(beeping) - Welcome back to Ask the Compound, where someone told us it was our 100th episode last week and we totally missed it. - No, no, no, today's our 100th. - Oh, today is, oh, I thought it was last week. Sean said it was last week, okay. He can't count, good thing we have someone who can't count in the finance department.

Today's show is sponsored by our friends at Bird Dogs. I think it's been our most, you said they've sponsored the most amount of shows. I just got a new shipment from Bird Dogs last week. I got my first pair of these stretch khaki pants. They're lovely, it's the same material, but they look a little better, might be a little thicker, I think.

Still have the side pocket, I'm wearing some today. I opted for the light gray. - I like the Phil Gates there, I gotta get the Phil Gates. - They're very nice, they look nice. I feel like if, I don't golf, but if you did golf, these are the kind of pants you could wear golfing.

Also, I have the Bird Dogs polo on. It's very nice, breathable, stretchy, it's pretty good. - You also still got my hat that I'll get one day? - Yes, you can still get this. Put the code in ATC, or go to birddogs.com/ATC. You can still get this, before Duncan.

I like it. It's coming your way, that'll be your Christmas present. Birddogs.com/ATC for more. So I figure, so we've done 100 episodes now. I figure we do five questions per show. That's 500 questions that we've answered. That's a lot. And we have a dock full of probably 100 questions we haven't answered yet.

Most of them are probably because they're too long. If you wanna get on the show, brevity is the key. We appreciate all the details, but give us a TLDR. So yeah, we've done a lot of them. Also, last week, people got mad at me because we called the show What's in Ben's Portfolio, and they said Ben didn't really tell us what's in his portfolio.

I don't know, I didn't know-- And you're in luck. This week, we're gonna screen share his Schwab account. I didn't know everyone wanted a fund by fund. The funds don't matter to them. I mean, I'd say 60% index funds, 40% factor funds. How's that, is that close enough? I don't know.

No one cares about the fund tickers. It's funds you would think. People wanna hear tickers. We wanna hear tickers, Ben. Yeah, it's boring stuff, but close enough. That's all you're gonna get, people. I like, we have viewers who know me well enough that the other day when the market was rallying, all the stocks had been beaten down, were soaring.

Someone was like, "Your portfolio's doing really well today "in the Dunkin'." I was like, "Yep, it is." We won't talk about the screen share, the screenshot you sent me of your total portfolio performance. We're gonna leave that one-- That's just one IRA, to be fair. But yes, yes, I picked like 20 stocks, and they're all down, so yes.

All right. That was the thing. Go to the first question. I'm gonna show you why that's probably the case. Yeah, okay. First up, we have a question from Steve. I keep hearing that the Magnificent Seven stocks are carrying the stock market this year. Does this matter? I get that these stocks could fall and bring the market down with them, but should we be worried about this level of concentration?

So it's changed-- This is a common question. We're getting this a lot these days. Yes, and this has been in the news a lot. So Magnificent Seven is Apple, Amazon, Facebook, not Meta, Google, not Alphabet, Microsoft, Nvidia, and Tesla. Those stocks are carrying the market this year. I looked yesterday.

It's kind of mind-boggling, especially when you consider how big these stocks really are. The average market cap for these seven companies is $1.6 trillion. The average return this year for those companies is 106% in 2023. And some of that is Nvidia being up like 240%, but even the median gain for these seven stocks is like 75%.

The average market cap for the remaining stocks in the S&P 500. Some people say it's 493. It's really like 497 or something, 'cause I think there's 504 stocks if you count the double-share classes. Whatever, I digress. The average return of the rest of those stocks, which the average market cap is like 57 billion, is a return of 4% this year.

And the S&P, as of this airing, is up like 19% on the year, close to it. So those stocks really are carrying the water for the rest of the market. Now, people worry about this dynamic, 'cause as Steve said in the question, what if these general stocks just roll over, right?

They make up close to 30% of the index. Apple and Microsoft themselves, I looked it up this morning, make up 15% of the S&P 500, which is huge. So this is a legitimate concern. If these stocks crash, you'd think the market would fall as well. But the rest of the market can actually do better in that situation as well.

They don't have to crash, too. So we don't have to go back that far to see how this played out. In 2022, one of the reasons these stocks are doing well this year is 'cause they did crappy last year. The average return for these seven stocks last year, Duncan, what was it?

