Most investors spend their energy asking the wrong question. It’s not which fund is best — it’s which combination of funds gets you to your actual goal at a cost and complexity level you’ll actually maintain. Joe and OG break down the full index investing playbook: where to start, when to add complexity, what Wall Street calls indexing that really isn’t, and the one number that should change how you think about your entire portfolio.
What You’ll Walk Away With
- Why the real argument for index investing isn’t that nobody beats the market — it’s that you can’t predict who will do it next
- The crockpot principle of index investing — and why the self-cleaning oven analogy might be even better
- Why the S&P 500 and the total stock market index are closer than most people think — and which one Joe is increasingly favoring for the long run
- The $100,000 turning point: what changes about your investment strategy when the portfolio gets big enough to get scientific
- The first two additions most Stackers should consider beyond their core index — and why OG would actually add more than two
- Why mixing index funds from different companies can quietly undermine your diversification without you ever knowing it
- How to replace the word “index” with “list” to instantly identify whether a product is actually doing what you think it is
- The buffered ETFs, factor ETFs, and active ETFs that call themselves indexes — and why most Stackers should walk right past them
- Why you’re not racing against the index — you’re on a road trip — and what that shift in framing changes about every investing decision
- The season one recap from OG and Anna’s financial planning basics series — plus the free workbook that ties all seven episodes together
Why This Matters Now
In your 40s, the portfolio is finally big enough to matter — and that’s exactly when the temptation to complicate things gets strongest. New products, new strategies, and new buzzwords show up constantly, each promising a smarter approach. The investors who come out ahead aren’t the ones who found the best fund. They’re the ones who built something simple enough to maintain, scientific enough to optimize, and sturdy enough to hold through the moments when everything feels like it’s falling apart.
From the Basement
Joe and OG dig into the full index investing playbook — from the first fund a beginner should buy to the asset class combinations that actually improve long-term outcomes once the portfolio gets big enough to warrant it. OG and Anna close out their seven-week financial planning basics series with a full recap and the surprise release of a free downloadable workbook at stackingbenjamins.com/basicsguide. Doug arrives with Nolan Ryan trivia that connects strikeout records to index investing in a way that only the basement could pull off. Whether the analogy fully lands is a question best answered with your earbuds in.
Resources Mentioned
Stacking Benjamins Meetups — stackingbenjamins.com/bad
The Simple Path to Wealth by JL Collins — referenced as the foundational text for beginner index investors; stackingbenjamins.com links to prior interview: Interview 1 and interview 2
Paul Merriman’s annual asset class research — referenced for data on adding small cap value and international to a core S&P portfolio; paulmerriman.com
iShares — referenced as an example of a consistent index fund family worth staying within
JP Morgan Guide to the Markets — referenced in prior episode; available at jpmorgan.com
Stacking Benjamins Basics Guide — free seven-episode workbook at stackingbenjamins.com/basicsguide
Stacking Benjamins Newsletter (The 201) — weekly investing hot takes from Kevin Bailey at stackingbenjamins.com/201
Stacking Benjamins Vault — stackingbenjamins.com/vault
Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.stackingbenjamins.com/201
Enjoy!
Our Headline
- How to Master Index Investing (Kiplinger)
Doug’s Trivia
- On this date in 1983, one legendary Major League Baseball pitcher passed Walter Johnson to become the all-time strikeout king. He played for the Rangers and Astros, remained closely associated with Texas, and kept piling up strikeouts for years afterward. Who was the new strikeout king?
Have a question for the show?
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Other Mentions
Join Us Wednesday
Tune in on Wednesday to talk about how to master the money basics, when we welcome the woman WE know as Haley Sacks, but you know as Mrs. Dow Jones!
Written by: Kevin Bailey
Miss our last show? Listen here: How to Find the Money Leaks Hidden in Your Financial Statements (SB1833)
Episode transcript
[00:00:00] Joe: It’s a sad day today. Yesterday I celebrated what I think is gonna be our last solo stove night out behind the basement.[00:00:08] Doug: You’re allowed to light a fire whenever you want. There’s no rules.
[00:00:12] Joe: You know, it’s funny, there was one time late in the summer, we actually had a nice night and so I invited my friend Mike over, but it was, it was like 70 something degrees and Doug we’re sitting a mile apart from each other across the ’cause.
[00:00:28] Joe: The fire was so damn hot. It was not. It was not great. It was a nice day to sit outside. Not a great day for the campfire. So campfire’s gone, but you know it’s still here. The SLU to our troops,
[00:00:39] Doug: the Men and Women Letting Us podcast, that’s who’s still here. Never leave
[00:00:44] Joe: on behalf of the Men and Women making podcast in mom’s basement and the men and women Stacking Benjamins around the world.
[00:00:50] Joe: Thank you for keeping us safe to all of our troops, our active duty, our vets, our. What do we got? National Guard,
[00:00:58] Doug: coast Guard. All of ’em. Everybody.
[00:01:00] Joe: We got ’em all. Thanks to you. Let’s go Stacks of Benjamins together now, shall we? Thank you.
[00:01:07] opener: I guess you should have called.
[00:01:08] opener: I did call earlier when using the phone.
[00:01:12] opener: Earlier. When was that?
[00:01:14] opener: Or later When? Then I, uh, left. Left a message.
[00:01:18] opener: A message. What number did you call?
[00:01:20] opener: 2 4 9. 5, 6, 7, 8.
[00:01:25] opener: I can’t hear you. You’re trailing off. And did I catch a niner in there where you’re calling from a walkie-talkie?
[00:01:30] opener: No, it was cordless.
[00:01:31] opener: Mm-hmm. You know what? Don’t. Not here. Not now.
[00:01:40] Doug: Live from Joe’s mom’s basement. It’s the Stacking Benjamin Show.
[00:01:54] Doug: I’m Joe’s mom’s neighbor Dug, and today we are helping you master index investing. What is it? How does it work? What are the pitfalls people fall into trying to index their way to success? We’ll share all of that. On today’s show, and of course OG and Anna are back and they’re ready to help you tie together all the lessons from the last seven weeks.
[00:02:16] Doug: You ready to dot i’s Cross T’s and fill in whatever you missed. We’ll help you pull together the pieces and of course I’ll also bring the piece peace and resists my incredible trivia question. Can you guess the answer? Of course you can. And now two guys who kicked the weekend can down the road until it was Monday.
[00:02:37] Doug: It’s Joe and O.
[00:02:45] Joe: It’s a hundred percent right Doug. Isn’t it funny when you’re like, nah, it’s the weekend. I don’t need to do that. Then you’re like, oh crap, it’s 9:00 PM on Sunday. Oh, the worst day, and I got nothing done. But it’s Monday here at Mom’s Basement. We’re here to get a lot done. I am Joe Sal Sea High. Welcome to the Greatest Money Show on Earth.
[00:03:03] Joe: The award-winning podcast. By the way, guys, I just found out that we have won a Plutus award. This year get out. So, or um, or indie award accolades coming.
[00:03:14] Doug: I thought we won so many that they banned us from winning anymore.
[00:03:18] Joe: So it’s interesting what happened. The answer’s yes, we can’t win podcast of the year.
[00:03:23] Joe: We’re not eligible.
[00:03:24] Doug: It’s possible to be too successful. Apparently
[00:03:26] Joe: we’re the only podcast that won it three times. They’ve ca it at two. So we will always hold the record of most years as best podcast. However, this year, because the Plutus Awards did a lot of rearranging last year, they are just giving awards non-specific categories to people who are movers in the indie personal finance space.
