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You heard about it here. Again, that's longangle.com. Hello, and welcome to another episode of All The Hacks, a show about upgrading your life, money, and travel. I'm Chris Hutchins, and I'm excited to have you here. Now, it probably won't surprise you to learn that one of the reasons I started a podcast is that I really enjoy listening to podcasts myself.

And while I follow a lot of them, there's only a few I listen to every week. One of those is a podcast called Animal Spirits, which as they say, is a show about markets, life, and investing. And today, I'm chatting with one of the hosts of that show, Ben Carlson.

Ben is a financial advisor and the Director of Institutional Asset Management at Ritholtz Wealth Management. He's also the author of four books about saving, investing, and money, the first of which shares a name with the blog he's been writing since 2013, A Wealth of Common Sense. Ben's one of my go-tos for questions about investing and personal finance, and I'm excited to have him here to chat about markets in 2022, inflation, interest rates, recessions, alternative assets, stock investing, and his favorite ways to hack and simplify your finances and investments.

That is a lot to cover, so let's jump in. Chris Hutchins works at Wealthfront. All opinions expressed by Chris and his guests are solely their own opinions and do not reflect the opinion of Wealthfront. This podcast is for informational purposes only and should not be relied upon for investment decisions.

Ben, thanks for being here. Hey, Chris. Nice to be here. Yeah. So I'm just going to kick off. I listened to your podcast this morning and you said, "I'm done picking stocks." (laughs) What changed? (laughs) My returns, maybe? I don't know. (laughs) I've had a love-hate relationship with picking stocks.

For some reason, I've always been a simple index fund, target fund investor, for the most part. My very first purchase in the stock market was a target date fund. My dad helped me set up an IRA right out of college. And I've just dabbled here and there. And I go on and off.

I go on these streaks. Then in 2020, when things were just getting crushed, I thought, "Why not wade back into it?" It was really fun. I had a Robinhood account. I bought a bunch of stocks. Everyone's stocks were going up that year. And I'm buying the things most people are, right?

I have a little crypto. I have some growth stocks. And that was really fun. And things are going high. And then I have this other part of my portfolio that's just working on automatic and it's a boring and all this other stuff. So it was a way to scratch an itch.

And then 2021 and 2022 happened. And all these growth stocks that I bought because it was fun are getting killed. And it's just a good reminder of just how hard it is. Because I talked on our show today, I had this thesis. And I've been thinking for a while.

I think I said in 2017, "Eventually, millennials are going to grow up like everyone else. And they're going to buy houses. And we're not building enough houses right now. So I think housing is going to be strong." And I didn't think it was going to be nearly as strong as it is.

But I've had this thesis. And I see last year, Zillow is down 50%. And I think, "Geez, this is a company that was just on SNL. It's really popular. It's the biggest brand name in the United States as far as housing goes. Everyone likes to play around on Zillow.

Why don't I pick up some shares on the cheap?" And then from those 50% down levels, it's fallen another 50%. And I guess maybe it's a good reminder to me that just how hard it is to pick stocks. And that's why I'm just like, "You know what? I know some people find a lot of joy in it and entertainment.

And some people are very good at it." For me, there's just so many first, second, third, fourth level thinking that you have to do to get it right. So even if you're right on the macro stuff, you could be completely wrong about a company or a company can just not fulfill its promises and expectations.

And it's just easier for me to do a lot of other stuff than pick stocks. I have had similar bets. The bet I regretted for all of 2021 was... Or maybe it was even 2020 was "Gosh, I didn't buy Peloton. I love my Peloton. I should have bought it.

I watch it rise and rise and rise." And then it was just down and down and down. So fortunately, I never bought it and I didn't lose as much as I probably could have. But every time it was down, I thought it was another time to buy and it just kept going down.

And for every one of those that you kick yourself for, "Oh, this was so obvious. Why didn't I see it?" There's 10 other examples of ones that you probably would have bought and just did terrible. And I think the market especially has just shown these last 4 or 5 years how difficult it really is to beat.

And maybe some people don't do it with their eye on "Well, I'm going to outperform the market. I'm going to have this alpha." And that wasn't my thing either. I have this, what I call a fun portfolio. It's 5% or 10% of my investable assets. And I do it just to follow some stocks and trends that I think are interesting.

But even that, I think there's enough ways to scratch an itch that you want to have an entertaining portion of your portfolio. There's other ways to do it these days where for me, it doesn't involve stock picking. And I already have these other investments in the stock market using low-cost index funds that can get the job done anyway.

So what are those things? If you're not going to scratch the itch with stocks, I agree. Most of my assets are in long-term diverse portfolio of index funds and it's boring. The best I get is a push notification that's like, "Oh, we did some tax loss harvesting." I'm like, "Oh, cool." But that's kind of it.

How do you scratch the itch now? So I'm probably going to leave my Robinhood portfolio. So I own some crypto. I've dabbled in art from a place like Masterworks. And Fundrise allows you to invest in real estate, direct real estate on a private basis. I've started getting into startups in the last 12 months, which sounds like everyone is doing.

I don't think any of these things I'm getting into are unique by any means. So I have some of this other stuff that I'm doing. And I get to talk about it all the time. You mentioned my podcast. I talk about this stuff on a weekly basis. And for me, that's almost as fun as investing in it.

It's just talking about it and so I just don't think I need it anymore. And I think there's a lot of time and effort you have to put into this stuff if you're really going to be good at it. Because it seemed like in 2020, you could just buy a stock that you knew, a company that you knew, or a brand that you liked, and that was easy enough.

But you have people out there who are really putting in the work and they have a hard time beating the stock market. They have these PhDs and quants and people who went to Ivy League schools that just are really, really smart. And they have a hard time outperforming the market.

So I think for me, I'll probably eat these words someday and come back to it, I'm sure. But for now, I have enough other stuff going on in my life. It's almost like I hear people talk about fantasy football. And they're always like, "Why do I do this? All it is is pain, and time consuming, and I never get anything out of it.

And if I win, who cares? And if I lose, I just feel like a jerk and it's not that fun." So to me, it's kind of like that, where it's like the risk/reward is not tilted in my favor. And it's like, "Why even do it then?" It's funny. With fantasy football, it was one of those things where I would get so into it.

And the prize at the end of the day for our league was like $500. And I was like, "Man, the hours I've spent..." And finally, I think I do miss that fun aspect of the banter around it. And I wish I could bring that back. But for me, it was just hard to play it casually.

So when I started a company, I was like, "I'm out. I don't have the time for this. If I do it, it's going to occupy so much headspace." But one of the things you said that's interesting is about some of these alternatives. A thing that I take away from all of this access is that a lot of these new alternatives, whether it's wine or art or real estate, they're still like long-term portfolio-driven bets, whereas stocks often feel like a short-term single bet.

And so you get this marriage of the excitement, but something a little more similar to a long-term strategy, which I think has made me more interested in that. So instead of picking stocks in the last 2 years, I've gone in, I've picked some art or I've picked some startups or stuff like that, just with a small piece of the portfolio, but still making portfolio bets, which I think, in my opinion, is a little bit less risk and more diversified, but of things that are more exciting than just the entire market.

