Is Robinhood REALLY Shaking Up Financial Planning? (SB1611)

Are you ready for a shake-up in the world of financial planning? This week, we’re diving into Robinhood’s bold leap into financial advising and what it could mean for the industry—and for you.

We’ll cover navigating market volatility, how AI is reshaping personal finance, and why index funds remain a top choice for long-term goals. Plus, Doug’s latest escapade leads us to some unexpected places, including a yacht adventure and the art world’s million-dollar banana.

Episode Highlights

• Introduction and Doug’s latest antics
• Robinhood’s big move into financial planning
• Practical tips for navigating today’s volatile market
• Why index funds might still reign supreme for long-term investors
• The pros and cons of RIAs (Registered Investment Advisors) and custodial platforms
• Financial planning strategies for young investors starting out
• Emerging trends shaping the financial planning landscape
• Smart debt management strategies to keep you ahead
• Highlights from past episodes that you’ll want to revisit
• Doug’s TikTok Minute: Yacht adventures and high-seas drama
• Trivia Time: The Great Smog of London and what it teaches us about resilience
• Listener Q&A: How to project portfolio growth without losing your cool
• The wildest story of the week: The art world’s million-dollar banana

From the latest in financial trends to practical strategies, this episode is packed with insights to help you take your financial planning to the next level. Tune in and start stacking smarter!

Links to Check Out

New York City Meetup: Join us for a fun-filled evening on December 12! Details at StackingBenjamins.com/NYC

Show Notes & Resources: Get the full scoop at StackingBenjamins.com

Retiremeet 2025: Joe is taking the stage on February 8, 2025! Grab your ticket at Retiremeet.com and use code STACKING for a discount!

Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.stackingbenjamins.com/201

Enjoy!

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Our Headline

• How Robinhood’s TradePMR acquisition changes the industry (Financial Planning)

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Doug’s Trivia

• What’s the term that was created to describe the foggy disturbance that descended on London in 1952, killing thousands and sending thousands more to the hospital?

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Better call Saul…Sehy & OG

• Stacker Jordan is 32 and his overall portfolio exceeds $100,000. He has a question about what rate of return assumptions to use for some single stock holdings that he still has from the early days of his portfolio (the remainder of his portfolio is in index funds).

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Join Us Friday!

Tune in on Friday for a podcast that you need to share with the people who loved you because we’re going to lay out the BEST gifts for our friends in the financial independence community!

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Written by: Kevin Bailey

Miss our last show? Listen here: The Basics of Financial Independence, Retire Early (FIRE) with Jackie Cummings Koski (SB1610)

Episode transcript

[00:00:00] headlines: Nervous. 

[00:00:01] tiktok: Yes. 

[00:00:02] headlines: First time, 

[00:00:03] tiktok: no. I’ve been nervous lots of times.

[00:00:09] Doug: Live from Joe’s mom’s basement. It’s the Stacking Benjamin Show.

[00:00:25] I am Joe’s mom’s neighbor, Doug. And on today’s show, big news from Robinhood. They’re getting into wait for it. Financial planning. Industry experts say this will shake up the world the same way that Robinhood claimed to shake up stock trading, even though M1 finance had already done that. But good news, Robinhood rarely lets the truth get in the way of a good story.

[00:00:48] But regardless, what does this mean for financial planning? How is the world of advising changing to meet the times? We’ll dive deep into what you should expect from a financial advisor on today’s show. But of course, that’s not all. We’ll share a TikTok minute. Sure. To make you think and answer a question from a stacker who said, Hey, I’d better call Saul.

[00:01:11] See hi in og. What’s the question? You’ll have to hear it with us. And now two guys who used to run a chicken dating service, but they had trouble making hens meat. They had trouble making hens meat. It’s Joe and OG. I’m just gonna go over here and cry. Hey everybody, 

[00:01:35] Joe: welcome to the Stacking Benjamin Show. I am Joe Saul Sea.

[00:01:41] Hi. And it is Wednesday and we are giddy. We’re so happy to be here with you today. So sit back and relax ’cause we’re talking all things financial planning ’cause Oh gee, Robinhood, the company that. Takes from the poor and gives to themselves is back in the news. It’s fantastic. So excited. Just headline a minute.

[00:02:00] It’s like the company that keeps giving, I’m like, oh, we don’t even have to prep for Wednesday show. ’cause Robinhood does all the planning for, I think I know what 

[00:02:06] OG: this one is. I I, I might have caught this one. This is, 

[00:02:09] Joe: this is pretty fabulous. Uh, how are you this fine Wednesday, did you really, after we got done recording, it looked like you were seriously excited about getting it on with Cyber Monday.

[00:02:19] Like you’re gonna put on some berry white, light, a candle, and go shopping. 

[00:02:23] OG: Well, I mean, I don’t really, I don’t play favorites. I feel obligated to shop on every day of the week, regardless of any specials or sales or otherwise. You know, I’m not motivated by social pressures. I shop all the time, so he’s, I don’t have to wait until the last minute.

[00:02:42] Doug: It’s like breaking bad. I am the one who knocks. He creates the social pressure. He’s the one starting the ball rolling for the rest of the economy. 

[00:02:51] OG: It’s keeping people employed. That’s my goal. 

[00:02:53] Doug: I’m not some kind of person waiting for 

[00:02:55] Joe: a sale to buy. I’m very 

[00:02:56] OG: altruistic. I don’t know if you guys know that about me or not, but I want to keep people working in their jobs.

[00:03:03] So I do that by buying their stuff. Lots of it. 

[00:03:08] Joe: The economy. 

[00:03:10] OG: The economy roll rolls through me. 

[00:03:12] Joe: We call it the OGP, right? OG Domestic product or OGDP. Yeah. 

[00:03:19] OG: Jerome Powell calls me and goes, how’s it going? And I go, eh, 

[00:03:23] Joe: what are you thinking about next quarter, og? You gotta keep this thing afloat another quarter.

[00:03:27] We’re gonna have to lower interest rates for you to make sure that you can make it happen. Uh, it is, uh, the holiday season and we’ve got so much to talk about today. Before we get to any of that, though, I mentioned at the end of Monday show that I will be at retirement in Seattle. I wanted to give you that.

[00:03:45] We’ll give it again here at the end of the podcast, but retire Meet Retire, MEE t.com/ Stacking will get you a discount into. The guys at Talking Real Money’s conference. They put in Seattle every year. You’ll see other guests there too. Paul Merriman’s there every year and it’ll be fun to hang out with, uh, Don and Tom from Talking Real Money and Paul Merriman and hopefully you come out and see us stackers.

[00:04:11] We’re also gonna do a meetup around them. We’ll have more details as we get closer about the Stacky Benjamins meetup. Maybe the night before Retire Meet starts. Make sure you sign up for that because tickets are limited just like they are for our New York City event. That one stacky Benjamins dot com slash nyc.

[00:04:28] But that one might be sold out even as I say this, 

[00:04:32] OG: he didn’t invite you or me to either of those Doug did he? You 

[00:04:34] Joe: guys can come. Nope. Tom and Don. Happy to have the entire Stacky Benjamins team there. It’ll be super fun. Uh, great show. Today we’re talking about financial planning and what is the future of financial planning and is it Robinhood?

[00:04:49] No, that you can guess if you’ve listened to this show before, we, we may think not. However we can talk about, uh, financial planning for the modern times. But before that, we have a couple of sponsors that make this show go. So we’re gonna hear from them so that you don’t have to pay for it and we can keep on keeping on and then into our headline.

[00:05:10] headlines: Hello doling and now it’s time feel favor, part of the show, our Stacking Benjamins headlines, 

[00:05:17] Joe: big News from Robinhood. This is written by Rob Burgess in@financialplanning.com. Financial planning.com is the website where financial professionals, uh, kind of dive into their news. And today, the reason why I bring up this headline in the first place is.

[00:05:35] We’re gonna take a look at this from an industry insider perspective. You know, we often talk about, hey, what would it be like working with a financial planner? What are financial planners actually worried about? Right now we’re seeing a little change in the industry. Rob Wrights, how Robin Hood’s trade PMR acquisition changes the industry online brokerage, Robinhood Markets announced a couple weeks ago, it had agreed to purchase the RIA Custodial and portfolio management platform Trade PMR.

