Welcome back to Portfolio Rescue after a little hiatus. Remember, our email is askthecompoundshow@gmail.com. Today's Portfolio Rescue is sponsored by Innovator ETFs. So, Innovator has these defined outcome ETFs, Duncan, right? Now, they can be a little tricky to understand. So, let's say you have an ETF with a cap of 15% and you have some downside protection to 10%.

But what if your stocks rise 15% and you're capped out, what do you do? So, you probably have to switch over to another fund, right? Same thing if you have the loss cap. If you're down 10% and you have that cap, maybe you want to switch over to a different fund that has another downside protection, right?

So, what they have is they've actually made it a little easier for people who don't want to switch to a different fund. So, they have this laddered allocation buffer ETF, BUFB. And just equal weights across the different 12 months, because they have a new one of these each month that kind of resets.

And it basically diversifies you. It's like a ladder of these buffers. So, if you look at the caps over the past year from all the 12 different funds that make up this fund, you could have a cap ranging from 13% in one fund to 23% in another. So, that depends on market conditions, like volatility and options trading, because these options, they become more or less valuable depending on when you buy them and how volatile the market is.

So, this is kind of an easier way for people who don't want to have to really get in there and do some things, because the market can move pretty fast, as we've seen in the last few weeks. Obviously, we've seen in the last few years, for sure. So, anyway, this is an easy one for people who don't want to -- who just want to have a little diversification.

Ladder their holdings. They don't want to think about it too much. They just want to get in there, have that protection. To learn more about this and more other Defined Outcome ETFs, remember to visit InnovatorETFs.com. All right, Duncan, you're back from your honeymoon. Welcome back. I have an important question for you.

Thanks. Okay. Which city is more expensive, London or New York? Hey, Michael. Hawaii. Which city? Which city is more expensive, London or New York? I would say New York, in my experience. Okay, even more than London. Okay, interesting. Sorry, that really threw me off there. I was like, who's walking in?

Oh, Michael. Yeah, I would say New York. I was actually surprised by how affordable a lot of stuff was in London. Okay. I guess it probably helps, being that you're converting from dollars, too, right? Yeah, yeah. Pink dollars. See, this is where the strong dollar helps, right? Yeah. Like, beers, for instance.

It's easy to pay $8-12 for a beer, depending on where you go in New York City. A lot of places there, I was paying like four pounds for a beer kind of thing. Yeah, I don't want to do the calculation in my head for how many dollars that is, but four is less than eight.

We know that. Okay. Yeah, exactly. All right, John, let's look at the chart here of the S&P 500. Look where we're at now. So, at the worst of it, the S&P 500 was down almost 24%. We've made back more than half of that in this little bounce here. I think the S&P is up 16% from the lows.

The NASDAQ 100 is up well over 20%, although it was down much more in the trough. It was down well over 30%. So, of course, everyone wants to know, was that the bottom? Is the bear market over? We're going to get into that a little bit today on the show.

I don't know. I really don't. I wouldn't want to put my neck out either way on this. Here's the thing, though. If you're a saver, you should hope this wasn't the bottom. Right? You should want more volatility to the downside. Now, this is always easier to say when stocks are going up than when they're going down.

A few weeks ago, six weeks ago, eight weeks ago, people would not want to say that. But now, just remember, when stocks are going up, it's good for your current holdings, but it's not great for your future contributions. So, I'm kind of in a weird spot. I'm approaching middle age.

I think I can safely say I'm almost there. I'm going to be, you know, let's see, a week. A week? Oh, wow. Less than a week. It's my birthday. Yeah. I just realized that. I don't think about this stuff anymore. We should do a joint birthday show because my birthday is the 27th.

So, like, we're relatively close. Ten days before you. Nice. Okay. So, I have more money in my portfolio than I did when I was in my 20s, of course. But I still have, I don't know, a couple decades to save. So, I'm kind of in the middle ground where I'm diversified.

If stocks go up, it feels good for my current portfolio, but bad for my future savings. And if stocks go down, it feels bad for my current portfolio, but pretty good for my future savings. So, I should hope that the market goes back down. Right? I'm making more money now than I did when I was younger.

I'm saving more. I have a higher savings rate. I should want it to go down. It doesn't feel that way, but it's true. And especially if you're young, it's okay. You've had two bear markets in the last three years. I hope young people were saving in those and kept making their contributions.

It's an unpopular opinion, but this is the way it should work. We should hope for a little more volatility to the downside. Now, if you have all your money in your portfolio and you're not saving anymore, obviously, you want new all-time highs. And guess what? I don't control these things, but this is my unpopular opinion.

