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Welcome to personal finance for
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long-term investors, where we believe
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Benjamin Franklin's advice that an
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investment in knowledge pays the best
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interest both in finances [music] and in
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your life. Every episode teaches you
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personal finance and long-term investing
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in simple terms. Now, here's your host,
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Jesse Kramer. Welcome to Personal
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Finance for Long-Term Investors, episode
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125. I'm Jesse Kramer. By day, I work at
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a fiduciary wealth management firm
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helping clients nationwide. You can
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learn more at bestinterest.blog/work.
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blog back/work. The link is in the show
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notes. And by night, I write the best
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interest blog and I host this podcast. I
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also put out a weekly email newsletter.
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And all of those projects, all of them
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help busy professionals and retirees
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avoid mistakes and grow their wealth by
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simplifying their investing, their
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taxes, and their retirement planning.
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Today, in the spirit of Christmas and
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inspired by Charles Dickens, we're going
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to do a sort of past, present, and
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future episode. My hope is that you all
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listening will walk away from this
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episode with a few interesting ideas to
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implement in your financial life or
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maybe to stick in your stocking for a
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later time. First, as always, we'll
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start with a very quick review of the
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week. This is a five-star review from
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Apple Podcasts and a t-shirt will be
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going to Gig Harbor, Washington. The
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review says, "Insightful and
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entertaining, five stars. Quick note of
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appreciation from a longtime listener.
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Your recent episode summarizing the
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complexity of planning with a special
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needs child was right on target. For
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anyone on this journey, it's a maze of
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uncertainty and worry. Episodes like
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this help many of us in processing the
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total investment landscape. And for
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those of you hearing that and are
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curious, that was episode 119 was a deep
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dive into financial planning with a
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special needs child. And thank you very
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much for those comments, Gig Harbor
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Washington. Feel free to reach out to me
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to jesse at bestinterest.blog and I will
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get a super soft podcast t-shirt mailed
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your way. And as this is the last
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episode of the year, I first want to do
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a very quick brief yearin review. As of
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this recording, which I'm recording
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right now on the first day of December,
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about 110,000 people have tuned into
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personal finance for long-term investors
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this year. And that is simply amazing
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and awesome. And I'm so thankful to all
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of you listening. I' I'd wager I've
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received probably more than a thousand
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emails this year from you. Hundreds of
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listener questions that I've used for
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the AMA episodes and for blog posts over
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at bestinterest.blog.
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By year end, there will probably be 45
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new articles on the blog and 29 new
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podcast episodes this year. Many of you
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have reached out as well about working
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with me professionally as as your
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financial planner. Me being your
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financial planner, hiring my firm, to be
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your your full-time wealth management
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firm, and sometimes for you to be the
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client, but just as often as a referral
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for a loved one in your life or an aging
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parent or a spouse just in case you get
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hit by a bus, having that backup plan.
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And it's just a huge honor that many of
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you trust me in that way. And you might
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have noticed here on the podcast that I
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don't run mattress ads. I don't sell gut
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health supplements. I don't sell banking
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products even. I don't sell a course.
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What I do though is remind you that I
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work for a fiduciary wealth management
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firm and I help clients nationwide. And
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I absolutely love all this work that I
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do. And I can say for now, at least for
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the first half of 2026, I will be
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accepting new clients. So, if you're
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interested in starting that conversation
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again, you can go to the website
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bestinterest.blog/work
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and you can find out more there. And
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thank you once again for listening.
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Here's to a merry Christmas and a great
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start to 2026. But on this Christmas Eve
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episode, stealing idea, maybe from the
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guys over at Stacking Benjamins, who I
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know they've done a similar episode like
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this before, though I swear we
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independently came to this idea, both
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stealing it from Charles Dickens. I want
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to be visited by the ghosts of past,
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present, and future. Not necessarily
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Christmas past, present, and future, but
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financial past, present, and future. So,
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I'm going to share some fun stories,
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some some lessons along the way, some
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timelines from my uh financial
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upbringing, and then I'll share with you
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a quick deep dive on my financial
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present, specifically my systems, my
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habits, how I track things, how I
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invest, how we're insured, those sort of
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details. Now, for the financial future,
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I thought about a few different
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directions to take the future route of
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this Dickens episode. and and the two
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routes I settled on is one I'm going to
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share with you just a little bit about
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what I think the future of kind of the
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financial education and financial
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planning and what those future
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industries look like and then also I
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want to share with you maybe just a
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little bit I'm happy to share with you a
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little bit about my personal goals for
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the future financial goals for the
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future my family's financial goals for
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the future and and putting on my
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financial planner hat some thoughts on
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what they are and and how we're aiming
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to get there
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>> the ghost of financial past appears
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before Jesse carrying a dripping mop in
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one hand and a package of water bottles
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in the other. Wearing a super soft
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personal finance for long-term investors
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t-shirt, the ghost urged Jesse to tell
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of his earliest financial beginnings.
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So, the ghost of financial past, one of
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my money beginnings, one of the stories
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that I first think about kind of my my
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relationship with money was the summer
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of 2001. when I was 11 years old and I
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really wanted to play the game Age of
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Empires 2. If you're not familiar with
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Age of Empires 2, it's a computer game
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where you start out controlling this
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small village and you collect resources,
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you build new buildings, you grow the
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village, you research new technology,
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eventually you raise an army, and you go
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out into the the map, if you will, and
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conquer some enemies who are doing the
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same thing as you are. And and to this
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day, Age of Empires 2 is considered one
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of the best computer games of all time.
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Actually, people still play it.
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Seriously, you can go on to YouTube
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right now and watch people playing a
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25-year-old computer game. But I don't
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think it's coincidental that this game
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appealed to me. It's strategic. It's
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about resource management. The same
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brain that loves those games also loves
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personal finance and investing and tax
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planning and economics. It all kind of
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makes sense. It's a game that expects
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and rewards your patience. you know, you
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plant the seeds early of technology
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choices and resource placement and early
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expansion and then and then later on you
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kind of harvest the bounty of planting
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those early seeds. And people who enjoy
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that rhythm, they often like real world
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planning, too. They're the people who
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don't mind playing the long game. It's
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also a game of systems. The real joy is
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kind of in the machinery underneath
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their supply lines and technology trees
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and trade routes and building different
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military units. It's a game where you
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want to understand why something works
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rather than just enjoying the flashy
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outcome of it. It's also a game of
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control, not necessarily
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micromanagement, though. The game gives
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you agency without demanding every
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little tiny detail. You know, it's about
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steering the ship and choosing
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priorities and and allocating resources,
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but not necessarily diving into every
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single bit of minutiae. And I see a
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similarity where I like deciding how to
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allocate my assets, but I don't
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necessarily want to vote in every single
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company's proxy. I'll let the mutual
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funds and the ETFs take care of that for
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me. It's a game about uh smart decisions
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compounding over time. It's a game about
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optimization, but not obsessively. So, I
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I think the same instinct that makes
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people enjoy budgeting and enjoy home
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projects or gardening or building a
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business is the same kind of thing that
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is the same reason why I enjoyed Age of
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Empires 2. But I had a major problem.
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And that's what I'm getting to. The game
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cost $50. And at 11 years old, I didn't
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have $50. And my parents, as great as
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they are, they weren't going to simply
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gift me the money for a computer game. I
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had to earn it. And I'm sure I could
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have done chores around the house. I
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could have collected soda cans for 5
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cents a piece or something like that.
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But I had a different idea. My older
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brother was playing in summer league
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baseball. 15 games over two months. Half
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of them being home games. And each game
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had a few dozen parents and grandparents
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up and down the first and the third
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baseline. Maybe those people could be
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customers, I thought. And my idea was to
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open up a small concession stand and
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sell to them, sell to those fans. So my
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dad lent me some money uh so I could go
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to Sam's Club and buy some inventory.
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And thankfully that bank, the Bank of
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Dad, happened to charge zero interest.
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And knowing what I know now, I can't
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believe I only borrowed $50 at zero
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interest, but it was what it was. I
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bought waters and soda and candy bars
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and chips and packs of gum, maybe some
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other things, too. And I'd load up a
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cooler of with ice before every game.
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I'd throw some drinks in there. I'd sit
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behind home plate with my little sign.
