Where Should I Invest $50K Right Now?

00:00:00.000 | (beeping)

00:00:02.160 | - Welcome back to Ask the Compound,

00:00:13.980 | where someone told us it was our 100th episode last week

00:00:16.400 | and we totally missed it.

00:00:17.640 | - No, no, no, today's our 100th.

00:00:19.920 | - Oh, today is, oh, I thought it was last week.

00:00:21.680 | Sean said it was last week, okay.

00:00:23.520 | He can't count, good thing we have someone

00:00:24.800 | who can't count in the finance department.

00:00:27.880 | Today's show is sponsored by our friends at Bird Dogs.

00:00:30.880 | I think it's been our most,

00:00:32.000 | you said they've sponsored the most amount of shows.

00:00:34.200 | I just got a new shipment from Bird Dogs last week.

00:00:36.400 | I got my first pair of these stretch khaki pants.

00:00:39.440 | They're lovely, it's the same material,

00:00:40.980 | but they look a little better,

00:00:42.160 | might be a little thicker, I think.

00:00:43.700 | Still have the side pocket, I'm wearing some today.

00:00:45.440 | I opted for the light gray.

00:00:47.080 | - I like the Phil Gates there, I gotta get the Phil Gates.

00:00:49.680 | - They're very nice, they look nice.

00:00:52.400 | I feel like if, I don't golf, but if you did golf,

00:00:54.720 | these are the kind of pants you could wear golfing.

00:00:56.280 | Also, I have the Bird Dogs polo on.

00:00:58.040 | It's very nice, breathable, stretchy, it's pretty good.

00:01:01.720 | - You also still got my hat that I'll get one day?

00:01:04.040 | - Yes, you can still get this.

00:01:06.400 | Put the code in ATC, or go to birddogs.com/ATC.

00:01:10.320 | You can still get this, before Duncan.

00:01:12.880 | I like it.

00:01:13.720 | It's coming your way, that'll be your Christmas present.

00:01:16.200 | Birddogs.com/ATC for more.

00:01:18.640 | So I figure, so we've done 100 episodes now.

00:01:22.080 | I figure we do five questions per show.

00:01:25.320 | That's 500 questions that we've answered.

00:01:27.800 | That's a lot.

00:01:28.640 | And we have a dock full of probably 100 questions

00:01:32.960 | we haven't answered yet.

00:01:34.800 | Most of them are probably because they're too long.

00:01:37.080 | If you wanna get on the show, brevity is the key.

00:01:40.180 | We appreciate all the details, but give us a TLDR.

00:01:43.480 | So yeah, we've done a lot of them.

00:01:45.100 | Also, last week, people got mad at me

00:01:47.280 | because we called the show What's in Ben's Portfolio,

00:01:49.480 | and they said Ben didn't really tell us

00:01:50.560 | what's in his portfolio.

00:01:52.240 | I don't know, I didn't know--

00:01:53.080 | And you're in luck.

00:01:53.920 | This week, we're gonna screen share his Schwab account.

00:01:57.720 | I didn't know everyone wanted a fund by fund.

00:02:00.480 | The funds don't matter to them.

00:02:01.400 | I mean, I'd say 60% index funds, 40% factor funds.

00:02:05.960 | How's that, is that close enough?

00:02:07.600 | I don't know.

00:02:09.480 | No one cares about the fund tickers.

00:02:10.640 | It's funds you would think. People wanna hear tickers.

00:02:12.680 | We wanna hear tickers, Ben.

00:02:14.780 | Yeah, it's boring stuff, but close enough.

00:02:17.840 | That's all you're gonna get, people.

00:02:18.800 | I like, we have viewers who know me well enough

00:02:21.680 | that the other day when the market was rallying,

00:02:25.000 | all the stocks had been beaten down, were soaring.

00:02:27.680 | Someone was like, "Your portfolio's doing really well today

00:02:29.680 | "in the Dunkin'."

00:02:30.520 | I was like, "Yep, it is."

00:02:32.280 | We won't talk about the screen share,

00:02:34.360 | the screenshot you sent me

00:02:35.320 | of your total portfolio performance.

00:02:37.880 | We're gonna leave that one--

00:02:38.720 | That's just one IRA, to be fair.

00:02:40.560 | But yes, yes, I picked like 20 stocks,

00:02:42.640 | and they're all down, so yes.

00:02:44.340 | All right.

00:02:45.180 | That was the thing.

00:02:46.880 | Go to the first question.

00:02:47.800 | I'm gonna show you why that's probably the case.

00:02:50.440 | Yeah, okay.

00:02:52.560 | First up, we have a question from Steve.

00:02:55.360 | I keep hearing that the Magnificent Seven stocks

00:02:57.540 | are carrying the stock market this year.

00:02:59.000 | Does this matter?

00:03:00.160 | I get that these stocks could fall

00:03:01.360 | and bring the market down with them,

00:03:02.960 | but should we be worried about this level of concentration?

00:03:06.400 | So it's changed-- This is a common question.

00:03:07.320 | We're getting this a lot these days.

00:03:08.480 | Yes, and this has been in the news a lot.

00:03:10.360 | So Magnificent Seven is Apple, Amazon, Facebook,

00:03:13.680 | not Meta, Google, not Alphabet,

00:03:15.640 | Microsoft, Nvidia, and Tesla.

00:03:17.940 | Those stocks are carrying the market this year.

00:03:19.520 | I looked yesterday.

00:03:20.440 | It's kind of mind-boggling,

00:03:21.560 | especially when you consider how big these stocks really are.

00:03:23.760 | The average market cap for these seven companies

00:03:25.780 | is $1.6 trillion.

00:03:27.360 | The average return this year for those companies

00:03:29.300 | is 106% in 2023.

00:03:32.120 | And some of that is Nvidia being up like 240%,

00:03:35.440 | but even the median gain for these seven stocks

00:03:37.320 | is like 75%.

00:03:38.880 | The average market cap for the remaining stocks

00:03:40.600 | in the S&P 500.

00:03:41.560 | Some people say it's 493.

00:03:43.680 | It's really like 497 or something,

00:03:46.080 | 'cause I think there's 504 stocks

00:03:47.400 | if you count the double-share classes.

00:03:49.360 | Whatever, I digress.

00:03:50.960 | The average return of the rest of those stocks,

00:03:53.120 | which the average market cap is like 57 billion,

00:03:55.200 | is a return of 4% this year.

00:03:57.640 | And the S&P, as of this airing,

00:04:01.240 | is up like 19% on the year, close to it.

00:04:03.680 | So those stocks really are carrying the water

00:04:07.720 | for the rest of the market.

00:04:08.640 | Now, people worry about this dynamic,

00:04:09.920 | 'cause as Steve said in the question,

00:04:11.320 | what if these general stocks just roll over, right?

