Welcome back to Portfolio Rescue. Each week we get tons of questions from our audience on personal finance, investing, taxes, markets, crypto, financial planning, everything in general. This show answers those questions. Remember, email us, askthecompoundshow@gmail.com. Today's sponsor is AcreTrader. AcreTrader allows you to invest in farmland across the country. One of the benefits of investing in farmland, while it has little to no correlation with stocks and bonds, does have a positive correlation with inflation.

Duncan, this week on Animal Spirits, we were talking about maybe inflation is going to be a little stickier, a little higher, 4 to 5 percent, potentially going forward. Maybe this is kind of one of those things. We haven't had to worry about inflation in a long time, and farmland is one of those things.

Remember, AcreTrader makes it easy to simply invest in professionally managed farmland. So visit AcreTrader.com to learn more and to learn more about the risks involved. That's AcreTrader.com/company/terms. Duncan, you and I were on the road this week in Texas. We were, yeah. Speaking of inflation, we kind of made the point that before there was like New York and maybe LA inflation and then everywhere else, when you go to restaurants, bars and such, it seems like that just permeates the whole country now.

Everything's kind of just expensive everywhere these days. Yeah. No, I bought a thing of whole bean coffee at a coffee shop near the hotel. It was $20. Okay. That seems fair. See, that's why I don't drink coffee. But that's like Brooklyn prices. That's what I would pay in Brooklyn.

Yeah. This is Houston, you know? Yeah. It is just interesting how long until the consumer revolts because it doesn't seem like anyone minds. Every flight I was on, everyone, "Get on quickly. Stow your stuff up top because this flight is full." People are still spending money. I wonder when we're going to start fighting it.

Anyway, let's do some questions. Cool. Yeah. Thanks, everyone in Texas. It was a good time. It was my first time in Texas. I thought everyone was nice, had a good time. Nice weather. It was fun. Yeah. Everyone was very nice down there. It was great. Yeah. Okay. First up today, we have a question from Yajur, I think is the best pronunciation I can do.

"Hey, guys. Love the show. Question for you. People are saying that the bond market is screaming recession. Has the bond market ever been wrong? Any notable examples? If so, why was it wrong?" The bond market generally is known to be smarter than the stock market. But yes, the bond market gets it wrong.

You don't have to go back very far in history to figure this out. The bond market totally missed inflation, much like most people. The bond market did not see this pandemic-induced inflation coming just like the Fed. Think about it. At the end of 2021, this is less than a year ago, the 10-year treasure was still yielding 1.5%.

By that point, inflation was already 7%, going higher. So the bond market was completely off sides. And I think that's one of the biggest reasons we've had this huge adjustment in rates this year is because the bond market had to play catch-up. Now, you could blame the Fed for that stuff, right?

The Fed was telling us all that inflation was going to be transitory. It wasn't going to last very long. It wasn't supposed to stick around at these high levels for this long. So maybe the bond market was taking its marching orders from the Feds. But I guess if you're in the camp that rates are all manipulated by the Fed and the Fed is doing all this stuff, can you really look to the bond market to be this predictor of what's going to happen in the economy?

I don't know. I think it can be helpful to understand what causes yields to change in bonds in the first place. So sure, the Fed controls short-term yields, right? But that's only on the very short end of the curve. You also have to think of things like supply and demand for bonds and based on investor demand for those.

And there are inflation expectations and expectations for future Fed moves, expectations for economic growth and maybe some price yield trends that's going on if you're a technical trader, I guess. I think if you add all this up, one of the things that's confusing for people who don't pay attention to the bond market is, you get bond yields moving, but they don't always move in the same direction at the same magnitude, right?

So John, throw on the chart of 10-year Treasury yields versus 3-month T-bills. So this is over time. You can see directionally they're fairly similar. So 3-month T-bills are essentially, think of them as like savings account yields. It's kind of a good proxy for the Fed funds rate that they use to sort of do monetary policy by raising and lowering rates.

But this is like a savings account yield, or a CD rate. You can see right now, at like 4.3%, 3-month T-bills are yielding almost 80 basis points more than the 10-year Treasury yield. That, we talked about in an inverted yield curve last week. In terms of risk and reward, that shouldn't make sense where ultra-short-term, 3-month, government-backed T-bills, which mature in a very short period of time, shouldn't yield that much more than something that goes 10 years out on the risk curve, right?

