Joe and OG dive into retirement planning with Christine Benz, Morningstar’s Director of Personal Finance and Retirement Planning. Christine shares her insights on pivotal retirement lessons and the importance of purpose, relationships, and health in retirement.
In our headline segment, the team also explores the recent changes in real estate commission structures, emphasizing the need for negotiation skills and knowledgeable agents. Lively banter and tips for financial well-being abound in this packed episode.
Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.stackingbenjamins.com/201
Enjoy!
Our Headlines
- The New Etiquette of Negotiating With Your Real-Estate Agent (Wall Street Journal)
Christine Benz
Big thanks to Christine Benz for joining us today. To learn more about Christine, visit Christine Benz | Morningstar. Grab yourself a copy of the book How to Retire: 20 lessons for a happy, successful, and wealthy retirement
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Doug’s Trivia
- The name Morningstar actually comes from the last line of a book by Henry David Thoreau, which reads, “The sun is but a morning star.” What’s the book?
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Episode transcript
[00:00:00] Joe: Monday morning in America, hard weekend of watching, uh, NFL football guys just a difficult week. You know how hard it is to sit on the couch the entire weekend and just watch college football and then NFL football. Oh gee. It’s exhausting. [00:00:14] OG: Takes the, takes the life right outta you. [00:00:16] Joe: Oh my goodness. [00:00:17] OG: You gotta call in sick on Monday. [00:00:19] Joe: Yeah. Well, I was going to, but then I realized that there were people working harder than you and me. Like the troops that defend us weekends, weekdays working their butt off. I can’t not show up for this. I’ve gotta do my duty. og. [00:00:33] OG: He said, duty. He said Duty [00:00:36] Joe: On behalf of the men and women making podcast in mom’s basement and the men and women, uh, serving our military members at Navy Federal Credit Union, big salute to our troops. [00:00:47] Thank you for all that you do. Let’s go stack some Benjamins this week. Now, shall we? [00:00:52] bit: You know, I don’t understand this podcasting thing. How come you boys can’t have those keg parties and chase the girls like all the other nice boys do? Y’all are nerds. I. [00:01:10] Doug: Live from Joe’s mom’s basement. It’s the Stacking Benjamin Show. [00:01:23] I am Joe’s mom’s neighbor,, Doug. And how’s your retirement plan coming along? Well today we’ll make it a heck of a lot better with Morningstar’s, director of Personal Finance and retirement Planning. Christine Bens in our headlines, the world of real estate Commissions is changing. And now your in the driver’s seat. [00:01:42] How do you negotiate with an agent? We’ll share plus we’ll answer a question from one stacker who thought, you know what? I’d better call Saul. See Hi and og, and I’ll also share. Okay. Sharing is caring. My amazing Morningstar theme trivia question. And now two guys who are negotiating hair loss and losing. [00:02:03] It’s Joe and O. [00:02:12] Joe: Oh, I’m totally winning at hair loss. I think I’m doing it faster. Doug. [00:02:16] Doug: I [00:02:16] Joe: have [00:02:17] Doug: achieved victory. One usually assumes that if you’re negotiating with the hair loss Gods, your winning strategy is to keep your hair. Oh, I like how you’ve turned the tables. Oh, I did not know. Like, oh no. I’ve got ’em right where I want ’em. [00:02:32] Joe: I’m losing quick now. What about my [00:02:33] Doug: back hair? Gods? [00:02:36] Joe: Hey everybody, welcome to the RO game podcast. I’m Joe Sci, and across the card table from me. The guy’s got his own little bald patch back there. The back 40 of his big giant nain. Mr. og, don’t make him angry right at the beginning of the podcast show. [00:02:51] Does that make him, that doesn’t make him angry. It’s just reality. [00:02:54] Doug: You outed him, you outed his bald spot. We’re okay. Everybody [00:02:58] Joe: knows. You [00:02:58] OG: know what, it’s a sign of, uh, wisdom. Mm-Hmm. And it’s the balancing act between still being youthful and, and exuberant and being close to 60. You know what I mean? That’s really, if I were comparing, one of us is closer to 45 and two of us are closer to 60 mm-Hmm. [00:03:19] Doug: So I’m still closer to 45 Now this is actually [00:03:22] OG: disagree. This is [00:03:23] Joe: funny because financial planning is the only career. I remember when I was told that I had to get glasses. And, and when, when that happened, I, oh gee, I was so happy because when you’re in the financial planning profession, like glasses are sales, like that is great. [00:03:41] He must be smart if he wears glasses like that, that is it. Oh, my hair’s going. It’s turning gray. Fantastic. People are gonna believe me more. [00:03:51] OG: I didn’t, I didn’t, I don’t have the same feeling about the glasses. Sometimes I wear them, sometimes I don’t. Yeah. The [00:03:55] Doug: convey wisdom. Only [00:03:56] OG: if you go like this. [00:03:58] Joe: Oh, that’s specifically what you do. [00:03:59] And for people listening to the podcast, he just kind of took ’em off and, and shook them. Like, you know, the guy saying four outta five doctors recommend like doing that little thing with the glasses. Doug, sorry. [00:04:10] Doug: Bite the end of him. Oh, well, when I first worked in England, I, uh, wasn’t sure what the dress policy was and uh, I came to work in a, you know, full shirt and tie and looking pretty solid. [00:04:23] And it was in the publishing industry where it was, they were doing casual long before the rest of the world. And, uh, some woman said, well, you look very smart today, Douglas. And my reply was, that’s just the glasses. I had no idea what you look smart today meant. [00:04:41] Joe: Don’t let the glasses fool you. Right. [00:04:45] That’s an answer like, when the guy offered me cocaine. Just, oh, I’m good. Yes. Yeah. Thank you very much. I already had some this morning. I’m good. I’m all glassed up. That’s why you think I’m smart. Speaking of smart, we got a great show. Boy. Just wish she wants to follow us. The glasses and cocaine references. [00:05:01] Christine PEs from Morningstar here, uh, right after we deflate the property values og, she is maybe one of the smartest people in personal finance and, uh, just a good friend of the show and I can’t wait to talk to Christine about, uh, she’s got 20 lessons in retirement planning. We’re gonna talk to her about a few of those, but before that, we have some sponsors that make the show go so that it’s complimentary for you. [00:05:27] No really have as much of it as you like. It’s all for free for you because of the sponsors. And we’ve got a couple of ’em right now and we’ll be right back to kick this thing off. So how do you plan a better retirement? Christine Bens is the director of Personal Finance and retirement Planning with Morningstar, and she has a project where she dove into 20 lessons talking to smart people from the personal finance community about their thoughts on different aspects of planning a great retirement. [00:05:57] She’s on her way down to the basement. Let’s say hello to Christine Bens. [00:06:11] I am so happy she’s back here with us. Christine Bens, how are you? I’m so [00:06:15] Christine: good, Joe. Thank you so much for having me on. [00:06:18] Joe: You know, there’s a question ever since I first met you that I’ve wondered about and we’ll get to your current project and I think it actually kind of ties into your current project, but a lot of our stackers are interested in maybe becoming financial planners. [00:06:31] I think we get five or six emails a month. I’m thinking about changing my career. How did you first get interested in financial planning? [00:06:39] Christine: Well, I would say it probably happened while I was working as an analyst at Morningstar and I was covering mutual funds, researching mutual funds, and then I eventually headed up our US fund analyst team. [00:06:53] But while I was doing that, I was like, gosh, there are a lot of things that seemed to be important here in terms of people’s financial wellness slash wherewithal that we’re not addressing. I was like, what are all those other things? That kind of make or break someone’s financial success. So things like asset allocation and tax planning and portfolio construction and all of the dimensions of retirement planning that I’ve gotten so focused on. [00:07:22] So that was kind of a pivot for me. And Jonathan Clements has been in the headlines, uh, as he’s announced his recent cancer diagnosis, but I’ve had the opportunity to tell him and to just tell everyone about how important reading his column was for me in terms of making that pivot. [00:07:42] Joe: For people that don’t know who he is, he is the former personal finance contributor to the Wall Street Journal and, uh, author of The Humble Dollar, and he’s been of course on the show. [00:07:51] But yeah, just a wonderful human being. [00:07:53] Christine: He is a wonderful human being, a fabulous writer, a fabulous. Thinker and someone who I’ve gotten to know personally a bit through our mutual association with the Bogleheads community. Reading Jonathan’s