Willpower has a terrible track record with money. It works until it doesn’t, and then your good intentions are the first thing to go when life gets busy. The investors and savers who actually make consistent progress aren’t trying harder. They’ve built systems that keep running in the background whether they’re paying attention or not. Joe Saul-Sehy, OG, Paula Pant, and Jesse Cramer break down the small, repeatable habits that quietly move the needle — and why simpler usually wins.
What You’ll Walk Away With
- Why motivation fades and willpower fails — and the structural shift that keeps your finances moving forward anyway
- The real debate between starting small and going big with savings — and how to know which approach actually sticks for your personality
- A practical framework for automating your finances so progress happens whether you’re paying attention or not
- When tracking every budget category helps — and when narrowing your focus to just one creates faster, more lasting wins
- How to dump a year’s worth of spending data into an AI tool and get back a categorized breakdown that surfaces forgotten subscriptions and leaks you’ve stopped seeing
- The surprising relief that comes from consolidating accounts — and why mental buckets sometimes matter more than the actual number of accounts
- Why brand loyalty and fewer cards aren’t just convenient — they quietly reduce the decision fatigue that erodes financial consistency
- The “joy budget” reframe that changes how you think about spending — and makes it easier to spot what’s actually worth keeping
- The shift that changes everything — from cutting spending to aligning spending with what actually matters to you
- How small habit changes, repeated without fanfare, compound into financial progress that eventually surprises you
Why This Matters Now
In your 40s, mental bandwidth is the real scarce resource. Work, family, and a hundred competing priorities mean complicated financial systems tend to break down exactly when you need them most. The edge doesn’t come from trying harder — it comes from simplifying, automating, and setting up defaults that keep working on your busiest days, when you’re not thinking about money at all.
From the Basement
Joe, OG, Paula Pant, and Jesse Cramer trade strategies on building better financial habits while the crew debates whether you should start small or go big — and nobody agrees. Doug arrives with a Beatles trivia question that shifts the basement scoreboard in ways the current leader did not anticipate. Whether the points hold or the margin call changes everything is a question best answered with your earbuds in.
FULL SHOW NOTES: https://stackingbenjamins.com/why-habits-beat-willpower-1821
Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.StackingBenjamins.com/201
Enjoy!
Our Topic:
These Small Money Habits Really Can Plant Roots (Kiplinger)
During our conversation, you’ll hear us mention:
- Willpower vs habits
- Financial automation
- Saving more money
- Modest transfers
- Bigger savings goals
- Budget tracking
- Spending categories
- Account consolidation
- Mental buckets
- Dashboard simplicity
- Money friction
- Joy budgeting
- Brand loyalty
- Credit card simplification
- Found money
- Spending awareness
- Values alignment
- Health vs wealth
- Exercise habits
- Food affordability
- Goal accountability
- Public commitments
- Dopamine traps
- Monthly reviews
- Income growth
- Career expansion
- Expense flagging
- AI money analysis
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 X: @AffordAnything
OG
For more on OG and his firm’s page, click here.
Doug’s Game Show Trivia
- John Lennon’s “Starting Over” rose to number one after his death. How many weeks did it stay at the top of the Billboard Hot 100?
Mentioned in today’s show
Join Us on Monday!
Tune in on Monday when we address the question: how do YOU protect your money when good times go bad?
Miss our last show? Check it out here: Even the Pros Are Wrong Half the Time. Here’s What They Do Differently (SB1820).
Written by: Kevin Bailey
Episode transcript
[00:00:00] opener: You know, I don’t understand this podcasting thing. How come you boys can’t have those keg parties and chase the girls like all the other nice boys do? Y’all are nerds. [00:00:16] Doug: Live from the basement of the YouTube headquarters. It’s the Stacking Benjamin Show. [00:00:31] Doug: I’m Joe’s Mom’s Neighbor, Doug. And you’ve heard of all weather tires. You might’ve heard of all weather driving, but how about creating all weather money systems? How would that look? One CFP recently wrote about it, and today we are going to share our ideas to help you make your money all weather. But that’s not all. [00:00:50] Doug: As the first quarter draws to a close, we ask ourselves, will Paula get on the board before Q2? Today’s her last shot at winning my trivia question. And now a guy who likes to shoot money into investments every chance he gets, it’s Joe Saw. See, hi. [00:01:10] Joe: Hey there, stackers, and happy Friday to you. Let me be the first one to welcome you to the Stacky Benjamin Show. I’m super happy you’re here. Sit back, relax. Don’t relax too much because we’re gonna help you create an all-weather portfolio today. It’s gonna be a ton of fun. Can’t wait for you to do better with your money no matter what the season is, right? [00:01:31] Joe: Sometimes things get bumpy in your life or things get bumpy in the markets. We worry about all kinds of things, about inflation, about ai, about stuff in the Middle East. We’re gonna solve all that with a great band of contributors. Easy for me to say. And uh, a guy who. Says it much better than I do. Mr. [00:01:49] Joe: Mom’s neighbor, Doug is here. How are you man? [00:01:52] Doug: I am here. I can’t wait for this episode because this episode speaks to my soul. It’s not about how fast can your investments grow, it’s building something that’s really rugged and really durable. It’s like me, I’m built for comfort. Oh, I’m not built for speed. [00:02:06] Joe: That’s, I have a friend that I ran with who always said that. She’s like, just so you know, built for comfort, not speed. [00:02:11] Doug: Right. [00:02:12] Joe: You know what? Something is gonna happen today. You mentioned in your open that Paula might goes, er. For all the trivia of our first quarter, which we’re gonna find out today if that’s the case. [00:02:25] Joe: That’s exciting. [00:02:26] Doug: If anybody can do it, she can. [00:02:27] Joe: We had something happen last week though, that, uh, longtime fans of the show, people were here last week. Know about if you are brand new to the show, just maybe fast forward 20 seconds because we had some controversy last week. Doug controversy on the Stacky Benjamin Show. [00:02:41] Joe: Who knew? [00:02:42] Doug: It’s the best. I love when that happens. That’s when you know you’re well loved. When people are totally invested in the show, when you can piss ’em off [00:02:50] Joe: at the, at the center of, that’s our goal. Uh, a hundred percent not our goal, but a guy who is at the center of the controversy, Mr. Jesse Kramer is here. [00:03:01] Joe: How are you man? [00:03:03] Jesse: Hey, uh, Doug texted me offline and said, I’m now winning the competition. Is that true? [00:03:07] Doug: I said, you can be if you play your cards right, is what I said, Jesse, [00:03:12] Joe: we, and if you hand Doug 10 bucks, I think that’s what, I think, that’s what Doug was really alluding to. No, we had some controversy last week just to let everybody know we are not gonna be able to solve that this week. [00:03:25] Joe: We sent it to the home office, Doug, in uh, Wichita. And uh, it turns out, Jesse, that when you were shooting the shot, your foot might have been on the line. And so we’re not sure if you get the point, if OG really loses a point. What’s going on? We’re gonna have more of that, but we’re gonna continue with the trivia this week and see just if Paula can actually get a point, Jesse. [00:03:49] Jesse: Let’s just see how the scores look in like early December and then we can retroactively decide who got or lost a point last week. [00:03:56] Joe: Let’s just wait. I think that’s fair. Let’s just wait till later. Wait till later. Yes, and a woman who never waits till later because she wants to afford anything today. Paula Pant is here. [00:04:04] Joe: How are you Paula? [00:04:06] Paula: I am fantastic. I am podcasting from my mom’s basement. [00:04:10] Joe: No way. [00:04:10] Paula: Literally, I’m in my mom’s basement right now. This place. It’s a home, [00:04:13] Joe: isn’t it? This place, [00:04:14] Paula: it’s a home. It’s so, it’s great and it’s full of board games. I’ve got payday [00:04:19] Joe: perfect. [00:04:20] Paula: Like the 1970s style. I’ve got family guy clue. [00:04:25] Paula: Look at that. Look at that. And then of course, for the real estate investors out there, I’ve got Monopoly, [00:04:31] Joe: my goodness. [00:04:32] Paula: But the Crown Jewel Cashflow Quadrant, Robert Kiyosaki, [00:04:36] Joe: Robert Kiyosaki’s game. So do we, uh, does that mean that you, as you go around the board, you call out the next market downturn like every 37 seconds? [00:04:45] Paula: Exactly. You call like a hundred of the last one Recessions. [00:04:48] Joe: That’s right. People who dunno, Robert Kiyosaki have no idea what they’re missing because there’s gloom and doom poll around every corner. [00:04:55] Paula: Yh. [00:04:55] Joe: Yes. And actually that kind of bleeds into what we’re gonna talk about today, right? Creating, if there is gloom and doom, how do we handle it? [00:05:01] Joe: If it’s good weather, if it’s bad weather, how do we make an all weather portfolio? [00:05:04] Paula: Look at that segue. Look at that segue. Wow. [00:05:07] Joe: Well, I don’t wanna segue into that though. I wanna segue into who our special guest is. Paula, [00:05:11] Paula: tell me, tell me about all the the special guest. [00:05:13] Joe: When I