Were so worried about the Benjamins, the job, the success ladder, and getting “the things” that sometimes we forget to live. Guy Kawasaki was in the room when the iconic Apple “Think Different” campaign was created. He believes that “Think Different” isn’t enough today. In his words, “You can be different and still suck.” It’s time for a higher target, and that target is “remarkable.” But how do you get there? We’ll detail everything from the findings of Carol Dweck to the work of Jane Goodall to parse what “remarkable” truly means. In Guy Kawasaki’s world, it means surfing. It means questioning your beliefs. It means learning how to ask better questions.
Before that we cover a disturbing headline: FinTech company Chime and company-with-a-reputation-of-dishonesty Robinhood are better regarded than products which compete against them offered by big names like Vanguard and Fidelity. Why are younger investors and savers trusting these names over the heavyweights? That’s good news, right? Maybe. We’ll share what we think this means and also what you should do about it when thinking about where to park your hard-won dollars.
Of course, we’ll also take a question from a Stacker in need AND share Doug’s trivia question! On the back porch, we also announce some new meetup dates. Come out and join us!
FULL SHOW NOTES: https://www.stackingbenjamins.com/how-to-live-your-best-life-best-self-guy-kawasaki-1486
Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.stackingbenjamins.com/201
Enjoy!
Our Headlines
Guy Kawasaki
Big thanks to Guy Kawasaki for joining us today. To learn more about Guy, visit Guy Kawasaki. Grab yourself a copy of the book Think Remarkable: 9 Paths to Transform Your Life and Make a Difference.
Doug’s Trivia
- What remarkable stance did Muhammad Ali take that put his career in jeopardy?
Better call Saul…Sehy & OG
- Stacker Guillermo calls in with questions about what are the differences between a “Backdoor Roth” vs. 401(k) to Roth IRA rollover conversion.
Have a question for the show?
Want more than just the show notes? How about our newsletter with STACKS of related, deeper links?
- Check out The 201, our email that comes with every Monday and Wednesday episode, PLUS a list of more than 19 of the top money lessons Joe’s learned over his own life about money. From credit to cash reserves, and insurance to investing, we’ll tackle all of these. Head to StackingBenjamins.com/the201 to sign up (it’s free and we will never give away your email to others).
Other Mentions
- Guy Kawasaki’s Remarkable People (podcast).
Join Us Friday!
Tune in on Friday when we’ll dive deep into one famous writer’s thoughts about money with the Bitches Get Riches ladies…Kitty and Piggy.
Written by: Kevin Bailey
Miss our last show? Listen here: Start Your Side Hustle/New Business The Right Way (SB1485).
Episode transcript
He got me invested in some kind of root
company
and so then I got a call from him saying, we don’t have to worry about money no more. And I said,
that’s good. One
less thing.
Live from Joe’s mom’s basement. It’s the Stacking Benjamin Show.
I’m Joe’s mom’s neighbor, Duggan. Today you’ll learn how to live your best life as your best self with author and entrepreneur, guy Kawasaki. In today’s headline, FinTech firms are reaching more people. This is good, right? That they’re beating banks. We’ll discuss what could possibly go wrong. Plus we’ll hear why a stacker said I’d better call Saul.
See hi in og, and finally I’ll share some thoughtful trivia. And now two guys who are remarkably good at personal finance. It’s Joe and oh Jean
remarkably. Hey there. Welcome to a remarkable episode of the Stack Benjamin Show. I am Joe Sal Sea. Hi. And I’m joined every Monday, Wednesday, Friday with the man across the table from you.
Right now. It’s Mr. og. How are you brother?
Remarkable. Have you seen those remarkable tablets? Do you know what I’m talking about? They’re like, uh, the little pencil that it is supposed to write, like
pencil. We actually, one year we looked into, uh, maybe giving those as gifts. Remember?
No, but I would approve you buying me that gift, so I will
take it.
I just remember thinking cost benefit. Oh yeah,
we’re a podcast. The accounting department approves.
We’re a podcast. Take two. Aspirin and call in the morning. Maybe next year. What were you thinking there? What is it you especially like about the remarkable tablet? Oh,
well obviously it has to
Wait a minute.
I didn’t know about the french toast part. It makes
french toast. Well, it’s kind of like french toast. First you drizzle syrup all over it.
Thank God it comes with a warranty.
Just don’t dunk it in the syrup. You Oh, oh
yeah. That’s, uh, user error right there if you do. Guy Kawasaki talking about living a remarkable life.
You know, we’re not about just Stacking more Benjamins, we’re about making them remarkable. Benjamins and Guy Kawasaki’s here to talk about that. But before that, you know what fans, we are a FinTech. Let’s, uh, dive in there first with today’s headline.
Hello darlings. And now it’s time for your favorite part of the show, our Stacking Benjamins headlines.
Our headline today comes to us from Investment news. This is written by EM Halas. A sobering report shows increasing reach of FinTech over. Traditional firms. At first I’m like, yeah, okay. Bank of America getting their butt kicked by these to be sober. Yeah, that’s right. Bank of America getting their butt kicked by these little guys.
So I’m like, what could go wrong there? And Emile writes Across America, people are twice as likely to know about FinTech firms like Robinhood and Chime than they are to be aware of the latest services from well established companies like JP Morgan, Goldman Sachs, fidelity, and Vanguard. While 40% of US households have heard of Robinhood and 39% of Chime, only 19% were familiar with JT Morgan Wealth Plan, 15% with Goldman Sachs’s market business, 14% with fidelity go 13% with Vanguard Personal Advisor Services.
According to data published Wednesday by consumer resource firm hearts and wallets, the findings, hearts and wallets, CEO Laura Vera said are quote, sobering and I would tend to agree there, og, well, Vanguard, fidelity, Goldman Sachs, JP Morgan, not your buddies, not your friends. The fact that. Companies like Robinhood have gotten so good.
So good at knowing the inner workings of your phone and how to reach you via your phone. And we’re so addicted to our phone that we know Robinhood, and for some of us, we trust them more than we trust a firm like Charles Schwab. Yeah.
But this seems a little apples and oranges here. You’re, it sounded like they’re asking, Hey, do you know this brand Robinhood?
Sure. Versus this sub-brand. Fidelity go. I’m almost betting that most people know Fidelity more than they know Robinhood. There’s more people that recognize Fidelity or Goldman Sachs or JP Morgan Chase, and when you get niched down into, but did you know that they offered this one little product that they’re trying to brand?
Well, no. I mean, I can’t keep track of all that either, but this feels a little apples and orangey. I mean, I, I gotta imagine most people are. More familiar with Schwab and Vanguard than
Robin. If I look at where the growth is as an organization, it’s gonna be through your app business, right? It’s gonna be through the, the, the way that we’re all communicating now.
We can jump on our phone, we open up the thing. If I’m gonna be with Goldman Sachs, well then Marcus is something that I’ll know about. If I’m gonna be, uh, with Fidelity, the growth area should be probably go, you know, we look at online Bank Chime, they talk about, I mean, if I don’t Chime is a company, people know more than Bank of America’s online product.
Again, you’re, I I think you’re talking about like a sub-brand niche thing. I mean, the company, Goldman Sachs has way more brand cash than Chime. But if you’re, if you’re trying to get into Goldman Sachs, that’s just, that’s, I mean, you’re not, you don’t show up via, you know, an app. You have to show up up with $10
million.
