What actually makes for a happy retirement? Today, Joe sits down with retirement expert Wes Moss, author of The Retire Sooner Method, to explore the research behind America’s happiest retirees. Wes explains why money is only part of the equation, how community and “super activities” give retirement purpose, why eliminating debt can create more freedom, and how a clear retirement plan can help reduce the fear of running out of money.
Then Joe and OG tackle one of retirement’s most popular investing strategies: living off dividends so you never have to sell your investments. They break down why dividends feel so appealing, where the strategy can fall short, and why building your retirement income plan around your goals may matter more than chasing a particular yield. Plus, Doug celebrates the anniversary of the ATM with some cash-dispensing trivia.
Resources mentioned
- Wes Moss
- The Retire Sooner Method: The 5 Secrets Behind America’s Happiest and Unhappiest Retirees
- You Can Retire Sooner Than You Think
- Retirees Love Dividends, but the Stock Market Surge Is Making Them Think Again — The Wall Street Journal
- Field Kit Finance
- The 201 newsletter — stackingbenjamins.com/201
- Field Kit Finance webinars: Sign up for The 201 to get the full schedule.
- The Clark Howard Show
- FinCon
- Dana Anspach
- Ben Carlson
- Attorney Tim Semro’s recent Stacking Benjamins appearance
Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.stackingbenjamins.com/201
Enjoy!
Our Mentor: Wes Moss
Big thanks to Wes Moss for joining us today. To learn more about Wes, visit Welcome – Wes Moss. Grab yourself a copy of the book The Retire Sooner Method: The 5 Secrets Behind America’s Happiest (and Unhappiest) Retirees
Our Headline
- Retirees Love Dividends, but the Stock Market Surge Is Making Them Think Again (Wall Street Journal)
Doug’s Trivia
- When kids are lucky enough to see money pop out of an ATM, which denomination of bill is it more likely to be than any other?
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Other Mentions
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Tune in Friday as health and wellness expert Angelo Poli joins Joe for a special one-hour conversation about getting serious about your health and feeling your best heading into fall.
Written by: Kevin Bailey
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Episode transcript
[00:00:00] opener: Hello. My name is Inigo Montoya. You killed my father. Prepare to die
[00:00:15] Doug: Live from Joe’s mom’s basement, it’s The Stacking Benjamins Show
[00:00:29] Doug: I’m Joe’s mom’s neighbor, Doug, and why are some people so happy during retirement, while not so much for others? We’ll talk about why some people struggle with their later years while others thrive with today’s Wednesday mentor, Wes Moss. And speaking of retirement, in our headline segment, many retirees love taking dividends from investments so they don’t have to sell anything off.
[00:00:52] Doug: But is that strategy sound? We’ll share our thoughts. Plus I’ll share some trivia that’ll put a nice big bow on this extravaganza. And now, two guys who are the Fred and Barney of financial podcasting, it’s Joe and O, Ju-ju-ju-ju-G.
[00:01:12] Joe: I don’t know which one of those I wanna be. Like, sometimes you think being Fred would be really cool, but isn’t Barney the one who’s always talking him out of stupid stuff?
[00:01:21] Joe: He’s, he’s going to Fred, “Should we do that?” I don’t, I, I don’t know which one. Hey, everybody. Welcome to The Flintstones Conundrum podcast. I am Joe Saul-Sehy, and across the table from me is, uh, my good friend OG. How are you, man?
[00:01:34] OG: Good. Looking forward to, uh, some fun stuff tomorrow, the 3rd, and then, uh…
[00:01:40] OG: Three-day weekend. Maybe four-day if, uh, you know who can get their homework done in time.
[00:01:46] Joe: Oh, this guy.
[00:01:47] OG: Mm-hmm.
[00:01:48] Joe: Yeah.
[00:01:48] OG: We’d all like to leave early on Friday, Doug, just so you know.
[00:01:52] Doug: Huh. I’ll keep that in mind.
[00:01:54] Joe: If he can, if we can wrap this up- Get
[00:01:55] OG: your chores done.
[00:01:56] Joe: It is never a chore, by the way, you like that segue?
[00:01:59] Joe: When Wes Moss is here. If there is a guy who lives halfway across the United States from me, that would be, uh, my number one draft pick to hang out with, far more often it’s Wes Moss, ’cause he’s always thinking phenomenal stuff, and he’s focused it right on retirement. You have said this through the years.
[00:02:20] Joe: Your big mantra is flexibility. You wanna solve for flexibility, and I think that Wes is in that same ballpark where he’s like, “Listen, you wanna be flexible with your money because of the fact that what we’re truly solving for is happiness. We’re really solving for how do we not have more money we can bury around us when we die?
[00:02:43] Joe: How do we make retirement happy?” And as you know, a good majority of people are happy, but there’s a significant minority, not a small minority, a significant minority, that the years of retirement are a painful misstep, and they realize they should’ve done it much better, and Wes is trying to solve that, as are you and me.
[00:03:06] OG: Mm-hmm. I mean, what’s the point of all this if you’re gonna be miserable, right? It’s like- Yeah … you just might as well try to have some fun along the way.
[00:03:14] Joe: Even before we hit record button, Doug was rolling his eyes ’cause you and I wouldn’t stop talking about designing a life that’s just around the way that you wanna live and not around all this extracurricular activity.
[00:03:24] Joe: Doug is like, “Can we record a podcast? Come on, man.”
[00:03:27] OG: Like, “Bro, I’m designing my life.”
[00:03:32] Joe: We’re gonna talk about the miracles of the universe, and Doug is like, “Hey, my miracle is if we can finish a podcast.” We’re gonna do that right now, though. I can’t wait because you’re about to hear… I, I love all the people that we schedule for this show, but Wes Moss is a gentleman who not only has he had the longest-running radio show, call-in radio show, in the world.
[00:03:52] Joe: People think Dave Ramsey’s had the longest. Nope. Wes Moss has had the longest in Atlanta. He also fills in for another guy weekly, a little personality named Clark Howard. So you hear Wes Moss all the time now on the Clark Howard Show, but more importantly, you hear him down in mom’s basement from time to time.
[00:04:13] Joe: Every time Wes is here, he brings it in a big way. So grab a piece of paper, however you take notes, because Wes Moss is on his way down to the basement. We do have a couple sponsors who make sure that we can keep bringing this to you for the exorbitant price of free, so we’re gonna hear from them, and then Wes Moss coming down to mom’s basement to talk about how to be happier in your retirement.
[00:04:38] Joe: Hey, Stackers, if you’re here because your budget’s a mess, where do you start? Well, focus on the big picture and grab your field kit. Head to Field Kit Finance for your new favorite budgeting tool and a ton more. When I say a ton more, I mean a ton more. Fieldkitfinance.com.
[00:05:02] Joe: Well, a lot of us stackers think retirement happens when you reach a certain age. Maybe it’s 62, maybe it’s 65, maybe it’s 67 or whenever the government finally sends them a permission slip. Wes Moss has spent years studying happy retirees, and his research suggests retirement might be less about reaching a birthday and more about reaching the point where work becomes optional.
[00:05:25] Joe: And even better, some people may be able to get there several years sooner than they assume. And today we’re gonna find out how to tell whether retirement’s closer than it looks, and how to make sure the life waiting on the other side is one that we actually want. Wes Moss, welcome back to Mom’s Basement, man.
[00:05:42] Wes: Joe Saul-Sehy, my favorite podcast host on the planet. What’s up, man?
[00:05:46] Joe: Stop, keep going, stop, keep going.
[00:05:48] Wes: Yeah. Well, you always have been. I, I will just say you’ve been nice to me even before we even met, and then we met in person and we had a good time. I think we had a couple drinks at the bar and, you know, became actual friends, but we don’t see each other as much as we’d like.
[00:06:02] Joe: No, likewise. I feel like if you moved to Texarkana, which I would love for you to do tomorrow, it would be trouble for both of our careers.
[00:06:10] Wes: I think it’d be good. No, I think it’s… It’d be good for socialization, and that’s, uh-
[00:06:14] Joe: A big part … chapter.
[00:06:15] Wes: Yeah, huge part of this book.
[00:06:17] Joe: Hu- Well, and a huge part of retirement, so let’s talk about that.
[00:06:20] Joe: One of our stackers, Wes, comes up to you and says, “I don’t need a giant retirement plan yet. I just wanna know whether I’m even in the neighborhood. W- where do I begin?”
[00:06:31] Wes: I thought you were gonna start with the friendship recession. We will get to that when we talk about socialization. But on the money side, which is, let’s say, the foundation of all of this, there are mixed messages in the world.