I'm hoping for more downside in the years to come. Either way, you have plenty of material for social media. You can always make cracks about how bad your portfolio is doing, or you can talk about how well you're doing, and dunk on people and stuff. So, either way. It's a 60/40.

I'm well-diversified. Alright, let's get into a question. Speaking of which, this is a good one from a young person. Yeah, exactly. Yeah, no, that was a good weed. Okay, so up first we have a question from, did they give us a name? Kamal. Kamal. I have a quick question that I think is pertinent to the current season we are in.

Like me, a lot of fresh graduates are looking for a job commencing this September. I would like to know how much of your salary you should save every month, and how much you should invest in the stock market. For example, suppose you have $500 left of disposable income, what percentage should be saved and what percentage should be invested?

You know, this one got me thinking. There's a lot of questions in finance that begin with how much, right? How much money do I need to save? How much do I need to retire? How much money should I be spending each month? How much do I need for a down payment?

How much house should I buy? How much money should I invest in stocks? How much is enough? All these things. Of course, this person is thinking about it the right way. They're coming from graduation. They want to save. It makes sense to begin saving from a young age, right?

We've seen the, I'm going to use this example that a lot of people use. It's totally unrealistic, but it makes the point. So, I did this for one of my books. Sarah begins saving at 25, sets aside $500 a month until 35. At that point, she stops saving and just lets compound interest take the wheel, right?

John waits until he's 40 to start saving, but he keeps saving every month $500 a month until he's 65. Sarah only saved $66,000. John saved well over $150,000. Sarah ends up with way more than $700,000. At the end, when she's 65, John ends up with $412,000. Now, we're using the same $500 a month saving, 7% on your investments, and Sarah ended up with more.

Why? Because she started early. This is completely unrealistic, but it makes the point, right? I hope no one is starting saving at 25 and stopping at 35. That doesn't make sense. But the point is, the earlier you start, the better you are, right? That's pretty simple. Now, when it comes to saving and budgeting, I do think it makes sense when you're just coming into the working world to think about this, that there's generally two ways to approach saving money, right?

One is like the manual approach. You track every single item that you want to budget for. You have a spreadsheet or some sort of tool that you follow, and then you make sure you track every last penny, and then at the end of the month, you have $500 left over, and then you decide to save it.

That sounds great in theory, but not many people can make that work in practice. I think the autopilot version is much better, where you automate as much of your saving and spending as possible and bill pay and all this stuff, and then whatever's left over, you can spend on anything you want, right?

But I think you treat saving like a bill payment. It's like Netflix subscription or a gym membership, right? That saving is like a bill pay. It's like your utilities. So you take that saving first, and then anything that's left over, spend it on anything you want, especially when you're young.

Now, my rule of thumb in terms of how much should you save, I think you should set yourself a savings goal, and it should probably be, my goal is always, I want 10% of your gross income, at least. That's what I want you to work up to. Now, when you're young, you might not be able to get there.

When I, my first job out of school, I wasn't making anything. I think I could save $50 a month. I was trying to save, I've had all these bills for the first time, I'm paying for my own car and all my own insurance and rent, and I'm trying to save for an engagement ring for my wife, and I could only save $50 a month.

But then every time I got a raise, I would save at least half of that raise and work up to it. So I think I want you to work up slowly to that 10% at least. 15% would be great. 10% I think is a good savings goal. So what you do is you figure out how much you want to spend, and I think it's okay if you're young to balance that a little bit.

Still have some fun, have some guilt-free spending, but again, make that savings come out automatically at first, and don't wait until the end to try to save. Set a savings goal, increase the amount you save over time, especially every time you get a raise, save at least half of it.

You'll never even notice it in your lifestyle. Then the rest of it, you can kind of bump up a little bit. That's my ideal, is just get to that goal, but start small and build up over time. And to clarify, you're talking about something different than like an emergency savings.

What's the rules on that? He's talking about stock market. I mean, people say, there's a lot of personal finance people who'll say six to 12 months. I think that is ridiculous for young people. I don't know how you can ever get to that point. It's huge. I don't think that makes sense.

I think you have to have a decent amount. I would set more of an amount on that. I want to get to a goal of having $1,000 saved or 2,000, whatever makes you feel comfortable where you can have some sort of... For emergency. Emergency, yeah. I remember my first job, I was three months out of school.

