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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 hello and welcome to episode 78
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of the best interest podcast my name is
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Jesse Kramer later on in today's episode
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Justin Peters is going to be joining me
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Justin and I are going to have a fun
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back and forth conversation where we
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compare and contrast these independent
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lists that he and I each put together of
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what we consider to be the golden rules
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the most important rules of Personal
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Finance on some ideas we were the same
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on some ideas we had big differences and
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we talk our way through it and I think
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it's just an enlightening conversation
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not only for Justin and I but maybe you
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guys will walk away with some new
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thoughts on things that we find
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important and that maybe you should find
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important in your personal finances too
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but first I want to do a quick listener
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review as always this review comes from
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Apple podcasts I really enjoy when you
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guys leave reviews on Apple podcast I'm
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happy to read them on the podcast and
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send you some best interest gear
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typically a nice soft t-shirt and it
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really is soft by the way this review
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comes from Derek d09 supremely useful
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and accessible Jesse has a knack for
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using everyday experiences to drive home
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his points his work is accessible for
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the everyday investor looking for advice
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to get moving right away extensive
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research and Sage Insight coupled with
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skilled narrative spells a unique and
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one-of aind experience you'll want to
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keep coming back to thank you Derek that
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almost sounds like the review of some
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sort of musical theater right or
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something you'd see in the paper spells
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a unique and one-of aind experience
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you'll want to keep coming back to I
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really appreciate those kind words Derek
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shoot me an email Jesse bestin interest.
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blog and we will get you hooked up with
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some bestest gear that aforementioned
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t-shirt and before I invite Justin on
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today I wanted to use today's monolog
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it's going to be a little bit different
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not necessarily a deep dive into a
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personal finance or investing topic I
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want to talk about the business of the
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best interest in other words you know
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the business model how the best interest
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makes money if it even makes money at
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all and the reason why I'm bringing it
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up is a few folds I suppose one because
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I get asked some of you reach out
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occasionally and say Hey Jesse I I
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noticed you weren't running
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advertisements so I'm just curious how
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does the best interest actually make
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money others if you reach out on
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occasion and you want to find ways to
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support me you say you know hey Jesse do
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you have a patreon that I can donate to
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do you have a paid newsletter that I can
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subscribe to and then ultimately after
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you hear my answer to these questions
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today you might realize that your help
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is very much welcome I don't want to say
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that your help is needed per se I don't
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think your help is needed but it is so
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welcome so I want to answer those kinds
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of questions today and the fact is as
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I've mentioned before on the podcast I
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would be doing this for free in fact I
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did it for free for three years the
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beginning of the best interest was while
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I was still working as an engineer and
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really there was no Financial benefit
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whatsoever to me running the podcast or
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or writing the blog but also at the time
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it wasn't exactly expensive to run and I
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was just throwing out some free
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information onto the internet seeing
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what's stuck and in fact if I didn't
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switch careers and I'll talk more about
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the career switch because it's pretty
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instrumental today if I didn't switch
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careers I would still be a diyer like
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many of you I would be making my own
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investing decisions I do my own research
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on tax optimization and cash flow
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management build my own monthly net
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worth statements all that kind of stuff
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I wouldn't probably write my own legal
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documents per se but I investigate my
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own estate planning understand what kind
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of beneficiary setups I needed and who I
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needed to talk about about writing the
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will all that kind of stuff DIY right
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that's the DIY way now I think it's
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important though to admit to ourselves
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that not everyone in our lives wants to
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be a diyer and that was a big
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realization that I had in the process of
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running the best interest over the past
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five years I came into the project a
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little bit from the the financial
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Independence space where I'd learned all
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this really cool information all my own
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started applying it in practice all on
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my own but for people to learn that
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stuff and apply it in their own lives
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some people want to do that all on their
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own I want to contribute to that which
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is a big reason why I run the best
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interest but what I've learned along the
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way sending this info out there to you
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guys in cyberspace is that some people
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they find it interesting they're happy
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to read it but for one reason or another
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they don't necessarily want to implement
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it in their own lives themselves and
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we'll talk about a few of those reasons
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one reason quite simply is some people
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don't don't really like personal finance
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and investing they're probably not
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listening to this podcast right now
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let's be honest some people love it many
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of you who are listening probably love
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it some people are just very comfortable
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with math others not so much some people
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like spreadsheets and calculators and
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doing their own inflation adjustments
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other people don't another big
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differentiator I suppose some people are
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just very comfortable with probabilities
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like when I look at the investing world
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when I look at longterm investing I know
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the odds are tilted in my favor I don't
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see it like a casino I see it much
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differently and I'm very very
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comfortable playing games where the odds
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are tilted in my favor I don't
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necessarily need 100% odds I don't need
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a guarantee I just need the odds tilted
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in my favor and I can figure out how to
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size my own bets accordingly I feel very
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comfortable in that kind of
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probabilistic space but not everybody
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does and many people they realize that
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it's important in their life to get this
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stuff right but they just they want
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someone else to drive the bus some
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people they want to drive the bus
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themselves others want to be driven and
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that's another idea that we'll come back
