Most DIY investors spend their energy optimizing investments. The wealthiest investors optimize systems. According to Vanguard, a great advisor can add roughly 3% to your portfolio — not by picking better stocks, but by keeping you from wrecking what you already have and by making the boring structural decisions most people skip. Joe and OG walk through the return boosters that actually move the needle, none of which involve a single exotic investment. OG and Anna follow up with the retirement withdrawal sequence that turns a good tax strategy into a great one.
What You’ll Walk Away With
- Why staying invested is the single highest-return move available to most investors — and the Wall Street Journal archive experiment that proves it better than any chart
- How news addiction creates the three portfolio killers: panic selling, market timing, and the constant feeling that today is the day to make a move
- Why your investment policy statement is a shock absorber between your emotions and your account — and why advisors often beat DIY investors not by picking better funds but by being harder to reach on bad days
- Asset location: the quiet return booster that moves money into the right tax shelter without changing a single investment
- Why tax loss harvesting is widely marketed to the wrong people — and who actually has a strong use case for it
- Social Security timing as a portfolio decision: why “I don’t have to decide today” is sometimes the most financially sophisticated answer available
- The sequence of return risk trap that turns retirement into a constant anxiety loop — and the simple margin of safety that makes it irrelevant
- The lightning round: concentrated stock, leverage, crypto yield products, options trading, rebalancing, and tax efficiency — return or trouble?
- OG and Anna on the distribution ladder: how to sequence withdrawals from pre-tax, brokerage, and Roth accounts to minimize taxes in retirement
- What IRMAA is, why it shows up two years after the decision that caused it, and why Roth conversions need to happen in November — not March
Why This Matters Now
If you’ve been dollar-cost averaging into index funds and calling it a day, this episode is the next conversation. The gap between a well-built system and a random pile of investments isn’t measured in which funds you chose — it’s measured in taxes paid, sequence of returns survived, and whether you had a plan when everything felt uncertain.
From the Basement
Joe and OG dig into the return boosters that have nothing to do with picking better investments — recorded while OG is already inside Hollywood Studios at 4 AM trying to figure out the Lightning Lane math. OG and Anna deliver episode four of their financial basics series with a full walkthrough of tax-efficient withdrawal sequencing, including the IRMAA trap, Roth conversion timing, and why the tax triangle you built in season one is the whole point. Doug arrives with Studebaker trivia. The community delivers an anonymous car buying post that may be the most actionable 200 words the basement has produced all year. And the Stacking Benjamins Inner Circle scam gets called out by name.
Resources Mentioned
Stacking Benjamins Meetups (BAD Groups) — stackingbenjamins.com/BAD
Stacking Benjamins Scorecard — stackingbenjamins.com/scorecard; free tool to evaluate your current financial position
Stacking Benjamins Basics Guide — season one and season two workbooks free at stackingbenjamins.com/basicsguide
Stock Market Maestros episode — linked at stackingbenjamins.com; on the habits of the world’s best investors
Stacking Benjamins YouTube channel — youtube.com/stackingbenjamins; full OG and Anna basics series
Stacking Benjamins Vault — stackingbenjamins.com/vault
Stacking Benjamins Newsletter (The 201) — stackingbenjamins.com/201
Stacking Benjamins Community (The Basement) — stackingbenjamins.com/basement
Doug’s Trivia
- An icon of industry was born on today’s date in 1831: Clarence Studebaker built one of the nation’s largest horse-drawn carriage businesses. After his death, the company evolved into the Studebaker Corporation. What product became the company’s claim to fame?
Have a question for the show?
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- Check out The 201, our email that comes with every Monday and Wednesday episode, PLUS a list of more than 19 of the top money lessons Joe’s learned over his own life about money. From credit to cash reserves, and insurance to investing, we’ll tackle all of these. Head to StackingBenjamins.com/the201 to sign up (it’s free and we will never give away your email to others).
Other Mentions
- Stacking Benjamins Vault
- How to Create an Investment Policy Statement – Stacking Benjamins
- Stacking Benjamins Financial Scorecard
Join Us Wednesday
Tune in on Wednesday when we answer the question: “how would you like to retire by 30?”
Written by: Kevin Bailey
Miss our last show? Listen here: Stop Treating Every Financial Decision Like It’s Mount Everest (SB1848)
Episode transcript
[00:00:00] Joe: Hey there, Stackers. If you’re brand new here, on Mondays we always have a salute, so gentlemen, raise your mugs.
[00:00:07] Doug: Raising.
[00:00:08] Joe: On behalf of the men and women making podcast in mom’s basement and the men and women who are trying to fill their basket with as many Benjamins as they possibly can, here’s to those people that kept us safe all weekend.
[00:00:21] Joe: Thank you to our troops, to our veterans. Thanks for all you do. Let’s go stack some Benjamins together now, shall we?
[00:00:28] Doug: Thanks, everybody.
[00:00:30] opener: He’s the type of guy, you get halfway home from the theme park before you’re like, “Oh, where’s Doug?” “Oh, no, we have to go back. My wallet’s in his fanny pack, so…” Oh, do not feel bad for Doug.
[00:00:42] opener: He’s terrible. Every time he tells a story, somewhere a child loses a balloon.
[00:00:52] Doug: Live from Joe’s mom’s basement, it’s The Stacking Benjamins Show
[00:01:06] Doug: Joe’s mom’s neighbor, Doug, and how about we find ways to add money in your pocket without adding more risk? How do you do that? We’ll share a framework you probably haven’t considered. Plus, OG and Ana are back with some more financial basics. This week, how to take more efficient withdrawals from your funds during retirement.
[00:01:26] Doug: Sure, you might not retire tomorrow, but wouldn’t you wanna learn this stuff two hours before? We’ll help you get ahead of the curve. And as always, you’ll be way ahead of the curve with your friends as I share some shareable and mind-bending trivia. And now, two guys who will bend your mind toward more confident investing, it’s Joe and O-G-G, G.
[00:01:55] Joe: Hey there, new and longtime Stackers. Welcome to the Stacking Benjamins show. I am Joe Saul-Sehy, the cohost of the greatest money show on Earth, and the guy across the card table does this with me, Mr. OG is here. How are you this fine Monday, my friend?
[00:02:10] OG: Well, Joe, I’m, uh, live from Hollywood Studios today. And, uh, I can’t really talk very long ’cause I gotta get on Ride of the Resistance here, so I’m gonna do that.
[00:02:19] OG: But, um, uh, what do you need from me today, man, ’cause I got chop-chop.
[00:02:23] Joe: It’s tough. I feel bad. New, new month, new you, OG. New month, new you.
[00:02:29] OG: Well-
[00:02:29] Joe: All from Hollywood Studios.
[00:02:31] OG: Uh, yeah, and if you catch me tomorrow, little Epcot love, Wednesday, back to Hollywood. It, it’s a whole thing. You know, so snap, snap. Let’s, let’s just burn through this one.
[00:02:39] OG: I, I’m in the long line, so I’ve got a solid 45 minutes. I did not get a FastPass or whatever the hell th- those things are called now.
[00:02:45] Joe: That sound you’re gonna hear in the background is the sound of money leaving OG’s pocket throughout today’s episode.
[00:02:51] OG: I watched a bunch of videos about Lightning Lanes, Lightning Lane passes, multi-passes, single-day passes, priority Premier passes.
[00:02:58] Joe: You need a PhD.
[00:02:59] OG: Yeah, well, I… When I got to the point where the Lightning Lane pass was three times as expensive as the Park Pass, I was like, “Okay, something in this doesn’t exactly math out, so I’ll just stand in line”
[00:03:14] Joe: Yeah. Get there early, do the thing. You’re, well, you’re already there early. Look it- Yeah, I’m here
[00:03:17] Joe: we’re recording this- Yeah, yes, I know … at like 4:00 AM.