And I think at this stage of my life where I've been doing this for a while now, I don't need to see those marks every day to make me fulfilled and see the scoreboard and I'm winning or losing. Sports gambling online is legal now in Michigan. So I've been doing that for the last year, just very little amounts and it's just entertaining.

And at least that's the kind of thing where you either win or lose after the outcome. You don't have to wait and see. Like in the stock market, if you pick up that stock, you can get killed every day. That scoreboard is just staring you in the face every day.

So I like having this stuff that maybe is not quite as liquid, but you also don't see the fluctuations every day. And that's why owning a house is often the best financial asset for so many people, even though if you compare the returns of the stock market over time, maybe it's not the greatest investment in the world, but because it's like a forced savings vehicle and you're forced to hold it, and every day someone's not coming to you and saying, "This is the value now." No, this is the value now.

It makes you a longer term investor. And that stuff has been way more helpful to me, just having a long-term mindset. And I think looking at individual stocks every day and how they move by 5% or 10% is not really helpful. I think Andy Ratcliffe, the founder of Wealthfront, came on the podcast and said, "Look, if having a small amount of money in something exciting is what lets you leave a huge amount of money or the vast majority of your portfolio in something tried and true, like a diverse passive set of index funds, then great.

It's the price you're going to pay for the 95% of your portfolio being in the thing you really want." It's probably better. But at the end of the day, it's unlikely that you will consistently outperform because people that do this for a living are not consistently outperforming. And we tell this to our clients, too.

It's good to have that behavioral resale for that part to say, "I'm actually doing something. I feel like my hands are on the steering wheel and this other stuff that's more automated and rules-based and boring and taken care of. This allows me to do something." And I also think it's a good comparison because you can say, "This really is hard." But doing it on a consistent basis, I can see that just having a smaller piece of my portfolio, I'm not going to wreck everything.

So I think there's something to that. A question I have. So stocks used to be the fun thing, but they're actually a component of most people's long-term passive portfolio as well. A lot of these new alternatives, I'm curious, you've thought about this both from an institutional standpoint and with clients at the firm, how do you think about some of these alternatives fitting into that longer-term portfolio as well?

Whether that's crypto or real estate or art or wine or things like that, they can be fun. But are they also a part of a long-term diverse strategy? Here's how I've dealt with it personally. I want the rest of my financial house in order before I ever even talk about alternatives.

So I'm maxing out my 401k. I have a SEP IRA that I'm putting money into. My kid's 529. I have that emergency fund, all that stuff. So all of that boring stuff is taken care of. And then after that's taken care of, then I move on to alternatives. Now, obviously, maybe not everyone gets to that point where they're maxing everything out depending on their means or whatever, their income.

But I think that's the idea is make sure you have everything else shored up first and then figure out how this stuff can fit within your portfolio. I know a lot of these platforms, say we're democratizing investing, we're making it easy and they have low minimums and all this stuff.

And it's great to have access to this stuff. But I think that you have to have these other building blocks in place before you ever even consider some of this stuff, especially if you really don't know what you're doing and don't understand how some of this stuff works. And would you put things like crypto in that bucket as well?

Probably. I know a lot of young people probably think it would be nuts to say that because they want to put a lot of their assets in that. But I do think it makes sense to have that stuff, especially since it's so speculative and moves around so much and so volatile.

Having some of these things in your life that aren't going to move as much and just be like the building blocks that you don't have to worry as much about and then have fun. Again, for me, it's 5% or 10% of the portfolio for my fun brokerage account or whatever.

But for other people, that may be a different number. So I think you have to figure out what you're comfortable with. But I think you have to have some sort of level or ceiling on these things so it doesn't totally get out of control. And either when it goes down, you're going to be in the pits of despair and try to freak out and "What am I going to do?" Or if it gets too high, then you go, "Well, now what do I do?

It's 50% of my portfolio." If you don't have some sort of line in the sand or reasoning ahead of time, it's going to be hard to figure out what to do with it when it gets to either too low or too high. That's where I think software that can take care of that is helpful.

Obviously, I work at Wealthfront. I love that if something goes too high, I don't have to think about it because man, I was in that situation with crypto. It's higher percentage of my portfolio than I want. And now I'm like, "But I don't want to sell it." Even though I know I should.

It's like coming to that conviction is really hard. Any advice to people who have ideas of what they want to do, but struggle to actually put them into place? Unfortunately, that's why you have to have some of these things in advance. I use this example in my book, they actually did a study of prison inmates.

And they found, surprisingly, even though they don't have as much access to food, and they get all this time probably to work out if they want to, like from the movies and TV shows that you think, "Oh, everyone at prison is just getting ripped and working out all the time." They actually found these 100 inmates they studied, 90% of them actually gained weight being in prison.

And they tried to figure out, "Well, why is this?" And what they found was they were those big jumpsuits, and there's no belt or anything around the waist, and they had nothing to restrict them and let them know or give them some sort of like, "What's happening to my body?" They had no idea.

So and some of these people were surprised, "I can't believe I gained 15 pounds in prison. I thought this is going to be a chance for me to work out and lose weight." And it's because they had no restrictor there to let them know that things were getting out of control.

So I think you have to go into it with these investments thinking... So let's say you bought Bitcoin back in the day and you said, "Okay, I have two options. I can let this be a buy and hold forever. And whatever percentage of my portfolio it goes to, that's what it's going to be.

I'm just going to let it run and it's going to be its own little bucket." Or you could say, "All right, I'm going to do the portfolio management thing here. And every time it gets to 10% of my portfolio, I'm trimming. And every time it gets to five, I'm adding." And so I think you have to go into it with that.

Because if you try to do it after the fact, if it's grown to 15% or 20% or 30%, at that point you're going, "I don't know what to do. Because what if it keeps growing and getting bigger? And what if I sell now and I feel like an idiot?" Because the whole process of investing is this premise of regret minimization.

What would I regret more? It goes to 50% but I sold early or it falls and it goes back to 5% of my portfolio and I never sold anything. Which one would be more painful to you? And some people... It's personality driven. But for some people, it really... Who knows?

It depends what affects you more. So for you, what would it be? Would you be more worried if all your crypto crashed 90% and now it's so small and you go, "Oh man, I never rebalanced once." Or if it kept going up and you sold a little and you actually locked in some gains?

For me, it's funny. Living in Silicon Valley, I think so many people are participating in this new asset class that if everyone... For me, if everyone else sees it go to the moon, as we say, and I was just on the sidelines, I would feel bad. So for me, I put a small amount of my portfolio in this.

Yes, it's grown a lot. I'm holding it. I keep saying forever, but I'm in the buy and hold camp for what I did. And yes, it's a higher percentage of the portfolio. But when it went in, it was just almost an insignificant amount. To be honest, I'm with you.

