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welcome to the best interest podcast
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where we believe Benjamin Franklin's
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advice that an investment in knowledge
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pays the best interest both in finances
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and in your life every episode teaches
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you personal finance and investing in
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simple terms now here's your host Jesse
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Kramer hey guys Jesse Kramer here I
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recently recorded an interview with
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Justin Peters on his podcast the
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struggle is real and I just thought it
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ended up being a tremendous conversation
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I I really enjoyed it and the final
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product I think was packed with a lot of
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interesting info that that can help
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people so Justin and I were speaking
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recently and he offered to let me
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publish that interview in its entirety
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here on the best interest podcast and
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that was an offer I just couldn't refuse
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so without further Ado let me introduce
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you guys to Justin Peters and you can
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listen to our awesome conversation on
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his podcast cast the struggle is
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[Music]
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real taking into consideration that you
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were only a walk-on 2-year athlete I
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want to hear about a glorious moment
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when you represented University of
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Rochester as a squash player and feel
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free to like embellish the story a
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little bit I'm looking for like a crazy
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match or like a move that happened I
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don't know a whole lot about squash so I
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was it really piqued my interest
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whenever I heard you were a squash
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player that's a that's a fun question
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and then man you you've done your
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research I always I always find it
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interesting and when I'm listening to
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like Tim Ferris podcast and the guests
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will be like holy cow like how do you
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know that like you how do you find that
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research but yeah so walked on the team
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so I think one memory that sticks out
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for me was it was one of my earlier
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matches and we were playing a university
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up here in Upstate New York called
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Hobart and it's a fairly small School
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Rochester as a team was ranked much
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higher than them but but still like the
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kid that I was playing from Hobart he
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had been playing for much longer than me
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and so then even though my teammates
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were all Heavy favorites in their
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matches I certainly didn't feel like a
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favorite in my match I'm new to this
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Sport and then early on in the first
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game I I hit this particular shot that
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in in squash it's called a Nick just
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like someone's name a Nick and basically
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all that means is that you you hit the
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ball so that instead of kind of bouncing
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into the floor it bounces into the joint
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between the wall and the floor so if you
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hit that joint perfectly rather than the
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ball kind of bouncing up the ball will
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tend to to roll or at least have a very
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small bounce so in the goal of squash is
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to get the ball to bounce twice or your
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opponent can get there just like tennis
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type thing but if you hit the Nick the
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ball is going to essentially roll and
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and it's their your opponent's not going
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to be able to get it and it's much
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harder said than
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described especially if it's like flat
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like a pancake is like that'll only
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happen like you know five times in your
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life as a squash player so there I am in
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like the first game of a of a of a real
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match and I just go for it and I hit
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like to this day the best nick of my
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life like literally flat as a pancake
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and my opponent just looks at me and
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he's like gee like he just kind of gives
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me this look like man you you you of our
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guys are really good at squash and I
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look out at the assist my assistant
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coach who's outside the glass watching
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and he gives me this look like dude what
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the like that was a world class shot
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granted it's just one shot in a match
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that has hundreds of shots in it but
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like literally my opponent I watched my
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opponent become deflated and he's like
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yep I'm playing against this world class
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U team and meanwhile on the inside I'm
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like well they're world class you think
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I am because of that shot but I'm not
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and anyway I ended up waiting did you
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end up okay I just about to ask that so
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I I don't I don't really understand how
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you got into squash too I know you were
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a walk- on and and it seemed like you
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got pulled in did you have a friend on
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the team or what what led you into it
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yeah so I had a couple a couple guys who
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lived in my dorm were you know top five
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in the USA as Junior players got
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recruited to play at uvar and so I knew
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them from freshman year they were just a
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couple couple guys who I knew and so I
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knew they were on the team and then me
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and a few just random athletic buddies
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we would go down and Play Just for for
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fun like we were terrible we knew we
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were terrible but we're like okay it's a
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weird sport it's a new sport it's a good
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workout let's let's do this and so for