[00:03:46] Joe: Congratulations also to Steve Stewart, our editor, who also is taking home a PLUTUS award this year. Our friend Paula Pant, who’s a frequent contributor here, also getting a Plutus award this year. So, uh, good, good stuff. Glad to be surrounded by great people like the two of you. Nice. Let’s start off with the guy across the card table from me, Mr.
[00:04:08] Joe: OGs here. How are you, man?
[00:04:09] OG: Great. Yeah. Happy, happy, excited to be here. Thanks for having me again. First time caller, long time listener,
[00:04:16] Joe: uh, the end of the card table shuffling his papers. Mr. Neighbor Doug’s here. Dude, you, uh, brought it as usual today. Congratulations. Nice work
[00:04:24] Doug: on my intro. Thanks,
[00:04:25] Joe: Joe.
[00:04:26] Joe: Absolutely. Yes. Well, what’s the show without a good intro? Here’s the reason why I bring up how great that was, is because of the fact that I read this piece in Kiplinger, how to Master Index Investing. And I thought there’s a lot of people are gonna read this and they really need to know the basics first, because I don’t find people making mistakes with, you know, the 2 0 1 3 0 1 4 0 1 when it comes to index investments.
[00:04:53] Joe: It’s the very fundamental thing. So today we’re gonna help you begin to master index investing. Uh, so the first thing is, Doug, we gotta be energetic and you brought it. That’s the foundation, right? Be energetic. Then we bring the tools so that you can do better with index investing. That’s on today’s show.
[00:05:12] Joe: Before we get to that, today’s show is brought to you by the vault. The vault is this Swiss army knife. You already have apps that protect your identity. They cut your subscriptions, they build your credit. They monitor the dark web. It’s all in one place. The vault not only does all that in one spot, so you’re not opening 15 different apps that you’ll never open because you have 15.
[00:05:33] Joe: It’s all in one place. You can get it done quickly and coming soon. Budgeting and tracking your net worth here in just the next couple weeks. I got a great note from Stacker John, telling me that when I talked about some functionality of the vault last week, I might not have done a great job. I said, your financial coach, if you have one, can also log in with a separate login and they can see what you’re doing.
[00:05:57] Joe: And he’s like, man, that’s, it’s got privacy concerns all over it. The answer, John, is you’re correct. So thank you for writing that. I think a better way to phrase that is you give them permission. If you want them to help you with your budget, you want them to look at your asset allocation, you want them to look at stuff.
[00:06:13] Joe: You can give them a separate ID to go into the vault and help you get all this stuff done. You’re the one that’s in charge. So how about that? Thanks for that note, John. Really cool. And uh, the vault on the way to some major, major fun changes and the price didn’t change, which is also good. Stacky Benjamins dot com slash vault.
[00:06:35] Joe: Alright, we only have a couple sponsor spots in this show. We’re gonna have two now. They help us keep on keeping on and then after them, nothing then until Doug’s trivia. And then none more for the rest of the show. So we’re gonna hear from two now and then OG Doug and I gonna help you dig into the 1 0 1 of index investing.
[00:07:04] Joe: I think the best thing about indexing guys is that if you do this right, the best thing about using index funds oji, I think is the fact that you can largely set it and forget it. We’ll talk about when, not to forget it, but it’s almost like a financial crockpot where mom puts all the stuff in the crockpot, you put the lid on it, you don’t touch it till dinner, it just does all the work.
[00:07:30] Joe: And, uh, you go about your living, which
[00:07:32] Doug: is pretty cool. Are you saying index funds make your house smell great on a cold day?
[00:07:38] Joe: I love the smell of midcaps. Mm.
[00:07:41] Doug: Just feel so cozy,
[00:07:43] Joe: so, so, so good. But I think the goal is here, og. The reason we index is partially number one. So we can do less, not more with our investments and still get where we wanna go.
[00:07:54] Joe: I
[00:07:54] OG: think fundamentally it starts from the belief system of do you think it’s better to pick and choose individual positions and or hire somebody to do that? Or is it better to own one of everything? And, uh, there’s some downsides to owning one of everything because you also have the ones that suck, right?
[00:08:15] OG: So you have the crappy ones as well as the good ones. And the argument for hiring somebody to pick individual stocks or, or hire a fund manager to, to use their strategy, the sale for that, what they, what they say is, Hey, we can eliminate some of those crappy ones, or, or more specifically, we’re gonna have our process to pick better ones.
[00:08:37] OG: And I think a lot of people get this wrong when they talk about indexing or investing in general. They say, well, nobody could beat the market. And the reality is, is that people do every single day and over periods of time it happens. It’s just not predictive in advance. So you can’t, you can’t look at it, the track record or the history of some, uh, investment or some stock picker and say, this has worked five years in a row, therefore it must work for year six.
[00:09:04] OG: So I should pay that person to get their knowledge. The reality is, is that people beat the market all the time. There’s no persistence in the predictive nature of performance. So it’s like, just ’cause I did it a bunch in a row doesn’t mean I’ll do it again and it costs a lot of money. So you put all that together and say, while there’s a chance that I might pick the right fund manager, or I might be the right fund manager myself, the cost of being incorrect is too high.
[00:09:33] OG: And so, so what I would rather do. I would rather have one of everything at a very low cost than try to outperform with a higher cost. And I think this just, I was at the beginning of the, of the flow chart of decision making as it relates to your investment philosophy is do I think that it’s better to have somebody manage this stuff actively or is it better to take a more passive approach and just own one of everything?
[00:09:59] OG: And if you are on the passive side, and if you think like, I think, you know, many of us do, it’s better just to have one of everything and do that at a low cost and accept the fact that there’s gonna be some underperformance there. That’s the, that’s the side that indexing falls on. Passive, hopefully, generally low cost, but not always.
[00:10:19] Joe: I’m gonna keep coming back to the interview we did a few weeks ago with, uh, Lee and Claire talking about stock market maestros. And if you remember, OG the hit rate, which was the number of times, the percentage of times that these pros get it right. The top pros, their average hit rate, and these are the maestros.
[00:10:39] Joe: The best of the best was 45%. Now, the reason why they outperform the index or have a history of doing that more often has been because of what they do afterwards, when they hold, how they hold, if they add to the position that they don’t add to the position. So they end up beating the market in other ways.
[00:10:56] Joe: But if you think about the fact that now we’re getting into really analytical, sitting on top of it all the time. Versus living your life doing the thing that you’re uniquely talented to do, which I think we don’t think enough about that. Is my talent really managing my portfolio? Is my talent going to be moving money in and outta the stock market, or would I get more joy and more life and probably more money if I go do the other?
[00:11:22] Joe: The other thing, if the top person is in the mid forties, by the way, the average fund manager, og, they said was what was uh, 40%. So it’s easy to extrapolate from that, that the average non-pro is gonna be maybe one out of three. Times that we get to the right hit. So our ability to call it to your point is bad.
[00:11:43] Joe: Even if we hire somebody, there’s very few people, we had to call them maestros who have any type of history of doing that, and generally speaking, we don’t know if they’re gonna do that next year or not. So I like the fact that you’re buying the guesswork. It’s just so beautifully simple. I mean, when you buy the s and p 500, you’re buying the 500 biggest companies in America.
[00:12:04] Joe: You get it for, and we’ll talk about cost, but generally if you do this well, which will show you how to do this today, you get it for really low cost. It’s already diversified, and this is the part that I like. I mentioned the crockpot earlier. Let’s go to another one of mom’s implements in the kitchen, the oven.