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to the fact that for many of you and and
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just like I am we're very comfortable
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being diyers but not everybody is that
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comfortable and just as a quick aside
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because I I mentioned before about the
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the cost of the best interest last year
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the best interest cost about $7,000 to
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operate now that's web hosting costs and
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a MailChimp email subscription there's
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some di Minimus stuff in there I have
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this awesome podcast production team
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that makes these episodes sound amazing
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they've saved me so much time in the
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process and yeah they charge me because
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they do really good work and all those
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little things add up to about $7,000 to
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operate the business last year and as
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much fun as it is to run the best
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interest I don't necessarily want it to
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be this $7,000 loss from now until the
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end of time the traditional models for
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how websites or podcasts make money but
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we have the advertising model that's a
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very common one and many of you will be
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familiar with that advertising model the
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idea simply is that somehow I gain your
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attention I get your eyeballs I get your
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ears and then I sell you something I
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sell you a product that might not even
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have anything to do with the podcast
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itself I might sell you mattresses or
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vitamin mixes or something like that I
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don't really like that my issue with the
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advertising model and I'm certainly not
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alone here if you're familiar with
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social media in general you'll know how
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Insidious the advertising model can be
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because it incentivizes whatever
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Behavior drives more eyeballs and gets
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more clicks and more listens the
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advertising model incentivizes a
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behavior that I don't necessarily want I
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want to deliver signal but not noise the
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advertising model say says well if noise
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is what gets people's attention then you
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should deliver that noise you should be
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outrageous you might need to be mean you
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might me to be rude literally last night
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I watched an HBO documentary about Alex
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Jones his talk show his focus on the
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Sandy Hook tragedy and his vitriolic
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opinions about the Sandy Hook tragedy
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and the connection between those
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opinions of his and his ability to get
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eyeballs and ears because of his
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opinions and then his ability to sell
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supplements and products to that AUD
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audience he' built that was his business
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model and when Jones was sued for
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defamation in Civil Court it was proven
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that the more vitriolic he got the more
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products he sold and that kind of
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feedback loop leads down a terrible path
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and I I insist upon avoiding that path
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now there are some personal finance
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creators some old some new but when you
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watch them you say to yourself that
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person's kind of being a dick the reason
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why quite often is because it has to do
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with the way they get paid part of the
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way they get paid is the advertising
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model and if they can attract more
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attention to their Channel through that
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behavior then they can sell more and
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they can earn more they can sell ads
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that's just not something that I want to
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pursue here okay well another very
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viable model in the content creation
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space is subscriptions meaning you would
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have to pay to listen to this podcast or
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you'd have to pay to subscribe to my
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blog I did think about that I think
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there are some places out there that do
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a subscription model very very well I
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understand it but I don't really want to
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pursue that I want this information to
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be free in the public domain so I wanted
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to lean away from subscriptions or up
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front pay walls then another common
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Revenue model is products or courses yes
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there is a a book that I wrote that you
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can find on Amazon and I'll say that I'm
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about 90% proud of that book The whole
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idea of the book was I had 30 different
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contributors write 30 different chapters
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and and most of those chapters I think
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are great there's a couple chapters that
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in hindsight not exactly proud of but
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long story short I don't want Book Sales
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to be a part of my business model I
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don't want to be here on every episode
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saying hey buy my book and it's similar
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with courses courses can be a terrific
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business model uh a paid course I
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suppose to educate you all listening but
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I don't necessarily want to be out here
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Shilling books or courses and products
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so I'll stop bearing the lead at this
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point and I'll just get to the meat and
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potatoes of the conversation now many of
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you know that for the past two years in
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four months and I'm recording this here
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in early April of 2024 I've been working
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for a fiduciary wealth management firm
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here in my hometown Rochester New York
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the firm is called Cobblestone Capital
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advisers we work with about 900 families
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and manage close to $3 billion of their
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assets providing detailed Financial
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Planning and Investment Management along
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the way our company's about 41 employees
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in size all here in Rochester and we're
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independently owned meaning you know
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we're we're not tied to a Schwab or
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Fidelity we're not owned by some large
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corporation or a private Equity Firm or
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anything like that the owners of my
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business well they sit right down the
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hall from me and therefore we get full
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say in how we treat our clients how we
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help them what investments are in their
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best interest etc etc and that
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investment philosophy lines up very
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closely with everything we talk about
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here on the best interest six of my
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colleagues are certified financial
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planners cfps with two more in training
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that's the highest designation in
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financial planning five are chartered
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Financial analysts cfas with two more in
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training and that's the highest and
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hardest designation in investment
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management and investment analysis three
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of my colleagues are CPA accountants
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which requires you know a college degree
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onto itself and then a challenging exam
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and then one of my colleagues is an
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attorney a former trust estate and tax
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ation attorney who now works full-time
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for us so these are smart people
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credential people that I personally get
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to learn so much from and which is
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fantastic in and of itself much of which
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eventually gets distilled down and
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shared with you guys here on the best
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interest and we bring that kind of
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objective diverse expertise to bear in
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the clients that we work with so my role
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in that mix is that I work with clients