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the freshman and most of sophomore year
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we just kind of played for fun but
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eventually got to the point we're like
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okay we like beating each other and
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we're interested in learning strategies
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to beat one
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another and then I got lucky as one does
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the way a lot of life unfolds it's it's
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just kind of luck right place at the
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right time so Harvard Trinity Yale these
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big-time programs in squash they all
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carry 20 players on their team 10
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Varsity 10 JV our coach at U ofar he's
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like you know what I want to emulate
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that model I want to be able to have JV
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competitions when we play these big
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schools so he wanted to expand his
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roster to 20 and the problem was there
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were only you know 17 guys on U of ours
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campus who had ever really played
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competitive squash before so those last
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three spots he just need
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warm-blooded enthusiastic
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volunteers who wanted to play and I got
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the last spot so here I am with no
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background just kind of some you know
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raw athleticism from other sports but I
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showed up to practice every day I got
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coaching from a worldclass coach I got
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to mingle with guys who actually knew
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what they were doing so I learned a ton
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through osmosis and I think it's fair to
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say I became one of the guys on the team
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who at least spent the most time on
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court where you know it was two hours a
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day of actual practice and then I'm
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spending two more hours a day on my own
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and it was not easy but it was natural
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from that time on court to at least
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catch up from being the 20th best guy on
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the team till the time I graduated I was
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playing at 8 n 10 in that in the top 10
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so yeah it it was just right place right
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time took advantage of the opportunity
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that was presented to me and that's the
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way a lot of Life Works I think and then
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you loved it so much that you went back
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and worked as an assistant coach correct
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correct exactly so I mean like I still I
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played yesterday like I played yesterday
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just against a local guy it's still it's
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my number one form of Fitness it's very
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fun and in some cases giving lessons to
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little kids it's also a form of
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financial compensation it really it
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checks all the boxes and yeah I plan on
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playing until my legs don't allow me to
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play
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anymore that's so cool I couldn't
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believe that I heard that story and I
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just like of course like that's just
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craziness and I love that right place
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right time man it's it's the way a lot
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of Life Works yeah well Jesse I
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appreciate you coming on the podcast man
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really excited for this I always love my
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personal finance guest and you're no
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different I mean I've Loved consuming
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all of your content I've actually saved
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a lot of it for you know further
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research after this conversation as well
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and your blog is just you know
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worldclass man it's so fun to read you
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really bring your personality into it I
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enjoy it Kudos man you got nominated for
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blog of the Year by plutus Awards which
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is kind of a big deal in our space how
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does that make you feel Justus I thank
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you for having me on thank you for all
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those kind words the plutus award
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nomination is a little surreal
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definitely a a huge combination of
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thankfulness graciousness Vindication
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and motivation for like you know it
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makes me feel good about the work I've
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put into the blog in the past and and it
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makes me feel thankful for all the
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readers who have helped me get to this
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point and yeah it's it's rekindled the
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the fire underneath me to keep me going
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for the
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future it's crazy that this all started
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out with just conversations with
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colleagues if if I have the story right
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you were 22 out of college started as a
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mechanical engineer and you know $50,000
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in student loan debt and auto debt and
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just trying to figure out what do I need
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to do with finances like what what do I
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need to do moving forward what are the
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right decisions and you would have
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conversations with colleagues and then
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that would always stem you out to go and
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do further research and then come back
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and you would summarize your research
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and you would send that over to your
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colleagues you seem like like somebody
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that's just like obsessed similar to
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your squash story earlier too you were
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just obsessed with with personal finance
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and learning more about it and and
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really diving deep into it and then it
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seemed obvious to me but I guess it
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wasn't obvious to you until a colleague
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pointed it out that hey you should just
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publish this for other people to read
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you know or you know make it easier for
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us to share out so that ended up
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obviously leading to to the route of you
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starting a blog any gaps to to fill on