column every week in the journal was just such a pivotal thing for me because I, at the time, I laugh about it, but I thought I needed to read like the whole Wall Street Journal every day. [00:08:16] So I would, you know, read all this stuff about corporate actions and blah, blah, blah. And then I’m like, but this guy, he seems to be telling people what they really need to know and what they can safely ignore. And so reading, Jonathan was just really pivotal in terms of informing my own career direction, wanting to focus more on financial planning, get away from the investment selection, not that I don’t. [00:08:41] Think it’s important. I do, but it’s really opened my eyes to the world of financial planning. So I went through the CFP program, took all the coursework, and at the time, which was sort of in the early two thousands, I wanna say, or maybe mid two thousands, the CFP had this work requirement that would not allow my Morningstar work, even though I. [00:09:02] Think you could argue it was very much related. I would think so, yeah. It didn’t qualify. So I was like, well, I don’t wanna leave here to go do the hands-on practitioner stuff I would need to do to earn the designation, so never earn my CFP. But nonetheless found it to be a super worthwhile download of information. [00:09:20] So I always say for people who are contemplating that career pivot, think about going through CFP. At least take the first course, see what you think, and then go from there. Because whenever I look at a planner, I always take their measure by seeing, well, what are their designations? And if someone is purporting to be a planner, I really like to see those CFP credentials, which I do not have. [00:09:45] Joe: Truly, to your point, doesn’t mean that somebody is phenomenal, but it certainly is a rigorous curriculum that. Just to get through it. I think a lot of people that don’t take the coursework, I like that as a first measure. You know, like me a first checkbox, R-U-C-A-P. Certainly not the last one, but a great first one. [00:10:02] But just personally, so do you like it better than being an analyst? Do you like dealing with the whole, well-rounded thing versus uh, diving into the Janice fund or what, whatever [00:10:12] Christine: might we, we joked, ’cause Janice was so hot in the, kind of the late nineties, early two thousands, I was our Janice analyst. [00:10:19] How about that? Yeah. I do enjoy what I work on just because it’s so broad. It’s like this deep blue ocean of different topics. There are so many different tentacles of financial planning and to me it intersects a little bit more directly with the human aspect of all of this, which I’ve gotten more interested in that we are all human beings making financial decisions and financial planning is squarely aligned with the human side of finances. [00:10:51] Joe: And you even say in this work that more than 50% of a good retirement plan is not about the money, it’s about other things. And it’s wild to see just the job of cfp. Speaking of CFPs change over the years, like when I was a financial planner in the nineties, it was nothing like, I mean, so behavioral now, Christine, like, what’s that other 50% besides the money that you’re talking about in your book? [00:11:17] Christine: Yeah, I’ve gotten a, an appreciation for all of those other things, and an appreciation for retirement planning is not a math problem. I think Michael Finca said something like that in the book, and I’ve just come to realize the importance of. Purpose later in life as we step away from work. Uh, what are we doing to replace the thing that got us up in the morning? [00:11:42] What are we doing to replace those relationships that we had at work? And for some people, this might be really seamless. Maybe they have a great network of friends besides their work friends, but for men especially, the data suggests that men sometimes struggle with that, that they don’t have those connections besides their partners, their spouses. [00:12:03] So purpose, relationships, physical activity, keeping yourself healthy later in life, making smart housing choices. And of course, that’s intertwined with the financial piece, but all of the other dimensions of your life. Are a component of retirement planning. And I think when you bring them in and when you marry them to the financial, the whole thing just comes to life. [00:12:28] And it becomes more fun when you think about, well, here’s my vision for what I want my later years to be like. And also, you know, to have sober thoughts about how you think your life will evolve. Because unfortunately, I think it’s the human condition that we kind of think of ourselves today as how it will ever be, thus, that we think will always be, you know, I’m not gonna change. [00:12:53] You’re gonna change, right? Yeah, exactly. So looking forward and thinking about how retirement may actually be kind of a series of phases and making sure that you’re kind of getting ahead of those phases so that if there are decisions that you need to make down the line, that you’ve been thoughtful about them and you’ve communicated them to your loved ones. [00:13:14] Joe: It’s so much more comfortable. As I was reading through these, uh, 20 lessons and we’ll get to just a couple of them here in a moment, but I was reading through them. I think it’s very comforting. It’s like the pilot coming on and telling us that there’s gonna be turbulence ahead. I’m generally a nervous flyer if they don’t tell me, I imagine, I dunno about you, Christine, but whenever the plane hits turbulence and the pilot hasn’t said anything, I’m imagining these two people in the cockpit just screaming and the plane’s going down and there’s warning lights all over the place. [00:13:43] But if they tell me, Hey, buckle your seatbelt, it’s gonna get bumpy, you know, and this is kind of what to expect. It makes it easier. I feel like this roadmap you’re trying to set out with these people is very much the same. [00:13:54] Christine: Yeah. Thank you for that. That was the goal, to help people look forward beyond where they are, just as they embark on retirement. [00:14:02] To think of retirement as a series of phases. I do think a great way to address it and just to put yourself in the driver’s seat or in the pilot cockpit, however you wanna put it, but to make sure that if you are changing, if you need to make changes to your lifestyle, that you’re driving those changes. [00:14:21] Not your kids necessarily. [00:14:23] Joe: You structure this project as 20 discussions with very smart people in the in the space. You begin with a gentleman, Michael Finca, who is a great thinker. I expect that Michael’s gonna be talking about charts and graphs and numbers, and you don’t go there like it’s the very first interview you do. [00:14:41] Christine, did it surprise you that when you’re talking to him that you’re not gonna talk numbers? You lead off this book with feelings. [00:14:48] Christine: Well, exactly, and that’s why I wanted to lead off the book in that way. Michael is one of my favorite retirement researchers and has done some great work on topics like annuities and safe withdrawal rates and all the other stuff that retirement research geeks work on. [00:15:05] But Michael also has this deep well of knowledge about what contributes to happiness and satisfaction later in life. So we discuss the role of healthy habits, thinking about how you will maintain your health, how you will maintain relationships later in life. And he also has this important point about the fact that even when you’re retired, you need to be relaxing from something that this contrast of like doing something that involves. [00:15:38] Some work, some engagement makes that relaxation all the more enjoyable. And we all know this, you know, from our working lives, that vacations are especially sweet when we’ve just come through a really difficult, challenging work period. And I think the same is true in retirement. You still wanna set up that contrast where you’re getting stuff done and then you can sit back and enjoy, you know, time on the beach or golf course or whatever it is that is your sort of dream retirement vision. [00:16:10] Joe: Can we pause on that for a second because I wanna make sure our stackers here very clearly what you’re saying here. Most people, I think I’m good saying most, I haven’t done the research, but I would guess that it’s most just my little 16 years meeting with individuals, almost everybody who came into my office thought that retirement equaled relaxation. [00:16:30] Retirement was I. I get to do whatever the heck I wanna do, and I’m just, it’s gonna be these relaxing activities. And the two of you have this discussion, and I know you just said this, but it’s No, no, no, no, no, no, no. Because I think this is a really important point. Relaxing from something. What does that mean? [00:16:48] And how does this change if retirement does not equal relaxation, what would be a better descriptor for quote retirement than relaxation? [00:16:58] Christine: Well, I think an important component of this is making sure that you have a purpose. It doesn’t have to be paid worth. If you’re stepping out of the workforce, that’s totally fine, but the point is to have some sort of purpose that is