moved over to the financial media side a while ago, what really bothered me was this idea that a lot of people in the space shared. [00:05:20] Joe: They’d read this book by a wonderful guy named JL Collins. I love the book. It’s called A Simple Path to Wealth. And in that book, he talks about how you can own one mutual fund. And you’ll be fine. You can own it forever. It’s called the Vanguard Total Stock Market Index. And other companies also have a total stock market index. [00:05:37] Joe: You can do that and you’ll be okay. And what was amazing to me was that even though I love that idea, it still bothered me. Like it really, it really should have made me feel calm and it didn’t. And then because I thought, you know what? You can do better once you learn about investing, like later on, once you’re comfortable in the markets, you can do better. [00:05:57] Joe: And so I went out to do the research to prove that you could do better. And it turns out that our guest today is a guy that did all that research for me. I was able to be super lazy. I just pointed people to him and the stuff that he did. He’s one of my favorite podcasters. He’s one of my favorite radio guys. [00:06:13] Joe: He’s just one of my favorite people all the way from the west coast. Mr. Erman joins us. Hey Mr. Erman, how are you? [00:06:22] Paul M: You know, I’m doing great. And I love that story about JL because I was on. A debate with him. It was a cozy debate. We were nice to each other, but he’d admitted in that debate that if you just put some small cap value into your portfolio, you would make more money. [00:06:43] Paul M: So I haven’t been able to sleep since actually [00:06:48] Joe: you’ve been so pleased with yourself. [00:06:50] Paul M: I know. Having myself, [00:06:52] Joe: and by the way, what a nice man. And Paul, he’s not wrong. You can have that one fun and you will be okay. [00:06:59] Paul M: Yeah, but with one fund you could do a lot better than that fund. That’s the part that’s bugging me is there is a better one fund solution, but I think that’s probably for another day. [00:07:11] Joe: Well, and that’s the thing that bothers me is that, uh, you know, a lot of times people say, well, I have enough for myself. But I think Paul, I live in a community where the average income is less than $40,000 a year today in Texarkana. And man, if I can take some extra money just because I’m blessed with the ability to hang out with people like you and Paula and Jesse and even Doug Heck, and learn about this stuff, I can make some excess money that can help my community. [00:07:37] Joe: I mean, there’s gotta be something to be said for that. [00:07:39] Paul M: That’s what they suggest education is actually about. So, uh, yeah, I think you’re right on. [00:07:45] Joe: Well, we’ve got a great show today. We’re gonna talk about making your portfolio, not just your portfolio, your life, a little more all weather. So if this random Friday hits where something’s bad, you lose your job, or inflation happens, you can’t afford the grocery store like you were able to, whatever it might be, your portfolio, right? [00:08:06] Joe: We’ve got all these worries and all this stuff happening in the markets these days. What do we do about it? This is gonna be a great place to start, but Paul, before we get into this, I also wanna point to a resource you have. You have a resource called the Bootcamp that I love. That’s a great primer for people when they’re getting into investing. [00:08:25] Joe: Tell everybody about the boot camp. [00:08:27] Paul M: Well, it’s this, the most serious work that we do. We have over 200 tables and graphs and charts on our site. And, uh, at bootcamp we, we show people all the information that I think they really need to know exactly the same information. Uh, professional investment advisor would know if they know that they can do it themselves. [00:08:51] Paul M: If they don’t learn it, I’m not sure they will. [00:08:54] Joe: Right. And the price is right on all this information you’re giving to Paul. It is completely free. Yeah. And will you go to paul merman.com for that and we’ll link to it in our show notes. All right. On today’s show, all weather, we’ve got Paul here, we got Paula, we’ve got Jesse, we’ve even got Doug and me. [00:09:13] Joe: We’ve got a couple sponsors to make sure we can keep on keeping on. We’re gonna hear from them, and then we’re gonna talk about making your portfolio and your life more all weather. [00:09:29] Joe: All right. The inspiration for today’s piece comes to us from a good friend, uh, Dana Oba, a phenomenal CFP. She wrote this piece at the Retirement Manifesto blog, and we’ll link to it in the show notes. You don’t need to open, you don’t need in front of you While you’re listening to today’s show, because we’ve got you, what Dana talks about is this idea of a lot of people want a flashy sports car. [00:09:52] Joe: They want this fast, exciting, impressive life or fast, exciting, impressive portfolio. But others want something that maybe handles the rain, they handles the snow potholes, maybe the occasional trip to Costco. Today, we’re gonna expand on that idea. Not just all weather portfolios, but all weather money, no matter what happens. [00:10:12] Joe: So, Paula, let’s begin with you. Why are we so in love with that shiny sports car life, the shiny sports car portfolio? Is it greed? Is it comparison, or is it maybe something deeper going on psychologically? [00:10:26] Paula: Oh, I think many of us aspire to success. A literal sports car is a symbol of success. You know, when you see that there’s a bit of a mental shortcut of, oh, that person has at a minimum enough discretionary income that they could have a sports car. [00:10:42] Paula: So it becomes a mental shortcut. It becomes a marker of success. And so I think you take that concept and you translate it to investments and many people see the story of a hot investment of crypto, of Nvidia, of back in the early nineties it was pets.com. You see that hot, shiny, new investment. And you hear in survivorship bias, you hear the stories of the people who did make a lot of money with that hot, shiny, new investment. [00:11:09] Paula: And so again, that. That same mental shortcut of if I bought that, I bet I could be successful too. I think that psychology starts to play in. [00:11:19] Joe: That’s interesting, Jesse. Things don’t change, right? I haven’t been a financial planner in what, 15, 16 years now. And yet when you talk to financial planners, they still say, and you probably hear this in your office, I just want higher returns. [00:11:33] Joe: I just want higher returns. Just give me higher returns. What are those people actually saying? Is it about money or is it about fear missing out, something else going on? [00:11:42] Jesse: I don’t know. I, I think like, I, I think the, the most common, uh, cause for that thought process, it’s simply that I looked at what Morningstar said about the past three year returns of this thing, the past five year returns of this thing. [00:11:55] Jesse: I was talking to my neighbor and my, I’m smarter than my neighbor. What’s that one famous quote, like, one of the hardest things in life is to see your neighbor who you know, you’re smarter than be more successful than you. And, and people say like, you know, I know what other, how other things have performed and therefore if I’m not getting that, I want it. [00:12:11] Jesse: So I think a lot of it does come from that. Charlie Munger has some great quotes on envy and like envy and jealousy of being these really powerful motivators for people. I’m sure we’ll get into it later, so I won’t bring it up now, but it makes me think of this concept of benchmarking. Mm. Like I think it’s really, really important in these conversations, today’s conversation, but just portfolio conversations in general to say, well listen, if, if you’re about to retire and your portfolio, I’ll just use a 60 40 portfolio. [00:12:36] Jesse: ’cause it’s so easy to describe. 60% [00:12:38] Joe: stocks, 40% bonds you’re talking about. [00:12:40] Jesse: Thank you. Yep, exactly right. If that’s what you’re invested in and you’re comparing yourself to the s and p 500. That’s a benchmarking issue and, and kind of that, that’s such a fundamental issue in my opinion, that it’s almost hard to progress the conversation from there. [00:12:53] Jesse: Like, first you need to fix that misunderstanding of benchmarks and benchmarking before you can then dive into actually understanding if you’re overperforming or underperforming. So it’s, it’s really nuanced issue, Joe. But if I had to go back to where I started, I think it starts with just comparison. We naturally want to compare ourselves to what other people are doing, how other funds are performing and can, [00:13:14] Joe: or [00:13:14] Jesse: the [00:13:14] Joe: 500, which is irrelevant for our goals. [00:13:17] Jesse: Right, right. [00:13:18] Joe: Yeah. [00:13:18] Jesse: But yeah, it’s really interesting thought process. [00:13:20] Joe: You know, Paul, this idea of the shiny sports car got me thinking is the big mistake that you’ve seen over your career, people take too much risk when they chase that sports car? Or is it chasing what worked last year? So I jump on the, on last year’s game when there’s a new game afoot this year. [00:13:41] Paul M: I, I think it’s a little bit of both sides. The people who are afraid to take any risk and think they’re gonna go broke if they take any, and then the other people who, uh, somehow you can’t, you can’t slow ’em up. And the people who, who like that are the people trying to sell the kind of products that people probably shouldn’t be putting their money in. [00:14:01] Paul M: That’s, that’s the part that’s so discouraging. But it should start with somebody asking a person a very simple question. And that is, is your desire to beat the market? Is your desire to find the lowest risk way to get