[00:06:43] Wes: There are studies that come out every week or every month that suggest what Americans say they think they need, 1.2 million, 1.5, 950,000. There are lots of authors and hosts that say you need 5 million or 10 or $20 million in order to retire. I approach it in a different way. I… My research is approaching it this way, Joe, which is- I’m looking at a population in America, and I’m doing research, and I’m saying, “How much do you have?”
[00:07:13] Wes: And then I’m mapping that group on levels of happiness. So I look at it as different zones. I think there are three zones that we get to of liquid investable cushion, the cushion assets that can now feed your spending for the rest of your life. And where those end up is that if we’re $100,000 and less, w- we are in the, what I would consider, the red zone.
[00:07:36] Wes: Happiness levels are dramatically below the baseline of my research. So the average person happiness, if you have 100,000 saved and you’re getting towards your retirement, you’re way under the happiness baseline. The neutral zone, Joe, is from that. It’s a big neutral zone where happiness levels are, are right around the population average, and that’s 100 grand to a million or 999.
[00:07:59] Wes: And then once I get to, or once we get to a million dollars, then happiness levels jump, and they jump dramatically, statistically significant. So to me, it’s about getting in what I would consider one of the three money green zones, and I know that once we get to a million dollars, that’s the first category, then there’s the 2.9 and, and above.
[00:08:20] Wes: Both of those categories, happiness levels jump dramatically for Americans. We can all make our own conclusions of why that is, but that’s what the data and the research tell me when it comes to retirement happiness. So I think we get to that money green zone of a million, and we’re in really good shape.
[00:08:37] Wes: We get above 2.9, happiness levels actually jump even a little bit more, but they start to plateau.
[00:08:42] Joe: They do. Yeah. You know what fascinates me, Wes, about your research? I feel like a lot of us solve for more money, and as you have pointed out, having more money can make us happier. There’s some old research that’s been debunked on this, right?
[00:08:57] Joe: More money can give you some happiness. But I think when people just focus on just the size of the portfolio, there’s a bunch that they miss. When people only focus on this number, just the flat-out number, what is it that they’re missing?
[00:09:13] Wes: They’re missing what I would consider the other 80% of retirement. I think it’s a critical one in five.
[00:09:20] Wes: So if there’s five things that are the formula, and if… And th- this is also something the research informed me on. If we nail each one of these five, collectively, money is only one of the five, so that’s 20% of the whole battle. But if we nail all five, my research suggests or tells me that you have a 96% chance of ending up in what I would call the happy retiree camp, or I call them HROBS, happiest retirees on the block.
[00:09:49] Wes: So what are the other four? Perhaps the most important one, and why I may move to Texarkana, is your community and socialization. And I’m skipping ahead here from the book. The first chapter is about the, the money green zones. But- Sure … when I get to socialization, if I can boil that down to one word, it’s about community.
[00:10:08] Wes: And we, we are in a friendship recession in America, and it’s been a, it’s been a long bear market for friendship. And one of the other things I wanted to find out is, and I asked this question, how easy or difficult is it for you to make a friend per decade in your life? So in your 20s, 30s, 40s, all the way to your 90s.
[00:10:28] Wes: And as you maybe can imagine, it’s pretty darn easy in your 20s. I mean, you’re in college or you’re, you’re… It’s, it’s almost, it’s r- it’s hard not to make friends. And then in your 30s it’s still pretty easy, but it gets materially more and more difficult as we age to make new close friendships. And we have to have, at least this is another piece of the research, we’ve gotta have four or more people in our lives that we consider real life, not online.
[00:10:55] Wes: Online doesn’t count. That’s a zero. But actual human relationships and if… and we want to have four or more of them in our lives.
[00:11:03] Joe: Isolation, isolation’s the enemy.
[00:11:06] Wes: It is one of the most unhealthy things on the planet, and it just keeps getting worse in America. And I don’t know what… I, th- this is where anthropologic…
[00:11:14] Wes: I don’t know why, Joe, it’s gotten so much harder, but no matter how you look at it, and I looked at outside research about friendship in America, and then I did my own r- research. Maybe mine informs us that it… If you think about it, we move, we get divorced, we die, we get sick, we get less able to, let’s say, do the physical activity or core pursuit that we love to do, so we stop doing that, so we lose that social group as well.
[00:11:42] Wes: So it gets hard, and we’ve gotta understand that that friendship recession j- but broadly, just for everyone in America, has got… We have less friends today than we did in the 1990s, and it just gets harder as we age. So we have to work against that and against that natural trend so that we nail that.
[00:12:02] Wes: That’s one of the five. We’ve gotta have four more close friends, and we’ve gotta have a community in retirement or else it doesn’t matter if you hit the money green zones.
[00:12:11] Joe: If community’s the first one, what one’s second?
[00:12:14] Wes: Well, th- community’s the third one in the book, but the second one is the Joe Saul-Sehy shout-out where-
[00:12:20] Wes: I, I give you serious credit on this. I mean, for real. If anybody listening remembers my first book, I, I used the phrase core pursuits, which I define as hobbies on steroids. So these are not just things you do once in a while. Your core pursuits are an enormously important factor of you having purpose once you stop your main work, which, again, is a really uphill climb.
[00:12:46] Wes: It’s a very difficult thing for folks j- when they stop working. They’ve got all sorts of psychological headwinds, like running out of money. We lose socialization when we stop working, and we lose purpose. So a core pursuit in my book is a hobby on steroids. I like to measure what these are, how many people have, how many the happy group has versus the unhappy group.
[00:13:08] Wes: And when you and I were talking, this is five years ago in FinCon, which by the way, I think you’re gonna be at the FinCon in, uh, California, right? Palm
[00:13:17] Joe: Springs, yeah. You coming?
[00:13:19] Wes: It’s not just Cali. It’s Palm… Yeah, it’s Palm Springs. I am gonna be there, man. Excellent. I am speaking, and I, I look forward to hearing you too there, and we’ll, we’ll hang out in California.
[00:13:27] Wes: But I think you said this. “The one thing I like about your book, Wes, is those things you talk about,” he goes, “I’m not exactly sure…” You, you said he goes. It’s this… I’m talking about you, Joe. You said, “The super activities-“
[00:13:42] Joe: Super activities “…
[00:13:43] Wes: that you talk about in your book.” And I said, “You mean core pursuits?”
[00:13:47] Wes: And you said, “Yes, core pursuits.” And I said, “You know what? Why didn’t I think of that?” Co- super activities is a such a cool way to say
[00:13:54] Joe: it. Well, that’s what… I mean, let’s be real. How instrumental was that single contribution to this entire research project? I- Like, did everything finally click together and that was the key piece of this whole deal?
[00:14:06] Wes: It was the single most motivating factor to write this book so I could tell the world that I have a better name for core pursuits than core pursuits. AKA hobbies on steroids. They are called super activities from Joe Saul-Sehy.
[00:14:18] Joe: But what turns it from an ordinary activity into a super activity, Wes?
[00:14:24] Wes: There’s gotta be a real anticipation and love for what it is, and only you know if a super activity is a super activity versus just a, a once-in-a-while hobby. And if you are planning your life around something, it’s a super activity. If you are doing this, let’s say, once a month or more, it’s a super activity.
[00:14:49] Wes: If you’ve got a group of friends and your social network and community is also based around a particular activity, it’s a super activity. It’s not… And golf is an easy way to look at it. If you are someone who golfs three to five times a year in a charity tournament, and somebody begs you. He’s like, “Oh, we really need you to put one…”
[00:15:07] Wes: That… Yeah, and you, you play golf- But if you’re not, not doing it all the time and it’s not something that’s a big part of your life, then it doesn’t count. That’s not a, that’s not a core pursuit. So it’s anything that you are really looking forward to doing. If I fish twice a year, is that a super activity?
[00:15:23] Wes: No. If I’m gonna go on f- three fishing trips a year with my buddies, I’m gonna take my kids fishing three times, and I’m gonna go fishing on my own three or four times, then guess what? That’s a super activity. But we need five of those, Joe, or more in order to fill the time and the structure once we are stop- o- once work is done.
[00:15:44] Joe: The thing you wanna hear from somebody is, “I’m so busy with this activity, I don’t know how I ever had time to work.” I think that’s what you’re looking for, isn’t it?
