Live from the Adobe Podcast Stage at FinCon in Portland, Joe Saul-Sehy brings the conference buzz straight to the Basement with a roundtable on what’s keeping money nerds up at night. Joining Joe: Paula Pant (Afford Anything), Jesse Cramer (Best Interest), and special guest Matthew Tarr (Coast FI Couple). It’s an in-person jam session on housing, interest rates, recession talk, and how real listeners can actually respond.
The crew digs into rent-vs-buy in the real world…price-to-rent ratios, down-payment math, supply shortfalls since 2008, and the sneaky homeowner costs (HOAs, insurance, roofs, HVAC, even lawn care). They debate timing a purchase (wait vs. lock-and-refi), then pivot to Coast FI readiness in a shaky market: PE valuations, cash buffers vs. “bonds as ballast,” the 4%/25× intuition, standard deviation in plain English, and Joe’s “fire-drill” IPS so you don’t make 2 a.m. trades. They close with early-retirement health care (ACA marketplaces, Medicare/Medigap incentives), Barista FI benefits (hello, school-bus driver health care and signing bonuses), long-term care tradeoffs, geo-arbitrage, house hacking, and spending for joy without blowing the plan.
Stick around for Doug’s segment—today he tees up a “Trading Places”-flavored trivia riff (frozen orange juice futures, anyone?) and wraps with three big takeaways from the floor in Portland. Think you can beat Doug to the punchline?
FULL SHOW NOTES: https://stackingbenjamins.com/live-from-fincon-2025-173
Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.StackingBenjamins.com/201
Enjoy!
Our Topic: Questions from the FinCon audience: Housing affordability and rent versus buy; interest rates and timing; recession risk and Coast FI readiness; portfolio behavior rules; and early-retirement health care choices.
During our conversation, you’ll hear us mention:
- FinCon collaboration vibe
- Housing affordability pressure
- Rent versus buy
- Price-to-rent ratios
- Hidden homeowner costs
- HOAs and insurance
- Interest rate context
- Down payment hurdles
- Supply shortage post-2008
- Emotional rate comparisons
- Waiting vs locking in
- Refinance strategy
- Coast FI readiness
- Recession risk framing
- High PE valuations
- Bonds as ballast
- 4 percent rule
- Standard deviation sanity
- Investment policy statement
- Selling to survive
- Buy the dip
- Income durability
- ACA marketplace choices
- Medicare vs Medigap
- Barista FI benefits
Our Contributors
A big thanks to our contributors! You can check out more links for our guests below.
Matthew Tarr
Another thanks to Matthew Tarr for joining our contributors this week! Hear more from Matthew on his show, CoastFI Couple, hosted with his wife, Yana, at CoastFI Couple – Podcast – Apple Podcasts.
Learn more about their journey to CoastFI by visiting their website at Welcome to the CoastFI Couple Podcast Website | CoastFI Couple Podcast – Leading Podcast where love meets financial independence
Jesse Cramer
Another thanks to Jesse Cramer for joining our contributors this week! Hear more from Jesse on his show, Personal Finance for Long-Term Investors – The Best Interest, on 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 at AffordAnything.com
Follow Paula on Twitter: @AffordAnything
Mentioned in today’s show
Join Us on Monday!
Tune in on Monday when we’re covering a few simple steps toward better money management.
Miss our last show? Check it out here: David Gardner on Breaking the Rules of Investing (SB1736).
Written by: Kevin Bailey
Episode transcript
My God, Dukes are going to corner the entire frozen orange juice market
live from Portland, Oregon. It’s the Stacking Benjamin Show.
I am Joe’s Mom’s Neighbor, Doug. And it’s that magical time when money nerds from around the country crawl out of their spreadsheets together at FinCon. That’s right. An entire convention of people who think compound interest is cocktail party. Small talk. It’s the kind of gathering that makes an actuarial convention look like a warehouse rave.
At 3:00 AM today, we are taking you straight to the floor of the Biggest Money Creator Conference in the land. What’s keeping your favorite money? Experts, audiences up at night, housing interest rates. The R word. Yeah, recession and a few more curve balls you’ll want to hear. More importantly, we’ll share what real people like you stacker can actually do about it.
So his mom upstairs always says, quit staring at the hot water heater and hit the button. Let’s take you now to Portland and Joe Saul-Sehy.
Hey there, stackers. I am Joe Saul-Sehy, and welcome back to a very special episode of the Stacky Benjamin Show. We’re so happy that you’re here and I’m super happy these people are here.
Let’s meet the crew. The woman who normally is way over Manhattan, is now sitting on my right pull of pants here.
I am so excited to be here in person. Things are always so much more fun face to face in the flesh.
It a hundred percent is like, that’s what I love about conferences. And it’s also Jesse Kramer, who’s also here normally in Rochester, New York, where I think the snow melt is finally gone.
That it’s September starting to get into fall now that, uh, second winter has finished.
That’s right. We can now see last year’s dead leaves on the ground because the snow has melted just in time for this year’s leaves to fall and add to the ever-growing pile. I I don’t know if people know that upstate New York is under 14 feet of, uh, dead leaves right now.
Wow. It’s the real calamity in America.
Yeah. Yep. Yes. Nobody’s talking about it. Nobody talking about, I think it’s a conspiracy, Jesse. Some say, some say D uh, I almost called you Doug. Oh, holy. Oh, what are you doing?
Gosh, the insult. We left him at home for a reason.
Dude. What are you doing? He’s in Portland, Maine right now by himself.
Can you picture Doug by himself right now? Like shelling a crab. Oh, he’s got this big fat, lower lip eating crab meat. Doug with crabs
I can imagine burn too. Too many jokes. Too little time. Anyway, where are we going with that, Jesse? How are you man?
Doing great. I’ve, I’ve loved this FinCon connected with so many people my first time in Oregon.
Portland’s a really cool city and uh, it’s been wonderful. I mean, a lot of really new people. Have you met any new people by chance? Joe?
You know what? There is one guy who I’ve been following for a long time. I think his show’s been around for a couple years, and we finally have him on a hot mic. Part of the Cofi couples here, Matthew Tar joins us.
How are you brother?
I’m doing good. I’m doing good. Yeah, thanks for, thanks for having me guys. This is kinda like a bucket list item for me. I have to admit, I my heart’s little powdering a little bit too. It mine too. Okay, good. ‘
cause I’m on with Matthew and it’s awesome. But you and your amazing spouse do this kick ass podcast.
Uh, tell us what Cofi couples all about.
Yeah, so Coast by Couples kind of a, a dream that my wife and I had about sharing our, our PHI journey and, and we talk all about our relationship through that stage and how we are trying to teach our kids to be a little bit money savvy. And so, uh, it’s been about a year and a half now that we’ve had the show going.
And honestly, it’s been a dream ’cause I’ve been able to rub shoulders with some of my favorite people on Earth. So, yeah, that’s all it’s all about.
Well, and the cool person you get to rub shoulders with, I mean you guys already rubbed shoulders before, is your spouse, who by the way, is way better on your show than you are.
I just, I hate to tell you that she makes work. I’m glad
you mentioned it. ’cause I’m not the star of the show. She definitely is.
Yeah. Yeah. But you guys together, I mean, obviously you’ve got chemistry, you’ve been, how long have you been married? Uh, over 10 years now.
Yeah. Yeah.
That’s amazing.
Yeah,
I’ve had to work with Doug for longer than that, and I’m ready for the divorce.
Paula, oh, let’s just, let’s just get that thing done. So let’s talk FinCon for just a second, Paula, so far this FinCon versus other ones, by the way. Mm-hmm. FinCon, let, let me define it for our stackers that have no idea what the heck this is. Mm-hmm. This is not a financial conference like economy or like a Camp Phi, which are great places for all of our stackers to go.
Meet other like-minded people. This is really helping. Creators of personal finance content, do a better job and reach more people. ’cause frankly, Paula mm-hmm. You can put our shows all together. Mm-hmm. Dave Ramsey, Susie Orman, you could put everybody in a stack. And still nobody in America’s listening to personal finance content.
Right, right. Unfortunately. Yeah, exactly. You’ve got 330 million people and we’ve, you know, Dave Ramsey’s reach is, what, 3 million or so maybe. Yeah. You know, and he’s, he’s the biggest and so, no, ours
is five.
Oh, I’m sorry. I didn’t mean 5 million. I meant 5
0 5 people.
