Is the Bear Market Over?

00:00:00.000 | Welcome back. When we first started this show, our assumption is, most people would ask questions

00:00:17.120 | about the markets of their portfolios. That's the kind of stuff that came into my inbox.

00:00:20.520 | Hence the name, Portfolio Rescue, right? But as the show has gone on to bring a more range

00:00:26.320 | of questions in, things will continue to expand. So we get questions now, barely any of them on

00:00:31.200 | markets or portfolios. Some of them are, but mostly it's taxes, retirement, insurance, spending,

00:00:35.040 | housing, debt, and just a bunch of other topics, too. Sometimes people ask me fashion advice,

00:00:39.600 | which I'm more than happy to give. So we felt it was time for Name Brand to better

00:00:43.160 | align the show with the questions that are coming in from our audience, because you guys are the

00:00:46.680 | ones that are giving us the topics every week. So Portfolio Rescue will now be called Ask the

00:00:51.040 | Compound. And it worked because we already had the email, right? Duncan, AskTheCompoundShow@gmail.com.

00:00:55.760 | So it's not like it's a huge departure. Still going to be lots of investing in markets and

00:00:59.280 | portfolio-related questions, but Ask the Compound just makes more sense when you consider the breadth

00:01:03.520 | of questions that we get. We also weren't really rescuing that many portfolios. We had people

00:01:09.920 | writing in, "Hey, I make $400,000 a year." We're helping on the edges, right? Yeah. They were

00:01:15.640 | asking questions. So remember, AskTheCompoundShow@gmail.com. Our sponsor today is Bird Dogs.

00:01:22.320 | Duncan, I just got a new shipment in of these bad boys. See them? They're so comfy. You got--

00:01:27.120 | Oh, yeah, yeah. I have those. Yeah, yeah. Yeah. The liner's great. My favorite thing is still the

00:01:33.040 | side pocket, because you put your wallet in there, and you don't sit on it. You don't think your rear

00:01:37.440 | end falls asleep if you're sitting on a wallet. I hate that. Go to Bird Dogs, BirdDogs.com. Use

00:01:43.160 | the code BenPR. BenPR. Still using the old Portfolio Rescue references here, but that's what

00:01:49.760 | they gave us before. You get a free Tumblr. I don't use a lot of Tumblrs, because I'm not a

00:01:53.520 | coffee drinker. I know a lot of people use them, though, right? So remember, BenPR. Really quick

00:01:59.520 | here, the whole premise of this show has always been that our audience dictates the content,

00:02:04.720 | right? So the content. Each week, we pick the best or most relevant topical questions. Last week,

00:02:10.920 | there was a handful of questions with people who have six-figure salaries or seven-figure net

00:02:15.200 | worths, right? I have all this money, not to brag, all this stuff. A few people in the chat, listen,

00:02:19.800 | I'm in there. I'm listening to you people. I'm hearing the feedback. They said, "All these not

00:02:23.680 | to brag questions are useless to me, because I'm not in that same financial stratosphere." Fair

00:02:27.840 | pushback. I'm willing to listen to feedback. I will say, though, a lot of this stuff does

00:02:30.680 | scale, though. You know, like, even if you don't have $4 million, a lot of the principles still

00:02:34.840 | apply that we're talking about. Here's the thing. So many of these finance questions are useful if

00:02:38.400 | you know how to apply them to your circumstances, right? I started my career in the institutional

00:02:41.400 | asset management business. I worked with nonprofits who had portfolios of hundreds of thousands of

00:02:45.320 | dollars, millions of dollars, sometimes tens of millions of dollars, hundreds of millions,

00:02:49.200 | up to a billion dollars, right? So the circumstances were different for each of these organizations,

00:02:53.800 | depending on the size of their portfolio. But there were still plenty of similarities to how

00:02:57.560 | we manage the portfolios, right? Each investment plan looked at the organization's risk profile

00:03:01.160 | and time horizon and spending needs, and then created an asset allocation based on those

00:03:04.960 | premises, right? So the way I saw it is the investment philosophy is universal. The strategy

00:03:10.360 | is just personal. So I always thought, like, the billion dollar or hundred million dollar

00:03:14.120 | portfolios, it was just an extra zero. You still have to think of investing the same way. And I

00:03:17.800 | think that the personal finance topics are the same thing. Sure, this person has $6 million,

00:03:22.280 | and maybe you only have $60,000 saved in your IRA, but they're still thinking about a lot of