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And it worked. My summer revenue ended
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up being well over $100, more than
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enough to pay back my dad, the 50 that I
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borrowed and buy my very own copy of Age
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of Empires 2. I certainly learned the
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the pride of entrepreneurship and
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earning your own money and then using
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that money to do something that brings
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you joy. And yes, for what it's worth, I
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am definitely glad I bought that game. I
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spent hours and hours and hours playing
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it. It was so much fun. That said, I
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also think there are some wonderful and
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funny lessons, some real world lessons
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that we can all apply, some lessons to
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learn from from my experience. First,
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the products. So, gums and chips and
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candy are the things that maybe
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11-year-old Jesse really enjoyed and
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would have wanted to buy at a baseball
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game, but not necessarily something that
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my customers, who are almost all adults,
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were really pining for. Now, by far,
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water was my bestselling item. It wasn't
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even close. So, if I had to do it all
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over again, again, it's not necessarily
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what you want, it's what your customers
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want. Okay, good lesson there. Now,
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second, a lesson about pricing. Being
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the little math nerd that I was, I
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decided to simply take my unit cost and
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double it to determine my unit price. In
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other words, since bulk water bottles
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ended up being, you know, 27 cents a
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bottle, I doubled that to 54 cents a
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bottle, I rounded up to 55 cents to make
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it a quote unquote round number. And
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that's what my price was,05 cents for a
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bottle of water. So there I am running
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my little cash register out of a plastic
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bag full of nickels and dimes. and
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people are giving me $1 and I'm giving
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them back4 cents and change. Of course,
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everyone's lives would have been so much
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easier and so much better if I'd simply
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charged a dollar for their bottle of
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water. And no adult in the right mind
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would have really boked at that. So, I'm
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not sure what I was thinking there.
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Third, and and this is perhaps the best
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lesson to learn, there's nothing wrong
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with a subtle, soft reminder. Now, I
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remember being too nervous and too shy,
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especially with the other team's fans,
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to simply walk down to their fans along
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whatever baseline they were, and say
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something like, "Hey, if you're thirsty
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or hungry, I've got some concessions
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behind home plate." Simple, just a
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simple message. Right now, I was too shy
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to go say that. Now, most of them
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probably didn't even know I was back
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there behind home plate, right? They had
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no idea I was there. I was just sitting
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there with my sign. I think I had
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watched too much Field of Dreams.
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Speaking of baseball references, if you
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build it, they will come. Well, here in
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the real world where you don't have dead
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baseball players walking out of
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cornfields, it's if you build it and
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tell them about it, they will come. At
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least most of the time. You've got to
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tell them about it at least a little
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bit. And I know some of you probably
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roll your eyes here on the podcast when
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I say every episode that I do financial
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planning work with clients at a
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fiduciary wealth management firm, blah
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blah blah blah blah. I get it. But guess
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what? If I never said it, most of you
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would never know. And I think there's
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nothing wrong with just that soft
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reminder. Anyway, on with that. Let's go
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to the next story. My first real job was
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at a place called Fair Haven Beach State
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Park, a beautiful state park with a
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wonderful beach in the village of Fair
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Haven, New York. And for my first summer
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there, I think I was 16 years old, I was
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a cleaner. I rode around in a little
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electric cart with my mop bucket and my
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Johnny brush. And mostly I cleaned
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bathrooms all day. I also cleaned cabins
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and and some other buildings there on on
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the Park campus. But mostly I was a
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bathroom cleaner. Minimum wage at the
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time was $7.25 25 an hour. I earned an
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impressive $7.60 per hour. And one of my
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memories from that summer cleaning
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bathrooms was doing the math where I
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earned a penny basically every 5
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seconds. And the memory is sitting there
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in the bathroom cleaning toilets, you
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know, a Johnny brush in my hand,
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thinking to myself, another penny in the
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bank. 1 2 3 4 5 another penny in the
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bank. And so one of the lessons there is
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if you're thinking that if you were
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literally counting the pennies entering
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your bank account at work, you've
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probably got to find something else to
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do. I know many people work in jobs they
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aren't totally passionate about, but
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holy god, if you're visualizing pennies
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going into a bank with a Johnny brush in
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your hand, you got to find something
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else to do. It's so much better when
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your paycheck is actually just an
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ancillary component of the work you do.
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I know we might not all get there, but
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it is a better place to be, a better
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place to work. But I stuck with it for
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the full summer. I earned my checks and
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my first $450 check. That was two weeks
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pay after taxes were removed. It felt
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pretty amazing. Though, it was also my
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first foray into income taxes. You know,
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I'd earned $550 bucks, but the federal
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and and taxes in New York State
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withholding took away 20% or whatever it
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was. Now, for the record, I had not yet
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heard of a Roth IRA, and I certainly did
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not take advantage of a Roth IRA. And to
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think that one summer of missed Roth IRA
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contributions could have been $150
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billion dollars for my great great
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grandchildren in the year 2200. I will
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never get that time back. So a a younger
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dad, probably in his late 30s at the
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time, he was taking pity on me as his
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little boys got sand and and lake water
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all over the bathroom floor that I had
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just mopped. And we spoke for a couple
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minutes and I could tell he was
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thinking, "Jesus Christ, this young guy
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is a career bathroom cleaner and he's
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16, you know, he's a teenager and he's
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just stuck cleaning bathrooms. I've got
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to try to impart some career advice to
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him." And he started with some line
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like, "It's got to be nice uh spending
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time here in the park. Pretty good
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career at the state. You know, a lot of
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opportunities for career growth. Do you
00:13:04
have some some good opportunities in
00:13:06
front of you?" And I smiled and I said,
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"Yeah, you know, I'll be a high school
00:13:10
senior next year. I'm applying to
00:13:11
colleges right now. And man, it was like
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a 2,000lb weight came off his shoulders.
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Anyway, just a little funny story there.
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But here here's another good lesson.
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Going into summer number two, they
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rehired me as a cleaner again. More
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toilets, more cabins, more emergency
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calls at the you got to come to this
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bathroom right now after Fourth of July
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weekend cuz it's a disaster. You do not
00:13:29
want to get one of those calls. But
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unsurprisingly, my heart was not in it.
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In fact, I was actually kind of dreading
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the idea of spending another summer
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cleaning toilets. And in my first week
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of that second summer, I ran into one of
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the three big wigs at the park, one of
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the three main managers. And I remember
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the conversation. I said, "Hey, Tom,
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listen. I'm I'm glad. I'm grateful to be
00:13:48
a cleaner, and I'll do it as long as you
00:13:50
need me to do it. But if an opportunity
00:13:52
opens up on the maintenance team, I'd
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like to be considered for that
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opportunity." And of course, he said,
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"You know, Jesse, there's nothing right
00:13:58
now, but actually something might be in
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the works. We might have an opening by
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the end of the week. I'll let you know."
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Sure enough, someone quit. and he quit
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in a pretty unique role actually at the
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park. You know, most of the people they
00:14:08
they mowed lawns and split wood and they
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did so from 8:00 am to 4 pm Monday
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through Friday. But the guy who quit had
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a hybrid role from 10:00 a.m. to 8:00
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p.m. including on weekends. And there
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was some physical labor and maintenance
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in the afternoons, but then there was
00:14:22
also a lot of after hours customer
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service. You know, when a camper calls
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to complain that the previous uh campers
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left a mess at the campsite, I would get
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the call, I would drive up to the site,
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I would apologize, I would calm them
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down, and I would clean up the mess. And
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once the rest of the the maintenance
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team left at 4 pm, I was one of the only
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people left in the park. So I had
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autonomy to work on whatever needed it
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to chat with parkgoers uh who needed to
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speak somewhere. And I absolutely loved
00:14:44
that job. It was perfect for me. I spent
00:14:46
time on my feet. I was outside. I was
00:14:47
driving around the park. I did some
00:14:48
manual labor, but I was always talking
00:14:50
to people, solving their problems,
00:14:52
having a little chat, a little bit of
00:14:53
everything. And I certainly was never
00:14:55
counting the pennies as they dribbled
00:14:56
into my imaginary piggy bank. Now, if I
00:14:59
hadn't gone out of my way to ask Tom for
00:15:01
other opportunities at the park, I
00:15:03
probably would have cleaned toilets
00:15:04
until the day I quit in frustration. So,
00:15:06
I think there's a pretty nice career
00:15:08
lesson in there to be on the lookout for
00:15:10
opportunities. Don't be afraid to ask
00:15:12
that question. You, you know, ask your
00:15:13
boss the question. It can't hurt. You
00:15:15
know, maybe you can help the people in
00:15:16
charge to actually solve their problems
00:15:19
while you're also solving your problem
00:15:20
at the same time. It's time to fast
00:15:22
forward a little bit further into the
00:15:24
future to about 2014 or so. I'm 24 years
00:15:26
old. my real career is underway. And I
00:15:28
like this story because it's how I
00:15:30
stumbled exactly into what I'm doing
00:15:32
right now. And if you've heard me talk
00:15:34
enough on the podcast, you might be
00:15:35
somewhat familiar with this some of this
00:15:37
story. I'm a huge believer that having
00:15:39
some skin in the game will naturally
00:15:40
steer you down the path to learning more
00:15:42
about the game that you happen to be
00:15:44
playing. And for me, it was a couple
00:15:45
years into my career logging into my
00:15:47
401k and seeing, you know, the cost of a
00:15:50
new car sitting there in my account
00:15:52
balance. I don't remember the exact
00:15:54
number if I'm being honest with you.
