The #1 Investment That Will Make You RICH In 2026! | The Money Guys

If you self-define yourself as a victim, that this system's built [music] against you, unfortunately, victims don't come out ahead. >> I think we're seeing the consequence of elevated volatility. Cuz I think [music] anybody can be wealthy, but it's going to require discipline, you live in a less than you make, you're using that margin to actually create the money that then gets invested, and anybody, if you give it enough time, can be a millionaire. >> What are some of the biggest mistakes that you've seen people make? Whether you're [music] a 20-year-old or you're a 60-year-old, if you don't have discipline, it's going to be very, very hard for you to be successful financially. So, I want to see [music] so many professional athletes who sign these huge contracts, have these huge salaries, and end up broke. Do you think that [music] that's on purpose? Consumption is profitable. Selling you stuff is profitable. Creating people who are independent and know how money works is not as easy. Shouldn't investors be worried about how much the market [music] is now dominated by AI? >> The market has a way, at least in my experience, of making us all, even the smart ones, look like fools. Brian and Bo, thank you so much for coming on the Iced Coffee Hour. You guys manage about 2.2 billion dollars worth of money for your clients. You guys are both certified financial planners, CFA, CPA. You guys are the real deal, and at the end of the episode, we want you both to react to Graham and my investment portfolios. >> [laughter] >> I think you guys are going to But before we do that, Graham has a question. I want you to react to this clip, because you focus a lot on retirement and saving. And Elon Musk just said that saving for retirement right now is pointless. Here's exactly what he said. >> And like side recommendation I have is like, don't worry about like squirreling money away for uh retirement in like 10 or 20 years, it won't matter. Okay. Either either we're not going to be here, or it it just uh like it's it's it's you won't need to save for retirement. If If any of the things that we've said are true, saving for retirement will be irrelevant. So, I think the context behind that clip is he was saying that artificial intelligence is going to advance to the point to where there's going to have to be some sort of like basic universal baseline for everyone. And also, I think he cuz I follow enough of of what Elon says is that he thinks because of all the breakthroughs that are to come is things are going to become so much cheaper cuz they're so efficient that you're not going to have the need for the way we think about money currently. And so, I think when we if you want my reaction, okay, we could move in that direction and he he could absolutely be right. And so, what do you end up with? You end up with a lot of people that saved a whole bunch of wealth or prepared for a thing that perhaps they did not have to be prepared for. But, he's saying 10 or 20 years on the line, what's the other side of that coin? The other side of the coin is it doesn't manifest exactly the way that he that he says. The grasshopper did not store up for winter. Winter ended up showing up and 20 years on the road, you're like, "Whoa, I don't have any money. I don't have any savings. I don't have any retirement. Elon told me I wasn't going to need it, but I got there and now I need it. Which one of those is a worse outcome? I sacrificed a little bit of today that I guess I could have been living it to the full or I actually get to retirement, get to the the place where I want to not have to work anymore, and I didn't do the stuff I was supposed to do to be able to actually retire. I'll put some context with it is that um no, fortunately, and we see it with our clients, too. 80% of millionaires are first generation. But, I've been doing wealth management long enough. I've had a few people come across my my path to where they're waiting for their parents to die because they know there's significant wealth when their parents, you know, die and they're going to inherit this money. It's the saddest thing in the world because, you know, do you want to root against your parents? And I think that's what he said, you know, in 10, 20 years, do you really want to kind of lay all of your your It's tied into what Bo's saying. I'm too self-determining with my life and I also know the secret to success is if you start early and often, time is your most valuable resource. So, maybe get excited about the dream that Elon's putting, but don't build your life off that. Just like I would never tell anybody build off of your parents' inheritance. I don't come from money, Bo doesn't come from money, but it's just a good case study on you need to be more self-determining with your success and and be disciplined and make something happen. That sounds like something to kind of get excited for or to fear, but it's more to get people excited. Elon also has a a tendency to really throw the world at you and get you excited and then it takes a while for it to actually come to you. Well, speaking of savings, we got some really scary statistics that just came out. Our personal savings rate that just hit a low of 4%. Nearly 40% of Americans have less than $500 in savings. 70% of Americans are living paycheck to paycheck. Gen Z is at 72% and the average American carries about 65 to 6700 dollars in credit card debt personally. Why do you think people are saving so little? Yeah, I I it's I think you can only talk about the the outside factors, right? Housing has gotten more expensive, cost of living has gotten more expensive, inflation is a thing that we have been dealing with over the past couple years. But what's really really interesting, even though that savings rate hit {quote} an all-time low, it's been low for a long time, right? It's not like it's like we were safe. The only time in the last 20 years we've seen an uptick in savings rate, you know what it was? 2020. >> 2020. It was during the pandemic. Cuz nobody could go out and spend money and it's amazing how much money you can save when you can't go spend on anything. And so, I think what we're seeing right now is more of a continuation of bad behavior that's gotten slowly and slowly and slowly worse. And and I it seems like people have arrived at the conclusion, oh, well, life is difficult, life is hard, money's tight. I will never be able to be where I I to be financially, so why would I even do anything differently today? I'm just going to keep moving in this direction. Um and I think that's just bad information. It's bad intel for a lot of people. I don't think a lot of people when they come out of high school, out of college, understand the fundamentals of wealth building and budgeting and cash flow management and living on less than you make. Um I think we're failing our young people in having them prepared to be able to do that. >> Do you think that that's on purpose? Because if you ask any intelligent person that has any ounce of financial literacy, they would argue it is clear-cut objective beneficial to everybody if we have more financial literacy in schools, if people know that they maybe shouldn't be taking out all of this ludicrous student debt for a degree that's not going to guarantee them a job. You're setting these kids up for failure. Is there a malicious reason maybe behind that? Are like the credit bureaus lobbying the universities saying like, "Hey, we don't want to promote financial literacy." Is there anything going on that we may be unaware of? Well, I think that it is more more lucrative for people to be bad with money. It's why payday lenders do so well. It's why credit card companies make so money. Uh if you look at tuition how much the cost of education has gone up, it's sort of asinine at this point. And uh there's sort of two sides of this coin. The the more fiscally responsible individuals all are in mass, the less profitable some of those entities will be. So, there is a misalignment of goals. It's in the credit card companies or whoever's best interest for people to not make good decisions. I think it's interesting cuz you were giving us a lot of stats. The one that always shocks me is if you look at the FRED data, the Federal Reserve data on net worth of Americans. You know where there was a huge pop in the last few years and it was all home owner equity. What shows me is that the only net worth that the typical American has is the equity in their house, meaning they're not saving any money outside of just the whole the old American dream of just go out and buy a house and then you know and you'll build wealth through that. That shows me that we we are failing in the fact that there is a better way to do money and it's and if you knew like one of the things we just introduced a brand new resource we updated who spent a lot of time kind of putting it out there trying to make sure the education impact was there is how much should you save? And it's one of the if you go look at this resource at money.gov.com/resources if you just start saving anything when you're like 20 years old It's hard to screw that up. >> I mean it literally you just have to basically do rounding errors on and it can be small decisions like coffee or it doesn't take hardly anything at all. That's what look take the politics out of it but I do think there's an interesting experiment going on with Michael Dell's contribution and then these these Trump accounts is what they're known is what if we gave all newborns a thousand bucks? Cuz we've done the the research if you go to the website money.gov.com/resources you can be a millionaire incredibly easily. Now look I know we we have inflation and other things but I can tell you if you want to get to a million dollars or you're or five million dollars get to the million first and it gets much much easier. Cuz I think if people knew that for your newborn you only need to save $13 a month to be a millionaire you know by the time you get to retirement. That's how powerful but I don't think anybody does that. I mean I think about you know the typical age when people start saving and investing is 30 years of old 30 years of age you know where they even discover probably your content our content I would love for it. Jack I think it would be and more high schools are adding curriculum. What I'm curious about is who's driving that curriculum. If you have the banks drive it are they going to talk about credit cards honestly? That that's the thing that I always cuz consumption is profitable. Selling you stuff is profitable. It's creating people who are independent and know how money works. That's that's not it's not as easy. I agree and I think I guess for me that just makes me suspicious because like I said, every single person with above average IQ and some form of financial literacy would argue everyone needs to learn these things. >> Absolutely. It's not like if they learn these things, hopefully it's not when they learn like we want it to be ASAP. >> Mhm. People need to know this stuff way more than need to learn all of the other stuff that they're taught in the universities, especially with like the the random prerequisites and these other classes that you're forced to take a language class Right. before you learn financial literacy is absolutely >> I'm sorry. Do you think it would move the needle a ton though? Cuz you you've heard of the marshmallow test and other things. There is a I've often wondered if we stratified I wish there was more behavioral science science research on just is there always just going to be a portion of population cuz I think anybody can be wealthy. I really do. I truly believe it, but it's going to require discipline, you live on a less than you make, you're using that margin to actually create the money that then gets invested and anybody if you give it enough time can be a millionaire. You know what? It's the same thing with getting in shape. Like everyone knows objectively how to be in shape, but there's only a small percentage of people who are actually in shape. >> And and we all know hey I need to eat good food, move my body. Eat good food, move my body. We objectively have that knowledge and yet a lot of people don't carry it out. Saving money and building wealth is no it's no different. >> is why I love what we get to do. I mean I really do feel like we're moving the needle. I I truly do. If you go now look that that's what we had a whole off-camera conversation. We just don't have the sizzle sizzle sexy of like certain cars on fire or doing weird [laughter] things that people but if you really want to know how money works, we try to lay it out there you know so that people can learn the basics. Yeah, I think what that's what makes the Trump account so interesting is because what Dave Ramsey would argue is that people might have the information which I would also argue that most people don't have the information, but of the people that do have the information and still decide to not act on that information is because they lack faith that if you put the good ingredients in that the recipe will turn out as you wanted it to. People think like, hey, if I go to the gym and start eating healthy, like I won't actually look the way that I my idealized body looks. The same thing goes for investing. If I actually save money and I invest it, billionaires or a millionaire is so far out of reach, I'll never be able to to get there, which is why I think the Trump account is so interesting because it's forcing these people to actually see the light at the end of the tunnel because they can watch this growth over a period of time. >> funny? It's not forcing people. I've spoken with several people who have just had kids in the last year, had no idea that the Trump account even exists. >> Oh, see, that's a lack of knowledge. >> like, what was that? And I explained it and they're all, I got to do that? I've never heard of that. If they'd known though, they would have signed up. Maybe I'm just in a bubble. >> not know how do you not know about the Trump account? I don't know. It's one of those things. We'll have young people all the time. High school students, college students. Hey, I just got, you know, whatever. I just got my first paycheck. I have enough. I can go max out my Roth IRA. Should I go max out my Roth IRA? And this will surprise you. You know what my answer is? Yes. >> No. No. And here's why. So many times through life I've told someone, hey, go max it out. Back way back in the day, hey, put 5,000 in. Put 6,000 in. They would do that. And inevitably, 2008 would happen, 2011, flat year, 2022, fill in the blank. And they'd make a contribution in March of one year. One contribution in March of the next year, it's down. And they're like, this investing thing is ridiculous. I don't like this. I say, hey, instead of going to max it out, just start doing $20 a month. Put $20 a month every month into your Roth and watch what happens. If you can get someone experientially to see what money can do. I'm doing this with my oldest daughter right now. And I'm showing her how interest works inside a bank account. And they can see, holy cow, no, no, it I put $20 in there last month and this month I have $20.50. Holy cow. And you can get them to experience it. I think that's where it starts to actually stick. It's just most people don't take that very first step of doing it. And then even with the Trump accounts, it's great to like use that to teach someone. But how often have you seen someone who like they go work for an employer, employer has a match, they say, "Okay, if you put in 3% we'll put in 3%." And they do that, but that's all they do. And that's noble and that's great, but if you don't actually increase that if you don't get better at it, right? It's not going to actually move the needle. So, you have to start somewhere, but then you do have to improve through time. So, what's interesting though is that just as many people are living paycheck to paycheck making over 150 grand a year as making under 60,000 a year. >> issue. It's not about the dollar It's not about the dollar It's not about the figure. There's a lot of wealthy or rich in income, but still dirt poor people because they spend every dollar they make. >> But what separates the people who make less, but still are able to get ahead? It's the discipline. It's the teachers. This That's why teachers are always so successful. They somehow Is it a knowledge problem though? Because I would argue that just as many people have the knowledge to be able to get out of that. Well, and I think a lot of people even when they're able to get to a high income, 150, 200, 300,000 incomes, you would not argue that they aren't intelligent, don't have knowledge. They must have some level of knowledge to get them to where that they are. But discipline really is the you know, we we talk about the three ingredients. There's discipline, there's margin, there's time. You have to have all three. Discipline is the one that matters the most in every facet. Like whether you're a 20-year-old or you're a 60-year-old, if you don't have discipline it's going to be very, very hard for you to be successful financially. So, why we see so many professional athletes who sign these huge contracts, have these huge salaries, and end up broke. It's a discipline issue. If you look at the the categories that typically become millionaires of you know, historically it's like your teachers, your engineers, and then like your accountants. Are those very popular categories. There's a big disparity on income between those, but you know what they all have in common is that they all start jobs pretty early in an apprenticeship type things, early 20s. They kind of both all encourage systematic type that mind and thought processes. It's the starting early and often that kind of does it. I mean, and I I know it it's not sexy enough for people to say this this cannot be what it is. And I'm here to tell you, just do something. I mean, if you cuz that's what got me. I mean, it was it's back to my Marrow moment, that high school teacher who told everybody in the class, "Look, if you save $100 a month, you'd be a millionaire." And coming from no money, I was like, "I could be a millionaire? $100 a month?" I was working fast food. I was like, "You mean, I could I could save $100?" I really did think that, and that's what made it happen for me. And it's it's the reality. It's the truth. Okay, so this as a challenge, guys. Not that we are, you know, financial advisors or anything. If you've never invested, open up an account. What brokerage? I mean, any of the big ones that like the low-cost ones. Like you think of Charles Schwab, Fidelity, Vanguard. And then just buy the market, the index. All right, buy like a total market index, S&P 500. >> Contribute some amount of money into it. >> retire a target index fund. And send a screenshot of it to the email that is right on the bottom of the screen, and we will respond to it. Just saying, "Good job." >> What about Robinhood? Uh Robinhood's a great one, too. Uh one of my um I'm going to I don't say problem, that sounds too aggressive, but Robinhood has gamified a lot of stuff that allows you to get distracted. Like when I go into Robinhood, now I can start doing sports betting and all these other things. That what I don't want someone to do is be like, "Oh, I'm going to start investing. I'm going to start investing." And they see this shiny thing in the corner, and they're like, "Oh, okay. Well, now I'm going to go start picking stocks, or I'm going to go start doing sports betting. I'm going to go start" I think some of the some of the larger brokerages have done a good job of not letting that become so flashy and so in your face. Uh if for a disciplined person, I don't think Robinhood's a bad solution, necessarily. Uh but I would probably go to one of the big low-cost anchor providers. >> In the beginning, your savings rate is so much more powerful than even what you invest in. So that's why if you can stay that That's why I like broad indexes, cuz it it lets you just set set the behavior, let it take hold, let it grow roots, let the compounding growth actually do something. Cuz you said I can't remember which one of you said it said people never can imagine a small thing can turn into a million dollars. That's because we don't we think in a very lateral, you know, where linear way instead of thinking in the exponential way that money really works. And that's why I would have love I don't like the gamification to where you people get distracted because that's where young people a lot of times they're trying to cut the corner off. I mean I I've had Look, we've had young people show us that you can play arbitrage with sports betting and all these other things. They're fun distractions to kind of look at, but they're not actually what I would consider what I'm going to be able to to to set my retirement by. That's why like when I was writing in Millionaire Mission, I said, "Fish with nets cuz you want to feed the family. Go sports fish, you know, for fun later, but if you're going to actually try to feed the family down the road, fish with nets, which is what index funds do." And really quick, I shouldn't have to say this, but we all think it. Life can sometimes be extremely busy and eating healthy can oftentimes feel like an impossible task. With work, friends, family, and everything else you've got going on, nutrition can often take a backseat, but that doesn't mean it's not important. Prioritizing protein, minerals, and fiber could really make all the difference and that's why we are so excited to be partnering with Huel. Huel completely eliminates the hassle of cooking without sacrificing your health or your bank account. 