I mean, if you think about as a proportion of the US population, even as a proportion of the adult population,
yeah.
It’s a drop in the bucket. There are so many more people that we can
reach. So to make things entertaining, to make people realize that this is not brain surgery, to make it as usable as possible, as quickly as possible, like it’s great. But this one versus other ones. Paula,
I’ve really liked this one. It’s been a perfect blend of.
Meeting with other creators, meeting with like video creators, long form video, short form video. People who are writing newsletters again, you know, newsletters. They kind of had a dip and they seem to have come back into mm-hmm. The zeitgeist. So in terms of the mediums through which people create content, whether that’s in the written format or the video format, um, I feel like there’s been a really, really good mix of people here.
Matthew, how many Fincons have you been to? This is only my second FinCon
y. Yeah. What do you think? This one versus last year? Yeah. I mean, I was real excited about last year ’cause I, I kind of, you know, had the chance to meet everybody that I’ve been listening to in person for, you know, 10 years. Right?
Yeah. So that was super exciting. This actually has been really great too. ’cause now I know a lot of people personally and I get to connect with them again. And so there’s friendships that are built and, you know, I’m a relatively newer podcast scene and so I’m learning a lot from pros. I’ve been doing this for over a decade and it’s really is a dream to be able to, you know, learn from the best.
Let’s put it that way.
Jesse, I’ve loved, this is my third FinCon every other year. So its Austin, new Orleans, and now here. For the listeners out there, the same way that say, okay, afford anything, Stacking Benjamins is this collaborative project to bring you really helpful information. FinCon is that version for us on the nerdy side of creating content where it’s a super collaborative and, and you meet people who are doing really interesting things, learning interesting things that we can then bring in into our own podcasts, our own newsletters, our own or even venture into new, new formats altogether.
And that collaboration, it really, it’s a rising tide that lifts all ships. I mean, that is one of the best ways to describe FinCon
and I know what some of our stackers are thinking maybe is you’re walking the dog that, you know what? That doesn’t apply to me. I don’t know my own little business, I don’t have a podcast.
I think the bigger lesson is, is that it’s brand you and whether you work for somebody else or you work for yourself, it doesn’t matter to hone your skills, don’t wait for somebody else to manage you. Don’t wait for somebody else to make you better at it. Go to industry conferences. It’s so important. Hmm.
Yeah. A lot of us are doing this completely by ourselves, just out of passion projects, and they just happen to take off with audiences that are interested or maybe experiencing something similar. And so why not talk and share and, and mingle and collaborate with everybody else? Yeah.
And I think about the fact that people, Paula, take for granted, you know, I’m gonna pay a couple hundred thousand dollars to a college that has a good ROI maybe, but maybe not, I don’t know.
But we won’t pay $5,000 to get coaching from the person that does the exact thing that I need to be better at in my life.
Right. What many people may not realize if you haven’t experienced it, is how much value comes from sometimes offhand remarks that people say when you’re just having a casual conversation that never would have come up in a prerecorded video, right.
A scripted, prerecorded video. Or even, ’cause I know some people have asked me, like, people from my audience have asked me, Hey, why do you, why do you board a flight and stay in a hotel? Why take all of that expense when you can just have zoom meetings with people and it’s because those levels of casual conversation that doesn’t really happen over, uh, remotely.
It’s almost like musicians riffing. Yeah. You know? Yeah. I say something and Matthew says something and Jesse says something and Paula says something and all of a sudden I got this brand new idea. I get this idea from a guy I haven’t seen in several years. An old friend Matt Givani, some of our stackers might remember.
Listen, money Matters. Matt’s back this year, I got like the best tip from this guy about our guides, which I already love and how to make ’em even better. Like it was incredible. Isn that cool. It, it was so cool. Just this chance meeting Paul, like he said in the hall, we are not here to talk about FinCon.
We’re here to talk about your audiences. You guys are obviously influencing a lot of people. You’re talking to a lot of different people. I would love to hear from all of you what your communities are worried about, and we’ll talk about those fears and the different things going on, maybe in the economy, maybe with the markets, maybe with just life in general, or trying to get where they want to go.
So that’s our theme today. I’ll give you guys a second to get ready for that mission. Uh, we’ve got a couple sponsor stackers that make sure that we can keep on keeping on and you don’t pay anything for this. So we’re gonna hear from them. And then Paula, Matthew, Jesse and I, we’re gonna talk about what’s going on in the zeitgeist live from the floor at FinCon.
All right, we’re recording. Live from the Adobe Podcast stage at FinCon in Portland, Oregon. One of my favorite cities. Jesse, you’ve been here before?
No, I haven’t, but I used this joke last night, you know, if it walks like a duck. We’re in Oregon, we’re in the home of the duck. I’ve been using
a, we’ve using
a lot of duck jokes.
We’re also, uh, Oregon State is here. I’ve been using fewer beaver jokes
and Jesse’s canceled.
You know, what’s the one from the naked gun? Nice beaver. Yeah, thanks. I just had his stuffed. This is so bad. Have any of you seen the new naked gun? Not
yet, no. Oh my
God. It’s the same stuff. It’s exactly the same. Uh, what’s his name? Liam Neeson. Tells Liam Neeson. Yeah. Tells Pamela Anderson. Take a seat. I already have plenty of chairs.
Thank you. Anyway, Paul doesn’t get it. I, I’ve never seen the original naked gun, so they’re all dumb dad jokes like that. Okay, cool. Why don’t you take a seat? And she’s like literally gonna take the chair home with her. Hmm. Yes. So funny, isn’t it? Yeah.
Amelia Bedelia.
Okay. Yeah, yeah. We’re gonna move on. Paul Pan.
Let’s stick with you. Let’s not ask you for humor. Let’s ask you for what are people worried about?
What’s one thing that people are worried about? Well, one thing I hear often from my audience is from people who don’t yet own a home. They feel like they’ve been priced outta the market. Oh, home prices from 2020 to 2021.
Nationwide rose. 17%. Wow. And, and that was just in one year. And in aggregate home prices overall are up about 50% higher than they were as of, I think relative to 2019 levels. So you have this huge run up in home prices, and then at least at the moment, you also have high interest rates compounding that.
Now that’s not gonna last forever. Eventually those are gonna go down, but sure, there’s the fed’s gonna have a series of rate cuts and those are gonna have a little bit of an effect, but it feels like a very long, slow process. And you know, rates will probably not realistically get back to the Zirp era like we used to see, you know, back in 2017.
So between those two factors, people really feel priced out. Okay. For people who dunno what ERP means, what the hell are you talking about
Per zeitgeist now? Zer. I know,
I like Z words I guess. Yeah. Uh, zer, zero interest rate policy. Oh, I gotcha. Yeah,
yeah, yeah, yeah. Nice. Thank you for that. I appreciate that.
Matthew, where are you based?
Uh, I live in Jacksonville, Florida.
Gotcha. Expensive housing there.
Uh, it’s getting there. I mean, most people from the north and the west kind of came over during the pandemic and ever since. And so we’ve had a lot more real estate booms and, and price increases just in the past three or five years.
I’ve definitely noticed that. You know, you mentioned about. Can people get in now? I think it’s, it’s not the best time to buy a house for me, if I were to start over again, you know, I, I personally would wait. ’cause I want my house to be the place that I’m staying and not having to worry about, uh, moving.
But I also want the flexibility of not being house poor. Right? Yeah. Like, I really am concerned about that. And so when I talk to my audience about, Hey, I really wanna buy a house, ’cause that’s the American dream, I, I would almost ask that. Well, you know, does the math make sense? Would you really wanna be tied down in such a high interest rate market?
Uh, maybe there’s a different option. And I think renting right now is probably the preferred option for me personally when I talk to people.
Dude, you brought up like three great topics. Let’s start with down payment though, Jesse. Yeah. If somebody’s looking at this gigantic down payment I gotta do, or some of these, you know, loans where I don’t have to put a lot of money down, well, what do I do to start trying to get that down payment together?
I, I mean the, the hard part about this conversation is I, I don’t know if there’s a magic bullet, like how do you put a down payment together? You really have to figure out a savings plan and, and figure out that number now to what Paula was saying is like. Well, if someone started in 2021 and they’re like, we wanna buy, this is our home and it’s a $300,000 home, 20% of that is 60 grand.