00:15:55
probably somewhere in that 20 to $30,000
00:15:57
range. All of it at the time was
00:15:58
invested into a 2050 target date fund
00:16:01
for when I'd be 60 years old. I was
00:16:03
happy enough with all those facts, you
00:16:05
know, I I was happy enough putting money
00:16:06
away and seeing it grow, but I wanted to
00:16:08
learn more. I wanted to just understand
00:16:10
truly the nuts and bolts of what was
00:16:12
going on. And I liked learning about
00:16:14
personal finance. I'd never learned it
00:16:15
really growing up. My parents instilled
00:16:17
some pretty good lessons and and and
00:16:19
principles, but I didn't know the
00:16:21
specifics. So, I started learning more
00:16:24
little self-study. Then I discovered the
00:16:26
fire movement. Then I discovered uh the
00:16:28
Bogleheads book on investing. Then I
00:16:30
discovered uh the world of blogs and
00:16:32
podcasts and all this stuff. Fast
00:16:33
forward to late 2018, I decided to start
00:16:36
my own blog, The Best Interest was born.
00:16:38
And then early 2021, this podcast was
00:16:41
born. In mid 2021, losing some of my
00:16:43
passion for being an aerospace engineer,
00:16:45
I started the conversations that
00:16:47
eventually led to me switching careers
00:16:48
and now working in wealth management.
00:16:50
And you know, the idea at the time was
00:16:52
simple. I thought to myself, I know a
00:16:54
good amount about financial planning and
00:16:55
investing. I'd love to learn more from
00:16:57
smart people. Some of my audience
00:16:59
members already want to pay me for
00:17:01
advice. It would be good to work for an
00:17:03
established and reputable firm if I were
00:17:04
to do that. And then I had this kind of
00:17:06
interesting way of finding clients.
00:17:08
Here's a little bit of inside baseball
00:17:10
for those of you who are curious. In the
00:17:12
world of wealth management, financial
00:17:13
planning, investment management,
00:17:15
referrals are still the king. Friends
00:17:17
tell friends. Accountants and attorneys
00:17:19
point people your way. If you do good
00:17:21
work at a as a financial planner, your
00:17:23
referrals will compound like sleepy
00:17:26
dollar cost average index funds, right?
00:17:27
It's great. So, referrals are still
00:17:29
king. The problem is when you're just
00:17:30
starting out, no one's really going to
00:17:32
want to refer to you, right? There's no
00:17:34
time for the compounding to have
00:17:35
actually started. Some financial
00:17:37
advisors, they buy leads through a
00:17:38
service like Smart Asset, which maybe
00:17:40
you've heard of. Some advisers provide
00:17:42
seminars in the community, you know,
00:17:44
learning opportunities at libraries and
00:17:46
community centers, and they want to
00:17:47
pitch you whatever they're selling at
00:17:48
the end of the seminar. Some advisers
00:17:50
really dive down into a niche or they
00:17:53
become the go-to person at the country
00:17:55
club or on the social scene or something
00:17:56
like that. But here I am with this blog
00:17:58
and podcast doing something that was
00:18:01
certainly relatively unique four years
00:18:03
ago. Nowadays, I think there, you know,
00:18:05
a few dozen financial planners like me
00:18:06
who I know of who are successfully
00:18:08
building their practice solely through
00:18:10
the free education they provide in
00:18:12
content, blogs, podcasts, YouTube
00:18:14
videos, whatever it may be. Some
00:18:16
advisers dabble in content creation, but
00:18:18
in my experience, few stick with it long
00:18:20
enough to reap the iceberg effect where
00:18:22
you know most of your audience is
00:18:23
quietly watching but not really saying a
00:18:25
word. Now, most of you listening, you've
00:18:27
probably never reached out to me and
00:18:28
that's totally okay. Most of the
00:18:30
podcasts I listen to, right, they the
00:18:32
person producing the podcast, they have
00:18:33
no idea who I am. Although until one
00:18:36
day, one of my listeners will email or
00:18:38
connect on LinkedIn or fill out the work
00:18:40
with Jesse form and they'll say, "Hey,
00:18:41
I've been listening for years. Can we
00:18:43
talk?" So, it's just interesting how
00:18:45
11ish years ago was the time when I
00:18:48
first felt like I had enough skin in the
00:18:50
game in my own personal finances to say,
00:18:52
you know what, I should really sit down
00:18:53
and learn what's going on here. and
00:18:55
then, you know, just reading book after
00:18:57
book and consuming expert blog post
00:19:00
after expert blog post and just diving
00:19:02
into the details as much as I possibly
00:19:04
could. Here I am 11 years later. Here's
00:19:07
a quick ad and then we'll get back to
00:19:08
the show. I send a free weekly email to
00:19:11
thousands of readers that shares two
00:19:12
simple things, just two. The first are
00:19:14
my new articles and podcasts so you'll
00:19:16
never miss when I publish new content.
00:19:18
And the second is my favorite financial
00:19:20
content from other corners of the
00:19:21
internet so you can see what's been
00:19:22
helping me the most. But Jesse, I don't
00:19:25
want another email.
00:19:26
>> I hear you. I make this newsletter
00:19:28
short, sweet, and full of essential
00:19:30
information, and readers enjoy that.
00:19:32
About 85% of newsletter subscribers are
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engaging with the newsletter more than
00:19:35
once a month. They're enjoying it, and
00:19:37
you will, too. You can subscribe for
00:19:39
free on the homepage at
00:19:40
bestinterest.blog. And you'll get a free
00:19:42
PDF of my white paper titled The
00:19:44
Step-by-Step Guide to Building Your
00:19:46
Retirement Paycheck. That's right, a
00:19:48
free weekly email that thousands of
00:19:49
people like you are already reading. A
00:19:51
free white paper to help you plan for
00:19:53
retirement. And you can sign up for free
00:19:55
at bestinterest.blog.
00:19:57
A net worth spreadsheet unfurls itself
00:20:00
before Jesse, upheld by what must be the
00:20:03
second ghost, the ghost of financial
00:20:06
present. The ghost opens his mouth and
00:20:09
countless receipts start falling out.
00:20:11
Amazon, Wegman's, diapers, applesauce
00:20:14
pouches, more diapers. How much
00:20:16
applesauce can one small child eat?
00:20:20
>> And now we are in the financial present.
00:20:22
So, I thought I'd do two things here.
00:20:24
First, I want to tell you exactly what I
00:20:26
do in my own family's finances. My goal
00:20:28
is to really leave no stone unturned
00:20:29
here. And second, I want to tell you
00:20:31
some stories of my favorite wins from
00:20:33
the world of financial planning, my
00:20:35
financial planning practice, where we
00:20:36
looked at a situation, a person, the
00:20:38
numbers, we gave some advice, and we had
00:20:39
a terrific outcome. First, let's do the
00:20:41
family finances. Like I said before, I
00:20:43
won't share my precise numbers here
00:20:45
because that feels a little bit exposing
00:20:46
or just a little bit weird in the eye of
00:20:48
the beholder. I suppose who knows how
00:20:50
you'll interpret my numbers. So instead,
00:20:52
I just want to describe to you again
00:20:53
without the numbers but in pretty
00:20:55
precise detail how we save and and
00:20:57
contribute to various accounts, our cash
00:20:59
management system and emergency funds
00:21:01
and credit card usage. Our view on debt,
00:21:04
how we use debt, and the steps we take
00:21:06
to burn down our debt. I'll talk about
00:21:08
our asset allocation, you know, how
00:21:10
we're invested across various accounts
00:21:11
and why. I'll talk about insurance, how
00:21:14
and why we're insured, taxes, how we use
00:21:16
our HSA account, our home, and the
00:21:18
thoughts that went into buying it. And
00:21:20
then last, how we budget and how we
00:21:21
spend. So, first things first, savings.
