Nothing says romance like a heated debate about the 4% rule.
Live from the basement (which suspiciously resembles YouTube headquarters), Joe Saul-Sehy, OG, Neighbor Doug, and the panel celebrate Valentine’s Day weekend the only way Stackers know how: by putting their favorite financial ideas on the hot seat.
This isn’t a polite discussion. It’s a rapid fire “love it or leave it” showdown where popular money strategies either get roses or get shown the door.
On the chopping block:
- Paying off a low interest mortgage early: financial freedom or opportunity cost disaster?
- The FIRE movement: empowering clarity or accidental misery?
- Lifestyle inflation: natural evolution or silent wealth killer?
- Real estate as passive income: dream scenario or second job in disguise?
- The 4% rule: reliable rule of thumb or outdated security blanket?
- Budgeting apps: behavior changer or digital guilt machine?
Expect strong opinions. Expect pushback. Expect OG to bring spreadsheets to a knife fight. Expect Doug to stir the pot. And expect at least one take that makes you argue out loud in your car.
Along the way, the crew swaps Valentine’s Day plans, reviews survey results from listeners, and throws down in a trivia challenge that could shake up the leaderboard. With margin call rules in play, nobody’s position is safe.
What You’ll Discover:
- Which popular financial strategies hold up under scrutiny and which ones deserve a breakup
- Why smart people disagree about mortgage payoff strategies
- Whether the FIRE movement creates freedom or just different problems
- The truth about lifestyle inflation and when it’s okay versus when it’s dangerous
- Why real estate investing is rarely as passive as it sounds
- Whether the 4% rule still works or needs serious revision
- If budgeting apps actually help or just make you feel guilty
- How to question your own financial assumptions without second guessing everything
This Episode Is For You If:
- You want to understand WHY you believe what you believe about money
- You’re tired of one-size-fits-all financial advice
- You enjoy hearing smart people debate and disagree respectfully
- You’ve been following certain money rules without questioning if they fit YOUR life
- You believe the most loving thing you can do for your financial plan is challenge it
This episode is for anyone who doesn’t just want answers but wants to understand the thinking behind them. Because sometimes the most loving thing you can do for your financial plan is break up with strategies that aren’t serving you anymore.
Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.StackingBenjamins.com/201
Enjoy!
Our Topic: Love it or leave it: Valentine’s Day edition
During our conversation, you’ll hear us mention:
- Low-interest mortgage payoff
- Mortgage vs cash flow
- Emotional money decisions
- Income stability vs risk
- Debt stress tradeoffs
- FIRE motivation
- FI vs RE split
- Job burnout
- Career change funding
- Sabbatical planning
- Purposeful work shift
- Lifestyle inflation
- Spending judgments
- Values-based spending
- Real estate “passive”
- Rental income definitions
- Active vs passive IRS
- 750-hour threshold
- 4% rule update
- 4.7% discussions
- Retirement security blanket
- Sequence-of-returns risk
- Budgeting apps effectiveness
- Tracking in “sprints”
- Measurement changes behavior
Our Contributors
A big thanks to our contributors! You can check out more links for our guests below.
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 Spotify.
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
OG
For more on OG and his firm’s page, click here.
Doug’s Game Show Trivia
- Savings.com surveyed Americans. What percentage said they want to do the “hottest” thing this Valentine’s Day and just stay home?
Join Us on Monday!
Tune in on Monday when we’ll dive into the tale of a couple who saved more than a million dollars and we’ll show you how you do it, too.
Miss our last show? Check it out here: 02/11/26 Show notes (SB1802) » The Stacking Benjamins Show
Written by: Kevin Bailey
Episode transcript
[00:00:00] opener: I ought to slug you hug. I’ve been kissed by a dog. I have dog germs. Get hot water. Get some disinfectant. Get some iodine. [00:00:15] Doug: Live from the basement of the YouTube headquarters at the Stacking Benjamin Show. [00:00:30] Doug: I’m Joe’s mom’s neighbor. Dug into kickoff Valentine’s Day weekend. We thought we’d get all romantic with some financial ideas. Or not? That’s right. Today we’re asking our Friday panelists some concepts and asking, love it or leave it from investments to insurance and estate planning to taxes and to that high school crush. [00:00:52] Doug: You’re still following on Insta. We’ll cover it all, but that’s not all. We’re halfway through Q1 and OGs staked a big lead in this year’s trivia challenge. Will he get margin called And now a guy who on Valentine’s Day weekend finds nothing more romantic than lighting some candles protecting his identity and canceling subscriptions. [00:01:13] Doug: It’s Joe Saw. See I [00:01:17] Joe: Oh, your poor wife. It doesn’t sound romantic. I think that sounds very romantic. Hey everybody, happy Friday. Welcome back to the Stacky Benjamin Show. It is Valentine’s Day. Love’s in the air and I love hanging out with all of our people on YouTube. That is, uh, clearly pandering. But also ready to have some fun. [00:01:39] Joe: Let’s say hello, by the way, to the guy who’s always a ton of fun, Mr. Announcer, man. Uh, Doug. How are you buddy? [00:01:47] Doug: Going like a barrel of laughs today, Joe. [00:01:50] Joe: Absolutely. The guy who also is a barrel of laughs across the card table from me. Mr. OG is here. How are you? [00:01:58] OG: I thought you were saying a ton of fun as in like metric weight. [00:02:02] Joe: Oh, when [00:02:02] OG: you [00:02:03] Joe: were referencing that? No, no, we wouldn’t do, we wouldn’t do that [00:02:06] Doug: Three oh pounds. Uh, heavenly joy [00:02:08] Joe: not live anyway. Yes, I might do it behind the scenes, but not, not here. Like the damn [00:02:12] OG: Patrick show. And you call in and go five eight two seventy five and they’re like, D whoa ding [00:02:18] Joe: ding. Yeah, it’s a good day, og. [00:02:22] Joe: You got any big plans for Valentine’s Day weekend? [00:02:26] OG: Ooh, um, I am probably going to do something romantic, obviously. It’s a big secret because I don’t want anyone to know what it is. So I would hate to publicize it today on this show. Well played. [00:02:44] Joe: Very well played. [00:02:45] OG: What day is it? And [00:02:46] Joe: another guy who is, uh, what day is today? [00:02:48] OG: No, what day is Valentine’s Day? [00:02:49] Joe: Today’s the 13th. [00:02:50] OG: Oh, [00:02:51] Joe: yes. [00:02:52] OG: And Valentine’s Day is [00:02:54] Joe: the 14th, unfortunately. [00:02:55] OG: Tomorrow. Yeah. [00:02:56] Joe: Yes. [00:02:56] OG: I wanna make sure everybody knew. Okay. We got all day today and tomorrow to get this surprise packaged together. [00:03:05] Joe: And a guy who thinks that, uh, reading mutual fund prospectuses is probably the most romantic thing he prospect. [00:03:11] Joe: I, he and, uh, Mrs. Kramer could do. Jesse Kramer’s here. How are you, man? Happy Valentine’s Day weekend. [00:03:17] Jesse: Yeah. Mutual fund. L-O-V-E-X. Love X. That’s a alternatives fund. Buy some for your partner. She will or he will really appreciate it, especially if they hold it for a long timeline. That’s, uh, not financial advice though. [00:03:32] Jesse: ’cause this is not, uh, this is not that kind of show what’s going on. Joe, [00:03:35] Joe: is there really a fun with that ticker symbol by the way? Or do you just [00:03:38] Jesse: I have no idea. Fly. [00:03:39] Joe: Make that up. [00:03:39] Jesse: Let’s look it up. [00:03:40] OG: It’s not. [00:03:41] Joe: Well, because I think a, like, you know, Southwest Airlines, you know, ticker symbol, LUV. [00:03:46] Jesse: Exactly. We’ve got some close ones out there, but I don’t think that mutual fund has taken it. [00:03:51] Jesse: We might have to make it here on the show. [00:03:53] Joe: Right. And the woman who says that her mutual fund is taken, I have no, no idea what that means. Paula Pan is here. [00:04:01] Paula: Well, I will be spending Valentine’s Day flying to Toledo, Ohio. [00:04:05] Joe: Oh, you’re in love with Toledo? [00:04:07] Paula: Yeah. [00:04:08] OG: Or [00:04:09] Paula: you know, um, Ohio and Michigan went to war over Toledo and Ohio won. [00:04:14] OG: Mm. [00:04:14] Joe: Yeah. Whi which is [00:04:16] OG: not exactly how it worked, but Okay. [00:04:18] Joe: Begged to differ. [00:04:19] OG: Have you been to Toledo? Yes. I think it was more like, no, seriously. The war was for different reasons. You think it was about who got to control Toledo? Mm-hmm. It was about who had to have Toledo, [00:04:31] Joe: Toledo send your, uh, hate mailto.