[00:06:08] Expected to close in the first half of 2025. The deals for about $300 million in cash in stock. Citigroup advised Robin Hood on the deal While Lazar advised Trade PMR. Through the acquisition trade, P R’s advisors are going to have access to Robin Hood’s, clients who tend to skew young based in Gainesville, Florida Trade.

[00:06:27] PMR has over $40 billion in assets under administration. It’s team will join Robinhood, we’re gonna dive more into this piece, but first of all, let’s talk about what exactly is going on here. og. For people that have been living under Rock, I think even they know that Robinhood has a very young customer based Mm-Hmm.

[00:06:46] Not all that savvy because they don’t think about the fees. So the fact that the company has a history of not being friends to their investors, but now they purchase this RIA custodial portfolio management platform. First of all, what is an RIA? What is an RIA Custodial and portfolio. Management platform.

[00:07:06] Easy for you 

[00:07:06] OG: to say, huh? So easy for me to say. Yeah. What is it again? What’s a t platform of some kind? Portfolio portfolio management platform, uh, trade. PMR is a RAA custodial platform. Like you said, it’d be like if somebody bought Schwab or somebody bought Fidelity, firms like ours, or investment advisory firms that have, you know, regular clients.

[00:07:31] Use trade PMR as the platform where the client money is. So we use Schwab. Some people use Trade PMR, some people use Fidelity, some people use Altruist, which is a newer one. Some people used to use TD before it was acquired by Schwab. You know, some people use Ameriprise, some people use Edward Jones or Merrill or Morgan.

[00:07:50] You know, you place where the money is. Basically, custodial platform is the place where your client money is and it’s really important. The good 

[00:07:58] Joe: news, by the way, about these platforms, I have to, I mean, for somebody who’s brand new to this, why do you have that platform? Well, I would think to some degree this would make it harder for a uh, Bernie Madoff situation, I would think.

[00:08:10] Because the money’s not with og. Yeah, the money is with 

[00:08:15] OG: money’s at Schwab. 

[00:08:16] Joe: Schwab or Trade PMR, whoever it is. 

[00:08:19] OG: Yeah. This is one of the safeguards that you put in place, both as a consumer but also as an advisor. The third party custodian. Allows the clients to have access to all their money all the time.

[00:08:30] And then the advisor who you hire has access to the money some of the time for trading, for example, or to do things that the client’s instruct. So that’s just one of those layers of safety that you wanna make sure that are there to avoid the Bernie Madoff thing, surprisingly, you think, well, nobody would do that anymore, right?

[00:08:48] With with Bernie Madoff, no. It still happens. There’s still companies out there, still people out there that are doing it the wrong way, but a lot fewer and far between 

[00:08:57] Joe: Robinhood clients. If somebody is listening and for God knows what reason, is still working with this company, uh, Robinhood clients, 

[00:09:05] OG: there goes that sponsorship opportunity.

[00:09:10] Joe: Rob Robinhood clients, it says, are going to now it sounds like, be solicited by trade PMR based advisors. So if you’re with Robinhood, I think you can expect a whole new level of advertising coming your way, OG. 

[00:09:26] OG: Again, not any different than anybody else. So Schwab and Fidelity particularly are known for this.

[00:09:31] If you have a retail account at Schwab, or you have a retail account at Fidelity and you don’t have an advisor assigned, they are going to make sure that you know that that’s an offer for them, right? They’re gonna say, Hey, by the way, we have professionals that can help you with your investment management or help with these other sorts of things.

[00:09:50] Schwab and Fidelity also have referral opportunities to outside firms. We have a partnership with Schwab in that if somebody walks into a Schwab office and says, I really wanna work with a local advisor. I wanna work with a person, not just, you know, an 800 number, or, you know, one of your client service reps in the home office, I need a person.

[00:10:07] Schwab will say, here are a few firms in your area that we partner with and that we’d, you know, they don’t say recommend, but that we, that we partner with, that you can do your due diligence on. And here’s, you know, here’s three firms, and then Schwab makes money. As we make money because they say, Hey, we just split the client fee with you.

[00:10:25] We provided you the, the lead source and now you do the financial planning work, or you do the investment management work and we, we split it with you. So very common organizational style in the advisor space right now. So I wouldn’t expect if you were a Robin Hood investor, I would not expect an undue amount of solicitation.

[00:10:43] But you’ll, you’ll be made aware that there are professionals that you can engage outside of the DIY platform of Robin Hood. And if you’re a client of an advisor who uses Trade PMR, I don’t think that you have to worry about getting Robin Hood hooded, Robin Hooded in terms of, that’s a good one. Like, I don’t think you’re gonna be on their platform because Tray, PMR has their own, why would they transfer all the money to Robin?

[00:11:07] Just, 

[00:11:08] Joe: Robin’s gonna be plugging into the same platform. They’ve already been used. I. Plug it into Robinhood. You know, a lot of this piece, uh, focuses on young investors and the fact that now younger investors are going to be approached about financial planning at an earlier age. I don’t, I don’t know that that’s necessarily a bad thing.

[00:11:26] I think that might be a good thing. 

[00:11:29] OG: Well, I think if you look at like the traditional model of financial planning and, and wealth management, you know, it definitely skews older and wealthier, right? I mean, at the end of the day, advisors have only their time available to them. And so if you say, well, would you rather have 10 clients that have a hundred thousand dollars or one client that has a million?

[00:11:49] I’d rather have one that has a million because now I can do that 10 times and I have 10 times the business size or 10 times the revenue or, or whatever the case may be. But the reality is, is that there’s a gap there between people getting started and those people that are at a million dollars or 2 million or whatever the number is, and.

[00:12:07] I think more and more companies are figuring out ways to scale down, to be able to advise profitably those types of relationships. You know, the people that are just getting started and there’s, uh, tons of firms out there who do this facet comes to mind as a financial planning company who focuses on, I mean, certainly they have lots of clients all over the board, but certainly skews probably a little bit younger in terms of their planning style.

[00:12:33] I don’t know. I feel a, as I think about it from a planner standpoint, why would I wanna wait and not help somebody who’s got $200,000 or $300,000, you know, and has resources available to save and to invest and, and wants to do it the right way. We have to have a way to say, you can engage with us. It makes sense for you in terms of a cost standpoint.

[00:12:53] It makes sense for us in terms of a revenue and expense perspective, but I want you to be on the right path from 200 K to a million, not just wait for you to get to a million and ago, oh geez. You could have done that way better if we would’ve helped you five years ago. Know what I mean? That’s kind of kinda a weird, I don’t know.

[00:13:09] To me it seems like there has to be a path for that. And I love the fact that, you know, I’m not gonna say Robinhood ’cause I’m not in love with them, but I love the fact that firms have ways to engage with people that are just getting started. And that mean, that doesn’t mean it’s free, it doesn’t mean it’s doesn’t cost anything, but, but I think firms are moving away, not moving away, but it adding adjacent opportunities for clients to engage with them.

[00:13:34] Whether it’s a hourly rate or a monthly type of financial planning engagement or some sort of way to say, well you don’t have a million dollars, I can’t help you. Sorry. 

[00:13:43] Joe: Yeah. And that was, 

[00:13:43] OG: that was, you know, 10 years ago that was the thing. And now it’s like, well I can help you but we’re gotta do it a different way.

[00:13:50] For some people that’s, that’s the best way because you know, they have a lot of income and no assets, or all their money is tied up in their company’s stock or whatever the case may be. Those people need financial planning help too, to the extent that they want it. So let’s have a solution for that. 

[00:14:04] Joe: It’s funny that you say people with a hundred thousand or $200,000 and, oh, we have a lot of stackers that aren’t there yet, and people are like, whoa, OG is, you know, well, how come he is not gonna work with people with less than that?

[00:14:14] Here’s the thing, I think. When you’re first starting out, I think the entire CFP industry, tell me if I’m mistaken, OG isn’t really set up for you. What is set up for you are things like budget coaches, like our friend Lacey Langford or Jen Hemphill, like people that are into coaching about getting the basic fundamental things fundamental in place.