What's your guess? - Last year? - Yeah, average return for these seven stocks in 2022. - Down 9%. - They were down 46% on average. Okay, so yeah, they're up 100% on average this year. They're down four, guess what? They round tripped. If you go 2022 and 2023, if you're down 50 and up 100, you break even.

- See, these names, I don't follow them. They're too big and respectable. Yeah, so I just don't pay attention to them. - Yeah, that place is too busy. No one goes there anymore. So Nvidia, Tesla, and Facebook and Amazon were all down 50% or worse. Every single one of these stocks underperformed the index last year.

So yeah, they're doing great this year, but last year, and the S&P was down 18% last year. Again, these stocks on average were down almost 50%. The S&P was down 18, so these stocks did crash. - Which was the worst out of those? - Nvidia, I think Nvidia and Tesla were down 60% or something.

So the other parts of the market picked up a slack. However, and I'm not gonna guarantee that's gonna happen again, but that tends to be what happens. In certain market environments, other stocks do well. So I think if you want to be invested in the stock market, you have to be comfortable with concentrated gains in the hands of a few stocks though.

So my favorite study on this was Hendrik Bessenbinder from Arizona State. I've mentioned this before, throw up the graphic. He did, he asked the question, do stocks outperform treasury bills? He has this really cool graphic that shows everything. He found 86% 86 stocks going back to 1926. And there's been like 26,000 stocks in total that have come and gone since then.

86 stocks accounted for half of all wealth creation in the United States stock market going back to 1926. All of that wealth creation came from 4% of the stocks. 60% of the stocks failed to beat T-bills over their lifetime. And the other close to 40% barely beat T-bills. So most stocks don't do all that well over the long run.

It's just a handful of stocks that account for most of the gains. Of course, this is like a hundred years of data. So plenty of stocks over this time had fantastic returns over shorter timeframes. You can take the thing off of there. But my biggest takeaway from his research is, it would be wonderful if you could just pick these stocks, but most people can't, right?

Apple was close to going out of business in the 1990s until Microsoft and Bill Gates gave them a lifeline and gave them a loan. And now Apple's the biggest company in the US stock market. It's kind of crazy to think about, but the biggest takeaway here is that diversification is what matters because you want to give yourself a wide enough net to cast so that you can actually own these winners.

So if you have a concentrated portfolio, yeah, I'm going to be Warren Buffett. Actually, you have a greater chance of underperforming. So there's this new paper, and you asked me about this last week. It's called the Underperformance of Concentrated Stock Positions from NYU. So throw up the chart here.

This is the distribution of returns over one month, one year, five years, 10 years, and 20 years for individual stocks. And the further these charts go to the left, the more losers there are. And what these researchers found is that over all 10-year periods, close to half of all stocks are losers.

And this works across sectors, too. So pick a dart, throw it at the newspaper, if they still print stocks in the newspapers, right? You can't really throw a dart at a computer screen. But pick any stock in any sector over 10 years, and half of them are going to be losers.

More than half. It's like 55%. And so fill up the next chart here. This shows the sectors. This just kind of shows. You can see the median return versus the average. So the average is really high. The median is really low. And then it shows the percentage of winners and losers.

That's because there's a handful of stocks that pretty much pick up the slack for all the losers. So the beautiful thing about the stock market is even though there's a lot of losers, the winners more than make up for them. So what are our lessons here? Outsized gains are normal.

This year, in a one-year period, it's an outlier. But over the long-term, this is the norm in the stock market. - When I was getting into the stock market years ago, reading, you know, I read Intelligent Investor and a bunch of, you know, Michael Lewis and all the books people typically recommend.

And yeah, my takeaway early on was like, you know, if you just pick some stocks and hold onto them long enough, you know, they'll do well. And yeah, like now I'm seeing that was not the right takeaway. - It is, yeah. But this isn't to say that some of these, again, this is like hundreds of years of data.

- Right. - So it's not to say that in between small caps-- - When Amazon proves this wrong, stuff like that, right? Where it's like it crashed down to how low and then came all the way roaring back. - Yeah, and like small caps and mid caps have still done well in this time period.

It's just that some of those stocks that came up to the top were smaller in mid caps before, right? He also found the relative underperformance over rolling 10-year periods increases when considering stocks whose performance is running from the top 20% over the previous five years. So like the best performers, eventually that momentum peters out.