I had no money to my name and my car broke down. And I'm like, what do I do? Hello, credit cards, right? So you have to have something, right? So I assume this person's talking about saving for retirement. Yeah, they are. I was just for our viewers clarifying that they were just talking about general savings.

And Kamal, if you're listening, send us an email. I will send you, because I think I wrote it for young people, my book, Everything You Need to Know About Saving for Retirement. I'll send you a copy. Send us an email and let us know where to send it. Let's do another one.

Awesome. Okay. So up next, we have a question from Robert. So I know you guys have talked a lot about whether or not we're in a recession now and being in a bear market, equity is declining 20%. When is a bear market by definition over? For instance, if we just trade flat for the next year and then enter a recession, does this correction still count as part of that?

And you guys kind of definitively on Animal Spirits this week said like, yeah, we are, we have not been in a recession, right? Right. Yeah, this one's more about a bear market, though. And this one's probably even harder than a recession. But I think, yeah, if we didn't get back to all time highs, and the market kind of just treads water for a while, then goes down again, because we go to recession in 2023 or 2024, people are going to count that as one bear market.

That's the problem, though. You never know this stuff until after the fact. And so this is another one of those things that there aren't any really good definitions about. I mean, most people believe there was a bull market from 1982 to 2000. Right? When the tech bubble burst, that's when the bull market was over.

But I'm sure a lot of people assumed that bull market was over in 1987, and stocks crashed 33% in like a week, right? So, you have cyclical and secular bull and bear markets, and they last at varying lengths. We have dead cat bounces and V-shaped recoveries and all this stuff in between.

Let's look at the 2008 scenario as an example. So, this is the 2008. We were down 56%. You can see it took a while to get back to those all-time highs that were reached in October 2007. It wasn't until like early 2013. But this is price only. No dividends included, right?

So, if we look at what happened in that time, including dividends, go to the next chart, John. This is the total return. Stocks were up 150% from the lows by the time we hit all-time highs again. That's, again, including dividends. So, I don't know. Did the bear market last from peak to peak?

Did it end at the trough in March 2009 when it stopped? I don't know. Barry Ritholtz has some very strong opinions. He's going to be on the show again, I think, next week for us. He has some very strong opinions. He likes to say, "We hit new all-time highs again.

That's when the bull market starts." I don't really have strong feelings about this. They can both last much longer than you'd think, or be over much quicker than you'd think. Eddie Ardeni from Ardeni Research has these really cool bull and bear market tables on his website, and it's free.

So, I think people should check these out. So, John, pull up the first one. This is corrections in bear market since 1928. You can see there's a lot of them. I think there's like 55 or 56 on this list. It's a lot. Go to the next one now. This is bull markets.

There's not as many bull markets as you can see. The bull markets tend to last longer, bear markets are shorter, and bull markets have much bigger gains, right? Because the bull markets outweigh the bears. It's kind of interesting. I think there's like 25 bull markets on here versus 55 corrections in bear markets.

So, obviously, the negative stuff hits a lot more often. And Eddie Ardeni defines a bull market as a 20% gain or more from a bear market trough. So, right now, if we're using his definition, you could say the NASDAQ 100 is in a new bull market, even though it hasn't reached the all-time highs yet.

I don't know. I don't think it really matters. The thing to know is downtrends are typically more volatile than uptrends. And this is the kind of thing that you can probably only know in the rearview mirror. But it's probably easier, as much as we're arguing about it right now, about a recession or not a recession, it's probably easier to define that than it is to define the end of a bear market.

But I think, definitively, once we hit all-time highs, yeah, sure, no more bear market. But if we don't, then this is still part of that same correction. How does that sound? Does that work? Yeah, that sounds fair. And I think, based on what you're saying, it really shouldn't impact what you're doing with your savings and investments either way, right?

No. Although, again, people feel a lot better right now that the stock market has bounced 15%, 20% than they did seven weeks ago, right? I'm glowing. I mean, just seeing some green in my portfolio feels great. You do have a goal about you. You went on your honeymoon, stocks are up.

I don't know how Beyond Meat's doing, but it's got to be doing better, right? Yeah, still down a lot. Yeah, it's up, it's up. All right. Speaking of down a lot, let's look at another one who's got a quitter or a closer. Yeah, I can relate. Not amount-wise, but percentage-wise.

"My background is in fintech and e-commerce, and during the 2020-2021 boom, I took some extra cash I had laying around from the sale of a boat," humblebrag, "and a side business and dumped it into the high flyers that were benefiting greatly from the pandemic. We're talking a basket of the most painful assets to earn in 2022, PayPal, Square, Alibaba, Shopify, Coinbase, and some Bitcoin and Ethereum.