the highest return that you need or want? Or are you looking for the lowest risk way to produce what you need to get somebody on the right path in the beginning? [00:14:27] Paul M: But the minute. You put ’em on a path that doesn’t lead to a sale for you on Wall Street, then you got this conflict of interest. I don’t think I’m gonna go there with the client. I wanna go where I can make the sale. And selling that, that shiny, that shiny car, it, it’s so easy to do. Unfortunately, people still buy lottery tickets knowing that the probabilities are not very good. [00:14:53] Joe: It’s so funny, Paul, I have a good friend who works at the bank in town and his family took his poker money, which we play poker for quarters. So literally takes a bunch of his quarters. He had had big winnings, he’d won like $15 and his family told him that they were gonna take it and they were gonna invest it. [00:15:11] Joe: Lottery tickets when the lottery hit a billion dollars. And he got angry, Paul, he got super angry that they were doing it, but they did it anyway. And they’re like, dad, somebody’s gotta win. He’s like, but it’s not gonna be us. What are you talking about? And guess what happened? [00:15:24] Paul M: Oh, that’s terrible. [00:15:24] Joe: He won $40,000. [00:15:26] Paul M: Oh, [00:15:27] Joe: see, he, he won a bunch of money, which gets me wondering this question, is chasing the shiny investment ever, ever, actually, maybe good. [00:15:40] Paul M: I’d say no. That’s what I’d say, because I mean, the worst thing to do is to teach a kid how to play the stock market game in high school. And he wins. Or she wins. And now they think the way to invest is the way that that stock market game turned out. [00:15:55] Paul M: And that’s a terrible lesson. And uh, just because somebody wins the lottery does not mean it’s a good thing for the next person to do. [00:16:03] Joe: Yeah. And I think Paul, the good lesson there is that he still hates it. He stays still, don’t get me wrong, he’s happy with the 40,000 bucks, but I don’t think that, uh, Robert’s ever gonna play it again. [00:16:12] Joe: Paul, do you think there’s ever a time when leaning into the trend, right? Like thinking, okay, AI’s the trend right now, AI has been a bumpy road a little bit lately, but it’s not going away. Is there a time to lean into it? [00:16:22] Paula: Mm, well, I think there’s a distinction between. Between a trend versus a fundamental shift in the way that society operates. [00:16:32] Paula: Going back to the nineties, the late nineties, early two thousands, people could see that the internet was not just a fad, that the internet was here to stay, and the information superhigh was going to fundamentally change everything about our lives in ways that would be deep and permanent. Where people went wrong was picking winners and losers based on that. [00:16:55] Paula: Hmm. So overall, being bullish about the internet, the information Super Highway was great, but picking specific winners and losers was not so great. And I think the same thing right now is happening with ai. I’m being bullish about ai, like I’m very bullish about ai, assuming that it doesn’t. Get smarter than us and then overtake us. [00:17:20] Paula: That’s a different story for a different day, right. [00:17:21] Joe: Battlestar Galactica live. [00:17:23] Paula: Yeah. Yeah, exactly. But overall, I’m very bullish about ai, but I don’t know who is going to be the big winner there. Right. I don’t know. Of the companies that are hot right now, which ones are Internet Explorer and which ones are early Amazon? [00:17:37] Paula: Mm. [00:17:39] Joe: Yeah. We don’t know until, I mean, you gotta be able to look in the rear view mirror, right? [00:17:42] Paula: Right. [00:17:43] Joe: To figure out what’s what. I wanted to start off with that. What’s the danger in the shiny sports car before we get to all weather? So let’s turn the corner, Jesse, into all weather. When I said all weather money, we’re gonna try to help people make their money. [00:17:55] Joe: All weather. Where’s the average person start and what does that really mean to you? [00:17:59] Jesse: Yeah. Well, you’re asking me where to start and one of my questions I had to you, Joe and or, or Paul or, or we can take this any way we want, but is what do we mean by all weather? And maybe that’s really the question that you want me to answer right now. [00:18:10] Jesse: Yeah. So Ill, I’ll kind of, I’ll put my finger on it. It was funny in the chat. When we were having our YouTube live issues here today, and I was kind of in the YouTube chat, oh, we weren’t having [00:18:17] Joe: issues. I didn’t realize we had issues. I had no idea, no idea. [00:18:20] Jesse: I, I posed a pop quiz to the audience. I said, uh, well how much of Ray Dalio’s all-weather portfolio is stocks? [00:18:27] Jesse: And I got a bunch of different guesses, and the answer is 30%. And the rest of his portfolio, I forget exactly what it was. I think it was 40% treasuries or maybe 15% short-term bonds, 40% long-term bonds. And then it’s like seven point a half percent gold and seven point a half percent commodities. And so he’s got all these different asset classes, some of which we might, you could, could say are a little controversial maybe. [00:18:48] Jesse: But I think the thing that rate Dalio and other all-weather proponents they’re trying to do is they’re trying to protect against these really big macro risks. Maybe it’s inflation or maybe it’s deflation. Maybe it’s recession or maybe they’re just trying to say, Hey, I want to have enough invested in growth assets, that if the economy’s doing well, my portfolio still does well. [00:19:07] Jesse: So no matter what that economic weather is, inflationary deflationary, growing receding, they still want something in the portfolio to be doing well. So may I’ll, I’ll pause my answer there to see if Paula or Paul. Feel much differently than that. [00:19:22] Joe: Yeah. Paul, when I said all weather money, what was on your mind? [00:19:25] Paul M: Well, of course you’re, that’s right. At my alley. I love the 10 fund strategy. Now I’m not advocating for the 10 fund strategy, but I’m half in, I do it at my own equity portion of the portfolio. And that be some US stocks, some international stocks. I’m 50 50. Some large, some small, I’m 50 50, some value, some growth. [00:19:49] Paul M: I’m 50 50. And then I also have 50% in bonds and 50% in stocks. So I have spread the risks. So when internationals are performing, I get some, if you go back to the seventies, international and small and and value were good. The s and p 500 was not, if you look at 2000 to 2009, the s and p 500 was not good. [00:20:14] Paul M: The others were good. And of course, when you have a crash like you have in 2000 to 2002, you’re gonna have the fixed income being there to, to help balance that risk out. Uh, the problem is when people start market timing and saying, now is the time to be in international, and they start moving to international. [00:20:37] Paul M: And typically the time they move is when it’s been on a run already. So when you talk about that shiny, well, ai for example, I’ve got AI in my portfolio. I’ve got lots of it in my portfolio, but I’m not there because, because it’s hot, it’s there because it’s just another industry that is represented in all of these different indexes that I advocate people hold in their portfolio. [00:21:05] Paul M: So it’s uh, the market timing problem with a lot of these people, I think is the biggest problem, not the fact that they don’t understand the idea of having different equity asset classes. [00:21:17] Joe: Yeah, we’re chasing the shiny sports car. We’re chasing the sports guard. Paula Paul makes a great point there around the index. [00:21:25] Joe: I think a lot of people, a lot of our stackers don’t understand that these indexes are self-cleaning, which I, I think really what Paul’s bringing up is that when something gets hot, you actually get more of it. Can you explain how the index does that for people? [00:21:39] Paula: Yeah. I mean, so when something gets hot, when when something becomes a bigger share of the overall index, you end up owning more of it. [00:21:46] Paula: So by virtue of doing that, you do end up leaning into the winners. I know people have mixed feelings about that. Some people say, you know what? I don’t want an over concentration in the winners. But we also know historically. The big winners there. There are generally a handful of companies that do tend to carry the index. [00:22:04] Paula: We don’t know in advance what they’re going to be, but once upon a time, those were railroad stocks, right? Like that. That has always been the case throughout history that there have been a handful of. Major companies that have really carried the index and naturally organically, you end up owning more of them when you buy the index as a whole. [00:22:22] Paula: And Joe to the self-cleaning portion of it. As companies go out of business, they naturally just fall out of the index and get replaced by newcomers and, and you yourself don’t have to do a thing. So [00:22:33] Joe: Yeah. You don’t have to weed the portfolio at all. [00:22:35] Paula: Yeah. [00:22:36] Joe: Which was so often the case when I would find people, uh, back when I was a financial planner, that were independent investors doing their own thing, their portfolio badly needed weeding. [00:22:44] Joe: Yeah. ’cause they’ll look at it, they’ll look at it three weeks in a row and then they don’t look at it for eight months. Yeah. And then they look at it three weeks in a row and then again, don’t look at it for eight months. I wanna broaden this topic though, because you know, Paula, I’m gonna stick with you. [00:22:55] Joe: We weren’t just talking about portfolios, which is where Jesse and Paul went. I was talking about all weather money, which might be about cash reserves or low debt. Mm-hmm. Or flexibility. Like what