00:21:24
This year will be the first year in a
00:21:25
while where both my wife and I are
00:21:27
maxing out our 401k retirement plans. In
00:21:30
recent years, with other priorities that
00:21:32
I'll get into, we just didn't have the
00:21:33
cash flow to max out both those
00:21:35
accounts. My wife maxes out her Roth IRA
00:21:37
month by month. For me though, simply
00:21:39
again due to cash flow conservatism.
00:21:42
I'll wait until filing taxes before I
00:21:44
make my year prior Roth IRA
00:21:47
contribution. For many years, we've both
00:21:49
maxed out our Roth IAS. Now, just in
00:21:51
case you aren't familiar with that, if
00:21:53
you didn't know, for, you know, here in
00:21:55
2025, you can make your IRA contribution
00:21:58
not until December 31st of this year.
00:22:00
you actually have until you file taxes
00:22:02
in in 2026 to make your IRA contribution
00:22:05
for the 2025 year. Moving on to the HSA
00:22:08
account. We max out our family HSA
00:22:11
account throughout the year. And as I
00:22:13
alluded to in a in a couple minutes,
00:22:14
I'll share how we actually use our HSA
00:22:16
account. We're putting away a couple
00:22:18
hundred a month into a 529 account right
00:22:20
now, assuming it'll eventually go toward
00:22:22
our children's educational spending. And
00:22:25
beyond those qualified investment
00:22:26
vehicles, we don't have too much extra
00:22:28
cash flow to save into to save into, for
00:22:31
example, a taxable account. But that's
00:22:32
okay. We're in a reasonably expensive
00:22:35
season of life right now. We have one
00:22:36
baby. We have a second baby on the way.
00:22:38
We have a newish house to us that we've
00:22:40
been renovating bit by bit, not only
00:22:42
paying the mortgage, but actually
00:22:43
putting money into to to make the house
00:22:44
nicer. Both of us had cars that kicked
00:22:46
the bucket recently. My wife's was 17
00:22:49
years old. Mine was 13 years old. So,
00:22:51
we've been using our excess cash flow to
00:22:53
spend or to replenish rather than to
00:22:56
save. And I think that's okay because
00:22:58
despite that spending, we're still using
00:23:00
our retirement accounts pretty well to
00:23:02
save pretty large dollar amounts each
00:23:04
year. Now, on to the next topic for cash
00:23:06
management. And at least here's the way
00:23:08
I think of the word cash management.
00:23:10
It's really, you know, how you're using
00:23:11
your banks and your bank accounts and
00:23:13
your savings and thinking about that.
00:23:14
So, I still have my legacy bank accounts
00:23:16
from when I was single and so does my
00:23:18
wife. My checking and her checking are
00:23:20
the two accounts that we separately use
00:23:21
as our kind of base of operations for
00:23:23
earning and for spending. But
00:23:25
importantly, we do have a joint savings
00:23:27
and a joint checking account through one
00:23:29
of the online high yield banks. And
00:23:31
those shared accounts serve a couple
00:23:33
important purposes, at least in my mind.
00:23:35
First, it makes it pretty easy and
00:23:36
seamless for us to move money back and
00:23:38
forth to one another when needed. And
00:23:40
second, we use the shared account to pay
00:23:41
certain large shared bills like the
00:23:43
mortgage. So, if I had to start from
00:23:44
scratch right now, I genuinely think we
00:23:47
would do the following. We would
00:23:48
establish a relationship with a local
00:23:50
bank to us here in Rochester where we
00:23:52
could both have a joint savings and a
00:23:54
joint checking account. We would keep
00:23:56
our joint accounts with a high yield
00:23:57
bank online. And that's pretty much it,
00:23:59
right? Our cash management in practice
00:24:01
is very much a shared experience. We
00:24:03
don't do too much solo. It's just that
00:24:06
due to the inertia of our old accounts
00:24:08
and our old econnections and all of
00:24:10
those old things we had went single, it
00:24:12
made sense for us to keep all those
00:24:13
legacy accounts to just layer on a
00:24:16
couple joint accounts on top of that.
00:24:17
And it works really, really well for us.
00:24:20
The next topic I wanted to cover is our
00:24:21
debt, how I view it, and the extra steps
00:24:23
we take to burn it down. So, right now,
00:24:25
the only debt we have on our balance
00:24:26
sheet is our house, but it's a bigger
00:24:28
mortgage than I'd like, and it's a
00:24:30
mortgage we got in the summer of 2023.
00:24:31
So, the interest rate is 6.5% which is
00:24:34
not my favorite. Now, it doesn't keep me
00:24:36
up at night. We're making our payments
00:24:38
every month in a pretty comfortable way,
00:24:40
but still, I've had a goal for the past
00:24:42
couple years to make one extra principal
00:24:45
only payment each year. So, on top of
00:24:47
the 12 regular monthly payments, one
00:24:49
more extra payment all to principal. And
00:24:52
based on the admittedly depressing math
00:24:55
of a 30-year mortgage, this
00:24:56
principleonly payment gets us just as
00:24:59
much equity in the house as the other 12
00:25:01
payments combined. So, yikes. But to be
00:25:04
clear, yes, I'm using a few thousand
00:25:06
that could go into a taxable brokerage
00:25:09
investing account, could be invested in
00:25:11
the stock market for the next 30 years,
00:25:13
and instead I am choosing to pay down a
00:25:15
6.5% mortgage. Some of you might be
00:25:18
thinking, why oh why are you doing that?
00:25:20
You can call it risk mitigation. You can
00:25:21
call it schmuck insurance. You can call
00:25:23
it diversification. You can take your
00:25:25
pick. Through our 401k, our Roth IAS,
00:25:28
and our HSA, we're already committing a
00:25:30
lot of money each year for our long-term
00:25:32
retirement goals. We're committing a lot
00:25:34
of money into the stock market. We're
00:25:35
taking on plenty of risk in that way.
00:25:38
This extra mortgage payment is a way for
00:25:39
me to feel like we're also locking in
00:25:41
some smaller gains. We're preventing
00:25:44
future 6.5% interest payments
00:25:46
guaranteed. The thing I'll I'll sit down
00:25:48
and talk to clients all the time is
00:25:49
saying, "Would you rather have a risky 9
00:25:52
or 10% or a guaranteed 6.5%."
00:25:56
Now, to each their own, but what I'm
00:25:58
essentially telling you right now
00:25:59
listening is that I'm taking a bit of
00:26:01
both, right? We have plenty of money
00:26:02
going into our qualified retirement
00:26:04
accounts, going into the stock market
00:26:06
where we are taking our chances for a
00:26:08
risky 8 or 9 or 10% per year, and then
00:26:11
with other money, I am taking the
00:26:13
guaranteed to 6.5%. To me, that feels
00:26:15
good. We're burning down the debt on our
00:26:17
family shelter. That feels really good,
00:26:19
too. So, that's my take on debt and and
00:26:22
mortgage payments. The next topic in our
00:26:24
current financial plan is our asset
00:26:25
allocation. How we're invested across
00:26:27
various accounts and why. So, our
00:26:29
retirement accounts are all 80% plus
00:26:32
invested into lowcost stock index fund
00:26:34
with roughly a 60/40 exposure to US
00:26:37
stock market versus international stock
00:26:40
markets. Our health savings account has
00:26:42
a few thousand dollars of cash in it
00:26:44
just in case I do want to use that cash
00:26:46
to start reimbursing medical expenses
00:26:48
sooner than later, but the rest of the
00:26:49
HSA account is invested into stock index
00:26:52
funds for the long run. Our 529
00:26:54
education savings account is invested in
00:26:56
well, first off, it's custodied with the
00:26:58
the New York State 529 plan, which is
00:27:00
all allocated and managed by Vanguard,
00:27:03
and it's invested in one of their target
00:27:05
enrollment date funds. very very similar
00:27:07
to a target retirement date fund except
00:27:09
it's an enrollment date. It's a
00:27:11
year-by-year date based on when your
00:27:12
children are going to enter college. So,
00:27:14
that one's pretty straightforward and
00:27:15
easy and low cost. Our taxable monies,
00:27:18
we we do have a small taxable account or
00:27:20
about 50% in cash. And really, I I count
00:27:23
all of our bank accounts and our
00:27:25
emergency fund in there. To me, it's all
00:27:26
the same taxable bucket. So, if I look
00:27:29
at our bank accounts, our emergency
00:27:30
fund, and our taxable investment
00:27:32
account, you would see that our taxable
00:27:34
monies are about 50% cash and then the
00:27:37
50% invested into stock index funds. We
00:27:40
do have a couple funny uh niche
00:27:41
allocations. I own some shares of
00:27:43
Bergkshire Hathway, not because I did
00:27:46
all the investment research that ought
00:27:47
to go into a decision like that, but
00:27:49
instead because I just wanted to own it.
