:37:01,680 --> 00:37:04,160
Speaker 1: we recommend people. It's a different Yeah, it's a different service,

818
00:37:04,200 --> 00:37:06,600
Speaker 1: and some folks kind of want that assistance. They want

819
00:37:06,640 --> 00:37:09,279
Speaker 1: to sit down in person, you know, going through that

820
00:37:09,320 --> 00:37:11,040
Speaker 1: whole thing. I think if you're going to go the

821
00:37:11,120 --> 00:37:14,080
Speaker 1: robo advisor direction, like I don't know. I think Betterments, Yeah,

822
00:37:14,200 --> 00:37:16,560
Speaker 1: is one of the best. And that combo of human

823
00:37:16,640 --> 00:37:21,319
Speaker 1: advice with the kind of robo platform helping you on

824
00:37:21,360 --> 00:37:23,319
Speaker 1: the tax front and on the advice front, I think

825
00:37:23,320 --> 00:37:25,839
Speaker 1: it's pretty cool, and you know, for some people it's

826
00:37:25,840 --> 00:37:28,359
Speaker 1: worth paying the extra money. But let's talk about Matt

827
00:37:28,480 --> 00:37:31,759
Speaker 1: just kind of some guideline, some basics. When we talk

828
00:37:31,800 --> 00:37:37,160
Speaker 1: about simplification of investing and how over complicating things, and

829
00:37:37,200 --> 00:37:39,600
Speaker 1: of course there are a million ways that you can

830
00:37:39,920 --> 00:37:43,000
Speaker 1: complicate your investing strategy, but we really believe that it

831
00:37:43,000 --> 00:37:44,759
Speaker 1: doesn't need to be. It shouldn't have to be, and

832
00:37:44,800 --> 00:37:48,480
Speaker 1: it shouldn't be terribly complicated. And I think the more

833
00:37:48,520 --> 00:37:51,680
Speaker 1: complicated you make it, the less likely people are to

834
00:37:51,880 --> 00:37:54,600
Speaker 1: partake in that action. Right when you say there's ten

835
00:37:54,640 --> 00:37:57,160
Speaker 1: hoops to jump through, people are going to just walk

836
00:37:57,200 --> 00:38:00,400
Speaker 1: away before they start. When the belief is that investing

837
00:38:00,440 --> 00:38:02,880
Speaker 1: is hard, a lot of folks decide to skip out altogether.

838
00:38:03,120 --> 00:38:06,680
Speaker 1: And so that does so much more harm than maybe

839
00:38:06,719 --> 00:38:09,640
Speaker 1: not having quite enough international exposure or missing out on

840
00:38:09,760 --> 00:38:12,440
Speaker 1: some years where real estate had super good returns something

841
00:38:12,480 --> 00:38:15,520
Speaker 1: like that. Doing the thing, even doing it imperfectly and

842
00:38:15,560 --> 00:38:18,640
Speaker 1: doing it regularly is the key it comes down to

843
00:38:18,719 --> 00:38:21,120
Speaker 1: the crux of the matter is don't let perfect be

844
00:38:21,160 --> 00:38:23,400
Speaker 1: the enemy of good if you're trying to you're just

845
00:38:23,400 --> 00:38:25,480
Speaker 1: starting out, and you're like, I want to invest the

846
00:38:25,680 --> 00:38:29,120
Speaker 1: exact right way, the perfect way for future returns, and

847
00:38:29,360 --> 00:38:31,879
Speaker 1: the perfect way so that I stay the course. I mean,

848
00:38:32,080 --> 00:38:34,359
Speaker 1: I think my advice would be get started and then

849
00:38:34,400 --> 00:38:37,280
Speaker 1: continue learning and you can iterate over time if you want.

850
00:38:37,520 --> 00:38:40,320
Speaker 1: But simplicity is better than perfection.

