You’ve played the game by the rules…moving your money from a 401k to an IRA when you change jobs (which happens in the USA far more often than you’d think). But are you forgetting a “step two” that could cost you over a million dollars? A recent Wall Street Journal piece says that you may be making a HUGE mistake. Today we’ll break down where people are getting it wrong so that YOU aren’t stuck with a much smaller retirement nest egg than you’d hoped or expected.
We also take a question from a Stacker who’s accepted a “job” that pays her as a 1099 “employee.” How does she make sure she doesn’t owe too much in taxes at the end of the year? In general, how should she set up her money now that she’s going to be responsible not just for taxes, but for her own benefits and more? We’ll help her (and maybe you, if you ever decide to start your own business or side hustle) take control of her money so that she’s in great shape come tax time and beyond.
Of course, we also share Doug’s amazing trivia question AND a TikTok minute that might mess with Doug’s brain…. (not too difficult, really).
FULL SHOW NOTES: https://stackingbenjamins.com/401k-rollover-mistakes-to-avoid-1555
Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.stackingbenjamins.com/201
Enjoy!
Our Headlines
- The 401(k) Rollover Mistake That Costs Retirement Savers Billions (Wall Street Journal)
- 3 Reasons to Buy the Vanguard Small-Cap Value Index Fund ETF Like There’s No Tomorrow (Motley Fool)
Our TikTok Minute
Doug’s Trivia
- As a general rule of thumb, by the time you’re 50, you should have how many times your annual salary invested?
Better call Saul…Sehy & OG
- Stacker Ashley from PA has a question about taxes as a new 1099 employee.
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Join Us Wednesday!
Tune in on Wednesday when we’re doing our annual check-in on the cost of a sandwich with one of the direct descendants of the Earl of Sandwich, Len Penzo.
Written by: Kevin Bailey
Miss our last show? Listen here: How To Save Big Money On DoorDash, Instacart, and Uber (SB1554)
Episode transcript
[00:00:00] Joe: Doug. Where’s og? Is he still in bed? He was supposed to be sitting right here at the table and he’s not here. Is he on the road again? What’s up with the video screen? Can I, uh, can I call in? Are, are you in an undisclosed location, dude? Where are you? [00:00:15] Doug: Oh, no. I’m very disclosed. I think he actually traveled in 1977. [00:00:20] Joe: He did 1977, wants their paneling back, 1975, [00:00:24] OG: called They want their paneling back. [00:00:25] Joe: For those not watching us on YouTube, he’s got a nice, uh. Thomas Kincaid Pastoral. That’s not even a Thomas Kincade. That is a no. That’s a person pretending to wanna be Thomas Kincaid. [00:00:36] Doug: I think Thomas Kincaid was a student of that guy. [00:00:41] That’s genuine imitation, maple paneling. It’s [00:00:44] OG: fantastic. There’s definitely no insulation. To worry about between here and the outside, between these walls, though [00:00:51] Joe: don’t need it like you do here in the basement where it’s already 102 degrees at nine o’clock in the morning as we record this. [00:00:59] OG: So, apologies for the audio. [00:01:01] I didn’t pack the right equipment. That’s a euphemism if I ever heard one, but, um, not like you’ve never heard that phrase before. He so beat us to it. But I have a microphone, doesn’t. You know, just doesn’t fit in the slot. That’s [00:01:18] Doug: right. He was looking for a way to avoid it. There is no avoiding it. Oh my goodness. [00:01:21] The USBA is too big for my USBC, [00:01:25] OG: if you know what I mean. [00:01:26] Joe: And you know what? Either way, Doug OG has protection, protection from the men and women who serve in our armed forces, no matter whether it’s U-S-B-C-U-S-B-A, wow, whatever it might be. They protected him all weekend long while he could have been getting ready for today’s recording instead decided to do something. [00:01:48] We’ll, we’ll share a little later. Uh, I’m not gonna tell people what it is. You gotta wait for the back porch to hear the story about what the mug OG has. I’ve got our Stacking Benjamin Circus mug. Doug, what do you got today? My hand. He, he’s, he’s got his face, he’s got the mug Mug. On behalf of the men and women at Navy Federal Credit Union, the men and women making podcast to mom’s basement, SL to our troops, let’s go stack some Benjamins together, shall we? [00:02:18] Thanks everybody. [00:02:21] TikTok: Uh oh. Sounds like somebody’s got a case of the mund. [00:02:30] Doug: Live from Joe’s mom’s basement. It’s the Stacking Benjamin Show. [00:02:45] I am Joe’s mom’s neighbor. Duggan is your retirement fund costing you big money. A new Wall Street. Journal piece shares how collectively we are making a $172 billion with a B mistake. What is it? We’ll share the problem and of course, solutions. Plus we’ll answer a question from one stacker who thought, you know, I’d better call solve. [00:03:09] See hi in og. And then I’ll share some multiplying trivia. And now two guys who are here to help you multiply your dollars. It’s Joe. Oh and OJG. [00:03:26] Joe: Well, hey, there’s Stackers. Doug and I got our feet up on the table ’cause we got all kinds of extra room ’cause OG is out on location today. Welcome to the Stacky Benjamin Show, Doug. [00:03:37] How are you man? [00:03:38] Doug: I’m feeling great that you finally let me to the big kids. Table. They get to sit over here. It’s, well, we [00:03:43] Joe: got so much room here that, uh, hey, it makes it easy. All we got is this iPad screen up and OGs face teleported from 1972. How are you, man? [00:03:54] OG: Why? Why can’t I be on assignment, on location like Jim Cantor the Weather Channel? [00:03:59] I think I wanna be on assignment. That sounds more important. [00:04:01] Joe: Do you wanna be Jim [00:04:03] OG: Kori and be blowing in a fake wind? There’s a really great song by Matt Haggett about Jim Kori. You’re a huge weather channel nerd. Basically, Jim Kori. The, the moral of the story is if Jim Kori shows up in your neighborhood, you are screwed. [00:04:16] You need to leave. It’s exactly what it is. One of the lyrics is Pack Light and Paddle hard. Paddle hard, Jim, because Jim Cantor’s there, [00:04:25] Joe: and I think your call needs to be to your homeowners insurance company too, just to make sure that you’re all covered. And we’re good. You’re not. Speaking of Covered. We got a great show today and Heron og, who last week we had a piece from her from the Wall Street Journal. [00:04:39] She’s got another one. This woman is just cranking out Gold Slam Bangers, huh? Yeah. We’re gonna help people avoid a big, big problem today. Plus Patrick wrote into us. Ashley wrote into us. We’ve got all kinds of great stuff, and because we got a big, big guest coming up on Wednesday, Len Penso and the sandwich survey, we’re flipping the week this week, so we’re gonna do the TikTok minute today. [00:05:03] We are locked and loaded for Monday, but before we get started, we’ve got some brands that make this show go so that we can bring it to you for free. Here’s one of them now. All right. Doug and I in the basement, OG on assignment. Is that better on assignment? Sounds important. Yeah. Let’s get this moving. [00:05:23] bit: Hello doling. And now it’s time for your favorite part of the show, our Stacking Benjamin’s headlines. [00:05:30] Joe: Our headline today written by the Amazing and Tsin and uh, this is a big one, og, the 401k rollover mistake that caused Retirement savers Billions. Let’s help our stackers. Make sure that they put more money in their pockets. [00:05:45] Anne writes, workers miss out on billions in investment gains by pulling retirement savings out of the stock market after switching jobs, often without meaning to when people roll 401k balances from their old company’s plan into an individual retirement account, she