00:03:27.760 | the same things. Sure, your financial life becomes a little more complicated, and we have more money,

00:03:32.200 | and maybe there's some other strategies on the edges that you have to think about. But the big

00:03:36.400 | questions, the behavioral stuff, getting the big building block stuff right is still exactly the

00:03:42.040 | same, no matter how much money you have. I've always thought that. And so what you're saying

00:03:45.280 | is go back and watch all of our old episodes if you haven't yet. Yeah. And what do you know,

00:03:48.520 | we got a handful of questions from viewers that don't involve not to brag situations this week,

00:03:52.440 | so let's get into one. Yeah, and thanks for the questions, because yeah, we literally said last

00:03:56.360 | week, I think, these are the questions we're getting. You want to hear something different?

00:03:59.480 | Send some questions. And people did. So up first, we have a question from Matt. "A few weeks ago,

00:04:05.640 | you got a question about paying off a 6.5% mortgage early versus investing that money. It

00:04:10.520 | seemed the consensus was against the early mortgage payments. Well, I have a 6% five-year auto loan on

00:04:16.040 | a truck that I use to haul a camper, which I live in full time. Since I do not benefit from the

00:04:20.840 | mortgage interest tax deductions, would it make more sense to aggressively pay off the loan in

00:04:25.160 | this case? I currently have enough money in stocks that I could pay this off if I sold everything,

00:04:29.360 | not counting my retirement accounts. I own land that I plan to build a house on in the next two

00:04:33.960 | to five years. I'm 33, single, and I owe $40,000 on my truck. I have no other debt and make about

00:04:39.240 | $50,000 a year." This one sounds like a "House Hunters" episode. I like this one though. So the

00:04:45.320 | auto loan is different from a mortgage because we're dealing with different time frames and

00:04:48.200 | different financial assets, right? Houses have generally appreciated in value over time and make

00:04:52.160 | for a good inflation hedge over the long run. Automobiles, on the other hand, are a depreciating

00:04:56.080 | asset. I think the good rule of thumb is the minute you drive it off the lot, an automobile

00:05:00.160 | is going to be worth 10% less. I don't know if that's an old wives tale, but I've also heard,

00:05:04.680 | "Take an additional 10% off the sticker price every year for like five years." And that's your

00:05:08.320 | car depreciation, right? Housing is a form of consumption that I think has similarities to a

00:05:13.360 | financial asset. Automobiles are a form of consumption that have similarities to a liability.

00:05:18.000 | That's the way I look at it. So, a hurdle rate of 6% per year is pretty simple on this one,

00:05:22.480 | but you should probably consider the tax implications of selling if you have any

00:05:25.800 | gains in the brokerage account. And you can do some cost-benefit analysis. I did a little back

00:05:30.560 | of the envelope here. $40,000 in debt at 6% over five years, we're talking $6,400 in total

00:05:36.120 | interest payments over the life of the loan. So, that's not egregious, but you can save

00:05:39.240 | yourself some money if you pay it off. So, that's your bogey in terms of taxes and opportunity

00:05:43.040 | costs if you decide to sell some stocks to pay it off. I think this one really comes down to

00:05:49.120 | psychology. Your expected return should probably be higher in the stock market, but if this is

00:05:54.440 | part of your living situation, that's potentially a different story. I think if you do sell some

00:05:59.080 | stocks to pay this off, and you pay the loan, just make a pact with yourself that you're going

00:06:02.960 | to use those monthly payments you would've been paying towards the car loan, and dollar-cost

00:06:06.920 | average right back into the market, or save for your house maybe that you're going to build

00:06:09.640 | sometime. So, if you're going to pay it off, don't let those payments go to waste if you

00:06:14.160 | decide to take care of them. Put those to good use, because then if you're taking away from a

00:06:18.560 | financial situation, you should help it out in other ways. Duncan, camper? Maybe is that

00:06:22.360 | your housing situation fixed? No, no. I'm happy to announce, I mean, we've talked about it, but

00:06:27.960 | yeah, after eight Airbnbs to start the year, I'm actually settled down in a new place now.

00:06:33.080 | Seriously, eight Airbnbs? Yeah, eight Airbnbs. So, I did my due diligence. I'm not a shareholder,

00:06:38.480 | but yeah. All right, I am, so I'll take it. All right, let's do another one. Good experiences.