[00:15:54] Wes: Totally. Totally. Yeah. I have a story in the book of someone who wrote me, and he talked about how he had such an empty calendar after work, and that now he, like back in his working years, he has so many core pursuits to schedule every week, every month, throughout the year, and tr- trips are part of that, so travel is a popular super activity core pursuit, that he now has a full Outlook calendar of just…
[00:16:18] Wes: And these are all just things he’s loving in retirement. He’s got his color-coded for his, his activities, and think there’s another color-coded for his wife’s, and then the ones that they actually do together. And I, I th- I think it’s awesome when people have a dozen of these things, and I, I get a lot of mail from people who will list out all their core pursuits, and it’s not…
[00:16:39] Wes: And I f- see people that have lots of them, way more than five. But I think five’s a lot. Five’s a lot.
[00:16:44] Joe: Uh, five is a lot, uh, ’cause I find that the older I get, I don’t know about you, Wes, but I put these things in the calendar at the beginning of the year, like some of the big core pursuits that have nothing to do with work.
[00:16:54] Joe: I don’t want work to get in the way of these things that I love way more than what my work is.
[00:16:59] Wes: I’m gonna ask you a question, and I’m putting you on the spot, ’cause it’s an easy and hard question all at the same time. What are your five super activities?
[00:17:06] Joe: Oh
[00:17:07] Wes: man Do you have five right now? Because you’re not fully retired, but-
[00:17:10] Joe: I do.
[00:17:10] Joe: I do.
[00:17:11] Wes: What are they?
[00:17:11] Joe: So I am president of a group that builds walking trails around Texarkana, and so I interface with city leaders, I help build paths, I help them raise money. We put on a half marathon every year. So that’s number one. Number two is travel. My wife is trying to go to all of the national parks, and we’re at 45 of 63, so we’re getting close.
[00:17:34] Joe: Mm. Mm. And I’m trying to go to all the Major League Baseball stadiums. I notched two more. I haven’t done Atlanta yet. When I do Atlanta, Atlanta’s one of the seven I’ve left, Wes, so when I go to Atlanta, I’m, I’m buying you a seat. We’ll go to a Braves game. I’ll buy you a seat, yeah. Okay. And, uh, we’ll do it together.
[00:17:49] Joe: Sold. Between those two things, so there’s mine and hers, but we do them together. She’s dragged all the Major League stadiums and I get dragged to all the national parks, and we couldn’t be happier. Uh, third- No, that’s
[00:17:58] Wes: three. I give you three already. So walking, travel to the parks, travel to baseball.
[00:18:03] Joe: Okay.
[00:18:03] Wes: I give you one of each. Uh, you’re at three down.
[00:18:05] Joe: Well, I got another one, which is I love board games, but the reason I love board games is not board games. I love hanging out with friends and just laughing and having a nice night, and I know how hard it is, especially for men, to form friendships- Yeah
[00:18:20] Joe: later in life. And as a guy who moved to Texarkana in his 40s, I know that there’s a lot of isol- I could already see the isolation in people that I was meeting. So I’ve got this- Yeah … it isn’t specifically for guys. It’s become guys game night. Yeah. But I really don’t want it to be, you know, just for guys.
[00:18:37] Joe: If a spouse wants to come, that’s fine. But all of our spouses go, “You know what I love about guys game night? Is that I know where my husband is. I know he’s not at a bar. I know he’s with a group of guys just hanging out, laughing about whatever the board game is.” And we do that about once a month, and we’ve got, I think, 18 guys on the list, and we’ll generally have 12 to 15 that show up at somebody’s house.
[00:18:57] Joe: Oh, that’s so cool. Somebody makes dinner, and we have a great time hanging out with the dudes. But that’s, you know, that’s something that I want to continue. Again, not so much for the board games. I love board games, but what I love about it is the camaraderie- Yeah … and the, you know, the shared experience that we have together.
[00:19:11] Joe: So there’s, there’s some of mine. That’s four
[00:19:13] Wes: really good ones, yeah. That’s four really, really good ones.
[00:19:15] Joe: Yours? And- L- well, let’s, let’s turn it back on you, Wes.
[00:19:19] Wes: You would think I have this memorized, but I don’t. Uh, these are just gonna be off the top of my head. I coach lacrosse. That’s one. Number two, I would say I do a lot of music.
[00:19:30] Wes: I have a, I have a dad band. That takes up a lot of time, and that’s a social activity as well. I play the keyboards, piano for that, and that’s a really, really fun… I am an actual golfer. Still not, like, a great golfer, but it’s a big part. I love doing it. I golf with my kids. I’ve got a, a pretty big golf group, and I have a couple golf trips a year.
[00:19:52] Wes: So I would count number three. I would say number four is
[00:19:57] Joe: snowboarding. Oh, cool.
[00:19:58] Wes: I still love skiing/snowboarding. I’m a, I’m really a snowboarder, not a skier so much. But I do that, and my kids do that. That’s a really fun thing, but that’s only in the wintertime. And then I’d say I’m in a pickleball league, so I’ll go pickleball is number five.
[00:20:15] Wes: And whoof, starting to sweat there. I wanted to make sure I had five.
[00:20:19] Joe: I get my ankle surgery done and out of the way, then I, I wanna go finally make it out to the pickleball court. But right now, my lateral movement is, is not very good.
[00:20:27] Wes: I can’t count, like, I, let’s say, lift weights two or three times a week for working out.
[00:20:32] Wes: Some people list their- exercise is a pretty big, it’s a high level core pursuit that they love. Walking group, hiking, running, yoga. I don’t list that as one of mine ’cause I do it- Yeah … because I, it’s, it’s healthy. Not that I love to do it. I don’t, I don’t look forward to lifting, but I do it.
[00:20:50] Joe: On Tuesdays I work out in a little group that includes our city mayor, and we have the most fun.
[00:20:56] Joe: It’s the way I got to know the mayor- That’s cool … was, uh, working out. I didn’t even know he was the mayor until he told me he was the mayor. It was kind of embarrassing. Wait,
[00:21:04] Wes: how many f- how many people, what’s population of
[00:21:07] Joe: where you are? Six, 60, 65,000.
[00:21:09] Wes: That’s a, that’s not a small town. He’s- That’s like a big town,
[00:21:11] Joe: yeah
[00:21:11] Joe: he’s the, the mayor on the Arkansas side. Um, you know, there’s another one which is interesting for you and me, because you have kids at home still. I do not. One of my core pursuits is always, and this is on my calendar, is to make sure that I keep up with my kids. One’s in Detroit, and one is in Boston. So, Cheryl and I decided that we’d do a yearly retreat now where we buy the house, we get you there, and then once you’re there, we just schedule dinners together.
[00:21:40] Joe: And if you wanna go do stuff by yourself, that’s fine. If you wanna hang out with Mom and Dad, that’s fine. What’s cool is we’ve done it three times so far, and the three times we did this, the kids wanted to hang out with Mom and Dad, which I love. Mm. Which is great. But even if they didn’t, just us being in a shared place for, you know, a long weekend.
[00:21:59] Joe: Um, the first year we did, uh, we did Cape Cod. The second time we did Manhattan. I think next time we’re gonna do, like, Telluride.
[00:22:07] Wes: Ooh.
[00:22:07] Joe: Should be a really fun time.
[00:22:09] Wes: G- just guaranteed fun time. Telluride’s amazing. I, I’m with you too on that. I do, we love Northern Michigan, and I have a place up there. And we, particularly in the summer, we try to spend some time up there, and it, that, that to me is a v- it’s a super outdoor type of place.
[00:22:26] Wes: There’s, there’s water, so you can, you can boat, you can golf. And, um, the kids are kind of all there together. They’re not quite out of the house yet like yours, but I look- Right … at those, I, I’m l- I’m looking at that day, Joe, always thinking about how am I gonna still be able to see my adult kids? And, you know, one part of that plan is to have a place where they would all wanna go.
[00:22:48] Wes: Well, and you- So we’ll see if that works. We’ll see if it works …
[00:22:49] Joe: and as you know from early in your career, they’re busy. So it’s on me to make sure that we take the time, right? Yeah. I, I, I don’t put it on them. I, I was listening to a dad the other day say, “Well, my kids know I’m one phone call away.” You know what?
[00:23:01] Joe: I gotta m- I got, I gotta be the one to pick up the phone. I gotta be the one to pick up the phone. Let’s go to the math here a little bit. I, I wanna use a simple example, Wes. Let’s say somebody wants an $80,000 a year lifestyle. They’ve got, like, Social Security. They’re lucky enough to have a pension. So that, let’s say, covers 50,000 of it.
