Unpacking Investments: From Horrible Misconceptions to Smarter Money Moves
Ever fallen for an investment that seemed like a sure thing… until it wasn’t? You’re not alone. Today, we shine a light on some of the worst investment advice out there—and help you steer clear of it.
Joining Joe at the roundtable are:
- Paula Pant from Afford Anything
- Jesse Cramer from Personal Finance for Long-Term Investors
- And Don McDonald, financial pro and former astronaut (not really, but just go with it) from Talking Real Money.
- Infinite banking and other shiny traps – What sounds like genius often comes with fine print you’ll wish you’d read.
- Penny stocks and the illusion of easy money – Spoiler: if it feels like a shortcut, it’s probably a detour.
- Equity-indexed annuities and their slick sales tactics – When someone tells you there’s “no downside,” maybe run.
- Gut feelings vs. data – The panel weighs in on trusting instincts vs. trusting actual math.
- Teachers and 403(b) plans – A quick peek behind the curtain at one of the most overlooked problem areas in personal finance.
- How not to invest – A rundown of red flags and hard-won wisdom from people who’ve seen the worst up close.
Meanwhile, Doug brings the trivia thunder with a question about sitcom salaries—and things quickly go from Big Bang to big bucks.
Whether you’ve made a misstep or are just trying to avoid one, this episode will help you tune out the noise, spot the nonsense, and build a smarter, more resilient investment plan.
Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.StackingBenjamins.com/201
Enjoy!
Our Topic: What are some of our (least) favorite horrible investments?
During our conversation, you’ll hear us mention:
- Infinite banking and its complexity
- Permanent life insurance vs. term
- Use of life insurance in estate planning
- Penny stocks and speculative investing
- Misconceptions about stock prices (e.g., Costco vs. penny stocks)
- Pump-and-dump schemes and pink sheet scams
- The illusion of doubling money with low-priced stocks
- Indexed (equity-linked) annuities
- Commission-driven financial product sales
- Deceptive marketing at steak dinner seminars
- 403(b) plans and annuity overload for teachers
- The role of financial literacy in poor investment decisions
- Dividends excluded from historical market loss charts
- Overreliance on social media (e.g., TikTok) for investing advice
- Spontaneous investing based on hype
- Crypto as a speculative tool vs. investment
- Variable annuities and high internal fees
- Using tax-sheltered investments inside IRAs
- The donut-and-fritter strategy for pitching bad retirement plans
- 403bwise.org as a teacher resource
- Misunderstanding of stock splits and share pricing
- Individual stock picking vs. diversified index investing
- Non-transparent private investments from friends/family
- The need for a personal investment policy/strategy
- Marketing annuities as risk-free stock market participation
Our Contributors
A big thanks to our contributors! You can check out more links for our guests below.
Don McDonald
Another thanks to Don McDonald for joining our contributors this week! Hear more from Don on his show, Talking Real Money at Talking Real Money (on Apple Podcasts).
Also, check out TalkingRealMoney.com.
Jesse Cramer
Another thanks to Jesse Cramerfor joining our contributors this week! Hear more from Jesse on his show, Personal Finance for Long-Term Investors at Personal Finance for Long-Term Investors – The Best Interest Podcast – Apple Podcasts.
Learn how you can work with Jesse by visiting The Best Interest – Invest in Knowledge.
Paula Pant
Check Out Paula’s site and amazing podcast: AffordAnything.com
Follow Paula on Twitter: @AffordAnything
Doug’s Game Show Trivia
- How much did Jim Parsons, the actor who played the character Sheldon on the hit TV show The Big Bang Theory, make over the course of their 2018 season?
Join Us on Monday!
Tune in on Monday when we dive into what it really takes to create some mass-market financial literacy.
Miss our last show? Check it out here: How NOT To Invest: Lessons from Barry Ritholtz (SB1661).
Written by: Kevin Bailey
Episode transcript
[00:00:00] bit: I am Max Ly s Navely being of sound, mind and body to hereby bequeath the following to my wife Rose, who spent money like there was no, tomorrow I leave $100 and a calendar to my sons, Rodney and Victor, who spent every dime I ever gave them on fancy cars and fast women. I leave $50 in dimes. And to my other friends and relatives who also never learned the value of a dollar.I leave a dollar.
[00:00:39] Doug: Live from the basement of the YouTube headquarters. It’s the Stacking Benjamin Show.I am Joe’s mom’s neighbor, Duggan. Let’s talk horrible investments. Are they as horrible as you think, or are you just using them horribly wrong? On today’s show, we are diving into how misconceptions can hurt your investing game, but that’s not all. We’ll stop halfway through today’s discussion to continue our year long trivia challenge, and now a guy who tried to beat the market but just ended up singing, beat it in front of the mirror for hours.
It’s Joe Saul-Sehy.
[00:01:33] Joe: Where the hell did that come from? Everybody, welcome to Friday. I am, uh, your surprise host, Joe Saul-Sehy. Hi, from Stacky Benjamins from somewhere. Nobody goes [00:01:43] Doug: off script [00:01:44] Joe: like I do, Joe. I have no idea what we’re doing already on a Friday, which means it’s a normal Friday and we’ve got a great band of contributors today.Let’s meet them. The one in New York City joins us. The poly pant is here. How are you? The poly pant.
[00:01:58] Paula: The Paula Pant. I’m doing great. How are you doing, Joe? [00:02:01] Joe: Well, not great. Everything here turned yellow and green and so Doug said this backstage, he’s like, so does that mean everything in your nose now is turning yellow and green, which is kind of gross.But the answer is yes, so, ah, not, you know what, Paula, I’m happy though ’cause I’m here with you.
[00:02:16] Paula: Well, yeah, you, the April showers make may flowers, so maybe, maybe your nose will bloom in the head. And how many [00:02:22] Joe: pilgrims do may flowers bring? Isn’t that the way that ends? [00:02:25] Paula: Uh, is that really? I hadn’t heard that.But that I don’t,
[00:02:29] Joe: I, I don’t know. I I might have made that up. Should I say TM at the end of that? [00:02:33] Paula: Yeah. [00:02:34] Joe: Jesse Kramer’s here from the Personal Finance for Long-Term Investors Podcast [00:02:40] Jesse: gets smoother every time you say it. I’m getting it, man. [00:02:43] Joe: Only a slight delay. How are you? [00:02:46] Jesse: I’m doing well. I’m doing well. Hey, I’ve got a technical question for you, Joe, Doug.Do you want me to close these blinds so that people don’t get distracted by the automobiles outside? Is that important? All
[00:02:56] Joe: the by all the stuff going on? Yeah. By all the brilliance going on behind you. Right. I think we’re probably good. Okay. All the stuff we could have thought about before we hit record.We’re just gonna do it live. Absolutely. And here to save the show already. We’re only three minutes in and we need saving Don McDonald from Talking Real Money joins us. How are you brother? Well,
[00:03:18] Don: good. But you know, sometimes things just can’t be saved. I’ll do the best I can, but I am. Well, sir. Thanks for, uh, having, thanks for having me back on the stacking show.Did, did you get some duct tape? With my duck.
[00:03:32] Joe: What? A little duct tape. A little wire. A little, you know, you can MacGyver the show. Oh, I can fix, [00:03:37] Don: yeah, yeah, yeah. That actually, that was, that was back in the day when I was handy, when that I could do that. But, uh, no, not anymore. [00:03:42] Joe: Does Paula Pat know what it means to MacGyver a show?I.