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So, to settle the debate of this harsh truth about money, would you then say if someone is not where they want to be financially, if they're broke between the ages of let's just say 25 and 45, is that their own fault or the fault of the environment around them? >> Well, I think certainly some people are born into more difficult environments to come out of than others. I don't want to minimize that idea, but I do think that building wealth is available and attainable to all folks, no matter what your path is. No no matter where your financial journey, no matter how bad it was at the start, that does not define what the end of your financial journey might look like. So, you might have had different circumstances that caused it to be more difficult for you, but I still think even for that person, they have the ability, whether it was uh environmental and circumstantial or it was their behavior. I used to run up credit card debt and live on more than I make and, you know, make all these bad decisions, I do think that there is an onus where they can change that, where they can actually improve their financial life. >> issue. If you look, we all hate villains. But I'll tell you, villains and unfortunately victims don't come out ahead. So, you if you if you self-define yourself as a victim that this system's built against you, you'll never get yourself out. Whereas, if you can put the mindset that yeah, okay, the system's hard, but I believe, and these guys are sharing some of the tools, and taking an active role to be the hero of your own story, I really do believe anybody can do it. And you just it's a mindset thing. Don't let cuz we've done shows we got a show that I'm so excited it's coming out cuz where we said, is it hard truly harder for for the new generation versus the baby boomers to get ahead. And we found out yeah, there are some things that holy cow, we ought to be pretty ticked off about what's happened in education. And even some of the things in somewhat in housing. It's not as bad as what happened in education. But still, there's so many new things with technology. I mean, if you saw what it was like to try to invest when I came out of college, you had to go through a broker. You couldn't buy index funds. It was it was just completely a different game. So much has happened. Now you can go online, you can do everything. It's instantaneous. You can do something. Do you think AI is going to make it easier, or do you think that's going to mislead a lot of people? Yes. I think it's both. I think it both is exactly right cuz we've even found I mean, it's amplifying what we can do for clients. It's not taking us out. It's going to make us better. But I do think if you're a person And and this is something I've tried to figure out. I'm not trying to change the subject to AI, but I think people ask us all the time like how you know, when you try to do Roth Roth conversion strategies, how long does that take you to figure that out? And I'm like, well, I can typically in 45 minutes of looking at your portfolio, I can have a pretty good plan, but it took me 15 to 20 years to kind of really see know all the things that go into all the factors and all the variables. So, you know, it's 45 minutes, but there's 15 years of experience or 30 years of experience now where I'm at. >> 15 years and 45 minutes to I am I think AI is going to bridge a lot of that stuff, but there's still a lot of ghost in the answers. Meaning the information. We've even been playing with some LLMs. And there's just there's so much confidence in bad answers that if you don't have the experience to actually see what it the output was to kind of navigate. I do hope younger people don't lose the ability to to be able to see what is how to think through things because we we we outsource intelligence only to the AI models because I think that's that's going to be scary for our for our for our kids and and the younger generations. So I think that technology and artificial intelligence will make it yes, perhaps easier to invest, easier to build a portfolio, easier to like gather information. But I do think it's also going to create the opportunity to be distracted as most other technologies have done. So there'll be pros and cons to it. It'll be interesting to see how it shakes out. You'll notice that when you talk to any of the chats or you know, chat GPT, the Groks and the they're all just trying to make you happy. So I mean they have this level of confidence. Yeah, but they are trying to Grok people pleasers. >> really good. Yeah. Chat GPT's awful. To the point where it's just confirmation bias wanting to say what you want to hear. >> Grok I find to be pretty objective, but Chat GPT yesterday I was trying to figure out at what point the S&P 500 would have to fall for me to get a capital call on a box spread. >> Okay. And it was so confident. [laughter] It was like 72%. I'm like that's incorrect. >> Did you check the math on it? >> Yeah, I did. Okay. I knew that was incorrect. I said, "Oh, sorry. Actually it's 58." I said, "No, that's not correct." "Oh, it's 80." It just kept changing. It's just random. >> "No, it's 90% plus." He's like, "Oh, yes. My apologies. I was interpreting incorrectly how you phrased the question. It's actually like 94%." I'm like that's too high. "Oh, actually it it's I knew that." And it would keep saying, "Oh, you're right. Oh, that's Oh, the great catch. Oh, I'm glad." I'm like, "No, you're I'm not supposed to catch You're supposed to catch it. It's frustrating." >> that's that's why you do have to be careful cuz the confidence that it comes out of the gate with is is really strong and there's a lot of ghost in those numbers still. >> But what's interesting is that now brokers are implementing this new AI into their system where you could tell it what you want it to do and it'll execute whatever trade on your behalf. So if Jack wants to buy call options on Amazon at a certain strike price, he can literally just type it in the chat and it'll go and do the thing that he's described. >> does have that? Uh Public and Robinhood Wow. launching that. Yeah. Interesting. But, I think I do think one of the things So, when I hear you say that, I was like, "Oh, that's really neat. That's super interesting." At some point, Jack would have to decide, okay, should I be buying call options on Apple? Do you know what I mean? Just cuz you Just cuz you can doesn't mean you should when it comes to that financial stuff. So, that's That's like a really neat thing that's probably like a cool value add, assuming it makes sense for me doing that. What I wouldn't want someone to do is hear that and be like, "Oh, I'm going to go get that I'm going to start buying call options." If you don't understand what that is or how that works, that that might not be the thing that makes sense. >> ChatGPT. Great call. I totally agree with this. >> Do they Apple have it right now? Yes, yes, yes. You're the next Warren Buffett. Graham said that he thinks selling covered calls is the dumbest thing ever. What what what are your words on this? I said it was pretty dumb. He said it was I said it covered calls it was like pretty dumb. It was a pretty dumb statement. I mean, how far out of the money? I mean, what are you There's so many what stock? I mean, there's so many variables here. Like very little out of the money, um but within like a month, 2 months, give or take, you know. How is that dumb? Because you're picking up pennies at the expense of the long-term stock market growing and there's no such thing as free money. >> That was my question. Whenever someone asks us, "What do you think about this?" I always default back to why. Okay, selling covered calls. Why do you want to sell covered calls? I would say there are certain stocks that I'm like hesitant on buying. For example, let's just say Chris Camillo says, "You should buy Bloom Energy." I'm like, "Well, I don't necessarily want to do all of the due diligence into why I should buy Bloom Energy, but maybe I would like to have the appreciation of this Bloom Energy." And so, I go and I buy 100 shares of Bloom Energy, but the only way I justify myself to buy this 10 shares is because, let's say, I can get 3 and 1/2% per week on weekly call options if I want to sell covered calls. That's a good enough hedge where hey look, if it does end up going down, do I think it's going to go down on average more than 3 and 1/2%? It could. Could it go down less than 3 and 1/2%? It could. But still I have some appreciation of a stock that he told me I should buy. I get to watch it. I get to be more like involved with the um Okay, so let's play this scenario you do it. You buy the Bloom Energy and you're selling this. And then uh Bloom does some exciting stuff and it takes off. >> And it did. And it just it's $300 now. And your position, you know, it gets called away. >> Would you buy it at? Uh well, I bought it kind of all over the place, but let's just say like my average I don't know why he's laughing cuz I made more money on Bloom Energy than him. So you go ahead and keep on laughing buddy. But let's say that but let's say that it gets called away, right? >> For forever you're going to be sitting in that position where you're like, man. Or [laughter] just like we are. I can't I can't totally pick on each other. He's laughing cuz I made more on Bloom Energy than he made on Bloom Energy. Dude, I'm up like 26 grand right now on my 200 shares I'm holding. I'm up more than that. Oh yeah, you're up like 60 grand. But y'all are making my point from a something I said earlier. Do you want to sports fish or you're trying to feed the family? Because y'all are y'all are I'm up way more than that. Y'all are no different than two buddies who go out fishing so you can tell fishing stories on the fish that you almost caught and it got away. Whereas I'm telling you there's a huge difference between investing versus speculating. Some of this stuff this is this is speculating. >> I mean surely because you're you're you're trying to but you're making money off of time. Which is what you're doing with invest But you didn't Oh explain that. Explain that. Explain that, please. Explain that. Jack doesn't understand that when he buys a stock there is a risk that it goes down. So if he's making 3% a week it could very well go down 6% a week and he's net negative. I don't understand that. I absolutely do. Your your your position is more bullish than my position because mine is actually a hedge against the position. That's why I'm up so much. But you were speculating more than I was. >> Yes, you were. >> I bought >> cheaper. So one of the So one of the questions I've been asking is like okay what what's the thing you What's the thing you're trying to accomplish here? What's the goal you're trying to achieve? What do you want your money to be doing for you? Um in the instance that you're describing, that would not be one that screams to me oh selling covered calls makes a lot of sense. Where a covered call position might make sense is if you're uh executive who has a highly concentrated stock position and you want to figure out a way okay I can't sell this position cuz of embedded gains perhaps I'm going to do some sort of strategy where I want to protect my downside but I also want to recoup some premium on the upside to cover the cost of the put. Something like that. You're it in your in your scenario if I was trying to just make a little bit more money on it and I was you know bullish on it I would maybe just buy a different stock that would do do something differently uh cuz I agree with you just cuz just cuz you can make some money doing something often times doesn't mean it makes a lot of sense. You can You can go walk around the freeway and pick up cans and you can bag up all those cans and you can spend a couple of hours doing that you can take them in and trade them in and get the recycling money for that. But is that a good use of the time or was that a good use of mental capital? >> I I don't think it's all worth the hassle factor. Because look I I've had this this has happened to me so many times in my decades of investing. Like I'll meet a neighbor and they'll find out he's over here calculating returns. I've had a neighbor who find out I'm a financial advisor and they and they are like you know what stock do you recommend? And then you know they're talking to me what you know whether at the time it's Fitbit or whatever the the latest greatest thing is. And then it was always funny as I tell them once they get to know me I'm like I buy index funds. I mean that's what I actually do with my money is I buy index funds. And what's funny is I watch the education as you know after we get to be friends and 5 years in the future they go you know I looked I started looking at my annual return of all the the trading I was doing in the individual stocks and then I started looking at what I was making on just the total market return or the total market or the S&P 500 index. And I I I'm making more money on the S&P 500 or whatever And I'm like, "Yeah, it's amazing. And you didn't have to stress out and and think about everything that was going on." That's That's the reality I try to share with people cuz even if you And this is the Let me play devil's advocate. Cuz even if you weren't selling the covered call to where they you got it taken away from you, Mhm. if it goes shoots up, I've experienced cuz I even have a story back in 2008, I called all my buddies and I was like, "Look, Apple stock right now is trading at a price that is the equivalent of what their physical assets." I'm not talking about their Their IP. >> their actual IP and intellectual property. I'm talking about the campus and other things. This stock has been beat up so bad. I was like, "This is the biggest no-brainer. We should buy some Apple stock." So, me and some buddies cuz I don't buy a lot of individual stocks. I'm an index investor. We bought Apple stock. I after And let me ask you, this stock you bought, would you have sold it if it was up 200, 300, 400%? Would you be taking your money? Probably not. You would have kept it You would have just rolled forever. I honestly have never really sold stocks. The only thing I've ever sold really >> So, you have permanent portfolio Robinhood except for Robinhood. Except for Robinhood cuz I had Yeah, cuz I that was a different >> You would You're the type Jack, you're the prospect that we would get I want to get back Don't let me get off topic on this. >> Robinhood called $10 a share for Robinhood. >> Wow. Jack it would be the prospect that comes to us and it looks like a quilt of his life. It's the It's the quilt of Jack's wonderful life. We get As you can see what he was doing in every decade of his of his life. >> 1/2%. >> 3 and 1/2%. Guess what time? How long? This is 1 week. If you sell a call 25 [snorts] cents out of the money on Robinhood weekly calls, you can get 3 and 1/2%. This already not This is just linear growth, not even counting compound interest times 52. This is 185% return on Robinhood over the course of a year. >> What price did your blown get called away at? Uh it got called away at a few different pri- I mean just like I I had quite a few different >> So that's why I was like 88, 92, 94. I was making money on all of them. >> trading for now? >> 280 bucks. I would argue that the long position you missed out on did not compensate for the ROI you got in the covered calls, right? Like had you held it >> But I'm not I'm not observing I'm just observing it in terms of what is the growth expressed as a percentage. >> Sure. And so like and also I had 200 shares because guess what? It started going up and I had 200 shares that didn't get called away from me. I'm like, "You know what? I'm just going to ride it out." And I did and now it's at 200 and whatever dollars. And so I'm just saying a company as solvent as Robinhood, do you think that it's going to zero in the next year? I don't I haven't looked at their financials. I wouldn't >> Probably not. >> I wouldn't I met Vlad Tenev. We had him on the podcast, the CEO founder of the company. Everything seems totally great. Love the company. Have used the app. Like I I invest on the app. It's phenomenal. And so like why if the company doesn't go to zero, assuming that premium stay the same, right? You'll get 185% return in a year. >> But is this the best use of your time? This is the point. >> me is is it the best use of his time to be hunting for a coffee that's a dollar cheaper? Right? It's the hunt. >> Right, you're saying it's the best use of your time. But this is a hobby. This is a hobby, though. You can give me a checkout an additional 5% 5% off when you add other things. We talked about that before the episode. Let me bring it back to why I don't love individual stocks. I got to say one thing that I've noticed by talking to a lot of entrepreneurs is that all of them want to use AI, but they don't know how it'll actually work inside their business. 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Plus with expressive mode, they give you way more control over the tone and delivery so the conversations sound way more natural and human. So try out 11 agents by going to 11labs.io/ iced coffee hour to get started today for free. Again, that link is down below in the description. Thank you so much. Now let's get back to the episode. Let me bring it back to why I don't love individual stocks cuz I just gave you the perfect example of Apple. We got in in 2008, dirt cheap. Me and buddies all threw a few thousand bucks at it. When it went up threefold, I jumped out because I was excited. I made 300% in a short period of time cuz when the market recovered, it came back quick cuz everybody else caught on that hey, Apple's a pretty good company to own. My other buddy, I think he might have held on for four times. But the the thing is we all dropped off. One of my buddies, he still owns it. He never got out. So I know he might be the jack. You know, we all bought a couple million worth. It's worth No, it because we I think he put in 5,000 bucks. It's worth over half a million dollars from that one holding. >> Wow. So I mean that but I'm telling you that that but that sounds great but the majority of us are going to exit early. I this is not This is not anything that I would recommend publicly because it's like you need to This is purely logic, no emotions whatsoever. >> is trying to say is that he's able to make over 100% a year with little downside if he keeps doing covered calls, right? Because if he gets the shares called away, he could always buy a little more and make another 100. >> and make another 3%. But the problem is there is some long-term because you got you getting called away on a short-term holding, so you're paying higher ordinary income tax rates instead of the long-term capital gains. I'm going to say yes. But okay, when you buy [clears throat] a position that actually does go down, that doesn't come back, and you made a poor purchase, you can't get those dollars back and they're all that arc. My opinion is if you're going to do those those sort of strategies, uh I think the losses would likely be more valuable than sacrificing Roth dollars you will not be able to replace. Roth, you only get 7,500 in there at a time. You make one bad call that loses you 20, 30, 40 grand. That's like years and years and years of contributions you won't get back unless you have another, you know, investment that hits. I would argue the tax drag is something I'd factor into my calculation that I'll consider in my tax. So, even QQQ, right, for example, you can sell daily call options on QQQ, and if you extrapolate that over the course of a year, it's like a 26% guaranteed return. If you were holding QQQ in your Roth IRA, why would you not guarantee a 26% return as opposed to what el- you know, what other way you could you could get that? >> were a guaranteed 26% rate of return that was an assured thing, why wouldn't every fund manager in the world be doing that? What would >> a volume investor, >> they do covered call ETFs. >> They certainly do, but not ones that are guaranteeing 26% rate of return cuz once an inefficiency exists, we live we operate in a capital market that adjusts pretty quickly. So, yeah, inefficiencies can exist, but once inefficiencies get exploited, they then become efficient. So, what are you? I don't think something like that has staying power where even if you made 3 and 1/2% for a week, and if you did that for multiple weeks, I don't believe that that would sustain throughout the course of a year. So, I think it's illogical and irrational to assume that you could extrapolate a 185% rate of return. No different than if you And it Look, it's not the exact same thing, but if you go to a casino and you All right, hit red, I hit red, I hit red. Well, if I did it 100 times, think about how much money I'd make. That's not the way that it works. I mean, you can get 3/10 of a percent daily on QQQ calls at the money. Which is not too bad. But you do real like you you said you make a hundred was it 185% or >> Yeah, on Robinhood selling covered calls. There's It is both exactly right. If you could actually do that repeatable, you know, in in a guaranteed way, people would be making a there'd be a you'd be able to do that. And there are structures Carter brings to us all the time. These crazy structures