[00:23:18] Joe: They have another 30,000 less. We’ve mentioned two of these five, uh, things that we wanna think about. Are we using the ex- the 30,000 to make sure that we’re hitting these core pursuits, that we’re hitting these relationships? What do we… H- how are we thinking about the other 30,000 bucks?
[00:23:39] Wes: Yeah. One of the, the other money green zones, one is about investable assets.
[00:23:42] Wes: That’s your cushion. Another one is years to pay off mortgage, and then there is one money green zone that, that I think is super important, a- and that’s household income. The money green zone on household income that I found starts at… It’s still, it’s neutral zone between 50 and 100, and then it’s green zone once you get above 100.
[00:24:04] Wes: The way I look at this is that all of your income should, and, and once you’re done your mortgage, should be able to be… Not all of your income, but a huge percentage of your income should go towards all of your core pursuits. I mean, that is, that’s the reality of what we wanna be doing. I statistically also found that the average happy retiree, and I’ll r- I’m gonna round the numbers here, spend 19 hours a week doing their core pursuits.
[00:24:29] Wes: The unhappy group is about 13. Mathematically, the happy retiree group does an extra 280 hours a year, which is the equivalent to seven… That’s seven working weeks per year doing structured activities that they love, and I would say that the 30,000 that you just mentioned or more of that goes, goes towards that.
[00:24:52] Joe: So I’m, when I’m thinking about my fixed expenses and what I can dedicate, I mean, that’s kinda my line.
[00:24:59] Wes: Well, it depends. If the yellow zone on income is 50 grand to 99, it’s- Yeah … th- those happiness levels are, are neutral, in the United States are slightly above the, the h- happiness baseline, and the higher the percentage of your overall household income that goes to discretion, discretionary, so that’s not your property taxes, and it’s not what’s left of the mortgage- Right
[00:25:20] Wes: it’s not car insurance, but discretionary to the activities, which may be their travel, their game night, they’re your other hobbies and corporate, your hobbies on steroids. I think that the higher the percentage of the discretionary household income, the better.
[00:25:35] Joe: Let’s play a game. You know how much I like games.
[00:25:38] Joe: I’m gonna give you some people, Wes, and you tell me, retire, wait, or we’d need more information, and if you say we need more information- Ooh … I wanna know what information we need. I don’t want any of these financial advisor answers with, like, 17 disclaimers either, okay?
[00:25:53] Wes: Okay. Of course not. I’m an author, Joe.
[00:25:57] Wes: Come on.
[00:25:57] Joe: That’s right. I’m sorry.
[00:25:58] Wes: I’m a podcast guy. I’m a author. Sure, I’m a financial advisor, but I’ll answer these in a, in a non-disclamatory way.
[00:26:05] Joe: A couple has $1.2 million invested. They have no mortgage. They have no idea what they spend. Retire, wait, or need more info? And if we need more info, what do we need more info on?
[00:26:19] Wes: You do need… It, it… This is a wait, but it could be wait only until you get your… have an understanding of what your spending is. And, and that goes back to the… I talk about the rich ratio. You’ve gotta have a rich ratio of plus one. If you’re bringing in 10 grand a month, that’s great. Amazing. If you’re spending 12, then there’s an insidiousness around that because it impacts you psychologically that you’re draining your accounts and you’re underwater.
[00:26:45] Wes: And psychologically, it lends itself to what I found to be the great- one of the great fears in our research in this book, and that’s running out of money, and it’s perva- it’s pervasive. It’s almost 40%, Joe, with folks that have a million or more. It is, it is 24%, so almost one in four, for people with three million or more.
[00:27:07] Wes: Wow. So it doesn’t matter if you’ve got the assets. If your spending doesn’t account for that, then you’re gonna have this anxiety, which I think that that’s what we’re try- that’s one of the things this Retire Sooner method is trying to do, is to reduce your financial anxiety. So this couple, million bucks, no mortgage, doesn’t know their spending, that’s a wait.
[00:27:27] Joe: Second, a couple has $2 million, pretty hefty mortgage. I didn’t put a number on it. Three adult children, though, who believe mom and dad are a subscription service. You know these people?
[00:27:38] Wes: Yeah. It’s a lot of America. Okay, so two million. I’m gonna say they have a big mort- they have 800K left, and they have three adult children that are not as independent as they’d like.
[00:27:50] Wes: No, they’re not retiring.
[00:27:52] Joe: What do I gotta do to get them there?
[00:27:54] Wes: They’ve gotta get their kids in check. They have to be… Their mortgage payoff has to be more within sight. Because if you are within a couple years of no mortgage and you have two million, the adult children financial problem is… should be easy to solve.
[00:28:12] Wes: It’s not always easy to solve. It should be easy to solve, and I would say that’s a very good candidate to be able to stop working and retire
[00:28:21] Joe: How about this one? You know, you drew the line there at 999. This person has not quite a million, Wes. They’re at 900,000. They wanna keep consulting 10 hours a week, mostly just because they enjoy it.
[00:28:32] Joe: They love doing the consulting. Retire, wait, or both? I,
[00:28:36] Wes: I’d say that’s a yes. That’s a green light retire because they love consulting, and again, it’s a rarity in America that you like your job. You happen to be one of them, but it’s only about one in five of us that really like what we’re doing. Happy retirees work in retirement only because they want to, not because they have to.
[00:28:56] Wes: In some of the research I showed that, that I see where people are working in retirement, if they’re doing it because there’s a money gap, and they’re doing part-time work because there’s a money gap, that’s a bad sign. So this person is very likely a good candidate, and I would probably say very likely yes, they could retire.
[00:29:15] Joe: There’s a guy who you fill in for fairly often who is long, long, long retired, uh, Clark Howard. Not only do you do your show, but you do his show often. I, I often point to him, Wes. I’m like, “You think Clark Howard’s still working ’cause he doesn’t have enough cash?”
[00:29:35] Joe: That dude loves what he does.
[00:29:38] Wes: He loves it. He has an amazing team that makes it so that… And he’s such a… He’s so good at it. He’s such a knowledge base that he can come in and just do an amazing show, and do two or three of them right out of the gate like it’s no big deal. There’s no reason in his mind why he would ever stop.
[00:29:58] Wes: And y- you’re right. I don’t deeply know his finances, but I can probably tell you that he has no worry about- I
[00:30:05] Joe: bet he’s okay … needing
[00:30:05] Wes: to have the income.
[00:30:07] Joe: Right. I bet he’s gonna be all right. You mentioned this person earlier, but I wanna dive a little deeper. A household has $3 million, but every single time the market falls they wanna sell everything.
[00:30:17] Wes: It doesn’t mean that group can’t retire. It just means that they… That you bring up number four of the, out of the five, and that is the power of any sort of planning. And the reason that person wants to jump out of their portfolio when the market cracks by 10%, which it happens to do couple times every year on average- Fairly often
[00:30:41] Wes: almost always. That person doesn’t have the confidence that they should have, and it’s because they don’t have a, any sort of plan that shows them why it’s gonna be okay. Because that person doesn’t need to be an aggressive investor. They could probably be fine with a 4 to 6% rate of return. And if you’re only looking at that, you shouldn’t have to worry at all about the equity markets.
[00:31:07] Wes: And the last two chapters of this book are about investing. The first part of it is Slaying the Inflation Dragon, which is a, essentially in my book, a must do. It’s not a nice to do. But there are ways that people can reduce their anxiety through segmenting how their assets are invested through different buckets, and having three years of what I call dry powder that really should take the vast, vast, vast majority of money anxiety away.
[00:31:36] Joe: I’ve had these, uh, professors recently come out of the woodwork, and I use professors-
[00:31:41] Wes: Ooh.
[00:31:42] Joe: Tell me about this … uh, as a derogatory statement, Wes.
[00:31:45] Wes: Oh, yeah.
[00:31:46] Joe: These professors talk about how poor, when you look at the science, that bucketing is vers- because money’s fungible, right? Because I can get any money whenever I want.
[00:31:56] Joe: So why would I use buckets? And yet, every practitioner I’ve ever talked to who’s great at their job, you, Dana Anspach. I talked to Ben Carlson about this. We talked to so many pros about this. They all still use bucketing even though they know that, that if human emotions weren’t involved, y- yeah, okay, maybe we don’t do buckets.
[00:32:18] Joe: But it seems to me with a, with a- I just always worried when I was a financial planner far more about you blowing up your plan than I was worried about the market.