851
00:38:40,719 --> 00:38:43,000
Speaker 2: So this kind of makes me think of why I

852
00:38:43,000 --> 00:38:45,839
Speaker 2: don't necessarily like talking about my budget in the fact

853
00:38:45,880 --> 00:38:47,759
Speaker 2: that we've made it available, which I guess I'm doing

854
00:38:47,800 --> 00:38:50,560
Speaker 2: that by even sharing this example. But the reason I

855
00:38:50,600 --> 00:38:52,400
Speaker 2: don't necessarily like pushing it out there for folks is

856
00:38:52,400 --> 00:38:55,879
Speaker 2: because it's too complicated for most folks. It's not something that,

857
00:38:56,239 --> 00:38:59,400
Speaker 2: especially if you've never budgeted before, this shouldn't be your

858
00:38:59,400 --> 00:39:03,280
Speaker 2: first step towards tracking your expenses and budgeting for the months.

859
00:39:03,320 --> 00:39:06,000
Speaker 2: And so, in a similar way, we want folks to

860
00:39:06,040 --> 00:39:10,400
Speaker 2: be successful rather than you know, having all the i's dotted,

861
00:39:10,400 --> 00:39:12,279
Speaker 2: all the t's crossed, and have anything's perfect, where you

862
00:39:12,360 --> 00:39:14,720
Speaker 2: end up kind of, you know, falling off the wagon.

863
00:39:15,040 --> 00:39:16,640
Speaker 2: And so we want folks to opt for what we

864
00:39:16,680 --> 00:39:19,879
Speaker 2: would call a minimalist portfolio. We've always said that a

865
00:39:19,960 --> 00:39:21,879
Speaker 2: total stock market or at S and P five hundred

866
00:39:21,920 --> 00:39:24,560
Speaker 2: fund it gets folks who are in the wealth building

867
00:39:24,600 --> 00:39:26,799
Speaker 2: phase of their lives basically what it is that they

868
00:39:26,840 --> 00:39:31,239
Speaker 2: need without overthinking it. And target date funds they are

869
00:39:31,320 --> 00:39:34,160
Speaker 2: another great set it and forget it approach for money

870
00:39:34,160 --> 00:39:37,680
Speaker 2: that you're stalking away inside of your retirement accounts. And

871
00:39:37,719 --> 00:39:40,880
Speaker 2: so it's not that you can't diversify further. You know,

872
00:39:40,920 --> 00:39:43,319
Speaker 2: if you wanted to say, add some a little more

873
00:39:44,000 --> 00:39:46,279
Speaker 2: real estate exposure via a rate, If you want to

874
00:39:46,320 --> 00:39:48,120
Speaker 2: do that, that's great, you do you. It's just that

875
00:39:48,440 --> 00:39:52,440
Speaker 2: the minimalist route, investing within a single fund or maybe

876
00:39:52,440 --> 00:39:55,720
Speaker 2: two that are already well diversified, this is an effective

877
00:39:55,719 --> 00:39:57,600
Speaker 2: strategy that will get you where it is that you

878
00:39:57,640 --> 00:40:00,160
Speaker 2: want to be. Yeah, man, I love that. A like

879
00:40:00,200 --> 00:40:03,200
Speaker 2: the idea of just keeping it as simple as possible,

880
00:40:03,280 --> 00:40:06,239
Speaker 2: keeping it minimalist, and then doing the right thing over

881
00:40:06,239 --> 00:40:08,640
Speaker 2: and over right. So the next thing would we mentioned

882
00:40:08,719 --> 00:40:11,000
Speaker 2: is to have that plan and then stick to it,

883
00:40:11,080 --> 00:40:13,120
Speaker 2: because the best plan is something that you can stick to,

884
00:40:13,520 --> 00:40:18,160
Speaker 2: and it's it's easy to make complicated plans and then it.

885
00:40:18,200 --> 00:40:21,080
Speaker 2: But it's easier to break those plans too, right, because

886
00:40:21,160 --> 00:40:22,960
Speaker 2: you're like, wait a second, I got to step three.