00:04:13.640 | They make up close to 30% of the index.

00:04:15.400 | Apple and Microsoft themselves,

00:04:16.760 | I looked it up this morning,

00:04:17.600 | make up 15% of the S&P 500,

00:04:19.120 | which is huge.

00:04:19.960 | So this is a legitimate concern.

00:04:20.800 | If these stocks crash,

00:04:21.960 | you'd think the market would fall as well.

00:04:24.000 | But the rest of the market can actually do better

00:04:27.120 | in that situation as well.

00:04:28.200 | They don't have to crash, too.

00:04:29.600 | So we don't have to go back that far

00:04:30.720 | to see how this played out.

00:04:31.560 | In 2022, one of the reasons these stocks

00:04:33.880 | are doing well this year

00:04:34.720 | is 'cause they did crappy last year.

00:04:36.200 | The average return for these seven stocks last year,

00:04:38.960 | Duncan, what was it?

00:04:40.360 | What's your guess?

00:04:41.640 | - Last year?

00:04:42.480 | - Yeah, average return for these seven stocks in 2022.

00:04:45.120 | - Down 9%.

00:04:48.360 | - They were down 46% on average.

00:04:50.200 | Okay, so yeah, they're up 100% on average this year.

00:04:53.320 | They're down four, guess what?

00:04:54.560 | They round tripped.

00:04:55.520 | If you go 2022 and 2023,

00:04:58.080 | if you're down 50 and up 100, you break even.

00:05:00.960 | - See, these names, I don't follow them.

00:05:02.360 | They're too big and respectable.

00:05:03.760 | Yeah, so I just don't pay attention to them.

00:05:05.960 | - Yeah, that place is too busy.

00:05:07.800 | No one goes there anymore.

00:05:09.200 | So Nvidia, Tesla, and Facebook and Amazon

00:05:11.760 | were all down 50% or worse.

00:05:13.240 | Every single one of these stocks

00:05:14.360 | underperformed the index last year.

00:05:15.960 | So yeah, they're doing great this year,

00:05:17.160 | but last year, and the S&P was down 18% last year.

00:05:19.840 | Again, these stocks on average were down almost 50%.

00:05:22.280 | The S&P was down 18, so these stocks did crash.

00:05:25.280 | - Which was the worst out of those?

00:05:26.880 | - Nvidia, I think Nvidia and Tesla were down 60%

00:05:30.560 | or something.

00:05:31.440 | So the other parts of the market picked up a slack.

00:05:33.960 | However, and I'm not gonna guarantee

00:05:37.640 | that's gonna happen again,

00:05:38.480 | but that tends to be what happens.

00:05:40.360 | In certain market environments, other stocks do well.

00:05:42.520 | So I think if you want to be invested in the stock market,

00:05:46.280 | you have to be comfortable with concentrated gains

00:05:49.120 | in the hands of a few stocks though.

00:05:50.280 | So my favorite study on this was Hendrik Bessenbinder

00:05:53.160 | from Arizona State.

00:05:54.000 | I've mentioned this before, throw up the graphic.

00:05:56.440 | He did, he asked the question,

00:05:57.720 | do stocks outperform treasury bills?

00:05:59.240 | He has this really cool graphic that shows everything.

00:06:00.920 | He found 86% 86 stocks going back to 1926.

00:06:05.920 | And there's been like 26,000 stocks in total

00:06:09.240 | that have come and gone since then.

00:06:10.760 | 86 stocks accounted for half of all wealth creation

00:06:13.120 | in the United States stock market going back to 1926.

00:06:16.360 | All of that wealth creation came from 4% of the stocks.

00:06:19.640 | 60% of the stocks failed to beat T-bills

00:06:21.880 | over their lifetime.

00:06:23.120 | And the other close to 40% barely beat T-bills.

00:06:27.340 | So most stocks don't do all that well over the long run.

00:06:31.180 | It's just a handful of stocks

00:06:32.400 | that account for most of the gains.

00:06:34.040 | Of course, this is like a hundred years of data.

00:06:35.560 | So plenty of stocks over this time

00:06:36.960 | had fantastic returns over shorter timeframes.

00:06:38.880 | You can take the thing off of there.

00:06:40.980 | But my biggest takeaway from his research is,

00:06:44.520 | it would be wonderful if you could just pick these stocks,

00:06:46.280 | but most people can't, right?

00:06:47.800 | Apple was close to going out of business in the 1990s

00:06:50.280 | until Microsoft and Bill Gates gave them a lifeline

00:06:53.000 | and gave them a loan.

00:06:54.100 | And now Apple's the biggest company in the US stock market.

00:06:56.600 | It's kind of crazy to think about,

00:06:57.640 | but the biggest takeaway here is that diversification

00:07:00.360 | is what matters because you want to give yourself

00:07:02.080 | a wide enough net to cast

00:07:03.980 | so that you can actually own these winners.

00:07:06.280 | So if you have a concentrated portfolio,

00:07:07.480 | yeah, I'm going to be Warren Buffett.

00:07:08.980 | Actually, you have a greater chance of underperforming.

00:07:12.200 | So there's this new paper,

00:07:13.580 | and you asked me about this last week.

00:07:15.720 | It's called the Underperformance

00:07:16.760 | of Concentrated Stock Positions from NYU.

00:07:19.360 | So throw up the chart here.

00:07:21.920 | This is the distribution of returns over one month,

00:07:26.320 | one year, five years, 10 years, and 20 years

00:07:28.960 | for individual stocks.

00:07:30.360 | And the further these charts go to the left,

00:07:32.720 | the more losers there are.

00:07:34.520 | And what these researchers found

00:07:37.840 | is that over all 10-year periods,

00:07:40.460 | close to half of all stocks are losers.

00:07:43.680 | And this works across sectors, too.

00:07:45.740 | So pick a dart, throw it at the newspaper,

00:07:50.520 | if they still print stocks in the newspapers, right?

00:07:53.560 | You can't really throw a dart at a computer screen.

00:07:56.560 | But pick any stock in any sector over 10 years,

00:07:59.160 | and half of them are going to be losers.

00:08:01.240 | More than half.

00:08:02.080 | It's like 55%.

00:08:03.680 | And so fill up the next chart here.

00:08:07.480 | This shows the sectors.

00:08:10.000 | This just kind of shows.

00:08:10.840 | You can see the median return versus the average.

00:08:13.520 | So the average is really high.

00:08:15.040 | The median is really low.

00:08:17.000 | And then it shows the percentage of winners and losers.

00:08:20.200 | That's because there's a handful of stocks

00:08:22.960 | that pretty much pick up the slack for all the losers.

00:08:26.700 | So the beautiful thing about the stock market

00:08:29.480 | is even though there's a lot of losers,

00:08:31.280 | the winners more than make up for them.