[00:12:19] Joe: It’s a self-cleaning oven. You’ve got these companies, when they stink, you don’t have to worry about, oh gee, that they stink so bad that I don’t wanna invest ’em anymore. They get booted. You don’t have to worry about taking out the trash or weeding the garden or whatever the analogy is that you wanna use.
[00:12:37] Joe: When it comes to indexing, it takes care of itself. You just hold it and the fund automatically adds it or subtracts it. So when you start out, starting with one index to me makes a lot of sense. Og. I see people in their twenties that worry about tax loss harvesting. They maybe get into this, they worry about super diversification.
[00:13:00] Joe: I think for me it’s probably more important that you just get investing. Where do you sit with people just beginning, they’re just starting their portfolio?
[00:13:08] OG: Well, I think first you have to recognize that just the mere act of buying an investment other than an individual stock, you are diversified. So if you’re buying an ETF, you know, in your 401k, or you’re buying a mutual fund in your brokerage account, or you’re buying an index fund in your Roth, every one of those portfolios, every one of those single line items on your statement are made up of probably no less than 40 or 50, but probably as many as 3000 individual positions.
[00:13:42] OG: So you already are diversified by having one line item on your statement. Again, if you could just go back to the history of investing, this all kind of spun off in the forties and fifties of, of ways for people to invest in lots of different areas at the same time. Because back long time ago when our grandparents were, you know, starting their careers, if they had the money to invest, which most of them you know, didn’t, you know, you had to take your cash down to the broker and the broker would buy shares of whatever company of stock that you know he recommended or that you wanted to buy.
[00:14:16] OG: And if you wanted to be diversified, which really wasn’t a, a strong, uh, pushback then, uh, you had to have lots of money. There wasn’t a way, I mean, the indivi stocks back in the twenties, thirties and forties, the minimum order was 500 bucks. So. I mean, $500 isn’t zero today. Imagine what it was back in, you know, the thirties, right?
[00:14:37] OG: Prices
[00:14:37] Joe: is doubling every 18, 17, 18 years like that. Yeah, that’s a big sum of money.
[00:14:41] OG: It’s a big commitment right out the gate. So imagine if you wanted to be diversified, how much, how much cash you had to bring into the brokerage accounts. So, so this was a byproduct of that, you know, the mutual funds and, and then eventually ETFs.
[00:14:53] OG: So don’t get wrapped up in the whole idea of like, well, I’ve just got one thing here. I’m not diversified. You probably are more than you think. In fact, I would say the other side of it is somewhat also true. How many people do we see that have 10 different things in their 401k and then, you know, they’ve got a few bucks in each one of them and you look and you go, you know, this is all the same stuff, right?
[00:15:13] OG: Like you just have a pretty pie chart on your website when you log in and unnecessarily pretty pie. We’re all gonna eat the same pie anyway, you know? So why do we have to cut it up? And it’s like, you know when mom makes the apple pie and sets it out on the window, Doug doesn’t cut it up into little slices.
[00:15:29] OG: He just uses his hands and just eats it because he’s gonna eat the whole thing anyway.
[00:15:33] Doug: Yeah.
[00:15:33] OG: You know
[00:15:34] Doug: why get a plate? He don’t get a plate outta the cupboard for that
[00:15:37] OG: and just like, just scoop out apple pie on one hand and ice cream in the other and just shove it right in. It helps solve, it’s about
[00:15:43] Doug: process efficiency.
[00:15:44] OG: Og. That’s right.
[00:15:45] Joe: If she ever gets them to stop doing that, that would be fantastic. Just as an aside.
[00:15:49] OG: Yeah, like use a spoon, man. So at the end of the day, you’re probably diversified just fine. Especially if you’re just getting started.
[00:15:56] Joe: Now there’s a great book for people just starting out called The Simple Path to Wealth.
[00:15:59] Joe: Uh, we’ll link to j Collins, the author of that book and a few others who’s been on the show before. And I think he makes a great point that, you know, new investors freak out, what do I buy? What do I buy? And he’s like, just buy the total stock market index. I’m actually over time, moji becoming less of a fan of the total stock market index.
[00:16:19] Joe: Not that it doesn’t work, but that when I went and looked at volatility and expected return of the total stock market index versus just the s and p 500, very, very close, incredibly close over lots of different timeframes, over lots of different, um, things going on, rising interest rates, lowering interest rates, stock market, uh, global issues, whatever it is, they move very close to lockstep and I think very strongly that when you get to about a hundred thousand dollars.
[00:16:52] Joe: The cool thing is it starts to get interesting and you don’t have to stop at one index, and this is at a time now that you’ve got it, imagine how long it takes to get to a hundred thousand dollars. Now you’re beyond the stage of getting your feet wet. You’re used to the ups and downs of your portfolio, and now you can get a little bit more scientific at that point.
[00:17:11] Joe: I like the s and p 500 better because of the fact that you are gonna need that long-term. That’s still gonna be the i, I believe, the whole of your ship long-term, and I’d love to get your take on this where the total stock market index is just kind of a sloppy index that covers a little bit of everything, and you’re gonna largely need to replace that.
[00:17:30] Joe: So whether you go s and p 500 or the total stock market index, which is what JL Collins likes over the short run, doesn’t matter. I think over the long run, if you don’t wanna sell it again and mess around with any of that, just buy the s and p 500. And then as you’re adding new indexes, add to these other places, add to some of the other things that we’re gonna talk about.
[00:17:50] Joe: But what I like best before we even get to these other indexes, og, the key to diversification, when you get to that a hundred thousand mark, instead of asking what’s the best fun? Now the key question truly is if you’re gonna master this, it’s not what’s the best fun, it’s what Mix gets me to my goal. I think rearranging your thinking so that you’re thinking about mix gets me to my goal versus what’s the hot thing I gotta buy today is gonna be a key to winning.
[00:18:17] OG: Well, in recognizing the upsides and downsides of the range of what those individual areas of investing will do over time, I think is also important. I like to think about the, the world of investing, which by the way, you know, if you talk to the Morningstar people, you know, a lot of people are familiar with the Morningstar style boxes, that kind of nine box square that has all the different large and mid and small and all that sort of stuff.
[00:18:47] OG: I think that Morningstar people would tell you, uh, somebody just created that on a bar napkin. There’s no real scientific information there. That’s just their marketing thing. So I like to think about the different areas of investing in big and small and then just look globally. So big and small. Us big and small, international and big and small, up and coming countries.
[00:19:10] OG: Those are the kind of ways that, that we think about it. And as you’re adding those extra layers of diversification or maybe extra layers of asset class. Significance. Maybe that’s how I would think about what to add and where to go. Paul Merriman’s got a great piece that he writes every single year where he basically says, Hey, you know, if we start with the s and p and add a little bit of us value, or a little bit of small companies in the US or a little bit of big companies internationally or small companies internationally.
[00:19:42] OG: And it just kind of goes through this thinking tool and how that affects the overall performance over periods of time. And more specifically, how it shrinks the range of variability. You know, we call it volatility. I like to say variability, but where that kind of bouncing around goes, if you’re investing in one stock, it can go from a bajillion percent or negative a hundred percent, right?
[00:20:05] OG: Like there’s a pretty wide range. When you start adding more pieces to it, you shrink that, that bell curve to a more tolerable range of range of returns. So Paul Merriman’s piece on that, and I’m sure we can find it and link it in the show notes. I think does a great job of explaining how adding those extra layers of, of different asset classes, how that affects your, your performance, but more specifically how it affects your variability.