with you know, that you can sell He's going to be mad I said the word crazy, but he he's he down he looks at those things where they do try to play these crazy arbitrage situations and they're interesting. But it's not something I don't know. I maybe this is where I'm boring. >> reason why billionaires don't do it is just because it's a strictly like volume problem. There's not enough volume. >> not millionaires? I agree with you. >> A lot of millionaires do. Yeah, I mean, a lot of people retire just doing the wheel strategy. Mhm. What's the wheel strategy? >> You sell a put and then if you get a stock put to you, then you sell a call to get a call away from you. I've never heard of that. >> I would ask you to to track your time on all these things, too. Because I think if you add the time element to to all these hobbies >> It seems like it's a hobby. This is something you enjoy. You're not doing it so much for the economic outcome. You're doing it for the enjoyment of it. >> problem I have when people try to compare my index investing to like real estate investing. I'm like, yes, a levered debt is going to do incredibly well compared to an index fund, but let's put into how much time you have to put into the real estate and everything. The time that's going on these strategies is worth something, too. Yeah, I sell calls on maybe 5% of my portfolio, 10% of my portfolio, transparently. But Just play my it's it's a And and yes, I have lost out on a lot of gains when stocks have gone up, but I've also decreased my level of loss when stocks have gone down. And if you extrapolate this as a return, maybe expressed on an annual basis, I've beat the market like consistently since I've done it. >> Not counting Bloom. I'm going to I'm going >> Yes, counting Bloom. I I made money on Bloom. I don't understand. >> Not the shares that got called away, though. I did money on the shares that got called away. 3% Yes, that in a week. How is that bad? 3% in a week is 150% >> since then. But I'm talking compared to like the average stock market returns. Here's what I can't wait to see, Jack, cuz y'all have already y'all have already put yourself in a box cuz you said you're going to see your portfolio at the end of the show today. [laughter] So I So we going to get to look at your portfolio. You've also, because we've all gotten friendly, I kind of know what you make to a degree. We're going to judge you hard if we know how well you're doing in life and then we look at your portfolio, we're expecting to see magical stuff because otherwise cuz otherwise I want to I want to feel like you're you're growing with your you have so much capacity to grow with your good income. So the money guys react to my stock investing portfolio. All right, let's let's go. Okay, let's look at this. Now Now can I can I ask you a question, though? Yeah. You shared last time we got Last time we got to hang out, I kind of know what your income is. >> Yeah, so this account multiple How long have you had that income that you shared with us last time we got to hang out? When did I say my income was? Well, I can't I'm not going to say that. I'm not going to say that. I'm not going to say that. Maybe >> Here, you want me to write something? >> year and a half? Okay. Okay. Okay. Okay. Cuz I want to see a multiple of that. You You understand? >> I don't spend any money. So it's all Yeah, I mean you could you could look, this is like my my gains over time. See, I don't spend any of my money. Most of my money is in this or not that, like the Vanguard equivalent. >> And you have Let me ask you another question. Yeah. When these stocks on volatile days, like right here, I mean if there was a stock, none of them are having huge days, but if you if you lost 20, 30% in about a 3-day cycle, do you emotionally feel like you get a you know, is it is it feel like you got kicked in the stomach? Do you actually have emotional reactions to what's going on in your portfolio? >> No. So as I'm looking at this, right? Like I'm just looking at this is specifically your taxable account, so you were kind enough to let us look through all the accounts. I I was expecting to see a bunch of really really crazy stuff in here. >> It's actually a bunch of household names. The lion's share of what you have is >> It's even SPY. >> Yeah, or in like you know, low-cost ETF indices, which I think is fantastic. Uh This is like >> Vanguard. Yeah, right. It's a vast majority. And so, you just You're dabbling. So, like you Yeah, you have >> You're dabbling. >> some individual stock positions, but at least in this account, I'm going to say relative to your total wealth relatively immaterial. So, this doesn't give me a lot of pause. Like, I'm not I'm not super concerned in this account. And these names that you hold aren't really frightening names. They aren't things that I think um that I think I would be afraid of holding. I do see some losses in here that perhaps if I were worried about my tax bill and stuff, I think maybe clip that loss and find something that seems a little bit more attractive. Uh I know he really likes that one though. So, Which one is it? You could say the names of the stocks, not the amounts. Yeah. >> Okay. Robinhood, that's the one that you're really super bullish on. Uh your position right now though, pretty attractive loss in there that could be used to offset some of these future capital gains. That's a good one. >> Uh it's 20 Uh it's 20 You're down 22 and 1/2% on that position. Might be a great Again, might be a great little loss to clip. Just so that way uh in our world, losses are We don't love losing money, but whenever losses are present, we love taking advantage of those. So, that's something there. >> Can Can I Can I look at something? Yeah, I want to go I want to get to the Roth cuz that's the [laughter] one I think is going to be the most interesting. Yeah. >> I would say I I couldn't do the math because it was moving really quick before me, but it looked like 3/4 of that account that we just looked at was pretty much in what I'd call tried and true, you know, It's index fund type or or fund or stocks that are in the index are the top performers. So, you know, in the top >> It's tech-heavy. It's super tech-heavy. It's already, you know, cuz the S&P 500 is already probably highly concentrated in a lot of these stocks that you already have. I don't think yours is you're acting like you're an exotic and it's actually pretty pretty plain vanilla in a lot of ways. If you look at the 75% of this, 80% of this is doing the the same thing. So, then I'm back to my point of what are we doing here? I mean, what is the hassle is and I'm fine with that. I'm fine Well, actually I've made money on it. Like a decent amount of money. A lot of There's a number of people that made money gambling. There's a number of people that made money in sports betting. There's a number of people that do those things. You can make money on hobbies. I'm not disagreeing with you there, but what I'm suggesting is it's more of a hot You get utility out of this. Totally fine. I was nervous I was going to look on here and see a bunch of like penny stocks No, it's actually it's much more it's much more I wouldn't do this strategy on a stock that I'm not bullish on. What would you rate his portfolio out of 10? Uh from aggressiveness or for quality of portfolio? >> for his age. >> Let's say yeah, quality of portfolio considering my age, my income, the industry I work in, etc. How much time are you spending on this? I know I keep asking that. >> not. No, but you are spending time because you obviously there there you've got stuff all over the place. >> show you my Schwab screen time. I mean, maybe it's like maybe it's 5 minutes a week, 10 minutes a week. >> Okay. I literally like I don't even look at the numbers. Like I just hop on and I just like I sell a call if I need to. I'll buy something if I have some spare cash. I'm going to give you I'm going to give you a seven and a half, eight. Seven and a half, eight. And I'm also want to disclose this portfolio is probably going to perform pretty well cuz it's very aggressive. Right? So, like when you we see a year like last year, 2025 where the market did really really well, I'm willing to bet this portfolio did really really well. And that that kind Now, now the things I'll pick on is also Okay, I do see an individual 401k, but it's there's no money in that account. There is a SEP IRA where there's some money in. I would you would you strike me as with your level of income, that solo 401k should have been fully loaded. >> That It will be. Yeah. >> Okay. And that's why and that SEP IRA probably disappear, right? So, then we're going to open up some opportunities some backdoor Roth contributions, that sort of thing cuz uh Yeah, and look, you've been saving good. This is a big Yeah, cuz that's the other thing is >> It's a big How old are you again? 27. 27. That's a great That's a really, really solid portfolio. >> great in the fact of where your age and where the assets are at. And your Roth, you probably haven't been able to make contributions because of that setup. >> Yeah. So but we're about to change that by doing the solo 401k. Yeah, so there's some account structure stuff that I would totally want to clean up so you could do backdoor Roth contributions and then really give it to the man legally by by loading up that solo 401k. Maybe y'all are enough Y'all have enough profitable profitability They could potentially do a cash balance and other things, too. Graham would attest that like I have never been a big spender. Like I have never spent money on anything. Like the most expensive thing I've ever bought was my car aside from my house. And I I bought a watch. >> nice car. It's a Tesla. Okay, yeah. But it's not It's not you didn't go out and buy a Corvette. You bought like a >> Yeah. >> a >> at his unrealized gain loss. I'm assuming Is this year-to- Is that Okay, now I want to see realized gain loss year-to-date. That's going to be on here, right? Yeah, that's just interest dividends. >> it doesn't show losses and gains. Cuz I was What I was trying to see is how uh was it tax inefficient? Like, you know, so one of the one of the things that you know, a lot of people >> tax inefficient. >> Yeah, a lot of people they like trading. They like to get super exciting and then it gets to April. And one, if they have an accountant, they got to pay their accountant an extra X number of hundred or thousand dollars cuz of the 4,000 transactions they have to put in or at least 4,000 transactions they have to monitor when they file their tax return. And then there's usually huge uh capital gain that they thought You know, if they've had success and they've not been harvesting the losses. So I was trying to see where that existed, but I In full disclosure, I'm going to give you an eight. Out of 10? Eight out of 10. What would take it to a 10? Um some more well- well-thought-out strategy, right? Like explain me how you define your allocation. Cuz what I really see is it's a lot of US Fortune 100, Fortune 500 tech companies. Um which is fine, but there's a lot of concentration in a singular asset class. Okay. >> Uh perhaps for a portfolio that size, I'd want to see something a little more diversified. So, my my response to that is I think that the the asset class that I'm in right now is like tech is going to just grow faster. And and for me, I I'm very very Since I've been investing for so long, I've weathered so many ups and downs, and I also assume every single time, cuz I don't dollar cost average, whenever I take a distribution from the company, let's just say I take $10,000, I immediately take 2,000, put it into my like checking account, 8,000 immediately into into the investment account. How often do you take distributions? Maybe monthly, month and a half. >> That's dollar cost averaging. You said you don't dollar cost average. That is in fact dollar cost averaging. Okay, sure. Yeah, yeah, yeah, but but I I yeah, but I I I basically just buy as much as I can, and I buy as quickly as I can. And then if taxes come up and I need money for taxes, I'll even sell my investments in order to pay my taxes. Because [laughter] Well, here's the thing though, if you extrapolate this over a long enough period of time, then it's a winning bet. If the market went up that year. But if Yeah, if it went up that year, if it went up it went down that year, but if on average the market goes up 10% per year, you're taking a 10% advantage bet. It's like you're being the house with a 10% You love Sequence of return does matter though. You love 3 and 1/2% guaranteed so much? If you just park that much some of that money for that tax bill in a 3 and 1/2% You had to count. No, but he likes 3 and 1/2% a week. A week it's like that. Not fair enough. Not a year, man. Uh that's that's a strategy. That's a strategy. I I do think that there's room for improvement on the structure, which you already know though, cuz you you just talked about that. >> I think the structure is probably >> and you see like last year, you know, again, we we are bullish on the same things that you were bullish on. But we do still love like international holdings. We do still love small cap. And like if you look this year, especially the first quarter we saw volatility in S&P 500, it was wonderful to have those parts and pieces in the portfolios cuz they've outperformed they outperformed last year, outperformed this year. Um so again, it's an eight. I would just love to see more like thought behind it. It looks like the thought is I like this today, I'm going to buy this today. Yeah, and then just hold on to it forever. Just hold on to it forever. Yeah. So speaking of investments though, the market has hit today officially an all-time high at the time we're filming this right now. Should investors be worried about this? >> Do you know how I mean I I I figured y'all were going to ask something like this and I should know the exact number, but I don't. You realize we've had like I think it's 200 plus all-time highs this decade. Hello. I mean in the six years Yeah, in the in the Is it So I mean when markets run through bull markets, so you know, you start going up, the market's up much longer. Like bear markets typically are 11 months, but bull markets run for much longer. So you hit all-time highs over and over again. Okay, but this chart is pretty scary. This is going viral right now on Twitter and the caption is only one question, who's the exit liquidity? That's a spooky looking chart. >> Yeah, it is a spooky looking chart, but 1984, right? So we're looking at 40 plus years of data right there. That is the economy though. That's That's what's happened. Think about where uh US GDP is today relative to where it was in 1984, right? It's a very different thing. The pizza pie gets bigger. Um should you be concerned about the market hitting all-time highs? If you haven't thought about your asset allocation and having a portfolio that matches your risk tolerance, your risk capacity, and your unique financial needs, then yeah, you should be worried about that, but you should have worried about that before the market hit all-time high. Uh Warren Buffett, you know, is famous for saying be greedy when others are fearful, fearful when others are greedy. What you never see Warren doing is when when markets hit all-time highs, he doesn't dump his portfolio. He doesn't sell his positions. He may store up additional cash when he thinks there aren't things that are attractive, but he's not being afraid. He's waiting for that moment where he actually can be greedy when the opportunity persists. So, I think if you're in the right portfolio, well-structured, well-thought-out, right asset allocation, right asset location, the market does go down from here 10, 20, 30, even in 2008 37% over the course of 12-month period, the right portfolio should be designed to weather that well for your unique circumstance. >> look, I I get I get the fact that a lot of this is concentrated in some of the biggest AI companies and technology companies right now. What I'm trying to figure out, just being honest, cuz we don't By the way, I'm going to be transparent to you. I don't have all the answers, but you should also know everybody who tells you they do with the confidence, they don't. I'm fully in the system and I can tell you they are they are probably trying to sell you something if they act like they have it all figured out. What I'm trying to figure out for myself is when you see this big run-up, I've I'm old enough that I've been around for the personal computer coming on the scene. I've been around long enough when web, you know, and the internet changed the world. And here we are in a new disruptive technology with AI coming on the scene. I'm trying to figure out is this a, you know, what everybody's worried about is a bubble? Are we truly at this what Elon was alluding to at this new new disruptive side of things where efficiency and profitability gets expanded at a level we haven't seen. It's kind of like, you know, the the horse and carriage compared to what happened when you you got transportation. And then take it up to another level when you got air transportation. We don't know yet. And that's the part I I trust the economics of of an index fund more than I do a manager that we'll see. And I And plus, we're diversifying. I mean, I will tell you I I just got off a I had a client meeting right before this interview where the client you know, when when had the in the meeting, I thought he was retiring in the next two to three years. So, we planned on having a lot of heavy discussions on let's start all-time highs right now. Let's start bringing down the the risk profile slightly. Not We're not doing apple cart turnover. Exactly what Bo said. But, we're going to bring it down slightly. He let me know he plans on working for many more years. So, we're going to let it keep rolling. But, you should make sure your allocation is good so that before something big happens, you don't have to react. You're good before, during, and after. That's what diversification is supposed to do for you. I'm always amazed that people think that they're going to do and that's why I always pick on the view for life. I love the S&P. But, there is too much of a good thing is if you think that you're going to do this until you're 55, 60 years old, then you're going to slam your retirement into the ground and and just you'll be okay. That's scary to me. I mean, and I made the analogy of air transportation on purpose is because if you flew commercially and the pilot got you up and then drew threw you into the ground as fast as possible, you would never fly commercial cuz you'd have a fear, a phobia of it. But, what you want to do is you want to glide path this thing down, live your best life, and not have to react no matter what the market. Cuz there's already going to be weird stuff that happens to you emotionally when you leave the workforce. So, you might as well make sure that your money can actually keep you safe while you're you're you're kind of going through the ups and downs of the volatility. >> Who do you think should manage their own portfolio? This episode is in partnership with Airbnb. Graham and I are always traveling for the podcast. We were just in Nashville filming a few episodes there, and let me tell you, the food was incredible. I had the absolute best appetizers I've ever had. There was this dough ball and these steak skin potatoes. It was incredible. But, let me ask you this, do you ever think about your place back home when you travel? When you're gone for days or even weeks at a time, you can list your space on Airbnb so it works for you instead of just sitting empty. And if you've ever considered listing your space, but you weren't sure how you'd manage everything while you're away, well, that's exactly where Airbnb's co-host network comes in. With this, you could partner with a vetted local co-host who has hosting experience and can help take care of the important details for you. A co-host can manage the reservations, communicate with guests, and handle the on-site logistics so everything runs smoothly while you're traveling. If you have upcoming travel, you probably don't think twice about your home sitting empty, but you could bring in some extra cash while you're away. I kid you not, a couple years ago before I had all of the rooms in my house filled up with roommates, I actually listed a room on Airbnb and the entire process was genuinely so easy. The extra cash was amazing and I was genuinely just so surprised at the simplicity of the entire process. If you're trying to make some extra cash on the side, I couldn't recommend Airbnb more. If you're ready to host but need a little bit of help, find a co-host at airbnb.com/host. Who do you think should manage their own portfolio? Um, I think there's a lot you know a lot of people >> is really interesting. People are like, oh well you're a financial easy point. I think Jack should. Yeah. [clears throat] A lot of people think, oh you guys are financial advisors, you must think that everybody should hire a financial advisor. No, not the case at all. There are a lot of people out there that are incredibly capable of managing their own portfolio. We we actually say for folks that are just starting out, while you're building out in your 20s, 30s, really until your assets hit a critical mass to where complexity enters in and you have uh 500, 600,000 dollars invested, there's so many great resources out there with YouTube channels and blogs and articles and self-management is not that