[00:14:36] Get that budget together, get the savings muscle working like Jackie was talking about on Monday. Yeah. Like those are much more of a, of a budget coach or a money coach than really what the certified financial planning industry focuses on. 

[00:14:49] OG: Well, and the shameless plug, maybe I’m out too far in front of my skis here, but a little shameless plug for what you and I are working on, right.

[00:14:56] We’re trying to create that kind of middle of the road beginning stages. Like I’m not ready to hire somebody and you know, go all in yet, but is there a solution for me somewhere in the middle? And maybe sometime in the late spring or early spring, we’ll have something to kind of fill that. But yeah, I mean I look at it when I talk to people and I love, you know, I talk to everybody who calls.

[00:15:16] I look at it from a value standpoint, you know, and say, is there enough value here that we can provide that offsets what we charge? And we have a business to run and it has payroll and expenses and so on and so forth. So I have to be cognizant of that. But if you’re saying, should I pay a planner $5,000 a year, or should I put that $5,000 a year in my Roth?

[00:15:38] You know, should I pay a planner $5,000 a year or should I work on paying off my credit card debt or my student loans at 5,000 a year? I think the right answer is keep it simple on the investing side and on the decision making side, and do the things that have the biggest lift. The biggest lift for somebody getting started is probably not to pay an advisor five grand, but it’s probably to say this five, if I have this $5,000 to pay, I should probably put this on my credit card debt, or I should probably put this in my Roth.

[00:16:06] ’cause that’s gonna have a bigger impact than an advisor would right now. Now as that grows, as you add some complexity around taxes or multiple rental properties, or you know, whatever happens in your life, that adds complexity. Now you start thinking about, well, am I getting a tax benefit or am I getting a better organization with my money or better investment returns or better decision making?

[00:16:29] That’s where you have to decide whether or not, you know, there’s value there, but early on, I don’t think that it’s a CFP thing necessarily. I look at it from the perspective of would this money be useful for this person in a different manner? Right. You know, in terms of the payout, that’s what’s the payout?

[00:16:45] Joe: Yeah, that’s what I meant is that, you know, you’ve got these areas that financial planners cover, and as you accumulate assets, the estate plan gets more complicated. Yeah. Maybe the tax plan is already complicated, but that balance sheet becomes filled with things that become like a garden that needs to be weeded.

[00:17:04] That’s a whole thing that somebody starting out you can stay away from. But I don’t think that having the CFP capability of like working on the efficient frontier makes sense. If you’ve got $10,000 and you’re making $200,000 a year, it’s much more about. Tax planning, using your benefits and just Mm-hmm.

[00:17:25] Just getting out there, you know what I mean? You’ve got all these different areas, the protection planning aspects that a financial planner will bring to bear. Yeah. Okay. You still need homeowners or renter’s insurance and you still need disability coverage, but I don’t think that the protection quote needs are there.

[00:17:41] ’cause you haven’t billed anything to protect yet. And there’s lots of ways, as you know, that A COP will get around that with insurance. So that’s, that’s what I meant was much more the bang for the buck. To your point, is there where, hey, if we just focus on these couple pillars, maybe a, you know, a budget coach is a better idea or, yeah.

[00:18:00] You don’t, you don’t 

[00:18:00] OG: need a concierge doctor, you just need a telemedicine guy or Absolutely. Yeah. You need to pay for Arnold to be your personal trainer. Just go do some freaking pushups. 

[00:18:10] Joe: There is one paragraph late in this piece that I wanted to focus on because I. I think we can actually learn from what Robinhood is doing.

[00:18:17] If Robin Hood’s good at anything, it is making sure that they make more money. And this is a quote, trading commissions are not coming back, says William Trout, director of securities and investments at technology data firm. Datas insights, trading commissions are not coming back and custody offers an easy way to connect with advisors and they’re affluent clients, many of whom are also self-directed investors.

[00:18:42] He said Robinhood is smartly hedging its bets as it shifts from a purely customer facing transaction centric model to an advice-based business. One that’s also business to business. Lemme back off this a minute because if we really parse what he’s saying there, OG Robinhood is when you take a look at the assets per person that Robinhood deals with.

[00:19:08] It’s not that high. Mm-Hmm. The average person doesn’t have that much money. Robinhood now wants to move upstream, and what’s interesting is trading commissions are not coming back. I love that quote. So they’re going, okay, if I wanna get around wealthy people, I’m gonna get around people that don’t trade as much, and so then I put together if equals B and B equal C.

[00:19:31] Well, if wealthy people don’t trade as much, maybe trading is not the way that I become wealthy. Maybe there’s other ways. ’cause if the vast majority of wealthy people and Robinhood wants to get with wealthy people, maybe there’s something here. I just want to get to an asset base that doesn’t need to trade to figure out a way to make money.

[00:19:50] OG: Or, you know, I thought what you were gonna say, there was a lesson for investors, which is, if Robinhood sees that wealthy people don’t mess with their money very often, why the heck are you doing it? I thought that’s where going. Well, that was 

[00:20:04] Joe: exactly my point, 

[00:20:05] OG: which is, oh, there you go. Thank 

[00:20:06] Joe: you for interpreting for me.

[00:20:08] OG: I was like, it’s like, let me restate what you just said. ’cause I got a little lost in the forest of Joe’s mind, but I came out the other side. It’s 

[00:20:17] Joe: a little, little foggy in there. Yeah, yeah. It is Maybe a premonition toward, uh, Doug’s, Doug’s trivia coming up. Little foggy. But yes, absolutely. If Robinhood thinks, Hmm, let’s make money in a, in a, maybe a better way, in a way that’s more sustainable, regardless of whether you’re using a financial planner or not.

[00:20:37] There’s big questions around, so what’s important this year in financial planning? Certainly we have the same pillars of financial planning we talked about earlier, and also that you’ll see with. Any financial plan, but go banking rates. Had an interesting piece recently for emerging financial planning trends for the rest of 2024, and I think og these carry into 2025.

[00:20:58] First of all, they start off with stock market volatility. We’ve had a lot of volatility here the past few weeks. It’s an emerging trend. Yeah, 

[00:21:06] OG: volatility is an emerging trend. 

[00:21:07] Joe: Well, there’s always volatility, but look at how choppy the waters have gotten. Even, even versus normal times. It’s been a little bit more choppy.

[00:21:17] It’s all, a lot of it’s news based, right? We’re talking about new administration, new things, what’s gonna happen? I feel like there’s a ton of speculation out there. I think that planning in your financial plan that things could be volatile and worried about it ahead of time is a good idea. In other words, what do I do or not do if the stock market goes down?

[00:21:39] And what do I do not do if the stock market goes up? Like what do I do if things get really volatile? I feel like. Making sure you got that plan ahead of time is a good idea for 2025. 

[00:21:50] OG: Uh, yeah. I mean, I hate this, this bullet point here because it’s implying that there is no volatility other time. I mean, most people don’t even feel that there is because it’s all upside right now, except for August.

[00:22:06] The stock market’s gone up for two straight years, pretty much. And what I think most people don’t understand is that that’s volatile. Also, you know, when the s and p averages 10, but the last two years it’s done 25, that’s volatile, but nobody’s complaining about it. They complain about the downside of volatility.

[00:22:27] But I think it’s a good idea to have lifeboat drills from time to time and recognize that, you know, hey, if I’ve got a million dollars today, there’s a very real chance that I wake up in a year from now and it says 800,000. What do I do? How do I feel about that? And. Is there anything that happens along the way?

[00:22:44] And really the right answer is if your goals haven’t changed, your portfolio shouldn’t change. Even if your account goes down 20%, that’s, that’s just part of the deal. So take advantage of strategic rebalancing or tax loss harvesting if you can. But otherwise, if your goals don’t change, you shouldn’t be changing your portfolio.

[00:23:03] Joe: Oh, come on. It’s not sell, sell, sell. 

[00:23:06] OG: No. Joe’s got a new toy. Well, then is it? Bye bye bye. Back the truck up as they say. What else is on your list of silliness? 