This $100,000 portfolio soared to $200,000 in 2021 and then crashed to $50,000 in 2022. If I sell and take the loss, I'll still have $50,000, which would provide plenty of additional peace of mind to quit and focus on finding a specific opportunity that I'm looking for. But at the same time, I hate being forced to sell at a big loss when this pile of stocks are beaten down to a pulp." This is a two-slider.

"The losses wouldn't be bothering me too much if it wasn't for my recent desire to quit my job and focus on finding a new one. Prior to that, my only worry was that I'd have to wait a year or two to get another boat. Either way, these stocks are getting trimmed, sold, diversified at some time in the future.

There's just something about selling at a big loss that's painful, especially when it is needed to free up money for something that comes with a completely different set of risks and uncertainties. I'd love to hear your thoughts on my situation." So, they're just kind of wanting some comfort, I feel like, here, you know?

Sometimes, what you need is not data and spreadsheets. Sometimes, what you really need is a financial therapist. I'm here to do that. I'm here to provide that to the people. I'm not a PhD, but I play one on Portfolio Rescue. So, I think, this is the opposite of a not to brag, right?

They were doing great for a while. I'm sure there's a lot of people like this, that high-flying stuff. And I think that's, sometimes, path dependency in the way that you invest matters a lot, because if you saw your money go from $50 to $200, right? And then all the way, or was it, what did he start with, $100?

Yeah, he doubled, went from $100 to $200, and then down to $50. $100 to $200, then down to $50. If you'd have just gone from $100 to $50, that'd be painful. But I think it's doubly painful to go from $100 to $200, then back to $50, because you're anchoring to that high level, no matter what.

In your mind, people think, "Okay, I'm going to sell once I break even." And for him, I'm sure breaking even is $200, not $100, right? So, there's a lot of these ... Daniel Kahneman has some of these stories. So, there's the San Francisco Exploratorium, where they have all this data about redwoods.

And they asked these group of people, "Is the height of the tallest redwood tree more or less than 1,200 feet tall?" And then they said, "What's your best guess of the tallest redwood tree?" That's one group of people. The next group of people, they said, "Is the height of the tallest redwood tree more or less than 180 feet?" And then they said, "What's your best guess?" So, they're anchoring these people to these numbers, right?

These numbers are meaningless. They pulled them out of thin air. The average guesses in the first group were 844 feet, and in the second group, it's 282 feet. So, people take that high number and they anchor to it, and the low number, they anchor to it, right? This is just the way that our brain works.

I think this is why people assume, when they save money on clothing, that, "I just saved so much money. I bought this $100 shirt for $80. Can you believe it?" This is what my wife says, "Do you know how much money I saved you this week? I bought stuff on sale." So, anchoring and investing, I think, works a little different, because we anchor to the high and the lows, right?

If I would have just bought at the lows, I would be making so much money. If I would have sold at the highs, oh my gosh, I would be doing so great. I think hindsight can play some massive head games with you. So, I think this is why defining your time horizon matters so much.

So, again, this person sounds like, this is almost the kind of thing that went from an investment to a trade, right? They sold their boat, I'm going to put it in here, and if I can just buy another boat with it, I'll make a little money. Maybe I can buy a bigger boat and a better boat with a bigger motor or whatever.

Now, the goal has changed, and that's fine, because this happens sometimes. You can say, oh, an investment turned into a trade, but that's okay if your goal changes. This person's goal changed from, "I've got a little bit of extra money from selling a boat," to, "Oh, wait, I might want to quit my job and try something new." I think, at that point, throw that original thesis out the window, right?

What matters more to your happiness in life? A missed opportunity? Let's say you turn this $50 into $100, because the stock market screams higher from here. Is that going to make you feel better than going for your desired career goal? Of course, how much joy do you get if you hold that $50 to $100, or $150, whatever it is, versus how much happiness do you get from pursuing your dream job?

I think you can't put a price on that. If that money is going to make you feel good and allow you to pursue your career aspirations, I don't know why you would, it's a pretty simple choice for me. It's going to sting if you see, "Oh, this stock doubled after I sold it." I don't think you can look at the opportunity set that way when you have this type of goal in mind.

Yeah, and I think that they could still have plenty of fun with a jet ski, you know what I mean? They could join the jet ski lobby. If they can get one, right? I'm in the process of selling mine. I'm out. I'm totally out of the jet skis. Sorry.