difficult. And and perhaps AI is making it even easier cuz now you can get real-time feedback on real questions you have. Answers aren't always right, so you want to make sure you kind of understand that. I think that a lot of people can self-manage up to that point, but generally speaking one of three things happens in your life. Either the gravity of your decisions is so great that you feel uncomfortable making the decision alone. Meaning like, okay, if I make a 10% boo-boo on $10,000, it didn't change my life. If I make a 10% boo-boo on a million bucks, okay, that's more significant. I don't know what I don't know. You know, my tax return used to be two pages long and I had my full Now I've got a different compensation structure. My Now, I have a rental property. I have all these other things going on where complexity has happened or I'm just so busy stuff is falling to the back burner. Me Meaning like, I know I'm supposed to rebalance, but I just haven't had time or I know I'm supposed to think about my allocation, but I haven't looked at it in two or three years. I think if any of those three things happen, that's an indication maybe I'm not at the point where I can self-manage. And And a lot of times it's not even people who can't do it. It's people who aren't able to do it based on the current station and circumstance in life. Uh the fourth one I'll throw in there is cuz we have some pilots that are clients that I told them in another life you should have done this for a living. Cuz I look at them I mean, you get they cut become clients. Well, they prospect first. Their asset allocation Their Their portfolio is 10 Their Their you you you see they've run all the Monte Carlos, they've done all the tax planning. You're like, you guys are geniuses. You're brilliant. And then, you know, and I'm honest enough when I when I was doing prospect calls with these guys, but you don't really need us. And then, they let me in on you're right, but I'm worried what happens when I'm dead. Mhm. And um I'm getting old enough that I'm, you know, I don't want to I I I don't want my wife or my spouse to be concerned about who takes us out. So, we've actually had people hire us who were doing a superb job of self-management, but they just wanted us we were their insurance policy in case they left and they wanted to make sure their spouse and their children had somebody in the background that could, you know, that thought like they did about about money. What should those people be investing in overall? I mean, we love index funds. Low-cost, well-diversified, broad index funds. I think if you looked at the portfolios we managed, the the lion's share of those are there. Now, there are areas where we do think that inefficiencies exist where maybe an active type fund might make sense. But for the vast majority, low-cost index funds. And And And the self-managers that are young, that are just starting out, I think things like target retirement index funds are a great solution. The reason Bo gave the the game earlier. We love index funds because because we don't talk about this a ton on the show. It's just the market because of how fast information travels everywhere now, it's hard to to think you have knowledge that somebody else doesn't have. So I I think just buy the market the efficient That's why when he talks about efficiency, like if you could truly do a trading strategy that generates 100 plus percent guaranteed a year, it would disappear so fast. I mean, it's like we even Cuz everybody would know. >> Everybody do I mean, we've even seen it cuz we really did have people present to us the the crazy arbitrage that you can do on sports betting and it's true. You really can make great money for a moment because their systems are so smart that they'll start limiting your bets as soon as they start realizing that you're playing those type of arbitrage trades the the sports betting sites. It's the same way with normal investing, too. If you really had the better mouse trap, I just don't I don't I think the things The exact reason of what you're saying is like is what has prevented me from putting a meaningful amount of my portfolio onto a strategy like selling covered calls because every smart person says that the market is efficient and that there is no way to get 100% a year. >> index and save yourself the hassle. It's still to me the logic does not make sense. Like I would love to be presented with an argument aside from just some theory that the market is efficient and you can't get it with actual math and data suggesting >> But but there's Look at the SPIVA research. All these If you could be an active manager that is just trouncing the S&P 500, go look at the SPIVA research. If you go to SPIVA was it spiva.org or whatever is but it shows you managers will beat the S&P but not consistently. I think it's that they probably have they're probably trading huge amounts of money which is they're that's Well, that's the other problem. That's a whole 'nother problem then. I think that we let's let's discuss this afterwards at dinner cuz we're doing dinner afterwards and I would love we'll we'll say if they're right, if I'm right, or if we just disagree to disagree. Jack's going to cut back in like tears in his eyes. [laughter] I was wrong, guys. But I will I think it's it's actually freeing if we tell the general public that it's okay to buy an index fund. Even if you have millions of dollars, it's okay to buy index funds cuz even there's still some sexy exotic stuff you can even do with index funds. Grammar had a had off, you know, conversations. Really cool things that are out there down the road if you're trying to get creative with borrowing money and other things, but you can just start your foundation still on just buying the general economy. >> And I think a lot of people are surprised to hear that even folks like decamillionaires who have, you know, tens of millions of dollars invested, a lot of them invest their money the exact same way as folks who have tens of thousands of dollars. Low-cost, well-diversified index funds. Should they be invested the same way? Uh it depends on your unique circumstance, but I think in a lot of cases, yeah. I know for a lot of the folks that we work with, Living they're doing the exact same thing. Buying low-cost S&P 500, diversified, appropriate cash, appropriate risk match metric. So here's here's an interesting theory. I think if you have less money, you depending on age, obviously. Let's just say a young person who has a lot of money, a young person who has little money. The the the person who has less money should probably be a little bit more aggressive because to them you can't really do anything with $10,000. >> Like if we if you don't Do you not You don't think the S&P is aggressive? You think only the Qs? You know, what are you thinking? You know, you could be more tech-heavy. You could maybe have a couple stocks that if they end up doing well, more more risk capital. You're going to say like Nvidia hood. And there's some recency bias to that to that analysis. You'd say if if someone has $20 million, and you'd say, "Oh, well, you should have tax-free muni bonds. You should have, you know, a little bit of this, a little bit of that. International index funds. Stuff that's more oriented towards capital preservation." Because once you have $10 million, you've won the game. There's nothing in your life that like for a reasonable for a normal person that you want that you can't afford. But if you have $10,000, you can't raise a family, you can't afford a new car if you need one, you some you know, let's say your car breaks, you know, you might have a hard time transporting yourself around the city. Uh you still need to work in order to afford the things that you want. Someone with $10 million does not. So like it's reasonable that they would go into capital preservation as opposed to the other person going into more like a >> is not capital preservation. I mean I mean look it's not it's not wild out, but it's also not it's not capital preservation. I would ask the the the risk of not being a successful investor is greater for folks with smaller sums of capital or lower income. That's why the the person who has a smaller income but a lot of time and they're only able to save, you know, I can only save a thousand bucks a year or five thousand dollars a year. It matters for that person that that five thousand grows and does well because they are really really counting on it for that to be multiplied through compound interest over years and years and years and years. If they say, "Oh, you know what? I need to swing for the fences. I'm going to put all of it in Nvidia or or an Apple or fill in the blank." and it doesn't pan out, I would argue that that was more Got some behaviorally, too. Because I mean I look I I have a great friend, came to America and he starts making good money. Started some businesses here in the United States. Starts making good money and he asked me how investing works. I was like, "Let's let's dabble into the Let's get you in the S&P 500." You know, we set up open up like a Fidelity account, set up a contribution. I kid you not, it was probably two months into it. He calls he he tells sends me a text or calls me, I can't remember, and he's like, "You didn't tell me I could lose 12%." And I was like, "No, this is it's part of the process. It's going to be A-OK. Don't worry about it." So he's I found out he shut it down. So he only did he only did two months. And but you know, they were decent sums though cuz he was going to dollar cost average some pretty good chunks cuz he had he had he had good money and he had some good savings. So these were two decent tranches that he put into the market. Fast forward 5 years, we're still good friends. He comes to me and he goes, "I think I need to fire this thing back up because I looked at this account and Brian, this thing's up like 60%." And I'm like, "Yeah, this is the way this whole works is that yeah, you know, you you put the money in, you just put You can't look at it daily." And that's what I I I worry if you put something too aggressive for somebody brand new to the money-making process and how the economy um works, they get discouraged. And And what And for a new person who doesn't know how economies work, what feels risky in the in the in the short term is actually your best advocate and success vehicle for the long term. And what feels safe in the short term is actually detrimental to you in the long term. That's what All these people I grew up in a household, we didn't have money, but my parents were great savers. Really good savers, really disciplined. I get my discipline from my parents. But, they did CDs. CDs will gut you with inflation and everything else. If you don't understand the value of actually making your army of dollars work, you're you're you're doing the hardest part of the discipline, but never getting the part of letting your money do the work for you. So, we've been pretty open about how much we love our team here at the Ice Coffee Hour. And when we were looking to hire Gavin, he wasn't just qualified, he was eager to learn about the job, excited about the podcast, and you could just tell that he wanted to be here. And that's what really made him stand out. And honestly, that is everything when you're hiring. You want a candidate who's passionate about your role. But, you can't get that insight from a resume alone. Unless you post your job on our sponsor ZipRecruiter. Because right now, you could try it for free at ziprecruiter.com/ich. And ZipRecruiter has this incredible new feature that shows you the most interested and qualified candidates first, so you meet the right people way faster. 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Well, not saving I think is one of the most common you see of the general public. Just never actually getting started saving or putting something aside. Uh living at their means. Because everything we're talking about is precipitated upon the idea that I'm going to defer a little bit of my income, my pay, my whatever today for some greater outcome in the future. And a lot of people don't even make it that far. I want to see the horror stories. Well, the other the other thing you see them I mean and and the stats show it, too. I can't remember if it was Schwab, Vanguard, one of the big investment houses talked about how much 401k money is just sitting in cash. Do you know how disgusting that is? To to think about how much money is in a in an asset you can't even reach until you're you're in your 50s to 60s is just sitting in cash? That that breaks my heart. I think that's a huge mistake. We see that all the time. Cuz a lot of people also don't know when you do rollover transactions, you know, it's a two-part transaction. You transfer from your old job to your new job, but then the second transaction you actually have to invest the money. A lot of people go through the hard work of transferring, but then it just sits in the the cash reserves or the stable value and never gets invested. That's disgusting, too. You know, say not saving, not letting your money work. I'm trying to think of the >> I'll say I've got two horror stories for you. One, not knowing when you've won the game from a risk standpoint. Tell the story. You know who I'm talking about. I won't I don't give too many details. >> real estate >> we had we had somebody that was in our life that and I saw their net worth I mean, cuz they left some stuff on the copier machine one time. >> And so that's what you do when you see someone leaving papers there? No, but it was it was it was a very successful this gentleman had a small business and it was very successful. What he started off as it was it was more of a food industry job. He had enough his son comes along and convinces him, "Hey, use some of that financial success. Let's get into real estate development." And they got into doing real estate development. And I realized pops is set for life. I mean, and and by the way, pops has done some good things. He owns commercial real estate. He's you know, he's he's got all these things going on. Well, they start getting into you know, residential developments. And they took on more and more debt. And unfortunately, they put up like I knew the commercial building that we had some affiliation with them. It was debt-free. It was completely but a building can be debt-free, but if it's promised to the bank >> as collateral as collateral on some other deals that you do and that's why personal when I used to work with professional athletes the personal guarantee was the thing that gutted most of these guys is because they don't realize what they're signing on to when they sign those personal guarantees. Is that and we watched this poor this multi-generational family that had every millions gone to nothing. And and essentially you know >> losing the building and losing all the assets. >> And and they just did not recognize hey we've won the game we don't need to take on additional risk. And then we have Don't run up the score. Another This is a horror story. One of our recent guests on making millionaires you know we sit down and kind of do this have this conversation with them. They had a financial advisor who had this unbelievable deal that they ought to get into and you just give us some money. And what ended up happening is the advisor said hey we're investing all this money in this development in Texas they did not live in Texas. And turns out the advisor just fleecing them just taking the money never actually invested it ended up losing his license having It was just this horrible thing where they lost hundreds of thousands of dollars from a nefarious actor because they believed him and trusted him and didn't actually know where their money was. I mean we've had cases I mean because we've been doing this decades now. I mean I had somebody who who convinced a widow with their 401k money to buy a bunch of equity index annuities that was you know fortunately because those things have look back periods we were able to go and and unwind it and fix it you know and kind of like the nick of time. You can imagine you know we've done some things to help people out. >> Another retired couple paid off house prior financial advisor was trying to convince them >> to do a cash out refi to take all that money >> money in the accounts with him. >> and go invest it and also buy a bunch like insurance annuity products out of the equity in their paid off house and they were already retired with pensions. It was Yeah from a risk standpoint that's that was less than fiduciary for sure. >> Did not make did not make a lot of sense. >> So, managing 2.2 billion dollars, who are the best investors aside from pilots, and who are the worst investors? Uh you know, I think anyone engineers tend to be like very good. If you work in like a a pragmatic field like that, engineers tend to be really good. Accountants, people that are in finance generally understand how money works. Uh but it's really interesting. I I do think and Brian said this or I think there might be like a savings gene that we're born with. People that just understand this cuz you would be amazed at all the like different and wild vocations where people can be very, very successful even if they're not the attorney, doctor, engineer, you know, that sort of thing. On the stereotypical high income careers, the one now look, I have clients that are in this field. So, I don't want you guys write me and say I'm I'm in that field. Why would you say I'm good with money? Yes, y'all are good with money. You work with us. You're a client. But I am amazed at how few attorneys we have as clients. Now, we do have attorneys as clients, so don't mishear this. But I I don't I'm one if you look at engineers, accountants, um teachers, attorneys, doctors cuz we have a lot of doctors, too. And we pick on doctors. Doctors already get picked on a lot. >> But there's a what what what I think is interesting with medical professionals, there's a wide disparity with >> They also have a target on their back. There there are some that are like unbelievably astute and incredibly good at managing money, and there are some that are unbelievably egregious and make horrible decisions. It's a it's a wild >> I I don't I I just I'm trying to figure out if attorneys personalities just don't lead to a lot of I mean cuz obviously there's a lot of wealthy attorneys, don't get me wrong. But seeing them in practice, working with financial advisors, I don't see as many. We do have some. Doctors, now we work with a lot of doctors, too, but I think that they have the uncomfortable thing is that they go from tremendous debt to making great incomes. So, there's an entire cottage industry that's trying to sell them products to to kind of lock their money up in in a lot of ways, too. And I think a lot of people that have the most success are people that are able to I'm going to say build wealth slowly, but like build it consistently. Some of the things where it doesn't always turn out turn out great. Professional athletes who like sign a big deal, big contract, but it's relatively short-lived. People that inherit a lot of money from a first or second generation. Big windfalls. Hey, I sold a family piece of business or I sold a business that was not liquid, but then it became liquid. Windfalls are also an area where it's kind of touch and go in terms of how well they're going to steward that. >> Good ones. Blue collar businesses. Oh, yeah. >> They usually they crush it. The small business owners, they crush it, especially when you can get in there. That's my That's the ones that I get the most like want to high five after I walk out of a meeting on because when you see their tax structures and you see their account structures and you show them the tax savings on certain strategies that you can do. They cuz Listen, if you're a small business owner cuz you know what happens with small business owners, they go from their paying taxes, but then one year they hit they actually hit it where they their income bounces and then they realize they go meet with the CPA and the CPA is like, "By the way, this year you owe $75,000 plus you owe an underpayment penalty of like six or $7,000." And that's just in the first year they hit it and they're "What? I paid all this tax already." And you know, so you can imagine they already have a relationship with with with taxation that they don't love it. So, if we can go in there and show them through just good retirement structures and other things or even business structures, that we can we can clean that up. They love you. You can imagine. It's like I guess it's a high five moment. When it comes to investing, I'm curious because Vanguard now predicts lower than average returns over the next like decade. Well, I I saw your I saw your Substack and I chuckled to myself. You have to know, Graham. I have to I have to I chuckled when I literally went and saw it. Because every year and if you go we could probably go pull the tape cuz we react to that every year. Vanguard >> of these years they're going to be correct. >> tells us, "You know what you ought to expect from the market going forward?" >> unrealistic, does it not seem realistic? Does it not seem That's going to be the easiest job. I want that guy's job. I want that guy's job. >> It's always back coming out of the Great Recession, we saw some really, really good years. 