That’s our number. And now that same home is selling for four 50. 20% went from 60,000 to now 99,000. Yeah. So it’s not easy. Uh, one interesting stat I’ve heard a few times is that if you look at kind of like the new homes being built and then you divide that by the total populations, like new homes per capita, that since 2008, the great financial crisis, the housing crisis, that new homes per capita number is, is lower than basically any other time in American history coming out of 2008, the the big kind of mega home builders that buy some trache of land and build 200 homes on it, they didn’t wanna do that anymore.
Or maybe they couldn’t afford to do that anymore. And so that lack of supply is part of the reason why we’re where we’re at. There’s just too much demand and not enough supply, but it, it’s just not an easy problem. Like you can’t snap your fingers can fix that overnight. Can you?
Tranche is a great word.
Ooh, that was a good one. Word. Thank you. Thank you. A little. I think
it, is it French? Oh, tranche.
Feels, feels,
I think if you say it right,
if there, I apologize to all the French listeners out there.
Yeah, that was spot on. Like, oh, he’s local. Stick with Beaver. Jesse. I think he’s vocal. Paula, if you know you’re going to be, because I think Matthew raises a great point, which is if you’re not sure how long you’re gonna be somewhere mm-hmm. Why buy a house?
Yeah. You know, renting provides a lot of flexibility and you know, the thought exercise that I often like to walk people through is imagine what this world would be like if there were no rentals. If that wasn’t an option, we would have a society that would have no mobility. Obviously with, if there’s no mobility, there’s no socioeconomic mobility.
So rentals are a really important part of our society. They allow for people of all ages and all stages of life to have flexibility. I think it. A wonderful wonder, I’m a renter in my apartment in Manhattan, and that’s actually for a different reason. It’s not for flexibility. It’s because Manhattan is a place where the price to rent ratio, which is the home price divided by the annual rental rate, the price to rent ratio points in a direction in which it makes financial sense to rent.
And that’s true regardless of how much or how little money you have, you could have Jeff Bezos money and it would still make more sense to rent in a place like Manhattan. So that’s the other element of it, is depending on what city you live in, there’s certain areas like Cleveland where it makes a lot more sense to buy financially versus Manhattan.
It makes a lot more sense to rent financially regardless of how much money you have.
I could just see Jeff Bezos with his new spouse going, you know what? I did the math. On Monaco and I decided we’re just gonna rent. Like he’s not making the financial decision. I think he’s like,
well, he may. He himself may not be.
But as a thought exercise, imagine that money was no object.
Yeah.
But imagine if money was no object, but you still wanted to make the financially sensible decision,
the sound decision, it
would still make more sense to rent in Manhattan and to buy in a place like Cleveland or Indianapolis.
But Matthew, what used to, I think, make all of us fricking eye roll was when you’d hear people go, well, renting is throwing money away.
And I go, oh, okay. Come on. No. Now what kind of gives me eye roll is renting’s better for everybody. Like I’m gonna rent for life because of the fact that if you’re renting 5, 6, 7, 8, 9 years from now, that rental price is always gonna go up and you’re not in control of it. Now I know your property taxes are still gonna go up.
Mm-hmm. Your insurance costs are gonna go up. So those are still gonna go, but. Where do you make that transition from renting is the right move over to buying is the right move?
Yeah, it’s a tough question because you don’t really know when you set out to look at the housing market or the rent market, what the next 10 years is gonna hold.
You know, I think if, for me personally, like I knew that I was gonna be in Florida for at least 10 years, uh, because I had a kid there and I had family there. So like, it made sense for me at the time to look and buy ’cause I wanted to be able to ride that up and, uh, build equity. But right now, I mean, my house is expensive.
Everyone’s houses are expensive in my area because you’ve got increased, uh, expenses on, you know, mowing the lawn. Everyone’s trying to drive their business. And so, you know, it costs me almost $150 a month to like mow my lawn if I wanted to pay a service for it. So that’s just one example of all the extra fees associated to having a home that you don’t necessarily tie into directly when you’re doing cost analysis.
And so, you know, I try to really think about what my, my plan is and if I feel like I’m gonna be like planted. Then, then yeah, maybe buying is the best option, but can I afford it? And then can I house hack potentially, you know, like, what, what kind of house am I gonna buy? Is it a starter home? Am I gonna be, you know, doing like a, a three, two, or am I gonna have a roommate?
Uh, so I have to get creative in that, you know, option. But for me personally, right now in my stage, my kids are getting older. I want the flexibility. I’m looking abroad. Can I take advantage of geo arbitrage? You know, I’ve got friends that have moved to Bali now. And there’s no reason not to explore internationally if you are looking for a place to live.
Me personally, I just, I wanted to keep my options open. Sure. Yeah. Did
you find, living in Florida, a lot of people that we talked to in Florida have watched their homeowners insurance prices go up. Yes. Have your skyrocketed.
Yes. Yes. They have. Uh, there’s actually a, a piece of legislation that’s coming by in Florida’s, particularly where we’re trying to fight HOAs right now because they’re kind of unregulated.
And if some HOA says, Hey, you now need to pay X, we all have no recourse. We have to pay X and, and we can’t do anything about it. Wow. So that pushes people out and creates a lot of angry consumers, let’s put it that way. Wow. Well,
and HOAs too. You always have that neighborhood who’s the president of the hoa.
Yeah, exactly. Who like thinks they Lord over the neighborhood. That drives
me crazy. We, we know a few people with that kind of personality, you know what I mean? Do you what I mean? Yeah. We, yeah, we do. No, we hear on this panel, we know a few people. Yeah. Not to be named. Something both you guys just hit on.
And for anyone listening who is thinking like, I’ve done the math on renting versus honing, like owning, uh, doing the math on renting is super duper easy. Like, your rent is $3,000 a month. And maybe you are in charge of utilities or something like that. Understanding your math on owning is unbelievably hard.
’cause there are so many variables that exactly like math, you don’t think of, I, I wasn’t thinking, but when I bought my house five years ago, that I don’t know that the cost of replacing a gutter would be X or that technically speaking the cost of a new mower, which I wouldn’t have to mow my own lawn if I was renting.
And so my point is it’s really hard to do. And one thing I do like that, I think all of the good rent versus buy calculators or spreadsheets have is a really important variable is that how long do you think you’ll live here? Because like no matter the math, if you’re a younger adult, say, and you’re living in a new city, because that’s where your job is.
Like if you don’t know, you don’t know, you’re gonna live there for whatever it is, 5, 7, 10 plus years, that might automatically preclude you from buying a house because so many of the costs are front loaded when it comes to like a mortgage or something like that. So my point is the buying slash owning math on a home.
It has a lot more variables to it than I think the average consumer might be aware of.
That’s funny because we think of it as this layup, it’s all the same number.
Mm-hmm.
Because I know my mortgage number, but it’s not just the two things I brought up. Dishwasher breaking.
Yeah. Back unit breaking. Yeah.
House, new roof needing. Yeah. Right. Exactly.
So let’s go back to Matthew’s Lawn Service. Are you then Matthew Tar Lawn Service? You’re your own lawn service? No.
So I live on a slope and I tried to do that myself ’cause I wanted to save money. Yeah. Like I’m a pretty frugal guy. Yeah. So the idea of me pushing this lawnmower up and down a slope, I did it for a couple months and I hated it.
I hated it. So as soon as I was able to, you know, sit down with my wife and justify how much time I’d get back on my Saturdays, but I having to mow and like that was the one thing that I put in my budget that I felt was justifiable in me being a little selfish. I love that. Yeah. But I have to count for it.
Like my lawn care expenses have gone up every other year for, you know, the entire time I’ve in my house over 10 years now. So I have to justify that. And you know, in addition, I got, I had a new HVAC unit and I know the new roof is gonna come. So I, there’s things out there that I have to plan for
Polo.
Look at how happy he looks that he doesn’t have to mow his lawn. Yeah, yeah. I’m thrilled. Yeah. Yeah. Like spending money on the thing that gives you joy. Right. That clearly gives Mr. Tar a little joy.
Yeah. Yeah. You can see the joy in his face. Eyes light up. I light up. This is exactly
the same argument I have with my wife when she says, you know, that’s looking pretty expensive.
I’m like, but look at all the time I get back. So yeah, we have a woman who comes
every other Friday to our house and cleans. We’re pretty clean people, but that every other Friday when she comes and it’s the beginning of the weekend and I don’t have to do it. It’s so awesome. And it’s the thing when I was younger, I would’ve never done.