motivating you, animating you, giving you a sense of, I’m still contributing here. [00:17:21] And I think that that is just a huge part of human satisfaction. It doesn’t go away when we retire. You know, maybe it’s having more time to babysit your grandkids or whatever. It doesn’t have to be this thing that Jordan Grommet talks about it in the book. You know, it doesn’t have to be what he calls Big P Purpose, like you’re starting a foundation or you’re climbing Machu Picchu or something like that. [00:17:45] But he. Do that stuff, but it can be what he calls smaller P purpose. Things like you might say, you know, I’ve worked really hard, but I haven’t been as great a partner to my spouse as I would’ve hoped. Or, I haven’t had as much time with my friends as I would hope to have. Or there was this hobby that I let go 20 years ago that I wanna re, you know, sort of reengage with. [00:18:10] And so those are what Jordan calls small P purpose. And the point is to come into retirement with a sense of what those things are for you. And then, you know, when you’ve got those purposes lined up and you might do a little bit of experimentation around them, but when you’ve got those things lined up that you wanna focus on, then you can also have, I think, your leisure basket, the things that really aren’t. [00:18:36] Necessarily purpose at all, but are just like, I have not had time to sit on my back deck as much as I’d want. Or there’s this, this and this Netflix show that I’ve wanted to see and I only have the bandwidth to watch a half hour of TV a night, or whatever it is. You have both things and they work together. [00:18:55] And I think the true leisure activities, you enjoy that much more when you have the purposes lined up when it’s [00:19:03] Joe: coming from, again, back to from purpose, you know, and that brings up another thing that surprised me about not just your discussion with Michael, but it also kind of resonates throughout the book, this idea. [00:19:14] You know, we also think about retirement as non-structured, but really Christine, I would say, even though you don’t say this really out loud, you don’t make this as a big point. Structure’s a big part of a successful retirement. I think I. No, [00:19:29] Christine: I would totally agree. Jamie Hopkins makes the point, and I’m not sure this is his original idea, but the idea is try this calendar exercise, look at your calendar for, say your first month in retirement, or look at a week in retirement and kind of plot out what you’ll do with your time. [00:19:48] Because it’s super important to set up structure that gets back to healthy habits where if you have things you’d like to achieve, you really do need to put ’em on a schedule just as you did while you were working. At the same time, I would say it’s also super valuable to do leave time for unstructured time because frankly, as a working person, that is, that is one of the things that I miss and I have periodically taken these. [00:20:16] Sabbaticals from work. I just had one this summer and that was one thing I really enjoyed about the time away. You know, there was one day I was out for a walk, walked to my local antique mall, and I looked out the window and I’m like, oh my goodness, it’s raining buckets out there. I don’t have an umbrella. [00:20:34] And so I just was like, oh, well I love this place. Anyway, I think I spent two hours, 2, 2, 3 hours in this antique mall going through old records, looking at vintage jewelry and housewares, and it was just so wonderful to not have this. Sense of being on the clock. So I think, you know, as a retired person you do have to relish being unstructured sometimes. [00:21:00] Another thing that I really enjoyed during the sabbatical was like being the person who, you know, if you tie with someone at stop sign being the person who could be like, ah, you go ahead. Yeah, I’m not, I’m not, you know, I’m not the right. Exactly. And there is something that’s really lovely about that. [00:21:17] Even while you might schedule your important activities, do savor that unscheduled time. [00:21:24] Joe: It’s funny, like I feel like with all of our devices around us and you know, you mentioned Netflix earlier and all the things that can entertain us all the time, like the power of boredom and being stuck a little bit is really, really could be a cool thing for you. [00:21:39] I was very surprised when you and Michael talked about social interactions and you brought this up already, esp, especially you know, men and loneliness as they get older. Big thing. But making sure that you socialize and you remain a part of your community. Maybe even expand how much you’re in the community now that you have time to work in the community versus whatever you were doing before. [00:22:01] I was surprised Michael really brought up most experts that come on the show, talk about how bad your devices are and how social media Christine’s just killing us. But he was pretty positive. He was like, you know, if you do this right in retirement, your devices can really help you expand that social network. [00:22:17] Christine: I. I thought that was an interesting point too, Joe, and I think Michael’s point is that it is an addition to the social networks that it shouldn’t replace your in-person interactions with people, but he frequents these online communities of older adults, of people who are sharing experiences, sharing ideas about how to proceed down the road of retirement, and he feels like there is a lot of very positive engagement that goes on. [00:22:46] I had a discussion in the book with Laura Carstensen, who’s the longevity researcher at Stanford, and she talked about devices as well, and she noted that indeed the online interactions or even just the text group texts that you might have with your friends group, her viewpoint is that those are great, but that they need to be, in addition to the face-to-face interactions, one can’t replace the other. [00:23:15] Joe: Almost like, uh, tying you together between the times that you get to be in the room together, I would think. [00:23:21] Christine: Exactly. And I shared with Laura that my two best friends are both in California, but we do make a point of getting together at least once or twice a year, even as we’re texting almost every day or truly every day. [00:23:33] Joe: I think we all felt that coming outta Covid, didn’t we? I’m like, oh my God, I get to see you in real life. What’s this all, all about, right? Yeah. Your second, uh, discussion is with, uh, Fritz Gilbert. We’ve had Fritz on the show before, retirement Manifesto, blogger, and a guy who not only writes about successful retirement, truly has had a successful retirement of his own and talk about community by the way, he and his wife and his wife’s, uh, mission that he talks about. [00:23:59] Tell us a little more about Fritz and why did you want to include him in this project? [00:24:03] Christine: Yeah, I’ve loved meeting Fritz. We’ve had him on our Morningstar podcast a couple of times. For one thing, I wanted him to talk about the nitty gritty steps to take as retirement approaches. So kind of set the clock and get yourself maybe five years ahead. [00:24:19] What are the steps that I need to take as I inch toward retirement, and is always just so incredibly specific about things and kind of methodical in a way that I appreciate. I did want Fritz to be part of the project because as you said, Joe, I think he so beautifully illustrates how to do retirement well in that he and his wife have this charity project called Fences for Fido, where they’re building these fences for dogs that would otherwise be on chains. [00:24:50] So the dogs are able to be freed from their chains, have a little bit more space to roam around. It’s probably good for the families to see their dogs have a little bit more freedom. So this is something that Fritz and his wife are passionate about, but it has brought this social network to them. They move to a new community in retirement, and this group of people who work on this shares. [00:25:14] Their values in terms of this charity project, but it’s also just turned into a great social network where I think they meet up for beers at a micro brewery, and it’s also physically engaging this work that they do, which to me seems like it ticks a lot of boxes. You’ve got the Friends network, you’ve got some outdoor physical activity, and you’ve got something that’s bringing you purpose in the sense that you’re doing some good in the world. [00:25:40] So I did want Fritz to talk about that project because I personally find it so inspiring and it’s, you know, it’s not this huge thing that they’ve set out to do. It’s not like, oh, we’re going to cure childhood illness, or something like that. As important as that would be, it’s not like they’re biting off more than they can chew. [00:25:58] This is a manageable endeavor to do some good in their community. [00:26:03] Joe: You start off your discussion with Fritz, with, you know, the big, big, big question and it actually is funny. I’m, uh, I’ll get to the question in a second. But I thought about this as I was reading through your discussion with Michael as well, which was, um, you know, we think about retirement and in a lot of ways, the way we have it now, it, it, it