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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 and in your
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life. Every episode teaches you personal
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finance and long-term investing in
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simple terms. Now, here's your host,
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Jesse
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Kramer. Hello and welcome to episode 103
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of Personal Finance for Long-Term
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Investors. My name is Jesse Kramer.
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Today, Christine Benz is joining us.
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Christine. You might know of her from
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her Morning Star fame, if you will.
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Christine is the director of personal
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finance at Morning Star and the host of
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the Long View podcast, which features
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Nobel laureates, A-list economists, and
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billionaire investors. Christine is a
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true expert when it comes to the ins and
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outs of well, personal finance general,
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but especially retirement. And we spend
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some of today's conversation discussing
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the interesting things she learned from
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other retirement experts while writing
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her book, which is called How to Retire.
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Before Christine joins us, I'm going to
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share a few thoughts with you. Uh, my
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own thoughts and first read one of our
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customary reviews of the week. This is a
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five-star review from Apple Podcasts
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where MG Taylor wrote in and said, "I
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love this pod. Jesse does a great job
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relaying highquality personal finance
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info. I've really enjoyed listening.
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From hosting quality guests, AMAs, deep
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dives on technical concepts or the
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psychology of money and saving and
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investing. You man, Jesse, keep it up."
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Well, MG, thank you very much for the
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kind words. Feel free to shoot me an
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email to
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jesse@bestinterinterinterinterinterinterinterinterinterinterinterest.blog
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and we will send you a supersoft
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bestinterest t-shirt. Yes, the t-shirts
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still say bestin interest. They don't
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say personal finance for long-term
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investors yet. Let me work through some
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of these best interest t-shirts and then
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we'll get new PFF LTI t-shirts at some
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point in the near future. Okay, before
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Christine joins us to dive into
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retirement topics, I want to share a few
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retirement topics of my own or just a
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few articles that I've written over the
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last year or two that have these
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interesting kind of tangential
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retirement topics associated with them.
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So, first I'm going to read from an
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article I wrote called Some Bets I'm
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Willing to Make. And this article starts
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with a a true story, a bachelor party
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that I was a part of, an attendee of.
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The party decided to go to a casino and
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I happily went along for the ride. the
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behavioral finance nerd in me was ready
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to witness some some pretty interesting,
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fascinating behavior. I'm not too much
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of a gambler myself. I I maybe
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occasionally will play poker for
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entertainment, and it certainly can be
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entertaining. But gambling, especially
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at a casino, is not financially savvy.
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As as long as you know that, you'll be
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okay, albeit most likely a little bit
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lighter in the wallet. And this
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particular casino had an engaging loss
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leader. You know, a loss leader is a
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strategy where a company has a product
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that it sells or a service that it sells
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at a price below its market cost to
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stimulate other sales of more profitable
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goods or services. Right? I mean, we've
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all seen it in our lives, if we're not
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familiar with it, where a company will
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intentionally give away something for
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free or intentionally give away
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something for a very cheap price to then
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encourage you, the customer, to come in
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and actually spend more money. That's a
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loss leader. Now, this particular casino
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offered all of us
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$1515 $15 in free casino credit to all
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of us new gamblers. The scheme, of
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course, is pretty cynical. You know,
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they hope that those free bets will hook
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you knowing, they know full well that a
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regular gambler is surely to lose back
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more than the free $15 over a long
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period of time. And all it really takes
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is one true gambling addict to make up
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for hundreds of free giveaways. Like I
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said, that's pretty cynical. Now, most
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of our friends from the Bachelor Party,
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most of them went to the blackjack table
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where, if you didn't know this, as
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you're listening, the perhand odds of
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winning at blackjack are about 42% for
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the player and 50% for the house and
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roughly 8% of of ending in a tie. And
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so, most of the bachelor party
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attendees, they went to the blackjack
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table and they bet their own money on
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top of the free $15 in credit. My buddy
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and I, we kind of cheaped out. We took
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our $15 free casino cards. We went over
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to the dollar slot machines and we
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basically said, "Let's push some
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buttons. Let's have some free fun and
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we'll do that until the $15 disappears."
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But we got kind of lucky. My friend
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Trey, he turned his $15 into 80 bucks of
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real money. And in the same period, I
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turned my $15 into about $200. So our
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$30 of of free casino credit became
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about $30 real dollars. And at that
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point, once we realized what was
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happening in front of us, we decided to
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count our blessings and we walked away.
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And you know what? We we bought a round
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of drinks and we said, "Guys, some of
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the appetizers are on us, you know."
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Meanwhile though, the blackjack players,
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they ultimately played until all their
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chips disappeared. A few of them lost a
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couple hundred bucks. They had their
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fun, but yeah, they ended up losing uh
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all their money. And when a few of them
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learned of our quote unquote success at
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the slot machines, they felt a little
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bit agrieved by our dumb luck. I get it.
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I understand. But if we look strictly at
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the financials, I personally see a clear
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takeaway from this story. Trey and I or
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my friend and I, we played quote unquote
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in a way that was literally impossible
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to lose as long as we didn't succumb to
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any impulse to wager our own money. We
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had a 0% chance of losing money in that
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casino. Granted, at the end, you know,
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we got lucky to leave with any sort of
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gains, right? I think the probability is
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that we would have taken the 15 free
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dollars, spent it down to zero, and
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walked away with nothing. But because we
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had this agreement or this shared
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thought, I should say that we didn't
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really want to wager our own money, we
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knew that there was a zero percent
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chance of us losing. But the way the
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blackjack guys played, in my opinion,
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they played in a way that was guaranteed
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to lose, barring any sort of luck.
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Right? the more hands they played, each
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hand with a 42% chance that they would
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win, but a 50% chance that the casino
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would win. Every hand they played
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increased the probability that they
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would lose money and walk away at a net
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loss. And okay, part of this story is
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that it's true. I'm not the most fun guy
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at a casino, but I would implore all of
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you listening to apply a similar idea to
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your investing, thinking about the odds.
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Now, the market is not a casino, and
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that's the first thing we need to talk
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about, and investing isn't, or at least
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shouldn't be gambling. I can understand
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at times why it feels that way,
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especially when we hear stories about a
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GameStop or an AMC or a Tesla or Bitcoin
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or Nvidia. Big wins, uh, sometimes big
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losses over very short periods of time.
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That feels like gambling. But the market
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as a whole especially is not gambling.
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It's not roulette. simply it represents
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the ownership of businesses, right?
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We've talked about that many times here
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before. A small slice of the global
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economy that we each own through our
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stock portfolios. And owning a business
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is not the same as blind gambling.
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You're not depending on the fall of the
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dice or the flip of a card to fall your
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way. Stock investing involves exchanging
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money today for the future income stream
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of that particular business or in the
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case of a broad fund of stocks, the
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future income stream of the global
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economy. The economy doesn't over or
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underperform based on dice or cards.