Really? I didn't use it enough. Wow, okay. Sorry. Well, I figured you could rent it out or something, right? Yeah, Uber for jet skis. Is there an Uber for jet skis? Maybe. People are paying up, so I'm just going to, I'm selling it. I'm out. I'm going to be like this guy.

I'm going to sell it and put it on the PayPal and Square and Shopify. Maybe not. All right, let's do another one. Okay. So up next, we have a question from Rishi. "My dad has about two million in a traditional IRA and is working five more years to get Medicare.

He does not want to have a high RME, so he wants to take money out now, but with him working, it will lead to a higher taxable income. He wants to invest in real estate and buy a bigger property, logic being that if he is going to take money out, he would like the money to go to interest and property taxes to write off his income rather than straight to the government.

What are your thoughts on the best ways to reduce taxes, specifically regarding RMDs?" Got to be honest, I don't understand a whole lot of that question. Do you remember RMDs? Required minimum distribution. Yeah. So for an IRA, at a certain point, you have to take a certain amount out.

Okay. Let's bring in a tax expert on this, because this is a tax question, retirement. So let's bring in one of my top two favorite bills who works at Redults Wealth Management in the tax department. He's in the top two. Bill Arts. I don't have a definitive ranking system.

Bill Arts, you're in. Top two. I love it. All right. Bill, I can't put my finger on this one, but it doesn't seem to add up. So the idea here is I know I'm going to have to take this money out of my IRA. I'm just going to take the tax hit now, and I'm going to buy some property with it, and that way my RMDs will be lower in retirement.

I won't be forced to take this money out. This seems like a little backwards way of thinking to people. What are we missing here? Yeah. I don't love this. First of all, well done to Rishi. You're pops. He's 60. He's got $2 million in an IRA, and he's looking to reduce his future income.

He's looking at a pretty comfortable retirement. So just general lesson on RMDs, required distributions. They start at age 72 from retirement accounts. That first year is about 3.6%. If your dad's worried about higher income in the future, higher RMDs, he's in the minority. Most savers, once they hang it up and call it quits from work, they're immediately pulling out from their retirement accounts to live on.

Rishi, I think your instincts are correct here. What IRA withdrawals while your dad is working, what that's going to do is it's going to stack income on top of income, and it's going to cause him to pay a higher rate on these IRA withdrawals than he probably will in the future.

This is probably, based on the information we have, this looks like an optimal Roth conversion case for your dad. As my man, Bill Sweet, always puts it, all roads lead back to a Roth conversion. We talk about him a lot around here. I should have known it was coming.

Yeah, every time, every time. The reason for this is it sounds like dad's targeting at age 65 retirement if he's looking to target Medicare upon retirement. Based on his savings rate that we can assume, he may be able to defer Social Security until age 70, and his RMD start at 72.

Between 65 and 70, he may have this period of five years where he has super low income. During this five years, John, could you throw that chart on? I've always wanted to say it. Here's a look at some ordinary income tax and long-term capital gains rates. This was built by the team at Kitsis.com a few years ago.

I updated it for 2022 rates. Based on dad's IRA balance of $2 million right now, I think it's safe to say he's at least in this 22% tax bracket, maybe 24, maybe higher. Then at age 72, this IRA is going to be worth $3, $3.5 million, so that first-year RMD is going to be north of probably $125,000.

At 72, he's probably in the 24% rate. There may be an opportunity, starting at age 65, to withdraw, to convert IRA money to Roth at maybe 12%, maybe 22%. What you're doing with the Roth conversion here is you're choosing to pay tax early, but at a potentially lower rate than you will in the future.

I guess the point, too, is that if you're going to pull it out to pay the taxes anyway, you might as well put it in a vehicle that's still tax advantage, right? That's the point of the Roth conversion. That's right. The Roth conversion gives you kind of three benefits.

Number one is that IRA money is going to be taxed at some point, so you might as well take advantage and pay at the lowest tax rate possible. Number two is the amounts that are converted to Roth are all going to grow tax-free. Rishi, this may benefit you. If dad is really comfortable living at a low rate, this may go to Rishi as an inheritance, and he could have tax-free money.

Then to dad's point- Say, "Dad, the Roth is for the grandkids." Well, yeah. In theory, you want to leave that Roth alone to grow tax-free as long as possible. For dad, his goal was to reduce his RMDs and the amounts converted to Roth. The Roth account doesn't have a required distribution date, so he is lowering his future RMDs.