says The money’s frequently held as cash until they select new investments. [00:06:06] But according to research from Vanguard Group. Many never do listen to how bad this is. og. Nearly a third, a third of people who rolled savings into IRAs at Vanguard in 2015 still had the balance sitting in cash seven years later. I. Wow. Yeah. Let’s talk about why would somebody move money outta their 401k. [00:06:30] Can we start there for our stackers? That might be new to this whole thing. If you got money in your 401k, why would you move it out? [00:06:36] OG: Well, I think there’s two things that may cause that. Firstly, if your balance is not high enough, some companies have, in fact, I think almost all of them now have some sort of balance limits or, uh, requirements, I guess is a better way to say that if you are no longer employed, so if you’re starting out at a company, you invest and do your thing. [00:06:54] But if you leave, you get fired, you change jobs or whatever, and your balance isn’t to a certain level and it’s in the plan documents, usually that number is 5,000. Then they will force a rollover. Mostly this is a cost control issue, right? It’s like we don’t wanna be in charge of this person’s balance. [00:07:11] It’s really small. It’s hard for us to keep track of [00:07:14] Joe: and, and this only occurs stackers after you’ve left the company, if you’re, yeah, putting just a little bit in. ’cause that’s all you can do in your 401k. As long as you’re working there, they’ll let you keep contributing. But this is when you leave the company. [00:07:25] OG: And it’s not like it happens without notification, right? They’ll send you 52 emails and 52 letters that say, Hey, you gotta do something, you gotta do something, you gotta do something. You gotta, if you don’t do something, or if you don’t, you know it’s gonna be this buildup to, if we haven’t heard from you by such and such a date, this is what’s happening. [00:07:40] And then unfortunately, in that instance, it’s less likely to be done from a tech standpoint, efficiently. It’s just gonna be an actual withdrawal. So let’s say your balance is 3,500 bucks. You don’t do anything with it. The company will. Now you’re gonna have to report that on your taxes as taxable income with a penalty. [00:07:59] ’cause you took out money when you’re not supposed to. That’s not what she’s talking about in this article. She’s talking about something different. But one of the reasons why, you know, you might be thinking about rolling over is because you’re getting those letters of, Hey, you don’t have a high enough balance. [00:08:11] You need to do something with this. So that’s one reason. The other reason is from a simplicity standpoint, most people change jobs and change careers several times throughout their lifetime. You think about all the different places you can have money, it gets a little bit complicated. I, I know everybody in the universe is like, I would never forget about an old 401k plan. [00:08:30] I know you say it won’t happen to you, but I see it happen to people all the freaking time. We had a client one time who. Had been retired for a number of years, was in the seventies, and he started getting checks from dairy companies like, I win some sort of contest. I don’t even know what this is. Why am I getting $112 from Land O’Lakes? [00:08:46] I don’t understand. And so we, we were talking about, I said, well, a butter contest. I just wanna pause [00:08:51] Doug: on that for a second. Did I hit the Butter sweepstakes? I was in one of those in a bar in Milwaukee. Once the butter sweep steaks. There was wrestling. [00:08:59] OG: Yes, indeed. So we went back and forth and back and forth. [00:09:02] And then he said, he finally said, wait, do you think this could be from my job? When I was in college? I, I worked at a dairy plant in Wisconsin for three years when I was in college. Do you think that has anything to do with it? I said, well, I think we’re narrowing down the likelihood too. Yeah. It was between the butter sweepstakes [00:09:19] Joe: earned in your job in college. [00:09:21] That might be, do you remember entering [00:09:23] OG: a butter sweepstakes? [00:09:24] Joe: That might be the more likely conclusion. [00:09:28] OG: So it happens. So simplicity is one of the reasons costs could be another, right? It’s, it’s complicated too, and it’s costly to manage a couple of different plans and convenience in terms of making sure that you’ve got access to the investments and the things that you wanna have. [00:09:42] So. I would say that the vast majority of people, once they leave their company, will roll over their 401k to an IRA. It’s tax-free event. As long as you do it correctly. And most companies are good at this now, right? All your 401k providers, they know what’s going on. They know how to do it. Some companies, if they manage the 401k and also manage IRAs, bigger companies like a Fidelity or something like that, a lot of times they just have one button. [00:10:06] You just push the button, boom, it’s done. Now your money’s in an IRA, just like that. The downside happens, what she’s talking about here, it requires a second step. You can’t just push the button to roll over my money and go, okay, I’m done moving on. And I can’t believe a third of people since 2015. Didn’t do. [00:10:26] Step two. [00:10:26] Joe: I like this idea of moving money over to an IRA OG because looking at statistics from LinkedIn, the average employee in the United States changes jobs every 4.2 years, 4.2 years. So think about a 30 year or longer career. You may have tons of these little accounts all over the place. Becomes very difficult to manage. [00:10:53] And if some of these companies decide to go cheap or if they are cheap and they load the funds with fees so that the employer doesn’t have to pay them, often these, uh, smaller accounts, often with smaller companies that just can’t afford to pay some of the big administration fees, they’ll pass those along to the employee. [00:11:12] So to. Get rid of a lot of those. I like this idea. So in in principle, I think this is a good move. Moving money to the IRA. But man, if it sits there in cash and Terin writes here. This number’s, big Americans give up more than $172 billion a year in retirement wealth according to Vanguard, because they didn’t get the money invested. [00:11:34] OG: Yeah. And that’s that second step, right? So the first part is taking the money from your 401k and moving it. Into your IRA or your Roth, if that’s where the money is, but into your, your own personal account. The second step of that is then you have to tell that company how you wanna invest it. Just ’cause it was invested in your 401k doesn’t mean it’s gonna be invested the same way. [00:11:56] In fact, most of the time, like she was talking about here, most of the time it comes over in cash. So you say, I’m gonna roll over this money. You’re not transferring the shares, you’re, you’re saying, I wanna take my $30,000 and now I have 30,000 in cash. You have to reinvest that money the day that it shows up. [00:12:12] Joe: Brie Pao in this piece, a financial advisor in Rockport, Maine, said a couple hired her in 2021 in part to help her decide what to do with $400,000 rolled over from a 401k to an IRA they’d done the year before, and the market from that big low in 2020 at the beginning of, uh, the pandemic. Into 2021, that $400,000 PIO says that this couple probably lost a hundred thousand dollars by not having the money invested. [00:12:43] OG: Oh, I don’t know what DS and P was in 2015, but my guess is somewhere in the 2000 range and now it’s at 5,000. She said a third of people who rolled over money in 2015 are still sitting in cash or in in 2020. That’s a doubling. [00:12:59] Joe: That is one move, one big mistake and I love Ann’s piece here and this reminder that we gotta look at our cash because while cash seems