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that or or what not no it's it's a
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perfect description I mean like probably
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a lot of your listeners I was a little
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bit lost in my own personal finances I
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commiserated with co-workers just like
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you describe and those quote unquote
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water cooler talks turned into follow-up
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emails that sometimes went into the
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nitty-gritty or or provided some cool
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graphics to go along with them and those
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followup emails eventually turned into
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blog posts and that's how the best
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interest started and really started with
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no particular aspirations or or High
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Hopes but quickly became something that
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was very fun for me like I I love
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writing I love the process of writing I
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don't know how many of your listeners
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are familiar with the term SEO which
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stands for search engine optimization so
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some websites out there they write to
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let Google know hey you should send
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readers to my website and that's that's
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perfectly fine that's a great way to run
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a business as a website but for me I
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just love writing about things that I
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find mentally stimulating you know
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finance and investing topics that I find
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interesting and what I found is that I'm
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not getting maybe the Google traffic
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that some of the big websites get but
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I've I've kind of grown this Grassroots
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audience that enjoys the same things
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that I enjoy so I like writing about
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these topics and I found this audience
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that likes reading about these topics
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and it's a very happy marriage and you
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were obsessed so much so that you ended
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up changing careers you know most Rec I
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I was this last year that you made this
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this transition it was around this time
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last year that I started the
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conversation where I basically I was I
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was at that point seven years into my
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engineering career and I I call my
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engineering career lukewarm you know a
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six out of 10 a seven out of 10 I
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enjoyed it most of the time but not all
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the time but what I really enjoyed was
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writing these articles after work and
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and you know interacting with my readers
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and and anything having to do with the
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you know appearing on podcasts like this
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one anything that had to do with the
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investing side of things that's what I
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enjoyed so I started some conversations
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I'm up in Rochester New York so I
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started some conversations with some uh
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some local people who I knew who were in
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banking or who were in real estate
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investing or who who worked in wealth
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management just anything that had to do
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with finance and I said hey what would a
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path look like to work at your company
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to work with you what would I be doing
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how do I get there and some of the paths
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were were very difficult some of them
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took years of work to get there other
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paths ended up in places that I didn't
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quite feel comfortable because you know
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not every job in the financial industry
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do I feel like actually looks out for
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the end client or the end user's best
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interest right so some some jobs I'm
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like you know what I I just don't want
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to do that and thankfully by the end of
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2021 I had found a firm that I I loves
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the work they do
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they had a role that that fit really
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really well with my skill set meaning
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you know writing communicating working
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with people one-on-one helping them
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understand Financial Basics the cherry
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on top was that they were like yeah we
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we want to hire you if you want this job
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it's yours so it was a very it's been a
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very happy marriage so far so I'm seven
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months in I started in January and I
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love coming to work every day what was
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once luke warm is now boiling hot in a
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good in a good way you know every day is
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a 10 out of 10 yeah well good for you
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and hat tip to you for making or taking
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those steps because as you mentioned you
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were lukewarm and making a significant
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amount amount of money as a mechanical
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engineer and there's a lot of Safety and
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Security around that and it takes a lot
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of bravado to go out and change things
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because you have an intuition that you
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might like it more and and our good
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friend Joel ly also agreed I reached out
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to him prior to this this and I just
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asked hey what you know a question you'd
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ask him or a thought that you have on
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him and and I'll read for btim here he
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said last year he he did a ballsy move
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of switching careers and jobs to
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something that he's more passionate
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about this was a pay decrease for him in
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in the short term but has a significant
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upside potential for him in the long
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term that sums up Jesse's General
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thinking that he is able to calculate
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life moves in a wise and long-term
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thinking kind of way he is completely
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okay sacrificing the little things now
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in exchange for the bigger things later
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so first can you confirm that that's a
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fair assessment of you and then second