[00:03:19] OG: I know. So. Yeah, they let me in early. It’s unbelievable. I said, “Do you know who I am? I’m the OG.” And they’re like, “Pardon me, sir, right this way.”
[00:03:27] Joe: Oh.
[00:03:27] OG: Surprisingly, there was already a line of 1,000 people, though, so I guess-
[00:03:30] Joe: That’s ’cause they stayed at the resort.
[00:03:32] OG: They’re still in line from yesterday.
[00:03:35] Joe: Well, we got a great show, and thank you for being here, for showing up, because according to Vanguard, you can add 3% to your portfolio if you have a great advisor. And, and the question that I always wonder is, you know, everybody’s looking for this esoteric stuff, right?
[00:03:50] Joe: How do I add 1% to my portfolio and have it, uh, n- not mean any more risk to me? Well, I thought about that, OG, and I thought there’s a bunch of stuff you can do that can add a little tweak here, a little nip and tuck there, and you can come up with maybe a percent, maybe two, maybe three, who knows? But we’re gonna go over that today.
[00:04:09] Joe: Esoteric, not esoteric. We’re gonna talk about stuff that works and stuff that doesn’t work. How about that?
[00:04:14] OG: I like it.
[00:04:15] Joe: Today, we have not only a great episode talking about that, of course we got OG and Anna, we have a couple sponsors who help us make sure that we can keep on keeping on, keep making these episodes, and it’s all free to you.
[00:04:27] Joe: The first of which is The Vault. The teams at Array and BudgetSimple have gotten together and worked their magic. They, they’ve created the power of monarch money budgeting and net worth tracking with rocket money ability to kill unwanted subscriptions, and the credit bureau’s ability to keep bad actors from your credit.
[00:04:45] Joe: All of those organizations been in one Swiss Army knife. Go to stackingbenjamins.com/vault to see how it works and to sign up. I think you’ll love it as much as I do. We got a couple more here, and then only one other sponsor break in the middle of Doug’s trivia. So we’re gonna hear from them. And then, OG, Doug, and I, we’re gonna dig into how to make more money appear without taking on more risk.
[00:05:17] Joe: Well, Stackers, you and I both want higher returns, but if the answer isn’t taking more risk, what if it’s just becoming more efficient, right? Maybe there’s some inefficiencies, OG, that we can get rid of, almost like, uh, on the new, uh, Muppets Rock ‘n’ Roller Coaster. Maybe right now you’ve got an old minivan with some bricks in the trunk, and instead you wanna be like the- the fast loop-de-loop.
[00:05:42] OG: Well, you know, the Rock ‘n’ Roller Coaster is scheduled to open today. I’ve never been on it. I have no idea what you’re talking about.
[00:05:51] Joe: Oh.
[00:05:51] OG: But if I had bricks- You’ve never been on the
[00:05:52] Joe: old one with the, uh, with the- If I had
[00:05:54] OG: bricks in my trunk, if you know what I mean. Is that, is that what we’re talking about?
[00:05:58] Joe: Well, and this is the key. To make the car run faster, so to speak, when it comes to what you’re doing, I think what most people do, most DIY investors do, OG, is they try to optimize investments. And I will bet, I will bet there’s a bunch of people that came to this episode going, “Oh, good. We’re gonna add like 1% yield to all of our investments,” or, “We’re going to, you know, figure out, like, how to build a filter using AI that’s gonna help us find, like, the magic sauce of the right investments.”
[00:06:30] Joe: But while DIY investors are optimizing investments, I feel like when you talk to really wealthy people, they’re optimizing systems, and this is where I wanna spend most of our time today.
[00:06:40] OG: Yeah, I would say that or optimizing for- for outcomes, not the inputs. Yep.
[00:06:45] Joe: I gave a lot of thought to this. So OG, I’d love to get your take on what you think about my thinking.
[00:06:51] Joe: I feel like the most underrated return booster, and this’ll be great if you’re new here especially, because the key between really wealthy investors and people who are brand new to all this stuff- is simply staying invested. I think staying invested is number one the biggest return booster of all.
[00:07:15] OG: Well, I mean, staying invested in Nvidia stock.
[00:07:17] OG: Yes. I think that, like, that last little prepositional phrase at the end is really the missing link to a successful- It’s easy
[00:07:23] Doug: to forget, Joe. Don’t worry about
[00:07:24] OG: it … successful retirement piece.
[00:07:25] Joe: Could be Nvidia, could be the penny stock.
[00:07:28] OG: Well, probably not that one. But it’s funny you took this time angle because I thought that you would, that you were gonna say time, and you did in some way, shape, or form.
[00:07:36] OG: You took the time angle as I need to continually be invested, as opposed to the time angle of I need to start as early as possible. I think there’s two sides of the same coin, both worth exploring a little bit further. But what you’re talking about in terms of staying invested is not paying attention to short-term day-to-day news cycles.
[00:07:58] OG: It’s even hard to call a day-to-day thing a cycle, but, you know, short-term news things that lead you to believe that it’s a long-term issue that affects your portfolio. And the way that you can kind of stress test this is go grab a business section newspaper. You know, head on down to the library, get some microfiche access.
[00:08:19] Doug: Whoa.
[00:08:19] OG: Um, just pull up, just pull up, you know, the Wall Street Journal app or the Apple News app or whatever you’ve got and, and go back in time and find a news article from a year ago or from two years ago or from two months ago, and just think through the storylines that were going on and how specifically bad it was for investors because of this specific storyline.
[00:08:45] OG: As recently as, you know, war in Middle East or inflation or tariffs or tariffs and inflation, or this person’s elected and this person’s not, or this person’s not elected and this person is. Like, every single storyline can be turned into, “This is the reason why you need to hit pause.” That’s the whole objective is to get people to freak out and do stuff.
[00:09:12] OG: And ’cause a lot of times with money, doing stuff equals transactions equals, you know, revenue for the people who are in the business of that. So, um, but the one thing that you can learn from that is now look at those storylines from five years ago and go, “Oh yeah, I remember. That was, that was all the rage for about 90 minutes.
[00:09:31] OG: That was the thing that was gonna crater everything.” And here we are five years later, the market’s up whatever percent it is over that period of time. Every single solitary chaos bomb that gets dropped into your lap from a news cycle is forgotten tomorrow and has no long-term effect on your portfolio.
[00:09:51] Joe: Over the years, if you just go back in time like that, you can see, I think time gives you the ability to see just how much a news addiction really can kill your results. ‘Cause it creates the three things that I listed here. Number one, it creates panic selling. Number two, it creates this desire to time markets, right?
[00:10:09] Joe: Oh, I think based on the news cycle, it is here. Now, I used to be a guy that wanted to time the market, OG, and what I figured out, what I figured out early on, and this is kind of funny, you know when I wanted to time the market? The day I happened to watch CNBC. And then I thought, “How crazy is, is it that every time I watch CNBC, I feel like today’s the day?
[00:10:29] Joe: And when I don’t watch CNBC for two weeks, it’s not the day.” But then I go back and I watch and, oh, today’s the day, I gotta make a bunch of moves. I gotta make a ton of moves.
[00:10:37] OG: Yeah, it’s that or reading something on Reddit or playing around with stuff on ChatGPT, which by the way is completely funny. But, um, any time that you’re engaged in something, you know, there’s, there’s a usefulness in taking the next step.
[00:10:54] OG: I would argue if you’re starting to think about your health and you’re like, “I need to eat a little bit better,” right? “I’m gonna really focus on eating a little bit better,” now is probably the time to go grab the Oreos out of the pantry and throw them out. Probably, right? Doug’s like, “Ooh, hard pass.” Now would be the time to eat all the Oreos- Yes
[00:11:13] OG: so that they’re not in there.
[00:11:13] Joe: Yeah, so they’re not in there anymore.
[00:11:15] Doug: Yes. Once they’re in the cabinet,
[00:11:15] OG: they’re
[00:11:16] Doug: basically in your stomach.