like it’s safe, og, the big thing that we need to do is not be safe in terms of not losing money. [00:13:16] We need to make sure our long-term money beats inflation. Because if we don’t beat inflation, we’re gonna have to save dollar for dollar in retirement, the money that we need. And I mean, imagine working 30 years and then having 35 years that you’re retired, do that. I need to live my life and I need to save exactly what I lived on for the future. [00:13:36] But do both of those. You just can’t do it. [00:13:39] OG: Well, not to put that too lightly ’cause I don’t think that we can stress that enough. At the end of the day, it’s just possible. It’s not possible to save enough money without the benefit of compounding without market returns, you cannot save enough money in your 30 year or 35 year working career to fund the next 30 years. [00:14:00] It’s just, there’s just not enough money in total to do that. You mean think about inflation from the day you start working plus 30 years, and then think about inflation from when you retire, plus another 30 years. The back 30 years are gonna be more than the first 30 years. So even if you saved every dollar that you made, never paid any taxes or had any expenses of any kind. [00:14:19] You still wouldn’t have accumulated enough money, so you have to use something else. And that something else is compounding returns, and that’s the only way to do it. [00:14:27] Joe: This thing that Ann brings up, I think is the vast majority of 401k rollover mistakes. I think that a lot of people in the industry see, a lot of people make that mistake. [00:14:38] They forget that they gotta do step two. That’s very common, less common og, but I think more common with an audience like ours is what. Money nerds do, which is, let’s say that I’m rolling over, we’ll use that same number, $400,000. $400,000 is a lot of money. I’ve got $400,000 sitting in cash. What’s the first thing I think? [00:14:58] I think I gotta be careful with this money. So I’m gonna take this 400,000 and I’m gonna leave it in cash looking for an opportunity. Let’s talk about that because this is one I think that we see people that are kind of investment savvy make [00:15:15] OG: well to me. I mean, what you’re talking about here is completely forgetting the fact that. [00:15:20] 36 hours ago, that money was invested and almost treating it like it’s a new cash infusion. And you’re right, it’s kind of silly. It doesn’t make any sense whatsoever. If you were still working at your job, it would’ve still been invested as per your investment allocation decisions three weeks ago. But now you get this money sitting in your brokerage account, this 400 k, and you go, whoa, hold on a second. [00:15:41] The number of people that ask the question, how should I invest this? It’s like, what do you mean? How should you invest it? How was it invested yesterday? Make it the same. If it was good yesterday, it’s good today. The fact that you missed today is a really bad thing. We talk about time in the market versus timing the market, and there’s different studies out there about if you miss one, you know the best day, you miss the second best day, so and so forth in a year how your returns suffer. [00:16:03] You just can’t afford to not know that Monday, August 5th is the best day. You don’t know that until the year’s over and you’re like, dang, that was the day I was sitting in cash. When we look at rollovers from 4 0 1 Ks to IRAs, if your time horizon is still the same, if you’re mid-career, that money should be invested. [00:16:22] The nanosecond that it shows up in its entirety. In the same manner in which it was invested, probably the week before. [00:16:30] Joe: We talked to, uh, Dr. Daniel Crosby last week. We didn’t talk to him about the same stuff, OG that we’ve talked to about in the past, which are these behaviors in our emotions. Instead, we talked to him about the soul of wealth and having, having money doesn’t make life, and it was an interesting discussion. [00:16:45] One different but. I know that, uh, Dr. Crosby deals a lot with, and you deal a lot with these emotional rollercoasters we on. I think this is a big time, and Doug, you’ve rolled money over from past employers to IRAs before. Yeah. I’d like to get into your head for a minute because it seems like good luck. [00:17:06] Did I say that out loud? You’re gonna find an empty cavernous. Lemme know when you find something. Hell am I thinking. I don’t know if you’ve done this Doug where you, you invest the money then right away and it goes down. I. Even if it was in the same type of stuff it was in before or even something that you truly believe might be a better mix, it’s gotta be difficult not to think. [00:17:30] My new IRA sucks. Like you get six months in and the IRA has lost money and you’re in this, in this new, you know, you roll it from whatever employer and it was doing fine. You move it over to Charles Schwab, let’s say it’s sitting in Schwab. It sits there for six months and loses money. Even if you think cerebrally. [00:17:49] These are good investments. It’s gotta be difficult to not think, oh my God, what did I do? I shouldn’t have done that. So here’s the thing about being [00:17:59] Doug: lazy. [00:18:02] Good hypothesis, Joe. First of all, you used several words in there. I don’t, I have no idea what they mean, but no, I’ve actually never thought that because I trusted who my advisors were at the time, and honestly, I am the. Poster child for, set it and forget it. I rarely look at the performance of those funds more than, I don’t know, a couple, three times a year. [00:18:26] I can’t remember the last time I thought I gotta move something. I don’t like where I’m sitting right now. I, I can’t remember the last time that happened, if ever. It’s been a long time and it has accumulated as predicted or expected because it’s been there long enough to hit those doubling points and weather all of those troughs. [00:18:45] Joe: Oh gee, Doug’s point there is a great one. I love to set it and forget it, but. I don’t know about your practice, but, but I just remember dealing with some serious coping when I was a financial advisor going, no, no, no, no, you’re in better stuff than you were in your 401k. We’re just in a down market right now. [00:19:03] OG: I mean, this is true no matter where you are from an investing standpoint especially, especially as we come off the heels or you know, in the middle of a pretty decent. 18 month-ish period here, a pretty decent performance since the end of 2022. I think people forget that volatility works both ways. You know, it’s like when you look at the long-term returns of, let’s say the s and p, and you go, well, it’s up. [00:19:26] You know, average is 10%. The number of years that it actually hits 10% exactly on the button. I think there’s three in the last a hundred years where it’s actually hit 10. It’s either above it or below it. You know, it’s either you’re getting 12 or you’re getting eight, or you’re getting 26, or you’re getting minus. [00:19:39] 15. And so we really like those high volatility years. When they work in our favor, it’s like, I love 26% returns. Like, well, hold on a second. That’s high volatility. That also applies the other direction too. So we like to do what? We’re gonna do this, this fall, this stuff called lifeboat drills. Take out a statement, scribble out the number and write in a number that’s 20% lower because that’s likely to happen. [00:20:04] That’s the reality of investing, is that some days you’ve got 500 K, and some days you got 400. But over long periods of time, the five turns to six, turns to eight, turns to a million, and then goes back down to 800. And that’s why I think it’s really important to look, look at those long backwards numbers because it just seems. [00:20:23] Impractical. It just seems, it seems almost impossible that that outcome has