[00:04:34] OG: I love, love Toledo. [00:04:34] OG: They have a great golf course. Sylvania and my, uh, bestest cousin lives there. [00:04:39] Paula: Ah, [00:04:40] Joe: did you see what Michigan got in exchange for Toledo? Yeah, [00:04:43] Paula: you guys got the Upper Peninsula? [00:04:44] Joe: Upper peninsula, so Yeah. [00:04:46] Paula: Well, Ohio didn’t want that. [00:04:49] Joe: Why would you want [00:04:49] Doug: one of the greatest troves of natural resources in the continental us? [00:04:54] Paula: Oh, ’cause it’s not connected to Ohio. [00:04:57] Joe: It’s not connected to Michigan either. It’s connected Wisconsin. Yeah. Wisconsin should be angry right now. Wait, what? We missed out on all that fun. Yeah. Well it sounds like a romantic, uh, trip. Paula. [00:05:11] Paula: Oh, I’m, uh, I’m crashing. You know the debt-free guys, John and David? [00:05:13] Joe: Yes. [00:05:14] Paula: I’m crashing their Valentine’s Day. [00:05:16] Joe: That is, [00:05:16] Paula: yeah, [00:05:18] Joe: just making sure it’s all romantic. And Toledo, Paula’s a mud. He at heart. Do you know what the Mudheads are? Do you know Mud? No. [00:05:24] Paula: Uhuh. [00:05:24] Joe: That’s the Toledo baseball team. Oh, cool. Toledo Mud. Hes, what a great name. What’s the Rochester baseball team there, Jesse? [00:05:31] Jesse: Or the Red Wings. The Red Wings. Yeah. [00:05:33] Joe: Red. Hey, there you go. There’s a name. Well, we’ve got a great show today, everybody, because on today’s show, you know, I was thinking what could be more romantic than asking yourself some big questions. You know, you think about Valentine’s Day and you think it’s a great time to fall in love with your strategy, but it’s also a good time. [00:05:52] Joe: Like if you’re really not in love with it, you should probably break up with it the day before Valentine’s Day. You should get rid of it. So I’m gonna ask you this day before Valentine’s Day, some questions, do you love it or are you gonna leave it? We’re gonna ask all those on today’s show. First, we got a couple sponsors who keep us keeping on. [00:06:13] Joe: So, Paula, you know what I’m about to say? The Stacky Benjamin Show is always free and [00:06:18] Paula: worth every penny. [00:06:20] Joe: There it is. We’re gonna hear from them. And then Paula, Jesse, and og, we’re gonna ask them these big financial concepts. You gonna love them or are you gonna leave them? [00:06:39] Joe: All right, Paula, let’s start with you. You ready? [00:06:42] Paula: I’m ready. I’ve been training all week. [00:06:45] Joe: Here we go. Salacious comment number one, paying off a low interest mortgage early, right? We see people do this sometimes. Our good friend Andy Hill, did it right, had a low interest rate mortgage. We see people say, ah, you know, I just didn’t want that loan anymore. [00:07:03] Joe: Paying off a low interest mortgage early is an emotional decision, pretending to be a financial one. Paula, do you love that statement or are you leaving that statement? [00:07:14] Paula: Man, you know, it’s tough because I really wanna say it depends on who you are, right? Are you a tenured professor or are you an entrepreneur who’s about to take a big risk starting a business? [00:07:26] Paula: But, uh, if I have to choose one or the other, I’m gonna say I love the statement. [00:07:31] Joe: Oh, you’re keeping that one around. So it is an emotional decision. [00:07:35] Paula: Yes. Yes. I would say if, if I must choose a black and white yes or no love or leave, I would say yes, it is an emotional decision, although there’s nuance. [00:07:43] Joe: Well, yeah. [00:07:44] Joe: You said there’s a difference between if you’re a tenured professor or if you’re an entrepreneur. Why the difference between those two specific people? [00:07:50] Paula: Because of income stability, the tenured professor has income stability. The entrepreneur’s income could be anywhere between, it could be a negative number or it could be a tiny positive number, or it could be a very big positive number. [00:08:02] Paula: So there’s, there’s a tremendous amount of volatility in income that the entrepreneur has. And so it might be a mathematical decision to de-risk and, or by, by virtue of paying off all debt, including low interest debt, [00:08:18] Joe: they’re more worried about cash flow. [00:08:19] Paula: Right, right. Exactly. [00:08:21] Joe: Yeah. Jesse. [00:08:24] Jesse: I, I love the statement. [00:08:26] Jesse: I think the operative word that stood out to me was, I think, pretend you said, I think the word pretend was in the pretending show. Pretending. Pretending, yeah. Because I think of it as, um, it’s just an emotional decision, and that’s okay. It, it doesn’t have to be emotional, pretending to be financial, although I’m sure some people do think of it that way. [00:08:43] Jesse: The way I, I usually frame it is that it’s just an emotional decision, but sometimes an emotional decision is the right decision for someone to make, especially if they’re aware of the financial consequences of that decision. And they say like, yeah, I, I understand that a spreadsheet might not tell me that this particular mortgage payoff decision is quote unquote right, but it’s gonna make me feel way, way, way better. [00:09:05] Jesse: And that has some kind of intangible value that I, I really value, and that’s the decision I’m gonna make. So whether it’s just emotional or emotional, pretending to be financial, I, I still love the, the statement as stated. [00:09:17] Joe: You’ve seen this, I, I would think in your practice, og, where the emotional decision is the right one. [00:09:22] OG: Uh, yeah, I mean, I don’t know that this one is an emotional decision. I think this is exactly opposite. [00:09:28] Joe: It’s here to leave it [00:09:29] OG: all debt is awful. Even good debt sucks. It just sucks less. And anytime that you are taking a long time to pay for something that you’ve already largely consumed, it’s a bad idea. [00:09:45] OG: And it just be Holdens. You kind of like what Paul was saying in terms of risk. It be holdens you to like keep producing an, an output just to maintain. I mean, just think if you, if your mortgage is, it’s not unheard of to have a $4,000 mortgage these days, right? So if, if you had $4,000 mortgage, you gotta make 70 grand a year in most places just to pay your frigging house payment. [00:10:09] OG: You know, like, think about the stress and everything that goes into it. You know, people say, well, it’s just a mathematical decision. It’s not just a mathematical decision. It can’t just be. About math, because if math was it, then why don’t we all lever our brokerage accounts six to one? Because mathematically, that’s the right thing to do. [00:10:30] OG: Why do you even have a mortgage that’s halfway paid off? Why don’t, every time you get some equity in your house, why don’t you go borrow more like, oh, Zillow says my house is up a hundred K. I should go get another HELOC for another a hundred K and do something with it. Because it’s not just about the math. [00:10:45] OG: How many times I got the letter the other day in the bank like, congratulations, you’re qualified for a hundred thousand dollars loan. Like, all right, that’s it. 8%, that’s 7%, whatever the number is, like, I should take that well because it’s not just the math piece of interest versus investing. [00:11:02] Joe: Wow. Two, love it. [00:11:03] Joe: And a leave it. To begin the day. Love this. Let’s go on to question number two. Jesse, we’re gonna put you in the hot seat. This one. Let’s talk about the fire movement, Jesse. [00:11:15] Jesse: Mm-hmm. [00:11:16] Joe: Let’s get those people angry for a moment. Uh, here on Valentine’s Day weekend, most people chasing the fire movement, they don’t actually wanna retire early. [00:11:25] Joe: They just hate their jobs. Do you love it or do you leave it? [00:11:31] Jesse: Oh, Joe, thanks for the setup, man. This is good. I wanna hear your answer, Joe. Why don’t you go first? No, I, uh, I would need a poll, but I’ll say love it. I’ll say love it again without polling a thousand people to hear their answer. Just from enough of the stories that I’ve heard, I do think that most people out there have something in their life that if they were doing that thing full time. [00:11:54] Jesse: Like compassionately, they probably wouldn’t care about retiring early. They might still care about reaching financial independence. And that’s why I think more and more you’re hearing people kind of split up the fi from the re financial independence from the retire early. But when it comes to people who are like, yeah, I, I’m gonna retire by 44, a lot of times it’s like my, I’m burnt out by my job. [00:12:16] Jesse: I cannot do this forever. I’m gonna save a ton and, and retire early. So I will love your statement. Joe, Paula? [00:12:23] Paula: I agree. Actually, anecdotally, I have heard a lot of people say essentially that they