So this is not normal. The hard part here is the Fed is effectively inverting the yield curve, right? They're raising short-term rates, and the long end of the curve is saying, "I don't care," right? Because the Fed is trying to snuff out inflation. So is the bond market predicting a recession, or is the Fed simply going to cause one?

It's kind of like, is the bond market really doing stuff here, or is it really just the Fed saying, "No, no, no. We're showing you we're going to do it, because we're raising short-term rates"? It's also interesting to see how the yield curve has changed over the past year or so.

So, John, throw this next curve up. This is a one-year difference in 3-month T-bill yields, 2-year Treasury yields, 10-year Treasury yields, and 30-year Treasury yields. You can see that the longer-term bonds have moved up. The 30-year went from 1.9 to 3.5 or so. The 10-year again went from 1.5 to 3.5.

But look at how much. 3-month T-bills, this is a year ago, not that long ago, went from basically nothing, 7 basis points, to 4.3%. Even 2-year Treasuries went from less than 70 basis points to 4.3%. So we've had a huge move in the bottom. There's been slight move up in longer-term rates, but not nearly as much.

And so, I guess the yield curve could be telling us a bunch of different things. We don't know. It can't communicate. But it could be saying, "The long end of the curve doesn't believe inflation's going to be here to stay." Which, if you think the bond market is smart, yeah, maybe we believe them, but is the bond market really that smart?

I don't know. Traders maybe assume the Fed is going to have to cut rates in the next 12 to 18 months, right? That's why those longer-term rates aren't moving down yet, or are staying put, because they don't believe that the Fed is going to keep rates this high. And again, the short end of the curve is maybe helping the Fed orchestrate retirement, because that's all they can do, or recession.

Retirement, yeah, that'd be fun if we could retire the Fed. Because that's all the Fed can do to slow inflation, right? So, I don't know. Maybe economic growth is going to slow in coming years. That's what the bond is telling us. And maybe just we should realize that predicting the future of the economy in the path of growth and inflation, interest rates, and all these things is really difficult for the bond market or the Fed.

So, my biggest reservation about using the bond market to try to predict what's going to happen in the economy right now is just that the Fed is so involved in these markets. And I don't know if the bond market is telling us something, or they're just doing what the Fed is telling them.

In general, do you think, are bond people having like a renaissance right now? Are they just like rolling up in a Rolls Royce and getting out with sunglasses on? I feel like they have to be feeling good these days. Well, not yet, because if you look at past performance, bonds have gotten killed this year.

Going forward, they should be doing better, because rates are finally higher, but- I just mean for years, it was like no one cared anything about bonds, and now everyone's talking about bonds. Yeah, to your point, we've been mentioning this for a few weeks. We get tons of questions on bonds these days.

We got another one in this very episode. But yes, I just think, I don't want to argue with historical relationships, but I also think that the Fed being so heavily handed and involved here makes it much harder to understand what's going on. Yeah. Yeah, I find it all confusing, and that's a good segue to the next question, because ...

Yeah, this one and the third question, actually. I find a lot of this bond stuff a little confusing. Let's do it. Yeah. All right. Up next, we have a question from Jacob. "My wife and I just got married in September. We both have good jobs and are trying to save up for a new house in the next few years.

We currently have $50,000 in savings for a house, along with a $10,000 emergency fund, which we hold at a local credit union in a savings account at a 3% yield. We are wondering if short-term, three- to 12-month T-bills yielding between 4.25% and 4.75% would be a better option than a high-yield savings account for these funds." Another question we received for years and years in a low-rate environment was, "We're saving up to buy a house, but there is no yield anywhere.

What do we do?" Savers of the world can finally rejoice. There is finally somewhere to put your money, and you have multiple options. The great thing is, there's not only yield again, but it's yield on the short end of the curve, because if you're trying to match that down payment in a house, say, like I have three years until I'm going to buy a house, or two years, you can match those assets and liabilities and match the time horizon of when you're going to do this.

If you bought a three-year treasury today, knowing that you're going to try to buy a house in three years, you could essentially set your maturity date for then, and it takes a lot of the risk off the table. I actually think for the first time in a long time, young people could have a better chance.