00:08:33.840 | So what are our lessons here?

00:08:36.600 | Outsized gains are normal.

00:08:38.160 | This year, in a one-year period, it's an outlier.

00:08:41.720 | But over the long-term, this is the norm in the stock market.

00:08:44.960 | - When I was getting into the stock market years ago,

00:08:49.760 | reading, you know, I read Intelligent Investor

00:08:51.740 | and a bunch of, you know, Michael Lewis

00:08:53.300 | and all the books people typically recommend.

00:08:56.160 | And yeah, my takeaway early on was like,

00:08:59.560 | you know, if you just pick some stocks

00:09:01.320 | and hold onto them long enough, you know, they'll do well.

00:09:03.800 | And yeah, like now I'm seeing that was not the right takeaway.

00:09:05.800 | - It is, yeah.

00:09:06.640 | But this isn't to say that some of these,

00:09:08.120 | again, this is like hundreds of years of data.

00:09:10.200 | - Right.

00:09:11.040 | - So it's not to say that in between small caps--

00:09:11.880 | - When Amazon proves this wrong, stuff like that, right?

00:09:13.600 | Where it's like it crashed down to how low

00:09:15.960 | and then came all the way roaring back.

00:09:17.560 | - Yeah, and like small caps and mid caps

00:09:19.000 | have still done well in this time period.

00:09:20.840 | It's just that some of those stocks that came up to the top

00:09:23.700 | were smaller in mid caps before, right?

00:09:26.280 | He also found the relative underperformance

00:09:29.800 | over rolling 10-year periods increases

00:09:31.880 | when considering stocks whose performance

00:09:33.480 | is running from the top 20% over the previous five years.

00:09:35.600 | So like the best performers,

00:09:36.840 | eventually that momentum peters out.

00:09:38.060 | So some of these stocks in the Magnificent Seven

00:09:40.680 | are going to underperform in the years ahead.

00:09:42.080 | I don't know which ones.

00:09:43.360 | I don't know when, I don't know why,

00:09:44.360 | but it's going to happen.

00:09:46.000 | That's pretty much the way the stock market works.

00:09:48.200 | And other stocks to pick up the slack.

00:09:50.200 | In 2000, some of the biggest stocks in the market

00:09:51.960 | were GE, Citigroup, AIG, right?

00:09:56.960 | All have fallen, some in magnificent fashion.

00:10:00.700 | And guess what?

00:10:01.540 | Other stocks came up and picked up the slack.

00:10:03.080 | NVIDIA, and Microsoft is the only one

00:10:05.280 | that still remains from 2000 as one of the biggest stocks.

00:10:08.360 | - Well, the question I asked you last week

00:10:09.840 | when I was showing you my like 20 stocks in an IRA

00:10:12.400 | that are all down significantly over like two years,

00:10:15.840 | not like over a couple of months,

00:10:18.260 | is does this reflect that the exchanges

00:10:21.300 | are too lenient with listing requirement?

00:10:23.120 | Like are too many bad companies able to list?

00:10:25.880 | Is that part of it here?

00:10:26.900 | Or does that not have anything to do with it?

00:10:28.600 | - No, I think it's always like this, unfortunately.

00:10:31.500 | - Okay.

00:10:32.340 | - And that's not to say some of your stocks

00:10:33.360 | won't come back.

00:10:34.320 | - Right.

00:10:35.160 | - Right?

00:10:35.980 | It's just that the history of the stock market

00:10:37.200 | shows that there's power laws,

00:10:39.320 | and the gains are typically concentrated

00:10:41.920 | in the hands of a few stocks,

00:10:43.000 | and that's why you wanna cast a wide net.

00:10:45.400 | And yeah, you can pick some stocks,

00:10:47.200 | but diversifying is probably gonna be a better bet overall

00:10:50.520 | for the majority of your funds,

00:10:52.280 | because you wanna make sure you have the ability

00:10:54.120 | to get those winners, 'cause it's hard to pick 'em.

00:10:57.100 | - Right.

00:10:57.940 | - That's where I come down from all this.

00:10:58.880 | It's hard to pick winners,

00:11:00.400 | and diversification is the way to ensure

00:11:02.280 | that you're gonna own the winners,

00:11:03.640 | and then those winners are gonna

00:11:04.680 | more than cancel out the losers.

00:11:06.280 | - Also, before we move on,

00:11:08.560 | John's out today, and so I forgot to set our windows here,

00:11:11.960 | so I'm gonna flip us around,

00:11:13.080 | so that people in the chat can--

00:11:15.760 | - Oh, and the guy on the left.

00:11:16.600 | - Can--

00:11:17.420 | - The guy on the right, I don't know.

00:11:18.260 | - Peace.

00:11:19.080 | - One of those.

00:11:19.920 | Oh, are people complaining?

00:11:20.760 | - Not complaining, just--

00:11:21.960 | - That we're on the wrong side?

00:11:23.160 | - You know, yeah.

00:11:24.240 | - Okay.

00:11:25.080 | - Now all is right in the world.

00:11:26.340 | - All right, let's do the next one.

00:11:27.520 | - All right, up next we have a question from Anthony.

00:11:29.960 | Hi guys, love the show,

00:11:30.880 | and appreciate all the information you put out.

00:11:32.600 | My fiance and I received a wedding gift

00:11:34.360 | of $50,000 from her father,

00:11:36.360 | and I was wondering what you would do--

00:11:37.520 | - Not to brag.

00:11:38.480 | - Yeah, not to brag.

00:11:39.840 | And I was wondering what you would do

00:11:40.960 | with that money in these unsure times in the market.

00:11:43.600 | We just bought a house in April,

00:11:44.800 | and got married in July.

00:11:45.940 | We had enough saved to cover the wedding costs.

00:11:48.360 | We'll likely need some of this money

00:11:49.840 | in the future for the house,

00:11:51.240 | but we would like to put some of the money

00:11:52.760 | to work in the meantime.

00:11:54.080 | I make around $100,000,

00:11:55.400 | and my fiance makes $70,000,

00:11:57.280 | but we both have student loans,

00:11:58.860 | and a pretty high mortgage to pay.

00:12:00.480 | Thanks in advance for your help.

00:12:02.520 | - All right, congrats on the new house,

00:12:03.860 | the wedding, marriage. - Nice wedding gift.

00:12:05.600 | - Nice father-in-law you've got there.

00:12:07.420 | The personal finance guy in me says,

00:12:09.120 | "Well, you fund your emergency savings,

00:12:11.040 | "you max out your Roth IRA,

00:12:12.340 | "and you pay off some student loans.

00:12:13.720 | "You can do some of that stuff if you want."