[00:11:17] Joe: I got a bunch of M&M’s sitting in my cabinet.
[00:11:19] OG: Yeah. Yeah, you’d hate to waste all that money. Yeah, exactly. But nothing is more steadfast than going, “I’m throwing the ice cream out that I just paid $6 for the half gallon for.”
[00:11:29] OG: So in some aspects of your life, taking the next step is the momentum that you need to kind of build the system, like you said, Joe. But money is, I think, the exact opposite. Doing nothing is often the rightest answer, if that can be a-
[00:11:45] Joe: The be rightest answer- … a word … I think is what you’re looking for there.
[00:11:47] OG: Doug approved. #Doug, Doug approved.
[00:11:49] Joe: On our YouTube channel, we have this interview that I keep going back to, which is the Stock Market Maestros, where they talk about the greatest investors out there. You’ll love this interview. We will link to it in our show notes page. A key here that maestros do, and that advisors do, this is why they work from an investment policy statement, because it’s a shock absorber between your news addiction, which you might wanna keep.
[00:12:14] Joe: I mean, I don’t know why you would, but maybe you do wanna keep. Maybe you get some type of perverse enjoyment from looking at all the things that could possibly go wrong. But it’s this little barrier between you and your money that makes sure you’re not gonna make a move. I mean, this is why some people have advisors.
[00:12:32] Joe: You know, we see all the time that advisors, th- the advisor, when you take off their, their fees, well, they don’t beat the index. Well, you know what? The advisor might not beat the index, OG, but they’re probably beating you based, based on what all the research shows, right? Just having these little shock absorbers in place between you and your ability to jump on your Schwab account, your Fidelity account, and do the wrong thing is half the battle.
[00:13:00] OG: Yeah. There’s no way to predict in advance whether or not any investment idea, strategy, model, system, whatever, is gonna do better than something else. But I would submit that not only does it not matter to whether or not y- you know, somebody beats something, it, it… And this is with or without, you know, advisor help.
[00:13:23] OG: I think what we’re trying to do is we’re trying to be successful in our financial journey over our lifetimes based on our definition of success. Joe, what your definition is, it’s gonna be different than Doug’s and different than mine. But that doesn’t make mine better or worse than yours or yours better or worse than Doug’s.
[00:13:39] OG: This is your financial plan. The problem is, is that when we focus only on money, one area of, of financial planning, because all the other areas are absent Then that’s the only thing you can evaluate. I was just talking to our new associate, Noah. We call him New Guy Noah. I call him New Guy Noah. I don’t know what everybody else calls him, but I call him New Guy Noah.
[00:14:01] Joe: Anna’s probably not calling him that.
[00:14:03] OG: Uh, probably not. I haven’t even asked him whether or not he likes it. Uh, maybe I should. But anyways, so I was talking to New Guy Noah about this. Doug,
[00:14:10] Joe: in three weeks, this could be Former Employee Noah. Oh.
[00:14:15] OG: No, it’s not.
[00:14:16] Joe: No, it won’t be.
[00:14:17] OG: No one loves us. It
[00:14:18] Joe: won’t be.
[00:14:18] OG: I can already tell.
[00:14:20] OG: But he came over from a more brokerage model. Like, he has, uh, some experience and, uh, one of his first questions that he had as we were getting ready for some meetings, he, he said, “What tool do you use to go through all your portfolio performance with your clients?” And I kind of chuckled because I said, “Well, technically we use this tool, but that’s not a thing that we spend a lot of energy on.”
[00:14:41] OG: And he said, “Well, what the heck else do you talk about?” And it dawned on me that his whole experience had been money, right? Like, the money is the thing that mat- The money, back to your original kind of overarching idea here, Joe. The, the money is the tool that gets you to your goal, and if you don’t have a clear goal or you don’t have a clear understanding of how to get to your goal, then the only thing you’re gonna have to fall back on is, “Well, I don’t know, maybe I should beat the Russell 3000.”
[00:15:06] OG: Is that the, is that, is that a good goal? Well, not if you miss your retirement by two years and run out of money at 90, then no, it wasn’t.
[00:15:15] Joe: Well, well, let’s define what you’re talking about, and I’m not sure exactly what you’re talking about. So let me-
[00:15:19] OG: Me neither sometimes, Joe.
[00:15:22] Joe: Because I can hear some of our stackers that are screaming at their device, “Well, if, if the money’s not important, then what the hell are we doing here?”
[00:15:27] Joe: Back when I was an advisor, we wouldn’t chase the performance of the portfolio, we would chase the goal. So we would have benchmarks around are we ahead of the game or behind the game when it comes to the goal? Number one, is this goal still relevant? Number two is, are we ahead or behind? If we’re behind on the goal, is it our asset allocation?
[00:15:49] Joe: Is it what we did? Or is the culprit the fact that the market’s just down, and there really is nothing that we could have done differently about it? In which case, what are we going to do differently? Are we gonna change the goal? Are we going to put more money in? Which is cool- Yeah … because then instead of chasing performance, what we chased was goal attainment, which meant that we were always doing the right thing.
[00:16:12] Joe: We were holding when the market went down, and we were looking for ways to create more income streams, which is super important thing. That, by the way, when we created new income streams and the market was down, guess what happened when the market was up? We still had those income streams. We still created more money, so we looked for, is there a raise?
[00:16:30] Joe: Is there a side hustle we’ve wanted to do for a long time that we’re not working on? Like, we’d have these fantastic conversations around, do we value this goal enough to create new ways to attain it? I think that’s what you’re talking about here.
[00:16:42] OG: Yeah, I mean, because at the end of the day, nobody cares whether or not you average 8% or 8.2% over your lifetime.
[00:16:51] OG: The thing that you care most about is, did I meet my financial independence goal? Did I not run out of re- you know, money in retirement? Did I give money to the people and places that I care about in a manner in which I wanted to do that? You know, was I impactful to other people in my life? And so those are the standards by which you measure yourself, not what did my, you know, mutual fund do compared to the other mutual funds in the world.
[00:17:18] OG: Now, don’t get me wrong, to your point, Joe, in terms of, you know, a little bit of pushback here, that’s a threshold issue in… You know, you gotta be in the ballpark, right? If the market’s up 10 and you’re up two, that’s a problem. Yeah. Right?
[00:17:32] Joe: Yeah.
[00:17:32] OG: I would also argue, by the way, if the market’s up 10 and you’re up 18, that’s also a problem.
[00:17:36] OG: It’s just a different type of problem. But you gotta be in the ballpark. But more specifically, you need to be in the ballpark of your return goal for your financial plan. If your return goal is I need 6% Go get 6. Like, live a life of leisure and not have to worry about the daily ebbs and flows of the stock market as much because 6 is your number.
[00:18:01] OG: I would argue that you should be fully invested, and if 6 is your number to reach your goal, you need bigger goals so that, you know, you can power compounding and o- over your lifetime and, and have really, really big impact. But if your financial goals get you there with 6%, then why are, why are you trying to get 10 or 12?
[00:18:19] OG: Like, what the heck? What are we doing? Absent a goal, absent a solidified dollar-denominated, time-bound, specific financial goal, you’re gonna fall back to whatever it is you think you need to fall back to, and the media generally will tell you the thing to fall back to is your portfolio performance.
[00:18:38] Joe: I wanna talk a little bit about another way that I thought people make, uh, uh, create excess return without taking more risk.
[00:18:48] Joe: Leverage. Oh. First one, definitely staying invested. What’s that?
[00:18:51] OG: I said leverage.
[00:18:53] Joe: Well, it’s funny. We’ll get to leverage here in a second.
[00:18:55] OG: Oh, all
[00:18:55] Joe: right. But I think this is the silent portfolio killer nobody talks about at parties, which is … I kind of groan as I say this, but I do think number two is a little bit of, of paying attention to taxes.