If you have a good credit score and you have a down payment saved, in the coming years, I think you're going to have a chance to have much better negotiating power for a home, and maybe much better price action, if prices do fall 10%, 15%, 20%, like some people think they could.

I think if mortgage rates just came down to, like, 5% or so, it would make things a lot better for people. And if they don't, if they stay in the 6% to 7% range, the prices are going to have to come down. So I think, again, if you're waiting in the wings now, it might not be as good of a time as it was three, four, five years ago, but I think it's going to get better.

So as far as where to save that short-term cash, an online savings account is going to be easier. I use Marcus. I'm getting 3% right now. That should hopefully be 3.25 or 3.5 by the end of the year, because the Fed is going to raise rates at their meeting next week again.

They said probably another 50 basis points, maybe 75, if they want to get it. 3% is not bad. So you have this person has $60,000 in savings, right? That's what they say, $50,000 and then $10,000 in emergency savings. That's $1,800 a year in interest at 3%. If we get to 3.5%, we're talking more than $2,000 a year.

That's pretty good. Now, to their point, short-term treasuries can earn a higher yield right now. I looked at the average maturity on the one to three-year treasury ETF for iShares. It's 4.3%. If you go to the Vanguard short-term bond fund, I think that actually has some more corporates than all governments, but that's 4.8%.

So with those kind of yields, we're talking more like $2,600, $2,900 a year, if those rates stay the same. That's pretty good. Now, the thing is, these yields, it's not like they just get to a level and then they stay there. But if the Fed's going to keep raising rates and try to fight inflation, those short-term rates should stay higher for a little longer, assuming the Fed doesn't destroy the economy and then have to lower rates just to save us again.

I talk a lot about the tolerance for complexity on this show, and I think that probably comes down to ease of access here. So in an online savings account, you might get a little bit lower yield, but it's super easy to transfer in and especially transfer out. It's not that bad if you have to go to a brokerage account, but if you're buying these short-term treasuries or treasury ETFs, you have to go to the brokerage account, you have to put the money in, then you have to make the purchase, and then you have to make the sale, and then you might have to wait a couple of days for the trade to settle to get your cash out.

So it's not the end of the world, but it's one extra step to get that extra yield. I honestly think either route probably makes sense these days. You could maybe even split the difference and have a little bit in each, because if rates do start moving, and treasury yields are moving different than the Fed funds rate or the savings rates, you could maybe go back and forth to one another.

I just think once you pick whatever route you're going to take, I would just stick with it and not try to go back and forth and earn an extra 10 basis points here or 20 basis points there. In the grand scheme of things, that's probably not going to matter much.

The good news is, you already know how to save. This person has $60,000 saved, they're well on their way to having a healthy down payment, and if and when home prices drop from here, they could actually be in a pretty good position to buy. Yeah, yeah. I mean, let's hope so.

For those of us that don't own homes yet, it would be nice to see this. This is you potentially, right Duncan? Yeah, right, yeah. So if you're saving for down payment now, what would you feel more comfortable doing? Honestly I would probably Google the highest yielding stocks and buy those and lose half of it by next year.

So you would take dividend stocks for your down payment? Yeah. I'm just telling you honestly what I would probably end up doing, but yeah. You can lead a horse to water. You know, here's the thing. I don't mind having some stocks in your down payment fund, but I would right size it and maybe put 20% in there, 30% because you just don't want those stocks to crash right when you need the money and go from I'm going to have $70,000 for a down payment to wait, it's $60,000 because I had one awful month in the stock market.

Right, yeah. Yeah, in all seriousness about the question, I would probably be more likely to have a savings account just because of what you're saying, the convenience factor. It is, it's easier. Now you have some yields. You're kind of paying a fee for convenience I guess, right? Let's do another one.

Yeah, I didn't even realize we did the first three ones are all about bonds here. Right, yeah. No, I'm learning a lot today. All right. Okay, so up next we have a question from Mitch and this is the most confusing thing to me. I keep saying bond math. I don't know.

Maybe you can make it make more sense. In the past I hesitated to allocate to bonds since you get killed on principle while collecting low rates of interest. Now that we've got a substantial allocation of bonds or a more substantial allocation of bonds than ever before, I'd like to get more clarity on the impact that rate changes have on principle value.