00:06:43.680 | Overall, very good experiences. That's good. Yeah. Okay, so up next we have a question. I

00:06:49.920 | don't see the name. Okay. We have about $30,000 in credit card debt. My wife and I have decent

00:06:55.960 | jobs and live with a modest middle class Midwest lifestyle here in Wisconsin. I'm trying to picture

00:07:02.440 | what that means, but find it hard to put much towards the payments other than minimums. We are

00:07:07.640 | making credit card payments of $750 a month with $450 of that being interest, and they say their

00:07:14.280 | rates are between 14 and 20%. My wife recently left her job and has a $200,000 ESOP, is that

00:07:20.400 | employee stock option plan? Nailed it. Yeah. Balance that we need to roll over into an IRA.

00:07:25.920 | I'm thinking of taking an early distribution on $30,000 to pay off these cards. I understand that

00:07:31.680 | there's a 10% penalty, but getting rid of a $750 monthly payment would be great for our peace of

00:07:37.200 | mind. What do you think? Love the show. Shout out Grand Rapids. My wife and I grew up in Western

00:07:41.960 | Michigan. Lots of Western Michigan shout outs. We're just blowing up here on the West side of

00:07:45.640 | the mitten. One of the things my father ingrained in my head from a young age, this is Ben's rule

00:07:53.440 | number one of personal finance. I'm not a shouter. I don't pound the table much. Pay off your credit

00:07:57.840 | card balance every single month. That's it. We're talking 15% to 20% interest. John, give me a chart

00:08:04.240 | on the average credit card interest right here. I think it's close to 18% or something. It's

00:08:08.800 | ridiculously high. This is an annual return that would make Buffett blush. There's no other

00:08:17.920 | expected return on investment that's going to do better for you than paying off your credit card

00:08:22.080 | debt. At the extremes, I think there's two types of credit card users. One, people who pay off

00:08:26.160 | their balance each month, and then they use a credit card for convenience or the ability to earn

00:08:29.760 | rewards. This group just doesn't or shouldn't care about what the rates are. Two is people on the

00:08:34.720 | other extreme who pay the minimum balance, have a hard time paying it down, and accumulate more

00:08:37.920 | debt over time because that's a huge compounding rate against you. So I like the idea of using

00:08:43.520 | credit cards to earn rewards, maybe build up your credit score, but if you're paying the minimum,

00:08:47.200 | you're just falling behind every single month. So you could do the cost benefit here of paying

00:08:51.840 | that 10% penalty. I'm guessing there's no benefit of not using that money to pay this off. So this

00:08:59.760 | person never really said how they got into credit card debt. That's probably maybe the first thing

00:09:03.200 | they should do after they pay it off. It probably makes sense to consider how you got in a situation

00:09:07.840 | in the first place, but I'm guessing it'd be a huge relief to pay it off, especially if you're

00:09:11.440 | only making the minimums. But I would think long and hard about how you got into in the first place.

00:09:14.960 | Was this a big one-time expense that you had to do to get into it? Or is this just budgetary

00:09:19.280 | problems where you made some bad choices or you had no other choice, but you just credit card debt?

00:09:23.040 | So paying it off is great, but if you just go back into debt, that's not going to help much.

00:09:26.960 | You know what I've found is the average person really does not understand how credit cards work.

00:09:32.320 | And I don't even understand all the intricacies myself, and I've read quite a bit about it.

00:09:35.600 | But people do not understand the compounding aspect of credit card interest rates.

00:09:40.240 | Oh, no. I remember my sister, when she first got out of college, she said, "It's great. I'm just

00:09:44.160 | putting all this stuff in my credit card, and all I have to pay is the minimum every month." And I

00:09:47.280 | said, "Yeah, that's all you have to pay, but do you realize how much money you're accruing?" She

00:09:50.640 | didn't realize that the debt grew on itself. She didn't know. She had no idea. But this is the

00:09:56.240 | simple stuff where, yeah, you get rid of this, whatever you have to do, the Dave Ramsey snowball

00:10:00.720 | approach, whatever it is, get out from under it. And when are they going to bring these rates down?

00:10:05.920 | 27% or 24% interest rates on credit cards? If credit card rates didn't come down with

00:10:10.400 | 0% interest rates, I think they just never are. I think it's just unsecured debt, and they're

00:10:14.240 | always going to have people default. I mean, before you pay it off, it's worth it to call

00:10:18.880 | your credit card company and say, "We're paying the minimums here. Can you help us out a little

00:10:22.000 | bit?" Sometimes they could help you a little bit. They may laugh in your face and say, "No,

00:10:25.600 | pay it off," but it's worth asking. I'm kind of surprised that Elizabeth

00:10:28.960 | Warren hasn't gotten up in there and done something, you know?