887
00:40:23,120 --> 00:40:26,319
Speaker 2: There's thirty more steps. I'm just gonna bow out right now.

888
00:40:26,640 --> 00:40:28,960
Speaker 2: And that's what makes like, it makes me think of

889
00:40:28,960 --> 00:40:31,439
Speaker 2: the app Couch to five K. Heard someone talking about

890
00:40:31,440 --> 00:40:35,040
Speaker 2: that recently and how it changed their life. They were

891
00:40:35,400 --> 00:40:38,840
Speaker 2: nervous to start running. But with that app, it's specifically

892
00:40:38,880 --> 00:40:40,839
Speaker 2: it like slowly changes the amount of time where you're

893
00:40:40,920 --> 00:40:43,759
Speaker 2: running and walking so that you don't feel overwhelmed. After

894
00:40:43,840 --> 00:40:45,960
Speaker 2: two days of You're like, if you try to go

895
00:40:46,040 --> 00:40:49,120
Speaker 2: run a five k and you've been like, haveing run

896
00:40:49,200 --> 00:40:52,600
Speaker 2: at all in years, good luck? Right, you're probably gonna

897
00:40:52,600 --> 00:40:54,480
Speaker 2: get demoralized. But if you take this couch to five

898
00:40:54,560 --> 00:40:56,000
Speaker 2: k route and you try to build up over I

899
00:40:56,000 --> 00:40:58,040
Speaker 2: don't know, the course of something like three months, you

900
00:40:58,120 --> 00:41:01,480
Speaker 2: are in all likelihood gonna running awesome five k a

901
00:41:01,560 --> 00:41:03,640
Speaker 2: recipe for success. Yeah you might even keep going go

902
00:41:03,680 --> 00:41:06,879
Speaker 2: ten k pretty soon, right, But yeah, So the same

903
00:41:06,960 --> 00:41:09,400
Speaker 2: is true with your investments. The most important thing is

904
00:41:09,680 --> 00:41:13,000
Speaker 2: shoveling money into those retirement accounts, consistently getting those dollars

905
00:41:13,000 --> 00:41:16,600
Speaker 2: invested in a diversified manner. So come up with the plan,

906
00:41:16,680 --> 00:41:19,680
Speaker 2: and hopefully that plan is minimalist in nature, and then

907
00:41:20,040 --> 00:41:22,640
Speaker 2: stick to it, do it regularly, do it religiously. That's

908
00:41:22,680 --> 00:41:24,680
Speaker 2: where dollar cost averaging comes in, right. If you just

909
00:41:24,760 --> 00:41:28,400
Speaker 2: kind of keep doing it with every paycheck, then without overthinking,

910
00:41:28,400 --> 00:41:31,240
Speaker 2: without overthinking it, you're going to be ahead, vastly ahead

911
00:41:31,280 --> 00:41:34,359
Speaker 2: of the majority of your peers on the investing front. Yeah,

912
00:41:34,400 --> 00:41:36,800
Speaker 2: and so you said kind of shoveling money into those accounts,

913
00:41:36,840 --> 00:41:39,799
Speaker 2: Which makes me think of the fact that especially early on,

914
00:41:40,480 --> 00:41:42,680
Speaker 2: when you are just getting started with your investing, when

915
00:41:42,680 --> 00:41:44,920
Speaker 2: you see fluctuations in the market, and especially like we've

916
00:41:44,920 --> 00:41:48,280
Speaker 2: seen over the past several weeks we've seen a booming market,

917
00:41:49,160 --> 00:41:52,200
Speaker 2: if you are just getting started with your investments, you're

918
00:41:52,239 --> 00:41:54,239
Speaker 2: not going to see much change when it comes to

919
00:41:54,560 --> 00:41:57,760
Speaker 2: the size of your portfolio because you're just getting started. Truly,

920
00:41:57,960 --> 00:41:59,759
Speaker 2: what has the biggest impact, what moves the needle of