For instance, if rates double, does that mean the principle has dropped in half? I think it would be helpful for people to better understand the scale of value changes with rates to get more comfortable with the risk or benefits of future bond value changes. Great question on the basics of bonds that most people either didn't know, didn't want to know, or maybe didn't care to learn about until this year.

All right, so the first things to know about bonds and prices and bonds and rates. There's an inverse relationship between bond prices and rates. John threw up my handy Tom Cruise here. Easy. Inverse, right? We've been using a lot of inversion lately. Tom Cruise explains it the best. So there's an inverse relationship, meaning when interest rates rise, bond prices fall.

When interest rates fall, bond prices rise. This makes sense. Let's look through a simple example, Duncan. So let's think about the relative attractiveness. If you own a 4% bond right now and rates go to 5%, your 4% bond has to be worth less if you want someone else to buy it because you can get 5% of the market.

So you're going to get less interest, so you're going to have to charge a discount if someone wants to buy that to give them a higher implicit rate, right? Now let's say rates go to 3%. Well, now your 4% bond is going to be worth more relatively because you have a higher rate.

So people are going to give you a premium for that bond, right? So it makes sense when you think about it in terms of the rates that you could get, right? Now the real question is how much do bonds fall when rates rise? That's what everyone wants to know, right?

And this is getting into a little bit of nerdy bond math territory, but I think it can really help set expectations if you're buying bonds for your portfolio. So duration is this number that measures the relationship between bond prices and yield changes. It's expressed in years, right? So you'll see 8-year duration.

And it's typically pretty close to maturity of a bond, but not exactly the same thing. It basically takes into account the maturity of the bond, but also how long it takes to get your money back. Because if you're earning a yield, you're technically going to get your money back before the end of it, right?

That make sense? Okay. So the most important thing you need to know about duration is the higher the number, the more volatility in your bonds, all else equal. So let's say you have a bond portfolio with a 5-year duration. What this tells us is that you can expect a 5% change in price for every 1% change in yield.

Yield goes up 1%, you should expect your bond to roughly go down 5%. Yield goes down 1%, you should expect your bond to go up roughly 5%. It's not exactly that, but it's pretty darn close. There's some other intricacies involved in here, but that's the gist of it. Okay.

So higher duration means bigger drawdowns in a rising rate environment and bigger gains in a falling rate environment. John, let's do a chart on a zero coupon bond to show an example here. This is the extremes. Zero coupon bonds are all duration because you don't get paid income over time.

You buy it at a heavy discount and you get paid back your principal at maturity. So there's no regular income payment. So zero coupon bonds are literally all duration. This is the 25 plus year PIMCO one. You can see it's rallied lately, but it's down 34% this year. That's more than the stock market.

And then we compare that to one to three year treasuries that are down 3.8%. So again, higher duration when rates rise is going to get smacked way more than lower duration, which makes sense because one to three year treasuries have like 1.9 year duration, right? So they're not getting hit as bad.

Now the other side of this can be seen in the first six months of 2020. John, do the next chart. This is the first six months of 2020. Zero coupon bonds were up more than 30%. One to three year treasuries were up 3%. This is like two sides. It's two sides of the extreme coin and it's rarely going to be this much extreme involved, but that's the trade off here.

So the question for you as an investor, I don't think there's a right or wrong answer, but it's do you want to accept more volatility in your bonds when rates fall? You want to get bigger gains and rates rise, you're going to get bigger losses. Or do you want to like try to predict how they will work in the economy if rates are going to fall because economic growth or the fed or recession, then you want to like go on along into the curve to get more bang for your buck.

Or if you're worried rates are going to rise, then you're going to go in shorter term and you want to be more tactical. Or do you just want more safety and predictability? Do you want to take the volatility out of the equation? My way of thinking about it personally has always been I'm going to accept volatility where I'm getting paid for it and that's in the stock market.

I don't want to take much volatility in the bond market, but it really depends on what you're trying to get. What do you think? How's my explanation here, Duncan? I mean, I feel like the Zach Galifianakis gif with all the numbers flying by me. Again, the biggest thing you need to know is that the duration tells you.