is so much a social construct, which Christine, we’ll see somebody who’s 40 and they’ll tell us they’re retired and we’ll say, what? [00:26:32] Why, why are you wasting your time? But then what’s funny is we’ll see somebody who’s 75 and they’re still working, and we’ll say the exact same question, but kind of the STA is elsewhere. It’s what, why, why are you wasting your time? Like, we have these set ages that we associate retirement with, which I think we need to get rid of those. [00:26:54] But with Fritz, you asked the question, your very first question is, what’s the right retirement date? How did he answer that? [00:27:02] Christine: He said that everyone had told him, he would just know he used his own experience. He said he just, I think, was really starting to think about the next chapter, and he said he, he actually did kind of know, he and I did discuss this idea of kind of phased retirement, which frankly I find really appealing. [00:27:23] Probably just kind of thinking about my own personal situation that I probably don’t want retirement to be a hard stop. But I think the point is, the broader point is that it’s very individual. Specific. I get a little nervous when I hear people think that retirement necessarily has to be at 65 or when their social security benefits kick in or whatever. [00:27:45] It’s very individual specific. I also am a little dismayed when I hear people think that simply because they have the assets to retire, they should retire, and I’m not at all convinced that’s the right answer in every situation. There are many, many situations I think, where people should continue to pursue some type of work, maybe paid, maybe unpaid. [00:28:07] Well, this goes [00:28:08] Joe: Christine, right to purpose. I’ve seen this in my life being around a lot of creators and business owners. I can think right offhand of three business owners that I know that sold their business at a youngish age because they were getting a big check. And it is clear, even to them, a couple of them say it out loud, they’re lost. [00:28:27] You know, they’re struggling to find their identity again, because of your point that, hey, just because I can and I have the asset that I could sell, it might have been a better idea not to. [00:28:37] Christine: Yeah. Someone I think Michael Finca says in the book, it’s not a math problem. People, this decision about whether and when to retire, there’s so much more that you need to weave into it. [00:28:47] So the finances are one piece. If you feel financially set, great, but there are a lot of other things that you need to think through before embarking on retirement. [00:28:57] Joe: But you and Fritz a couple money nerds sitting around talking about what to do five years out, what do we do five years out? [00:29:04] Christine: I’m trying to think. [00:29:05] I think on his list was to start exploring long-term care. I would argue you should probably start in kind of your mid fifties to be thinking about that decision. And you’re talking about [00:29:18] Joe: the issue, not the insurance, right? [00:29:20] Christine: Well, maybe both, but making sure that you have a plan for long-term care is crucial and for some people, perhaps some sort of an insurance product might be a fit, but for others, especially those with. [00:29:33] Substantial assets. Thinking about, well, how much do I need to set aside for long-term care? Where am I putting those funds? How am I investing the money? All of those sorts of considerations. Social security, claiming decisions, I think was probably sort of toward the front end of the thought process for Fritz on the calendar. [00:29:56] Countdown to retirement. He’s actually a big believer in physically putting a countdown clock on your phone just to give you a sense of, okay, this thing is approaching. I need to lay the groundwork. It’s real. Right? Yeah. And I believe that he and I also talked about making some changes to your portfolio in that period in say the five years before retirement. [00:30:20] Because one thing I see a lot is that many older adults do have very equity heavy portfolios today, and this is an outgrowth of the fact that we’ve had. A really great stock market. They have not de-risked Bonds have not been great. They haven’t been a compelling alternative, but yields have come up a lot and I do think that de-risking is a really great idea for people at that life stage. [00:30:45] Don’t wait until you’re like a year before retirement to say, oh, holy cow, I’m 95% stocks in my retirement portfolio. You need to get ahead of that and start building out that bulwark of safer assets. [00:30:59] Joe: I totally would agree that it’s return chasing. It’s been forever and it will be 50 years from now. It’s gonna be people chasing what was hot yesterday. [00:31:07] That’s always gonna happen. But you also think it’s, it is something to do with longevity, like we stay in equities longer because we know that we may live longer. [00:31:16] Christine: Well, potentially so, and, and I do think no matter who you are, if you have some sort of an investment portfolio and you need it to grow, you do need the growth that stocks can provide. [00:31:27] So I would argue that most retirees probably should have a minimum of 50% of their portfolios and stocks, probably more. And that is because, you know, when we look at the various asset classes with the best long run opportunity to outrun inflation by a decent margin, stocks, are it fixed income assets and certainly cash are not it, on an inflation adjusted basis, you might modestly outperform the inflation rate, but uh, probably not by a lot. [00:31:57] So you’re not not gonna get any growth [00:31:59] Joe: there. You have such interesting conversations with 20 brilliant and compelling people, like, uh, friends of the show, Jean Chatzky, Ramit, Sadie, Cameron Huddleston, our collaborating partner. Of course, you mentioned ’em earlier. Uh, Jordan Grommet, aka Doc G. Where did you find most of these people overlap? [00:32:19] Was there a theme that you maybe Christine did not expect as you’re doing these interviews? [00:32:25] Christine: One theme, and I referenced it earlier, is the idea of phasing into retirement. Several of the experts discussed the value of that, about being thoughtful about that, potentially seeing if you can kind of have a mental ledger as retirement draws close, where you’re thinking about your work and your. [00:32:45] Creating that. Stop doing list, like the things that you do not enjoy. Okay, let’s put them to one side and say whatever we do later in life, it will not involve these tasks, but then take stock of your really happy days at work. If you’ve had a great day and you kind of walk out of work thinking like, yeah, that was a really good day. [00:33:07] Take stock of your activities. Are there some of those. Things that you can carry forward later in life. And again, it doesn’t have to be by continuing to work, but if you’re pursuing volunteer activities, for example, making sure that they entail some of those sort of kindred activities to what you were doing by while you’re working. [00:33:30] So that was one thing. Numerous people also talked about the virtue of trying to be thoughtful about enlarging your non portfolio income sources. So people approach this in different ways, but the name of the game is to, I. Try to get those to be as large as you possibly can coming into retirement or in the early years of retirement. [00:33:52] So that’s looking at maximizing social security and I talked to Mary Beth Franklin about making sure you get your fair share of social security. Numerous people discuss the role of annuities. Some hate them, some actually like them. So that was an interesting debate. People have differing views about annuities. [00:34:14] Those were a couple. Is that such a shock of key topics, Christine? Such a shock. Very controversial area. I mean, one of the issues is that I think the term annuity is so broad and encompassing that it’s almost not helpful because you have so many different. Product types bundled under that one umbrella. [00:34:33] So it’s not surprising that there’s some disagreement there, but I would argue that retirees shouldn’t reflexively rule them out, especially if they are, you know, a key idea would be if you’re coming into retirement, you’ve got your basic expenses that you’re going to have to pay for. See if you can’t get those non portfolio income sources to align with those fixed outlays, I think that’s a, a terrific strategy when thinking about in retirement budgeting, [00:35:02] Joe: to your point, people that really needed. [00:35:06] Annuities back when I was a financial advisor, and it wasn’t as often as I see them out there and being mis-sold misappropriated or people that needed permanent life insurance for their specific strategy, which again, another niche, uh, group of people because of this broad stroke stuff. To your point, Christine, these broad brushes people have, it was so difficult to get the few people that needed these things to actually accept them. [00:35:32] They’re like, oh, I heard it’s bad. I’m like, well, yes, but you know, it was so frustrating. All right. That’s the overlap. Let’s talk about the other side as you’re doing these interviews, any wild outliers