00:27:51
You know, go Warren Buffett. It's just
00:27:52
like owning a Michael Jordan jersey to
00:27:54
me. I own a couple B shares of Berkshire
00:27:56
Hathway and I also own a little bit of a
00:27:58
Bitcoin ETF and Ethereum ETF mainly for
00:28:02
Schmuck Insurance and partially too
00:28:04
because I wanted to feel motivated to
00:28:06
learn more about it. Speaking of
00:28:08
insurance, let's talk about insurance,
00:28:10
how and why we're insured. So, we have
00:28:12
six types of insurance in my house. We
00:28:14
have homeowners. Homeowners insurance is
00:28:15
basic and straightforward part of having
00:28:17
a mortgage. There's nothing flashy, at
00:28:19
least that I know of, about our
00:28:20
homeowners insurance policy. Same goes
00:28:22
for our auto insurance. We have
00:28:24
liability as everyone needs to have by
00:28:26
law. We also have collision. So
00:28:27
liability protects other people from
00:28:29
your mistakes. You know, the injuries
00:28:30
you cause, the property you damage, but
00:28:32
it doesn't fix your car. Now, collision
00:28:35
though protects your car when you hit
00:28:36
something, another car, a tree, a
00:28:38
mailbox, something like that. If your
00:28:40
vehicle is damaged from an impact,
00:28:41
collision is the bucket that pays for
00:28:43
that. We do not have comprehensive
00:28:45
insurance which covers any other type of
00:28:48
damage or breakin or something like that
00:28:50
that isn't covered by collision. We do
00:28:52
not have comprehensive insurance. We
00:28:54
also have an umbrella insurance policy.
00:28:56
And to me, umbrella insurance prevents
00:28:58
that rare awful accident from turning
00:29:00
into some sort of financial crater. It
00:29:02
protects your wealth. It protects your
00:29:04
future earnings. It protects some of
00:29:05
your peace of mind. And umbrella, kind
00:29:07
of like the name implies, it it sits on
00:29:09
top of your other insurance policies and
00:29:12
says if there comes a point where my
00:29:13
homeowners insurance or my auto
00:29:15
insurance doesn't cover whatever cost is
00:29:18
going on, whatever liability is going on
00:29:20
because there's some sort of really big
00:29:22
liability overflow. Well, umbrella
00:29:24
insurance can kick in then. And and the
00:29:27
reason why people buy it is because, you
00:29:28
know, they drive, they own a home with
00:29:30
guests coming and going, they have
00:29:31
teenage drivers in the house, they have
00:29:33
assets to protect, they want some sleep
00:29:35
at night insurance. So, not everybody
00:29:38
always needs umbrella insurance. But I
00:29:40
think it's a question from a financial
00:29:41
planning point of view. It's a question
00:29:43
worth looking into just seeing if if
00:29:44
your family situation would benefit from
00:29:46
an umbrella policy. I have disability
00:29:48
insurance through work. Now, if you
00:29:50
believe the insurance industry, which
00:29:51
see this seems like a reasonable stat, I
00:29:53
suppose, they say that about three in 10
00:29:56
working age Americans will become
00:29:57
disabled and unable to work for at least
00:29:59
3 months or more at some point during
00:30:01
their career. So, 30% of Americans will
00:30:04
have a disability that lasts more than 3
00:30:06
months at some point in their career.
00:30:08
So, that's the concern that that is
00:30:10
probably worth insuring against. On
00:30:12
health insurance, we're using my
00:30:13
employer's plan, but there is an
00:30:14
interesting twist here. And I think for
00:30:16
anybody, especially with children, if
00:30:17
you have health insurance, it's worth
00:30:19
hearing this. In my situation, we use an
00:30:22
employee plus spouse plan that covers me
00:30:24
and my wife, but it does not cover our
00:30:26
daughter and it likely will not cover
00:30:28
any of our future children because
00:30:30
instead with them, we're going through a
00:30:31
New York State plan called Child Health
00:30:33
Plus, which is New York's version of the
00:30:35
federal CHIP program. CHIP stands for
00:30:38
Children's Health Insurance Program.
00:30:40
What a unique name, I know. So, if
00:30:42
you're a parent, I would recommend
00:30:44
looking up if your state offers a
00:30:46
version of the CHIP program. And the
00:30:48
reason why, quite simply, is that our
00:30:50
New York State Child Health Plus is
00:30:52
significantly cheaper for our daughter
00:30:54
than me going through work. And it has
00:30:57
much better coverage. It sounds too good
00:30:59
to be true, but it's but I suppose it's
00:31:00
not. It's really, really good. And it is
00:31:02
true. It's cheaper and has better
00:31:04
coverage. So, if your state offers some
00:31:06
version of a CHIP style program and
00:31:08
you're a parent, highly recommend you
00:31:10
look into it. Last, a big one because
00:31:12
the world of financial planning, for
00:31:13
better or worse, overlaps a lot with
00:31:15
life insurance. There are a lot of
00:31:17
people out there calling themselves
00:31:18
financial planners who are really just
00:31:20
life insurance salespeople. Kind of
00:31:22
gives life insurance a bad name, but
00:31:23
life insurance has a terrific place
00:31:25
inside a financial plan. For 99% of us,
00:31:28
that would be term life insurance. It's
00:31:30
all we need is term life insurance. It
00:31:32
literally will pay you if you die, and
00:31:35
eventually the insurance policy will
00:31:36
end. And if you haven't died by the time
00:31:38
the policy ends, then you don't get any
00:31:40
payment. It's life insurance. My wife
00:31:42
and I both have term life policies. But
00:31:44
I think our strategy behind them is is
00:31:46
kind of worth understanding. We started
00:31:47
with a question of course, if one of us
00:31:49
died, would it fundamentally alter our
00:31:51
family's ability to maintain our
00:31:53
lifestyle until our children got out of
00:31:54
college. And if you look at that
00:31:57
question and you say, well, could we pay
00:31:58
off the mortgage if one of us died?
00:32:00
Could we live a comfortable life if one
00:32:01
of us died? The answer for both of us
00:32:03
was that we needed some life insurance
00:32:05
to protect us against that risk. But we
00:32:07
also realized, and I think this is the
00:32:09
the important part, we also realize that
00:32:11
every year that goes by, our need for
00:32:13
life insurance kind of diminishes bit by
00:32:16
bit by bit. Mainly, it's it's
00:32:18
diminishing because the timeline until
00:32:20
our children leave the house is growing
00:32:21
shorter and shorter and shorter and
00:32:23
shorter. So, for that reason, I have a
00:32:25
relatively small 30-year policy that
00:32:28
will provide a benefit over their entire
00:32:30
childhood. So, you can think, you know,
00:32:32
right around the time when we're empty
00:32:33
nesters, that smaller 30-year policy
00:32:36
will still be in force, but then I have
00:32:38
a much bigger 15-year policy that is
00:32:40
meant to cover our kind of much bigger
00:32:42
risk during these early near-term years
00:32:45
of our children's younger childhood. So,
00:32:47
I think, you know, I'd be interested to
00:32:49
hear if any of you are a true life
00:32:50
insurance expert out there, what you
00:32:51
think about that. I'm a big believer in
00:32:53
the math underlying layering some life
00:32:56
insurance policies on top of each other
00:32:58
in that way. The next topic is taxes.
00:33:00
And the main thing I wanted to share
00:33:01
here is that I use a tax preparer. I use
00:33:03
an accountant. I do not prepare my own
00:33:05
taxes. Even though I'm probably better
00:33:08
than the average American at looking at
00:33:09
a 1040 tax return and understanding what
00:33:11
all the numbers are that go into them,
00:33:13
part of the problem is that the way I
00:33:15
get paid and running this business and
00:33:17
and doing business deductions and what
00:33:19
percentage of the square footage of my
00:33:21
house counts as a deduction because
00:33:22
sometimes I sit in my wife's office and
00:33:24
record this podcast, right? All those
00:33:25
questions like that. I want an actual
00:33:27
CPA involved in case I ever get audited.