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anything to add to this I can confirm
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that Joel o is awesome if you guys
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Justin and I know it to be true and any
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of you listeners go check out 5 AM
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jo.com Joel is one of my favorite humans
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he was he was also on the podcast too I
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think episode 31 we'll talk a lot but
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you know if you really love this
00:13:46
conversation you'll probably love that
00:13:48
conversation with Joel as well awesome I
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can confirm that what Joel said there is
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is more or less true I took a pay cut to
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switch careers the engineering path like
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you said Justin was was well paid and
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was not cushy per se but comfortable in
00:14:03
that like I I my job security was
00:14:06
Skyhigh whereas at this job not only is
00:14:09
there a pay cut but to some extent it's
00:14:13
it's part of my role here is business
00:14:15
development meaning I'm I'm out in the
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community I'm talking to people and and
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sure I'm I'm writing on behalf of my
00:14:21
firm I'm working with clients of the
00:14:23
firm already but I'm also expected to
00:14:25
bring in new clients who who need our
00:14:28
help who are a fit for the firm and
00:14:30
that's a kind of pressure that Engineers
00:14:32
very rarely have to deal with but I just
00:14:34
kind of looked in the mirror and said I
00:14:37
believe in myself I know I can work hard
00:14:39
one of my favorite parts of this job is
00:14:41
that a lot of it is built on trust a lot
00:14:43
of it is I'm sitting across from a
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potential client and I need that client
00:14:47
to trust that them coming to work at
00:14:50
Cobblestone is the name of my firm that
00:14:52
them coming to work at Cobblestone is a
00:14:53
very trustworthy relationship because
00:14:55
they're often putting a lot of money a
00:14:58
lot of their their life's energy in our
00:15:00
hands and I can look at myself and say
00:15:03
you know what I think I am trustworthy
00:15:05
and I think I can help people understand
00:15:08
that so I think in the long run I'll be
00:15:09
good at this job but it's a scary
00:15:12
interim that intermediate time between
00:15:15
the the the safety net of engineering
00:15:17
and whenever that that long run here at
00:15:19
Cobblestone occurs it's a test it's a
00:15:23
test so so far so good but the results
00:15:26
don't come overnight and that's another
00:15:28
part I think for anybody listening to
00:15:30
this is when you find yourself in a in a
00:15:33
job or any kind of opportunity in life
00:15:36
where the cause and the effect have a
00:15:39
long time period in between them it it's
00:15:42
really challenging because you don't get
00:15:44
that positive feedback that you're
00:15:45
looking for right away and so right now
00:15:48
Justin I'm in this point in my career
00:15:49
where I'm like you know what I think I'm
00:15:51
doing the right things my management
00:15:53
team here is happy with what I'm doing
00:15:55
and they think I'm doing the right
00:15:56
things but some of the these
00:15:58
relationships might take years to form
00:16:00
or some of this Trust might take years
00:16:02
to form so I don't really get all the
00:16:04
positive feedback I'd like to get until
00:16:07
12 24 60 months from now so it's it's
00:16:12
been an interesting
00:16:13
change yeah and we could probably
00:16:15
extrapolate that concept out and apply
00:16:17
that to finances as well I mean just the
00:16:20
concept of compounding interests you
00:16:22
really don't see a lot of the immediate
00:16:24
returns especially if you enter
00:16:26
investing in a recession or in a down
00:16:28
period as well you might see some
00:16:30
negative impacts from the get-go but
00:16:33
more times than not almost every time
00:16:35
you know if you're a long-term investor
00:16:37
you will see the positive returns and
00:16:39
and you'll see compound interest take it
00:16:41
take it effect yeah I mean one I it's
00:16:43
one of my favorite topics to write about
00:16:45
is is the idea that not everything in
00:16:49
investing is golden all the time and
00:16:51
this was it was a great topic to write
00:16:52
about for like 2018 2019 2020 2021 when
00:16:57
the market was on this multi year bull
00:16:59
market everything was kind of increasing
00:17:01
it was very easy to be making money as
00:17:04
an investor especially as a as a stock
00:17:06
market investor and I was writing a lot
00:17:09
of topics to my readers being like hey
00:17:11
let's let's zoom out a little bit let's
00:17:13
look at long-term averages let's look at
00:17:15
some kind of bad periods in Market
00:17:17
history and let's try to put some
00:17:19
perspective on what we're seeing here
00:17:21
because I was having conversations with
00:17:23
a lot of 24 26 you know a lot of young
00:17:25
adults who are like yeah it's pretty
00:17:27
easy I put my money in the market I get
00:17:28
my 15% per year based on that I should
00:17:32
hit Financial independence by age 34 I'm
00:17:34
like okay time out let's go back you
00:17:36
said my 15% per year let's talk about
00:17:40
that right like that's not necessarily a
00:17:42
realistic expectation of of what the
00:17:44
stock market will give you it it
00:17:45
happened to be true for 2018 and 2019 or
00:17:49
whatever the years were but that's not
00:17:50
realistic going forward and yeah there
00:17:52
have been some periods in stock market
00:17:54
history where you could very easily put
00:17:57
this steady drift of money into your
00:17:59
investing account by some Diversified
00:18:02
let's say S&P fund and 5 years later
00:18:06
have less money than you put in even 10
00:18:08
years later have less money that you put
00:18:10
in the stock market has had 10year
00:18:13
periods of real negative return but when
00:18:16
you zoom out to that 15 20 30e timeline
00:18:20
that's where you start to see this thing
00:18:21
called reversion to the mean where very
00:18:24
bad periods often revert to the mean and
00:18:27
and are followed by quite a good period
00:18:29
what we might be seeing here in 2022 is
00:18:32
a very long good period from 2012
00:18:36
roughly until 2021 is now reverting back
00:18:39
to the mean of around uh 10% return per
00:18:43
year that's been the long-term average
00:18:44
of the S&P 500 so it is good Justin to
00:18:49
to remind people that you oftentimes can
00:18:52
be doing the right thing today but you
00:18:55
might not see that really good result
00:18:57
until a few years from now yeah and I've
00:19:00
been having lots of conversation
00:19:01
recently especially this being maybe one
00:19:04
of the first recessional periods of you
00:19:07
know young investors careers as of right
00:19:10
now I mean we had the blip in in 2020
00:19:12
but that rebounded quickly and rebounded
00:19:15
you know statically pretty quickly as
00:19:17
well you know by the end of the year and
00:19:18
into 2021 but yeah just a lot of
00:19:20
reassurance too and honestly for myself
00:19:23
as well I feel I feel like you and you
00:19:26
know you know Jeremy Schneider over at
00:19:27
personal Finance Club I've been
00:19:30
consuming a lot of your information as
00:19:31
just reinforcement to okay you know this
00:19:34
is what we predicted this is how the
00:19:36
market works this is the regression to
00:19:38
the mean as you were mentioning it is
00:19:40
okay you know stick to the plan because
00:19:42
honestly my plan was you know 30 or 40
00:19:44
or 50y year plan by the end of that
00:19:46
you're going to come out on the right
00:19:48
side correct correct and and like it's
00:19:51
people will be like well are you are you
00:19:53
sure and the answer is like well I'm not
00:19:56
sure but I don't know what any sort of
00:19:59
better plan is right like I cannot
00:20:02
guarantee that 30 years from now the
00:20:04
stock market will be higher than it is
00:20:06
today I can't guarantee it but I think
00:20:08
it's the best probabilistic bet of any
00:20:11
other bet out there right it's it's not
00:20:14
a guarantee but you know it's it's the
00:20:16
kind of thing that I don't know what
00:20:18
else to do with my long-term money other
00:20:21
than put it in some sort of stock or
00:20:24
stock like
00:20:25
portfolio so let's dive into that a a
00:20:28
little bit deeper like you the question
00:20:30
I get most frequently from listeners or
00:20:32
the audience or people that just know
00:20:34
that I'm a personal finance junkie is
00:20:36
where do I start I want to start
00:20:38
investing I just don't know what to do
00:20:39
and you have this concept of financial
00:20:42
order of operations can you expand on
00:20:43
that a little bit and then maybe walk us
00:20:45
through some of the first few steps in
00:20:46
that sure sure so the the financial
00:20:49
order of operations it's it's useful for
00:20:51
both beginning investors and really just
00:20:53
anyone who's beginning their personal
00:20:55
finance journey and I separate those two
00:20:57
ideas is out you know investing is more
00:21:00
about trying to grow your money whereas
00:21:02
personal finance is more about how to
00:21:04
deal with the daytoday uh aspects of
00:21:06
your money so something like budgeting
00:21:08
that's a personal finance topic what
00:21:10
bank account should I have that's a
00:21:11
personal finance topic investing is more
00:21:13
of like the 401K Ira brokerage account
00:21:17
stocks bonds crypto so the financial
00:21:19
order of operations is based on the
00:21:23
mathematical order of operations in a
00:21:25
way you know please excuse my dear Aunt
00:21:27
Sally p what was that parentheses
00:21:29
exponentials multiply divide that that
00:21:32
thing so it basically says if you have
00:21:35
money that you don't know what else to
00:21:37
do with let's say I just gave you a pot
00:21:38
of $10,000 right now Justin you might
00:21:41
have this question well shoot what's the
00:21:44
best thing that I can do with my money
00:21:47
like and and and how do I compare all