[00:23:16] Joe: Yeah, well, number two is the expansion of AI and personal finance. And you’re seeing a lot of sexy, Hey, let AI pick your stocks. AI knows where the market’s going.

[00:23:26] I love our friend Michael Kitsis. Just had a piece. Pretty much saying, oh gee, beware all that. ’cause as Robert Farrington said on our show, man, the amount of times AI is brilliantly and confidently wrong is pretty disturbing. 

[00:23:42] OG: A couple weeks ago, I, I went and played golf with a bunch of friends and we have a, uh, an interesting golf bet that we do in each foursome, and it has to do with putting, basically if you make the putt, you get some money.

[00:23:51] If you lose, you pay everybody else. Money seems simple enough and it’s easy until like, there’s a lot of wins and a lot of losses. Then somebody doesn’t have any, right? So it’s like who’s paying who and whatever. And so we’d always sit there and try to struggle to figure out who owes who, what money. And I said, oh, I’ll just put this in Jet GPT told him the rules of the game, told him who won and lost.

[00:24:10] And he goes, oh, everybody pays Taylor 75 bucks. I was like, this is awesome. Done. Right? So then the next game we do the same thing and he goes, everybody pays Taylor 90. And I’m like, wait a second. I did more than I did more than Taylor. How come I’m not getting in? And, and you’re like, shouldn’t Should’t OG get some money?

[00:24:27] And it’s like, oh, you’re absolutely correct. Everybody pays OG $90. And I’m like, well, no, Taylor gets money too. You’re absolutely correct. Everybody pays Taylor and OG $90. Like, yeah, okay. You can’t even get the, a simple matrix of like this very simple game of yes and no, no cost. This, yes cost. You know what I mean?

[00:24:44] So you can’t get the bet, right? I’ve asked it to say, you know, what’s the best asset allocation for the next 20 years? And it’s like, you should have 80% of your beer money in Nvidia. So, you know, it’s very confident. 

[00:24:57] Joe: And the rest in Bitcoin number three on this list, interest rates are still high. I think this is great for whether it’s a trend or whether this ends up being wrong.

[00:25:07] ’cause either way, OG planning on a world where interest rates are high is better than betting on interest rates low. And then you gotta deal with the consequences. Like, I like planning conservatively and I think planning for high interest rates in 2025 kinda the place I wanna be. 

[00:25:22] OG: Yeah, I mean, again, we were all super spoiled in Covid times of two and 3% mortgage rates.

[00:25:28] I mean, when we bought our house in 2015 in Dallas and our rate was 4%, I distinctly remember saying there is absolutely no way in my lifetime I see an interest rate this low. Lo and behold, it changed, but. There’s not a scenario where that happens again, absent to another covid scenario. So just flush from your memory the fact that, but I got my mortgage at 3%.

[00:25:52] It’s like that’s not happening again. Five is the normal, six is normal. Eight’s probably high four and a half’s probably low. The, the normal is six 

[00:26:00] Joe: seven’s much more normal. 

[00:26:02] OG: Yeah. 5, 6, 7 is kind of the normal float between, you know where rates are and if you wanna have a lower rate, you gotta buy down or you gotta, here’s a crazy thought.

[00:26:11] Borrow money for a shorter period of time. Oh my God, the horror what? But, um, or do an arm, there’s a lot of different ways to manufacture that lower rate if that’s a desire of yours. But we’re comparing it against, it’s, it’s almost like, you know, when the market goes down and everybody says the really dumb thing of like, it’s on sale.

[00:26:29] It’s not on sale. The way that I look at it is, it’s like if your portfolio was worth a million and now it’s 800,000, or the s and p was at 6,000 and now it’s five. I don’t look at that as being on sale. I look at that as like a time machine. The downside is you’ve seen the six, right? You’ve seen 6,000 and you’re comparing today against this, you know, this other known that you have and you’re like, I lost 20% or whatever.

[00:26:54] Right? But the other thing that you have is you, you, you’ve, you’ve just entered a time machine. You know, where the, if it went from six to five, you know where it’s going. You already know. You get to experience that five to six all over again. And maybe it doesn’t happen tomorrow, or it takes a year or two or five or whatever it does, but you know that it’s gonna happen again.

[00:27:13] It is such an amazing benefit and everybody gets freaked out about it, but nobody cared when it went from five to six the first time. Like, that’s great. It’s like, no, no, no, we get to do it again. You know, I don’t know. I don’t, I don’t think of it as back to truck up time or, you know, let’s, uh, let’s buy ’cause it’s low.

[00:27:30] It’s just, it’s just yesterday’s price and, you know, today’s price, it’s like an unfair advantage, you know? It’s like if somebody told you what the stock market a hundred percent guaranteed was gonna do tomorrow. You could invest that way. Right. It’s 

[00:27:41] Joe: amazing. Well, just keeping your emotions in check. Let’s say that the stock market goes up from $8.

[00:27:49] Whatever stock you’re looking at goes from $8 to $10, 

[00:27:52] OG: let’s say. 

[00:27:53] Joe: In. Yeah. Let’s say Lumen goes from $7 and 62 cents. Not that I watch it. Who’s 

[00:27:57] OG: counting 

[00:27:58] Joe: to 12 bucks, which is a just stupid, huge gain, right? Yeah. Yeah. It goes to 12 bucks and then it comes down to 10. Yeah. You feel horrible about the 10. 

[00:28:10] aftershow: Yes.

[00:28:10] Joe: Even if it just went straight line from 7 62 to 10, you feel phenomenal. Yep. You’re like, this is great. And balancing out your emotions there, 

[00:28:20] OG: and the difference between an individual stock in the overall market is that there is a chance that 10 is the highest it ever goes again, right? It can go from 10 to nine to eight to zero.

[00:28:27] No, no, no. Not with your stock. I know, I know. Not that shiny world, not with that bellwether of a stock, but I’m saying like with some companies they do, they are known to go bankrupt, but when you invest in the overall market and it goes from seven to 12 to 10, you’re like, I already see, I’ve already seen this movie.

[00:28:44] I know it goes to 12. Like what? It’s unfair. It’s not even, not even a it’s, anyways, uh, don’t get me started. I don’t understand why people get frustrated by that. For 

[00:28:53] Joe: people just starting out here, full disclosure, which I think we have to make, which is, uh, I own Lumen stock. I bought it for the dumbest reasons.

[00:28:59] OG: I don’t think anybody cares. Uh, or I, there’s got lucky disclosure required. We’re not 

[00:29:03] Joe: gonna turn into the SEC. Nobody’s gonna turn me in for, I hope, with your 11 shares. I 

[00:29:06] OG: think we’re safe, buddy.

[00:29:10] Joe: I have almost a thousand shares now. 

[00:29:12] OG: So you dollar cost averaged up. 

[00:29:14] Doug: Wow. He can actually move the market on that stock if he sold. I can four more shares. Doug. 

[00:29:21] Joe: I own the company. Like I gotta start declaring every time I buy and sell. ’cause I’m an insider. Uh, sir, you own 10% of the company. Oh, hey. Uh, long way to go till we reach that point.

[00:29:32] Uh, last thing is, and this is a disturbing Tino that you and I have seen over the past year, year and a half, uh, especially through all the inflationary times. Recent data from Experian found that Americans owe more than $17 trillion in total consumer debt. And that number is that all? That number continues to go north.

[00:29:49] It just continues. That’s why the 

[00:29:50] OG: economy’s booming baby to go north. Keep borrowing. I mean, you have to think about it that way. That’s your contribution to your retirement account. Your contribution is to borrow money, which makes companies profitable, which makes your stock account go up. Please, Don.

[00:30:04] Never ending money Glitch. Please don’t. It’s, it’s the new Stacking Benjamins money glitch. Infinite money gl. It’s glitch. Infinite money. Glitch. 

[00:30:12] Joe: I found a hack. You know what the hack is? I just keep borrowing. Just keep borrowing. 

[00:30:16] OG: Yeah. What, what did Robert Kiyosaki say? You know, if I owe the, if, if I owe the bank a hundred thousand dollars, that’s my problem.