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directly I get to know them understand
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their goals in life and understand how
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they got here in life and where they
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want to go with their finances so I
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listen to their financial situations
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their wins and their losses and the hard
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numbers involved and then between myself
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and the planning team and the investing
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team and everyone I'm surrounded with
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here we put together a financial plan
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for those clients often looking 10 or 20
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or 30 years out in the future we make
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investing decisions based on that plan
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to help them execute the plan to reach
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their goals to end up where they want to
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end up and over time the idea is that we
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execute that plan so our clients can
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lead the life that they want to live and
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so here's a quick example with some
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details changed because we do take
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confidentiality very seriously with our
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clients I was referred a client by a
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best interest listener this lady's in
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her early 60s and she came to us with
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$1.1 million some of it was taxable some
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qualified in an IRA but all $1.1 million
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were invested into annuities those
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annuity fees on average were about 2.5%
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per year and the annuities since the
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time she bought them in 2009 had grown
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by about 3.9% per year so the total
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return over 14 years had been 22% that's
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about
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1.4% compounded for 14 years and again
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that's 1.4% annual growth during one of
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the greatest bull markets in history now
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granted we should probably pause and ask
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ourselves well this woman she owned
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annuities did she own them because of
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her risk tolerance and you know she
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bought them in 2009 right after the
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great financial crisis was she sold
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annuities because they right annuities
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hold their value they there's no risk of
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losing money there well I'd argue and I
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think you might argue too that this
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woman paid an enormous price in terms of
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opportunity cost and opportunity lost
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you know she missed out on part of the
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greatest bull market in history if we
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compare over that same time period a
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simple 60/40 portfolio returned about
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88.9% per year a 50/50 portfolio 7.8%
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per year and even a more conservative
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4060 portfolio returned 6.7% per year
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over that same time period and one of
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those very simple basic ified portfolios
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her total returns would have been in the
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range of 150% to 225% and instead she
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got 22% growth so now that this woman is
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approaching retirement and Social
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Security age we're also helping answer
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questions for her on the the financial
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planning front it's not just about
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Investment Management it's also about
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financial planning you know what is the
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optimal time for her to start taking
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social security what's the best order
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for her of of withdrawals from her
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various accounts to help her fund her
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monthly income needs needs while keeping
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her tax bill optimized you know she
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would go to Ira first her tax will
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account a little bit of both and she'll
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have to start taking rmds in a in a
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decade or so so we're thinking about
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that right now she's making small WTH
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conversions during these years it's a
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topic we recently talked about on the
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blog her her tax liability is quite low
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right now so we're taking advantage of
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that by making small Roth conversions
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right now that in the long run will
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absolutely make sense for her so you
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listening to the story you probably
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never would have bought the annuity in
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the first place and you might be doing
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that kind of planning work that I just
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reviewed all on your own but I hope
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you'll recognize that someone who owned
00:14:04
an annuity for the past 15 years
00:14:06
probably needs a fiduciary financial
00:14:08
planning firm to help them understand
00:14:10
what the best path forward is for them
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right now and for that person the idea
00:14:15
of hey just just DIY it that's probably
00:14:18
an unrealistic idea so the same kind of
00:14:20
stuff that I'm preaching here on the
00:14:21
best interest I put into practice with
00:14:23
my clients on a daily basis how do we
00:14:25
marry these various topics that we've
00:14:27
been talking about today well in the
00:14:29
past two years about 10 different
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readers and listeners have reached out
00:14:32
to me to either speak with me about
00:14:35
their own lives about working with me
00:14:36
professionally at Cobblestone or to
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refer a friend or a family in their life
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to come work here I take the fiduciary
00:14:43
role very seriously and sometimes the
00:14:45
right answer for these referrals has
00:14:47
been hey you wouldn't get enough benefit
00:14:49
from Cobblestone I I truly think you
00:14:51
should do exactly what you're already
00:14:53
doing or maybe I think there's another
00:14:55
financial planner out there who's a
00:14:57
better fit for what you're looking for
00:14:59
and let me introduce you to someone else
00:15:01
but for a few people there's been a
00:15:02
great fit just a perfect relationship
00:15:04
where they found out about me through
00:15:06
the best interest they reached out to
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learn more about Cobblestone we do
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exactly what they're looking for it's a
00:15:11
great fit for us it's a great fit for
00:15:13
them I and my colleagues are able to
00:15:14
provide organization and planning and
00:15:17
execution to help them get their
00:15:18
financial lives on track and I
00:15:20
understand if you're listening to this
00:15:22
podcast right now that's probably not
00:15:24
you right most of you those of you I
00:15:25
know are listening to this you enjoy the
00:15:27
DIY process you want to build build your
00:15:29
own Investment Portfolio and open your
00:15:31
own accounts and do your own tax
00:15:32
planning etc etc you want to make your
00:15:34
own decisions on those nitty-gritty
00:15:36
details but like my client I mentioned
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before with the annuities that's not
00:15:40
everybody not everybody wants to be a
00:15:42
diyer in fact I truly believe that to
00:15:44
allow some people to kind of Flounder in
00:15:46
the DIY space is a disservice to them is
00:15:50
an important truth that I've realized
00:15:51
over the many years that I've been
00:15:52
running the best interest it's one of
00:15:54
the main reasons why I changed careers
00:15:55
in the first place even the most
00:15:57
dedicated DIY reader and listeners might
00:15:59
want a second opinion typically for them
00:16:01
typically for you listening hiring an
00:16:04
hourly planner might be the right move
00:16:06
for you but not for this annuity owning
00:16:09
client that I mentioned before the
00:16:10
reason goes back to a fundamental
00:16:12
Vanguard study that looked at the pros
00:16:14
and the cons of hiring a financial
00:16:16
planner in the first place they found
00:16:18
that by far the biggest value ad in a
00:16:21
financial planner is preventing
00:16:23
behavioral mistakes in other words
00:16:25
stopping clients from doing stupid
00:16:27
things in their portfolios hourly
00:16:29
planners are wonderful in that they
00:16:30
provide a road map and then they set you
00:16:32
off on your own to follow that map it's
00:16:34
very hard though to prevent someone from
00:16:37
choosing to deviate from that map and
00:16:39
when markets are acting up in either
00:16:41
direction right the highs or the lows it
00:16:43
can be tempting to change course and
00:16:45
leave your map now if you're a dedicated
00:16:48
map follower many of us here are no
00:16:50
worries hourly planning is right for you
00:16:52
but we all know that friend from college
00:16:55
or the great aunt or the colleague who
00:16:57
would quickly deviate from the if left
00:16:59
to their own devices and one of the best
00:17:01
skills that I can offer my clients is
00:17:03
not only providing the map but also
00:17:05
providing deep fundamental education to
00:17:07
convince them to stay on the map for
00:17:09
many people who have come to me wanting
00:17:10
to become clients some of them want to
00:17:12
offload the entire process onto someone
00:17:14
else they have incredibly busy lives
00:17:17
they don't want to make mistakes along
00:17:18
the way and it's worthwhile for them
00:17:20
both in terms of return on investment
00:17:21
and peace of mind to pay someone else to
00:17:24
Outsource that work to or maybe they
00:17:26
just want a safety net in place for
00:17:27
their spouse and something happens to
00:17:29
them that's a very common story they're
00:17:31
very comfortable being a diyer
00:17:33
themselves but whether it's a health
00:17:35
reason or a sudden unexpected loss or
00:17:37
for whatever the reason is they want a
00:17:39
safety net in place because their spouse
00:17:41
is not a diyer and their spouse wants to
00:17:43
lean on a trusted professional in case
00:17:45
something happens to the DIY spouse or
00:17:49
maybe they just want someone else to
00:17:50
drive the bus for a little while while
00:17:51
they ride shotgun to see how things go
00:17:53
and then to re-evaluate those are many
00:17:55
of the different types of people who I
00:17:56
serve who I work with and that in my
00:17:58
mind gets back to the business model of
00:18:01
the best interest I want to continue
00:18:03
giving away this kind of helpful true
00:18:04
advice for free to anyone and everyone
00:18:07
who wants to hear it and I also
00:18:09
professionally offer a service a paid
00:18:10
service that I do in you know the real
00:18:12
professional world to people who want
00:18:14
that good advice implemented in their