One more thing here. Does it ever make sense? Is real estate a good, taxable vehicle for retirement? There's a lot of pain points when you own real estate if you're renting it out, but are there any pros for investing some money in real estate in retirement? Yeah, this is a big "it depends." If it's not a rental property, you're pretty limited in what you can write off.

If it is a rental property and you're age 70+, you may not want to manage a rental property when you're retired. It's not my favorite for retired people, and if you're not renting it, the tax benefits just aren't as strong as if you are renting. Counterpoint if we're trying to help Rishi out here.

If he says, "Dad, buy a place in Florida on the beach," maybe that's a good idea. Some place for me to come visit. I'd sign off on that. Sounds good to me. Also, Rishi said they listen to our show on their evening walks, so thanks for listening. Colin writes, "My wife and I recently got married and are trying to figure out the best way to navigate the tax portion of things.

So romantic. Especially with getting married halfway through the year." Duncan, is this what you talked about on the Air Flight over to your honeymoon? What tax bracket are we going to be in, honey? Yeah. "Filing jointly this year, we are going to be borderline between 32% and 35% tax bracket.

Our salaries put us close to that limit. However, I also have a few side hustles, like personal training. With personal training, I work for a company and receive a W-2, minimal amount, approximately $2,000. And the other, I claim at the end of the year as it's my own business.

Is there ever a scenario where it makes sense not to work in order to avoid being bumped up a tax bracket? If it's something where I would not want to miss the income of the company I'm training for, is there more upside in stopping that side hustle?" Now, this is the kind of thing where people say, "Why would I want to make a million dollars?

I've got to pay 50% taxes on it." Does it ever make sense to have that theory, if you say, "Why would I make more money because I'm going to pay taxes on it?" Doesn't it always make sense to make more money? Yeah, this is kind of like, "Do people turn down raises to avoid more taxes?" You know what I mean?

I mean, I know if you're really, really close, I don't know. Does it ever really make sense, Bill? General rule of thumb, no. Earning a dollar is better than not earning a dollar. Even after paying taxes, you're going to have more money net than you otherwise would. In Colin's case, we're talking about a side hustle, so that could change his math on this.

The big reason why you still want to earn the dollar is ordinary income tax rates are marginal. If Colin jumps from 32% to 35%, all of his income isn't taxed at 35%. It's only the amount over that threshold. John, can we throw that chart up one more time? For reference, these are- Bill, chart on.

Come on. Chart on. Chart on. My mistake. I'll get used to it. There you go. These are ordinary income rates. If Colin's side hustle, his personal training pushes him up from 32% to 35%, only the amount over that threshold is taxed at the higher rate. I think to answer Colin's question, "Should I stop my side hustle?" It's really not about tax.

I think with a side hustle, we should think about this with two different questions. Number one is, "Colin, are you relying on this income?" If you're pushing the 35% tax bracket, you're $400,000, $500,000 plus in the income. Is a side hustle earning a few thousand bucks, is that material to your income and your wealth?

Maybe not. Everybody's financial plan is different, but that might not move the needle for you. Question two is, "Do you enjoy the side hustle?" Since this is not moving the needle financially, do you value the side hustle income more than your free time? In a highest tax scenario, Colin lives in California, and if he's pushing 35% on the Fed rate, he's at 9.3% in California, so effectively, he's going to earn $0.56 for every dollar.

He's going to net $0.56 for every dollar that he earns. For Colin as a side hustle, is $0.56 on the dollar worth it? That's a good point. Him and his wife are already making decent income. The side hustle is not bringing in that much on top of it. Is the time worth it to go ahead and keep doing that personal training on the side?

Right. I would never tell somebody, "Turn down a raise," or, "Stop working in December to not go over a tax threshold," but for a side hustle, it's really a matter of how much do you value your time versus how much income are you getting off of the side hustle?

Based on their income, I'm guessing they do this more because they enjoy it, right? That's what it sounds like to me. I think they probably just enjoy the personal training is my bet. I'm just happy seeing all this data that Bill is sharing. I'm just happy our tax code is so simple and easy to understand.

That's what I'm always grateful for. Yeah, always. If you're listening to this in podcast form, leave us a review. Duncan wants you to hit the subscribe button on YouTube. If you're not, compound merch, idontshop.com. Tomorrow, Duncan will be back with Compounded Friends. Yes, after a little hiatus? We have Alex from The Science of Hitting.

Oh, yeah. That's a very good sub stack. Thanks again to Bill for coming on, sharing his tax expertise. Remember, if you have a question, email us, askthecompoundshow@gmail.com, and we will see you next time. Thanks, everyone.