happened. You know, we were talking about 2015, somebody who has access to faster internet than me in the middle of North Michigan can look up, you know, what was the s and p at in August of 2015? I don’t know what the number is, but it’s half probably of what it is now. [00:20:44] And you look back and you go 2015, wasn’t that long. It was a long time ago, right? Nine years at this point, but not that long ago. You go, holy crap, if I’d have just stuck my stupid money in and not done anything with it, it would’ve doubled just sitting there and then, you know, look at those over periods of time. [00:21:01] The hard part is looking at that in the future and believing it will happen again, especially if the market’s not behaving the way that you, you hope so long-term money, long-term results approach. [00:21:12] Joe: Yeah. Uh, the third thing I wanna bring up is that I think for some people. When they move that money over to an IRA, they go, you know what, I’m gonna take a little bit of this and I’m gonna go to the casino now that it’s not in a 401k with these responsible options, and I can do whatever I want. [00:21:29] Oh, hey, you might get better returns in the casino. I got, Hey, uh, great email from, uh, stacker Patrick who found this one. And this is an area where we see people bet and not bet. This is from the Motley Fool. Written by Keith Spice, three Reasons to Buy the Vanguard Small Cap Value Index, ETF, like there’s no tomorrow. [00:21:52] And Patrick said. You get these, not just from Motley Fool, but from these different online investment. Oh, I should buy the Vanguard small cap value index. And the key points in this piece are there’s this rotation of small cap stocks. We’ve seen it, you know how we predicted this og? We predicted this would happen a couple months ago when we were talking about people online saying, I’m no longer going to buy small caps. [00:22:15] ’cause the second that people start saying online, I’m not buying ’em anymore. That is specifically, I think when they come back, it’s amazing how much correlation there is. [00:22:23] OG: Well, I saved an article from Morningstar. It’s on my phone still because I, I saw it and I was like, oh, I gotta save this one. This will be great. [00:22:30] And the whole thing is, is that academic research has supported the idea that smaller companies produce higher returns, higher expected returns than, than big companies. And that just makes a ton of sense. Right. If you’re like a small. Chip manufacturer and you’re making, you know, doing $500 million a year revenue, and all of a sudden Apple says, we wanna use your chips. [00:22:49] You go from 500 million to 1,000,000,005, right? Like you three x your firm with one contract, apple says they sell 10 million more iPhones and nobody notices, right? But if they sell using your chips, all of a sudden, like things go crazy, that academic research has been around a long time, but in lately, let’s say the last seven-ish years, that hasn’t been true. [00:23:11] So large companies have done better than small companies, and you’re starting to see the disparity between the returns on both ends. Large companies are doing so much better as small companies are doing so much worse. And so this whole article that I read from Morningstar was like, you know, the small cap premium, that’s what it’s called. [00:23:29] The small cap premium doesn’t exist anymore. It’s gone and they’ll never be back. All this other, like all this, you know, like basically you don’t ever need to own that stuff. Again, not equipped to Google stuff and record podcasts at the same time based on download speed, but in the not too distant past, the small cap markets were up 15% year. [00:23:49] They come in like seven trading days or something. And back to that point of you never know, and by the time you find out about it, it’s already too late. I mean, that’s a great example, right? Even if you’re watching your stuff on a weekly basis or on a couple of days, you log in or something, by the time you process. [00:24:06] Wait a second. Small companies were at 200 a share. Now it’s at 2 25 ish. Like, oh, whoa, whoa. What happened here? Those are the three days that that happened. It may stay at 2 25 for the next year, but guess what? That 200 to 2 25 happens in that short period of time. Fast forward one year. All you see is 200 to 2 25. [00:24:25] You go. It was a great year. No, it was a great four days. So from an investment perspective, you have to be participating in all of this all of the time. [00:24:33] Doug: Like your trip to tj, it was a great four days. [00:24:36] OG: Yeah, I don’t, uh, I don’t mind Molly fool telling people to go in on, uh, small value, but back [00:24:42] Joe: the truck up. [00:24:43] We also wanna remember what kind of a rollercoaster ride this is gonna be. Like, don’t get out of it, but man, I’m not taking my whole 401k and riding the small cap value train. [00:24:53] OG: You’re such a baby. Um, the, uh, but there’s two sides to that, right? So we were talking about volatility, upside, and downside. So if we know that small companies have a better return, and we know that value companies have a better return, this has been shown academically. [00:25:07] Why would we not have all small value? That’s a logical question, right? If I know this is true and this is true, why not just have all of this? And if you did, you know, we, we say that the s and p average is 10% a year. That’s historical number. Small companies average close two. 13% a year. Whoa, whoa, whoa, whoa, whoa, whoa. [00:25:24] Joe: This is what Dave [00:25:24] OG: Ramsey must be really talking about. 13 is greater than 10, right? Why? Why don’t I want the 13? Well pick up one end of the stick, you get the other. So what’s the other side of plus 13? Every so often, small companies go down 65%, and to all the people out there who go, oh, I’d totally stay the course. [00:25:45] So, uh, no, you won’t. Bless you. Yeah, thank you. I mean, again, thinking of this in real dollars, you have a million dollars all in small companies, and you wake up a year later and it’s at 350 k and your first reaction is, oh, I’m totally staying in the corner. This is great. This is awesome. Back to truck up. [00:26:03] That never happens. I doubt anybody actually sees it. So you have a little bit of those things. You have little, little pockets of diversification, so you have the opportunity to participate. When small companies do well, you also have the opportunity to rebalance into small companies when they don’t do well and large companies do well, right? [00:26:20] So you sell the profits from large companies and rebalance back into small, that’s, that’s how dollar cost averaging works once you’re not putting money in anymore. Some people ask that question. Well, if I’m retired, how do I dollar cost Average rebalancing is your dollar cost average. [00:26:32] Joe: Small value is a, it’s science. [00:26:34] Yeah. Small value is a nice place to be. Thanks for sending this to us, Patrick. Back it up. I just don’t, I don’t like the gambling, the gambling aspect. And I love people gambling out. You and I are a little different in that, uh, regard. We might be a little different. People gamble out going, I’m not gonna gamble on this anymore. [00:26:51] And then they lose and people go, I’m gonna back the truck up. And they lose. [00:26:55] OG: Well, and fundamentally to your point, it’s not any different than somebody saying AI is the new thing and therefore you need to put all your money in Nvidia. It’s like, or the magnificent seven or whatever. Some of that is appropriate. [00:27:08] You need to have some of that in your portfolio. But you also need real estate, which has gotten its face kicked in in the last two years. You need to have small companies. [00:27:15] Joe: I was at a dinner last night with a guy who’s the head of a major, uh, healthcare