[00:20:33] OG: I’d be careful with looking at it from the perspective of what does my return need to be, because we can get lulled into not understanding what that means on the downside. I’ll give you a perfect example of that. The best performing asset class that we’ve tracked for the last a hundred years is US small value companies.
[00:20:51] OG: So we just kind of pigeonholed it into one section, right? US companies that are small that have been around a long time, you know, so it’s like, you know, this one little subset of companies, and we know historically that group of companies, uh, average is about 13.5% a year. And for, for people that have paid attention to, uh, other numbers, they might say, well, wait a second.
[00:21:15] OG: I’ve heard that the s and p does 10. You know, 13 sounds better than 10. Gimme some of that. 13. If you don’t know what that is made up of, you could get yourself into a little trouble. So the average of 13 comes with a minus 67 every so often. Most people just don’t have the, I I, I don’t think anybody does, honestly.
[00:21:38] OG: Nope. I, I don’t know that there’s anything, any person out there that would have a million dollars, watch it, go down to 300,000 and then have the intestinal fortitude to wait it out all the way back to a million
[00:21:50] Joe: and go, I’m good. No, I’m good.
[00:21:52] OG: I’m good. Good. I’m not gonna do anything different. You know,
[00:21:54] Joe: trust the process.
[00:21:56] OG: Yeah. Those things, when you see those things, you just be aware of what the variability looks like and recognize that, to your point, I think what you were saying before, Joe, is in, in, in your perception. Large US companies, in this case, the s and p 500 is kind of the main course. The rest of the stuff, international and emerging market and you know, whatever, they’re just accompaniments to the main course.
[00:22:21] OG: You know, this is, I don’t think it’s an evenly split thing. Back to Doug’s pie analogy, Doug always gets three quarters of the pie and then we get what’s left. Right. Because he gets full and he’s like, I’m, I’m, I, I ate what I needed to guys. You guys can have the rest.
[00:22:37] Doug: I love the pie charts that are like, yes, 55% still yes, but in a different color.
[00:22:45] OG: Yeah.
[00:22:46] Doug: So that’s how I look at the, at Mom’s Pie, head of the quarter. Still mine, I just haven’t stuck my hand in it yet.
[00:22:55] Joe: Percentage of the pie. I stuck my hand in 55% percentage of the pie I’ve yet stick my hand in, but I’m about to 30%.
[00:23:02] Doug: Yeah.
[00:23:04] Joe: Part that will be left when I finally ask, Hey, does anybody want any of this?
[00:23:08] Joe: 0.5%.
[00:23:10] Doug: Yeah, I left that for you. Oh, you’re not gonna eat that. Why?
[00:23:13] Joe: I think this is a great place. You know, we talked about OG not to use AI for final decision making, but asking AI a little bit about volatility I think is a safe place. I. Is this expectation that I have for my portfolio, realistic, I need my portfolio to do 11% per year to reach my goal.
[00:23:32] Joe: How realistic is that? I think even AI will say hard pass. Like, Nope, that is way too volatile. So expecting a lower rate of return and that you’re going to do more of the heavy lifting is always a safer bet, but you also wanna be realistic so that you’re not over saving money, and you can have some fun today too.
[00:23:53] Joe: We’re gonna talk in the second half of this discussion about which ETFs are the ones that you probably want to consider first, as your main course in the accoutrements is OG talks about which ones you might think about skipping, and then how to make sure they all work together and how to look at volatility in fees.
[00:24:13] Joe: We’re gonna do that in the second half, but at the halfway point of every show, we take a slight break to make sure that you look as cool as possible today because you’re gonna be able to brag that you know the answer to today’s financial trivia question.
[00:24:33] Doug: Hey there, stackers. I’m Joe’s mom’s neighbor Doug. And index investing well is like knowing you’re gonna use a baseball analogy, hit the ball only some of the time, and you’re not only okay with that, you’re fired up about it. The best hitters in baseball are only successful about a third of the time, which means two thirds of the time.
[00:24:53] Doug: You and me. Well, we’re as good as any major leaguer around. So here’s today’s question. It was way back in 1983, that one Benjamin Stacking major league pitcher asked Walter Johnson to become the strikeout king. Hold it right there. How cool is that? There’s a stat called Strikeout King. Fun side note happened to be yours.
[00:25:17] Doug: Trulys nickname in college. Who knew? Well, pitcher Walter Knight, train Johnson had held the mark for a long time before this guy. Who played for the Rangers and Astros and is still considered a Texan. Through and through. He beat the mark. He even continued piling up the Ks by playing for several more years afterwards.
[00:25:40] Doug: Okay, stackers. Even if you don’t like baseball, you probably know this guy’s name. Who was the new strikeout king? You know, besides me, I’ll be back right after I look up. Just why being called strikeout King always made people laugh, but he laughed about this guy I am talking about in the trivia question, but they always laughed about me.
[00:25:59] Doug: It was very weird.
[00:26:10] bumper: We’re looking for the answer and correct spelling. Old McDonald had a what? Farm. E-I-E-I-O.
[00:26:22] Doug: Hey there, stackers. I’m term looker, upper and guy who just got the joke. Joe’s mom’s neighbor, Doug. Wow. Joe’s mom just shared with me what being called the strikeout king really meant, and unbeknownst to me, these guys weren’t talking about baseball at all. Also, while everyone has cold streaks, sometimes there’s no need to throw shade at those of us who are out there trying every night of the week.
[00:26:47] Doug: Well, a guy who tried and succeeded is the subject of today’s trivia because on today’s date, he beat Walter Johnson’s Strikeout King record. He’s known for many other feats, including during his final years of baseball. Beating the snot out of one Robin Ventura when Robin charged the mound. In fact, because he was defending himself, the umpires didn’t even kick this guy out of the game.
[00:27:11] Doug: So who is the pitcher who has become a living legend in the minds of fans everywhere? It’s none other than Nolan Ryan. See, even if you don’t like baseball, you probably knew that guy’s name. Right? And now time for me to hit a lazy fly ball over to OG and Anna.
[00:27:29] OG: All right, Anna. Six weeks, six episodes. Well, I mean kind of seven weeks and seven episodes.
[00:27:34] OG: I guess if you’re
[00:27:34] Anna: counting today,
[00:27:35] OG: actually keeping track at home. We’ve got a lot of stuff coming up. We’re not gonna do anything new today. We’re not gonna add anything to the pile, add anything to the mess, just kind of zoom out and let’s just recap the stuff that we’ve talked about in season one.
[00:27:46] Anna: Let’s do it.
[00:27:47] OG: Let’s go through each episode, remind everybody what we covered, and then we’ve got a little special. Is it bonus? Should we have a bonus? Is it, it sounds too salesy to say a bonus, but
[00:27:58] Anna: you know what? I don’t even know what the bonus is, so I’m excited.
[00:28:00] OG: We have a special bonus. We have a bonus at the end for everybody.
[00:28:03] Anna: It’s a bonus for me.
[00:28:04] OG: Yeah, well I think, you know, once you, it’s not really a bonus, you’re gonna find out. You’re gonna be like, oh, I already knew about that.
[00:28:09] Anna: Okay. Okay.
[00:28:10] OG: All right. So let’s go through ’em. You start, what do we start with?
[00:28:12] Anna: So week one we just talked about how a financial plan, it’s more than just investing.
[00:28:19] Anna: We’re looking at cash flow. We we’re looking at insurance estate planning. And not that we covered all of these things, but we just talked about how it incorporates all of that and it all is connected to each other.