[00:32:28] Wes: Yeah. Listen, man, you’re so right about that, and the struggle with money is that it’s, it… The, the psychological tug of war that we have, we know about, which is, let’s say we, we get one unit of pleasure out of our stock portfolio going up.
[00:32:46] Wes: We get two to three units of displeasure if it goes down.
[00:32:49] Joe: Mm-hmm.
[00:32:50] Wes: And that imbalance, which is something that we have to deal with constantly, is an impossible thing for the human brain to just learn and be okay with. So you’ve got to, for the vast majority of folks, and this is why I think practitioners like to use a- any…
[00:33:07] Wes: And there’s different versions of bucketing. If we’re able to segment our assets into different time horizons and different risk tolerances in the, in the different buckets, it’s tremendously helpful to, to reduce the anxiety. I read a, something from a professor recently. I always love when I see the, the, “Research center at XYZ College says that if you’re worried about stock market drops and you’re totally comfortable with being the richest guy in the graveyard, then set your withdrawal rate at 2% or less per year.”
[00:33:46] Wes: I mean, wh- wh- where is that research coming from, Joe? What, what is… That gets into the what’s the point research.
[00:33:52] Joe: Yeah, what are we solving for?
[00:33:53] Wes: One of my favorite Pennsylvania phrases, what’s the point of, of all this planning if you can’t use your money to begin with?
[00:34:01] Joe: Well, and it does make the point that you’re solving in this book.
[00:34:03] Joe: I feel like a big piece of the Retire Sooner method, Wes, is let’s solve for happiness. Let’s not solve for more cash. Let’s not solve for more, you know, richest person in the graveyard.
[00:34:14] Wes: Yeah, and enough, Joe, is a number, right? There’s, I talk about enough sleep. I talk about e- enough in our investible assets.
[00:34:21] Wes: That is a number that I think is attainable for folks as opposed to unreachable, “Hey, you need $20 million if you think you’re gonna be able to retire.” That just doesn’t help, that doesn’t help 99.9% of Americans get to the freedom they’re looking for. And, yeah, I’m, I’m trying to give folks a GPS in this book on how to shave off a couple of years.
[00:34:46] Wes: I mean, you get… The, my analogy, and I was, when I’m driving around new towns, and I’m doing that all the time with sporting events and tournaments for some of my older kids, if you leave off your GPS for like, like, let’s say the internet’s bad, and you have no signal for the first two minutes of your trip, you can double your trip time.
[00:35:03] Wes: Oh, boy, I ended up in the wrong way on the wrong highway. And I think it’s about making enough correct turns. And does it shave off a 30-minute trip, can I do it in 28? I think if you make the right turns, you can. In 20, in two minutes off a 30-minute trip, you know, that’s 6%. That’s, that’s four or five years.
[00:35:23] Joe: No big deal on a 30-minute trip, but when we talk about your retirement-
[00:35:26] Wes: Yeah …
[00:35:27] Joe: it’s a lot more. I got one more person for you. Yeah. Person has plenty of money, no idea what they do after breakfast
[00:35:35] Wes: And they’re still working?
[00:35:36] Joe: Still working. Retire, wait, need more info.
[00:35:41] Wes: They’re a wait. Not more info, they’re a wait because they…
[00:35:44] Wes: If they have plenty of money and they’re still working… Well, I don’t know, how many… Do they know how many core pursuits they have?
[00:35:50] Joe: They have no idea.
[00:35:51] Wes: They have no idea. That means they don’t have, they don’t have enough.
[00:35:54] Joe: Workaholic.
[00:35:55] Wes: Yeah. They… Okay, yes. That person is… No, that person is not a candidate right now because that person, Joe, has to spend, and plenty of money could be, they probably have two, three, five, eight, 10 million.
[00:36:10] Wes: I’ve seen lawyers that, you know, they’ve been working at a firm, they’re making a huge amount of money, their 401s eight million. That person is not going to be happy if they stop because they don’t have a set of y- what, what Joe Saul-Sehy calls super activities. And what I would be doing for… if I were that person, and if I were helping them, I would say, “Over the next year, you’re gonna…,”
[00:36:33] Wes: or maybe two, ’cause it takes a while, “I wanna see how you can reduce your work time, see if you can even do it, and fill that time with a handful of core pursuits that, by the way, you don’t even have right now. So you gotta figure out what they’re gonna be.” And then they may be a candidate, but not right now.
[00:36:50] Joe: Is that the person that worries you the most out of all those scenarios?
[00:36:53] Wes: Yeah, and, and those are the people that are the hardest.
[00:36:56] Joe: Yeah.
[00:36:57] Wes: It’s really hard to make a ton of money and save a ton of money, and when you’ve got somebody who’s a 10 millionaire, they’re very often, they’re all, all, all in, and they have, like, a guilt around doing anything but work.
[00:37:09] Wes: And then when they stop, they just haven’t… They can never figure out what replaces the satisfaction of work, and it’s a really long journey to figure it out. But if… It’s a fun to figure out for most people, but some people, it’s really hard.
[00:37:26] Joe: I’ve got a couple more random things that I always find interesting with your research.
[00:37:30] Joe: Let’s talk about the mortgage because your research found a relationship between retirement happiness and whether you pay off the mortgage or not. Talk to me about that.
[00:37:41] Wes: As years to pay off mortgage go down, in, in the new research, which is all from 2025 and beyond, the relationship stands true, but the years are different.
[00:37:54] Wes: There is great, great power of not having any sort of mortgage. It takes a long time for most people to be able to do it Well, let’s say we have a new mortgage. There is a statistically significant lower level of overall retirement happiness. Now, it’s just one variable. Doesn’t mean you’re unhappy if you have a 30-year mortgage.
[00:38:14] Wes: It just means that on average, these people are below the baseline. When you start to pay it down and you’re within, let’s call it 10 years, you’re in the kind of the neutral zone, a little bit below the happy- US happiness baseline. But you get to nine years or to zero, so nine years is better, eight years is better than nine, seven better than eight, et cetera, happiness levels for this one particular category go through the roof.
[00:38:38] Wes: I don’t know exactly why, but I know that there’s great satisfaction knowing that your house is yours, and you have no more check to one of the big banks, and that’s done. And the closer you are to that moment, the better.
[00:38:51] Joe: I wanna put these in relation to other things, so let’s play one more quick game.
[00:38:55] Joe: Let’s
[00:38:55] Wes: do
[00:38:55] Joe: it. I wanna compare retirement moves. You tell me which one is likely to buy us freedom, and by freedom, I really wanna talk happiness like you do. An extra $500 per month invested or eliminating a $500 monthly payment permanently, getting back to the mortgage?
[00:39:13] Wes: Eliminating the payment.
[00:39:15] Joe: Better. W- working two additional years or doing part-time work you love for five?
[00:39:21] Wes: Part-time work for five that you love.
[00:39:24] Joe: Having one giant investment account or several reliable income sources?
[00:39:32] Wes: I’m gonna choose r- uh, several, uh, multiple streams of income. That’s even better
[00:39:37] Joe: See, and for those of you that aren’t watching our, our YouTube video of this, Wes is having trouble not doing the advisory seven-
[00:39:44] Wes: Disclaimers
[00:39:45] Joe: And buts.
[00:39:46] Joe: And disclaimers.
[00:39:48] Wes: Depending on your situation, depending on your retirement risk tolerance, et cetera- … and your age and r- risk tolerance. That’s all true.
[00:39:55] Joe: Uh, having another $500,000 or knowing exactly what your current money can support?
[00:40:01] Wes: Ooh, Joe.
[00:40:03] Joe: How about that one?
[00:40:04] Wes: Ouch, that’s a hard one. 500, an extra half a million dollars or already knowing what your money supports.
[00:40:13] Wes: How much do you have? Can I, can I get more on what… Okay, I’m just gonna say y- it is im- for the most part, knowing what your money supports is better than the extra 500K.
[00:40:28] Joe: Last question, Wes. Let’s reiterate something. How important was the phrase super activity to this research?
[00:40:36] Wes: I think it’s a really cool word-
[00:40:39] Wes: and it’s more memorable than what I came up with a long time ago. So I’d say it’s a- … it’s a top five thing in the book, Joe. And I’m thankful f- that we at a, at, wherever that was, and you- … and you said, “Hey, what are those things? Those super activities?” I’m like, “Hey, man, that’s a good one.”
[00:40:57] Joe: We were, we were, we were…
[00:40:58] Joe: And I couldn’t remember core pursuits. I was like, “You know.” Yeah. And we were standing around in a group. I said, I’m like, “You know, um, yeah.” Couldn’t think of, of, of core pursuits. Last question. One of our stackers might be able to retire tomorrow, but they’d love to get a few years of their life back. You talked about 6% more life, and what that could mean, right?