00:12:16.160 | That amount of money certainly gives you

00:12:17.480 | a nice springboard to getting yourself

00:12:19.440 | your finances right.

00:12:21.360 | It probably makes some sense to set aside

00:12:22.600 | some money for a house, too.

00:12:24.000 | When you move to a new place,

00:12:24.960 | there's a lot of stuff you end up buying,

00:12:26.120 | especially if you haven't been in a house before.

00:12:27.640 | Furniture, decorations, maybe new TV,

00:12:30.040 | tools, landscaping, all that stuff

00:12:31.640 | that you have to-- - A mudroom.

00:12:32.800 | - Pick up.

00:12:33.640 | Yeah, that's the boring stuff, though.

00:12:34.800 | Don't get me wrong, the boring stuff is important

00:12:36.160 | if you wanna get ahead,

00:12:36.980 | but you should also have some fun with it.

00:12:39.360 | This is a windfall, right?

00:12:40.440 | Probably not happening again.

00:12:41.280 | You're newlyweds.

00:12:42.600 | I don't know, probably no kids in the house yet.

00:12:45.800 | Set aside some money to have fun and go on a vacation.

00:12:47.720 | My wife and I made a point to do that,

00:12:48.960 | 'cause we knew once we had responsibilities

00:12:50.720 | and kids were here, we weren't gonna be able

00:12:51.560 | to travel as much.

00:12:52.380 | So we traveled as much as we could after we got married,

00:12:54.560 | because we knew that part of our life

00:12:56.100 | was gonna be much harder to do going forward.

00:12:58.560 | But I think this is also a good time

00:12:59.660 | to set up your bonus asset allocation.

00:13:02.040 | This is the way I think about this.

00:13:03.440 | So I got my first bonus for my first job in year two.

00:13:06.640 | I think it was $300 for my bonus.

00:13:09.480 | My boss was a little stingy.

00:13:10.880 | But anytime I got money outside of my regular salary,

00:13:14.560 | I set up some sort of asset allocation

00:13:16.320 | where a certain percentage would go to short-term savings,

00:13:18.640 | a certain percentage would go to my travel fund,

00:13:20.280 | a certain percentage would go to retirement accounts,

00:13:22.600 | and then a certain percentage would go to just--

00:13:24.520 | - Sports gambling.

00:13:25.400 | - Frivolous, well, frivolous whatever, spending.

00:13:28.240 | Buy something for your house, go on a trip,

00:13:30.580 | go out to a nice dinner, reward yourself a little bit.

00:13:33.380 | I think that if you're just gonna save it all,

00:13:35.620 | that's kind of boring.

00:13:36.460 | So I think it's just a good way to keep yourself honest,

00:13:37.940 | not throw all the money away.

00:13:39.780 | Have some sort of rule of thumb

00:13:42.220 | anytime you get money in like this.

00:13:43.620 | And obviously, it might not happen very often,

00:13:44.940 | but if you do get some sort of windfall for whatever reason,

00:13:48.380 | then you know what to do with it,

00:13:49.580 | just like you know how to invest your money

00:13:51.380 | with an asset allocation.

00:13:52.380 | That's the way I think about it.

00:13:54.220 | - Makes sense. - I'm not gonna give you

00:13:57.500 | anything to invest in, but I would worry more

00:13:59.740 | about how you're allocating it.

00:14:00.580 | - I think they want a ticker.

00:14:02.060 | Can you give a ticker?

00:14:03.620 | - Sorry, no tickers.

00:14:04.860 | - What's the world market fund?

00:14:07.640 | Just kidding.

00:14:08.500 | - Someone says YOLO the 50K into 500K.

00:14:11.300 | We all know you more likely YOLO the 50K into 5K, but.

00:14:14.840 | - Yeah.

00:14:15.680 | - All right, let's do another one.

00:14:18.180 | - All right, up next we have a question from Kurt.

00:14:21.380 | So this is what you would do, really, with that money, right?

00:14:23.420 | You'd put it into your spreadsheet to keep track of it?

00:14:25.660 | - Yes.

00:14:26.500 | - I think you've mentioned that you track

00:14:27.960 | your portfolio investments and other finances

00:14:30.040 | in a big spreadsheet.

00:14:30.940 | Can you go into detail on how you have that set up?

00:14:33.620 | - We've had a few people ask if I can just share

00:14:35.340 | my spreadsheet with them.

00:14:36.680 | And I keep telling people, like,

00:14:38.500 | you're gonna be severely disappointed

00:14:40.060 | 'cause it's so, so simple.

00:14:42.020 | I'm a, let's be fair, I'm a simple guy, right?

00:14:46.060 | It probably wouldn't be all that helpful to most people.

00:14:47.620 | So my finance tracking system is just this.

00:14:50.780 | I use an Excel spreadsheet.

00:14:52.160 | I have for years.

00:14:53.000 | It looks like this.

00:14:53.820 | So net income for the month after taxes

00:14:55.940 | and 401(k) contributions and all that stuff.

00:14:58.100 | And then I list my fixed expenses.

00:14:59.500 | So it's mortgage, insurance, car payments,

00:15:02.100 | phone, utility, cable.

00:15:04.320 | I still have cable.

00:15:05.180 | Thank you very much.

00:15:06.100 | - When your cable one goes down over time, right?

00:15:08.440 | Because you keep negotiating them down.

00:15:10.260 | - Yeah, every 12 months.

00:15:11.760 | And then savings.

00:15:12.600 | I treat savings like it's a fixed bill, right?

00:15:14.900 | Savings are non-negotiable.

00:15:16.500 | I set IRA, IRA, 401(k), all that stuff.

00:15:19.260 | Then all the variable expenses go on the credit cards.

00:15:22.300 | Food, clothing, all the stuff,

00:15:24.660 | crap we have to buy for our kids,

00:15:26.540 | subscriptions, et cetera.

00:15:27.580 | All of it goes on a credit card.

00:15:29.200 | After the variable expenses,

00:15:30.660 | like that's basically like my leftover pile, right?

00:15:33.020 | So you take the fixed expenses away from that income.

00:15:35.040 | Variable is what's left over.

00:15:36.860 | Start with the net income,

00:15:37.940 | subtract the fixed, subtract the variable.

00:15:40.500 | That's it.

00:15:41.340 | Hopefully it basically zeroes out at the end of the month

00:15:43.300 | 'cause I should be spending it all.

00:15:44.220 | That's the Bend budget.

00:15:45.380 | See how simple that is?

00:15:47.460 | It's not like, it's not,

00:15:50.700 | I'm not changing the world here.

00:15:52.700 | My net worth tracker has probably been simpler.

00:15:54.300 | I have an Excel spreadsheet.

00:15:55.580 | I've used this for years too.

00:15:57.220 | So I have all my accounts listed.