[00:03:45] Paula: I’ve never seen MacGyver, but I know that MacGyver is a television character who is capable of fixing a lot of things in a creative manner. [00:03:51] Joe: This is incredible. This is already the best episode we’ve ever had. Today we are going to talk investments, which is one of Don’s favorite things to do on talking real money with his co-host Tom.You guys dive into investments and people trying to fleece you, but you know what’s funny, Don? Often? Yes. Often what I see is people are told by well-meaning people to get out of X investment only to do much, much worse in a fantastic investment. I. Which drives me crazy. In fact, I was talking to a guy just last week who was with a commission only broker, Don,
[00:04:28] Don: they still exist. [00:04:29] Joe: I know. Working with a, you know those ones that are on everybody’s corner, the people that go knock on your door? Oh yeah. Yes. [00:04:35] Don: The ones who now only want $10 million plus accounts. Yes. Do they really? Is it big now? Yeah. That’s their, that’s their new philosophy. They’re going only for high net worth investors. [00:04:42] Joe: Well, that’s in every neighborhood. I mean, that’s, that’s in every neighborhood. But I [00:04:45] Don: think there are like three quarters of a million of them in the country. When you exclude, uh, home equity. It’s not that many people. [00:04:52] Joe: Well, if they get [00:04:53] Don: one [00:04:53] Joe: outta [00:04:53] Don: seven, [00:04:54] Joe: I mean, that’ll be, that’d be big. [00:04:55] Don: Yeah. [00:04:56] Joe: So this gentleman had a well diversified portfolio of high fee mutual funds.He was convinced through online activities. Right. Uh, through online forums to dump that person. And then he goes, and then I was lost. So I just put everything in the s and p 500. Mm-hmm. And he has lots and lots and lots of money. Now he’s taken it on the chin and he was actually talking to me about, uh, what do I do?
I’m like, what? You were so efficient. You were high fee, but you were so efficient. Things were going very well for you, but the mutual funds you had might not have been ideal.
[00:05:35] Don: Okay? So he went from actively managed expensive mutual funds to the standard imports 500. Was he getting guidance in this process or did he do it on his own? [00:05:45] Joe: No, he did it on his own because the, the internet told him that’s what he should do. Oh, the internet is so foolish. I know. So that was where I came up with this guys and the fact that we had Barry Riol on on Wednesday and he was talking about how not to invest. So I. Is it worse to invest with high fee stuff, but allocated correctly or to use fantastic stuff that’s stupid ’cause you haven’t allocated at all.What are some of these investment choices? We’re gonna ask all of you that we’ve got Don, Jesse, and Paula here. That is the mission guys. So think about that for a second because we have a couple of great sponsors who make this free for all of you so that we can keep on keeping on and you get all this goodness and all you have to do is.
Pinch yourself because you’re so happy that you get this for free. We’re gonna hear from them, and then we’re gonna talk about horrible investments or horrible decisions.
All right, Paula, you heard my preamble? Mm-hmm. Let’s talk about a bad investment choice, like one that makes you go, ugh, like what is a, what’s a type of investment somebody’s making a huge mistake with if they choose that type of investment?
[00:06:58] Paula: Trying really complicated things like what’s the universal, what’s that?What’s it called? The universal, like forever, the one that cycles, do you know what I’m talking about?
[00:07:11] Joe: The universal cycle. Um, reincarnation? [00:07:15] Paula: No, the infinite reincarnation. Infinite banking. Oh, infinite banking. Infinite banking. That’s it. Infinite banking. Infinite banking. The, [00:07:21] Don: the life insurance deal. [00:07:23] Paula: Yeah, the life insurance deal with the Infinite Banking bank on yourself.Banking. Yeah. That one. And the people who I hear interested in it are like, the people who are 27 just opened up a 401k and, but then they’re like, Hey. I heard about this thing on TikTok called Infinite Bank. You know, like it, yeah.
[00:07:42] Joe: Which is the way all good sentences should start, Jesse. I heard about it on TikTok, so therefore [00:07:47] Jesse: TikTok iss where I get a lot of my dance moves and where I get a lot of my investment advice, it’s usually those things do come in pairs.I’ve found in my experience, it’s, it’s a twofer. Yes, correct. It takes two to it. It takes two to tango, it takes two to TikTok, and it takes two to invest in penny stocks. Oh, I think that’s one where, I mean, think about it guys. If you buy it for a penny. It goes to a dollar. You’ve just a hundred x to your money.
And I mean, look, I mean look at Costco right now. Costco’s. What is Costco trading? We’re gonna do this live. We’re gonna do a Bill O’Reilly, we’re gonna do this live. Costco is trading for $904. That’s 90,400 pennies. If you had only gotten in when it was a penny. You would’ve look where you would’ve been now.
Oh my gosh. So I think penny stocks are one of those things that people don’t underestimate. They don’t under understand any of the underlying mechanisms behind what drives a stock’s price. And therefore when they see it selling for a penny, they, they come with this false notion that it can only go up, or that eventually it’ll be in the realm of a Costco that’s trading for $900 a share.
And, uh, you know, penny stocks, I think are akin to just straight up gambling, like go play the roulette wheel.
[00:08:58] Joe: Well, let’s dive into both of these, Don. I’m gonna ask for years in a second, but I wanna go back to life insurance and then we’ll cover penny stocks next. But life insurance, what Paul is talking about is using permanent life insurance.Mm-hmm. I often hear, and this is a great place I think to start this, that permanent life insurance is the devil. Do you believe permanent life insurance is the devil?
[00:09:19] Don: I believe that most financial life insurance products are devilish, uh, and ish and commission ish. They are loved by those who sell them.They are rarely, if ever purchased actively by clients because they don’t make much sense. The insurance company always wins, always. The, the odds are stacked in their favor. The client can’t win, and it’s all part of this desire for magical investment products. That don’t exist. Never have, never will.
[00:09:52] Joe: Well, let’s talk about banking.Paula, do you know enough about infinite banking to be able to talk about why somebody would want to bank and have life insurance at the same time,
[00:10:02] Paula: like use their [00:10:03] Joe: banking for their life insurance? [00:10:04] Paula: I, I haven’t read up on it recent. Like basically one of my readers, this is back when I was still a blogger, one of my readers reached out to me and asked me what I thought about infinite banking.And so I went down the rabbit hole at that time and I was like, wow, this is complicated and stupid and no one should do this. Since then, I have forgotten the details of how it operates. Isn’t
[00:10:21] Jesse: the idea that you have some sort of permanent life insurance, the cash value builds? Mm-hmm. And then you can take, rather than, say in a traditional investing account where you have to sell your assets at a capital gain in order to get money out of that investment account.With infinite banking, you’re allowed to take a loan against your cash value in your insurance product, which is not a taxable event, and then the cash value continues to build. And eventually you repay the loan on your own terms. And when it’s presented that way, it’s like, where’s the downside?
[00:10:54] Don: Yeah, I mean the downside, the downside is the fact that you gotta pay that loan back.Correct. And you gotta keep paying your premiums. Correct. And what’s the rate? Hold on a second. What the rate, go ahead
[00:11:05] Jesse: Joe. I’ll hold on. [00:11:06] Joe: Yeah, ’cause there’s some more upsides to this. Like let’s dive even more into the upsides that they will tell you about, which by the way are a hundred percent true.Number one is that loan is at a 0% interest rate. So instead of going and borrowing money from somebody else, you can borrow it from your life insurance policy. And assuming Don will get to this in a second, Don is ready to go. Assuming you continue to put enough money in. That the life insurance stays in enforced now, you don’t owe anybody anything.