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Investing in stocks, at least the way I
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implore all of us to approach it, is not
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gambling. But the stock market isn't a
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guarantee either, right? There will be
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times when we invest on Monday only to
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see our investments decline in value on
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Tuesday. In fact, the shorter our
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investment period, you guys might know
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this, the shorter our investment period,
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the more likely we will see losses in
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our portfolio. Now, I don't want to play
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blackjack with my retirement. I don't
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want to make coin flip bets. And the
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more the odds are in my favor, the more
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I'm willing to wager, right? The more
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I'm willing to put on the line. In one
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of Bergkshire Hathway's annual meetings,
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uh this is up on YouTube. Warren Buffett
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says something akin to roughly speaking,
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he goes, quote, "If you give me five to
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seven odds, we'd be willing to wager a
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very large sum of money." For what it's
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worth, five to seven odds is roughly a
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60% chance of winning. Now, personally,
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I don't have enough extra money to make
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too many bets that are a 60% chance of
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winning. I'd much rather make bets that
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are a 90% or a 95% or a guarantee to
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win. I really want to feel sure that I'm
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going to walk away a winner. Now, the
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longer you invest in the stock market,
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the more likely you will walk away with
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profits. And that's a wager I'm willing
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to make. In this article and the link we
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will share in the show notes, it shows a
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great graph that shows total market
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returns from like the 1870s until
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basically today over uh 1 month and two
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month and three month and five month and
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one year and three year and five and 10
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and 20 and 30 year holding periods. And
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the shorter the period, the two months
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and the 3 months and the four months,
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you have roughly a 60% chance of making
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money in the stock market. But if you're
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willing to wait 10 years or 15 years or
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20 or 30 years, your odds of making
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money in the stock market, at least
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historically, have approached 100%. High
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80s, mid9s, all the way up to 100%.
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Granted, is is the future going to mimic
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the past? Well, of course, that is the
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trillion dollar question, but it's a bet
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I'm willing to make. Now, as of writing
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this article originally, the S&P 500 was
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at 5,500. As I'm speaking these words to
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you right now and talking to you in this
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recording, the S&P is much closer to
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6,000. Now, I ask myself the question,
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will the S&P 500 be higher or lower in
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one month from now? Now, I don't know
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the answer to that question. And to be
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honest with you, I don't care. I don't
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want to make that bet, and I'm not
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making stock market bets over the next
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month. Here's another question to ask
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yourself. So, as of this, as I said, as
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I'm speaking into this microphone, the
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S&P 500's at about 6,000. Will the S&P
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hit 6,100 or 5,900 next? In other words,
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will it increase 100 points from now
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before it decreases 100 points from now?
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I don't really want that bet either cuz
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both those bets I just described involve
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short periods of time and or really
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small changes in the market. You know,
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100 points out of 6,000, that's roughly
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a 2% change in the market. And those
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bets, at least according to historical
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data, those are too close to being 50/50
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bets. And I don't want to take 5050 bets
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with my money. It's too risky for me.
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And that's why, in my opinion, stock
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investing is inappropriate over short
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periods. It's inappropriate if you're
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only trying to ek out a one or a 2%
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quick hit return, 1 month, 6 months,
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even out to a few years. Stocks aren't
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appropriate over those kind of
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timelines. But then if I think of a bet
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that says, will the S&P 500 be higher or
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lower in 10 years? Will it be higher or
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lower in 20 years or more? Well, now
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we're starting to talk about bets that
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I'm willing to make, and it's a pretty
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sizable bet that I'm willing to make at
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that. I've got a lot of money on the
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line. I'm not sure it's going to pay
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off, right? I'm not positive that it'll
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pay off, but I really like my odds. Now,
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will the S&P 500 hit, call it 9,000
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before it hits 3,000, right? Will it go
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50% up before it goes 50% down? I'm not
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positive, right? 50% declines in the
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market do occasionally happen. They have
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happened before, but they're not too
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frequent. 50% increases actually are
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much more common. So when it comes to
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this particular bet, I'm an optimist
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here. I like the odds being in my favor.
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I care about long periods of time and
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steady compounded returns over those
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periods of time. And the odds are
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clearly in the investor's favor in our
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favor when looking at those kind of time
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scales. Those are some bets that I'm
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willing to make. All right, the next
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retirement topic, a kind of a quick one,
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and it comes from an article I wrote in
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April 2023, and we will link it in the
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show notes. And the article is simply
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called, "How long will you live?"
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Because I was reading in April 2023, and
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I saw a headline stating, most people
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don't understand life expectancy data,
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which means they don't understand the
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fundamental aspect of retirement
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planning. A 20-year retirement is
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drastically different than a 30-year or
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a 40-year retirement. Specifically, the
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headline said, "More than half of US
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adults are jeopardizing retirement
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preparedness with poor life expectancy
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knowledge report says. So, let's answer
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that question right now. How long will
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you live?" Well, as of 2020, the average
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American male lived for about 75 years.
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The average American female lives for
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about 80 years. But wait, there's more.
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Because imagine you're 55 years old
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right now and you're planning your
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retirement. How long should you plan
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for? Well, if you're a male, you might
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say, "Well, about 20 years, right? the
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average death 75 minus your current age
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of 55 yields 20 years and for females
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the answer would be 25 years because
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you're 55 right now and you die at age
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80. But that's actually the wrong
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approach because the average death of 75
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and 80 years respectively accounts for
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all deaths at all ages including all
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those unfortunate deaths that occur
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before age 55. Once you've already hit
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age 55, you've avoided those premature
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deaths meaning that your most likely age
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of death will actually be above average.
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We can look at the Social Security
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Administration's actuarial data to see
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that truth in action. And I have a link
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to this in the article. So, if you want
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to check it out yourself, go to the show
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notes. The average 55-year-old male will
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actually live another 24 years to age
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79. That's 4 years beyond the average of
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all males. And the average 55-year-old
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female will live another 28 years to age
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83. That's 3 years beyond the average
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age of all females. The true midlife for
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the average American man is 38 years
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old. Because at age 38 their average
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remaining life expectancy is another 38
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years. And for women true midlife is age
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40. Because at age 40 the average life
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expectancy is another 40 years. Now
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maybe you haven't planned much of your
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retirement and you're sitting down say
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at age 65 to figure out your retirement.
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You have on average 17 more years to
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live as a man and 20 more years to live
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as a woman. That's 82 years old in total
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for men and then 85 years old in total
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for women. Now, every year matters in
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retirement planning. The difference
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between dying at age 74 and 79 and 82,
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it's a big difference. Not only that,
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but you might live longer than the
00:14:01
average. For example, a 55year-old
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American male listening to this right
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now has the probability of reaching age
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75. Well, it's about 64% that he'll
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reach age 75. About 50% that he'll reach
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age 80. about 30% that he'll reach age
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85 and about 13% that he'll reach age
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90. Now 13% might sound small, but it's
00:14:24
a 1 in8 chance. It's nothing to ignore.
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In short, as part of your retirement
00:14:28
planning, don't look at the average life
00:14:30
expectancy for all people. If you're
00:14:33
going to look at an average, you should
00:14:34
certainly start with the average life
00:14:35
expectancy of people your age. Then
00:14:38
potentially bake in some conservatism on
00:14:40
top of that because there's a 50% chance
00:14:42
you'll live longer than average. Now,
00:14:45
when it actually comes to things like uh
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when to take social security, estate
00:14:49
planning, insurance planning, those kind
00:14:51
of things, I also highly, highly, highly
00:14:53
recommend you factor in your own family
00:14:55
history. At the end of the day, there
00:14:57
might be no better indicator of your
00:14:59
life expectancy than your family
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history. Yes, environment does play a
00:15:03
huge role, so you do want to take care
00:15:04
of yourself. But if you have four
00:15:06
grandparents who lived into their 90s,
00:15:08
right? If you have two parents who are
00:15:10
currently 85 and and strong as oxen and
00:15:13
and you're sitting there at age 50, odds
00:15:15
are you're going to live into your 80s
00:15:16
and well into your 90s, right? There's
00:15:18
just a good chance genetics play a huge
00:15:20
role. If you have two parents who died
00:15:22
prematurely at age 50 and you're at age
00:15:24
55 and you have a bunch of health
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concerns yourself, I I think it's okay
00:15:28
to assume that you might live less than
00:15:30
the average person and it's okay to make
00:15:32
those assumptions and bake them into
00:15:33
your retirement plan. It's a really
00:15:35
interesting conversation. It's a little
00:15:36
touchy, right? Because it deals with
00:15:37
life and death. It deals with our own
00:15:39
mortality and it's never something that
00:15:41
we want to think about. But the point
00:15:42
being, if you're out there doing some
00:15:44
DIY retirement planning, it behooves you
00:15:47
to understand your own life expectancy.