2009, 2010, all the way up to 2012. Then 2013, I think the market made like 32% and they said it again, "All right, market has recovered, poised for below average returns." They say it over and over and over again. And at that point in time, you would have suggested, "Man, well, doesn't it look like this? Look at all this stuff going on. Look at what's going" It always, quote-unquote, looks like that and yet it doesn't manifest. Now, could there be a period of of underperformance? Perhaps, yeah, that could be a thing. But is there something going on right now distinctly that would suggest the next period is going to be underperformance? I don't think so. They literally said 10 years ago that over the next 10 years, you're going to average 4%, 5% >> If you look at what the broad markets have done, it smoked it over the last >> 17 to 20% in the last 6 years. >> Every year, there's typically a a 14 to 15% entry year up and down anyway. And then if you think about what we've seen historically, like broad markets like the S&P that we've already had all these conversations on, they typically do what's called a V-shaped recovery. They will either get overpriced really quick or underpriced really quick in the you see snaps. You know, it's the you know, it pops. Like we call it the rubber band effect, you know, is so that's why if you just dollar cost average, I know it's boring, I know it's not sexy, but if you just consistently buy, you get to capture all that stuff. It's a great volatility um protector from yourselves is just being consistent with your behavior. The difference is like real estate, cuz I know you have so much background in real estate, it's more of a you know, a U-shaped recovery. You know, you it's not uncommon that you'll see the real estate market not do V-shaped recoveries. They're more much slower moving and I think that's why sometimes we have trouble or at least the public does differentiating that different things act completely different. And that's why when Vanguard tells me 3.8 or 4.8% I'm always like that a moment in time. I mean last April were we down 20%? I mean it was So if you were basing decisions off of that, I think you would drive yourself crazy. >> But I also think it's like the weatherman, right? If the weatherman predicts a beautiful sunny day and it rains, you get pretty upset. But the weatherman predicts a rainy day and all of a sudden it's sunny, everybody's in a good mood. >> I think that's what I've that's what I've often thought that they have had their thumb on the scale saying, "We're going to get you 4.8% then voila! Oh, another year we got 8% or 12% this year." And like everybody's like, "That's right." Under promise, over perform. >> Yeah. Well, speaking of over performance, what do you think about investing in Pokémon cards? It's There's a lot of people that do it. >> a lot of content on that though, by the way. I I don't do it myself, but I've watched all those seasons. I'm fascinated by the collectors. >> And what's wild is like so my brother, he has my him and my nephew kind of gotten into it and they'll do the thing and do the packs and he's opened a couple packs that had like some very valuable cards. And he's actually shown me how they have everything like cataloged by like what it is, how much it is, what the RO and it's wild. Now, it's a collectible like anything else. I I would not call that investing. That would not be my nomenclature, but it is a collectible that does have the ability to increase in value over time, no different than other types of collectibles that can increase in value. >> I've always wondered. Now, look, I'm not I'm I do not I'm putting the disclaimer out there. But it's just like I I'd be curious and maybe somebody knows this and they put it in the comment section. Like Elvis, now maybe because the new movie came out it's it's back the market's back up or but I've often wondered cuz that audience is aging out. Do are his collectibles like still worth as much as they were cuz I've also wondered this like cuz collectibles I I have to believe is there some ebb and flow on the age of the people? Exactly. That's the inefficiency Well, that's why they're saying right now it. Right now, collectible is going to be Justin Bieber and Taylor Swift. Oh, really? Huh. But I would I would imagine their memorabilia is already It is, but imagine in 30 years from now when a lot of these people have a lot of money and maybe they're not performing as much. What I was saying is like Pokémon was a big thing when I was when I was a kid, right? And it seemed like there's been this new resurgence that now young kids these days it's still a big thing. So I don't feel like if it were going to be a collectible it's going to be a long time for it >> But but you realize you are getting to the age now where things are you're going to see the boomerang is starting to go again because things from your childhood will now become the hot commodity just because of you are the age of you're the parents of the generation of kids. Consumption is profitable. So there are people who are out there creating markets to take advantage you'll see the movies, the music, everything is going to be catering to your group to when they're creating all this this creative content. So what percentage of a portfolio should be allocated to Pokémon cards? I mean look, if you want to cuz we let people do speculative stuff. So if you want to if you want to dabble with 3 to 5% of your portfolio go go knock yourself out. That's more but it falls in the back to the to the Jack category of hobby. I mean cuz that's what I'm not picking on you about that. It's just but you said you get fun out of that. >> get fun out of it, yes. I'd say less than 5% less than 5% of your liquid portfolio would be okay to do something if if collectibles are your thing or individual stocks your thing or you know, cover call option strategies your thing. I would try to limit it there. >> Here's what I found really interesting is that there's a theory out there that says that young people are not buying houses because houses are so expensive. So instead they're putting their money in collectibles like Pokémon cards, watches, and cars. And that's why a lot of those things are going up in value because think about it, maybe buying a $600,000 house is unobtainable. Buying a $20,000 Pokémon card you can't theoretically obtain that or buying a $80,000 sports car. But the thing can can I tell you the only problem I have with collectibles is kind of like cuz I went through a watch phase myself. Um now I'm all seems like the wealthier I get the more gizmo I get and instead of looking at the luxury watches the thing nobody ever talks about is the market drag cost to actually turn what the market value is into liquid value because you usually have to go through brokers. You typically have to or a trading site that's going to have a some type of trading cost to it. So the market what and we all get it frothy and excited about it, but if you actually I think you took into account all the cost that you'd have to turn that into liquid cash I don't think it's actually as valuable or as as people say. I think it's great if you sell that. Like I think Mr. Golden probably does a great living being the marketplace for that stuff cuz he get it's a pretty nice rake on that doesn't he? But I mean but if you were thinking this is how I'm going to build my wealth the same thing if you're trying to sell watches or jewelry they're going that the market is very inefficient on what they're the costs are going to be for you to turn that into liquid cash. >> Yeah and and they're all unique products so you'd have to I'd want to you'd want to feel pretty confident you had the right one, right? Not all Pokémon cards are designed the same so you hope that you buy it for $20,000 today and it's worth more in the future but it's only worth more in the future if someone else is willing to pay more than you paid for it. I would tell that young person, "Hey, if you have $20,000 instead of doing the Pokémon card, if you're going to set yourself for a higher probability success, go buy $20,000 of the S&P 500. You have a higher probability that in the future that S&P 500 be worth more than it was when you purchased it." >> But I do want to give one one exception is that cuz I've had two examples. We we had a client of the farm who was making six figures trading Disney pins because he was just an expert at the market and there aren't a lot since it's such an inefficient marketplace he'd go find pins, you know, and you know, whether it's eBay or elsewhere and people not know what they're worth and he'd go basically steal them. It's kind of like your story. >> active that's an active market. >> way. He he knew the he knew the knowledge. Well, also cuz you always hear people say don't buy boats the best two days own a boat is the day you buy and the day you sell it. But then we we had we had a client that also made a great living buying trading boats. And but once again, it's because he was an expert. It's back to my point earlier bringing it full circle. Sometimes it takes 10-15 years to develop the expert where you can see stuff that nobody else can. But you have to take into account there's a skill set or a time component that that also went into that that that efficient that you built a skill that the market doesn't have. And that's why it's easier just to buy the index if if you can't go out there and spot that. And if you don't know if you're the expert or not, then you're probably not. >> not the expert. What are the riskiest investments that you both have personally? Well, I would argue like commercial buildings. Would does that does that count as risky? Is that No. No. No. No. No. No. No. No. No. No. >> What are you talking about? Triple net commercial real estate. Come on. No, it's you know what I mean? It's Uh I would argue that that you know that kind of stuff is risky. You know, we're small business owners, right? There's a lot of volatility in small business. So that Okay. No, it's investment. I don't [laughter] mind I don't I know what you're arguing. Where where have you put your money? I dabbled in crypto. I dabbled in crypto for a while. Um I did it for about a a three-year stint and I lost money on it. So I quit. Because I just I I was trying to dollar cost average into it to see if that would work. And it was just The thing that bothered me about Bitcoin >> same problem like the other guy you were telling about and then four years later like the guy out But let me let me defend my position. I and I'll admit I I was exactly if I'd have stayed the course, I'd have I'd have done okay. But what I didn't like about it Graham was the daily volatility. It felt it didn't feel like an investment. It felt like a speculative play based upon how much play was every day. Um I mean when you have four, six, eight percent you know every day on your trading. That that's that's weird to me. I mean I just feel I feels like the market swings. And we still like right now I I'm barely keeping up with Bitcoin anymore because I when I gave off And and the other thing that scared me off from it was when the government put that line across the top of your 1040 and made you basically yes no are you dabbling with cryptocurrencies. I felt like they were setting a trap to a degree cuz a lot of people out there marketing hey this is outside of the government you don't have to do it and I'm like no taxation is not outside the government and if you're not checking that box yes you don't and you don't think coinbase or even if you're putting this stuff in vaults and stuff there's things I don't know if you're keeping up with some of the geopolitical stuff. They just had a big announcement that a lot of the Iranian Bitcoin and stuff has been frozen. How do they know about it? You know when we had all the protests up in Canada they froze all the Bitcoin of those church. How do they that's what you're you're told these things that about and I just don't think it's this disconnected as everybody thinks it is and I I worry the volatility makes it feel more like a speculative play than an investment and I'm more into the investment. Emotionally maybe it's cuz I come from an accounting background I don't get my highs from from from riding the speculation. What price did you sell Bitcoin for? I mean it was probably in the the mid 30s. It was in the mid 30s so it's around 35,000 probably. >> So you would have doubled. Yeah I would have doubled from here. I would have. But you know but I have no regret I would have done okay. [laughter] I would have done okay. I mean but but realistically I could have tripled but now I would have been back to double only in like cuz we went up to 100 we we went up to 100 how how how high did we go 120? 125. Yeah 125. So I mean but look how crazy that ride is. I mean I would have been cuz the other thing is I I already told you the Apple story. I mean I still kick myself on that one because emotionally I started getting reactions. Now look as a percentage of my assets it wouldn't even a rounding error of a tenth of a percent but yet I was mad that that it was down and it's the Apple I mean I should have held on but you don't know and that's why probably the craziest thing I have now is I do have close to seven figures in one stock. And um and I've just told myself I'm going to ride or die with it. stock is it? Well, >> [laughter] >> should I say? Yeah, yeah, yeah. >> Should I say what it is? Is it okay to say? >> I think you can say it cuz you've owned it for a long time. Okay, I in 2018 um I got my first Tesla. I got the Model 3. I got the Model 3. >> it was Tesla. I got the Model 3 in 2018 and I had one of the early versions. It was cuz I remember I'd ride by the Coffee and Cars like where all the exotics were here in town cuz there's a lot of fancy cars here and I watched all these these people with their Lamborghinis and right cuz the Model 3 when it first came on the scene people were like really excited. Now we see them everywhere. I mean you can go I can walk out the door and probably we can throw a rock at 12 of them but but when they came on the scene and this is the first time I drove a car that people were like ripping their necks trying to look at you and everywhere you pulled up you know, you people would want to talk to you about it. So I was like holy cow this thing is pretty magical. So I put $25,000 into into Tesla back at the beginning of 2018. You can imagine it's done pretty well. >> So you're at close to seven figures now. Yeah. Now if you sold some of your Tesla >> put some holes on it. It seems like you're a little over weighted in that >> Can I tell you the other thing I am excited about? It's in a Roth IRA too. Is it actually in a Roth? >> a Roth IRA. So I am I I feel I feel like I have to >> the best investment you've ever done. It it's pretty good. Now now the best investment is is hiring Bo. >> [laughter] >> There we go. I hired Bo in 2008. That was probably the best you know, but yes from a individual stock it it's been the best investment. >> Incredible. And I've just decided I'm going to ride or die with it at this point. >> There's no plan, there's no goal, it's not if it hits this amount you're going to do something. It's just like money for the sake of it. Cuz as even as a even though that is at that level it still as a percentage of my holdings is is just it's not enough to move the needle. And so for you you don't have a story like that. >> Uh well, I have one similar but it's way it's it's not as exciting. Uh I also own Tesla stock. Mine's not quite seven figures. Uh but I was going to do mine was a content play. When they first when they very very first announced the Cybertruck I knew how much Brian loved his Tesla and written it off lunch and I was like, "Oh, you know what I'm going to do? I'm going to see if I can create some content." So, when they announced it, I started just dollar cost averaging buying a couple of dollars of Tesla every single month, right? And my plan was by the time the Cybertruck actually came out, I was going to create some content around how to this is how Tesla paid for half of my Cybertruck or whatever the whatever the thing was. Well, it ended up coming out and it was not as like interesting or exciting to me. So, I decided not We decided we're not Cybertruck type. I was like, I don't I'm not really but I was like, well, okay, I've got all the stock and it and it did what I thought it would do. It was certainly more than enough to buy the buy the truck. I was like, but you know, I'm going to hold on to it. First for some of the same reasons Brian said. I'm like, I've got it. I don't really want to pay the tax. I don't want to realize the gains. So, I'm just going to kind of consider that a lifetime holding. So, that's I guess technically that's my riskiest investment. Um My wife forbade me from buying the Cybertruck. She thought it was so ugly. I couldn't do it. And what's the most that both of you have lost on an investment? Because it was a speculative play. I mean, that Tesla's been all over the place. But you haven't lost. You didn't lose. Yeah, you've you've made a ton of money off of it. What have you lost money on? Uh you know, there was we did options for a while. This was not a ton of money, but it was a great learning experience. You know, we put a we did some options strategies. This was way earlier. Back when I got the CFA. Very early on. This was We were like, let's flex the muscle on this investment. >> I thought I had the market figured out. So, I came up with some um option strategies we could deploy. Uh I was the strategist. Brian was the capital back then. Uh and so, we made we We doubled in in a month and a half. We thought we were geniuses. Worst thing that happened with a strategy is you actually hit it the first time. So, we turned 5,000 into 10,000 like in a month and we were like, we are like, "Bo, we're going to be so rich." >> then I was like, "Hey, you know what? Okay, this was good. I have another idea." And I came up with another idea and this is what's so frustrating. We were going to Uh we were going to buy some long calls and we're going to buy some puts on a on on a on >> Well, we can say it's probably cuz it's kind of fun to think about it Netflix. >> Oh, wow. >> So, we bought calls on calls on Apple cuz we were bullish Apple and we were going to buy puts on Netflix cuz we thought Netflix was overvalued. >> And it was. We were right. And here's what's wild. >> But this is why you have to be worried about the time degradation. That's a real thing. >> sell them. It was like 6 9 months some something like that and I think Netflix was trading at like 300 or something at that point in time. Uh and the time ended up running out options ended up expiring worthless cuz you know it never And I kid you not it was like less than 6 months later I think it was less than 2 months. >> later it would drop down by like $70 >> 30 or 40% >> $70 [clears throat] or $80 >> It was clear it was a huge drop. We would have made a fortune. If we would have been 2 months >> But we realized that you can be right on a trade and still not make a dime because the time element of doing contracts it it it it can hurt you because you can be spot on but markets aren't efficient in the short term. They're very inefficient on the short term. You can be spot on that something is overvalued, it's a bubble or whatever the case may be. Now look, Netflix turned out to be a great company in the long term. That's one small one more, you know, cap uh you know, feather in the cap for being a long-term investor is that even if you would have ridden that stock down the 40% where we were right on the overvaluation, they caught their stride and went right back up cuz they were still you know, there's been frothiness. All companies deal with that and that's why I like being a long-term holder. >> But that's why the lesson the lesson I took away from that is as an investor now since that point until now, I have a really hard time betting when there's a time constraint. If I'm going to buy something invest in something, I want to be okay this is a Warren Buffett mantra again being a lifetime holder of that thing. If I buy this, I don't care what it does this week, this month, this quarter, this year, this decade I'm going to be okay holding it long term. That's why most all bets even if I was going to do some sort of option thing, I want to be long. I want to be bullish on whatever that is. Uh cuz it's just so hard to get the timing right when it comes to investing. The market has a way at least in my experience of making us all, even the smart ones, look like fools. What are your thoughts right now on the real estate market? Because here's a few other stats. 