[00:30:21] But if I owe the bank $20 million, that’s their problem. It’s their problem. You know, it’s like, it’s not my problem anymore. So this is, this becomes your problem. 

[00:30:31] Joe: I’m glad we talked about Robin Hood and Kiyosaki in the same, uh, I know 

[00:30:35] OG: what a, what a banger of an episode. The, um, wow. The thing with consumer debt’s, bringing 

[00:30:38] Doug: the flame thrower, aren’t you 

[00:30:40] OG: at all the touch, the thing with consumer debt is when you look at it, this is, we were talking about this last week about paying my house off.

[00:30:46] When you look at it in the context of how much money you have to make, and earlier this week we talked about fire, right? And you look at it in terms of the fire number. How much freaking money do you have to make? How long do you have to work in the year we’re starting January, there’s a, what’s the, what’s the thing that happens in sometime in April?

[00:31:03] It’s like finally you’ve paid your taxes by the time you get to like April, whatever, so that the rest of the money is yours. Basically, the government gets your money from January through March or whatever. You know what I’m talking about you guys? 

[00:31:14] Doug: Yeah. I just don’t know the term for it, but I know the concept.

[00:31:16] Yeah. 

[00:31:17] OG: Yeah. It’s just the concept. Like when you figure out how much money you make, you work the first 120 days of the year for the government, the rest is yours basically, or whatever. Mm-Hmm. But anyways, when you think about it from a debt standpoint, if you have a car payment that’s a thousand bucks.

[00:31:30] That’s pretty high. I guess maybe you have two car payments that are a thousand bucks. Not that high anymore 

[00:31:34] Doug: actually. 

[00:31:34] OG: Yeah, well say it’s a thousand bucks and if you’re a person that has a car payment, you’re probably gonna have a car payment kind of forever, right? Because you’re the, you’re the person that, you buy a car, you pay for it, and then a few years after that, you buy another car and pay for it.

[00:31:46] Like it’s just this never ending cycle. And so $12,000 a year of car payments, how much money do you have to have? How much money do you have to make every year to pay 12,000 a year? You gotta make what? 15, $16,000 just to pay your car payment. How much money do you need in your retirement account to kick off 12,000 a year for freaking cars?

[00:32:08] You know, what is that number? It’s use that 4% rule, 200 grand. You know, like you have to save an extra $200,000 to just sit in an account, $300,000 to sit in an account to afford your car payments. Like holy jesuses, you know? So I think when I look at consumer debt, when I look at my credit card or I look at car payments or loans or whatever, I look at it in that context.

[00:32:32] And that’s why when I think about the mortgage, when we were talking about this a week ago or whatever, I don’t think about it in terms of, well, it’s two and a half percent. Like, who cares? That’s good. That’s easy money. I look at it like, dude, I gotta make a load of money every year to pay for this damn thing.

[00:32:46] I’m tired of doing it. I want, I wanna take the stress off. And the same thing with the, and you’re still gonna 

[00:32:51] Joe: have the property taxes going up, you’re gonna have your insurance costs still going up. Well, I got all that, but, but it’s, no, I’m saying let’s get rid of part of the loan. Yeah, man. Like there’s still enough load already that 

[00:33:00] OG: plus the mortgage.

[00:33:01] Yes, exactly. 

[00:33:03] Joe: Yes. Preach man. Preach 

[00:33:06] OG: og. Yeah. So if you got consumer debt, look, just suck it up buttercup. Just do it for like six months. It doesn’t even suck it up, buttercup. I mean, it just sucks for a short period of time. You don’t have to suck for a long time. You just suck for a short time and just get it over with.

[00:33:22] Joe: If you want inspiration by the way, just go back to Monday’s episode and listen to Jackie. Yeah, because, uh, man, as we do the Monday after Thanksgiving week, every year when we talk basics, uh, there’s a lot of inspiration there to get you rolling on the right track. We will dive more into what’s going on in the world of financial planning in the 2 0 1 newsletter.

[00:33:43] We’ll have links to everything we talked about on our show notes page. At Stacking Benjamins dot com. Also a link to the 2 0 1 there, our newsletter. But if you want to just go right there and sign up for it to continue this discussion tomorrow, it is uh, Stacking Benjamins dot com slash 2 0 1. And uh, that is the link to sign up.

[00:34:01] And you know what? That’ll also put you on our list so you know, when we’re traveling, where we got details coming up on Seattle. Coming to New York City. New York City. I’m York City. I’m sure at some point I will be back, uh, in Boston, uh, next year. At the very least. I know we’re coming to those places. So, uh, stay tuned ’cause we might be coming to, uh, area near you.

[00:34:22] Coming up next, the TikTok minute, we’re gonna shine the light on a TikTok creator who is, uh, doing something original. And actually, this TikTok creator was actually listening to Doug. I’ll explain that after Doug gives us today’s kind of foggy trivia. Segment, not a great day in history.

[00:34:50] Doug: Hey there, stackers. I’m Joe’s mom’s neighbor, Doug and Bad news. If you were planning on coming over today, I’d recommend holding off Joe’s mom, made her famous chili and well, let’s just say that OG and Lima beans don’t go well together. Speaking of fog, Lima beans 

[00:35:06] Joe: in the chili, what is she doing? 

[00:35:08] Doug: What makes it, it’s what makes it famous.

[00:35:10] Speaking of fog, you want, you wanna have good health insurance. Back in 1952 when a lethal fog combination descended on London for five days, sending thousands to the hospital and even killing thousands more. Here’s the question. What’s the term that was created to describe this foggy disturbance in the basement?

[00:35:33] We just call OGs, uh, outbursts Gross, but this is a different name I’m talking about. I’ll be back with it. Just after I begged Joe’s mom not to serve chili and to get a gas mask,

[00:36:03] hey there stackers. I’m the guy who enjoys breathing and who will not pull OGs finger. Joe’s mom’s neighbor died back in 1952. A combination of smoke and fog descended over London, causing a bigger disturbance than that time. Joe had three helpings of ice cream in a single setting. That was disgusting.

[00:36:24] But in this case, sadly the fog was fatal and gave way to a new term by combining the words smoke and fog into smog. Yeah, I figured you could probably do the math. Ah, you could do the math there. I figured you could. And now let’s get back to two frequent smogs on this podcast, Joe and og. 

[00:36:47] Joe: It’s sad Doug how little we know about history.

[00:36:49] ’cause that sounds like just an absolutely horrible time. I knew nothing about that until I watched The Crown. The Crown. Yep. That was my mom’s birthday. 

[00:36:56] OG: That’s when she was born. It was during that time, that day. 

[00:37:00] Joe: Yep. Wow. But not, not in the small, not a great time in history, and definitely a time you wanted to make sure you had some health insurance, although it sounds like that didn’t even, wasn’t even enough for, uh, for some people.

[00:37:12] Hey, let’s, uh, dive into the TikTok minute. Where do you go? Hey, smog killed a bunch of people. Let’s pivot way, abort. Get done. Get out, get outta that segment. TikTok minutes where we normally shine a light on a creator. Who is either doing something brilliant or air quotes brilliant on TikTok. Today, though, I was sent by stacker Julia.

[00:37:35] Julia sent me a discussion with Doug and his banker that we actually found on TikTok. Now the voice has been changed with ai, but Julia assures me that this is Doug, 

[00:37:46] Doug: this ought to be good. And 

[00:37:47] Joe: Julia says the thing that Doug and his banker were talking about buying a new boat. Huh? Doug. You’re buying a luxury, uh, luxury motorcraft.

[00:37:55] Doug: Yeah. Talk about a great investment boats. 

[00:37:58] Joe: Yeah. This is, uh, Doug buying a yacht with all that big announcer guy money. This is Doug and his banker. 

[00:38:04] tiktok: Take a look at the numbers. Okay? Okay. Totally. Yes. Yes. Okay, so that’s, um, 17 million mm-Hmm. Uh, so you have to put down 3.4 million. You have to put that down now in cash, and then your monthly payments are gonna be 77,000.

[00:38:22] Plus, uh, maintenance and tax. So basically $80,000 a month plus the 3.4 million that you’re gonna plunk down right now. Okay? Mm-Hmm. Okay. So now let’s compare that to your current assets. Alright? Currently savings you have, um, $7,000 

[00:38:42] caller: Mm-Hmm.