00:15:49
And the last one today on the topic of
00:15:51
retirement planning from a recent
00:15:53
February 2025 article on the best
00:15:55
interest blog, an article that I titled
00:15:57
The Man Who Never Looked Up. I was
00:15:59
hoping that would be a catchy title. I'm
00:16:01
not I'm not sure if it worked or not,
00:16:02
but The Man Who Never Looked Up. I'm
00:16:04
reading and I've just about finished
00:16:06
Morgan Hel's recent book titled Same as
00:16:08
Ever. And one of the chapters in that
00:16:10
book is called The Best Story Wins. The
00:16:13
idea is pretty fascinating and it
00:16:15
probably makes sense to all of us. The
00:16:16
takeaway is that as humans we promote or
00:16:20
discount particular ideas simply because
00:16:22
of the story told around that idea.
00:16:24
Which means that at times we will ignore
00:16:27
a great idea because it involved a bad
00:16:29
story or because we heard a bad story
00:16:31
about it. And other times we're going to
00:16:33
promote a terrible idea because of a
00:16:35
good story that we've heard about it.
00:16:37
And Hel the author Morgan Howell
00:16:39
challenges all of us readers or for you
00:16:41
guys all of you listeners to ask
00:16:43
yourselves in your lives who is someone
00:16:45
in my life who has the right answer but
00:16:46
I ignore them because they're
00:16:48
inarticulate or what do I believe is
00:16:51
true but is actually just good
00:16:53
marketing. I immediately thought of one
00:16:55
of my former engineering colleagues in
00:16:57
our early years working together. I saw
00:16:58
him as quirky, obtuse, at times
00:17:00
unprofessional, and overall just a bit
00:17:02
of an oddball. Over time though, I
00:17:05
realized, yes, while all those things
00:17:06
were still true, every room that he was
00:17:08
in, he was always one of the smartest
00:17:10
people in the room. And okay, call me a
00:17:13
jerk, but I think the average person
00:17:14
sometimes can confound or confuse a
00:17:17
quirky personality with an intelligent
00:17:19
personality. Think about um like the Big
00:17:21
Bang Theory. She's so strange, she must
00:17:23
be a genius or something. No, I I
00:17:25
disagree. Just because someone is weird
00:17:27
enough to memorize Wikipedia doesn't
00:17:29
necessarily make them intelligent.
00:17:31
Hollywood might have taught us to
00:17:32
correlate weird with smart, but I don't
00:17:34
buy it. This former engineering
00:17:36
coworker, though, I know enough to know
00:17:38
that he was genuinely brilliant and
00:17:40
coincidentally also very quirky. But the
00:17:44
problem that he faced was that 99% of
00:17:47
our shared colleagues, of our customers,
00:17:49
of the stakeholders, they couldn't
00:17:51
really get past his strange exterior to
00:17:54
see, to understand, and appreciate the
00:17:56
genius underneath. His story, as Morgan
00:17:59
Hel would say, the way he presented
00:18:00
himself was a perfect example of Morgan
00:18:03
Hel's idea that a bad story can discount
00:18:06
a terrific idea. Nobody took him as
00:18:08
seriously as they should have. I thought
00:18:10
of this idea again recently when I spoke
00:18:12
to one of my clients. They emailed me
00:18:14
with an insurance pitch that they
00:18:15
received. The video featured this very
00:18:18
affable, well-dressed, wellspoken
00:18:20
insurance guy. He explained the untold
00:18:22
downsides of all the traditional
00:18:25
retirement investing advice, the kind of
00:18:27
things that I talk about here on the
00:18:28
podcast while preaching his own
00:18:30
incredible upsides of the universal
00:18:33
indexed life insurance that he was
00:18:35
selling. All the upside, none of the
00:18:37
downside. and you get a free steak if
00:18:38
you go attend his seminar. Now, it was a
00:18:41
great story, though, and it was
00:18:43
delivered smooth as butter. And I've
00:18:45
seen these pitches before. I've seen the
00:18:47
math. The math they use is patently
00:18:49
untrue. And the language they use is
00:18:52
usually overly emotional. It stirs up
00:18:54
the audience's deepest fears. You know,
00:18:56
if I can scare to you, I can sell to
00:18:58
you. That kind of thing. But to the
00:19:00
unknowing outside listener or viewer,
00:19:02
I'm sure this insurance pitch works.
00:19:04
It's a good story. Now, is it dishonest?
00:19:06
Of course it is. And if a viewer sees
00:19:08
through that lie, well, the jig is up.
00:19:10
But until that point, it seems like a
00:19:12
conversation worth continuing. And by
00:19:14
looking at the size of big insurance out
00:19:16
there, all the names that you might have
00:19:18
heard of, you see their commercials on
00:19:19
TV. There's no shortage of people having
00:19:22
those conversations with insurance
00:19:23
salespeople. Meanwhile, what's going on
00:19:25
on the independent fiduciary side of the
00:19:27
financial industry? Well, the smart
00:19:29
long-term financial planning principles
00:19:31
we discuss here are immensely valuable.
00:19:33
And I think the stories I share here on
00:19:35
the podcast or on my blog, they add some
00:19:37
spice, add some flavor to the topics, I
00:19:39
hope it's somewhat entertaining to all
00:19:40
you listening. But is it exciting? Or is
00:19:43
it at times maybe a little boring, a
00:19:45
little repetitive, lacking some
00:19:46
boogeyman to fear? So, I'd like to
00:19:49
present to you the man who never looked
00:19:51
up. Ryan had a plan. Or so he thought.
00:19:54
Work hard, earn more, save later. He
00:19:57
wasn't irresponsible, per se. He paid
00:19:59
his bills, avoided credit card debt. He
00:20:00
even put a little bit into his 401k. But
00:20:03
retirement, well, that was a problem for
00:20:04
future Ryan. For now, Ryan had bigger
00:20:07
things to focus on. The next promotion,
00:20:09
the next house upgrade, the next family
00:20:11
vacation. So, he kept his head down,
00:20:13
grinding, hustling, living in the
00:20:15
moment. And then one day, he looked up.
00:20:17
He was 55. Retirement wasn't some
00:20:19
distant concept anymore. It was right
00:20:21
there staring him in the face. But he
00:20:23
wasn't ready. His savings not nearly
00:20:26
enough. His investments scattered and
00:20:28
inconsistent. His timeline pushed back
00:20:31
yet again. Ryan had done what so many
00:20:33
people do. He spent decades focused on
00:20:35
the next step, never stopping to see the
00:20:37
bigger picture, never looking up. And
00:20:39
what if he had started sooner? If he had
00:20:42
invested consistently so that time, not
00:20:44
effort, did the heavy lifting? If he
00:20:46
built a real plan so his future wasn't
00:20:48
just a vague idea. If he optimized his
00:20:50
choices so that he kept more of what he
00:20:52
earned. The truth about retirement isn't
00:20:54
complicated. You don't drift into it.
00:20:56
You plan for it. Because someday you'll
00:20:58
look up. The only question is whether
00:21:00
you'll like what you see. Here's a quick
00:21:03
ad and then we'll get back to the show.