You still have your life insurance and you have this cash, like what? What could be wrong with a zero interest loan against your life insurance policy, Don McDonald,
[00:11:42] Don: because you’ve just now lost any earning potential on that money that you’ve borrowed from yourself. So it’s not making money. You’re not making money on that money and you always, [00:11:51] Joe: but that’s always, but that’s why they call it banking because the goal is not to make money, don, the goal is to avoid banking someplace else. [00:11:59] Don: But the fact of the matter is, if you put money into a bank account at your bank and you take it out of your bank, you are not paying any interest on that because it was your money to begin with. It’s not somebody’s magic money that you’re borrowing, it’s your own money. I’m gonna go borrow money from my wallet.Yeah, exactly. Jesse. Borrowing money from your wallet. And the other thing they don’t tell you about is the fact that those life insurance premiums can rise over time. They must be kept in effect, if you fail to make a payment on the life insurance, the loan becomes immediately taxable
[00:12:34] Joe: immediately. And that’s where the difficulty comes in.And also. I mean, when you look at these permanent life insurance policies, Paula, I mean, there is a minuscule segment of the world. So where these actually work though, I don’t think even a banking’s where they work. But I do think that life insurance for somebody that is a very, very high net worth, uh, life insurance can be great for estate planning, might be a good, uh, much better tax shelter than annuity.
I can’t believe we haven’t heard annuity yet, but I’m sure that’s coming. Mr. McDonald?
[00:13:03] Don: Mm-hmm. [00:13:03] Joe: But Paula, for that one. Percent of the 1% that those work for banking. [00:13:11] Paula: You know, I see a place for extremely, extremely high net worth individuals who are worried about estate taxes. I mean, extremely high net worth.I can see an argument for permanent life insurance in those very rare cases. Even in that regard, I don’t see the infinite banking portion.
[00:13:30] Don: Yeah, the infinite banking’s a gimmick, right? It’s just a sales gimmick. [00:13:34] Joe: Right, and here’s what’s frustrating, Don, is that infinite banking can work, and all the math they’re doing is not incorrect, but they’re telling you three quarters of the story.Mm-hmm. The problem that I have with infinite banking is different than your bank account. Your bank account. If you overdraw your bank account, you might have a fee from Bank of America or whatever bank you have, right? You’re gonna get an overdraft fee. With this, you’re gonna unravel your entire life insurance strategy.
It’s like your life insurance goes, bye-bye when your banking goes bad, like that’s absolutely horrible. So frustrating. Permanent life insurance, though we talked about briefly using it, uh, high net worth individuals for estate planning. Don, is there any place else you see that permanent life insurance might make sense in a financial plan?
Like if you saw it, you go, uh, that’s not too bad. No,
[00:14:21] Don: I, I can’t see. I really, except for the case you stated and Paul discussed, there is no place for permanent life insurance in a portfolio. Life insurance is by any other name, death insurance. You are insuring against your untimely passing. Should someone be reliant upon your income or your wealth.You wanna make sure they’re taken care of. When you get to the point, your family gets to the point where there is no longer a need for someone to get a windfall from your death, there should be no death insurance, none. That’s why permanent insurance makes little or no sense to me except for those rare estate planning purposes, and as Paula said.
Very high net worth individuals.
[00:15:05] Joe: Jesse, any place you could see a permanent life insurance policy implemented in a financial plan well. [00:15:11] Jesse: I think if you are the type of person who enjoys pranking, people in your life, especially people you don’t like, you can sign them up for, uh, permanent life insurance policy. [00:15:21] Joe: Oh, we have the perfect gift for Don McDonald be it’s [00:15:24] Jesse: locking instead of doxing. Well, it’s funny, the whole estate planning, high net worth individual part, in case anyone’s wondering, we’re talking usually about taxable estates, the federal. Exemption’s $28 million for a couple. Right now. Just when we’re talking about high net worth, like those are the kind of numbers that we’re talking about.The interesting thing I’ve found in my experience is that that factoid is used as part of an insurance sales pitch. We might’ve heard it before because it’s like, Hey, I. I just helped a family with $50 million and they’re using this strategy, why do you think you shouldn’t be? Right? And it’s like, well, because a different tax rule applies to those people dingus.
So anyway, if, if any of you, if any of you listeners out there are, uh, if, if you’ve heard that one before, you can, you can ignore it.
[00:16:08] Joe: You know? And it is funny because you do hear that all the time, right? Rich people are using this. How come you’re not using it? Well, they, they have a whole different set of problems, which by the way.Jack Schwager, the guy behind Stock Market Wizards, that whole series of fantastic books about these, uh, traders who actually beat the stock market. And pretty much I read these books and I’m like, I do not want to live these individuals life. That’s pretty much, pretty much what I learned is that I don’t even, and I asked Jack, I said, studying all these people, it sounds like you’re saying the stock market isn’t efficient.
And I love his, I love his phrase, he goes. The stock market is not efficient, but for 99.9% of us, we should pretend it is. Mm-hmm. We should just pretend it is because the things you have to do and the moat you have to swim across to get to the point, which is by the way, is a lead into my caveat to what all of you said.
I do think that stuffing a bunch of money, if you’ve looked at every other, if you’ve got cashflow for everything and you’re looking for another tax shelter. Stuffing it into a permanent life insurance policy, can 100% work? The bad news is it has to work forever. You have to be right on the modified endowment contract line, and you have to stay there.
I think you have to use a policy that has very low fees and also has, uh, separate accounts that look like mutual funds on the inside. See, listen to how technical I’m getting already.
[00:17:25] Don: But with all of this, that’s way too many caveats for the normal person. [00:17:29] Joe: Well, and exactly why. Outside of estate planning, I think somebody who’s high, high, high, high, high net worth working maybe in a private financial planning office with people implementing that tax shelter can be quite a boon, but [00:17:44] Don: none of them are my listeners. [00:17:45] Joe: Well, I just put everybody that listens to this show to sleep too with my explanation of how that thing works. All right, let’s go into penny stocks. Jesse brought up penny stocks. Paul, is there any case to be made for penny stocks in your portfolio? [00:17:58] Paula: No. No, there is not. No, I mean, I generally think that the case for individual stocks is fairly slim for the average person, even in the individual stock world.I’m talking about the big blue chip individual stocks. I think even that for the average person, there’s not much of a case. A Proctor and Gamble. Exactly. A Procter and Gamble at Johnson and Johnson and Nike, a Coca-Cola. I think even for MicroStrategy, right? Uh, I was looking ’em up earlier today. The. Asset allocation for something like that, for the average person should be a fairly slim portion of your portfolio.
So generally, the stock picking game should be avoided. Then when you get into these further niches of, for example, penny stocks, for the average person, you’re asking for trouble. It can go down to literally zero. And there’s just no space for that.
[00:18:50] Joe: But I love what Jesse said, Don. I mean, look at Costco trading for, I think, Jesse, you said 90 bajillion dollars.It was 9 0 4. Share. If I buy a stock that’s only trading for 2 cents and this thing just, don manages to get to 4 cents. Yeah, I have doubled. Oh, a double my flipping money.
[00:19:09] Don: Yeah. Well, okay then if a stock is a deal at 2 cents, or let’s say a penny, why doesn’t Costco split 90,000 for one so they can get their, or one for 90,000 so they can get their share price down to a penny.Because if it’s a great deal at a penny, everybody’s gonna be buying their stock. The, this all feeds into that stupid sh share price fallacy that so many investors. Boy, I thought,
[00:19:32] Joe: deh, I thought I was like, whoa. This is a family show. Don, [00:19:35] Don: the, the thing that they, they all live under, which is this belief that, well, if it’s a great deal at 900, it’s a better deal at four 50 or it’s a better deal at two 50.The price makes no difference. And we should stop talking about little companies as being penny stocks, their micro cap or, you know, they’re, they’re, they’re even smaller. These are tiny little companies. Buy them based on market capitalization, and generally speaking, a smart small cap stock that goes public does not go public at a penny.