921
00:41:59,760 --> 00:42:01,720
Speaker 2: the most is your savings rate and how much money

922
00:42:01,960 --> 00:42:05,839
Speaker 2: you are able to sock away versus you like we've

923
00:42:05,840 --> 00:42:08,279
Speaker 2: been investing for like ten fifteen, like coming up on

924
00:42:08,360 --> 00:42:12,080
Speaker 2: twenty years, and we've got bigger nest eggs. That's bottom

925
00:42:12,080 --> 00:42:15,359
Speaker 2: line than when we started investing fifteen twenty years ago,

926
00:42:15,840 --> 00:42:18,160
Speaker 2: and now when the market goes up, it's a little

927
00:42:18,200 --> 00:42:20,000
Speaker 2: more fun, right Like, it's a little more fun to

928
00:42:20,040 --> 00:42:21,960
Speaker 2: see the balances increase a little bit when you check

929
00:42:22,000 --> 00:42:24,439
Speaker 2: it at the end of the month. But that would

930
00:42:24,480 --> 00:42:28,800
Speaker 2: not have happened if we weren't sacrificing, cutting back on expenses,

931
00:42:28,840 --> 00:42:32,560
Speaker 2: finding ways to invest more while we were younger. Basically,

932
00:42:32,600 --> 00:42:34,640
Speaker 2: you kind of have to like pay your dues a

933
00:42:34,680 --> 00:42:36,840
Speaker 2: little bit. And once that nest egg gets to be

934
00:42:36,880 --> 00:42:41,000
Speaker 2: a certain size, well market fluctuations and a growing market,

935
00:42:41,200 --> 00:42:42,799
Speaker 2: that's when you get to see the beauty of the

936
00:42:42,840 --> 00:42:47,160
Speaker 2: compound of compounding returns, because compounding returns and interest doesn't

937
00:42:47,200 --> 00:42:50,200
Speaker 2: make a huge dent in those early years. On the

938
00:42:50,280 --> 00:42:51,640
Speaker 2: back end is when you start to see that.

939
00:42:51,680 --> 00:42:54,160
Speaker 1: You can totally split hairs about how much money you've

940
00:42:54,160 --> 00:42:58,520
Speaker 1: got allocated international, how much exposure you have to real estate,

941
00:42:58,760 --> 00:43:02,560
Speaker 1: whether or not you're investing in vintage lines, whatever. I mean,

942
00:43:02,719 --> 00:43:04,440
Speaker 1: you can split hairs over all that stuff, and what

943
00:43:04,440 --> 00:43:06,719
Speaker 1: the exact right percentage is for every single thing. Do

944
00:43:06,800 --> 00:43:09,880
Speaker 1: I need more small cap value in my portfolio? Bloody

945
00:43:09,920 --> 00:43:14,400
Speaker 1: bloody blah. And it's not that those conversations are completely worthless.

946
00:43:14,640 --> 00:43:17,359
Speaker 1: But you're right, Like, the biggest change that we can

947
00:43:17,400 --> 00:43:20,560
Speaker 1: make most easily that comes with the less stress and

948
00:43:20,600 --> 00:43:22,920
Speaker 1: the most likelihood of follow through is to keep it

949
00:43:22,960 --> 00:43:25,480
Speaker 1: simple and to just ramp up the percentage that we're

950
00:43:25,680 --> 00:43:28,360
Speaker 1: that we're dedicating each and every month, each every paycheck

951
00:43:28,400 --> 00:43:31,440
Speaker 1: to those accounts, Like that is the spigot that we

952
00:43:31,440 --> 00:43:34,160
Speaker 1: can turn on the most that's going to lead to

953
00:43:34,200 --> 00:43:36,360
Speaker 1: the largest growth in nest egg. You can try to

954
00:43:36,840 --> 00:43:41,760
Speaker 1: get that perfect allocation, create the most diverse investment account possible,

955
00:43:42,040 --> 00:43:44,480
Speaker 1: but the reality is then you're probably not quite as