I bought a very small amount in 2017 because like you, I wasn't a true believer in crypto. But I said, "I can see what's coming and I've studied human nature and behavior. And if this thing gets so big, and all these tech people are saying this stuff, and I miss out, I'm going to kick myself." So I put some money in.

And I said at the time, "I'm buying and holding this forever." Whatever forever could change, I guess, someday. But I'm basically... I'm not going to trim it. I'm not going to... I'm going to let this thing go. And it's going to be its own entity. But then the rest of my portfolio, I have these bans around allocations and weights and rebalancing and all this stuff.

But I think you have to have that discussion with yourself ahead of time. Because if you're doing it after the fact, your judgment is gonna be so clouded by whatever the price is. Yeah. I think that's the... My big takeaway is whatever your plan is, just come up with an idea of what you want to do when you put it in place.

If you put a portfolio in and say, "I want to rebalance this," say, "Here's what I'm going to do it." Because it's way harder to make those decisions after the fact. I always tell people like even a bad plan is better than no plan at all. Because at least a bad plan has some sort of guidelines and gives you some sense of what to do.

And it's like winging it, which I know a lot of people are when they first get started. And that makes it 10 times scarier when something goes down. Because if you don't have a plan for planning in advance that my stocks or my crypto or whatever is going to get killed, if you're just hoping it's not going to, eventually, you're going to be wrong.

It's not going to work out for you. I know you've spent a lot of time on the institutional side. And institutional funds, especially things like endowments, they're the golden example of how to invest. Are there lessons that you've taken away from how institutions invest that would be great for people to adopt or maybe some that shouldn't even apply that would be helpful to hear?

It's funny. I like to look at the difference between institutions and individuals from the lens of mistakes. And so most individual mistakes come from being naive and not understanding enough before they invest in something, again, and not having a plan. You can't say that about institutional investors like endowments and foundations I've worked with.

They have boards and committees, and they have everything documented. And they pretty much have all that stuff in place. They have these plans. Their problem is that they're all so smart that they get overconfident in their abilities. And they think that they're just they're going to outthink and outsmart everyone.

And so it's like different ends of the mistake curve or whatever, where the really smart people who have all this money, just assume that because they're so intelligent, they have so many resources that outperforming should be easy for them. And then the other end, you have the naive individuals who haven't thought through this stuff and don't know how hard it is yet because they haven't experienced it or paid the market gods their tuition.

They don't understand that, "Oh, yeah, wait, this is really hard to do." So that's the way that I look at it. As far as learning for institutions, I always tell people, it's just a few more zeros that they have. I've worked with a billion dollar foundations before. And I don't think that you can really throw out the basic building blocks of having some sort of investment policy in place and having an asset allocation.

And I know this stuff is so boring to most people. But that's the thing where the difference between managing a billion dollars for an endowment and a million dollars for a family is just a few zeros, as far as investment policy goes. They still have to pay attention to the risk profile and time horizon and understand an asset allocation that suits their needs and their ability to take risk and all this stuff.

So it seems like there should be this one path for these institutions because they're so big and have so many resources, and then something else for the little guy. But I don't think it has to be that way. And that's honestly, one of the reasons that I was banging my head against the wall when I worked in that field.

Because I wanted those big institutions to simplify the way that they invested. And a lot of them wanted to make it way more complex than I thought it had to be. So I want to ask a question on asset allocation. If someone's listening and that's an unfamiliar term, and they're sitting here like, "Whoa, what's going on?

I bought a few stocks. I haven't even thought about that." Is there a place you'd point them to get started? I know we could do a whole episode just on asset allocation. So maybe that's in the future. But where would you point someone to get started thinking about their risk profile and the portfolio they should build?

I think thinking through what's happened just in the last couple decades of the stock market is probably not a bad place to be. So let's say in 2008, the stock market fell 50%, maybe 55% in the US stock market. Some other stock markets fell more. If you have all your money in stocks, that's something you should plan on happening at least a few times throughout your lifetime, depending on your age.

You'll probably see your portfolio get cut in half if you have all your money in stocks. And then think about bonds right now, basically, because yields are so low, like cash. If you have your money in cash, it's not going to earn much for you, but it's also not going to go down in value, nominally, a stock market can.

We can talk about inflation, all that stuff that eats into cash. So obviously, the levers here are hold more cash or less cash, and that's going to decrease your volatility and losses, but potentially decrease your returns. And for most young people, a lot of people who think just like type A personality, everyone should be rational.

You have to have all your money in stocks because you have all this time ahead of you. You're going to be saving more. You have this human capital as the wind behind your sails. And put all your money in stocks because you can handle it. But some people, because of their personality, their emotional makeup, they can't.

They really just can't. They couldn't withstand a 50% crash in the stock market without selling and tapping out and saying, "Uncle." So I think a lot of it has to do with your personality. But that's the idea, is how much more safe, liquid stuff do you need that will allow you to leave the stock market investments alone?

And so is that 10% in cash and bonds or 20%? Whatever it is, whatever that lever is, some people can handle the volatility and other people just can't. And the worst thing to do is make a mistake at the worst possible time and sell out of your stocks when they're already down.

That's the worst thing. So yeah, I think a lot of it has to do with your personality. But yeah, that whole asset allocation thing, there's no perfect number for anyone. You can't just say like, "Oh, for you, it's $95,500." It's unfortunately, there's no such thing as a perfect portfolio.

It's only known in hindsight. But people have to get something that they can be comfortable with. Because if you have this perfect, optimized portfolio, great, but you can't stick with it. It's effectively useless. Is there a book or a blog post of yours or someone else's that you'd say is a good starting point for thinking about this?

So Wealth of Common Sense, my first book you mentioned. I have a whole chapter in there about asset allocation and diversification and rebalancing that goes through some examples between a 50/50 stock bond portfolio or 100/0 and all those things. So I have a whole chapter on that, I think, in that one.

And if all of this is crazy, and you're like, "I just want something simple." There's 2 things. There's target date funds, which is like just pick a fund. And there's usually a year associated with it that affects the portfolio and changes over time. Or I'd be mistaken to not mention that I work for a company that offers a very simple robo portfolio that you could just put money in and take a risk quiz and it'll rebalance for you.

So those are the simple options. And I know there's a lot of people who say like, who will try to find issues with taking those risk questions or a target date fund. But to that I say, what's the alternative? I think these robo advisors and target date funds are some of the best leaps forward we've had for individual investors in a long, long time.

It started with index funds and then we get to these things now that are a whole portfolio in one for you, just through the click of a button, basically. And I think it's fantastic for the vast majority of investors, especially if you're just starting out and don't know what to do.

One question. You work at an RIA or a firm for financial advisors. Is there something you would tell a friend that said, "Should I be working with a financial advisor? When does that matter? Who is that important for?" I hear a lot of people that fall into money and they're like, "Well, now that I have a million dollars, now it's time to work with a financial advisor." I'm curious what your perspective is on that.