00:10:31.120 | All right. Let's do another one. Okay. Question three is from Miguel.

00:10:36.000 | "Big fan of all the shows. Thanks for the info you provide. I recently accumulated

00:10:40.880 | 100 shares of a couple of blue-chip stocks -- Apple, Disney, Google, and AMD. Is it a good

00:10:46.160 | idea for me to start selling covered calls on these stocks?" Covered calls are something we

00:10:49.840 | never got questions about until the bear market, basically.

00:10:52.880 | Yes. It does seem like a bear market. Let's bring our favorite stock prognosticator on here,

00:10:57.440 | Mr. Josh Brown. Josh.

00:10:58.720 | Hey, Josh. Hey, guys. So great to be on my favorite show.

00:11:04.640 | Thank you, guys. Thanks for coming.

00:11:07.200 | And a new background. Josh, these are the kind of things --

00:11:10.640 | I don't know if you know this. This is actually a penitentiary behind me.

00:11:13.520 | It's a few snipers -- It does look like you have a prison yard behind you.

00:11:17.120 | This is 39th Street, and our office faces -- no, not 39th. What is this?

00:11:27.840 | I don't know. We're on 40th, right?

00:11:29.120 | 40th. We face 40th.

00:11:31.200 | No, that's 40th -- no, 40th is the front of the building.

00:11:35.280 | Yeah, yeah, you're facing 40th.

00:11:36.240 | Okay, let me fix this. The western exposure of our headquarters looks over Bryant Park.

00:11:44.720 | So you see, right? But that's facing down 40th in the corner, and then behind us is 39th.

00:11:52.240 | It was nice of you to use your six minutes of sunlight to be with us today.

00:11:57.360 | That was very nice.

00:11:58.000 | So, Duncan's right. Covered calls are a bear market phenomenon.

00:12:03.360 | No one talks about this when stocks are going up and we're in a bull market.

00:12:05.840 | But when stocks are going sideways or going down, people say,

00:12:08.880 | "This is a free lunch. I'm generating income on the shares I own. What's the downside?"

00:12:13.360 | So do you ever dabble in options at all? I honestly don't.

00:12:17.120 | I think it's like an extra added layer of complexity. That's not for me.

00:12:20.160 | Some people swear by the income you can get.

00:12:22.160 | I think it just adds a layer of complexity that some people don't understand.

00:12:27.680 | Yeah. As a retail broker, we did this, and we loved it because it was two commissions

00:12:32.160 | on the same trade. You would sell a guy a stock, and then you would sell him a covered call

00:12:37.600 | to "protect the stock." And then if he got called out, it was even better.

00:12:42.320 | Then it's another commission, and then another commission because you have to buy a new stock,

00:12:45.920 | of course. So retail brokers loved selling option strategies to retail clients,

00:12:52.080 | but that's 20 years ago. So does this make sense for Miguel? I think no, because he said

00:12:59.280 | he's accumulated a couple of hundred shares. So what is the covered call premium that you're

00:13:05.360 | able to bring in from selling those options contracts? I mean, we're talking about not a

00:13:11.280 | lot of money for a lot of annoyance, a lot of aggravation to not really bring in that much

00:13:16.880 | money. Because if you get called out of one of these stocks, meaning you bought it, it worked,

00:13:22.800 | the stock went higher, and it was called away from you at a lower price than where it is,

00:13:27.600 | then what do you do? You buy it back, or you have to go find a new stock because you don't want to

00:13:31.440 | pay up for the stock you just lost. So I don't like it from that standpoint. Then there's tax

00:13:37.120 | consequences wrapped up in that as well. And then the other thing is, why are you buying them to

00:13:43.120 | begin with? Is it a trade? If it's a trade, and you want to use options to risk manage the trade,

00:13:50.800 | all right, I suppose. But this sounds like when you say the word accumulate,

00:13:56.880 | it sounds like you're accumulating an investment. So why would you want to put a ceiling over the

00:14:04.880 | upside of those stock positions? If you're going to be a long-term owner of these shares-

00:14:07.520 | Like I'm not sure what it accomplishes. Yeah. Get your income.