[00:38:46] tiktok: Take, 

[00:38:48] Doug: apparently that’s not enough. I’m not, I mean, I didn’t get the, like, the tone of his voice there. He made it sound like a bad thing and I don’t. I don’t know why. I mean, it’s How did they get the, how’d they get the microphone in that room? A ton of, I might have left my phone on record there, but, ’cause I wanted to be able to go back and take notes.

[00:39:03] I just don’t understand what he was trying to tell me when I only had said I’m, it’s a lot. You’re gonna plug that $3.4 million now and 

[00:39:11] Joe: $80,000 a month. 

[00:39:13] Doug: Yeah. I just take the 3.4 as a write off. It’s just a write off 

[00:39:17] Joe: that, that’s how you afford it. You just write it off. 

[00:39:19] Doug: That’s, that’s what I’ve heard.

[00:39:20] Companies do it all the time. It’s a write off. 

[00:39:23] Joe: I’ve been watching the new show about Ryan Shan’s, uh, brokerage firm in New York City on Netflix. It just, I love these real estate shows and somebody in, I think episode five had a budget of $10 million to buy a place in lower Manhattan. You couldn’t find the type of place they wanted.

[00:39:43] You know, 4,000 square feet all on a single floor as you do, right? And, uh, also wanted to make sure that there was privacy because these people like their privacy. So no tall buildings around them. ’cause there’s very few in lower Manhattan, this broker finds a place for $22.5 million and presents it to them.

[00:40:03] Their budget’s $10 million. And so they get done and the guy’s like, yeah, this looks great. So how much? And she goes, well, that’s the bad news. It’s just over double what your budget is. Yeah. You know how this story ends. They say, yes, the people actually go with $22 million. 

[00:40:24] OG: There’s a show I think on, uh, I dunno, one of those HGTVs or whatever Yeah.

[00:40:28] Where the people make a list of all the stuff. Yeah. And then they go do the tour and they’re like, how’s this? They’re like, oh my god. Open floor plan, 5,000 square feet with a pool on two acres. This is exactly what we wanted. You’re amazing. He’s like, yeah, your budget was 500. This is 6.8 million. Right. So 

[00:40:43] Joe: yeah, it’s go, let’s 

[00:40:44] OG: go ahead and readjust our perspective here.

[00:40:46] ’cause you’re not, I like 

[00:40:47] Joe: that one better. Let’s just give you a little slap. 

[00:40:50] OG: Or, or my other favorite is, it’s like he’s a florist and she’s a dance instructor and their budget is 19 million. And you’re like, wait, what? 

[00:41:01] Joe: Yeah. Not that you can’t make loads of money in those professions. 

[00:41:04] OG: Yeah. I mean, maybe you can, but let’s meet Jack and Jill.

[00:41:08] He’s a plumber and plumbers do make a lot of money. 

[00:41:12] Joe: Yeah. 

[00:41:12] Doug: Don’t say that. Yeah. 

[00:41:13] Joe: Plumbers are making more than we are. My nephew leaving the Navy, going into plumbing and got a great, great start. Learned a ton in the Navy, uh, working in plumbing in the Navy and now he’s on the market and I’m just, this kid’s gonna make more money than 

[00:41:27] OG: Yeah.

[00:41:27] Joe: He’s gonna make so much money. 

[00:41:28] OG: What’s funny is, is a lot of times I, I’ve known stories with that where they’ll say they’re leaving and then the Navy goes, well, what are you gonna do? Like, I’m gonna go do the same job I was doing. I’m just gonna go make 10 times the money. And they go, yeah. How about we give you a hundred thousand dollars bonus to stay for another four years to even out the cash?

[00:41:44] ’cause we need your skill. Ah, yeah. That’s why we taught 

[00:41:47] Joe: you. Wow. Yeah. I’ll do that. They need podcasters. Navy need podcasters. 

[00:41:52] OG: I would love to see Joe in the Navy. That would be kind. Let’s do that with that little. Hat off to the side in your little white uni, like a little defense ribbon. 

[00:42:01] Joe: Why was that’d a pretty badass.

[00:42:02] I’ve seen him in that. He’s, oh, I’m, 

[00:42:03] OG: I mean, 

[00:42:04] Joe: it’d be pretty amazing. I wore a uniform in college for a couple years. Well, I know. 

[00:42:09] OG: Was it a Navy uniform? 

[00:42:11] Joe: Uh, it was not. No. Didn’t make it that far. It was 

[00:42:14] Doug: a little bow Pete uniform was you wore 

[00:42:18] Joe: and scene. No, no, no, no, no, no, no. Uh, hey, uh, because we probably can’t help Doug with that transaction.

[00:42:26] Let’s help another stacker who said, you know what? I better call solve. See, hi and og. This is where we shine the light on a stacker who has a little call for help. And today we’re gonna help our buddy Jordan. Hey Jordan. What’s going on? 

[00:42:44] caller: Hey, Joe OG and Neighbor Doug. I’m calling to get my free T-shirt and apply to be one of Doug’s Secret Service agents.

[00:42:52] Anyways. I’m 32 and recently passed the mythical 100 k, invested across my retirement accounts and a taxable brokerage. Woo. Nice job. In my pre Stacking Benjamin days, I tried to pick some single stocks, which represent about $10,000. Out of the 100,000 they’ve done okay overall, but I’ve just been going in indexes since then.

[00:43:12] My question is, when projecting out the future value of my portfolio, decades from now, people say to use an eight to 10% rate of return for those compound interest calculations, but does that only apply when it’s in those like main index funds, like the s and p 500 or total stock market, and then I should just use 90 K as the starting point for those compound interest calculations?

[00:43:35] Or can I assume the same with the single stock as long as they just don’t go completely belly up? I’m just trying to gauge where I stand and if I should wait till I have a hundred K just in index funds before I start celebrating. Thanks. 

[00:43:48] Joe: Oh, Jordan, great question. And you know what? Start celebrating now, brother.

[00:43:52] OG: Yeah. Cash is cash, bro. Getting 

[00:43:54] Joe: there. It’s getting there. It’s getting there. So, cheers to you raising the mug to Jordan. Nice job. Oh gee. There is, you know, a big difference to this point. I mean, over long periods of time, those index funds not a hundred percent predictable, but I think a lot more predictable than what we think Avidia is gonna do the next 10 years.

[00:44:15] OG: Yeah, well, asset classes in particular, right? Because we’ve got a hundred years worth of data there. And the beautiful thing about investing in an asset class as opposed to picking individual stocks is when, I mean, Bezos has come out and said, uh, I dunno, within the last five years that he doesn’t believe Amazon will be a company in 20 years.

[00:44:34] He’s like, I just don’t think it’ll be around. Something will be better, bigger, faster, stronger than, than this, and we will cease to exist. So, do you wanna ride Amazon the whole time or do you want the, can you imagine 

[00:44:44] Joe: that, by the way, what you just said? I can’t imagine Amazon not being around, but then I go back to 1990.

[00:44:50] Yeah. And I’m like, could I imagine Amazon doing what they do now? 

[00:44:54] OG: Yeah. The beautiful thing about buying an asset class fund or an index fund is that as they fade away, it just goes away. It’s worth less and less of your portfolio, and you’re owning all the things that are doing well, as well as the things that are not doing well.

[00:45:07] But it evens out. My question would be, why would you continue to hold onto the stocks if you didn’t believe that they were gonna perform at the same rate as your, the rest of your portfolio? It could be some tax issues potentially, but that would be pretty minuscule. You know, unless you make a bunch of cash.

[00:45:24] Capital gains taxes are zero for a long time, and then 15% for a really long time. So maybe you gotta pay a little bit of capital gains taxes to get out. But if you’re holding stocks that you believe are gonna perform better than the average market return. Then I don’t know why you wouldn’t use the same rate of return in terms of your calculations.