It goes public at $10 a share, because that is a more respectable number, generally speaking. If you go public at a penny, you go public because you’re getting ready to scam people.
[00:20:16] Joe: Jesse, you were nodding your head. [00:20:17] Jesse: Yeah, I think Don’s right on because I think the average person doesn’t understand that a stock’s price is only half the equation to figure out the value of a company.Right. The other half, it’s arbitrary. Correct? Correct. The other half is how many shares are outstanding, right. If stacking Benjamins as a business is worth a million dollars and there’s a million shares of it, well it’s gonna be $1 a share. I could arbitrarily say, no, no, I don’t want a million shares. I only want a thousand shares.
Well, now the share price just went up to 1000 per share. Mm-hmm. And again, the arbitrary amount of shares outstanding leads to the arbitrary value per share. And so it is, it’s the average, I think the, the penny stock. Illusion has to do with people not understanding that fact.
[00:20:57] Joe: It is scary when people first get in.They’re like, that one’s $75. This one’s 40. I’m buying the $40 one.
[00:21:01] Don: Right? [00:21:01] Joe: Because that’s what we do at the store. [00:21:03] Don: The stock split thing where people say, well, I’m gonna buy stocks when they split. Yeah, because they always go up. Well, no, it’s the same price was a hundred dollars and they split 10 for one.Now it’s $10. Is it? Cheaper. Cheaper. No, it’s the same hundred dollars.
[00:21:17] Joe: It’s the same, is same number of shares. Why is, why is he so angry about [00:21:20] Jesse: this? Oh, it’s just, it’s the way I roll. But Don is, as you probably know, the funny thing is that for a lot of companies, when they do split. The valuation of the company does go up, which simply shows the, the irrationality and the inefficiency of the market.It’s like, there you go. That’s true. You know it, this pizza, this eight slice pizza, it’s, it’s 20 bucks. Ah, but what if I took the same pizza and split it up into a hundred slices? Would you pay 30 bucks for it? Some investors, a lot of investors bargain say yes they would. And it’s crazy. I absolutely
[00:21:48] Joe: love my spouse and she’s brilliant, but whenever we go to that pizza, she asks that question every time, and it drives me crazy.For 30 years. How many slices? How many slices are in this pizza? I’m like, that is so irrelevant.
[00:22:00] Don: We’ll get a knife and make more. If you want more honey, it’s a hundred percent [00:22:02] Joe: irrelevant. Oh yeah. You know, there’s something else going on with penny stocks too, that we haven’t talked about was penny stocks most often, unless they just became penny stocks, which means they’re falling like a rock, they are not listed on an exchange.Mm-hmm. And I learned a very, very hard way that it is the SEC’s ability to police penny stocks also is incredibly low. So the pump and dump schemes, Don, that you were talking about. Oh yeah. If you think it’s a deal, somebody’s ability to fleece you when a stock is under a dollar, it’s pretty good.
[00:22:39] Don: That’s where all the boiler room brokers were back in my day was Was selling the pennies.Selling the pennies. Selling off the pink sheets. Yeah. And they literally were pink sheets. Or they listed all the little songs. It’s a good movie.
[00:22:50] Doug: Boiler Room, if our listeners haven’t seen that, you gotta watch Boiler Room. It’s fantastic. Paula, have you seen that one? [00:22:57] Joe: I have [00:22:57] Doug: not. [00:22:58] Joe: You would really like this movie?Yeah, you would. It’s a good movie. You would? Yep. Fantastic film. All right. In the second half, I bet we’re gonna. Talk about something that rhymes with Nuity when it’s Don’s turn. But before we get there, at the halfway point of every Friday show, we dive into our year long trivia challenge. And Don, today you’ll be playing for og, which is, oh, I
[00:23:20] Don: love playing for og. [00:23:22] Joe: It’s good news in his bad news. Don, you want, is he doing badly? Oh, no, no, no, no. My friend. Oh, the good news is the pressure’s off. In fact, we’d love it if you just. Cook the books with us and said some horrible, yeah. Horrible. Yes. Oh, you want me [00:23:36] Don: to be wrong? Yeah. So really the fix is in [00:23:39] Doug: Yeah. The answer to our party.Sorry, og.
[00:23:41] Don: The peer pressure is ridiculous. Here. [00:23:44] Paula: The, the answer to our Friday. Friday. Doug Don will send you 10 bucks later. [00:23:48] Jesse: Sorry. Go for it. Doug. Go. Doug. [00:23:50] Doug: Come on Doug. No, I tried twice. I’m not gonna strike out a third doc. You can. I think you can. I think Doug can me, [00:23:59] Joe: I think Doug can. [00:24:00] Doug: Well, Don, you may recall that the question for our Friday trivia is always numbers based.It’s always very difficult. We, we make sure that almost nobody is gonna know this number. Yet, OG seems to get remarkably close, so I’m just gonna tell you right now, the answer is cheesecake to today’s. So make sure you say cheesecake and we’ll all be really happy.
[00:24:25] Joe: We’ve had seven editions so far as we’re getting ready to close out the first quarter of this year.OG has five. Paula has one, and Jesse last week finally got on the board, my friend with one. Will Don help OG pull further ahead? Will Paula go back into second place where she was for most of the first quarter, or will Jesse, I. Go to second and make a move. We need a trivia question though, Doug, to find out.
I think today’s trivia question’s about, uh, science. It’s about science. Huh?
[00:24:56] Doug: Pretty sy. Yeah. Hey there, stackers. I’m Joe’s mom’s neighbor, Doug, and on this day, way back in 1948. English astronomer, Fred Hoyle coined the phrase Big Bang as he was describing the noise that Don’s brain makes when he sees a listener with an annuity.Oh no, the pain. Maybe it’s the sound of both of our listeners heads hitting the floor when they find out. Paula actually watched a movie at a theater that was made in the last two years. Nah, I’m just kidding. It was actually just all Fred calling the notion of a big bang. Ridiculous as he was trying to support his alternative universe.
Origin story called the Steady State Theory. Do you know what the steady
[00:25:43] Joe: state theory is, guys? No. It’s when a man universe loves a woman universe very much, and they, no. Anyway, continue Doug. And well, that was worth it. Speaking of Joe, [00:25:56] Don: so very, very valuable. I’m still trying to figure it out. [00:26:01] Doug: Speaking of Joe’s mom, I have it on good authority that the number one reason the universe was created was so she could watch Big Bang Theory reruns on television.This hit show’s cast. Raked in tons of Benjamins over the life of the series, but Sheldon played by Jim Parsons was paid the most four years in a row. Parsons was the highest paid actor in television, culminating in 2018 when he made how much money over the course of that season. I’ll be back right after I try to imagine Jim Parsons eating grocery store ramen with me and Joe’s mom.
What
[00:26:39] Joe: a. Oh, wouldn’t that be fun sitting? He probably Golden chopsticks. Yeah. With all that, uh, money, because I bet it’s more than $4. I bet that Jim Parsons made more than $4. It might. How many episodes [00:26:50] Don: in a season did you say that? Did we get that? We did not. Oh, we gotta do the episodes season. Did you use your own giant [00:26:55] Joe: brain [00:26:55] Doug: for that? [00:26:56] Joe: We did not. And uh, with that giant brain, you get to go first on. So Jim Parsons 2018 highest paid actor on television. How much did he make for the season? 52 million. $52 million sounds well-reasoned little math applied to that number. [00:27:18] Don: Little, very little meth. [00:27:19] Joe: Paul ap Pat, you’re going next because you’ve been in, uh, second place longest. [00:27:25] Paula: Ooh, so strange to go second. Fundamentally, the question is, if you take Jim Parson’s identity out of it. The question is, how much would the highest paid television actor have received in the year 2018? [00:27:40] Doug: Well, well, it was him. He was the highest paid actor in 2018. So we don’t need to take Jim Parsons out of it.Leave Jim Parsons alone.