[00:19:06] Joe: When I look at inefficient portfolios, I think there’s some cleanup that we all can do with our portfolio around asset location. Like, do I have the right type of shelter for my money? I can very quickly create a little bit more return without any more risk just by having the right asset, asset location.
[00:19:26] OG: I hear what you’re saying in terms of like a little bit of return and, you know, just being a little bit more intentional. But Joe, you have to r- also remember the power of compounding that half a percent over your lifetime, and making those small changes as it relates to where the money is, and you kind of talked a little bit about taxes, which I’ll circle back to in here a second.
[00:19:50] OG: Those little bits of additional benefits pile up, but the problem is, is you don’t see the pileup happening. And in our life, we don’t get to see the here’s what would have happened, here’s what did happen comparison. You know what I mean? There’s not like a, “This was the path you were on until you made this asset allocation change.”
[00:20:08] OG: You don’t get to compare yourself to it because it didn’t happen, so there’s no record of that in the future. So it’s hard to produce that, “I told you so” in terms of how did we make this better by being more intentional? ‘Cause it just is where it is now, you know, so it’s hard to kinda prove that backwards.
[00:20:27] OG: But I do wanna talk about taxes for a quick second. So we started doing this scorecard, um, early March, just as a way for stackers to evaluate where they are, so it’s just stackingbenjamins.com/scorecard. You can evaluate where you are, and I don’t think the value is in necessarily figuring out where you are relative to other people.
[00:20:46] OG: It’s figure out where you are, then go do some things different, then go back and evaluate where you are again and see the change in your own life. That’s the benefit of the scorecard. So you can take it multiple times. But the number one thing across the board, we’ve had, I don’t know, maybe close to 500 people do it now in two months.
[00:21:08] OG: Across the board, the number one thing is I have no tax strategy, or my tax strategy is not aligned with what I think it should be, or I’m tired of getting surprise tax bills, the occasional tax refund, but mostly surprise tax bills. Um, I think that this is a bigger issue in the public than what we think, both in our firm and then also kind of on the show.
[00:21:32] OG: I think this is something that we could spend a little bit more time on, I think maybe in future seasons. This has been pretty eye-opening for me to learn kind of what’s on everybody’s mind in their commentary and in their notes.
[00:21:44] Joe: Well, the good news is you’re gonna be covering some withdraw sequencing on today’s episode here right after the break, so we’re gonna be talking a little bit about that.
[00:21:52] Joe: Oh, yeah. Of course
[00:21:52] OG: I am. ‘
[00:21:53] Joe: Cause I think that’s, uh, that was big on my list here of ways, just when you’re in retirement, you know, you’ve got all of these… You think about people that are going to, uh, jump out with parachutes out of a plane. It’s like your money. Which ones do you send first? You send the Roth contingent first.
[00:22:08] Joe: You send the pre-tax money first. Well- You send the others,
[00:22:10] OG: and- … yeah, there’s that, but I also think there’s the tax benefit of making sure that it’s growing correctly-
[00:22:16] Joe: Yeah …
[00:22:16] OG: you know, along the way. So this is an emerging area for consumers to pay attention to.
[00:22:24] Joe: What do you think about tax loss harvesting?
[00:22:25] Joe: Because I think it can be important, but let me be clear here. I feel like these, uh, robo-advisors so many people use, like Betterment and Wealthfront, they emphasize their marketing around 20-something-year-olds, and I think they’re the wrong people to be marketing tax loss harvesting toward. They barely have an opportunity there, but somebody with half a million dollars invested, OG, might have a great opportunity for tax loss harvesting and isn’t thinking about it.
[00:22:52] OG: I think that if you have a purpose for it, it’s super helpful. If you’re piling up your losses w- with a strategy for a particular outcome, like say for example that you have an investment portfolio or, you know, a regular brokerage account, and you also have rental property, and you’re gonna sell your rental property in 10 years from now when you retire.
[00:23:11] OG: Well, undoubtedly you’re gonna pay capital gains taxes on that rental property. The capital gain taxes from your rental property could be offset with capital losses from your brokerage account if you manage it correctly, and thus having a more tax-advantaged sale at the time I think in the long run, it’s beneficial.
[00:23:31] OG: In the short run, it can seem a lot like, well, I’m just taking money out and putting it back in, and now y- yeah, lo- I s- I, I c- capitalized that loss, which was nice, but now I just started over with a lower basis because I just sold that thing and bought a new thing, and now that new thing, when it gets back to even money, now I pay taxes on the whole thing, not just the little bit that it would’ve been if I’d just let it sit there.
[00:23:53] OG: That’s why I think you gotta have a plan for the, for the losses that you’re capitalizing, not just, let me just pile these up for no particular reason. Uh, they can help for distributions. They can help for, you know, lots of different reasons. But have a plan for what you’re… you know, why you’re doing it.
[00:24:07] OG: Why are you adding complexity? This is the question. If I add this complexity, ’cause that’s another layer in the, in the math, if I add this complexity, what’s the payoff?
[00:24:18] Joe: The next area where I think we can add return has nothing to do with your portfolio at all. This is more around planning, and I think there’s some things that we can think about.
[00:24:28] Joe: Like, as an example, planning when you’re gonna take Social Security. Oh, gee, lots of discussions. Do I take it early? Do I take it late? Like, financial advisors say take it late. People tend to take it early because they think of retirement as a one-time event, and I’m just gonna get it all done at once, right?
[00:24:42] Joe: I’m gonna retire this year at 65, and I’m going to, at 65, take Social Security, so I don’t have to think about this again, and it’s on autopilot. But Social Security timing can really change your portfolio d- dynamic, can change the amount of money you have available.
[00:24:57] OG: If everyone just took a look at their investment accounts and said, “Okay, this is my bucket of money here,” but then also subsequently looked at their Social Security as a separate bucket of money, just like you go, “Well, I’ve got my IRA, and I’ve got my Roth, and I’ve got my brokerage account, and I’ve got my r- real estate portfolio.
[00:25:15] OG: I’ve also got my Social Security bucket.” Once you kinda layer in the facts along each one of these things, I think it becomes pretty obvious what most people should choose, with the asterisk of, but this is why you do planning for yourself and not just, you know, read what’s in Newsweek and decide what to do based on it.
[00:25:32] OG: Because at the end of the day, that bucket and Social Security has a guaranteed rate of return Your bucket in your, maybe your IRA and Roth don’t have a guaranteed rate of return, but could grow faster. You know, so this is the trade. The other thing that’s interesting about Social Security is you don’t have to make a decision at 65 or 66 or 63 when you retire.
[00:25:56] OG: You’re just saying, “I’m not making a decision today.” And that’s different than, “I’m making a decision.” At 70, you have to make the… I mean, there’s no decision to make at 70 if you make it that long. But what I would encourage people to do is, is as you’re thinking about your wi-withdrawal strategy, as you’re thinking about your cash flow in retirement, think about Social Security as a bucket that has a guaranteed return between 63 or 62 and 70, and you can map out what that guaranteed return is.
[00:26:22] OG: And then just think of it from the perspective of, “I’m not deciding not to take it. I’m not deciding to take it.” Don’t get the decision fatigue of like, “I have to make this decision today.” No. Just don’t make a decision, because you can make the decision tomorrow. The, the fact is you’re trying to give yourself the most opportunity to make the most decisions in the future.
[00:26:45] OG: Some people might call this, “Well, you’re just being lazy.” I, I don’t think so. I’m take… I’m saying, “I don’t have to make this decision today. I’m not going to.” You know, what am I gonna eat for dinner in six weeks from now? Don’t know, don’t care. Don’t have to make the decision today.
[00:26:59] Doug: So if I decide not to decide, I get to check something off my to-do list for the day, is what I’m hearing.
[00:27:05] Joe: Doug
[00:27:05] OG: likes where this
[00:27:06] Doug: is
[00:27:06] Joe: going already.