Once I started doing that, I’m like, why didn’t I spend that money sooner? You have any of those Paula?
I used to, I used to have a cleaning person. Yeah. Uh, not anymore, but I agree that. To walk into your home and to have it just be spotless and know that you didn’t have to deal with any of it. And the other thing that I noticed is that oftentimes if I had piles of stuff, they would organize it in ways that I hadn’t thought of.
Yeah.
And they would organize it in ways that were so much more clever and more efficient than anything that I had come up with. So there’s innovations essentially. I mean, it’s a small innovation, but it is, it’s a new idea, is an innovation. And their ability to see like, Hey, you know what? If we stacked this stuff in this way, it actually would make a lot more sense and it would take up less space and it would look meter.
Yeah, then that’s like something that you get from having more brains in the room.
I just invested in some new shelves that was just lit up my life and my board game collection looks badass. Now, by the way. It looks fantastic. I wanna go down that rabbit hole because I know that sometimes, you know, we talk about being frugal, but sometimes I think Matthew, we’re overly frugal and we don’t remember.
It’s about having more joy in our life, not just a bigger bank account.
Yeah. I’m totally guilty of being as frugal as possible. I was that guy who would stop and pick up every penny on the road. Like, that was me for years, and it was made dating really hard. Right. Nobody wants to really be with that guy.
But, but luckily my wife, over the past 15 years we’ve been together now, she’s kind of made me stop and smell the roses a little bit. So, you know, we talk a lot this on our show, like, what is it that makes my life enjoyable? Well, I’m gonna pay for those things. I’m gonna put more effort into those things.
I contribute now to like a date night fund, because before I would just ignore it. I, I wouldn’t really think about it. But now if I want to maintain a healthy relationship, I gotta prioritize, take my wife out. And so those are the things that we are putting money to that I normally wouldn’t do naturally by myself.
That’s fabulous. Let’s talk
about, Matthew mentioned interest rates, higher interest rate environment. We hear that a lot, Paula, but is this really a high interest rate environment?
Historically speaking? No, but you know, there’s that disconnect between, I, I can tell you historic data, but that doesn’t affect how you emotionally feel.
And so Sure. If we zoom out and we look at the last 50 years of interest rate history, historically speaking, this is a fairly normal interest rate environment. But if your lived experience is that you came of age in the 2010s and you saw all of your friends get these mortgages at three, two and half, 3%, two and a half percent.
Yeah, exactly. All your friends locked in mortgages at that rate back when homes were cheaper and you didn’t, and then of your group of friends, you feel like the music stopped and you’re the one, what’s the musical chairs? The music stopped and you’re the one left standing. Yeah. Right. That’s a really difficult emotional experience and nothing that I can say about historic norms, you know?
Uh, but look at what it was in the 1970s. Right? That’s not gonna great. Yeah, exactly. Fantastic. That’s not gonna heal that wound. Really,
Paula? I was talking to someone here at FinCon, our mortgage size, the amount we borrowed is within like $5,000 of each other. So when you’re talking like a six figure mortgage, we essentially have the same borrowing amount.
You and your friend? Me and me and another Fin Conner. Okay. And his interest rate from like 2021 or 2020 something like that is 2.75% minus 6.5%. His mortgage payment is something like half of mine. And like I’m just sitting there like, I’m happy for him obviously, but in the back of my head I’m like, oh, like our mortgage could be half of what we’re currently paying.
And it’s crazy. So you’re right. Like even though 6.5% in the historical scheme of things isn’t that bad. Yeah, there’s, there’s some bad fields when I know that. Anybody who got a mortgage in whatever it was from like 2017 to 2022, who has got that two or three or 4%? Like they’re in a much better spot than, than we are.
Whatever. Count my blessings, it’s fine. But yeah, I, I don’t care that people paid 14% in 1982. Why should I care about that?
Right.
Yeah. But houses back in 1982, 14% were way less expensive in relation to Good point. You know, salaries, total
cost compared to Sal. Yeah, it’s a very interesting. Housing time that we’re living through right now.
Which is why I get frustrated when I hear older people go, well if, if they just buckle down, you know? And I’m like, it’s not the same man. You cobble in together. $8,000 for your down payment is not the same as somebody trying to get 90,000. ’cause they live in the Bay Area.
Yeah. Yeah. When you say older people, could you add some definition to that Jeff?
Way older than me. I’m saluting Jesse right now. Everybody give a nice, nice one. Finger salute. Thank you man. Uh, Jesse, let’s stick with you for a second because let’s say that Paula’s math works out, right, and, and the mortgage makes sense. Matthew talked about still might be with the interest rate time, he might wait.
Do you agree with that? Or if the math makes sense and you think you’re gonna be gonna be around you instead lock it in and then refinance.
I’m more of the mind of lock it in and refinance for a couple reasons. A, I don’t want to be in the game of predicting future interest rates. I mean, even though I agree with everything that you guys have said here, like most likely in the coming six months, interest rates will start to go back down.
Like that’s what the bond market is predicting right now.
The data we’ve seen just in the last few days have have kind of mm-hmm. Shown that. Yeah.
And so that’s the first reason why is like, if I can help it, I don’t wanna be in the game of predicting future interest rates. And then the second reason why is that at the end of the day, I still don’t view a, a personal home as an investment.
Mm-hmm.
I don’t, I view it as a place to provide shelter for your family. And, and to that end, it’s not that I want to be stupid with my money there, or I’d want anyone to be stupid with their money, but it’s, it’s, if you find your dream home and you can pull the trigger today and you can win that bidding war, ’cause Lord knows that’s probably gonna happen in today’s environment.
I think you should do it. And sometime in the future, whether it’s in six months or 12 months or five years, maybe you’ll get a chance to refinance and make it smarter financially, but at least you have. Provided that family home that you wanted, and I think that’s the first priority for me or for people who I talk to.
Guys, we’ve covered one topic. We’re gonna cover three. Initially when I planned this, I thought we were gonna do six, but I’d rather cover less and dive deep. So we’re gonna get two more after the break. Stackers, we’re gonna be back from the floor of FinCon in just a moment.
And did you miss us? I bet you did. Matthew Tar, that’s me. What are Cofi couple listeners worried about?
Yeah, so I did a little poll with my community and what I’m hearing a lot of right now has to do with the maybe potential of AI taking jobs and the potential for a recession coming. We, we have no idea, can’t predict the future, but there is this feeling of uncertainty and for many listeners that are roughly, you know, my age, I’m 39 right now.
We haven’t gone through too many downturns in the past. My investments have been pretty consistent and. You know, that’s been a blessing, but it also has given me a little sense of maybe recency bias. I, I’m expecting an average 10 plus percent growth. And so my community we’re, you know, coasters or we’re trying to become coast phi, uh, and there’s this fear of like, well, can I be reliant upon this 10%?
Am I ready to leave my job and start just covering my expenses? Because if I’m expecting a 10 year, you know, dip or, or a stagnant growth rate, that really impacts my plan. And so that’s the fear right now. And I guess the question from, from that individual would be like, what do I do? Do I change my plan or should I be more conservative?
Should I change my asset allocation? Like, what would you all.
Oh, that’s fantastic man. Well, let’s dive into those. ’cause you’ve got 15 things that you always bring up. Great. Like five different places for us to go. Hey, I only get one shot at being at this table, you guys. I’m trying to be prepared. Right? If you keep doing that, my God, we’ll get rid of Doug.
Um, Jesse, let’s start on Matthew’s list. I wanna start with this idea of a possible downturn coming because I was watching CNBC on the plane ride on the way over here. And, uh, Jamie Diamond from, uh, JP Morgan Chase mm-hmm. Was on, and they have a new headquarters building, but they were talking to him about the same thing Matthew brings up about the potential for a downturn.
Right. And Jamie Diamond said, and I, not direct quote, but he said, there’s probably a downturn coming. And when Jamie Diamond says, and JP Morgan Chase has so much data, so, so much data, when he says it’s probably coming. The Matthew’s probably not wrong. So what’s your first thought as a guy working in a financial planning firm about that possibility?
Yeah, I mean, it’s funny, one of the notes I took when I was thinking about what my one thing will be, so I, this won’t be it, but Right, an overvalued stock market. Now we’re talking, maybe the economy might go through a recession, but the, the stock market right now too, the, the average price to earnings ratio is 30.