want a well-funded career change. So, you know, retirement in their definition is not the cessation of income. [00:12:40] Paula: Retirement is maybe a sabbatical for six months or a year, or heck, maybe year and a half, two years even. Right? But a sub, a time to sabbatical. Followed by a well-funded career transition. Maybe they have spent their entire career being a, you know, a software engineer, but they really wanna be a middle school basketball coach. [00:13:02] Paula: Yeah, right. [00:13:03] Doug: That is an oddly specific example you just chose. I need to hear the backstory on this. [00:13:11] Paula: Well, let’s see. You know, you know that if you make that type of career transition, there are going to be some income ramifications to that. And so you wanna know that before you become a middle school basketball coach. [00:13:21] Paula: Uh, you’ve got your house paid off, you’ve got your retirement totally funded, you’ve got your 5 29 plans for your kids totally filled. Like you wanna know that that foundation is taken care of, and then you make the career transition. So anecdotally, I’ve heard a lot of people in the fire movement talk about that as their, you know, their motivation. [00:13:41] Paula: So I will say, love it. [00:13:43] Joe: To love it. Oh gee, we’re making this unanimous. Uh, what was the question again? [00:13:51] Doug: Do you wanna become a middle school basketball coach? Yeah. [00:13:55] Joe: People in the fire movement, they just don’t want to retire early. Uh, or or excuse me. Oh, [00:14:00] OG: yeah. [00:14:00] Joe: Yeah. They, they just want to quit their jobs. They hate their jobs, they hate their [00:14:02] OG: jobs. [00:14:04] OG: I have never run into a scenario, I think much like my two esteemed colleagues here, where someone who retired early didn’t transition to something else that provided fulfillment. Mm-hmm. My guess is that’s some offshoot of, I like this thing less than I might like the other thing, but I’m taking the responsible approach and, you know, not gonna give up my software job for a middle school basketball job. [00:14:33] OG: Not that there’s anything wrong with being a middle school basketball coach or middle school teacher, but my training is in this thing and I wanna make money and whatever provide for my family in the manner I see fit. Then I can transition to this thing that I really have some, uh, [00:14:50] Doug: that’s funny. [00:14:51] OG: Yeah. Um, [00:14:53] Joe: that’s good radio right there. [00:14:55] Joe: Yeah. Would you comment, comment on, great. What’s going, what’s going on on YouTube? Shane hanging out with a said. I think it’s, uh, f it retire. [00:15:04] OG: I didn’t know what to say because I, I don’t see stars. I see the real word and I was like, Joe, no. Like you when OG swear. So I was, [00:15:11] Joe: yeah. [00:15:12] OG: I was like, I better not say that anyway. [00:15:14] OG: So I’m gonna agree with everybody on this one. This is, uh, just ma you know, retirement early is masquerading as I hate my job. Yep. [00:15:20] Joe: Well, and Jesse, I’m gonna be a fourth on that one since you asked my opinion. I wasn’t gonna give my opinion brave, but um, yeah. Now that everybody else has agreed, I’ll go ahead and I’m just gonna pick the [00:15:31] OG: opposite from now on. [00:15:32] OG: Just add some fire, [00:15:35] Joe: uh, to the [00:15:35] OG: conversation. [00:15:36] Paula: And I wanna emphasize that like these lower paying new jobs, the reason people are making such sacrifices to go into them is because for many people that’s so much more fulfilling. And not just personally fulfilling, but like purposeful, you know, purposeful in a deep, meaningful way. [00:15:54] Paula: Like you find that you have a calling to do something, to be a middle school basketball coach, to be a preschool teacher, to to do something, to be a standup comedian, right? To do something that is likely to be lower paid, but it’s your calling so you don’t wanna like, not. Follow it, [00:16:14] Jesse: not honor that. [00:16:15] Paula: You just wanna like pay off your mortgage first. [00:16:17] Paula: Yeah. [00:16:18] Jesse: Is that how you ended up here, Doug? I mean, is this your calling? [00:16:21] Doug: A hundred percent. [00:16:22] Jesse: Yeah, [00:16:23] Doug: a hundred percent. And I get to be a standup comedian. [00:16:25] Jesse: What about like the higher paid versus lower paid aspects and the [00:16:27] OG: $20,000 a month contract certainly doesn’t hurt. But wait, you guys are getting paid. That’s what Paul is thinking right now. [00:16:35] Joe: My spouse, Cheryl and I met as middle school track coaches and if I, if it paid better, man, I, I’d love that job. It was so great being a part of, uh, well you [00:16:45] OG: liked it so much, Joe, that you tried to go back to it for a second, for a third career or whatever, right? I did a second career. I did, yeah. And that was like an interim stop of like, I like this so much that I used to do it. [00:16:55] OG: Now I’m gonna try to do it again. [00:16:57] Joe: Yeah. My goal was definitely not retire early to Jesse’s point. It was, go find the thing. Go back to the thing that really lit me up. Speaking of light, you up. Oh gee. It’s your turn in the hot seat. Let’s start with you on this one. Lifestyle inflation. Isn’t a moral, isn’t a moral failure, that’s why I’m asking you this one. [00:17:17] Joe: Lifestyle inflation is not a moral failure. It’s the entire point of making more money. It’s why you make more money is so you can inflate the lifestyle. Love it or leave it. [00:17:28] OG: So I’ll answer this by way of story time, by og my middle kid was debating back and forth about a decision that he was trying to make around some athletics, some high school athletics. [00:17:41] OG: As a matter of fact, he was kinda getting pulled in two different directions. He had, he had made his mind up, but he was very stressed about communicating that idea. Um, he felt that other people were gonna be maybe judgy a little bit on it, you know, if he did one sport and not another, or not both. And so he had crafted this, for lack of a better term, a sales pitch to the coach, right? [00:18:03] OG: Like, Hey, here’s what I’m gonna, but it’s, it’s because of this and this and this. And, you know, I’m like, listen. You don’t owe anybody an explanation for the decisions you make. You get to do what you wanna do without having an explanation for that, I wanna do this period. Because once you start adding the like, but I, you know, the stuff with the thing and I got, you know, I what now you give an opening for other people to challenge your, your decision making or to maybe try to try to give you a little grief about it or, or maybe try to meet you halfway and you’ve already decided, my heart’s not in this thing. [00:18:43] OG: And so when I think about lifestyle inflation, I think about it in the context of you don’t owe anybody an explanation for how you spend your money other than the people that are immediately impacted by that decision. If you wanna have a big house and a $10,000 mortgage and all that stuff that goes with it, okay, cool. [00:19:03] OG: Maybe that’s not a fit for you. Maybe that’s not a fit for your family and how you’re doing things. But if it doesn’t affect you, I think you just gotta stay out of it. Just ’cause you like to go to a nice steak dinner and it’s a bunch of money and you go, I would never spend that kind of money. That’s okay. [00:19:19] OG: You have the things that are important to you. Other people have the things that are important to them. [00:19:22] Joe: It sounds like this is couched in though, that it goes along with your values, that the spending still goes along with your values. [00:19:29] OG: Well, I mean, sure, but you’re the only arbiter of your own value system. [00:19:33] OG: So, you know, if you wanna lie to yourself, you can, I suppose. But getting what you want and having a ever evolving list of stuff that you’re striving for is perfectly fine. And just ’cause it’s a thing that I want to do doesn’t make it a thing that’s bad for you or good for me, or whatever the case would be. [00:19:52] OG: And I think we do a disservice to people who are striving for things that are beyond our reach and basically say, well that’s because they’re, you know, like we kind of like. Shame them a little bit like, oh well that’s just ludicrous, you know? I don’t understand why you’d ever want to do that. Well, okay, you don’t have to understand it. [00:20:12] OG: That’s how Jesse wants to spend his money is racing jet skis across the lake, and he is got a souped up jet ski. That was like $70,000. Okay, cool. Good for him. You know what I mean? So, yeah, man, make more money and spend it. [00:20:27] Joe: But it is interesting, Paula, I mean, even as OG starts, I’m gonna make up a phrase. [00:20:32] Joe: You can afford anything. Just not everything. Like I just made that up on