[00:27:07] OG: I like it. I like it. If, if, if you, if you are a checklist person, if you’ve got your, the premium subscription to Todoist- Oh, yeah. … and you have, uh, mental, um, uh, satisfaction, I’ll say it that way- Yeah, I
[00:27:19] Joe: just
[00:27:19] OG: love this … for making boxes checked off, then, then, yes, you should make a…
[00:27:22] OG: You should every day.
[00:27:23] Doug: I’m the kind of person that if I do something that’s not on the checklist, I write it on the checklist just so that I can check it off.
[00:27:28] Joe: Right, Doug’s to-do list is 10 things. Do not make the bed. Do not shower. Do, do not… He’s like, “Damn, I just woke up. I, I got 10 things knocked off my list.”
[00:27:39] Doug: I’m
[00:27:39] OG: already- Yeah … I’m already successful for the day.
[00:27:41] Doug: I can make decisions without any fatigue.
[00:27:43] OG: It’s like I’m Tony Robbins.
[00:27:45] Joe: Looking at a happy retirement, which f- for those of you that have, uh, seen me speak, has been on my mind a lot lately, and, uh, and I love talking about this at events and in my keynote talks.
[00:27:57] Joe: We see a lot of people who have studied personal finance, like Christine Benz over at Morningstar, talk about retirement comes to people in different ways, and we often don’t get to choose, OG. But if you do get to choose, not going suddenly from mattering in the world of work to suddenly having to figure out where you do matter is a huge mistake if you can avoid it.
[00:28:21] Joe: If you can’t avoid it, you can’t avoid it, right? We, we all… It comes differently for all of us. But if you can, trying to find a way to maybe go part-time first, then maybe quarter time, and working your way, has two different, uh, two different things that happen. Number one, you, you generally tend to be happier and the transition is easier, ’cause you give yourself time to kind of, you know, put your feet in the pool before you jump in and figure out where these other areas of your life are going to build purpose and excitement versus the huge amount of time that you had working hours.
[00:28:56] Joe: But then second, also, that delaying retirement partially means more income in your portfolio. So when it comes to happiness and also to return, going slowly into retirement can yield huge results.
[00:29:11] OG: I will, uh, let you know ’cause I’m not anywhere near that, so I will take your word for it. Or what are you doing, going slowly into retirement, Joe?
[00:29:17] OG: Is this, is this- Well, you know- … foreshadowing?
[00:29:20] Joe: W- w- well, for me-
[00:29:20] OG: Every day is retirement for you ’cause you get to hang out with us.
[00:29:23] Joe: Yeah, I f- I actually… The concept of retirement for me is w- why would I do anything different to what I do right now? Yeah. I feel like Paul Merriman. Paul Merriman’s like 82.
[00:29:32] OG: Well, what, what would I do differently, right? Yeah. Like, I already do what I want. I already hang out with the people that I want.
[00:29:36] Joe: There is no such thing.
[00:29:37] OG: I kind of feel the same way.
[00:29:38] Joe: Luckily for me, in hindsight, I was able to make that, with a lot of help, I was able to make that decision at 40 years old.
[00:29:44] Joe: Most people don’t have that ability. But for me, that was big. But I do see this a lot. You know, our friend Bill Yao over at Catching Up to Fi. Mm-hmm. Bill just negotiated a raise with the group that he works with and a cut in his hours. So he’s gonna make more per hour, and he’s gonna work less hours as he starts transitioning into retirement.
[00:30:03] Joe: That’s the best of both worlds if you can do that.
[00:30:06] OG: Yeah.
[00:30:07] Joe: And the last thing I wanna bring up in this area, OG, before we move on, is that there’s a lot of, uh, pontification by financial pundits and people online, in their Sub Stack, in their blog post, and on their websites about sequence of return risk and how horrible this can be.
[00:30:23] Joe: Well, the conclusion that I see is that if you make your spending every single dollar that you have available and try to notch up the amount of spending you can make every year, you’re gonna have a miserable existence because every single thing that could go wrong, you know, that news cycle that people are online following, you become the angry, frustrated person that’s waiting for the other shoe to drop the entire time that they are retired.
[00:30:51] Joe: So looking at spending a lot of time focused on what is my, quote, “safe withdrawal rate” and trying to take every penny increases sequence of return risk, which makes a miserable retirement. I think if you wanna have a better financial outcome and not have more investment risk, let’s move away from that jagged edge of taking every dollar.
[00:31:15] Joe: Have more
[00:31:15] OG: money. Is that your advice?
[00:31:18] Joe: Well,
[00:31:18] Doug: just figure it out.
[00:31:19] OG: Be more rich.
[00:31:20] Joe: No. Actually, you can go the opposite w- I mean, there are two things, right? Be more rich is number one. Yeah. But number two is if I can spend $5,000 a month, let’s just make the number 4,500. Let’s find a way to back away from that jagged edge.
[00:31:34] OG: Yeah. The other thing I would point out about the sequence of returns risk, God, this is another phrase that I’m starting to hate more and more.
[00:31:43] Joe: I, I hate it so much.
[00:31:44] OG: I’ll just call it being unlucky. That’s gonna be my new phrase, the being unlucky time. The fact is, is, like, that, that period of time only exists for a short while.
[00:31:54] OG: To your point, if you’ve given yourself a little bit of margin of safety, because if you have the million-dollar portfolio, the 4% rule says 40K. If your money can double, which it should double faster than inflation doubles historically, right? So inflation’s gonna double 20, 25-ish years. That’s kind of the pace of doubling for inflation.
[00:32:15] OG: So if your spend is 40, to get to 80 might take a quarter century or maybe 20 years, but it’s gonna be a while. The doubling of your money should happen in 10, 7, 12, somewhere in there. So maybe you have two doubles of your portfolio in the time that you’re spending doubles once. You follow? So the first double of your portfolio, the million to two, if your spending has gone from 40K to 45K, there is no more sequence of withdrawals risk, right?
[00:32:47] OG: You’re, you’re good. You’re done because you have so much margin of safety. And I think what you’re talking about, Joe, is if you’re spending 50,000 on your, on your million because some obscure Perplexity research AI tool said that the new withdrawal rate’s 5% if you get lucky, and so you just kind of get your lips right above water at 50K, and, and now the portfolio dips a little bit, to your point, you’re gonna be all freaking out the whole time because you’re right on the edge.
[00:33:20] OG: And the other piece of that is, if you’re trying to manage it, now you have higher percentage of your portfolio in fixed assets to avoid the sequence of withdrawals risk, which then, in fact, makes your portfolio as a whole grow slower than it would’ve if you’d have just had a little bit smaller
[00:33:38] Joe: withdrawal
[00:33:39] OG: need.
[00:33:39] Joe: You’re miserable. You’re miserable, and you have less money.
[00:33:41] OG: And it’s growing slower, so you’re never- … you’re not getting out of it fast enough to, like, you know, put your whole head above water instead of your lips. So it’s like this big psych spiral of, of iness. I don’t know.
[00:33:55] Joe: What’s…
[00:33:59] Joe: There’s several other ways that you can make this happen. I thought we’d put a few more of these into a lightning round, everybody. So OG, I’m gonna ask you, is this more return or more trouble? Ready? Here we go. More return or more trouble, concentrated stock positions?
[00:34:18] Joe: Trouble. More leverage?
[00:34:24] Joe: Lightning.
[00:34:24] Doug: Lightning. What part don’t you get?
[00:34:28] OG: I mean, I like it, but, um… Trouble.
[00:34:34] Joe: Crypto yield products.
[00:34:36] OG: Okay, that’s, this, these are just words you made up.
[00:34:39] Joe: There are. Those products, you can, you can, you can put your crypto… My brother-in-law uses these. You put it in a hot wallet, which is a medical condition and a place where you can put your crypto, and-
[00:34:51] OG: Hotbox?