I think a lot of people who optimize their lives and they listen to your podcast and look for these hacks. A lot of them will probably say, "I'm a DIY person. I will never need an advisor. I can do it myself." And honestly, there's a lot of people who do put in the work and don't really need an advisor.

They can probably find the right resources on their own if they look hard enough and they can handle it. But the people that come to us do so for a number of reasons. One of them is just that they are busy and they have other stuff going on in their lives and they don't care about this stuff as much as you and I do.

You and I obsess over this stuff and we read about it and we follow it and listen to podcasts and we do our own podcasts. And that's great. But some people just don't have the time or the inclination to do all the stuff that all the work that we've put into this because we actually like this.

Other people would say like, "What is wrong with you dorks? Why do you care about this stuff so much?" But we love it. Some people don't. They just want to outsource. And they do this with other areas of their lives too where they're outsourced to tax providers or lawyers or whatever.

And so that's probably a big one. The other one is just when you have a big life event. So for a lot of people, recently, that's retirement, right? We've got a lot of people come to us and say, "I've been doing this myself for 30 years. I've saved. I've got this whole retirement nut here.

But I'm nervous I'm going to mess it up. And I don't want that to happen. And I want someone else to take the steering wheel and help me make better decisions." A lot of people are worried about, "Hey, I've been managing money myself forever. What about my kids or my spouse that doesn't pay attention as much as me?

I want someone else there to help make decisions if I get hit by a bus or something." So I think those are a few. I think a lot of times when your financial life does get complex, for me, a simple one, from the time I had my first job at 15, my dad, who is a financial nerd himself, taught me to do my own taxes.

And he thought that I could learn something by doing that and I thought it was great. And I've done my own taxes for 20 plus years until about 2 years ago, when my life got more complex. And we have a tax team on staff. And I handed it over to them because my life got more complex because I became a shareholder in the firm and I had all these weird K1 things going on and it became way too complex for me to handle.

And even though my dad wanted to help me through it, I'm like, "Dad, all right. It's enough. I'm handing it over." And so some people just have that happen where they have an inheritance or an estate planning issue or something in their tax life. I know a lot of times people think you hand over your money to an advisor because they're going to help you manage your portfolio.

Portfolio management is one piece of it. But there's so much else that goes into it from taxes and estate planning to passing your money along and making good decisions. So I think that's a big one too. It's just your life has become a little too complex, your financial life, that you need someone else to just take over for you.

And I'll point out that for anyone listening, there are financial planners out there that help people go through a lot of these decisions that aren't investment managers. It's not all or nothing. There are people... I'll link to a couple places where you can find them in the show notes.

But there are people that you can say, "Hey, I'm going to pay a fee." Kind of like you pay a tax advisor each year and say, "I want to run through everything. I want to figure out what I'm doing wrong. What am I doing right? Where should I be thinking?" Exactly.

And then you can keep managing your investments. So I think there are multiple options here and it's not all or nothing. It's not, "I have to give up every piece of control." And that's great is that because of the internet, it's wide open. In the past, you would have had to go to your local person down the street.

And that was the only option. There's so many options for people to get help. And even at some of the big financial institutions now, they'll have a call center of financial planners there that you can call and talk to. And like you said, an hourly planner. Pretty much anything you want now you can get if you look hard enough.

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One is, you talked about retirement accounts, and it's important to put money in retirement accounts first before you think about alternatives. And I just want to tap on... There's a different perspective I've heard recently, which is as you're young, liquidity is really important. When you put money in retirement accounts, you can't use it for a down payment.

You can't use it to do anything other than save for retirement without paying fees. Do you still think that the right guidance is always max out all retirement accounts? Or is there a perspective that might be different for younger people where liquidity is more important and things like a down payment cost a lot of money and a lot more than it did years ago?

Yeah, I've heard some of this too. My colleague, Nick Majulia, writes this blog of dollars and data. And he said, "Maxing your 401(k) is ridiculous when you're young." Because he compared, "What if you did an index fund portfolio in your brokerage account compared to the 401(k) and that tax deferral benefit?" And he ran the numbers and it's not as much as you would think.

That tax deferral, how much it really helps, especially if you're someone who is not making a lot of moves in your portfolio. I do think that there's something to the constraint of having it in a retirement account and knowing that you have to pay a penalty if you take it out, in most cases, that it helps you think and act long term.

When I put money in my 401(k), it's just totally out of sight, out of mind to me. And I know I'm not going to touch it for decades. And that helps me plan around my other stuff. So if I need liquidity, I plan around it. I do think that a Roth IRA is probably your best option for this kind of stuff because you can take out your contributions, tax and penalty-free.

You can't take out any investment gains you make. But those contributions make sense. I really wish that they would just increase the limit on that to your 401(k) for people who don't have a 401(k) or a 401(k) at their job. That makes sense to me. But I can get behind that.

And I've had a lot of people in recent years ask, "Do you think it makes sense to cut back on my 401(k) to save for these other things, a wedding, a down payment, I have kids on the way?" And yeah, if you're... You have the foresight to save for those things and you're cutting back on your 401(k) a little bit.

The simplest advice is always get the match because you're turning down free money that way. But then if you have other things you're saving for, sure, especially with housing prices so much higher than they were, and the down payment may be having to be so much higher. Yeah, sure.

I think it does make sense. Especially if that's a much bigger priority than retiring in 4 decades or whatever. I think the 2 big things. If there's a match, I'm always an advocate of putting in whatever you need to get the match. But also, take a look. I've looked at some 401(k)s that are just really expensive.

The funds that they force you to go in... I'll link in the show notes. Maybe you know the site. There's a site where you can put in your employer and they'll tell you how bad the fees are in your 401(k). And there are some places where it might actually be a worse decision financially.

If your 401(k) is at Vanguard, it's probably not that bad. But there are a handful of companies where it's expensive. So that's the only other big thing that I think about. But I love it as a forced savings vehicle. If you have the discipline to force yourself to save and not touch your money, then let yourself decide.

But definitely get the free match and look out for fees. Yeah. I do think that one of the things that's the greatest about having a 401(k) if you have it is just that that money comes out before you even see your paycheck at your bank account. And you don't even think about the lost money that you have saving there.

I know it's only one extra step if you got paid and then you transferred it somewhere. But just taking that step away for people, putting that barrier in place, I think is really helpful to a lot of people. They don't even think of that loss aversion of "Oh no, that $500 is gone forever now because I had to save it." It's out of sight, out of mind.

One thing... It's kind of a hack, I guess. If people don't know this, a lot of payroll providers will let you split your direct deposit. And so let's say you're saving for a down payment and you want that same benefit. You can go in, open up a savings account somewhere else, and take the routing number and the account number and go to log into ADP's website or whatever your payroll provider is.

And you can usually go add it. And you can say, "I'm going to add this to my account and sweep $100 each paycheck so I don't have to see it." So there is the ability to automate that with most payroll providers, if you want that same feeling. My wife did this.