00:21:04
I still remember it was 2019 and a guy
00:21:07
from Fidelity came in to speak to my
00:21:09
then employer about personal finance in
00:21:11
general and about our 401k plan in
00:21:13
particular. There were 60 or so of us
00:21:15
who attended, mostly 50 plus years old,
00:21:18
clearly with retirement on their minds.
00:21:20
And nothing against this individual from
00:21:22
Fidelity, but unfortunately the guy just
00:21:24
didn't really know what he was talking
00:21:25
about. It ended up being a major
00:21:26
disappointment and a bunch of my
00:21:28
colleagues afterwards said in short, you
00:21:30
know, man, we're really thirsty for good
00:21:32
financial retirement information. Where
00:21:34
do we go find it? Now, does that sound
00:21:37
true, listeners, for you and your
00:21:38
colleagues? Last year, either in person
00:21:41
or via Zoom, I spoke to about 800
00:21:43
employees at 11 different organizations.
00:21:46
sometimes about personal finance in
00:21:47
general, sometimes about specifics of
00:21:49
their retirement plans, sometimes about
00:21:51
the the nitty-gritty details of social
00:21:53
security and withdrawal planning and
00:21:54
retirement math. The point being, if
00:21:57
you're interested in inviting me to come
00:21:59
talk money to you, to your colleagues,
00:22:00
where you work, that is absolutely
00:22:02
something I'm interested in talking to
00:22:04
you about. Simply drop me an email to
00:22:07
jessebinterest.blog and let's start a
00:22:09
conversation. And with that, I would
00:22:11
like to bring Christine Benz onto the
00:22:12
podcast. Again, Christine is the
00:22:14
director of personal finance at Morning
00:22:16
Star and the host of the Long View
00:22:17
podcast featuring Nobel laureates, Alys
00:22:20
economists, and billionaire investors.
00:22:22
Christine's true expertise is about
00:22:23
retirement planning. And today, we spend
00:22:25
much of the conversation discussing the
00:22:27
many interesting things that Christine
00:22:29
learned from other retirement experts
00:22:30
while writing her book, How to Retire.
00:22:33
So, without further ado, here's
00:22:34
Christine Benz.
00:22:37
[Music]
00:22:41
Well, Christine, thank you for joining
00:22:42
the podcast today. And my understanding
00:22:45
is that you've been with Morning Star
00:22:46
for over 30 years. You're currently the
00:22:48
director of personal finance, retirement
00:22:50
planning, as we said in the intro. And
00:22:52
so, with that kind of experience and in
00:22:54
your capacity in your role, I'd love to
00:22:56
get an understanding for how you view
00:22:59
the conversations around personal
00:23:01
finance and retirement planning have
00:23:03
evolved over the last 30 or 35 years,
00:23:06
you know, over over your career. How has
00:23:07
the public conversation changed? Thanks
00:23:10
so much for having me on. It's really
00:23:12
great to chat with you. I know we know
00:23:13
some of the same people and it's great
00:23:15
to to finally meet you. As far as how
00:23:17
the conversation has changed, it may
00:23:19
have something to do with my own kind of
00:23:21
evolution in terms of the work that I
00:23:23
focus on, but I do feel like we have
00:23:26
gotten away from focusing strictly on
00:23:30
investments more toward financial
00:23:33
planning matters. And that probably does
00:23:35
dovetail with kind of how I've chosen to
00:23:38
position my career. So I just am getting
00:23:40
more questions in the realm of financial
00:23:43
planning and retirement planning. But I
00:23:45
do think that the
00:23:47
conversation has had a healthy shift
00:23:50
away from an investment selection only
00:23:54
mindset toward one that is more holistic
00:23:57
and more planning based. And I think
00:24:00
that's all for the better. Do you find
00:24:03
that's true? And and when it comes to
00:24:04
maybe this might be a question that has
00:24:06
to do with Morning Star's actual
00:24:08
consumers and clients if you will. Do
00:24:11
you find that to be true from both the
00:24:13
side of professionals meaning the
00:24:15
advisers who you're working with at
00:24:16
Morning Star or who are reading Morning
00:24:18
Star or writing in but also I I think to
00:24:20
myself I most of my audience maybe 20%
00:24:23
of my audience are other adviserss or
00:24:26
planners. The other 80% tend to be
00:24:28
DIYers who are they enjoy learning more
00:24:31
about financial planning or just
00:24:33
investment management. So do you find
00:24:35
that to be what your your answer just
00:24:36
now is that true for both sides of the
00:24:38
aisle? In general, I would say it is
00:24:41
that the
00:24:43
advisor community seems to have gotten
00:24:46
away from advisor as portfolio manager.
00:24:49
And there are still some adviserss who,
00:24:51
you know, that is what they perceive to
00:24:53
be their main value ad. But it seems
00:24:56
like many other advisors and certainly
00:24:59
planners are looking more at holistic
00:25:04
planning. In fact, they're increasingly
00:25:07
outsourcing the investment selection to
00:25:10
a basket of inexpensive index funds or
00:25:13
ETFs. So, I feel like we've seen a
00:25:17
pretty clear migration there in the
00:25:19
advisor space with consumers. It still
00:25:22
is a mixed bag. We have a healthy share
00:25:24
of engaged individual investors on
00:25:26
morningstar.com who really do like the
00:25:30
process of either picking individual
00:25:33
stocks or picking individual funds. But
00:25:36
there again, I think we've seen many
00:25:40
individual investors appreciating the
00:25:43
virtue of a lowcost minimalist portfolio
00:25:47
composed of index funds and ETFs. the
00:25:49
fund flows very much tell that tale and
00:25:52
I think it's being driven by both types
00:25:54
of investors, their adviserss as well as
00:25:58
individual investors. So, you recently
00:26:00
published an excellent book, How to
00:26:02
Retire, where you interview 20 subject
00:26:05
matter experts and and we'll get into
00:26:07
some of these questions later because I
00:26:09
have some some pointed questions about
00:26:10
the book. I love the fact that basically
00:26:13
by by my count at least 10 of the 20
00:26:16
chapters are about what I'd call maybe
00:26:18
more nitty-gritty numerical objective
00:26:20
retirement topics and the other 10 are
00:26:23
about more subjective mental
00:26:25
psychological retirement topics and
00:26:27
alluding to what you just said about the
00:26:29
more planning focus that the industry
00:26:31
has taken over the recent decades. I
00:26:32
mean that is that marriage of the the
00:26:35
numerical and the more mental or the
00:26:37
softer psychological. But even before we
00:26:39
get into these 20 topics that you dive
00:26:41
into, I want to ask you about your
00:26:44
parents, Christine, and specifically
00:26:45
your dad, and the story that you share
00:26:48
in the introduction to your book, How to
00:26:50
Retire. Can you tell us that story and
00:26:52
and kind of how it shaped some of your
00:26:54
thoughts on financial planning and
00:26:56
family and and all these different ideas
00:26:57
and how they're intertwined? Sure. So, I
00:27:00
was very close to my mom and dad.
00:27:02
They've since passed away and was my
00:27:04
family's kind of quote unquote first
00:27:06
responder. I was the person living in
00:27:09
close proximity to my mom and dad and so
00:27:11
was frequently with them and ended up
00:27:14
helping them through the last years of
00:27:16
their lives when my dad had cognitive
00:27:19
decline and needed long-term care. My
00:27:21
mom eventually needed long-term care as
00:27:24
well. But I was able to be my dad's
00:27:27
buddy, investment buddy throughout his
00:27:30
journey. He was someone who always
00:27:32
really liked investing, was a stock
00:27:34
investor early on and then eventually a
00:27:36
mutual fund investor. And so he and I
00:27:38
frequently talked over investment
00:27:40
matters. And I think about his
00:27:42
transition into not being able to
00:27:44
oversee his portfolio was about as
00:27:46
smooth as you could get where he was all
00:27:49
in on letting me be on his accounts to
00:27:53
see what was going on. Eventually we
00:27:55
transferred it to where I was managing
00:27:57
my parents' money and then managing
00:27:59
other aspects of their financial lives
00:28:00
as well including bill paying the stuff
00:28:02
that my mom had handled. I think for
00:28:04
them it was you know a beautiful kind of
00:28:08
transition. They had this trusted adult
00:28:10
child who did this stuff for her job.