Historically, it’s usually between 12 and 20. And the SP 500 is at an all time high. So if you’re about to start coast high and that whole idea of a, a multi-year downturn or a recession where I might lose my job before I wanna lose my job ’cause I don’t wanna retire, like I totally get the fear in that.
I wanna talk about that. Could you go on for a second because.
Some of our stackers might not know what PE ratio really even means. Yeah, sure. Sure. So it’s the price of the stock. If you take all the shares of the stock, and this is what the stock’s priced at versus the earnings of the company, that number that it creates is the number of years it’s gonna take based on earnings.
Yeah. For that price to be justified. Totally. So if you’re saying 12 to 15 years, normally it would take to justify that price. Yeah. Now it’s gonna take fricking 30 years.
Yep. Yep, yep. And and right. The, the simple analogy is, you know, if you’re running a lemonade stand that made a hundred dollars last summer, how much as a company is your lemonade stand worth?
And someone might come in and say, I’ll pay a $2,000 for it. Well, the price 2000 divided by the earnings 100, it’s PE ratio of 20. And just, yeah, Joe, you’re right. That person is assuming that either at a steady clip of not growing the company, they’ll get their investment back in 20 years. Right. Yeah. Or what they’re really saying, and what’s going on right now with this high P ratio of 30 is there’s a lot of optimism, maybe irrational exuberance in the market of investors saying, I think earnings are going to continue increasing so that that earnings portion is gonna go up, up, up, up and will later in the, you know, five years from now, today’s price is totally gonna be justified.
’cause look at how the earnings have grown. Maybe that’s true, maybe not. Uh, but, but either way, the idea of, yeah. I mean a, a recession and or the market crashing in some way, bear market, whatever you wanna call it. It’s this weird dichotomy in my head where on the one hand I say we have been here before, like, you know, the market has crashed before, uh, we’ve had recessions before.
And again, this is where Paula, it’s gonna echo exactly what you said. The problem with that logic is that that idea of reminding people of history mm-hmm. Is like, that might not make me feel better today. Right. Right. And so for that reason, I mean, that is the reason why if someone’s seriously consider.
Pulling the trigger on fi on financial independence, retire early, or just retirement in general. Tomorrow they need to have some sort of a conservative asset in their portfolio. Mm-hmm. Right. Maybe it’s cash, maybe it’s bonds to each their own. A bigger question might be, well, how much, and that’s where I was on a financial independence podcast a few months ago and I brought up the idea of having eight to 10 years worth of bonds and or cash.
And a lot of listeners were like, who the hell is this guy? And why is he so conservative? And it’s like, well, listen, if you look at the 4% rule and depending on how much money you have, so I’ll quiz you guys. We’ll go live. So if you have the 4% rule and that’s your retirement guidepost, how many years worth of money do you have?
If you’re following the 4% rule, does, does that make sense?
Well, but if you have the 4% rule, you, according to Bill Benin, yeah. You can draw down four, actually. 4.2%. Yep. Until infinity. Right? Totally agree. Totally
agree. But how many years of expenses do you have in your portfolio?
Well, how big is the portfolio?
What’s the value of the portfolio? It’s a million dollars. Oh, then 40,000.
Right. And so 40,000 times what? How many years? I, I guess my point is 25 years. Right? It’s the 25 x rule. 4% is the 25 x rule. It’s the same
thing.
So yeah, I guess what I’m saying is that when I say you should have 10 years worth of bonds, really what that’s saying is that 40% of your portfolio should be in bonds.
Right. But Bill Benin’s research is around, so his statement is not that you have 25 years worth of expenses. It’s that if you draw down 40,000 a year on a 1 million portfolio Yeah. Because that portfolio is going to continue to grow. Oh, I know.
Yeah. I’m, I I understand that the portfolio is growing, but I’m saying day one of retirement mm-hmm.
You have 25 x your expenses in your portfolio.
Right.
What I’m saying is that if someone were to say that they have 10 years worth of bonds, ’cause it’s just a, a round number, they are going to back themselves into a 60 40 portfolio. That’s the only thing. I’m trying to reach a conclusion here. ’cause they have, that’s maybe I, I’m not explaining it clearly, but the point is that if you’re entering retirement, I think you have to have a, a reasonably conservative nest egg.
I mean, and the cool thing about what we’re talking about is that Bill Bank’s research, at least initially, was based on a 50 50 portfolio. Mm-hmm. 50% stock, 50% bonds. At the end of the day, some sort of conservative ballast is needed. How much. To each their own talk to, uh, OG about it. But, uh, well,
and that’s where we need OG here, because he, he would disagree with everything you just said, Jesse.
I know, I know. He would disagree. It’d be a great fight. Yep. Yeah, it’d be fantastic. So Matthew, now you gotta be OG and fight with him. Fight with him right now. Yeah, let’s go. Well, I,
uh, well, I, I agree to an extent. You know, I think it’d be hard pressed for me, uh, because again, I’m living frugally. I’m trying to cover my, my annual expenses.
My plan is to be retired hopefully by 55. That’s my current trajectory. So if I were to sit here and say that I had eight to 10 years of cash on hand to cover my expenses,
mm-hmm.
Oh man, that would change. That would make me feel comfortable for sure. But that I would also, that would, on the flip side, I could bring my 55 year retirement date much closer if I invested some of that.
So it’s, it’s, that’s the concern, that’s the balance. Like how comfortable am I with the math and with the potential for, you know, this, this maybe 10 year plus. Uh, stagnant market. Um, I, I don’t know. I, I think I would be uncomfortable with that much cash on hand. Uh, given my experience in the market, which granted is, is only limited based off of the past, uh, you know, two decades or so.
Sure. Yeah. Yeah,
because Jesse, it makes me feel horrible. Kinda saying what you’re saying, Matthew, is that I’m like, that’s just too much. Yeah. That just to me is just crazy. Too much. I mean,
well actually, you know what? Now that I’ve thought about it, I will actually speak up in defense of Jesse’s position.
What? Yeah, because Okay. ’cause we’re trying to hang ’em out to dry here. Well, alright, so let’s take the lower of the two numbers. Let’s take eight. Yeah. And let’s say that, ’cause Jesse said a combination of cash and bonds. Cash and bonds. Yep. Let’s assume that the majority of that was bonds. Sure. Maybe there’s like six months of cash and the rest of it is bonds.
If on day one of retirement you have 25 years worth of expenses in your portfolio. Then eight years is one third, which is 33%. Yeah. So that’s a 33% bond allocation. Yeah. So that actually makes sense
to me. It might not be too unreasonable. Yeah. And, and maybe if someone’s coming from the FI community or, or just if someone I, I do understand there’s this, um, Joe, you might have to remind me of his name.
Nick Murray.
Oh, Nick Murray. Nick Murray
is this advisor. He’s this financial advisor coach. Wonderful. Writes some really nice books. He has, like, his advice to his own clients in his advisory practice is Zero bonds.
Zero
bonds, all stocks all the time forever because of the long-term track record.
And that’s who OG by the way, is a disciple of, is Nick Murray.
He loves Nick Murray. And he’s like, Nope, no bonds.
Yeah. But, but the counter argument is what Matthew just brought up of, well, if you didn’t own any bonds in, in 1999. Those next 10 years, were totally gut punching, gut wrenching if you were a retiree entering retirement in late nineties. And so the question is here we sit at a point where, okay, some people are worried about a recession, some people are worried about an overvalued stock market.
What if the next 5, 7, 10 years resemble that time from our past? Do you want to be in that position again? And that’s just a challenging question to wrestle with.
And, and you know what I like about that though, Jesse, is that when you talk about the turbulence, and the true question is, is can you hang on or not?
Mm-hmm. Because it only works if you stay in the plane to keep the analogy right. Right. Because I think OG also says this, he’s like a hundred percent stocks. That is the right way to go according to markets. But if you blow up your plan because you couldn’t take the volatility, then it was the worst thing you could have done.
I mean, when we were flying out here, we hit turbulence over Montana and I was in an exit row and I. It almost jumped out. No, it’s so true. It’s, it’s okay. I’m not flying home. I, I call it, I wrote, okay. I wrote a blog post once called Selling to Survive, and the whole point of the blog post is that people have this flight or fight response at times to the market that is just like a flight or fight response in some other part of life.