Our twins are 4 years old now. When they were 1 year old, she's like, "Alright, when they turn 4 or 5, I want to bring them to Disney." And so she turned it on. She did $50 a month from her paycheck. And this is going to be my Disney fund.

She's like, "I'm going to save for 3 years and we're actually going to Disney next week." And she saved for 3 years for this. And 3 years later, $50 a month is paying for the majority of the trip. And just because she did it in little drips and grabs and thought of it ahead of time.

But yeah, that just went to a straight online savings account. Nothing fancy. So we talked about investing in the long term and we've been dabbling a little bit in, "Okay, well, if it's for 3 years, online savings account. If it's a down payment." I know a question that you get on the podcast all the time.

And a question I get is, "What do you do with that short term money?" It used to be 2-3 years ago, it was like, "Well, high yield savings accounts are paying 2+%." There's a lot of good options. With interest rates so low, the average savings account right now is probably paying point something percent.

It's probably low single digits percent depending on where it is. Is there a good option that isn't as risky as the stock market? Is it really like a 2080 portfolio of stocks and bonds? Is it high yield crypto accounts? What do you think is a good place to put money that you don't need for 4 or 5 years?

I wish I had a good answer for this. In the low interest rate world, it's possible we might be in a low interest rate world for a long, long time too. So I think this is something people might have to get used to. I think my Marcus online savings account pays 50 basis points, right?

Half a percent. I think the first question you have to ask yourself is, "If I'm going to stretch for yield in some way, whether that's investing in stocks, investing in a diversified portfolio..." By the way, I got an email from someone last week saying, "I put the entire down payment of my house into growth stocks." Not just like Apple and Amazon, but hyper growth stocks.

And they were like, "In 2020, I was a genius. And now I don't know what I'm going to do." And so that's the downside here. And I think especially... That's the extreme, of course. But think about... Let's say you have $10,000. And for every $10,000 you have, every extra 1% is $100 a year.

Now, $100 can be a lot of money for some people. But I think you have to think through, "How much do I have in savings and how much is reaching for yield and putting that extra risk on going to actually matter? Is it going to make a difference in the down payment two or three years down the line?

Or should I just play it safe and not worry about it?" I'm a play it safe kind of guy. I know that there are people who have especially the stablecoin stuff at places like BlockFi and Gemini. And we've had the BlockFi CEO, Zach Prince, on our podcast a number of times.

And the way he says it is, "Listen, if I'm having this emergency fund that's actually for emergencies, I'm probably not going to put it in this stuff. Because it is... You're not earning 7% or 8% for nothing. There is some risk involved there. And this is still a really new product.

Right? Now, I personally have some money in there. But again, that's not an emergency fund." And he said, "Listen, if you're saving for a boat, sure, I'd feel pretty comfortable putting in there because it's not going to be the end of the world if something happens to it. But if it is an emergency or your down payment that you're going to need in 18 months, I think you'd...

The regret... Again, the regret stuff, you'd much more regret not having enough for your down payment than you would making a little bit more and having a bigger down payment than you expected. So I always err on the side of caution with that stuff. Because I think the downside is way bigger than the upside." And I would say, if you are thinking about where to put this stuff, it's not all or nothing.

You don't have to say, "I'm going to put all of it in a crypto savings account like BlockFi or all of it in Markus and get half a percent." You could say, "Well, I'm going to put 20% here and treat it as a blended rate. You're going to get 88% on half of it and almost zero on the other.

It's more like a 4% return, but you're spreading the risk out." And that's effectively what I've done. I would have kept all my money in the online savings account in the past. That was for my liquid savings. And now I've spread it out to 2 or 3 different places.

And again, so I don't have that concentration risk if something should go wrong. And then I think you spread your bets that way. That makes sense. For me, I think the cash that I hold for the short term doesn't necessarily have a purpose. It's kind of like, I just want some there.

If the economy takes a downturn in 2020, I was glad I had a little cash on the sidelines when the market was down 20% or 30%. So I don't have a specific purpose. So I'm probably a little bit more comfortable with risk. So I think I have the majority of it earning 8% or 9%.

But for something like emergencies, I keep a healthy cash buffer that earns nothing in a checking or a savings account that I just want to make sure is always there no matter what that has the liquidity of I can wire it out somewhere tomorrow or withdraw it at an ATM today.

And I don't have to wait a day or two to transfer it from something. And that decision probably depends as much on your investor risk profile as on your circumstances in life. I think I have kids now. I have 3 kids. And so if I was single, I'd probably think about this and come at it a different way than if I had kids because it changes the way that you view risk.

So I think that is part of it too. What else do you have to potentially prepare for in terms of those downsides? I'm like you. I have liquid cash savings. I don't have it earmarked for anything. I have buckets where I... This is our vacation fund and this is for...

I have some of those things, but then I have this cash that's just there just in case. Like break if necessary. Or if you find a opportunity, my old co-founder called it his elephant hunting fund. And it was like, "I have this money sitting here in case some big opportunity comes across my way and I don't want to miss out on it." And he was like, "That could be a unique investment.

That could be a down payment on a house. It could be something... The market crashes." And he's like, "I'm willing to give up the return on this because it's for an opportunity in the future that I hope will outperform the 2% or 3%." I have a home equity line of credit for the same reason.

We took out a home equity line of credit because we bought our house in 2017 and housing prices are up, I don't know, 40% or 50% where we live. And I have all this equity sitting there and we paid down the house a little bit and mortgage rates are low.

And so we've opened up a decent-sized home equity line of credit for as much as they would give us. And that is my other fallback for this kind of thing, where if I really need to write a big check for some reason, and I don't have to shuffle around all my other finances, this is another financial backstop for me that I can use.

And especially since rates are so low, it's also not a bad way of using debt when you're borrowing at your house. And you could do the same thing with your portfolio at pretty low interest rates. I've written in my newsletter in the past about some of the risks that borrowing comes with.

Things like getting a margin call if the market crashes. So I try to keep that to a percent that won't end up in any of those circumstances. At Wealthfront, we cap the portfolio borrowing at 30%. And I don't think we've ever had to make a margin call because we've set it up in a way that it can withhold the kind of market drops that we expect in the worst-case scenarios or at least the almost worst-case scenario.

That's the other side of this low rates thing. People are earning really low rates on their savings. But the other side of that is low rates on your debt. So right, you talk about using margin in a reasonable way. That's something that in the past would have seen, "No.

Why would you ever do that? That sounds stupid." But if you're using it just for a portion of your portfolio, you set up 20% or 30% maybe 10%. With rates so low, that equation kind of changes. And in the past, I would have been one who probably would have said, "I'm going to pay my house off." And in fact, the first house that my wife and I bought, we refinanced like three times because our initial rate was like 6.5%.

And then we're down to in the threes. And we were making the same payment and it was effectively a double payment. And now that rates are so much lower, I think, "Why did I pay that off so much faster? I'm in no hurry to pay off my debt." And I know some people just they have this burning desire inside them like, "I have to pay off all debts." But for me, where the rates are, that's the other side of the...