00:28:12
And I think about how rarified that is
00:28:15
that most people do not have that and
00:28:18
really need to put some thought into
00:28:21
well how do I create a plan that could
00:28:23
kind of manage itself for a while if it
00:28:26
needed to? How do I find a competent
00:28:29
advisor? A whole suite of considerations
00:28:32
that should accompany aging and
00:28:34
transitioning that portfolio into later
00:28:37
into life. And so I wanted to talk more
00:28:39
about those things. And that's been
00:28:41
something that I've focused a lot of my
00:28:43
work on for the past 10 or 15 years,
00:28:45
influenced in in no small part by that
00:28:47
experience with my mom and dad. Yeah,
00:28:49
it's funny you say that, Christina, and
00:28:51
I think about my own background. And I
00:28:53
don't know if I I don't think I've
00:28:54
shared this with you or maybe you found
00:28:55
out on your own. I was an engineer and
00:28:56
so my background is in engineering and I
00:28:58
went through this interesting little
00:29:00
career change that first involves
00:29:02
creating content because I was just
00:29:04
interested in investing in personal
00:29:05
finance and eventually led to now I'm
00:29:08
working at an RAIA. And when I was an
00:29:10
engineer and very much a dedicated
00:29:12
DIYer, I found this stuff so
00:29:14
interesting. I thought to myself, well,
00:29:16
I'm sure there are financial planners
00:29:18
out there who simply understand the
00:29:20
numbers better than I do, and that's
00:29:23
their value ad. And to some extent, now
00:29:25
that I'm in the industry, I see some
00:29:27
truth in that. But I was surprised in
00:29:31
some of the clients that I'm now working
00:29:32
with that it's far more common to hear
00:29:35
someone say, "No, no, it's not
00:29:37
necessarily about the numbers or it's
00:29:38
not that the client is saying, I don't
00:29:40
understand the numbers, Jesse, and you
00:29:42
do, and that's why I want to work with
00:29:43
you." It's also extremely common to
00:29:45
hear, "Well, if I got hit by a bus
00:29:47
tomorrow, my family wouldn't know what
00:29:48
to do, so that's why I'm outsourcing it
00:29:50
to you." Or, "Here I am, 60 years old
00:29:53
and in good health. I don't know if
00:29:55
it'll always be this way. So that's why
00:29:57
I want to onboard a competent adviser
00:30:00
right now. And so it's just that idea
00:30:01
that there is more to financial planning
00:30:04
than simply the numbers themselves and
00:30:06
optimizing the numbers themselves
00:30:08
because it really is about these
00:30:09
potential curve balls that life can
00:30:11
throw your way and depending on the
00:30:13
severity of that curveball, what you're
00:30:15
going to do once it comes. Yeah. No,
00:30:19
absolutely. I am someone who has a
00:30:21
financial planner myself and people are
00:30:23
sometimes surprised to hear that. But
00:30:25
one of the key reasons that we work with
00:30:27
her is that she is a receptacle of all
00:30:30
of our information if something happened
00:30:33
to us to my husband and me that she
00:30:36
would be there for our loved ones to say
00:30:38
okay what do they have and where is it
00:30:40
and you know she could help with that
00:30:43
transition. So, I do think that's a key
00:30:46
benefit, which is not to say everyone
00:30:48
needs an advisor all through their
00:30:51
accumulation and deumulation years, but
00:30:53
it does it does make sense to have at
00:30:57
least someone in place to keep track of
00:31:01
what you have. Maybe it's a super
00:31:02
trusted adult child who's very
00:31:04
financially competent, but I don't know
00:31:06
how common that configuration is. Yeah,
00:31:10
I completely agree because I I I can
00:31:11
also hear some of the listeners right
00:31:13
now saying that's all well and good,
00:31:15
Jesse and Christine, but still you're
00:31:17
you're not going to convince me to hire
00:31:18
someone full-time. And that is fine. And
00:31:20
and something we've talked about here
00:31:21
before is just the concept of, for
00:31:23
example, a life file or some people call
00:31:25
it a death file or just that's fine. If
00:31:27
if you're not going to have if you're
00:31:29
not going to outsource this to someone
00:31:30
on the outside, well, at the very least,
00:31:32
whoever your next of kin is or whoever
00:31:35
might be the executive of your estate,
00:31:37
you better put everything in order for
00:31:39
them so that if something happens, it
00:31:41
there's a smooth transition and
00:31:42
everybody's on the same page after you
00:31:44
die. Cuz those are, again, not to
00:31:46
fearonger, but some of the stories that
00:31:48
you hear about so and so passed away and
00:31:51
boy, it was a mess, cleaning up after
00:31:53
that was mess. Those are the kind of
00:31:54
things that ideally ideally we'd want to
00:31:56
avoid. Absolutely. Yeah. And I would
00:31:59
also say, Jesse, we don't pay our
00:32:00
planner every year. We find that our
00:32:03
advice needs are pretty episodic and we
00:32:06
are fine managing our portfolios. I I
00:32:08
would hope I would be able to do that
00:32:10
after all these years. So, we're fine
00:32:12
managing our portfolios, but we pay her
00:32:15
on an hourly basis, and it just works
00:32:16
out tremendously well for us. So, which
00:32:19
is not to say that model is the right
00:32:20
thing for everyone, but for us, it's
00:32:22
been a super good fit. Yeah. No, to
00:32:24
totally hear you. The most common
00:32:26
questions that I get as far as people
00:32:28
seeking out advice tends to is hourly.
00:32:31
The most common questions I get are
00:32:33
people seeking hourly advice and then
00:32:35
after that is usually a tie between
00:32:37
either annual flat fee versus annual aum
00:32:42
based fees. But it's funny, my the firm
00:32:44
that I work for here in Rochester, we
00:32:46
don't offer hourly guidance. At one
00:32:48
point we did, but strictly from a
00:32:49
business decision and you know where's
00:32:51
our revenue coming from and do we want
00:32:53
to diversify across these you know to
00:32:55
the listeners who aren't familiar I'm
00:32:56
sure Christine has some experience in
00:32:58
this like it takes quite a bit of
00:32:59
overhead to dedicate part of your firm
00:33:02
to the hourly advice model. It just
00:33:04
takes a different amount of overhead to
00:33:06
do the flat fee or the AOM model and we
00:33:08
basically said you know what we're a
00:33:10
solid business on this one fee model and
00:33:12
that's what we're going to stick with.
00:33:13
But at the same time, I see the value in
00:33:16
hourly advice, especially for someone
00:33:18
like me, someone like you, someone like
00:33:19
a lot of our listeners who say, "I never
00:33:21
have that many portfolio questions."