Well, sure. But I’d be interested to see what, what percentage of, uh, younger people. You know, just know Goldman Sachs. Let, let’s take as an example versus the, the collection of Chime plus Robinhood. Like, I would bet that if I’m 30, probably Chime Plus Robinhood resonates with me way more the Goldman Sachs and maybe, well of course your does your point.
It’s,
it’s outta your, it’s outta your market. I mean, it’s like going, Hey, did you know that there’s a gated community over there that has $30 million houses in it? It’s like that. Let’s take the other side that
let’s take Fidelity Go, or So
Fidelity versus Chime. I guarantee people, more people know Fidelity.
Fidelity Go is a product. It’s their, it’s their, I mean, I don’t know how to say it’s a service offering underneath their overall brand of Fidelity pointed at a specific decision. Doesn’t it
feel like, I don’t know if I’m, because I see the marketing for all these companies. If I am 27 years old and I’m looking at establishing my first relationship with a company, and you’ve seen how sticky these relationships are.
The reason why companies wanna get your direct deposit Yeah. Is because once they get your direct deposit, it’s a hellish game to move it. Right? Yep. So everybody wants to get these, these automatic things. And I’m not saying that it’s bad to do that. It actually is good for you to do that. I mean, automate as much of the stuff as you possibly can because it’s not about discipline.
But I also think that if I’m 27 years old, I see Chime and Robinhood as these closer to me. Companies that feel like companies that I can easily deal with. Fidelity feels to me, even to their marketing, like a big, huge ass institution. Yeah. And that, you know, I gotta become a part of the machine. Which is kind of a lie in both cases because Chime and Robinhood are machines as well.
Yeah.
I guess maybe they’re betting on the future, right? Like, like, I’ll take your $500 a week deposit because I know that if I can get your money now, maybe you’ll eventually turn into the 5,000 a week deposit, 10 years from now or whatever. And I can see that obviously, like my kids have a banking relationship at our credit union that’s branded for the kids.
They get rewarded for saving. They get rewarded for having good grades. You know, it’s very much like, Hey, we’re your buddy, because it’ll be easier for them when they get to, oh, I have a real job. What do I do? Oh, I’ll just go to the same bank that I have been with since I was a teenager, because they’re nice to me, you know?
And then it’s like, now I need to get a mortgage. Oh, well, I’ll just go to the bank. So there’s definitely some value in that, bringing the dollars in regardless of the. Of the level, but, but I think the argument, at least as I heard it here in this article, was these companies are falling behind. No, I don’t think
that’s the sobering part.
I think for me and for these people, the sobering part is how much headway they’ve made about how, how much further along we think these FinTech companies is. These little tiny companies that are, you know, not really No, no, no, no, no. In that future that you’re talking about, I think that they’re betting on, I bet 10 years from now, this is a much different ball game than is today.
I’m not saying they’ll take over in 10 years. Yeah. But I think that ball game is gonna be much, much more in sadly, Robinhood and chimes favor if this trend continues.
Yeah. Could be. I mean, look at Betterment and Wealthfront. Another couple of good examples. Betterment
sponsor of, uh, this podcast.
Oh, sorry.
Then, uh, just look at Betterment. Yeah. That other, that other place
that other, that
other one. They’re evil. Well, well, you make a great point about credit unions because you can make a case that, and I said, you know, these companies are not your buddy. If there is any of these companies that could have a chance to be your buddy, a credit union, much more likely could be your buddy because they’re member owned.
Right. They’ll be closer to being your buddy. And when I was the mc of the recent, uh, relevant conference out in Las Vegas, one of the big themes I heard these credit unions talk about is the fact that the data they had was that people are much more likely to trust Citibank. Then their local credit union.
You know what the difference was? Advertising. Yeah. Difference was was that Citibank advertises we’re your buddy. I will tell you, given Citibank versus my local credit union, I trust my local credit union to do the right thing more than I trust Citibank to do the right thing. Well, let’s get rid of Citibank, let’s say Bank of America.
’cause I don’t trust them at all. Uh, been on record for a long time of saying that one, but yet people do trust Bank of America more because of advertising. And I think that with, you know, when we look at our phones and how prevalent our phones are in our life and the way that Chime and Robinhood have made all these inroads, people likely to trust Robinhood, you and I know, and I’m not gonna replay this.
I mean, feel free to write me if you want the lowdown on how scummy Robinhood is. Robinhood just has this history. Just Google it. Yeah. Yeah, that’s true. You don’t need to either to write, don’t write, don’t write Joe. Just Google it. Yes. Robinhood. Just this history of not doing the right thing. Yet we see it in front of us and we trust it.
Yeah. Not a great way to monitor what the right move
is. Well, you gotta look after yourself. That’s the major thing. Just like we were talking about on Monday with credit cards, if you’re not being served by it, don’t, don’t spend 195 bucks on a, on a credit card every year if it’s not serving a purpose.
Like get, get rid of the darn thing and find something that does serve you. It’s not, it’s not that the 195 or 5 95 or whatever the annual fee is, is a big deal. It’s just that it’s foolish not to get value out of it. Whatever that value is, you spend $500 on nothing. Yeah. I mean, or you’re spending $500 on an amazing experience because you use all the benefits that are associated with that tool.
Trust me, a Amex or Chase or whomever, they’re, they’re getting plenty rich on all the people that just like to have the plastic in their wallet and they don’t need to spend the money on, you know, updating it. But if you’re, if you’re taking advantage of all of the things. Then it’s valuable for you. I don’t have our banking relationships at a major bank, nor at a credit union.
We use a local regional bank because I want to have somebody that calls me and goes, dude, you’re gonna overdraft your checking account unless you move some money into it. It’s like, oh, oh yeah, sorry, my bad. As opposed to, as opposed to, Hey, guess what? Uh, we didn’t pay that bill and we charged you $32. And they tell you that five days later via a postal letter, you know, as opposed to a notification.
And then to call, you go, you go into, uh, phone bank.
Hell yeah. So we track down a bank that’s regional, that’s a big enough bank and, and has all of our business, all of our personal stuff and all of our business stuff. And they, you know, so far have treated us really well. So. All this stuff you need to look at, whether it’s banking or whatever the relationship is.
I mean, hell, your doctor needs to work for you. You know? I mean, I think,
I think that’s the key to value in life is am I being served by this? We talk about subscriptions on Monday. Yeah. You know, am I being served by having all these subscriptions? Am I being served by these credit cards in my wallet? Am I being served by these?
Which means there’s a little due diligence. I think that’s our second takeaway here, og, is there’s gotta be some due diligence. Don’t just go, oh yeah, I’ve heard of Robinhood. Robinhood seems cool. I’m just gonna jump on that. Well do a quick Google search and you’ll find out, remember the pushback I got when I started railing against Robinhood?
Like, people go, why are you picking on Robinhood? Robin Hood’s a new company. No, Robin Hood’s not a new company. Well, Robinhood just messed up once. No, they haven’t messed up once. They’ve messed up a lot in, in areas where they shouldn’t, like people get so into the advertising and we get so defensive that the thing that we did might have been the wrong thing.
That we just want to naturally go, no, I didn’t do the wrong thing. No, Robin Hood’s fine, dude, I
remember. 20 plus years ago, I was having a conversation with an advisor’s client. I was leading an office at Ameriprise and we were replacing a New York Life whole life policy. We went through the whole like, okay, term versus permanent.