[00:34:54] Joe: Ooh, Shiffman. Mm-hmm. And they give you this money. So you’re saying more trouble?
[00:34:59] OG: Um, yeah, sure. Okay.
[00:35:01] Joe: Options trading.
[00:35:04] OG: I mean, trouble. Are we getting anything here that’s worth it now? Yeah,
[00:35:07] Joe: rebalancing.
[00:35:09] OG: Okay, that one’s worth it. I don’t remember the other one ’cause I’ve said trouble so many times. Or
[00:35:12] Joe: return.
[00:35:14] OG: Return, yes.
[00:35:15] Joe: Yes. Tax efficiency.
[00:35:17] OG: Yeah, return.
[00:35:20] Joe: Checking your portfolio every hour.
[00:35:23] OG: Return.
[00:35:24] Joe: There we go, everybody.
[00:35:26] Doug: Wait, what?
[00:35:29] Joe: Just gonna see if we catch that, and I almost didn’t. I was already rolling on the end. Okay, great
[00:35:34] Doug: job, OG. And next.
[00:35:35] Joe: Nice work. Wait, wait, what? All right, we will link to all these on our show notes page at stackingbenjamins.com if you wanna add more return to your portfolio.
[00:35:43] Joe: Of course, we have another step in this process coming up right after the break, OG and Anna and their segment of the Financial Basics. We also have all the past Financial Basics and the guides associated with those at our YouTube page, youtube.com/stackingbenjamins. All right. That means, Doug, it’s time for your trivia question, and you’re gonna riddle us about an entrepreneur who, if he were alive, would be celebrating a birthday today
[00:36:17] Doug: Hey there, Stackers. I’m Joe’s mom’s neighbor, Doug, and what a day. First, it’s Monday, the day I get rolling on all my goals, and then second, there’s the OG and Ana segment coming up, which I can’t get enough of. But best of all, I get to share another dose of incredible trivia that you can share with all of your friends.
[00:36:37] Doug: But how about this one? An icon of industry was born on today’s date back in 1831, named Clarence Studebaker. Early in his career, he built the nation’s biggest fleet of horse-drawn carriages, but that’s not what he’s known for. Later, after Clarence’s death, the company he formed became the Studebaker Corporation, which made what?
[00:37:00] Doug: I’ll be back right after I go get the Fiji water for OG and Ana’s segment. This is gonna be great
[00:37:15] Doug: Stackers, I’m water getter and student baker, Joe’s mom’s neighbor, Doug. Clarence Studebaker… See what I did there? You made the, made the connection? Yeah. Clarence Studebaker learned how to be a blacksmith in his father’s shop when he was young, and he worked in a threshing factory. Learning both metalworking and how to operate a factory, he and his brother built the biggest supplier of wagons to the US Army at the time.
[00:37:44] Doug: Later, after Studebaker had passed away and the wagon industry was rolling to a stop, the company made the transition, staying in transportation, to creating Studebaker automobiles. Did you get it right? Of course you did. And even if you didn’t, your friends aren’t gonna know. See if they know the answer, but do that after you hear this segment from OG and Ana
[00:38:10] OG: Okay, everybody, episode four of season two, tax efficient withdrawals. Uh, in season one we built the tax control triangle, three buckets, pre-tax brokerage, Roth. The whole point was to spread your money across these different tax buckets so that they have different tax treatments so that you have options in retirement.
[00:38:28] OG: Today we’re gonna talk about the question that a lot of people want answered, “All right, cool, so I got all these buckets of money. Now how do I take the money out?”
[00:38:35] Anna: Yeah, so we’re gonna think about this in the form of a distribution ladder. So we’re gonna look at the different buckets that you have, how those are gonna help manage your taxable income, keeping you in the right tax bracket, and how those are gonna affect different decisions too, or different issues that can come up.
[00:38:53] Anna: Some things we’ll think about is the tax triangle, like you said. We’ll look into provisional income, social security taxation, how your income impacts IRMAA. Mm-hmm. Great Aunt IRMAA.
[00:39:04] OG: Aunt IRMAA, yep.
[00:39:05] Anna: And we’ll talk about Roth conversions too.
[00:39:07] OG: Yes.
[00:39:08] Anna: Sweet. Like, do we need to do these? How much are we doing them for?
[00:39:10] Anna: All that.
[00:39:11] OG: Yes, all of it right now. All of it. All right. So before we talk about withdrawals we gotta know what we… where, kinda where we are. So as we think about this tax triangle, what’s a healthy tax triangle look like?
[00:39:23] Anna: So a healthy tax triangle would be a combination of having that pre-tax bucket, money that you have not been taxed on yet, so it’s gonna, when it comes out it’s tax-free.
[00:39:35] Anna: We’re gonna have a bucket of brokerage assets where it has been previously taxed coming out, and the only taxes then are gonna be capital gains. And then the last bucket where it’s been taxed before, and it’s gonna come out tax-free, which is your Roth bucket typically.
[00:39:52] OG: And all of this can be found in our season one guidebook.
[00:39:55] OG: Mm-hmm. It’s in episode six. So if you haven’t seen that section or listened to that, uh, segment you can go back and find it. Um, and, uh, and just kinda pencil out kinda where you’re at right now.
[00:40:05] Anna: Yeah. So you kinda want these fully balanced if possible. Obviously depending on where you are in your financial journey, like, that’s possible or not possible.
[00:40:14] Anna: Mm-hmm.
[00:40:15] OG: And this can affect taxation on a bunch of stuff. You’ve mentioned before social security and taxes on social security. I, I feel like a lot of people don’t really realize that your social security is taxed. It kinda seems a little screwy, right? Like, so my social security is funded with my taxes, and then I get taxed on my taxes.
[00:40:34] OG: I mean, it sounds like a good gig if you can get it, if you’re the government, I guess.
[00:40:37] Anna: Yeah, it is kinda crazy. It’s like the same as, like, unemployment income. I have the same- I
[00:40:41] OG: have the same feeling about that.
[00:40:42] Anna: The big piece here is that it can be taxed at different amounts. Mm-hmm. Like, different parts of your social security, it can be a lower amount if you control your other income sources.
[00:40:51] Anna: It can be a higher amount if, if that gets out of control. So it’s, like, figuring out how do we optimize this, and control your situation so that your social security is taxed at the least possible amount.
[00:41:04] OG: So I should just have all my money in a Roth then because none of that counts.
[00:41:08] Anna: Yeah, 100%. Yep.
[00:41:09] OG: Yeah. I mean, if we could all go back in time and only put money in our Roth, that would be fantastic.
[00:41:14] OG: Mm-hmm. But really it’s about, you know, balancing, like we said before, so that you’ve got options along the way. The best scenario is deferring taxes in your 401, for example, pre-tax when you’re a high tax bracket, paying taxes on that at a low tax bracket when you convert it to a Roth potentially, and you do all this in between the time that you retire and when RMDs kick off or when Social Security starts.
[00:41:37] OG: And Social Security can start between 62 and 70 for most people. You can see how complicated this can start getting as you start layering in these different decisions along the way. And if you’re not paying attention to it, one of the areas that I think catches a lot of people by surprise is this whole thing called IRMAA This is our fr- great friend Aunt IRMAA, I-R Mm-hmm M-M-A.
[00:41:59] Anna: She’s a sneaky girl.
[00:42:01] OG: What the heck is IRMAA- … and why do I give a crap, and, you know, what does it have to do with withdrawals?
[00:42:08] Anna: It’s basically an additional premium on your Medicare premiums if your income gets above a certain level. So, um, you’re gonna take Medicare at 65. This can start, IRMAA can start looking back at your income at age 63.
[00:42:26] Anna: So if you’re like, “Oh, cool. I’m retired. I’m gonna do Roth conversions. I’m gonna r- uh, convert a bunch of stuff over.” Well, and you’re not thinking about Medicare at that point because you’re 63. You’re still using Marketplace or whatever, and you’re two years away. This can kick you in the butt when you’re 65, and now your Medicare premiums go from, like, $300 a month to $800 a month.