And they feel this need to sell, even though we all know the rational thing is not to sell, but they feel this need to sell in order to dampen that fight or flight response. They are literally selling because some survival instinct in their brain is saying, you are in danger and you need to get out of this.
So we wanna avoid situations where people feel the need to sell to survive. And I’m of the opinion that if a substantial bond allocation helps you. Avoid that situation, then it’s the right thing to do and it has to be the right thing to do. Yeah. And maybe that means that you can’t retire at 53 and instead you need to retire at 56 because you have this extra bond allocation.
Because, uh, your bonds aren’t gonna grow as much as your stocks, and that’s what the math says. But at the end of the day, as you said, Joe, like the idea of someone blowing up their own plan or jumping out of the plane at the wrong time is infinitely more damaging than the idea of like, well save a little more money and put it in something conservative.
You know, for me, a key metric back when I was a financial planner to have my clients understand was this thing called standard deviation, which shows you how much up and down it will have on a normal day. So if it’s a standard deviation of 15 and Uber nerds, this is not exactly how it works. So I get that, but that means it could be plus 15 or minus 15.
I know that’s not perfect, but that’s a good place to start on any given day. So if your portfolio does plus 15 and you’re high fiving yourself that you’re a genius, that’s a normal day in this portfolio. And also if it’s minus 15 and Jesse’s gonna open up the door to the plane and jump out, it’s a normal ride of that.
So I would go over, listen, you might not know what standard deviation is, but this is what it means. It means minus 15 is gonna be what this will do and it’s gonna be normal. And you know what people would say at first? They’d go, that sounds fine, that’s fine, I’m good. I go, no, no, no, no. Let’s say this. You have a million dollars and you just lost $150,000.
And that same person goes, oh, that’s not fine. That is not fine at all. Mm-hmm. Like the plus 15, minus 15, not the thing. And then we would make the portfolio more, you know, have it have less bounce predictably so that they could sleep at night.
Yeah. Yeah.
Was super important.
Is this where we talk about the Mike Tyson quote?
What’s it, Mike? Bite your ear off. No,
every everyone has a plan until they get punched in the face. Until they get punched. Oh yeah. And it is a joke a little bit in these investing circles ’cause it’s like one of those quotes that people, it’s like Warren Buffett. Everybody quotes Warren Buffett. And in these conversations everyone brings up the Mike Tyson quote.
And to some extent, for some people there is no way of explaining it other than the fact of like, you’re gonna have to get punched to understand what it feels like. ’cause some people are like, you know what, 15% wasn’t that bad. I know enough about the market to feel okay. It wasn’t that bad. And other people, Joe are like, get, I’m gonna jump out of the plane.
It was horrible. Open that emergency exit.
Paula, what was your first big downturn as an investor? Which downturn did you live through first? The Great Recession. Okay. The 2008 Great Recession. Tell me about your emotional experience during that time.
So I had not been investing for that long prior to the 2008 recession.
So I, I didn’t have a lot to lose. I was excited about the opportunity to buy low. That excitement lasted for a number of years afterwards, like. 2009, 2010, 2011, 2012, like all of those years I recognized we’re fundamentally buying low years. And I mean that both in terms of stocks and in terms of, uh, the real estate market.
Sure. Not excited about
people’s pain, but excited about people would sell and, and not real estate. Some people are forced to sell. Right? But in the stock market, in the stock market, some idiots are out there selling their stuff at the wrong time.
Yeah. Yeah. So I, I was excited about the opportunity to buy low.
What I was confused about is, so this wasn’t an emotional thing, but this was based on my lack of financial education At the time. I was hearing people say, oh, you should never hold in a down market. Yeah, I heard people say that and they had their arguments and it sounded very rational. And I was like, oh, there’s a very rational case to be made for not holding in a down market.
So that was actually the thing that threw me off course. It wasn’t an emotional feeling of I’m scared by watching, you know what little I have drop. It was, oh, I’m being swayed by these very logical sounding arguments that I’m hearing from people who say that they are experienced investors and they have made a very persuasive argument as to why holding in a down market is a bad idea.
Annuity sales always go through the roof during these down markets. I mean, it’s a perfect time to go, Matthew. Yeah. You don’t want this to happen. I mean, look at why don’t we, why don’t we guarantee you some upside and you will never lose any money. Doesn’t that sound great? It sounds great.
And
I
considered annuities.
If I had more in my nest egg
Yeah. I wouldn’t go near. Yeah, exactly. I mean, it’s,
yeah, it’s not, not something I’m, but,
but, but, uh, 2008, your first down market too, then.
Thrilled in 2008. ’cause that was my prime earning years, and I knew that everything was on sale, so I went heavy in investing in 2008. I did, I got lucky.
But this, this is, if the, uh, future happens, we do have a recession, this’ll be my first time that the market is down and I am coast. I i this close to barista. I, I would be pulling out for my portfolio. And so I have to have a plan. So I’d be nervous now, but it, I think it’s dependent on my age, you know, and my, and my plan.
And Coast Five means again that you’re gonna keep working, but you can stop investing.
Exactly. I, I no longer have to contribute to my retirement accounts to be able to be Okay. Come 55.
How far can the market go down before you’re no longer coasting and you gotta redo it?
Yeah, I think it comes down to how long will the recession last, if it’s a 10 year recession or, or a 10 year no growth.
That’s too long for me. I want to be able to still achieve the amount that I need for my fine number at 55. Mm-hmm. And so every year I’ll be evaluating that, and I’m still working, I’m still bringing in what I need to cover, but my hope is my wife just left her job two months ago, and my plan was to move to barista at some point and to start tapping those accounts.
And I’m not gonna do that if I don’t have a couple years of cash saved up. Mm-hmm. Or if I’m comfortable with the market being down, I’m not gonna tap that account. So it’s just a strategy and I think it’s worth discussing. Yeah.
Paula downturn coming. Mm-hmm. Jamie Diamond said it. What’s your first thought?
Well, I think we should always be prepared for a downturn. I mean, I cannot predict whether or not one is coming imminently. Well, you’re off this panel. Yeah. You know,
that’s, that’s the whole reason you were here. If Paula can predict it, who could?
I think even Jamie Diamond, and I respect him greatly, but.
He can’t prognosticate with any degree of certainty as to if and when the next downturn might be. He, well, and to be clear,
here’s what he said. He said it looks very apparent that it’s coming. He goes, I don’t know when. Mm-hmm. And I don’t know how long, and I don’t know how deep, which also means, well, you could say that Jesse said, anyone could say that Jesse’s looking at me.
Anyone could say that at any time. Yes. And here’s one, I, I’m predicting that right now. I, I could, Jamie Diamond and I both said at some point the market’s gonna go down.
Right. Maybe I could Google it. I think it was, I’m gonna estimate 18 months ago, maybe 24 months ago. Jamie Diamond, I remember this because of his specific noun that he used, a hurricane was coming.
A hurricane, hurricane. You kinda look at what the last 18, 24 months have been. I, I don’t know. I, I don’t see that hurricane per se, and so I, he might be right this time, but you’re right, I mean. Anyone can say that at any time and within a few months, a few years, they’re probably gonna be somewhat right. I live on the East coast, so maybe he was being literal.
Basically we knew there was Hurricane Milton and there was hurricane. Yeah, pretty sure this is.
Hey Jacksonville a hurricane. I was gonna say,
isn’t it weird that Florida man points out that he hurricane, he might have been literal, didn’t mean I moved or left. I’m still there. H Yeah, the guy, hurricane
Helene.
Yeah, maybe. Maybe he was referring to that,
right?
Maybe he’s a weatherman.
Yeah. And he’s like, you know what I’ll do, I’ll move to the mountains around Asheville. Oh wait. Oh no. Like who would’ve known like holy cow. Too soon, hurricane. It is. It’s always too soon. Yeah. First thing, Matthew, you think strategically if there is a downturn, like what’s on your mind?
Strateg, what would you do and what would you not do?
Yeah, I’ve thought a lot about this. You know, I’m actually in the camp where I don’t have any bond allocation. I am still in my growth phase. Mm-hmm. And I do have a roughly call it, two years of cash on hand and that’s enough. I’m hoping to weather through a two to three year downturn.
Yeah. And I don’t have intention to stop working in the short term, but if I want to, I want the option. And so I’m trying to be as careful as I can with still high growth potential. Um, I want to stay in the market ideally and I don’t wanna have to pull out,
but, so that means hold number one, you would hold in endow market
given my age, you know, 39, I’ve got enough time left in my clock to be able to weather a potential decade of no growth.