956
00:43:44,560 --> 00:43:48,239
Speaker 1: focused on that more important lever and ultimately, yeah, you

957
00:43:48,800 --> 00:43:50,920
Speaker 1: might have the most diverse portfolio on earth, but you're

958
00:43:51,080 --> 00:43:54,839
Speaker 1: the perfectly diverse. Yeah, but you're missing out than on

959
00:43:55,000 --> 00:43:56,840
Speaker 1: the most important thing. It's kind of like, well we

960
00:43:56,880 --> 00:43:59,480
Speaker 1: talked about back not too long ago with frugality, how

961
00:43:59,520 --> 00:44:01,000
Speaker 1: it has to men wishing returns.

962
00:44:01,200 --> 00:44:02,320
Speaker 2: Same thing. People.

963
00:44:02,400 --> 00:44:04,400
Speaker 1: If you're so focused on frugal, you're probably not going

964
00:44:04,480 --> 00:44:07,239
Speaker 1: to be as thoughtful about ramping up your income. And

965
00:44:07,280 --> 00:44:08,640
Speaker 1: this is true too. I think the more you think

966
00:44:08,680 --> 00:44:12,360
Speaker 1: about how your portfolio is allocated, boom, you've lost the

967
00:44:12,400 --> 00:44:14,680
Speaker 1: plot and you're focused too much on the little things.

968
00:44:14,680 --> 00:44:16,239
Speaker 1: You're majoring on the miners, that's right.

969
00:44:16,320 --> 00:44:18,680
Speaker 2: Yeah, And then and finally too, I mean, so one

970
00:44:18,719 --> 00:44:21,840
Speaker 2: of the reasons we're talking about this today is because

971
00:44:21,840 --> 00:44:22,960
Speaker 2: of the timeliness of it.

972
00:44:23,040 --> 00:44:23,919
Speaker 1: Right, So, as the.

973
00:44:23,800 --> 00:44:27,760
Speaker 2: Market is booming and we've seen some you know, fluctuation recently,

974
00:44:28,239 --> 00:44:30,359
Speaker 2: but folks, it becomes something that folks want to talk

975
00:44:30,400 --> 00:44:32,360
Speaker 2: about more. And what we want to encourage you to

976
00:44:32,400 --> 00:44:33,920
Speaker 2: do is like, once you do have this plan you've

977
00:44:33,960 --> 00:44:35,960
Speaker 2: heard us talk through, Hey, maybe you should just be

978
00:44:35,960 --> 00:44:37,880
Speaker 2: looking at a total stock market index fund or an

979
00:44:38,000 --> 00:44:40,919
Speaker 2: SMP five hundred index fund, or maybe a target date fund.

980
00:44:41,120 --> 00:44:43,600
Speaker 2: Once you have that plan, ignore everything else. We want

981
00:44:43,600 --> 00:44:46,480
Speaker 2: you to put the blinders on. We want you to

982
00:44:46,520 --> 00:44:50,080
Speaker 2: limit the noise, especially when it comes to the different

983
00:44:50,120 --> 00:44:54,000
Speaker 2: headlines that you read. But when the market is tanking,

984
00:44:54,280 --> 00:44:57,080
Speaker 2: folks are like you batten down the hatches, right, Like

985
00:44:57,120 --> 00:44:59,040
Speaker 2: you are not interested in taking some of these risks.

986
00:44:59,080 --> 00:45:01,200
Speaker 2: But like you were saying earlier, when things are booming,

987
00:45:01,239 --> 00:45:05,319
Speaker 2: everybody feels brilliant, everybody feels rich, and they're thinking, ah, well,

988
00:45:05,360 --> 00:45:08,279
Speaker 2: what else can I do in order to make this

989
00:45:08,400 --> 00:45:11,680
Speaker 2: ride last even longer? Basically, and we that is the

990
00:45:11,719 --> 00:45:14,440
Speaker 2: opposite of what you actually should be doing. And so

991
00:45:14,480 --> 00:45:16,560
Speaker 2: while everyone else is out there figuring out different ways

992
00:45:16,560 --> 00:45:20,000
Speaker 2: that they can invest in the latest sexy thing like

993
00:45:20,120 --> 00:45:24,960
Speaker 2: and who knows what the next iteration of distracting investment

994
00:45:25,000 --> 00:45:26,240
Speaker 2: opportunities are going to come down.