[00:27:49] Paula: But [00:27:49] Doug: I Why do you hate him? [00:27:50] Paula: By not letting that bias the question, by asking the, the base question of. If you take the profession of acting, specifically television acting in the year 2018, what would’ve been the top end of the range in terms of compensation? That leaves me with, I don’t know, so I’m gonna say I.Hmm. How much do the people on friends make per season at the end of friends? We did that one. Yeah, we did that one a long time ago, and I don’t remember the answer. I also read Matthew Perry’s biography, and I also don’t remember the answer. Joe.
[00:28:28] Doug: Joe, do we have a director off stage telling Paul to stretch for time? [00:28:32] Joe: I know. Is he getting that signal? We gotta give Don’s brain time to settle back down before he starts talking about annuities. He’s gotta cool [00:28:40] Don: off. Oh, I’ll be fine. I’ll be fine. Go ahead. Yeah. [00:28:43] Paula: Alright, so my objective is to keep the field goal wide. So I’m gonna go 21 million. [00:28:52] Joe: $21 million. Well, Jesse, 52 on one end, 21 on the other.Where are you going?
[00:29:01] Jesse: I’m going under 52. I texted Don offline and I said I’d give him 10,000 slices of pizza if he tanked this one, [00:29:10] Don: which in [00:29:11] Jesse: his world is, [00:29:11] Don: is just one personal pan pizza cut up tiny. It’s tiny, 800 calories, bite sized nuggets. [00:29:18] Jesse: It’s four pieces of pepperoni on that. Um, this is a good one.This is a tough one. Do I believe? I mean, I, you know, for the sake of brevity, guess we’re 52 and 21. Yeah. Mm-hmm. I’ll go 30,
[00:29:35] Joe: 30. $30 million. Alright, we got Don in 52. Paul at 21, Jesse at 30 million. How much did Jim Parsons make in his highest paid year? We’re gonna find out in just a minute. Don, you started with $52 million and everybody thought that might be just a skosh outside.Uh, looking at the other two answers, 21 and 30, but you feeling pretty confident?
[00:30:01] Don: No, not at all. I’m feeling about as confident as I would feel, uh, putting money into crypto. [00:30:07] Joe: I don’t know, man. I don’t know. Could be your day. Oh cool. Paul at [00:30:10] Paula: 21 million, right? You know, I was mentally toggling between 21 or 27, so I’m actually a little bit nervous that Jesse took 30.’cause I, I was thinking the 21 to 27 range.
[00:30:23] Joe: And so again, you went with your gut. I. [00:30:26] Paula: I know. Why, why, why do I do that? [00:30:30] Joe: I, I can’t wait to find out what the answer is. But if you’re wrong, I, I’m like, why do you trust your gut every time? And, and how is your gut wrong every single time [00:30:38] Doug: she has to do the costanza, where you just do everything exactly opposite of your gut?It
[00:30:43] Paula: is the, the inverse gut. The inverse gut there. Yeah. It’s [00:30:46] Joe: exactly what I’m thinking, Doug. I’m like, her gut has been wrong for three consecutive years, maybe five, maybe seven consecutive years. Like every time her gut is wrong with rare exception. So number one, why you wouldn’t as step two say, that’s my gut reaction.Go the opposite way, Paula. I I have no idea. I have no idea. Jesse, you’re at T 30 million. You feeling good? Paula likes that territory. Yeah, and I don’t
[00:31:11] Jesse: know. Again, I, I, I like the whole idea of like how many episodes were there and how much per episode, I don’t know, 1.5 million times, 20 episodes, maybe. I’m, I’m not sure.It’s a lot of money either way for, I mean, what’s the pulse on the show? Do you guys enjoy the show? Big Bang Theory? It’s a good show. Yeah,
[00:31:27] Doug: I think it’s a good show. It’s easy to hate. It’s like people went out there and started saying how bad the office was or how bad friends is. Any big giant show, it’s easy.To find a whole group of people that say it’s horrible, but there’s a reason it was on air for like 29 years or however long it was on. Yeah. Full season.
[00:31:43] Don: Massively inoffensive. [00:31:45] Joe: Yeah. I also heard by the way that the writing is purposefully backwards. Usually they make, uh, characters that are empathetic and Sheldon is.Completely unempathetic on purpose, and it’s just meant to rub you the wrong way every single time, which is very hard to pull off. So the fact that they were able to pull it off, uh, like we do with Doug every week, we, that’s, that’s good stuff. All right. 52 million from Don, 21 million from Paul, a 30 million from Jesse.
Who’s winning this thing, Doug?
[00:32:21] Doug: Well, hey there, stackers. I’m Ramen lover and guy who always loves a big bang. Joe’s mom’s neighbor died. Hey, no, no, [00:32:29] Don: no, no. Can’t [00:32:30] Doug: say that. [00:32:31] Don: No, [00:32:33] Doug: he did say it though. He did. Yes. Continue. The Big Bang Theory, I’m gonna hire Don to just be my laugh track. That’s awesome. The Big Bang Theory television show made the five main co-stars millions.But how much did Jim Parsons, the actor who played character Sheldon make over the course of his 2018 season? Well, I’m not gonna tell you, but I will tell you that it was 25.6 million less than what Don guessed. 5.4 million more than what Paul guessed. Unbelievable. Just 3.6 million less than what Jesse guessed, because the correct answer is $26.4 million making Jesse’s sole possessor of second place.
[00:33:16] Don: Wow. Wow. You see, my thinking was I thought somebody from friends got a million in episode once. [00:33:23] Doug: They all did. [00:33:24] Don: Yeah. And I was thinking million in episode. Then Jim Parsons if, if it’s that much later, must have gotten two. But I was wrong. [00:33:30] Paula: I can’t believe I was toggling between 21 and 27. You were dead on. [00:33:34] Joe: Unbelievable. 27. [00:33:36] Paula: Wow. [00:33:37] Joe: So incredible. Your ability to be wrong is just amazing. [00:33:42] Don: Yeah. But she was right somewhere in her mind. [00:33:44] Paula: Exactly. [00:33:45] Don: Yeah. And she can take that with her after the show and feel good about herself. [00:33:51] Joe: I let other people win. It’s so nice. In this case, Jesse. Nice. Jesse. Two weeks in a row. Alright.Nice job man. A little momentum. A little momentum. Alright, let’s use that momentum to slide into the second half of this discussion. We are going to, uh, Don Don, what’s an investment? That you think might not be the world’s best investment. There
[00:34:13] Don: are [00:34:13] Joe: so many good [00:34:15] Don: options. They’re just so good. I could go crypto, I could go options.I’m speaking of good options, but I’m gonna stick with the one that I think is the most horribly sold product in all of the financial universe, and that is a product. For some weird reason called an equity indexed annuity or indexed annuity EIAs. These are hyper sold. They are the subject of almost every free steak dinner you get in the mail.
Because the commissions paid are so high, and yet because the insurance industry so effectively lobbied to have these things unregulated. Years ago, the SEC wanted to regulate equity indexed annuities or indexed annuities as securities. The insurance industry spent, I believe it was $200 million lobbying to keep those under the control and the purview of state insurance regulators.
So these people who could sell these things, could it with impunity tell you? You’re getting an investment that will give you the returns of the stock market with none of the risk. The biggest lie in the investment business, I believe.