[00:41:19] Joe: Yeah. What’s the first move you’d like them to make this week?
[00:41:25] Wes: Well, it’s more than If l- if a stacker already has a large list of core pursuits, and I’m gonna assume that they do, because these are what… Your listeners are well-balanced and they’re more, they think more than just about the money. My thought would be being able to have plenty of cushion in retirement.
[00:41:50] Wes: I think if there’s one thing you can do today that really ha- moves the meter, it doesn’t take a year to figure out your core pursuits, or 10 more years to save more, or more years to pay off the mortgage. These are all long-term marathon type events. The sprint event in this is about drawing out your happy retiree life map, which you can do in an hour, and it’s so much fun to do it.
[00:42:16] Wes: I have an example of it in the book from a listener who sent in a life map, and I redrew it so it’s in black and white. And doing the r- a written timeline plan. That exercise, which is a sprint, it’s short, it doesn’t take y- it takes literally an hour. That moves the meter so much to give you clarity and reduce the fear of running out, which puts you in a very different category than most Americans, and that is something you can do today.
[00:42:44] Joe: You know how much I love the timeline. I’m a huge fan of the timeline. The new book is called The Retire Sooner Method: The 5 Secrets Behind America’s Happiest and Unhappiest Retirees. Let’s talk about the project for just a moment. How was writing this book versus writing the first two? Was it more challenging?
[00:43:06] Joe: Was it different? Do you feel like you got more clarity? Is it more of a streamline? Tell me about the difference between this and the last two projects.
[00:43:15] Wes: This took the longest of all because I scrapped the first book. What I thought I wanted to do, and I started this like four years ago, is update You Can Retire Sooner, and I spent almost a year doing that.
[00:43:29] Wes: It was a lazy exercise because I didn’t wanna do a whole new book, which really is a project because you gotta do a bunch of research first, and then you hope the research says something. So it’s a risky proposition with your time and money to do a bunch of research and then see if the statistical significance says anything.
[00:43:49] Joe: Can you imagine that at the front of Barnes & Noble? A book by Wes Moss called Meh, No Change.
[00:43:55] Wes: Yeah. Yeah, No Change. So I was resisting doing a whole new thing out of laziness, Joe, and I wasted so much time. And I remember the day, I was sitting at my kitchen counter and I said, “I’m just…” I remember saying like, “This book update isn’t good enough.
[00:44:16] Wes: I’m gonna scrap the entire thing,” so I wasted a year, “and I’m gonna go ahead and do a brand-new research project.” And I remember saying, “I don’t care- If it contradicts my old numbers or it comes back meh, I don’t care. I’m just gonna do it. And that was the epiphany that happened probably a year and a half ago.
[00:44:36] Wes: And then I did it, and I spent much more time doing this book than I ever have, but it’s because I was able to crystallize it down into the most understandable version of what I’ve done in my entire life. And so I like where this book ended up more than any of the other ones. It just took more work. A- a- and, and Joe, and Joe, another thing.
[00:44:57] Wes: Yeah. I remember thinking like, “Oh, well, AI will help me,” because now AI is, is what… AI was the opposite of helpful. It was horrible, and I had to just stop using it because it led me down the wrong paths. The, the verbiage was always terrible. So that was another false… That was like a false front for me. I was like, “Oh, now the, the world has AI and we have Chat- GPT and Claude.”
[00:45:18] Wes: That’s also a total misnomer. That actually made it worse, and I had to totally scrap all of it in order to just go back to real human beings writing and analyzing.
[00:45:28] Joe: I found that with my writing, too. I have to use, at the most, a ChatGPT or a Claude as an editor, as an editing help. Yeah. Whenever I was like, “Oh, I need something pithy here.”
[00:45:39] Joe: Yeah, no, no. No, God, no. Yeah. Man, thank you so much for mentoring our Stackers today. I super appreciate it, and I love, Wes, as you know, I love how y- you put it in perspective. We’re not solving for more money, we’re solving for more happiness. And, you know, you see people solving for longevity, people solving for this pile of money, Scrooge McDuck money, but we solve for happiness.
[00:46:01] Joe: I think we finally get where we’re going, so thank you very much.
[00:46:04] Wes: Yeah, man. You’re the man, and I love your show and I appreciate y- your support over the years, and thanks for having me.
[00:46:14] Doug: Hey there, stackers. I’m Joe’s mom’s neighbor, Doug, and today is quite the anniversary. It’s the date that the first ATM opened at a Chemical Bank branch in Rockville Centre, New York, way back in 1969. Yes, the old ATM, a place where you pull up, stick in a plastic card, the kids marvel when real money pops out, or a fun little note that tells mom and dad or Uncle Doug, “Try again later after payday.”
[00:46:38] Doug: Here’s the question: When the kids are lucky enough to see money pop out of an ATM, which denomination of bill is it more likely to be than any other? I’ll be back right after I go help Joe’s mom celebrate the anniversary of the ATM by practicing taking money out of her account for our sizzler happy hour.
[00:47:03] Doug: Hey there, stackers. I’m former ATM fan and guy who just got played, Joe’s mom’s neighbor, Doug. All right, after the world’s quickest trip to the ATM, man, do I have a story to tell. Joe’s mom and I were gonna take money from her account for Sizzler happy hour, right? Right? But she says the ATM needs to warm up first.
[00:47:23] Doug: So while you’re listening to our second sponsor spot, she tells me put my card in first so that we can get it all ready to go. Well, not wanting to disappoint, I go ahead and dip my card in and she’s like, “Oh, well, while, while, while we’re here, let’s just push a few buttons and make sure they work.” I’m like, “All right, sure.
[00:47:39] Doug: That sounds fun.” I love pushing a few buttons, right? But before you know it, there’s 100 bucks sticking out of the machine. My card’s back in my hand. Joe’s mom says, “Cool. Looks like it works,” and she just takes off. That’s right, it was a wham bam, thank you ATM incident, all orchestrated by that evil genius, and now I’m paying for the Sizzler tonight.
[00:48:04] Doug: If only she used those powers for good. Well, here’s today’s question, though. According to the Federal Reserve Bank of Atlanta, was it the $100 bill like I received that was spit out more often or another? Well, the answer is, it’s a $20 bill. And now here come two guys who love to reimburse a guy when he’s been taken advantage of.
[00:48:26] Doug: Seriously, OG, can I get a hundo maybe? A little something? No? All right. Well, whatever. I- it… Back to Joe and OG
[00:48:35] Joe: Sorry about that, Doug. But, but you should’ve known ahead of time. I mean, it’s funny, fool me once, shame on you. Fool me 100 times-
[00:48:43] Doug: She’s so- Might be- She’s so believable, though. She’s… That sweet old lady voice.
[00:48:49] Joe: Might be a whole different issue. Huge thanks to Wes Moss for stopping by. What a phenomenal project that he’s working on with retirement. Let’s talk about retirement in our headline.
[00:49:02] headlines: Hello, darlings. And now it’s time for your favorite part of the show, our Stacking Benjamins headlines.
[00:49:09] Joe: This comes to us from The Wall Street Journal, written by our good friend Veronica Dagher and Sharada Dinesh.
[00:49:14] Joe: Retirees love dividends, but the stock market surge is making them think again. And it’s funny, OG, talking to people like Veronica about this, often we talk about retirement, of course, Wes just got done telling us it’s not all about the money, but let’s talk about the money in retirement while we’re on this topic.
[00:49:33] Joe: I meet retirees all the time that go, “You know what? I don’t wanna sell anything off. I love this idea of a dividend. Like, heck, I can just sit on the pile of money, and I could just get dividends, and I don’t have to sell anything off” And I feel like that’s kind of our brain playing tricks on us, isn’t it?
[00:49:49] Joe: I mean, is a dividend-taking strategy really the thing that, as a financial planner, you focus on most with clients?
[00:49:57] OG: Focus on most? Absolutely not, no. I mean, you know, you just have to think kind of the origin story here first of what are we talking about when we’re talking about dividends? Well, a company makes profit, or that’s the goal anyway, and so if they earn a profit, they have to do something with that profit for the people that own the company.
[00:50:14] OG: So it’s real simple. If Stacking Benjamins made a profit-
[00:50:19] Joe: Theoretically …
[00:50:20] OG: theoretically, if that were to ever happen, you know, the owners would say, “Well, what are we gonna do with it?” We could buy more tech stuff. We could do some marketing. You know, we could invest in new people. If we kinda did all those things and there’s still money left over, we gotta do something with it.