00:15:58.900 | 401(k)s, IRAs, 529 plans,

00:16:02.260 | brokerage accounts, savings account.

00:16:04.860 | And I have the funds and the holdings

00:16:06.380 | listed under each of those accounts.

00:16:08.120 | And once a year, I update the market values.

00:16:10.180 | That's it.

00:16:11.460 | - See, this is why people tune in

00:16:12.660 | for the spreadsheet content.

00:16:14.220 | - You can build it yourself.

00:16:15.620 | So I even, just for fun,

00:16:17.220 | I added a real estate column a couple of years ago

00:16:19.540 | 'cause I've got some equity there now.

00:16:21.020 | Some equity because housing prices have gone up.

00:16:23.840 | Very simple, old school, doesn't take me very,

00:16:25.460 | my finances take me 15 minutes a month probably.

00:16:27.900 | Sometimes more, sometimes less.

00:16:28.740 | - That's what I was about to ask,

00:16:30.060 | how much time this takes you.

00:16:31.260 | - That's the whole point.

00:16:32.100 | I have most of this stuff automated

00:16:33.440 | so I don't have to spend a ton of time doing it.

00:16:36.380 | That's how I like it.

00:16:38.220 | So other people would rather micromanage.

00:16:39.060 | - I don't know how to use Excel really

00:16:39.900 | so this would take me a while to set up probably.

00:16:43.020 | - There's no formulas here, Duncan.

00:16:44.220 | It's very easy.

00:16:45.060 | I'm literally in your numbers.

00:16:46.420 | - I see. - You can do it.

00:16:47.260 | I have faith in you.

00:16:48.100 | - I like my system better

00:16:49.860 | where I just see how much is left in the bank account

00:16:52.220 | every once in a while.

00:16:54.060 | - That's probably what most people do though.

00:16:56.540 | That's the problem with like the,

00:16:57.860 | I'll save whatever's left over.

00:17:00.240 | Sounds great in theory until,

00:17:02.900 | there's an old Jerry Seinfeld bit where he says,

00:17:04.880 | "It's funny how every single day,

00:17:06.980 | "the newspaper is completely full

00:17:08.660 | "where the amount of news

00:17:09.980 | "matches the pages of the newspaper."

00:17:12.340 | That's how your spending works too.

00:17:14.200 | - Right. - Right?

00:17:15.040 | You're going to spend whatever's there

00:17:16.300 | so if you save first, spend whatever's left, invert.

00:17:21.060 | - That's true. - Right?

00:17:22.320 | - That's, yeah, I like that.

00:17:23.900 | - All right, next question.

00:17:25.380 | - All right, up next we have a question from Tony.

00:17:28.540 | I'm retired from 20 years on active duty with the Air Force

00:17:32.060 | and 10 years as a federal civil servant.

00:17:34.940 | This is just in time, we just had Veterans Day

00:17:37.180 | so thank you for your service.

00:17:38.500 | - Yeah, thank you for your service, Tony.

00:17:39.940 | - I have a pension, social security, VA benefits,

00:17:43.260 | and rental income of about $130,000 annually.

00:17:46.820 | I'm single, age 64, and have two adult sons.

00:17:50.100 | I have $765,000 in investments.

00:17:52.700 | Of that, 500,000 is in Roth accounts

00:17:55.640 | and 265,000 is in tax-deferred accounts.

00:17:58.900 | I have nothing in a taxable account.

00:18:01.020 | I live below my means.

00:18:02.360 | The first part of this is, in terms of my bond allocation,

00:18:06.180 | should I simply own the G fund

00:18:07.940 | in the federal government's thrift savings plan

00:18:10.320 | and forego other types of bond funds

00:18:12.220 | and individual bonds altogether?

00:18:14.140 | Do the benefits of the G fund mean I should just stick

00:18:16.580 | with that fund and eschew the others?

00:18:19.120 | Part two, I'm buying a new Sprinter camper van

00:18:22.000 | in a few months.

00:18:22.840 | It's got all the bells and whistles, all-wheel drive,

00:18:25.180 | lithium batteries, solar power, et cetera.

00:18:27.660 | I've already paid for the chassis and down payment

00:18:30.380 | so I've paid about $88,000 in cash.

00:18:33.180 | I need to come up with about $190,000 more

00:18:35.700 | once I pick up the van.

00:18:36.880 | Should I pay cash for it out of my Roth IRA

00:18:39.820 | or should I finance it?

00:18:41.580 | - Hey, as a finance guy-- - This is a good one.

00:18:42.420 | This is a fun one, I like this.

00:18:43.260 | - This is a good one.

00:18:44.660 | What's a chassis?

00:18:46.140 | - It's like the skeleton of the vehicle.

00:18:49.060 | - Okay, so he's-- - Basically, yeah.

00:18:50.260 | - Okay, start.

00:18:51.100 | Okay, so this, to me, this is an investment question,

00:18:54.660 | this is a financial planning question,

00:18:55.940 | this is a personal finance question,

00:18:57.280 | so let's bring in a financial advisor

00:18:58.700 | to help sort through it all.

00:19:00.580 | Riddleswell's own Alex Palumbo.

00:19:02.740 | - Hey, Alex.

00:19:03.940 | - Hey, guys, thanks for having me.

00:19:05.380 | Ben, great to see ya.

00:19:06.900 | - Alex, most people on podcasts would say,

00:19:09.020 | "There's a lot to unpack here,"

00:19:10.060 | but I'm not gonna do that 'cause I'm not cliche.

00:19:12.800 | But first of all, where I wanted to start here

00:19:14.140 | is he said he's got all of his savings,

00:19:15.860 | you know, he gets the pension income and rental income,

00:19:17.900 | but his savings are all in tax-deferred accounts.

00:19:20.300 | If a client comes to you with all tax-deferred money,

00:19:22.780 | does that technically make your life easier

00:19:24.580 | from a planning perspective?

00:19:25.580 | Does it make it harder 'cause it's less flexible?

00:19:27.300 | I'm just curious that there's no taxable money whatsoever.

00:19:30.780 | Is that a good thing, a bad thing, does it not matter?

00:19:32.460 | What do you think?

00:19:34.180 | - Yeah, good question, Tony.

00:19:35.660 | First of all, thank you for your service.

00:19:37.060 | Duncan mentioned Veterans Day.

00:19:38.420 | Thanks, Tony.

00:19:40.200 | To answer your exact question,

00:19:42.120 | when clients come with qualified accounts,

00:19:45.120 | I like it because they're more tax-efficient.

00:19:47.840 | It also gives us the opportunity

00:19:49.420 | to utilize different investment strategies

00:19:51.960 | because we can trade as much as we want,

00:19:54.680 | maximize trading, and there's no tax consequences

00:19:57.400 | as opposed to non-qualified accounts

00:19:59.280 | where we'd be generating short-term capital gains or losses.