00:21:49
these different options and how do I
00:21:50
order the different options I have in
00:21:53
terms of Best Thing I should do and then
00:21:55
once that's covered the next best thing
00:21:57
I should do all the way down the line so
00:22:00
the financial order of operations would
00:22:01
start and say listen Justin do you have
00:22:03
a
00:22:04
budget that's for me that's Step Zero
00:22:06
it's like do do you have a budget and we
00:22:08
we can get back into budgeting later I
00:22:10
I'll move on to step one so step one
00:22:12
it's create a small emergency fund so
00:22:15
you should have and this is for all for
00:22:17
all listeners out there at least for
00:22:19
most listeners you should have somewhere
00:22:21
around $1,000 sitting in your bank
00:22:23
account that is earmarked for the
00:22:25
express purpose of I need money really
00:22:29
fast because something bad happened in
00:22:30
my life my car broke down and I need
00:22:33
$800 to the mechanic today to cover that
00:22:36
expense so it provides you this little
00:22:38
mini safety net and then okay once you
00:22:40
have that covered so let's say Justin
00:22:42
let's say I you were a blank slate and I
00:22:44
just gave you $10,000 your first
00:22:46
thousand maybe 2,000 would go to cover
00:22:48
that step right and then you'd move on
00:22:50
to step two of the financial order of
00:22:52
operations pay off all your high
00:22:54
interest debts I would ask you Justin
00:22:56
well listen are you in credit card debt
00:22:58
because credit card debt typically has
00:23:00
an interest rate of 16 18 20% per year
00:23:05
and paying off that debt is the next
00:23:08
smartest thing that you can do with your
00:23:10
money so I tell you to do that and we
00:23:13
would just keep going right down the
00:23:14
line I think there's maybe 11 or 12
00:23:16
steps 10 steps in the in the in the
00:23:18
little PDF that I put together it would
00:23:21
just help someone figure out the next
00:23:23
smartest thing I can do with my money
00:23:26
based on where I am in life yeah and I
00:23:28
think your first entry point into
00:23:30
investing probably step three I believe
00:23:32
was your 401k match because leaving
00:23:35
money on the table there I mean that's
00:23:38
50 even 100% match you're not going to
00:23:40
find those returns anywhere else but the
00:23:42
credit card makes sense and the high
00:23:45
interest rate you define is pretty much
00:23:46
anything above the the mean for what
00:23:49
should be the standard stock market
00:23:50
return so if you have something 10% or
00:23:53
higher you you're probably considering
00:23:55
that as high interest debt correct right
00:23:57
for from from a mathematical point of
00:23:59
view if you have a debt with an interest
00:24:02
rate of right 10% or higher you're
00:24:05
you're better off paying down that debt
00:24:08
than investing money in the stock market
00:24:11
I would totally agree with that and
00:24:13
actually and one one good point that you
00:24:14
just brought up Justin that made me
00:24:16
think is you know the steps that I put
00:24:18
together they're Up For Debate I have no
00:24:20
problem with someone kind of saying like
00:24:21
really you would put paying off high
00:24:23
interest debt ahead of getting your 401k
00:24:26
match I depending on who the person is
00:24:28
and how much debt they're in listen like
00:24:30
you said free money is free money for a
00:24:32
lot of people I think getting that 401k
00:24:33
match might be better than paying off
00:24:35
the high interest debt so it's like do
00:24:37
you want to switch steps two and three
00:24:39
sure go for it but switching steps two
00:24:42
and nine that's probably where itd be
00:24:44
like well there's an order for a reason
00:24:47
and and for the most part sticking to
00:24:48
that order of operations is definitely a
00:24:51
a beneficial structure for someone who
00:24:54
has no background in this so I want to
00:24:56
push back on this a little bit as well
00:24:58
and so I was listening to a Twitter spes
00:25:00
Replay that you posted on your podcast
00:25:03
and you guys were discussing this kind
00:25:06
of tried andrue method with your
00:25:07
financial order of operations and you
00:25:09
mentioned that you know if someone came
00:25:11
to you with that question where do I get
00:25:12
started you you said go get your 401k
00:25:15
match and use it to invest into a total
00:25:18
market fund and then I believe his name
00:25:20
was Shadow he pushed back or he
00:25:22
countered and said he would experiment
00:25:25
early he would screw up multiple times
00:25:27
he would skip safely investing into the
00:25:29
401K and shoot for the moon he would try
00:25:32
and you know try 10 different income
00:25:34
streams because you can always invest
00:25:36
later do you have a Counterpoint to that
00:25:39
or some other thoughts you didn't you
00:25:41
didn't elaborate any further on that and
00:25:43
I'm not you know I'm I'm guessing you
00:25:45
would also be open in two trying
00:25:48
different experiments in that sense too
00:25:49
it's not like you're saying like one way
00:25:51
is right and one way is wrong but what
00:25:52
will be your counter back to Shadow on
00:25:54
this great question everyone's built a
00:25:57
little bit different when people in
00:25:59
general ask me about my thoughts on you
00:26:02
can call it sandbox investing play money
00:26:05
on the thought of like listen I kind of
00:26:07
want to invest the way I want to invest
00:26:08
I don't want to follow your boring Index
00:26:10
Fund method one thing I point them to is
00:26:14
the wisdom of John Bogle who was the
00:26:16
founder of the Vanguard group who really
00:26:18
was the person who was you know he is
00:26:20
the the way that Paul was to Jesus on
00:26:23
spreading the word of Christianity John
00:26:25
Bogle is to the index fund okay he's the
00:26:29
who spread the the wisdom of the index
00:26:31
fund and John ble would say yeah take 5%
00:26:34
of your money do whatever the heck you
00:26:36
want with it Bitcoin individual stocks
00:26:40
junk bonds real estate Ventures whatever
00:26:43
you want totally fine the other 95% of
00:26:46
your money should be in some form of
00:26:48
tried and true
00:26:51
lowcost doesn't have to be an index fund
00:26:53
of stocks or bonds per se but something
00:26:55
that's at least is tried and true that
00:26:57
that you really believe in I know some
00:26:59
people out there might be like well what
00:27:00
if I want to do Residential real estate
00:27:03
as kind of a a landlord instead of
00:27:06
investing in the stock market okay if if
00:27:08
you if you know a lot about being a
00:27:09
landlord go for it because it's a
00:27:11
reasonably tried and true investing
00:27:13
method but the idea of someone saying
00:27:16
like well I'm going to take my money for
00:27:18
the next two years I'm going to take
00:27:19
$10,000 a year and I'm just going to do
00:27:22
a whole bunch of random stuff with it my
00:27:24
main hesitation and my main push back
00:27:26
there is
00:27:28
it can be an interesting way to learn
00:27:32
but it's kind of like putting someone in
00:27:34
the cockpit at 30,000 feet and saying
00:27:36
like let's go go Learn to Fly you're
00:27:38
you're you're doing it now you're live
00:27:41
that's a tall order and it probably
00:27:43
doesn't end well most of the time I
00:27:45
think the people who do land that plane
00:27:47
successfully they're like see I did it I
00:27:50
learned and That's a classic case of
00:27:52
survivorship bias I think for most
00:27:54
people our age they're going to lose
00:27:56
that money quick l or they're going to
00:27:59
be so far out of their depth that
00:28:01
they're not going to have any sort of
00:28:02
conviction in their Investments right
00:28:06
the first blip of of turmoil they're
00:28:08
going to cut and run and and they're not
00:28:10
going to be in a better place for it and
00:28:13
I mean my opinion is you could do a
00:28:14
blend of both as you mentioned the 955
00:28:17
you can you can change that maybe it's
00:28:19
8020 maybe it's even 5050 I think even
00:28:22
attacking it from the 50-50 standpoint
00:28:24
this tried and true method and then also
00:28:26
this 50% of your income especially early
00:28:28
on deployed at things that find you that
00:28:31
you find interest in but outside of that
00:28:32
I think it's also you're also capable of
00:28:36
running experiments with low Investments
00:28:38
I mean I I will point to your blog and
00:28:41
you know running your blog and I'm
00:28:42
guessing you probably had a little bit
00:28:44
of a text stack on the background that
00:28:45
you had to to pay for your website and
00:28:48
and you know I know you have grammarly
00:28:50
and things like that even though I don't
00:28:51
think you had it you know when you're
00:28:52
first starting but you might you might
00:28:54
need $500 to start this blog and you're
00:28:56
running that experiment and you're
00:28:58
getting it to a place where it is
00:29:00
creating some kind of s stream of income
00:29:02
for you without it necessarily being you
00:29:05
know all of your investment money that
00:29:08
you're putting into these certain things
00:29:09
that may or may not hit so I think you
00:29:11
could probably do a blend of the two
00:29:13
totally agree I do totally agree and and
00:29:16
like I you know to elaborate if I were
00:29:19
to think about my budget it's not that
00:29:22
95% of my extra money goes towards
00:29:25
investing definitely not like you said
00:29:27
like I've got a line item in my budget
00:29:29
for the blog and like I think about okay
00:29:32
how putting some of my personal income
00:29:34
into the business into the blog and it's
00:29:37
totally true like I invest in myself in
00:29:40
that way and yeah if someone wants to
00:29:42
take their portfolio and 8020 it or even
00:29:44
5050 it I totally understand my
00:29:46
recommendation would be take good notes
00:29:49
take really good notes on what investing
00:29:51
decisions you're making why you're
00:29:53
making them understand your own
00:29:55
rationale and then be really honest with
00:29:58
yourself in the subsequent years look
00:30:01
back a year later and compare your
00:30:04
boring tried and true investment that
00:30:07
John Bogle recommended or whatever it is
00:30:09
against your against your experimental
00:30:12
portfolio sure and and see how you did
00:30:15
and see if your rationale held up I
00:30:18
think that's also important too it's not
00:30:20
just about the results it's also about
00:30:21
how your reasons held up yeah we talked
00:30:25
about this on the podcast before it's in
00:30:27
the early 60s maybe 60 or 61 with a a
00:30:30