So if it's a 10-year duration and rates go up 1%, you're probably going to lose 10%-ish. That's your relationship. So if it's a 50 basis point move, you're going to lose 5%. That's kind of the relative relationship. Okay. I think I got it. I think I'm getting it. So if we go into recession and interest rates get cut in half here, long duration bonds are going to do much better, right?

Because they have a much higher duration. Got it. Let us know, Mitch. Let us know if that explains it and helps you understand it. All right. Let's do another one. Okay. Up next we have a question from... Actually, I'm not going to save your name in case this question makes them have an awkward conversation with their wealth manager.

Okay. Long-time listener of Animal Spirits. I'm 49 with three kids, retired and married. For all intents and purposes, I'm rich-ish. That is comfortable but can't afford a yacht. I hired a wealth manager and he brought me this fund of uncorrelated assets with a 10-year walk up. I trust my manager implicitly, but he claims that it's exclusive and not everyone has access to this private equity fund.

I think I'd be better off buying Vanguard ETFs, but for what it's worth, he's a professional wealth manager and I'm just another guy on the street. I don't know if he means on the street or like the street. You know what I mean? I think just a guy. Okay.

Guy on the street. Someone in the comments here asked how I have three kids and a house that's so white. You know those magic eraser things? I'm constantly washing the walls here. Fingerprints, crayons, everything. Is that like a long call for Procter & Gamble or who makes those? I don't know who does make them.

It's got to be one of those consumer staples, but yeah. Or OX. Yeah. I get those every three months from Amazon because I go through so many of them. Internet down in my office today. I was down hard. No internet when I got to the office. They canceled my account for some reason.

I said this week I'm not feeling so great about AI. It took me 45 minutes to get a person on the phone. AI doesn't understand. Talk to an operator. Talk to an operator. I just say it over and over again until someone talks to me. Right. Yeah. That's the future, but I like the Christmas vibes.

I appreciate that. My wife is big into big decoration. Okay. My view here is that there are a lot of ways to be successful as an investor. I have my way of doing things, but I'm not delusional enough to think that my way is the only way to invest.

Having said that, if you're going to see through a long-term investment plan, you have to be able to understand what you're doing and why you're doing it. We get a lot of questions about hiring an advisor. I think you can outsource your investment plan and your financial plan and your portfolio management, but you can't outsource your understanding.

Let's actually bring in a financial advisor because I think this is better for someone who's working with clients on a daily basis. Alex Palumbo. Hey, Alex. Hi. How are you? Alex, you've implemented a lot of plans. You've worked with a lot of clients. You've talked to a lot of prospects.

Now, one of the big things for us at RDWM is fit, and that's fit between the client and our way of doing things and then our way of doing things and the client. I mean, if someone comes to you and wants you to do something for them that we simply can't or won't do, how does that work?

Alternatively, you have a client who comes to you and they say, "I just don't agree with the way that you invest, but I still need a financial advisor." How does that work and how do you work through those sort of challenges? Yeah. It's interesting when people want to work with a financial advisor or a financial planner and then don't want you managing their portfolio or they don't trust the things you say.

It seems like a very non-mutually beneficial relationship. Like, "Why are you going to pay me money for advice that you don't then take?" Regarding this particular listener, I mean, first of all, 49-years-old, three kids and retired, rich-ish. I don't know a lot of 49-year-olds that are retired with three kids that are in fact rich-ish.

Very impressive. Just because they don't have a yacht, yes. No, to be honest, that is impressive. So we could assume that you're listening to Animal Spirits. You're somewhat financially savvy, you would say. I mean, these illiquid investments are like the bane of my existence as someone who previously worked in the broker world selling a lot of these typically subpar products.

And listen, it's exclusive. Not everyone has access to it. It's a private equity fund. He's probably right, but that exclusivity doesn't necessarily mean better outcomes. And you're paying a steep premium for it in the fact that you can't touch this investment for 10 years. So if you trust your wealth manager and you like to add diversification to your situation, then it's most likely fine with a very small portion of your portfolio to take that leap into the private equity fund.

However, within the financial plan that you're monitoring with your financial advisor, I would categorize this investment as not funding goals. So don't rely on using any of these funds towards the achievement of your financial goals. You're essentially increasing variance in an attempt to hit home runs, which is fine if you understand the risk-reward relationship.