[00:28:30] OG: And we wanted you to grade yourself. That was your homework, was, you know, give yourself a letter grade A through F on each one of the areas.
[00:28:37] OG: And uh, I think our hope at the beginning was to get through all of them, but we kind of lingered on a few topics that we thought were kind of interesting. So maybe some of your grades are incomplete right now. Maybe an incomplete in your semester grade, but that’s okay. We’ll circle back to that. Week two, then we started with cashflow.
[00:28:53] OG: That’s kind of the basis of everything that we do. There’s two ways to think about cashflow, right? You can sign up for, uh, an expense tracker. You can keep track of it electronically, can use AI to download all your transactions, say make me a budget, or you can use our system, which is basically saying, we know these areas of your cash.
[00:29:12] OG: How much money do you make? How much debt do you pay? How much taxes do you pay? How much savings do you have? And then if you just subtract all that we know, here’s the everything else number, that everything else bucket is the basis for literally every other decision in your financial plan.
[00:29:27] Anna: I love cash flow.
[00:29:28] OG: It’s so fun. So how do we use the monthly cashflow number? Then in week three,
[00:29:33] Anna: we kinda had to start with that to then get to the emergency fund. Which was basically where we could take that number. We’re breaking it down monthly. We’re multiplying it by a certain number based off of how you answered a set of questions.
[00:29:49] Anna: So definitely good to go back to that one and just double check that everything is lining up between those two weeks.
[00:29:56] OG: Then we took a little break. We had a bunch of questions, so we grabbed a couple of questions and worked through those. I love answering questions. That’s kind of my, my jam.
[00:30:04] Anna: I mean, that’s our job outside of this too.
[00:30:06] OG: Fair. Fair. It is kind of the job, but um, me just talking is kind of my favorite part. So, so week four is a bunch of questions and then we got into some. Maybe some kind of fun tactical things in week five.
[00:30:20] Anna: Yeah, I think this is where people actually wanna listen to us. Um, it’s more of the investing portion.
[00:30:25] OG: All the cool part. Yeah,
[00:30:26] Anna: all the cool part, and it kind of goes back to like if you’ve heard of goal-based investing, but it’s like, how do we separate all of these goals into different categories? We have like a short-term bucket, which is more of an emergency fund. We have the middle term like goals within two to five years, and then we have all your stuff that’s a little bit more long term that you haven’t actually, you know, thought about right now, but it could probably happen in the future.
[00:30:50] Anna: Retirement probably fits in there for most people too.
[00:30:53] OG: And thinking about where those goals are and making sure that the money that you have is set aside for the right timeframe, which then makes the decision around investing a lot easier. Instead of saying, I don’t know what to invest in, it’s like, well, if you start with the time and the right bucket, it really narrows down the, you know, the selection of stuff you, you’re not searching for.
[00:31:15] OG: Which stock fund to buy for your emergency fund, for example.
[00:31:18] bumper: Mm-hmm.
[00:31:19] OG: All right. And then, uh, last week then we talked a little bit about taxes. We started with taxes. There’s a lot to unpack here, and I think maybe in the future we’ll dive back into this a little bit as well, but we established the concept of what we call the tax control triangle and where are your investments.
[00:31:34] OG: So we’ve got the, the time-based kind of way to look at it, but then also the tax-based way to look at it. Where are your investments from a pre-tax standpoint, from a tax-free standpoint, from an ongoing tax standpoint? So brokerage, Roth pre-tax and kind of reverse order or IRA and more specifically, how is that money gonna be taxed when you distribute it?
[00:31:53] OG: I think a lot of people pretty quickly realized if you sat down and did the math, your triangle maybe was a little off balance. You know, maybe not exactly the stool that you thought you were building in the garage, uh, when you decided to, to, you might topple
[00:32:08] Anna: over,
[00:32:08] OG: it might topple over. So, uh, work through that and do the calculations of where your tax treatment of your dollars are.
[00:32:15] OG: So six weeks, six episodes, seven if you count today, how does this all tie together?
[00:32:21] Anna: Going back to the first episode where we talked about how all of these things are integrated. Like we were saying, episode two, you can’t figure out episode three, the emergency fund without episode two. Mm-hmm. And there’s gonna be a bunch of other topics that we talk about in the future that we can’t really get into until you’ve figured out these five topics that we talked about today.
[00:32:44] Anna: So everything’s integrated. You pull one lever, it affects another portion of your financial plan. So it’s really important to understand each piece and how they integrate together.
[00:32:56] OG: You know, when you and I sit down with people for the first time, obviously, but even years later, it’s amazing to see the impacts of that interconnectedness of those different areas of planning.
[00:33:06] OG: We go through all of these areas all the time with with people, depending on what’s going on in their life. It’s like, if all we focus on taxes, that’s great, but we’re gonna mess up cash flow. Mm-hmm. If all we focus on is the investing, we’re gonna mess up taxes. So having an an understanding of how those things all are inter interconnected, I think is, is super important.
[00:33:26] OG: Okay. So we promised a little bonus, and I know you played it off like you don’t know what the bonus is, but you know what the bonus is.
[00:33:32] Anna: I know what the bonus
[00:33:33] OG: is, so give the people what they want. Anna.
[00:33:35] Anna: All right. You’ve been asking and we’re delivering. We, um, we put together a workbook for these past seven episodes, so go through, download that at Stacking Benjamins dot com slash basics guide.
[00:33:53] Anna: So basics with an S at the end. Mm-hmm. Guide, download that. You’ll be able to basically do a review of these last seven episodes, and then you’ll also be prompted with the next guidebook for season two.
[00:34:07] OG: Yeah,
[00:34:07] Anna: which will be really nice. You can kind of start the sessions with it.
[00:34:11] OG: Follow along this guidebook.
[00:34:13] OG: Every episode’s got a page or two. Gives you the worksheets of the questions that we go through. You know, fill in the blank, you can print it off or use your editing tool and whatever PDF editing tool you have for Apple Pencil or whatever, you know, figure it out. But you can kind of follow along instead of.
[00:34:30] OG: Having some note cards, you know, lying about. Uh, and then when we get done with season two, or when we, before we start season two in a couple weeks, we’ll have, for those of you who get season one, we’ll send you season two’s guidebook right away as well. So you’ll have that to work through. So Stacking Benjamins dot com slash basics guide.
[00:34:49] OG: Um, this has been really fun. Kind of feel like we make this up as we go every single week, but, uh, we had a little bit of a strategy, maybe a little bit firmer strategy into season two. That’s the other thing. You can preview what the topics are in season two if you get the guidebook, because it’s already on there.
[00:35:01] OG: So thank you for the feedback and suggestions for that from people.
[00:35:05] Anna: We see all the little comments. We see the names that you’re coming with. It’s super fun that everyone’s been engaged in, in this new segment.
[00:35:13] OG: Yeah, a little fun for us as well. We’re gonna kick it back to Joe. Go get your guidebook, Stacking Benjamins dot com slash basics guide.
[00:35:20] OG: Uh, with an s like you said, basics. Guide, uh, and we’ll see you in a couple weeks after we get, we got an off week next week and then we’ll kick off season two right after that. Okay,
[00:35:28] Joe: let’s do it.
[00:35:30] bumper: Hi, it’s Chuck Jaffe and every day while I’m living the money life, I’m also Stacking Benjamin’s.
[00:35:36] Joe: Speaking of home runs another home run there.
[00:35:39] Joe: Og. Thank you very much.