gives you the ability to have more of an all-weather life. [00:23:10] Paula: Mm. Cash is king. Right. Nothing is more important than it. [00:23:15] Paula: One mistake that people often make is that when times are good, people often view the market as a high yield savings account. And so when times are good, people will say, well, I hate the fact that my cash is sitting, you know, in a high yield savings account, earning next to nothing when it could instead be in the market earning double digit returns. [00:23:35] Paula: And then when something sudden and negative like re recessions are always defined by severity and duration, right? So something severe happens and maybe it lasts for a long time, that’s when people are really glad that they hold cash. And so having that cash allocation, having the proper insurances that fit you, having the proper like protection overall, like thinking, not you think about any sports game, there’s offense and defense. [00:24:01] Paula: So having the right defenses in place as well, that gives you a good all-weather life. [00:24:05] Joe: Let’s talk about that idea playing defense. Jesse, when people think about financial storms, we talked earlier about those black swan events, right? We worry about what happens if, let’s say there’s craziness in the Middle East or, or whatever the thing might be that we might not have seen coming. [00:24:22] Joe: Is that truly the biggest thing if you put on your financial planner hat, we should be worried about are these external events or are there things that maybe are more under our purview that we could build defenses around? [00:24:33] Jesse: Well, I guess, I think the answer is probably both, right? I mean, I, there’s certainly behavioral things that we need to control and there’s certainly that fact of, you know, hey, in so far as you can control what you spend and control what you save, great in so far as over the long run, you can even control what you earn and you can start earning more money. [00:24:50] Jesse: Fantastic. So obviously, like those are the biggest styles are the ones that you can control and, and some of these defenses that you can build up for yourself are also in your control. You know, Paula mentioned emergency funds and insurance decision decisions, like that’s within your control too. But I do think to myself a really cool concept that. [00:25:07] Jesse: Sometimes I, I feel like I ought to implement more day to day is this fact that like there are so many interesting different risks, including financial risks in our lives. And a lot of times when you hear a certain story in this kind of financial planning space, someone has really keenly identified this one particular risk and they’re going after that with all their muster. [00:25:27] Jesse: And to them, what they’re doing makes so much sense. ’cause they’re like, well, of course the, the risk I currently feel, for example, might be entering retirement without enough money. And that’s why I’m still at a hundred percent stocks, even though I’m 56 years old and wanna retire by 60. Because the biggest risk is I don’t have enough money. [00:25:42] Jesse: Stocks I’m told help me grow my money over the long run. I’m all stocks. And, and the thing to think about is like to pull that person aside and say, Hey, there are all these other risks that maybe you haven’t thought of. And certainly you’re not weighing largely enough in your life that you probably ought to be protecting against. [00:25:59] Jesse: So the point is that if you start the conversation first by thinking about the risks. Then you think about how to allocate your resources to protect against those risks, that can be a, a pretty interesting way of building up a financial life from the bottom up. [00:26:12] Joe: Paul Jesse goes back to the portfolio talking about a hundred percent stocks. [00:26:17] Joe: I wanna ask you about that because more and more research I’ve seen lately suggests that that can be the key to success. However, the problem is not the stocks. The problem is you like, how, how, how, how hard is it for an investor to train themself to stay in this bumpy portfolio of all stocks when they’re hearing more and more research showing in all stock portfolio is the place to be over the long term. [00:26:44] Paul M: Well, I think every person, uh, as an advisor, this was my approach in working with, with clients. I, I think they should all expect that tomorrow starts the worst bear market in their life. I mean, they, they should be built from day one to expect bad things. I used to tell people, if you follow my advice, I guarantee you will lose money. [00:27:07] Paul M: Absolutely guarantee it. And now I want to talk with you about how much you’re willing to lose to have your money invested. And if it’s an all stock portfolio, there’s nothing wrong with that, except what you’re accepting at any moment now is losing half of your money. In fact, many of us sat through a day in October of 1987 where the market went down 22% in one day. [00:27:32] Doug: Yeah. [00:27:32] Paul M: One day. We know it went down over 50% in 73 to 74 and 50 in 2000, 2002, and 50 in 2000. All of these times it goes down 50. So my belief is if we wanna stay the course for a lifetime, whatever that happens over the glide path, over a lifetime, we should just assume the bad times are starting and realize that we’re gonna have to accept some loss. [00:27:59] Paul M: My wife and I, 50 50 stocks and bonds, we are accepting a 25% loss of our savings. That’s what’s there if you’re 50 50. And the meantime, I’m investing. And the reason we take that 50% equity is because we’re trying to help out Western Washington University and we’re trying to help out children and all those other things that don’t even have to do with our lifetime. [00:28:25] Paul M: But right up front, I have determined how much I’m willing to lose and I expect to lose it. [00:28:31] Joe: Getting away from the portfolio. My last question before the halfway break is, do you think, Paul, from your financial planning days, that disability is the biggest threat when it comes to risk management strategies? [00:28:44] Paul M: Well, it, it is one that’s rarely addressed for one thing, uh, unfortunately, but certainly in some industries it’s a necessity and the probabilities are better than, than death for a lot of people. I don’t know the exact numbers, but [00:29:01] Joe: you got a one-on-one chance of death at some point. Oh, you’re talking about this year? [00:29:05] Paul M: That’s right. That’s exactly’s, right? [00:29:07] Joe: How do you beat that number? I don’t think any of us. I wanna know your strategy, Paul. [00:29:12] Paul M: So, yeah, I, I don’t think we’re very good at, at addressing risk. If you look at all of the things that, that lead to successful investing, almost every one of them. Is a decision on managing a risk, a risk of loss, whether it’s taxes or inflation or the expenses. [00:29:34] Paul M: We should look at every risk we faced as an investor and ask ourselves, are we addressing that risk? And certainly disability is a huge one. [00:29:44] Joe: We are going to dive more into that ’cause I wanna dive more into the non portfolio pieces of creating an all-weather portfolio in the second half of today’s discussion. [00:29:54] Joe: But at the midway point, we pause for our year long trivia competition and even though it’s the last week. Of Q1 because we had to send the videotape via horse and buggy all the way to Wichita. There will be no margin calls. Paul has no idea what the hell we’re talking about. But there’ll be no margin calls today. [00:30:15] Joe: ’cause uh, we have to review the tape. So, yeah, [00:30:17] Doug: I mean, like the major league baseball, the NFL, they get to send their stuff when plays get reviewed. They’re, it’s in New York, like instantaneously out. We don’t have that kind of money. They’re figuring it out. We [00:30:26] Joe: don’t have that [00:30:27] Doug: kind of money. I mean, we’ve got three pack a day Dottie sitting in her apartment in Wichita trying to figure this out. [00:30:33] Doug: So just be patient with us people. [00:30:35] Paula: Wait, wait, wait. If there’s no margin call today, that, that means I lose my Q1 opportunity to [00:30:40] Joe: margin call? No. We’ll make an allowance if we, if we do it, we’ll make an allowance, but we just, we just have to figure out where this whole thing’s headed. [00:30:48] Jesse: Just wait until the listeners hear you’re getting multiple margin calls in one quarter. [00:30:51] Jesse: Paula [00:30:52] Paula: Ooh. [00:30:52] Joe: Call you. [00:30:53] Paula: Just wait. So the thing we’re reviewing in the tape, is it that Jesse May not have waited for the full three second interval? Is that it? It’s the allegation. [00:31:01] Doug: No, no, no. It, it’s whether or not he was even eligible to make a margin call. Did he have enough points to make a margin call? Mm. [00:31:08] Doug: Were Joe and I thorough enough when we recited the rules at the beginning of this, yes, there’s a lot of things under, it’s all very intertwined and complicated. It’s so complicated, [00:31:18] Joe: Paul, [00:31:18] Doug: reading to things. I mean, just [00:31:20] Joe: our trivia is so complicated. Today’s is not complicated. Paul, today you’re playing for my cohost OG who, uh, couldn’t be here today. [00:31:29] Joe: So we keep the financial planning guys together. Good news and bad news that you’re playing for og. You want the good news of the bad news? [00:31:37] Paul M: Oh, I always want the bad news first. [00:31:38] Joe: That’s right. Set up as if it’s gonna be the worst bear market ever. Right? Like you just said, Doug, give Paul the bad news. What place is uh, OG in right now? [00:31:47] Doug: Well, the dark Lord himself is in first place. Paul, he’s got six points. I’m sorry, [00:31:53] Paul M: og. [00:31:55] Doug: He’s got six points, which means you temporarily have six points, which