You know, this is a short term need. You know, we know it’s till your daughter graduates. It’s kind like building the whole case of you don’t need whole life, you need term, and if you don’t need whole life, you need term, you should swap it out. And, and oh, by the way, look at all these premiums that you’ll be saving, which now you can direct toward your retirement or your kids’ college and you know, these goals get achieved, da da da da.
And this woman looked at us and went, so what are we talking about here? And, and so I boiled it down, I said. We need to apply for a new policy. Once that gets in place, then we’re gonna cancel the New York Life policy. And she said, I can’t cancel that New York life. It’s the company that you keep. I was like, like the gears in my head just stopped moving.
I was like, wow, that the advertising
stuck my second time hearing that story. And a AI didn’t stop you and B, I’d laugh to get, ’cause it just, that’s, that’s
such a great story. That’s advertising.
Just it’s the company. You keep sticks
with us. No shame on New York Life, by the way. I mean, they’re great company and you know, they’ve got stuff that worked for people.
New York Life. You’d like to sponsor the show. We will just tell everybody, tell, don’t cancel
New York life. Yeah. We’ll change our tune. I’ll change that whole story up. And then I sold her a New York Life policy because it’s the company you keep
this segment sponsored by. Yeah, exactly. We will of course dive more into that in our 2 0 1 newsletter near the bottom of the 2 0 1 newsletter.
Uh, stack Benjamins dot com slash 2 0 1 gets you signed up for our newsletter. Comes out every Tuesday and Thursday absolutely free. Not only talks about topics like the one we just discussed and goes deeper into them, but also tells you what’s happening. And, uh, og I’m gonna have an announcement. On the back porch today about something else where I will be going.
And maybe, maybe you’ll able to join me too. I’m gonna try to strong arm you into come in with me too. We will. We will.
See. It’d be amazing if I got invited to things.
Well, I’m going to invite you publicly. We’re gonna see everybody.
What happens? It’s probably already happened. That’s we’re about to retroactively invited to the thing last week.
See,
he’s already back it away. We’ll see. Let you let me know. The reason why we talk about our headline at the bottom of the 2 0 1 is because we dive even deeper into our mentor of the day and the topic they bring. And today we’re gonna talk about being remarkable with a gentleman who’s incredibly remarkable.
Guy Kawasaki. He is currently the chief evangelist of Canva, which is a platform that we use to create great graphics all the time. However, what I love about Guy Kawasaki, when we were just starting our blog originally, the free financial advisor blog. We were first starting this podcast. Guy Kawasaki was a guy who gave us lots and lots and lots of fantastic advice.
I used to watch his stuff all the time. So to be able to talk. Specifically to Guy Kawasaki is amazing. He was of course the chief evangelist of Apple back in the day with Wikimedia Foundation, Mercedes-Benz brand ambassador, special assistant to the Motorola division of Google. He is quite a guy and we’re gonna learn to be remarkable from this remarkable man.
But first Doug, I think you’ve got some trivia for us.
Hey there, stackers. I’m Joe’s mom’s neighbor. Doug Spring is right around the corner and I’ve been thinking of creative ways to spend more time outside this year. I already do all of the yard work for Joe’s mom and myself, but I’m so good at it that I barely have time to watch. I mean, I greet the women that jog past my house every day.
’cause I’m a people person. This morning I came up with a brilliant idea to get more fresh air. I’m gonna have a punching bag installed in my garage. That way I can practice boxing with the garage door open. Give the ladies a chance to check out the goods as they’re running by. Am I right? I haven’t boxed since that one time in high school gym class, but you know, I, I think I still got it.
I can feel it in my bones. My favorite boxer and probably everyone else’s is the greatest. Muhammad Ali. He won an impressive 56 matches and lost only five over his career. Sounds like my dating record. Come to think of it, I got a lot in common with him. I’m charming, beloved. I look great and sat in shorts and I’m so fast that I’m in bed before the room gets dark.
Well, you know, I have the clapper, but still, today’s trivia question is what remarkable stance did Ali take that put his career in jeopardy? I’ll be back right after I order a satin robe with Joe’s mom’s neighbor. Doug stitched across the back.
Hey there, stackers. I’m amateur boxer and fastest man in Texarkana Joe’s mom’s neighbor, Doug, nearly 50 years after he won the heavyweight championship for the first time. After defeating Sonny Liston, the gloves Ali wore for that title match sold for $836,000, which is 200,000 more than he earned from winning the fight.
Today’s trivia question is, what remarkable stance did Muhammad Ali take that put his career in jeopardy? The answer, born Cassius Clay, Muhammad Ali changed his name. After joining the Nation of Islam, his religious beliefs disallowed him from fighting in a war. His decision to refuse induction into the military and declare himself a conscientious objector, caused him to lose his boxing license for three years.
The Supreme Court later found him to be a sincere objector and overturned the ruling in a unanimous vote. Reinstating his license and restarting his career. And now here to teach you how to live. Remarkably, it’s today’s mentor guy Kawasaki.
I’m super happy he’s joining me at the card table. Guy Kawasaki’s here.
How are you man? Ah, I’m
great. Yeah. Mom is a remarkable woman. I, I enjoyed our conversation.
She is clearly the better part of this entire operation. Like if she would actually get on microphone, I think this podcast might go somewhere, guy. It might,
well, the seed doesn’t fall far from the tree.
Well, we will see about that my friend.
I know quite a bit about you having followed your work for a long time, guy, but one thing I did know is exactly where you start this latest project. One of my favorite ad campaigns of all time was the think different campaign that Apple had. Yeah. You were in that room. You were in the room. Yeah. When different ad agencies were presenting to Apple.
Tell me, pa paint us a picture of that moment. Okay.
I was an Apple fellow at the time. It was my second tour of duty at Apple. It’s kind of like serving in Vietnam, you know, or, or Afghanistan or something. So I was my second tour of duty and Steve was not yet back as CEO. He, he had sold next to Apple and you know, he was kind of hanging around the fringes, but not exactly clear what exactly he was doing.
I believe the VP of marketing at the time was Garino DeLuca. He went on to become CEO of Logitech. Mm-Hmm. So Garina DeLuca assembles his marketing staff and as an Apple fellow focusing on marketing, I was invited to that meeting. And in comes the ad agency and it’s a guy named Lee Klau and he was involved with, uh, 1984 commercial.
So he goes way back with Apple. Brilliant, brilliant marketing and advertising guy. So he shows a video of the spots for Think Different and for people not, not even alive in 1997 Think Different was an ad campaign focusing people like Gandhi and Martin Luther King and Einstein and Pablo Picasso. Yeah.
The innovators. It was all these
cast, the, the uh, the wild children. Yeah. Right. All the people who are
thinking different. And the message was that if you wanna be an innovator and an artist and you know, an outlier, you have to think different. You can’t just think like everybody else, IE using Windows, you had to think different and use a Macintosh.
The ad really resonated with all of us in the room because at the time, just everybody was just crapping on Apple. So you, you had to really be a believer to continue to use a Macintosh. This is 97. And so it really appealed to sort of that rebellious individual innovator artist kind of personality and Macintosh users.
So anyway, Lee shows the ads. We all love it. And at the very end, I kid you not, Lee says, I have two copies of these videos with me, Steve. I’ll give you one and I’ll give the other one to Guy. And Steve says, don’t give one to guy. And, and I’m like sitting there incredulous, right? I said, Steve, you don’t trust me.