So some of these stocks in the Magnificent Seven are going to underperform in the years ahead. I don't know which ones. I don't know when, I don't know why, but it's going to happen. That's pretty much the way the stock market works. And other stocks to pick up the slack.

In 2000, some of the biggest stocks in the market were GE, Citigroup, AIG, right? All have fallen, some in magnificent fashion. And guess what? Other stocks came up and picked up the slack. NVIDIA, and Microsoft is the only one that still remains from 2000 as one of the biggest stocks.

- Well, the question I asked you last week when I was showing you my like 20 stocks in an IRA that are all down significantly over like two years, not like over a couple of months, is does this reflect that the exchanges are too lenient with listing requirement? Like are too many bad companies able to list?

Is that part of it here? Or does that not have anything to do with it? - No, I think it's always like this, unfortunately. - Okay. - And that's not to say some of your stocks won't come back. - Right. - Right? It's just that the history of the stock market shows that there's power laws, and the gains are typically concentrated in the hands of a few stocks, and that's why you wanna cast a wide net.

And yeah, you can pick some stocks, but diversifying is probably gonna be a better bet overall for the majority of your funds, because you wanna make sure you have the ability to get those winners, 'cause it's hard to pick 'em. - Right. - That's where I come down from all this.

It's hard to pick winners, and diversification is the way to ensure that you're gonna own the winners, and then those winners are gonna more than cancel out the losers. - Also, before we move on, John's out today, and so I forgot to set our windows here, so I'm gonna flip us around, so that people in the chat can-- - Oh, and the guy on the left.

- Can-- - The guy on the right, I don't know. - Peace. - One of those. Oh, are people complaining? - Not complaining, just-- - That we're on the wrong side? - You know, yeah. - Okay. - Now all is right in the world. - All right, let's do the next one.

- All right, up next we have a question from Anthony. Hi guys, love the show, and appreciate all the information you put out. My fiance and I received a wedding gift of $50,000 from her father, and I was wondering what you would do-- - Not to brag. - Yeah, not to brag.

And I was wondering what you would do with that money in these unsure times in the market. We just bought a house in April, and got married in July. We had enough saved to cover the wedding costs. We'll likely need some of this money in the future for the house, but we would like to put some of the money to work in the meantime.

I make around $100,000, and my fiance makes $70,000, but we both have student loans, and a pretty high mortgage to pay. Thanks in advance for your help. - All right, congrats on the new house, the wedding, marriage. - Nice wedding gift. - Nice father-in-law you've got there. The personal finance guy in me says, "Well, you fund your emergency savings, "you max out your Roth IRA, "and you pay off some student loans.

"You can do some of that stuff if you want." That amount of money certainly gives you a nice springboard to getting yourself your finances right. It probably makes some sense to set aside some money for a house, too. When you move to a new place, there's a lot of stuff you end up buying, especially if you haven't been in a house before.

Furniture, decorations, maybe new TV, tools, landscaping, all that stuff that you have to-- - A mudroom. - Pick up. Yeah, that's the boring stuff, though. Don't get me wrong, the boring stuff is important if you wanna get ahead, but you should also have some fun with it. This is a windfall, right?

Probably not happening again. You're newlyweds. I don't know, probably no kids in the house yet. Set aside some money to have fun and go on a vacation. My wife and I made a point to do that, 'cause we knew once we had responsibilities and kids were here, we weren't gonna be able to travel as much.

So we traveled as much as we could after we got married, because we knew that part of our life was gonna be much harder to do going forward. But I think this is also a good time to set up your bonus asset allocation. This is the way I think about this.

So I got my first bonus for my first job in year two. I think it was $300 for my bonus. My boss was a little stingy. But anytime I got money outside of my regular salary, I set up some sort of asset allocation where a certain percentage would go to short-term savings, a certain percentage would go to my travel fund, a certain percentage would go to retirement accounts, and then a certain percentage would go to just-- - Sports gambling.

- Frivolous, well, frivolous whatever, spending. Buy something for your house, go on a trip, go out to a nice dinner, reward yourself a little bit. I think that if you're just gonna save it all, that's kind of boring. So I think it's just a good way to keep yourself honest, not throw all the money away.

Have some sort of rule of thumb anytime you get money in like this. And obviously, it might not happen very often, but if you do get some sort of windfall for whatever reason, then you know what to do with it, just like you know how to invest your money with an asset allocation.

That's the way I think about it. - Makes sense. - I'm not gonna give you anything to invest in, but I would worry more about how you're allocating it. - I think they want a ticker. Can you give a ticker? - Sorry, no tickers. - What's the world market fund?