[00:35:40] OG: Anna carries the weight
[00:35:42] Joe: and I hope stackers that if you missed some of OG and Anna’s sessions, we are turning them into a YouTube series that you can go through. We have fantastic graphics that accompany the lessons so that you’re able to see visually the things that they’re talking about.
[00:36:00] Joe: And I know from some people they’ve already told us. Those are really helpful. Head to the Stacking Benjamins YouTube page, and it’s much more like a class that’s a seven week class. So those are coming online just a couple weeks behind where we are on the podcast. Go there and begin and start doing the homework.
[00:36:17] Joe: Let’s get this stuff done. Don’t just listen to it and go, oh, that sounds nice.
[00:36:20] Doug: It’s a fun class though.
[00:36:22] Joe: It is a fun class. It’s
[00:36:23] Doug: not like the kind you dreaded going to
[00:36:25] Joe: no. And in the first two, you even get the video of, uh, OG telling some of the best jokes that you can share with the whole family.
[00:36:33] OG: Try.
[00:36:34] OG: Let’s try it. They got all cut out at the end.
[00:36:36] Joe: Let’s go into part two of our discussion about indexing and index funds. Og. We talked about maybe adding some different areas to your portfolio and you’re gonna have a step one of some of the accoutrements that you’re going to add. What are probably the first two additions you could see the average stacker needing to think about bringing on to give them better diversification when they need to get a little more scientific as the portfolio gets bigger.
[00:37:06] OG: Well, I’ll give you two, Joe, but I, I don’t understand why you would just stop again, back to the transaction cost of this being low and the, you know, the, the fractional ownership share, whatever you wanna say. Like, why would we just only do a little bit if you’re trying to keep it super easy? Probably international and then maybe a little bit of us small companies, but I don’t know why you wouldn’t add us large value, us small value, international growth and value.
[00:37:40] OG: You know, like, why wouldn’t we do all of those things? Especially once you get to that a hundred K level, I guess there could be a, maybe a tax problem or something like that, you know, in terms of rebalancing. So maybe you’re just doing it by adding, you know, your new money contributions over time. But if you pinned me down and say, I just want two funds to buy.
[00:38:01] OG: I’ve got all s and p right now. I think I would add us small. International. Those would be my first two.
[00:38:09] Joe: Yeah. And then beyond that, I like the fact that if you’re gonna get more scientific, get more scientific, but realize the more scientific you get, and this is where behavior starts to matter, at what point are you going to not maintain.
[00:38:24] Joe: Your stuff. So I, I think to keep it easy, you go three, but if you’re going more scientific, let’s go toward these other areas. It’s funny you, you mentioned international and one of my favorite areas of international OG that I think is interesting, but interesting in the same way as your small company stocks.
[00:38:42] Joe: You talked about in the first half of this discussion that’s very volatile is emerging markets. Like look at some of these nations around the world that the way they’ve grown up, like over my lifetime, India when I was born versus India, today is a totally different economic situation.
[00:38:57] OG: Yeah, and I think you can capture most of that with international.
[00:39:00] OG: You asked me for two, so I gave you my two.
[00:39:03] Joe: No, I’m saying that when you get more gritty. So why the bent toward value are you adding in large company growth and large company value if you get more scientific?
[00:39:15] OG: Well, here’s the thing. I think the difference that I look at this from and how we’re talking about it today is.
[00:39:21] OG: Like trying to keep it very, very, very simple. I don’t actually like indexing because I think it’s the worst way to do it. So how about that? For a frigging hot take? For the hot take?
[00:39:35] Doug: That is a hot take. I’m sitting here thinking, did he just say that like 40 minutes into the, into the show?
[00:39:42] OG: Well see, here’s the thing,
[00:39:43] Doug: that’ll wake you up.
[00:39:44] OG: So I think we use these terms interchangeably and I just, you know, it’s, to me, it doesn’t do anybody any justice here to, to just say a word and then think we all mean it the same way. The whole concept of an index is, it’s just a list. And now I’m gonna start this like big rant. And I don’t mean to do it, but it’s just a list, right?
[00:40:07] OG: Like we could create the Stacking Benjamins index, you know, be like, Hey, we’re indexing, right? It’s just a list put together by a bunch of people that went, this is the list. Then a whole bunch of other people decided that that’s the list that they wanna follow for today. And so the group at Standard and POS goes, we’ve got a list.
[00:40:25] OG: It’s 500 ish. It’s not even 500, it’s like 505, but that sounds really dumb. So they say 500, you know, the
[00:40:35] Doug: s and p
[00:40:35] OG: 5 0
[00:40:35] Doug: 5.
[00:40:37] OG: Yeah.
[00:40:37] Doug: This week,
[00:40:38] OG: you know, we could have the blue logo company list. We could have, you know, and just be like the blue index, I follow the blue index, I follow the red index. It’s like, you know, it doesn’t,
[00:40:47] Doug: or
[00:40:48] OG: the reality is,
[00:40:49] Doug: well, I don’t know, maybe the,
[00:40:50] OG: or the dunk
[00:40:50] Doug: index, the US Congress index.
[00:40:54] OG: Yeah, yeah. Well there’s that whole company too, you know, what’s the name of that firm that like, just does the trades that the Congress people do, you know, and they make a like a killing. All of the academic research around investing is centered around asset classes. And when you tear apart, you know, and this is, this is, I’m not knocking, I mean, I kind of am, but it’s a fine way to do it.
[00:41:21] OG: But all the research is around asset classes, not on the s and p 500, you know, and so when you look at a specific index, or I’m just gonna say a specific list because that’s what it’s called, then we can see that it’s a, an amalgamation of different asset classes that kind of maybe go together. But we’ve just largely accepted that this list is representative of this, this asset class.
[00:41:48] OG: And while it’s somewhat true, I think there’s an opportunity to be a little bit better when you focus on asset classes, not on lists. The s and p is a great place to invest. It’s fine. Warren Buffett famously said, I want half, you know, 90% of my money to be in the s and p and 10% in cash when I’m dead. Like, cool.
[00:42:11] OG: The reality is for most investors, the problem isn’t what their asset allocation is. The problem for most people is ’cause they’re not saving enough frigging money. That’s the major problem. Um, so getting a 0.5% better return isn’t gonna make you retire at 65 instead of 75. It might make you have more money on the backend.
[00:42:34] OG: The thing that’s gonna get you to retire at 60 instead of 70 or 65 instead of 75 is saving more money. It’s really negligible the difference. Whether it’s the s and p or the total market or you know, I use an active fund or whatever. I feel like we, we try to identify a boogeyman that we can attach. Well, this is the reason why I’m not being successful.
[00:42:58] OG: It’s because I paid 0.5% management fee instead of 0.05. And that’s the reason my entire financial life sucks.
[00:43:06] Joe: Well, this is specifically, and I’m glad you brought this up, that’s specifically why we talk about, forget about any of the scientific stuff until you get to a hundred thousand ’cause it just doesn’t matter.
[00:43:15] Joe: And then going to the Merriman research where you look at him getting more scientific by combining asset classes, there’s a huge delta. There can then be a huge delta between doing. The total stock market index versus getting a little more scientific about this. But I think you bring up something really, really good, which is a mistake that a lot of people make OG and it’s funny ’cause this is exactly what I wanted to bring up next, is that I like how you described these as lists and I got this list over here and I got that list over here.
[00:43:47] Joe: And a place that I think even some experienced investors don’t recognize. If I’m using one company’s list, A on the left and I combine it with B companies list on the right, their definitions of what goes into these things, maybe a lot different. And you could have overlap that you don’t even know that you have.