75% of US homes currently for sale are unaffordable with the median income household, and 97% of the US are considered unaffordable by historical standards. >> Mhm. It's hard out there. >> We just did a a show that's doing really well, cuz I think we hit a chord with something, should you own or rent? And we went deep into the data. And cuz something I've been on the on the rooftops screaming. I've kind of Cuz this is frustrating, though. >> Yeah, I mean, cuz that's I want people to be able to buy a house. But I also want to be be I want people to get good information so they don't get themselves in a bad somebody give them the expectation that they should buy a house because that's the next thing successful people do, and get themselves in a bad situation. And what I've been telling people, and I'd encourage you, please go check out that show we did cuz it was a super deep dive. I'm not going to be able to do it justice with this quick answer, is that for a lot of people, you know, the market made 50% in like a 3-year cycle on residential construct You know, if you think about what houses went up. So, to think that that reversion to the mean, cuz like I said, it's not a V-shaped recovery uh with the real estate markets, they typically are much slower moving. I think you're going to see real estate likely might underperform for a period of time. I mean, you're even seeing it like a lot of a lot of markets now have inventory levels exceeding 4 months, which is something that we didn't see that long ago. We're starting to feel like that it's a buyer's market more so, but it's not there yet because also the interest rates went up to a point where 50% more your your monthly payments went up 50% just off the interest rate alone. So, don't do don't feel forced to do it. Do it because it's actually something that makes sense for your personal life. >> So, from an investment perspective, we would argue primary residences are not an investment. It's not an investment decision you're making, it's a lifestyle decision. You need to make that decision based on when it makes sense for you to buy a home. So, if you're someone who's thinking about getting into real estate as an investment opportunity, well, then it comes back to the same tenants that real estate has always had, location, location, location. What's attractive about that a market? What type of property is it? What do you hope to get out of it? What are the you're going to pay cash or the financing options? Can you cash flow it if it goes bad? Uh I think you can still investigate it and look at it. I think it's there they're still can be a compelling case to be a real estate investor. It's certainly harder to do now specifically in the residential side than it was 10 or 15 years ago. >> your holding period so you can hopefully the time will will smooth out any craziness in in the pricing. Yeah, it's crazy what I'm seeing right now throughout Los Angeles. A lot of properties are selling now for the same price that they were between 2014 and 2018. >> It's wild. >> Depending on the price. You also highlighted there's a lot of crazy stuff on restrictions on how you can use the property, too, which I think that kills the market as well. >> But even in Las Vegas, I'm seeing a lot of sales that when people bought from 2021 to 2023, they're selling at the same level if not slightly less. >> Yeah. So, these are people who bought and they're losing money on a sale holding it for 3 to 5 years. So, don't feel forced to do it because I you know, trees don't necessarily have to grow to heaven, you know, that's the thing. I think we we all know real estate's good and especially the levered debt side of it when things are good. Everyone it's great, but it also can hurt you. If you have to use other people's money to afford whatever you're trying to do in real estate, you probably can't afford real estate. That's why we love real estate, you know, we've talked about we do quite we've done some decent amount of commercial real estate, but it's more of once you have a good financial stability underneath you so that if your place that's empty or you know, you have to make big repairs or put a new roof, it if it it doesn't need to stress the system. Too many people try to get in way too soon. Is now a good time to flip a coin for a house? Oh my [laughter] god. I I still it still seems that he did it. Yes. He did it. He was like, "Hey, I got and it was $1.9 million, right? Like that was how much the was. Y'all Y'all Y'all said y'all are friends with him. Yes. I I wouldn't flip a coin. >> He's got to come see us because I I want to meet his person cuz his personality is the polar opposite of my I'm just too I'm too risk-averse to to ever do anything awful. >> do it. He did a whole financial audit with Caleb Hammer. What's the most amount of money that you would flip a coin Would you flip a coin for a thousand bucks? >> Yeah. 10,000? With you guys? Yeah. 100,000? How many views do you think we could get out of If we did a full coin flip for $10,000? >> no, not 100,000. I would do 10,000 because I know it would be going to you and you would invest. >> Okay, [laughter] fair enough. Uh so I just thought that someone could do that for $2 million just seems Y'all Y'all are great in the Y'all much better at the content space than us. Do you think sometimes when you do those big transactions that do do the views cover the the loss? Like >> [laughter] >> He spent Do you want me to call him? Well, I'll call and ask him what's the most you would flip for. Oh no, we're not doing that cuz I No, [laughter] he just flipped for a house. And also I am I am I am better than I deserve on things that I'm just not crazy enough to do it. Okay, we'll see. We'll see if he answers. Yo, what's up, bro? Yo, we're on a podcast right now with the Money Guys and you came up and we had some questions, okay? >> Did you really flip a coin for a house? They don't believe that you flipped a coin for a house, so we need confirmation. You flipped a coin for a house and lost $1.9 million. $1.95 million on one coin flip. >> [laughter] >> It's actually real and I don't own that house anymore. So Okay, so My friend, the guy I lost to, gave me a Huracan but then I crashed it. So I didn't get much out of it. So if if Okay, so if you would have won, you would have gotten cash or or what would you have gotten? Cash. So he put up cash for my house, so I would have gotten $1.9 So would it have really gone down like if you flipped and you would have won, would it Do you think He'd have given you $2 million bucks? >> Gosh, that's just crazy. That's a different life. >> What's the >> best friend? Like we it's you know, would you trust, you know, your friend that's sitting next to you to pay you 2 million? Yeah, but if you're my best friend and we flipped the coin for the house and I I felt like I was going to take your house, I'd probably like, "Dude, I know don't worry about it." >> Well, you know, two out of three or something. >> at least make enough to like compensate to make that a worthwhile investment of 1.95 million dollars? No, no, you have to understand this. Listen, ready? It's not like I would invest in 1.9 million. I invested in the opportunity to make 2 million. >> [laughter] >> The video didn't This is facts. First of all It's facts. I I I it's not about the video ROI. Maybe the video ROI ROI made like realistically 300,000. Okay, it did make 300,000. >> opportunity. So, what? I I I really really I I made 300,000 on the video and a 50% chance of making 4 million is worth 2 million. So, I made 2.3. It just on paper it don't look like that. >> That mathematics only works if you do it over and over and over again. For a single outcome, you can't do that same sort of statistic. >> You want to do it again? >> You have to flip If you were to flip a hundred times and a hundred times you were to do that, in theory that your math would hold. But, one time >> of nerds ABOUT IT. >> [laughter] >> ALL RIGHT, LAST QUESTION. WHAT'S THE MOST you would flip a coin for? Honestly, as much as I joke about it, that was mildly traumatized. >> [laughter] >> Okay, there we go. There we go. All right. Today in my life position today, I would do 400,000. I'm not comfortable doing anymore. Hey, can can I ask a question though? Cuz and you don't have to disclose this. What is your liquid assets? Like investments. I want I'm just trying to figure out how deep 1.9 was in in in into your bench. >> This is funny. You're going to like this. Hold on. I just want to know. I I need to have context. >> right now, well I we have like, you know, maybe we have a crib that's a few million Uh a bunch of cars. But I emptied the bank account, no investment, this is my only asset right now. This parlay that just hit for 1.4 million dollars. I got to go cash it in in 2 days. >> Holy crap. What what did you bet on? We put 600,000 on PSG to win 2 nights ago. So, that's why I'm in Paris. We were going to watch the game and cash it. Name Name five players on PSG. Couldn't name one. >> [laughter] [gasps] >> Oh my god. >> wild. That that tells me everything I need to know. That is wild, man. Congratulations. >> That is so awesome. Thank you for Thanks for answering the questions. Appreciate it, man. That's wild. There you go. That's wild. He's He's as real as they come. >> Yeah. That's Brutally honest, too. Yeah, that's I >> a guy you could trust with your life. Yeah, but yeah, but if my guy But what if someone else is like, "Hey, I'll flip you for Bo's life?" He'd probably take that. You know what I mean? That's wild. I mean, holy cow. I mean, but you know what? In friend groups, I would probably want to hang out with somebody like that cuz I'm always looking for opportunities. Cuz [laughter] I'm wired so the opposite of that that it it's it it'd be interesting. >> I always love going to the casino when my buddy's going to high stakes room. I just get to kind of watch them. That's I get utility from that. Oh, it's exhilarating. We went with SteveWillDoIt into one of the back rooms and we saw There was a person there betting $100,000 a chip. That's wild. And in a hand you could lose 100 grand, make 100 grand. He was up a few hundred thousand dollars, but it was just To me, I got the same feeling as uh if I were doing it myself. >> Oh. Yeah, but it but it wasn't your money, which is great. You got to Same experience. Yeah. Not the same cost. It's why I have like to have friends that have boats. So, in order to afford a property, how much money must you be making these days? Uh for a primary residence? Oh, I think it depends, right? You know, it's interesting you mentioned the affordability of housing is I think right now if you look at the median home price in this country relative to the median income it's like 4.8 times. It's the highest it's ever been. So housing is at as unaffordable of a rate relative to the median household to spend. So I think it's very much person dependent. In our opinion when it comes to buying a house we think that three things should hold hold true. You don't have to put down 20%. I think that a lot of people say you have to put down 20% on your first house. You don't have to put down 20%. You can put down as little as 3 to 5% depending on the type of loan you're getting. We do want you to be in the house at least for 5 to 7 years. But we don't want your total housing costs to exceed more than 25% of your gross income. So I think that's where the barrier lies. Like what income do you need to be able to buy a home? It depends on the prices of homes in your area that you're looking at and you need the income that would substantiate that housing is not more than 25% of your gross There are two asterisks I'd put with that. If you live in high cost of living area that has public transportation, you might be able to boost that you know juice that number up 8% because you don't have a car loan. You know most people have car loans. The other thing is if you're in a high flying career like you let's just say you you're right out of school or you're an attorney or an accountant or somebody who's your career trajectory over the next three years is going to go up, you can use some projections to to to go by you know to skew a little higher. And I don't think you have to own a home. I think there's this conventional idea that you have to be a homeowner have to be You can be incredibly wealthy, incredibly successful, and build towards financial independence as a renter. It's a very personalized decision based on where you live. >> Look at the look at the market because like some markets you're crazy if you buy. I mean we we have a number of clients in Silicon Valley it's cheaper to rent than it is to buy. And then you just go retire somewhere and you don't >> buying there? I think some people use it as a holder of value. You know what I mean? You know if you have You just told me the majority of Americans only wealth they build is in their house. And so it's like a forced savings account. And also you have outside resources. You know we you know, international money, there's you know, corporate money, there's others that are using real estate as a holder of value and you're in competition with that in some And if you're you know, that you get married, you have kids, you want to start a family, you want to set roots, your family is there and you think oh well, I want to be a homeowner, but I'm not going to leave this area cuz everyone's here. There's a lot of things that pull people towards that, but if you're going to make that decision, you recognize that it can be hugely detrimental to your long-term well-being if it's poor financial decision. And I don't know if I might have mis-mis-misunderstood your question is cuz I I think rent is so cheap in those places cuz a lot of these people have mortgage I mean, if they have mortgages on the property, it's sub 4% cuz then they also the prices were probably a third to a quarter because it wasn't that long ago that these property was much more affordable. That's very true. Do >> So renting is easier. Do you still think real estate's a good way to build wealth? Yeah, I mean, I'd be crazy not to Like your primary residence? Yeah, I would say so. Over the long term. That's where you your holding period, I know we said our like our checklist is 5 to 7 years. Me personally right now just giving an opinion, I love the rule 5 to 7 is traditionally right, but I think you have to elongate your holding period because there could be some crazy volatility but just buying and >> How how long? Cuz the average person I think holds their house for 11.8 years. >> 12 years, yeah. I think that that would probably work. I think it's at least 10 years. But what why does it build value? Well, most people buy a home, it's a lever property, right? So you're borrowing money, you have small amount down, but the entire value of the property on average going to increase at about the rate of inflation. So if you assume the rate of inflation is somewhere between 3 to 4%, my home value is going to increase every year 3 to 4% and because I've a levered, I am now amplifying the actual rate of return. So if my house for me cash on cash return can make you know, 8, 10, 12% over a long time period, then yeah, it's going to build wealth, but you can't eat your house. So, bank on that being the way that you're going to pay for your retirement living, but it's not it shouldn't it shouldn't surprise people that wealth can still >> this argument that you're going to have a lot of boomers going into these nursing homes and having to sell their house and all of these homes flooding the market at a time when millennials cannot afford it? Well, you never never bet against the system could change to a degree. Think about this. I've heard several proposals. What if all of a sudden you have capital gains right now are capped at 500,000 on being tax-free for married couples, 250 for individuals. They could they could index that for inflation. They could change it. They would probably you'd probably have a lot more houses hit the market. And you know what but because it would be tax-free gains potentially index people might be willing to give a little bit. That could maybe make affordability even help out a little bit because more houses would fit cuz it's a supply and demand thing, too. >> I was going to say, supply and demand. If all these houses hit the market, it's going to naturally drive down prices as inventory increase and as prices come down, well, now all of a sudden it's affordable for millennials or for Gen Z or whoever. And then even the SBA has now made where residential construction qualifies for some of these favorable deals that they offer where these lines of credit are dirt cheap. I mean, it I don't think residential construction has always been considered eligible for some of those SBA loans. Um so, there's I I know there was a huge headline that came out probably 4 months ago. I sent to every one of my home building friends. I was like, "Hey, you might want to go check this out." It's just like when we were we were about this building, the SBA was a big part of the driving factor of that is because you know, sometimes you know, they they're trying I feel like No, look, I don't think the government is overall a creator of economic growth, but I do think that they can help subsidize and you know, spark things to a degree. You need to pay attention to what those incentives are. I'm going to show you this. What do you think about this as a strategy to pay your mortgage? Uh I just last week bought uh $250,000 of stretch. And And reason I did it, one was just to sort of go through the experience, which I enjoy doing, but the second is I have monthly obligations. And I said, "Well, I have a 1.75% 30-year mortgage, right? And if I can, instead of paying down that mortgage, put it into an instrument that pays me 11.5%. That's 10x my mortgage rate. I'm essentially making money by taking the money, putting it into stretch, getting 11 and 1/2% and paying off my 1.75% mortgage." And where is that yield coming from, since again, you're not selling Bitcoin? Yeah, the yield comes from us issuing shares typically into the market. So, on the back end, what we're doing is MSTR, our common, right? High [snorts] liquidity stock, the highest liquidity stock in the stock market, period. We're issuing shares, and we're using that proceed to basically pay off our dividend. Uh and as long as we're issuing shares above net asset value, that's accretive to our common shareholders, and it's good for Bitcoin, and it's good for stretch. But haven't we seen this story play out though with others others cuz there's we we reacted to some content where people were going out there and buying massive houses, and then doing the was it stable coins or other things so these strategies, and then they all kind of if they imploded upon themselves. I remember that. I saw I could probably go pull up a yeah. It was Terra Luna. I cuz I remember seeing a TikTok where someone said, "I'm going to borrow from here, and then I'm going to make 20% a year from over here. It's free money. Why isn't everyone doing it?" It's back to kind of our conver- You know, what's funny is how full circle because we're we're we're not unique. We all are trying to figure out how we can make money easier than everybody else. But it's back to the if the market really lets you do that, I just don't believe it's possible. >> let's say let's step away from the actual investment that he was suggesting, that one. Yeah, if you're someone who has a 2 and 1/2 I mean, he said 1.75, but 2 and 1/2 3 and 1/2 4 and 1/2% mortgage, it's a really difficult thing to justify paying that mortgage off early because that capital likely could be better utilized somewhere else. Even if you're just buying a boring old index fund that's going to make, you know, 9, 10% annualized, if I can make 9 or 10% over the long term and I'm only paying over here 3.5, 4.5, even 5.5% his strategy still works. It's not 10x, but it's still, you know, a 2x rate of return or whatever that number may be. I'm I don't know about the actual investment he's suggesting, but the idea that if I have low interest debt, I shouldn't be super aggressive in paying it off makes all the sense in the world. It's why in the financial order of operations, the very last step, step nine for us would be prepaying low interest debt. I leave that as long as possible so my money can work for me as hard as possible. >> I I get nervous when somebody talks about how stable or safe something is, but then tells me it's going to make 11%. I mean, it just it just it doesn't pass the sniff test. >> Or 100% of the time. I mean, I've been around long enough for the Bernie Madoff conversation. I mean, one of my I've been doing content since 2006. I remember one of my favorite shows, it never was really popular, but you were involved with this too. It was we did the I pulled Bernie Madoff's regulatory filings. There were so many red flags in there. If you just go read his ADV, um >> What did you see? Well, it was it was just like He when you deposit your money, deposit to Bernie Madoff Securities, and then the statements you received were from Bernie Madoff Securities, and then the reporting he gave was Bernie There was no check and balance. There was no Fidelity, Vanguard, Charles Schwab. And and there were certain disclosures you were signing off on. There wasn't any sort of mark-to-market reporting required. It was >> The small accounting firm that he was that was the the accounting firm listed, it wasn't one of the the big four at the time. I think it was still big four back then instead of big six, but it's not the household name accounting firms that you typically see with public companies or or big companies. It was just all kind of weird stuff that that he was doing that just it it the only reason people were doing it is cuz a little bit of greediness that hey, this guy was making greater than 10% every year and it felt like it was somewhat guaranteed. So, why not get in there and get some of that? You turn a blind eye when something seems too good to be true and you experience it for a moment, you let your like rationality and logic fly out the window. >> I I can understand how the the S&P 500 is average 10% a year because there's risk and reward tied to it. When somebody touts something on its safety, and then tells me the same return as the S&P 500 that has risk associated with it, it just it it it makes me my spidey senses go. >> So, what do you think is the ideal risk-free return? Are you just looking at >> probably probably I mean I mean that's what most