Right. And you know if it's a 10-year lockup, and sometimes these private equity funds, I know from experience, can extend and be way longer than 10 years. It could be 15, 20 years to get all your money back. And so understand, you're right, that this is untouchable money for a long time.

So if you're retired at a young age, you're not taking in Social Security yet, you're living off your investments, where else is that liquidity coming from? And do you have the ability to take 5%, 10%, 15% of your portfolio and put it in something liquid and still have the ability to fund your lifestyle in the meantime?

You know, we have products that, not products, we have strategies we offer clients that very small portion of their overall portfolio, "Hey, I think this could make sense for your particular situation. Definitely not mandatory. What are your thoughts?" But then we have our core bread and butter strategies that saying, "Hey, when you become a client, these are the 1, 2, 3 strategies that you are going to utilize inside of these accounts.

So this isn't like a buffet. You can come and get anything you want because that's a very nonproductive relationship in my opinion. So there's a difference between like small percentage of your assets. Let's try to hit home runs, but we're not going to mess with the bread and butter, the core competency of how you and your family are going to grow your assets over time and achieve your goals." And I do think, not trying to like, you know, take out this guy's advisor here, but if you're saying, "I think I'd be better off with Vanguard ETFs and this advisor keeps pushing private stuff and illiquid stuff because they're exclusive and all this other stuff." I think that's at the point where you start having a conversation with someone else, just see what else is out there because if it's really not something that you can stick with, even if it's a great investment and it's not going to work for you, like it's not suitable for you, then you're never going to be able to stick with it and you're going to want to leave eventually anyway.

And by the way, breaking up with an advisor with a bunch of illiquid stuff in your portfolio, as Alex you can attest to, is not an easy thing to do. It's much easier to cut bait when you have a more liquid portfolio. Yeah, that is brutal. I interpreted this question as, "I already own a high percentage of Vanguard ETFs.

Now he's coming to me with this little portion of my portfolio that maybe I should use in this private equity fund." But if your interpretation is correct, Ben, and this guy is talking negatively on Vanguard ETFs or recommending a very high percentage in this investment, then I think that's a much bigger issue and you should not proceed with using this advisor.

Right. Okay, let's do another one, Duncan. I have one follow-up, one new boil question maybe, but what's the point of a 10-year lockup? Why would you be okay with that? Well, it's a private equity fund, so that's just an illiquid fund structure that you're going to be investing in these things.

And they assume by the time you buy into some of these investments, turn them around operationally, and then have some sort of liquidity event, it's going to take 10 years probably. Okay, okay. So they just don't want to be pestered after three years about getting money back when it hasn't had a chance to do what they're trying to do with it?

Yeah. Okay. Duncan's like, "Why would I need 10 years of a lockup in an investment when I can lose all my money in Oatly in six months? I don't really understand." When I can lose 40% in a year, why do I want a 10-year lockup? Okay, so last but not least, we have the following.

"I'm in my mid-20s and just got my CFP. I've been an advisor for a couple of years now, but I'm having trouble relating to our firm's clients since most of them are retired or approaching retirement. I'm worried they don't trust me since I'm much younger than they are, and I don't have a ton of experience.

Do you have any advice for a young advisor?" Well, we actually do. Great, great question. Alex, I'm not sure you know this, but I look a lot younger than my 41 years of age, right? I have three kids, and I go to the store and I still get carded sometimes.

Do you really? On occasion. That's got to be flattering at this point. One of the first meetings I ever had with Chris Venn and one of our clients that reached out when I first joined Ritholtz was a guy in his mid-50s, and he kind of made the point to both of us immediately that, "I don't know if I can handle this age difference because you guys are so much younger than me." It can be tough because there is a huge difference between experience and expertise and all these things, but a lot of people you come into contact with who have the most money are going to be older.

Alex, you came to us at, what, 24 years old? Is that about right? Yeah, I was 23 when I first started here. 23. How did you navigate that as a young, up-and-coming advisor and then building a book of business? Yes. Well, now that I'm old and crusty and in my 30s, I can give a very seasoned answer to this question.

First and foremost, I did a previous interview with the one and only Josh Brown on this exact topic, which you can see here, being a younger financial advisor. But yeah, it's actually a really good question. I think it's pretty nuanced, to be honest. First and foremost, I would say to this listener's question, your clients are not your friends.