00:18:16
own lives but they don't want to do it
00:18:18
DIY they don't want to navigate the map
00:18:20
all on their own I think there might be
00:18:22
people in your lives listening right now
00:18:24
there might be people in your lives who
00:18:25
would benefit from this kind of help and
00:18:27
if you know them I hope you'll consider
00:18:29
connecting them with me I hope you'll
00:18:30
talk about who I am and what I do maybe
00:18:32
you'll send them the podcast so they can
00:18:34
listen to themselves and if they're
00:18:36
comfortable you'll reach out to me send
00:18:38
me an email or a LinkedIn message and
00:18:40
you'll say hey I have someone in mind
00:18:42
who I think you should talk to about
00:18:44
Cobblestone if you're looking to support
00:18:45
the best interest I I don't want to spam
00:18:47
you with ads for mattresses I don't want
00:18:49
to beg for your donations but I do enjoy
00:18:51
putting in the work I do want to provide
00:18:53
valuable hard work financial planning
00:18:55
wealth management investment advice to
00:18:57
you or your friends or loved ones
00:18:59
someone in your life I hope you'll trust
00:19:01
me with that you know I was listening to
00:19:02
a podcast the other day it was a Sam
00:19:04
Harris podcast and he was talking with
00:19:06
the founder of the Ted Talk conferences
00:19:08
about the struggle between doing
00:19:10
something that's good for the World
00:19:11
building up that kind of trust and then
00:19:13
asking others for money for that thing
00:19:15
and the question came up in their
00:19:16
conversation should you feel bad for
00:19:19
asking for money and I thought about it
00:19:21
and ultimately my thoughts aligned with
00:19:22
what Sam Harris and his interview guests
00:19:25
said which is you know I know I'm
00:19:26
providing value here value to thousands
00:19:28
of of you listening value to my clients
00:19:30
I know I'm working hard on everyone's
00:19:32
behalf and I don't think there's
00:19:33
anything wrong with getting paid to
00:19:35
provide that value so thank you for
00:19:37
listening and spreading this podcast far
00:19:39
and wide it's so much fun for me to sit
00:19:41
here behind the microphone and let alone
00:19:42
to watch it grow has been awesome
00:19:44
absolutely fantastic but like I said
00:19:46
last year there was maybe $7,000 in
00:19:48
operating costs between the blog and the
00:19:50
podcast and the newsletter and as much
00:19:52
fun as it is I don't want it to be a
00:19:54
charity so again if someone in your life
00:19:55
needs the kind of help that we talk
00:19:57
about here but that person has no
00:19:58
interest in being a true diyer and
00:20:00
implementing it on their own you can
00:20:02
support me you can support the best
00:20:04
interest and I think you can do right by
00:20:06
that person by introducing them to me I
00:20:08
take that idea very seriously if they're
00:20:10
a good fit for what I do at Cobblestone
00:20:11
the kind of work that we do here I want
00:20:13
to help them but if they're not a good
00:20:15
fit or if they just wouldn't get enough
00:20:16
benefit from it I want to inform them of
00:20:19
that and point them in a useful better
00:20:20
Direction so if you've wondered what my
00:20:22
business model here is on the best
00:20:24
interest that's your answer if you want
00:20:26
to support me that way thank you so so
00:20:28
much and if no worries at all I'm still
00:20:30
glad you're here listening and I want to
00:20:32
keep on creating content for you thank
00:20:34
you here's a quick ad and then we'll get
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that's a free no strings attached
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subscription at bestin interest. blog so
00:21:26
let's transition to today's interview
00:21:28
today's interview is a little bit
00:21:29
different it's far more of a two-way
00:21:31
conversation and a very entertaining one
00:21:32
at that I invited Justin Peters to join
00:21:35
me Justin is a good friend a financial
00:21:37
educator in his own right and he's the
00:21:38
host of the struggle is real podcast
00:21:41
which is aimed towards 20s somethings
00:21:42
and covering all manner of important
00:21:44
young adult topics although recently
00:21:46
Justin has really been honing in on
00:21:48
personal finance and financial
00:21:50
Independence Justin has been kind enough
00:21:51
to invite me on the struggle is real
00:21:53
three times now and by the way Justin
00:21:56
and his brother Kyle run a company
00:21:57
called Simple pod Studios that does all
00:22:00
of my podcast production the reason why
00:22:02
the podcast sounds good as it does and
00:22:04
it does include all my stutters and all
00:22:06
the times that I curse because I flub a
00:22:07
line is because Justin and Kyle and
00:22:09
their team they edit it all out so thank
00:22:11
you guys as you'll hear Justin's
00:22:13
combination of conversational skills and
00:22:15
financial expertise makes him the
00:22:17
perfect sparring partner for this
00:22:18
conversation where we compare and
00:22:20
contrast our top five golden rules of
00:22:23
personal
00:22:27
finance
00:22:30
[Music]
00:22:33
Justin Peters thanks for coming on the
00:22:35
best interest podcast how you doing man
00:22:37
I'm doing great man this is such an
00:22:39
honor and privilege to be on the show
00:22:41
man I've been a longtime listener and a
00:22:43
fan of yours for quite a while so thanks
00:22:45
for inviting me you're welcome and I did
00:22:46
just give you an intro where I talked
00:22:49
about the struggle is real I talked
00:22:51
about the fact that we're business
00:22:53
partners the right way or is it kind of
00:22:54
a a client and an expert relationship
00:22:56
where where you and your brother Kyle
00:22:58
help with the podcast editing and
00:23:00
everything that listeners hear every
00:23:02
week has your fingerprints on it so very
00:23:05
very cool to have you on the podcast I
00:23:07
guess client and peer or client
00:23:10
relationship but also I look at you as a
00:23:12
peer man I I follow a lot of what you do
00:23:15
and I feel like you and I pick each
00:23:16
other's brains on on what's happening in
00:23:18
the world of podcasting so so yeah
00:23:20
definitely just as much up here as a
00:23:21
client to me awesome and we have a
00:23:23
really fun episode today I think Justin
00:23:26
and the quick backstory for everybody is
00:23:28
I watch English soccer and on some of
00:23:30
these English soccer shows they have
00:23:32
this really cool format where they'll
00:23:33
ask two panelists to independently come
00:23:36
up with a list and then live on air
00:23:38
they'll have those panelists and maybe
00:23:40
some other commentators compare and
00:23:42
contrast and criticize or promote one
00:23:44
another's lists and it'll be you know
00:23:46
the be who who are the best 11 players
00:23:48
in English soccer right now and each
00:23:49
person will come up with their list and
00:23:51
their reasons and then they'll compare
00:23:53
and debate live on air and so we're
00:23:55
going to do something similar today I
00:23:56
asked Justin to come up with his top
00:23:59
five golden rules of personal finance
00:24:01
and investing I did the same plus we
00:24:04
added in some honorable mentions because
00:24:06
maybe Justin's number five will be my
00:24:07
number eight and that's worth talking
00:24:09
about but then here live on the podcast
00:24:12
we are going to reveal each others lists
00:24:15
I haven't seen Justin's Justin hasn't
00:24:17
seen mine and then we're g to talk about
00:24:19
it and we're going to talk through why
00:24:20
we think the things we think why we
00:24:22
don't think the things we don't think
00:24:23
hopefully it's it's fun and also maybe
00:24:25
sheds a little light or a little
00:24:27
education on our opinions and and maybe
00:24:29
that'll help you in some little way what
00:24:31
do you think of all that Justin I think
00:24:32
this is a great idea as soon as you
00:24:33
pitched me on this idea I was like yes I
00:24:35
am down for it I'm so stoked for it I
00:24:37
think we might have a little overlap
00:24:39
here but I'm also interested where you
00:24:41
and I have a little bit of disagreement
00:24:43
in it so let's get into it right perfect
00:24:45
well as the guest I feel like I I have
00:24:48
to ask you to go first Justin what and
00:24:50
we we can snake back and forth like like
00:24:52
they do it in in a fantasy football
00:24:54
draft why don't you start with your
00:24:56
number five my number five my number one
00:24:59
should I work up or down that's a good
00:25:00
question what what do you think what do
00:25:02
you think's the best I think we should
00:25:03
work down uh because I think we're going
00:25:05
to have some overlap here at the
00:25:06
beginning and then I think we're going
00:25:08
to start to differentiate near the the
00:25:10
bottom of the list that's fair that's
00:25:11
totally fair okay let's do it start with
00:25:13
your number one I think number one is
00:25:15
spend less than you earn I I think you
00:25:18
actually mentioned it as one of your
00:25:19
your golden rules of personal finance in
00:25:21
one of your blog post essentially living
00:25:23
below your means and if you want to bolt
00:25:25
on one of our Good Friends Jeremy
00:25:27
schneiders to it's spend less than you
00:25:29
earn and invest the difference so
00:25:32
however you want to do this you know if
00:25:34
it's creating a budget or whatnot I
00:25:36
think cash flow is so important in the
00:25:39
world of personnel finance and I
00:25:41
definitely think that's my number one
00:25:42
rule whenever I look at the top five
00:25:44
golden rules of personal finance I
00:25:46
largely agree I think I wrote the rule
00:25:48
slightly differently but the the rule
00:25:51
that I wrote for number one is you must
00:25:53
measure and really what I was talking
00:25:55
about there is cash flow uh with a
00:25:57
little maybe a little next to it of of
00:25:59
also net worth statements that kind of
00:26:01
thing but the idea being that you've got
00:26:03
to measure your monthly cash flow you
00:26:06
have to know how much you are spending
00:26:08
you have to know how much you're earning
00:26:09
you have to know if that cash flow is
00:26:11
positive on a monthly basis because
00:26:13
everything else that you do in your
00:26:14
financial life is a function of do you
00:26:17
have extra money on a monthly or
00:26:19
bimonthly or quarterly basis to do those
00:26:21
things with every vacation that you
00:26:23
spend is is saved from positive monthly
00:26:26
cash flow every time we put $500 a month
00:26:29
into our Roth IRA is because we have the
00:26:31
extra cash flow to do that so earning
00:26:33
more than you spend spending less than
00:26:35
you earn measuring your cash flow I
00:26:38
agree is the most important Golden Rule
00:26:41
of personal finance is that one of the
00:26:43
very first things you do with new
00:26:44
clients I'm I'm guessing it would have
00:26:45
to be can you make subsequent decisions
00:26:47
without really thinking through this
00:26:49
very first one one of the first things
00:26:51
we do with new clients is we ask them
00:26:53
for their big four and their big four
00:26:55
are assets and liabilities and that's to
00:26:58
be be able to put together a net worth
00:26:59
statement and then we ask them for
00:27:01
monthly income and monthly expenses or
00:27:03
annual income and annual expenses and
00:27:05
that's so that we can start to do cash
00:27:06
flow planning for them we Supply them
00:27:08
with a tool it's called e-money Fidelity
00:27:11
originally developed e-money which is
00:27:13
similar in some ways to any order of
00:27:14
budgeting or cash flow tool that you've
00:27:17
experienced before but yeah it is
00:27:19
absolutely fundamental and ideally we
00:27:21
capture all that information from our
00:27:23
clients before a pencil hits a paper and
00:27:25
we do the first bit of work because you
00:27:27
need to know all those different puzzle
00:27:29
pieces before you can start putting the
00:27:30
puzzle together makes total sense and
00:27:33
then I think I know you personally too
00:27:34
but I'm guessing are you a measure every
00:27:36
dollar type of person like something
00:27:38
comes in something comes out you have
00:27:40
some kind of transaction on a ledger so
00:27:43
my old school approach especially before
00:27:46
Kelly and I combined finances was very
00:27:48
much that very very much that now I
00:27:51
actually use e-money myself because it's
00:27:54
pretty easy you can link accounts and
00:27:55
it's all automated it's got a lot of
00:27:57
that nice function it to it technically
00:27:59
speaking e-money does measure every
00:28:01
single dollar but there are definitely
00:28:02
times where it'll Mis categorize
00:28:04
something or do something a little like
00:28:05
that and because it takes a lot of the
00:28:07
automation on itself I don't have to log
00:28:10
in that often to check it so I'll log in
00:28:13
twice a month say and just look at
00:28:15
what's happened recently make sure that
00:28:17
everything makes sense make sure that
00:28:19
all the transactions are real and
00:28:21
Justified and sometimes it Sparks some
00:28:23
conversations between Kelly and I about
00:28:24
you know we spent this and why do we
00:28:26
spent that that kind of thing so in some
00:28:28
ways I guess I'm still measuring every
00:28:30
single dollar but it doesn't feel quite
00:28:32
as intensive as the old way I did it
00:28:35
what what do you do Justin I'm still old
00:28:37
school spreadsheet measure everything at
00:28:39
the end of the month pull up my
00:28:40
statements and and go through everything
00:28:42
and add it in by hand I guess uh but by
00:28:45
keyboard and then categorize it myself
00:28:48
there I have given myself some Grace
00:28:51
like cash was always an issue for me if
00:28:53
I do a cash transaction I finally have
00:28:55
been like you know what I'm no longer
00:28:57
recording those I'd like track them in a
00:28:59
note and then at the end of the month I
00:29:00
would add those in or something and I'm
00:29:02
like Justin you are far enough along in
00:29:04
your financial Journey that you do know
00:29:06
no longer have to do that I might make