995
00:45:26,080 --> 00:45:28,520
Speaker 1: The pike, right like, they'll come they oh, they.

996
00:45:28,400 --> 00:45:31,480
Speaker 2: Absolutely will, but they are not things that you need

997
00:45:31,560 --> 00:45:33,799
Speaker 2: to be paying attention to. And so, yeah, we wanted

998
00:45:33,840 --> 00:45:35,880
Speaker 2: to talk about the different ways that you can simplify

999
00:45:35,960 --> 00:45:38,160
Speaker 2: how it is that you invest in. Truly, it does

1000
00:45:38,280 --> 00:45:40,160
Speaker 2: not need to be all that complicated.

1001
00:45:40,320 --> 00:45:43,759
Speaker 1: Agreed and simple doesn't mean unsophisticated, right, Simple can still

1002
00:45:43,800 --> 00:45:46,880
Speaker 1: be diverse, and it can it can give you exactly

1003
00:45:46,880 --> 00:45:49,000
Speaker 1: what you need without ever thinking if.

1004
00:45:48,960 --> 00:45:50,399
Speaker 2: You think the S and P five hundred NIX fund

1005
00:45:50,440 --> 00:45:54,000
Speaker 2: or the total stock market in NIX fund is unsophisticated.

1006
00:45:53,320 --> 00:45:54,839
Speaker 1: Log into all of.

1007
00:45:54,800 --> 00:45:57,960
Speaker 2: The different companies that make up sure that that fund

1008
00:45:58,520 --> 00:45:59,120
Speaker 2: consists of.

1009
00:45:59,800 --> 00:46:02,640
Speaker 1: Back to see and go back and listen maybe to

1010
00:46:02,760 --> 00:46:06,359
Speaker 1: our episode with Robin Wigglesworth about his book Trillions and

1011
00:46:06,440 --> 00:46:10,680
Speaker 1: how Jack Bobol kind of really started the index fund

1012
00:46:11,160 --> 00:46:14,600
Speaker 1: movement and it's been a powerful one. So yeah, it's

1013
00:46:14,880 --> 00:46:17,040
Speaker 1: investing is the one thing where the more effort you

1014
00:46:17,080 --> 00:46:20,680
Speaker 1: put in, the worst your returns get. Typically, simplicity makes

1015
00:46:20,680 --> 00:46:22,440
Speaker 1: a whole lot of sense. We'll link to that interview

1016
00:46:22,440 --> 00:46:24,520
Speaker 1: as well. Yeah, all right, Matt let's mention as come

1017
00:46:24,560 --> 00:46:25,879
Speaker 1: back to the beer we had. This one is called

1018
00:46:25,920 --> 00:46:30,040
Speaker 1: Symptom of Progeny. It's a golden sour ale fermented with

1019
00:46:30,040 --> 00:46:32,880
Speaker 1: spontaneous culture. What were your thoughts on this one? I

1020
00:46:32,920 --> 00:46:33,400
Speaker 1: really like it.

1021
00:46:33,440 --> 00:46:34,160
Speaker 2: What do you think about it?

1022
00:46:34,320 --> 00:46:37,439
Speaker 1: I really, I guess I say it's like brightly tart.

1023
00:46:37,560 --> 00:46:39,960
Speaker 1: It's got chris. I know there's no fruit in this.

1024
00:46:40,040 --> 00:46:43,000
Speaker 1: It's got peach fuzzy elements. Oh yeah, big time dude.

1025
00:46:43,239 --> 00:46:44,240
Speaker 1: So truly.