00:14:10.880 | In the same way. Last thing, in 0% interest rate land,

00:14:15.840 | yeah, you got to do some stuff to generate income. But you don't need that now. You can

00:14:21.520 | buy a six-month or a one-year T-bill, and you can generate current income and leave your stocks

00:14:27.680 | alone. So I am anti that approach. And we've had people before reach out and say that there's ETFs

00:14:34.880 | you can get too. I would much prefer if you're going to do this and try to earn some option

00:14:39.120 | income, have a professional do it for you instead of trying to do it yourself. Understanding the

00:14:42.880 | absolute premiums, and that's hard. There are covered call strategies that are now

00:14:48.240 | in an ETF wrapper. So if you want to make that part of your portfolio strategy, I think you can

00:14:54.800 | do that in a pretty low-cost way and not have to be logging in and checking options all day.

00:15:01.040 | So look, if you're talking about a million-dollar position, and it's a company you worked for,

00:15:07.520 | and you can't sell it, and there's a huge tax liability, but you want to protect that position,

00:15:13.920 | options are a smart way to do that. But that doesn't sound like this is the scenario that

00:15:20.800 | Miguel is describing. Yeah. It's not a free lunch. It sounds like it is, but it's not.

00:15:26.560 | There's so much more that goes into it. It's much work. You're accumulating shares.

00:15:29.040 | Yeah, it is. Keep it simple. Okay. I'm being told by Nicole to back up from my mic.

00:15:33.600 | Thank you. Is this good? You guys can say it on the air. You don't have to hold up cue cards.

00:15:39.040 | Hey, we try to be professional around here, you know?

00:15:40.960 | What is this, The Tonight Show? Just say, "Josh, back off your mic."

00:15:46.480 | We're working on it. We're working on it. Okay. Up next, we have a question from Tom.

00:15:51.840 | "I'm in my late 30s, so I know I should look at this environment as an opportunity to buy

00:15:58.000 | at lower prices, but I'm sick of the bear market." Me too. "I got caught up in investing,

00:16:03.040 | in tech in 2020 and 2021, so I'm down way more than the S&P 500, probably down 25% to 30% from

00:16:09.040 | my previous highs. It would help to hear your best and worst case scenarios between new all-time

00:16:14.480 | highs this year and a 1970s environment where we go sideways for years." I can relate to this

00:16:19.520 | question because I'm kind of bored. It's getting boring. Well, I think the last three years have

00:16:24.560 | kind of taught people the wrong lessons, that they think everything is a top or a bottom,

00:16:28.320 | and everything has to be like we either go up really fast or down really fast.

00:16:32.480 | It's hard to wrap your head around this. Most of the time, the stock market is somewhere in the

00:16:35.520 | middle. Just by sheer definition, the stock market can't always be at a top or a bottom.

00:16:41.920 | John, throw the chart up here. I looked at the new all-time highs by decades. It's actually

00:16:45.680 | been a decent amount in the 2020s. This is a great chart. I think there's roughly 2,500 trading days

00:16:52.480 | per decade. So if you average this out, it's like, I don't know, 6% or 7% of the time that we hit a

00:16:57.760 | new all-time high. So it doesn't happen as often as you think to hit a new all-time high. Even in

00:17:05.280 | the 1970s scenario where we had all this volatility and stuff, I think the stock market before

00:17:11.120 | inflation was still up 6% per year. So it's not like you went nowhere. It's a more volatile/boring

00:17:17.040 | market. I think people just want there to be an event that happens that, "Okay, we're back," or,

00:17:21.760 | "No, we're not," because we are kind of in the middle ground. The stock market was down 25%.

00:17:25.040 | Now it's down, I don't know, 12% or 13%. So it does feel more boring, but maybe people should

00:17:32.720 | take that as a good thing. It's not always a bad thing that the stock market is not as volatile as

00:17:36.800 | it was the last few years. So I had this conversation with my driver yesterday coming

00:17:42.560 | back from the airport. And he's talking about how frustrating the market is right now. And

00:17:50.000 | he wants it to go back to new high. First of all, the two words that you need to remove from your

00:17:55.600 | vocabulary is "boring" and "exciting." Neither one of those should have anything to do with

00:18:03.680 | investing. That's one. Two, how old are you? Why do you want new all-time highs? Aren't you a buyer?

00:18:09.760 | Is this it? You're not going to buy a stock ever again? You bought tech stocks in 2021 and you're

00:18:16.000 | done? That doesn't seem likely. Are you 100 years old? So I actually don't understand why people

00:18:23.040 | can't... I mean, I do understand. It took me a long time. I shouldn't say that. I think that

00:18:28.400 | people need to refocus their energy and what they get excited about, because we're all forced savers.