00:33:23
It's more about what happens after I
00:33:25
die. It's more about how do I do these
00:33:27
Roth conversions? And for them, some
00:33:29
sort of hourly or flat fee advisor makes
00:33:32
a lot of sense. There's a space for all
00:33:34
those different kind of adviserss. I
00:33:36
think of uh Cody Garrett who I know
00:33:37
you've had on the long view and he's
00:33:40
been here on the best interest and you
00:33:41
know he's a terrific example of someone
00:33:43
who exclusively works in the hourly
00:33:45
space and does a great job for his
00:33:47
clients but on the topic of experts I I
00:33:49
don't think Cody is in is in the how to
00:33:51
retire book Christine but he's not but I
00:33:54
love his work. Yeah, you still you found
00:33:56
some terrific terrific authors, writers,
00:33:59
uh storytellers to help you put that
00:34:00
book together. And I know this is a hard
00:34:03
question because it might be like
00:34:04
picking your favorite children, but did
00:34:07
any of the authors in the chapters
00:34:08
really stick out to you as something
00:34:10
that you feel like it's just not
00:34:12
discussed enough? A couple, Jesse, and I
00:34:15
will say I'm I'm someone who had
00:34:17
probably underrated all of the
00:34:20
non-financial aspects of retirement
00:34:22
planning while I was toying with bucket
00:34:24
portfolios and safe withdrawal rates and
00:34:26
all that stuff. I think I had not
00:34:28
thought enough about the non-financial
00:34:31
pieces. So, when I think about some of
00:34:33
my favorite chapters, those really stand
00:34:35
out. Early on in the book, I have a
00:34:37
conversation with Laura Karstensson,
00:34:39
who's a the director of the Stanford
00:34:42
Center on Longevity. And so, we talk
00:34:44
about the role of work in our lives. She
00:34:48
has made the point and she makes the
00:34:50
point in the book that the way we work
00:34:52
in this country is all wrong. She thinks
00:34:55
because people oftenimes show up in
00:34:57
retirement completely exhausted,
00:35:00
completely burned out. They are only
00:35:02
able to visualize sitting on the couch.
00:35:05
They really don't visualize a fuller
00:35:08
retirement. And so she makes the point
00:35:10
that we need to retire more often in
00:35:13
this country if we can. that there may
00:35:15
be times in our lives when young
00:35:18
children enter the picture. For example,
00:35:20
that might be a good time when someone
00:35:22
could pull back from work for a few
00:35:25
years, fully engage with child raising,
00:35:28
and then maybe step back in. But our
00:35:31
culture really doesn't support that
00:35:33
model as much. So, we talked about that,
00:35:34
but the bulk of the conversation was
00:35:37
about relationships later in life and
00:35:40
how our relationships tend to change a
00:35:43
little bit as we age. we tend to self-
00:35:45
select into smaller networks of people
00:35:48
who we are spending time with. And she
00:35:51
leaves the reassuring message that
00:35:53
that's actually just fine. You don't
00:35:55
want that inner circle to get too too
00:35:57
small. And there might be sad reasons
00:35:59
why that social network gets a little
00:36:02
smaller like people moving away or dying
00:36:04
or things like that. But overall, she
00:36:07
said that we are becoming more
00:36:09
discerning. we are self- selecting into
00:36:11
smaller, more satisfying or a smaller
00:36:14
group of more satisfying relationships.
00:36:16
So, I just really enjoyed all of the
00:36:18
aspects of that conversation. She talks
00:36:20
about healthy aging, getting outside.
00:36:23
Ideally, you would be moving physically
00:36:27
outside and with someone. And if you can
00:36:30
bring those three things together, all
00:36:32
the better, but those factors tend to
00:36:35
contribute to healthy aging. So, that
00:36:37
was one of my favorites. And then the
00:36:38
last chapter with Jordan Grummit, who is
00:36:40
a an author and a a leading light in the
00:36:44
fire movement and has his own podcast.
00:36:46
That was another one that I really
00:36:48
enjoyed and felt was a good end cap to
00:36:50
the book. Some of Jordan's words about
00:36:53
the conversations that he's had with
00:36:55
dying patients and the thoughts or the
00:36:58
regrets, the excitement, the things that
00:37:00
brought people joy during their life as
00:37:02
they're dying or what they reflect on
00:37:04
most versus the kind of things that you
00:37:05
and I hear during the prime years of our
00:37:07
life. the things that we think might be
00:37:09
important aren't always the things that
00:37:11
people really reflect on as being
00:37:13
important. And I think some of that
00:37:14
message is really interesting. I love
00:37:16
that uh discussion and I remember
00:37:18
telling my husband I was like so you
00:37:20
know that hospice doctor I'm always
00:37:22
talking about I'm going to make his
00:37:24
chapter the last chapter in my book and
00:37:26
he's like really a hospice doctor but
00:37:28
the message is so uplifting because
00:37:30
Jordan speaks with people at the end of
00:37:33
their lives but his point is you're not
00:37:34
at the end of your life right you
00:37:36
probably have 20 or 25 or 30 years ahead
00:37:39
of you what are you going to do to
00:37:42
maximize this time this remaining time,
00:37:45
how will you make sure that in the end
00:37:49
you don't have regrets? So, I felt like
00:37:51
ultimately it's a really uplifting
00:37:53
message and his whole thing on purpose
00:37:56
of making sure you have purpose but also
00:37:58
making sure that you aren't
00:38:01
overly sort of fearful like oh I've got
00:38:04
to start a foundation or do something
00:38:06
really he calls it big P purpose
00:38:09
something really you know sort of with
00:38:12
enormity about it. It doesn't have to be
00:38:14
that. That can be something more modest
00:38:15
and that's totally fine too. Yeah,
00:38:19
absolutely. Here's a quick ad and then
00:38:21
we'll get back to the show. Serious
00:38:23
question. Why do podcasters constantly
00:38:26
ask for ratings and reviews? Yes, they
00:38:28
do help highlight our shows to new
00:38:30
listeners. They help strangers find us
00:38:32
on Apple Podcast and Spotify. It's
00:38:34
totally true and a good reason to ask
00:38:36
for ratings and reviews. But I have
00:38:38
something more important, at least more
00:38:40
important to me. I want to know if you
00:38:42
like this stuff. I want to know if you
00:38:44
like my podcast episodes, my monologues,
00:38:46
my guests, the information I share with
00:38:48
you and the stories I tell. I want to
00:38:50
improve and make your listening more
00:38:52
enjoyable in the process. So yeah, I
00:38:54
would love to read your reviews. And
00:38:56
sure, if you throw a rating in there,
00:38:58
too, that's great. If you like what I'm
00:39:00
doing, please share it with me. It's
00:39:02
such a great feeling to read your
00:39:03
feedback. I'd love to read your review
00:39:06
or see a rating on Apple Podcast or
00:39:08
Spotify. Thank you.
00:39:11
What about on the more technical
00:39:13
numbers-based objective side? I know
00:39:15
that's where your experience and your
00:39:17
expertise lies, especially maybe on the
00:39:19
asset allocation or security selection
00:39:22
or those kind of topics. But still, were
00:39:23
there any of the authors where you just
00:39:25
said, "Oh, this their message is either
00:39:27
something that was surprising to you or
00:39:29
you just thought was particularly
00:39:30
pointed for someone planning their
00:39:32
retirement?" Well, I love talking to
00:39:34
John Gayton, who is a financial planner
00:39:37
in the Minneapolis area and has done
00:39:39
some research on flexible spending in
00:39:43
retirement. He developed or co-developed
00:39:45
what's called the guard rails approach
00:39:47
to retirement spending that basically
00:39:50
ratchets spending up and down depending
00:39:53
on how the portfolio has behaved. And
00:39:55
the guard rails kick in to help ensure
00:39:58
that in a bad market that the portfolio
00:40:01
withdrawals won't have to go too low and
00:40:03
really start to cut into someone's
00:40:05
quality of life. And they also help
00:40:07
ensure that in a good market environment
00:40:09
like the one that we've just come
00:40:11
through that even though you are giving
00:40:13
yourself a raise, you aren't going
00:40:15
crazy. And so that's what the guard
00:40:17
rails are about. But I just find him to
00:40:19
be phenomenal at explaining things
00:40:22
because he works with clients. So he's
00:40:24
not just someone who does academic
00:40:27
research, he's actually a practitioner.