[00:44:11] Joe: I think a best result, and I really like this is. Pick a responsible, good family of indexes. iShares is is just one of them off the top of my head, right? Pick one because then I know iShares has defined large company value as this. They’ve defined small company value as this, and I know that they’re not gonna have the same thing in the small cap value at the top that’s in the bottom of another company’s large cap value.
[00:44:41] Joe: You know what I mean? Mm-hmm. They decided though. So whenever possible, find one company and try to get as many of those lists instead of list A from this company that you heard was good. List B from this company that you think is good ’cause your overlap and you’re not really being scientific. You’re not even diversifying.
[00:45:03] Joe: As much as you probably should,
[00:45:05] OG: Joe, I’ll give you a c plus on the all funds in one place.
[00:45:11] Joe: Wow. C plus of OG is like,
[00:45:13] OG: it’s like a curved a everywhere else. I don’t, I don’t grade on a curve. You get what you get.
[00:45:18] Joe: Thank you. Thank you.
[00:45:19] OG: I think if we’re looking at the world through the lens of these indexes or through the lens of these lists, I would agree with you that every company is gonna have their definition of what goes in each list.
[00:45:31] OG: And so to eliminate the opportunity to have overlap or under overlap, is that a thing? Keeping it within one and, and I’ll just give you a perfect example. Let’s say that you’ve got, you know, your 4 0 1 Ks at Fidelity, your brokerage accounts at Schwab, and your spouse’s 4 0 3 Bs at Vanguard. You know, there’s a good chance that you’re gonna have three of the exact same things, or really close to the same three things.
[00:46:01] OG: Vanguard’s s and p 500 Fidelity’s s and p 500, or if you said large cap growth index, whatever, and Schwab’s or whatever, whatever group I said, you know, like there’s gonna be a bunch of the same stuff and you see three different line items and you go, oh, I’m diversified. That’s not really how that works, right?
[00:46:18] OG: You’re, you’ve got three of the same things. You know, if we’re looking at this from a planning standpoint, and this is, you know, one section of your financial plan, right? Your investing behavior or investing plan is one section. I’m assuming that everything else is, you know, from a planning perspective, is taken care of, right?
[00:46:36] OG: We’re saving the right amount of money and we’re putting it in the right places. And this is that last like 10% optimization. You know what we talked about earlier, and certainly we’ve talked about for years, the biggest lever in your financial plan is you, you know, in terms of like saving money and investing and doing that.
[00:46:55] OG: But if we’re looking at it from, okay, now what other things can we add to. Ticket. You know, what does Emerald say? I gotta add a little bam,
[00:47:05] Joe: bam.
[00:47:06] OG: Gotta kick it up a notch. These are the areas that you can use to kick it up a notch. So the difference between the investor who has a hundred percent s and P, which is fine, and the investor that has large cap value, small cap value, small cap growth, international large value, and small emerging market value, and small, that investor is gonna have a better range of returns and a higher expected return than the person that just has one.
[00:47:32] OG: And I like your cutoff of a hundred K as kind of being that number where some of that stuff comes into play. So as your portfolio grows, you should add layers of this extra stuff to it to help improve the overall experience that you’re having as an investor.
[00:47:49] Joe: But what I like, what I like stackers that OGs focused in on, and I want to make sure that we make this point.
[00:47:56] Joe: That adding a little bam assumes there’s something in the pan. And the problem that I had, and I think the problem that you’re pointing out is there’s too many investors that have nothing in the pam. They have, they have, they’re not cooking anything. They don’t have any investments, they don’t have any, and they’re getting all scientific about this strategy.
[00:48:14] Joe: And that’s not going to win the day. That’s not gonna win the day. None of this is
[00:48:19] OG: do it. Yeah. It can make, it can make a little difference in the long term. No, listen, no doubt about it. When you, I don’t like how this is portrayed, but using the fee thing as an example, right? You’ve probably, everybody’s seen these charts where it’s like, you know, if you have a 1% fee versus a half a percent fee, this is five bajillion dollar difference in 60 years.
[00:48:37] OG: It’s like all things being equal, the math works, right? But you have to assume that somewhere in there, you know, some behavior takes over. And so I think that if you make it too complicated, then. The seasoning didn’t work. And yeah, you got an experience, but it’s probably not the experience that you wanted.
[00:48:56] OG: If you keep it too simple, then you are missing out an opportunity, you know, to make it a little bit better experience. These are all like little tweaks and adjustments, you know, that you can make
[00:49:08] Joe: Add the bam.
[00:49:09] Doug: I think, I think you guys need, we gotta take a lunch break. Have you noticed how many food analogies we’ve used today?
[00:49:16] Doug: You guys need a
[00:49:17] Joe: snack? Doug’s like all of a sudden I’m hungry. We’re talking about,
[00:49:21] Doug: I wasn’t even hungry when we started and now eat a whole pizza.
[00:49:25] Joe: Uh uh. I wanna cover very quickly, one last area, which is what I call, is this still indexing? Because OG you brought this up earlier and I wanna hammer this home.
[00:49:35] Joe: There’s a bunch of stuff that you and I don’t consider indexing. That these companies, because indexing is a buzzword that they call indexing. And you might think that you’re getting more scientific, and I think you and I can agree, you’re probably wasting your time. These buffered ETFs, the factor ETFs, the active ETFs, these quote, uh, indexes that are really moving targets and that are, and that are, I feel like they’re just, they’re just Wall Street marketing speak.
[00:50:04] Joe: It’s more complexity, it’s more cost, and it truly is for a much more niche audience than a lot of these companies are making them out to be.
[00:50:13] OG: Go back to replacing the word index with list and then see who’s sponsoring the list. Yeah. And see if it makes sense to you. Right.
[00:50:22] Joe: And is this actually a list?
[00:50:24] Joe: Like, can I look at the list?
[00:50:26] OG: Well, I, I would just submit to you like, if you recognize the company, then you’re probably, if the Dow Jones came out with an index, if somebody said, Hey, this is the Dow Jones index. And you say, I’m gonna take out the word index and make a list. This is the Dow Jones list.
[00:50:42] OG: Would you go thumbs up or thumbs down? Generally speaking,
[00:50:45] Joe: thumbs up.
[00:50:46] OG: Thumbs up. Yeah, right. I know who Dow Jones. I know Dow. How about the s and p list? Thumbs up Russell. You know the, the Russell list?
[00:50:54] Joe: Thumbs up.
[00:50:55] OG: Okay, thumbs up. We’ve heard of these company Stacking Benjamin’s index. Thumbs down, thumbs down.
[00:51:00] OG: Right? We’ve never heard of these guys. Right? Like, what the hell is their strength? Like, what are we doing If it’s the, uh, green company index it, like it doesn’t matter. So, so just replace the word index with list and see if it makes sense to you. And, and I think what you said here is really important.
[00:51:15] OG: That’s not to say that what they’re doing isn’t good, it’s just maybe a little bit more specialized than what 98% of people need. And there’s a balance here between simplicity and complexity and. There’s no right answer. It’s a continuum. There’s some people that are supposed to be complicated because it makes the most sense, and they get a lot of value out of that.
[00:51:38] OG: There’s some people that are complicated that need to be simplified because that’s where the value lies,
[00:51:44] Joe: and because they recognize they’re not gonna maintain it, you just gotta recognize what you’re
[00:51:47] OG: gonna maintain. There’s cost everything, right? There’s a cost. Having all of your money in the s and p, you know, the J Collins approach of like just buy the total market index.