And that’s unfortunate and I’d have to still work longer than I’d want to, but I still feel like I am more bullish in this than bear. Gotcha.
Jesse thing you do and the thing you don’t do in a down market, you’re saying for me personally, yeah.
A thing I, I don’t do would be sell. Uh, I don’t know when I’m going to retire.
It’s certainly not gonna be in the next, well, we have one, 1-year-old home and a second one on the way now. So I don’t think I’m gonna retire in the next 22 years. So my timeline’s long enough to not sell. I mean, something I would do though is maybe feel a commitment to double down into the way that I’m bringing in income.
It’s not that I wanna sit here and hit the hammer and be like, you must work harder. But that combination of extra earnings buying into a market while it’s low and in a recession, unfortunately, people do lose jobs, and it’s a scary idea. And so you just wanna make sure that hopefully, ideally you aren’t one of those people, and that your, your income is there to support your family even as maybe, um, you know, other families out there struggling.
Great point. Paula,
if there’s a downturn, I agree. Don’t sell, double down, buy low. Buy the dip. So what I would not do is I wouldn’t sell, what I would do is I would try to free up as much cash as possible to be able to buy the dip. But what does it mean to free up as much cash as possible? Does that mean downsize to a smaller apartment?
Does that mean curtail, uh, you know, restaurants and clothing and have some of that know run around naked? You know, well, let’s stick with the clothing that I have. Okay. You know,
thanks for
that. Become a nudist.
What
would I do in a recession? Become a nudist.
We’re like, Jesse, this is a family
show. What would I keep the same in a recession?
I would still be a nudist. They didn’t want me to come to FinCon, but I’m here. They made me put on a Speedo.
So I would have to give some thought as to what it would mean, what would be the sacrifices that I would be willing to make in order to free up that money to be able to buy the dip. But if it was a severe enough downturn, I mean.
The more severe the downturn, the more excited I get, given that I have decades ahead of me, the more excited I get about the opportunity to buy load.
I think for me, I would, and even knowing one’s coming at some point, like we said, right? Predictor,
hurricane’s
coming. Yes, it is coming. Not sure when it’s like winter is coming, right?
Winter is coming. We know that. So, um, I think we do know when
winter is coming.
We, yeah, we do. We, we can’t forget that we know the uh, uh, just ended in Rochester. We, knowing that, I think now’s a great time to get what we call an investment policy statement because the one thing I don’t wanna do is react.
I wanna feel the emotions. That’s okay. But if I’m ever in my damn Schwab account at two in the morning after a couple glasses of wine during a market downturn, you know, that’s bad. The thing I hate hearing online is when people go, the market just went down, how do we react to this? Yeah. Right. Yeah. How do we react?
Have I ever told about the fire drill analogy with you guys? Like one of my favorite things in the world is like, okay, remember when you were six years old, you’re in Mrs. Jones’ first grade class and the fire alarm goes off. Mm-hmm.
And you
stand up and you get in line and you kind of parade out towards the playground and all the other kids are out there too.
And you see your friends in the other class and three minutes later the bell rings again and everybody goes back inside. And you do that like four times a year every year throughout all of school. Why do you do that? It’s because when there’s an actual fire, the last thing you want are, and there’s actually like some smoke in the hallways and like Mrs.
Wick’s class is actually burning. The last thing you want are a bunch of children literally panicking because it’s happened before and it’s really bad. And so you practice when times are calm so that you know what to do when times actually get bad. And it’s the same thing here. You set something up when things are calm so that when things get bad, you go, I’ve put some thought into this.
I’ve thought about this. I know what I’m supposed to do. I know how I’m supposed to react. I know how I’m not supposed to react. Let me now execute that plan. So anyway, that fire drill analogy is something I think a lot. Great analogy. Yeah, that’s good. Fantastic.
Jesse, you got the last one. I saved you.
Three minutes for yours.
Well, hey, I mean, I’ll bring it up and we can either dive into detail or maybe we can have Matt on another time. ’cause I, I wanted to pick Matt’s brain about this specifically. I’ve gotten some really interesting questions from either early retirees and maybe like the really early sense, like people wanting to retire at 40 or just people who are like, I’m 57 and wanna retire next year.
And that question is, you know, the a CA, uh, American Care Act, you know, Obamacare, Medicare, Irma, private healthcare. Like, how do I tackle these healthcare questions and, and not that things are necessarily changing right now. It’s, it’s not like, you know, the first two topics where we’re like, oh, we’re kind of in an interesting time.
It’s more just the idea that like, I feel like there’s a decent amount of confusion out there about how people. Tackle healthcare in either early retirement, just regular retirement. Um, and so that’s just been a fun, interesting topic that I’ve been digging into lately with, with some of my audience.
Paula,
oh, I just wanna jump in and say we’re here at FinCon in Portland right now and one of the things that I have learned just started learning about in the last 24 hours, I went a little bit last night down the Medicare rabbit hole.
Mm-hmm.
Wow. Wow. What an interesting topic. So, not to shell for my show, but like on afford anything, but I will anyway.
Right, exactly. You know, you don’t have to hear it from me. You can use Google and find somebody else. But one of the things that I will be starting to create some content on is Medicare because. I didn’t know anything about it, and now I’m deep down the rabbit hole and it’s actually fascinating. Mm-hmm.
It is like, wh like, mind-blown. Fascinating. So anyway, that’s my new obsession. I’m a Medicare girly, um, you know, like a,
that’s
a first F double I fire, um, fire,
fire, fire fireman. Maybe throw an A
in there and you could be fireman.
Oh, quick say tm. TM trademarked that right now before somebody steals it. So Paula, I hope they’re good.
You can learn from anybody. I hope they’re good. That’s, did you get that passive aggressive from mom? Like, that was so good. No, no, no. You know, you can get it anywhere, but you know.
No, you can, you can, but that’s, but I sincerely hope
they’re
fine. No, no, no. Really. No. The reason that’s sincere is because there are a lot of scammers out there who are pushing Medicare Advantage plans and they’re pushing plans that have an an incredibly high commission payout to them.
Even though that’s not necessarily the right plan for you. And so there’s a huge financial incentive for people to be pushing the wrong information. That’s why I said I hope they’re good. It’s not a passive aggressive whatever. I genuinely hope they’re good because if you are getting information from a trusted source, then you are getting information that is told in a neutral way in which the provider of that information has no vested interest in you making decision A versus decision B versus decision C.
But if you are getting information from a biased source in which that source has a vested interest in you making decision C rather than A or B, then you are getting skewed information. And unfortunately in the Medicare arena, there is so much bad information out there because the incentives are misaligned.
It’s, I think it was Charlie Munger who said, show me the incentives and I’ll show you the outcome. And there are such misaligned incentives when it comes to Medicare information.
Matt, you said you’re 39? Yes. Uh, how old is your spouse or is she older or younger? She’s 38. Okay. 38. And she’s already stopped.
Yeah. Yeah. So how did you two think through healthcare options as early retirees?
Yeah, I, I wish she was here because we went down the rabbit hole, but admittedly she was the one kind of leading the charge trying to figure out if she could leave her job right. And so we looked very heavily at the a CA and the open marketplace.
And we did buy a plan just in the past couple weeks actually. So we are now one of those plans. It is expensive, and we had to figure out, well, if we had to go back to work, if a recession does happen, we’d have to get a job that would essentially cover some healthcare. So that’s why Barista FA is what it’s, it’s called, because usually when you’re a barista fi stage, you’re pulling from the market, but you’re not pulling enough and you still need to cover your healthcare.
And so you go and work at Starbucks who offers even part-time employees healthcare. And so that is something that we’re considering
our, our local school system is always needed bus drivers. And outta my run the other day going by the high school, they had this big banner and the big thing they were emphasizing was you get healthcare if you drive the bus.
Yeah. It’s, it’s like a huge selling point apparently. It’s funny you bring that up. ’cause my school, like my son’s school also has that same banner and there’s a $5,000 signing bonus.
Wow. So my
wife left her job. We’re driving past this banner every day going, Ooh, that’s looking awfully tempting. And so we might actually do that.
And she’s actually entertained the idea. So my son might get real lucky on the bus someday. So
I was a bus five. You heard it here first. Bus
five. That’s right. I wanna be bus five. Get on the bus. I hear it now. Get on the bus podcast. Yes.