where you’re like, wow, so and so said this thing, and that was way different than I thought, or way different than what anybody else was saying. [00:35:50] Christine: I would say I, I love Ramit, but his thoughts on kind of spending, not that it’s an outlier, but I think it’s an eyeopening discussion about, are you saying that Ramit, Sadie said something spicy? Is that what you’re about to say? Yeah, he is, because he doesn’t do that at all. He’s one of my favorites. But we talked about retirement spending and just making sure that the expenditures that you’re making are in line with what you truly value rather than just sort of mimicking what everyone in your world is doing. [00:36:22] I feel like that’s a thought provoking chapter. I love that message for younger people, but I also think it resonates for people getting close to retirement where maybe, you know, you see your friends all doing certain things and really just step back and take the measure of whether that is. The right activity or outlay for you. [00:36:43] So I found Ramit’s discussion of, of how to do that, how to be thoughtful about that, to be super refreshing as I, as I do find most of his work. [00:36:53] Joe: The book is How to Retire 20 Lessons for a happy, successful, and Wealthy Retirement. It is definitely, as I mentioned, a great way to see the turbulence that might be coming and also to appreciate some of the fun things retirement can be if you just do a little bit of planning. [00:37:09] You’ve seen these statistics, Christine. People will plan more for their next family vacation than they do for their retirement years, which is crazy. But the book’s out tomorrow everywhere. I assume [00:37:19] Christine: it is available through all the major channels and I’m very proud of it. I think everyone will find something new in it and just, I love the cast of characters that we assembled to be part of the book. [00:37:33] I’m very thrilled to be associated with each of these people. [00:37:37] Joe: Well, thank you for mentoring our stackers on retirement today. I super appreciate you and this work. [00:37:42] Christine: Thank you so much, Joe. It’s been a pleasure. [00:37:49] Doug: Hey there, stackers. I’m Joe’s mom’s neighbor, Doug, and maybe my favorite class in high school was English. Sure. I barely passed and yes, I really didn’t learn too much about the classics, but Mr. Morris had enough gin in his coffee cup that I could sleep pretty soundly for 45 minutes every day. I only bring it up because Christine Bens works for the great rating service company, Morningstar, which got me thinking, where did the name Morningstar come from? [00:38:16] Turns out that it comes from maybe the only book I know by Henry David Thoreau, which is. Well that’s today’s trivia question, isn’t it? What’s the book by Thoreau with a last line that Read The Sun is but a Morning Star? I’ll be back with the answer right after I look up. If Moby Dick is about an older pop stars in private parts, kind of hope not. [00:38:46] Hey there Stackers. I’m Whale Watcher and High school Cliff Notes junkie. Joe’s mom’s neighbor Doug. So it turns out Mobby Dick is actually about a wait for it. This is gonna blow your mind a whale and they never mention his private parts Once. Huge disappointment. What won’t be disappointing is the answer to today’s trivia question. [00:39:09] The name Morningstar actually comes from the last line of a book by Henry David Thoreau, which reads The Sun Is But a Morningstar. But what’s the name of the book? Definitely the only book I know by Thoreau. It Chronicles the Author’s Simple and Frugal Life in a cabin on some land owned by his mentor, Ralph Waldo Emerson. [00:39:30] Ah, that explains why they both have three names. Anyway, the book and the answer to today’s trivia question is named after the pond on the property and is called Walden. Thoreau, over the course of about two years, built a house and grew his own food. The house costs $28 and 12 cents to build, which is about a thousand dollars in today’s money. [00:39:53] And now here to help you frugal your way to your next house are Joe and og. [00:40:01] Joe: Yeah. Thanks Doug. A big headline in the last couple weeks, uh, this is from, it’s funny, I don’t remember Doug ever reading Walden. Uh uh, obviously know the book. Nobody’s [00:40:10] Doug: ever read Walden. [00:40:12] Joe: They just reference it to sound smart. You said this first [00:40:16] OG: thing where you’re looking for the guy in the straight pajamas, like where’s Walden? [00:40:19] Yes. [00:40:20] Joe: Yeah. Where’s Walden? Everybody asked that. Like [00:40:23] OG: it’s like in the, yeah. Okay. I’ve seen that. I’ve seen, and it’s in Ralph. I’ve seen all those and I can never, I can never find them. [00:40:28] Joe: It’s in Ralph Waldo Ton’s Backyard is what we just found out. You’ve read the graphic novel version [00:40:33] Doug: of it? [00:40:34] OG: Yeah. Well, I mean, it has lots of pictures, but Right. [00:40:37] It tells a story. This guy goes on lots of adventures and he’s lost. He’s always lost. Actually. [00:40:43] Joe: He’s not lost. He’s waving at me. I just [00:40:45] OG: can never [00:40:45] Joe: find him. [00:40:45] OG: Yeah, he’s waving at the camera. It’s like always packed with people. I mean, it seems like he has lots of friends. [00:40:51] Doug: Those old classics would always have these really subtle but but maybe off color type references that you had to really read between the lines to figure out where’s Walden is the same way, but you just have to look really carefully. [00:41:04] ’cause some of those beach scenes, there’s some stuff hidden between the lines in those beach scenes that are not meant for young eyes going on. Going [00:41:13] Joe: on at Walden Pond. The beach scenes at Walden Pond. Oh yeah. There’s apparently a nudist beach at one corner of the pond. Can we. Can we just call it Walden Pond After Hours? [00:41:29] Walden Pond after dark. Yeah, it’s where Thoreau got his crazy on. I don’t know. But where the hell are we going with this? Everybody’s wondering. Let’s talk about Doug, which you were alluding to, which is Real Estate in the News og. A couple weeks ago, one of our favorite writers over at the Wall Street Journal, Veronica Dagger, who’s been on the show a couple times, Veronica writes about the new ET etiquette. [00:41:52] Easy for me to say, the new etiquette of negotiating with your real estate agent. ’cause as you know, og, this is completely. Not completely, but it certainly has changed a lot. Here’s what happened, everybody, if you, you’re not familiar with what’s been going on in the real estate business. The National Association of Realtors settled a series of lawsuits totaling $418 million, and that ushered in all kinds of changes, which are supposedly aimed at improving communication and helping consumers understand all the stuff that they’re gonna get and at what cost. [00:42:28] So the deal is apparently people didn’t know that I’m paying my realtor, even though nothing comes outta my pocket, like realtors are magically being paid. So it was this collusion type thing they were accused of, I guess to put it gently. I dunno. Veronica writes though, so they’re trying to make it easier, OG. [00:42:49] This sounds like the Securities and Exchange Commission and just another, you know, page of things you sign that you don’t read when you sign up for investments. Shopping for a home now requires a knack for negotiation and a lot more due diligence. She writes. So now when you, when you’re working with your real estate agent, everything’s negotiable. [00:43:11] og. It’s all on the table now where didn’t, didn’t seem to use to be. [00:43:16] OG: Well in talking with some real estate people over the last couple of weeks about this, I’ve actually learned that all of this stuff has been negotiable. I mean, I know that I sold a property a couple of years ago and negotiated the commission. [00:43:31] I think having it be top of mind is probably good for consumers, but there’s a lot of baggage that goes with that. For example, if you’re gonna sell your house, you negotiate the commission, right, with your realtor, which you always could do. And then they’re in charge of negotiating it with the buyer. It used to be that it would just be generally accepted that it was split, right? [00:43:53] Like, Hey, this is a 5% commission deal. I get two and a half, you get two and a half. And they would put those numbers on the listing for the agents to see. So when you call your, your buyer and you call your realtor and say, Hey, I wanna go look at some houses, they had the information to be able to see who is gonna pay ’em. [00:44:09] Now some people would say that that’s collusion, like you said, and you know, that’s gonna, you know, not, not work in your best interest as the buyer, but I also get, they have to get paid for their time, so that’s fine. So now you’re going into a, a, if you’re a buyer, you’re going into a home and the buyer’s agent doesn’t know what their compensation will look like until they start getting down the process of getting into that open house or, or whatever the case may be, right? [00:44:37] So it’s not a screening tool. Probably a good thing for consumers in the sense that, Hey, I know that, uh, you know, I’m, I’m gonna