I'm not earning a lot of my savings, but my debt is not costing me much either. So I'm actually more comfortable using it a little bit in a reasonable manner. Yeah. So here's a question. I get a lot from listeners and you probably have too. If I'm out there and I want to buy a million-dollar house, it is totally reasonable for me to put down $250,000 and buy a million-dollar house.

But it seems so unreasonable for me to use leverage in investing in the market. And I know there are some reasons like margin calls and variable interest rates. But used responsibly, what opinion do you have on leverage in investing? Taking 30% or taking your home equity line and investing in the market, which in the long run has returned greater than the 1% or 2% that you're probably paying to borrow?

I'll tell you what. When the market was down 35% in March 2020, I was trying to get my home equity line of credit through so fast, so I could take out of it and put it in the market. Now, that was during a crash situation, not now. But I do think if you're doing it in a reasonable manner and you understand the potential downsides...

And the great thing is, if you're borrowing at your home, again, not everyone has this opportunity if they don't own a home or they don't have enough equity. But you have like a 10-year period to use a home equity line of credit in most instances. Then you have 15 years to pay it off.

So it's not like you're going to get a margin call on that home equity line of credit, right? If you used it, it's not like it's going to become right for you. If you borrow against your portfolio, that could be different. But yeah, if you're doing it... If you have some sort of cap in mind, like, "I'm borrowing at $3 and I'm going to get $8." As long as you don't need that money for something else, and you understand any potential...

The biggest downside, obviously, is, "Well, the stock market falls 70% like a Great Depression and then I'm screwed." I guess if that happens, we have bigger problems on our hands. But I do think if you thought through it all, it's not the worst idea in the world if you can do it in a reasonable manner.

I would just say, make sure you have the horizons in mind, right? The stock market, historically, has returned much greater than the 1% or 2% or 3% interest rates you're paying right now. However, the stock market has not performed greater than 1%, 2%, or 3% every single year. And so, it's probably not a safe bet to make it for a one-year bet, but it could be a safer long-term bet.

Or at least, as a long-term bet, it might be safer than a short-term bet, I guess. It's never safe because we never know what's going to happen. But I will say one hack in here is that when you borrow money to invest, the interest you pay on that money is often deductible against the gains you have as investment interest expense.

Depending on your tax rate, depending on a lot of circumstances, you might be paying 2.5% to borrow money. But if you invest that money and you have enough gains, dividends, interest to use it to deduct, that interest rate could cut as high as half off depending on your tax bracket and what state you live in.

And again, I think where we are in the interest rate cycle has so much more to it. This would seem antithetical to personal finance people to say 10 years ago, "You'd be nuts to... Why would you borrow against your portfolio or invest more from borrowed money?" But where rates are today, I think it's something that makes more sense than it did in the past.

And another piece of rates that I think is similar that you mentioned earlier is inflation. All I hear about from everyone right now is, "What's going on?" You guys have talked a lot about it on the show and have greater opinions than I do. Obviously, no one can predict what's happening.

But what's your thought on what's happening with inflation and rates outlook for 2022? I think the craziest thing is that just... We've never gone through anything like this. It's been 4 decades. I was born in 1981. That's basically the last time we had inflation this high. So you have...

I know people always say, "Oh, if you just started investing in 2020, you've never experienced A, B, or C." But unless you've been in this game for 3 or 4 decades, you really haven't experienced any inflation this high. I think from 2008 to 2020, inflation was like 1.6% per year.

Now it's 7%. And we've had higher economic growth because of that and all this other stuff going on. But I think that trying to come up with a short-term hedge to beat it in your investment portfolio is really difficult. I'm going to own gold or gold miners or commodities or whatever it is.

And not thinking through how much of that is priced in and how much inflation needs to hire for some of those things. I still think that the stock market is probably your best bet for long-term inflation. So in that same period from 2008 to 2020, the S&P 500 was up well over 10% per year, even with 2008 getting crushed and inflation was much lower.

So that's why holding stocks over the long run is a good inflation hedges because you make up for it in those years when inflation isn't high. So your real returns there were way above average. So I think that's why holding stocks over the long run makes so much sense is because your real returns when inflation is low, help make up for that what happens when inflation is higher and your real returns are lower.

So the stat I always give is that over the last 100 years, the dividend payout on the S&P 500, the US stock market, has gone up at 2% above the rate of inflation. So you think, "Oh, I'm earning 1.7% in dividends on the S&P 500." That's nothing. It sounds paltry.

But that dividend is growing every single year and it's because corporations are earning more and growing and innovating, they're paying out above the rate of inflation over the long term as well. And so that income is a growing stream of income. That's why I still think that the stock market over the long run is by far your best hedge against inflation.

And for cash, it's kind of tips beat a savings account these days. And for anyone not listening, the Treasury Inflation Protected Securities are government-issued bonds or securities that you can invest in that beat inflation or that's the goal? It's actually almost an alternative investment. It's only been around in the US since the mid-90s.

And effectively, what it does is it builds in the expected inflation. So it gives you a yield that is the Treasury bond minus what the market thinks inflation is going to be. So your yield when you buy it is effectively negative. And then you add on inflation to it.

And so what it does is it gives you a one-for-one inflation, which is why the returns there were so high last year. You earned like 5% in tips last year, where if you invested in a total bond market fund, you were down like 2% because that's a 7% difference in inflation.

So you get a one-for-one inflation kicker. And where you really get the returns from there is if you get unexpectedly high inflation. Because again, the expected inflation is built in. So I think that is actually one of the... Yeah, maybe that's something we should have mentioned for a short-term vehicle is investing in inflation-protected securities.

Because that is in the short term, a big problem is that cash is earning nothing and it's getting eaten away from inflation on a real basis. So yeah, those tips actually make a lot of sense in the short run, because that's the one thing you can invest in. You could say, "I want to invest in gold and all these other things." And even people said, "Well, Bitcoin is an inflation hedge." But these things don't move one-to-one with the inflation rate, because people are putting their expectations in on them and telling stories.

Whereas tips give you that one-to-one hedge, where you're going to get exactly what the inflation is as your return, basically. And they're not things where you have to go buy a bond from the government. They're ETFs. I think it's just tips as the ticker. You could just buy ETFs.

Low-cost ETF. Yeah. So if you're thinking about how do you do this, for anyone who's ever bought a government bond from... I can't remember the site and it feels old school and complicated. This is easier. There's just an ETF for it. But my one thing about inflation is that it's really, really difficult to hedge.

So last year, you had the greatest setup for gold ever. You had... The government was printing tons of money. We finally had inflation. It was 7%. But gold was down like 5% or 6% on the year. And for years, people are saying, "Buy gold because the Fed's printing money.

The government's spending too much. Debt is at an all-time high." And gold drops in the year that all this stuff finally comes to a crescendo. And that's why the markets are so difficult to manage and try to get. So that's why I think you can get too cute with these things and try to outthink things.