[00:51:55] OG: There’s a cost to doing that, and the cost is missed out. Opportunity on the upside and decreased volatility on the ride. But the benefit is simplicity. So know thyself. I
[00:52:10] Joe: think the takeaways here, you’re not racing against the index, you’re racing against your goal, number one. So don’t build an index to beat the world.
[00:52:20] Joe: ’cause you’re gonna start making bad decisions. Simple wins the day and define simple according to what OG just talked about. Really, are you going to maintain it and can you bear the cost? And then third is it’s not about picking a fund, it’s about combining the funds in the right way. You’re not on a racetrack, you’re on a road trip.
[00:52:39] Joe: And I think that’s important to remember. We will have more on this topic in our newsletter, the 2 0 1. So if you’re very interested in investing, we talk about investing all the time in our newsletter. You can read it at your leisure. And, uh, man, Kevin Bailey, who’s worked both for Vanguard, which we mentioned earlier in the show, and TIA, uh, he writes just, uh, fantastic hot take about investing or another financial planning every week at Stacking Benjamins dot com slash 2 0 1 Gets you there.
[00:53:10] Joe: At the end of the show, we like to talk about this amazing community of stackers. We call it the back porch. And, uh, Doug on the back porch, man, we’ve had some cool, cool, cool, cool things happening in the stacker community.
[00:53:24] Doug: Joe, first and foremost, we gotta celebrate the fact that the Tucson bad group had their first meeting.
[00:53:31] Doug: Uh, I am told reports came in to me at my desk that there were 326 people there. Wow. Does that sound about right to you?
[00:53:39] Joe: That sounds a little not
[00:53:41] Doug: correct. There was, there was a six in, it wasn’t there.
[00:53:44] Joe: It was such a nice group of people. And to see Kevin and Scott who’ve spent so much time and energy getting this group off the ground to see that they had their first session.
[00:53:55] Joe: We even had a young stacker there. One stacker brought the baby. So we’re starting ’em early. Doug,
[00:54:00] Doug: imagine if our parents took us to, uh, a financial, what, what’s the right term for it? It’s just like financial rightness. It’s just like good, good financial thinking in a social. If our parents did that, they’d be sitting on the beach in France right now.
[00:54:18] Joe: Still podcasting from a beach in France.
[00:54:20] Doug: Yeah.
[00:54:22] Joe: Bad. By the way, if you’re new to Stacking Benjamins is Benjamin’s after dark. Uh, there are meetup groups around the country and you can go to Stacking Benjamins dot com slash BD to get
[00:54:30] Doug: there. You know, one of my other favorite bad groups is the Boston Bad Group, and Boston.
[00:54:36] Doug: You can use this if you want. I’m gonna just give this to you for free. You need to be calling yourself the Bababa bad group.
[00:54:45] Joe: Oh, Baba Baba,
[00:54:46] Doug: Boston Baba. Bad group. Like, like George Thurgood, right? They had their second meeting and they didn’t do quite as well as Tucson, but they had 228 people there.
[00:54:58] Joe: They did.
[00:54:58] Joe: It was really cool to see. They had a great first meeting, even more people at the second meeting. Even more stackers in the Boston area and in New England saying, gotta make it out to meet with you. So seeing the interest, uh, in the New England area has been really cool. And
[00:55:13] Doug: the whole eastern seaboard is lighting up Joe.
[00:55:15] Doug: ’cause now we’ve also got rumblings. There are rumblings in Baltimore.
[00:55:20] Joe: David in the basement. Our Facebook group wants to have a first session. He’s like, I can’t run a long term, but I’d love to have kind of an exploratory session. You know, when somebody’s about to run for office, but they’re not sure if they’re going to or not.
[00:55:34] Joe: You know? He’s like, Hey, do you want to, so. Check your email people in the greater Baltimore area because we’re helping Dave, uh, get this off the ground.
[00:55:44] Doug: So maybe David will wanna run it like in 2032.
[00:55:49] Joe: He might, I think he has young kids at home, so he is like, I can come. But it is a lift, which is why if you’re thinking about starting a Benjamin’s after dark group in your community, we always recommend having a group of three people.
[00:56:01] Joe: A, it’s so much better doing it with friends. And B, if you’ve ever tried to run anything by yourself, any group, it’s so, so, so difficult to do. But getting these other people, keeping the enthusiasm high, working off each other, riffing off each other, so a group of three people is what we need in the flame lit.
[00:56:18] Joe: Yeah. And by the way, if we get three people, it’s not, I’ll tell you right now, it’s not that hard. If you have one person beyond hard, if you’ve got two people, it’s gonna be difficult for two, for three. It’s actually really fun and a lot easier. Which also, by the way, we have had a lot of outpouring. I sent out a list because a stack of Roxanne wanted to start one in the Bay Area around San Francisco, and we had lots of people reach out for that one.
[00:56:48] Joe: So watch your emails if you wrote to me, because we’re gonna have a information session for people that are interested in helping out with the Bay Area group, which already looks like it’s gonna be a hit because the number of people that responded that email was great to see. In fact, it’s funny, uh, one stacker wrote to me and said, I’m not sure if this is a real email.
[00:57:08] Joe: ’cause literally an hour ago before I got your email, Joe. I had just done a Google search on is there a bad group in my area, and then I get an email from you. Right. You know how it always sounds like your phone’s listening to you
[00:57:21] Doug: because it is.
[00:57:22] Joe: Well, the answer is we’re listening to you stackers.
[00:57:25] Doug: We
[00:57:25] Joe: know your thoughts.
[00:57:27] Joe: Put the pizza down. You know who you are. Somebody’s eating pizza right now. I dunno. That’s great. Lots of fun stuff going on in the Stacking Benjamins community. Speaking of community, if you know somebody who wants to know more about indexing, that’s why we made this episode, so you can share it with them.
[00:57:47] Joe: Please give them the gift of better financial literacy and hand them the keys by handing them this episode On Wednesday, we’re gonna be joined by Mrs. Dow Jones, herself, one of the biggest names, personal finance and social media world. She has over 2 million people following her on Instagram, uh, several hundred thousand on her YouTube page and her TikTok page.
[00:58:10] Joe: And, uh, Hailey Sacks. We call her Hailey. You call her Mrs. Dow Jones.
[00:58:13] Doug: Her parents, Bob and Linda Jones had choices when they named her. And they, they went right. They went right there. They named her Dow. What
[00:58:22] Joe: would Dow
[00:58:24] Doug: could have named her, Katie or Michelle. Nope. We’re going Dow in a predetermined.
[00:58:28] Joe: This is what being a podcast yourself on, because just getting to, uh, meet somebody I followed and by for so long.
[00:58:35] Joe: Is, I think it’ll be really fun. So she’s visiting mom’s basement on Wednesday, but we end every show by asking you this. What should be on your to-do list today after this episode?
[00:58:47] Doug: Well, Joe first take some advice from you and OG indexing. It’s a low cost simple path to helping you reach your goals.
[00:58:56] Doug: Second, while all of the areas OG and Anna discussed, these last weeks are important. It’s even more important that you pull them all together. How you plan in one area of your life can help the rest of the team. But the big lesson, don’t let Joe’s mom know that you have a soft spot, like being called Strikeout King.
[00:59:15] Doug: We already know that 10 years from now, she’s gonna bring that back up in the middle of a crowded coffee shop or a quiet restaurant. That woman is ruthless. 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 Stacking Benjamins dot com, along with the show notes and how you can find us on YouTube and all the usual social media spots.
[00:59:44] 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 Benjamin Show.
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