pay what I’m gonna pay. Probably not a good thing for realtors. And honestly, it’s gonna end up with a bunch of wasted time because look, from a realtor standpoint, if you have two houses that are basically identical in the buyer’s eyes, and one is, Hey, this one’s gonna pay me 2% commission, and this one’s gonna pay me 3% commission, which one are you gonna get pushed to? [00:45:07] And if you’re the buyer, that’s not necessarily a good thing, but does it matter to you? You’re not writing the check. I think that all of this was just a big amount of paperwork. And all it’s done is confuse a bunch of consumers. It hasn’t, I don’t know that it’s gonna result in lowering anybody’s costs. [00:45:25] Joe: Here’s what’s new from a, uh, Yahoo piece. Among the changes home buyers now are going to sign a written agreement with their agent before they tour home. So if you’re trying to buy a house, you sign a written agreement that they are, um, which is completely [00:45:40] OG: unenforceable. After, like you could sign that and say, oh, I promised to, like, we’ll do business with you and then you can walk away. [00:45:48] The only outcome is small claims court for the realtor to go to the, to the buyer unenforceable. [00:45:54] Joe: It’s intended though that you know what you’re getting into with this particular person to tell you ahead of time, Hey, this is what, as a buyer’s agent, this is how my fee structure works. Sure, this is what, but how about this, this is what you’re going to pay. [00:46:06] OG: Okay. If you use me, so you say as a buyer, okay. The buyer’s agent says, Hey, my commission’s 3% on whatever deal we do. And you go, okay, whatever. That seems like the normal rate sounds great and now you go find a house that the seller has said, oh, I’m only paying a two A, you know, a 3% commission total. [00:46:27] Right? And the seller’s agent couldn’t negotiate that any better. Like that’s as good as they got, right? Are you telling me as a buyer and I just go buy a million dollar house that I also need or stroke a check for 30,000 to the agent? Tell me that’s not gonna blow up in somebody’s face here in their not too distant future. [00:46:44] Oh, [00:46:44] Joe: it’s totally gonna blow up on in people’s face. Isn’t there been tons of things written about this og? And you know what’s gonna happen is up until closing, you [00:46:51] OG: can walk away from that. So you’re gonna get to closing and go. Uh, wait, this says I have to write you a check for 30,000. Yeah. Yeah. We signed a deal, 3%, you know, and, and, and the seller’s agent didn’t have the ability, didn’t have the sales skills enough to like, you know, whatever, negotiate a good enough commission on the selling side. [00:47:10] And so now the buyer has to pay. Not gonna happen. Not gonna happen. People just walk. [00:47:15] Joe: Veronica has a great graphic on how this used to work then versus how it works now. So just to walk through it the way it used to work. Number one, when listing a house for sale for half a million dollars, the seller agrees to pay the seller’s agent a percentage of the sale price, 6%. [00:47:32] So there’s one negotiation that traditionally happened, og, and it was between the seller and their agent. So $500,000 price, $30,000 commission. Number two, the buyer agrees to buy the house for half a million dollars, and when the sale closes, the seller’s agent gives part of the commission, often half of that 3% to the buyer’s agent, so they pay a part of their commission over to the buyer’ss agent, not the way it works now. [00:47:59] Now the money to pay the buyer’s agent is negotiated. Buy the buyer. To your point. Number one, when listing house for sale, the seller agrees to pay a seller’s agent a certain amount. The seller can decide to offer to pay. The buyer’s agent too. The buyer and the buyer’s agent agree on a price for the agent service. [00:48:17] The buyer agrees to buy the house, the money to pay. The buyer’s agent can come from the seller’s agent or from the seller, or to your point, OG a $30,000 check or $15,000 check from the buyer depending on whatever was negotiated. So it’s that second piece, that second half of it, it’s not clear. Here’s my question though, og, if, if I’m a seller of a house, why would I not as an incentive, want to make sure that I make it as easy for people buy my house as possible. [00:48:46] Like I would think as a seller in a competitive market, you know what, I’m gonna go ahead and pay the buyer’s, uh, fee because I want this house to move. [00:48:54] OG: Yeah, and that’s really the thing. The struggle is when you go to sell your house, you’re negotiating for your. Total commission price that you’re gonna pay as a seller, right? [00:49:04] If you’re a buyer and you’re, you know, you’re hiring an agent to go help you select a new house, each one of those houses might have a different structure. And so you don’t know going into the house, Hey, this one is, oh, this one, the selling agent was sucky at sales and didn’t negotiate enough commission to split. [00:49:25] And now this one, I’m on the hook for a bunch of money or this, like, you don’t know that until you get to it. As a buyer, I would wanna know that in advance and be like, well, I don’t want to go see those houses. Because to your point, Joe, if you’re a seller, and this is the thing that I think, you know, most people get wrapped up in, if you’re a seller, you wanna drive as much activity as possible to your house. [00:49:45] Right? I think everybody knows this from watching all the HGTV shows and whatever, you know, when they, when they have the, the, you know, the million dollar listing shows or whatever, and they have the big open house and like three people are there. Yeah. Like the energy’s just out of it. Right. It’s like, oh, we really screwed up this deal because you want a lot of excitement. [00:50:03] You want a lot of people in the neighborhood, you want a lot of people there. And how do you incentivize that? You incentivize it by paying them to do it. Just go, look, I’m gonna pay you a full commission on this deal. So you as a buyer or buyer’s agent, and all the buyer’s agents around are gonna be like, whoa, this is a good deal. [00:50:20] This is good for me as the, as the buyer’s agent to get all of my customers. Because if I sell this deal, I’m gonna make a big commission. Versus I might have one that’s maybe a few dollars less. So as a seller, I think you have to balance out, like, I get it. You know, you’re gonna write a 6% check. That’s been the historical number. [00:50:38] I don’t know if that’s too much or too little. It seems like a lot of money, honestly, especially as you get some of these big higher priced homes. But what’s the balancing act between, I can sell my million dollar house, it costs me 60 grand to do it, but I can sell it in a weekend versus it takes me four months to sell it. [00:50:57] Or I gotta drop the price by 5%, that’s nine 50. I could have sold it for nine 60 full, asking the, you know, or you know, nine 40 just to incentivize [00:51:07] Joe: good professionals to work on my behalf. [00:51:09] OG: Yeah. So I think it’s gonna be a really tough balancing act. And I think that there’s a big issue with blindly signing buyer’s agents agreements going, I’m gonna pay X percent. [00:51:18] I’m gonna, basically, as the buyer, you’re saying, I will guarantee your comp no matter what the other side of the transaction has done or not done. And it’s like, well, why do I have to be on the hook for that guy being a sucky salesperson? You know what I mean? [00:51:33] Joe: Well, and this also makes me wonder, something else OG along this, you know, the nebulousness of this whole thing, which is. [00:51:42] I kind of think this brings the whole idea of fees involved in real estate to the forefront. You and I have been saying for a long time, we’re like, are you kidding me? There’s people online saying a 0.03 is a lot of money to pay for a mutual fund. Yeah. And then the same person goes out and pays 6% for a piece of property and they think it’s a great deal and don’t think at all about the fees. [00:52:03] I think this does bring the fee thing up, which also means, and I’m wondering your take on this, do you think you’ve got all these people in real estate that are part-time that are just middle people? You know, they don’t, they truly aren’t great at sales. They just kind of hang on and get credit and facilitate the deal, but don’t really bring any much value to the table. [00:52:25] Yeah. You think this washes a bunch of crappy real estate pros outta the market. [00:52:29] OG: Well, that’s already been happening with the, you know, if you’re part-time in anything and the economy starts going in the opposite direction from that industry, you’re not gonna be doing that thing very much anymore anyway. [00:52:41] So, so you’re already seeing that interest rates rising, those who are really professionals that have full on networks and referral sources and our, like you said, providing lots of value regardless of scenarios. They’re still busy. The ones that are like, oh, my brother-in-Law got his real estate license three Tuesdays ago. [00:52:59] He can sell your house. Yeah. That person’s not there anymore. Probably it’s gonna be harder to break [00:53:03] Joe: into