Or you could invest in tips and understand, "I have a one-for-one. I'm not going to worry about it. That's the hedge." Yep. Sometimes the smallest changes make the biggest impact. And Trade Coffee is a great addition to your New Year routine. And I am so excited to be partnering with them today.

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Do you all remember episode 122 when I spoke to Chef David Chang about leveling up your cooking at home? If not, definitely go back and give it a listen. But one of his top hacks was using the microwave more. I'll admit, I was a skeptic at first, but after getting a full set of microwave cookware from AnyDay, I'm a total convert and I'm excited to partner with them for this episode.

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Again, that's allthehacks.com/anyday for 15% off. I just want to thank you quick for listening to and supporting the show. Your support is what keeps this show going. To get all of the URLs, codes, deals, and discounts from our partners, you can go to allthehacks.com/deals. So please consider supporting those who support us.

So I'm sure we left off a lot of stuff. I'm sure there are people with questions. Definitely send them in, chris@allthehacks.com if you have them. Maybe we'll do this again. I want to jump outside of investing a little bit and talk about a few things. One is just ways to simplify your finances.

And investing is a part of that. But I know you've had a lot of thoughts there. You have your own hacks to make things easier. I'd love to hear what you've got. My simplest hack, honestly, is just being optimistic about the future when it comes to finances. I think if you're one of these people that is always just down on the economy, the markets, what's the point of investing in the first place?

So that's one thing. I think if you're going to invest, the whole point of investing is that the future is going to be better than today. Otherwise, why invest your money? So that's where I start. I think the rules-based thing applies to a lot of things. So obviously, automated saving, automated investing, rebalancing.

I also think bill pay, all these things that a lot of people have mentioned before. One of the things I've done in recent years that I don't know why I didn't do before, but automated giving to charities. So on a monthly basis, anytime I find this good... In the past, around the holidays, or there was something going on, there was some catastrophic event, then I'd give some money and I'd do it in dribs and drabs.

Now I automate that. And I've actually gotten letters from these charities saying, "Thank you. We appreciate that. Because we know we're getting your monthly amount each month. That actually helps us plan out our finances for you. Obviously, it's not just me, but it's everyone." And so actually, giving to these charities on a monthly basis, like you do with your savings automatically, and they almost all have an option for that now.

You check a box saying, "I'm going to give $25, $50, $100 a month to this charity." And that's actually a really good thing for them for their planning purposes. I'll just chime in for a sec. There's a company I've mentioned in the past, or at least in my newsletter called Daffy, which is a donor-advised fund.

It's a new app. And it's interesting because it disintermediates... So donor-advised funds have historically been this thing, "Oh, here's an opportunity for people who are in really high tax years to donate a lot in one year, and then be able to give over a series of years." So it's been a great thing for people who are, "Oh man, my company got acquired.

I got some inheritance in that high tax year." You can actually donate money to a fund that you manage. And then anytime in the future, you can donate money from that fund to a charity and you get the entire tax write-off at the beginning. And if you donate appreciated stock, you can often get it even multiplies the tax benefit.

But the cool thing they've added is the ability to set up recurring donations. And so I like that there's a disintermediation from, "I want to give and I know where I want to give." And so every now and then there's a thing where, "Oh, I want to give to this cause." I don't always, like it sounds like you do, have the same cause every time.

It might change on the circumstance, what's happening in the world. And so you can actually set up automated giving and say, "I'm going to give $100 a month and not know where it's going to go." And then while that money is sitting there, you can actually invest it. So they even have a portfolio with a little bit of crypto.

So I was like, "Oh, let's take a little bit of risk here." And so that's something I've started doing. All the donations I make, I make them to Daffy. I keep it all managed there. I let it grow with the market. And then when I'm ready to donate it, I could do that whenever I want.

And my wife and I both log into the app and she's like, "Oh, I'm going to send money to this thing right away." And Daffy didn't pay me to say any of this. But if you do want to check them out, I'd definitely love you to use my referral code.

It gets you $25 for free. It's at allthehacks.com/daffy. And the only downside is, I wish there was a way to use something like that with some of the online fundraisers. Because I always feel like the worst person saying, "Oh, you're raising money for this cause for your birthday." I was like, "I just sent a check to the cause on your behalf." And then they're like, "Yeah, but the meter didn't go up." And I was like, "I know.

I did send it." I was like, "No. That the money's there. I'm really sorry. The meter didn't go up." I think that that's something I've changed my tune on. So I mentioned asset allocation and how important that is for investing. I like the idea of having a savings allocation too.

So let's say you get a bonus at work, or I don't know if you had an inheritance or a check for Christmas or something. I don't know. Whatever it is. You get a chunk of money that you didn't expect you were going to get, or it's just outside of your regular income.

I like having an idea percentage-wise of how I'm going to save that money. So you don't just blow it on something. So I have a percentage that's going to go into retirement funds. I have a percentage that's going to go to brokerage, savings, maybe vacation. And then I always leave 20% to 30% where I'm just going to blow it on something.

And I think it's important to have that in Scratch that is because I talk about all this stuff about saving and investing and being rules-based. But I think this is, again, since I've had my kids, something I've really come on, changed my mind on is like, it's okay to spend money and have fun and do things for yourself and not just save everything.

So I think it's important to have that piece of your budget or your whatever it is, your money that is going to just be there to have fun and blow in a guilt-free way where you don't have to worry about it. And you don't have to think every single decision you're making, let's just have a little fun with this money, whatever it is.

And it depends on the person what it's going to be. But I have that piece too, where it's just, I'm just going to spend this, I'm going to blow it, and I'm not going to obsess over it. Are there some things you've spent that money on that you'll share that are like, just God made you feel so good?

I think any sort of thing with my kids, like I'm never going... Here's a little one that my daughter is seven and she's getting into reading. So this is kind of a dumb one. But I told her, "Anytime you want to buy a book from Amazon, I'm never going to say no.

If you're going to read this..." She reads every night. I don't know how she got into this habit. And I told her, "Other stuff we're going to have discussions on. But if you want to buy a book, and I'm going to see that you're reading them, I will buy you a book anytime you want.

That's like, I'm not going to think about it." So just little, I think little things like that help. And then other things, like I said, like family vacations and things like that stuff. I think those creating those memories and experiences are always going to be useful. Even though my wife is much more of a Disney person than me, like my kids are so excited to do this.

And my wife wanted to stay at like the nice hotel right by that's really close to the parks. And in the past, I would have felt, "Well, why don't we stay at the cheaper one further away?" But I know this is going to be fun for the kids because there's a pool and stuff there and all this stuff.

And that's the kind of thing where I'm not going to lose sleep over the fact that we're spending a little more on this vacation because like the memories and experience is going to be... That's going to stay with us for a long time. Awesome. I'm excited. My daughter's too young to really appreciate Disney, but I know that's in our future.

It's honestly not cheap. And everyone says once you get there, they put this wristband on you that's attached to your credit card. And every time you want to spend money, all they do is have to swipe your wristband and it charges to your room. And I know it's a lot of money, but yeah, I think for the experience, it's totally worth it.