means. You gotta go first. You’re out there, you’re the, you’re the bleeding edge. This shining [00:32:03] Joe: light. Yeah. Showing everybody how this thing’s done. Paul, here’s the good news though. [00:32:07] Joe: You’re slightly ahead because our other financial planner, Jesse, is uh, well, how’s Jesse doing? [00:32:14] Doug: He’s got one point, Joe, but there is a big fat asterisk next to that one point. It’s like the Roger Marris hitting 61 home runs. There’s a big asterisk in the record books at the moment for Jesse Award. Pre day [00:32:26] Joe: Doty has to figure out [00:32:28] Doug: Yeah. [00:32:28] Joe: How that works. Yeah. And then Paul, what does Paul have? How many points does Paul have? [00:32:31] Doug: Um. We could just move on. I mean, I think it’d be safe if, if we just Probably Good idea. Just like, let’s just get to the question. [00:32:37] Paula: What rhymes with zero? [00:32:39] Doug: Paula has less than Jesse. Zero. [00:32:43] Paula: LiRo. Hero. Hero. [00:32:46] Joe: Yes. Paula is our zero hero. [00:32:48] Doug: Yeah. [00:32:48] Joe: Yes. All right. Is Paula gonna get on the board before the first quarter’s over? Well, we need a trivia question. Doug. What’s on tap today, man? [00:32:59] Doug: Hey there, stackers. I’m Joe’s mom’s neighbor, Doug, and today is the birthday of a rising star. No, not me. Singer and actress. Halle Bailey was born on today’s date in 2001. Now look, OGs not here to defend himself, probably shouldn’t say this, but it’s also the first day he started demanding naps as part of his contract. [00:33:22] Doug: Anyway, here’s today’s question. True story. By the way. Not only did Hal, not only did Halle Star as Ariel in the live action version of The Little Mermaid, but she’s also half of the popular duo, Chloe and Halle, who sang America The Beautiful during Super Bowl 53 back in 2019 when she was, um, only hold on. [00:33:44] Doug: Gotta do math. Um, 2001 from 2019 that were 18, 18 years old. Bam. I did it. Got it. Right. Got it. Right. Here’s today’s question. If you had wanted to buy a 32nd ad saying Happy birthday to Halle. What’s the least amount of money that network would’ve let you spend back during Super Bowl 53? I’ll be back right after I see about charging for on-air shoutouts. [00:34:12] Doug: I’m thinking stacker Drew owes me like 50 bucks for last week’s. Shout out. Wait a minute. That was another one. It’s like a hundred bucks now. I’m gonna be rich. [00:34:21] Joe: Doug’s making money already today off of, uh, stacker Drew. So Paul, here’s the deal. It’s 2019. You’re buying a 32nd ad on the Super Bowl. What’s the minimum amount of money the network’s gonna let you spend? [00:34:37] Paul M: Yeah, you know, I, I, I know it’s a lot. Uh, I’m going to go with, uh, $12 million. [00:34:45] Joe: $12 million is the least money you could spend. Jesse, are you a fan of, I, I forgot to ask Paul this. Uh, are you a fan of the live action version of Little Mermaid? Did you see Halle Bailey? [00:34:58] Jesse: Uh, I have a memory of seeing her in the movie, one of the James Bond movies, or Swordfish in the nineties. [00:35:07] Jesse: Yeah. Nope. Nope. I’m thinking of the same person. [00:35:08] Joe: Nope, that’s Halle Berry. [00:35:10] Jesse: Ah, [00:35:10] Joe: this is Halle Bailey. [00:35:12] Jesse: Got it. [00:35:13] Joe: Yeah. [00:35:13] Jesse: Never heard of her. [00:35:13] Joe: Yeah, never [00:35:14] Jesse: heard of her. [00:35:15] Paul M: By the way, I’ve watched that movie at least a dozen times. [00:35:18] Joe: The live action version of Little Mermaid, [00:35:20] Paul M: the cartoon. The, yeah. [00:35:21] Joe: Oh, the cartoon version of it, huh? [00:35:23] Joe: Yes, [00:35:24] Paul M: I have old kids. You know, I’ve got a 60-year-old son for crying out loud. [00:35:31] Joe: How can that be when you’re only 37, Paul? [00:35:33] Paul M: Yeah, I know. That’s how [00:35:34] Joe: I [00:35:34] Paul M: feel. [00:35:34] Joe: It’s like you’re from Arkansas right up the road from me here. All right. Uh, Jesse, what’s your guess, man? [00:35:41] Jesse: I’m gonna go lower, uh, than Paul. I’m gonna go, so this is the least amount someone could spend on a 32nd ad. [00:35:50] Jesse: I’m gonna say, uh, $1.7 million. [00:35:55] Joe: Oh, you’re going the opposite way. Yeah. Boy, there’s a big, I know Paula, how you like the field goal. We got 1.7 and Doug, what was Paul’s guess? [00:36:05] Doug: Paul’s guess was $12 million, Joe, [00:36:07] Joe: 12000001.7. Did you see the live action version of the Little Meine? [00:36:13] Paula: No, no. I have Notre Big Bailey fan. [00:36:15] Paula: I have heard the name, but I am not familiar with her. I, I have not watched the live action version of The Little Mermaid. I’ve heard that it’s good. I’ve heard good things about it, but I don’t really watch movies very often, so, but I did, you know, I did like the cartoon version. I watched that as a kid. [00:36:31] Paula: Okay. So 32nd ad in 2019. It’s notable that the question is what’s the least amount? ’cause I’m trying to, that implies there are different price points for the same length of ad in the same Super Bowl. So I’m trying to figure out what would cause those prices to change. Would it be like. Placement in the Super Bowl. [00:37:00] Paula: Yeah. [00:37:00] Doug: Yeah. Win win during the game, whether or not there’s a, a wardrobe malfunction. I mean, there’s all kinds of different things that factor in. [00:37:08] Joe: I think if it’s the fourth quarter and it’s a boring game, you know, there’s a chance it might be a boring game and people will tune out. Mm-hmm. So I think fourth quarter advertising might be priced lower than the, you know, around the national anthem. [00:37:20] Paula: If it’s a great game, then wouldn’t more people be tuning in? [00:37:23] Joe: But I think there’s more risk, I think, to put it in investing terms. There’s more standard deviation on your money. Yeah. When you, when you buy that ad. [00:37:31] Paula: All right. I’m gonna buffer Jesse to the upside. So I’m gonna go 1.8. [00:37:37] Joe: 1.8 million. That’s the way the pros do it right there, Paul. [00:37:42] Joe: They just, oh, [00:37:43] Jesse: is it [00:37:43] Joe: Cap ’em? Right. Like that. Ah. All right. We got 1.7 million. We got 1.8, we got 12. Million. [00:37:52] Jesse: Paula, do you remember? This Isn’t Paul, this is og. He looks like Paul Merriman. This is not, this is og. [00:38:02] Joe: That’s right. It’s not the nice guy who’s on with us today. It’s og. Yes. All right. We’re gonna find out who’s gonna win this. [00:38:09] Joe: Is Paula gonna win one before the first quarter’s over? We’re about to find out. We’ll be right back. All right, Paul, you started off at 12 million and man, both, uh, Jesse and then Paula. I think Paula was just playing the game though. They thought maybe that guest was a little high. How do you, how are you feeling? [00:38:25] Joe: You feeling good? [00:38:26] Paul M: I didn’t understand how this was going to work, and so I, I was thinking of coming in at 1.9 if I could, [00:38:38] Joe: Paul’s like a race. A race, [00:38:39] Paul M: you know, something. This is a problem. This is an area I don’t spend much time on. Uh, so I am just guessing. I know that now there are a lot more than 12 million, at least from what I’ve read. So from what I just heard, I would probably go lower if I had the choice. But no, I’m, I’m not uncomfortable with my guess. [00:39:02] Joe: I was gonna say 2019, not that far away. And that’s right, they were still expensive then. So, Jesse, uh, you at 1.7, how you feeling? [00:39:11] Jesse: Not good. Not good anymore? I mean, I, I wasn’t feeling great to begin with because I, I, my, my gut was slowly, okay, I’ll walk you through it. My gut was that a full ad, prime ad is like five, six, 7 million. [00:39:24] Jesse: That if you’ve got really bad placement, maybe you’re paying a fraction of that. But, uh, what I heard Paul just say there that like, the prime ads might be even more than the 12 that he was guessing. [00:39:35] Joe: Yeah, [00:39:35] Jesse: that definitely moved my anchor to a place where I realize I’m, I’m probably wrong. [00:39:40] Joe: Some of these numbers pretty eye popping. [00:39:42] Joe: Paul, how you feeling? [00:39:43] Paula: You know, I, I’m feeling pretty good. Like, I think that in reality the true answer is probably in the neighborhood of like three mil ish. So I’m, I’m feeling pretty good. [00:39:53] Joe: That was your gut. [00:39:54] Paula: Yeah. Yeah. And we know how, how Right. That tends to be. [00:39:57] Joe: Iwas