Just kidding. - Someone says YOLO the 50K into 500K. We all know you more likely YOLO the 50K into 5K, but. - Yeah. - All right, let's do another one. - All right, up next we have a question from Kurt. So this is what you would do, really, with that money, right?

You'd put it into your spreadsheet to keep track of it? - Yes. - I think you've mentioned that you track your portfolio investments and other finances in a big spreadsheet. Can you go into detail on how you have that set up? - We've had a few people ask if I can just share my spreadsheet with them.

And I keep telling people, like, you're gonna be severely disappointed 'cause it's so, so simple. I'm a, let's be fair, I'm a simple guy, right? It probably wouldn't be all that helpful to most people. So my finance tracking system is just this. I use an Excel spreadsheet. I have for years.

It looks like this. So net income for the month after taxes and 401(k) contributions and all that stuff. And then I list my fixed expenses. So it's mortgage, insurance, car payments, phone, utility, cable. I still have cable. Thank you very much. - When your cable one goes down over time, right?

Because you keep negotiating them down. - Yeah, every 12 months. And then savings. I treat savings like it's a fixed bill, right? Savings are non-negotiable. I set IRA, IRA, 401(k), all that stuff. Then all the variable expenses go on the credit cards. Food, clothing, all the stuff, crap we have to buy for our kids, subscriptions, et cetera.

All of it goes on a credit card. After the variable expenses, like that's basically like my leftover pile, right? So you take the fixed expenses away from that income. Variable is what's left over. Start with the net income, subtract the fixed, subtract the variable. That's it. Hopefully it basically zeroes out at the end of the month 'cause I should be spending it all.

That's the Bend budget. See how simple that is? It's not like, it's not, I'm not changing the world here. My net worth tracker has probably been simpler. I have an Excel spreadsheet. I've used this for years too. So I have all my accounts listed. 401(k)s, IRAs, 529 plans, brokerage accounts, savings account.

And I have the funds and the holdings listed under each of those accounts. And once a year, I update the market values. That's it. - See, this is why people tune in for the spreadsheet content. - You can build it yourself. So I even, just for fun, I added a real estate column a couple of years ago 'cause I've got some equity there now.

Some equity because housing prices have gone up. Very simple, old school, doesn't take me very, my finances take me 15 minutes a month probably. Sometimes more, sometimes less. - That's what I was about to ask, how much time this takes you. - That's the whole point. I have most of this stuff automated so I don't have to spend a ton of time doing it.

That's how I like it. So other people would rather micromanage. - I don't know how to use Excel really so this would take me a while to set up probably. - There's no formulas here, Duncan. It's very easy. I'm literally in your numbers. - I see. - You can do it.

I have faith in you. - I like my system better where I just see how much is left in the bank account every once in a while. - That's probably what most people do though. That's the problem with like the, I'll save whatever's left over. Sounds great in theory until, there's an old Jerry Seinfeld bit where he says, "It's funny how every single day, "the newspaper is completely full "where the amount of news "matches the pages of the newspaper." That's how your spending works too.

- Right. - Right? You're going to spend whatever's there so if you save first, spend whatever's left, invert. - That's true. - Right? - That's, yeah, I like that. - All right, next question. - All right, up next we have a question from Tony. I'm retired from 20 years on active duty with the Air Force and 10 years as a federal civil servant.

This is just in time, we just had Veterans Day so thank you for your service. - Yeah, thank you for your service, Tony. - I have a pension, social security, VA benefits, and rental income of about $130,000 annually. I'm single, age 64, and have two adult sons. I have $765,000 in investments.

Of that, 500,000 is in Roth accounts and 265,000 is in tax-deferred accounts. I have nothing in a taxable account. I live below my means. The first part of this is, in terms of my bond allocation, should I simply own the G fund in the federal government's thrift savings plan and forego other types of bond funds and individual bonds altogether?

Do the benefits of the G fund mean I should just stick with that fund and eschew the others? Part two, I'm buying a new Sprinter camper van in a few months. It's got all the bells and whistles, all-wheel drive, lithium batteries, solar power, et cetera. I've already paid for the chassis and down payment so I've paid about $88,000 in cash.

I need to come up with about $190,000 more once I pick up the van. Should I pay cash for it out of my Roth IRA or should I finance it? - Hey, as a finance guy-- - This is a good one. This is a fun one, I like this.

