Grab your coffee mug and join us for a journey full of strategic insights and valuable life lessons. Business legend Seth Godin joins us to share his wisdom on financial strategy and personal success. From college applications to wedding planning, Seth’s advice on using a strategic compass over an outdated map will help you navigate big decisions and avoid wasting time and potential. Plus, we explore the balance between effortless yet intricate service and strategic pricing, advocating for value over cutting costs like Walmart because, sometimes, the tension in the experience is what makes it memorable and rewarding. There are plenty more actionable takeaways in our discussion with one of the most prominent gurus in marketing. Mainly, we delve into why having a well-thought-out strategy for life and personal finance can make all the difference. Learn from Seth’s rich experience—from guiding startups to success to creating impactful strategies.
We also explore the historical strategies that have shaped businesses like Yahoo and Google. Seth emphasizes the importance of vocalizing strategies, balancing personal agency with systemic constraints, and the essential threads of strategy: time, empathy, games, and systems. Using personal finance as a lens, Seth helps you understand complex concepts in a relatable way, underscoring how strategic thinking can transform everything from wedding expenses to retirement planning.
Of course, that’s not all. In our headline segment, we share the results of a recent study by Harvard, Vanguard, and others on 401k plan “leakage.” New rules allow people to take annual withdrawals from their retirement plans. Will people abuse this new rule? The results of this study are surprising, to say the least. We discuss how to use 401k loans, why we don’t favor them, and strategies to plug leaks so that your financial boat doesn’t sink.
On top of that, we also share trivia from Doug and much, much more! This may be your favorite Monday on Stacking Benjamins!
Run of Show
- Morning Optimism and Weekend Plans
- Saluting Our Troops
- Special Guest: Seth Godin on Strategy
- The Importance of Strategy in Personal Finance
- College Applications and Life Strategies
- Seth Godin’s Background and Achievements
- Understanding Strategy: Time, Empathy, Games, and Systems
- Walmart’s Competitive Edge
- Freelancing on Upwork: A Race to the Bottom
- Justifying Higher Prices
- The Power of Peer Groups
- Mentorship vs. Peer Groups
- Personal Experiences with Peer Groups
- Trivia Time with Doug
- 401k Loans and Retirement Plan Leakage
- The Importance of Cash Reserves
- Upcoming Events and Meetups
- Consulting Firm Anecdote
Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.stackingbenjamins.com/201
Enjoy!
Monday Mentor: Seth Godin

Big thanks to Seth Godin for joining us today. To learn more about Seth, visit Seth’s Blog. Grab yourself a copy of the book at This Is Strategy: Make Better Plans
Our Headline
Doug’s Trivia
- What strategy consulting organization is the largest in the USA, based on locations, annual revenue, and employees?
Have a question for the show?
Want more than just the show notes? How about our newsletter with STACKS of related, deeper links?
- Check out The 201, our email that comes with every Monday and Wednesday episode, PLUS a list of more than 19 of the top money lessons Joe’s learned over his own life about money. From credit to cash reserves, and insurance to investing, we’ll tackle all of these. Head to StackingBenjamins.com/the201 to sign up (it’s free and we will never give away your email to others).
Other Mentions
Join Us Wednesday!
Tune in on Wednesday when we talk risk and more with the guy behind America’s most offbeat personal finance blog, Len Penzo.
Written by: Kevin Bailey
Miss our last show? Listen here: Has Anyone Ever Gone Broke From Bad Tax Planning? (SB1589)
Episode trancrtipt
[00:00:00] Joe: Still hope and optimism. I got my Michigan State spart mug because I gotta get fired up early for hopefully a good weekend. Who knows. Who are they playing this weekend? I don’t know. Some school with some, it’s like blue and yellow or their colors. They got this big bowl stadium like dug into the ground. [00:00:22] West Virginia. West Virginia’s more of a golden color than Pit. Pit. Pit, yes. Delaware State? No, it’s the shoot. It’s the team in that really stinky town, just blue and yellow. Stinky town, west of, I forget the name. [00:00:37] OG: Yeah, [00:00:38] Joe: just west of Detroit. Have they won anything recently? Uh, not so much this year. [00:00:45] OG: Oh, okay. [00:00:46] Are they the defending national champions? I think we’re narrowing it down. [00:00:51] Joe: It it only took him, let the record show. It only took him a minute and a half. Yes. To flex the national championship. [00:00:57] OG: Hey, it’s the first one in 25 years. It’s, it’s the only one in 20, 30 years almost. I guess. Did I be [00:01:03] Joe: flexing it five years from now? [00:01:04] I’d still be like, Hey, I don’t, do you remember we won this national championship? Yeah. Yeah. That’s what we do. I mean, look at the Matt Cleve years of Michigan State basketball. Yes. We’re still talking about that. The Flintstones. The Flintstones. Those are the gold names. People are like, what the hell are you talking about? [00:01:20] Get on the Michigan State’s party train everybody get on [00:01:23] OG: the bandwagon. Yes. From 1997, it was awesome. [00:01:27] Joe: You know whose bandwagon I’m on? og. Who’s [00:01:30] OG: that? [00:01:30] Joe: The men and women defending us, our troops. It’s a good bandwagon. Yeah. And I love the fact that every Monday we get to salute them. So raise a glass. On behalf of the Men and Women making podcast in Mom’s basement, those cool people who love the team in East Lansing, Michigan, and those weirdos who might vote for the horrible school this weekend in Ann Arbor, Michigan from both of us and the people make a podcast in mom’s basement and the people at Navy Federal Credit Union. [00:01:58] Here’s to our troops, SPER five Spart on, as they say, [00:02:03] bit: at some point far in the future, historians will probably ask, what was daily life like in the early 21st century? Well, one thing we know for sure. Nobody will ever point to these two clowns and say, this was how you should have been. Stacking. Benjamins [00:02:28] Doug: Live from Joe’s mom’s basement. It’s the Stacking Benjamin Show. [00:02:42] I am Joe’s mom’s neighbor. Duggan, what’s your strategy? What do you mean? For what? For life. For your money, for your career, for your family. Come on. Wake up and Face North Soldier to help you pull it all together. Today we welcome a business legend to Stacking Benjamins, who’s all about strategy. That’s right. [00:03:02] The. Seth Godin joins us for most podcasts. That’s enough, but in mom’s basement. Oh, no. We’ll also share a headline segment on leakage from your 401k. A new study from Vanguard, Harvard, and others is in with some surprising results about your leakage. And then I’ll share some absolutely incredible trivia. [00:03:26] And now two guys who are ready to fire up this purple cow of a podcast and poke the box. Once again, it’s Joe and oh Ju Judge G. [00:03:43] Joe: Nice job Doug. Before people think that Doug’s just making some innuendos. Those are a couple popular. Seth Godin books for the Uninitiated Purple. This guy, OG Legend in the basement, [00:03:55] OG: Seth Godin. Does he know what he’s getting himself into? Did I think he’s got no idea what? What did his agent promise him? [00:04:01] That’s what I want to know. I [00:04:02] Joe: saw him upstairs pacing in the driveway, and I’m pretty sure he is on with his agent going, well. Well, what do you mean I gotta go down there? I don’t want to go down there. [00:04:11] OG: It’s spooky, it’s scary. Turn the lights on. Doug. [00:04:15] Joe: You know what’s funny? So Seth Godin usually og uh, for people that don’t know who Seth Godin is, I’ll give everybody his bio in a little bit. [00:04:23] This guy is all about connections and now he’s focused his brilliant lens on strategy. And I know there’s gonna be a bunch of people saying, well, and you kinda addressed it Doug a little bit in the open. People are wondering what does strategy have to do with my financial life? I think og, especially in a year like this year, where so many people are probably doing stupid stuff around the election with their money, it’s a great year to have a strategy. [00:04:53] OG: Well, I just don’t know why you wouldn’t have, I mean, you have it for everything else in your life. We’re working with my oldest right now in terms of his college applications. What do you have to show for these different schools and what kind of character they do they want to admit and what should be the tone of your essays? [00:05:11] And you know, this whole, I mean there’s whole groups of people that hire people who help with college applications, right? This, these college consulting type of folks. We decided to kinda. Do it on our own here. And you know, that was a great idea. But, um, so far so good. But that has a strategy. You have a strategy for how you want to progress in your career. [00:05:31] You have a strategy for, I allegedly had a strategy a week ago playing golf. It was, hit it as far a field as you can and use the whole golf course. You know, that worked out really well. It, uh, was not my favorite week of golf. Preserve [00:05:45] Joe: the fairway as much as possible. Yes. [00:05:47] OG: Was your strategy? Yes. Do not damage the fairway for God’s sake. [00:05:51] So why wouldn’t you do that for money? I don’t, uh. Makes a lot of sense. Well, and it is [00:05:54] Joe: funny, to your son’s point, what I think of as kind of a micro strategy around college applications, really as part of a larger strategy. Like it’s gotta be so hard at your son’s age too. Dude, I just, because I just remember that because it all starts with, [00:06:10] OG: oh yeah, it’s really tough to be my kid. [00:06:11] Joe: Well, it is. It’s what do I want? I mean, well, it’s true. You know what I mean? Because I’m gonna go to this school, I’m not gonna go to that school. And it’s easy without that game plan to just go, man, those buildings are pretty, or Oh my goodness, did you see all the architect? You know, did you see, oh, there’s basketball team is fantastic. [00:06:27] Speaking of Michigan State, their football team at University of Michigan, their football team’s great, so I’m gonna go there, man. That is not a strategy. Yeah. Like if you think a little deeper about what do I really want for myself, even if you don’t know what your career’s gonna be, my niece is in the same spot. [00:06:45] She made this list of criteria. She’s like, listen, I don’t like crowds, so I want to be a small school. I also really want small class sizes. So I want a small school. I want small class sizes. She really wants the liberal arts, broad education, but she also knows she’s interested in nature. So she’s looking at these schools with a bent toward natural science, but that will also teach her to write, to think critically. [00:07:09] And with small, I mean, you know what I mean? Strategy is gonna create a winning situation for her. Yeah. Even at the age of 17, she’s thinking about this stuff, and I’m sure your son’s going through that same stuff. [00:07:20] OG: I think you give him a lot more credit than a 17-year-old boy should have whose present answers include one word, one word sentence that’s like yes, no. [00:07:29] And uh, [00:07:31] Joe: right. [00:07:31] OG: Uh, my [00:07:32] Joe: son is almost 30 and everything is on a need to know basis and I still don’t need to know. [00:07:39] OG: That’s right. There’s no need for that, dad. You’re not in the circle of trust right now. [00:07:44] Joe: I have a friend that was talking to their 3-year-old son and was asking him about. Girlfriends and he, he looked at her finally and he goes, mom, I’m just not gonna talk to you about this. [00:07:55] I think it’s time for healthy boundaries. Nice. That’s a strategy. [00:08:01] OG: Somebody’s been reading the Reddit. I know. [00:08:06] Joe: Absolutely. Super. Seth Godin talking strategy. And by the way, if you don’t have a strategy at work, people around you eating your lunch at whatever job you’re in, I mean, if you don’t have a strategy for your career, you’re just maybe wasting years. [00:08:20] Wasting time. Truly. It’s fun. That’s the most fun thing I get outta the coaching that we get is once a quarter OG getting on a plane to Chicago. And really, because we’re not sitting here in the basement thinking bigger. Like, what is my, not even, what is the business about? Why are we doing a podcast at all? [00:08:40] I still wonder every day. Yeah, but what are we doing here? [00:08:43] OG: Well, I mean, that kind of informs a lot of your decisions, right? I. It helps at least point the boat in the right direction. You may not get all the oars rowing in the, in the right speed, but, but at least you’ll be facing, facing the direction you need to be going. [00:08:57] Joe: Seth Godin here to talk strategy. Let’s talk about Seth’s background. So Seth, back in 1986 was working for a company called Spinnaker Software. A software company that in the fairly early days of computers, was making educational software. He was on board with them and when he left, he started his own company, which morphed into a company called Yo-Yo Dine and maybe our, our older stackers know Yo-Yo Dine, a permission marketing company named after the fictional Yo-yo Dine, and the classic movie The Avengers. [00:09:37] A Buckaroo Bonsai. You ever see that Buckaroo Bonsai? No. Just a crazy movie. Yo-Yo Dine was different because the advertising was around fun and games. They used contest online games and scavenger hunts to market companies to participating users. And August in 96, Flatiron Partners invested $4 million for a 20% stake. [00:09:57] In 98, he sold yo-yo down to Yahoo for get this $29.6 million. In 1998, money became Yahoo’s Vice president of Direct Marketing back in the Go-go days. [00:10:10] aftershow: Mm-hmm, [00:10:10] Joe: of Yahoo. March, 2006, he launched Squidoo By 2008, it was one of the 500 most visited sites in the world. In 2014, he sold that to HubPages Forbes calls God’s book Free Prize inside the Business Book of the Year in 2004, New York Times USA Today and Wall Street Journal. [00:10:27] Uh, bestseller the Dip Business Week, named his book Linchpin Among its 20 best books by the most influential thinkers in business in 2015. American Marketing Association’s Marketing Hall of Fame in 2018. Times 25 best blogs. That’s all he’s done, og. That’s it. [00:10:45] OG: That’s it. [00:10:45] Joe: Yeah. [00:10:46] OG: And Stacking. Benjamins. [00:10:48] Joe: That’s right. [00:10:48] Now he’s at the pinnacle of his career. Seth Godin coming up next, but before Seth, we have a couple of sponsors who make sure this is free for you today to hear great people like Seth Godin. Let’s hear from them. And then we’re running. Seth Godin coming down the stairs. Let’s say hello, [00:11:15] and I am super excited. We have this gentleman with us at mom’s cart table in the basement. Seth Godin is here. How are you my friend? [00:11:22] Seth: I am fantastic, but getting better. Thank you for having me. [00:11:25] Joe: Does every day get better when you’re Seth Godin? [00:11:28] Seth: Oh, I don’t think it has to do with being Seth Godin. I think it has to do with deciding, [00:11:32] Joe: just deciding that tomorrow’s gonna be better. [00:11:34] Seth: You know? It’s the choice, isn’t it? Compared to the last King of France, all of us are richer than they could have ever have imagined, [00:11:42] Joe: and yet you see, sense me on social media, right? We all feel like we’re miserable all the time. [00:11:47] Seth: Yeah. I mean, your slogan is at happy hour yet. I would say any hour is happy hour if you want it to be. [00:11:52] It has nothing to do with drinking. That [00:11:55] Joe: that is true. I forgot I even had that on there. Uh, for people not watching the video, it does say, is it happy Hour yet? Your focus now speaking of intention, intentionality, your focus right now in this season, Seth is on strategy. Why strategy today for you? [00:12:13] Seth: Well, I think the challenge is that most people have no idea what strategy is and we avoid having a strategy ’cause it puts us on the hook that we’ve been indoctrinated to have tactics indoctrinated to do our job and follow instructions. [00:12:28] ’cause then it’s somebody else’s job that if you are following an investment strategy that someone else came up with, that’s on them, not on you. And strategy is a philosophy of becoming. It is agency. It is our choice. It’s not a tactic, it’s not a hack. It’s simply. What is our compass? Where are we headed and why is heading in that direction a good idea? [00:12:52] It doesn’t matter how fast you’re going, if you’re going in the wrong direction. [00:12:55] Joe: I wanna ask you about that specific analogy because you dive more into that, into map versus Compass. But before we get to that, this being a personal finance show, people are like, okay, strategy, but what does this have to do with finance? [00:13:06] Joe, you actually write this very succinctly, Seth. You write for people who think, this is just for entrepreneurs. Here’s some strategies you may need. Get into the college of your choice. Find a new job, increase sales of your new product. Decide where to live. Get your neighbors to come to the local block party, get married without spending more than you should have enough savings to retire with. [00:13:29] These all have a financial component to them. Strategy is everywhere. [00:13:32] Seth: This is right. So let me talk about weddings for just a second, because other than college and your house, it’s one of the biggest expenses in most people’s lives, particularly when they don’t have the money for it. The system that most of us live in, the wedding industrial complex is very simple. [00:13:48] The system is the money you should spend on your wedding is exactly how much your best friend spent, but a little more, right? And that’s some complex [00:13:58] Joe: math. Exactly. Very complex. [00:14:00] Seth: The typical wedding in New York City last time I checked was $85,000. If you instead spent $5,000 and put $80,000 in the bank, you could pay for your first kid’s entire college education, no problem. [00:14:12] So that’s a strategy choice. It’s a strategy choice to say, what is this wedding for? What is the system pushing me to do and what do I really want to do? Same thing is true for people who have enough money to live on, but who spend an hour or two or seven a day focusing on their personal finance, actively thinking about it. [00:14:34] Well, if that was your job and you weren’t getting paid to do it. Is that how you would want your job to be like you are voluntarily, this is become your hobby. ’cause you’re not doing it to survive. You’re doing it ’cause it gives you something. Okay. What does it give you? What are the alternatives? How can you buy your time back? [00:14:55] What would you get if you bought your time back? These are strategy choices that we skip over. ’cause instead all we’re focused on is basis points. And basis points are interesting, but basis points