company in town, scoreboard hundreds of millions of dollars scoreboard. [00:27:23] And this guy asked about the podcast and he said, um, I think it’s time to sell Nvidia. And I said, really? Why do you think that? He goes, because I’ve had three people that know nothing about money. Ask me whether they should buy Nvidia in the last 10 days. Which means in his long-term perspective, the guy must be 70 in his mid seventies. [00:27:45] He’s like, historically that’s always been the time to get out. Mm-Hmm. That’s always the sign. That’s always the sign. [00:27:50] OG: Fearful when others are greedy. Yeah. [00:27:51] Joe: Did he have you pay for dinner, Joe? Luckily it was a company event. Nice. Which is why I was there. Doug, I’m like, oh, I get to go to this pretty shrimp cocktails. [00:28:00] I get to go to this high. We know how dogs yummy get to go to this Highend restaurant and somebody else is buying. I’m a. But it is funny, you start seeing this stuff, everybody going, ah, I don’t need diversification. And here comes small cap back. Uh, we will dive even further into this If you’re like, well then how do I diversify appropriately? [00:28:18] You know what, that’s where this starts to get technical. We call that the two oh one, and we’ve got a newsletter that handles that, that’s gonna come out. Well, it already comes out the day after each of these Monday, Wednesday podcast every Tuesday, Thursday. You’ll get a copy of the 2 0 1 and when we are traveling, like I’m headed to Minneapolis St. [00:28:34] Paul at the end of this month. So sign up for the 2 0 1 Stacking Benjamins dot com slash 2 0 1. Gets you there coming up in just a minute, our TikTok minute. And I’ve got a great investment OG that I absolutely love, and this TikTok is going to explain exactly why. It’s a fantastic investment, but that’s on the other side of maybe the pinnacle of this podcast. [00:28:58] Doug, get your feet off the table when your podcasting. It’s time for you to go. Doug, what’s today’s trivia question? [00:29:07] Doug: Hey there, stackers. I’m Joe’s mom’s neighbor, Doug, and as the most youthful and strongest man on the Stacking Benjamin’s team. I’ve always taken it as my responsibility to impart on our younger listeners the importance of investing in your financial future. A lot of. 20 and even 30 somethings, which I practically am mistakenly think of retirement as too far to imagine. [00:29:31] It’s never too early to plan for the future, even if you’re like me and don’t seem to be aging physically. I never used to plan ahead for anything. Every year I put off Christmas shopping until bam. It’s suddenly Christmas morning and all the stores are closed, so I gotta go to seven 11 to get everyone their favorite beef jerky. [00:29:48] Luckily. I’ve never procrastinated when it comes to saving for retirement. I plan to spend my final years drinking Hootie lights on a beach with a beautiful lady. I don’t wanna risk that not happening. So I invested all my money, even with its occasional volatility. The best place to keep your money is where it’s gonna pile up fast, which is why I’ve put everything into money market funds. [00:30:09] ’cause like that’s where you make the money, right? Duh. Today’s trivia question is how many times your annual salary should you have invested by the time you’re 50? According to rules of thumb in major online publications. I’ll be back right after I see how much it would be to retire into the Virgin Islands. [00:30:28] Sounds like those are people like me. [00:30:37] Hey there, stackers. I’m retirement mentor and future beach Bum Joe’s mom’s neighbor, Doug. Just to prove I’m done procrastinating. I started my Christmas shopping during the break instead of my usual move of waiting till the morning of. I made a quick run to Costco and got a huge box of beef jerky. No more overspending at convenience stores for me, which means more cash to invest in money markets. [00:31:02] Today’s trivia question is, as a general rule of thumb, by the time you’re 50, you should have how many times your annual salary invested The answer. According to varied sources like the US News and Fidelity investments. By the time you’ve lived half a century, oh God, I don’t wanna reach that age. You should have six times your annual salary invested. [00:31:25] And now back to two very old guys, Joe. Oh man. And oh gee, [00:31:33] Joe: it is funny how much I dislike these rules of thumb because it was, it’s so different depending on. On who you are and yet Doug, we see it over and over and over [00:31:42] Doug: again depending on where the thumb is. It hurts sometimes. [00:31:45] Joe: And you might wanna Google Money Market, by the way, quickly moving on away. [00:31:50] Away from that time. For our TikTok minute, this is the part of the show where we, not only the last part of the show, we helped you save money on your beef jerky by planning ahead. It’s a very important thing. We’re gonna go even more important, og. We’re gonna talk about a TikTok creator who’s either saying something brilliant or air quotes brilliant. [00:32:10] Uh, which one do you think this is? Never in doubt. Oh, come on. He’s already shaking his [00:32:15] OG: head. This is not TikTok. [00:32:16] Joe: I gotta stop asking Doug. What the hell if I do you keep asking him. You know what the answer’s gonna be. Yes. [00:32:21] OG: TikTok is the devil. [00:32:22] Joe: You know what I finally invested in? I finally invested in air tags. [00:32:27] I have to tell you, I love air tags. You guys have air tags? No. Doug’s looking at me like you don’t even know what that is. I, of course know what it is, but why the hell would you do that? Oh, the number of times a week I’d lose my wallet. I have no idea where it is, and I’d just pop on my phone and I’ve got an air tag in my wallet and boom, there it is on the nightstand right next to my bed. [00:32:46] There it is. [00:32:48] Doug: This is so, there’s something so important, like your wallet, it, my, and you need to put a tracker in it. [00:32:54] Joe: It might desk. I never leave the basement. You know me. I’m always in the basement and I don’t like having, uh, back pain from this loaded [00:33:01] Doug: wallet. This is like when they say, here’s a tip to not forget your child in the car, seat in the backseat so that you don’t leave ’em in the hot car. [00:33:09] Leave something I important. Put the dare tag on them. Leave something important in the backseat like your laptop. Something more important than your child or put an or, [00:33:18] Joe: or put an or put an air tag on your kid. Yeah. Put an air tag in your kid’s diaper. Yes. Well, apparently Sarah has air tags because, uh, she found her Coca-Cola. [00:33:31] TikTok: My friend Sarah accidentally left her Pepsi 60 miles south of Tampa. That’s the location of Sarasota. There it is. [00:33:42] Joe: They found it must add an air tag. [00:33:44] Doug: I’m not quite sure how to respond to that. Is it warrant a response? [00:33:50] OG: Uh, your Honor, I would like to, uh, submit, uh, TikTok minute as evidence as, uh, as, as how dumb this app is. [00:34:01] This most recent one? [00:34:02] Joe: No, no. She found her soda 60 miles south of Tampa. [00:34:06] OG: It sounds like. She, I don’t even know. [00:34:11] Doug: Sara Soda. How would you get an air tag on a soda? Or it, did you put it in? Does it fit in the soda? Do you just like dump it in there? Works under [00:34:19] OG: Doug. Will get it eventually on, working [00:34:21] Joe: on it. [00:34:21] Someday Doug will figure out what just happened there. I am so confused. Big thanks to Mandy, by the way, for setting that to us. That was, that was, that was pretty awesome. Uh, just Doug doesn’t even know what the hell we’re talking about, so you can’t go. I. Uh, but og I’ll take that. I’ll take that. Good dag joke, Mandy. [00:34:46] Good. Dad joke? Nope. Still doesn’t matter. How was that a dad