[00:45:42] The thing I would do however, is I wouldn’t use the 10 number S and p averages 10, but I think it’s a lot more prudent to be more conservative than that and force yourself into higher savings rates and then be surprised on the backend. So I love using seven and a half. I love using eight. Get above eight and I get a little squirrely because, you know, human behavior’s there and there’s, there’s, there’s reasons why it won’t go to 10.

[00:46:08] Joe: Jordan, this is exactly what we talked about earlier when we’re talking about betting on interest rates staying high. 

[00:46:13] aftershow: Yeah. Because 

[00:46:14] Joe: if you bet on them staying high, you’re gonna high five yourself. When interest rates come down, if you bet on them coming down and they don’t, now you’ve gotta do extra work that you didn’t plan on.

[00:46:23] And much like we talked about riding that emotional rollercoaster with stocks, og the emotional rollercoaster of, ugh, I gotta do all this extra work, versus I went in planning on doing extra work and now I don’t have to do as much. Yeah, it’s much, much better to plan on doing more work ahead of time.

[00:46:38] OG: Yeah, so in my plans I would use seven and a half or eight. If you don’t have any serious reason to keep those, those individual stocks, I might consider transferring those into your, you know, your asset class funds or your index funds, and then you don’t have to worry about it. And then you can use your seven and a half for all of it, or eight for all of it and be done if you like the stocks and you go, nah, I’m gonna keep this as part of my portfolio, totally fine.

[00:47:00] Um, evaluated it every year to make sure that it’s doing what it’s supposed to be doing. And pretty soon the reality is, is that that 90 of the a hundred is gonna grow so much faster, even against the 10, the 10 would have to grow so much faster than the 90 to make up the loss of the fact that the, or to, to make up a meaningful amount of the overall, you know, so like if you look at your 10 and you say, well, it’s gonna grow by 10%, that’s a thousand, right?

[00:47:29] If I look at my 90, it’s gonna grow by 10%. That’s 9,000. But going to 11, if you have a year that’s 11, your 90 grows by 9,900. So your 10, if it stays flat, you’re still even money. So my point is, is that, you know, is the juice worth the squeeze here on the excess risk that you’re taking for the 10, the, you know, the $10,000 there to make a meaningful return on the extra 10.

[00:47:55] It has to grow so much faster than the market that I just don’t know that it’s, I don’t know that it’s worth it. We were, I was just having this discussion with a client a couple weeks ago. They just brought something up about Tesla as an example, and I said, sure. So if you want to invest in Tesla, fine, but what does it have to do for, to have a mark on your portfolio?

[00:48:14] You know, so you have a million dollars in your account, what do you want? How much Tesla do you wanna buy? Oh, maybe I’d buy 50,000. Okay, cool. So we know that, that normally that 50,000 is gonna grow by five grand, right? 10% or four grand, 8% pick your number doesn’t matter. So what does that 50 grand have to grow?

[00:48:31] To make it an outsized return against the risk of Tesla going bankrupt. And you going from 50 to zero? Does it have to double? Does it have to go from 50 to a hundred? Does it have to triple? Does it have to go to one 50? You know, it’s like, well, if it doubled, that’d be awesome. Okay, cool. So doubling is your goal.

[00:48:48] Zero is the downside. So in a big picture, the grand total of all the money you’re gonna make here is 50 grand. I mean, against a million, you know? You see what I’m saying? Like it’s not zero, $50,000 is a lot of money. I’m not saying it’s not. I’m just saying against a million dollars, you should be making a hundred thousand dollars a year anyway.

[00:49:08] And so you’re also not making 50 grand 

[00:49:10] Joe: because that’s the 50 grand’s, not even the premium. If the 50 would’ve made five on its own, the premium truly is 45. 

[00:49:18] OG: Right? Exactly. And so you finish the year and you go, I’m super excited. I own this individual stock for 5% of my portfolio. What did it get me? Got me an extra 40 grand.

[00:49:28] aftershow: Okay. 

[00:49:29] OG: I mean, it’s not zero. That’s, yeah, that’s definitely $40,000, but it’s also a chance that that 50 stays and doesn’t do anything. I know another investor that took a bunch of money, bought into a really small company that he was very confident in, in the long run and, uh, got bought out, was like literally, you know, the company was, Hey, we’re not interested in having investors anymore.

[00:49:49] Here, let’s buy you out. And he’s like, well, wait a second. I put this half million dollars in this small company. ’cause I believed in the long run, the returns were gonna be outsized. And they’re like, cool, but we don’t want investors anymore. We’re gonna, yeah, we’re gonna get you out today. They will be outsized, but not for you.

[00:50:02] Yes, they’re gonna be for us ’cause we’re taking your money off the table. And they paid him out and he made a return, but he didn’t make a return equal to even the market. He’s like, that would’ve been better for me just to put my money in, in the freaking s and p over the last year. So I think we get wrapped up too much on these, you know, these little teeny, tiny decisions and don’t look at the outcome and what’s the best outcome that can happen or the worst outcome.

[00:50:24] And then go, is this really worth it? Now, there are some circumstances where you’re an employee at a pre IPO company or you’re at a startup and your boss goes, Hey, we’re gonna give you 50,000 shares of this company at 10 cents a share. Like, all right, cool, whatever. Right? And it’s gonna cost you some money to get in five grand, 10 grand.

[00:50:42] To me, that looks like a, a good ROI potential, right? Because at 10 cents a share, if it goes to a dollar or $2 or $5, as the company grows, this is a profound amount of return versus already a publicly traded company. People going used Nvidia as an example, Joe. People going, well, I think NVIDIA’s gonna double.

[00:51:03] Okay. So is the s and p by the way. It’s just who’s gonna do it first and is the juice worth the squeeze on the volatility associated within the individual stock? The time to buy Nvidia was freaking seven years ago, dude. Like that’s when you should have put all your money in Nvidia. But you know why you didn’t?

[00:51:18] Because that was dumb idea. Nobody wanted to do with it. It was a dumb idea. And if anybody would’ve said to you, I got an idea. Let’s put a bunch of money in a company that’s, eh, pretty much teetering on the edge, but I have a feeling that their graphics cards are gonna be amazing. Sometime in the future you’d have gone like, okay, yeah, no, I’ll just buy my index funds.

[00:51:35] Joe: I remember so many years, Nvidia just being the company you did not want in your portfolio. Yeah. 

[00:51:40] OG: So why play the game with 10 grand when 10 could turn into 12, 14, 20, or eight, or not six or four versus the known outcome of, you know, you can’t pick the returns every year, but I’m pretty confident the s p’s gonna average 10.

[00:51:53] It has for the last a hundred years. It probably will for the next a hundred. 

[00:51:56] Joe: Now, but Jordan, if you enjoy the individual stock investing and you know, we, we’ve talked about how each of us enjoys some of that ourselves. Just don’t bet on that 10 grand for your goals. You know? Uh, uh uh, go ahead and count it when you’re high fiving yourself that you got to a hundred.

[00:52:11] But maybe when you talk about the certainty of reaching your goals, you just take that money off the table. Do you 

[00:52:16] OG: plan on 90? Yeah. Instead of a hundred. 

[00:52:18] Joe: Yeah. Don’t get me wrong. High five yourself when you reach the milestone cash bro, based on the whole thing. But for your planning purposes, take it off the table and I think, you know, you get that nice, nice midpoint.

[00:52:28] I certainly have enjoyed to, oh gee’s point, my 11 shares of Lumen stock. Yeah. They’re gonna make me super wealthy. 

[00:52:36] OG: Super, 

[00:52:37] Joe: super, super 

[00:52:37] OG: fun for sure. Maybe, 

[00:52:38] Joe: uh, probably not, but it certainly is a good time. Jordan, thank you for the question. Of course. We are going to send you some swag for calling in. We do that with all of our stackers who call in Stacking Benjamins dot com slash voicemail.

[00:52:51] If you’ve got a question for og and certainly if your question isn’t just, Hey, what do I do about these stocks? It’s how do I make my plan go and I need a better plan in 2025 than I had in 2024? Well, guess what? OG and his team are taking clients, so head to Stacking Benjamins dot com slash OG and that’s the first step gets you on their calendar to see how they can interface with you to get the plan rolling in 2025.