[00:50:35] OG: So you can just say, “Well, I’ll just keep it in the bank for later,” and if that’s enough, then you say, “Well, maybe I’ll just give some out to the people that own the company.” So you know, a dividend is just another way of distributing company profit- After the board has decided all the strategic objectives have been accomplished.
[00:50:53] OG: And sometimes a strategic objective is to pay a dividend because that bolsters your company’s, uh, a view, you know, or whatever status in the eyes of investors.
[00:51:03] Joe: Well, and especially, can I stop there for a second?
[00:51:05] OG: Yeah, it’s your
[00:51:06] Joe: show. Espec- uh, uh It’s your show, too, which is why I asked. Especially if you’re a company like a railroad or a container ship company, where the chance of you growing is zero, how the hell are you gonna attract investors?
[00:51:19] Joe: You’re not gonna go, “Oh, you know what? We’re gonna increase this railroad from, you know, the tracks that we have now to a bunch of new tra- ” That ain’t happening. Yeah, probably not. You’re not doing that. Right. So instead, the way you attract them is by going, “Hey, I know we’re not gonna grow the company.
[00:51:33] Joe: Instead, we will pay you this hopefully fat dividend check because we did really well.”
[00:51:39] OG: Yeah, so basically dividends are nothing more than just a return of profit after all the other reasons for using that profit have been, you know, kind of checked off. And so you look at some companies, uh, famously Apple never paid a dividend for a really long time.
[00:51:55] OG: They, they do now a little bit, but Steve Jobs was like, “We’ll never pay a dividend” And the reason for that was, “Hey, if we make a profit, we think it’s better for our shareholders, for our investors, if we take that profit and reinvest it into the company, building more stuff and more tech tools and creating new things that will then drive bigger and bigger numbers in the future,” versus saying, “This would be better for us to distribute this profit.”
[00:52:18] OG: There’s, look, there’s no right or wrong way to do any of this stuff. Apple obviously didn’t pay a dividend and their stock price went up a whole bunch. That was the trade that Steve Jobs and Tim Cook and everybody else was kind of betting on. We think that we can take this money, turn it into more money by launching new products, and so on and so forth.
[00:52:37] OG: If dividend and capital appreciation, you know, is basically all the same thing in terms of what the company is, uh, a reflection of how the company is, uh, doing from a profit standpoint, then it’s kind of the same thing. Statistically, you’ll have a little lower return, little lower capital appreciation return when you get a high dividend, which I guess kind of tracks if you think about it.
[00:53:00] OG: There’s less money to be deployed into R&D and so on and so forth. And statistically, if it’s a high growth company that’s not paying a high dividend, then maybe you get higher capital appreciation. But for our purposes, we would say that the stock market averages 10%, and that’s gonna include companies that pay dividends and companies that don’t pay dividends or pay high dividends or pay lower dividends, right?
[00:53:22] OG: It’s just kind of a combination of all that stuff. It’s all the same, all the same return of profit to shareholders, whether it comes to you via cash or otherwise. What’s sexy about dividends is that it feels like a paycheck.
[00:53:35] Joe: It feels so like a paycheck.
[00:53:37] OG: You know, so you go, “Well, I’ve got a million bucks, and they’re gonna send me $20,000 or $30,000 a year, and I don’t have to spend my million dollars.”
[00:53:46] OG: But remember that your 10% number when you’re calculating that, when you say, “Well, the S&P has averaged 10%,” that includes the reinvestment of the dividends If you’re spending your dividends, and you’re planning on 10%, you’re probably off by a little bit there
[00:54:01] Joe: Which is why I think during retirement, retirees, and rightfully so, should have a lower return expectation because, A, if you’re gonna lower some volatility with a piece of your portfolio because you’re taking it soon, and then second, um, if you’re spending that dividend check, then you’re not gonna be able to lock that in as much.
[00:54:19] OG: Yeah, I would say, you know, if I was evaluating a, you know, a retirement income portfolio, I’m building the asset allocation first, and then I’m gonna be smart about where the asset location is. So I want my high-growth stuff in my tax-free bucket. I’m gonna make sure, you know, I don’t have a lot of fixed income in my, in my brokerage account because it’s gonna pay some weird, have some weird tax issues potentially.
[00:54:39] OG: Dividends are taxed at a preferential rate, so if I had positions that were gonna issue a dividend, I would probably favor that to be in the brokerage account because of the preferential tax streams, a little bit lower tax rate on a certain amount of dividends. So I would be smart about that. And then as I’m building the cash flow, I would say, “Oh, well, if this thing’s gonna deposit 11 grand in my account every year, okay, yeah, I can count that as income,” but I’m not gonna build a portfolio specifically to generate income, if that makes sense.
[00:55:10] Joe: The bad news on dividend-paying stocks that I think some retirees don’t understand is that just because a company has paid dividends quarterly forever doesn’t mean that they have to continue paying it. In fact, in Veronica’s piece here, she even talks about how a lot of companies have been lowering the dividend, and about how as the stock market surges, then the dividend becomes a lower piece of the puzzle.
[00:55:33] Joe: It, it becomes a little bit harder to find, the big dividend that you thought that you had. Because the company isn’t paying, “Oh, we wanna pay a 7% dividend.” They’re paying it based on a set dollar value, not based on- Yeah … the stock price.
[00:55:46] OG: It’s based on the number of shares, and so if, if you have 1,000 shares of stock, they don’t say, “We’re gonna give you a 7% dividend.”
[00:55:53] OG: They say, “We’re gonna pay 50 cents per share.”
[00:55:56] Joe: Yeah.
[00:55:56] OG: And then if the stock price goes up by 3x, they’re still paying 50 cents a share. Well, the percentage, you know, your income is gonna stay relatively consistent, basically, is what she’s saying. You know, or it should stay consistent r- regardless of what the stock price does.
[00:56:11] OG: And frankly, I, I, to kind of play a little devil’s advocate, that’s what may be one of the things that’s nice about the dividend piece, right? It’s like if the stock market goes down a little bit or up a little bit or whatever, I’m still getting 50 cents a share.
[00:56:24] Joe: 50 cents is 50 cents, yeah.
[00:56:26] OG: Yeah.
[00:56:26] Joe: But in the current environment y- those yields, Veronica writes, no longer outpace safe alternatives, which usually is the case.
[00:56:33] Joe: As you mentioned, if you own the company, the dividend is usually higher because of the fact that you’ve got some volatility built in- Mm-hmm … because of the stock. In this current environment, a lot of the time the yield doesn’t often outpace. But I think there’s a behavioral point. I love your behavioral point of it feels like a paycheck.
[00:56:50] Joe: That’s definitely a behavioral aspect of just- You know, wrapping our head around why do we like dividends so much. I think there’s that second piece that Doug alluded to in the open and that we talked about early on in this segment, which is I’ve got this pile of money and I don’t want to sell anything, OG.
[00:57:07] Joe: ‘Cause when I start selling anything, y- you know, you’ve worked with a lot of clients, I worked with a few clients back in the day, that scares everybody. Like, the second that you start eating into that capital number, people go, “Oh, my goodness. Oh, boy.”
[00:57:20] OG: Yeah, especially if the market’s going, going flat or going down the other way.
[00:57:24] OG: Which is why I think it’s important to bucket out where your cash flow or where your cash needs are gonna be. You know, if you’re 60 years old and you’re gonna retire in five years, I don’t think you change your investment allocation. You don’t become instantly conservative and, “Well, I’m 60, so I should have 60% of my money in bonds,” or some nonsense like that.
[00:57:42] OG: You know, you’re still invested long-term in equities. However You do have to recognize the fact that at 65 you’re gonna need money, and y- you know, you need $80,000 to live that year. Well, where’s it coming from? Well, I get $32,000 from Social Security. My spouse is gonna get $17,000 from Social Security. Okay, well, you’re 30 grand short, where’s it coming from?
[00:58:02] OG: Today, at 60, is the time to think about that for 65 so you can say, “Okay, well, I need 30 grand when I’m 65. I’m gonna need $31,000 when I’m 66. I need $32,500 when I’m 67,” you know, ’cause of inflation, ballparking it. So, okay, so I need 100 grand. If I set that aside today and say, “Okay, that’s my three-year number,” now I can invest the other 90% of my portfolio long-term, and then just refill that bucket as I’m, you know, five, eight years out, so I always have eight year plus money, and I always have one to eight year money, basically.