joke? Still no [00:34:51] OG: idea. It’s okay. Listen to the output again. [00:34:54] Joe: Do we gotta play it again? Let’s play it again one more time. No, no, no, [00:34:56] Doug: no. I, I, there were words I couldn’t [00:34:58] Joe: understand. [00:34:58] TikTok: My Sarah accidentally left her Pepsi, 60 miles south of Tampa. That’s the location of Sarasota. [00:35:07] Doug: Bam. Okay. Might have just got it. Might have just got it. You have to know geography to get that one. You, you may have to, and actually I’ve been to that region quite a bit. I should know that mile. And that’s [00:35:18] Joe: why I, it’s a very much surprise me that that went right over. I’ve made that drive. I should know it’s 60 miles, but you need an air tag. [00:35:26] Might if you have an air tag. I, I do love my air tag. I’ve also heard you should put those, if you check your luggage, put those in your luggage. Yeah. And I’ve, I have fought with airlines about where my luggage is, and I think having an air tag would solve that. Oh, no, [00:35:39] Doug: it doesn’t. It doesn’t. Well, wait, does it, it it doesn’t get your luggage back, but you still know where it is. [00:35:45] What part are you saying it doesn’t help [00:35:47] OG: og? It’s on the tarmac and DFW. Well, it’s checked into the system. It’s not checked into anything. It’s on the tarmac, on in DFW, like it fell off of the truck. I can see where it is. It’s in the lane where the guy drives the little truck. Oh, now it’s getting run over with all the bags on it. [00:36:03] It’s like I could see it’s blinking. Someone needs to go get it and get it on the plane. It’s fine, sir. We’ve got it handled. It’s been checked in. It’s not checked in. It’s did. Do you think the air tag fell out? Did some, did somehow the P bag open up and fall? Everything. It was still intact. But the air tag, no, that’s the suitcase. [00:36:23] It’s on the ramp over there. This sounds like you’re [00:36:25] Doug: reciting a discussion verbatim. [00:36:27] Joe: Yeah. [00:36:28] OG: This [00:36:28] Joe: is weird. How, [00:36:29] OG: how, oddly specific this is Doug. Well, the fun thing is when you get to the next destination and you just walk right up to the thing, you’re like, I need to make a claim for my luggage for you. [00:36:36] They’re like, it hasn’t come out yet and it’s not gonna come out sitting on the tarmac. And dw [00:36:42] Doug: Do I need to draw a picture for you here? Well, let’s just wait and see what happens. [00:36:47] OG: I don’t wanna wait. I wanna get in my, my Uber and go to the hotel. [00:36:50] Joe: Hey, let’s help one stacker draw a better picture of, uh, how to do their money better. [00:36:54] How about that? Okay, you are on your segue game today. Joseph Ninja. Time for Better Call Saul. See hi and og. We’re gonna help Ashley with her money. Hey Ashley, what’s going on? [00:37:09] caller: Hey, Joe OG and Neighbor Doug. This is Ashley from Pennsylvania. I recently accepted a position as a 10 99 employee, so I’ll be a full-time contractor, and this is my first non W2 job. [00:37:23] And my question is around how do I deal with taxes for this? So I do have to track my hours for my new job, so I will know. What my paychecks will be coming in ’cause I know what my pay is, but I know that they don’t withhold any taxes for that. So how would you recommend maybe like setting things up so that I will be easier come tax time. [00:37:46] And also do you recommend doing quarterly taxes or do I just wait until the end of the year? Like a normal W2? Um, just trying to feel all of that out. So any recommendations that you have would be extremely appreciative. Thanks so much. [00:38:02] Joe: Oh, great question, Ashley. Congratulations on the new job, og. If you become a 10 99 er, and by the way, the words 10 99 an employee, do not go together, Ashley, now you officially own your own business. [00:38:15] Congratulations. Congratulations. Yeah, but og, how does she set this up so she doesn’t end up with a IRS surprise later. [00:38:22] OG: Hmm. Yeah. And this is really one of the most common things when it comes to contract work. And this isn’t just like contract work of maybe you’re a, you know, freelance designer or something like that, but if you do some gig economy stuff, right, you drive Uber, or you know, you deliver DoorDash or Instacart or something like that, you know, you get 10 99. [00:38:41] And so the question always is, is how do you account for that on your taxes? One of the things Ashley said here was, well, do I wait until the end of the year like you do for a W2? Well, you don’t for a W2, you are paying taxes every week or every other week, or you know, certainly no less than once a month, your employer formerly was sending in your tax receipts for you and their their contributions as well. [00:39:05] So that’s an automated process that happens in the payroll system behind the scenes. So when you’re a 10 99, when you run your own business, you have to think of it that way. You are now. The HR department and you have to submit payroll receipts and taxes and all that other sort of fun stuff. Generally speaking, when you take a 10 99 position versus a W2 position, the the pay rate is higher. [00:39:28] And so that’s the enticement part of that, where it’s like, I was making $30 an hour, but they’d wanna pay me $40 an hour if I’m 10 99. So sweet. Well, there’s isn’t gotcha for everything. Right. So that extra $10, a lot of that’s gonna go back to the government in form of taxes that you now have to be in charge of as opposed to your employer. [00:39:48] So a couple of things that I would think about. Firstly, you need to separate your 10 99 income from your personal income. In fact, I would have. The 10 99 money be paid to a separate bank account. If you wanna set it up as a separate company, a separate LLC, just to kind of formalize that, that would be great too. [00:40:07] No requirement to do that. Doesn’t save you any money or cost you any money in taxes, but it’s a way to kind of separate it in your mind. Either way, your 10 99 paycheck needs to go into a separate bank account. Then as the employee of your 10 99 company, see what’s happening here. Now you need to pay yourself a salary from your 10 99 job. [00:40:28] Part of the 10 99 salary, or part of the salary that you’re gonna pay yourself means that you also have to submit taxes on your employee, which is yourself and on your employer, which is, you know, also yourself. See what’s happening here. You are kind of all of the things, right? All of your employer retirement contributions, all that sort of fun stuff. [00:40:47] So a good way to pencil this out if you’ve never done this before, is by an hour or two of a CPA’s time, especially this time of year, this is a little quieter. They’re gonna ramp up as we get into the fall when extensions start becoming due. But this is a great opportunity to make an introduction, uh, or get an introduction to a tax repair or CPA in your area if you don’t have one, and just go, all right, map this out for me. [00:41:10] Like, here’s how much I think I’m gonna make. Here’s how much I think I’m gonna earn. Here’s what I think my deductions are gonna look like this year. As a 10 99 contractor, you had the opportunity to have business expenses that you might not have as an employee, and then set up a system for what that looks like. [00:41:26] Ballpark, rule of thumb, you probably are gonna have to withhold 20 or 25% and submit to the IRS quarterly your estimated tax payments to be able to stay on top of it. The questions I would ask the CPA if you get some time would be, what do you think that I need to submit on a quarterly basis and what’s the minimum number so I don’t have to pay a penalty at the end of the year? [00:41:46] And those two numbers are factored based on, you know, an estimation of the future, but then also a look back of what actually happened last