gentleman called Darren shate he had
00:30:32
this concept that we talked about near
00:30:34
the very end of the episode called
00:30:36
decision journaling and he would he runs
00:30:38
a a tech company out in San Francisco
00:30:40
and he writes the decision he makes why
00:30:43
he made that decision and then he'll
00:30:45
postmark that and revisit that maybe six
00:30:47
months or a year later whenever that
00:30:49
decision has a little bit more Runway to
00:30:51
it so that he can start to analyze why
00:30:52
did I make that decision what were my
00:30:54
blind spots where did it like what was
00:30:56
the actual result in the outcome so that
00:30:57
could be an interesting thing to go back
00:30:59
and incorporate into your investing
00:31:01
career but like you as well I it's funny
00:31:03
you mention that I do the same thing and
00:31:05
it's not in my investments but it's
00:31:07
actually in my budget I have a line item
00:31:09
called personal development and it is
00:31:11
money that I need to spend on myself and
00:31:13
part of that is anything and everything
00:31:14
that I want to spend money on my podcast
00:31:16
for because I see my podcast as a
00:31:18
modality for me to go out and learn and
00:31:20
grow and kind of invest into myself so
00:31:23
yeah maybe it is a good idea to to maybe
00:31:25
just make a line item in your budget for
00:31:27
that and you can go and run maybe it's
00:31:30
called entrepreneurship and you put
00:31:32
aside you know a certain amount of money
00:31:34
every single month to just go and try
00:31:37
entrepreneurship and you know Ventures
00:31:38
whatever capacity that may look like
00:31:41
totally agree I I don't think you can
00:31:43
really you can't really go wrong with
00:31:46
investing in yourself in that way in my
00:31:48
opinion do smart things do do
00:31:50
interesting things uh yeah pursue your
00:31:53
podcast pursue your blog pursue whatever
00:31:56
it is it's hard to it's hard to misspend
00:31:59
money that way if you have room in your
00:32:01
budget for it definitely I would agree
00:32:03
with that I I know you're like a
00:32:05
hardcore fanatic for budgeting you've
00:32:07
tracked every penny since November 2018
00:32:11
do you have any interesting you know
00:32:14
budget lines or you know weird just
00:32:17
crazy things that you wouldn't share
00:32:18
with strangers maybe only like hardcore
00:32:20
personal finance people that you're like
00:32:22
yeah I do this with
00:32:24
budgeting I mean I I would say this and
00:32:26
I think it might be beneficial for
00:32:28
people to hear it I am fully aware that
00:32:31
I am on the far end of a spectrum when
00:32:34
it comes to budgeting yeah me too and I
00:32:36
don't and I don't by any means do I hold
00:32:39
other people up to that standard I don't
00:32:40
suggest people start with that I think
00:32:43
it's got its benefits like trust me like
00:32:44
if someone were to say Jesse I want you
00:32:47
to tell me the most beneficial way for
00:32:49
me to budget I would say well if you
00:32:52
want to put in the time you should start
00:32:54
tracking every penny you earn and spend
00:32:57
it's just a great way to have this
00:33:00
confidence that you know where all your
00:33:02
money is and you know the reasons or the
00:33:07
the purposes for your money in the
00:33:09
future you know so like in my bank
00:33:11
account right now I have a few months of
00:33:15
emergency fund but for the months of
00:33:17
August and September I know that for the
00:33:21
remainder of August I have $250
00:33:24
earmarked for groceries and then when
00:33:26
September first hits that account or
00:33:29
that bucket kind of resets and I have
00:33:31
$350 for groceries in September and I
00:33:34
know that the money in my bank account
00:33:36
has already been allocated for those
00:33:38
specific purposes it gives me a lot of
00:33:40
confidence it gives me a lot of faith
00:33:42
when I spend my money I'm not worried
00:33:44
about overdrafting or or anything along
00:33:47
those lines okay well that that is a
00:33:50
little bit of a a commitment for someone
00:33:53
who's new to budgeting so the one thing
00:33:55
I would say to a new new budgeter is you
00:33:58
can't manage what you don't measure okay
00:34:01
you can't improve something that you're
00:34:03
not even measuring so at the very
00:34:06
Baseline you need to somehow measure
00:34:09
your inflows and your
00:34:11
outflows a good starting point that's
00:34:13
super basic is every other Friday or
00:34:17
maybe every Friday put a little reminder
00:34:20
on your work calendar to Simply log into
00:34:23
your bank accounts just your bank
00:34:25
accounts and write down where they're at
00:34:28
every Friday so some Fridays they might
00:34:30
be up because you got paid that week
00:34:32
other Fridays they might be down because
00:34:34
you've been spending money and over time
00:34:37
over a series of say three months or six
00:34:39
months you're going to get let's say you
00:34:41
do it every Friday so over six months
00:34:43
you're going to get 26 data points 26
00:34:45
Fridays in six months and you're going
00:34:47
to be able to see some pattern when are
00:34:49
you spending a lot are you spending a
00:34:51
lot are you saving money are you losing
00:34:53
money and that hopefully will influence
00:34:56
you today dig a little bit deeper and
00:34:58
say like oh crap most of these months
00:35:01
I'm I'm saving $500 a month but this
00:35:04
most recent month I actually overspent
00:35:06
by $1,000 my account went down $1,000
00:35:09
this month where did that money go how
00:35:11
how did I spend that money and it might
00:35:14
give you a little bit of a barometer to
00:35:15
then dig in a little bit deeper and
00:35:18
understand not just the broad strokes
00:35:20
but even put the more specific how are
00:35:23
you spending your money on a daily
00:35:25
weekly monthly basis m
00:35:27
I see most people whenever they start
00:35:29
budgeting end up getting deeper and
00:35:31
deeper and deeper into budgeting I
00:35:33
helped my girlfriend set up a budget
00:35:34
maybe two years ago and now she has like
00:35:36
this extensive Google Sheets breakdown
00:35:39
of everything and she wants like more
00:35:41
categories so that she can you know
00:35:43
finally identify more specific things
00:35:46
which I love but to an extent too as you
00:35:49
mentioned we might be on the other side
00:35:51
or scale of this the the budgeting
00:35:54
sphere of like kind of going too deep
00:35:55
into it which brings me to another
00:35:58
thread that I really wanted to talk
00:35:59
about to you with because it resonated
00:36:01
it really hit me pretty well which was
00:36:03
this success to stress ratio can you
00:36:06
explain what that is and kind of put
00:36:08
some context around it maybe with a
00:36:10
specific example yeah totally to that
00:36:14
one I I'm sure I got influenced by
00:36:17
someone somewhere but I don't remember
00:36:19
who so to some extent I put my own twist
00:36:21
on the success to stress ratio when I
00:36:24
view personal finance and investing and
00:36:26
I'm when I'm talking to other people
00:36:28
about it I want them to Envision a
00:36:31
fraction which I know scary fractions
00:36:33
nobody really likes a whole lot of math
00:36:35
in this episode already man we got the
00:36:37
order of operations fractions now I know
00:36:40
but in the in the numerator of this
00:36:42
fraction so on the top of this fraction
00:36:45
we have success and on the bottom of
00:36:47
this fraction we have stress and
00:36:50
whenever you want to increase a ratio or
00:36:53
increase a fraction you want the the one
00:36:55
on top to to go up and you want the one
00:36:58
on bottom to go down so I want to help
00:37:01
people find as much success as they
00:37:04
possibly can without necessarily
00:37:07
stressing over it so I want the stress
00:37:09
to go down so the budgeting is is a
00:37:11
perfect example here Justin because on
00:37:13
the one hand I would say if you do want
00:37:15
to maximize your success you should be
00:37:18
tracking every single dollar every
00:37:20
single dollar but for some people that's
00:37:23
going to be a pretty stressful exercise
00:37:25
they're going to FL they lost a receipt
00:37:27
they paid cash so they don't have
00:37:29
evidence on under the credit card
00:37:30
statement you know they don't remember
00:37:32
how they spent like listen Okay that
00:37:34
that might be too much stress so instead
00:37:37
let's let's dial down the success part
00:37:39
of it a little bit by being a little bit
00:37:41
less detailed but in the in parallel to
00:37:44
that we're dialing down the stress a ton
00:37:47
so that's a pretty big win we're turning
00:37:49
down the stress and we're only
00:37:51
sacrificing a little bit of success same
00:37:53
goes for investing right if someone were
00:37:56
to tell me I spend four hours a day
00:37:59
researching individual stocks because I
00:38:02
think I'm going to beat the S&P 500
00:38:05
returns by 1% per year okay that 1% per
00:38:09
year beating the S&P that's a success
00:38:12
that's good but is the stress of four
00:38:14
hours a day of research is that worth it
00:38:17
I'm not sure so for each person I would
00:38:19
say how much you know let's talk about
00:38:21
how successful you can be in these
00:38:23
various exercises in personal finance
00:38:25
and investing and let's also consider
00:38:27
how much stress it's going to add to
00:38:28
your life let's increase the stress as
00:38:30
much as we can while also keeping did I
00:38:34
say that right we want to increase the
00:38:35
success as much as we can while keeping
00:38:37
the stress relatively low yeah and I'm
00:38:40
glad that you brought the stress aspect
00:38:42
into it as well I think as a personal
00:38:45
finance Enthusiast I sometimes am too
00:38:48
heavy on the success piece to it where
00:38:51
you're getting small dividends of return
00:38:53
in terms of success for a substantial
00:38:55
amount of stress and therefore the ratio
00:38:58
is actually getting smaller even though
00:39:00
in hindsight I thought or in my view it
00:39:03
was getting larger because I was
00:39:04
increasing the success piece to it and
00:39:06
you know even simple things like if you
00:39:08
want to use an adviser to some PE for me
00:39:11
it's like is a 1% or 2% AMU really worth
00:39:16
what an adviser can can provide to me
00:39:18
maybe maybe not that's different for
00:39:20
everyone and you need to ask yourself
00:39:21
that question is the stress of managing
00:39:24
it or a diyi approach to your investing
00:39:27
you know is handing that off to somebody
00:39:29
else maybe worth the the stress that it
00:39:31