[00:42:47] OG: Yeah.
[00:42:47] Anna: It’s important to consider- Per person … that. Yeah, per person. Could be per
[00:42:50] OG: person, yeah.
[00:42:51] Anna: Yeah, or, or higher than that too. But it’s important to consider how that’s going to be a piece of this puzzle when you’re doing distributions in retirement or doing Roth conversions, how those can h- how those can impact then your, your Medicare premiums.
[00:43:09] OG: All right. So transitioning to Roth conversions then, ’cause you kind of talked a little bit about that. Like, obviously we got to be thinking through tax brackets, Social Security taxation, IRMAA issues, RMD things. Is the juice worth the squeeze here, or, are we just kind of chasing ourselves, you know, in a circle?
[00:43:29] Anna: For certain people it is, and that’s, like, a big decision to figure out, like, who is the right candidate for this. It comes down to, like, what is your total income for the year? This is why we don’t do Roth conversions until November typically. Mm-hmm. We’re not gonna know what your year looks like. Hey, if we want to do Roth conversions in March, but then you tell us in August that you’re gonna buy a house and we need to take money out or we need to move stuff around, like, well, we just totally screwed up, you know, something that could’ve been really helpful for you.
[00:43:59] Anna: So it’s important for us to do this at the end of the year when we know what your total income is. We’re gonna keep you below IRMAA increases. We’re gonna keep you below a certain tax bracket. Like, there’s a lot that goes into Roth conversions. It’s not just, you know, picking a number out of the sky, and that’s what we’re gonna convert.
[00:44:17] OG: And all of this kinda ties together. In the workbook you’ll find that we’ve got three, uh, years modeled out for y- well, three years for you to model out in terms of your withdrawal, uh, sequence table, year one, two, three, kinda mapping out how much should come from each bucket. This is not set in stone.
[00:44:34] OG: This is not, you know, a contract, you know, for life. It’s really just kind of giving you an opportunity to jot down your thoughts here of where do we think we’re gonna be in terms of these next couple years of withdrawals, you know, if you’re at that stage of your life. And, and this is kind of where that whole tax triangle pays off.
[00:44:52] OG: You know, if you’re 30 right now and you’re going, “I don’t care what, I don’t know what we’re listening to this for. I- I got 30 years before I have to take any withdrawals,” well, this is the decision tree that you can make when you’re in your 30s and 40s of like, where am I saving money so that I’ve got the flexibility when I’m 50 or when I’m 55 or when I’m 60 and I r- and I’m financially independent and I retire, where’s my cash flow gonna come from?
[00:45:13] Anna: Mm-hmm.
[00:45:14] OG: All of financial planning, I think, is really just built around how do I put myself in the best possible scenario to have future options available to me.
[00:45:23] Anna: Yeah.
[00:45:24] OG: Is make as many decisions that give me as many decisions in the future, you know? Mm-hmm. And some people think that’s a little silly because, you know, you’re kinda never-ending decision tree, but it’s flexibility.
[00:45:33] OG: We’re solving for flexibility ’cause if there’s one thing that I think that I’ve learned over the years, nobody can predict the future. Mm-hmm. I can’t tell you what the stock market’s gonna do tomorrow. I can’t tell you what tax rates are gonna be tomorrow. I can’t tell you who’s gonna be president tomorrow.
[00:45:47] OG: None of this stuff is predictable. We can have guides, we can have an idea, but the idea is we wanna make sure that at the end of the year we can visit from a tax standpoint, let’s say, and say, “Hey, this is what we think 2027’s gonna look like,” or, “Here’s what 2026 has shaped up to be. What changes can we execute on in these last, you know, 60 days of the year?”
[00:46:09] Anna: Mm-hmm.
[00:46:10] OG: Homework for today then, Anna, is what?
[00:46:14] Anna: First, pull that tax triangle snapshot from season one, so that we talked about, you know, those different buckets. Let’s start with that. Like, if you’re still in the financial journey where you’re getting to the point of withdrawals, you’re not there right now, let’s focus on, like, how can we control this right now?
[00:46:31] Anna: How can we make this more balanced? The other thing that you can do is if you are within 10 years of retirement, you think you’re somewhere around there, start looking into Roth conversion math. It’s gonna creep up on you. You’re gonna wanna kinda have a little bit of a handle on this, and you’re gonna wanna calculate, like, where is the gap that I can do Roth conversions?
[00:46:52] Anna: I’m, you know, at this, at this piece of the, the tax bracket. I have X amount of dollars that I could convert to tap out on this, this bracket. How much could I do? So that’s kinda what you wanna start calculating.
[00:47:08] OG: Kinda start modeling that out-
[00:47:10] Anna: Yeah … before
[00:47:10] OG: you get there, because yeah, you’re right. At the end of the day, this stuff just shows up super fast.
[00:47:15] OG: You know, you think 10 years, but for those of us with- 19-year-olds. They, they, they were nine just a second ago. Yeah. So 10 years goes by pretty snappy. Um, if you have no idea what we’re talking about in terms of the guidebook, uh, it’s because you don’t have it, because you didn’t get one, and you’re not cool, and only the cool kids get guidebooks.
[00:47:37] OG: So if you wanna be a cool kid, you’re gonna go to stackingbenjamins.com/basicsguide, and you put your name and email in. We’ll send you an email with both of them, season one and season two. You can go to YouTube and follow along on season one if you’re a little behind, and then catch up on season two as they get posted there.
[00:47:55] OG: They’re in the show every Monday, have been for the last, I dunno, 12 or 13 weeks, something like that. Golly, have we been doing this this long? But that’s where we have all the stuff, all the homework that you can fill in and kinda follow along, so stackingbenjamins.com/basicsguide. Next week we’re gonna talk about stock options, RSUs, ESPP, incentive options, non-qualified options.
[00:48:15] OG: Well, we’re probably gonna basically scratch the surface on that, ’cause Joe only gives us, like, this much time to cover that much stuff. But, um, uh, it’ll be a fun topic for sure, so tune in next week for those. And, uh, I guess back to you, Joe, in the studio or basement, wherever you happen to be. Hi, I’m David Stein.
[00:48:35] OG: When I’m not talking to other people
[00:48:37] Joe: about money on Money for the Rest of Us, I’m stacking Benjamins. Let’s mosey out on the back porch, Doug, because there’s something that before we get too into just what’s going on in the community, something all our community members wanna be well aware of.
[00:48:51] Doug: Yeah. I mean, I felt, as one would, I felt incredibly honored when I got a friend request on Facebook, ’cause that, that doesn’t happen that often to me, and I was really excited when I saw one from the Stacking Benjamins inner circle.
[00:49:04] Doug: And then it dawned on me, hold on, I am the core of the inner circle. Like, if anybody’s already in the inner circle of Stacking Benjamins basement, it’s this guy. So how am I getting an invite to b- join the inner circle? And then I started to smell a dead fish.
[00:49:20] Joe: Oh.
[00:49:21] Doug: Right?
[00:49:21] Joe: It’s so frustrating.
[00:49:22] Doug: It’s a scammy, isn’t it?
[00:49:23] Joe: It’s so frustrating. The inner circle is the basement, the BAD groups. If you’re new here, you’re like, “What are BAD groups?” Benjamins After Dark groups. I always forget that we have to not use the acronym, ’cause people… Somebody said that to me the other day. I was like, “Oh, we have a BAD group meeting in, in, uh, in, in Boston coming up, and I’m trying to make sure that, uh, I’m, I’m able to attend.”
[00:49:46] Joe: And, and, and somebody I knew is like, “What’s a BAD group?” Like, oh
[00:49:51] Doug: Oops
[00:49:51] Joe: Yeah.