the spot. It still does seem like there’s some value involved there. You, you love or leave that statement? [00:20:41] Paula: Can, can you repeat what the statement is? Like the, the, the wording of the p [00:20:45] OG: Paula got lost in my [00:20:47] Doug: story [00:20:47] OG: hour. She is like, [00:20:48] Doug: she fell asleep, got popcorn, came back, was still going on. [00:20:52] Doug: Yeah. I kind of got dizzy when I heard you were the arbiter of your own value system own values, [00:20:57] Paula: like, whoa. Yeah, I, I actually really liked that [00:20:58] OG: phrase. [00:20:59] Doug: T am I getting college credit for this course? I, [00:21:01] Jesse: I just liked how OGs it was You owe nobody an explanation. Mm. Now let me explain that for the next 10 minutes [00:21:11] OG: how it went down. [00:21:11] OG: I don’t really remember that. We had the court reporter read it back to us just to be sure. But, um, let me explain what not explaining things means. [00:21:19] Joe: Paul. I don’t know that I’m gonna get the words exactly right. But the gist of it is lifestyle inflation isn’t a moral failure. Like often in financial shows, we talk about the fact that it’s, you know, cool to be more frugal. [00:21:34] Joe: It’s the whole point. Why make more money if you’re not going to inflate your lifestyle? [00:21:40] Paula: Oh, leave it. Yeah, leave [00:21:42] Joe: it. [00:21:43] Paula: Leave it. Yeah. Yeah. Lifestyle inflation is an option, but it’s not the only option. I totally agree. Uh, with OG it’s an option that nobody else ought to be judgy about. You are free to choose to inflate your lifestyle, and if that’s what you want to do, cool. [00:22:02] Paula: That’s what you can do. But you can also, you look at Warren Buffet, he’s worth $150 billion. He still lives in a, he lives in the type of upper middle class house in Omaha, Nebraska that you would expect like a well paid local dentist or. Dermatologist or somebody to live in. He lives in a nice house fought by upper middle class professional standards, but he does not live in a billionaire house. [00:22:28] Paula: You know? [00:22:29] OG: I mean, he does have a Gulf stream, so [00:22:32] Paula: Well, yeah, but that’s, that’s not, [00:22:33] OG: he donates billions of dollars a year. It’s just different. He’s inflating different sections of his lifestyle. Maybe this is what you’re talking about here. He’s, he’s choosing what he’s inflating based on, you know, [00:22:44] Doug: there’s like three jokes here. [00:22:46] Doug: Come on. [00:22:47] Joe: But again, Doug, I wanna point to one, which is Paula being widely specific again, like weirdly specific, a well-paid dermatologist. Yeah. Like [00:22:57] Doug: who, who, what’s going on with? Paula? Paula who’s [00:22:58] Joe: come up with Paul just without a, you know, I bet a well-paid dermatologist lives in that house. Have you ever thought that drive by any house? [00:23:04] Joe: Not a, [00:23:05] OG: a quarterly paid one, just a well-paid one. [00:23:07] Joe: A moderately paid dermatologist, [00:23:09] Doug: me with their own line of skincare products in the lobby. [00:23:14] Joe: I got no, no idea. Jesse Kramer Love it. Or leave it. [00:23:19] Jesse: Uh, leave it. Leave it. My mind went to, um, well, first off, yeah, I, I thought that was pretty funny too. Like, definitely not an oncologist. [00:23:27] Jesse: Dermatologist only. Dermatologist only they [00:23:29] Joe: would be cut dead in that house. [00:23:31] Doug: Yeah. Let’s not get crazy. [00:23:32] Jesse: Well, I, I, you can’t have your lifestyle inflation kind of go stride for stride with your income. Like I think that is a, whether it’s a moral failing or not, I, I don’t know. And, and I, I suppose that’s, maybe that’s where OGs answer was that focus on kind of that moral word in the statement, but strictly from a financial point of view, I mean, yes, I, I think the point is hopefully we want to, maybe our income does increase over time, but if our lifestyle matches its stride for stride, we’re gonna be in some sort of trouble, most likely. [00:24:03] Jesse: So there’s nothing wrong with having some lifestyle inflation, it just can’t be the same magnitude as your, your income inflation. [00:24:10] Joe: I do remember, uh, Dave Ramsey example one time saying, you know, somebody pulls up next to you in a Lamborghini. And you’re like, oh, look at them. Or you go think, well, I can drive a Lamborghini. [00:24:19] Joe: And he’s like, you have no idea how much money they make. Like you have no idea if that Lamborghini is one, 1000th their income or if they’re spending their entire paycheck, which the, you know, the judgment of that piece is, uh, we do get judgy sometimes. [00:24:31] OG: Mm-hmm. [00:24:32] Joe: Alright. It is the halfway point of today’s show. [00:24:35] Joe: I’ve got some more, uh, salacious ones in the second half of this. I’ve got one I can’t wait to ask Paula. I’ve got an exciting one for Jesse. I asked my exciting one to OG earlier, but I do have one for him too. So [00:24:48] OG: very blah, blah one for me. Okay, [00:24:50] Joe: fine. Blah, blah, blah, blah. Uh, at that way point we transition into our year long competition between you three fine people. [00:25:00] Joe: And what’s interesting is we’re not halfway through February and nobody has yet margin called anybody. And you know what? The pressure to do so rises because og, while you were gone last week, Sarah Catherine Gutierrez. Scored not one point for Team og. She scored two points. [00:25:19] OG: Oh really? [00:25:19] Joe: For Team og. Because how did, how did [00:25:21] OG: that happen? [00:25:21] OG: How did you [00:25:22] Joe: get to We had a game show competition as well, and she won the game show and won the trivia competition. So Doug, that means the score at this juncture is, [00:25:32] Doug: yeah, it’s a little, it’s either unsettling or it’s comforting depending on what your worldview is. OG has reclaimed what he feels is his God-given right to be at the top of the, the trivia pile. [00:25:44] Doug: Uh, Jesse is working hard to prove that he was just a flash in the pan and Paula is making sure that the universe is stable and remains in last place. That’s OG with four Points, a commanding three point lead over Jesse and a uh, four point lead over Paula because she has a big fat donut in her column [00:26:04] Joe: four, one [00:26:06] OG: donuts are [00:26:06] Joe: yummy. [00:26:06] Joe: Zero. [00:26:07] Doug: Yep. [00:26:08] Joe: And once again, here’s the rules. Anybody can say margin call at any time. And when you say margin call, you use your margin call for the first quarter of the year. We got about what, six weeks left to margin call people and, oh, we have a special episode coming. We only have five weeks left to use your margin call after this week. [00:26:25] Joe: So if any of our contestants say margin call, then they tell us who they’re margin calling. That person either has to win that week’s competition or they lose a point. But if they do win, whoever said margin call, they lose a point. And of course they lose their margin call for the first quarter. So those are the rules. [00:26:44] Joe: We know what’s at stake this week. And Doug, you’ve got our Valentine’s Day weekend trivia. [00:26:50] Doug: Well, I sure do, Joe. Speaking of Valentine’s Day margin call, daggers. [00:26:55] Joe: Wait a minute. Oh geez. Wait a [00:26:57] Doug: minute. We have our first margin call and was that Jesse Kramer? [00:27:02] OG: No, it was me. [00:27:04] Doug: It was, oh gee. Oh my. Oh gee goodness. [00:27:06] Doug: Who [00:27:07] Joe: are you? Who are you? Well, [00:27:07] OG: I can only do Jesse, right, because Paula doesn’t have points because Paula [00:27:10] Joe: doesn’t have a point. [00:27:11] OG: Yeah. [00:27:12] Joe: How about that? [00:27:13] Doug: Here we go, ladies and gentlemen, here we, okay, [00:27:16] OG: so just hold on, let me get the rules again. So Jesse has to win the the thing today. And [00:27:22] Joe: if he doesn’t, he loses his point. [00:27:24] Joe: If he does win, then you lose a point. [00:27:26] OG: Gotcha. [00:27:27] Joe: And he gains his point as usual. [00:27:29] OG: Understood. So the worst outcome for me is I go to three. The best outcome from him is he goes to two. [00:27:35] Joe: That’s right. It could be three to two. [00:27:39] Paula: So it’ll either be three to two or it’ll be five to zero, zero [00:27:43] OG: or four to zero and one, because Paula, you could still win. [00:27:47] OG: Yeah. [00:27:48] Joe: Paula in her own example, just assumed that she’s losing. [00:27:54] Paula: I haven’t considered that [00:27:55] OG: fair. [00:27:58] Joe: Doug, continue. [00:28:01] Doug: Hey there, stackers. I’m Joe’s mom’s neighbor, Doug, and you’re about to experience the smooth sounds of my trivia question. That’s right. Folks. Wrap those arms around your listening device and hold it tight. Because it’s time for a scorching hot