00:20:01.000 | - That's true, you could change the portfolio allocation

00:20:03.160 | if you wanted to without triggering any taxable gains.

00:20:05.240 | Good point. - Yeah, you can do

00:20:06.080 | anything like that.

00:20:07.720 | In terms of Tony's exact question,

00:20:10.800 | did you wanna hop into the G Fund question?

00:20:12.920 | - Well, let's talk about the G Fund

00:20:14.040 | because you asked me about this yesterday,

00:20:15.760 | and you said, "What is a G Fund?"

00:20:16.760 | And I have some experience with this because--

00:20:17.960 | - Oh, way to throw me under the bus.

00:20:19.280 | You know, actually, Ben,

00:20:20.560 | I'm a very experienced G Fund advisor.

00:20:23.240 | - Well, I'm guessing a lot of people

00:20:24.320 | don't know what this is

00:20:25.640 | 'cause my brother works for the federal government,

00:20:27.260 | and he asked me about this a while ago,

00:20:28.880 | and there's five funds in this,

00:20:30.480 | and I've been pounding the table on this

00:20:31.600 | for a number of years that the Thrift Savings Plan

00:20:33.520 | or the TSP, which is all federal government retirement plan,

00:20:36.160 | that should be open to everyone

00:20:37.280 | because, I don't know, 40 or 50% of people

00:20:39.160 | have access to a workplace retirement plan.

00:20:41.160 | This is one administered by the government.

00:20:42.640 | It has all five index funds.

00:20:44.360 | Fees are really low,

00:20:45.640 | but the G Fund is really something else

00:20:47.720 | because it, Duncan, throw up the fund comparison.

00:20:51.080 | So they have two bond funds in this thing.

00:20:53.020 | So one is the G Fund, one is the F Fund.

00:20:54.520 | The F Fund is like the Barclays Ag,

00:20:56.680 | like a total bond market.

00:20:57.640 | The G Fund is a treasury fund,

00:21:00.280 | but the way it works is it acts like a short-term treasury

00:21:03.820 | in terms of volatility,

00:21:05.080 | but the yield it pays is more like long-term treasury.

00:21:07.720 | So it pays a higher yield, but your principal is protected.

00:21:10.200 | So you can see over like three years,

00:21:11.320 | this thing's outperformed by 7% per year over the aggregate

00:21:15.240 | because it doesn't have interest rate risk.

00:21:17.360 | It acts like a short-term bond fund,

00:21:18.760 | but you're earning a higher yield.

00:21:20.440 | And if this was another fund company

00:21:23.140 | that was administering this fund,

00:21:24.240 | you'd think it's like some sort of Ponzi scheme,

00:21:26.360 | but it's the federal government

00:21:27.400 | who's essentially like guaranteeing that it's very,

00:21:30.400 | it's like it takes an average of all the treasury yields.

00:21:33.280 | It's very, so what I'm trying to say is like,

00:21:35.840 | this thing is a really good deal

00:21:38.320 | and you could diversify by having the other one,

00:21:41.200 | but it's in terms of,

00:21:43.440 | you don't have to worry about like rates rising

00:21:45.080 | for this thing to hurt you.

00:21:46.680 | It's through the rising rate environment,

00:21:48.400 | it's probably one of the best performing bond funds

00:21:49.960 | that there is.

00:21:51.480 | - US government, Ponzi scheme, what's the difference, Ben?

00:21:53.680 | You know?

00:21:55.000 | - No one ever says that, right?

00:21:57.360 | - Yeah, the G Fund is good to your point

00:21:59.760 | because the value of your account will never fluctuate.

00:22:03.720 | You simply get the stated interest

00:22:05.520 | of long-term fixed income instruments.

00:22:07.400 | - Yeah, if you look at like the description of this,

00:22:09.160 | it sounds too good to be true.

00:22:11.520 | - Well, the downside is that, there's not much downside,

00:22:14.240 | but if I had to play devil's advocate, Benjamin,

00:22:16.880 | it would be that when the yield curve is inverted,

00:22:20.200 | you'd be getting the longer term rates,

00:22:22.160 | which are lower than the shorter term rates,

00:22:24.520 | but that's really nitpicking, to be honest.

00:22:26.720 | The pros are it's super low cost

00:22:28.720 | and it's also taxed at ordinary income rates

00:22:30.880 | because it's government fixed income.

00:22:32.600 | However, our boy, Tony, only has qualified accounts,

00:22:35.520 | so it seems like an appropriate asset class

00:22:39.120 | or fund to own within this type of account.

00:22:41.080 | So overall, Tony, if you're comfortable with it,

00:22:43.200 | I think you get the thumbs up from us.

00:22:44.480 | - Yeah, it's a pretty, it's pretty good.

00:22:45.560 | So let's say the Sprinter camper van.

00:22:46.880 | So I'm guessing the Sprinter one is like a shorter camper,

00:22:49.480 | smaller one, since he's by himself.

00:22:51.080 | - It's like one of those oversized vans.

00:22:53.320 | It's pretty large.

00:22:54.560 | It's kind of like what some shipping companies use.

00:22:57.000 | - So Alex, I'm sure you've talked to many clients about this

00:22:59.160 | whether it's buying a new car or buying a second home

00:23:01.880 | or something like this.

00:23:02.980 | It's the kind of decision where I can either

00:23:05.040 | let my investments ride and borrow some money,

00:23:08.880 | or I can take it from my portfolio and pay in cash.

00:23:11.720 | Like the pro, there's obviously pros and cons of each,

00:23:13.960 | but how do you help people make this type of decision?

00:23:16.200 | 'Cause I'm guessing where rates are right now being so high,

00:23:19.880 | it's kind of a push in terms of a hurdle rate.

00:23:22.580 | - Yeah, this is a pretty common overall decision tree

00:23:25.280 | and point when I'm working with my clients for sure.

00:23:28.040 | I say that it always comes down to two things,

00:23:30.160 | the interest rate and investor behavior.

00:23:32.880 | If the interest rate that you're getting quoted

00:23:35.840 | in terms of financing, the camper, the house,

00:23:38.040 | whatever it is, is higher than your expected rate of return

00:23:40.880 | on your investments, then it becomes a no-brainer, right?

00:23:43.280 | You wanna just pay that off.

00:23:44.600 | You don't wanna finance the camper.

00:23:46.280 | If you're getting quoted a 12% interest rate

00:23:48.440 | and you're gonna invest the difference at a 6% rate,

00:23:50.520 | that doesn't make too much sense.

00:23:52.640 | And then it comes down to investor behavior.

00:23:54.440 | So for example, let's say Tony is getting

00:23:56.960 | like a 6% interest rate quoted if he finances the camper

00:24:00.320 | and he has all this income coming in that he told us about.