- This is a good one. What's a chassis? - It's like the skeleton of the vehicle. - Okay, so he's-- - Basically, yeah. - Okay, start. Okay, so this, to me, this is an investment question, this is a financial planning question, this is a personal finance question, so let's bring in a financial advisor to help sort through it all.

Riddleswell's own Alex Palumbo. - Hey, Alex. - Hey, guys, thanks for having me. Ben, great to see ya. - Alex, most people on podcasts would say, "There's a lot to unpack here," but I'm not gonna do that 'cause I'm not cliche. But first of all, where I wanted to start here is he said he's got all of his savings, you know, he gets the pension income and rental income, but his savings are all in tax-deferred accounts.

If a client comes to you with all tax-deferred money, does that technically make your life easier from a planning perspective? Does it make it harder 'cause it's less flexible? I'm just curious that there's no taxable money whatsoever. Is that a good thing, a bad thing, does it not matter?

What do you think? - Yeah, good question, Tony. First of all, thank you for your service. Duncan mentioned Veterans Day. Thanks, Tony. To answer your exact question, when clients come with qualified accounts, I like it because they're more tax-efficient. It also gives us the opportunity to utilize different investment strategies because we can trade as much as we want, maximize trading, and there's no tax consequences as opposed to non-qualified accounts where we'd be generating short-term capital gains or losses.

- That's true, you could change the portfolio allocation if you wanted to without triggering any taxable gains. Good point. - Yeah, you can do anything like that. In terms of Tony's exact question, did you wanna hop into the G Fund question? - Well, let's talk about the G Fund because you asked me about this yesterday, and you said, "What is a G Fund?" And I have some experience with this because-- - Oh, way to throw me under the bus.

You know, actually, Ben, I'm a very experienced G Fund advisor. - Well, I'm guessing a lot of people don't know what this is 'cause my brother works for the federal government, and he asked me about this a while ago, and there's five funds in this, and I've been pounding the table on this for a number of years that the Thrift Savings Plan or the TSP, which is all federal government retirement plan, that should be open to everyone because, I don't know, 40 or 50% of people have access to a workplace retirement plan.

This is one administered by the government. It has all five index funds. Fees are really low, but the G Fund is really something else because it, Duncan, throw up the fund comparison. So they have two bond funds in this thing. So one is the G Fund, one is the F Fund.

The F Fund is like the Barclays Ag, like a total bond market. The G Fund is a treasury fund, but the way it works is it acts like a short-term treasury in terms of volatility, but the yield it pays is more like long-term treasury. So it pays a higher yield, but your principal is protected.

So you can see over like three years, this thing's outperformed by 7% per year over the aggregate because it doesn't have interest rate risk. It acts like a short-term bond fund, but you're earning a higher yield. And if this was another fund company that was administering this fund, you'd think it's like some sort of Ponzi scheme, but it's the federal government who's essentially like guaranteeing that it's very, it's like it takes an average of all the treasury yields.

It's very, so what I'm trying to say is like, this thing is a really good deal and you could diversify by having the other one, but it's in terms of, you don't have to worry about like rates rising for this thing to hurt you. It's through the rising rate environment, it's probably one of the best performing bond funds that there is.

- US government, Ponzi scheme, what's the difference, Ben? You know? - No one ever says that, right? - Yeah, the G Fund is good to your point because the value of your account will never fluctuate. You simply get the stated interest of long-term fixed income instruments. - Yeah, if you look at like the description of this, it sounds too good to be true.

- Well, the downside is that, there's not much downside, but if I had to play devil's advocate, Benjamin, it would be that when the yield curve is inverted, you'd be getting the longer term rates, which are lower than the shorter term rates, but that's really nitpicking, to be honest.

The pros are it's super low cost and it's also taxed at ordinary income rates because it's government fixed income. However, our boy, Tony, only has qualified accounts, so it seems like an appropriate asset class or fund to own within this type of account. So overall, Tony, if you're comfortable with it, I think you get the thumbs up from us.

- Yeah, it's a pretty, it's pretty good. So let's say the Sprinter camper van. So I'm guessing the Sprinter one is like a shorter camper, smaller one, since he's by himself. - It's like one of those oversized vans. It's pretty large. It's kind of like what some shipping companies use.