00:29:07
four or five transa cash transactions a
00:29:09
month it's just not worth it to me
00:29:10
anymore but yeah I still track
00:29:12
everything how how long have you been
00:29:13
doing that for oh man I bet 10 years I
00:29:17
bet I can pull spreadsheets back from
00:29:19
pretty pretty far do you do you feel
00:29:21
like if you stopped doing it today would
00:29:24
that negatively affect your actual
00:29:26
spending like you'd spend more
00:29:28
accidentally and it would actually
00:29:30
negatively impact your financial life or
00:29:32
would it just have a negative effect on
00:29:34
kind of your financial anxiety for lack
00:29:36
of a better term I think the latter I
00:29:37
think this is actually a really good
00:29:39
question I think I would probably be the
00:29:40
exact same spender if I tracked or
00:29:42
didn't track there might be a few things
00:29:45
you know fraud for example or
00:29:46
transactions that that were over what I
00:29:49
expected there are some things that I
00:29:50
pick up that I'm like oh I need to
00:29:52
question that or that actually belongs
00:29:54
somewhere else but no I feel like I have
00:29:57
some pretty good spending habits already
00:29:59
it's one of my superpowers in the world
00:30:00
of personal finance I'm not really sure
00:30:03
it would change if I knew if I didn't or
00:30:05
did track my monthly expenses I I feel
00:30:08
the same exact way I I think I spent six
00:30:10
or seven years using wab you need a
00:30:13
budget religiously and when I stopped
00:30:16
using it I still spend the same amount
00:30:18
I'm still hesitant to spend on certain
00:30:20
things I still love spending on these
00:30:22
other things still save for the big
00:30:25
expenditures the same exact way but I I
00:30:27
will say the part that affected me was
00:30:29
just not quite knowing that was the part
00:30:31
where I had a little knot in my stomach
00:30:33
about not knowing where my money was
00:30:35
going whereas now at least what I'm
00:30:37
doing now I feel like is this happy
00:30:38
medium where I still at the end of the
00:30:40
month get very clear knowledge on what
00:30:42
we've spent and how we've spent it but
00:30:44
I'm not necessarily in the weeds and I'm
00:30:46
not doing it on a you know multiple
00:30:48
times a week logging in to to make sure
00:30:50
that my accounts are all reconcile to
00:30:52
anything like that I will say it does
00:30:54
help at the end of the year to kind of
00:30:55
look back and I just put up all my
00:30:58
vendors and my spending categories sort
00:31:00
them highest to lowest and then I just
00:31:02
start thinking through each one is there
00:31:03
a way that I can reduce this cost or
00:31:06
this spend even like gift cards like my
00:31:08
dad's like they like to give me gift
00:31:10
cards for Christmas so I'll just like go
00:31:11
and like where do I spend my money okay
00:31:13
those are the gift cards I'm got to ask
00:31:14
for and that's a really silly and
00:31:16
nuanced example but it does help me kind
00:31:18
of look at do a kind of end of year
00:31:21
recap I'm like Oh my insurance was up
00:31:23
maybe I need to call my broker and just
00:31:25
see if he can do anything there or
00:31:27
Internet you know seems to be climbing
00:31:29
or that's number five on my line item
00:31:31
like I'll go and I'll do a couple
00:31:33
proactive things knowing where some of
00:31:35
my big budget spending is have I ever
00:31:37
told you my some would call it Frugal
00:31:39
some would call it smart some might call
00:31:41
it cheap skate that's okay but my gift
00:31:44
card hack for lack of a better term no I
00:31:46
would love to hear because I have way
00:31:47
too many gift cards and I'm I'm gonna
00:31:49
put it in the form of a question not
00:31:51
only for you but for the audience
00:31:52
because if you get a gift card to say
00:31:55
Red Lobster or Cheesecake Factory or
00:31:57
whatever even your favorite restaurant
00:31:59
in Austin what's likely to happen is
00:32:01
you're going to go there and and you are
00:32:03
going to spend money at that restaurant
00:32:05
that maybe you wouldn't have otherwise
00:32:07
have spent and therefore it's very nice
00:32:09
because it's it was a gift from someone
00:32:11
and you're getting a great meal and I
00:32:12
don't want to Discount that but purely
00:32:14
from a personal finance point of view it
00:32:16
might not have actually helped your
00:32:17
financial life that much because it it
00:32:20
encouraged you to spend money that maybe
00:32:21
otherwise you I wouldn't have gone to
00:32:22
Red Lobster unless I had this gift card
00:32:24
and now I'm here so the question is what
00:32:27
are the things in life
00:32:28
that you only buy when you need and you
00:32:31
never spend more money than what you
00:32:34
need and for me that answer is gasoline
00:32:37
I only buy it when I need it and I never
00:32:39
spend a dollar more on gasoline than
00:32:42
what's needed for my car right there the
00:32:44
reason why I bring this all up is my
00:32:45
bank gives these reward points and I can
00:32:47
convert the reward points to Amazon gift
00:32:49
cards or Target gift cards or miles I
00:32:52
can also convert it to mobile or Sonoco
00:32:55
or other gas company gas cards and
00:32:57
that's usually what I do because it it
00:33:00
literally is as good as real money
00:33:03
because I spend real money on gas only
00:33:05
as much as I need and never a red penny
00:33:08
more it's so funny you mention that
00:33:11
because the most routine gift card that
00:33:13
I asked from my dad is Quick Trip which
00:33:15
is a popular gas station in the Midwest
00:33:17
and coming down south now and it's like
00:33:18
the one gift card that always exits my
00:33:21
wallet and it's funny that you mentioned
00:33:23
Red Lobster I've had this Red Lobster
00:33:25
gift card for like two years and my
00:33:27
girlfriend and I finally are like hey
00:33:29
like every other Friday we're going to
00:33:31
pick one of the gift cards and we're
00:33:32
going to use one of these gift cards as
00:33:34
like a date night and we hit Red Lobster
00:33:36
two weeks ago and we're like all right
00:33:38
we got to go to Red Lobster and you're
00:33:40
right honestly we spent more on Red
00:33:43
Lobster than we wanted to because a with
00:33:45
the gift card strategy it's like you
00:33:46
either need to spend right up to the
00:33:49
allocated amount but right under it and
00:33:51
then just kind of toss the excess on it
00:33:53
because I'm not going to go back to Red
00:33:54
Lobster and spend the
00:33:55
$437 that's left on the
00:33:58
or you overspend so you know you cover
00:34:00
all of the gift card but then you're
00:34:02
left kind of forking out whatever the
00:34:04
overage is and that's what happened I
00:34:06
was like why did I end up spending $14
00:34:08
at Red Lobster when I walked in with a
00:34:10
$50 gift card like didn't make any sense
00:34:13
to me the subject line should either be
00:34:15
genius or cheap skate and you can send
00:34:18
those emails to Jesse bestin interest.
00:34:20
blog and you could CC Justin from simple
00:34:22
pod Studios Justin we'll just say it now
00:34:24
and we'll also say it at the end what
00:34:25
email should people CC you on when send
00:34:28
these genius cheate emails Justin at
00:34:30
simple pod Studios I think that's a good
00:34:32
one perfect perfect all right Justin
00:34:34
let's go on to our second Golden Rule of
00:34:37
personal finance now some of my rules
00:34:39
I'll admit they aren't maybe as
00:34:41
nitty-gritty as they could be and and
00:34:44
whereas maybe some of yours are more we
00:34:45
we'll see as we go on and that might be
00:34:47
just a little bit of a difference
00:34:48
between the way we approach this problem
00:34:50
independently but my second rule is that
00:34:53
you must invest in knowledge and in
00:34:56
yourself that's funny I have that as
00:34:58
number five more so because once again I
00:35:01
was kind of looking at this from one to
00:35:03
five and and thinking I would say that
00:35:05
one last I would actually probably put
00:35:07
that one as my number two as well and I
00:35:10
put your tagline on here and investment
00:35:11
and knowledge pays the best interest
00:35:13
just because I think it's so good but
00:35:15
yes I wholeheartedly agree with that
00:35:17
that I don't think there's a whole lot
00:35:19
of disagreement in this area both of you
00:35:21
and I are are personal finance Educators
00:35:23
we both love learning and and sharing
00:35:26
what we learn with other people people
00:35:28
and and I think the way to progress in
00:35:29
your personal finance is to be
00:35:31
continually learning you even talked
00:35:32
about it I think in a recent monologue
00:35:34
too you lose a little luster of the
00:35:36
whole personal finance game after you
00:35:38
start to optimize and you've learned all
00:35:40
these things and you put it into place
00:35:41
but if you continue to learn and put
00:35:43
yourself out there you'll continue to
00:35:44
get better and better when it comes to
00:35:46
money yeah I think I was saying how
00:35:47
there's some boring topics now or topics
00:35:49
that I certainly found boring like a few
00:35:51
years ago that in the last few years I'm
00:35:53
like oh like the tax code is actually
00:35:55
kind of interesting and you know we all
00:35:56
have to pay tax ta it's part of our
00:35:58
civic duty I think to pay taxes but we
00:36:01
also as taxpayers have a right to not
00:36:04
pay more taxes then we should and it's
00:36:07
about finding that balance and and the
00:36:09
tax code is kind of like this game where
00:36:12
you've got rules and you've got laws and
00:36:15
you've got lots of different pieces
00:36:17
different options different strategies
00:36:19
and it's kind of about putting together
00:36:21
your game plan this year and for all
00:36:23
years in the future so that you you pay
00:36:25
the right amount of taxes the fair
00:36:26
amount of taxes for you and I think
00:36:28
that's interesting it's a little bit
00:36:29
boring but it's something I've learned
00:36:31
about I chose to learn about I actually
00:36:33
really liked that you brought up the tax
00:36:35
code because I've recently been getting
00:36:37
into it more and more and I do find
00:36:40
there's so much information I had no
00:36:42
idea about especially now running my own
00:36:44
business over the last two years and
00:36:46
that opened up a whole another pulled
00:36:48
back the curtain and and I saw a whole
00:36:50
another world of personal finance that I
00:36:51
didn't know a lot about so I enjoyed
00:36:53
learning about it and my favorite topics
00:36:56
that I get to prep for an interview on
00:36:58
my show are usually a topics I don't
00:37:00
know much about like I got to do student
00:37:02
loans a couple of years ago and I I
00:37:05
never really managed or how to deal with
00:37:06
my own student loans but doing a deep
00:37:08
dive into student loans got me really
00:37:10
stoked about just learning and personal
00:37:13
finance in general I've really actually
00:37:15
kind of been enjoying learning a little
00:37:17
bit about the tax code recently yeah
00:37:19
something that was eye opening for me
00:37:20
and for a younger listeners it might not
00:37:22
affect you for a while but for the older
00:37:24
listeners it'll affect you soon or might
00:37:26
be affecting you right right now it's
00:37:28
really interesting how much retirement
00:37:31
income can be subject to very low if not
00:37:35
zero% tax brackets and it's very
00:37:37
interesting the way that different forms
00:37:39
of retirement income interact where you
00:37:41
can have earning a few more dollars over
00:37:43
here not only is that a taxable event in
00:37:46
and of itself but it also might make
00:37:48
other forms of income now taxable the
00:37:51
kind of the basic example being Social
00:37:53
Security right a lot of social security
00:37:55
for a lot of retirees is actually not
00:37:57
taxable at the federal level depending
00:37:59
on your overall income so someone can be
00:38:02
in situation A where they're really not
00:38:04
paying much tax on their social security
00:38:06
income oh but if they decide to take a
00:38:08
withdrawal from their Ira not only is
00:38:10
that withdrawal itself considered
00:38:12
taxable income but it has now qualified
00:38:16
more of the Social Security that was
00:38:18
previously not taxed the federal
00:38:20
government the IRS will now consider
00:38:22
that Social Security taxable that's a
00:38:24
very common scenario but something that
00:38:26
I think a lot of people don't realize
00:38:27
and the rabbit hole only goes deeper
00:38:29
from there but anyway I digress the idea
00:38:32
of investing in that kind of knowledge
00:38:34
or investing in yourself like developing
00:38:36
your own skills in some way which then
00:38:39
kind of Segways into potentially
00:38:40
increasing your income over time because
00:38:42
you've been investing in yourself and
00:38:44
investing in your skills is a huge part
00:38:46
of this personal finance investing
00:38:49
Journey yeah I think the the quote to
00:38:51
summarize this your your income can only
00:38:53
grow to the extent that you do so like
00:38:56
and so much of what I talk about on my
00:38:58
show because we speak to 20 something is
00:39:01
increasing your income and such a big
00:39:03
portion of that is becoming more
00:39:04
valuable therefore to become more
00:39:06
valuable you have to increase your skill
00:39:09
set a lot of what I love to talk about
00:39:11
is learning and growth and I think
00:39:13
that's super important outside of even
00:39:15
the context of personal finance agreed
00:39:17
so what was your number two Justin my
00:39:19
number two was don't invest anything you
00:39:22
don't understand I like it I think there
00:39:25
might be some Nuance in this so I'd be
00:39:26
curious to see if you have any push back
00:39:29
on this and of I think we we probably
00:39:31
have to put a few definitions or or
00:39:32
bumpers on something because can someone
00:39:35
ever truly understand the complete scope
00:39:38
of what they're investing in probably
00:39:39
not if I'm investing in some kind of
00:39:42
index fund do I understand entire
00:39:44