Is that why? And Steve says, yes, guy, I do not trust you right there. This is one of those make or break moments in your life where you either say, I teed it off. You know, I connected, I hit the ball out of the park, I caught the wave,
I scored the
goal, I killed the guy. This is one of those moments, you’re either stand up for it or you don’t.
Without even thinking. I said, that’s okay, Steve. I don’t trust you either. Now maybe that cost me $10 million, but it was worth it.
What was Steve like then? Did you seriously not trust you? Why? Why wouldn’t he trust you?
I don’t know.
I wasn’t the leak all those years. All the stories you’ve heard about Steve.
True. He was truly remarkable. I mean, people throw around the terms like visionary and innovator and all that pretty loosely, right? Like if you create the 25th Twitter clone, you call yourself a visionary and innovative. Mark Zuckerberg we’re so innovative. We created threads. Whoa, mark.
Really?
Wow. 2023 you released threads.
So innovative people can post messages. Wow. Oh, but Steve truly was, it was difficult to work for him because he had such high standards, and let’s just say that he clearly didn’t have the kind of Marcus Welby bedside mannerisms, let’s just say. And so he was very brutally frank and he would not hesitate to call you a bozo in front of the entire company.
You know, he just, he was just like that, and I wouldn’t say he was sadistic or mean spirit or whatever. He was just very blunt. And I’ll tell you something with hindsight, it’s better to deal with someone who is blunt and honest and has good taste than someone who is full of and doesn’t have the ability to really make a judgment.
I actually was scared working for Steve all the time because I. I often thought, oh, someday he’s gonna just rip me in public. And so contrary to every HR theory that you have ever heard about, you need to have form an emotional bond with your employees and communicate openly and focus on the positive and you know, kumbaya and wear Birkenstocks and sip white wine and hold hands and walk together on the beach.
Steve Jobs was like none of that. But I’ll tell you something, he was formative in my career. I would not be where I am without Steve Jobs. God bless his soul. I.
Well, you start this because obviously think different was not marketing computers guy, it was marketing feelings, right? It was, it was marketing this belief that I can be something that I can do more if I just bought, go buy this product from Apple, right?
I mean, meld the, the fusion of, of feelings with product was something that Apple has always been great at. But you start this story here because you say that we need to go even further think different is fine, but in 2023 we need to go beyond think different. And,
and my case is you can’t just be thinking differently.
You have a higher standard now you have to think remarkably, you need to think about how to truly jump to the next curve. How to truly, you know, fulfill customer needs and stuff. So different is not always good, let’s just say, but remarkable is always remarkable. I would make that case. And so I, I, I needed a story to set the tone of the book because I, I don’t want people to just be thinking, oh yeah, if I’m different, I’m good.
I mean, you could be different and suck. So to me, the definition of remarkable is that you’ve made a difference. You’ve made the world a better place. Now, I don’t want people to get all bent outta shape saying, oh, so Guy, what you’re saying is, if I’m not Steve Jobs, I’m a failure. If I’m not Jane Goodall, I’m a failure.
That’s not what I’m saying at all. I’m saying, you know, you can make a difference to one person. That person could even be you. You could make a difference to a classroom, to a pop one or football team. It could be to a pond in your neighborhood. As long as you make a difference, you can be remarkable. It doesn’t mean you have to be Steve Jobs or Elon Musk or Jane
Goodall.
I don’t know if you’re into the chef scene, but I love this show on Netflix Chef’s Table. Have you seen Chef’s Table? I. I,
I, I used to watch the, you know, the one where they have the three chefs in the time limit, but I, I don’t Oh, no. That’s what Chef’s
Table. No. Chef’s Table is just where they do these profiles of some of the best chefs on earth, and they kind of tell their backstory.
Yeah. And how these people, in many cases, they fought their way through adversity to get where they are and how they had to build teams. And in one of those episodes, the only reason I bring this up, guys, in one of those episodes, one of the chefs said, of course, great food is table stakes. That doesn’t make a fantastic chef.
That is just the minimum bar, right? If I make great food, that doesn’t mean I’m providing this entire experience for people to come into my restaurant. You kind of start off by setting the table stakes at a place in 2024 that I think we truly need more of. I mean, we have this election year, we all are fixed in our opinions.
We go on threads or acts or wherever the hell we’re gonna go, and we just fight about why I’m right and you’re wrong. You kind of set the table stakes at this growth mindset idea, and it seems like Carol Dweck really helps you paint a good picture
here. Yes. Carol Dweck is a professor at Stanford. Tiny woman, petite woman.
She breaks all the stereotypes about 98 pound weaklings. She, she’s a 98 pound goddess. Yeah. And so the, the crux of a growth mindset is the belief that what you are today is not your limitation. You can learn new skills, you can learn new things, you can improve. And this also applies to people who are successful.
So one of the limitations of the fixed mindset is not only that you think you can’t do more or better, but it could be very successful people who are very good at one thing. They want to preserve their self-image so they don’t risk it and try anything else. So, you know, maybe you’re very good at physics, but you don’t wanna learn to how to try surfing because you know you’re gonna make an ass of yourself by surfing, which is kind of what I did.
So anyway, o of the 200 people I’ve interviewed for my podcast who are remarkable, every one of them had a growth mindset. Nobody said, I am what I am, I cannot be anymore. This is it. Nobody who’s remarkable has that attitude.
Is it this fundamental question of instead of defending why I’m right guy, maybe we need to start asking, where am I wrong?
Yeah, well, well, I mean, you open the door here with the discussion of 2024 politics, and trust me, I, I don’t know where you are on the spectrum, but I’m, I guarantee you there are people that I. Look at others and say, how the hell can he believe that? Right? So how can Nikki Haley not mention slavery? How can she say that America has not been a racist country?
And what I learned by interviewing a guy named Mark Lamberton, who was the CEO of Fuller Seminary, which is kind of the Harvard Business School of Christianity, although, you know, if you think about it, even that metaphor, Harvard Business School of anything. That used to be a absolute positive, but Right.
Maybe not anymore. Even that’s come under fire. Yeah. Yeah.
So I, I mean that in a positive way. Sure. So I asked him this question, you know, like, how can people come to believe stuff like that and how can people believe that, I don’t know, rape is okay, or whatever, and, and he said, you know, guy, you’re asking the wrong question.
When you ask people why do you believe that? Or what do you believe? That’s the wrong question. All that is gonna do is lead to arguments. You know, this is why I believe America’s not a racist country, and this is what I believe it. But he said the question to ask a very valuable lesson. One that I don’t always observe, I must admit, the question to ask is not what you believe or why you believe vaccines don’t work.
The question to ask is, how did you come to believe that? Because that fosters empathy and understanding, right? So how did you come to believe that vaccines are bad? And maybe the answer is, well, my grandfather was in this US Army study and he was in this study where he got vaccinated or he had a placebo.
He actually got the disease and died. And so I have never trust vaccination because my grandfather was in this experiment and it led to his ill health and death. Well, that’s very good data to understand a person as opposed to you’re such a dumb, you don’t believe in vaccinations, you wanna get covid and die.
Go ahead. Right. I mean, it’s completely different attitude.
Y you know, you write that, uh, if having growth mindset were easy, we’d all just switch on because we’ve all heard this before, guy. But like anything, it isn’t what you’ve heard. It’s what you do. What are some of the ways that we can work on getting a better growth mindset?