year. So you can avoid any penalties by at least doing the required amount from 2023 in 2024. And then you kind of washroom repeat every year. That doesn’t mean you won’t owe a bill. [00:42:04] Which is kind of the forward looking component of that too. So I kinda like to be somewhere in the middle where I might owe a little bit of money, but I’m definitely not gonna have a penalty that I’m comfortable with having a little bit of liability. But I don’t wanna have to pay a penalty because I under withheld throughout the year. [00:42:19] This is a new adventure altogether by being a business owner, even if you’re a business owner of one. [00:42:24] Doug: Hey og, can I ask for a bit of clarification there? Yes, you must. Thanks for making me feel so at ease. Uh, so towards the beginning of that, you said you don’t have to set up a company, you don’t have to set up an LLC or anything like that. [00:42:39] But then you started talking about well set up a separate account and then pay yourself ’cause you’re the employee, you know, and the employer. Were you. Of using that as just a way to think about that, setting up the two accounts, and think about it like you’re the employer, paying yourself as the employee that I got a little bit. [00:42:56] ’cause at first you said you don’t need to do that, but then you kind of talked about it like you’re doing that. So is that just a way to think about it? Is that why you chose that analogy? [00:43:04] OG: You don’t need to have a separate entity name. It doesn’t have to be Neighbor, Doug and Associates to be a 10 99 contractor. [00:43:11] If that helps you, you know, mentally or if it helps you, if this is the, the, the path of your life where you’re gonna be an entrepreneur and you’re gonna have a company and that would be beneficial in the future, branding and all that other sort of stuff, then there’s no harm in it. Either way, you have to think of it like a business. [00:43:27] So it’s also not a problem just to say, yeah, I’m not gonna do that. I’ll just, you know, that’s not required. The tax forms allow me to be a sole proprietor in this operation, but still I’d have two bank accounts. I’d have, you know, my bank account that the payroll checks are gonna go into from the company that I’m doing the contract work for. [00:43:44] And then I would have my personal account that I’m gonna pay my regular bills from. Gotcha. It just has that layer of. Just a little bit layer of complexity there that your business isn’t your personal giant piggy bank and recognizing that, just ’cause I got a check for $10,000 today from my contract work, that doesn’t mean I have $10,000 to spend. [00:44:03] Personally. You have $10,000 of revenue in your business. From which you now need to pay your employees, which is you. You need to do marketing, you need to pay taxes, you need to build a website, you know, whatever. It’s that you’re doing gas to get [00:44:16] Doug: to your contract opportunity. Yeah. Yeah. [00:44:18] OG: I mean, all of those things. [00:44:19] Yeah, absolutely. [00:44:20] Doug: Are there any last question, are there advantages to setting up an LLC or, or anything like that, or whether it’s liability protection or anything like that, why you might consider that if you’re gonna become a 10 99? Worker. [00:44:31] OG: I mean, maybe there’s a little bit of liability protection, I suppose. [00:44:34] It all depends on what kind of work you’re doing. If you’re designing, you know, websites or a photographer or something like that, there’s probably not a lot of liability that you have to worry about too much if you’re, you know, contracting on government contracts and. You know, weapons manufacturing may be a little different. [00:44:49] Viability perhaps. I’m just trying to think of something that’s completely opposite. Just grab that out. The thin air ing flowers and, uh, you know, being a photographer, but maybe you’re building missiles. Theoretically you’re a contractor for the CIA, you know, maybe it’s a plot line to a story I read recently, I’m not sure. [00:45:05] Works [00:45:06] Joe: out of a room in 1970s paneling. [00:45:09] OG: Yeah. With his hat on backwards. Yeah. If you foresee this becoming a going concern, where you’re gonna turn this one contract into multiple contracts and so on and so forth, and now you’re gonna be an entrepreneur, then I don’t see why it hurts. But if this is a, well, this is a stop gap. [00:45:25] I’m in between positions and this is a contract thing I’m gonna do for the next six months, I wouldn’t go through the. Gotcha. [00:45:31] Joe: Thank you. I do like still though the, the separate account and separate credit card for a few reasons. Number one, Ashley May be able to deduct some expenses if she wasn’t able to deduct before, so I. [00:45:42] Separating those from all of her other expenses. If the IRS comes calling, you wanna be able to clearly delineate what was toward this contract and what wasn’t. And if you’ve got Mm-Hmm. Your trip to the grocery store, next to the thing that you’re writing off, it’s gonna be very difficult. [00:45:58] OG: Yeah. Yeah. [00:45:59] Lunch with a client and also you stopped at the grocery store on the way home. To your point, it’s like, how do you, how can you say that this lunch was. Not just a personal lunch and it was a business lunch. [00:46:07] Joe: Yeah. So even if it is just a separate account with your name on it, not an official quote business, having that separate account, separate credit card, separating those two, gonna make things much cleaner for you. [00:46:17] Much easier. And plus, you know what, og, just from a, a lifestyle perspective, if your client pays you different amounts better to keep that all in a separate account so that you can see the revenue streams and keep track of how you got paid, even. [00:46:34] OG: That, and you don’t want your paycheck to be contingent on your contract work. [00:46:41] You know the, the timing of their compensation, right? You wanna have revenue that comes in and you pay yourself consistently like you would any other employee, right? If you, it doesn’t matter that you’re. Project didn’t pay on time. You still owe salary to your employees. So that just helps build it the correct way. [00:46:56] And I think all of those things that you’re talking about in terms of being able to delineate between personal business expenses, kind of line of demarcation between those things, all those things are important. [00:47:06] Joe: Ashley, thank you so much for the question. And you know what, we’re gonna send Ashley A. Key to some swag at the Stacking benjamin store. [00:47:13] Stacking Benjamins dot com slash shirts gets you there. Doug, you’re in the final 100 days of this election cycle and, um, clearly the choice. If you don’t wanna, boy, [00:47:26] OG: things have turned [00:47:26] Joe: if you don’t wanna be a, a part of the political game. The political machinery we’re seeing all around us everywhere. Just a vote for Doug. [00:47:34] Doug: Okay. Right in candidate. Vote for Neighbor [00:47:36] Joe: Doug. Not crooked at all. Shirts, just says it Not crooked at all. Uh, stacky Benjamins dot com slash shirts or stacky Benjamins dot com slash voicemail if you’ve got a question for og. And again, Ashley, congratulations on the new gig. That’s fantastic. Hey, uh, time for us to wander out on the back porch where we discuss, uh, all the things going on in our life and, uh, oh gee, we said that you are on assignment. [00:48:02] Early in the show. I’m [00:48:03] OG: Simon. I’m testing all sorts of new, uh, you know, some people do side hustles. Yeah. I am trying to explore different side hustles this summer. I think I’ve kinda laughed in on one. What are you doing to stack the Benjamins this week? og? Oh, it’s, it’s filthy. It’s not even fair. How easy. [00:48:19] It’s like fish in a barrel. So in Texas, where I live. There’s no casinos, casino. You