piece of tantalizing trivia. [00:28:18] Doug: Right from my mouth to yours, baby. Here’s today’s curiously captivating question. While everyone else spends a lot of money on Valentines Day savings.com, just completed a survey asking what percentage of Americans want to do the hottest thing possible this year and just stay home. You got it, baby. Just you, me, and the remote control to your heart. [00:28:45] Doug: Don’t take your clothes off all at once. I mean, you gotta make me work for it a little bit. Am I right? I [00:28:50] Joe: don’t even want the visual. [00:28:52] Doug: I’ll be back right after I figure out how to work the record player down here so I can fire up these old Luther Vandross albums. [00:29:00] Joe: Just a scenario I don’t even want to imagine. [00:29:03] Joe: So let’s get into it. Oh gee, you are going first. [00:29:07] OG: Wouldn’t Mr. Margin call go first in [00:29:09] Joe: this Mr. Margin call does not go first. He just has to win in his current position. [00:29:14] OG: Hmm. What was the question? What percent of people actually just wanna stay home for Valentine’s Day [00:29:20] Joe: this year? The savings.com did a survey and a surprising number of people said, I’m just gonna be frugal and stay home. [00:29:28] OG: Did you add the word surprising based on your value, judgment of the number or [00:29:34] Joe: Surprisingly low? Surprisingly high, surprisingly, what you would think. [00:29:39] OG: The article itself said a surprising number. Or are you ad-libbing? [00:29:43] Joe: No idea. He [00:29:44] Doug: ad-libbed. [00:29:46] OG: He ad-libbed. Okay. Because he knows the answer. So for him to have that little Freudian, like a surprising number, like, ooh, what makes the number surprising? [00:29:56] OG: Um, I am going to say that the number of people that want to stay home this Valentine’s Day is, uh, my current age, 39%. [00:30:13] Joe: Perfect. Uh, Jesse Kramer, he goes with 39% people staying home. What are you thinking? You staying home? [00:30:23] Jesse: Yeah. I think we are. Yeah. I, I feel like it’s gonna be higher than that, but I don’t know. I just It is [00:30:29] OG: a surprising number, [00:30:30] Jesse: right? It is. It is. I’m gonna go over 50%. I’m gonna go 62%. [00:30:38] Joe: 62%. Paula, we’ve got 39 and 62. [00:30:46] Paula: You know, consumer confidence is generally low. People are a little bit nervous about the economy. People are nervous about jobs, so I think people are gonna be more cautious this year. So I am going to go with 62.1 [00:31:03] Joe: 62. [00:31:05] Doug: I had to build a damn spreadsheet with like formulas in it just because of you jokers who pull that crap on me. [00:31:15] Joe: We’ve got 39, 62 and 62.1. Is Jesse going back to zero or is the score tightening or crazy of crazies? Is Paula actually gonna get on the board? We’ll find out and that means Paula will go ahead of Jesse and be in in second place. First place among the second place people was what I should have said. I think we’ll be back to find out. [00:31:43] Joe: All right, Paula, you were the last to guess and um, you put your brain to work this time betted against your gut. I’m sure [00:31:51] Paula: I, I took the over at 62.1. Uh, the only reason that I think that I have a chance is because in this episode I predicted that I would not win. And so if there were ever a time for me to win, it would be immediately after predicting that I wouldn’t, [00:32:08] Joe: it’s gotta start sometime. [00:32:09] Joe: Gotta Why not now? Oh gee, you were the first guesser at, uh, 39. You heard the 61 and the 61.1. [00:32:19] OG: Yeah. I just don’t think it’s over 50. It could be a surprising number and be like 80. That’s the, that could be surprising. [00:32:28] Joe: Jesse, would it be surprising if you won? [00:32:30] Jesse: Uh, I’m, I’m really liking my chances. Right, because I think if Paula had gone with the under, because she went with the old, there’s a little bit of like Schrodinger’s cat going on. [00:32:40] Jesse: Once she went with the over the odds kind of redistributed and now all of a sudden I’ve got a really good chance of winning. ’cause if she had gone with the under, she would’ve won. [00:32:50] Joe: I would love this to be like the apps when I’m watching a baseball or football game and we’ve got like the ESPN ticker down here going, Paul got a 36% chance of winning. [00:32:59] Joe: Like everybody’s got their, their number up poly [00:33:01] OG: markets. Should we start a, like a poly [00:33:03] Joe: market khi? [00:33:04] Doug: Yeah, [00:33:07] Joe: that would, that would be on brand. As we’re doing shows about telling people not to bet, then you can bet on our, on our trivia. [00:33:15] OG: I’m not saying not to bet. Just saying Might [00:33:18] Doug: lose your shirt. [00:33:18] Joe: Uh, all right. [00:33:20] Joe: Who’s taking it home? Is Paula getting a point? Did Jesse get margin called? Is OG going back to the beginning? Well, not back to the beginning. He’ll only be ahead by one. Who’s taking this home? Doug. [00:33:32] Doug: Hey there, stackers. I’m financial home wrecker and guy. You call your trivia Zady Joe’s mom’s neighbor, Doug, listen, baby. [00:33:41] Doug: I know this trivia segment is all you’ve ever wanted, which is great because you’re all this trivia master has ever wanted. Between my questions and your answers, we make a perfect pair. So answer me this before things get outta control and we have to turn off the lights according to savings.com. How many of us are gonna press the Frugal Romance button? [00:34:02] Doug: And have the most spicy Valentine’s Day ever just by staying at home and reviewing our budgets. Well, what I’ll tell you is it was 16.1% less than what Paula guessed. 16% less than what Jesse guessed. And just 7% more than what OG guessed, because the correct answer is 46%, making OG our sexy trivia winner today. [00:34:27] OG: It was pretty close to my real age. Somebody put that as a quote. [00:34:32] Joe: I thought 46 was surprising. I probably, Doug shouldn’t have said surprising, but 46% of people to meet. [00:34:37] Doug: Yeah, you forgot how, uh, I forgot how observant OG is. He picked that up fast. I was impressed. [00:34:44] Joe: And now this is on, [00:34:45] OG: I thought about just saying 50, but then I thought I get hosed on both ends. [00:34:49] OG: Like I, somebody would pick 49 and somebody was gonna pick 51, and then I was like, all right, so that’s out. I have to pick a number that’s not 50 just to force. Course everybody’s hand. But, um, anyways, so do I get, do I get Jesse’s point also? [00:35:03] Joe: You get a point ‘ [00:35:05] Doug: cause [00:35:05] OG: you won not Jesse’s point. Okay. Jesse [00:35:07] Jesse: goes back. [00:35:07] Jesse: Points are fun points are fungible. You got my point. [00:35:11] Doug: Yeah. So now we’ve got a, a rough situation. You two. Should we just [00:35:15] OG: stop this? [00:35:16] Doug: Jesse and Paula just. [00:35:18] OG: OG [00:35:19] Doug: has a five point lead on both of you. [00:35:22] OG: This is exactly how you guys envisioned this was gonna happen when you set up these new rules last year, huh? [00:35:27] Joe: Exactly right. [00:35:28] OG: Exactly. What you saw was gonna go down and December [00:35:30] Joe: is OG 48. [00:35:36] Joe: Not at all what we were, what we were thinking. You know what I am thinking though? I’m thinking we need to get back to Valentine’s Day ’cause we’ve got some, uh, some more salacious comments that we’re gonna ask you. Love it or leave it around. Let’s go back to Paula. ’cause Paula, I want to know what you’re thinking about this one. [00:35:54] Joe: Let’s talk real estate. Paula Pant. Love it or leave it. I’ll say this, real estate is only passive income. If you ignore, you know, the stress, the time and the risk, love it. Or leave it. [00:36:11] Paula: Leave it. Because I think that that statement. Misinterprets what passive income means. And so I’ll say two things. Number one is that passive income is not the euphemism for free money, passive income. [00:36:26] Paula: And I think probably the better term is residual income better. Only in the sense that like people don’t often think that residual is the euphemism for free money, the way they misinterpret the word passive to be. But passive income means you’re front loading the workload, you’re front loading the bulk of the workload so that you can get paid later. [00:36:46] Paula: Oh, a less desirable way to phrase that is you do all the work upfront and you get paid years and years and years later for the work that you did in year one. So you, you could actually think of passive income as delayed payment. Um, [00:37:03] Joe: you could have said though that you love that statement and given that same answer. [00:37:07] Joe: ’cause you could have said, I hate the words passive income. Instead I’ll replace it with residual income. [00:37:14] Paula: Well, [00:37:15] Joe: because I think that