[00:49:52] Doug: But this inner circle thing, should I be honored, or is this like the, my home warranty is expired and it looks official, but it’s not really?
[00:50:00] Joe: Tell them, uh, tell them no, stackers. Tell them no. We definitely want to, uh, stay away from scammy stuff with people that, uh, that we don’t know.
[00:50:10] Joe: There is no such thing called the Stacking Benjamins inner circle.
[00:50:13] Doug: Well, I mean, there, there is, but if you get the invite, it’s coming from me. If you get the invite to join- … the inner circle, there’s only one guy that’s coming from.
[00:50:22] Joe: I mean, look at the way we name stuff, the BAD groups, the basement. The- Yeah.
[00:50:28] Joe: Yeah
[00:50:28] Doug: We are anything but elitist.
[00:50:30] Joe: Have, have none of that
[00:50:32] Doug: Hey, can we transition to talk about a great post that I saw, uh, a few days back? Well, now it’s probably, uh, you know, 10 days back-ish, but about car purchases. Can I, can I dive into that for a minute, Joe?
[00:50:44] Joe: Uh, sure, yeah.
[00:50:45] Doug: So, uh, this was by Anonymous Member.
[00:50:48] Doug: We have a f- a couple of those, but it’s, it’s a legit question that I think a lot of people are interested in, so if you didn’t see this post, uh- Well, it’s a comment,
[00:50:55] Joe: right? Listen up. It’s a comment.
[00:50:57] Doug: Well, I guess you’re right. It’s a- I don’t
[00:50:58] Joe: think there’s a question.
[00:51:00] Doug: You’re right.
[00:51:01] Joe: It’s somebody that knows the auto industry pretty well based
[00:51:04] Doug: on this post.
[00:51:05] Doug: They at least know the retail side of the auto industry. Yeah. Yeah, for sure. So this was a tip that Anonymous put out there, and that’s where all the best tips come from, uh, are from the anonymous people. But, uh, they said, “A thought about car purchases and tips mentioned by Joe and Beth in, uh, episode 1841.
[00:51:22] Doug: If you are buying a new vehicle, the time of the month matters. Dealers dealers will often dig a bit deeper at the end of the month. I’ve done this on several vehicles and saved big. We buy new and run it to the ground, Subarus, Outbacks, uh, Ford F-150s, et cetera. I always check the KBB, Edmunds and Consumer Report MSRP and sales price ranges for the make and model we’re looking to purchase in the exact trim and color.
[00:51:48] Doug: Then they start calling and emailing the sales managers at local dealers within a 60 to 90-mile radius around the 20th of the month. It helps to stay firm that you want the lowest out-the-door price, and you want it detailed in writing.” You can do all of this, this is me adding in my two cents, you can do all of this without ever leaving your house.
[00:52:08] Doug: Like, dealers now very much will negotiate, you know, based on email and, and over the phone. They would never- But- … used to, but now they’re starting to.
[00:52:17] Joe: It, uh, th- this was the key to the last, uh, three, last two, sorry, car purchases I negotiated after, uh, we had a, um, discussion with Phil, uh, uh, Rosen from Edmunds- Okay
[00:52:30] Joe: on the show. Yeah, do it all via text and email.
[00:52:33] Doug: Yeah. Another great tip, uh, that Anonymous puts in here is make sure you ask if that minimum price, the out-the-door price that they’re offering you, uh, includes a finance incentive, ’cause a lot of times that price is only gonna be valid if you use their financing and m-
[00:52:49] Joe: But, but and their take on this was great, though.
[00:52:51] Joe: Right. Go ahead and use the financing even though it might suck.
[00:52:54] Doug: And here we go. “And what is the minimum finance amount to get the incentive? I have financed $8,000 to save 1,000,” and you pay it off on the very first statement, which by the way, you gotta find out if you can do that without a penalty because there are some of those finance, uh, contracts that you can enter into with automotive, uh, con- Well, with dealerships and you’re not allowed to pay it off
[00:53:17] Joe: super early And the cool thing here is to think about the dealer’s motivation because in this case, Doug, the dealer doesn’t care when you pay it off.
[00:53:25] Joe: Right. You can tell the dealer what you’re up to. The dealer does not care. This is a third party. The financing arm is a whole different party, and they’re giving the dealership, which is general- usually independently owned, they’re giving them an incentive to get the financing in place. So if there is an early payoff- Yeah
[00:53:42] Joe: you, y- you can go ahead and ask the person and say, “Hey, I, you know, I wanna pay this off as soon as possible. When’s the first, first moment I can do that?”
[00:53:49] Doug: I think you’re mostly right. They’re, depending on how they are incented by the finance arm, it could be Chrysler Financial or it could be a completely third party, but depending on how they’re incented, they may not be super forthright and open with you because they want that kickback to them for signing you up as a finance person.
[00:54:07] Doug: But I think generally you’re okay just being like you just said, being open and honest. So, uh, Anonymous is saying, “So even if you have other financing and you were gonna put a chunk down, it may help to play the game. By pitting dealer against dealer via email and phone and being willing to jump through a few hoops at the end of the month has sa- helped me save thousands.
[00:54:27] Doug: Some dealers will not play, but I’ve alwa- I have always found one that will because they wanna hit their sales numbers for their brand incentive at the end of the month.” So this is why you start this process around the 20th of the month. That gives you some, you know, 10 days-ish to nail down the deal.
[00:54:43] Doug: So, uh, yeah, I mean, I just, I thi- I love this post. This is the community helping the community, and, uh, I wanted to put a spotlight on this.
[00:54:51] Joe: Fantastic post. I would love it if we’ve got anybody in the car dealership industry or anybody who’s worked there before to talk about those incentives, ’cause my understanding has been that they get incentive for you to take out the loan.
[00:55:03] Joe: Doug, I never thought about the fact that, you know, hey, maybe they go, “Hey, it’s gotta stay on the books for three months-
[00:55:08] Doug: Yes …
[00:55:08] Joe: or gotta stay on the book for six months,” or whatever it is.
[00:55:10] Doug: Yep, ’cause that’s how the financing arms, the only way the financing arm is making the money in most cases- Sure … or the, you know, they’ve got a certain number of months to hit, basically, their, uh, to turn a profitable.
[00:55:20] Joe: Would love to know that. Either write to me, joe@stackingbenjamins.com, or, uh, do a post in the basement for our Facebook. The basement is the inner circle. There’s no other there is no such thing. If you get invited to the inner circle, tell them no and report it, ’cause that’s not us.
[00:55:34] Doug: It’ll go on their permanent record.
[00:55:36] Doug: Yes. Like your parents threatened
[00:55:37] Joe: you with. This goes on your permanent record.
[00:55:39] Doug: Right.
[00:55:40] Joe: All right. Well, we do have a permanent record at the end of every show, and that is what are the three things you should have taken away from this particular episode. Uh, Doug, what would be on our top three here?
[00:55:50] Doug: Well, Joe, first, take some advice from our featured conversation.
[00:55:54] Doug: Looking to add returns to your portfolio? Stop thinking about esoteric investments and start thinking about systems. Easy steps like an investment policy statement and tax strategies can add tens or hundreds of thousands to your end results. Second, take advice from Anna and OG. By focusing on your withdrawal strategy, your money is spent more orderly, which means more living for you without any more work.
[00:56:21] Doug: I love less work. Putting that on my to-do list. Do, period, less, period, work, period. Wow, another task accomplished. I’m rolling. But the big lesson Don’t ask Joe’s mom about sequence of returns if you haven’t trimmed her shrubs over the weekend. She’ll tell you that first, you don’t trim the shrubs means you risk not being invited to Monday night’s cookout, and third, then not having the opportunity for the cake that’s served afterwards.
[00:56:49] Doug: That’s horrible sequence of return risk. So you know what I’m doing right now? Grabbing the shears. This show is the property of SP 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.
[00:57:15] 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
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