[00:35:25] Joe: But it’s all true. It’s all true. Paula. You get to participate in the stock market. [00:35:30] Don: Ah, and you don’t get any of it. Returns of the stock market, the return, they claim the returns of the stock market with none of the risks. They don’t, they don’t say participate. [00:35:39] Joe: Never in writing, never in writing. Never [00:35:41] Don: in writing. Right. [00:35:42] Joe: In writing, it’s always, Hey, you get to participate in the stock market.Mm-hmm. And have
[00:35:47] Don: you ever read one of those [00:35:49] Joe: disclosure documents? It’s incredible. It’s so ugly. It’s so, so, so [00:35:54] Jesse: ugly. One time I participated in the Victoria’s Secret model fashion show. You did? We can see. We can see why. Just looking at you. Yeah. I, I watched, uh, at a bar. Oh, that was me participating.Participate. Sorry, Paula. Go ahead.
[00:36:07] Joe: You got all the upside. The audience got none of the downside. Jesse. Thank heaven. Uh, oh my goodness. Paula, let’s talk annuities. Equity index annuities. Why do we buy ’em? [00:36:21] Paula: Why do we buy them? I think broadly there’s a lack of financial literacy. I was listening to this podcast yesterday.There was a guy, he was 41, and he talked about how he had just gotten into the market about five years prior. It was his first time ever buying into any type of putting money in a 401k, buying into any type of stock, buying into any type of bond. I think for most people it feels very overwhelming. And so when you get that free steak dinner that says, Hey, you get.
All the benefit with none of the risk. In a world with the lack of financial literacy, it’s tempting to believe it because you want to believe it. And in a world in which for a lot of people it feels as though things get more and more expensive and it’s hard to keep up. You know, we’ve now got like a younger generation that feels as though they might be doing worse than their parents.
I think in that type of an environment, it’s so tempting to want to believe the two. Good to be true sales lines.
[00:37:17] Joe: But if I sell these things, Jesse, like I know what’s going on. I know what’s going on. I’ve read the data, like I get it. Or do these people also not get it so they can, [00:37:27] Jesse: on the sales side, you’re saying? [00:37:28] Joe: Yeah. The salespeople. [00:37:30] Jesse: Yeah. Well, there’s two interesting things there. I know Don’s getting excited, so I, I do wanna hear what Don to say. The two things are, it’s funny that we’re using the verbs, buy and sell, how, you know, how often why are so many people buying these? Well, again, I, I would say it’s.They’re being sold more often than they’re being bought. They’re being pushed more often than they’re being pulled, right? They’re being pushed onto people more than those people are actually seeking them out. But then as for, do the salespeople know what’s up? I’m sure many of them do, but there’s a really good series.
A few years ago in the New York Times pertaining to about 4 0 3 B programs, and a lot of 4 0 3 B advisors push annuities on teachers. Even though the teachers might be getting a pension in social security too, which acts as fixed income anyway, but it was very interesting in this interview series, a lot of these younger advisors who were pushing annuities we’re talking like 24, 26, 28, 30.
The training that they went through, very much indoctrinated into them that they were doing a good thing by selling these annuities to their clients, and it might’ve taken them years of. Being in the business and eventually kind of seeing the bad results, having to unwire like, you know, remove themselves from the cult of annuities before they realize, oh, they, they weren’t doing something good for their clients.
So some salespeople know that they’re not setting their clients up for success, but I’m sure many think that they’re doing the right thing.
[00:38:48] Don: Jesse nailed it. You absolutely nailed it. It’s a, a lack of integrity, I believe, on the part of the industry because the sales tools that they give them, and this is what they learn from which they learn, are so misleading.I went, I’ve gone to several of these steak dinners. He loves steak. I do, and, and rarely is it a really good one, but you know, see, every once in a while you get a Flemings or a Ruth’s Chris or something. Oh,
[00:39:11] bit: nice. [00:39:12] Don: But in every case, there is a chart that they show, and you can find this chart online. It’s a chart of the stock market from 1929, and they show you this chart and they go look at what the stock market did from 1929 from here, and you did not recover until the 1970s from the lost in 1929.What they neglect to include on that chart. Dividends. Dividends. Yep. They are just looking at, if you bought a hundred percent of your position in 1929, you didn’t recover back until, I think actually it was the fifties, if I’m, if I’m correct. Um, but it was a very long period of time. It’s very misleading information.
And the reason they mislead is because of greed. Ooh. That could be a song five, I mean, 5, 6, 7, 8, 10% commissions. Yeah.
[00:40:03] Joe: Early on in my career I was even taught some, uh. Math that I could use on whiteboards, and I was like, well, the math even proves that this stuff is great. Like the math from the sales trainer, right?This is, uh, what, early 1990s and so, so amazing. It took me Don four years. To realize that the math, and I stopped using the math well, well before that, there were other reasons why I decided I did not like these tools, but it took me four years to realize. One, I’m driving down the road and I’m just going over, I’m like, well, then why is this math equation right?
If, if all this stuff is bad and I stopped selling this, why would. Why would the math be right? And then I realized the math was so sneaky bad. It was so, so sneaky bad. Like it was well, it’s
[00:40:49] Don: the lies, damn lies and statistics. You can manipulate statistics to fit whatever story you want. If you are clever enough on the front end, [00:40:56] Joe: absolutely good mentor mindset.Beware charts and graphs. ’cause a chart and a graph can show you whatever anybody wants to tell you. And yet, Paula, maybe equity index annuities are bad, but we hear from people just annuities, like stay away from annuities altogether. Uh, is that good advice? Just stay away from annuities and you solve the problem.
[00:41:15] Paula: I. I used to think that until I heard Dr. Wade FAU talk about, uh, specific annuities that he recommends in very specific use cases. And again, I don’t remember the details of precisely what Dr. Fau recommended, but he made a compelling case that in some cases for some people, some types of annuities will work. [00:41:35] Don: Beware of Dr. Fal though, please check the credentials. He is endowed. His school is endowed by New York Life. Hmm. So take what he says with a grain of salt. But what he’s referring to are immediate annuities. Yeah. And they do serve an occasional useful purpose. The other ones though, fixed annuities. Eh, they’re not terrible.Uh uh, variable annuities are horrid.
[00:41:58] Joe: So just for people that don’t know what these are fixed, annuities feel like you’re in a, you’re in a long-term CD is really what it feels like. Yep. You are in a long-term CD and often these come with a teaser rate. That’s fantastic. The bad news is, is after the teaser rate period is over, you drop to this rate.You always have to ask, what’s the guaranteed rate? What’s the guaranteed lowest they will pay? Nobody ever asks that question, but that’s a question you need to ask if you’re gonna go in. ’cause it’s not gonna be 7%, it’s not gonna be 8%, it’s gonna be 1.7% forever after you get done with that teaser rate done.
[00:42:31] Don: Yeah, and the variables. What I dislike so much about variables is the fact that they have very, very high internal fees to give because you, when you buy a variable, you’re buying into a group of mutual funds, so you get to pick the funds you want in that group because the insurance company doesn’t directly control the money in this case, as they do with other annuities.They have to make money and so they tack on all these fees and writers that can add up to two and a half, three, three and a half percent extra over and above the mutual fund fees, which makes them a terrible deal and people in retirement plans need to remember. You cannot get double tax deferral. If you’re in a 4 0 3 B and you have an annuity, the 4 0 3 B’s already taxed for the annuity provides you with no benefit on the tax side.