- So Alex, I'm sure you've talked to many clients about this whether it's buying a new car or buying a second home or something like this. It's the kind of decision where I can either let my investments ride and borrow some money, or I can take it from my portfolio and pay in cash.

Like the pro, there's obviously pros and cons of each, but how do you help people make this type of decision? 'Cause I'm guessing where rates are right now being so high, it's kind of a push in terms of a hurdle rate. - Yeah, this is a pretty common overall decision tree and point when I'm working with my clients for sure.

I say that it always comes down to two things, the interest rate and investor behavior. If the interest rate that you're getting quoted in terms of financing, the camper, the house, whatever it is, is higher than your expected rate of return on your investments, then it becomes a no-brainer, right?

You wanna just pay that off. You don't wanna finance the camper. If you're getting quoted a 12% interest rate and you're gonna invest the difference at a 6% rate, that doesn't make too much sense. And then it comes down to investor behavior. So for example, let's say Tony is getting like a 6% interest rate quoted if he finances the camper and he has all this income coming in that he told us about.

You could probably theoretically say that your overall portfolio should get like a seven or 8% overall rate of return. So that's pretty positive rate of return arbitrage. However, the investor behavior, right? Like you were just talking about it and actually Tesla was down 65% last year. Nvidia down 50%, Amazon down 50%.

And I was taking a look at this for certain clients. This is gonna blow your mind. Duncan, keep that hat on 'cause your mind's about to be blown. Over the past two and a half years before November, this month. So from May 1st, '21 to October 31st, '23, the S&P was flat and every single asset class was down, down bad tremendously over that time period.

That's 630 trading days. - Right, so that's the kind of-- - Over the past, hold on, Ben. Hold on, this is gonna be good, I promise. Over the past 13 trading days, just this month of November, every single asset class that we invest for clients has drastically outperformed in 13 days versus the past 630 trading days.

Most notably, international stocks with a 35% discrepancy in performance and small cap stocks with an over 30% discrepancy in performance. - It is crazy. - Yeah, what you're trying to say is returns are lumpy, but if you're going through a period like that and you look back and you go, oh shoot, I could have just taken this money out before this crappy period of returns happened and now you're kicking yourself, that's like the regret minimization piece you have to think through is will you feel that or will you act on that if you, 'cause you don't know what the right decision is gonna be or what the markets are gonna do so you have to kind of be happy with it one way or another and understand why you're doing it.

- Or even worse, you make this decision to finance, you invest, you're like, oh, I can easily beat that 6% benchmark over the next like 30 years, 20 years, 10 years, whatever it is. Then you go through a period like the past two and a half years and you're like, screw it, I'm just gonna pay it off.

Now the market's up 8% over the past 10 days and you just completely wrecked your entire portfolio. And it's like one decision over three years that can completely destroy, not destroy your finances, but materially impact your lifetime returns. - Right, Duncan, I can see you driving one of those Mercedes Sprinter ones.

Is that fair? Like I can see you tooling around Europe in one of those things. - Powered by vegetable oil. - Yeah, I mean, I'd be down. That sounds interesting, sounds fun. - By the way-- - Be able to go wherever you want, anytime, sounds fun. - Sorry, by the way, to answer his question about taking distributions from his Roth IRA, that might be a consideration, right?

Because that Roth money is that sweet, sweet, sweet Roth money, as Bill Sweet mentioned, like that's one reason to maybe lean more towards financing it. But at the end of the day, Tony, big tone, you accumulated half a mil inside of that Roth IRA and what better to spend it, like what, 30% of it, 40% of it, once you're retired, on the Sprinter camper of your dreams?

I would say, generally speaking, if the interest rate is like 6% to 7%, it's close. If it's 5% or lower, you can finance. If it's a higher interest rate, then I would just pay it off and use that Roth money. - It could be like 8% or 9% these days.

If it's that high, paying it off. And you get your living situation taken care of. - I think it has to be over 8%, 9% to finance a Sprinter camper, right? - Lastly, if Tony is living below his means, how come he doesn't have any non-qualified assets built up, Tony, huh, huh?

- I think it's great that he's got it all tax-deferred. This guy knows what he's doing. - But he's saying he's living below his means, so if he's bringing in 130K, he's spending 80K, where's that extra 50K going? - The government's Ponzi scheme. All right, Duncan, next question. (laughing) - Okay, last but not least, we have a question from Daniel.