00:33:30
So, that's why I use a tax preper. I
00:33:32
just think it's worth understanding that
00:33:34
there's nothing wrong with using a tax
00:33:35
repairer and you don't have to do your
00:33:36
own taxes. And I would wager that for,
00:33:39
you know, maybe not everybody out there,
00:33:41
but a surprising number of people are
00:33:43
probably missing out on little
00:33:45
deductions and little credits that they
00:33:46
don't know about simply because they're
00:33:48
doing their taxes themselves and they've
00:33:49
they just don't know what they don't
00:33:51
know. Anyway, outside of that, uh there
00:33:53
aren't too many complications at this
00:33:55
point in life because we're not that
00:33:56
close to retirement. You know, we use
00:33:57
our 401k and our HSA contributions to
00:34:00
reduce our taxable income. We get a
00:34:02
child tax credit. On the state level,
00:34:04
our 529 contributions are a deduction.
00:34:06
And we have enough mortgage interest,
00:34:08
you know, gh we have enough mortgage
00:34:10
interest and other charitable deductions
00:34:12
to actually itemize our taxes rather
00:34:14
than claim the standard deduction.
00:34:15
That's not exactly a great thing. It
00:34:17
means you're paying a ton of mortgage
00:34:19
interest, but it is what it is. The next
00:34:21
topic, how we use our HSA. So, we use
00:34:23
the HSA strategy that you might often
00:34:25
hear people talking about in financial
00:34:26
planning circles. We max out the
00:34:28
contributions every year. We keep a
00:34:30
large portion of those dollars invested
00:34:32
for the long run in stocks. Like I
00:34:33
mentioned earlier, we keep a small
00:34:35
portion in cash in case we ever decide
00:34:37
to use it in some sort of emergency need
00:34:39
or to reimburse ourselves for cash flow
00:34:41
reasons. But for the most part, we
00:34:43
intentionally do not spend any of our
00:34:45
HSA dollars on an annual basis. But we
00:34:47
do keep all the receipts. And in case
00:34:49
you've never heard of someone's process
00:34:50
here, it's not too complex. We keep all
00:34:52
the receipts so that we can, you know,
00:34:54
reimburse ourselves decades down the
00:34:56
line. That's the whole point. In the
00:34:58
process of kind of keeping track of all
00:34:59
this stuff, we keep a spreadsheet, a
00:35:01
shared Google sheet of all of our
00:35:03
medical visits. And we have a a column
00:35:05
that has the date, the patient, you
00:35:07
know, me, my wife, my daughter, what
00:35:09
occurred, you know, what the service
00:35:10
was, and the cost. And then we make sure
00:35:12
we have a PDF of the receipt. We keep
00:35:15
the spreadsheet and all the receipts. We
00:35:17
keep all the receipts, the scans if you
00:35:19
will, in the same Google Drive folder.
00:35:21
And then we'll paste a link to the
00:35:24
receipt file right there in the
00:35:26
spreadsheet. So the last column in the
00:35:27
spreadsheet is a link to that that row's
00:35:30
receipt. So any given row of the
00:35:32
spreadsheet, you could see Jesse went to
00:35:34
the dentist on November 1st, 2025. It
00:35:36
was a normal checkup. It was $150 out of
00:35:39
pocket. And click here's this link to
00:35:41
the receipt itself. So that someday in
00:35:43
the future, we'll be able to reimburse
00:35:45
ourselves for all that. I think the
00:35:46
process can be quite as simple as that.
00:35:48
That's all that you need to do. The
00:35:50
second to last topic, some thoughts on
00:35:51
our home and and really the thoughts
00:35:53
that went into buying our home. Our
00:35:54
current home I hope is our forever home.
00:35:56
The first home I bought I knew would be
00:35:58
a starter home and this is the second
00:36:00
home that I was involved in purchasing.
00:36:02
We purchased it jointly and we both hope
00:36:04
it's our forever home. We purchased it
00:36:05
in a pretty normal way. We put 20% down.
00:36:07
We got a 6.5% mortgage like I mentioned
00:36:09
earlier. And at the time when we bought
00:36:11
it though, our monthly payment was about
00:36:14
40% of our net monthly income. Now, no
00:36:17
matter which rule of thumb you ascribe
00:36:19
to, that 40% of net income number,
00:36:22
that's pretty high, and it certainly
00:36:23
meant that we had to make cuts in other
00:36:25
places in our budget to make this work.
00:36:27
But our thought process was twofold.
00:36:29
First, we didn't mind stretching for
00:36:31
what could truly be our forever home.
00:36:33
you know, this seems like such an
00:36:34
important fundamental part of your
00:36:36
family's life that maybe it is the kind
00:36:38
of thing that if if you want to spend
00:36:40
some extra money there, go ahead and
00:36:42
spend some extra money there. Second, of
00:36:44
course, we expected our household income
00:36:46
to grow and and even I think it was
00:36:48
reasonable for us to expect our income
00:36:49
to grow beyond simple inflation. Now,
00:36:52
that was an important assumption. You
00:36:53
could argue a risky assumption that went
00:36:55
into our housing purchase. But again,
00:36:57
the idea there is that we knew that on
00:36:58
day one we would be spending 40% of our
00:37:01
net income. Now, here we are less than
00:37:03
three years later and we're spending
00:37:05
about 29% of our net income each month.
00:37:08
Our payment's the same, but our income
00:37:10
has gone up enough. And I certainly hope
00:37:13
that percentage continues to trend
00:37:14
downward over the coming years. And
00:37:16
usually with mortgages, assuming that
00:37:18
your career grows a little bit, that
00:37:19
your income is simply going up at least
00:37:21
by the rate of inflation, you will see
00:37:23
that happen for your mortgage payments,
00:37:25
too. And the last topic about my
00:37:27
personal finances right now is how we
00:37:29
budget and how we spend. And now I'm
00:37:30
excited for this one because it's
00:37:32
evolved quite a bit over the last 10
00:37:34
years. If you would ask me five plus
00:37:36
years ago, I was all in on using WAB.
00:37:38
You need a budget if you're not familiar
00:37:40
with that app. We wab to budget ahead of
00:37:42
time and then to monitor every single
00:37:44
penny that I spent. And I have zero
00:37:46
regrets about running my budget like
00:37:47
that for probably four or five years. I
00:37:49
ran my budget that way because I think
00:37:51
that level of clarity is a wonderful
00:37:53
thing to have in your financial life at
00:37:55
the very least for some period of time
00:37:57
to really get a grasp on what kind of
00:37:59
money you're spending. But then when my
00:38:01
wife and I joined finances, we needed to
00:38:03
adopt a system that we both could use,
00:38:05
something that we both felt comfortable
00:38:06
with. So here's what we do now. At the
00:38:08
end of every month, I update our balance
00:38:10
sheet, our net worth statement with
00:38:12
account values for all of our cash
00:38:14
accounts, for all of our credit cards,
00:38:15
and all of our investment accounts. It's
00:38:17
a simple spreadsheet. Each column
00:38:19
represents a different month. Each row
00:38:21
represents a different account. And
00:38:22
every month, I update that net worth
00:38:24
statement. And also in the spreadsheet,
00:38:26
I write down each month's most
00:38:28
significant expenditures. We need data
00:38:31
to do that. So in order to get that
00:38:32
data, we link our bank accounts and we
00:38:34
link our credit cards to the e-money
00:38:37
software package, something I I get
00:38:39
through work. So I can pull on any from
00:38:41
and to date range, any date range. I can
00:38:44
see all the money that we've earned and
00:38:45
spent. I can sort it. I can look at the
00:38:47
biggest expenditures and the kind of the
00:38:49
the random outliers each month. I tend
00:38:51
to write those down so I can say, "Oh,
00:38:53
right. Back in April 2025, we spent
00:38:55
$1,700 on a new washer and dryer because
00:38:58
our washer and dryer kicked the bucket."
00:38:59
So, at the very least, I can go back and
00:39:01
see what the major expenditures were in
00:39:03
every month and maybe at some times
00:39:05
change our ways because of what we see.