[00:43:16] Joe: I saw a statistic last year the number one place where variable annuities exist is inside IRAs. Yeah, inside IRAs, it’s double place of all to put them. Why do I have a tax shelter inside a tax shelter? Jesse, and you mentioned teachers. I mean, teachers really got it bad because for you, for a teacher, it’s, you know, choose the annuity and you’ve got maybe three or four different choices.What do you tell the stacker teachers in our audience when they’re trying to sift through annuity hell, uh, for their retirement? I.
[00:43:44] Jesse: On Friday, I went out to my high school alma mater and taught 30 teachers what I would consider some financial basics, including 4 0 3 B basics. And one thing I did for their 4 0 3 B, their their 4 0 3 B plan had not yet been uploaded to this website called 4 0 3 B Wise.I was hoping you’d mention them. Great site. Yeah. Are you familiar with that, Joe or, or Paula? Yeah. It’s a nice site. You need to have ’em on. That’s a
[00:44:06] Don: powerful [00:44:07] Jesse: tool. Yeah, it’s a really good nonprofit. By former teachers to help current teachers figure out some better paths within their four three B program.And I’ll just use my personal high school as an example. Shout out to Red Creek, New York. Uh, I think they had about 10 different custodians and or insurance companies as potential vendors in their four three B program. The school district, and this is kind of by law, it’s not the district’s fault, but, but they stay out of the conversation.
It’s up to each individual teacher to choose which of those 10 custodians they work with.
[00:44:36] Joe: Which, which by the way, can we, can we just pause there for a second? [00:44:39] Jesse: Yeah. Yeah. [00:44:40] Joe: At General Motors. The HR department because of ERISA rules, has to teach people how to use the 401k, or they violate the law with a 4 0 3 B in our teachers.If a school district tries to educate you about your choices, you violate the law. It’s so, it’s so crazy, Jesse. Anyway, continue.
[00:45:03] Jesse: Yeah, no, you’re, you’re, you’re right on. And then the next question is, well, who do the teachers choose? Then, the way it’s traditionally been done, and, and this kind of makes sense, is you’d say, well, is one of these people from under these companies coming to talk to me at the school and get me to sign up?Uh, usually someone is, usually, I call them the donut people. ’cause they often come with a couple dozen donuts. They sit in the break room and they ask teachers, Hey, have you signed up for your 4 0 3 B yet? The question then to ask is which companies have enough profits or which companies have a business model with high enough sales fees and commissions such that they can afford to send a human being into the break room with donuts?
Right. It is the. High commission annuity companies. And so, so many teachers end up getting signed up for with, with one of those companies. They’re not signing up with Fidelity and Vanguard, even if they’re on the list. ’cause Fidelity and Vanguard are low fee firms. They’re not sending a human to the school.
Oh, anyway, Jesse, that was so great. Thank you, Don. That’s so powerful. I just love the
[00:45:58] Joe: takeaway. If they bring the donuts, they’re automatically on the naughty list. [00:46:04] Jesse: To [00:46:04] Don: some extent. Yeah. Yeah, yeah. ’cause the commission makes it worthwhile for them to show up in person. Vanguard gets one basis point on some of their funds.It’s not, there’s not enough money in there to pay somebody to fly out to your school.
[00:46:17] Jesse: Right. Right. I mean, listen, I love to travel, but I’ve got something against the Danish. If you bring the Danish into the break room, don’t sign the paper. Mm-hmm. Anyway, 4 0 3, I’ll send your hate mail to [00:46:31] Joe: Jesse [00:46:32] Jesse: or send it to me.I love the hate mail. The crawlers. The fritters. Uh mm-hmm. If four oh threes, you can look up your school’s options and if your school isn’t on there, you can. Upload your options to the website and they will do the research for you, and they will give each custodian a grade. I think it’s like A through F, and at so many schools it’s almost all D’s and F’s with, if you’re lucky, there’ll be like one A or B vendor, and that’s the vendor that if you’re a teacher, you should really think about working with.
[00:46:59] Joe: And what, what is their criteria, by the way? Is it expenses? Choices? All the above. [00:47:04] Jesse: All the above, right. It’s mainly, I think, a function of fees and flexibility. And essentially whether the company’s trying to push you into an annuity or give you more of a 401k like experience where there are target date funds, low cost index funds.I’m sure there are probably some other criteria. I am not an employee for 4 0 3 B wise, but um, yeah, I still think it’s, it’s, if you are a stacker teacher out there, that could be a resource that’s really valuable to you.
[00:47:30] Joe: That’s fantastic. Let’s do a quick, uh, lightning round. Any other horrible investments in honor of, uh, Barry Ritholtz being here on Wednesday, how not to invest.Or maybe let’s just do that. Barry was here on Wednesday talking about how not to invest Paula. What’s a way you can think of that you see people invest, which is a model of how not to invest?
[00:47:52] Paula: How not to invest. I see a lot of spontaneous investment. You know, the proverbial water cooler in which a person.When there’s a lot of hype around a given investment, people without having any kind of big long-term strategy or plan or investor policy statement will just start shifting their money towards the thing that’s being hyped. So back in the, in the heady crypto days. I guess we’re now kind of entering another heady crypto era, but like, especially like post pandemic, like right at the edge of the, the bleeding edge of the pandemic.
When crypto was super hot, I would see a lot of people just like move a ton of their money into that. So that kind of spontaneous investing, unplanned, non-strategic following the hype. I’ve totally done it.
[00:48:39] Joe: I’ve totally done it. I, yeah, [00:48:40] Paula: I have as well [00:48:41] Joe: just hype from online. Bought that Lumen stock, watch it go all the way up to 10 and now back down the dollar above where I bought it still.Huh?
[00:48:50] Don: Well, they, they found out, they found out what, what that, that little chip does to you. [00:48:54] Joe: That’s it. It’s so funny because now you say lumen and everybody thinks the TV show. Immediately. Yes, Don. What’s a way not to invest? How not to invest. [00:49:04] Don: Uh, putting your money in things that aren’t really investments, but people call them investments because they’re lying, trying to sell you something.Perfect. Example, crypto. It’s not an investment. It’s a, it’s a big bag of air. It’s merely a pure speculation. All the things that are gambling, they’re not investing, playing the options market, trying to buy gold. I mean, gold can’t grow. Gold has it better than crypto. It’s a store of value in some way or another.
Crypto is not a store of anything, but anything that involves gambling as opposed to putting money into something that is likely to grow or give you interest over a period of time.
[00:49:39] Joe: I wish you’d tell us how you felt about crypto. I wish you I know, come clean. I don’t get, I still don’t get it. That’s, that’s another episode, Jesse.I have like 16 episodes. It’s 16 episodes. Jesse, how not to invest.
[00:49:53] Jesse: I’m gonna go with certain types of, like off the book private investments that your second cousin brings to you because, you know, he’s renovating this apartment building and needs equity. Mm-hmm. You know, I see some smiles here, but you’d be surprised.I mean, it happens every day. Hey, I’m, I’m starting up this business. Need some seed capital. We just bought this building, we’re gonna renovate it. We need some debt. Who can loan us some money? There’s always gonna be some sort of castle in the sky argument associated with that. Well like, just wait. You know, once the pizzeria gets going, we’re gonna do X, Y, Z and here’s gonna be our revenue, and here’s gonna be your return.
And, uh, Jesse’s hungry. What’s the pizzeria? Good. Their 12 inch
[00:50:28] Joe: pizzas have eight slices And wait. Pizza and donuts. Ours is gonna succeed because it is 16 slices. Right. [00:50:37] Jesse: The stackers are here to see how the sausage gets made, right? That’s what we said at the very beginning. Is it mealtime yet? I’m a [00:50:43] Don: little hungry. [00:50:44] Jesse: Clock is ticking. But yeah, there, there are just so many investments out there where you really have no, unless you have a lot of expertise to be able to evaluate the investment before you put your money into it. And then hopefully that you have transparency once your money’s there, you, you have transparency in reporting to see how the investment is progressing over time.There’s just so many black boxes out there people ought to avoid.