Yes. I just remember being in high school and getting lucky on the bus.
Just had a whole different meeting. I’m sorry, you got healthcare on the bus, Jeff. I was like, where? Where is this going dude? Yeah. So Jesse, I think not even just healthcare, but I think you even gotta put the long-term care. Issue in that as well, don’t you? Probably,
yeah. I mean, long-term care is another one that I’ve, I’ve taken some deep dives down.
I still won’t consider myself like a long-term care expert. It’s just really hard. So my understanding, long-term care insurance is a tough one ’cause it’s very expensive. Premiums can change over time. Like a, a lot of current people who maybe are in their late seventies, eighties who are starting to benefit from long-term care insurance, they saw their premiums multiply by ridiculous amounts between times they bought the insurance policy 25 years ago and today.
And then for some people, you never need the long-term care insurance. Like you never need it in your life to cover some sort of expense, but that’s what you’re hoping for. Mm-hmm. Correct. Exactly. I mean, you
don’t have car insurance going, man, I hope I get in a severe accident. So this baby pays,
you’re totally right.
I mean, you are totally right. It’s just that matter of do you self-insure and build it into your retirement plan. Yeah. And say, listen. This $250,000 pot of my retirement dollars is going to be if I need this long-term care coverage eventually. Or do you buy the insurance coverage when you’re in your fifties or maybe early sixties or whatever It’s, and then pay that premium for the next few decades, unsure of whether or not you’ll use it.
I, I’m not sure I have the right answer personally. I, I would lean towards self-insuring in my own life, but who knows what the industry will look like in, uh, you know, boy, by the time I’m in my sixties, that’ll be 40 years from now, so a lot of change. I’m kidding. I was like, wow.
I,
you look old
for 25, Jesse.
I wasn’t gonna say it, but he tried to slip that in. He did. He does that every episode. He’s gonna, I’m just gonna say something, see what they do.
I didn’t try to slip it in, Joe. That was. That was on the school bus. Wrong healthcare.
No, no, no, no, no, no. Alright, let’s wrap this up. I think, Paula, that we’re not gonna solve Medicare today.
I think what we’re alluding to is, this is probably something that may take more time exploring than you may think it is. So dedicate a bunch of time to this.
Yeah. You know, and I think one thing that kind of caught me off guard is I’ve been immersed in the personal finance space since 2011, and I’m just learning about this for the first time.
What that tells me is that even people who have a very developed understanding of people who are highly financially literate and have a developed understanding of the world of personal finance, still don’t know what they don’t know, particularly in the world of healthcare. You know, in the, in the world of insurance and government benefits and in these arenas that are not clickbait.
Headlines. You know, so there are not a lot of people creating content about it because it’s just, it’s so not clickable. Right. It’s not going to ever go viral. Probably the truth about your Yeah. Yeah. Medicare Advantage wide, the truth about Medicare Advantage versus Medigap. Right. Like that, I’m, I’m clicking on that right now.
Yeah. So you don’t see content creators make content around it. You don’t see bestselling authors write books about it. Um, and so even if you believe yourself to be financially literate, you might have a kind of a big oversight. Like Right. You know, Joe’s laughing at me right now. No, I’m just thinking about that headline being ClickBank.
Difference number three will make you LOL, you know,
you’ll be shocked. Wait till you see
number five. Yeah.
One weird trick to
get.
Oh. So, so, so good. Guys, as always, thank you so much for hanging out. Let’s find out what’s going on, where you live and work, and the great stuff you guys are putting out into the universe for your communities. We’ll have our guest of honor go last. So Jesse Kramer, what’s happening at Personal Finance for long-term investors?
My friend,
we are expanding to three episodes a month. I think that’s the exciting news. We’re going from every other week to three episodes a month. With that, we’re gonna start doing a monthly a MA episode ’cause that’s. Seems to be what the people want, and I have a blast putting them together. So to be honest with you, I don’t know my exact publishing schedule off the top of my head.
I can’t remember what episode is next, but starting in October, three episodes a month. So we’re pretty excited about
that more. Jesse, pinch me, please. God pinch me. That’s so good.
I do have long arms, Joe, don’t be careful what you asked for.
We heard it here first. And by the way, congratulations. In order. I just found out a couple days ago, and you mentioned it earlier in passing on the show, baby number two on the way,
baby number two is on the way.
Thank you. Fantastic. Very fantastic. Exciting little nerve wracking, but mostly exciting. Yeah, that
is fan. That’s fantastic. Thank you. Thank you. Paula Pant. What’s going on at the Afford Anything Show?
So here at FinCon, I’ve recorded a number of interviews. I spoke to Rob Berger. He has an eponymous YouTube channel, rob berger.com.
So we’ve released that on the Afford Anything Podcast. As a bonus episode, I interviewed Carsten Eska, better known as Big Earn. He is an economist, kinda well known in certain online circles for his safe withdrawal rate series. Um, he writes a lot about early retirement, but we spoke about current economic conditions, the fed interest rates, inflation.
So we had a pretty wonky conversation about that. A real deep dive. Wait a minute. Mm-hmm. Wait, did you
say that you had a wonky conversation with Big Ern?
Exactly. When does that happen?
Besides like every other minute with Big Ern.
So yeah, Rob Berger, big Ern. And then we also spoke with Andy Hill, but that one is not out yet.
Oh. But Rob, coming soon, Rob Berger and Carsten, those episodes are already out.
Awesome. Three great people, three fantastic people. And you can hear that at the Afford Anything Show. Yes, that’s
the Afford Anything podcast,
Matt. It’s about damn time. We got this done, my friend.
Yeah, yeah. Well, well thanks again guys for having me.
I’ve really enjoyed this. This has been, again, a bucket list item for me. Uh, you can always find us at Ghost by a couple.com and we’re a YouTube channel as well. So in the next couple weeks we’ve got a couple new interviews coming out. Uh, Justin Peters from The Five Minded Podcast.
Oh, nice guy. We just saw him walk by.
Yeah. Yeah.
Well his, his girlfriend Gabby was with us and so we talk all about their journey on Coast Phi and getting to that stage. And did
you grill her about what the hell she’s doing with him? I didn’t, I mean, because really we’ve known Justin for a long time and I’m like,
as a, as a host, I try not to get too particular on their relationships and I try to be respectful, Joe.
So, but yeah, I mean, it, it’s been really good conversations and we’re doing more of that. We’re getting more guests on there with their spouses or their partners talking about how they come together as a couple. And I’m excited for the next couple weeks because we’ve got more on the, on the list. So
that’s cool.
’cause it’s funny, they call communication a soft skill, but that’s kind of often the hardest thing.
Yeah. You know, these are sometimes awkward topics and oftentimes I find when I’m interviewing people that maybe some of the questions I’m asking, they haven’t fully talked about themselves yet. And so I’m getting kind of raw input at, at in real time and it leads for some really interesting discussions.
Stackers, thanks so much for hanging out with us on today’s episode. We’ll see you again on Monday. We’re gonna send it back to Doug back in the basement. Doug, what are three takeaways from today’s show?
So what’s stacked up on our to-do list for today? First, take some advice from our panel recession.
Sure, one’s coming, but that doesn’t mean reacting is the answer. Instead, create an investment plan and stick to it. Second, renting versus buying while buying can be a good answer and you should always make great financial decisions. You should never think of your primary home as an investment, but the big lesson next time Joe tells you to meet him in Portland, be sure and ask which one, Joe, which one?
I found out myself that Portland, Maine, it’s beautiful this time of year. I mean, you know, the decor at Howie’s Lounge or Bubba Soki room probably doesn’t change much no matter what time of year you visit. You know if it still look pretty nice to me. Thanks to Matthew Tar for joining us today. You’ll find his Coast Fi couple podcast on YouTube and wherever you are listening to us now.
We’ll also include links in our show notes at Stacking Benjamins dot com. Thanks to Paula Pant for hanging out with us today. You’ll find her fabulous podcast. Afford anything wherever you listen to finer podcasts. And finally, thanks to the Jesse Kramer for pitching in, you’ll find his charming personal finance for long-term investors podcast wherever you’re listening to us right now as well.
You know what? You know what I’m gonna do? You solid and share links in our show notes at Stacking Benjamins dot com. This show is the property of SP podcasts, LLC, copyright 2025, and is created by Joe Saul-Sehy. 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.
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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