Yeah. Any other hacks? I think the simplest one that I always tell people, especially young people, and I wrote this in my book for people who, let's say you're 40 or 50 years old and you're behind on retirement savings and you think, "All right, I'm going to become the next Warren Buffett and I'm going to shoot the moon and my stock picks or my investment prowess is going to propel my portfolio and I'm going to be fine in retirement." This is in my retirement book.

And I said, "Let's say I use a simple round number like $100,000 household income. You save 10% of it and you could earn 6% a year in the market. What happens after 10 and 20 years?" And then I said, "Okay, what happens if instead of earning 6%, you're able to earn 12%?" You double it up, right?

You're this great investor, same savings rate, you double it up, obviously your money is going to be much higher. But now let's go the other way and say instead of saving 10%, you double your savings rate and save 20, but your return stays at 6, right? You're not Warren Buffett.

You can't double up the market. You only return 6%. Your return is actually higher from doubling your savings rate over 10 and 20 years than it is from doubling your investment return. And doubling your investment return is way harder for most people than it is to double your savings rate.

Because as we talked about, beating the market and picking stocks and these things is very, very difficult. And that's promised to no one. But most people can probably figure out ways to save more money. So I always tell people, especially when you're young, that saving is way, way more important than investing, even though investing is way sexier.

And it's funny, when you go from 10 to 20, it's a huge leap. But I always tell people, you could probably go from 10 to 11. You could probably go from 10 to 10 and a half. And if you make those adjustments over time, most people end up... Their budget just fills the gap.

And obviously, if you try to take out 10%, it might be a little bit rocky. But if you try to take out 1% or 2% and just slowly add on to that, you become comfortable with it. And also, anytime you get a raise, maybe just sweep the raise into that process.

If you want to get to 20 and you get a 3% raise, just take 3% right away. You already know you can live without the raise. Maybe take... To your advice, maybe take 2% and then put 1% in a fun fund so that you can go and spend some money and enjoy the fact that you worked hard.

You got a raise. Yeah. The stair-step approach. When I first started out of college, I was making nothing. I think the most I could save in my boring target day fund was like $50 a month. But then every year, I would bump it up a little bit more and maybe save half or three quarters of my raise and slowly got to that place where I wanted to get...

But like you said, if you're ripping the bandaid off and going from 10% to 20%, most people can't realistically do that. But you can do a slow stair-step approach where you increase the percentage of the amount a little bit every year and get to that goal. Okay. Last thing before we head out, I would love to hear...

You read a lot, you follow a lot of sub stacks, you follow a lot of people on Twitter. You stay on top of the market better than me. Are there a few people that you enjoy reading from or following that people listening might want to check out if they want to stay on top of things?

Other than you, of course. I came up before the whole podcast, YouTube blog thing, I was actually talking to a college class recently. And I was asking them because they all seemed way smarter about the markets than I ever was at that age. I knew absolutely nothing. When I graduated in 2004 or whatever it is, I came out with very little knowledge.

And the resources today are so much more easily accessible to people, especially young people. They're watching the YouTube videos and following the podcast and stuff. Learned a lot of my stuff that I... My way to catch up on my lack of knowledge was just reading books. I think anything written by William Bernstein is my favorite investment writer of all time.

So probably his best well known is the Four Pillars of Investing, which is from the early 2000s. But he wrote one after the 2008 crash called The Investor's Manifesto. He was a former brain surgeon who turned investment advisor, and it's probably one of the smartest people I know. So anything by William Bernstein is very good.

There's also this book called, and I'm looking for some underrated ones here, not the ones that you can just Google and say, "What are the best investing books?" But I learned losing a million dollars by the story about this guy, Jim Paul. Have you heard of this one before?

No. He was a commodities trader in the 1980s. And he talked about being this young hot shot commodities trader who made a ton of money, had no idea what he was doing. He made all this money and he talked about how it messed with his head. And he thought all the profits he was making were because he was so smart and successful.

And then when he lost it all, he realized, "Oh, wait. I was actually just an idiot. I didn't know anything. I got lucky." So it's his emotional journey of going from this young guy who became this hot shot commodities trader and then losing all the money and what happened and his journey of figuring out what that all meant and how you shouldn't personalize successes and how much luck is involved.

And how just because you make money doesn't mean you made a right decision. And just because you lose money didn't mean you make the wrong decision. Sometimes it's just the fate of the market. So that's actually one of my favorite investing books that I've ever read about the psychology behind it.

I love that. And I love benchmarking yourself. I think in 2020, so many people were like, "Oh, I made so much money in the market." Or 2021 also. And I'm like, "Okay, but how did that compare to the market?" Because you can look like you got a 20% return but if the market went up 20%, then you just got the market return.

And so I think that's a lesson that takes more than a couple minutes to process. But sounds like he learned that also. So I'll check that out. Anything that you use day-to-day, week-to-week? What's your go-to source of market news? Honestly, for me, I've curated a list of people to follow on Twitter.

And I know like social media, there's a lot of bad things about it. But I think if you have the right filters in place, and can figure out to follow the right people to pay attention to this stuff, and just filter out the people who are just going to waste your time.

I think there's actually a lot of signal there as opposed to noise if you follow the right people. So I guess if you're listening, just check out who Ben follows. And that's a good list. There you go. Look at my follower list. Awesome. And perfect time. What's the easiest thing you're doing?

Podcast, book, writing, everything. Yeah, it's probably easiest just to check out my website, A Wealth of Common Sense. I've been doing that for going on 9 or 10 years now. I write everything there and put all the podcasts up there so that you can find me. Awesome. I'll link to all that in the show notes.

Thank you so much for being here. Awesome. This was fun. I really hope you enjoyed this episode. Thank you so much for listening. If you haven't already left a rating and a review for the show in Apple Podcasts or Spotify, I would really appreciate it, especially Spotify since they just added podcast ratings.

And if you have any feedback on the show, questions for me, or just want to say hi, I'm chris@allthehacks.com or @hutchins on Twitter. That's it for this week. I'll see you next week. I want to tell you about another podcast I love that goes deep on all things money.

That means everything from money hacks to wealth building to early retirement. It's called the Personal Finance Podcast, and it's much more about building generational wealth and spending your money on the things you value than it is about clipping coupons to save a dollar. It's hosted by my good friend, Andrew, who truly believes that everyone in this world can build wealth and his passion and excitement are what make this show so entertaining.

I know because I was a guest on the show in December, 2022, but recently I listened to an episode where Andrew shared 16 money stats that will blow your mind, and it was so crazy to learn things like 35% of millennials are not participating in their employer's retirement plan.

And that's just one of the many fascinating stats he shared. The Personal Finance Podcast has something for everyone. It's filled with so many tips and tactics and hacks to help you get better with your money and grow your wealth. So I highly recommend you check it out. Just search for the Personal Finance Podcast on Apple Podcasts, Spotify, or wherever you listen to podcasts and enjoy.