[00:51:06] Joe: I think that’s a great place to leave this discussion. Thanks to all of you for doing a great job on steering our stackers. Well to, uh, wrap up, I think it was a great week of. Making sure that we don’t step in the landmines while we’re investing.I think that’s, that’s so important. Let’s dive into what’s going on, where all you work because you’re working on brilliant things. And will our guest of honor go last? Paula, what’s going on at the Afford Anything Show? I.
[00:51:32] Paula: On the Afford Anything Podcast. Well, so we, uh, are absolutely committed to getting you a raise.We know that life has gotten more expensive. Inflation is high. Car insurance is expensive. Groceries are expensive. Everything’s expensive. Now your investment might
[00:51:46] Joe: have huge fees. [00:51:47] Paula: Exactly, exactly. You followed your cousins, second cousins, third cousins, uh, into the pizzeria. Mm-hmm. Which they funded by taking a.Leveraged annuity full of Bitcoin and just, yeah, now you’ve lost everything. So anyway, you need a raise and we’re committed to teaching you how to get one because I think a, a lot of people could be making more money doing exactly the same work. So afford anything.com/your next raises. We are offering a second beta round for people who want to become beta testers and help us put the refining polish on it, and then probably later this summer.
We will be ready for our full alpha release, but if you join the beta round, you get it at a deep discount.
[00:52:27] Joe: Yeah. If Paula would’ve followed her own advice, she could have gone from 21 million to 27 million. [00:52:33] Paula: I know, right. [00:52:34] Joe: And she could have been paid, like Jim Parsons [00:52:36] Paula: should have given young Sheldon raise.Or old Sheldon, I guess.
[00:52:39] Joe: Old Sheldon. Yeah. Old Sheldon. $26.4 million a year. You can’t live on that, but it’s a nice start. Yeah. Jesse, uh, what’s going on at the personal finance for long-term investors? [00:52:49] Jesse: That’s it. We. Recently had Christine Ben on the show from Morningstar, recently published a book, never heard of her, called How to Retire.I know. And it was really fun. ’cause I, we, I, I specifically wanted to understand not only what has kind of changed in the, the American retirement landscape over her 30 year career at Morningstar, but then also she’s got 20 chapters from 20 experts in her book. And like some of them are really unique and kind of some interesting advice that people aren’t used to hearing.
So we, we talk about that. And then, uh, next after Christine, we’ve got a a MA, our sixth ask Me Anything episode come out is coming out, which are probably the, the most popular episodes I put out. So I’m excited for that.
[00:53:27] Joe: What do they ask you? Like what’s your favorite soccer team? [00:53:30] Jesse: I will say it’s not truly ask me anything, it’s ask me anything financial planning related.Oh. So we have, you know, questions about like the California fires, about annuities. I go deep on annuities. Have you ever looked at the IRR of an annuity? Don? The internal rate return. So it’s like you wait 10 years and then it starts paying you 7% per year. Mm-hmm. It takes you like 18 or 20 years to get your money back.
Anyway, we’ll save that for the podcast, but some good financial planning questions.
[00:53:53] Joe: That’s fabulous. And that’s it. The personal Finance for Long-Term Investors Podcast where? Where finer podcasts are found. I just keep repeating it so it starts rolling off my tongue. It’s that [00:54:05] Jesse: muscle memory. [00:54:06] Joe: Speaking of rolling off my tongue.What’s going on? Talking Real Money Don.
[00:54:11] Don: Same darn thing that’s been going on at Talking Real Money since like before the internet. We’ve been around that long. Uh, really? And one more or another wasn’t, did you like [00:54:21] Joe: ride your horse and buggy to the radio station? [00:54:24] Don: No. No. Can string you remember that technology?Oh, yeah, sure. Yeah. We, we use the latest technology talking real money. We’re just trying to make this whole process of dealing with money, particularly the investing part, a whole lot more simple. Than it appears it is because it is a lot more simple. We wanna put most of Wall Street out of business so that you can do most of this yourself with the help of some really honest people who tell you the truth.
So that’s what we do and we’ll keep doing it for as long as they’ll let us.
[00:54:54] Joe: Are you [00:54:54] Don: dozing Wall Street? Dude. Yeah. Is that what’s going on? Yeah. Without a meme. Coin to go with it. [00:55:04] Joe: Meme coin is extra. [00:55:05] Don: I dunno. Yeah. Meme. Meme, coin. Sold separately. [00:55:07] Joe: All right. We’ll link to Talking Real Money, personal Finance for long-term investors and The Afford Anything Podcast on our show [email protected].Doug, wrap this thing up for us, man. Oh, by the way, I, I. I forgot to say earlier, Margaret was so ha. Hoping she was hanging out with us live was so hoping Paula, that she was hoping you were gonna do great.
[00:55:29] Paula: Oh, thank you. Thank you for the support, Margaret, because she was like, go Paula, [00:55:32] Don: I need to add a thing.I need to add a thing. Joe, thank you so much for showing up at Retire Meet in Seattle. Oh, thanks. You did an incredible job. The audience loved you. He came out and spoke. He introduced Tom and me. Really appreciate you, uh, you being a part of that event. It was a great event. Thank
[00:55:48] Joe: you. Well, I’m so happy that you invited me.It was great to see our mutual fans there and, uh, so many people worried about retirement, which is great. It was, man, that place was packed. You guys just packed the house. Been doing it for 11 years now, so it was super, super fun. Alright, let’s uh, end on that high note. Doug, what
[00:56:09] Doug: uh, should we have learned today?Well, Joe first take some advice from Don McDonald. Pretty sure Don said there’s no better place for permanent life insurance than in your retirement portfolio. He
[00:56:19] Don: was paying attention. [00:56:21] Doug: He, I got that right Don. Didn’t I get that? Okay, cool. Second, Jesse said some pretty smart stuff about the 403 custodians at Red Creek High School.Seems like a lot of people pushing brooms to me, but I mean, can you clarify, Jesse?
[00:56:38] Don: He is not gonna do it. He’s not even gonna, [00:56:40] Doug: he’s gonna leave me hanging out there on that one. All right. I’ll figure it out for myself. But the big lesson, if you wanna see how high a human can jump, sneak up behind Joe’s mom with a firecracker.Now that’s a big bang. We laughed and laughed and because she was still holding onto a wrench when she landed, I get to go to the dentist. Thanks to former astronaut and teen heartthrob Don McDonald for joining us today. Wanna find out what Don looked like when he was on the cover of Tiger Beat Magazine in the seventies?
Sure, you do. So head on over to talking Real money.com. We’ll also include links in our show [email protected]. Thanks to pop culture expert Paula pant for hanging out with us today. Need answers to almost any trivia question. You’ll find the opposite of that on her fabulous podcast. Afford Anything wherever you listen to you.
Finer podcast, Jesse’s terrified about what I’m about to say. We’re all
[00:57:42] Joe: terrified. [00:57:44] Doug: And finally, thanks to this podcast, chief Dingus, Jesse Kramer, searching for the tastiest darn snickerdoodle recipe in the world. You’ll find that and more on his fabulous podcast. Personal Finance for long-Term investors, wherever you listen to podcasts.This show is the property of SB podcasts, LLC, copyright 2025 and is created by Joe Saul-Sehy. Hi, Joe gets help from a few of our neighborhood friends. You’ll find out about our awesome [email protected], along with the show notes and how you can find us on YouTube and all the usual social media spots.
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.
I.
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