What are the some of those things we can do, such as what you just suggested, where we lead with empathy when we question versus how could you be such a dumb ass?
Well, it it, first of all, I mean, I don’t expect you to read my book or any book and say, oh yeah, he’s right. I believe you should approach everything with skepticism, especially today.
So with the growth mindset, first of all, being aware that, huh. Maybe I can grow. And then it’s a matter of finding people around you who support growth. Finding people around you who are suggesting that yes, you know, try these different things. Don’t worry about failure. Failure is a form of learning. So you need to find supportive people.
If you’re surrounded by people who say, oh, you’re only good at this, or All you’re ever gonna be is a, you know, I don’t know, part-time barista. If you have, if you’re surrounded by negativity like that, you’re not gonna get the growth mindset. You need to find people who have grown and will support you.
And then I suggest taking baby steps to use a surfing analogy, if you are a world class physicist or violin player, now you say, okay, a guy, I believe in a growth set I’ve, I’ve always wanted to take up surfing. I’m gonna grow, I’m gonna try surfing. Well, the baby step is to get like a really long board, go to a place with one to two foot waves and get a instructor.
That’s the baby step. That’s how you grow into surfing. I am not suggesting that you go to NRE in Portugal and you take your board out and you go into a hundred foot wave because Guy said, I have the growth mindset. I’m gonna learn how to surf. Nazare 100 foot wave. Come on down baby guy’s. Like I’m not covering
your medical bills.
You gotta sign a disclaimer when you buy this. Right?
But I love this because instead of trying to get all big, and I think we all get freaked out by these big huge changes, looking into the abyss, thats of the future. What can I be, I love this baby step idea because it doesn’t have to be big things. Case in point, one thing I love that you wrote was that you say study subjects you’ve never considered.
Or that you failed at explore areas you’ve kept putting off because you didn’t think you’d excel at them and adopt the interest of family, friends, and followers. You did this yourself. You brought up surfing. Who in your family brought up surfing and did you ever think, and by the way, you’re from Hawaii.
Why the hell haven’t you been a surfer your entire life guy? What? What’s going on? Okay,
there’s a good answer to that question. I’m from Hawaii. You would think that I would have learned how to serve? Yes, correct. Well. When I was a kid, I did not have the growth mindset. I had the Asian American mindset of you gotta study hard, you need to get eight hundreds on your SATs, 4.0 GPA, and you need to get into a great college.
Right? And so surfing when I was growing up, that’s for the kids who are like not doing well in school, screwing off, taking drugs and all that. But I wanted to be a good Asian and I didn’t want to like go beyond that. I did not have the growth mindset to say. You’re in seventh grade, you’ve never surfed in your life.
You should try this. It was, you’re in seventh grade, you’re doing well in this college prep school. You don’t wanna make an ass of yourself going out there and surfing with all these delinquents. Now, there’s many things to unpack about this. I have to say that I took up surfing at the age of 60. So if there’s no greater proof of the growth mindset than being willing to make an ass of yourself and learn surfing at 60, I don’t know what it is.
But I, I will tell you one unanticipated benefit is that if I had taken up surfing as a kid, I love surfing so much. I don’t think I would’ve accomplished as much in my career. Oh, oh. Because I would just be surfing every day.
So there’s a, there’s a
silver lining to everything.
Uh, one of your kids introduced you to hockey as well too, and I don’t think, by the way, while I do think surfing in Hawaii, I, I’ve never once thought hockey in Hawaii, just to
be clear.
Well, yeah. You know, the, the closest thing to pond hockey in Hawaii is eating shave ice. But I digress. So this is another great story. So my wife and I take our two boys, eight and 10 to a Sharks game and they love hockey. Where, where are you
from? I’m from Detroit. I’m a red wing man. Okay. I’m a red wing, so you
understand hockey.
Oh yeah. You understand. Red wing hockey. So we go to this hockey game and my kids fall in love with hockey. Now, for people who are not familiar with hockey, hockey is the greatest team sport there is. There’s no question. Hockey is a combination of war. And ballet and physics, unlike other sports where the ball goes out of bounds and there’s all these timeouts and stuff, hockey is nonstop action.
The puck hardly ever goes out of bounds or you know, there’s, and it’s certainly not soccer, where every 60 seconds somebody’s flopping on the ground as if he broke his leg, and then 60 seconds later he’s back running around. Like if you did that in the NHL, you would be laughed outta hockey, right? So there’s none of that bullshit.
And my kids say, oh dad, we wanna try hockey Now as Silicon Valley parents, you know, you can never say no to your precious little jewels. So we find them a hockey class. And then my wife says to me, God bless her. She says, you know, I don’t want you to be like other Silicon Valley husbands. I don’t want you coming to their games and you’re on your Blackberry.
And every once in a while you look up to see when your kid is on the ice on his shift. I want you involved with their lives. So maybe you should take up hockey too. Oh, good for her. And I’m a wise man, so I listened to my wife and we knew so little about hockey. We get skates. We didn’t know you had to have ’em sharpened before you go on.
That’s like, you know when you
buy basketball shoes, you don’t have ’em sharpened before you smell basketball. You just lace them up and go. So anyway. One of the first times I tried hockey was this kid’s parents game. And Scott McNeely, the founder of Sun Microsystems, is on the team of Par. He’s an excellent hockey player.
Wait a minute, wait a minute. Hold. I mean, he
helps when you’re Scott McNeely. What? What I was gonna say guy, is he excellent because he’s really good at hockey or is he excellent Because nobody wants to hit him and everybody wants to let him score. So
it’s like playing with hockey with Putin,
right? Well, I’m thinking if I’m a Sun Microsystem supplier, I’m letting that guy go.
Like he’s, he’s gonna score no matter what.
But anyway. Well, you know, it helps if you’re Scott McNeely and you love hockey and you’re so rich that you build an ice rink at your house. Yeah, because literally he did.
That’s a flex. So
anyway, I step on the ice. I can’t skate for shit because guess what? I cannot surf.
I cannot skate, but I can take SATs anyway, so. I step on the ice and it was a religious experience. I said, oh my God, this is just so great. And I, I think we’re getting, we’re going all over the map, but that’s what happens when you have me as a guest. You know, people say I’m spending a lot of time searching for my passion, my calling in life, you know, and it should be the intersection of what I’m good at, what I like to do and what I can make money at, right?
I mean that, that’s the perfect Venn diagram. So you draw these circles, I’m good at this stuff. I love doing this stuff, and I can make money at this stuff. And where the intersection is, that’s what you should do. I have a completely different theory. When you find something that you like to do and you’re not good at and you cannot make money, but you still do it, that’s when you found your passion.
What, what? What about people? You know we have stackers guy that are in their late thirties, forties, even fifties, going, well, you know what? This pivot that it would take, I found my passion, but I think I’m too late. What? What do you say to those people?
I’m saying being too late is a mental concept. Listen, at 44, I took up hockey.
It’s 60. I took up surfing. At 65, I took up podcasting. You are not too late for anything. And in a sense, you need to get over yourself To be remarkable. You need to get over yourself. And, and I hate to make this whole interview about surfing, but it’s, it’s just a good metaphor for life. So when you start surfing, you think, oh, people on the shore, ’cause there’s always people watching people surf, right?
So people on the shore, they’re gonna see me, they’re gonna see me not get up, they’re gonna see me fall, they’re gonna see me making ass of myself. And when I get out of the water, they’re gonna all come up to me and say, guy, you’re such a loser, you cannot surf. And so you’re afraid of this potential embarrassment.