[00:39:57] Joe: gonna say, why the hell do you think that’s right? [00:40:00] Paul M: Uh, you know what I hate about this topic is that I heard, I read that over 50% of the money that was spent on ads at the last Super Bowl. For gambling, sports gambling. [00:40:13] Joe: Oh yeah. Yeah. [00:40:14] Paul M: And that just drives me absolutely nuts that, that has, uh, happened to our society. [00:40:20] Joe: I heard a Robin Hood commercial just, uh, during the conference championships in, in college basketball last week. [00:40:27] Joe: Robin, I thought, thought you were gonna gonna [00:40:28] Doug: say during the break for this trivia. [00:40:32] Joe: No, I hope that happened one time accidentally. I have no idea how there was a Robinhood, by the way, Paul, we just got done ripping Robinhood and then there was a Robinhood ad that showed up just perfect. But Robinhood getting involved with gambling, it’s incredible. [00:40:46] Joe: Speaking of incredible. Will this be the incredible time that Paul App pant wins? Is it low enough that Jesse is going to get the win? Is it up there in the stratosphere because it’s expensive and Team OG slash Paul Merriman that they win? Doug, you got the answer, man. [00:41:05] Doug: And here I come with a Joe. Hey there stackers. [00:41:07] Doug: I’m big time podcast influencer and guy who will shout out your loved one’s names for a cool 50 bucks. Joe’s mom’s neighbor, Doug. Turns out, Joe’s over there shaking his head about the $50 shout out thing. That dude’s a wet blanket. We’ll have to circle back on that from. But today we’re talking about birthday girl, Halle Bailey. [00:41:27] Doug: You may remember her in the live action version of The Little Mermaid, where she played opposite Paul Merriman. Fun fact, who starred as her wise and lovable dad, king Neptune. I mean, it could be true. I don’t know. You both have great beards, [00:41:40] Joe: very similar beards. Yeah. [00:41:41] Doug: But because Howe performed America the beautiful at Super Bowl 53, we asked our contestants how much of your minimum spend would’ve been for a 32nd ad. [00:41:52] Doug: You know, I’m not gonna just tell you how much it was, but what I will tell you is that it was 6.9 million less than what Paul guessed. 3.4 million more than what Jesse guessed. Oh, [00:42:04] Joe: like no way. No way. [00:42:04] Doug: Just 0.3 million. More than what Paula guessed. Paula is a winner at the last second coming in before the end of the quarter. [00:42:14] Doug: The correct answer is 5.1 million, making Paula pant our winner. [00:42:20] Paula: It had to, I didn’t even have a speech prepared. I’d like to thank, [00:42:25] Doug: look at the pure joy on her face. She’s not thinking that. [00:42:30] Paula: Wow. [00:42:30] Joe: Holy crap. Paul. I’m tearing up. I’m tearing up. [00:42:33] Paula: Wow. I’d like to thank my family for always being there for me. I’d like to thank the academy. [00:42:39] Doug: It’s a big day in the basement. [00:42:41] Joe: Nice [00:42:41] Paula: job. I’d like to thank my mom’s basement, [00:42:44] Joe: but I think Paul is a hundred percent right. I think between 2019 and today they’ve gone up substantially. [00:42:50] Doug: So I’ve just verified this Joe a. 32nd ad in this most recent Super Bowl 2026 was $10 million. 10 million. [00:42:58] Joe: So [00:42:58] Doug: yeah, and it was $8 million last year. [00:43:00] Doug: So it went up a big percentage. [00:43:02] Joe: Yeah. [00:43:02] Doug: You know, uh, just between 25 and 26. [00:43:05] Joe: Wow. Well, enough of that. We’ll put the trivia away for another week. We’ll find out what happened with the controversy from last week. Man, the plot thickens here. But let’s get back to our all-weather portfolio plot, because I think this is a really important topic, Paul, all these years of seeing people retire. [00:43:22] Joe: Right. I feel like just during my 16 years as a financial planner, the number of people I got to see retire successfully was a large number. And people listening to this, they wanna do it once. Right. But you’ve been blessed to see it many, many times. What’s the biggest financial shock that you saw derail people’s retirement? [00:43:41] Paul M: The biggest one I saw was, uh, being underinsured and getting in a car accident. Uh, they thought they had plenty of insurance, but the lawsuits that went to the folks that they had hit, it wiped them out. It just wiped them out. They could have, they didn’t have the umbrellas that they, in fact, that’s probably the reason I have umbrellas that are larger than normal is because it’s a very low cost to protect against a catastrophic event. [00:44:12] Paul M: But they happen. Now, if you talk about things that people did more generally that got them in trouble, not many of our clients got in trouble because they tend to have enough to take it to an investment advisor to do the work. And that says that, that most of them probably would’ve been okay without me. [00:44:35] Paul M: But what we did see is when people came in, the thing that they were about to do that was wrong was they were about to take more money than they should out. [00:44:44] Joe: Oh. [00:44:46] Paul M: They were taking six and 7% because that’s what it, there are many people who came in for us to prepare a retirement plan, and what we told them was, go back to work because they did not have enough. [00:45:00] Paul M: And the odds would was that they were gonna run out money before they’d run out of life if they live a long time. [00:45:06] Joe: Is that just a case of not really looking at your portfolio size versus what your goals are in retirement? Like just this simple. I didn’t adequately plan my goals to see if that number’s safe. [00:45:19] Paul M: You know, there are people in this industry that tell folks that the average return for the s and p 500 is 12% a year. [00:45:27] Joe: Who would say that? [00:45:28] Paul M: Somebody who doesn’t know anything. But the reality is, is that if somebody hears that. Says, well, I can take out eight. I’ll, I’ll get the 12. It’s the average. And you can say, well, people can’t be that stupid. [00:45:44] Paul M: But in fact, it, for a lot of people, it’s just not what they do. It isn’t that they’re stupid, it’s just not what they’re right with. I know one thing and I know it really well, and my wife would be the first to tell you about the rest of life. I’m not all that smart, but I know this field and I know what’s right and at least what’s wrong probability wise. [00:46:07] Paul M: And a lot of people don’t, and they need somebody. Uh, I’m working hard to try to help people be do it yourself, investors. That’s what I’m focused on. But I, I know a lot of people are never going to do it right on their own, and they need somebody to take care of them. [00:46:23] Joe: But at the very least, I think even then, you still need to know what you’re doing, which is what I like about your, what, what you teach Paul. [00:46:29] Joe: Because even if I have that person in my corner, which I believe. People should at least surround themselves with smart people. You still gotta know your stuff. Nobody’s gonna know this. This for you, Jesse. There was an interesting, uh, piece I saw in the media last week, people predicting that the jobless rate of students just outta college could hit 30% because of ai. [00:46:51] Joe: So AI becoming this concern, taking away jobs. How do I plan around this idea that I might be jobless? How do I get ready for the spectra that no matter whether I’m coming outta college or I’m 40 years old, I am, I might have my boss come to me next week and say, pack it up. [00:47:12] Jesse: Uh, that’s a really hard question. [00:47:14] Jesse: It’s a little existential. You know, especially the more kind of value you tie to your work and your career, the more existential it feels practically. I mean, an emergency fund helps, right? An emergency fund is that thing that at least gives you three months or six months, or 12 months of time to not totally freak out. [00:47:33] Jesse: I still think if my boss came to me and said I was being replaced by ai, I would be pretty freaked out. I mean, I know Paul, I’ve heard Paula talk about this and, and she certainly knows more about it than I do about, like, some of the skills that you wanna develop at work to try to make yourself a little bit, you know, give yourself that steely resolve against the threats of ai. [00:47:50] Jesse: ’cause I think certain people in certain jobs, certain careers are, are probably more, um, more likely to be replaced. Like they’ve got more, uh, vulnerabilities and other people in other jobs, or there’s certain skills you can acquire to make yourself less vulnerable. And maybe the silliest part of the answer. [00:48:06] Jesse: But the third answer is like, I think, you know, my, my brother’s a, a contractor, right? He does basements and kitchen and bathroom remodels and it’s like, it’s really hard for me to see how AI is going to displace him. It’s much easier for me to see how AI is going to displace me. I work in an office, I provide advice for a living. [00:48:22] Jesse: So I think, you know, maybe some of it comes back to too, it’s like, what’s your fallback? If push came to shove and you lost your job, where would you go next? And thinking about that in advance, I think is better than, better than sticking your head in the sand. [00:48:33] Joe: I like that because it also includes part of your financial plan, includes networking, I mean includes, mm-hmm. [00:48:39] Joe: Going out and making sure that your resume is dusted off and you’re ready to move. And also being well-rounded, I think, you know, thinking about your skillset outside of your, your immediate, uh, surroundings, Paul, a part of that involves negotiating. Uh, somebody I know has a whole thing about negotiating. [00:48:55] Joe: I’m not sure who that is, but let’s say hypothetically that it was you. Negotiating seems to me then to be a skill that I need today more than ever. Agree. [00:49:04] Paula: Yeah, I absolutely agree. The thing about negotiating, the number one kinda myth that I wanna bust is a lot of people believe that it’s a zero sum game. [00:49:13] Paula: And what you really are doing when you’re negotiating is you are trying to come up with a solution in which everybody wins even more. So you’re trying to read the room and understand what is important to the other party, and then have the introspection to understand what is important to me, and then find a solution where, ’cause, ’cause oftentimes the variables that are important to the other party are not the same as the variables that are important to you, you know, so if you think of all of the vari, especially with a job you’ve got, you’ve got salary, but you’ve got health insurance, retirement benefits, paid time off, sick days, commuter bene, uh, depending on how big the company is, maybe commuter benefits or gym, you’ve parking hybrid work versus fully on site, depending on the job Again. [00:49:59] Paula: There are all of these different factors at play and there are professional development, budget, you know, that sort of a thing. And when you figure out what are the things that are really important to my employer, what are the things that are really important to me? And then you like get the things that are important to you and trade off the things