1026
00:46:45,120 --> 00:46:47,600
Speaker 2: I was curious because we've been drinking some really big,

1027
00:46:47,719 --> 00:46:51,799
Speaker 2: really sweet stouts from Burial recently, and because of that,

1028
00:46:51,840 --> 00:46:54,560
Speaker 2: this one almost seems like a touch to tart. But

1029
00:46:54,719 --> 00:46:57,320
Speaker 2: I think it's because of all the sweet beers that

1030
00:46:57,360 --> 00:47:00,920
Speaker 2: we've been drinking like this. It's still such a bright, crisp, refreshing,

1031
00:47:01,480 --> 00:47:04,800
Speaker 2: perfectly aged, perfectly oky golden ale. It's exactly what I

1032
00:47:04,840 --> 00:47:07,040
Speaker 2: want out of a golden golden ail. And it's I mean,

1033
00:47:07,160 --> 00:47:08,560
Speaker 2: there's a good reason why Kate and I mean we

1034
00:47:08,640 --> 00:47:10,359
Speaker 2: picked up several bottles of us to bring back home

1035
00:47:10,400 --> 00:47:12,760
Speaker 2: to enjoy, because we certainly enjoyed this one.

1036
00:47:12,840 --> 00:47:14,400
Speaker 1: It just makes me think Burial does some of the

1037
00:47:14,400 --> 00:47:15,680
Speaker 1: best beers in every genre.

1038
00:47:16,040 --> 00:47:17,680
Speaker 2: Oh yeah, before we were talking about just how they're

1039
00:47:17,680 --> 00:47:20,000
Speaker 2: crushing it. They crush it with their their New England

1040
00:47:20,040 --> 00:47:23,040
Speaker 2: hazes and obviously there are stouts that we've been enjoying recently.

1041
00:47:23,080 --> 00:47:25,000
Speaker 2: But yes, this is a barely age sour.

1042
00:47:25,239 --> 00:47:26,880
Speaker 1: Do they make bad beers? I don't think so. Not

1043
00:47:27,200 --> 00:47:29,799
Speaker 1: completely knock out of the park. Yeah for sure. All right,

1044
00:47:29,840 --> 00:47:31,720
Speaker 1: that's gonna do it for this episode. You can find

1045
00:47:31,880 --> 00:47:33,960
Speaker 1: links to some of the stuff we mentioned up on

1046
00:47:34,000 --> 00:47:36,839
Speaker 1: the show notes at our website howtomoney dot com, and

1047
00:47:36,880 --> 00:47:38,799
Speaker 1: of course you can sign up for our how to

1048
00:47:38,840 --> 00:47:41,759
Speaker 1: Money newsletter. One came out just yesterday. You missed it,

1049
00:47:41,840 --> 00:47:43,480
Speaker 1: but you'll make that next one if you go sign

1050
00:47:43,520 --> 00:47:46,359
Speaker 1: up at hoddam money dot com slash newsletter or.

1051
00:47:46,360 --> 00:47:48,600
Speaker 2: You didn't miss it because you're one of the select few.

1052
00:47:48,640 --> 00:47:49,520
Speaker 2: You're one of the chosen.

1053
00:47:50,280 --> 00:47:51,440
Speaker 1: No, it's growing. It's a growing list.

1054
00:47:51,440 --> 00:47:52,920
Speaker 2: There's a lot of people in there, but we just

1055
00:47:52,920 --> 00:47:55,440
Speaker 2: want we're not selective everybody to get anybody and everybody

1056
00:47:55,480 --> 00:47:57,480
Speaker 2: the free glory that is the Hadding Money newsletter. But

1057
00:47:57,520 --> 00:47:59,400
Speaker 2: that's right man, all right. So that's gonna be it

1058
00:47:59,440 --> 00:48:01,920
Speaker 2: for this one until next time. Best friends Out, Best

1059
00:48:02,080 --> 00:48:03,080
Speaker 2: Friends Out,