the business again. I think [00:53:04] OG: it’s kind of interesting how this whole thing transpired, right? Which is, you know, somebody somewhere had a big, like, I’m gonna go get somebody, you know, whether it was a, a law firm, I don’t remember how this all started. [00:53:14] It was probably a ambulance chasing law firm that finally got their class action lawsuit approved and, you know, and, and went after Meanwhile. One of the most egregious fees in the whole process of buying a house is title insurance, which to be a title agent, you have to be a lawyer. So, you know, that’s kind of, you know, not gonna where you eat. [00:53:35] Right? Do we wanna go after title insurance because it’s a gimmick. I mean, yeah, you need to make sure that your house is, you know, yours to sell and buy. I got that part. Does it really cost $20,000 for title insurance? No, it doesn’t. But to be a title agent, ’cause I looked into it because I was like, this, this, there’s a lot of money there. [00:53:56] I can figure out how to do this with a good service level. Uh, you have to have some sort of legal background and OG and associates don’t so, so big nuisance fees. Let’s keep those, but let’s go after the commissions of the people that provide all the value. That makes a lot of sense. [00:54:11] Joe: Yeah. It’s annoying. [00:54:11] And maybe this is the beginning of something good where we start to unravel all of these real estate fees that are on that big long disclosure. The document [00:54:19] OG: preparation fee of $150. The credit check analysis fee from your mortgage company for $72. The, you know, all those, like, I just had a client that bought a house and I looked through their, their disclosure documents of all their stuff and I’m like, what is going on here? [00:54:33] Like, some of the stuff you makes, it makes sense, right? Like obviously prorated taxes that you have to pay. Yeah. Like that’s prorated insurance. That’s like, that’s fine. It’s like, you know, buyers title, agent super duper analysis charge 3000. It’s like, we have talked about this [00:54:50] Joe: in the past. You wanna work with people that are good at what they do and you wanna make sure that they get paid because of the fact that people that are truly good at what they do, they’re gonna get paid. [00:54:59] And if you’re not gonna pay them, they’re going to go to people that will pay them. And these people, it’s a cost benefit analysis, right? You buy a nice sweater that’s gonna last for a long amount of time, it’s gonna cost more. [00:55:12] OG: Price is only an issue. Absent value. If you can provide tons of value, then it doesn’t matter what you, what you charge, whatever your business is, right? [00:55:22] You can have a medical professional, a financial professional, a real estate professional, a tax professional. Your lawn care guy could charge a bunch of money relative to everybody else, but if they provide a lot of value and do a lot of things for you that you get a lot of outcome from, then it’s worth it. [00:55:39] It’s not an absolute dollar amount that you say, well, it’s worth it if it’s under $500 a month. It’s like, well, what if your tax guy saves you 700 a month? Is it now worth six 50? Maybe. I mean, I don’t know. But if there’s some value there, you have to decide what the value is. And that’s really, if there’s a silver lining in all this, I think it’s the fact that the consumer now gets to really put their finger on, here’s what I value. [00:56:04] And if you are like, I don’t need to have a buyer’s agent. I don’t need to, I don’t care if this house sells. I. Overnight, and I’m okay with paying for the value associated with that. I’m gonna pay a lower commission, I’m gonna have, you know, whatever. Then you get to choose as a consumer. So if there’s any sort of outcome here, that’s good. [00:56:20] It’s, it’s that. But I think getting the same service level, I. Paying lower money. I don’t think that’s actually gonna happen. [00:56:27] Joe: Veronica writes that, you know, these, these companies have known this settlement’s coming for a long time, so they’ve already tried to get ahead of it, smart to get ahead of the thing and put processes in place. [00:56:36] Veronica writes that many of these firms, uh, real estate firms have already changed their policy like four or five times is they’re ironing things out. Uh, one person in this piece says the process is clunky. It’ll become a lot less clunky, I think, over time. But I think going to the table, knowing that you may have to put your negotiation hat on a little bit is a great idea. [00:56:55] And then they, because that’s [00:56:55] OG: everybody’s strong suit. [00:56:56] Joe: Yeah, I know, right? And then thinking, what am I really negotiating for? Do I, am I negotiating for lower price or am I negotiating for a better process? And I think for me, negotiating for better process and sticking it to them to make sure that I get the service that I need to get this house sold unless you’re pro at it yourself. [00:57:16] Makes a lot of sense. A lot of sense to me. One more thing in this, while we’re in the area of real estate, og, you know, banks will approve you for a lot of house, you know, 30%, sometimes 40% of the amount of money you got coming in the front door. I don’t love rules of thumb, but is there any rule of thumb about how much house we really should take on when it comes to the monthly payment on that mortgage? [00:57:41] OG: Well, I think that there’s a lot of rules of thumb here, and one of the better ones that I’ve heard, I can’t believe I’m gonna say this is, is the old guy from Tennessee’s version, which is 25% of your income max, with a 15 year term. If you can qualify for that. Like if mathematically that works and you choose to do 30 instead because you’re gonna invest the difference, but nobody does. [00:58:06] But you know, like that’s whatever you want the flexibility. I totally get it. I think in all the experiences that I’ve had, I think Joe probably, you can probably attest to this as well, it’s like, yeah, the bank will let you get your lips just above water. Like they’re, they’re okay with you almost drowning because an almost drowning person fights like hell. [00:58:28] And that’s what they’re, they’re okay with that because they’re like, you’re just gonna be out of the water enough that you’re okay with paying interest on your credit card. You know? ’cause you can’t let the house go, you know, or you’re ju you’re, you know, you might be late a couple times on your car payment, but that’s okay. [00:58:41] And [00:58:41] Joe: if there’s a few [00:58:42] OG: overdue [00:58:42] Joe: fees. Yeah. If there’s a bunch of overdue fees, but you don’t go bankrupt, cha-ching. That’s good for them. Yeah. [00:58:47] OG: We’re, we’re good with all of that, right? We just, just right above. Now if you’re drowning, sometimes people just give up and they sink to the bottom. And it’s probably a terrible analogy. [00:58:57] It’s, it’s, it’s very visual, you know? Do you sink though? I think you basically sink and then you float back up again. I guess [00:59:06] Doug: actually most drowning victims die of a heart attack. So it’s even more graphic and violent than what you’re describing. Oh. [00:59:13] OG: Most people die of heart attacks and then drown. Is that what you mean? [00:59:16] Doug: No. In the process of drowning, you panic so much that you have a heart attack. So when they do postmortems on victims, when they can find them, they find that they had a cardiac arrest. [00:59:26] OG: Huh. Well, how about that? Yeah. [00:59:29] Doug: Okay. It kind of sucks. It’s even darker. Thanks for, for allowing me to make it even worse than what you were describing. [00:59:35] Joe: Sweet. We haven’t done it yet, Doug, but we were gonna add that the more you know, theme to the soundboard, and that’s what we needed. D Like an afterschool special on drowning [00:59:45] OG: or your life jacket folks. [00:59:46] Joe: Can you imagine you’re like six or 7-year-old. You know, you get home from work. So mom, I learned all about drowning today on NBC. [00:59:54] I’m never [00:59:54] Doug: swimming again. Mom, fill [00:59:56] Joe: in the pool. It’s like being a kid. When Jaws came out, I didn’t want to go in any lake, any pool. Not even that little kitty pool. I didn’t want to go in there. There could be a shark, who knows. Oh, yeah. Yeah. [01:00:06] OG: So I’d like to keep it at that 25% number. As you get closer to 35 or 40, which banks will let you, you’re gonna feel pretty stressed out and. [01:00:15] I think in my experiences and others, the more flexibility that you have, the better. The downside, of course, is that if you make a quote unquote normal income and you try to do the math on that, you probably are having a hard time finding a house that matches up with that, depending on where you, where you live. [01:00:32] That’s a different struggle altogether. But, um, as best as you can, I like 25%, maybe 30. And, and golly, if you can get it done in 15 years, man, you will be happy. 