And so I think a lot of people, they don’t try to learn a new musical instrument. They don’t try a new job. They don’t try a new sport because their fear embarrassment. What I learned at surfing is, eh, nobody cares. I mean, nobody cares. Probably they didn’t see you fall, and even if they see you fall, they think nothing of it.
So I’ve never come out on the water and people run up to me and say, guy, I saw you fall five times in a row. You’re a, you’re such a loser. You should give up surfing. It just never happens. So get over yourself. It’s not gonna happen. So with the growth mindset, you push past that and you try stuff.
Nobody’s gonna condemn you for being a lousy piano player. If you started piano at 65. You know, more power to you. You try something that
late. I’m actually the opposite. I see people at 65 trying to be a piano player and I’m like, what a badass. Exactly. Well, and this is how hard the growth mindset is, guy, because you never see it.
You never see people do that. When I do, I think it’s so refreshing. I wanna push past, because you have three main areas in this work, growth, grit, and grace. You have one point in grace, which is to take the high road. And I feel like over the past 15 years as social media takes over more and more of our lives, I see people take the high road less and less and less.
It seems harder guy than ever to take the high road.
Well. Let’s just say there’s never traffic on the high road. It’s like one big carpool lane.
But does anybody notice anymore when you take the high road? Oh, I, I think
because so few people take the high road, it’s actually maybe more noticeable, right? I mean, you stand out.
So listen, I think that roughly the sequence of making a difference and becoming remarkable is first you have to have a growth mindset. Then you have to have a grit mindset where you pay the price because being remarkable is not gonna be easy or cheap. And finally, you have to pay back. That’s grace. Now it was an act of God to find three words that describe those concepts that begin with gr, gr growth and Grace.
Like right there, right there. You should buy the book. I’m
laughing guy’s, a fellow author ’cause I’m with you. I’m like, wow. Like you tell her the universe something
happened. Is that the
best alliteration? And I like a Pulitzer Prize winning alliteration right there, baby. The daytime Emmy
goes to Guy Kawasaki.
So as I look back on my career, the first third I was underpaid. The second third, I was overpaid. The third, third, I believe I should pay back that. That’s roughly how my life has worked out. And when I was in college, my father, God bless him, he told me, you know, son, we are fortunate. Now, we came from a lower middle class family.
Don’t get me wrong. It’s not like we were the Trumps. Okay? But he said, you know, we, we are lucky. We are fortunate. And now you’re going to Stanford. You’re extremely fortunate. So I wanna explain this concept called noble oblig. And noble o oblig translates into kind of the, the obligations of nobility. Now I happen to not like.
Nobility because it implies that, you know, you gotta be Prince Harry or King Charles or Meghan Marco. You know what? You gotta be one of the the nobility. So my term is success o obligation, which means that if you’re successful, if have a moral obligation to help other people, let’s face it, you are quite fortunate to be successful.
You walk through a door and you are successful. So you have a moral obligation to not just keep that door open, but if you can make the door even bigger for other people, because life is not a zero sum game, other people’s success is not going to reduce your success and other people’s failure is not going to increase your success.
The rising tide floats all bolts. The sinking tide sinks all boats, so get over it and fulfill your success. Oblig the
book is Think Remarkable. What a remarkable last half hour. We’ve had together Nine Paths to Transform Your Life and Make a Difference In Guy. It’s available everywhere. I hope. If it’s not, there’s somebody who might be getting the Steve Jobs treatment from you.
Kai Kawasaki, thanks for mentoring us on growth, grit, and grace today. I super appreciate
it. Thank you. You know it, it’s really a pleasure to sometimes be the guest instead of the host.
Well, I should ask you that. I usually think, of course there should be one takeaway, but tell me what’s coming up on the podcast, one podcast or two another.
Maybe there’s something you could break here on the Stacking Benjamin Show that nobody else knows is coming up that we can hear about first.
Well, let’s me think. Um, well, you already heard Mark
Rober, right? I, I did. And it’s funny because people need to go listen to that episode. Mark Rober, of course, the guy who was the NASA engineer who his, uh, groundbreaking work with squirrels and making sure
it’s, I’m sure that’s on his LinkedIn profile, his squirrels
or, or his work with Nerf guns or, um, oring boxes or porch pirates.
Yeah, porch pirates. But anyway, yeah, mark Rober was
on. Okay. I’ll tell you a story that nobody has heard yet because we just recorded it and it was with Angela Duckworth. Oh, yeah. Angela Duckworth, believe it or not, just like Carol Dweck is the mother of growth. Angela Duckworth is the mother of grit, and she actually won a MacArthur Fellowship for her work on grit.
So we interviewed her last week. I don’t know how we got onto this topic. That’s the mark of a good podcaster. You don’t know where you got stuff from. But anyway, so she tells this story like, you know, when I was growing up, my father was the biggest influence on me. He had high standards, he forced me to be gritty.
You know, blah, blah, blah. Right? Very formative. But now as I get older, I have realized that my mother was also gritty and she moved from China or Taiwan to the United States, not speaking English all by herself to get a better life. And then when she had kids, she dedicated her life to her kids, even though she was an artist.
And then even after we were adults, my father was a very successful chemical engineer, but he did not support my mother’s artistic. Endeavors. She’s in her nineties and now she’s finally got the time and the energy and the growth to become an artist. So she’s living in this, you know, senior living facility.
And she went to the manager of the place and said, I wanna rent another unit. And the guy said, what? What’s wrong? And you don’t like the one you’re in. He goes, no, I like the one I in. I want another one, want two, and I’m gonna make it into my art studio. So at 90 she finally realizing her dream to be an artist.
I’m thinking, oh my god. Angela Duckworth, mother of Grit and MacArthur fellow award professor at the University of Pennsylvania. Co-host on this great Freakonomics podcast. I said to her, have you ever told anybody else about the realization of what your mother has done? And she said, no, I’ve never told that story before.
And that is a great story. 90 years old, becoming an artist, getting another room in a senior living center to be her studio. You know,
it’s funny, being a money guy, guy. All I think about is how expensive that second run. But that shows how worth it. It is too. I mean, to have your own studio. That’s fantastic.
We’ll link to the podcast on our show notes at Stacking Benjamins dot com. Man guy, thank you so much for hanging out with us. I super appreciate it. Oh,
as you can probably tell, believe me, I can tell too, being the host, you can tell when a guest. Isn’t considering, you know, there’s some guests who come on you can, you can just tell that this is a burden they just wanna get it over with.
Right, right. Yes. They’re listening to their PR team. Tell them, oh you gotta be on this podcast ’cause it’s good for your book. And then there are guests like me who like, we just don’t give a shit. We just wanna have fun. I stay on with you another 45 minutes if you want. I don’t care. Let’s just like, you know, I know you can edit, cut the stuff you don’t like.
I don’t care. Hey, I’m Mr.
Wow.
And I’m Mrs. Wow. From Waffles on Wednesday.
And when we’re not eating waffles, we’re Stacking Benjamins.
When I get to speak to people like Guy Kawasaki. Well really OG and you, I just get goosebumps. Yeah.
Well I have that result for everybody. Goosebumps everywhere. The shivers hoo.
Can’t
believe I could hang out with you. Can’t believe it, uh, for all these shows. Hey, time for one stacker who thought, you know what? I better call Saul. See, hi and og. This is the part of the show where we answer a listener question Who’s having an issue with our money? If you’ve got a question you’d like OG and I to answer, head to Stacking Benjamins dot com slash voicemail.