less important to you, but that are important to the other party. [00:50:20] Paula: Everybody walks away with a better deal. [00:50:22] Joe: What you’re saying is we don’t think about negotiation wide enough. [00:50:25] Paula: Yeah, exactly. Yeah. So it’s, it’s about widening the lens because so many people think that negotiation is a synonym for confrontation, when actually it is a form of like creative collaboration. [00:50:36] Joe: And what’s interesting to me here too is understanding the person on the other side is a key piece of it. What do they want? [00:50:42] Paula: Right? [00:50:42] Joe: Because respecting what they want I think is a lot of about what’s getting what you want. I think those two go together. Paul, I wanna swing back to the portfolio one more time. [00:50:51] Joe: There are times we build these all weather portfolios, and I’ve had this, I’m sure you had it, I remember back in 1999. Early 2000 just before the market went down, I got fired by a client. And the reason was his portfolio had only done 45%. His friends were getting 80%, 85% in internet 1.0. Right. The internet stock craze. [00:51:17] Joe: But the reason was we had built for these people, we’d help them build an all weather portfolio like we’re talking about today. What do you say to people when they come to you and they feel like, yeah, okay, my portfolio is diversified, but that means it’s broken. Right? Because that’s specifically the conversation we were having. [00:51:35] Joe: ’cause at that time, as you remember, 1999, diversification felt broken. [00:51:40] Paul M: Well it did, and the strategy that I would call an all weather portfolio, just talking about the equities over that five year period compounded at about 12% a year. That was a period of time that, uh, the s and p 500 compounded at over 28% a year. [00:52:00] Paul M: And a lot of people just came to the conclusion that all they ever needed in their life is the total market index or the s and p 500 because they had done so well. And the problem is this recency bias. Uh, we have a free book that we give away, uh, that at the back of the book it has the 48. Biases according to Kahneman, uh, Daniel Kahneman. [00:52:27] Paul M: These are biases that, that get us in trouble financially and make us do the wrong thing. And, um, uh, we took the, the 500 page book from Kahneman and boiled it down to 16 pages of, of the biases themselves. So people wait. How does he feel [00:52:44] Joe: like that when you cut out the other 70 something pages? [00:52:48] Paul M: Well, the reality is people need to understand how Ill prepared. [00:52:52] Paul M: I never, I have read at least a half a dozen times, your Money and Your Brain by Jason Zweig. [00:52:59] Doug: Mm-hmm. [00:53:00] Paul M: I love that book. It, it is such a great primer on how crazy. I mean, if we think that we’re a little bit nutty about money or our clients are, when you read that book, you understand. Yeah. Most people are just a little bit nutty and you gotta work so unbelievably hard. [00:53:19] Paul M: To keep ’em on the straight and narrow. That’s what an advisor is paid for. Anybody can put together a portfolio. It’s keeping them on the straight and narrow and when, when other people are making more money. Uh, so it’s educational about the intellectual aspect of it and the psychological aspect of it. [00:53:40] Paul M: And those are two totally different problems. And some people can be really good about the, uh, portfolio part, but they don’t get the psychology. And so they aren’t a good advisor, even though they’re pretty doggone smart. And that’s, uh, something sometimes you find out too late. [00:53:57] Joe: Well, that’s what was frustrating was I couldn’t find a way to convince these people that in the long run this idea of going tech. [00:54:05] Joe: And of course they changed in early 22 or early 2000 and Paul, you know, what happened to them then if they switched their portfolio to tech? They, they switched right at the time. The market started dropping March of that year and they ended up getting just absolutely obliterated. By not hanging on [00:54:20] Paul M: one market timing mistake, one can cut your retirement in half for a lifetime one. [00:54:28] Paul M: And that’s what people don’t get until it happens to them. And that’s what happened to them, [00:54:34] Joe: Jesse. And I feel like that’s half your job. It’s not what you do, it’s what you convince people not to do. [00:54:38] Jesse: Yeah, totally. I mean, it’s the Charlie Munger, right? Invert. Always invert. Tell me where I’m gonna die. So I never go there. [00:54:44] Joe: Yeah. [00:54:44] Jesse: It’s like, tell me the things that will absolutely ruin my financial plan. And those can be some of the lowest hanging fruit that you decide to protect yourself against. And Paul’s right. I mean, someone who she, she didn’t end up working with me, but I ’cause, but it doesn’t matter. But she told me the story as we were talking during COVID. [00:55:02] Jesse: She worked in higher education and she saw the, the college that she worked at changing around her during that March and April of COVID. And she was like, this is going to be the most unbelievably destructive thing that our society has ever seen. And so it totally freaked her out. Which kinda makes sense if you’re, see, if you’re on a college campus and you’re seeing the way that, that I was gonna say, people react [00:55:22] Joe: rightfully so. [00:55:22] Joe: Yeah. [00:55:23] Jesse: Yeah, exactly. And so what did she do? Well, she made a portfolio decision at, at kind of the various bottom bear market of COVID. No. By the time the market had recovered, I think maybe her, her decision was somewhere in like the 25 or 30% range of her portfolio value. Right. You can almost think of it as a scar. [00:55:41] Jesse: It’s like that scar is never gonna go away. Her portfolio has this scar on it now. [00:55:45] Doug: Yeah. [00:55:46] Jesse: It’s never gonna go away. And so to prevent someone from doing something like that. It can be so powerful. Uh, anyway. Yeah. Uh, it, [00:55:55] Doug: you know, Jesse, that story reminds me of an exercise I used to do with a lot of clients when I was in consulting and we’d do some strategic planning or do some operational planning and whenever, inevitably you would do the default for consultants, right. [00:56:07] Doug: Or look, let’s brainstorm. And you’d sit there and look at each other after about four ideas and nothing would come out. But as soon as I would say, let’s do the crash, the plane exercise,right?
[00:56:17] Doug: And we’d say, if we wanted to screw this up as royally as we possibly could to make sure this plane crashes, you can’t shut people up. [00:56:25] Doug: Mean, there’s so many things, like our brains are naturally wired to think about that stuff. And pretty Then all you do once you’ve got your list of 72 things you can do to score everything up, is just put a, don’t just put the word don’t in front of that. One of those in this context would be don’t sell after the market just took a dive. [00:56:44] Joe: Well, and again, in this case, don’t compare a portfolio to the s and p 500, you know? Right. Don’t compare what you’re trying to do to this arbitrary number. Figure out what you need to get where you want to go, and all that means is kind of knowing a little bit about where, where you want to go. I think it’s a great place to leave it. [00:56:58] Joe: It’s funny you talk about scars. In fact, uh, Jay Greg hanging out with us on YouTube says, the scar analogy is a really good one. My father-in-law, uh, Paul, you were talking about 1987. Mm-hmm. My father-in-law sold on that day. The day that the stock market went through the floor, and as Paul knows, and you guys may know, the market roared right back and that money was gone. [00:57:19] Joe: Yeah. And the bad news was he owned mutual funds and my father-in-law did not understand that when you sold, you waited till the end of the day. Right. Didn’t matter if you called your broker at 10:00 AM or at 2:00 PM you were out at the end of the day. And of course you 87 you were doing online, by the way, for the young people out there. [00:57:35] Joe: That’s why. Why would you call your broker? [00:57:37] Paul M: Can I share one quick story about that day? [00:57:39] Joe: Yeah. [00:57:40] Paul M: I was a market timer at that point, only a market timer. I didn’t have a buy and old portion to my business, which we did later. And on that day, my clients were totally out of the market. And because we were out of the market, we had been out of the market for a month. [00:57:57] Paul M: It’s not like we called the collapse. We were out when it happened, and everybody wanted to give me credit for having called. Market and I even ended up on Wall Street Week and I was on, I had a three page spread in US News and World Report. The money the clients just rolled in. Because we did that, we totally underperformed because we walked into a market where being defensive was not helpful. [00:58:28] Paul M: I’ve just seen people chase, performance chase. There’s something magic about what just happened. Like we believe we could capture that if we just did a few things, but it seems very difficult to capture that magic. It’s like buying last week’s, winning lottery tickets after they are announced to be. You can hold the winning ticket for which you get nothing. [00:58:52] Paul M: You cannot buy the past. That’s the hardest thing to get people to understand. There is no risk in the past. You can’t buy it. [00:59:01] Joe: It is interesting that they didn’t want, uh, defensive Paul Merriman. They wanted the oracle in Seattle. Paul Merriman, that’s who they wanted. That’s right. Yeah, that’s right. Yeah. [00:59:09] Joe: The Oracle guys. Great discussion. Thank you so much. And, uh, thank you by the way, to Dana SBA for, uh, writing this piece and we’ll link to it that inspired today’s discussion. We’ll link