00:40:29
And so I just find him to be
00:40:31
extraordinarily good about explaining
00:40:33
things. So one point he made on this
00:40:35
guard rail strategy and on on being
00:40:38
flexible with your withdrawals in
00:40:40
general is that taking less when the
00:40:42
market's down and taking more when it's
00:40:44
up is the rare thing that feels like the
00:40:47
right thing to do
00:40:49
behaviorally that also aligns with
00:40:51
what's good for your portfolio. So he
00:40:53
makes the point that he's like spending
00:40:56
more feels better than spending less and
00:40:58
pulling money out of stocks feels good
00:41:01
when the market's down. Those those
00:41:03
things are bad for your long-term
00:41:06
financial wherewithal. Adjusting your
00:41:08
portfolios up, portfolio withdrawals up
00:41:11
and down with the market is something
00:41:13
that actually feels like the right thing
00:41:15
to do and is also the right thing for
00:41:17
your investment portfolio. So I loved
00:41:19
that whole discussion with him. Yeah,
00:41:21
that is that's a really good point
00:41:23
because so many of the things that we
00:41:25
have to talk about or or so many of the
00:41:26
truths of, you know, this investing
00:41:28
journey that we're all on is that we
00:41:30
kind of have to come to the
00:41:32
understanding that we we fight our own
00:41:33
human nature. We have to fight our human
00:41:35
nature. It's, you know, there pick your
00:41:37
favorite Warren Buffett or John Bogle
00:41:38
quote about it's what's John Bogle say?
00:41:40
Uh when the human instinct is don't just
00:41:43
stand there, do something, right? Well,
00:41:45
well, yeah. Actually, in the investing
00:41:47
world, most of the time you're you're
00:41:48
not supposed to do anything at all.
00:41:49
You're just supposed to live with the
00:41:51
discomfort of a volatile market and just
00:41:53
wait it out. But right, the gon guard
00:41:55
rails are actually something that's it
00:41:58
feels right like the right thing to do
00:42:00
and numerically or when you crunch the
00:42:02
numbers, it is the right thing to do. I
00:42:04
wanted to ask you specifically Christine
00:42:06
about one of the chapters. I want to say
00:42:08
it's with Jean Chhatsky
00:42:11
and it has to do with some specific tips
00:42:14
and tricks and thoughts that women need
00:42:16
to apply in their financial lives that
00:42:20
that are different. Can you dive into a
00:42:21
little bit of that chapter? Yeah, Jean
00:42:24
is kind of a role model to me. Her work
00:42:26
has been so influential and she has been
00:42:30
out there in the consumer space, but
00:42:32
helping women improve their financial
00:42:34
well-being is a huge thrust of her work.
00:42:37
And so when I asked her what she wanted
00:42:38
to talk about for the book, she was
00:42:40
unequivocal. She said, "We should talk
00:42:42
about what women need to do differently
00:42:44
with their money as retirement
00:42:45
approaches." What we do know is that
00:42:48
women tend to be more likely to be
00:42:51
exclusively reliant on social security
00:42:53
than men. and they're tend to be
00:42:55
understsaved for retirement relative to
00:42:57
their male counterparts. And there are a
00:43:00
few reasons why. We discussed some of
00:43:02
them in the book. In fact, Gene said
00:43:04
quite pointedly, I blame child care or
00:43:07
caregiving because women of course are
00:43:09
much more likely to be caregivers for
00:43:11
their children. And many women want to
00:43:13
be caregivers for their children, but
00:43:15
that time out of the workforce does
00:43:17
reduce the opportunity for retirement
00:43:20
savings. And then I think the thing that
00:43:23
we're only beginning to get a greater
00:43:25
recognition of is that women are much
00:43:27
more likely to be caregivers for their
00:43:29
elderly parents than men. Which is not
00:43:32
to say some sons don't help a lot. They
00:43:35
do. But women when you look at the data
00:43:37
are very often unpaid caregivers. Often
00:43:41
adult daughters are unpaid caregivers.
00:43:44
And that can reduce their retirement
00:43:46
savings contributions. It can also just
00:43:48
limit their work uh opportunities. It
00:43:52
may require that they pull back from
00:43:54
paid work to help with the parents and
00:43:57
those things can work against women with
00:43:59
respect to retirement savings. So, Gene
00:44:02
made a couple of points. One is that
00:44:04
women their earnings tend to peak a
00:44:07
little bit earlier than men. So, early
00:44:09
in their careers, they need to hit it
00:44:11
hard in terms of retirement savings.
00:44:14
They also need to make sure that they
00:44:15
are investing in an age appropriate way.
00:44:18
So investing aggressively, having enough
00:44:22
in stocks. And then women need to be a
00:44:24
little bit more mindful about long-term
00:44:26
care than men. They both probably do,
00:44:29
but women are more likely to need paid
00:44:32
long-term care than men. And so that
00:44:35
necessitates having a plan for that,
00:44:37
whatever that might be, whether it is
00:44:40
buying insurance or setting aside a a
00:44:43
long-term care fund apart from insurance
00:44:46
or for women with very constrained
00:44:48
resources, it it may be re relying on
00:44:51
government provided care, but having a
00:44:53
plan there is super important. That's
00:44:56
really interesting. And it reminded me,
00:44:57
Christine, when we were planning for our
00:45:00
daughter, we've got a seven-month-old. I
00:45:03
remember writing a few articles and I
00:45:05
think recording a couple episodes just
00:45:07
about I was going through it. So, what
00:45:08
are all the things that a young parent
00:45:10
needs to prepare for when it comes to
00:45:12
financial planning? And one topic that
00:45:14
came up that I was I just hadn't thought
00:45:16
of it before, hadn't heard of it, but it
00:45:18
totally made sense is this idea that
00:45:20
from a like an estate planning point of
00:45:22
view or almost it's almost like a
00:45:24
postnuptual agreement point of view is
00:45:27
depending on what path the parents take,
00:45:30
it is far more often that the woman the
00:45:33
mother might take more of a caregiving
00:45:35
role while the father might continue to
00:45:38
work or at the very least what whatever
00:45:40
the situation is. Sometimes one partner
00:45:42
takes on more of a caregiving role than
00:45:44
the other, whichever one it is. And for
00:45:46
that caregiving partner, they're going
00:45:49
to contribute far less to their own
00:45:50
retirement. They're going to earn far
00:45:52
less. And there might come a point in
00:45:54
the future when depending on again, and
00:45:57
this is going down a bit of a rabbit
00:45:59
hole, but let's say in the unfortunate
00:46:01
event that couple ends up getting
00:46:03
divorced. Well, depending on the
00:46:06
arrangement that they have in place, is
00:46:08
one partner going to leave post divorce
00:46:11
with potentially much more assets or a
00:46:13
much larger retirement account or
00:46:15
whatever it may be as a function of the
00:46:17
fact that they had different caregiving
00:46:19
roles. And basically what some articles
00:46:22
that I read discussed is partners should
00:46:25
have that discussion because oftentimes
00:46:28
as you and Jean discussed the woman does
00:46:31
take on more of a caregiving role. And
00:46:34
it's almost this idea of do we need to
00:46:36
put something in place? Do we need to
00:46:37
come to some sort of financial agreement
00:46:39
just to make sure that woman doesn't end
00:46:41
up getting screwed over in some way
00:46:43
because she's the one who's taking a
00:46:44