00:18:37.920 | My driver's young. This guy's younger than me. I don't understand. You're going to buy stocks next

00:18:43.520 | year, you want to pay up just so that the old stocks you bought are higher? What does that do?

00:18:48.000 | Are you selling them all and living on the money right now? Probably not. So if you're not a seller,

00:18:53.040 | like you're an accumulator, you're a buyer, boring is great. Flat market is great. 1970s would be

00:19:00.160 | okay. It's not great for our lives, but we don't have control over what's going to happen.

00:19:05.520 | The one thing that the 1970s were great for, and 2000 to 2009, which was also a lost decade,

00:19:11.840 | is that every 401(k) contribution you made, you were heavily rewarded for during the next bull

00:19:19.040 | market. You just had to wait. So if you're not using the money tomorrow, I don't know why you

00:19:24.160 | want all-time highs. I think that's the biggest question. When do you need the money? And your

00:19:29.680 | point about the 70s, they didn't have 401(k)s back then. They didn't have the ability to invest a

00:19:33.920 | little bit of money out of every paycheck. And yeah, so having things... I know my retirement

00:19:39.040 | money is not going to be touched for, I don't know, 25, 30 years. It's sure it's not fun to

00:19:43.840 | look up at what your account used to be worth and realize like, "Oh, it's worth less than that now."

00:19:48.000 | But long-run returns are the only ones that matter. Yeah, right.

00:19:52.080 | Listen, in an IRA, in a 401(k), you can't touch it. So what the hell do you want to... And you're

00:20:00.000 | contributing more to it. So you want to buy your parents' stocks from them at record highs? I could

00:20:05.440 | see why they would like that. Why do you want that? Yes, exactly. So I think that's kind of

00:20:11.680 | where you have to come down on, is just understanding that if you have the ability to

00:20:15.600 | make 12 or 24 or however many purchases you're going to make out of your 401(k) or IRA this year,

00:20:20.400 | and the market just kind of goes nowhere. And it is funny, though. People say the market's boring.

00:20:26.720 | The S&P is still up, I don't know, 7% this year. That's kind of a lot for not even halfway through

00:20:31.840 | the year. So I know it seems boring, but... You know what else is funny? All the commercials

00:20:37.360 | on the radio. Like if you listen to Bloomberg Radio, CNBC Radio. So I often, when I'm driving,

00:20:42.960 | I'll listen to Sirius XM. All the commercials are like people selling, like the way they sell

00:20:50.960 | is they start the commercial with, "In today's volatile times." Dude, just today? They were

00:20:58.240 | rolling that years ago, too. Yeah, back when... Yeah, every year. We've had less volatile years

00:21:04.000 | than this year, but we've had way more volatile years. We have a guy in West Michigan who's on

00:21:09.280 | all these billboards and he sells insurance and annuities, of course, and he's literally holding

00:21:13.920 | two safes on his arms. Like an actual safe. Like, "I'm going to keep you safe from the stock market

00:21:19.200 | volatility." It's so gross. You're right. Can we get Ben a billboard? Let's get Ben a billboard

00:21:24.640 | in Michigan. We don't... That's not how we roll. We only do business with fans. We don't trick

00:21:31.600 | people with billboards. If you're a fan of ours, you can become a client or stay a fan. You can't

00:21:36.800 | come in here through some bizarre channel where we put billboards up with a picture of a safe.

00:21:43.040 | Never make it through our process. I've got no slogans, Duncan. Sorry.

00:21:47.520 | Okay, okay. I tried. Last question. Okay. It was more fun, though, I have to say,

00:21:52.080 | when the market was going up every day. I miss those days.

00:21:54.720 | Well, of course. Everyone feels better when the market's going up, but you should... Yeah.

00:21:59.520 | It's like, "Am I up 3% or 4% today?" No, I'm just kidding. Okay. So question five is from Frank.

00:22:06.720 | "My wife and I are 34 and we have very different views on finance. She would rather take more

00:22:12.480 | trips and spend more now while I have a savers mindset and want to work towards early retirement.

00:22:18.880 | I enjoy the occasional trip each year, but not one each quarter. We also have a newborn on the

00:22:23.280 | way in two months. I'm of the mindset that we'll never be able to save enough, and that's based on

00:22:27.600 | my upbringing. My wife's family did very well financially, so she's never seen the other side

00:22:31.600 | and what the struggles are like. I'd like to take more trips to make her happy, but I don't want to

00:22:35.680 | sacrifice early retirement. Should we lower our retirement savings rate in favor of more after-tax

00:22:42.000 | investing? We could still save but have access to the money if we wanted to take these extra trips."