Ben, do you feel like getting an MBA helped your career? Did you pay for it yourself or did an employer help? I'm mulling over starting an online MBA from a public university, but I've been hearing that it's not worth the time or money. I was hoping to get your perspective, thanks.

- Getting an MBA did help my career, but not the way I thought it would. - I gotta be honest, you need to talk this up more. I actually didn't even remember you had an MBA. - Exactly. - This should be on your signature and stuff. - I'm not gonna be a LinkedIn guy that puts Ben Carlson, MBA, after it, sorry.

- 100% it should be what you do. - No way. My employer had a reimbursement plan up to a certain level, and I went to a local university, so it wasn't that expensive. And I think they probably covered 90% of the cost. And I was at a career crossroads where I knew I wanted to do something different.

And actually, I started my blog, A Wealth of Common Sense, while in my MBA program in one of the classes. So if I wouldn't have done that, I don't know if I would've started my blog and I wouldn't be here today. So it helped me in that way. But I don't know, I didn't learn much in my master's program that I couldn't have learned by reading books.

I think it's a good decision if you can get into a really good school, if you're stuck in your career and just want to figure something new out. It's also really helpful to build your network if you don't have a network in terms of helping for upward job mobility.

So those are the reasons I think you should do it. I don't think you should do it if you think it's gonna mean like a springboard to your career automatically. I think it guarantees you all that much. Alex? - Yeah, agreed. I think you phrased it nicely. It might add value to your overall situation, but most likely in ways that you didn't see it, right?

Like why are you getting the MBA in the first place? To get a job or become an entrepreneur that you otherwise couldn't get without the MBA. In 99% of circumstances, real life experience trumps education in the classroom. - Yes, I think if you had to, like I know people stop and do a full-time program.

I would only do that if it's like one of the top 10 universities or something. If not, I would keep working. - Online is a little tricky too, just because so much of the point of a degree like that is the connections you're making and people you're meeting and that could end up being great relationships for you to have down the road.

I don't know that you get that as much with an online degree. - And also, would you go to the brightest and best, AKA the most expensive? Now look what you've done, Ben. You're two years out of the workforce. You have zero more experience. You're 150K in debt, and you didn't make any money over those two years.

Most likely, the reason that you, whoever asked this question or just someone making this debate, that you can't get the job you want is not because of whether you have an MBA or not. That's just the fact, right? No one's gonna interview you, really like you, think you're capable, and then say, "Well, you actually don't have an MBA." If you think the MBA will get you that interview, then sure, go for it, but that's a heavy price to pay, both financially and period of your life, just to hope to get a better interview while gaining zero more life experience.

- I would wanna know what the career prospects are and if there's jobs you're looking for that require an MBA. Like if there's a job you really want that requires it, then you think about it, I think. But if it's not really required, I don't think it, I wouldn't put so much weight on it.

- I'm banking on one day getting an honorary MBA, you know? That's what I want. - Think of what happened here. I was hired on a three-month internship as a gadget guy, eight years ago. They didn't hire me 'cause I had an MBA. In fact, I'd imagine we interviewed much more qualified and more well-polished candidates, but at the end of the day, people just want to work with people that they like.

That's why we put Ben in Ann Arbor, Michigan and me all the way in New Jersey, so we're not even close to one another. - Alex basically worked his way up from the mailroom. - It's true. - I mean, I'm not in Ann Arbor, but close. - An intern to director of glow-ups.

Wow, oh my God, that's not even why I made this my name. There you go, Duncan. See, full circle, baby. - Yeah, that's a reference to our Fantasy Football League. Alex's first place. - First place at a 16, nine-game winning streak, not to brag, Ben. - People want to hear less about your fantasy football team than they want to hear about Duncan's stock picks.

I'm just putting that out there. - There's a lot of appetite for my stock picks. - Congratulations on the 100th episode, guys. Very impressive, everything you've done. You're giving the YouTube base the knowledge that they need. And thank you for having me on this very special episode. - Thanks for coming on, Alex.

Tune in tomorrow, brand new episode of The Compound and Friends. Do the usual stuff, like, rate, review. Leave us a comment. Thanks for everyone on the live podcast. As always, leave us a comment or a question on YouTube or email us. Askthecompoundshow@gmail.com. No show next week for Thanksgiving. We're off, we'll see you in two weeks.

- Happy Thanksgiving. - See you, everyone. (upbeat music) (upbeat music) (upbeat music) (upbeat music) (upbeat music) (upbeat music) (upbeat music) (upbeat music) you