aren’t the point. [00:15:08] Joe: Back when I was a financial planner, I haven’t been a financial planner in a long time. I. [00:15:12] People would tell me, they would meet with me, Seth, and we would work to develop a strategy. And one couple put it very succinctly. They said we went home and had some of the best sex we’ve ever had because we strategy can be very, very sexy. [00:15:26] Seth: Hmm. You must be quite a financial planner. That’s all I can say. [00:15:30] Joe: Barry White. I, I guess that’s the thing, but let’s talk about that. I mentioned, I wanted to circle back to something you said earlier. You said that strategy is a compass, but you also say it’s not a map. What’s the difference between strategy being a compass and strategy being a map? [00:15:44] Seth: If [00:15:44] Joe: I’m remembering you’re [00:15:45] Seth: somewhere in the Midwest. [00:15:46] I was in Detroit, but now we’re in Texarkana, Texas. Okay. Texarkana, Texas. If I wanted to drive from here to Texarkana, Texas, and I had a map from 1947, it would be a rough journey. If I have an up-to-date map, but the road is out, I’m still not gonna get to where you are because maps don’t always match the territory, but compasses. [00:16:09] Compasses, help me find where I am going, even if the territory has changed. And so when you think about organizations that have had smart compasses, they can keep coming back over and over again to what they do. Even if technology changes, even if the world changes, sometimes the system changes so much. [00:16:31] We need a different compass. And that’s what happened when I was at Yahoo. They bought my company and I was, I was not in the room when they decided this, but they had the chance to buy Google for $10 million, not 10 billion. 10 million. And they said, no, we’re gonna spend the money to reinvest in Yahoo kids instead. [00:16:51] And the reason is their strategy was the internet is young. We’re gonna build a site where people come and they stay, that everything we’re gonna do is to turn one click into 10. 10 clicks into a hundred. The more they stay, the more ads we sell. And Google strategy was, we’re gonna build a site where people come and they leave. [00:17:09] Everything we’re gonna do is about getting people to leave Google because the open web is gonna start to thrive. And that’s our strategy. Well, Google wrote that strategy for 20 years quite successfully. And because Yahoo didn’t change their strategy, no one goes there anymore. So strategy can be super simple. [00:17:28] It can be, I am going to have a personal finance strategy that lets me sleep every night, or it can be more complicated than that and it’s gonna be my hobby and I’m gonna dig deep into it and blah, blah, blah. But you gotta be able to say it out loud because if you don’t say it out loud, you can’t make it better. [00:17:45] Joe: There are two problems you write with strategy. One of them is that we have no power at all, and the other is is that we have ultimate power. You say the truth is in neither one of those, and we really need to acknowledge it for the strategy to become more elegant. [00:18:01] Seth: Yeah. So what I’m saying here is if you are a narcissist and you think the world revolves around you, you would imagine that whatever you decide is gonna happen. [00:18:12] That’s where frustration lies. But the other thing you could decide is that you are simply a cog in a machine and you have no power whatsoever. And that leads to apathy. And that’s not true either. There’s something in between. We have leverage, we have agency, we can make a difference, but we’re not in charge. [00:18:30] Joe: This is where it matches up. I think Seth, with your compass analogy, because knowing there’s a compass, we know that conditions are gonna change. We know mountains are gonna get in the way, and because things are gonna change, we’re not, to your point, building a map. I am constantly reevaluating where I’m at and updating the strategy because of it. [00:18:48] Seth: Right. And you know, Warren Buffett, who’s the patron saint of people in the finance business, has a very profound, clear compass. His compass cost him billions and billions of dollars. ’cause he refused to invest in the internet. His compass sometimes isn’t right. He lost a lot of money on Dexter’s shoe, but over the course of 60 years or whatever it is, that Compass keeps pointing him in a direction he’s glad to go. [00:19:14] Joe: Isn’t that wild that he did invest in the biggest growth engine of all, and yet he still found a way, Seth, he still, he, he, he still may have figured it out. I’m not sure you write that there’s four threads of strategy when we think about it. Time, games, empathy, and system. Can we dive into those maybe individually? [00:19:34] Sure. Let’s start off with time. The [00:19:35] Seth: time component strategy. Why is that important? Okay, so I wasn’t thinking about personal finance when I wrote the book, but oh sure. These four things are exactly what personal finance is about. So time says that money has value over time. That nobody who starts with a hundred dollars makes a million dollars tomorrow. [00:19:55] That day traders lose because they don’t understand time, they don’t understand compound interest, they don’t understand patience. So our strategy with time needs to be out loud. Are you hoping that this is gonna pay off in 10 years or 40 years or tomorrow? And getting comfortable with that helps us begin to outline our strategy. [00:20:19] The second one is empathy. And empathy says I’m not in charge. Other people have choices. If I show up with a strategy that requires everyone to obey me, it’s not gonna work. I need to realize other people. Want something. I don’t want believe something I don’t believe. And if I’m not okay with that, then I have no business engaging in anything with the public. [00:20:43] ’cause. If you think a company’s a great stock and no one else does, the price is gonna go down. ’cause you need to understand they’re seeing something and you’re seeing something. Third one are games. Not Monopoly or Scrabble Games are any activity where there’s a limited number of players. There are rules and there are outcomes. [00:21:07] And it’s so clear that finance is a game. And one of the reasons it’s useful to call it a game is it helps us not take ourselves so seriously that if you make a move and it doesn’t work, it’s not ’cause you’re a bad person, it’s ’cause the move didn’t work. And so that frees us up. To engage in a way that’s useful. [00:21:29] Joe: When I read you talking about games, by the way, just to interject for a second, I really got this strong, uh, Carol Dweck, right? The, uh, keeping a growth mentality, Seth. [00:21:39] Seth: Yeah. When you see people who are paralyzed, and sometimes I get that way about certain kinds of personal finance is because we can’t live with ourselves if we’re losing at a certain level, we feel like we’ve let people down. [00:21:54] And the most successful investors I know don’t feel that way, right? So, Fred Wilson, who’s the king of VCs in New York, I was the first person he invested in with my company. So I’ve known Fred for 30 years, and Fred has made billions of dollars and lost through opportunity costs even more than that. And if you take every one of those seriously, not like you’re moving pieces into game, then you’re just gonna keep working in the steel mill and you’re not gonna do anything. [00:22:26] Joe: You write that strategy builds systems, but also depend on them. I I get this idea of a continuous wheel. Right? Exactly. What do you mean by that? [00:22:34] Seth: Alright, so this one’s important enough to decode. So what’s the most famous system in the world? It’s the solar system. And Pluto is a whole controversy we don’t need to get into, but, um, poor Pluto, the earth rotates around the sun. [00:22:48] It doesn’t do it ’cause it wants to, it does it ’cause of gravity. Gravity is invisible, but it’s real. The educational industrial complex is a system from the time a kid is little. They’re hearing about famous colleges. From the time parents start becoming parents, they’re thinking about what will it mean for their reputation if their kid goes to a famous college, famous colleges, which have been around for hundreds and hundreds of years and nearly bankrupt. [00:23:17] Families, there are alternatives, but the system is so ingrained and there’s so many people in the system. No one means ill, no one is trying to hurt anybody, but the system is real. There is gravity there. And so when you meet someone who’s very smart about personal finance, it’s ’cause they see the systems, they see what the credit card companies do for a living and how they seek to make more money. [00:23:43] They see all of the components of how marketing fits in. I still remember years ago overhearing this woman getting out of her car, a supermarket parking lot. She said to her friend, my last car payment is next week. I’m going to buy a new car that day. Oh Lord. Because she’d been trained that what it means to have a car is to have car payments. [00:24:09] And the idea that she was gonna have a free car going forward never entered her mind because she made her payments. Now it’s time for a new car. [00:24:16] Joe: We, we just had Ben Orland recently who’s a great mathematician and tries to make math fun on the show. Really had a great conversation with him. But he talked about mathematics shows you constraint and you can become more systematic and more powerful once you recognize the constraints. [00:24:37] And I feel like this is very congruent, Seth, with what you and I are talking about today. Yeah. When you understand there’s constraints and where those constraints are coming from, then the system [00:24:46] Seth: gets stronger. Exactly. You can’t, this idea of thinking outside the box is crazy ’cause it’s really dark and cold outside the box. [00:24:53] What you need are the edges of the box. [00:24:55] aftershow: Mm. [00:24:56] Seth: When you understand where the constraints are, you have something to lean against. And people who are uncomfortable with constraints are the ones, say just this one time, I’ll, I’ll put it on my credit card just this one time we’ll splurge because we already spent this much money for dinner, so we might as well spend that much money on the last bottle of wine. [00:25:14] No, they’re not related. You can live a life with constraints quite happily, because knowing where the boundaries are keeps you from having to question them all the time. [00:25:26] Joe: Speaking about the constraints of being outta the box, all those things that you said, well, this one time, or I deserve it, right? The worst words a broke person could say, are I deserve it? [00:25:36] Or a rich person, right? These are emotional. These are emotional things that I feel like building a system helps us realize the fact that we are emotional creatures and helps keep emotion out of our decision making. [00:25:50] Seth: Okay? So you’re using the word system differently than me, and there’s nothing wrong with that. [00:25:55] So let’s call that a system with a small S, when we have a personal approach and algorithm to doing things, you know, I have this thing somewhere that takes money outta my account every month and puts it into my retirement. I decided that once that I’ve been a backer of charity water for years and every month. [00:26:13] Money just disappears from my account and goes to charity Water. I don’t get as much philanthropic joy ’cause I’m not making a new decision. But it also means that if there’s a speed bump in my life, charity, water doesn’t have to pay for it. It keeps happening. And these algorithms, these processes, enable us to take the emotion out on a regular basis and instead say on the best day of the month, when I was thinking clearly I decided this. [00:26:42] So now on days when I’m not thinking clearly, it’s outta my hands. I [00:26:47] Joe: got [00:26:47] Seth: it. [00:26:48] Joe: I I had no idea. By the way, skipping way ahead in your book, I had no idea about the history of Duncan Hines. I had none. I had, I just, you know, you see the Duncan Hines on the shelf. Uh, what does Duncan Hines have to do with strategy and with systems? [00:27:04] Seth: Duncan Hines’ biography is an absolutely fascinating book. So we’ll just do a small aside here ’cause I’m, it’s, he was a printing salesperson in the 1920s. And in the 1920s, if you were driving your car from town to town, it was risky. Not just ’cause of car accidents, but because diners serve terrible, dangerous food. [00:27:27] There was no health department so you could get really bad food poisoning. So Duncan was sort of cheap and he also cared about people. So he kept notes of which restaurants throughout the Midwest were worth stopping at. And he typed them all up. And for Christmas, instead of sending his customers and friends a gift, he sent them his notebook, a copy of his notebook, here are the safe restaurants. [00:27:49] It was so popular. He did it again and they did it again. And the fourth time he turned it into a book and the book took off. And then restaurants started to say to him. Can we put a sign up front that you picked us? So then he would charge the restaurants money to have a Duncan Hein seal of approval in front. [00:28:08] So he was one of the most famous food people in the world. And then he got a call from a company that said, we wanna make canned goods that have your name on them because it’ll be safe food. And he said, sure. And then that led to cake mix. And then, uh, the rest is history. The, the point is that he didn’t set out to build a billion dollar food empire. [00:28:30] What he set out to do is have empathy for the people he was serving to be able to say to them, I don’t have this problem, but you might. And if you have this problem here, what do you think of this? [00:28:43] Joe: Systems, I think work better if we see measurements. In fact, you have another great story, Seth, about, uh, Denmark and Electric Meters. [00:28:52] I don’t know if you remember what I’m talking about. Yes. Because you, because there’s a big book, but could you describe that if you do. [00:28:57] Seth: It is a magnificent story. There were, it was a scientific experiment that wasn’t built by a scientist. There were all these houses, they’re identical all throughout this neighborhood in Denmark. [00:29:06] The only difference between them is that the builder had put the electric meter in the basement of some of them, and in the entranceway of others. That was it. And it turned out that in the houses where you could see the electric meter every day, the amount of power that was used was dramatically, like 30%, I think, lower than in the other one. [00:29:29] Same houses, just knowing the number. And so, you know, there, there are plenty of tools online like Rocket that will suck in all of your credit card data and give you a report. Yeah. And send you an email if something’s unusual. Most people don’t wanna see that because they would like to have their life be separate from their money, except when it stresses them out and then their money. [00:29:54] Makes their life worse. But when you see it and you start to understand the pace of what’s happening, as Andy Tobias has taught, there’s no difference between saving $10 and getting $10 in the mail. Right? If you spend $10 less, it’s like getting $10. In fact, it’s even better ’cause it’s after tax money. [00:30:16] So what Andy used to do, he, he said that the number one return on investment by far, that the typical person can make is to buy a year’s worth of canned tuna when it’s on sale, because that’s like a 50% return on your money. [00:30:33] Joe: Bam. [00:30:35] Seth: I thought that was fascinating. [00:30:37] Joe: Well, you know, it’s funny the whole time that you’re explaining this, I’m thinking about the fact that some of these strategies that we see out there, well, you call ’em something great in the book, you call them elegant. [00:30:49] What makes a strategy el, I love the word elegant when it comes to strategy, what makes a strategy elegant? [00:30:56] Seth: So an elegant strategy is one where you are working with systems not against them, where you are aligned with where you seek to go. So the most elegant strategy I’m aware of in personal finance is for somebody who is looking for a certain kind of growth in a certain kind of position and doesn’t wanna worry about it, is to regularly put their money into a low cost index fund. [00:31:19] Because over time, time, after time, after time, there’s no drama and time. Rewards you. There are plenty of ways you can argue that you could do better, but what does better mean? If your goal is to live your life without worrying about it, it’s hard to think of something better than automatic and invisible that would be argued to be an elegant strategy. [00:31:42] It gives you what you want and it’s also quite effective. So what we’re looking for as we seek to decide how to spend our time, our money, our conversations are things where the path we’re choosing lines up with the thing we want. [00:31:58] Joe: Our stackers have jobs, obviously some of them are in marketing, they’re running companies, they are entrepreneurs. [00:32:04] I wanna switch over and talk, not about personal finance, but talk to these people. Sure. I think I know more about that anyway. Yeah. Well, well, and making money is a huge part of the game, and if we can help people through empathy and better systems and help ourself at the same time, then that’s, that’s a fantastic win for everybody. [00:32:21] What I’m wondering is, I just went on this trip, Disney put this on it’s Adventures by Disney. It is Disney’s highest rated thing that they do. And what was interesting about this trip, Seth, was there was sometimes where Disney just took care of everything for us. It was part of the magic of the trip was they took care of everything and I didn’t, you couldn’t see the hands of the people. [00:32:43] Mm-Hmm. You know, puppeteering as we went from place to place on this adventure with them to Peru and it was fantastic. But other times. I felt like they deliberately wanted me to see the system and it was a little bit of a flex. You know what I mean? Yeah. So is a system better when it’s unseen like the universe? [00:33:03] Or is a system as a creator better When you, when you do that flex and you go, Hey, look what I just did. I just showed you a thing that you wouldn’t have done by yourself, and that builds referrals. [00:33:14] Seth: Right? So who’s it for and what’s it for? Or where we begin everything they’re doing, they know who it’s for. [00:33:21] It’s for Joe. What’s it for? Well, it’s not to lull him into a complete sense of complacency. It’s to make him feel like he was an active participant in quote, the adventure. That’s what they called it. Adventures have to have tension. You can’t make an action movie where nothing happens, but people shooting each other. [00:33:41] ’cause it’s boring, right? It’s the tension in between. That makes the whole thing work. So there’s an Italian term Torah. Torah is what happens when you deliver things with grace and care, and it seems effortless, but it’s not. That’s a level of service. So if I’m calling up a fancy restaurant, I think the way that they could create the most magical experiences begin with tension. [00:34:11] I probably can’t get in, they’re probably full. I probably have to pull a string to get in. But when I pull the string to get in, all of a sudden I feel better because it says something about my status that I could get in that starts me off on the right foot. Compared to a restaurant that says, we have times at 4 30, 5, 30, 6, 30, 7, 38, 39 30, 10, 30, same restaurant, but they created tension. [00:34:34] When I get there, the person recognizes me. Well, they don’t recognize me. ’cause they recognize me. They recognize me because my name’s in the book. And they’re trying, they’re leaning into it. So we go through all of these steps in all of these interactions. Is it a daily special? What does it mean? It’s special, right? [00:34:53] Didn’t they make all the food today? But by calling it a special, they’re showing something about how their system works, is for the person that wants to hear that story, hears that story. And you know, to, to wrap up the riff, when my son and I walked the Inca Trail up to the top of Machu Picchu, it was a five day thing. [00:35:17] Oh yeah. In Peru, two of the days, the weather was 38 degrees ahead. Icicles on my nose and my feet were in the mud. It was the best. It was the best. If there had been an escalator to the top, that would’ve been horrible. That what I remember about that trip were the apparent hardships, not everything being perfect. [00:35:37] Joe: Isn’t it wild how the lows make the highs even better? Exactly. Yeah. To have the restaurant kind of point that out, point out that tension, I think is huge. You also talk about competing on price, and I know a lot of our young entrepreneurs, heck, when I was an entrepreneur, when I first became an entrepreneur, Seth, you know, the first thing I thought about was price. [00:35:55] And I gotta, I gotta, I gotta charge less. I have to charge less. Which you point out, if you’re Walmart, that’s great, but otherwise might be a problem. Can you talk [00:36:04] Seth: about pricing for a moment? Sure. Well, there are only two useful slogans. One useful slogan is you can pick anyone, and I’m anyone, I’m the cheapest. [00:36:15] The other slogan is, you’ll pay a lot, but you get more than you pay for. In between is a mess. If you’re gonna race to the bottom, you better win. And so Walmart didn’t just lower their prices. Walmart put in a spectacular regime of container ships and brutal relationships with suppliers and, and, and all these things that enabled them to make a profit while being the cheapest. [00:36:40] So you can’t compete with Walmart on price. ’cause Walmart actually can make things cheaper than you can. If you’re a freelancer and you go on Upwork, you’ve already sort of announced that you’re racing to the bottom. So you better be prepared to have clients who wanna pay as little as possible for someone who’s starting out or not starting out. [00:36:59] My best advice is what work do you need to do to be able to justify being more expensive than your competition? If you can’t justify it, no one’s gonna buy from you. If you can, there will be a line out the door [00:37:12] Joe: just thinking about the fact that I’d have to compete with Walmart in this whole system. [00:37:17] Where were you when I started? Because I, I went down that whole rabbit hole and it was a mess. What I really love about this project, Seth, is not only is it about, we say this all the time in Stacky beds, but it’s not about what you know. It’s about what you do and you challenge people right up front. You tell them first, find three or four other people and start a group in person or in Zoom, meet once a week and make assertions highlighting your fears and sharing your path. [00:37:41] Frankly, I love that. I feel like when like minds get together, it isn’t one plus one equals two, it’s one plus one equals five. Just the back and forth banner that that we have, you say, then surprisingly quickly, you’ll notice you’re shifting your strategy. I think that’s so huge, right? Can you talk about mentorship and the power of teams for a moment? [00:38:04] Seth: Mentorship is a great idea and it almost never happens because it’s not a good offer to the mentor. It doesn’t scale, and it’s a huge responsibility. So you’re not gonna find a good mentor. I hope you do, but you’re not. Heroes are great. Heroes are people you’ve never met, but you can ask yourself what would they do right? [00:38:22] What would Warren do? What would Oprah do? The idea of the peer group is you are peers. That person is sitting across from you. It’s not their job to reassure you. It’s not their job to teach you. It’s their job to ask you hard questions. You can return the favor by asking them hard questions. Early in my career, I was lucky enough to be in a circle. [00:38:43] Two different circles, lucky for one, unlucky for the other. The unlucky circle were 11 other entrepreneurs, many of whom didn’t have a lot of confidence, and they found solace in criticizing each other in undermining the work. That was inner innovating. That really cost me a lot. But the other group were people in my industry who understood we weren’t competitors. [00:39:08] That other is the competitor, not us. I would have to justify why the project I was working on was a good one. Just me saying it out loud would make the project better. That idea that for free, you can find a few people who are by your side, whether it’s personal finance or the business you’re building or parenting. [00:39:28] It’s spectacularly important because this isn’t about other people telling you the right answer. It’s about other people opening the door for you to find the right answer. [00:39:38] Joe: The book is called, this is Strategy. It comes out tomorrow, by the way, and I think it’s gonna be, I would have to imagine, Seth, it’s available everywhere. [00:39:47] Seth: Only where finer books are sold. [00:39:49] Joe: The finest books. Seth, great to finally meet you. I’ve been a fan of your work for so long and thanks for mentoring our stackers today. I super appreciate it. [00:39:59] Seth: Thank you, Joe. Keep making a ruckus. It matters. [00:40:06] Doug: Hey there, stackers. I’m Joe’s mom’s neighbor, Duggan. How about Seth Godin? Ah, while the guys were talking strategy, I was thinking I may need a strategy to clean up this place. Sure, we could have the fin turn, do it during greatest Hits week, but wouldn’t it be nice to not be tripping over Nintendo cartridges and risk pieces every time we invite a guest over? [00:40:27] You know, I don’t know what to clean up first. Maybe taking a page from Seth Godin. I’ll consult Joe’s mom. Speaking of strategy consultants, here’s a good trivia question. What’s the largest consulting organization in the USA based on annual revenue employees and locations? I’ll be back right after I run upstairs and get some guidance. [00:40:55] Hey there, stackers. I’m Seth Godin fan and a guy who’s always open to consult with you on ice cream flavors. Joe’s mom’s neighbor, Doug. Well, there’s a lesson. Don’t ask Joe’s mom about what we should clean up first. Her strategy notes were, um, uh, they were these, let me, hold on. I got ’em right here, um, folded in my pocket, holding it folded neatly. [00:41:17] Hold on. Oh, wait a minute. No, that’s a waffle House receipt. Oh, here it is. Here it is. Here’s what she said. Can make out her handwriting. I don’t care. Just clean that up. That, is that what the big consultants do? Did I ask Joe’s mom or Dave Ramsey for advice? Well, maybe next time we consult a more professional organization. [00:41:38] Here’s today’s trivia on that topic. What strategy consulting organization is the largest in the USA based on locations, annual revenue and employees. Third largest is Bain and Company. Second is Boston Consulting Group, but the big one is McKinsey with 45,000 employees, 133 locations and revenue in 2023 of $16 billion. [00:42:04] Man, and I thought paying Joe’s mom five bucks was bad. Then again, they say you get what you pay for, which means back to two guys who come for the price of a couple of advertisements. It’s Joe and og. [00:42:16] Joe: Big thanks to Seth for hanging out with us. It’s always interesting when you hang out with Luminary like Seth and just how person believes og, you know what I mean? [00:42:26] Like, I’ve been reading Seths books for 20 years and then he’s sitting across the card table and That’s right. Just another guy, [00:42:33] OG: just a dude who did all the stuff that he wrote about and then was successful in doing about, you know, we did the stuff. Then he wrote about it, right, and, and still continues to do it. [00:42:42] Joe: That’s crazy [00:42:43] OG: talk. You don’t just sit [00:42:44] Joe: around and talk about [00:42:45] OG: it. It’s like, uh, [00:42:45] Joe: you actually do this stuff. [00:42:46] OG: Is that what you, uh, what you call the, um, the online, you know, Reddit finance people, what do you call those? Oh, broke professors, right? Steph Goodin is not a broke professor. He is not a, he’s a very, very wealthy professor. [00:42:57] He’s a successful professor. [00:42:59] Joe: I think he’s lived the thing. Mm-Hmm. Let’s go to our headline. [00:43:04] headlines: Hello doling. And now it’s time for your favor, part of the show, our Stacking Benjamins headlines. [00:43:11] Joe: Our headline today comes to us from napa dash net. I have not used a headline from napa dash net in a little while, but that doesn’t mean it’s not great. [00:43:18] This is the National Association of Plan Advisors, people that that plan 4 0 1 Ks, other retirement funds, pension funds. This is a piece written by John Sullivan a couple weeks ago, a big surprise, found a new research on 401k loans and leakage. You thought less was bad. Listen to this. Too soon. A recent paper from a collection of Harvard, Yale, and Vanguard researchers could throw a wrinkle into how we view retirement plan leakage. [00:43:51] Have you ever heard that term, reti? I’ve never heard the term reti. I, I think John’s messing with this retirement plan leakage. I gotta go run to the other room for a minute. ’cause I’ve had some retirement plan leakage. [00:44:02] OG: I was gonna say, all you old guys are, uh, reading some weird stuff. I saw I did this come from a RP. [00:44:08] Is this part of the, does your plan have leakage? [00:44:12] Joe: It’s so weird how I came up with this. Visit your doctor [00:44:14] OG: for [00:44:15] Joe: Yeah, I’m on Google and I just put in leakage. And this came up. [00:44:19] OG: Yeah, just [00:44:19] Joe: unintended. Who knew? Uh, and its detrimental effect on retirement savings. The piece was titled Does 401k loan repayment. [00:44:28] Crowd out retirement saving implications for plan design. So, [00:44:32] OG: so hold on a second. Hold on, hold on, hold on, hold on, hold on. The question was. This is the question that the world famous researchers at Harvard, Yale, and Vanguard are trying to solve. If there’s a 401k loan, do you suck at contributing money to your 401k? [00:44:49] Is that the question? That’s the question. Oh, hold on, hold on. Let me, let me, let me get out my abacus and figure this one out real fast. So I borrowed money from my retirement plan and I paying it back, and you’re wondering if I also have enough money to make other contributions on top of the payback? [00:45:05] Yes. Oh, whoa, whoa. Let’s hear what the famed researchers at Harvard and Yale have to say about it. Well, remember how I, I’m gonna guess there’s some leakage. [00:45:16] Joe: Remember how I said the word surprising? [00:45:18] OG: Oh my God. I [00:45:20] Joe: can’t believe people [00:45:21] OG: had, why do we have to prove this? [00:45:24] Joe: Does everybody knows this? No. It’s exactly the opposite of what you think it is. [00:45:29] Believe it or not, exactly the opposite. [00:45:31] OG: Okay. All right. This is surprising. I’ll be open-minded. [00:45:34] Joe: Citing Vanguard’s record keeping data. They study participants who took loans and hardship withdrawals and establish what they said as a new empirical fact. Retirement plan contributions are, quote, remarkably stable after loans and hardship withdrawals and participants accessing their assets during employment usually did not elect to reduce their contribution rates. [00:46:02] They did not. They went right to Vanguard Run 4 0 1 Ks. People kept contributing OG while they were paying back the loan. How about that? Huh? [00:46:11] OG: Okay. I stand corrected. I know. So I’m gonna start taking four oh K loans. Then forget everything that I’ve learned over the last 25 years of. Doing all this yolo, I guess. [00:46:22] Joe: Well, and the reason they call it leakage and, and also the reason they actually did this study and wanted to come out with these surprising results was because they thought, what? You thought [00:46:31] OG: you tricked me. [00:46:32] Joe: No, it’s still practical though. I mean, if I take out a 401k loan and then the proverbial crap hits the fan again, what’s the first thing to go? [00:46:42] Yeah, I’m gonna go, oh, I gotta back down my contributions. ’cause I’m not allowed to stop putting money, you know, repaying the loan. I gotta repay the loan, right? So I’ve gotta slow down contributions. So in terms of order of operations, if something bad happens, you almost have to strategically, I mean, hell we just said Seth talking strategy. [00:47:01] Maybe it just [00:47:01] OG: means that the people who are taking 401k loans are a little bit more, I don’t wanna say intelligent, but a little bit more of not disciplined either. What’s the word I wanna say here? Um, focused a little bit more intentional, motivated. No, they know what they’re doing. Because maybe they’ve chosen to contribute to the 401k at a high rate, knowing that they’re foregoing other liquidity type savings buckets, and then a house purchase opportunity comes available and they’re like, well, the only place I have is my 401k, and I know I can take 50 k from it for my house down payment. [00:47:37] So I’ll just do that. And maybe they’re just a little bit more intentional around paying it back or maybe the, the weight of it being a 401k loan means that there’s some sort of psychological anxiety that goes with that. Right? Like saying like, oh crap, I took money outta my 401k, I have to pay this back and I need to be, you know, I, I gotta get caught back up again. [00:47:58] I dunno. [00:47:59] Joe: Yeah. I don’t know. It’s super interesting. They’d call it leakage because. What people really worry about is a provision under Secure 2.0, which a lot of experts really don’t like. You can’t do it in every retirement plan. I almost don’t want to talk about the fact that you can now do this in some retirement plans, and I’m sure og you know where this is going. [00:48:22] But these legislative changes under Secure 2.0, which for people new to this area is legislation that happened a couple years ago that’s been slowly rolled out the provisions of secure being rolled out. There is now emergency withdrawal provision in there that allows participants to once a year take a free distribution of up to a thousand dollars. [00:48:47] Mm-Hmm. You can touch a thousand dollars now of your four. Oh. Without any penalty once a year. Now your plan, your specific plan has to say yes, right, that you can do that. But so more plans are coming on board with it. So this research was meant to prove, I’m sure that you shouldn’t and that’s why they use the term leakage. [00:49:08] ’cause once that water’s out of the tub, it ain’t coming back. [00:49:12] OG: Well, there’s a difference between taking a withdrawal and taking a loan too. At least the loan, you have the opportunity to pay back. You, you know, are gonna pay it back with after tax money. And you know, there’s a lot of negatives to it, but at least you’ve got the opportunity to put the money back, to get back to even Steven now, notwithstanding the five years it takes to pay it back and the market results over that period of time and so on, so forth. [00:49:34] But if you take a distribution, it’s gone. You know, it’s out and there’s no putting that back. I. Look at the end of the day we did this. I’m, I don’t know if you, did you ever take money outta your 401k? No. Ever take a four one K loan? Never have. Well, good for you. No. You know, we did a long time ago and in the moment, you know, it seems like it’s kind of the, the last resort thing, right? [00:49:54] And, and it’s like, well, I’ve got this 30,000 that’s sitting in my four one k. I could take this 15 and wipe out this credit card debt and then I’m good. But basically you didn’t wipe it out. What did you just do? You just made the, the payment structure three times as much to pay off your credit cards. [00:50:13] ’cause the credit card payment is in this example, right? Your 15,000 credit card payments interest plus 1% of the balance, it’s gonna take 40 years to pay it out. I get it. This sucks. That’s a big number in terms of cumulative dollars, but the payment associated with your 401k loan is over five years, so that’s gonna be a much higher monthly obligation. [00:50:33] The interest rates lower. You know, the arbitrage of like, well the discover’s charging me 30% in my 401k. It’s my money. Yeah, I’m paying myself back. I’m paying myself back. But it’s only, you know, 5% interest or whatever. It’s not about that. The reason you’re in credit card debt isn’t because the interest rate’s too high. [00:50:50] It’s because you’re freaking cash flow is screwed up. You know what I mean? And so if you have the money to pay the extra payment that the payment would be by having the five year payment on the 401k loan, pay it on your Discover card. ’cause all you’re doing by swapping those things out is just doing a balance transfer. [00:51:05] That’s really it. You’re just balance transferring it. Only you’re the bank. And now if you don’t pay it back, then you know, there’s taxes and penalties and so on and so forth. But I realized that after we did like, it was, it was like this big aha, I’ve got this $30,000 account. I can take 50% of it. We can finally wipe out all this credit card debt and be done. [00:51:22] And we did it all. And I went, wait a second. I didn’t wipe anything out. I just moved it from one line on the balance sheet of a liability to the next line of a liability on the balance sheet. It didn’t go anywhere. I still owe the money and the only way to wipe it out is to take a distribution, which of course can’t really happen unless you screw up the loan or you know, in this case, a thousand bucks. [00:51:42] And then you gotta pay taxes and you gotta pay penalty. You know, there’s no good solution here. So after that, we decided, you know what? If we need to adjust 401k contributions for cashflow, we’re gonna do that. Prefer not to, but if we need to, we can, but we’re not gonna take money from the retirement plans. [00:51:59] You know, that’s just the, the power of compounding is so profound if you just freaking let it sit there and do its thing over your lifetime. And if you get in the way of that snowball, take half of it out every so often. It takes away so much momentum and you don’t see it, you don’t feel it until you’re, you know, like in your forties or fifties and by then you’re like, dang it, I wish I would’ve just eaten ramen noodles for a couple weeks and paid off my stupid credit card bills or something. [00:52:28] Joe: It’s funny having Seth Godin here on a day like today, because Seth is one of the foremost pros in the world of marketing, and I remember taking this online marketing course about getting people to trust you. And the way the human brain works is there are some sites online that you think of as places I buy from, and there are other sites that I get information from, but I don’t buy stuff from them, and I just don’t think about it. [00:52:57] I don’t, my brain does not associate that place with buying. These marketing gurus espouse this idea that when someone first comes to your website, sell them something for five p. Five. What a small ticket item because it bridges the gap in the brain between you thinking, this is a place where I go to buy stuff and it’s a place that I don’t go to buy stuff. [00:53:25] So immediately, so you come, you see, oh, this is only five bucks. That’s a great deal. It might be a loss leader, og, so that you’re gonna buy bigger ticket items from them in the future. And it’s a great marketing strategy. But think about this. So people like, so what does that have to do with my 401k? If you touch the honeypot one time with this thousand dollars deal. [00:53:45] aftershow: Yeah. [00:53:45] Joe: In the back of your monkey brain, you know what you’re doing next year. You’re like, I got the thousand dollars reserve sitting over here. And I bet 10 years from now we’re gonna see this string of people. There’ll be another vanguard study this string of people that every year take the thousand bucks out. [00:54:02] Yeah. Oh, I, I gotta go back and get that a thousand dollars before the year’s up. ’cause then I can’t get it back out. [00:54:08] OG: Yeah. It would be just easier to change your contributions by $80 a month. Buy $40 a paycheck so that a thousand bucks goes into your cash account. You know? And that’s also why I think when it comes to all of this stuff around building your financial plan the right way, and you have to do it a certain order, and people say, well, this is boring. [00:54:26] I’ve got 10,000 sitting in my check in my savings account, you know, whatever. It’s not doing anything. I need to do something with it. It’s like, no, you don’t. You have to have that money in cash so that you can do this other stuff. Because life is, I, I throw a lot of shade sometimes at like 20 and 30 year olds who are like, you think they’ve reached fire? [00:54:44] Or something like that, you know? And it’s like, well, you don’t know what life is gonna be, but that’s true, right? You just don’t know what the future’s gonna be. Hell at 47, I don’t know what the next 15 years are gonna look like. I’ve got a pretty good sense of what I want it to look like. You know, back to CES thing, I’ve got a pretty good strategy of what the next 15 years are gonna look like in my life, but I’m gonna go skiing this year. [00:55:02] You know, knock on wood, all my tendons, stay where they are. You know, like, who knows, right? You don’t know what’s gonna happen and if you’re not gonna be able to work for a period of time, or if your boss is gonna be a complete jack wagon and you’re gonna wanna step away and try to find something different, or a family member gets sick and you have to, you know, go on a leave of absence for a little bit to kind of, to help and take care of that. [00:55:21] There’s, there’s so many different possibilities of things that can go a little off the rails in your life. And I’m not talking about like crazy insane off the rails, just like a little bit. And if you don’t have that reserve, if you haven’t built a plan the right way, what’s the first thing you do? You go, well, the only resources I have are line of credit on my house are my 401k. [00:55:40] I gotta take money outta my Roth. You know what I mean? It’s like, just have a cash, just have, get your god dang three months of cash reserve and then you’ve got like the space to do what you need to do and it’s stress free and you, you know, you just go, okay, I can do this. I have this flexibility to my life to do this stuff. [00:55:56] Joe: I’m smiling because I’m going back to my days of financial planning and the number of clients I met with at the beginning of the relationship. And I’m talking about getting your Strat. What, okay. What happens if you get in a car accident? I got this $15,000 I wanna invest. Let’s talk about that. No, let’s talk about your will. [00:56:18] I do We gotta talk about the Yes. Yeah. Because if you pass away, what’s your family gonna do with, uh, who’s gonna take care of your kids? Uh, you have three kids, like they’re not gonna live on this 15,000 bucks. What about your budget? ’cause you told me you’re finding it impossible to save and this 15,000 was a small inheritance that you got. [00:56:36] What if we used it to I don’t wanna do that. I just wanna invest the Can we do the fun stuff? Let’s do the fun stuff. The fun stuff is a hell of a lot more fun. [00:56:43] aftershow: Mm-Hmm. [00:56:44] Joe: When you don’t have to worry about that investment. Yeah, you can be a lot more aggressive. The reason I love your stay in stock strategy. [00:56:51] Is because I know you well enough to know that when somebody is a hundred percent equities, they have an emergency fund they can go to first that’s funded enough that they don’t have to worry about it. They have an insurance and just overall protection strategy that if the wheels come off the bus in other ways, we’re not gonna have to touch this money. [00:57:10] The thing that blows up your aggressive strategy is the fact that you didn’t think about what you were talking about earlier. You go skiing and something happens. [00:57:18] aftershow: Yeah. [00:57:19] Joe: Love it. It’s funny, in this piece the authors were talking about what they worry about leakage, this leakage that they think might be coming from emergency withdrawals and uh, a quote from the piece. [00:57:34] One effective intervention would be an automatic repayment feature that encouraged or defaulted participants into repaying the withdrawals into payroll, deferrals, incremental to their elective contributions. Essentially treating the withdrawal as if it were a loan. They conclude. So when you take that a thousand dollars emergency loan every year, your 401k company ops you into your workplace, opts you into repayment, even though legally you don’t have to repayment. [00:58:05] But it’s funny because why would you wait for your company to do that? Like if the company thinks, and these experts think this is a great idea, make it automatic so you don’t have to think about it and just make that money disappear. It totally works. [00:58:19] OG: It’s no different than the car loan strategy. [00:58:22] Sometimes you have to have a car loan. I get it. Like if the cars are freaking expensive. I just saw a study the other day that said their average car is $49,000 right now. Like that’s the average. I mean that’s, that’s ridiculous. So, you know, used ones are just slightly, but you go out and you got your car loan. [00:58:37] It is what it is, right? That’s how life is. But when you get done paying the car loan off, don’t go get another car. Like keep your car for like five more years or four more years, but keep baking the car payment and baa boom, baa bing. You can pay cash for the next car. Like you’re already doing it. You’re already doing a $500 a month car payment. [00:58:54] Just keep doing it for another three or four years and you’ll have cash so that now when the car takes crap, you can be like, oh, go to bank of me and take out, instead of car, changing your cash flow like this as your life goes on. Right? It’s. It’s like, oh, life’s really good. I don’t have any debt. Oh, I got a bunch of debt. [00:59:09] ’cause I get, you know, bought a house and a car and student loans and all that crap. And then I get that stuff paid off and it’s like, now I wanna get a vacation house. It’s like, my God, just keep your cash flow the same. It’s like [00:59:18] Joe: save the difference. We’re there with a Tiguan right now. We had enough money to buy Cheryl’s Volkswagen with cash. [00:59:23] My car is a junker. It is total scoreboard cash. But um, with the Tiguan, we took out a loan ’cause it was at 2% for a little piece of it. Mm-Hmm. We took the number we wanted to pay, which was $300. We figured out how much money we could get at 2% for 300 bucks. Then we paid cash for the rest. Yeah. And so we took the amount we think our next car is. [00:59:46] We’ve been putting that into the next car fund. But now that the Tiguan loan is done, now that $300 a month we’re adding to that fund. So we’re right where you’re talking about with the Tiguan. [00:59:56] OG: Yeah. Yeah. You’re already doing it. You’re already making a $300 payment. [01:00:00] Joe: Yeah. Just keep making it. Well, and you know what’s fun about the game now? [01:00:03] The game for Cheryl and I now is how long can we make the Tegu one last? [01:00:06] OG: Yeah. Oh, a hundred percent. Yeah. [01:00:08] Joe: Can we squeeze a little more time out? It, I know you and Doug say it’s impossible. Like we’re at the point where it’s all gonna, just, the wheels are gonna come off that bus. [01:00:16] OG: We’ll see. I mean, I, I suspect that it all ends up being all is in the wash, basically. [01:00:20] Like the, the cost of that car is the same, whether or not you have it brand new, whether or not you pay it for, you know, maintenance. The thing that you can’t control is the lumpiness of the maintenance cost. And if you happen to time that out exactly right, then life will be fine. If you get unlucky and you have a couple of those large maintenance costs on the front end, then yeah, it’s like, oh crap, I should just bought a brand new one. [01:00:44] Joe: If you wanna see this, uh, wonderful piece from NAPA dash net that we dove into today, head to stacky Benjamins dot com in the show notes, which. Our friend Kevin Bailey puts together. Kevin, by the way, speaking of Vanguard, used to work for Vanguard and for TIA. A couple great institutions and now he writes for us, and if you want to go deeper into this, you can see more Kevin’s writing at the 2 0 1, which comes out twice a week. [01:01:07] Stacking Benjamins dot com slash 2 0 1. This is the 1 0 1 on the show, and then the 2 0 1 is the day after where, whether you hit the show or not, Kevin curates the best stuff on the internet that we can find on these topics and leads you down a deeper path on 401k loans. Maybe not about leakage. We may not talk about leakage tomorrow. [01:01:29] We’ll, and that here, but and more. Let’s mosey out to the back porch before we say goodbye, og. The cool thing is. You know what’s funny? I wanted to end my book tour in Vegas, uh, for selfish reasons, back in 2022, and the reason was I just wanted to party in Vegas that I was done. And so Cheryl flew out. We had a wonderful time at Barnes and Noble and met some great stackers there, but honestly, we do not have a large audience around Las Vegas. [01:02:02] OG: I mean. It’s kind of on brand, right? It’s not like there’s, [01:02:05] Joe: they’re not really conservative. They’re really not [01:02:06] OG: preaching the good news over there so much as other news. But [01:02:11] Joe: I’m going there for an interview. I’ll be interviewing a person we will name later who a lot of our stackers have heard of this gentleman. [01:02:19] aftershow: Indeed. [01:02:20] Joe: But I’m gonna go interview him in person. I’m really excited about it. You’re really excited that we’re doing this interview. I wish [01:02:25] OG: I could be there. Yeah. Might get a little pump on with him. [01:02:28] Joe: Yeah, he is That there’s a, a little hint as to who it is. I can’t watch this dude’s videos ’cause he is so jacked and he always wears those shirts. [01:02:37] Like me, dude that just, yes. Just like you. So while I go interview him, stackers, if you are in the Vegas area, I don’t expect this to be an absolutely huge thing, which is great ’cause we can get to know each other. We’ll have a lot of fun. [01:02:50] OG: Joe, at the crabs table at Caesar’s at 9:00 [01:02:51] Joe: PM How about instead, we meet at Las Vegas Brewing at six 30 on the seventh, [01:02:59] OG: seventh thousand. [01:03:00] Thank you [01:03:00] Joe: Benjamins. [01:03:01] OG: Seventh [01:03:01] Joe: of, sorry, November. [01:03:03] OG: Yes. November 7th. Yes. Just coming up here. [01:03:06] Joe: Is that a Wednesday in a couple weeks? It’s a Thursday. [01:03:08] OG: A Thursday. Okay. So two days post. [01:03:11] Joe: Yes. Stacking Benjamins dot com. You know what’s funny? When I first set this up, I’m looking at my thing here and I wanted it to be at seven o’clock, and I’ve been telling everybody six 30 and I’m gonna get there like right at six 30. [01:03:22] ’cause my interview ends an hour before, and I’m not sure what Vegas traffic is like, but we’ll see. I’ll get there when I get there. But six 30 Las Vegas brewing to sign up. Stacking Benjamins dot com slash meetup and tell us you’re coming because we’re gonna have reserved an area. We’ve talked to the nice people there. [01:03:43] Sounds like a great place. Uh, can’t wait to meet our stackers in the Vegas area. [01:03:49] OG: Failing that craps. Table 10:00 PM Caesar’s Palace. Come on. [01:03:54] Joe: Let’s see if we can just, I know. Put it all on the line. You’re more of a roulette guy. Yeah. 10:00 PM is a recipe for disaster at the craps table. Maybe we’ll talk about that at a future date. [01:04:02] But for now, Doug, you’ve got it from here, man, lots of lessons about, huge thanks again to all of you for hanging out with us. Thanks to Seth Godin. I just feel, oh gee, a lot of love right now. But, uh, Doug. Take it from here. What should we have learned today? [01:04:18] Doug: So what’s stacked up on our to-do list for today? [01:04:21] First, take some advice from Seth Godin. You already have a strategy. If you don’t think you have one, that means everyone else is in control. Time to take the reins, lay out what you want for yourself and that’ll narrow your career Focus, your money concerns, and your daily calendar. Second, that 401k loan or hardship withdrawal. [01:04:42] We know it’s easier to take, but still don’t do it. But the big lesson, okay, you wanna know the secret of our local consultant, AKA Joe’s mom. It’s three-pronged, poke, prod, and jab. [01:05:02] Thanks to the Seth Godin for joining us today. You’ll find Seth’s new book. This is Strategy. Make Better Plans wherever Books are Sold. We’ll also include links in our show notes at Stacking Benjamins dot com, and if you use our Amazon link, you’ll help out the show. This show is the property of SB podcasts, LLC, copyright 2024, and is created by Joe Saul Sea High. [01:05:27] Joe gets help from a few of our neighborhood friends. You’ll find out about our awesome team at Stacking Benjamins dot com, along with the show notes and how you can find us on YouTube and all the usual social media spots. Come say hello. Oh yeah, and before I go, not only should you not take advice from these nerds, don’t take advice from people you don’t know. [01:05:49] This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor. I’m Joe’s Mom’s neighbor, Duggan. We’ll see you next time back here at the Stacking Benjamin Show. [01:06:57] aftershow: And that later moment might be now. [01:07:00] Joe: I love the fact that we’re like for people who’ve been stackers for a long time, when we had that meeting OG and we’re like. Screw apple, screw the algorithms. We like doing the after show. People aren’t gonna listen, whatever. So be it. It’s not why we do it. So for those of you that said, I love having the after show, so do we, which is why we’re back here. [01:07:23] We’re giving the finger to the man, og. [01:07:26] OG: My wife, when she first started working, worked for a consulting firm in Detroit. It was like Troy maybe. But anyways, speaking of consulting firms, yeah. The first week she was there, I mean she started right outta college. She graduated college, we got married, honeymoon. [01:07:43] She started, you know, a couple weeks later, like it was like boom, boom, boom, boom, boom, start job. So a couple weeks later they’re like, um, hey, we’re gonna do a little office outing with the new person. Right? And so it was, she was the new one, and then they had three other total people. So it was a group of four total. [01:08:00] And I think there were all guys and her, it might’ve been two guys and two girls, but I can’t remember. But anyways, they have a little dinner, they go downtown, they park at the casino. ’cause you can park and get validation for free. Right. You just walk in and get your ticket validated. And they ate dinner, did their thing, whatever. [01:08:16] And on the way back through the, the [01:08:18] Joe: people who don’t know, by the way, ’cause some people haven’t been to Detroit, which is Detroit downtown is, is getting amazing. It is actually really cool now, I mean, this [01:08:27] OG: was a long time ago. So this wasn’t like, this was pre Yeah, pre Dan Gilbert love, [01:08:32] Joe: but even then there were, th there’s three big casinos in downtown Detroit. [01:08:35] OG: Yeah. Yeah. So anyways, they park it to dinner and they’re, they’re leaving. And the boss, the head guy says, we got some petty cash left from this outing. You guys wanna, you guys wanna hit the casino? Some untraceable cash from the company. Yeah. You know, who knew? So they start playing craps and, and, and, and Alyssa says. [01:08:58] This isn’t for me guys. It looks like, look, and I don’t really, this, I’m not a gambler. You guys have fun. Thanks for a great evening. I’m going home. And they went, no problem. See you lateral. And so that may leads me to believe it was three guys and her exactly like they were like, whatever, whatever. Get outta here. [01:09:15] Big money. I guess they played a little roulette and then they played blackjack, but, or I’m sorry. Um, uh, craps. So the next day comes and she walks into the office and they’re all there early, like kind of giggling. And on her work computer, there’s a big envelope, big thick envelope. And she kinda looks at it and she looks, and you kinda look and everybody’s like looking at you, you’re like, obviously this is something I’m supposed to do something with right now. [01:09:42] And they open it up and it’s just full of cash, like $6,000 full of cash. And they’re like, what? She’s like, what is this? And they’re like, dude, you missed it. We caught a heater with the petty cash from the company and we just kept letting it ride until it got to 25 grand. So they caught this. They like literally like played craps starting with like 500 bucks until it went to 25,000. [01:10:12] And then the boss goes, this is pretty good guys, right? Like, just divvy this up and we’ll put the petty cash back. No one’s wiser. Yeah, penny gets six grand, [01:10:21] Joe: $500 goes back in the envelope. Yeah, goes back in the till. [01:10:24] OG: So you put the petty cash back and the dinner works out to be free. So she comes home and she’s got this big stack of money and of course her first line is, you wouldn’t believe what I had to do to get this. [01:10:36] It’s only my second day on the job.
Leave a Reply