also alleviates in that sense as well
00:39:33
totally I can't just to back up what you
00:39:36
said there Justin not every person needs
00:39:40
a financial advisor period there are
00:39:42
tons of people out there I mean listen
00:39:44
when I was doing my engineering thing
00:39:46
there's no there was no way especially
00:39:48
at my age that I needed or wanted or
00:39:51
would have really benefited from a
00:39:53
financial adviser maybe as I approached
00:39:55
retirement having someone to help me
00:39:57
with some financial planning stuff some
00:39:59
of the taxes withdrawals y estate
00:40:01
planning that gets complex especially
00:40:03
for the average person but just like you
00:40:06
said for some people for some people not
00:40:08
all people paying like you said a 1% AUM
00:40:12
fee it helps alleviate their stress a
00:40:15
ton it hopefully helps them achieve a
00:40:18
little bit more success and even if that
00:40:21
adviser says listen I'm not going to
00:40:22
beat the market for you all I'm going to
00:40:24
do is give you average Market return
00:40:26
Returns on your investment but I'm going
00:40:28
to charge you for it so essentially that
00:40:30
person's now going to be underperforming
00:40:31
the market having a professional by
00:40:34
their side is going to alleviate enough
00:40:37
stress for them to be good it might save
00:40:40
the money because now they're not going
00:40:41
to be tempted to pull their Market their
00:40:43
money out of the market when things go
00:40:44
badly they'll have a professional
00:40:45
helping them so there are these these
00:40:48
benefits in in advising and particular
00:40:51
that right not for everybody but for
00:40:53
some people it's it's a good thing is
00:40:55
there something that being a a personal
00:40:57
finance content creator is there
00:41:00
something that you disagree with the
00:41:02
majority of personal finance writers on
00:41:04
is there a topic that that comes to mind
00:41:06
whenever I ask that question there are
00:41:09
some really big ones there are some
00:41:10
really big ones actually and it's most
00:41:13
of the time it's a perfect example of I
00:41:16
want to say this is uh Sigman Freud the
00:41:19
narcissism of small differences you
00:41:21
heard that have you heard that before no
00:41:23
sounds really interesting so it's this
00:41:24
concept and I don't want to I'm not a
00:41:27
psychologist but I I think I I think I
00:41:29
got the attribution correct essentially
00:41:31
when you have two people who are very
00:41:34
well informed on a particular
00:41:37
topic they find they can have very large
00:41:40
disagreements about very small
00:41:42
differences so you can take two
00:41:45
evolutionary biologists and one says
00:41:48
this thing thing a and the other person
00:41:51
says something that's 1% different and
00:41:53
they are going to find a way to have a a
00:41:56
heated debate about that 1% difference
00:41:59
because according to Sigman Freud it's
00:42:01
like you know we we get a little bit
00:42:03
narcissistic and and self- indulged
00:42:05
about these little things that we find
00:42:07
different than other people okay so a
00:42:10
lot of that happens in my opinion in
00:42:12
personal finance and investing where you
00:42:15
and I Justin could agree on 99% of the
00:42:18
stuff that we talk about but that 1%
00:42:20
that we disagree instead of just kind of
00:42:22
letting bygones be bygones it's very
00:42:24
easy for us to have this heated debate
00:42:27
okay so that's my Preamble because
00:42:30
because some of these some of these
00:42:31
quote unquote debates yeah well I do
00:42:33
have some and and some of them I just
00:42:35
think like guys we are making mountains
00:42:37
out of mole Hills here it's not that big
00:42:39
a difference so one that really comes to
00:42:41
mind is what I would call the math
00:42:44
versus psychology debate and that debate
00:42:47
in simple terms is should someone do
00:42:50
what is mathematically optimal for their
00:42:53
finances all the time or should they
00:42:56
account for their psychological
00:42:59
well-being kind of goes back to that
00:43:01
success distress thing some people would
00:43:04
look at my ratio and they'd say screw
00:43:06
stress all I want is Success how do I
00:43:10
maximize success and then others of us
00:43:13
say well hold on a second if you can't
00:43:16
sleep at night because of your portfolio
00:43:19
construction because of how much risk
00:43:20
you've taken is that a good outcome so
00:43:23
personally on this debate I fall on the
00:43:25
psychology side of this debate where I
00:43:27
take people's well-being their mental
00:43:29
well-being into account when I'm having
00:43:31
conversations with them but some people
00:43:34
especially people with a math background
00:43:36
people with a a a engineering background
00:43:38
say they're like no no no this is a this
00:43:41
is an algorithm this is a math problem
00:43:43
math problems have Solutions and I'm
00:43:46
going to find the mathematically optimal
00:43:48
solution to get the most money over time
00:43:51
so that's a really big one that I'm not
00:43:53
sure if I'm in the minority or the
00:43:55
majority on it all I know is that
00:43:56
there's a very vocal opposing side to
00:43:59
that debate yeah I see it fairly split
00:44:02
in the space and I've had probably a
00:44:03
dozen personal finance people on and I
00:44:05
bet if I ask them truly what they what
00:44:10
what line of thinking they would fall
00:44:12
under it would be pretty split there
00:44:14
because I do have many people come on
00:44:15
and and especially the little things if
00:44:17
it's got to save you some of your
00:44:19
psychological sanity then go for it but
00:44:22
then I there are some significant
00:44:24
decisions you know if look at the math
00:44:27
there might be a significant difference
00:44:28
between one decision and another
00:44:30
decision and and now we're getting into
00:44:33
nuance and undefined words because we
00:44:35
need to Define what significant is
00:44:36
because some people one you know $50
00:44:39
might be significant right to another
00:44:41
person $50,000 might be significant so
00:44:44
there's lots of nuance in this
00:44:45
conversation but one of my favorites is
00:44:47
I mean the most polarizing person in our
00:44:49
space Dave Ramsey and his his his
00:44:51
thoughts on credit cards and I think a
00:44:53
lot of people disagree with him on his
00:44:56
thoughts on credit cards that no one
00:44:57
should have a credit card which is a um
00:45:00
as you mentioned an absolute rule but
00:45:03
you actually went to defend him on that
00:45:05
and thought there was a lot of insight
00:45:07
or wisdom that you can gain from
00:45:09
creating an absolute rule like that
00:45:11
right it's it's a great thing that's a
00:45:13
fun article if I remember I think do I
00:45:16
is that the one where I compare Dave
00:45:17
Ramsey to a Sith Lord yes yes because as
00:45:21
you Star Wars nerds know only a Sith
00:45:24
deals in absolutes that's a Star Wars um
00:45:27
well yeah so if I remember that article
00:45:29
correctly the problem with leaving
00:45:32
loopholes in rules is that too many
00:45:35
people tend to think that the loophole
00:45:37
applies to them and I think that Dave
00:45:40
Ramsey is aware of that and I I don't
00:45:43
think he's necessarily as stiff and as
00:45:46
much of a stickler as His Radio Persona
00:45:49
presents but I think what he's realized
00:45:52
is that his listeners tend to be better
00:45:55
off off when he makes his rules absolute
00:45:58
and when he doesn't allow for a loophole
00:46:01
because too many people would think the
00:46:03
loophole applied to them and so Dave
00:46:06
Ramsey I think is great at getting
00:46:07
people from negative net worth to zero
00:46:10
he's great at helping people get out of
00:46:12
debt and for people who are in debt I
00:46:15
think cutting their credit card is more
00:46:18
often than not the right thing to do
00:46:20
totally agree totally agree it might not
00:46:22
be right for 100% of people but it's
00:46:24
right for 80 or 90% of people and you
00:46:27
know what if if 10% of people cut their
00:46:31
credit cards when they really shouldn't
00:46:33
have because of they Ramsey's absolute
00:46:34
rule that's an unfortunate consequence
00:46:37
of of his advice but I think on the
00:46:40
whole his advice is good when it comes
00:46:42
to getting out of debt when it comes to
00:46:44
the investing stuff I have my have my
00:46:46
questions for him we'll say but but yeah
00:46:49
R rule making is really hard Justin you
00:46:51
know I I found it's really hard and like
00:46:54
it's funny I I see it every day when I
00:46:55
think about even stuff like corporate
00:46:57
rules like why does a giant Corporation
00:46:59
make a certain rule why are they so
00:47:01
stiff why can't they make allow room for
00:47:02
loopholes and I just think it's because
00:47:05
yeah too many people tend to think the
00:47:06
loopholes apply to them yep I would
00:47:08
agree I see it most frequently applied
00:47:10
in my life in the health space you know
00:47:12
I need to I I'm definitely a a you know
00:47:14
bright lines or a rule maker that I you
00:47:17
know have to set something and then I
00:47:18
just don't really waver from that it
00:47:20
helps me a lot in the health and
00:47:21
wellness space because that is probably
00:47:23
one of the most crippling spaces where
00:47:24
I'm like h
00:47:26
maybe this is when I make an exception
00:47:28
for this certain thing so I've always
00:47:30
loved like the um 75 hard challenge if
00:47:33
you know of that where it's like here
00:47:34
are the five rules that you have to do
00:47:36
every single day and um they do that
00:47:38
over a 75 year period and he is the
00:47:41
creator of it is pretty strict on like
00:47:42
no this is like if you miss this there's
00:47:45
not like a you get a pass like you
00:47:46
restart at zero and you start the the
00:47:48
whole process again and I like the
00:47:50
people that go pretty hardcore into 75
00:47:53
hard but once again I'm also open to it
00:47:56
if if before you set out on it you want
00:47:58
to redefine what some of the rules are
00:48:00
as long as they are definitive rules and
00:48:02
then you're living by that don't
00:48:04
redefine the rules once you're in the
00:48:05
middle of a tough spot you know if
00:48:07
there's something you want to live by
00:48:09
then then go for it and make it can I
00:48:11
ask what are the five rules uh let's see
00:48:13
you have to drink a certain amount of
00:48:15
water every day you have to do two
00:48:17
workouts two 45 minute workouts one um
00:48:20
one of them has to be outside read 10