makes a bunch of sense. [00:37:16] Paula: So the IRS defines rental property income as passive, like the IRS definition of what rental income is, is it’s a passive gain, which is why on your tax forms only passive losses can offset those passive gains. [00:37:30] Paula: You know, active losses cannot. So it is technically passive income in the IRS sense of the word. [00:37:38] Joe: Ah. [00:37:38] Paula: It’s just that, uh, people misunderstand what that word means. [00:37:41] Joe: Jesse. The IRS is using the wrong terminology. Love it. Or leave it. Uh, [00:37:47] Jesse: love it. Having read the IRCA few times, all 170,000 pages of it, they get, they get a few words wrong. [00:37:55] Doug: Yeah. [00:37:55] Jesse: Uh, what was the original statement, Joe? Because I, I, I do think, uh, I’m trying to think, Paula, you left it. [00:38:00] Joe: Mm-hmm. [00:38:01] Jesse: So I do think I, I think I loved it. I think I loved it. [00:38:04] Joe: Real estate’s only passive income if you ignore, you know, the stress, the time, and the risk. [00:38:08] Jesse: Correct. I love that. But I think the, the words I would use to explain why are gonna be kind of similar to Paula’s, at least in a way, which is right. [00:38:18] Jesse: It’s, it’s a pretty active endeavor, I think, especially when you compare it to certain other investment approaches. There’s more activity owning real estate then, then there is, say, owning a portfolio of highly diversified passive ETFs. I think that’s relatively hard to argue with. And if you’re the one who is doing the maintenance yourself, if you’re the one who’s sourcing the deal yourself, if you’re this one who’s interacting with all the tenants yourself, I mean, that is a fairly, uh, it’s, it’s more work intensive than what I would traditionally call passive investing. [00:38:52] Jesse: So I will love your statement, Joe. [00:38:55] Joe: Love it. One for love it. One for Leave it. Oh gee, you’re breaking the tie. [00:39:01] OG: Well, I think based on Jesse’s description there of activities, I, I, um. Somebody can correct me if I’m wrong here, but doesn’t that make the investing then active by definition, from an IRS standpoint, if you’re sourcing the deals and you’re managing the property and you are, you know, running all of it, doesn’t that uh, change that? [00:39:22] Paula: The IRS would only, uh, consider you to be an active real estate investor if you spend at least, I think the cutoff is approximately 750 hours per year. [00:39:31] OG: Yeah. So this [00:39:32] Joe: would be really active flippers. [00:39:34] OG: So there’s some, there’s some metric that you can flip that switch from [00:39:37] Paula: Exactly. [00:39:37] OG: The IRS definition of passive to the IRS definition of active. [00:39:41] Paula: Yeah. [00:39:41] OG: And sometimes that matters, you know, or, or if your profession is real estate. [00:39:45] Paula: Yeah. If your profession is real estate and you don’t make more money from some alternate profession, or if you spend 750 hours per year or more. Or if you Airbnb a property rather than have it on a 12 month lease, uh, there’s some allowance for that as well per the, the IRS definition of what is passive versus what is active. [00:40:06] OG: Yeah, I would not call any investing passive in any way, shape or form in the sense that everything requires some attention. The amount of attention that you are required to give it is somewhat dependent on whatever season you happen to be in. You know, during tax season. At the end of the year, your investment portfolio probably takes a little bit more center stage. [00:40:28] OG: If you’re buying a property or you’re flipping it, or you’re renters are out and now you’re dealing with cleanup and repair and rerenting, you’re gonna be a little bit more involved in it at that point in time. But I also think there’s a lot of times that you can put stuff on autopilot, and like Paula said, I think when you’re. [00:40:46] OG: Thinking of the words active and passive, you think like, I don’t have to do anything. And it’s like really more about systems and if you can build the right systems around whatever it is, whatever you’re investing philosophy is, whether it’s all real estate or equities or you know what, bus own businesses or whatever, you’re just managing the systems at that point. [00:41:04] OG: And some people would consider that to be a little more hands off than necessarily in there. So I don’t know where that puts me. Honestly, I’m, I think I’m on Paula’s side here. Does that sound right? [00:41:15] Joe: That makes you leave it. Okay. So one for love. [00:41:18] OG: I like Paula more than Jesse, so I’m gonna go Aw, Paula’s side. [00:41:22] Jesse: That’s fine. That’s fine. [00:41:24] Joe: Happy Valentine’s Day, Jesse. [00:41:26] OG: Yeah. [00:41:26] Jesse: Dealt with it before. [00:41:28] Joe: Jesse, while we have your attention, let’s give you a love it or leave it, you know, as well as anyone that this, uh, so-called 4% rule is now, what do we call it? Not quite as sexy. The five and a quarter percent rule, I think is the new one. [00:41:43] Joe: So the five and a quarter percent rule. Is less of a rule and more of a financial security blanket. Love it. Or leave it. [00:41:53] Jesse: Definitely love it. Definitely love it. I’m not as familiar with the, uh, the kind of under the hood of the five and the quarter rule. I haven’t read Bill Bean’s new book about the 4.7% rule yet, which I know is one number that’s been tossed around a lot in the last 12 months. [00:42:08] Joe: Well, and he’s the one, by the way, this is, uh, five and a quarter by the, and a quarter optimally could be five and a quarter, but I guess it is the 4.7 rule now. [00:42:15] Jesse: Yeah. [00:42:15] Joe: Is the, uh, yeah. [00:42:17] Jesse: I’m gonna go off the assumption though, that he probably came to that 4.7 or five and a quarter with like a similar kind of analysis method that he originally came to the 4% rule with. [00:42:26] Jesse: And I just think if you look at how that number is arrived at and you see all the layers of conservatism that are kind of added up into that number, it is that financial security blanket that makes you say like, well, at least I know I’m skewing so far conservative that it’s super unlikely that this backfires against me. [00:42:44] Jesse: And what you’re neglecting is all the kind of middle of the road outcomes, let alone the optimistic outcomes that would suggest you could spend more than 4%. So yeah, it, it’s that security blanket to make people feel good and maybe to start the conversation or to do some back of the napkin math. But once you’ve done that first step and done that back to the napkin math, it kind of behooves you to dive deeper before you, you really understand, uh, how much you can spend in retirement. [00:43:10] Joe: And people who are new to all this and have no idea what we’re talking about at all. We’re talking about the amount you can spend, which Jesse, you just mentioned, and it used to be 4%. So you take the amount of money you’ve saved up and 4%, that was the safe number. And now in Bill Bang’s new book, he’s got it closer to 4.7, uh, rule or financial security blanket, OG [00:43:31] OG: blanket. [00:43:31] OG: Absolutely. I mean, it’s a good starting point. It’s a good place to, like Jesse said, back of the envelope, like, am I somewhat kind of in the ballpark maybe, but totally. Totally does not take into account if you actually happen to do better than the median. And more specifically, what happens if you go on a tear like the last, you know, five years of market performance or 10 years of market performance. [00:43:57] OG: And if you have so much excess that you’re already spending whatever you wanna spend at 4% or 3% or 5%, then it doesn’t matter to you. But if your lips are just barely above water, and you know the difference between $2,000 coming outta your portfolio and $3,000 coming outta your portfolio, to some people that’s a thousand dollars. [00:44:18] OG: To some people, that’s a 50% increase in their income. That can make a profound impact, especially if you know you have a more standard life expectancy of 80 or 82. Whereas if you talk to anybody from a planning standpoint, what do we say? 95? 