00:22:47.600 | All right, this is the kind of thing that... This is a relationship problem.

00:22:50.880 | Yeah. This is a psychologist kind of thing. I just got to get on the same page. Yeah.

00:22:53.840 | Have you read the Die With Zero book yet by Bill Perkins?

00:22:58.080 | I haven't. You've heard this, Josh, or not? I know of it, but I haven't read it.

00:23:01.360 | Okay. He was a hedge fund manager, an energy trader. I don't agree with everything in it,

00:23:04.880 | but I think it's kind of eye-opening. His point is that you should be spending now

00:23:09.040 | so... and not, say, waiting for the future. Just go for it, and your net worth should peak way

00:23:14.800 | sooner than you think. Your net worth shouldn't peak at 65. It should peak at, like, 50 and start

00:23:19.360 | spending it down. So that's one side of it. The other side is, how do you think about having a

00:23:24.960 | huge, like, just, like, philosophical disagreement with your significant other about how you should

00:23:30.960 | spend money, right? Like, I don't... That seems like something that almost should be handled before

00:23:36.080 | you get into the relationship as opposed to during, because I don't know how you're going

00:23:39.200 | to change the fact that I'm a huge saver and you're a spender. Where do we meet in the middle?

00:23:45.360 | I think it works. My wife and I are the opposite. Like, I get emails from, like,

00:23:51.920 | Madison Square Garden and Barclays and the UBS Arena, like, "This concert is happening." I'm like,

00:23:58.480 | "I'm buying it. I'm going. I'm going. I'm going. I'm going." She's like, "What are you doing?"

00:24:04.240 | But we hash it out, and we end up at a reasonable compromise. If it were up to me,

00:24:12.080 | I don't even know how much money we would have saved, not a lot. And I wouldn't... My attitude

00:24:17.760 | is I'll just go make more, because I'm insane. And I don't think about early retirement. I'm

00:24:22.400 | going to die doing this. Maybe today. Stay tuned, guys. So, listen, if you're doing something that

00:24:29.360 | you hate, then early retirement maybe is a goal. But hopefully, that's not the case. And maybe

00:24:35.840 | that's the bigger issue, that you're so focused on stopping working that you're willing to go 30

00:24:42.080 | years denying yourself things like family trips. And, like, in the end, like, what do you have to

00:24:48.880 | show for your life? It's the moments that you remember forever. Like, we took the kids to the

00:24:55.200 | Caribbean, or we did a cruise. I don't do cruises, but we did a cruise. Or, like, those are the

00:24:59.280 | things that really matter when all is said and done. And so, if you're not doing those now,

00:25:04.880 | when do you want to do them? I promise you, it doesn't become more fun when you're 60 or 70.

00:25:10.560 | Here's the thing, too. If you hold everything back now and retire at 55,

00:25:15.920 | you're not going to hit a switch when you turn 55 and all of a sudden be okay with spending.

00:25:19.440 | At that point, it's going to be even harder to turn this big around.

00:25:21.840 | It's worse.

00:25:22.720 | Yeah, you're right. The compromise thing is part of it, to say, here's our travel budget per year.

00:25:28.320 | We're going to take either one really great trip or two smaller trips, whatever. You have to have

00:25:32.320 | some sort of compromise where you plan it out and put it into your budget and then figure out the

00:25:36.960 | saving from there. But yeah, I'm a big proponent of -- I'm more of a balanced person. Yes, I'm a

00:25:43.200 | big saver, but you have to get those experiences out of the way once you -- I'm middle-aged now.

00:25:48.960 | I know that it's not going to last forever.

00:25:50.400 | Out of the way? No, you have to -- it's your life.

00:25:52.800 | Out of the way. All right, we knocked that one off the list. What's next?

00:25:57.200 | Listen, I'm a planner.

00:26:01.840 | Hey, Seattle Michelle in the chat is pointing out -- I can't believe I've never

00:26:06.080 | noticed this before -- how much Duncan looks like The Edge from U2.

00:26:10.240 | The reason that's relevant is I'm going to be in Vegas in October for one day,

00:26:21.440 | like a business trip, and it happens to coincide with U2, they're doing a residence at The Sphere.

00:26:28.640 | And The Sphere is -- Madison Square Garden opened this state-of-the-art entertainment

00:26:33.760 | destination on The Strip, and I think U2 is the opening thing for it.