00:48:22
pages of a personal development book
00:48:25
pick a diet and stick to that diet so he
00:48:27
gives you some flexibility there but you
00:48:28
have to decide up front if it's keto or
00:48:31
no sugar or you know no eating after 6
00:48:34
o'clock whatever you define that ahead
00:48:36
of time and then stick to it and then
00:48:38
I'm missing one more out there if I
00:48:41
remember I'll I'll drop it in so that's
00:48:43
interesting yeah well I diet's a great
00:48:45
one I have struggled on the diet side
00:48:48
not to get away from personal finance
00:48:49
stuff go ahead I've always struggled as
00:48:51
a Dieter and one reason why is because
00:48:54
I'll I'll it's my it's my type one and
00:48:57
type two thinking it's my Danny Conan my
00:49:00
current brain versus my later brain it's
00:49:02
very easy for me right now Justin to say
00:49:04
to you and say to the listeners you know
00:49:06
what I'm gonna have nothing but healthy
00:49:07
food the rest of the day future
00:49:11
me present me planning for future me
00:49:14
it's very easy to say I'm GNA have
00:49:15
healthy food the rest of the day but
00:49:17
when future me is looking at a menu
00:49:20
today when I sit down with someone for
00:49:21
for dinner that person in the present
00:49:24
then is going to have different things
00:49:26
on his mind right and I've always
00:49:28
struggled with that and I think to some
00:49:30
extent if I had been or if in the future
00:49:34
I I am more firm and strict with my
00:49:36
rules it would benefit me
00:49:39
100% so wrapping up this conversation
00:49:42
one more thread for you you're getting
00:49:43
married in like a month now like it's
00:49:46
pretty soon it's coming up five five
00:49:47
weeks from Friday oh man and at this
00:49:50
point in time when people are listening
00:49:51
you will have been married first
00:49:53
congrats man second anything changing
00:49:56
for you in the personal finance space
00:49:58
now that you are getting married things
00:49:59
you're reconsidering thinking about
00:50:02
having a conversation with your partner
00:50:03
about yeah there's going to be some
00:50:06
stuff some things already have changed
00:50:09
and I'm sure some things are going to
00:50:11
change over the last I would say six
00:50:14
months or so or maybe even from the time
00:50:16
we got engaged so it's been 10 months
00:50:18
since our engagement I would say our
00:50:21
finances have combined or at least we're
00:50:23
both more flexible with like sure even
00:50:27
though I've covered the last even though
00:50:28
I've bought the last two dinners I'll
00:50:30
buy this one too because let's be honest
00:50:32
it's the same pot of money yeah right
00:50:34
but I do think or at least I hope we'll
00:50:37
see there there are some conversations
00:50:38
that still need to be had when it comes
00:50:40
to something like okay I've got this
00:50:43
kind of detailed budgeting system my
00:50:45
fiance she doesn't per se have that
00:50:47
detailed budgeting system she's more of
00:50:49
a the other budgeter who I talked about
00:50:51
earlier she reviews her credit card
00:50:53
statement in detail every month and some
00:50:55
months she's like oh I I need to pull it
00:50:57
back a little bit next month that's kind
00:50:59
of her approach to budgeting and I think
00:51:02
maybe we have to find some happy medium
00:51:03
just so that we're spending responsibly
00:51:05
saving responsibly and still doing the
00:51:08
stuff that we both love to do that'll be
00:51:11
an ongoing conversation one that we've
00:51:12
kind of started but I still think the
00:51:14
Lion Share of that conversation lies
00:51:16
ahead of us what about uh life insurance
00:51:19
if I am getting my facts correct I don't
00:51:22
think you had life insurance up until
00:51:23
now are you changing your mind about
00:51:25
that
00:51:26
yeah you're right I I currently do not
00:51:28
have any life insurance she and I will
00:51:31
probably have to talk about it I
00:51:34
definitely think if and when we have
00:51:36
kids for me I'm I then I'm going to try
00:51:40
to encourage her I think we'll both
00:51:42
probably buy life insurance policies at
00:51:43
that point term policies especially if
00:51:46
we potentially move into a bigger house
00:51:48
which is something that we've been
00:51:49
talking about doing and now we've got
00:51:51
that mortgage over our head that might
00:51:54
be a good time for me even if there
00:51:56
aren't kids in the picture to buy a life
00:51:59
insurance policy at least the size of
00:52:01
the mortgage so that in the unfortunate
00:52:04
circumstances that I get hit by a bus or
00:52:06
what I'm really hoping for is you know
00:52:08
if I'm going to die in an unfortunate
00:52:09
way I want it to be a meteor strike I I
00:52:12
just want to go out in a blaze of glory
00:52:14
and be like wow the first human who got
00:52:17
hit by a pingpong siiz meteor directly
00:52:20
in the forehead if it happens then I
00:52:23
want to make sure that my fiance and the
00:52:25
house that we move into is going to be
00:52:27
covered um so that might be our our
00:52:30
impetus and an epic story though and an
00:52:33
epic story an epic story it'd be great
00:52:35
for blog traffic I can tell you that
00:52:36
much no doubt no doubt you have to like
00:52:39
pre-write that one and get it scheduled
00:52:41
and what not so well Jesse I had a blast
00:52:44
talking to you man I'm I'm really
00:52:45
excited to stay connected and continue
00:52:47
to consume your content on your blog if
00:52:50
people are interested in that they can
00:52:51
easily find your blog bestter interest.
00:52:54
blog and then you're super active on
00:52:56
Twitter I love some of your quick short
00:52:58
quby um tweets and they can find you
00:53:01
bestore J C and that's the letters J and
00:53:05
C anything else you'd like to add or
00:53:06
Point people to Justin thank you so much
00:53:09
for having me on this was a blast
00:53:11
nothing else to add I really appreciate
00:53:13
it I got uh one more final question for
00:53:15
you Jesse all right let's do it if you
00:53:18
had the opportunity to teach a 16we
00:53:20
class to a group of graduating college
00:53:22
seniors on a topic that isn't normally
00:53:24
covered in the classroom
00:53:25
what would you teach and how would you
00:53:27
teach it great question Cool question I
00:53:29
gave it some thought beforehand the easy
00:53:32
answer is like go teach personal finance
00:53:34
and investing basics but I don't want to
00:53:36
I don't want to use that answer because
00:53:37
I think there's a cooler answer out
00:53:39
there I think that teaching a course
00:53:41
that would be some sort of like applied
00:53:43
statistics it'd be how to think about
00:53:46
the world in a statistical and
00:53:48
probabilistic manner to help you
00:53:51
understand how you know I think too
00:53:53
often as humans we tribute luck to skill
00:53:56
and skill to luck we look at the
00:53:59
weatherman who said there was an 80%
00:54:01
chance of rain and when rain doesn't
00:54:03
come we're like that idiot what is going
00:54:05
on and I just I look around me and I
00:54:08
just feel that too many people don't
00:54:10
they don't have even a basic grasp of
00:54:12
stats and probability not that I'm an
00:54:14
expert on it but I think I have a solid
00:54:16
grasp of it and it helps me understand
00:54:18
the world in a really fundamental way
00:54:21
and I I would love to teach that to
00:54:23
other people I love that answer very
00:54:26
creative answer and a great class for
00:54:29
decision-making and most of the answers
00:54:32
the general theme on these answers are
00:54:34
usually something that applies to a
00:54:36
higher level decision-making kind of a a
00:54:38
skill with inside of decision-making and
00:54:40
I think that class would fit very nicely
00:54:42
in there so Jesse perfect answer man
00:54:45
thank you Justin you're exactly right it
00:54:47
really is decisionmaking there's a great
00:54:49
quote and maybe this is a good good
00:54:50
quote to end on is from Annie Duke who's
00:54:53
a famous poker player and now she's an
00:54:55
author and a lot of investors love Annie
00:54:58
Duke's writing and the quote is
00:55:01
something like the only the only thing
00:55:03
we can control is our decision- making
00:55:05
everything else is left to luck we have
00:55:08
to optimize our decision- making stats
00:55:10
and probability help us do that perfect
00:55:12
tup I got a former top 20 poker player
00:55:14
coming on the podcast here this will be
00:55:17
not the next episode but the episode
00:55:18
after that so just a nice teaser for
00:55:20
people that are are looking ahead and
00:55:22
we're going to be talking a lot about
00:55:25
statistical decision- making systems
00:55:27
thinking all of that I'm really excited
00:55:29
for that conversation because I I
00:55:31
realized poker players have this skill
00:55:33
really dialed in I'm excited for it too
00:55:36
you're exactly right I'll share your way
00:55:38
whenever it comes out cool thank you
00:55:40
Jesse it's been a pleasure man thanks
00:55:47
Justin thanks for listening guys that
00:55:49
was pretty good wasn't it so thanks
00:55:51
again Justin thanks for having me on the
00:55:52
struggle is real it was an awesome
00:55:54
conversation
00:55:55
and listeners thank you for listening to
00:55:57
the best interest podcast as always you
00:55:59
can reach out to me via email at Jesse
00:56:03
bestin interest. blog I'd love to hear
00:56:05
what you think I love your feedback that
00:56:07
you send me and I'm always happy to
00:56:09
answer your questions here on the
00:56:11
podcast so thank you again for listening
00:56:13
to the best interest
00:56:16
podcast thanks for tuning in to this
00:56:19
episode of the best interest podcast if
00:56:21
you have a question for Jesse to answer
00:56:23
on a future episode send him an email at
00:56:25
Jessie bestin interest. blog again
00:56:29
that's Jesse bestter interest. blog did
00:56:32
you enjoy the show subscribe rate and
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review the podcast wherever you listen
00:56:37
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00:56:39
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00:56:41
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00:56:43
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00:56:46
[Music]
00:56:48
podcast the best interest podcast is a
00:56:50
personal podcast meant for education and
00:56:53
entertainment it should not be taken as
00:56:55
Financial advice and is not prescriptive
00:56:57
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00:56:59
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