15 years goes by really [01:00:44] Doug: fast. Or just do what Thoreau did. Build your own. I mean, in today’s dollars, apparently you can do it for a thousand bucks. [01:00:49] There you go. That’s all you gotta [01:00:51] OG: doche. GPT will do it for you. I [01:00:52] Joe: figured it out. Chet. PT how do I get a house? You buy a, uh, you buy a 3D printer and you just print yourself a house. Yeah, that’s, [01:01:03] OG: that’s what do I did? I did, I did watch a company do that. They, they built the entire house for 200 K. It’s like 1300 square feet. [01:01:09] Three bedroom, two bath. Yeah. [01:01:11] Joe: We did a story about an entire community over on Stacking deeds about that Doug. You remember that? [01:01:16] Doug: Yeah. It’s in Texas. Yeah. Is it [01:01:18] Joe: near, uh, Austin? North of Austin. I think George think’s right next [01:01:21] Doug: to your neighborhood. og. It’s probably bringing your house values way up. [01:01:26] Joe: Maybe. [01:01:27] Look, it looks just like OGs house, but you can 3D print it, right? It’s great. Uh, we will dive even deeper into this topic in the 2 0 1, our fantastic newsletter. Uh, stacky Benjamins dot com slash 2 0 1 gets you to the newsletter that’s free and always continues the conversation in a much more in depth way. [01:01:45] Uh, curated links to all kinds of sources on this topic. But if you’re not here for real estate help or the mortgage, you’re here because just your budget doesn’t really work, or the investment strategy tied to your real estate strategy, like how does this stuff all dovetail together? OG and his team are taking clients, so head to Stacking Benjamins dot com slash og and that gets you to OG and his team’s calendar. [01:02:11] It’s the first step in seeing how they can help you make better decisions. As we round out 2024, man, if you’ve been moving in 20, 24, time to get time to get going. Let’s go. We’re rolling toward the fourth quarter already. I can’t believe it. Fourth quarter. Four. Four. Four, four. [01:02:26] OG: Oh definitely. [01:02:29] Joe: Last thing before we go out to the back porch. [01:02:31] We have released our guide to benefits. Read this before you choose your workplace benefits. Open enrollment. As you guys know, for a lot of people, average person changes jobs every 4.2 years. Government makes changes, companies make changes. Here’s the deal with our guide. You buy it once and as long as we have it, you get access to it. [01:02:47] We’re updating it. Kevin, who does that? 2 0 1 we just talked about worked for Vanguard and TIAA. Uh, you get OGs wisdom from the shows. We’ve taken that and packed it in. We’ve got so much in there. We send it to HR Pros for their insights and help. Uh, Stacking Benjamins dot com slash benefits for the benefit guide, Doug, we’re on the back porch man. [01:03:09] I’ve got something for the back porch. What? But please don’t tell me. We’re gonna talk about what happened six years ago on Below Deck Mediterranean. Well, no we’re not. ‘ [01:03:17] Doug: cause I’m getting caught up now, so I’m only a couple of years back. But no, I won’t take, I won’t take everybody through that. I’ll wait and, uh, pick and choose my spots to talk about the greatest show on television Below Deck Mediterranean. [01:03:29] What do you got, Joe? What do you, what do you have for us? [01:03:31] Joe: I’ve got this story. I saw, uh, the AP had this story and I was wondering what you guys think about this late French film. Star Ellen Delan wanted his dog buried with him. This is, uh, before he died this week, according to this piece, French film icon, Ellen Delan once suggested he wanted his beloved sheep dog Lobo buried with him. [01:03:54] Doug: He had a, a cheap dog. What’s a cheap dog? [01:03:57] Joe: Sheep [01:03:57] Doug: dog. He, oh, I thought he got it down at the pound for free. Oh, I see. Inexpensive dog. [01:04:02] Joe: Yeah. It’s a dog that impersonates a sheep. I think so. The relief of. Animal lovers around France, Lobo’s gonna be allowed to survive. So he, he wanted this dog to die with him. [01:04:13] He’s quoted in 2018, interview with Paris Match, saying he wanted Lobo a Belgian Malis. Yep. He adopted in 2014. Bear with him. Quote, listen. Now egotistical, this is, I’ve had 50 dogs in my life, but I have a particular relationship with this one. He told the magazine, if I die before him, I’ll ask the veterinarian for us to leave together. [01:04:34] I’d prefer that to knowing that he would let himself die on my tomb Amid so much suffering. Hold on. My dog loves me so much, it would just [01:04:41] Doug: die on my tomb, but hold on. How many dogs did you say he said he had in his lifetime? Fitty. Okay, that’s a problem because that means his dogs are living like 18 months max. [01:04:55] Joe: And if [01:04:55] Doug: he’s [01:04:55] Joe: happy going to the vet with the dog and just going, Hey, time for this dog to go. Yeah. Like, you [01:04:59] Doug: wonder [01:04:59] Joe: what’s really [01:05:00] Doug: going on there. Doug, right? He pro it was probably safe for him to assume the dog would die when he died, right? ’cause there’s really good odds. Uh, that’s, that’s a weird, weird thing. [01:05:12] But I will say, you know, people talk about this, of putting provisions in their estate plan for their pets. If, if, you know, obviously to go with them, survive them. No. Not to go with no, like what to do. [01:05:25] OG: Like who’s gonna take care? Who’s gonna show up and take care of grandma’s cat? [01:05:29] Doug: Well, if it’s a cat, nobody, because cats suck. [01:05:32] But I mean, you better take care of my dogs if you’re not gonna take care of my dogs when I go, you’re outta the will. Like that absolutely will be a condition of you being able to receive any inheritance is take care of the dogs. [01:05:45] Joe: I know so many people wouldn’t take care of, they would’ve taken care of your dog four minutes ago. [01:05:49] But you just said, cats suck. Take care of my dogs people. Nope, I’m out. ’cause because they said a bad word about cats. Some animals you did, that’s horrible. ‘ [01:06:00] Doug: cause cats will tear your face off for no reason other than that, they’re bored. Dogs will [01:06:05] Joe: drive you crazy with some neurosis. You can’t figure out what the hell’s going on. [01:06:10] My sister’s dog is so manipulative. All she thinks about is food. Like all she thinks about is food. And I had to take care of this dog just for a weekend. Oh my God. Talk about needy with my cat. I don’t have to do any of that crap with a dog. I gotta, that’s all what Doug thinks [01:06:24] OG: about [01:06:25] Joe: food. And one other thing, I jumped [01:06:26] OG: on, I jumped on this to make this show, and the first thing he said was, man, so yesterday I ate a whole big bag of potato chips. [01:06:32] I’m like, geez, where did that come from? [01:06:36] Joe: At 10:00 PM? [01:06:37] OG: Yeah, [01:06:38] Joe: right. [01:06:39] OG: I tried to make it all night. I only made it till 10. [01:06:41] Joe: And then when he is done with that, Doug goes over to the couch pillows. Like a dog. [01:06:46] Doug: Yeah. Curl up. I am simple. [01:06:49] OG: Walks around in a circle three times. [01:06:51] Doug: Yes. I’m a golden retriever of a human, which is why people like hanging out with me, so sure. [01:06:58] I shed a little bit go play fetch with this Doug. Which should we have learned on today’s show? I was clever enough that I will abide. I’ll tell you, Joe. Hey, let me go get it. Okay. Okay. Okay, I got it. First, take some advice from Christine. Bens wanna organize your money better for retirement. Begin thinking about what activities light you up as much as your money, and you’ll organize your financial picture far better than if you try to optimize around tax shelters or hot investments. [01:07:27] Second, it’s on you now to negotiate with your real estate professional, but remember that good people want to get paid. And sometimes it’s better to surround yourself with people who are happy working for you rather than those who’ve been coerced to do you a favor. But the big lesson, don’t tell Joe’s mom that this Thoreau guy built his own house. [01:07:48] Now she’s like, if you don’t go get the garbage out to the corner, I’ll throw you so far. You won’t know what hit ya. Yeah, I see what you did there, ma. Nice play on words. I. [01:08:01] Thanks to Christine Bens for joining us today. You’ll find her new book, how to Retire 20 Lessons for a Happy, successful, and Wealthy Retirement, wherever Books Are Sold or At Your Local Library. We’ll also include links in our show notes at Stacking Benjamins dot com. This show is the Property of SB podcasts LLC, copyright 2024, and is created by Joe Saul-Sehy. [01:08:24] 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. 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. [01:08:46] 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. [01:09:06] You guys can hear me, right? Yes. I wasn’t sure why Josh repeated what I said, so I thought maybe you didn’t hear me [01:09:12] Joe: because he thought he said it better. [01:09:14] OG: Oh, I didn’t hear you at all. You’re really quiet, so No, I don’t hear you very well. [01:09:18] Joe: Really, [01:09:19] OG: Joe Joe’s really loud. Doug’s very quiet. [01:09:21] Joe: I can hear you fine. I hear you both fine. [01:09:24] Doug: I’ll go up one on my gain. There you go. All right. All right. I mean, this is higher than I usually am. You are so high. [01:09:36] That makes me giggle and I’m hungry.
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