[00:58:37] OG: Sitting and thinking about that five, seven years out from retirement is really quite key.
[00:58:42] Joe: It’s interesting how many times, Stackers, we go back to the same, the same rubric, the same way of thinking about these things. Heck, before our Greatest Hits week break, we talked to attorney Tim Semero really about the same thing.
[00:58:55] Joe: It isn’t about whether a trust or a will is better. You don’t begin there. You begin with, what am I trying to accomplish? And I think in retirement it isn’t that dividends are better, like I hear some people say, or that treasuries are better, b- w- whatever. It is begin with what I’m trying to accomplish, and I think you’re much more likely- Yeah
[00:59:13] Joe: to reach a place that you’re comfortable with. Yeah. We will link to Veronica’s piece in our show notes at stackingbenjamins.com. I’ve always liked Veronica’s work. Glad to see she’s making a lot of sense again. You may love dividends, but dividends might not be loving you. And maybe you need to re-question whether that’s where you wanna head anyway.
[00:59:33] Doug: Hey, I’m Mr. Wow.
[00:59:34] bumper: And I’m Mrs. Wow from Waffles on Wednesday.
[00:59:36] Doug: And when we’re not eating waffles…
[00:59:38] bumper: We’re stacking benjamins.
[00:59:40] Joe: That brings us to the Back Porch. Short Back Porch today. I’ve been giving webinars for the Field Kit, the all-in-one keep track of all your financial life while you’re out on your next adventure.
[00:59:54] Joe: So whether it’s your budget, your net worth tracking, your credit, all the above. And I’ve gotten a lot of questions about what the field kit does, so we have a series of webinars. If you get the 201, our newsletter, uh, and you just sign up at stackingbenjamins.com/201, you’ll get a full list of all of the webinar dates.
[01:00:14] Joe: We’re recording this a little ahead of time, so I don’t have those while we’re recording. But definitely come to them. I know that, uh, when the earlier first version of this, the vault, was out, that does about 65% of what the field kit does. We gave some great webinars, and I know a lot of our vault users were very appreciative and, uh, could see exactly how to use it.
[01:00:37] Joe: Even people that had already signed up for it knew how to use it. So whether you’ve already signed up for the field kit and you’re using it, or you are somebody who’s wondering, “Is this really how to manage your money?” We think so. Just go to stackingbenjamins.com/201 and, uh, you’ll get the 201. Now, I know some people, just for whatever reason, you don’t want the 201 newsletter.
[01:00:59] Joe: Don’t know why you would do that. But if you don’t, just email me, joe@stackingbenjamins.com or DM me in the Facebook basement or on social media, and I’ll be sure to get that to you. All right, that’s our back porch for today. Big thanks to all of you for sharing today’s episode. If you know somebody who’s staring at retirement, whether they’re 40 or they’re 70, and they’re wondering, “How do I create a successful retirement?”
[01:01:23] Joe: As Wes says, it starts early. Uh, send them this episode. I think you can do a world of good for somebody that should be a stacker and maybe isn’t yet. One thing we do at the end of every episode, though, is we ask Doug what should be on our to-do list after today’s show.
[01:01:38] Doug: Well, Joe, first, take some advice from Wes Moss.
[01:01:42] Doug: Retirement? Focus on community, super activities, and not just the money. By combining your love of building financial strategies with focusing on more life, you’re much more likely to have a successful, happy next chapter. Second, dividends? They’re great, but focus on more money, not just on a strategy that sounds great.
[01:02:03] Doug: There are many ways to receive income. Begin with your goals, and maybe dividends will be the answer, and not the other way around. But the big lesson can someone tell Joe’s mom that everyone calls Wednesday hump day? Can you also tell her that I may be old enough to wash my own mouth out with soap?
[01:02:25] Doug: Thanks to Wes Moss for joining us today. You’ll find his new study on a successful retirement, The Retire Sooner Method, wherever books are sold. We’ll include links in our show notes, and also, we’ve been featuring it in the 201 newsletter. If you get the newsletter, just click that link. We’ll also include links in our show notes at stackingbenjamins.com.
[01:02:46] Doug: This show is the property of SB Podcast, LLC, copyright 2026, and is created by Joe Saul-Sehy. You’ll find out about our awesome team at stackingbenjamins.com, along with the show notes and how you can find us on YouTube and all the usual social media spots. Come say hello. And oh yeah, before I go, not only should you not take advice from these nerds, don’t take advice from people you don’t know.
[01:03:12] Doug: This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor. I’m Joe’s mom’s neighbor, Doug, and we’ll see you next time back here at the Stacking Benjamins show
[01:04:19] Joe: Welcome to After Show. I’ve had people ask us, like what kind of things do we talk about while we’re getting ready to record? This is a little snippet of the, um, complex and, uh, mentally stimulating conversations we have backstage before we’re recording a show
[01:04:37] OG: This is all gonna get on the, uh, on the clip at the end of the year
[01:04:42] Joe: Lesson, don’t start a land war in Asia, Doug.
[01:04:46] OG: I just watched that with my daughter. And w- I mean, we got about 80% of the way through it. She had to go to bed, but she was like, “This is a pretty good movie.” And I’m like, “Yes, it’s like one of the all-time greatest movies in history.”
[01:04:57] Doug: Yeah.
[01:04:58] Joe: W- we took a road trip out west when our kids were, like, eight. Cheryl read the book because, uh, you know who it was?
[01:05:05] Joe: It was, uh, Mark Chuci. Do you remember Mark Chuci- Mm-hmm … Josh? Mark Chuci told me to read the book, ’cause I was like, “God, I love that.” He goes, he goes, “Get The Princess Bride book,” because you know the whole thing, “I’m Inigo Montoya. You killed my father. Prepare to die.” There’s a whole chapter about his dad and how his dad got killed by that dude.
[01:05:25] opener: The Sick Finger Man.
[01:05:26] Joe: Yeah, and they just had to kill it for time, but, but- I
[01:05:28] OG: think it’s crazy when you watch that movie to go back and see who all those actresses and actors are. Oh, yeah. You know? And, like, what they also did. Like, Inigo Montoya-
[01:05:40] Doug: Oh …
[01:05:41] OG: was the CIA director of Homeland.
[01:05:43] Doug: Mandy Patinkin. He’s- Mandy Patinkin, yeah
[01:05:45] Doug: one of the biggest stage actors on Broadway. He’s- Yeah … massive.
[01:05:48] OG: Yeah, huge. Huge. You know, like, Robin Wright Penn or Robin Wright, I guess as she was, you know, at that time.
[01:05:55] Joe: Yeah, all the stuff she did afterwards. Billy Crystal.
[01:05:58] OG: Yeah, Billy Crystal. Yep.
[01:05:59] Joe: Andre the Giant.
[01:06:00] Doug: Probably the person who did the least was…
[01:06:03] Doug: Well, if you don’t count Andre the Giant, because he didn’t live much longer after that- Sure … was, uh, o- who was the guy who was the main character? I, I, I don’t even know- Yes … his name right now. That’s funny.
[01:06:13] Joe: Carl
[01:06:14] OG: Hughes or something. Was that… No.
[01:06:16] Doug: Uh, yeah, Cary Elwes. Cary Elwes. Cary Elwes. I saw
[01:06:18] Joe: him recently on a show, and I’m like, “Oh, my goodness,” and he was a great-
[01:06:22] Doug: Yeah
[01:06:22] Doug: he was
[01:06:22] Joe: a villain on a show.
[01:06:24] Doug: As
[01:06:25] OG: you wish. I mean,
[01:06:26] Doug: he’s, he’s around, but he didn’t get nearly as big- Yeah … as you would’ve expected him. He did
[01:06:31] OG: not get as famous as, uh- No.
[01:06:33] Joe: Princess Bride.
[01:06:33] Doug: Uh, who was the… The priest was from Monty Python. Um-
[01:06:39] OG: That was what my brother’s speech was at our wedding.
[01:06:42] Doug: Wuv.
[01:06:42] OG: He goes, “Mawwage.
[01:06:45] OG: Mawwage is what bwings us together today.” Did
[01:06:51] Joe: he really do it?
[01:06:52] OG: Yes. He goes, “Wuv. Twoo wuv.” That’s so good. All right. Steve,
[01:06:59] Joe: let’s see if you can cobble that together and do a short after show. It’ll be fun. Just make
[01:07:05] Doug: a show, Steve. See ya.
[01:07:06] Joe: Yeah. Steve, we’re done. Make that work.
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