people We're talking three to three three to five percent depending upon where we are with inflation in the treasuries. Really good proxy, if you whatever you're making on your cash in a good high yield is a pretty good proxy for what the risk-free rate is. Cuz I would argue that's about as close to risk-free as you're going to get. Now, now in terms of retirement, how important is it that you own your house? You know, we have a lot of clients who for their entire working career, they uh owned a home, they had they retired and they said, "Hey, I want to go be in Florida. I want to go be in Arizona." And they sell their house and they decide, "Hey, I'm just going to rent in different markets for and that works totally fine." So, I would argue for them, the necessity of home ownership doesn't exist at all. They have a really small footprint, they're able to kind of bounce around. That's totally okay. People can do it and be successful. And other people love having a home base. Hey, I'm going to buy my house, I'm going to have it paid off, I'm going to live here, this is where I'm going to age into a ripe old age. There's not a right or wrong answer. It is Personal finance is so personal. It depends on the unique thing that you're trying to accomplish. >> I do like people to be debt-free in retirement, but it's not a necessity. The thing I always try to remind people, you know, we we we have this concept we talk about the wealth multiplier. That's why I I get heartbroken when I find out a 32-year-old is paying down their mortgage that's 4% instead of funding their Roth IRA because they're debt crusading versus I don't get mad when I find out like a 58-year-old is paying down a 2 and 1/2% mortgage is because Assuming they have assets. >> Assuming they have assets is because they might be deciding that the arbitrage or the delta on what they're making is just not worth it. The the squeeze of the fruit or the risk is not worth it when what they're trying to do overall. So I like de-risking cuz I I kind of alluded this earlier. When you retire, meaning you're living off the money you've now saved or a pension or whatever, it stresses you out when you see all this geopolitical or economic stuff because it you know, a lot of us I think we have this cope that we do is when the market goes down we're like, "It's okay. I'll just put down my nose. I'll work harder. Or maybe I'll even save a little bit more to hedge against it." When you leave the works workforce and you go into full retirement, you don't get that comfort. Now you you have to say, "Holy cow, I'm not only living off these assets, but I'm watching the volatility decay what took me decades to to build." So it just hits different. So if you can do other things in your life like take out debt and other things that create obligations or or or things that you have to do, um it's it's a truer version of freedom in retirement. Is $1 million enough to retire in 2026? Can you live off of $40,000 a year? How How old are you? I'm 60 years old. Okay, 60 years old. What that means is social security is likely going to come your way. 60-year-old with a portfolio if you assume somewhere between a 4 to 5% annual draw rate, you're going to be able to pull 40 to 50,000 off of that assuming you never been into the principal. >> But reality in retirement, you can get into the principal. >> put social security on it, too? So then I was going to say, once you have that 40 50,000, then you put social security on top of that, which for a lot of folks is another So you live off of four or five grand a month, yeah? Maybe. What if you're 40 years old? No. Will a million be enough when you >> I'm going to say no. To retire, you you want to retire at I'm going to say you want to tell you why I say no. It's cuz there are and I'm not going to call them out by names, but there have been other FIRE movement people who've retired super early like 35 40 and then they've come back and and it's still they're really good people and they've done great content but they have but if you're being honest once they start having kids and they realize holy cow these kids are a lot more expensive than I ever thought and they usually have to go figure out cuz it it's just they didn't have enough life figured out to truly call yourself retired at 40 years of age because a lot of life is still going to happen to you. I think a lot of times in retirement you need to the die needs to be set to a degree so you kind of really can measure out what your expenses are going to be in the future. If you're doing this at 35 or 40 years old and you don't like for you Jack you're not married right? Don't have kids. Do you know how much life is going to change for you if you try to say right now I'm done I've got enough? I mean I I I I just don't know that you have enough of your life tied down. What is the realistic retirement amount for someone who wants to have a family of four? >> to make sure I understand your question. Are you asking can a 40 year old with a million dollars >> retire today or can a 40 year old today get to a million dollars by >> No can can a 40 year old with a million dollars today retire? >> Yeah I think that'd be hard. >> And so what is the realistic >> Cuz health insurance too. What is the realistic amount that someone who is 40 years old needs to retire to support a family of four? It depends on their living expe- I know it's it's a really hard answer to give but depends on living expenses. Some families of four can live off of $3,000 $4,000 a month. Some families of four require $9,000 $10,000 to live. Well the retirement portfolio necessary to satisfy both of those enterprises very very different. So it's hard to like give like a hard and fast number. >> I wouldn't even sniff around it unless I had three to five million dollars. At the age of 40? Yeah 40. What would you say FU money is? 10 million. Yeah we talked to we I think we kind of covered it cuz I think 10 million is is a good number because your money earns what is a great life even if you took very little risk. What if the market underperforms like Vanguard says? But when we That's the beauty of the 10 million is because it's so even if you use the safe withdrawal I mean if you use the you know risk-free rate of return of like cat you know of treasuries. I mean it's still 400,000 I mean I mean you talk about four or 500,000 dollars depending on what money you make. What do you think is the ideal safe withdrawal rate? What age? 40. I mean Three and a half percent. >> a half. What is the >> And I wouldn't retire with that. I would want to do a still a running Monte Carlo simulation and stress it. >> I I've done so many calculations on this and it determined that if you want to retire at the age of I I I can't remember if I put 36 or 40. It was one of those and you live to the age of 95 assuming that average lifespans are going up. Uh it told me that to be able to account for the Great Depression. So basically you're retiring the day before everything collapses. It said 2.75 to I believe it was 3.2 at the very most. A variance between that. And it said you could actually do a little more if you had a year of expenses in addition to that safe and cash. Well see but I I mean I think with three and a half you're still a young enough and able-bodied you can go subsidize it if you really got squeezed. >> And I I want to be This is something important for the audience to hear. In our minds safe withdrawal rates are napkin math. Right? So like what we're doing is we're talking about a real financial plan. Uh I would never let tell someone oh based on a 3.5% draw rate and this pot of money you can retire. What I'd want to do is say okay you want to retire at age 36. How much are you going to spend from 36 to 50? What are you going to spend from 50 to 65? What are you supposed to Like I'd want to actually not just factor in an estimate of the things you think that will happen between 36 and 95 but realistically put some teeth to it. Okay you have daughters great are you going to pay for their wedding? How much do you think weddings are going to cost in today's dollar today's dollars? What do you project that wedding is going to How often do you replace automobiles? Do you replace them every 7 years? What kind of automobile Okay, you want to travel. How often do you want to travel? Do you think you'll be traveling when you're 93? And we would try to and this we do for our clients get as granular as possible on the things that we can realistically estimate and then we would reverse engineer using money car analysis does this get there cuz what actually ends up happening is it's not a static 3 and 1/2% safe withdrawal rate every year. There may be a season where the safe withdrawal rate is 9 and 1/2 10% but then something changes. Spending changes, lifestyle changes, another income source enters and then the safe withdrawal rate drops down to 2% or something like that. So it's way more dynamic in practice than it is in like academic theory around safe withdrawal rates. How common is it that people run out of money in retirement versus save too much? But it's always you know that's the the the save too much as cuz I think I'm at the stage with with money that you try to figure out you look back over your life and go which were the dollars that actually turned into this dollar and which decision was it and it was all the as the culmination of all the good decisions together that I don't have regret that I'm going to probably I'm without a doubt I'm not going to leave this planet broke based upon all the good stuff but I don't have regrets or feel like I left something on the table. I I know that's not really answering the question but I'm trying to get to the mindset that I think you have to be careful when cuz so many so few Americans actually save what they need to for retirement even though we showed you with our wealth multiplier would take very little just a little bit of discipline when you're younger to do it. Um that people aren't even like a 60 year olds don't have you know what was it 100 and when we did the book tours like $110,000 for was the average you know investments for somebody in their 60s that's way below what they should be. So since we have a problem that nobody has the money, I don't want to say there's the you know, the risk is you're over you're going to have too much. That's just a your your rounding error is statistically that that's probably not the message I'd want to put out. And then the on the flip side of your question, um are there a lot of people that would run out of money in retirement? What often ends up happening is nobody Most people aren't like living life, living life, living life, living life, everything goes to zero. What ends up happening is it kind of goes down and they begin having to make sacrifices they might not want to make. Hey, I had a house, but we can't afford this house anymore, so we got to sell it. Hey, I was living on my own, but I can't afford the bills, so I'm going to move in with family. And if it gets really dire that it evolves in a situation where I don't really have any assets, but I've got social security. I'm going to figure out how can I live on whatever my social security check is. I think that's more the reality, cuz I think the number was something like 60% of retired Americans right now, uh the majority of their retirement income is social security. And then this this this this is some crazy number like that. Which is sort of which is sort of a wild thing to think about. Um so, how often do people have to make concessions in retirement they didn't want to make? I think that probably happens more often for the average American than realize, cuz I think the average American is not preparing for retirement the way they ought to. What about lifestyle creep? Do you see that as being an issue over time? Is it spending a little more? Like doing the $200,000 cruise and then pretty soon they're like, I got to do the $500,000 cruise. >> Well, look, lifestyle creep gets a bad rap. Uh it's a hot take. Lifestyle creep is not bad. Uh we actually want lifestyle creep. We want for most people to have a nicer lifestyle in our 30s than we had in our 20s. A nicer lifestyle in our 40s than our 30s, nicer in 50s than in 40s. That's your lifestyle creeping. What you can't let happen is let your lifestyle outpace your savings, outpace your building. So, so long as you're continuing to save and continuing to grow your pot of money and continuing to build for the future, there's nothing wrong with you buying the nicer home, buying the nicer car, going on the nicer trips, assuming you're doing all the other stuff that you're supposed to. I think far too often people forget that second part and they just let the lifestyle creep. >> I would like to give some old man knowledge though on something. You know, you hear we we talk about on our show the hedonic treadmill. >> Uh-huh. Is good things that happen in your life, you should try to spread those out as much as possible so you can squeeze every ounce of dopamine and goodwill or good experience from it. And then bad stuff you should stack up. And what I mean by that is like you always hear about lottery winners they go broke. If lottery winners would learn, "Hey, let's start off with 10% or something of what you learn, you know, what you you win. And maybe you buy a house and that's it. But usually they want to go buy the house, they want to buy the vacation property, the speedboat, they want to buy the new car. >> They do it all and then they they find out they're numb. You know, all you did was you shot your system because you numbed it. You didn't give yourself any time to absorb and process it. So I always tell young people, as you start making money, don't shoot for the global, you know, international business class, do it to the nine when you're in your 20s. Go do something, you know, you go go do Europe cheap because you're at the stage where that's the best. So that way you save something, leave a little bit meat on the bone for your 30s and 40s. And if you can think about your life and creating success and achievements and and and experiences that way, I think you'll find that you have an appetite for and your happiness and fulfillment will be much better than if you just go run yourself in debt, do the most exotic and luxurious vacation. You know, you might be setting yourself up for for just a life that is just not set up right because you did too much too fast. >> Uh-huh. What's the best thing to spend money on? I mean, I I I look, I'm at the stage where experiences, family, you know, I'm the sentimental guy that tells everybody they should be having a gazillion kids um because I only have two, but I also waited 5 years into my marriage to have kids and now looking back cuz my oldest is graduating, leaving the house, I wish we'd had more. I mean, and because it's it's just kids are they're hard. Now, I don't want to misplay cuz you're in the messy middle. You have a little ones in your house. It's easy for me at my age to say it's not hard, but um I love experiences and memories and and doing things like that. Travel is awesome, especially when I can get loved ones. I'll bribe the heck out of my oldest daughter to get her to do vacation with us. >> to bribe her to go on vacations? I mean, he wants to go on vacations that she wants to go on. I don't mind. I planned on And and here's here's a compliment to her. She graduated high school, we took her to Paris to celebrate graduate. She graduated college, I said, "Where do you want to go?" And I'll write a check, you know, and we've even had more success. I was thinking she was going to choose She just wants to go to Disney. So, I mean, I was like I was shocked cuz we go to Disney all the time. So, I mean, it showed me that that's where you you know, you worry about lifestyle creep and stuff. People, if you want to know the secret to happiness is is the people that you surround yourself in. And you know, all the research in happiness usually comes down to spirituality, relationships, friends, not doing commute commuter traffic and things like that. That's where it's not necessarily the the exotic house and car. The biggest thing that shocked me once I got really what I could think with people look at my net worth on paper, they'd be like shock and awe is that I realized how empty the stuff was. I mean, and you you I mean, you and I have talked enough that you I think Have you experienced any that? I mean, it's it's the money I don't know, but I don't buy that much. I know, but but but that's the thing. You don't buy that much cuz you you could. You could buy anything I could buy You could buy any exotic car, you could buy any exotic watch. I just find I don't get much out of that stuff. I mean, and that's what it's funny, we've done coverage on this. The billionaires look like they're almost homeless. It's the aspirational people that are typically out there, you know, blinging it up. Yes. So, because they're trying to let people They want people to look at them. I think there's something when you have it it it doesn't feel like it's doing as much for you and you almost are a little embarrassed that if you wear some of those trinkets. Yeah. I think the best thing to spend money on is stuff that creates memories and experiences. My favorite thing to spend money on is stuff that creates convenience. I just love convenience in my life. So if I can outsource something or add some sort of efficiency, I'm willing to like spend money for that thing. >> Yeah, that's what Jack has really been trying to hammer in me. I remember this this stood out when you said I was comparing sounds so dumb. I was comparing two dentists. One of them was expensive, but was really close by, could do everything in one visit. The other one was half the price, but I'd have to go back twice. And I was because they had to do x-rays >> explain let's >> this one. Let's talk. So how much was the more expensive one? Like $300 more expensive. >> I would go to the one that could do it all for $300. And then and then the other one how far away was it? Oh, an extra 15 minutes. 15 minutes one way? So but it's two visits versus two visits on two separate occasions and then one is how far? Eight minutes away. Eight minutes away, so and and one visit and it's $300 more. If I can afford the convenience, I'm going to go with the convenience. Yeah, I I went with the more expensive one. Great experience. >> Your time is worth a lot of money. You value of your time is worth a lot. That's the other thing I've learned is that you know, when you're younger you are literally trading your time for wages. And as you get older and successful and you realize holy cow, I don't have that much time left, you are you understand the value of your time. So you're willing you trade you definitely trade your money for the time and that's why the experiences and other things is because it's not forever and it goes quick. I mean I called a dear friend of ours, his birthday was yesterday and we talked on the way in. He was like yeah, man, he feels like the the the years go faster and faster the older you get. He's in his 70s. >> Yeah. And um so I I cherish the time I get to spend with people I care about. And that's why I I'm on the old man tour now. Like I go on a spring training with my high school buddies. I go um I'm trying to get my college buddies. It's a little It's an act of Congress to get my college buddies to get together. And but then I every year I go on a golf trip. I play golf once a year. It's with my old neighbors from Georgia. We go down to Florida and we play rounds of golf together. Love that. It's It's important to make time for memories. Graham, you should show them your portfolio. Now you guys are going to react to all of Graham's investments. Obviously no numbers. Just say Say how Say what you think. >> After seeing how you I hope you Did you keep track of what you gave um on the previous score? Cuz if you don't Jack You gave Jack a 7 and 1/2. >> 7 and 1/2 8. >> Because I can see how Jack and Graham are They're going to They're going to be mad at whatever Whoever loses is going to feel slighted. >> I already know you guys are going to agree more so with Graham. And it's okay. I gave you a high score. We Like we were not >> I'm not I'm not upset. Like I'm actively choosing every day when I wake up to have a portfolio that looks like this. So it's I'm I'm not I'm completely >> You're way ahead of the curve. >> unbothered. >> way, if you I'll go ahead and tell you if you want us to give you a prospect kit, we'll give you a prospect kit right out in the lobby as you leave today. He just said he's one of those lifetime do-it-yourselfers. >> it. I know I would I look I I'm open to anything. I love it. Okay, this is Now you can open up and see all the different accounts. Here's the first >> this the biggest one? >> No, here's the first investment account. Oh, this is all of it. This is This is him playing around. >> All right. That's some stuff. >> Robinhood, you you're basically That's your speculative play account. Yeah, for the most part. A lot of lot of people are getting in on this. Go to the big stuff. Go to the big stuff. It's just an interesting to note. Um here's a $1 position. Here's a $5 position. Here's a $6 >> probably the free trades that they gave us. Those are the free trades, aren't they? There's a $6 position in US dollars. >> Uh there's a $7 position. There's a $12 position. Wait, so one of the things I'd probably do is clean up a bunch of the single-digit dollar positions. >> of those I can't close out because