to it in our show notes at stack you Benjamins dot com. Let’s find out the great work that all of you are doing. Paul, what’s up next for you, Mr. [00:59:26] Joe: Merriman? [00:59:27] Paul M: Well, I gotta finish the bootcamp series and every year I speak to the graduating nurses at Texas a and m for three hours. It is absolutely as good as it gets because it’s a chance to get them right at that point where they’re walking out, starting to make money, and now we want to get ’em to do the right thing. [00:59:47] Paul M: And I do that anywhere people want it on Zoom. If I can be helpful to any group of young graduates like that, [00:59:55] Joe: I thought you were coming down here to my neck of the woods. I was gonna come see you while you were in College Station. [01:00:00] Paul M: I am coming down there. [01:00:01] Joe: You are going to College Station? [01:00:03] Paul M: I is. That’s College Station. [01:00:06] Joe: In Texas. In Texas. In Texas, yeah. [01:00:08] Paul M: Yeah. I am going down there and then I’m going to see you in, at the Millionaires. [01:00:12] Joe: Something that in Orlando. Yeah. The mm m conference will be, uh, in the villages speaking together. How about that as a dual threat? Paul Merriman, Joe’s, Saul. See, hi. I gotta try to keep up, man. [01:00:22] Joe: I don’t know. Dunno how, how to do it, but people can go get the bootcamp right now@paulmerriman.com. We’ll also link to that Paul in the show notes. Yep, you [01:00:30] Paul M: got it. Thank you. And thank you all for what you guys are doing. I really appreciate it. [01:00:35] Joe: We are, we’re, we’re doing our best to make trivia, as you can see, that’s our, that’s our goal. [01:00:40] Joe: Yeah. [01:00:41] Paul M: I’ll be ready next time. [01:00:43] Joe: Is there a way to get ready? I don’t know. Do you limber up like Yeah, call on [01:00:45] Paul M: me third. [01:00:47] Joe: That’s right. You gotta play for Paula then instead. Apparently, but Paula’s the winner today, so we don’t wanna focus on that. [01:00:55] Paul M: Yes. [01:00:56] Joe: What’s going on at afford Anything? [01:00:57] Paula: I can’t believe I’m tied with Jesse is where I’m [01:01:01] Jesse: rarefied air. [01:01:02] Paula: Yes. [01:01:03] Joe: We’re three months in and she’s still tied with Jesse. [01:01:07] Jesse: Yes. I think Paula, I’ve got an asterisk next to mind. You don’t. Wow. You actually might be ahead. [01:01:11] Paula: Wow. Wow. True. [01:01:13] Joe: That [01:01:13] Paula: is true. The heavens have shifted. Up is down. Black is white. Blue is red. Cats [01:01:18] Doug: are living with dogs. [01:01:19] Paula: Yeah. Seriously. [01:01:21] Doug: Chaos. [01:01:21] Paula: Chaos. Chaos. [01:01:23] Doug: Chaos. [01:01:23] Paula: Chaos. Total chaos. Chaos. Chaos. [01:01:25] Joe: Yeah. Hey, Paula, what’s going on at Afford Anything [01:01:27] Paula: On the Afford Anything Pod? That was, that was me, uh, really drawing it out. ’cause I don’t know what’s happening on the Afford Anything podcast. [01:01:34] Joe: Oh, you and I are answering questions. [01:01:36] Paula: Oh yeah. So they’re, yeah, exactly. [01:01:37] Paula: We’re, we’re [01:01:37] Joe: great at it. [01:01:38] Paula: It’s so fun. We’re, we’re great at it. We answer lots. We, every Tuesday, every Tuesday you join me on the podcast and we answer audience questions and, uh, lemme take a look right now at the editorial calendar, let’s see what’s coming up in, uh, the, the not too distant sometime we’ve got. [01:01:55] Paula: Let’s see. Oh, the, the suspense. The suspense. Look at how unprepared Would you like [01:01:59] Joe: me to ask Jesse Kramer? What’s going on while you look this up? [01:02:02] Paula: Uh, we’ve got Neil Iyer. Neil Iy is going to be a guest on the show. He deals with like behavioral finance, like the psychology. [01:02:10] Joe: Cool. A lot of the stuff we talked about today. [01:02:11] Paula: Yeah, exactly. So he talks about how your beliefs really shape your reality, you know, rather than reality shaping your beliefs, your beliefs shape your reality. Mm. Um, but he talks about that in a not woo woo way. He talks about it in a very research backed, data-driven, scientifically grounded way. [01:02:27] Joe: That’s fabulous and that’s at Afford Anything Where Finer Podcast are found, [01:02:31] Paula: we are the finest. [01:02:32] Joe: Jesse Kramer, thanks for hanging out again, my friend. [01:02:35] Jesse: Awesome. This is so much fun. [01:02:36] Joe: What is going on at Personal Finance for long-term investors? [01:02:40] Jesse: Great question. What is today, Joe? Today? What’s, what day is today? [01:02:44] Joe: I can’t believe you don’t have your calendar open. You have no idea what day today might be. [01:02:48] Joe: It’s the 27th. Duh. [01:02:50] Jesse: Is it? Okay. It’s the 27th. So, uh, we just released, uh, an, uh, oh an episode I think all about Monte Carlo simulation. Oh. Which is kind of fun. A deep dive into casino. We’re going to the casino, how Monte Carlo works. [01:03:02] Joe: We’re going to the casino. [01:03:03] Jesse: We’re going to the casino, how it works, but more importantly, as a potential retiree, how to use the tool properly. [01:03:10] Jesse: How to, how to not draw too many wild conclusions from it, but you know how to use it to help plan for your retirement. [01:03:16] Joe: Can you tell her new stackers briefly what a Monte Carlo simulation even is? [01:03:20] Jesse: Sure. So in the top context of retirement planning, this whole idea is that, uh, the future of the, the market’s performance or your portfolio performance is, is pretty unknown. [01:03:31] Jesse: And certain potential futures you could be, you know, you’ll be fine. You’ll be making tons of money, you’ll have nothing to worry about, but there are other potential futures where maybe it would put your particular retirement plan under some stress. And so the idea is that the Monte Carlo simulation kind of, uh, randomizes or adds some sort of variation or volatility into the future market performance. [01:03:52] Jesse: It does that a hundred, a thousand, 10,000 different times. So you get all these kind of potential futures that your financial plan might live through. And then some of them succeed wildly, some of them fail, some of them barely make it. And the results allow you to kind of analyze what type of market conditions might put you under some financial stress, and then potentially what you might be able to change today to better protect yourself from that stress. [01:04:15] Jesse: That’s how I would describe it. [01:04:16] Joe: Yeah, it’s pretty neat. It’s pretty fun. And a problem I find newbies have with Monte Carlo, they want it to be a hundred percent success all the time and all 75% success rate means is that, uh, 75% of. The outcomes it looked at you were good, which means 25% of the time you need to do more planning. [01:04:33] Joe: Right. And if you know that going in, it doesn’t mean you can’t retire, it means that, uh, you know, your expectation for, for, uh, maybe having to, uh, tweak it a little bit. [01:04:43] Jesse: That’s exactly right. And now that, uh, now that you’ve said that, Joe, I don’t think anybody really needs to go listen to my episode. You heard it here. [01:04:50] Jesse: You heard it here first [01:04:53] Doug: as usual. [01:04:53] Joe: Jesse’s like, shut up Joe. Taking all the, and that is it. Personal finance for long-term investors. Also, where Finer podcast are found. Hey, thanks to everybody who hung out with us today. We had lots of trouble with YouTube interconnecting. I’m so happy that you guys stayed and played with us. [01:05:09] Joe: I could barely see the comments, but the ones that I saw were hilarious. I wish we could have put them on screen, but unfortunately, technology not play in the game. But if you wanna hang out with us, please do so. We’re here. Fairly reliably Monday afternoons, and that’s at the Stacking Benjamins YouTube channel. [01:05:25] Joe: Just subscribe and uh, you will get an alert then on your device that shows when we go live. That’s gonna do it for today except for one question, which is this, Doug. What should we have learned on today’s show? [01:05:38] Doug: Well, Joe first, don’t forget what revered elder statesman Paul Merriman said, every person should expect that tomorrow starts the worst bear market in history. [01:05:49] Doug: Your portfolio should be built to withstand that and so should your intestinal fortitude. Also, he said, make sure you’ve got fresh batteries in your smoke detectors. Thanks, dad. Second, remember what Paula said about the hot, hot, sweaty. Physically fit, bad boy stock driving around in that red Camaro. Wait what? [01:06:11] Doug: I mean, sure. They’re, they’re great for a little while, but pretty soon, just like all the others before them, they get bored with you and they dump you while you’re eating some crappy two for 20 meal deal and a chili’s out by the mall. Next thing you know, you’re bumming a ride home off the career dishwasher when a shift is over. [01:06:29] Joe: Sounds like Doug needs a therapist. [01:06:31] Doug: Sorry. I mean, just, I’m guessing, I was just filling in the blanks between the lines of what Paula was trying to say. But the big lesson, start your money journey on the right foot and sell shout outs. I’m sure those $50 checks are about to start rolling in any minute. [01:06:49] Doug: Any, any minute. Just gonna, we’ve been having a lot of tech issues today. Let me hit refresh on my browser. I mean, they’re, they got like any minute, right? They’re gonna start coming. Something’s wrong with my computer. Hey, my, check the internet. This show is the Property of SP podcast, LLC, copyright 2026, and is created by Joe Saul Sea High. [01:07:13] 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 nerds, don’t take advice from people you don’t know. [01:07:32] 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.
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