mechanics of that Index Fund no probably
00:39:47
not do I understand the balance
00:39:50
statements or the business model of
00:39:52
every business that's included in that
00:39:54
Index Fund no probably not but what
00:39:57
meant by this is that I think you need
00:39:59
to understand at least the high level
00:40:01
mechanics of how something is going to
00:40:04
make you money and what are the
00:40:05
potential pitfalls of investing in this
00:40:08
certain business or property or Equity
00:40:11
or whatever asset we might be talking
00:40:14
about and I think from a personal
00:40:16
standpoint this is where I've gotten
00:40:17
myself in trouble so I hired I say
00:40:20
financial advisor really insurance
00:40:23
insurance salesperson early on in in my
00:40:25
investing Journey because I didn't know
00:40:28
how to invest I thought I heard so many
00:40:31
people say you need to go hire a
00:40:32
financial advisor you need to go get
00:40:34
help and I got introduced to someone at
00:40:36
a company that I probably shouldn't
00:40:37
mention so that this doesn't get taken
00:40:39
down but if I said the company you would
00:40:41
know this company yeah and I didn't
00:40:43
realize I thought they were someone that
00:40:45
was looking out for my own good but you
00:40:48
know after I started learning more and
00:40:49
more about personal finance and I
00:40:51
started to ask better and better
00:40:53
questions to this salesman I started to
00:40:56
realize they don't have my best interest
00:40:58
and I think I'm actually out equipping
00:41:00
them whenever it comes to to knowledge
00:41:02
and what's best for me and I got stuck
00:41:04
in some kind of life insurance policy
00:41:06
which kind of looks like an infinite
00:41:07
banking product and it was egregious I
00:41:10
think I ended up putting in about
00:41:12
$15,000 and by the time I pulled it back
00:41:14
and tried to get as much money out of it
00:41:16
as I could so I could just go into more
00:41:18
simple Diversified investment products I
00:41:21
came out with like
00:41:22
$1,200 and you know there was much much
00:41:25
promise about you know how much this has
00:41:27
got to pay me out in my 60s and 70s but
00:41:30
I was just looking at the fee schedule I
00:41:32
was looking about the complexity of how
00:41:34
that product paid and I fully didn't
00:41:36
understand it like if someone challenged
00:41:38
me and asked me to explain it to them
00:41:40
how I was making and generating money
00:41:41
and how I was going to get money and
00:41:43
what were the pitfalls of this product I
00:41:45
wouldn't have been able to tell you
00:41:46
therefore that should have been a full
00:41:48
stop for me I shouldn't have invested in
00:41:49
that product at least at that time until
00:41:51
I started asking more questions and
00:41:53
getting more educated in that that's a
00:41:55
really powerful example and and
00:41:57
unfortunate example but thank thanks for
00:41:59
sharing with us thanks for sharing with
00:42:00
the audience and thankfully again in the
00:42:02
big scheme of things hopefully I hope
00:42:04
and you hope one day you'll be able to
00:42:05
look it back on that and say that was a
00:42:08
$14,000 lesson that sucks but thankfully
00:42:11
it was only 14,000 not 140 or 1.4
00:42:14
million because those are some of the
00:42:16
mistakes that people end up making later
00:42:18
on with bigger sums of money in in a
00:42:20
similar way I don't have something quite
00:42:23
as succinct as you put it on my list but
00:42:25
it doesn't mean that I disagree with
00:42:27
with how important it is to invest in
00:42:29
what you know I I loved your example of
00:42:31
the index fund and how you don't have to
00:42:34
understand the underlying mechanics of
00:42:36
every company in the index fund but you
00:42:39
should have an understanding of
00:42:41
something I I might end up talking about
00:42:42
soon on another podcast and maybe I've
00:42:44
talked about on my own podcast before is
00:42:46
this investing framework that is an
00:42:48
acronym and deserves a better shortcut
00:42:51
but it's you know RR TT llu I don't know
00:42:54
if I've ever talked about this before
00:42:55
with you Justin so it's again RR TT LL U
00:43:01
maybe you can pronounce it Rudy Lou I'm
00:43:03
not sure but it's risk return taxes
00:43:07
timeline legal liquidity and unique
00:43:11
situations and the idea is for any
00:43:12
investment you should be able to go
00:43:14
through that and understand both for the
00:43:17
investment and then also how the
00:43:18
investment kind of how it fits into your
00:43:20
overall portfolio what's the risk what's
00:43:23
the return the expected return what are
00:43:25
the tax implications what's the timeline
00:43:28
your personal timeline or just the
00:43:29
timeline that the investment has on it
00:43:31
where it's going to give you that return
00:43:32
that was promised are there any legal
00:43:34
implications of the investment do you
00:43:36
have any liquidity concerns or is the
00:43:38
investment very liquid or not liquid at
00:43:41
all and then are there any Unique Kind
00:43:43
of asterisks there and I think for
00:43:46
typical listener right now for you and I
00:43:49
for the person who's investing in index
00:43:50
funds it's a simple enough product for
00:43:53
lack of a better term that we can go
00:43:55
through bit by bit and answer those
00:43:57
questions for an index fund when someone
00:43:59
has shared their whole life policy with
00:44:02
me before or they've said like hey Jesse
00:44:03
this insurance salesperson is is trying
00:44:05
to get me to invest in this universal
00:44:07
index life like what's going on it's
00:44:09
challenging for me to go through that
00:44:11
rrtt llu framework and understand
00:44:14
exactly what's going on I don't know and
00:44:16
I'm not saying you can never invest in
00:44:18
these things but you you should
00:44:20
understand them beforehand and and more
00:44:22
times than not in the world of personal
00:44:24
finance simple is better than complex
00:44:27
agreed I love that rule that's another
00:44:29
rule that that could be that could be
00:44:30
out the top five top 10 here's a quick
00:44:33
ad and then we'll get back to the show
00:44:35
serious question why do podcasters
00:44:38
constantly ask for ratings and reviews
00:44:40
yes they do help highlight our shows to
00:44:42
new listeners they help strangers find
00:44:44
us on Apple podcast and Spotify it's
00:44:46
totally true and a good reason to ask
00:44:48
for ratings and reviews but I have
00:44:50
something more important at least more
00:44:52
important to me I want to know if you
00:44:54
like this stuff I want to know if you
00:44:56
like my podcast episodes my monologues
00:44:59
my guests the information I share with
00:45:01
you and the stories I tell I want to
00:45:02
improve and make your listening more
00:45:04
enjoyable in the process so yeah I would
00:45:07
love to read your reviews and sure if
00:45:09
you throw a rating in there too that's
00:45:11
great if you like what I'm doing please
00:45:13
share it with me it's such a great
00:45:15
feeling to read your feedback I'd love
00:45:17
to read your review or see a rating on
00:45:20
Apple podcast or Spotify thank you
00:45:23
number three a little bit more generic
00:45:25
but cover your risk and of course I'm
00:45:27
about insurance here term life Health
00:45:29
Auto all of the things and then e funds
00:45:32
emergency funds and I thought your
00:45:34
recent episode with Brian what's his
00:45:36
last yep faldi he did a really good job
00:45:40
telling me why it's important to cover
00:45:41
your risk and someone that is a risk
00:45:43
taker at least in the context of how he
00:45:45
invest he simply said like I can be a
00:45:48
little bit more aggressive whenever it
00:45:49
comes to investing because I've have
00:45:51
taken care of this whole other world of
00:45:54
personal finance for me I have a budget
00:45:56
I have an emergency fund I have
00:45:58
insurance products that protect me
00:45:59
against potential risk and you were
00:46:01
saying it too in in a recent monologue
00:46:03
too if you don't have the asset to cover
00:46:06
your potential liability you might need
00:46:08
insurance so I thought that was just
00:46:10
really good to be thinking about what
00:46:12
are some of the risk out there and how
00:46:14
can you counter correct or plan if that
00:46:18
risk comes up even if it is a one and
00:46:20
10,000 or one and one million chance
00:46:23
it's still worth considering and is
00:46:25
there some assets that you currently own
00:46:27
that you can deploy against it great if
00:46:30
not it might be worth considering buying
00:46:32
Insurance on top of that I I was going
00:46:34
to break that quote out you beat me to
00:46:36
it that's exactly right and and it's so
00:46:38
funny there was a I think it was on
00:46:40
choose fi's Facebook page recently
00:46:42
someone was asking about pet insurance
00:46:44
and pet insurance is a really
00:46:45
interesting one because with pet
00:46:47
insurance some pet owners out there I
00:46:50
totally understand it I mean Kelly and I
00:46:52
we love our dog STI and and some pet
00:46:54
owners out there they love their animals
00:46:56
so much that if their animal needed a a
00:46:59
$100,000 surgery to give it another
00:47:01
couple years of life they would try
00:47:03
their hardest to find a way to make that
00:47:05
surgery happen and there are other pet
00:47:06
owners who would face with that same
00:47:08
situation they would say you know what
00:47:10
scruffy's had the a great life he's had
00:47:12
10 years with us and and we love them
00:47:14
very much but we can't justify $100,000
00:47:17
surgery to give scruffy another couple
00:47:18
years of life I think both of those are
00:47:20
very understandable I understand the
00:47:22
emotions I understand the brass Tac
00:47:24
finances but when getting back to pet
00:47:25
insurance that first first example the
00:47:28
person who is willing to spend $100,000
00:47:30
on scruffy surgery that person probably
00:47:32
needs pet insurance because that is such
00:47:34
a large outlay of money that it's
00:47:37
probably going to do some serious
00:47:38
damages to their personal finances and
00:47:41
if they're paying 60 bucks a month for
00:47:43
pet insurance which they can build into
00:47:44
their budget and they can build their
00:47:46
life around 60 bucks a month of pet
00:47:47
insurance well now scruffy surgery might
00:47:49
be covered whereas the second family who
00:47:52
they say yeah we can't do it we can't
00:47:55
justify that surgery they might not need
00:47:57
pet insurance because they're going to
00:47:59
be better off saying you know what the
00:48:01
$200 visits they odd you know scruffy at
00:48:04
a tennis ball and now he needs to get
00:48:05
endoscoped and pull it out and you it's
00:48:07
going to be 500 bucks okay maybe they
00:48:09
can cover that from their normal
00:48:11
spending but they're going to have some
00:48:13
point where they say this is too high a
00:48:15
dollar value we aren't going to do it
00:48:17
and they might not need insurance in
00:48:19
that case you can apply that logic to
00:48:22
anything in your life whether it's your
00:48:23
own life like life insurance well if you
00:48:26
died would your family need some sort of
00:48:29
compensation in order to continue their
00:48:31
lifestyle for a lot of people with
00:48:32
dependence the answer is yes which is
00:48:34
why they probably should have life
00:48:36
insurance if you don't have any
00:48:37
dependence the answer is probably no and
00:48:40
you probably shouldn't have life
00:48:41
insurance etc etc so I I really like
00:48:44
that I think insurance is kind of an
00:48:45
underrated topic partly because some
00:48:48
some parts of the insurance industry
00:48:50
have kind of a tilt your head at exactly
00:48:52
what they're doing but yeah I like that
00:48:54
that's on your list Justin what do you
00:48:56
got for number three so my number three
00:48:58
is focus on the big stuff housing
00:49:02
Transportation your spouse those kind of
00:49:05
things so you must focus on the big
00:49:07
stuff I mean we were talking about
00:49:08
budgets earlier and when you look at the
00:49:10
typical budget whether it's your
00:49:11
personal budget or your household budget
00:49:13
and you see where your money is going
00:49:15
housing transportation and food are the
00:49:17
top three usually by far for most
00:49:20
households and then we've all heard it
00:49:22
before but who you choose to spend your
00:49:24
life with and what their personal
00:49:26
financial habits are what their assets
00:49:29
and liabilities are kind of what
00:49:31
situation you are inheriting by marrying
00:49:34
them or or spending your life with them
00:49:35
it's not the end all be all but it is
00:49:38
pretty important at the very least that
00:49:39
you're accepting of whatever situation
00:49:41
they're in you don't have to be
00:49:42
perfectly aligned if I'm really Frugal
00:49:45
and my spouse wants to spend a million
00:49:48
dollars a year well you've either got to
00:49:50
accept that or avoid it because your
00:49:52
other option isn't isn't going to be
00:49:53
good yeah this one landed on my
00:49:55
honorable mentions and it could have
00:49:57
easily been in my top five I believe I I
00:50:01
think it dropped a little bit lower I
00:50:03
don't know I was kind of like back and
00:50:04
forth on a few of these ones at the very
00:50:06
end here what's the importance level
00:50:08
actually my next one coming up number
00:50:09
four it was between this and my number
00:50:11
four that I I put down here but it's so
00:50:14
true like it's kind of the pros law or
00:50:16
Pros rule like 80% of your expenses are
00:50:19
are probably 20% of your items and
00:50:21
worrying about the big three that you
00:50:23
mentioned is is probably got to make the
00:50:25
the most impact like whenever I'm doing
00:50:27
my end of the year expense recap I'm not
00:50:29
looking at the bottom anything that I
00:50:31
spent $500 or less on like it's marginal
00:50:34
in terms of what impact I could
00:50:36
potentially do sure could I call up
00:50:38
juice land and ask if you know when they
00:50:40
put their coupons out and I could go do
00:50:43