95, a hundred, 105. So we’re already elongating that, that life expectancy number, and we’re being conservative with the withdrawal number. [00:44:41] OG: You get to 82 and you live a normal, standard American life and you got money still left and you left some life on the table. I think it’s also good to do the opposite side of that. Like what’s the stress test on this? Not just at 4%, but like where, like where do I die? [00:44:58] Joe: That’s, [00:44:58] OG: it’s basically my life motto like, how do I die on this? [00:45:01] OG: You know, like, don’t do 10. Got it. [00:45:06] Joe: Yeah. That’s what the, the lips just barely above water is the part that gets me. ’cause I don’t feel like it’s even then much of a security blanket. Paula. [00:45:13] Paula: Security blanket. Um, first of all, I, I do wanna say as you, as we’re talking about 4.7, this sounds like a conversation about the Fed funds rate. [00:45:22] Paula: It does. Is that right? Oh, well, it’s between 4.75 to 5.25. Like should [00:45:27] Joe: we have had like a big, should we have had like a big hurrah and the markets change when Bill Bing and goes, uh, four percent’s been raised to 4.7 everybody. Oh my God. [00:45:35] Paula: Exactly. Yeah. There should be like a, a press conference, a Jerome Powell style press conference. [00:45:40] Paula: That’s right. Release it at exactly 2:00 PM on a Wednesday, [00:45:43] Joe: bill bang and appears before Congress. [00:45:45] Paula: So, going back to, not that I take all of my financial cues from the IRS, but I’m thinking about how with, uh, foundations, a foundation that has an endowment, the IRS will require 5% of that foundation’s money to get spent. [00:45:59] Paula: They’re doing that because they want to make sure that the money doesn’t just sit there forever in perpetuity, but they also don’t wanna demand a rate that’s so high that you’re gonna spend it down to zero. So there’s a requirement of, you know, spending five and, and they’ve got all kinds of like caveats and bells and whistles. [00:46:15] Paula: So when I say they require 5% spend, don’t take that as, don’t [00:46:19] OG: at me, bro. That’s what you [00:46:21] Paula: wanna say. Yeah, yeah, exactly. Don’t at me. ’cause there are lots and lots of caveats associated with it, but that is what they push foundations to do. So it makes sense to me because I remember when I first learned that about mandatory foundation spend, I was like, man, this is back in the 4% days. [00:46:40] Paula: I was like, man, 5%, you’re gonna whittle that down to zero. That was back when Bill Bengan was saying 4.2. [00:46:47] OG: Turns out the Harvard Foundation’s doing okay. [00:46:49] Paula: Yeah, exactly. I think 5% is a good starting point. It’s designed so that even if you retire on January 1st, 2008. You will probably still be. Okay. And for everybody who doesn’t retire on January 1st, 2008, you know, it turns out you actually retired January 1st, 2021 and you didn’t end up facing any sequence of returns risk. [00:47:14] Paula: You’re doing even better [00:47:16] Joe: if somebody, by the way retired at the beginning of 2021, is there a propensity thing to be overconfident or to like wait for the other shoe to drop? Like, like what have you guys seen? I [00:47:27] Paula: mean, I think it very much is gonna depend on the personality of the individual. [00:47:31] Joe: I could see, I’d be really easy to be a little confident going, oh, this is way easier than I thought I could spend a bunch more money. [00:47:36] Joe: Don’t you think so? [00:47:39] Jesse: I think so. Yeah. I think so. Sorry for the silence. [00:47:42] Joe: Thank you. I [00:47:42] Jesse: think so. I think so. I mean, just from a couple conversations of people who write, you know, they retire with X, they’ve spent the money they’ve wanted to spend for the last two or three or five years. Now they have 20% or 30% or 50% more than they had when they originally retired a few years ago. [00:47:58] Jesse: And yeah, it gives them permission and it gives them confidence to loosen up the purse strings a little bit. Whether that tips them over to the other side of now being like overconfident and actually like spending too much. I mean, that’s a little bit of a different conversation, but I think it, it certainly has to allow them to spend a little bit more. [00:48:13] Joe: I do like the, uh, approach that, uh, our friend Paul Merriman talked about when he was on the show, when he said that, you know, during his retirement years that the market goes up, they spend the excess to travel the world and when it goes down they just travel to the Pacific Northwest where he lives, uh, so that the basic budget stays the same. [00:48:31] Joe: So he is not getting used to this different lifestyle during the go-go years in case there’s a no-go one after it. All right, og, you are gonna bring it home for us. Let’s talk about budgets. [00:48:45] OG: You okay? [00:48:45] Joe: But your specialty? He [00:48:47] Doug: can answer right now, I think. [00:48:48] Joe: Yes. Leave it. [00:48:50] OG: Leave it. Yeah. [00:48:52] Joe: Budgeting apps. Let’s talk budgeting apps. [00:48:55] OG: Apps, okay. [00:48:55] Joe: They don’t fix spending problems, they just document them in prettier colors. We’re gonna love that. Or are we leaving it? [00:49:03] OG: I mean, is this like a personal attack? Like how do we answer this? [00:49:07] Joe: Are you looking at me? It [00:49:08] OG: highlights the inadequacies. So the question was they don’t fix it, they just, you know, they don’t do anything. [00:49:14] OG: Basically. I’m going to leave this one because if you actually keep track of stuff, you can’t help but notice inefficiencies in, back to my values conversation before. In your own value system. We go out to eat a lot. That’s just where we are in our life. [00:49:34] opener: We have [00:49:34] OG: kids, sports and travel and we’re, you know, kind of doing that. [00:49:38] OG: What I noticed was we donate a lot of money to DoorDash five years ago. I bet we ate out just as much. We just got our asses off the couch and went and got it, you know, or timed it better and said, you know, hey, on the way home from whatever, we’re gonna stop and grab the to-go order. And now we’re just like, ah, we can go home and just play it on our phones. [00:50:00] OG: So I’m making a very concerted effort, not documenting it, just aware of where we are. A very concerted effort to say, Hey, if we wanna go out to eat, just go out to eat. Like you have to go get it. As opposed to, you know, just DoorDash who reads. [00:50:16] Joe: Sure. [00:50:17] OG: And the only reason is because it just was brought to my attention on the spend, you know, on Monarch [00:50:22] Joe: on the app. [00:50:22] Joe: Yeah. [00:50:23] OG: I mean. It’s just a number. So to me it’s just something that I, I happen to pay attention to. So I’m gonna say that it does change your behavior a little bit. [00:50:32] Joe: We’ve had a great discussion with our friends hanging out on YouTube. We record these on Monday afternoons if you want to join us on Monday afternoon, and we put them on the screen so we kind of have two conversations going on our conversation. [00:50:44] Joe: Another one, but I do wanna highlight this one from Dennis. Dennis Doughboy, like that name Dennis is absolutely, I was budgeting $900 a month for grocery sign up for Monarch, and I realized I was spending closer to $2,000. Had to cut that down a little bit. Plus Publix more Walmart, less Publix, more Walmart I guess. [00:51:01] Joe: And for og, you know, less DoorDash, more. Let’s go get it. Just pretty pictures. Paula, or does the app actually help you change behavior? [00:51:10] Paula: I think the app does help you change behavior. I’ve often thought of budgeting as the calorie counting of personal finance in that it’s hard to stick with for longed period of time ’cause it’s just so tedious. [00:51:23] Paula: But if you do it in just [00:51:26] Joe: sprints, [00:51:27] Paula: right? In sprints. Exactly. In short sprints. Every now and again, just as a check-in, it can be the equivalent of saying, Hey, I’m just gonna take a week to track every single thing that I eat and I’m not gonna try to do it forever. ’cause I don’t wanna walk around with a scale everywhere I go, you know, a food scale everywhere I go. [00:51:49] Paula: But for one week I can do that. Right. And I think budgeting is very much the same way. It’s carrying a food scale and eating everything out of a measuring cup. Right. It’s not realistic to do that. Long term, but doing it in a sprint will give you a lot of information and you can’t help but change your behavior once you have that information. [00:52:08] Joe: I think Paulette would’ve been funnier if you walked around with a regular scale right after you, right after you get done at the restaurant, like you’re at some cool Mexican restaurant than you put your scale down and go, oh, shouldn’t have done that. [00:52:19] OG: Yeah. Which is at Tony Paco’s in a couple weeks. How much were these hot dogs? [00:52:27] Joe: Jesse, bring it home for us. Love it. Or leave it on the financial app. [00:52:31] Jesse: I just think it’s cool that, um, OG uses Uber Eats as a budgeting app. I didn’t know it had that functionality. [00:52:38] OG: It’s on Monarch. It just, you know, it like, it categorizes it. [00:52:42] Jesse: You order food on Monarch. That’s cool too. [00:52:44] Doug: I like how most people would be like, we, we need to eat out less OGs. [00:52:48] Doug: Like, no, no, no. Screw that. We’re still eating out. We don’t pick it up. We’re just actually gonna go pick it up. That’s where I draw the line. [00:52:55] OG: Ipso facto, it’s gonna change the behavior, right? It’s like a, it’s gonna be because you don’t get the DoorDash markup, but then you’re gonna go, I don’t feel like going out. [00:53:03] OG: And if this is my new rule, then magically there’s food in the fridge that I can eat. [00:53:08] Jesse: I’ve got a prediction. Uh. Next year when OG iss not training for a bike race, he’s going to get delivery again. He’s just looking for an excuse to ride his bike. [00:53:16] OG: I mean, to be fair, I did get delivery today. It didn’t change behavior today, but, but it was, we did have a lot of recording to do, so I rationalized, but it’s like [00:53:23] Joe: 26 days outta 30. [00:53:24] Joe: That’s good. [00:53:25] OG: Yeah. [00:53:25] Jesse: Joe, you just highlighted a, a comment from Andrea in the chat. It’s very similar to one from Peter Drucker, and this might even be the original Peter Drucker quote, which is the one I’ve heard is that which gets measured, gets managed, and she wrote What Gets Measured Changes. That’s what Andrea wrote. [00:53:41] Jesse: What Gets Measured changes, and that’s, I think both OG and Paula hit on it, and that’s from my own personal experience, is the act of measuring something. You can’t help but start to manage that something or change that something. That’s why I still, I don’t budget using an app, but I do look backward at what I’ve spent and I try to keep a pulse on what I’ve spent, especially like the really big expenses that are kind of out of the ordinary. [00:54:05] Jesse: That’s my way of, of measuring my spending, and that influences my spending decisions going forward. Whether you use an app or not, it’s definitely more than just a, a colorful way of, of visualizing the spending. It, it does affect how you behave. [00:54:19] Joe: And I think that was a colorful way. Speaking of colorful ways to and today’s show, what a, what a great, uh, pre Valentine’s Day episode. [00:54:27] Joe: So many more questions by the way. So little time. I was armed and loaded with a lot of these and, uh, maybe some for you guys to think about later. Some more salacious ones. Emergency funds are wildly over recommended for high income earners. Love it or leave it. Automating your money works until life gets complicated and then it quietly fails or maybe not so quietly fails. [00:54:49] Joe: Most people buying umbrella liability. Insurance don’t actually understand what it covers. They just love like the name. [00:54:55] Jesse: Ooh. [00:54:56] Joe: Estate planning before you have Real assets is just adult cost play. I like, I like that one a lot. Wow. Just pretending if you don’t have any assets. So think about those stackers that maybe place your love it or leave it on those in our Facebook group, the basement. [00:55:13] Joe: Alright, let’s talk about what’s going on with all of you this holiday weekend. Oh, gee, I know it’s a big surprise with what you’re doing, but, uh, staying at home like 46% of people or what is Doug? 42? 46. What was it? [00:55:26] Doug: 46? [00:55:27] OG: Yeah, we’ll likely go to dinner somewhere. [00:55:29] Joe: So not doing DoorDash. You sound so [00:55:31] Doug: excited about it. [00:55:33] OG: Well, here’s the thing. We have a higher propensity to go out on like Sunday than on Saturday because of the whole like. It’s just stupid on Valentine’s Day, you know? Oh yeah. Like packed plaque restaurants. This will be my 35th Valentine’s with my wife. So like Okay. We know. Wait, and [00:55:51] Joe: he just told us he’s 39. [00:55:53] Paula: Yes. Aren’t you 39 years old? [00:55:56] OG: Well, I just celebrated my talk about [00:55:57] Joe: long term relationship. [00:55:59] OG: I did just celebrate my ninth anniversary of being 39. So yes, I’m 39 for the ninth time. [00:56:07] Joe: So you will be out day after Valentine’s Day? Probably this weekend. I don’t [00:56:11] OG: know. It depends on like softball and whatever. [00:56:15] OG: We’ll [00:56:15] Joe: figure out, pull a pant. What are some romantic episodes of afford Anything we can have our listeners go toward if they wanna fall in love with their money all over again. [00:56:23] Paula: Yeah. Well today’s episode is not about the heart, it’s about the brain. [00:56:27] Joe: Ooh. [00:56:27] Paula: We are interviewing a brain doctor. Uh, he does not live in the type of house that Warren Buffet lives in. [00:56:34] Paula: That’s, that’s for dermatologists only. [00:56:36] Joe: That’s right. Forget brain doctors. [00:56:39] Paula: Yeah. Yeah. That’s only for skin doctors. But we are interviewing Dr. Majeed Tui. He is a brain doctor who, uh, talks to us about how to keep yourself sharp so that you can live to be, be a CEO of a company at the age of 94, like Warren Buffett. [00:56:56] Joe: Wow. That’s cool. So some, uh, not just longevity, but also longevity and [00:57:02] Paula: co cognition. Like he talks about just how to keep your cognitive ability sharp because your brain is your biggest wealth building tool [00:57:09] Joe: that’s an afford anything. Jesse Kramer. What romantic stuff about people and money is coming up on the personal finance for long-term investors show. [00:57:18] Jesse: We have a, a special Valentine’s Day episode that actually came out earlier this week, and if you’re thinking. It’s probably about asset liability matching and defined duration stock allocations. You are right. [00:57:30] Doug: She [00:57:30] Jesse: just heard [00:57:31] Doug: that dirty mouth of yours. [00:57:32] Jesse: That’s right. [00:57:34] Doug: NSFW. Wow. [00:57:37] OG: Such sweet pillow talk [00:57:39] Doug: blushing. [00:57:39] Jesse: That’s right. Doug actually does all the voiceovers for this episode using his lover boy voice from earlier today, so make sure you tune in. [00:57:46] OG: That’s his normal voice. This is actually his throwing voice [00:57:51] Joe: and that is at the Personal Finance for Long-Term Investors Podcast, which like afford anything. It’s found only where the finest podcasts are at. [00:57:59] Joe: I wanna say another thank you to everybody hanging out with us live on YouTube. This is always so fun doing these live. I’m so glad, uh, for all of your appreciative of all of your comments as we made the show. And if you get a chance, come watch it on, uh, YouTube and see what all these fine people are rock and rolling about. [00:58:16] Joe: ’cause they had many opinions about, uh, well, not just about how you guys uh, answered the questions, but also about, uh, maybe Paula Pan someday winning one of our trivia contests. It’s several points on that. Alright, Doug, we’re gonna leave it with you, man. What this Valentine’s Day weekend should we have learned from today’s show? [00:58:36] Doug: Well, Joe, here’s what’s stacked up on our to-do list for today. First, on this Valentine’s Eve, when you are craving some intimacy, take some advice from og. One little suck in your life. Take on some debt because all debt sucks. Second, think budgeting apps just show you how much you suck. Take some advice from Jesse. [00:58:58] Doug: Once you put your spending habits out in the sunlight, you’ll be surprised how much your habits change. But the big lesson, take it from a professional, romantic, nothing will turn up the eat and create delayed gratification like sitting on the couch with your partner, wearing your onesie Pokemon pajamas, and shoveling a bag of flaming hot Cheetos into that naughty, naughty mouth of yours. [00:59:21] Doug: No, [00:59:22] Joe: nope. [00:59:25] Doug: Thanks to Jesse Kramer for joining us today. Be sure to tune into his podcast, personal Finance for Long-Term Investors, AKA the FL podcast, anywhere you listen to the coolest podcast. We’ll also include links in our show notes at Stacking Benjamins dot com. Thanks to Paula Pant for hanging out with us today. [00:59:42] Doug: You’ll find her fabulous podcast, afford anything wherever you listen to the finest podcasts. And thanks finally to OG for joining us today looking for good financial planning. Help head to Stacking Benjamins dot com slash OG for his calendar. This show is the property of SB Podcast, llc, copyright 2026, and is created by Joe Saul Sea High. [01:00:06] Doug: 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 and oh yeah, before I go, not only should you not take advice from these nerd. Don’t take advice from people you don’t know. [01:00:24] Doug: 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, Doug, and we’ll see you next time. Back here at the Stacking Benjamin Show. [01:00:58] Joe: My spouse Cheryl and I met as, uh, middle school track coaches and something just, uh, spilled over. [01:01:04] Paula: Oh, [01:01:04] Joe: and there, [01:01:06] Paula: that’s Paulette per hatch. You’ll, you’ll remember Paulette per hatch as a former writer on the Stacking Benjamins podcast. Paulette, come say hi.
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