They're paying you for a very serious service that you should be efficient and adequate in delivering. So when you mentioned I'm having trouble relating to them, to me, it makes me think you're viewing your relationship in the wrong context. Now I'm very close with a lot of my clients.

Some send me yearly holiday cards, not going to give out names. A lot of them send me wedding gifts when I got married. We are very close, but this closeness is not based on us watching the same TV shows or having the same friends. It's based on the mutual respect of our financial planning relationships and then adding in layers of humanity, personality, and bonding based on this core financial planning concept.

So first and foremost, you have to understand their perspective. Trust me, when you're 50, 60, and 70 to this listener, and you're going to be talking to 25 year old, you're going to be thinking they're like your kids or even worse, your grandkids. But your job is to have such a deep level of competency and technical expertise that these prospective clients or your clients are forced to look past your age because your age is not what defines you.

To Ben's point, a 55 year old broker could be doing terrible work for their clients for 30 years, and a phenomenal advisor can be doing exceptional work for your clients for five years, and in a vacuum, you'd want the 25 year old every time. Do you think the remote work thing actually works in a young person's favor when you're not having to sit across the table from someone, and it's a little harder to tell the age gap or experience it?

That's definitely so. When I first started here, we didn't even do like Google Meets. It was all phone calls and screen shares. And I did feel that helped me a lot as a 23, 24, 25 year old advisor because I still look kind of young. So they couldn't see that.

I do think that helps a lot. One other piece of advice, you have a team on your side, right? It's okay to leverage your team and say that you don't have all the answers yourself from an investment management perspective, from a portfolio allocation perspective, from a tax insurance estate perspective.

You have people in your firm that should have decades or combined decades of experience, and it's okay to leverage that. Yeah, I think that helps make a lot of people more comfortable if they know that there's a team behind you. Here's our tax expert or insurance expert. It's not just me.

I'm your first level of communication and I'm your relationship manager and all these things and I'm helping you to plan, but there's more people here than just me. And like me, I'm here. I'm always happy to help, you know? Portfolio construction. To be honest, I've probably spoken with the most prospective clients out of anyone that's 31 years old that's in this industry.

Thousands of people. And I can count on my hands. That's a not to brag right there, Duncan. Yeah, that's definitely a not to brag. That's a not to brag. I've talked to many, many people. I can count on the amount of hands, the amount of hands that I have, the fingers on my hands, the amount of people that have actually said, "Hey, you are too young.

Let me chat with someone more experienced." And you know what, Ben Carlson and Duncan Hill, we do that, of course. Make sense? Yeah. Chat with Gary, chat with Bill. Not one of them have become client because if someone's coming into that meeting with this preconceived notion about it, they're probably not the best fit.

And the second thing that I'll add is there are certain clients or prospective clients who think the opposite. Hey, I want to work with someone who's younger, more eager. They're in the new school of advisory work, not going to shove me in some investment unit trust. I like the ETFs, the new school way.

So don't always project some of those insecurities even though some of them are real. And that comes back to our first question about fit. And it's going to figure out if you want to work with that person or not, it's a two-way street. So also, I just wanted to say, Alex, I've never seen Duncan in a worse drawdown than we went to a nice restaurant in Houston and the maitre d' told him to take off his hat.

There's no hats involved. Yeah. I probably would have left if I wasn't with all of you guys. He was in an immediate bear market, immediate bear market. One time we were in the office and Duncan didn't have his hat on and Cameron looked at him and he goes, "Is Duncan wearing a wig?" Yeah.

No one knows what my hair looks like. All right. Thanks, Alex, for joining us again, offering your expertise as a more seasoned advisor now that you have a beard. I know. I always had the beard. Thank you so much for having me. May I make a quick plug, a product placement?

Compound water, tastes like Barry, for the intellect, for the trader, for the daredevil inside you. All right. Don't do that again. Hold that bottle up a little closer so people can see. It's a real thing. We actually made a ... This is Compound Water, Ben. Did you know this?

A listener. Yes. A listener is like a bottle of water person. Yeah, we made some bottles. May or may not cause you to wear deep V-neck spandex style. All right. If you're listening in podcast form, leave us a review. Remember, leave us a comment in the YouTube comments here.

If you have a question, email us, askthecompoundshow@gmail.com. We will see you next time. See you, everyone. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye.