Thirty years ago Beth Kobliner wrote the book that a generation of financial planners handed to their clients’ kids. The core advice still holds. But the world around it has changed dramatically — frictionless spending, gambling apps disguised as investment platforms, and a housing market where the average first-time buyer is now 40. Beth comes back to the basement with an updated edition of Get a Financial Life and a clear-eyed take on what’s harder now, what’s easier, and what was always just common sense.
What You’ll Walk Away With
- Why the shift to invisible, frictionless money has made spending harder to track — and the two-week experiment that fixes it without turning into a second job
- The yours, mine, and ours account system for couples where one person saves and one person spends — and why autonomy is the key to avoiding money resentment
- Why putting a price tag on your goals changes your spending behavior more than any budget ever will
- The biggest mistake first-time home buyers make right now — and the math on why a 10% down payment often beats waiting for 20%
- Used versus new car: the $20,000 gap that makes the decision simple — and the negotiation script that puts you in control at the dealership
- Student loan reality check for 2026 — what’s changing by July, where to run the numbers, and who qualifies for public service loan forgiveness now that it’s actually working
- Why paying off a 22% credit card is mathematically equivalent to earning 22% guaranteed — and what that means for how you prioritize your money
- The gambling platform statistic that should alarm every parent of a 20-something: 25% of Gen Z and millennials consider online gambling an investment
- The annuity conversation most advisors won’t have honestly — what they’re actually selling, what the fees really cover, and the two use cases where they might actually make sense
- Why an annuity inside an IRA is, in OG’s words, an abomination — and the three questions to ask before signing anything
Why This Matters Now
Whether you’re in your 40s and wishing you’d read this at 22, or you’re handing it to someone who just graduated, the fundamentals Beth laid out three decades ago are still the fastest path to financial stability. What’s changed is the noise around them — and the sophistication of the products and platforms designed to get in the way.
From the Basement
Beth Kobliner joins Joe and OG to walk through the 30th anniversary edition of Get a Financial Life — covering homes, cars, student loans, debt, and the new financial traps that didn’t exist in 1996. The headline segment digs into a CNBC piece on why retirees are thinking about annuities wrong, which turns into one of the more honest annuity conversations the basement has had. Doug arrives with Spice Girls trivia that everyone over 35 finds embarrassingly easy. The meatloaf debate breaks out at the end and resolves nothing.
Resources Mentioned
Stacking Benjamins Community — stackingbenjamins.com/basement
Get a Financial Life by Beth Kobliner — 30th anniversary edition available wherever books are sold
Beth Kobliner — bethkobliner.com
studentaid.gov — loan simulator and repayment plan options
Edmunds and Kelley Blue Book — invoice price research before car negotiations; edmunds.com, kbb.com
CARFAX — used car history reports; carfax.com
Carvana, Autotrader, CarGurus — used car shopping platforms
CNBC annuities article by Greg Iacurci — linked at stackingbenjamins.com
JP Morgan Guide to the Markets — referenced in discussion; search “JP Morgan Guide to the Markets”
Stacking Benjamins Newsletter (The 201) — stackingbenjamins.com/201
Stacking Benjamins Vault — stackingbenjamins.com/vault
Stacking Benjamins Meetups — stackingbenjamins.com/meetup
Enjoy!
Our Mentor: Beth Kobliner
Big thanks to Beth Kobliner for joining us today. To learn more about Beth, visit The Official Website of Beth Kobliner: BethKobliner.com. Grab yourself a copy of the book Get a Financial Life: Personal Finance in Your Twenties and Thirties
Our Headline
Doug’s Trivia
- In honor of the 30th anniversary of Beth Kobliner’s Get a Financial Life, Doug looks back at another major debut from 1996. What was the name of the four-singer British supergroup whose breakout hit told listeners what they wanted, what they really, really wanted?
Have a question for the show?
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Other Mentions
- Stacking Benjamins Vault
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Join Us Friday!
Tune in on Friday when we dig into the question: what are the habits that truly make millionaires…wealthy? Our panel of financial bloggers, coaches, and planners will weigh in!
Written by: Kevin Bailey
Miss our last show? Listen here: Why 67% of Americans Fear Running Out of Money More Than Dying (And What to Do About It) SB1840
Episode transcript
[00:00:00] opener: My gosh, you boys already know I’m not letting that Ramsey boy come over and play until you clean up your rooms.[00:00:12] Doug: Live from Joe’s mom’s basement, it’s The Stacking Benjamins Show.
[00:00:26] Doug: I’m Joe’s mom’s neighbor, Doug, and today, we’ve got a little something something for everyone. First, we’ll help you build a better foundation with the woman whose New York Times bestseller propelled her all the way to helping the president’s Financial Literacy Council. It’s the one and only Beth Kobliner.
[00:00:45] Doug: In our headline segment, we’ll go from just starting out to retirement, because one headline says retirees are looking at annuities all wrong, and it may be costing them. What do you need to know? We’ll share answers. And no need to worry, because of course, I’m also waiting in the wings with today’s trivia extravaganza at no extra charge.
[00:01:07] Doug: And now, two guys who get a charge out of watching you level up your personal financial life… See, you like to watch. It’s Joe and O-G-G-G-G. I knew there was something wrong with you guys.
[00:01:26] Joe: Well, there’s nothing more thrilling than watching somebody’s net worth statement go from zero to millions. Hey, everybody. Welcome to the show that hopefully is gonna help you do that again today. I am Joe Saul-Sehy, and welcome back to Stacking Benjamins. Sit back, relax, grab a piece of paper and your favorite beverage, ’cause we got the man, the myth, the legend here, Mr.
[00:01:48] Joe: OG joins us again. How are you, man?
[00:01:51] OG: Happy to be here. Thanks for having me again, Joe.
[00:01:54] Doug: Never once has he sold that. Happy
[00:01:58] Joe: to,
[00:01:59] Doug: happy
[00:01:59] Joe: to be here. You just had quite an adventure with, uh, your son. It sounds like he had a very successful first year of college, so congratulations.
[00:02:10] OG: Yeah, time flies, man. It’s crazy to think a year ago we were planning high school graduations, and now we’re doing summer internships and helping move out of the dorms.
[00:02:20] OG: And a weekend ago, uh, or a little bit over a weekend ago, uh, was his birthday, so I was able to… I had some other work to do down in Houston, so I went down to Houston in the morning, did that work in the afternoon, then zipped over to College Station, took him to dinner. Got to do a little bit of, uh, dad-son time, which is fun, on his birthday.
[00:02:39] OG: Came back. You know, I did the Joe travel plan of, uh, let’s just drive everywhere, uh, which I do not recommend. Like, it is not as exciting as people make it out to be. Left at 5:00 in the morning and came home at 11:00 at night, and all of it was driving, and, uh, that was a lot of windshield time. I even called Doug.
[00:02:58] OG: He didn’t even r- reply to my call. I texted him, like, “Hey, man, I’m on the road for four hours.” I didn’t even get a rep- I didn’t even get the, the three dot bubble back.
[00:03:06] Doug: Like, you- No, ’cause I knew then that that was gonna use up my four hours of a morning. It’s
[00:03:10] OG: like that’s… Oh, well.
[00:03:12] Joe: Well, we got some great road trip material for our Stackers today.
[00:03:15] Joe: How about that- Yeah, good … for-
[00:03:16] OG: Yeah, yeah …
[00:03:17] Joe: a segue, huh? Today’s show brought to you by the letter A, A for amazing. That’s how we describe Beth Kobliner. She’s been a teacher to so many people. Listen to this. Back in 2010, she was asked to be on the President’s Advisory Council on Financial Capability. She’s also served on the President’s Advisory Council on Financial Capability for Young Americans.
[00:03:42] Joe: She’s written two huge bestsellers. She’s written a bunch of books, but two huge bestsellers, and of course, we’re gonna talk about the, believe it or not, 30th anniversary of one of them. And w- what is it, OG, that makes good advice really timeless? And there’s some timeless ideas in this book that, you know, 30 years ago it was relevant, today it’s relevant.
[00:04:03] Joe: Some things are different. We’re gonna ask Beth about all that today, too. Also, the letter A for annuities, because-
[00:04:11] OG: Mm. Those are my favorite …
[00:04:12] Joe: yeah, annuities, uh, people thinking about them the wrong way, and a great piece from CNBC that we’re going to dive into today. And also, brought to you by the letter A, for limiting access to your financial data.
[00:04:25] Joe: You know, it’s funny, I just spent the weekend, this last weekend, with a group of multi-millionaires, and one of them, while we were talking, she listens to the show, and she’s like, “So what’s this thing, the vault?” Specifically, she wanted to verify that the vault can take your name off all those public lists automatically.
[00:04:43] Joe: You know, the ones where your name gets legally sold, your address, your phone, your email, et cetera. She goes, “Did I hear you right that you can do all that?” We talked about how you have seven apps on your phone. Replace all them with a vault, especially now that budgeting and net worth tracking are right around the corner.
[00:04:58] Joe: Stackingbenjamins.com/vault gets you there, stackingbenjamins.com/vault. We have just a couple sponsor spots on the show. We’re gonna hear from two of them now so we can keep on keeping on, and then we’ll have a couple more in the middle of Doug’s trivia question. So you can think about your answer, and Doug, I think you got a good one today.
[00:05:18] Joe: I think people are actually gonna get this one, though. I think they’re gonna get one.
[00:05:20] Doug: A good answer or a good question?
[00:05:21] Joe: I, I think it’s a good question. I think people are gonna have a good answer. It’s teamwork. Teamwork makes the dream work.
[00:05:26] Doug: Lately I’ve been in the mood to just throw some softballs, ’cause you gotta get people to feel good about themselves, right?
[00:05:32] Doug: We’re gonna get back to some unanswerable ones soon, but for right now, I’m gonna let you have some fun with it.
[00:05:39] Joe: I think we should’ve done that differently. I think we should’ve said, “This one’s really, really difficult.” Oh. And have people just feel great, right? So let’s do that.
[00:05:48] Doug: Joe, I think they’re gonna figure it out.
[00:05:50] Joe: No, nobody listens that closely. I
[00:05:51] Doug: think they’re onto us.
[00:05:52] Joe: This is maybe one of the hardest questions, Doug, that we’ve ever done. It’s gonna be, gonna be difficult
[00:05:57] Doug: Okay. Yeah, it’s really hard.
[00:05:59] Joe: All right. We’re gonna hear from our sponsors, and then the amazing, the incredible Beth Kobliner joins us.
[00:06:14] Joe: I’m super happy she’s coming back to the card table. It’s been far too long. Beth Kobliner’s back. How are you?
[00:06:20] Beth: I’m great. How are you?
[00:06:22] Joe: I’m better now that you’re back in mom’s basement.
[00:06:25] Beth: Thank you, Joe. Yeah, I see you’ve really done a lot to, uh, fix up the place. It looks really nice.
[00:06:32] Joe: Yeah, a little less sketchy than maybe the last time.
[00:06:34] Joe: A
[00:06:34] Beth: little less sketchy, a little cleaned up. Yeah, I noticed that.
[00:06:37] Joe: Well, you know, Mom won’t let us stay down here if we don’t keep the place clean.
[00:06:42] Beth: That makes sense. That really makes sense.
[00:06:44] Joe: Y- you know, it’s funny, Beth, normally I don’t, I don’t like during interviews to talk a lot about, quote, the book. I like talking about themes and the things that these people do, like all of the cool stuff that you’ve done and all the people that you’ve helped and all the great stuff.
[00:07:01] Joe: But in this case, I do wanna talk about the book. Back when I was a financial planner, and it’s been a long time since I was a financial planner, I remember telling my clients with kids that were in their 20s that they had to read your book, and I’m like, “How could this book be 30 years old-
[00:07:19] Beth: I don’t know
[00:07:19] Beth: when
[00:07:19] Joe: you’re
[00:07:21] Beth: 35?” Exactly. How is that possible? Well, when I walk around sometimes, I’ll meet people, and they’ll say, “Oh my God, I have your book on my shelf,” and they’re, like, 70 years old. I’m like, “Am I 112 years old?” “How old am I?” So it’s been gratifying, and doing the 30th anniversary, I mean, honestly, the publisher, Simon & Schuster, they’re great, but they’re like, “Maybe don’t tell everyone it’s 30 years old.”
[00:07:45] Beth: They’re like, “That’s a long time.” But I feel very proud of that, you know? A lot of the advice has changed because times have changed, but a lot of it is also fundamentally the same, and I think that’s so important for people to know, that there aren’t these crazy, newfangled things you really need to know a lot about.
[00:08:04] Beth: You need to just stick to some really basic- Straightforward advice, and with some wrinkles here and there, and, uh ’cause we, we can talk about wrinkles, uh. No, but but it’s really, really gratifying to be able to talk to an audience for this many years and see how there are changes from Gen X to Gen Z.
[00:08:27] Beth: Yeah. It’s just a totally different environment. And, you know, the good news is this generation actually is doing quite well. Even though they’ve had a really, really hard time, they’re saving. They’re more serious about money. They are paying attention in a lot of smart ways. So I’m very optimistic about, you know, almost like the Depression generation.
[00:08:48] Beth: They’re having a hard time, and they realize they have to pay attention, whereas, you know, back in the day, 30 years ago, people in their 20s were like, “Whoo, it’s fun. Who cares?” And it, it’s, it’s a different time, but I am impressed by this generation and how they really are doing some smart things.
[00:09:05] Joe: Yeah, we’ve done some headlines recently, and man, uh, Gen Z, to your point, is doing some really great stuff.
[00:09:10] Joe: But the world, as you pointed out, though, has changed in a lot of ways. What’s the biggest way our relationship with money, you think, has changed over the last 30 years, Beth?
[00:09:19] Beth: Uh, we don’t touch it anymore. I mean, even little kids that I meet, their 20-, 30-something parents don’t teach them about coins. You know, kids don’t understand money, little children.
[00:09:30] Beth: And all of us, you know, we all use our debit card. We tap to pay. It basically feels magical. Or obviously now we use our phone to buy things, and I think that has really changed our relationship to money. You know, years ago you’d go out and say, “Okay, I have $50 in my wallet,” and by the end of the day you’re like, “Oh my God, where did my money go?
[00:09:49] Beth: I, how did I spend $50 today?” Today you don’t even know what you spent- Yeah … because you’re using a card or using your phone. I think that’s the most difficult part about handling your money since it’s now invisible, and it’s seamless and effortless, which is really nice in some ways, but that also makes it seamlessly and effortlessly come out of, you know, your savings account without really realizing it.
[00:10:14] Joe: I think it’s a great point because, you know, back in the ’90s, you had a lot of friction between you and your money, and largely, you know, the banking industry, credit card industry, stores, right? With Klarna and Affirm and all these things, like they’ve gotten rid of the friction, so I feel like maybe, maybe, well, and this is kind of a theme in your book as you’re talking tactics, that you really almost have to create your own friction now, Beth, just to make sure you slow down a little bit.
[00:10:39] Beth: That’s exactly right. In fact, I just wrote an op-ed on this, how the friction is ex- the exact word. The idea that, you know, before you’d have to take out your cash and count out your dollars, and now you go to the counter and, like you said, like Klarna’ll say, “You know what? You don’t have to pay us today.
[00:10:56] Beth: Not only that, we’re not even gonna charge you interest if you pay us on time.” So it sounds smart. Like, “Oh, that’s a great idea. I’m gonna sign up for that. I’d be a dummy not to.” But what they don’t tell you is they know that half the people will miss some payments and then have to pay extra fees and extra expenses.
[00:11:13] Beth: And it’s the psychology of it all. If you buy a jacket for $100 and then you don’t have to pay for it right away, you still in your mind think, “Well, I didn’t pay for it, so I still have the $100,” or, “Maybe I only paid $20, so I still have $80 that I’m working with.” It changes our whole relationship to what we actually have.
[00:11:33] Beth: I mean, it’s very difficult, and I think, again, young people are super smart and super savvy in terms of they’re si- on the, on the positive side of this. They’re signing up for 401ks in record numbers. You know, I used to have to beg people to sign up for a 401k in their 20s. Right. Now young people know that’s the right thing to do.
[00:11:52] Beth: They know about matching. They have to do it up to their match. So that can be a very positive thing, but the flip side of it is that it can be very deceptive and tricky. You can put a ton of money into cryptocurrency that you hear about, since, you know, a vast majority of young people get their personal finance information from social media.
[00:12:14] Beth: So you might hear someone who’s talking about this thing that sounds really good, and you think you’re being smart, “I’m gonna invest in cryptocurrency,” and then not really thinking about the fact it’s extremely volatile, and if you wanna buy a house in five years, that’s not the place to put it. So I think it gets very complicated for, for young people to sort all this out.
[00:12:37] Joe: It’s interesting. We spend all day with our with ourselves, right? We know what we eat.
[00:12:42] Beth: Right.
[00:12:42] Joe: Like I, I could tell you what I had for lunch. I know what I had for dinner last night.
[00:12:45] Beth: Tell me, Joe, what’d your mother make for lunch for
[00:12:47] Joe: you? Campbell’s soup today. Very frugal.
[00:12:50] Beth: Oh, she’s always been a good cook.
[00:12:51] Joe: Very frugal. Yes. The, today- … Campbell’s was the cook, though. All we had to do was turn it on. It was awesome.
[00:12:56] Beth: Exactly.
[00:12:56] Joe: Mom being a little, you know, a little less so today. She’s got other things going on. But, uh, big poker game tonight for Mom.
[00:13:03] Beth: Mm.
[00:13:03] Joe: But we know what we eat, we know what we wear, but somehow we have no idea how much money we spend.
[00:13:09] Beth: Right.
[00:13:10] Joe: How do we solve this money blind spot w- without making it a full-time job?
[00:13:14] Beth: Right. And this is one that I would say going old school makes sense. First of all, research shows us when you write something down, you learn it better. So I would say take a week, take two weeks. Every time you spend your money, write it down.
[00:13:28] Beth: You could put it in your notes app in your phone, whatever, just to keep track of where it’s going. You could also just, you know- Look at your credit card statement and your debit card statement. But at the end of the day, most people won’t do that. If you give yourself an activity for two weeks, I’m gonna write it all down, you might be amazed to see, wow, is it really, like, $100 a week on coffee?
[00:13:51] Beth: Or, you know, it’s the old time, you know, people say, “Oh, but I want my coffee.” All right, so if you do it once a week. You know, it’s funny, I’ve been talking to young people in, uh, high schools now, and when I told them, “You know, if you skip a coffee, you put it into a retirement account, you’d have, you know, $100,000,” they’re amazed.
[00:14:09] Beth: Like, that example used to be people would roll their eyes, but now young people, again, I think they’re smart, and they realize, “You know what? I really didn’t think about it that way.” So I think coming up with a spending diary, do it for two weeks, and see where your money’s going. I think it’s just that m- money mindfulness of I didn’t realize, yeah, you know, I’m paying for parking, maybe I should park a block away and get the extra steps in.
[00:14:33] Beth: And, you know, now I’m talking about steps, but, you know Yeah … to pay attention so that you know where your money’s going. There are also some really good apps. There’s EveryDollar and PocketGuard. They’re third-party apps that can help you sort of track where… They’ll sort of divide it up by the different categories so you’ll see where your money’s going.
[00:14:51] Beth: Or for couples, this is always a big one, um, Honeydue is another one. It’s especially good for couples because it, again, helps you figure out who’s spending what where. And that will never go away, couples fighting about money. New people, people who are getting married, learning about their spouses, all the debt they have that they didn’t really realize.
[00:15:10] Beth: Those are all constant discussions. But when it comes to spending your money, I’d say take two weeks, track where your money’s going, and you’ll have a better sense of where you can cut back.
[00:15:22] Joe: That’s awesome, ’cause it r- truly isn’t about the app. It’s about you and your behavior. Y- you know, you mentioned a married couple.
[00:15:30] Joe: You’ve got a great story early on in your book about, uh, Gretchen and Max. Gretchen is like a lot of our stackers. Very frugal, loves listening to personal finance stuff. Very. Not all of our stackers. I’m a spender at heart. I’m much more like Max, who the second that he gets money, Beth, it’s gone. So I had to create systems to make sure that I kept my money.
[00:15:49] Joe: But you’ve got a spender and a saver married to each other. How does that work? Like, how do we bridge the gap with a spouse that might not be as frugal as we are?
[00:15:57] Beth: Well, you might wanna have, first off, a yours, mine, and our account. You each have a set amount of money, whether it’s you each say, “Okay, every month we’ll put $100 into our own account, and that’s money I don’t have to talk to you about where I’m spending.”
[00:16:11] Beth: But- The combined money is something that you really do have to come to agreement on how much, you know, we’ll pay our bills out of the set account, because resentments could grow. You know, really get deeper and deeper. At first what was charming, like, “Oh, my, my, you know, spouse is so, um, spontaneous and buys things, fun things.”
[00:16:31] Beth: Um, later and later it can get very annoying. Yeah. And you have to talk about these things early, it really is, and have set goals, savings goals together. But having a little autonomy is really important for couples, and having that separate account does make a difference.
[00:16:50] Joe: You know, you talk about goals, and I’d forgotten this from the first time that I read your book, that that truly is where you begin, is you begin with, hey, we can have a budget.
[00:16:59] Joe: You know, we talk Klarna, we talk credit cards, we talk all this stuff. The first thing to do is put a price tag on your goals. ‘Cause most people say, like, “I want a house, I want freedom,” but that’s not really a number. Let’s talk about the stakes of that though, Beth. You know, like a good movie has stakes, I think our financial life has stakes.
[00:17:16] Joe: What happens if you don’t start with the price tag on your goals?
[00:17:22] Beth: Life. Life happens, and suddenly you’re spending money on this, and now we went on this vacation, and, and not that there’s anything wrong with any of those things. But when life gets in the way, and life costs money, I think it’s very important to put a price tag on your goals because it’s a dose of reality.
[00:17:38] Beth: It’s saying, “You know how much I need? I wanna buy, I’d love to buy a home.” Say, the median first-time home buyer, typical home for a first-time buyer now is $270. So say if you want to put-
[00:17:52] Joe: $270,000
[00:17:53] Beth: you mean. Sorry, $270,000. Sorry. I was like, “Beth, I want
[00:17:56] Joe: that first number. Give me the first number.”
[00:17:57] Beth: I was back in the 1800s for a second, sorry.
[00:18:00] Beth: $270,000. So that means if you put 10% down, it’s 27,000. If you wanna put 20% down, which is roughly what most lenders want, you’re talking a little over $50,000. How long is it going to take me to get to that goal, and how much do I have to save? So in my book, I do have a chart. It’s, like, simple chart of, wow, if I wanna buy a house in five years, I’d have to save about $900 a month in order to get that amount to get the down payment.
[00:18:36] Beth: And I think that’s important because it makes it… You might say, “Oh, my God, that’s crazy. I’ll never have $900.” Well, what if you put in half that, $450? It might take you 10 years, or you might move and live somewhere else where a home is maybe less expensive, or you might move somewhere it’s more expensive, but at least you’re working toward a goal.
[00:18:55] Beth: It doesn’t have to be perfect. You don’t have to not enjoy your life and say, “Oh, my gosh, if I don’t put that set amount in for my house down payment, I’m not gonna have lunch that week.” You know, um, whatever it is, you have to set the goal and know it’s there and work toward it. That is not only smart, it’s also liberating in a way because the idea of having, “Oh, one day I want a house,” and it’s sort of simmering in the back of your mind, but you’re not doing anything to get that house, can be sort of stressful in its own way.
[00:19:26] Joe: Yeah. And I also think, you know, you talked about coffee earlier. The coffee discussion truly, when you start with your goal, isn’t about the coffee. It’s about, do I want the coffee worse than I want the house?
[00:19:35] Beth: Right.
[00:19:35] Joe: Because if it truly… Wh- what’s the Marie Kondo phrase? Like, sparks joy, right?
[00:19:39] Beth: Yeah. Sparks joy.
[00:19:40] Joe: Yeah. If it truly sparks joy, well, then have the coffee. But if you’re like, “You know what? The coffee’s keeping me from this house and the 900 bucks…” ‘Cause it’s amazing, it is amazing to me that whenever I take that advice that you just gave and I put a number on my goal, how my subconscious brain just starts working on it, Beth.
[00:19:58] Joe: You know what I mean? I’m like, “Oh, I could have more money here. I could take money from here. I’ve got this part of my budget that, you know, I don’t need this subscription.” Like, my subconscious starts really attacking it.
[00:20:08] Beth: It’s so much more empowering, and also, if you can’t make that $50,000 goal, well, it will also give you options such as, well, maybe I’ll get a Fannie or Freddie Mac loan, or maybe I’ll get an FHA loan, and I could put down 10% or even 5%, which may or may not be a good thing depending upon your situation, but there are a lot of options.
[00:20:30] Beth: State and local housing agencies have all kinds of great deals for first time home buyers. If you have a goal in mind, you have a number in mind, then you can get a little bit more creative, ’cause at least you have something that’s called your, you know, down payment account, then it becomes more real. I mean, I think the manifesting of the world, but it kind of is, it works.
[00:20:52] Beth: If you have a down payment account, that’s gonna be the thing that you could turn to when you finally do feel like, “You know what? I’m ready to buy a home, or at least I wanna buy one in two years or three years.” I think that’s very important.
[00:21:05] Joe: I specifically, Stackers, wanted Beth to talk about this because back when I was a financial planner, and I know talking to OG, my, uh, co-host, he hears this all the time.
[00:21:15] Joe: Like, who cares about the goal set? Let’s just have more money. If we have… Who needs goals? We need… But you know what? You make far fewer mistakes- Totally … when you have goals. You stop wasting money when you have goals. Right. Like, really, it, things
[00:21:27] Beth: become- It’s back to it not disappearing, you know? It doesn’t sort of vaporize and you don’t…
[00:21:31] Beth: where money’s going. Also, the things like nowadays one in five young people- Can work remotely. You could be home just like you in your basement, you know, maybe even in your own apartment one day, Joe, just, you know, something to think about We all have dreams, Beth, right? Then you could say, “Well, maybe I’ll…
[00:21:48] Beth: You know, I’m living in New York City. Maybe I’ll move to Memphis, or I’ll move to St. Louis, or I’ll move somewhere else where it’s less expensive to live, and I still have the same job ’cause they allow me to do it remotely.” And in that case, you are saying, “I have money. I’m, I feel like it’ll be a long time before I could afford an apartment in New York City.
[00:22:07] Beth: But if I move somewhere else, then I can afford one, and that’s a place that I wanted to live or thought about living.” I think, again, by setting goals and working toward them, it creates all other opportunities to solve the problem. But if you’re just saving money and not paying attention to your goals, you’re never gonna…
[00:22:25] Beth: You know, when’s that moment where you finally say, “I wanna buy a house”? Y- you’re sort of at wit’s end because you might see the money isn’t there.
[00:22:34] Joe: Yeah, like this, this mental bucketing-
[00:22:36] Beth: Yes …
[00:22:36] Joe: that we can do. You list four goals that I, heck, most of our stackers in their 20s and 30s are worried about, even in their 40s, 50s worried about, “I wanna do these, attack these,” ’cause these are very early on.
[00:22:50] Joe: Let’s start off with buying a house. You just mentioned it. What do most people get wrong when they go try to buy a house right now?
[00:22:58] Beth: I think, you know, we had the m- the mortgage crisis, which is about 20 years ago. It’s hard to believe. But the idea of people putting down 3% down, zero money down, that can be very, very, very risky.
[00:23:11] Beth: Now, there are programs that allow you to do that, and there are ways to do that, but it’s much… You’re s- basically, you’re borrowing less money if you put a bigger down payment. So shooting for that 20% down payment is really hard, or at least a 10% down payment. I think that’s sort of one of the biggest mistakes.
[00:23:32] Beth: I hate to say this one, Joe, and th- this is where you’ve really excelled. I mean, I think you’re, like, probably the best in the whole world on this. Living at home in your parents’ home, you know, post-college. We’re coming up on graduation season. It’s a very difficult time for college graduates to find jobs right now.
[00:23:49] Beth: It’s a hard time for anyone to find, young people to find a job. So living at home for a year or two is a great way to save up some money, even just to rent an apartment. But the biggest mistake is not paying attention to the fact that you’re gonna need a big chunk of money to get into a home, and there isn’t as much of a rush that people feel like, “Ah, if I’m renting, I’m throwing money away.”
[00:24:15] Beth: And sometimes it makes sense to rent because there are a lot of costs you’re not incurring if you’re renting, especially if you buy a place, uh, a few years out. Say you’re in your mid-20s, and you can only afford a studio, small apartment, and then- You know, suddenly a year later you get married, you have kids, and you have to move again.
[00:24:36] Beth: All the costs, the closing costs of buying a new place, the moving costs, all those expenses can really add up. So I would say don’t rush into buying right away. Renting for a couple of years. If you think you’re gonna stay in the home at least six, seven, eight years, then buying makes sense.
[00:24:53] Joe: What about owning a car?
[00:24:54] Joe: A lot of people buying cars. New versus used?
[00:24:58] Beth: Used is the smartest thing you can do. You know, you can really, really waste money by buying a new car. I hate to say it, but it’s true. I mean, it’s… Look, if you have the money and you like the idea of a new car, it’s okay, it’s fine, but the average price of a new car now is $50,000.
[00:25:15] Joe: That’s incredible.
[00:25:16] Beth: And it’s really gone up a lot. Car prices have gone up, interest rates are up on auto loans, insurance costs have climbed. It’s really expensive. But a used car, the average price now is about $30,000, which isn’t cheap, but at least it’s, you know, you’re… And as we know, when you buy a new car, the minute you drive it off the lot, it depreciates.
[00:25:35] Beth: It loses so much in value. Get a used car, pay 20% down payment on it. That will be a much, much smarter move for you, and there’s all these great resources now. Um, there’s sites like Carvana and Autotrader and CarGurus. They can just deliver the car to your door, and you can return it if you don’t like it, no questions asked.
[00:25:56] Beth: Or if you buy a car in person, there are ways to, you know, check the CARFAX report, which will tell you the service, what the service history of the car is, inspection history, as well as estimated miles that have been driven, and that’s cost you $40, but you can buy a used car knowing what its background is.
[00:26:16] Beth: And I think-
[00:26:16] Joe: Boy, that 40 bucks is, like, just a small insurance policy.
[00:26:19] Beth: Exactly. So buying a used car, if you’re buying from a person directly, negotiate, ’cause they will expect you to negotiate. I think sometimes people feel a little cagey about that- Yeah … but they’re expecting you to. That’s their pri- they price that into the price.
[00:26:34] Beth: Uh, pay an independent mechanic about 100 bucks, 150 bucks to look at the car to make sure it looks okay. So I’d say used car, used car, used car. That’s the best thing you could do.
[00:26:44] Joe: You know, and I know that negotiation, Beth, is not your specialty- But how do you negotiate a car?
[00:26:50] Beth: Well, when you go into the dealer, first and foremost, they often say, “Well, what monthly payment do you wanna spend?”
[00:26:55] Beth: That’s always the first line, and it’s a bit of a trick ’cause they can kind of figure out how to make the monthly payment what you want it to be. They can, you know, give you a, instead of a five-year loan, they could give you a seven-year loan. And so you don’t even realize, “Oh my gosh, this is, what a great payment.”
[00:27:12] Beth: But you don’t realize you’re gonna be paying it back in much more interest over so many years. You know, the shorter the term, the less expensive, the less interest you’ll pay over the years. Instead of doing that, it’s good to go in, before you go into a dealer, first off, get pre-approved for a loan. Go to a credit union, they tend to have lower rates for auto loans, or a bank, or shop around online.
[00:27:35] Beth: Get pre-approved. When you go in and they say, “What’s your monthly payment?” Say, “You know what? I don’t need financing. I’m all set. I want this car, and I wanna pay 10% below the invoice price.” Uh, and you could find the invoice, invoice price at edmunds.com or Kelley Blue Book. For very little, you could find those out, and if you pay 5 to 10% below that price, that’s the negotiation.
[00:27:56] Beth: That’s the real way to do it. It can get so confusing, and things are being added on, and they’re talking monthly. That’s why you wanna be in control of the situation and know what you’re negotiating for. ‘Cause you could be the best negotiator in the world, “Oh, great. I’m only, um, I lowered my monthly payment.”
[00:28:13] Beth: But what you don’t realize is, “Oh, I’m paying $10,000 more in interest over seven or eight years.”
[00:28:18] Joe: Well, and I gotta say, that’s what I love about everything that you said and everything that you wrote in the book because it isn’t about this emotional game. Right. It’s just about knowing the facts before you walk in.
[00:28:29] Joe: Yeah. Knowing what the numbers are.
[00:28:30] Beth: I think people, the best negotiators I know are honest, straightforward, and clear, and they’ve done their homework. And then, and also having a good credit score is very important when you’re getting that car loan because the better your credit score, the, the better interest rate you’ll get on the loan.
[00:28:45] Beth: And when you go into a dealer, instead of being like, “Hey, I’ll…” you know, “Give me a good deal,” you just sort of know the facts and very clearly state what you’re interested in. And if the dealer’s giving you a hard time and being a little beastly, walk out. You don’t need to buy it from them.
[00:29:00] Joe: It’s incredible.
[00:29:01] Joe: When I remember first reading this in your book and, and thinking, “Had I known that earlier, some of my early car decisions would’ve been much, much, much better,” because there’s plenty of car dealers. Right. Like, you don’t have
[00:29:14] Beth: to- Exactly. Exactly. It’s, it’s nerve-wracking, and you feel like they’re the expert and they know what they’re-
[00:29:18] Joe: Yeah.
[00:29:18] Beth: Nope, you could be in control of that situation.
[00:29:21] Joe: Uh, when you mention credit scores, that brings up the issue of debt, student loans, still a huge weight for a lot of people. I paid off my student loans ’cause as a lot of Stackers know, I was really, I was not great with money. So it was, Beth, for me in my early 40s, and now that’s early, right?
[00:29:38] Beth: Wow.
[00:29:38] Joe: And back then, I was a dinosaur when I paid it off. Now if you got student loans in your 40s, hey, that’s, that’s nothing, man. How do we think about our student loans now?
[00:29:47] Beth: Well, I too, I… When I graduated from college, I had $20,000 in student loan, which was huge. This was back in the 1850s. No, it was in 19-
[00:29:57] Beth: in the 19- late 1980s.
[00:29:59] Joe: And again, she graduated when she was seven,
[00:30:01] Beth: so- It was… Well, I was- Yes … yeah, I was very gifted. I was actually six, which is, I don’t like to brag, but I had this amount of debt, and I lived at home for two years, and my dad by the second year said, “We’re getting sick of you.” No, he didn’t say that.
[00:30:15] Beth: He said, “If you want,” and he was, like, a principal, he didn’t have a lot of money, but he said, a teacher, “I can take that loan from you. You’re paying, like, 8% interest. I will pay it off for you. You pay me back and pay me 4% interest,” which was still better than he was getting in a savings account, so it was kind of a win-win deal, and we obviously trusted each other.
[00:30:38] Beth: It was a good deal for both of us. So that was, that was the olden days. Now people have much more debt, although interestingly, the median debt load is $20,000. Back then it was probably more like $10,000. So the median debt load is $20,000. We always read stories about people with hundreds of thousands of dollars in debt because often they were talked into a bad school decision that really didn’t jive with what their career was going to be.
[00:31:05] Beth: But if you have a student loan, it’s been so tricky in the last few years because of all the rule changes. It’s probably the most confusing time right now in history when it comes to student loans, and there’s a very good chance that if you have student loans now, you’re gonna have to change your plan by July 2024.
[00:31:25] Beth: The good news is they’re simplifying the student loan programs. The bad news is-
[00:31:30] Joe: July, July 2026.
[00:31:32] Beth: July 2026 are some. That mean- if you got your loans before July 2026, there are certain number, there are certain rules, but by July 2028 is when you have to make that decision. Gotcha. Although there’s the SAVE program that they just got rid of.
[00:31:51] Beth: You know- Yeah … there’s a lot of… And I go through it, all, all the details in my book. But the bottom line is you need to go on the government website, um, ’cause a lot of people have been, had not been paying their loans for a while. Go on the government website and figure out- First of all, if you’re on the existing, the old standard plan, and you can afford it, keep it up.
[00:32:12] Beth: You pay it off over 10 years, you make the same monthly payment, and you’ll save money on interest, and you’ll pay off your loans faster. But on studentaid.gov, you can find the loan simulator, and you can try the different loans that’ll be available. Basically, they’re gonna just be now two plans that are available, the standard and another plan that hasn’t even really been set up yet.
[00:32:34] Beth: But the point is, you want to make sure you know what you owe. Go to studentaid.gov. Try the different options that you’ll have. Also, this public service loan forgiveness program, which kind of got people who did it and tried to do it years ago, it was really a mess. Now, it’s a little bit better. So if you’re a public school teacher or a nurse or you work for the government or you’re a non-profit worker, um, your debt might be give- forgiven if you make 10 years of on-time payments.
[00:33:08] Beth: Finally, they have that so it’s working. I’ve talked to a lot of people, a lot of teachers lately who told me that they’ve been able to see their debt forgiven.
[00:33:15] Joe: That could be exciting.
[00:33:16] Beth: Yeah. It could be really amazing. It could be really amazing. And it’s, it’s only fair. You know, government workers, teachers working for non-profits, these are people who are doing really, really hard work.
[00:33:26] Beth: I hope once the plan, you know, it’s finally done, people kind of stick with the plan that they’re in, and they know what they’re doing. Um, like, one little tip is if you are in the not-for-profit sector, and you’re going for the public service loan forgiveness program which forgives your loans after 10 years, you might wanna opt for one of the plans that allows you to, like, they look at your income and determine your payments based on your income if you have a lower income, because then you’ll be making lower payments over that 10-year period, so by the time your loans are forgiven, you would have paid less into it- Oh, yeah
[00:34:06] Beth: in other words. Yeah. Yeah, yeah, yeah.
[00:34:08] Joe: A bigger number forgiven.
[00:34:09] Beth: Exactly.
[00:34:10] Joe: Can we talk just for a second about debt in general? Let’s poke the bear here. Do you like the phrase, “good debt”?
[00:34:15] Beth: Uh, if explained well. I mean, getting money to invest in yourself and go to a college, within reason, you know, and that, that’s sort of a key for people.
[00:34:27] Beth: Figuring out how much you need to borrow and how much you’re gonna pay off and what job you think you’re gonna have. Years ago, you didn’t have to think about it. Now, you do. It’s just too expensive not to. So I do think, though, that is good debt in the sense if you’re mindful and paying attention, you’re investing in yourself.
[00:34:44] Beth: But there’s no good credit card debt. You know, is mortgage debt good? Yes, if you are, again, in a reasonable situation. You’re working toward buying a home. The thing that’s always made this make the most sense to me is if you have debt, say you have a credit card that’s charging you a rate of 22%, which is the national average now.
[00:35:05] Beth: Close to the high, like the all-time high ever. It’s crazy. If you have… You owe money on a credit card at 22%, if you, say, had some savings, say you had $1,000 in savings and it was earning 1%, 1%, $1,000, the end of the year you’d make $10. But if you have that $1,000, you take that $1,000 and you use it to pay off your high rate credit card debt, you’re not losing $250.
[00:35:35] Beth: In other words, that 22% is so expensive that every year you’re losing ground. Even if you have savings sitting there, you’re losing ground on that very high rate debt. Paying off a high rate credit card that charges you 22% is the equivalent of earning 22% guaranteed on your money after taxes. And you say, “Where can I earn 22%?
[00:35:55] Beth: Certainly not in my bank account. Maybe if I have a 401that matches.” Well, they say for every dollar I put it up to a certain amount, they’ll put in a dollar. That’s 100% return on your money. So that’s the best thing you could do. But right after that, it’s paying off high rate debt, and that is so critical, and I think it’s very difficult for someone who gets into debt, because it becomes a spiral.
[00:36:21] Beth: I think this generation initially was really averse to debt. They were like, “No, I’m gonna use my debit card. I don’t wanna spend beyond my means.” But I think COVID hit, and it got very expensive, and now this debt- this generation has $500 more on their credit card on average than our generation did- Wow
[00:36:39] Beth: maybe years ago. So it’s a tough time for young people. If you pay attention to some of these rules, don’t buy something that you can’t afford to pay with immediately. You know, something you can’t afford to pay off immediately, try as hard as possible not to buy it.
[00:36:55] Joe: Have you seen that, the Saturday Night Live skit?
[00:36:57] Beth: Which one?
[00:36:58] Joe: The one where, uh, Steve Martin has a new book out called- … Don’t Buy Stuff You Can’t Pay For.
[00:37:03] Beth: Yeah,
[00:37:03] Joe: yeah.
[00:37:04] Beth: Yeah. I know.
[00:37:05] Joe: I felt like you were giving the same advice there, Beth.
[00:37:08] Beth: I know, but he’s a lot funnier. But I, but I think that that concept, again, it’s like you were saying, why put, why put a price tag on goals?
[00:37:17] Beth: Why think about these things? I think once you sort of think logically about it, you’re like, “Yeah, that makes no sense. Why would I buy something, you know, buy a slice of pizza and be paying it back for 10 years?” You know, or buy a pair of sneakers that are, were silly and I probably, you know, I want them, and it, and it’s hard.
[00:37:35] Beth: There are a lot of conflicting things, and it’s not like you could never splurge in life, but I think- Once you get this down when you’re in your 20s, and if you start paying attention to it, it really lasts a lifetime. And on the one hand, it’s true, when you’re in your 20s, you’re probably earning much less than you will in your 30s or 40s.
[00:37:53] Beth: Like, look at you, you put new pillows into your basement. You know, your place looks great, Joe. So things will get better. You’ll have more money, but you also have more expenses. You get married, you have kids. Before long, your parents get older. I’ve had so many young people ask me how they can help their parents.
[00:38:11] Beth: They don’t have a ton of money themselves, but they worry, “You know what? I see my parents. They spent it all on my college, and now they don’t have money.” So getting a handle on it sooner, ’cause if it’s like you’re in your 20s and you force yourself… And so many people have said to me, “I read your book. I was like, ‘What is she talking about?
[00:38:29] Beth: I don’t have extra money. I can’t put it in my 401.’ But I forced myself to do it, and now literally I have $400,000.” Wow. And I’m like, “Could you give me half?” No. Right. I don’t say that. I say, “That’s amazing.” Because at the time- It is
[00:38:43] Joe: amazing …
[00:38:44] Beth: you small amounts, you put small amounts, small amounts, and it does grow exponentially, whether it’s in these, you know, tax-favored accounts, and you put it in an index fund, and all the basics that really make a difference, which is great.
[00:38:58] Beth: I’m happy to have been doing this for so long and see the success stories, and feel very confident that, look, nobody knows what the market’s gonna bring, but we do know what are some smart things to do with your financial life, and I’ve seen it make a difference in, you know, probably millions of people’s lives.
[00:39:19] Joe: Boy, something that is really changing people’s lives on the topic of debt and, uh, things that would create debt, a house, a car, those are things that you need, that we aspire to have. But I can’t watch a sporting event now, Beth- Mm … without seeing, uh, sponsored by DraftKings.
[00:39:39] Beth: Mm.
[00:39:39] Joe: Now I can bet on the weather.
[00:39:41] Joe: I could bet on what color of sweater you were gonna wear down to the basement, right? I mean, I could bet on everything. This feels like, uh, you know, danger lights all over it.
[00:39:52] Beth: 100%. I find it, and it’s particularly young people who are doing this, 70%, 69% of people 18 to 26 have participated in gambling. So 70%, and that’s compared to only 57% of baby boomers.
[00:40:08] Beth: So young people who have much less money, we were talking before they have less money, are putting money into gambling, and what’s even more disturbing is a quarter, 25% of Gen Z and millennials consider online gambling an investment.
[00:40:23] Joe: Oh,
[00:40:23] Beth: no. They feel like it’s an… They have literally said they think it’s an investment.
[00:40:27] Beth: And-
[00:40:28] Joe: I saw a TikTok video, Beth, about this. A guy for one of the, you know, he was talking about Kalshi, and I just had this feeling that he’s being paid money by them. Right. He’s like, “I put $100 in every day.” Right. And making it sound like it’s dollar cost averaging.
[00:40:42] Beth: 100%. It’s so crazy the way they have appropriated the words of investment community, and now they’re using them to make people feel like, “Oh, yeah, I’ll put $100 away in my, you know, gambling account.”
[00:40:56] Beth: And what they’re not paying attention to is studies show 96% of the time if you gamble, you lose, 96% of the time. Meanwhile, if you… There was a study that came out that shows if you put money into a stock index fund, if you look at every 15-year period, so starting, like, from 1929 to 15 years from there, and then 1930, 15 years from there, every 15-year period you made money over 99% of the time.
[00:41:24] OG: Wow.
[00:41:25] Beth: Don’t gamble your money. The winners are DraftKings and all the big gambling places and the prediction websites. And what’s really concerning is some kids 18 years old are able to participate in this. And like I said, I’ve been in high schools, and kids are telling me, “Yeah, you know, I lost a bunch of money, you know, on one of these prediction sites, or lost a bunch of money in gambling.”
[00:41:50] Beth: And it’s really something that is a waste of money. It’s hard because it’s fun and it’s social and all that, but it should be not something that you think about as an investment in your future.
[00:42:06] Joe: It had to be fun opening up these pages again and seeing how much of it was the same, but also how many things have changed.
[00:42:15] Joe: With this new updated version of Get a Financial Life, what do you hope people do differently after they read the newest, the newest version, Beth?
[00:42:25] Beth: I hope they take a breath. I think we all need to take a breath in this country. Understand that it’s not easy, but it’s not rocket science. Young people have a very hard time.
[00:42:41] Beth: The unemployment rate is much more difficult for them. You know, they’re seeing… I was looking at some Fed study that showed that historically college graduates have better job prospects than the public on average. The unemployment rate is better, is, is lower for college graduates. And the last few years it’s actually the general public jobs have– they’ve had a better employment rate than college graduates.
[00:43:07] Beth: Hmm. So it’s a very tricky time, and if you did everything right, you went to school, you worked hard, you graduated from college, it’s very frustrating to feel like, wow, things are stacked against me. This is a very difficult time. That being said, this generation is doing a lot, that they’re doing well.
[00:43:25] Beth: They’re saving more. They’re putting money into 401Ks. They have health insurance. In our day, uh, about 25% of people did not have health insurance. Now it’s much lower. It’s like 15%. So they have twice as much health insurance, and health insurance is so– I mean, twice as many people have health insurance. In our generation it was very common to go without health insurance.
[00:43:45] Beth: That was a disaster for a lot of people. Now young people have health insurance. Maybe they’re covered by their parents’ plan. Going to college still gives you a premium. Graduating from college still gives you a premium in the job market. It’s not as much as it used to be, but you still get an example.
[00:44:03] Beth: And so young people are doing a lot of really good things. I think the breath that I want them to take is to say, “You know what? It’s not gonna be easy, but the information is there, and it’s pretty straightforward.” That’s the difference. It’s not easy, but it’s straightforward. And I’m not gonna get all bent out of shape.
[00:44:23] Beth: And, you know, one study showed that they think the reason young people are gambling more is because housing market seems so far away from them. The typical first-time home buyer now is 40 years old. That’s been something that they hear, and they’re like, “Well, I’m never gonna buy a house. I might as well just, you know, take a flyer on some sports team and hope-” Yeah
[00:44:44] Beth: “for the best.” And that’s a mistake, and I would say very strongly that although there’s a lot of fear out there, there’s also a good horizon. And generation to generation to generation, there’s always a bad time. I remember when I graduated in the ’80s, they’re like, “Oh, it’s the worst job market ever.” You always hear the bad.
[00:45:05] Beth: This is a particularly tough time, but there are things this generation could do, and I think they’re really smart. And I’ve seen it again and again. Take a breath and do some basic things. You know, get out of debt, start to save automatically, put your money in your 401k plan, and you will be like that 70-year-old person- 30 years from now, I’ll meet you on the street, and you’ll have to talk really loudly-
[00:45:30] Beth: because I won’t be able to hear and say, “Thank you.” And I’ll say, “For what?” And they won’t know who I am now. But I think I’ll be 90, which, who knows, maybe I’ll be like a cool 90-year-old. Absolutely. But, yeah, we both will be. I’ll come see you in your basement. I’ll find something to compliment you on your basement by.
[00:45:48] Beth: We’ll have to
[00:45:48] Joe: figure out, Beth, how to get down the stairs and, and-
[00:45:52] Beth: Yeah. True. That is an excellent point.
[00:45:55] Joe: If only, if only somebody had put all this wisdom in one place, like if there was a book w- that I could open or I could gift to somebody. This i- this is, by the way, is a phenomenal college gift. We are, at that time, I remember giving this to my clients for their kids, when their kids graduated, ’cause it’s incredible.
[00:46:16] Joe: And of course, the new version, all of the numbers up to date, all of the… You know, when you first wrote this, ETFs, exchange traded funds, not as prevalent as they are today.
[00:46:25] Beth: Oh, gosh, no.
[00:46:26] Joe: We talk about an- online gambling.
[00:46:27] Beth: There’s no TikTok.
[00:46:27] Joe: Yeah.
[00:46:28] Beth: Yeah, online gambling. It was so funny. I looked at… I’m like, “If you wanna buy a stereo, here’s what you have to do.”
[00:46:32] Beth: I’m like, “Stereo?” Then it was like, “If you wanna buy an iPod.” I’m like, “iPod?” You know, things have changed so much, but it is comforting to know that some of the basics are very much the same, and it’s not like the world’s not, it’s not like, oh, they don’t work anymore. They do work. So just pay attention to that.
[00:46:52] Joe: It’s called Get a Financial Life: Personal Finance in Your 20s or 30s.
[00:46:57] Beth: Yeah. And I like the neon green cover.
[00:46:59] Joe: I do, too. It’s getting
[00:47:00] Beth: a little cool.
[00:47:01] Joe: I saw at some of your events you had, like, a big, uh, step and repeat that had that all over it. Like, it was just, it- it- it- Yeah … it was really cool the way it… I think it glows in the dark.
[00:47:11] Beth: You know what? I just got this copy yesterday, and I have to go in the bathroom and close the door and see if it glows. I didn’t, I didn’t even think of that. What a smart idea.
[00:47:19] Joe: Beth, it’s available everywhere, right?
[00:47:21] Beth: Everywhere. It’s available on every place, even in bookstores. It’s available all over.
[00:47:27] Joe: Thank you for mentoring our Stackers today.
[00:47:30] Joe: It’s been far too long. Thank you so, so, so much.
[00:47:33] Beth: Great. Thank you, Joe. Great to see you.
[00:47:38] Doug: Hey there, Stackers. I’m Joe’s mom’s neighbor, Doug, and can you believe it’s been 30 years since Beth first released Get a Financial Life? It’s incredible. Also incredible is what else was going on back in 1996. How about one new band that stacked tons of Benjamins back then, or, you know, in their case, in Britain they call 1,000 British pounds a ton, and then they spell it weird, got, like, extra Ns and Es in there.
[00:48:04] Doug: So we can safely say that this band accumulated tons of money. So what was the name of the four-singer supergroup who debuted in 1996 who could tell you what you want, what you really, really want? I’ll be back right after I see if I can help Joe’s mom spice up tonight’s dinner. It’s meatloaf night.
[00:48:26] Doug: Meatloaf.
[00:48:35] Doug: Hey there, Stackers. I’m meatloaf lover, especially when there’s that, like that sauce on the side. So good. And guy who’s always hungry for more money knowledge, but mostly meatloaf, Joe’s mom’s neighbor, Doug. Well, back in 1996, there were lots of exciting things happening. First, of course, Beth Kobliner first wowed readers with Get a Financial Life, but also, it was the 100th year of the modern Olympic Games, which happened in Atlanta, Georgia.
[00:49:01] Doug: Not the 100 years ago part, but the 1996 part. Dolly the sheep became the first cloned mammal, and IBM’s Big Blue defeated grandmaster Garry Kasparov in chess. But today’s trivia was about none of that. We asked you about a British supergroup that could tell you what you want, what you really, really, really, really, really want.
[00:49:19] Doug: Who were they? Of course, 1996 was the year hitmakers the Spice Girls released their first album and rocked the world pop charts. And now, let’s hear from two people helping you rock your personal financial foundation, Joe and OG.
[00:49:36] Joe: So OG, uh, when it comes to meatloaf, are you the, uh-
[00:49:40] OG: I’m never the… Nope. No, I’m n- nope, I’m not.
[00:49:43] Joe: What?
[00:49:43] OG: Absolutely hate meatloaf.
[00:49:44] Joe: Are you kidding me?
[00:49:46] Doug: It’s hamburger, dude. Yeah. How
[00:49:47] Joe: do you
[00:49:47] Doug: hate
[00:49:47] Joe: meatloaf? Are, nope. Are you a communist?
[00:49:50] OG: Nope.
[00:49:51] Joe: Wow.
[00:49:51] OG: It’s, it’s hamburger with, like, garbage put inside of it- Ugh … to soup it up, ’cause-
[00:49:55] Doug: Seasoned
[00:49:56] OG: breadcrumbs- Like, let’s put- …
[00:49:57] Doug: and sometimes
[00:49:57] OG: an egg … breadcrumbs and potatoes and just, you know- Potatoes?
[00:50:01] OG: I don’t know. People put weird .
[00:50:03] Doug: It’s a hamburger without a bun, dude.
[00:50:06] OG: It’s not. It tastes way different. Hamburgers are grilled. Meatloaf isn’t, isn’t grilled. Meatloaf is baked. It’s like you just put it in the… It’s like I… Just take the meat- … smoosh it, and put it on the grill, and it’s way faster to do that anyway.
[00:50:19] OG: Like, how long does it take to make a meatloaf? Like, you gotta get your fingers all up in there, and you gotta dump weird in there, and then- … and then you gotta bake it for, like, a bunch of time. Like, just flatten it out and put it on a grill
[00:50:29] Doug: This is like the Finn turn when he was a little kid who loved pizza but wouldn’t eat pasta.
[00:50:35] Doug: We’re like, “It’s carbs- Okay, those are way different things … and tomato sauce and cheese.” No, way different. “It’s all the same.”
[00:50:40] OG: Pizza sauce is not the same as spaghetti sauce. What, what- Oh, my goodness … Joe calling me a commie. Like- It
[00:50:45] Doug: is when you pour it out of a jar. We’re not making sauce with Marzano tomatoes like you do at your fancy house.
[00:50:51] OG: It’s not my fault, and pizza sauce out of a jar is different than pasta sauce out of a jar.
[00:50:57] Doug: This is your after show right here, Joe.
[00:50:59] Joe: I feel bad because we’ve had lots of phenomenal conversations in the basement lately that actually are, which is our Facebook group, Stackers, if you wanna join us. But I gotta tell you that I can just see, this is, this is going to be the discussion for the next two days now.
[00:51:18] Joe: We’ve been talking about all this great financial planning stuff, and now the next two days we’re gonna debate meatloaf. There’s
[00:51:25] OG: not a debate. There’s nothing to debate, so it’ll be pretty short.
[00:51:28] Doug: There’s 100% a debate.
[00:51:28] Joe: 100%. Okay, Doug, so, uh, same question. Are you kind of the crusty outside of the meatloaf- Oh, yeah
[00:51:36] Joe: or are you the middle juicy center of the
[00:51:38] Doug: meatloaf? No, no, no. I like the crust in everything. So- I like the crust, the corner brownie piece, the corner piece in, like, a Detroit pizza.
[00:51:46] Joe: Oh, yeah.
[00:51:47] Doug: Yeah, the crust on a meatloaf. I’m all about the crust. I’m the guy who’ll eat the bread crust piece everybody else leaves in the bag.
[00:51:53] Doug: I like that, put that in the toaster. Okay, that’s
[00:51:54] OG: just bread.
[00:51:56] Doug: Fantastic. So
[00:51:56] OG: I, I agree with that.
[00:51:57] Doug: Oh, you’re okay with that part?
[00:51:58] Joe: That’s where the line is, Doug. There’s this definitive line right there. That’s just
[00:52:02] OG: bread. It’s just a different color bread. Like, people freak out about it. Thank
[00:52:07] Joe: you. Let’s get to our headline.
[00:52:08] headlines: Hello, darlings. And now, it’s time for your favorite part of the show, our Stacking Benjamins headlines. I
[00:52:15] Joe: was inspired by this piece, Greg Iacochci, who writes a lot of great stuff, presented this one, “Retirees are thinking of annuities the wrong way and it may trip them up,” advisors say. So today we’re gonna talk about annuities, which I think is great, guys, because nothing says party like an insurance product you can’t explain at dinner, right?
[00:52:39] Joe: No? Sasan? Anybody? So here’s the deal. Annuities are having a moment again because rates are higher, markets feel shaky, and people during this time always get sold on this idea that you want certainty. The core idea, oh, gee, let’s start here. The core idea of an annuity is turning a chunk of your savings into this guaranteed paycheck for life.
[00:53:08] OG: Yes
[00:53:09] Joe: And that’s a solid idea. That’s the piece at the party that we can explain, right? That’s the piece we can go, “Oh, what’s an annuity?” It turns it into a paycheck for life. Not wrong.
[00:53:18] OG: Right. Well, except the problem is, is that I don’t know the stat, maybe you have it, but some large percentage of annuities never are turned into paychecks.
[00:53:27] OG: So it, the purpose of the tool isn’t being used for the purpose of the tool. So if you’re, if you’re saying, “Hey, I’m gonna buy an annuity because I want to have a guaranteed stream of income for the rest of my life,” setting aside for a second that there’s some significant downfalls to that idea, most people, and it’s a high number, I don’t know what it is off the top of my head, but it is in the 80% range or higher of annuity contracts are never annuitized, which is the whole purpose of that, because-
[00:53:55] Joe: And that means turning it into that guaranteed paycheck
[00:53:57] OG: yeah. Here’s the other side of that. When you say, “Hey, I’ve got $100,000, I wanna turn this into a paycheck of 500 bucks a month for the rest of my life,” the trade-off is once I sign that paperwork, I am no longer getting the lump sum ever again, nor is my family or spouse or whatever. So that feeling of like, “Oh crap, what if I get hit by a bus on the way to the mailbox to get the first check?”
[00:54:21] OG: That’s the risk that you’re taking, no different than a pension or something like that. So no one wants to do that. So instead they end up with an anu- a product that has generally higher fees, generally lo- lower investment returns, and the whole purpose of having it is never used for those higher fees and lower returns.
[00:54:40] OG: So you end up with this, like, hybrid of, like, slop that doesn’t fulfill the need of what you had it for.
[00:54:48] Joe: It is so sad, I guess, that if you buy an annuity with the express idea of having this guaranteed paycheck, we’re so afraid of the irrevocable-ness, I guess is, is the word. Yeah. The fact that I can’t take it back, that we don’t do it.
[00:55:03] Joe: Because what it does really well, what the annuity does really well is it solves that great retirement fear of running out of money. And I think it was Ben Stein, the guy that was the… He did a game show for a while, but he also was on Ferris Bueller’s Day Off. Mm-hmm. He was the, uh, economics teacher, I believe.
[00:55:20] Joe: And, uh, Ben Stein, very smart guy. Oh, and by
[00:55:22] Doug: the way, uh, speech writers for presidents.
[00:55:25] Joe: And speech wr- right. Yeah, we’ll
[00:55:26] Doug: go-
[00:55:26] Joe: Super smart guy. But
[00:55:27] Doug: we’ll go with Ferris Bueller. Also
[00:55:28] Joe: that. Yeah, that too, whatever. Ben said with his parents, he said, “You know what? My parents, I was never gonna teach them about money.”
[00:55:37] Joe: There was just, it just was never gonna happen. He goes, “Setting a pension up for them with some of their money was like the best freedom of worry for those people,” his own parents.
[00:55:48] OG: Except if you actually do the math on it, you would go, “Well, wait a second, this income doesn’t rise with inflation- No, but it-
[00:55:54] OG: it doesn’t rise with cost of living.” Yeah. “So now I’ve just created this other-
[00:55:58] Joe: Well, and that was- …
[00:55:59] OG: you know, catastrophic problem.”
[00:56:00] Joe: 100%. That’s actually was Ben’s point. At, at some point, with some people it’s not about the math. It’s that no matter what you do, you’re never gonna teach them how this works, and they’re gonna freak out about stuff that- Mm-hmm
[00:56:11] Joe: they shouldn’t be freaking out about, th- they’re not gonna understand the strategy. So you know what? Just give them the freedom from that.
[00:56:17] OG: Let’s just run out of money slowly.
[00:56:19] Joe: Just give them the freedom. But retirement does have two problems that I think we should address, that annuities try to solve. The first one is that markets are unpredictable.
[00:56:30] Joe: And OG, markets being unpredictable, actually while annuities present that as a, annuity salespeople present that as a problem, this is actually the win. The fact that markets are unpredictable is how you’re able to generate enough money without using annuities for the excess return that allows you to not run out of money so fast.
[00:56:52] OG: There’s so many layers to this annuity conversation that I think every time I think, “Okay, this is the basic level,” it’s like well, no, we should probably go back even a half a step further before that. Because on its face, an annuity is just a contract with an insurance company where you say, “You give me a guaranteed return of principal back.
[00:57:14] OG: Like, I’m gonna give you a lump sum, you’re gonna turn that into a stream of income for the rest of my life, or if I’m willing to take a little less money for the rest of my life and another person’s life,” just like your pension, you know. But what annuity companies have realized, and they realized this a long, long time ago, was because of that trade-off, right?
[00:57:30] OG: The, what did you say, the irrevocableness- Yeah … of, I’m sure that’s a word.
[00:57:35] Joe: I think we coined a new one.
[00:57:36] OG: Of that decision. They said, “Well, people aren’t gonna do that, but we still wanna sell annuities ’cause, you know, we’re an annuity company and that’s how we make our money. So what can we do?” So now we started layering in other sort of features, probably bugs actually, but marketed as features to offset the things that people don’t like.
[00:57:55] OG: So instead of saying like for example, “Well, now you turn this into a lifetime stream of income and you lose the, the principal value,” annuity companies go, “Wait a second, we can do the lifetime stream of income anyway. We’re just gonna charge you a little extra for it, and you actually still own the money.
[00:58:09] OG: Well, how great is that?” Now you get a little bit of both. Or people say, “Well, annuities are bad because the rate of return is really low.” Because it’s an insurance company it’s gotta be guaranteed, right? So you think about, like the guaranteed payout, so they have to invest your money in guaranteed products so that there’s a guaranteed stream of income.
[00:58:27] OG: You know, multiply that by millions of customers. And you say, “Well, that sucks.” And they go, “Well, hold on. We’ll just stuff it with variable sub-accounts, kind of like mutual funds, but we’ll charge you for that also because, you know, we g- still have to have this guarantee side of our business, so we gotta offset the fact that we’re giving you some flexibility with some more guarantees, so we’ll charge you for it.”
[00:58:45] OG: And so you end up with this wrapper around your investment account under the assumption of this is a better deal, when really you just paid for the illusion of security or the illusion of flexibility when you could have had that outside of that. You know, the sales pitch right now, and back to how we think about investment products, you know, both Stacking Benjamins and how we think about it, you know, in our planning firm, every tool has a use.
[00:59:13] OG: The problem is, is that we use the tool incorrectly, and that’s where it gets its bad juju from. I do think that annuities have a use. I don’t use them very often because I disagree with the use case. But to your point, and to Ben Stein’s point, and maybe to the author’s point here, there is a use case for them if you use them in the appropriate way.
[00:59:32] OG: But the sales pitch right now is, get all the return of the upside, none of the downside. And so now they’ve merged these things and they go, and you just look, there’s a little asterisk. It’s really small font. You have to, like, zoom in on your screen to be able to see the asterisk. And it goes, “Yeah, subject to some limitations.”
[00:59:46] OG: You don’t get all the upside. And to get the none of the downside, we charge you for none of the downside. All these layers of complexity to basically say, how do I have a stock account but, like, get charged three times as much?
[01:00:00] Joe: I’m laughing, OG, as you’re talking because all I can think of is when you decide to buy an annuity with all these sub-accounts in it and all of these, quote, “guarantees” in it that they charge you more, and they charge you more, and they charge you more, what you’re saying is, because they’re selling you on the unpredictability of the markets and how they’re gonna solve that, but if you walk back away from that and you go, “What you’re really saying is you’re telling the market, ‘I don’t trust you anymore,'” which is fine, we can talk about that.
[01:00:27] Joe: Mm-hmm. But instead, I’m gonna go hang out with an insurance company over… I don’t trust the market, so I’m gonna hang out with an insurance company? Uh, I- Yeah … I don’t think I’d take that.
[01:00:38] OG: Well, and my favorite thing with that, of course, is the other side of it, which is, you know, and this gets into the sales process of it.
[01:00:43] OG: I was having a conversation with somebody a couple of weeks ago or a month ago or so, and they were evaluating this product from another provider. And they said, “Well, you know, it doesn’t cost anything.” I’m like, “Really?” I mean, just think about this logically. Was there a building where these people work?
[01:00:58] OG: Were they all completely financially independent and were like, “You know what? We’re good.” It’s free. “We’re so good.”
[01:01:03] Joe: We’re fine. “
[01:01:03] OG: We’re good. We don’t need commissions. I don’t need to get paid. I don’t need any… You know, I’m the CEO, I don’t need any bonuses. I don’t care what my stock does anymore. I’m so wealthy, I wanna create an entire organization layered with professional people who also are all apparently financially independent, that they need absolutely no money either, so we can do this all for free for you.
[01:01:23] OG: And we’ve worked out a special deal with AT&T so we don’t pay cellphone bills. We’ve worked out a special deal with Google so we don’t have to have, you know, internet bills. And we don’t pay taxes for this big, giant building we have to the city either because, you know, we’re doing such great work for all of these people, that everyone has decided to chip in to help us do this for free.
[01:01:41] OG: And, uh, and the motivation for us isn’t money or success, it’s just the fact that we get to do all of this for free.” Bull crapola when you just think about it that way. Nobody does that. It’s just not transparent. Like I told this person on the phone a couple of weeks ago, if you actually presented this correctly, I wouldn’t have a problem with it.
[01:02:02] OG: But the industry writ large, there’s some, uh, how about that, Doug? Has decided to make this the most, you know, uh, what’s the opposite of transparent? Opaque?
[01:02:12] Joe: Opaque.
[01:02:13] OG: Product possible, and fill it with, like, a bunch of nonsense, you know, that just logically doesn’t make sense. Sell it correctly. If you love this thing and you’re an annuity salesperson, sell it correctly, and then, then report back and let me know how it works out for you.
[01:02:29] Joe: Which is why I think when you talk about use case, being a stream of income you can’t outlive is important because a way that you’ll see good advisors often use annuities is because you might live a really long time, and it’s this longevity insurance, so it can help you there. But I wanna go back to the other side of that.
[01:02:46] Joe: Trusting insurance companies is the downside. There’s people going, “Well, wait a minute. Why should I trust the financial markets?” Well, you know what? If you’re trying to trust an individual company, that doesn’t make a lot of sense. But what we’ve learned over time to do with the unpredictable nature of the markets is look at long-term periods versus short-term periods, which means I’m thinking about the economy.
[01:03:06] Joe: I’m not thinking about one investment. I’m thinking about the economy, and if the economy’s gonna continue, these companies are gonna have to perform, and for them to perform, their stock goes up. It’s just a reflection of a healthy economy. So we solve it with long-term thinking and diversification, which really, OG, that becomes your annuity, right?
[01:03:25] Joe: But for some people, they can’t do that. For some people, they’re just not gonna learn that. And I remember from time to time back when I was an advisor finding those people. I, I could talk to them all day, and it just wasn’t going to make it so that they understood a lot of this. So I think the good is you can’t outlive it.
[01:03:41] Joe: It’s this lifetime income paycheck replacement. It gives you, it gives you peace of mind. OG, to your point, you’re paying for the peace of mind. Mm-hmm. But, but, but you’ll get the peace of mind. You won’t have to worry about it again. It is an irrevocable peace of mind, which is why people make it halfway there.
[01:03:57] Joe: They buy the damn product to do it. I
[01:03:58] OG: say irrevocable. Doug, how about you? Is it… Do you like irrevocable better? Or… Uh, pause, Joe. I know
[01:04:05] Doug: you’re on a roll here. Irrevocability.
[01:04:07] OG: Ah.
[01:04:08] Doug: Irrevocability.
[01:04:09] OG: Yes.
[01:04:10] Doug: And
[01:04:11] Joe: I, I do like how it works when it’s a piece of a larger financial plan. I don’t like it, like when I saw, when I saw people that would come into my office and all they had were annuities.
[01:04:23] Joe: I was like, “Oh, man. Ugh, you just got sold.” But if you’ve got this little lifetime stream annuity that’s coupled with investments, social security, your pension- Well, let
[01:04:32] OG: me give you some use cases that I think sometimes could make sense, just as a, you know, so I’m not annuity anger guy all the time. I can actually, I can actually spell out a few things that I might be interested in using it for.
[01:04:46] OG: Let’s say, for example, that you’re pairing it with another insurance decision. For example, I’m gonna buy some long-term care insurance for, for Mrs. OG and myself, and I know that the policy premium for this long-term care coverage is $5,000 a year. I can write a check for $5,000 a year, or I can take $100,000 today and put it in a fixed annuity with a $5,000 a year payout.
[01:05:12] OG: And now I know, no matter how long I live, that the annuity income is gonna pay for my long-term care policy. Like, I’ve, I’ve earmarked that specific thing, and in theory, you know, it’s not supposed to go up, but we know there’s some issues with that, but, but let’s just say that it doesn’t. So I like the use case for that.
[01:05:31] OG: The other use case I can see makes a lot of sense is maybe a deferred annuity, and I think this is maybe where, where you might go with this, Joe, and say, “I actually think I’m good from 65 to 80. Like I- I don’t know if I’m gonna live to be 90. You know, Grandma and Grandpa did, so maybe I do. What I’m really concerned with is this unknown of like, what if they fix all these health problems, and I live to be like 105 or 113 or something like that on the back end, and I’m healthy, but my retirement income is like kind of, you know, in the 90-ish range.
[01:06:02] OG: So I like the idea of saying, “Okay, I’m gonna put some money aside that I turn on at 90 years old, and that’s gonna provide me a bump up of income from 90 to that, whatever that end age is gonna be, in case I do live too long,” versus putting money in at 65 and turning it on at 65. Put it in at 65, let it sit there until 90, so you’re not making that irrevocableness-ish decision at 65.
[01:06:29] OG: You’re waiting until you’re like, “Okay, I’m 90 now. Like, the kids are taken care of, the grandkids are taken care of. This is about me. I need to, I need to make sure I can pay my bills and put food on the table.”
[01:06:38] Joe: Lock it in.
[01:06:39] OG: Now I can turn on this thing without having to make that decision, and if I die when I’m 88, then you know, there’s still this bucket of money that goes to my heirs like it’s supposed to.
[01:06:47] Joe: Yeah. So- It can still be part of your legacy plan.
[01:06:49] OG: Yeah. So I think that makes a little bit more use case sense for me than, you know, a 60-year-old retiree going, “I’m scared about the market, so I’m gonna put 30% of my portfolio in this, you know, 3% product.”
[01:07:02] Joe: Yeah, I definitely see that as the good. The bad, just I think to encapsulate, OG, ’cause I was sitting here taking notes while, while you were riffing on so many things.
[01:07:13] Joe: Number one, as you were listening, I’m sure, Stackers, you were hearing OG talk about all these bells and whistles. Just the complexity, it’s one of the most poorly understood products, and for good reason. It just, it’s so … Th- there are so many bells and whistles. There are so many add-ons, which means extra fees and extra commissions.
[01:07:32] Joe: They can be opaque. They can be high, and that lack of flexibility that you talked about. The fact that it’s irrevocable makes people get half sucked in, which is almost worse than getting completely sucked in and turning it into a stream of income.
[01:07:44] OG: Yeah.
[01:07:44] Joe: If you go halfway, then finish the deal, but lack of flexibility, people worry about you’re locking money up and-
[01:07:49] OG: Joe, what do you think about like, so we’ve talked about this from a retirement income standpoint.
[01:07:53] OG: What do you think about the 40-year-old that walks into the air quote financial advisor office and has a regular brokerage account, an IRA, and then a variable annuity IRA also? Like, is this … That’s a big no-no, yeah? Is that how you, uh, like almost universally- An
[01:08:12] Joe: annuity inside an IRA is an abomination.
[01:08:16] OG: Okay. All right, yeah.
[01:08:17] Joe: An annuity inside an other IRA-
[01:08:18] OG: Correct. You passed the test. Good.
[01:08:20] Joe: Well, you’re paying for … W- well, what’s an IRA do? And people don’t know what, you know, what the test is all about, but here’s the way I see it is that an IRA is a tax shelter so that you don’t pay taxes until you pull the money out, right?
[01:08:33] OG: Right.
[01:08:33] Joe: And an annuity is a tax shelter where you pay money- You
[01:08:38] OG: don’t pay taxes until you- On the- … pull the money out …
[01:08:40] Joe: I would always ask people, I’m like, “Why the hell do you have a tax shelter inside of a tax shelter?” Like, what are we doing? And we’re paying the annuity people for the tax shelter piece of that.
[01:08:47] Joe: Right. So if I’m paying the annuity people and then I have the IR- what the hell am I doing? Why would I do that?
[01:08:52] OG: Yeah. I would say almost universally this is a decision, if you’re gonna have it, is nearing retirement, not any amount of time before that.
[01:09:02] Joe: I think 40 year old and annuity don’t go together.
[01:09:05] OG: Yeah.
[01:09:05] Joe: Fight me on that one, Stackers. I’d, I’d love to hear, hear your thoughts, but I can’t, I can’t think of a time when I saw a 40 year old with an annuity and I went, “That’s a great decision.” It’s
[01:09:14] OG: like a headline of a blog post. Yes. 40 and annuity don’t go together.
[01:09:17] Joe: No. Here I think is the adult conversation, Stackers.
[01:09:21] Joe: Annuities by themself, not good or bad, can be really, really bad. I love the fact, and I underline this as you said it, OG, they are a tool, right? They are a screwdriver, and it’s this weird screwdriver that you don’t ever use very often. You know, you got like the, your basic Phillips head and your basic screwdrivers?
[01:09:39] Joe: This is not that one. That’s, this is that funky Allen wrench one- Mm-hmm … but not the, the one, the little starry Allen wrench, uh, piece that you use once every 10 years. I think you gotta ask yourself three questions. First one is what problem am I trying to solve? Don’t start with the annuity. Don’t start with the annuity salesperson.
[01:09:58] Joe: Don’t start with I’m afraid of the market. Start with what is the problem. Is it income, is it taxes, is it my legacy? What am I trying to do? And then second, how much of my portfolio should go here? And I don’t think, OG, I’ve seen a use case where it should be a bunch. And the third one is, you know, that irrevocableness-ish-procity-
[01:10:15] Joe: is something that-
[01:10:20] Doug: I like neprocity.
[01:10:22] Joe: There’s a, there’s a trade-off, right? Do I understand the, the trade-off? So at the end of the day, I think it’s a little like those samples at Costco that Doug likes so much, when he walks around Costco. Like, if he’s trying them out once in a while or maybe in little tiny bits, it’s okay, but when Doug decides that’s dinner time, we all pay for that.
[01:10:41] Doug: There, there are… Oh, you, you’re gonna wind me up on this one, Joe, ’cause there’s so many people who just crowd around that poor old lady who’s trying to cook those things in the little oven they give her, and then cut it up into tiny cubes, and they want 11 of them because they’re trying- Yeah, you know it’s dinner
[01:10:57] Doug: to get a free lunch.
[01:10:58] Joe: It’s
[01:10:58] Doug: 100%. And all I wanna do, I’m just trying to get to the frozen pizza aisle, and they’ve clogged up the whole aisle.
[01:11:07] Joe: Doug, Doug wants to get to the frozen pizza aisle, but he wants to taste the weenie first. That’s the- Okay … that’s the deal. ‘
[01:11:14] Doug: Cause there’s hundreds of people waiting for that little old lady to cook ’em.
[01:11:18] Joe: Uh, we will link to this piece, uh, Greg Iacochci piece from CNBC, on our show notes page at stackingbenjamins.com. I’m sure- Kevin is gonna be writing about this in the near future over at the 201, our newsletter. Always with a hot take at the 201, and, uh, goodness, there’s a lot to talk about with annuities.
[01:11:36] Joe: All right, there’s also a lot going on in Stacker land. We’re gonna wander out to this segment we call the Back Porch. This is where we talk about all the cool stuff going in the Stacking Benjamins community, that Stackers, you can be a part of this. Not only join us in the basement, our Facebook group, or, uh, join us, our newsletter.
[01:11:54] Joe: People hit… If you hit reply on the newsletter, I also love chatting, and Kevin loves chatting about the topics there. Yep. So if you’re not local to a place, you can do those things. But Doug- The- … we also have these meetup groups we call Benjamins After Dark, or- Yeah,
[01:12:08] Doug: there’s an- I’m gonna- we’re gonna talk about that in a second, but you forgot another easy, cool way to hang out with us.
[01:12:15] Doug: It’s on, on Monday afternoons when we record our Roundtable episodes on YouTube.
[01:12:20] Joe: Yes.
[01:12:21] Doug: Yes. Talk about an easy, awesome, fun way to just hang out, at least you get to… It’s, here’s the thing, they get to, like, shoot these, these rounds of ammunition across our bow while we’re recording. They show up in the comments.
[01:12:34] Doug: We can’t do a darn thing about it. So people are just having fun talk- But it’s hilarious, so join, join that. But there is, there are a lot of great things happening out there in Badlands. Huh? See what I did there? We have
[01:12:46] Joe: some speakers. Before we get to that, we have some great speakers and people that are incredibly well-versed, uh, advisors or deep thinkers.
[01:12:56] Joe: A gentleman named, uh, Mau- Mark Troutman joins us frequently. Chris Lugar joins us quite a bit. Paul Merriman has joined us in, as a guest, but he’s also joined us in the, in the comments just watching the show. Yeah. Often you get two shows. You get the thing that’s gonna appear on the podcast- Right … and you also get the additional contributions of some pretty smart Stackers.
[01:13:15] Doug: And sometimes, and this is where it’s just rude. I mean, I just wanna, I think I need to air some dirty laundry here. Our Stackers are having these meaningful conversations in the comments section with each other, and they’re not listening to us. The gold that we are producing- … they’re like, “Yeah, yeah, yeah.
[01:13:32] Doug: Can you guys quiet down for a minute?” ‘Cause we’re over here- Oh, easy … answering and asking questions and- Yes … learning stuff.
[01:13:39] Joe: I’m sure they would say, “We need some adults in the room.”
[01:13:41] Doug: Yeah.
[01:13:41] Joe: Right. Doug, what’s going on though locally?
[01:13:43] Doug: Yeah, the other places that they’re getting together and learning stuff and having great conversations, uh, are all over the country really.
[01:13:50] Doug: Man, this list is growing. W- here’s a great goal, Joe, is to get to a point where we don’t have time to read through all of these meetups, and the list is growing. The cities are growing, and there’s a lot of demand. An incredibly smart guy named Doug in northern Virginia asked if there was gonna be a Bad group forming anywhere in that whole northern VA, you know, DC, Georgetown, Arlington.
[01:14:13] Doug: Um, we’ve got some interest in Maryland, uh, which isn’t that just kinda all one metro area, I think?
[01:14:19] Joe: Watch what’s funny, David and I, the guy in Maryland who initially- Fired the first shot here. He and I were talking about this. I wrote an email to people within 100 miles, and I got so many answers back that we actually are, already have a Zoom call scheduled.
[01:14:35] Joe: So I’m fairly certain, Doug, that we’re gonna have something happening in the DC- Maryland’s on the
[01:14:40] Doug: launch pad?
[01:14:41] Joe: Maryland, Baltimore-ish area. We’ll- Awesome … more to come on that front.
[01:14:46] Doug: Yeah. The Bay Area, there’s a lot of interest in the Bay Area. I’m assuming that means San Fran.
[01:14:53] Joe: And you said that specifically just to- 100%.
[01:14:57] Joe: I love how you just like to poke the bear.
[01:14:59] Doug: Oh, yeah. Just
[01:15:00] Joe: poking
[01:15:01] Doug: things- Poke, poke, poke … putting peas in mattresses. That’s all I love to do.
[01:15:04] Joe: Yeah. As we record this, we’re about to have our Zoom call with that potential leadership group as well. So Bay Area, uh, it looks like Benjamins After Dark going to be happening, uh, fairly soon.
[01:15:16] Joe: We’re, we’re probably, I would guess with the Bay Area, we’re further along than we are on DC slash Baltimore. So I would say we’re maybe, um… We’re maybe three m- uh, I would guess September, uh, Bay Area, that group’s gonna be ready to have their first meeting.
[01:15:33] Doug: You know who’s ready a lot sooner than that, Joe?
[01:15:35] Doug: The Boston group. They’re meeting in a few hours. The Boston group is air- uh, meeting on May 13th, probably tonight. It’s a good chance that’s tonight. Today? Today? Uh, at 6:00 PM at Hannah’s Brewing in Melrose. And we know about a meeting for the southern Minnesota BAD group. They’re meeting on May 27th at 6:30 where they always meet.
[01:15:59] Doug: Uh, nice and consistent, that group. You can always count on the Mankato group. Uh, they’re meeting at 6:30 at the Maverick Innovation Gateway.
[01:16:06] Joe: On the campus of Minnesota State University there.
[01:16:09] Doug: Yep. Seattle, Twin Cities, Tucson, don’t forget to let us know and post. And folks, here’s the thing. I know you love h- hearing us talk about it, but the easiest way to figure out if there’s something happening in your area, go to stackingbenjamins.com/meetup, and all of this stuff is posted out there.
[01:16:25] Doug: You know me, I just read what’s, what somebody puts in front of me. So I’m just reading all this stuff off of our website.
[01:16:31] Joe: Well, here’s what, uh… You won’t have to read, Doug, because I know you internalized it. What are the top three things on your list that we talked about today?
[01:16:41] Doug: I have inculcated it into my very soul.
[01:16:45] Doug: Well, Joe, here’s what’s stacked up on our to-do list for today. First, take some advice from Beth Kobliner. Get the basics of money right, and the rest will take care of itself. Stay out of debt, build an emergency fund, and think carefully through your spending. It’s that easy. Then you’re off saving Benjamins and stacking them like a champ.
[01:17:05] Doug: Second, annuities, not all bad. But buyer beware. If you’re doing anything other than creating a pension for yourself, you’re probably buying an annuity for the wrong reason. But the big lesson Don’t ask Joe’s mom to spice up the meatloaf. She’ll counter by helping you spice up your day by, like, pulling weeds in the flower beds, which, you know, honestly, now that I think about it, it’s not that spicy.
[01:17:31] Doug: I’m not gonna argue anymore. I mean, she’s gonna keep throwing stuff at me, like washing dishes or de-furring the cat or, I don’t know. De-furring the cat. She’s asked me some crazy stuff before. I’m, I’m… That’s on the list, I bet. Thanks to the Beth Kobliner for helping us mentor you today. You’ll find the updated edition of Get a Financial Life wherever books are sold.
[01:17:58] Doug: We’ll also include links in our show notes at stackingbenjamins.com. This show is the property of SB Podcast, LLC, copyright 2026, and is created by Joe Saul-Sehy. You’ll find out about our awesome team at stackingbenjamins.com, along with the show notes and how you can find us on YouTube and all the usual social media spots.
[01:18:21] Doug: 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. 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 Benjamins show.
[01:19:37] Joe: Oh, gee, you ever, uh, have a trip that gets canceled at the last minute and then you accidentally tell somebody? Yeah,
[01:19:43] OG: I accidentally told you, and now we’re d- … doing a bunch of recordings. You’re like, “Oh, you’re in town? Well, let’s record ahead a little bit.”
[01:19:51] Joe: If we could record, that’d be great.
[01:19:53] OG: Yeah. No, I mean, you know how it is.
[01:19:54] OG: It’s like work expands to the time allotted, so when you, when you have it all planned and you go, “Okay, cool. I’m gonna… I know I’m traveling these days, so I’m, you know, incommunicado. I gotta get everything set up,” and then, uh, your schedule changes a little bit If you’re an idiot like me, you mention it to somebody, and they’re like, “Oh, well, hell, if you’re in town, why don’t you work on these 32 projects since you have a bunch of time all of a sudden?”
[01:20:18] OG: “Congratulations. Here’s the follow-ups I was gonna give you next week, but- That
[01:20:20] Joe: is the mistake …
[01:20:21] OG: but now you have these instead.”
[01:20:22] Joe: That’s a law of the universe. If you tell loved ones that you have free time, they will find
[01:20:28] OG: ways to fill it for you. No, I said I told you. I didn’t say anything about telling loved ones.
[01:20:31] Joe: Oh, well. Yes. I didn’t give you 32 things. Burn.
[01:20:35] OG: Ouch. Kidding.
[01:20:36] Joe: I didn’t give you 32 things, I gave you two. I said, “How about a Monday and a Wednesday show? Let’s do those.” You know- Yeah … call me crazy like we do every week.
[01:20:44] OG: No, it’s fine. It’s, it’s good ’cause y- you need a little buffer time to, like, work on backstage projects that, that just pile up of like, I really wanna get into this, but I need three hours of uninterrupted, said again, uninterrupted, Doug, time so that I can, uh, just put some headphones in, rock out- Yeah
[01:21:05] OG: to some TayTay and- Dad, dad.
[01:21:07] Doug: Dad, dad, dad …
[01:21:08] OG: do you guys listen to Taylor Swift when you’re really kind of in the zone? I find that that’s really kind of the vibe for me.
[01:21:12] Doug: Never once.
[01:21:13] Joe: I can’t say. Taylor Swift isn’t on my… I have a, quote, “work mix.” Yeah. Taylor Swift’s not on it.
[01:21:18] OG: Really? Hmm. Yeah, it’s quite the vibe.
[01:21:21] Doug: Is that because work is in air quotes, like it’s not really work? Is that why it’s, quote, “work mix”? Well,
[01:21:27] Joe: when you’re dancing around the garage, Doug, you gotta have some good, good beats.
[01:21:32] OG: The important thing is to leave the garage door closed so that the neighbors don’t report you again.
[01:21:38] Joe: The third time, I heard though, OG, is the charm.
[01:21:42] Joe: I think that doesn’t just apply at home. Yesterday, I was on a flight and I had five and a half hours of slop time to make sure that the one connection I needed to make happened. And OG, you already know how this, how this story ends. It doesn’t matter if I have 35 minutes or five and a half hours. If American Airlines is going to make it so you miss your flight, you’re not gonna miss it by an hour.
[01:22:10] Joe: It’s not gonna be canceled three hours before. You’re going to be running through the airport and get almost to the gate and the plane’s pulling away.
[01:22:21] OG: Hmm.
[01:22:22] Joe: Five and a half hours they messed with. It was great. So got home last night at 3:00 AM, which is why this was such a s- such a what the heck’s Joe talking about episode.
[01:22:34] OG: Wow. Did you walk home from DFW? I did.
[01:22:38] Joe: Is
[01:22:38] OG: that why it took you so long?
[01:22:39] Joe: There are never rental cars, and I heard it’s because the franchisees have to pay the fee, the one-way fee, and the franchisee in Texarkana apparently doesn’t wanna pay that fee, so there’s never… If you miss your flight, there’s never rental cars.
[01:22:52] Joe: Well, there happened to be one last night. Hmm. And so by the time I got to the rental car facility, it was about 11:45. Got in the car at midnight, and it’s a three-hour drive home. So good times.
[01:23:09] OG: That’s fun.
[01:23:10] Doug: This is the most boring after show of all time. Like, I wanna hear, like, you just broke out the lawnmower ’cause it’s spring and you cut off a toe, or you ate three pounds of steak over the weekend.
[01:23:24] Doug: Like, I had travel problems.
[01:23:26] Joe: Did you ever see that movie The Ringer? Hmm.
[01:23:28] Doug: I think I did.
[01:23:29] Joe: In the movie The Ringer, Johnny Knoxville accidentally cuts off somebody’s finger and, and he needs to pay for the surgery. And so he, uh, he finds out that the Special Olympics give a bunch of money to the priz- to the winners in the d- in the different races.
[01:23:48] Joe: And so he pretends that he’s eligible for the Special Olympics. And by the way, this i- sounds like a horrible i- sounds like a Johnny Knoxville idea for a movie. It’s so funny because guess who the first people who are onto him are? The- All the Special Olympians.
[01:24:07] Doug: The athletes, yeah.
[01:24:08] Joe: All the athletes. And they figure out what he’s trying to do, so they’re all in on it.
[01:24:13] Doug: Are they asking for a cut?
[01:24:15] Joe: They’re just trying to help him do the right thing. It’s a s- if you’ve never seen The Ringer, that movie holds up. I
[01:24:21] Doug: think we need to spend some time analyzing why you watched a Johnny Knoxville movie. Like, what made you say, “This seems like a good idea. This is how I wanna spend two and a half hours”?
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