step back from work? And I suppose the
00:46:47
way you just described it is that
00:46:49
arrangement can express itself in other
00:46:51
ways too. Whether it's the caregiving
00:46:54
for elderly parents or just the career
00:46:57
sacrifices that women often make more
00:46:59
than men and some of the long-term
00:47:01
financial repercussions as a as a
00:47:03
function of that. Yeah. No, it comes
00:47:05
down to communication really very much
00:47:08
so. If the couple are kind of a healthy
00:47:10
intact couple, it's well worth having
00:47:12
those conversations. And then, you know,
00:47:14
unfortunately in the case of like
00:47:15
divorcing couples, it's super important
00:47:17
for the spouse, the female partner to
00:47:21
make sure that she's getting good advice
00:47:22
on which assets she should go for in the
00:47:26
divorce. Often times, the way it works
00:47:29
out is that the female partner, who's
00:47:31
often the caregiver for the children,
00:47:34
gets the house and less of the
00:47:36
investment assets. and that may be
00:47:38
exactly what she wants, but it will tend
00:47:40
to leave her with fewer retirement
00:47:44
assets. So, getting some good financial
00:47:47
advice as part of that divorce process,
00:47:49
I think, is very much a key point to
00:47:52
make. Speaking of couples though, we can
00:47:55
obviously hope that many couples enter
00:47:56
retirement perfectly, blissfully happy
00:47:58
and and their marriage is intact. But
00:48:00
still, were there any interesting
00:48:01
thoughts that came out of the research
00:48:03
for the book or the interviews for the
00:48:04
book when it came to partners who are
00:48:07
retiring? Maybe they're not retiring at
00:48:09
the same time or maybe they're not
00:48:11
exactly on the same page for what they
00:48:13
want to do in their retirement. Are
00:48:15
there any chapters that we can point
00:48:16
listeners to or any experts when they
00:48:18
that had really good thoughts on on that
00:48:20
topic? Well, I loved our mutual friend
00:48:22
Fritz Gilbert's thoughts on navigating
00:48:25
retirement with his wife. He shared a
00:48:30
really poignant story of his wife having
00:48:32
been the primary caregiver for her
00:48:34
mother who I believe had dementia and
00:48:37
then passed away and how they had not
00:48:40
planned on her retirement quite as much
00:48:43
as they had Fritz's. Fritz had a
00:48:45
traditional career in the office and so
00:48:48
they, you know, knew that his retirement
00:48:50
was impending, but they I think that
00:48:52
they weren't equally prepared for sort
00:48:54
of the life dislocation that would
00:48:56
happen with her as part of her mom
00:48:59
passing away and those caregiving
00:49:01
obligations going away overnight. And
00:49:03
I'm sure there were aspects of that were
00:49:05
a great relief, but also, you know, an
00:49:08
element of a loss of identity. Here's
00:49:10
something that I did at one point in my
00:49:12
life I no longer do. I'm effectively
00:49:15
retired from that work. So he discussed
00:49:18
that which I thought was
00:49:19
thoughtprovoking. And he also just
00:49:21
talked about embarking on retirement
00:49:23
with another person. He called it he
00:49:26
time, she time, and we time. Don't
00:49:28
assume that you will just be hanging out
00:49:30
together constantly during retirement.
00:49:32
That you you need things that you pursue
00:49:35
independently. You need things you do
00:49:37
together, some shared interests. So, I
00:49:40
thought that he did a great job of
00:49:43
discussing his realworld experience
00:49:46
navigating retirement as part of a
00:49:47
couple. Very good. The last question I
00:49:50
wanted to ask you, Christina, I I
00:49:51
haven't even thought through this
00:49:52
question to be honest with you. So, let
00:49:53
me see if I can navigate my way through
00:49:54
it. It's maybe it's more of a statement,
00:49:56
and I'll start with the fact that when
00:49:58
people ask me for a lot of the podcasts
00:50:00
that I consume, The Long View is always
00:50:03
at the top of my list, which is hosted
00:50:05
by you and and Jeffrey Pac. Sometimes
00:50:07
you'll have a guest host come on and one
00:50:10
of the reasons why is because I feel
00:50:11
like you guys quite simply I mean you
00:50:13
guys get worldclass guests and you ask
00:50:16
them very interesting questions about
00:50:18
what makes them world class and you know
00:50:20
whatever their expertise is in in the
00:50:21
financial or economic world. So I
00:50:23
suppose maybe the question can simply be
00:50:26
how did it start? How do you manage to
00:50:28
find get these guests to come on and
00:50:30
then how do you not stumble over your
00:50:31
words like I've been stumbling over my
00:50:33
words today when you're sitting in front
00:50:34
of, you know, a Nobel laureate or or
00:50:36
something like that? Well, Jesse, thank
00:50:38
you so much for listening to the
00:50:39
podcast. I really appreciate it. We've
00:50:41
been doing it since precoid, so like
00:50:44
2019 or something. And it's just been a
00:50:47
a really fun diversion from my job where
00:50:49
we have these great deep conversations
00:50:52
with thought leaders. In terms of
00:50:55
getting the guests, recruiting the
00:50:56
guests, I think just, you know, reading,
00:50:58
listening to other podcasts, those are
00:51:01
great sources of ideas about who to ask.
00:51:04
Increasingly, I've been delving into
00:51:07
some non-financial podcasts. So, we had
00:51:10
Charles Doohig, who did a great book
00:51:12
called Supercommunicators.
00:51:14
We've had a few totally non-financial
00:51:16
guests on the pod which have been really
00:51:18
fun. And then some sort of psychology
00:51:21
types as well because we know the
00:51:24
intersection between psych psychology
00:51:26
and money is is huge and rich terrain.
00:51:29
And then we have in terms of just making
00:51:31
us sound our best. That's our engineer
00:51:34
George Cassidy is a phenomenal producer
00:51:37
and I think he really nicely clean
00:51:40
cleans things up for us. Awesome. Well,
00:51:42
if our listeners today, if they either
00:51:44
want to check out the long view, if they
00:51:46
want to go get a copy of How to Retire
00:51:48
Christine, or maybe if they just want to
00:51:50
reach out or follow you on social media,
00:51:52
something like that, where can we point
00:51:53
them to? So, I'm on X. I'm also on
00:51:56
LinkedIn and I'm a fixture on
00:51:58
morningstar.com writing articles and
00:52:01
doing videos. That's really my main job.
00:52:04
And so, people can find me there as
00:52:06
well. Awesome. Well, Christine Benz,
00:52:08
thank you so much for stopping by the
00:52:10
Best Interest Podcast. Thank you so
00:52:12
much, Jesse. It's been my honor. Thanks
00:52:14
for tuning in to this episode of
00:52:15
Personal Finance for Long-Term
00:52:17
Investors. If you have a question for
00:52:19
Jesse to answer on a future episode,
00:52:21
send him an email over at his blog, The
00:52:24
Bestinest. His email address is
00:52:27
[email protected]. Again, that's
00:52:31
jessevestinterest.blog. Did you enjoy
00:52:32
the show? Subscribe, rate, and review
00:52:35
the podcast wherever you listen. This
00:52:37
helps others find the show and invest in
00:52:39
knowledge themselves. and we really
00:52:41
appreciate it. We'll catch you on the
00:52:43
next episode of Personal Finance for
00:52:45
Long-Term Investors. Personal Finance
00:52:48
for Long-Term Investors is a personal
00:52:50
podcast meant for education and
00:52:52
entertainment. It should not be taken as
00:52:54
financial advice and it's not
00:52:55
prescriptive of your financial
00:52:57
situation.