00:39:07
And the goal of that exercise again is
00:39:09
to both monitor the money that we spend
00:39:11
and to remind ourselves of past
00:39:13
expenses. maybe to realize sometimes we
00:39:15
didn't spend money very wisely. But the
00:39:17
powerful thing in terms of budgeting
00:39:18
here is the fact that we monitor our
00:39:20
cash accounts on a monthly basis, right?
00:39:22
All of our bank accounts, all of our
00:39:24
credit cards. So, what I can do is on
00:39:26
every single month, I can get a sum of
00:39:28
our cash accounts. How much cash do we
00:39:30
have in the bank minus how much debt do
00:39:32
we have on a credit card? Not that we're
00:39:34
running a month- over-month balance, but
00:39:35
at any given snapshot, there's going to
00:39:37
be some negative balance on the card
00:39:39
most likely, unless it's the day that
00:39:40
you paid the card off. So the point
00:39:42
being at any given time I'm running this
00:39:45
spreadsheet we get a snapshot in time of
00:39:47
our cash account and then I can say well
00:39:49
how does that compare to last month or
00:39:50
the month before or the month before
00:39:52
have we been saving money have we been
00:39:54
spending more than we earn and then by
00:39:56
graphing those values those monthly
00:39:58
values over time we can see if we're
00:40:00
trending in a good direction or not you
00:40:02
know do we have some negative systemic
00:40:04
spending habits or is this just one bad
00:40:07
month in an otherwise great year. So,
00:40:09
one of my go-tos when it comes to
00:40:11
budgeting is, you know, you you can
00:40:13
choose to budget ahead of time. You can
00:40:15
choose to monitor some data after the
00:40:17
fact if you want to. You can get in the
00:40:19
weeds and get really really nitty-gritty
00:40:20
on it. But the one thing that I think
00:40:22
you cannot do is choose to do nothing.
00:40:24
Everybody who I know who has some
00:40:26
semblance of, you know, financial
00:40:27
planning success, they do something,
00:40:30
some even simple system to monitor or to
00:40:32
track what they spend. Next, while we're
00:40:34
here in the present, I just wanted to
00:40:35
share three simple stories, three
00:40:37
helpful stories from this year from my
00:40:39
practice as a financial planner. I just
00:40:41
think it's so helpful to hear about the
00:40:43
problems that people face and the way
00:40:44
that financial planning helps them find
00:40:46
solutions. So, the first one, one of my
00:40:48
clients had a hard death in his family
00:40:50
this past summer, and that caused him to
00:40:52
have this, I don't know if come to Jesus
00:40:53
moment is quite right, but for lack of a
00:40:55
better term, a a come to Jesus moment.
00:40:57
And the death made him realize that life
00:40:59
is too short and if he could retire
00:41:01
tomorrow, you know what? He would. He
00:41:03
was sick of getting on the planes and
00:41:04
traveling across the country. And even
00:41:06
though you could tell he was a driven
00:41:07
guy who I think enjoyed his work, there
00:41:09
came a point where he said life is short
00:41:11
and and his he wanted to spend more time
00:41:13
with his family. And so that begged a
00:41:15
question in his life and the question
00:41:17
was could he retire? Is he ready to
00:41:19
retire? And good financial planning
00:41:21
answers that question for him. And
00:41:23
thankfully in his case, we were able to
00:41:25
give him a really good answer that he
00:41:26
should feel really comfortable and
00:41:27
confident in retiring. So even though
00:41:29
obviously it was a very sad death, there
00:41:32
was a a silver lining that came out of
00:41:33
it and and he made a important life
00:41:35
decision for himself that so far so good
00:41:37
and and I think he has no regrets that
00:41:39
he made that decision. The second story
00:41:41
comes from a client who works for a you
00:41:43
know relatively well-known Fortune 500
00:41:45
company. They earn a great living from
00:41:47
this company. They also have a huge
00:41:49
amount of company stock from years and
00:41:51
years and years of restricted stock
00:41:53
units and stock options being gifted to
00:41:54
them, which is a terrific thing, right?
00:41:56
All else being equal, we're more than
00:41:58
happy to get those gifts in our life. If
00:42:00
you've got a job that's paying you in
00:42:02
RSUs or stock options, that's great,
00:42:04
right? It's money. It's free money to
00:42:05
some extent, but it's also risk, risk,
00:42:08
risk. There's the portfolio risk that
00:42:10
this person now has because about 25% of
00:42:12
their net worth is tied up in one stock.
00:42:15
And then there's the added income risk
00:42:17
of having all your future human capital
00:42:20
tied up into the same company that
00:42:22
already presents a portfolio risk to
00:42:24
you. And then there's the challenging
00:42:26
tax planning that comes with having
00:42:28
millions of dollars in this case of
00:42:30
appreciated stock while also earning
00:42:32
lots of money from the company itself
00:42:34
while you're in the the highest federal
00:42:35
tax brackets. Not exactly an easy
00:42:38
solution. Again, it's a solution that
00:42:39
all us being equal is a quote unquote
00:42:41
good problem to have. Right? If any of
00:42:43
us said, "Oh, my biggest problem in the
00:42:45
world is that I'm paying relatively high
00:42:47
taxes on millions and millions of
00:42:49
dollars." Listen, you're doing well.
00:42:51
That's a great problem to have. But the
00:42:52
point is that good financial planning
00:42:54
finds solutions to these types of
00:42:56
problems. There are also just some more
00:42:58
mundane stories, some helpful mundane
00:43:00
stories that happen in the world of
00:43:01
financial planning. And that's what this
00:43:02
third story is. One of my former
00:43:04
engineering colleagues has, you know,
00:43:06
he's doing everything right. He's got
00:43:07
everything going well in his finances,
00:43:09
but he had an interesting question,
00:43:10
which is, hey, if my new employer laid
00:43:13
me off, how screwed would my retirement
00:43:16
plan be? That keeps me up at night. I
00:43:18
lose sleep over the thought of getting
00:43:19
laid off. And one of the things I love
00:43:21
about the story is that our financial
00:43:24
planning work for this person, it didn't
00:43:26
influence any direct decision he's
00:43:28
making, right? He didn't quit. He didn't
00:43:31
start spending more. He didn't start
00:43:32
saving more. He didn't change his asset
00:43:34
allocation. Instead, our answer to his
00:43:37
question, which was, you know what, if
00:43:38
you got fired tomorrow, you'd still be
00:43:40
totally okay. Our answer just helped him
00:43:42
feel better. It helped him sleep better.
00:43:44
And I bet if we looked, it probably
00:43:46
helped him lower his blood pressure a
00:43:47
bit, too. You know, not everything in
00:43:49
the financial planning world has to be
00:43:50
about saving hundreds of thousands of
00:43:52
dollars or this huge decision, a death
00:43:54
in my family. Do I pull the trigger and
00:43:56
retire or not? Sometimes it's just, hey,
00:43:59
give me some answers to the questions so
00:44:00
I can sleep a little bit better at
00:44:02
night. Here's a quick ad and then we'll
00:44:04
get back to the show. You probably know
00:44:06
that I love listener inspired content,
00:44:08
but this is my first listener inspired
00:44:10
advertisement. Frank asked me in short,
00:44:12
Jesse, is there a best time to start
00:44:14
working with you as a client? And the
00:44:16
short answer is yes. There are two ideal
00:44:18
times. One is at the beginning of a new
00:44:20
year for probably some pretty obvious
00:44:21
reasons, but the second one is right
00:44:23
about now, September and October. It's
00:44:25
the perfect time for year-end tax
00:44:26
planning to ensure you find the correct
00:44:28
balance of Roth conversions, tax gain or
00:44:31
tax loss harvesting, making charitable
00:44:33
gifts, spreading out any portfolio
00:44:34
changes over multiple tax years, or
00:44:36
whatever other tax dials we can turn for
00:44:39
you. working backward from the December
00:44:41
31st tax deadline. The time to start
00:44:43
those initial conversations is right
00:44:45
now, August, September, maybe into early
00:44:47
October, you want to give yourself and
00:44:49
us enough runway to make sure we get
00:44:51
this right for you. So, if you're
00:44:53
interested in starting a conversation
00:44:54
with me and my colleagues, you can go to
00:44:56
bestinterest.blog/work
00:44:58
and fill out the form there. Again,
00:45:00
that's on my blog on the workwithjesse
00:45:02
page. The address is
00:45:04
bestinterest.blog/work
00:45:06
and fill out the form. The final ghost
00:45:09
appears. Shrouded in a cloak, the
00:45:11
phantom holds only a clock. It doesn't
00:45:14
seem dangerous or scary, but peering
00:45:16
through the translucent ghost, some
00:45:18
foggy but fleeting shapes quickly
00:45:20
materialize and then disappear. Well, as
00:45:24
I'm sitting here now facing the the
00:45:26
ghost of financial future, I have to
00:45:28
start with one of my favorite sayings,
00:45:29
which is that my crystal ball is as
00:45:31
foggy as yours. Now, professionally, I'm
00:45:33
4 years into my career change with
00:45:35
absolutely zero regrets. The podcast
00:45:37
continues to grow and grow and grow, and
00:45:38
I'm looking for more ways to help more
00:45:41
and more listeners like you find helpful
00:45:43
answers to their personal financial
00:45:44
planning questions. And some of you
00:45:46
might know that the local firm I work
00:45:47
for was actually recently purchased by a
00:45:49
larger national firm, still an
00:45:51
independent fiduciary firm, but we went
00:45:53
from a small local firm now to a a big
00:45:55
national firm. And you know, changes
00:45:57
like this, they they're going to come
00:45:58
with some positives and some negatives,
00:46:00
and I'm sure we'll see some of that as
00:46:02
time goes on. But the thing that I'm
00:46:03
happy about is that I'm still working
00:46:04
with my clients in the way that I want
00:46:06
to. I'm still able to write and podcast
00:46:08
here and and that seems to be something
00:46:10
that leaves everybody involved pretty
00:46:12
happy about the way things are going.