have to casino, go to Oklahoma or uh, Treeport. But in Michigan, I found they bring the casino to you on your mobile device. Another reason why it’s the greatest state, all you have to do is put in a put your name and social in there. [00:48:40] Give them a little bit of money. They have like prestige buttons. You can play all the blackjack you want. So I’ve devised a new strategy. I’ll be coming out with my, uh, Ted talk later. But, um, this involves traveling to Michigan. You open a casino app, you put some money in it, they give you a match. So you go, oh, I put in a thousand. [00:49:01] They give me a thousand bang. Mission accomplished. I win. Make a bet. Bingo, bono, I just made a thousand bucks. Hmm. It doesn’t work like that. Somebody didn’t redefine print. Oh, [00:49:10] Doug: it’s strange. And it doesn’t work like that. Just giving out a grand. I can’t believe that. So [00:49:14] OG: there’s some fine print involved. What you have to do is you have to bet 15 x. [00:49:21] What your total deposit was in order to release whatever the balance would be. So like every time you, so let’s say put in a thousand, they give you a thousand. So you have two grand. You have to bet 30,000. Oh my God. To get whatever’s left. I didn’t, I didn’t know that. No, it’s not that you have to put in 30,000, but like every time, you know, you put in five, you know, you spend something for a dollar and you win 90 cents, you spend another for a dollar, you might, your balance might have only gone down a dollar, but you’ve spent two spent. [00:49:49] Right. Honey, [00:49:49] Joe: we’re selling the car. Yeah. Do they have all those crazy bets, by the way? og, they have like. I don’t play DraftKings and that stuff, but I know that when I was at a Super Bowl party, all these guys were, they were betting on how long the, the, you know, the, uh, national anthem’s [00:50:04] OG: gonna last. Oh, I’m not sure. [00:50:04] This is straight up slot machines, digital slot machines on your phone. Definitely not able to be manipulated by anybody. Totally legit at all times. So I played this wonderful game called Almighty Buffalo, and uh, yeah, it’s a thing. Did you got trampled? No, I trampled the casino. [00:50:25] Joe: No, it [00:50:26] OG: was so filthy. There was one point in time that I was up almost $9,000. [00:50:31] I had won like five grand in like a, a bonus jackpot spend and another 2,500 bucks. And so everybody’s like, dude, what are you doing? You put a thousand in this worth nine to take the money out. I’m like, yeah, I can’t. I gotta bet 30,000 person. Like, you can do what? Here’s [00:50:45] Doug: what’s coming next. What I should have done was, but wait a minute, is your thousand locked up? [00:50:50] Yeah. Oh [00:50:51] OG: yeah. Yeah. You take their money, you’re like in with, uh. You know, your [00:50:56] Joe: money’s my money now. [00:50:58] OG: Like one of those situations, and there’s no way [00:50:59] Joe: this is rigged. I got a third of the way there and things were going great. [00:51:03] OG: Here was the great news. So they have a little progress bar at the bottom that shows you like how much you, you’ve bet relative to this, this number for the bonus. [00:51:10] And so I did the math at the end of the second day. To be fair, it is very hard to gamble $30,000. I don’t if anybody’s tried to do this before. It’s Brewster’s millions slot machine. No, you just literally have to press the button like on your phone. Like I see my mom do it on like fake casino apps or you see old people do it. [00:51:26] That’s insane. They have a little way to like automatically do it. So you can do like 50 in a row and you just like hold your phone and watch something else and oh, done. You do 50 in a row again. But trying to get 30,000 spend is a. So at the end of the first day, I, I was about 75% of the way there, which was cool, so I bet 27 odd thousand, but I had eight grand left. [00:51:46] So I was like, there’s no way I lose every single spin for the next $8,000 worth of spins, right? That can’t happen. That’s not gonna happen. I didn’t lose them all. I lost about half of them. But the moral of the story is, is that if you go to Michigan, you put a thousand dollars in the casino, and then you transfer 4,500 back to your bank the next day. [00:52:06] What do you think about them? Apples? Fellas? I got the first round of years at the similar you because [00:52:12] Joe: Wait, I thought you said you [00:52:13] OG: could how? Yeah. Wait a minute. [00:52:15] Joe: How did this, this math isn’t working out, you just said you can’t, you couldn’t take the money out [00:52:21] OG: until you got to 30,000 to spend, which I did. [00:52:24] So I see you have to keep playing. Like if even though it says like you have $9,000, you have to keep betting until you’ve bet 30,000. [00:52:31] Doug: Oh, cumulatively. Cumulatively. Yeah. Yeah, yeah. And after all of that action, you netted to be, I netted 45. 4,500. You netted even though you put in a thousand in the first place. [00:52:42] So did you net 3,500? No. Or did you check out with 5,500? Yep. Yep. Okay. Would you like to [00:52:48] Joe: speak into the microphone and tell the mafia exactly where Michigan you are? [00:52:52] OG: The funny thing was, was that not funny? Ha ha. So you know, my kids are watching me do this and they go, dad, this is rigged. And I go, it’s rigged. [00:52:58] How am I up like nine? I got nine grand. And they’re like, it’s rigged. And then like proceeded for the next $8,000 worth of spins to basically lose half. I was like, okay. Yeah, that’s right. So, uh, anyways, so I’m uh, one for one in Michigan, seniors. I like how the teenagers are the voice of reason. I know. So, uh, I’ll be back next summer, folks. [00:53:19] Uh, looking for another, another play vacation. It’s gonna be great. [00:53:24] Joe: Great way to end a financial planning show. [00:53:27] OG: Well, don’t bet more than you can afford to lose. Don’t do that. But, but if you happen to hit a, a heater on the, on the casino app on your phone, you can thank me later. But then my father-in-Law, had to be a killjoy and goes. [00:53:44] You gonna owe taxes on that? Like, God dang, come on man. [00:53:50] And then I thought he’s probably right and I’m gonna have to file Michigan taxes. That’s I’m in Michigan and my CPA’s probably gonna charge me a thousand bucks to file out state taxes and. Well anyways, I probably lost money on this whole deal, but it feels good right now. But you’re a winner. It feels good right now, baby. [00:54:07] Don’t do what I do. [00:54:08] Joe: Doug, besides, don’t take the thousand dollars from the Caribbean online casino to play to play rig slot machines. What else should we have learned today? [00:54:21] Doug: Well, Joe, here’s what’s stacked up on our to-Do list today. First, take some advice from our headline Rolling over the 401k. That’s a great first step. [00:54:30] Step two, get that money invested. Second Sarasota. Yep. We found it and I finally figured it out, but what’s the biggest to-Do. Definitely Google where you’re putting your money. Turns out that money market doesn’t mean what I thought it did. Now I have to adjust my retirement. Beach house filters on Zillow. [00:54:55] This show is the property of SB podcasts LLC, copyright 2024, and is created by Joe Saul Sea. Hi. Joe gets help from a few of our neighborhood friends. You’ll find out about our awesome team at Stacking Benjamins dot com, along with the show notes and how you can find us on YouTube and all the usual social media spots. [00:55:15] Come say hello. Oh yeah. And before I go, not only should you not take advice from these nerds, don’t take advice from people you don’t know. This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor. I’m Joe’s Mom’s neighbor, Duggan. We’ll see you next time back here at the Stacking Benjamin Show.
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