they're worth so little that I tried to sell them and they won't let me sell them. So, I actually have to go and request this thing from Robin Hood. >> Or donate them or something? >> Yes, for them to get rid of them. >> share. Okay, so >> Yeah, so just ignore those. Those are But, but I'm >> Go look at his big stuff. >> Hey, look, we're assessing the whole We you have to look at the whole picture. That's the thing. >> He's got Your big your big assets are the same thing. I mean, they're in tried and true stuff. Yeah. >> I mean, our point cuz everybody here we have decent investment portfolios everybody at the table and we're all buying the same similar market type stuff. And that ought to be something for the audience to take a big note of is be like, here we are having all these pontifications on the investment marketplace, but if you actually look at what money we're going to live off of in the future it it's the broad markets. So, you just have like a number of different accounts that could likely be consolidated. I'm sure there's some strategy there. >> You're talking about the investment accounts? >> Yeah, there's like just a couple like there's a couple of different investment accounts. >> affiliations or do you have pro programs with some of these things cuz you do have a lot of different companies? >> Yeah, I used them all and I've just kept the investments in there and they've grown since 2017. >> cuz you were curious or you did something with these companies? No, a lot of those were me just trying out different brokerages because back in like 2017 I would go and make accounts with every single brokerage out there. Yeah. >> Yeah. And I would use them drive me crazy. It drove me crazy. I had accounts at every single brokerage. >> feel like I got I want more simplicity in my life. >> I'm merging a few of these, but I have different accounts for different purposes. I Okay, you've got a health savings account. Love HSAs, right? >> Yeah. You have like $3,600 of cash in your HSA? >> I just forgot to invest it. But that's He's He's going to have a hard time making seven and a half I know. But it is it is it is the same I mean, cuz I was going to pick on cuz I was like, man, that's a round No, that for that's account size that's actually pretty decent size. Yeah, that left a lot of cash but it worked. Um there's no there's no positions in this one. So, is that just cash? >> It's It's your It's your Roth. There's no positions in here. I didn't probably translate over from from that brokerage. >> Okay. Well, we'll make sure that's what I was talking about that brokerage. >> That's VTSAX in the Roth. Oh, that's all of it? Okay, great. The entire thing. That's great. Um the Acorns account can't see any uh cannot see any holdings in that one either. Yeah, that's four ETFs in that account. >> Okay, good ones or bad ones? Good ones. Okay. Yeah. Yeah, you just They're all They're all like Vanguardic. Okay. Yeah. All right, that's fine. That's fine. You don't even classify yourself as an exotic. Talk about a snooze fest, right? >> Yeah. Actually, I probably I mean It could just It could be a little bit cleaner. Like I just feel like there's some account consolidation. Like if you were a client, I'd be like, "Hey, why do you have all these different accounts? Why do you have all these different positions? It might be easier to get your head wrapped around anything." And not cuz what's What's interesting is, "Okay, I forgot to invest that $3,600 of cash." Well, $3,600 of cash can turn into $13,000 of cash just cuz you didn't 13 that turn into 30. 30 can turn into 100. Like it just It happens that way pretty quickly. If you have so much stuff that's hard to keep an eye on where everything is. >> easier to compare to know annualized performance or how well you're doing when things are consolidated. Cuz you got stuff I mean it now I'm sure these things go spit out a report somewhere on here where it would tell you, but it's just there's a lot of scrolling. >> have like 12 1099s from different >> the other part of it. >> is that is that not like bother you a little bit? Just like >> track of them all and then an accountant does it all for you. >> you're you're naturally good at Yeah. this stuff, but that doesn't Just because you have a a a a way of doing this, I don't know that I think it's the most efficient use of your time either. >> Now, that's a Okay, so that's a big one. It seems like maybe I don't know if the total net worth, but it seems like you're pretty bullish on crypto. Yeah. Yeah, but it's still under I think 12. So how much is he up? Does it show how much he's up? Cuz we don't have to give the number, but it would Does it You know how much you're up? Total, I'm up maybe right now at these levels like 6%. Okay. Okay, so that's Maybe 10. Maybe 12. >> cuz that's a it's a it's a decent size holding to hear you're only up 6% kind of Yeah, because because I have a lot that I bought in 2017 and then a lot that I was buying in 2021 two three four. Like more like dollar cost average. So do you think Bitcoin's going to change the world? Like for the term of like >> upside that it will do better than it will do worse. What what about all the quantum stuff that people are out there throwing out there as risks risks >> Bitcoin would be able to change the way it's secured to be quantum resistant. I don't think it's going to be a risk. >> I'm not saying that's a risk. I've just >> [laughter] >> We all have these headlines thrown across our you know our our our feeds and I just >> would have to update as well. So it's like you know, would would banking be a risk? >> Yeah, a lot it just a lot of And those computers don't necessarily exist yet. Yeah. Like you have some positions that are like pretty substantial. And then you have some positions that are just very small relative. Right, like It's more of a wrangling issue for you rather like I just I got some thoughts on that. Yeah, so what would you rate my portfolio out of 10? You get now remember you gave you gave Jack a seven and a half. I have a number I think I think you want to say and I'm curious to hear it. >> don't do it because you gave me a seven and a half. Just do it independent of me at a But you have to know where the scale is. >> your overall allocation much better. Like I think it's it seems to be a more well thought out Mhm. more robustly diversified portfolio but it's a little bit sloppier in terms of like cleaning up some stuff. Right? So Well, he when he says that I I think well, I'll I'll let you be cuz I I would skew it. Um I was talking about the quilt of life. Yours is out of choice is that you have assets all over the place, you know, different providers. And you said that you went on a journey trying out all the big providers. And I think for you from a content creation standpoint that was great. But just ongoing I I would probably try to consolidate to simplify your life so you own more of your time. And by that you're saying close down a lot of these brokers. >> Yeah. Yeah. If you don't have a business relationship with them and you don't you know then then why make it where you have to do more compliance for accounting purposes and more you just keeping up with it worried about access and everything else that that comes with having more accounts. Was there a retirement account in there? As I'm going I don't remember seeing a retirement account. There was no there was just a Roth that I had set up. No. What are you doing? I just figured You won't pay your taxes. My my honest my honest thought was I think that you know I didn't want to do a 401k because I just think taxes are going to be going up substantially by the time I retire and I would rather just pay the tax today. Okay. Did you do a Roth 401k? Roth 401k? I just I should have done that for you. But if if you're going to take that stance of do a Roth 401k. Cuz you know what's cooler than taxable assets? Completely tax-free assets. >> thought about it and then I was just like well I just kind of want access to it now if I wanted to. You just said you don't touch it. Right now you have access to capital. Like like we just saw your accounts. You have access to capital. So starting today starting yesterday it'd be sort of insane not to start building up 401k solo 401k assets. You got to give me a rating. You got to give me a rating. Okay. This is what I want to say. I'm going to I'm going to give yours an eight. So let's see what yours >> Wow. I'm only 0.5 higher than you. No no no I was thinking the exact same number. I didn't want to I didn't want to color his answer but I was thinking the exact same thing. A seven and a half because yours feels a little more emotional. And by the way seven and a half you're great. Emotional? Meaning you love your portfolio. Like you make your decisions based on emotion. This is you said every morning I choose to That's not a negative thing. Your emotion is I like being >> Only for a small portion by the way as we've discussed. I completely disagree with And then yours is a little more well thought out, but it's just a little bit sloppy. It could be consolidated. Both of you just are missing some tax opportunities. Like there are like some huge opportu- So that's not really a portfolio rating, it's more like a financial planning rating. Man, there's some stuff that you could be taking advantage >> thing I I should be doing on that though is just not the Roth 401k. Well, I I I think there's probably a case to be made that you could do not only a solo 401k, not only load that up, but you could also look at some sort of cash balance plan, which is another way to defer hundreds of thousands of dollars. >> I think taxes are going up though. So like I don't want to defer anything. Like I'd rather just pay the taxes now. Like I I think you can still do the Roth. And you don't you don't have to go as big as these numbers we're talking about, but from a legacy standpoint you could still do some Roth planning. Let's assume for the moment the tax rates are going to go up. Do you think that um So we we work in a we we operate in a progressive tax system. And so a lot of people think, okay, well taxes are going to go up. That seems likely. Do you think that you're always going to be in a position where even if tax rates go up in in mass, you're going to always be in the the highest tax bracket? >> Yes. I think I think with appropriate and proper planning that doesn't have to be the case. Only because we have clients that live in that world. The The only thing I will say cuz I I do think at the level Graham's at that he is probably going to be in the higher tax brackets, but it's more of the opportunity cost of what you could do with the money yourself versus giving it to the government right now. Um because that's really what also we're talking about. So we got if you could save a few hundred thousand dollars off your taxes now, that's money you get to keep in your back pocket and deploy if you want to. Now you don't That That's the thing. I still don't have the why figured out for you, because I think that you know, that I would want to have a lot of discussion on what you're trying to build for. He's too busy to be a real estate professional right now, but maybe at some point in the future >> I could work slow down that he could become a real estate professional. take a bunch of paper losses and that's when he could just never want to touch real estate ever again. Done [laughter] with that. You really think you're done with real estate? Which is which is so interesting to me. It really is. Nope, I want nothing to do with it anymore. >> soured you so much? A lot of losses. >> Besides the timing Yeah, a lot of Los Angeles, the illiquidity of it. Like right now I'm in the process of listing and selling two properties and the amount of time and work it's taking to be able to get those ready to list. Because I don't want to list a place that's like not to say falling apart Right. but sloppy. I don't want people to go in and there's like peeling paint. Like I'm spending maybe 80 grand this month fixing up these places. >> it ready to sell. >> Just to get it ready to sell. >> Yeah, that's fine. >> And it's not only that, but it's also dealing with contractors and uh dealing with oh, what what's the staging quote coming in? Are they doing this? Are they That should have been done. I caught a few things that should have been done that weren't. It was different when I was 25 and I had the free time and all I was doing was real estate. It was really not difficult for me to manage these properties. Like I was in the areas anyway >> money was so much less expensive. The prices were so much The economics were so different. >> Totally. And for my time, it was valuable. Like I showed up every single day to every job site. And I was there at 9:00 a.m. and when they weren't there, I'd give them a call. Where are you? Why aren't you here? I'd be stopping by at like after work and I loved it. I had so much fun. Now that's a pain in the ass. Like now I couldn't >> It's a young man's game. Yeah, exactly. So, is there anything you'd recommend me doing differently besides opening up a Roth 401k? Uh I didn't do the math, but cuz you had so many accounts, it was difficult for me to do the mental accounting of how much of your portfolio is like risk on, risk off. Right? Like I saw some risk off, more conservative positions, but I didn't have like a good asset mix. I'd want to be able to figure out what those numbers were. On under 12% is risky. So, uh under 12% is risky. Yeah, that that's basically the crystal definition. >> our definition of what we consider risk. So, I would say like risk off more would be like fixed income bonds, equity holdings, that sort of stuff. Like it you know, is your is your portfolio It's 75% equities, real estate, 25% treasuries. Okay, great. So, um that's you know, given the size of the portfolio, probably not crazy. Maybe even a little bit more conservative than I would have thought at your age, but not awful. I didn't see a clear performance metric for you one of you across the whole portfolio. So, one of the things we like for our clients to be equipped with is like every report they get or even on the portal they see, they can see exactly what their portfolio, the whole thing, all of the accounts have done year-to-date, for the last 1 year, last 3 years, last 5 years, since the day they started working with us. So, even though we see the portfolios as they exist today, what was not clear to me in looking at it is how effective of an investor have you been over the last 5 years? >> Yeah, I actually don't know how to create that with Schwab because I had all of my money spread across a few brokerages, but then about 8 months ago I consolidated everything with ACATS transfers into Schwab. And so, it's kind of hard to track my actual performance >> that as like your gains. And every time I monthly contribute >> it. I mean, essentially in their system. Because what they do is a lot of these brokers they focus so much on short-term performance. They will show you what you're doing for the day or what you're doing this quarter so far. We want our folks to have a much longer term view. Hey, how much did I start with? How much have I put in? How much have I put out? >> thing is how they track this tracking, too. That's what I was talking about principal versus gains. We help our clients here because we're we're tracking all that stuff, you know, with people like you. >> is good about tracking basis. But if you don't consolidate, performance is lacking. Well, they they include the principal in the which I wish you could just toggle that off. >> Yeah, I wish I wish, too. Charitable giving, I didn't know I didn't see it Do you all have donor ever consider donor advised funds cuz I saw gains in there. You could do donor advised funds if you're charitably minded. >> I forgot to look for the loss position. I didn't see I was so blinded by the $3 positions that I didn't look for losses to see >> Well, there was also a lot of If we had gone through every one of your accounts, this would have been a full 3-hour >> [laughter] >> audit. I mean, there was a lot of accounts there. Yeah, I mean, it was scrolling. But you're both by and large, you're both doing the big things right. Just neither one of these are dumpster fire portfolios, neither one of them are things that give us a whole lot of We could give both of you prospect kits and and and and feel really good about it. So Jack and I are actually working on a side business because for us to be in front of the camera all the time and definitely it's just it's not going to happen. It's not feasible. So we want to build something outside of the Ice Coffee Hour. And we were spitballing back and forth a while ago what good ideas are. And one of the things that we kept coming back to is the fact that people who open credit cards have these rewards that they are either unaware of or they just never utilize. Like there's like a Saks credit and like a Dell credit. They all expire on different time horizons. So you have one that expires, let's say you get two per month. Maybe you get one every three months. Maybe you have one semi-annually, one annually for all of these different websites for different amounts. And so what we decided to do was consolidate every single credit card bonus, credit, discount, benefit all into one dashboard and then it'll send you notifications when something is expiring according to your liking. So if you want notifications like a lot of notifications, very little notifications, it'll just kind of tell you based off your preference, "Hey, by the way, here's a link to Saks Fifth Avenue. Just click it and use this card at checkout because you have 50 free bucks that's expiring in a week." Yeah. How How difficult would it be to keep up with the rapid rapid changes that take place? It's very easy. There are already things that exist online that can scrape all of that data and just immediately. Yeah, yeah. So it's it's 99.9 99.9% accuracy, the software that we're using for that. Um but the main idea is that people will pay $900 a year for like the MX Platinum or whatever it costs, but not use Resy credit that comes $100 every single quarter. >> Right. $400 or Uber That's true. What I do All the time. What I do is at the end of every single month, I'm like, "Oh crap, I have an Uber credit." And so I just Uber eat some food. Even though I don't even need it because I want to use it. Same thing, I forget that my MX Gold has benefits. So what is this a membership thing? How do you So It would be a membership thing. As of right now, the concept, people could link a few cards for free uh to be able to try it out. Um and then if they want to link more than that, there'll be a small fee with that. But it'll also tell you which cards you should be using for certain purchases. And it'll look through your transactions and tell you how much you missed out on rewards by not using the appropriate card. >> And will it update like rotating categories? Like some cards like Discover have rotating So like if you go through the Chase portal with different Chase credit cards, you know how they have like the discounts and promotions uh tab? So like if you s- expiring at the end of the month, you get 10% back at Lululemon up to $50 back total, so $500 total expenditure. So it'll also determine, hey, on this card you're spending Lululemon quite often, but on this card, if you just click and uh what is it? Like accept the Oh yeah, exactly. Cuz you have to opt in. Cuz you also have to you have to opt in for the >> the thing, when you look at the offers on Amex, there are hundreds of them. Yeah, but you have to go through it like, "Oh, Home Depot's offering $5 >> doesn't tell you, hey, you shopped at Home Depot and you didn't opt in. It could also just link you and say, "Hey, just opted into like these 30 cuz you shop at these 30 places across these cards." And then like it'll just Yeah. So we bought the website extrabucks.com. Nice. I like it. I'm surprised that was available. So we're working on it. So if anyone wants to sign up for the waitlist and get first access to be able to try it out, it's extrabucks.com. E X or the letter X? E X T R A Yeah, like actually written out extra dollar. >> dot com Love that. Because you get to save an extra dollar. >> Or more. >> [laughter] >> Terms apply. >> Extra dollar plus dollar up, yeah. Cool. Uh well, thank you guys so much for coming on the Ice Coffee Hour. It's always a pleasure. Thank you for the team for all sitting in on this. Thank you for letting us use all of your equipment. This has been such a blast. I love it. I've been looking forward to this. >> Mhm. Mi casa su casa. We always have a blast, really. And you guys, I love the dynamic. I mean, I think Bo and I pick on each other. You guys >> Yeah. We were joking earlier. Uh we were saying like Jack and and me. >> Oh, yeah. Yeah. That's kind of the way it works. All righty. Well, thank you guys. Thank you guys so much for watching. We would not be here if >> Not for you. We We flew all the way out here, okay? The flight was expensive because gas prices are going up like crazy. >> flight was twice as much as it usually is. So, if you appreciate that, just hit the like button, subscribe. >> [clears throat] >> We'll link to all of your information down below in the description as well. Thanks, guys. We always have a blast. By the way, if you enjoyed this episode, we just posted our next one early for members. So, if you click the join button, you could literally begin watching our next episode right now. Really hope you enjoy it.