a 50% off coupon sure like over the
00:50:45
course of the year that might save me 20
00:50:48
30 bucks if I did this pretty
00:50:49
religiously but at the same time
00:50:52
clipping those coupons and and having to
00:50:54
stay on top of that how much of a
00:50:56
workload and and exercise is that for me
00:50:59
probably not worth it but negotiating a
00:51:01
100 bucks or 200 bucks off your rent
00:51:03
with your landlord that might be worth
00:51:05
the time and effort the phone call that
00:51:06
you have to make to make a huge impact
00:51:08
on a big line item in your expenses love
00:51:11
it juice land I don't know if we have ju
00:51:13
lands up here it's an Austin specific uh
00:51:15
they have literally taken over Austin I
00:51:17
don't think there's very very few juice
00:51:21
juiceries uh I think that's the right
00:51:23
word juiceries and and Austin outside of
00:51:25
JuiceLand whenever come next uh I'll
00:51:27
take you out because it's it's
00:51:28
definitely one of my favorites got it
00:51:30
yeah I don't know how many juiceries we
00:51:32
have up here in Rochester uh maybe
00:51:34
there's a garbage plate restaurant
00:51:36
that's gonna start turning garbage
00:51:37
plates into a Juicery soon but I I can't
00:51:40
see it for some reason I I just can't
00:51:41
see it okay let's do number four my
00:51:43
number four was you must automate that
00:51:47
includes paying yourself first and that
00:51:49
also includes things like getting your
00:51:51
employer match so this there's some
00:51:53
there's some sub bullets there I might
00:51:55
be cheating a little bit but I think you
00:51:57
must automate is a terrific catchall
00:51:59
that involves it captures many different
00:52:02
things from just making sure that your
00:52:04
bills are paid on time and you don't
00:52:05
overdraft or you don't screw something
00:52:07
up and get a late fee to make sure that
00:52:09
you're saving money and investing money
00:52:12
in an automated way whether it's your
00:52:14
401k maybe you know 500 bucks a month
00:52:16
your Roth IRA that kind of thing just as
00:52:18
you go down the line as you look at the
00:52:20
behavioral research automation is a key
00:52:24
truly a golden rule for personal finance
00:52:27
and investing succcess yeah this one it
00:52:30
didn't quite land on my honorable
00:52:31
mentions because I couldn't frame it
00:52:34
into to something but I had this kind of
00:52:36
psychology Behavior section that I was
00:52:39
trying to pull forward at least one kind
00:52:41
of golden rule that encapsulated a lot
00:52:43
of these kind of sub bullets that I was
00:52:45
thinking on but automating was
00:52:47
definitely something I was interested in
00:52:48
but if I push back are there any areas
00:52:51
or moments or situations where you feel
00:52:53
like automation is probably not
00:52:57
something someone should be doing at
00:52:58
that certain time like for example if I
00:53:00
were to give you something maybe when
00:53:02
someone is first creating their budget
00:53:04
maybe it's not right for them to use an
00:53:06
automated tool that summarizes some of
00:53:07
those things but they have to go through
00:53:09
the pain stake of actually at the end of
00:53:11
each week writing down those expenses so
00:53:13
they can it can really get ingrained in
00:53:15
them yeah I think that's a perfect
00:53:16
example actually and and you're right I
00:53:18
think as people are learning and dipping
00:53:21
their toe into some of these things it
00:53:23
helps to be a little bit more Hands-On
00:53:25
and to be in the weeds a little bit and
00:53:27
to really see and feel what's going on
00:53:29
on a regular basis totally agree with
00:53:32
that it's really helpful for the
00:53:33
learning curve you and I can probably
00:53:35
both attest to the fact that when we
00:53:36
talked about our budgeting before being
00:53:38
in the weeds a little bit there was
00:53:40
beneficial for us and probably led to
00:53:42
more good than harm I just think there
00:53:44
are some things and I I bet you agree
00:53:47
Justin like there's some things where
00:53:48
once you do it once or twice then it's
00:53:50
time to set it on autopilot because you
00:53:52
kind of look at the cost benefit of it
00:53:54
all and or the the risk versus the
00:53:56
reward
00:53:57
and the risk is you forget about it and
00:53:59
it's that's not something that you want
00:54:01
to flirt with and so you're just better
00:54:03
off setting it and forgetting it in some
00:54:05
way I promise you I don't want to pay my
00:54:07
bills every single month like the fact
00:54:08
that that is automated and I don't care
00:54:11
is great there have even been times
00:54:13
where I wanted to balance my checking my
00:54:16
savings my investing accounts and and
00:54:18
then I finally got that to an automated
00:54:20
State as well you know whenever it hits
00:54:22
this certain dollar threshold then it
00:54:23
pulls money from my savings back into my
00:54:26
checkings like I you do want overdraft
00:54:29
fee and have to deal with the Fiasco of
00:54:31
of getting that off of your statement
00:54:33
I'm pretty much over that and I figured
00:54:35
out a way to automate it so I think in
00:54:37
most of this statement I think Jesse you
00:54:39
and I are probably aligned and we
00:54:41
probably agree that automation is for
00:54:43
the better especially whenever it comes
00:54:44
to investing dollar cost averaging all
00:54:46
of the like perfect I love it what what
00:54:48
was your number four my number four was
00:54:50
play the long game so what I meant by
00:54:52
this is doing the the small good things
00:54:55
for as long as possible of course I
00:54:57
think this is really obvious whenever it
00:54:58
comes to investing and man you really
00:55:01
shook me a little bit on on some of
00:55:02
those recent episodes when you were
00:55:04
talking about like 1997 to 2009 the S&P
00:55:08
500 looking at it from inflation
00:55:11
adjusted like the returns would be zero
00:55:14
but then you tack on like 10 more years
00:55:17
behind that from kind of looking at it
00:55:19
from like a 20 or 25 year period and it
00:55:21
was something crazy like 10x returns and
00:55:24
I think that's super important important
00:55:27
and in the context of investing for sure
00:55:29
not trying to play the short game and
00:55:31
compete with the people that are I think
00:55:34
more harm than good comes from from that
00:55:37
element I don't find too much harm from
00:55:40
playing the long game in most areas of
00:55:43
personal finance not only do I agree but
00:55:45
you're just making me think of I am now
00:55:48
suffering in some cases from the curse
00:55:50
of knowledge when it comes to playing
00:55:52
the long game because the communities
00:55:54
that we're part of and things like think
00:55:56
about through the best interests the
00:55:57
kind of conversations that we have kind
00:55:59
of conversations I have at work
00:56:01
everything is focused on the long game I
00:56:03
mean it is such a good fundamental of
00:56:06
personal finance and investing to be
00:56:08
focused on the long game and the curse
00:56:09
of knowledge comes about where you know
00:56:11
last week now so this is the third year
00:56:12
in a row where in March there's a local
00:56:14
school district that's invited me to
00:56:16
speak at their kind of teachers
00:56:18
education teachers self-improvement day
00:56:20
and I just give a a personal finance 101
00:56:23
investing 101 type course focused
00:56:25
specifically with some thoughts on their
00:56:27
403b program which is kind of like a
00:56:30
401k and also the New York State
00:56:32
teachers pension system and some of the
00:56:34
questions I get during the investing
00:56:35
portion specifically I realize that the
00:56:39
the definition of investing that these
00:56:40
teachers or the school staff have been
00:56:43
exposed to is not the long game like I
00:56:45
can just tell by the question itself the
00:56:47
question is well well how do I know
00:56:48
which companies to buy and how often
00:56:50
should I be buying and selling them and
00:56:52
and what are some good like what's a
00:56:54
good price to buy a stock at it'll be a
00:56:56
question like that what's a good price
00:56:57
to buy a stock at and that's a hard
00:56:59
question to answer I mean you can't
00:57:01
answer it shortly right because the real
00:57:03
answer is we got to start at ground
00:57:06
level we got to build a foundation up
00:57:08
just that question itself belies the
00:57:10
fact that you're not thinking about
00:57:11
investing from a long-term point of view
00:57:13
and totally understandable I mean that's
00:57:15
why that's why we're doing the things
00:57:16
that we're doing here Justin but anyway
00:57:18
it's a great one yeah the long game I
00:57:20
think is so fundamental to the way that
00:57:22
I approach it that sometimes I'm caught
00:57:24
off guard because I forget the fact that
00:57:26
a lot of people out there aren't
00:57:27
thinking about it this way and they'd
00:57:29
probably be better off if they were yeah
00:57:30
to push back on my own rule too I do
00:57:33
think you made a pretty good point too
00:57:34
in in that episode where you talking
00:57:36
about the returns in the S&P 500 that we
00:57:39
should be playing the long game but also
00:57:41
especially for new investors you should
00:57:42
be educating them about what's got to
00:57:44
happen in the short game and that you
00:57:46
might see 10 20% drops or a year where
00:57:49
you get one or two% and you have to
00:57:52
explain the difference between the short
00:57:54
and the long game from an investing
00:57:56
stand point and honestly one other side
00:57:59
note on on playing the long game too I'm
00:58:01
also working on getting a little bit
00:58:03
better at enjoying the short game and
00:58:04
spending a little bit money a little bit
00:58:06
more money right now so I can enjoy a
00:58:09
little bit of what's happening right now
00:58:11
here and day in my life and I don't know
00:58:14
if that entirely goes against my number
00:58:16
four but at the same time it's like I
00:58:18
don't have to always be looking out for
00:58:20
75y old Justin like you can also look
00:58:23
out for 30-year old Justin on occasion
00:58:25
too totally you have to find that
00:58:27
balance I we could probably have that
00:58:29
somewhere in here maybe my number five
00:58:31
actually might strike on the balance
00:58:33
side a little bit not to give away too
00:58:34
much like I'm sure you're doing plenty
00:58:36
of great things right now for 40 and 50
00:58:39
and 60 and 70 year old Justin but right
00:58:42
you don't have to put all your eggs in
00:58:43
the basket that comes to 30 years from
00:58:45
now you're allowed to take a couple of
00:58:47
them and and enjoy them today make an
00:58:49
omelet today Justin with some of your
00:58:51
eggs well Jesse you know my number five
00:58:53
which was learn about money invest in
00:58:55
yourself and your tagline in investment
00:58:57
and knowledge pays the best interest I'm
00:58:58
a big believer in it and the only reason
00:59:00
I put it as number five is because I
00:59:01
just felt like it was a good Capstone to
00:59:03
my whole list here but love to hear your
00:59:05
number five my number five and this is
00:59:08
getting into a little bit of the balance
00:59:10
is that you must consider stress along
00:59:13
with success and it hearkens back to
00:59:16
something we've talked about before my
00:59:18
the the success to stress ratio in in
00:59:20
personal finance it also hearkens back a
00:59:23
little bit to our budgeting conversation
00:59:24
and you were talking about you know I
00:59:26
want to go through all this effort to
00:59:27
save $20 at juw land and it's like well
00:59:30
if you think about the stress there and
00:59:32
maybe it's not anxiety maybe it's just
00:59:34
the time commitment or maybe it's the
00:59:36
sore fingers because you still have
00:59:38
Elementary School scissors and you
00:59:40
haven't graduated to real scissors yet
00:59:41
I'm not sure but however you want to
00:59:43
measure stress if you take that stress
00:59:45
and then compare it to the success which
00:59:47
in that case might be saving 20 bucks
00:59:49
it's like is that ratio worth it and
00:59:51
again I don't want to turn life into
00:59:52
some giant fraction but a lot of the
00:59:54
personal finance community talks about
00:59:56
different ways that you can find
00:59:58
benefits in your life which is awesome
01:00:01
but they have something called
01:00:02
denominator blindness which is when you
01:00:04
say well I know what the good thing is
01:00:06
but what am I comparing it to a good
01:00:08
example would be like wow there there
01:00:10
were a thousand car crashes in the
01:00:12
United States yesterday and you say like
01:00:14
well that's a big number but then you
01:00:15
have to ask yourself compared to what
01:00:17
what's a typical day is a thousand car
01:00:19
crashes a lot or little you need to have
01:00:21
a denominator to compare that to
01:00:23
something and a lot of the personal
01:00:25
finance community will talk about all
01:00:26
the benefits of XYZ or maybe all the
01:00:29
downsides of something else you have to
01:00:31
have a point of comparison and for me a
01:00:33
big one is I can understand the success
01:00:36
that comes from budgeting or long-term
01:00:39
investing or anything like that but how
01:00:42
much stress am I dealing with along the
01:00:44
way and there's some cases where I say
01:00:46
yeah that the thing that someone else is
01:00:48
doing seems really successful for them
01:00:50
and I wish them well and good for them
01:00:51
for finding so much success but I don't
01:00:53
really like how much it's stressing them
01:00:56
out or I think it would stress me out a
01:00:58
lot and therefore I don't want to pursue
01:01:00
that path because it's just not a good
01:01:01
ratio for me yeah I think that's a
01:01:03
really good point and I think I really
01:01:06
struggle with this because I'm so math
01:01:09
and logical heavy that sometimes
01:01:11
decisions I just always lean that way
01:01:14
it's like oh what should I do invest or
01:01:15
pay off this debt and it's like always
01:01:17
really obvious for me depending on
01:01:19