And for being brave, we’re we also throw in some swag? But that’s not the reason that you call. You call because you wanna be as cool as Guillermo. Hey, Guillermo.
Uh,
yes. Hi. My name is
Guillermo, uh, and I was hoping to retire, uh, next few years, but I’m still having some questions regarding a back row
Roth versus a 401k to Roth rollover.
I’m hoping you could help
shed some light on the differences when each is best and maybe some of the pitfalls associated with each practice. I
appreciate it. Thank you, big fan.
Guillermo, we’re a big fan of yours, man, for calling in and it is interesting. Well, first of all, maybe we should de describe what is a backdoor Roth for people that have no idea what that is, and then we’ll talk about, uh, 401k, traditional 401k to Roth versus, uh, backdoor
Roth.
Yeah, all retirement accounts, or I should say most retirement accounts have some sort of income limit or restrictions associated with them. And so for Roth IRAs, if you’re married filing joint and you earn over $218,000 of modified adjusted gross income, which is found nowhere in your taxes by the way, so you have to calculate that, let’s say 200,000, $218,000, you can contribute to a Roth IRA this year.
The contribution limit is 7,000 per person, so two people working, two people making less than 200 k, both can put in $7,000 in a Roth. No must no fuss. Once you get past 200,000, then you enter this phase out range, which says between this dollar and this dollar amount, you can put some in, but not all of it.
And so it’s based on a percentage of how much above the 218,000 number you are reduces that $7,000 number all the way down to zero. Once you get over $228,000, so between 2 18, 2 28 for married filing joint, you know you get a reduction after 2 28 of modified adjusted gross income, then you can’t contribute to a Roth anymore.
So the question is, is how, what if I still have my $7,000? What can I do? Well, one of the things that people talk about is doing a backdoor Roth IRA, which is just a fancy way of saying it’s a non-deductible. IRA contribution. So normally IRA contributions you receive a tax benefit for. But because you make 200 grand, in this case, 228,000, you don’t get a tax deduction for that.
You make too much money. So the IRS is not giving you a tax deduction, so it’s a non-deductible. IRA contribution, and then you do a Roth conversion. If you do this in a relatively short period of time, there’s really not any taxes due. There might be a little bit on the gain between how much money you put in and how much you do the conversion.
So there are a lot of rules around this in terms of the balances of other IRAs and that sort of thing. But broad brush stroke, if you’re over $228,000 of income and you’re married and you wanna do a Roth, one of the only ways to do that is to do a non-deductible contribution with a conversion. So you have to do this extra step.
The other thing that you could do if you’re not fully contributing money to your Roth 401k, which I don’t understand how people don’t, you know, everybody gets so wrapped up in doing Backdoor Roth, and meanwhile they’re doing 3% in their 401k. Then we’ll just put that money in a, in your Roth 401k, it’s the same outcome and it’s much cleaner.
So much cleaner. So if you’re not contributing the maximum, which this year to a 401k plan is $23,000. If you’re over 50, you can do more. But if you’re not doing 23,000 in your 401k and you still have capacity in there and you wanna do a backdoor Roth, well just. Put some money in your 401k, that’s Roth 401k and bottom boom B, you got some Roth money without all the paperwork.
’cause there’s definitely a mess of tax documents that you have to get through.
And I guess the downside there, ’cause Guillermo is for downside, the downside would be chief if you don’t have the cash flow to do that. If you don’t have the cash flow to do that, then you gotta go with the back door Roth.
But we got getting in your, it’s the same thing. Reserve to pay the tax. Yeah, I,
well, I mean, I’m saying that it’s the same outcome. If you don’t have the cash flow to do the Roth 401k, then you don’t have the cash flow to do the backdoor Roth either it’s the same seven grand unless you’re taking it from savings.
In which case then just live off the savings, live off the savings and take it outta your paycheck. And again, it’s still gonna be a heck of a lot cleaner than doing an IRA contribution, filing a tax form, doing a conversion, getting another tax form, and hoping all of this happens correctly, that you don’t run afoul of anything.
So I think the order of operations really needs to be put your money in your 401k up to the company match. And if you still have the ability to make contributions above that, you have the cash flow to do that. Or you can structure it in a sense between you and your partner to do that. I, I don’t know, especially if you have a Roth 401k option, why you just wouldn’t do that?
I mean, there’s some liquidity, maybe you can’t get to it, you know, so there’s some of that. But if you’re planning for it for retirement purposes, it matters. Not whether it’s in a Roth IRA or a Roth 401k.
Well, and the good news is I think Roth 4 0 1 Ks not only cleaner and easier to do, tell me if I’m wrong, but really aren’t Roth 4 0 1 Ks a little bit less restrictive?
Like as an example, Roth 4 0 1 Ks don’t have the income restriction. I mean, that’s number one. If you’re eligible for it, you can do it. Roth 4 0 1 Ks have the higher contribution limit. They, they also, which of course for the backdoor not really concerned, is having the money available, but they can also offer the employer match.
Mm-Hmm. Uh, so you could get employer match if you’re missing out on that. In a few ways. I feel like Roth 4 0 1 Ks give me a little bit more flexibility than a Roth IRA gives
me, yeah, I, again, you know, you need to be up to 23,000 of contributions. If you’re married, 46,000 of contributions before, you really need to go back to the backdoor IRA, if that’s what you’re looking at.
And a lot of companies allow you to do after tax 401k contributions as well, which is like, people call it the mega backdoor Roth. So in theory, let’s say that you’re like, well, but I’ve got 50 grand I wanna save and I’m married. You and your spouse could both do 46,000 and put another 4,000 of after tax in your 401k and have it all come outta your payroll.
It’s just simple. You don’t have to do any extra tax filings or forms or any of that stuff. It’s just done. But sometimes you even have more money than that, or you’re single, or you know the plan options are awful or you don’t have retirement. Some people don’t even have retirement plan options, in which case.
You could do the non-deductible. IRA contribution and a conversion is just gonna take a little bit. Now, what he was also talking about here was, well, how do I get money outta my 401k and do conversions to a Roth? And that’s a completely separate thing because when you do the non-deductible, IRA contributions followed by a conversion, you’ll pay taxes if there’s any gains on that $7,000.
So let’s say that January 1st, you put in seven grand in your IRA, and on August 1st you convert it to a Roth. During that period of time, that $7,000 has done whatever it’s done in terms of your investment choices. And maybe it’s now worth $8,000. Well, when you convert the 8,000, you’ll pay taxes on the thousand, but now it’s tax free forever.
However, in your 401k, when you go to take money out of your 401k, all of that money is likely to be pre-tax. If you said, well, I’m gonna take $50,000 outta my 401k and do a conversion to a Roth, all 50,000 of that is taxable. In which case, you know, now it’s a much higher tax bill than just that little bit would be on the non-deductible ones.
So those are two completely separate things and separate strategies around building up the tax free bucket versus converting money once it’s already in the tax deferred bucket. This is gonna be around tax optimization and it’s, I
know we, I know we say this at the disclaimer at the end, but I feel you’re walking in circles.
I feel like after that we need to say, uh, consult your advisors. Yeah. This is for entertainment purposes only. You really wanna make sure that whichever way you go goes with your overall strategy. Well, and, and
really what’s funny about this is people ask me this all the time, Hey, so what do you think should, how should I contribute into my 401k pre-tax or Roth?