00:26:39.200 | So I'm just trying to get sprinkles to buy a ticket and come with me,

00:26:44.400 | and let's go see U2 at The Sphere. And she's like, "Yeah, but we have to take

00:26:48.480 | our daughter to see two more colleges." And I'm just like, "Yeah, but when is this ever

00:26:54.800 | going to happen again? I happen to be in Vegas for something cool like this."

00:26:59.040 | So that balance, I'm not saying I'm always right or she's always right,

00:27:06.000 | but you have to have those conversations. And so maybe this is less a financial question,

00:27:11.120 | it's more like a relationship question. And maybe you should just leave her.

00:27:14.720 | No, I'm not saying that.

00:27:16.960 | My wife and I are kind of similar. My wife, she'll spend on a lot of the small stuff and

00:27:23.200 | not think about it. When it comes to big stuff, she's like, "I don't know if we should get this."

00:27:26.800 | And I'm kind of the opposite. It's the little stuff that kills me for some reason, but the big

00:27:30.400 | stuff, I don't mind about. So it is this balancing act where I think it's good to have some give and

00:27:35.840 | take, but then you have to figure out what's the middle ground and what are your limitations

00:27:40.080 | you're putting on any of it. And also, John, we need a side-by-side of Duncan and The Edge,

00:27:43.360 | because that's a great call. Oh, man.

00:27:45.920 | It's nice to see that Frank is empathetic here, right? Frank is trying to think about

00:27:51.120 | her side of the situation and trying to do right by her and not just be like,

00:27:55.520 | "We have to save every dollar." And we've had questions from people talking about spending

00:28:01.680 | tons of money on joining a country club or something, right? To me, something like taking

00:28:05.040 | trips is probably something that is going to enrich your life more. I don't know. I've never...

00:28:09.360 | Yeah, as long as you're not wasting your money on handbags. Yeah.

00:28:11.920 | It's situational, because where I live, or not really my town, but on the north shore of Long

00:28:19.040 | Island, the country club becomes the center of your social life. It's where you meet with your

00:28:24.320 | friends every weekend. The guys play cards, you golf with your wife and another couple,

00:28:30.400 | and then your kids grow up with the kids of the other families, and it becomes like...

00:28:35.680 | I thought that was Starbucks.

00:28:38.320 | No, no. It becomes a community. So I think it's a walk of life question also, when you're like,

00:28:45.680 | you can't just be like, "I'm not a country club guy. I have five seconds of attention for golf."

00:28:52.080 | But I'm saying that question, like, "Is this a good use of money? Is that a good use of money?"

00:28:56.880 | What's the context? What does it mean for your life and the experiences you're going to have?

00:29:02.080 | Do the people you care about, are they into that shit? Because then maybe that is the right way

00:29:07.920 | to spend money. So these are very rarely boiled down to a nickel and dime financial question.

00:29:14.960 | A lot of this stuff is lifestyle.

00:29:16.320 | - Our next spinoff is Couples Rescue.

00:29:18.400 | - I like it.

00:29:19.920 | - Couples Rescue.

00:29:20.480 | - I like it.

00:29:21.200 | - Don't have me on for that.

00:29:22.800 | - Josh, we have a new compounded friends tomorrow, correct?

00:29:25.280 | - We sure do. I can't spoil who our guests are, but they are a lot of fun,

00:29:32.720 | and we're going to have a great show.

00:29:34.000 | - All right. Remember, if you have a question for us, askthecompoundshow@gmail.com. Leave us

00:29:39.760 | a question or a comment in YouTube. There's the Bird Dog Tumblr.

00:29:43.760 | - Yeah, Bird Dogs. Give them the link again.

00:29:46.080 | - Yeah. While we were on the show, we actually got an updated code. The code this week is

00:29:49.680 | actually Duncan.

00:29:50.320 | - Oh, Duncan. Okay. If you want that free Tumblr, put Duncan in.

00:29:53.760 | - Yeah.

00:29:54.640 | - Okay. So it's birddogs.com.

00:29:56.560 | - It's in the description.

00:30:00.400 | - All right. Go by the description. Hey, guys, if you like the rebrand,

00:30:06.240 | go ahead and give us a like. That's artwork by Duncan Hill, ladies and gentlemen.

00:30:12.880 | - Looks fantastic. All right. Keep those questions and comments coming. Remember,

00:30:17.040 | it's askthecompoundshow@gmail.com. We'll see you next time.

00:30:20.000 | - See you, everyone.

00:30:31.360 | - Bye.

Is the Bear Market Over?

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