[00:53:18] Gonna have trouble saying that 2025 already, 

[00:53:22] Doug: wasn’t that Buck Rogers or something? Isn’t there some famous like super futuristic movie that was in 2025 and we’re there? Yeah. Yeah. And, and boy, it looks just as 

[00:53:33] Joe: cool being speaking of something in the 

[00:53:36] OG: future. I just saw a thing on Reddit that apparently John Malkovich, did you guys see this?

[00:53:41] Made a movie called a hundred Years and I, no one knows what the movie is about except the people that were in the movie. And it’s sealed in a vault that is not gonna be opened until 2115. So they made the movie in 2015, and it’s gonna be opened in 2115. They’ve got the release dates like November 18th, 21, 15 in theaters.

[00:54:02] Doug: You wanna talk about a long-term investment because the people who financed that movie are banking on that to have huge dividends for their heir, for their offspring, for their 

[00:54:13] OG: great, great grandkids. Right? Yeah. And 

[00:54:16] Doug: probably will, frankly, I mean, I don’t know, it’s a little bit like, was it Boyhood Joe who, um, who’s the filmmaker that took like 20 years to film because he used the same actors for their, that whole time of their lifespan.

[00:54:29] Yeah. Uh uh, Richard Linklater, link Lauder, Richard Linklater. Yeah. It had that wow effect and we’re like, I wanna see the movie that used the same actors from when they were little kids to when they were young adults. I mean, that’s a great concept, but is that gonna be enough to justify what you spent making a movie in 2015?

[00:54:47] Yeah, I got my 

[00:54:48] Joe: RSVP by the way, for that open. I had to send my regrets. I will not make it. 

[00:54:52] OG: I will be dead for 80 of those 20 years. You gotta go to the red carpet 

[00:54:56] Joe: because I will take, I be, I’ll be taking a nap, 

[00:54:58] Doug: a dirt nap. That is super cool. Yeah. Plus with actors that none of those people in 2115 will have ever heard of or know.

[00:55:07] Joe: No idea. 

[00:55:08] Doug: Wow. It’s Malkovich 

[00:55:09] Joe: guy. I gotta look back and see that guy. That’s incredible. Uh, time. I think we already did it. Uh, but time to journey out onto the back porch. This is where we talk about community stuff coming up. I’m not sure if New York City has tickets, probably not. But stacky Benjamins dot com slash nyc If you wanna hang out with OG and I, Paul Pant, uh, doc G Nick, be Julie.

[00:55:32] Jillian John’s rude. Uh, star studded lineup. Stack Benjamins dot com slash nyc But be even Bigger. Retire. Meet in Seattle. Today’s the first day We’re announcing this on the podcast so you can make sure you get in. We have discounted tickets, Tom of Tom and Don fame over on the Talking Real Money Podcast.

[00:55:55] This is their retirement, one day conference in Bellevue, Washington on February 8th. Even better pricing than their early bird pricing tickets for our stacker friends. Thanks to Tom and Don for doing that for us, but it’s Retire. Meet. Retire, ME t.com/ Stacking gets you discounted tickets. And we’re gonna have a meetup too, more details in January on our Stacking Benjamins meetup.

[00:56:22] So if you’re in the Seattle area circle that weekend. Either join us at Retire Meet, I’m sure Paul Merriman will be there. Our good friend Paul. Good to see him again. And of course, uh, Don and Tom, who are the awesome host of the Talking Real Money Podcast. So thanks to them for inviting me to talk and I’m going to be speaking about what the happiest retirees know, uh, which is going to be, uh, fun-filled.

[00:56:47] Probably the best part of the conference. og I would say probably for sure. 

[00:56:52] OG: Yeah, maybe. 

[00:56:53] Joe: For sure, for sure. Maybe that’s gonna do it for today. Doug, you’ve got us from here, man. What should we have learned on today’s show? 

[00:57:03] Doug: So, what’s stacked up on our to-do list based on what we learned today. First, take some advice from our headline.

[00:57:09] While you wanna follow the trends and financial planning, the best plans are always evergreen and will work no matter what hot topic is top of mind today. Second, do you want returns that are more reliable? Because the standard deviation on an index is easier to predict than a single stock. Stay diversified and then you can project away how wealthy you’ll be in the future.

[00:57:34] But the big lesson, I know that fog in London was no laughing matter, but neither is og. When he wears that tra car, cologne from Walmart, God, next time og, just, just, just use a manure spreader. It’ll be faster.

[00:57:51] This show is the property of SB podcasts LLC, copyright 2024, and is created by Joe Saul Cihi. Joe gets help from a few of our neighborhood friends. You’ll find out about our awesome team at Stacking Benjamins dot com, along with the show notes and how you can find us on YouTube and all the usual social media spots.

[00:58:12] Come say hello. Oh yeah, and before I go, not only should you not take advice from these nerds, don’t take advice from people you don’t know. This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor. I’m Joe’s Mom’s Neighbor, Duggan. We’ll see you next time back here at the Stacking Benjamin Show.

[00:59:24] OG: OG rocking the Tom Ford. Let’s get real dka. DKA was so great 

[00:59:30] Joe: rocking the Tom Ford. Uh, speaking of rocking, how about this guys? This is, uh, news from ap. I think we’re in the wrong business. Because there is, you can just end that sentence there. Yeah. Correct. And seed. That’s the after show. Uh, walk into any supermarket, you can generally buy a banana for less than a buck, but a banana duct tape to a wall.

[00:59:57] Well, that might sell for more than a million dollars at an upcoming auction at Sotheby’s in New York. The yellow banana fixed to the white wall with silver duct tape is a work entitled comedian by Italian artist, Maurizio Kelon. It first debuted in 2019 as an addition of three fruits at the art Basil Miami Beach Fair, where it became a much discussed sensation, was it a prank commentary on the state of the art world.

[01:00:25] Another artist took the banana off the wall and ate it. Backup banana was brought in. Selfie seeking crowds became so thick. Comedian moves were drawn from view, but three editions of it have sold for between 120,000, 150,000. Now guys, they think it’s gonna fetch between 1000001.5 million. Banana duct taped to a 

[01:00:43] Doug: wall.

[01:00:44] I love that they had a backup banana. I’ve had that job description before. 

[01:00:49] Joe: Well, you’re the, a previous career, the fluff. Are you the fluffer? What movie is that? That’s a Christmas movie. Love actually, right? Yes. Is it love actually where they’re fluffers? Yeah. Setting up the, setting up the camo work. It is that time of year.

[01:01:08] Where 

[01:01:08] Doug: do we go 

[01:01:09] Joe: from there? I was wondering about this, this banana. So here’s what happens if you buy this thing, you actually get a certificate of authenticity that says that you can use different duct tape and a different banana and put it back on the wall because what you’re really buying is a certificate that this is the intention of the artist.

[01:01:29] Doug: Wow. Oh my God. That reminds me of another similar, uh, story I just saw in the last month, two months. Somebody sold an invisible sculpture. You got a certificate and this little sculpture. Yeah. It was a, this is a real thing, like from an art gallery and you just got the certificate. 

[01:01:50] Joe: You know these people in the art world, by the way, overthinking this, right?

[01:01:53] They’re like, uh, catalog premiered the work at an art fair. Visited by well off art collectors were comedian was sure to get a lot of attention on social media. That might mean the art constituted a dare of sorts to the collectors to invest in something absurd. Mm-Hmm. This one collector said, if comedian is just a tool for understanding the insular capitalist art collecting world.

[01:02:15] Cooper Jones said, it’s not that interesting of an idea, but she thinks it might go beyond poking fun at rich people. Catalan is often thought of as a trickster artist, she said, but his work is often at the intersection of the sort of humor and the deeply macabre. 

[01:02:34] OG: Please stop. 

[01:02:35] Joe: He’s quite often looking at ways of provoking us, not just for the sake of provocation, but to ask us to look at some of the sort of darkest parts of history and of ourselves.

[01:02:45] They go into the history of the bananas and the people that had to harvest the bananas. 

[01:02:49] Doug: Oh, for God’s sakes. And

[01:02:54] OG: Doug’s mom harvests bananas all the time.