And my answer is always the same. I don’t know. And everybody looks at me like I have three heads. What? What do you mean you don’t know? Shouldn’t you know? Aren’t you the Aren boy? Aren’t you the guy? I said, well, dance money guy. Yeah, dance clown. I mean, the reality is what, what info do you need with that to be able to make that a perfect decision?
The info is, you need to know what tax rates are in the future. And we don’t know. I mean, you can guess. You can look at the tea leaves and go, eh, I don’t think they’re going down. That’s Ed slot’s perspective. He’s America’s IRA expert. All the great knowledge that he has, he’s on the side of the fence of just get it in the tax free bucket, pay the taxes today.
It’s a known outcome and it’s tax free forever for everyone, which I happen to largely agree with. But in terms of like, well, should I do 41% in pre-tax and 19% and it’s, I don’t know. I mean, we’re just guessing on what tax rates are gonna be in the future and what you’re gonna need in the future and when you’re gonna need it.
I think the right approach is to have a whole bunch of money and a whole bunch of places. So anytime there’s a new tax law or anytime there’s a new Congress involved and they shut down this income stream, that makes sense, but make this one better. You have an opportunity to, to make a decision and be flexible as you need capital throughout your life.
When those big money things come up. So if you’ve got all of your money in your 401k and it’s all pre-tax and you got 2 million bucks, I mean, that’s pretty good, but it’s all pre-taxed and you’re now in one silo. I would much rather have, you know, 750 K in three different buckets, even if it’s not perfectly tax optimized going in, because in the back end I’ll be able to decide year to year how
optimize the hell out of it on the back end.
Well,
I mean, you have I a great, a great example of this. We were talking with somebody the other day who was thinking about retiring and we were talking about Medicare expenses, or I’m sorry, uh, healthcare expenses prior to retirement. And the Affordable Care Act and, and how that’s all income driven.
It’s largely driven by how much money you have. Well, guess what? If all of your money is pre-tax and you’re gonna live on that for the first 10 years of retirement, well, you know, now you have taxable income on your tax form versus having a brokerage account where you can live on some of it and fill that up exactly perfectly to get a tax break on your healthcare premiums.
So having the flexibility there, I think is better on the backend than it is on the front end, frankly. Thanks
for the question, Guillermo. Glad that you called. If you’ve got a question for us, head to Stacking Benjamins dot com slash voicemail. By the way, if you don’t have a question just about Backdoor Roth versus contributing to a Roth 401k, you’ve got bigger questions like, what is my overall strategy and where does this all fit in?
Well, G and his team are taking clients, so head to Stacking Benjamins dot com slash og. That’s the link to their calendar and the first step on seeing how they can interface with you to help you make better decisions for the rest of 2024 and beyond. Hey, time to wander out to the back porch and today we’re gonna keep it, uh, fairly quick.
But og I just found out two days ago that I am going to be doing a, uh, a little bit of a meetup tour. So I’m super excited about this. I can announce a few dates today, and these are all subject to change, but on May 14th, busy, I’m on. May see there it is on May 14th. Just
kidding. Lemme, lemme look at the calendar here.
Hold on, hold on, hold on. May the 14th. All right. Where are
we headed? May, may, OG and possibly Doug are gonna be in Cleveland, Ohio. Cleveland, Ohio, definitely busy. And then on the 16th, and we’re seeing exactly where we’re gonna be in each of these cities. But on the 16th we’ll be having a meetup, uh, back in the old stomping grounds of Detroit, Michigan, May 16th.
I’m a for sure, maybe. And then May 17th. Again, hard to find a spot for a meetup on a Friday night, but I think we’ll get it done. We’ll be in, uh, my old, old hometown of Kalamazoo, Michigan for a meetup. So Cleveland, Detroit should be easy
right around college graduation, weekends in high school, graduation weekends to, to find an open bar where there won’t be any people there in Kalamazoo.
Exactly. There’s, it’s, that’ll be easy.
It’s actually funny, og ’cause guess what? I’m gonna be in both of those towns, college and high school graduations. How about that? And so while I’m there, why not? Uh, why not come see people? And I know it’s been quite a while since we’ve done a meetup in Cleveland. I know I went to a meetup with Andy Hill a couple years ago in Detroit, but it’s been a couple years.
And, uh, Kalamazoo not since the book tour. That was the only time we did a meetup in Kalamazoo. But it certainly was fun. Also, I can announce that on Thursday, May 23rd, we will be doing a meetup in Boston. So, uh, Boston, Massachusetts are coming for you in og. You’re welcome to attend that one as well. That is
quite literally my kids’ last day of school, so sadly that one I definitely am a for sure.
Maybe. So Boston,
you’re, you’re stuck with me it sounds like. Mostly maybe. But anyway, if you get the
two, one, my kids last day of school, I’ll be definitely in Boston.
Oh, she’s
like, and
Amen. And that one, I’m going to, let me think through that again. Even if I’m not going,
I’m
going. But those are a few.
Seattle. I hope to make it out there later on this summer. Uh, we have some plans. I can’t announce anything. And also. Our meetups in Minneapolis, which are every month. Our meetup in August, which is usually the third week of each month, is actually going to be the fourth week, and I believe it’s going to be August 29th.
We are going to be having our regular Minneapolis meetup. I will be there, my son Nick is gonna be there. And, uh, og maybe you can come to Minneapolis to the Twin Cities to, uh, do that meetup as well. Yeah, for sure. Maybe, uh, we’re on the move guys, trying to see as many of our stackers across the nation as we possibly can.
I think that’s it, unless you got something else. I’m good, man. Yeah, let’s do this. All right. Uh, Doug. Doug’s been outside, still working on that project for mom all day. You’ve been quiet all day, man. So, uh, what’s, uh, what’s on our to-do list? We got a lot. So
what’s stacked up on our to-do list today? First, take some advice from Guy Kawasaki and think remarkable.
What can you do today that leads to remarkable results tomorrow? You know what it is? Carve out time for yourself versus doing what everyone else is demanding. Your future self will say Thank you in a big way. Second, that new FinTech ask, is this the best way to get this done? Or am I just falling for the next, next thing?
Don’t let your phone dictate who you trust and your next financial moves. But what’s the biggest to do? I gotta put my boxing gloves up on eBay. Who knew there was such a high demand for used ones? Thanks to Guy Kawasaki for joining us today. You can find his book Remarkable wherever books are sold. Also, you can listen to his podcast, remarkable People, wherever you are listening to me right now.
We’ll also include links in our show notes at Stacking Benjamins dot com. The show is The Property of SP podcasts, LLC, copyright 2024, and is created by Joe Saul-Sehy. Our producer is Karen Rein. This show is written by Lisa Curry, who’s also the host of the Long Story Long podcast. With help from me, Joe Kate Yakin, Karen Repine, and Doc G from the Earn and Invest podcast, Kevin Bailey helps us take a deeper dive into all the topics covered on each episode in our newsletter called the 2 0 1.
You’ll find the 4 1 1 on All Things Money at the 2 0 1. Just visit Stacking Benjamins dot com slash 2 0 1. Wonder how beautiful we all are. Of course you do, but you’ll never know. If you don’t. Check out our YouTube version of the show Engineered by Tina Ichenberg. Then you’ll see once and for all that I’m the best thing going for this podcast.
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