00:24:03.280 | You could probably theoretically say

00:24:06.120 | that your overall portfolio should get like a seven

00:24:08.200 | or 8% overall rate of return.

00:24:10.000 | So that's pretty positive rate of return arbitrage.

00:24:14.000 | However, the investor behavior, right?

00:24:15.760 | Like you were just talking about it

00:24:17.280 | and actually Tesla was down 65% last year.

00:24:23.040 | Nvidia down 50%, Amazon down 50%.

00:24:26.080 | And I was taking a look at this for certain clients.

00:24:27.840 | This is gonna blow your mind.

00:24:29.320 | Duncan, keep that hat on

00:24:30.720 | 'cause your mind's about to be blown.

00:24:32.240 | Over the past two and a half years

00:24:34.440 | before November, this month.

00:24:36.520 | So from May 1st, '21 to October 31st, '23,

00:24:40.440 | the S&P was flat and every single asset class was down,

00:24:45.200 | down bad tremendously over that time period.

00:24:48.360 | That's 630 trading days.

00:24:52.080 | - Right, so that's the kind of--

00:24:52.920 | - Over the past, hold on, Ben.

00:24:53.800 | Hold on, this is gonna be good, I promise.

00:24:55.480 | Over the past 13 trading days, just this month of November,

00:24:59.400 | every single asset class that we invest for clients

00:25:02.160 | has drastically outperformed in 13 days

00:25:05.320 | versus the past 630 trading days.

00:25:08.560 | Most notably, international stocks

00:25:11.120 | with a 35% discrepancy in performance

00:25:15.520 | and small cap stocks

00:25:16.560 | with an over 30% discrepancy in performance.

00:25:19.120 | - It is crazy.

00:25:19.960 | - Yeah, what you're trying to say is returns are lumpy,

00:25:22.480 | but if you're going through a period like that

00:25:23.920 | and you look back and you go,

00:25:25.480 | oh shoot, I could have just taken this money out

00:25:27.280 | before this crappy period of returns happened

00:25:29.500 | and now you're kicking yourself,

00:25:30.560 | that's like the regret minimization piece

00:25:32.200 | you have to think through

00:25:33.360 | is will you feel that or will you act on that if you,

00:25:36.920 | 'cause you don't know what the right decision is gonna be

00:25:38.800 | or what the markets are gonna do

00:25:39.760 | so you have to kind of be happy with it one way or another

00:25:42.000 | and understand why you're doing it.

00:25:43.800 | - Or even worse, you make this decision to finance,

00:25:46.840 | you invest, you're like,

00:25:47.680 | oh, I can easily beat that 6% benchmark

00:25:49.760 | over the next like 30 years, 20 years, 10 years,

00:25:52.000 | whatever it is.

00:25:52.840 | Then you go through a period like the past two and a half

00:25:54.680 | years and you're like, screw it,

00:25:56.680 | I'm just gonna pay it off.

00:25:57.840 | Now the market's up 8% over the past 10 days

00:26:00.360 | and you just completely wrecked your entire portfolio.

00:26:02.280 | And it's like one decision over three years

00:26:04.520 | that can completely destroy, not destroy your finances,

00:26:07.260 | but materially impact your lifetime returns.

00:26:09.940 | - Right, Duncan, I can see you driving

00:26:11.840 | one of those Mercedes Sprinter ones.

00:26:14.080 | Is that fair?

00:26:14.900 | Like I can see you tooling around Europe

00:26:15.800 | in one of those things.

00:26:16.640 | - Powered by vegetable oil.

00:26:18.720 | - Yeah, I mean, I'd be down.

00:26:20.640 | That sounds interesting, sounds fun.

00:26:22.600 | - By the way--

00:26:23.440 | - Be able to go wherever you want, anytime, sounds fun.

00:26:26.440 | - Sorry, by the way, to answer his question

00:26:28.200 | about taking distributions from his Roth IRA,

00:26:30.840 | that might be a consideration, right?

00:26:32.200 | Because that Roth money is that sweet, sweet, sweet

00:26:33.920 | Roth money, as Bill Sweet mentioned,

00:26:35.600 | like that's one reason to maybe lean more

00:26:38.240 | towards financing it.

00:26:39.400 | But at the end of the day, Tony, big tone,

00:26:41.400 | you accumulated half a mil inside of that Roth IRA

00:26:43.800 | and what better to spend it, like what,

00:26:46.960 | 30% of it, 40% of it, once you're retired,

00:26:49.560 | on the Sprinter camper of your dreams?

00:26:52.840 | I would say, generally speaking,

00:26:54.080 | if the interest rate is like 6% to 7%, it's close.

00:26:57.200 | If it's 5% or lower, you can finance.

00:26:59.080 | If it's a higher interest rate,

00:27:00.560 | then I would just pay it off and use that Roth money.

00:27:01.400 | - It could be like 8% or 9% these days.

00:27:03.040 | If it's that high, paying it off.

00:27:04.720 | And you get your living situation taken care of.

00:27:06.480 | - I think it has to be over 8%, 9%

00:27:08.560 | to finance a Sprinter camper, right?

00:27:12.180 | - Lastly, if Tony is living below his means,

00:27:14.700 | how come he doesn't have any non-qualified assets

00:27:17.020 | built up, Tony, huh, huh?

00:27:18.740 | - I think it's great that he's got it all tax-deferred.

00:27:20.780 | This guy knows what he's doing.

00:27:21.900 | - But he's saying he's living below his means,

00:27:23.320 | so if he's bringing in 130K, he's spending 80K,

00:27:25.620 | where's that extra 50K going?

00:27:27.080 | - The government's Ponzi scheme.

00:27:29.420 | All right, Duncan, next question.

00:27:30.580 | (laughing)

00:27:32.020 | - Okay, last but not least, we have a question from Daniel.

00:27:35.880 | Ben, do you feel like getting an MBA helped your career?

00:27:39.380 | Did you pay for it yourself or did an employer help?

00:27:41.980 | I'm mulling over starting an online MBA

00:27:43.980 | from a public university, but I've been hearing

00:27:46.240 | that it's not worth the time or money.

00:27:48.180 | I was hoping to get your perspective, thanks.

00:27:50.980 | - Getting an MBA did help my career,

00:27:52.480 | but not the way I thought it would.

00:27:53.580 | - I gotta be honest, you need to talk this up more.

00:27:55.680 | I actually didn't even remember you had an MBA.

00:27:58.220 | - Exactly.

00:27:59.060 | - This should be on your signature and stuff.

00:27:59.880 | - I'm not gonna be a LinkedIn guy

00:28:00.720 | that puts Ben Carlson, MBA, after it, sorry.

00:28:03.180 | - 100% it should be what you do.