whatever the numbers say but I know it's
01:01:22
not always obvious or like there is
01:01:25
Nuance to that with this kind of unknown
01:01:27
factor around stress and like what is it
01:01:29
got to do for your Wellness your
01:01:31
financial wellness and and your mental
01:01:33
wellness and all of this and honestly
01:01:36
that that's a big reason that I do like
01:01:38
Financial Independence in general like
01:01:39
I'm somebody that that grew up in a very
01:01:43
Thrifty and Frugal household and money
01:01:47
was always a topic of
01:01:50
conversation and I think I just always
01:01:53
going through my 20s was worried about
01:01:56
finances and how am I going to pay for
01:01:57
life in the future and whenever I came
01:01:59
into Financial Independence and kind of
01:02:01
came across this Theory and idea I was
01:02:03
like I really like that because it gives
01:02:05
me a little bit of safety net and
01:02:07
security around Justin you can live life
01:02:10
exactly how you're living it right now
01:02:12
and this nest egg that you built over
01:02:14
here can take care of you so if
01:02:16
something happened to your job or to
01:02:19
your health and you couldn't generate
01:02:20
income anymore you're taken care of and
01:02:22
it also allows me to get a little bit
01:02:25
more risky with stuff and invest into to
01:02:28
areas or delegate some of my time
01:02:31
elsewhere that I would normally delegate
01:02:33
to generating income because I have that
01:02:35
mentality well now I can do something
01:02:37
over here that long term might pay off
01:02:39
really well but in the short term I'm
01:02:40
looking at it I'm like it's not like
01:02:42
it's not paying me as much as this thing
01:02:44
over here is paying me so it's really
01:02:46
helped the concept and the pursuit of of
01:02:49
financial Independence has really helped
01:02:50
alleviate a lot of the macro
01:02:53
psychological effect that that money has
01:02:55
had on me but yeah it's weird in the
01:02:56
short term though I'm always just like
01:02:58
super analytical and logical about some
01:03:01
decisions I mean one thing that I think
01:03:03
the financial independence movement or
01:03:06
the idea set of financial Independence
01:03:07
gets right is in general you want to
01:03:10
simplify and earlier in this
01:03:12
conversation Justin you said simple
01:03:14
usually beats complex when it comes to
01:03:16
personal finance and investing and this
01:03:18
rule of mine about comparing that stress
01:03:21
to success is very much in that vein
01:03:24
where you say okay maybe complexity is
01:03:28
mathematically going to lead to a
01:03:29
slightly better outcome but it's so much
01:03:32
harder to implement it's so much harder
01:03:33
to stick with it's harder to stomach
01:03:35
it's harder to understand and a lot of
01:03:37
the financial Independence Movement
01:03:38
rather says no just kind of simplify
01:03:40
addition by subtraction usually ends up
01:03:43
being a good thing and and I'm mostly
01:03:45
agree with that Justin are there any
01:03:47
things in your honorable mention that
01:03:49
you wanted to bring up because you like
01:03:51
them or are there any rules that I know
01:03:53
you were mentioning earlier you provise
01:03:54
the internet and you saw rules that you
01:03:56
thought to yourself no I don't agree
01:03:58
with that rule at all I think we hit on
01:04:00
most of my honorable mentions things
01:04:03
that fell into your list or just
01:04:05
subsequent to the conversation that we
01:04:07
are having today a couple of things that
01:04:10
hit on my disagree well one big one in
01:04:13
particular is that you need to set clear
01:04:16
financial goals and this might seem
01:04:19
really obvious but I was starting to
01:04:21
think about it I I added it to my list
01:04:23
initially because I was like you know
01:04:24
what oh that that seems logical like
01:04:26
that's probably a good rule to have and
01:04:28
then I a questioned myself what is my
01:04:30
clear Financial goal right now is that
01:04:33
been important to anything that's
01:04:35
actually currently happening in life
01:04:37
right now either and there have been
01:04:38
many of times I've floundered through my
01:04:40
20s and my career not necessarily having
01:04:43
financial goals or clear financial goals
01:04:46
and I think that's been okay like I I've
01:04:48
known from the get-go like sure spend
01:04:50
less than you earn invest the difference
01:04:53
invest in yourself and grow your
01:04:54
knowledge and you're doing kind of all
01:04:56
of these things these macro things that
01:04:58
are are actually right and you don't
01:05:00
necessarily need a North star at that
01:05:02
particular time so I actually pushed it
01:05:04
down to honorable mentions and then
01:05:06
eventually I pushed it out of I actually
01:05:08
just disagree with this
01:05:10
one I I will say the financial goal
01:05:13
setting exercise is becoming more and
01:05:16
more and more a big part of what I'll
01:05:19
kind of umbrella call Professional
01:05:21
financial planning is the idea that you
01:05:24
know we need to be thinking on an idual
01:05:26
basis with clients and each client
01:05:28
likely has their own unique goals in
01:05:30
life and we need to take that into
01:05:32
account but at the same time there's
01:05:34
kind of a side conversation that's
01:05:35
occurring because people are starting to
01:05:37
notice if I sit down across from a
01:05:39
ostensibly a stranger during an early
01:05:42
meeting and I say well tell me what are
01:05:44
your financial goals they might look at
01:05:46
me cross-eyed like I I don't know uh
01:05:48
retire is that a good answer and so
01:05:51
anyway there's becoming this whole kind
01:05:52
of sub genre or subset of conversations
01:05:55
within the Prof professional Community
01:05:56
about well what really what is the
01:05:58
information we want to get from our
01:05:59
clients how are we going to help our
01:06:01
clients and really there's some really
01:06:03
great alternative questions I'll say
01:06:06
that tend to be much more useful and
01:06:08
helpful other than just the blanket like
01:06:11
tell me your goals or let's set some of
01:06:13
your goals there are better questions to
01:06:15
ask what kind of Lifestyle are you
01:06:16
living right now do you want that how do
01:06:19
you want that lifestyle to change in
01:06:21
three five 10 years or right if I'm
01:06:23
sitting down with a 55-year-old couple
01:06:25
who's considering retirement it might be
01:06:27
hey guys so you want to retire what's
01:06:29
your retirement lifestyle going to look
01:06:31
like like let's talk through that and
01:06:33
then you can kind of back into from
01:06:35
there like okay they're going to be
01:06:36
spending money like this and they're
01:06:37
going to go on trips that cost that
01:06:39
they're going to give to charity in this
01:06:41
way so you can kind of build their goals
01:06:43
from there but it is very interesting
01:06:45
that the question itself or the exercise
01:06:47
of just like tell me your goals not
01:06:48
everybody knows that answer very clearly
01:06:52
it's something often times I have to
01:06:54
help people with and then some people
01:06:56
like I don't know Jess quit asking me
01:06:57
questions just I I keep I come to you
01:06:59
for advice tell me what I'm doing wrong
01:07:01
so especially with younger people too I
01:07:03
think Justin that's another thing that
01:07:04
you hit on there which is folks that are
01:07:06
our age it's like I'm not sure I I want
01:07:08
my household to still be in a healthy
01:07:10
position this time next year and I want
01:07:12
to make sure my wife and my kid have the
01:07:15
support they need and I know I want to
01:07:16
save some money but beyond that I don't
01:07:18
know keep doing what I'm doing and I
01:07:20
think that's an I think that's an okay
01:07:22
answer Jesse what about you honorable
01:07:23
mentions disagreements anything
01:07:26
that that's left unturned right now yeah
01:07:28
I mean I did have a couple down in the
01:07:30
audable mentions I had a couple
01:07:31
nitty-gritty ones that got into some
01:07:33
specifics avoiding credit card debt I
01:07:36
think is it's a personal finance
01:07:38
fundamental in our day and age but again
01:07:40
maybe it's not quite as Broad and
01:07:42
important enough to include in the top
01:07:44
five but I will say I've had a few
01:07:46
experiences recently with people who
01:07:48
have been in large sums of credit card
01:07:51
debt and it's kind of a scary place to
01:07:52
be and this is coming from individual
01:07:55
stories where people were making many
01:07:58
many hundreds of thousand dollars a year
01:08:00
I mean what you would call 95th
01:08:02
percentile 98 percentile incomes and
01:08:05
we're not only spending more than they
01:08:07
earned but we're doing so at such a clip
01:08:10
that they' racked up a large credit card
01:08:12
debt and it kind of goes to show it's
01:08:13
not about what you earn I mean yes what
01:08:15
you earn is very important and it's
01:08:17
worth trying to increase but no matter
01:08:19
what you earn if you spend more than
01:08:21
that you will be in trouble I I laugh
01:08:23
every time I say it because it's like
01:08:24
duh and everybody in everybody who knows
01:08:27
anything about personal finance says
01:08:29
that y but there's a reason why and
01:08:31
that's the important part for everyone
01:08:32
to understand there is a reason why I
01:08:34
need to like clap as I say it eat
01:08:36
healthy like from like a wellness coach
01:08:39
or a personal trainer it's like yeah
01:08:41
obviously but you got to call it out
01:08:43
because people still don't follow that
01:08:46
line of thinking correct totally totally
01:08:48
totally totally that's exactly right as
01:08:50
far as the diet goes like that I can
01:08:52
attest to I know I know there are things
01:08:55
I should shouldn't be eating and yet I
01:08:57
still often eat things that I should not
01:08:59
be eating and I do need someone to slap
01:09:02
me on the head and say put that down
01:09:04
that's cheesecake Jesse that's
01:09:06
cheesecake uh and then the other one I
01:09:08
had in in the in towards the bottom but
01:09:10
in my autoral mention is you must
01:09:12
diversify I think diversification yeah
01:09:14
is they say speaking of food the only
01:09:16
free lunch in investing and it it really
01:09:19
is it really is it's this kind of thing
01:09:21
where you don't necessarily need 20%
01:09:24
returns per year for you to get to a
01:09:26
place that you want to go and
01:09:27
diversification is a way to essentially
01:09:30
increase your it's called your risk
01:09:32
adjusted return but that's way too nerdy
01:09:34
of a term the idea is that you can still
01:09:36
achieve very healthy investment rewards
01:09:39
while not exposing yourself to Too Much
01:09:42
investment risk or volatility if you
01:09:44
properly diversify anything on your last
01:09:46
minute thoughts Justin I don't think so
01:09:48
I think I part of me thought we would
01:09:51
have some more disagreement but part of
01:09:52
me now looking at it realized that in
01:09:55
lock step a lot around values and
01:09:58
principles whenever it comes to personal
01:09:59
finance so I'm actually not that
01:10:01
surprised I actually I do have uh one
01:10:03
more that you might disagree with only
01:10:05
because I I know the way you think and
01:10:06
you might disagree with so this was my
01:10:07
last one on my honorable mention was buy
01:10:12
Dogecoin kidding everybody kidding uh I
01:10:15
would not recommend that no I agree I
01:10:17
think you and I come from similar
01:10:19
overall perspective to personal finance
01:10:21
so you know by and large we we approach
01:10:23
this the same way and speaking of so so
01:10:25
we we mentioned before we mentioned the
01:10:27
struggle is real we mentioned your
01:10:28
approach to personal finance tell us a
01:10:31
little bit more real quickly about the
01:10:32
struggle is real and how listeners can
01:10:35
find you and can find the podcast Justin
01:10:37
the struggle is real it's built for 20
01:10:39
somethings that want to focus on
01:10:41
mastering their money now so they don't
01:10:43
have to worry about it later on in life
01:10:45
so if that sounds like you even if
01:10:46
you're not 20 come on over I turned 30
01:10:49
last last year so I'm starting to feel
01:10:51
out of touch with my my audience as well
01:10:53
and and starting to think about some old
01:10:55
stuff but yeah if you're interested in
01:10:57
those kind of conversations and a lot of
01:10:58
the ones that that Jesse has feel free
01:11:00
to come over Jesse will be back on the
01:11:02
podcast first third appearance in May so
01:11:04
if you're listening to this around early
01:11:05
may head over to the feed and you'll be
01:11:07
able to find Jesse there anywhere you
01:11:08
listen to podcast you should be able to
01:11:09
find the struggle is real fantastic
01:11:11
Justin and if people want to reach out
01:11:13
after this episode to either give you
01:11:15
praise or to make fun of your list or to
01:11:17
just say like Justin you should have
01:11:18
taken it easy on Jesse why why'd you do
01:11:20
that how how can people reach you I
01:11:22
think I took it easy on you but if they
01:11:23
want to make fun of the list definitely
01:11:25
you can email me Justins simple pod
01:11:28
studios.com or find me on LinkedIn I'm
01:11:30
super active over there as well
01:11:32
fantastic and I will make sure that my
01:11:34
production team puts this all in the
01:11:36
show notes Justin because it's your
01:11:37
brother
01:11:38
Kyle all right Justin Peters thank you
01:11:41
for stopping by the best interest
01:11:42
podcast Jesse thanks for having me on
01:11:45
man thanks for tuning in to this episode
01:11:48
of the best interest podcast if you have
01:11:50
a question for Jesse to answer on a
01:11:52
future episode send him an email at
01:11:54
Jesse best bestter interest. blog again
01:11:57
that's Jesse at bestter interest. blog
01:12:00
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01:12:19
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01:12:24
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01:12:26
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