00:46:13
So, that's good. I think this industry
00:46:15
though, this wealth management industry
00:46:17
will have some interesting changes in
00:46:18
the future. Now, perhaps some of them
00:46:20
are going to be driven by AI. We're
00:46:22
already starting to see some very
00:46:23
interesting tools enter the world uh the
00:46:25
wealth management world that are AI
00:46:27
powered tools and we're even starting to
00:46:29
see some startups that are largely it's
00:46:31
like you know a subscription AI bot to
00:46:33
be your financial planner. Kind of
00:46:35
interesting. There's definitely some use
00:46:37
cases and and some people will also
00:46:38
never want to use them. That's fine. And
00:46:40
we're also probably going to see fee
00:46:42
models shifting. We're already seeing
00:46:44
more and more advisers become kind of
00:46:45
true financial planning quarterbacks
00:46:47
instead of that hands-off mutual fund
00:46:50
picker. And I think that's great too. I
00:46:52
think more and more planners actually
00:46:54
doing real financial planning work is
00:46:56
what's going to help people out there
00:46:57
like you listening right now, right? We
00:46:59
this industry needs to be better at
00:47:01
providing like holistic financial
00:47:03
planning, holistic wealth management to
00:47:05
our clients. I think we'll also start to
00:47:07
see a tighter merger of wealth and
00:47:09
well-being. Clients in in my experience
00:47:11
already I'm seeing people want more than
00:47:13
just performance, right? They definitely
00:47:15
want that underlying financial planning.
00:47:17
help me answer the questions about all
00:47:19
the other parts of my personal finances.
00:47:21
They want confidence and clarity and
00:47:23
better lives. And advisers and planners
00:47:26
are are leaning into that more
00:47:28
valuebased planning, decision coaching,
00:47:30
behavioral accountability, life design,
00:47:33
major transition planning. And it's not
00:47:35
this isn't, you know, kind of woo woo.
00:47:37
This is recognizing that money is the
00:47:38
tool, sure, but it's not the goal. The
00:47:41
goal is having that better life,
00:47:43
whatever that means for you. And so
00:47:45
money is one of the tools to get there,
00:47:47
but there have to be other tools to get
00:47:49
there, too. And that's where the the
00:47:51
valuebased planning or the the life
00:47:53
design, the major transition planning,
00:47:54
that's where those things come into
00:47:55
play. On the personal side, we're
00:47:57
viewing our our current financial plan
00:47:59
with a pretty clear first priority, and
00:48:01
that's to live a a comfortable, not
00:48:03
extravagant, but also not ultrarugal
00:48:05
lifestyle right now, with a focus on our
00:48:08
family, both present and future. And of
00:48:10
course, there are secondary goals that
00:48:12
involve long-term savings for
00:48:14
retirement, for other lofty goals, kind
00:48:16
of like the lakehouse you might have
00:48:17
heard me mention on this podcast before,
00:48:19
but retirement or that lakehouse or
00:48:21
whatever, they don't have precise
00:48:23
timelines in my mind. Not at all. Truth
00:48:25
be told, I enjoy work too much to be
00:48:27
sitting here go telling you guys that
00:48:29
I'm going to retire at 47, I'm going to
00:48:31
retire at 53, I'm going to retire at 60.
00:48:33
I just don't know. So anyway, there's
00:48:35
not a precise timeline to that. Whereas
00:48:37
the family life though, our children's
00:48:39
time at home, there are some pretty
00:48:41
precise timelines there. Our daughter is
00:48:43
now one and a half years old. It's kind
00:48:45
of crazy to think that going a little
00:48:48
less than 10% of her time at home is
00:48:50
already done. I don't like that, but at
00:48:52
the end of the day, it's the way it is.
00:48:54
And uh I'm going to be happy for her
00:48:55
when she leaves the nest in 16 17 years.
00:48:58
But the point is there's a defined
00:49:00
timeline there and that's something I
00:49:01
want to focus on right now. And I will
00:49:03
say we're also in a lucky position that
00:49:05
independently both I and my wife saved
00:49:08
at a pretty high rate early in our
00:49:10
careers. We benefited from those those
00:49:12
years of asset prices going up and up
00:49:14
and up during those times. So here we
00:49:16
are at age 35 and our long-term
00:49:18
retirement accounts are in a pretty
00:49:19
healthy place and that affords us some
00:49:21
flexibility to say if we want to take
00:49:23
our foot off the pedal a little bit
00:49:24
right now and focus on some of the other
00:49:26
parts of enjoying life right now, we can
00:49:28
do that. So, it's kind of funny that we
00:49:31
do not have a hard defined financial
00:49:33
plan ourselves, but we are saving a
00:49:35
comfortable amount. Not necessarily a
00:49:37
crazy amount, but a comfortable amount.
00:49:38
Our spending looks the same. We're
00:49:40
spending a comfortable amount, not a
00:49:42
crazy amount. And we're living life
00:49:44
right now and also saving a little bit
00:49:46
for the future. We're maintaining our
00:49:47
ability to be flexible at some future
00:49:49
date without sacrificing our ability to
00:49:51
enjoy life right now. And I'm pretty
00:49:53
happy about that. That's all I got for
00:49:55
you today. That's what the ghosts of
00:49:57
financial past, present, and future had
00:49:59
to say about my life and my career and
00:50:01
what's going on here at the podcast and
00:50:02
the blog. Listeners, I can't thank you
00:50:04
enough for an amazing a truly just a
00:50:07
podcast now that I think about it. I
00:50:08
mean, a banner year, a a life-changing
00:50:11
year for the podcast, crossing 100,000
00:50:14
downloads in just this year alone. And
00:50:16
we're hoping for bigger and better and
00:50:18
more exciting things coming in 2026. So,
00:50:20
merry Christmas to you all. Happy
00:50:22
holidays and a happy new year. and I'll
00:50:24
talk to you in 2026. Bye-bye for now.
00:50:27
>> Thanks for tuning in to this episode of
00:50:28
Personal Finance for Long-Term
00:50:30
Investors. If you have a question for
00:50:32
Jesse to answer on a future episode,
00:50:34
send him an email over at his blog, The
00:50:37
Bestinest. His email address is
00:50:39
00:50:41
Again, that's jessevestinterest.blog.
00:50:45
Did you enjoy the show? Subscribe, rate,
00:50:47
and review the podcast wherever you
00:50:49
listen. This helps others find the show
00:50:51
and invest in knowledge themselves, and
00:50:54
we really appreciate it. We'll catch you
00:50:56
on the next episode of Personal Finance
00:50:58
for Long-Term Investors. Personal
00:51:00
Finance for Long-Term Investors is a
00:51:02
personal podcast meant for education and
00:51:05
entertainment. It should not be taken as
00:51:07
financial advice and it's not
00:51:08
prescriptive of your financial
00:51:10
situation.