00:28:04.700 | - No way.

00:28:06.020 | My employer had a reimbursement plan up to a certain level,

00:28:08.680 | and I went to a local university,

00:28:10.300 | so it wasn't that expensive.

00:28:11.200 | And I think they probably covered 90% of the cost.

00:28:13.820 | And I was at a career crossroads

00:28:15.180 | where I knew I wanted to do something different.

00:28:16.740 | And actually, I started my blog, A Wealth of Common Sense,

00:28:19.500 | while in my MBA program in one of the classes.

00:28:21.420 | So if I wouldn't have done that,

00:28:22.860 | I don't know if I would've started my blog

00:28:24.060 | and I wouldn't be here today.

00:28:25.220 | So it helped me in that way.

00:28:26.780 | But I don't know, I didn't learn much in my master's program

00:28:29.340 | that I couldn't have learned by reading books.

00:28:31.460 | I think it's a good decision if you can get

00:28:33.900 | into a really good school, if you're stuck in your career

00:28:35.940 | and just want to figure something new out.

00:28:38.300 | It's also really helpful to build your network

00:28:40.180 | if you don't have a network in terms of helping

00:28:42.320 | for upward job mobility.

00:28:44.680 | So those are the reasons I think you should do it.

00:28:46.660 | I don't think you should do it if you think it's gonna mean

00:28:48.520 | like a springboard to your career automatically.

00:28:51.200 | I think it guarantees you all that much.

00:28:53.200 | Alex?

00:28:55.680 | - Yeah, agreed.

00:28:56.520 | I think you phrased it nicely.

00:28:57.800 | It might add value to your overall situation,

00:29:00.000 | but most likely in ways that you didn't see it, right?

00:29:03.560 | Like why are you getting the MBA in the first place?

00:29:05.240 | To get a job or become an entrepreneur

00:29:07.420 | that you otherwise couldn't get without the MBA.

00:29:10.580 | In 99% of circumstances, real life experience

00:29:13.760 | trumps education in the classroom.

00:29:15.120 | - Yes, I think if you had to, like I know people stop

00:29:18.280 | and do a full-time program.

00:29:19.720 | I would only do that if it's like one

00:29:21.720 | of the top 10 universities or something.

00:29:23.560 | If not, I would keep working.

00:29:25.040 | - Online is a little tricky too,

00:29:26.280 | just because so much of the point of a degree like that

00:29:28.880 | is the connections you're making and people you're meeting

00:29:31.300 | and that could end up being great relationships

00:29:34.040 | for you to have down the road.

00:29:34.960 | I don't know that you get that as much with an online degree.

00:29:38.300 | - And also, would you go to the brightest and best,

00:29:40.380 | AKA the most expensive?

00:29:42.420 | Now look what you've done, Ben.

00:29:44.660 | You're two years out of the workforce.

00:29:46.060 | You have zero more experience.

00:29:47.660 | You're 150K in debt,

00:29:49.220 | and you didn't make any money over those two years.

00:29:52.220 | Most likely, the reason that you, whoever asked this question

00:29:55.780 | or just someone making this debate,

00:29:57.740 | that you can't get the job you want

00:29:59.660 | is not because of whether you have an MBA or not.

00:30:02.860 | That's just the fact, right?

00:30:04.540 | No one's gonna interview you, really like you,

00:30:07.120 | think you're capable, and then say,

00:30:08.440 | "Well, you actually don't have an MBA."

00:30:10.640 | If you think the MBA will get you that interview,

00:30:13.320 | then sure, go for it,

00:30:14.400 | but that's a heavy price to pay,

00:30:16.240 | both financially and period of your life,

00:30:19.680 | just to hope to get a better interview

00:30:21.400 | while gaining zero more life experience.

00:30:23.120 | - I would wanna know what the career prospects are

00:30:25.400 | and if there's jobs you're looking for that require an MBA.

00:30:28.000 | Like if there's a job you really want that requires it,

00:30:30.040 | then you think about it, I think.

00:30:31.640 | But if it's not really required,

00:30:33.360 | I don't think it, I wouldn't put so much weight on it.

00:30:37.480 | - I'm banking on one day getting an honorary MBA, you know?

00:30:41.120 | That's what I want.

00:30:42.880 | - Think of what happened here.

00:30:43.820 | I was hired on a three-month internship

00:30:45.680 | as a gadget guy, eight years ago.

00:30:47.680 | They didn't hire me 'cause I had an MBA.

00:30:50.160 | In fact, I'd imagine we interviewed much more qualified

00:30:53.720 | and more well-polished candidates,

00:30:55.340 | but at the end of the day,

00:30:56.180 | people just want to work with people that they like.

00:30:58.700 | That's why we put Ben in Ann Arbor, Michigan

00:31:00.700 | and me all the way in New Jersey,

00:31:01.860 | so we're not even close to one another.

00:31:03.540 | - Alex basically worked his way up from the mailroom.

00:31:05.560 | - It's true.

00:31:06.800 | - I mean, I'm not in Ann Arbor, but close.

00:31:08.920 | - An intern to director of glow-ups.

00:31:10.960 | Wow, oh my God, that's not even why I made this my name.

00:31:13.900 | There you go, Duncan.

00:31:14.740 | See, full circle, baby.

00:31:16.440 | - Yeah, that's a reference to our Fantasy Football League.

00:31:19.540 | Alex's first place.

00:31:20.920 | - First place at a 16, nine-game winning streak,

00:31:23.420 | not to brag, Ben.

00:31:24.260 | - People want to hear less about your fantasy football team

00:31:26.840 | than they want to hear about Duncan's stock picks.

00:31:28.360 | I'm just putting that out there.

00:31:30.040 | - There's a lot of appetite for my stock picks.

00:31:31.980 | - Congratulations on the 100th episode, guys.

00:31:34.380 | Very impressive, everything you've done.

00:31:35.860 | You're giving the YouTube base the knowledge that they need.

00:31:38.780 | And thank you for having me on this very special episode.

00:31:41.220 | - Thanks for coming on, Alex.

00:31:42.820 | Tune in tomorrow, brand new episode

00:31:44.260 | of The Compound and Friends.

00:31:45.460 | Do the usual stuff, like, rate, review.

00:31:47.980 | Leave us a comment.

00:31:48.980 | Thanks for everyone on the live podcast.

00:31:50.820 | As always, leave us a comment or a question

00:31:52.680 | on YouTube or email us.

00:31:54.680 | Askthecompoundshow@gmail.com.

00:31:56.140 | No show next week for Thanksgiving.

00:31:58.740 | We're off, we'll see you in two weeks.

00:32:00.400 | - Happy Thanksgiving.

00:32:01.880 | - See you, everyone.

00:32:02.880 | (upbeat music)

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