Advice Evolution

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You're gonna do a really great financial future. Tom and Don are talking real money.

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It's story

Origins of the Show

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time. Welcome to a special story edition of the Talking Real Money Podcast. I'm Don McDonald. Over there is Tom Cock being invaded by plastic planes. And today's story begins in a mountain town several years ago. Because I can't do the math well enough to tell you exactly when it was. Oh, I'm guessing it was about forty years ago. A young man sat down in front of a microphone and started giving advice first to elk in a field at 10,000 feet in Leadville, Colorado. But then as the program grew, he was giving advice to people in ninety cities and towns across America. That man was me. And the reason I'm telling you this story today about the advice I gave way back then is to show you how we've evolved in our opinions and suggestions about investments, that we don't just remain static and keep doing the same thing over and over and over again, despite the fact that it kind of sounds like we do, if you listen in the short run. So back in the day, I was giving advice on how to invest. I love doing it. It was my favorite thing. We used to have a lot of guests on the Don McDonald show, previously the Ways and Means Committee, but I decided I like taking calls and answering questions a whole lot better. So you would call me, or people who looked a lot like you but had actual landlines, would call me. That was all we had then was landlines, right? I I believe that uh well I had a I had a mobile phone about 1990, I think.

SPEAKER_04 2:06

Okay, so this is 88. Yeah, that's pretty I'm still stuck on the elk thing because I was trying to figure out which which members of the elk probably really liked you, but I'm thinking it was a buck. Just a guess. I could be.

SPEAKER_02 2:18

Well, we're talking money. Yeah, I know. Wait, is that isn't that a there buck elks? I don't know. All I know, all I know is that my first station was in Leadville, Colorado, and I was doing an overnight show. And now Leadville, Colorado is at 10,000 feet. Everybody is sound asleep suffering from hypoxia in the middle of the night.

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The money is thinner.

SPEAKER_02 2:39

It used to be thick back when it was a silver mining town. But now that it's just a Molly B dam mining town, as my grandfather used to call it, he could not say molyddomum. So he called it Mollybee Dam. It's kind of a hard word to say. Well, molybdum. Yes,

Index Funds Take Hold

SPEAKER_02 2:56

it is. Moliddumum. It's tricky, yeah. So anyway, back then uh I was looking up the best funds. You know, these the the conventional wisdom was great active managers. They were worth paying those high fees too, because they could help you beat the market. That was the way of thinking back in the 80s. There was very little interest in the un-American practice of index fund investing. However, from its humble roots in 1974, was it? I didn't even look up the I think it was 74. Public Vanguard Index Fund. Yeah, something like that. Yeah. Something like that. From its humble roots back in 1974 with the uh S P 500 fund, Vanguard was slowly starting to build a following and a track record that showed that index funds, despite the fact that they never beat the market, index fund investors themselves actually did better than their brethren who were trying to pick funds and buy the right one and sell the wrong one and move in and out. And so over time, instead of suggesting Janice and 20th century, which changed to American Century, and Invesco and Safeco and Safeco. Remember Safeco funds?

SPEAKER_04 4:15

Yes, of course. Yeah.

SPEAKER_02 4:17

Yeah. And all of these others, and the list is endless. PBHG, I could just, you know, slowly I begin to learn, because I like learning that index funds were a better place to be. And then by about the early 90s, early to mid-90s, no, early 90s, I was suggesting Vanguard almost 100% of the time, Tom. Why was I suggesting Vanguard almost 100% of the time?

SPEAKER_04 4:46

Well, Vanguard was the at the vanguard of index funds, right? I mean, they were they were the same.

SPEAKER_02 4:52

There were no other options then.

SPEAKER_04 4:54

Right.

SPEAKER_02 4:55

So nobody was doing it, and they were doing a lot of it. They were bringing out all kinds of broader indices and you know, giving you bond indexes and all of these options. Is it indices or indexes? I think it's both.

SPEAKER_04 5:08

The interesting thing about that is you get to about 2,000. In 2000, it was still one out of every $20 that was invested in an index or index-like product. Still pretty small penetration. Tiny, tiny, tiny. So all those years when you started talking about them when there were a few people, but it was still fringy, right? It's still anti-American in some way because there were posters to that effect.

SPEAKER_02 5:36

Exactly. Here's the thing. In 1993, when I moved to Walt Disney World because I got fired from Business Radio Network so they could sell my show to somebody, I was being accused over and over again of being on the take that Vanguard was paying me under the table to suggest their funds. And I used to give them a hard time going, you know, how much money have I sent you? And they go, Oh, billions. And I don't get anything for this. I joked about it. I joked about it on the show. Uh then in 1993, when we were trying to go it alone, we desperately needed money because we had no uh no revenue coming in except advertising revenue. I used to advertise temperatic mattresses for $25 every time somebody called the 800 number. Um and Vanguard said, Well, tell you what, we'll sponsor the show.

SPEAKER_04 6:31

I guess I'd even forgotten that part of it.

SPEAKER_02 6:34

Yeah, so they gave us uh about $8,000 a month to run ads on the show. Now they ran as ads, but I did say I'm being paid by Vanguard because I I want to be upfront about any remuneration because it it does uh it it does color your judgment.

SPEAKER_04 6:52

Creates a possible conflict.

Factor Investing Arrives

SPEAKER_04 6:54

Sure. Yeah.

SPEAKER_02 6:55

So I was an index guy for a very, very long time. However, just prior to me moving down to Disney World, a seed was planted in my wee little brain when I was in Colorado Springs broadcasting from my house, when a guy, I mean, honest to God, he cold called me basically. He showed up at the front door like a fuller brush salesman. Branched the brush. Branched to the brush. Under his arm was was was a stack of paper. Really? That's a brand. Honest to God, he had charts and data. I know you can't believe this, knowing who who this is. The guy's name is Paul Merriman. He literally got on a plane and flew from Seattle to Colorado Springs because he listened to my show in Seattle and he wanted to convince me that this new thing called factor investing was the way to go. It was being, it was being uh uh What was that like '97? No. It was ninety-two. No, it wasn't that early. Well, he came to Colorado Springs.

SPEAKER_04 7:55

That early? Okay.

SPEAKER_02 7:57

So he had just, but no, he thought it was interesting. He was a market timer who was starting to say, and he just wanted to show it to me. So we talked about it. And I went, this is interesting, but it looks, yeah, you know, where's the evidence? Well, here's the evidence from all these years, Fama French, all that stuff. I'm I was slow. I was slow to come back to the show.

SPEAKER_04 8:15

So was he a little bit, by the way, because we didn't he didn't start using them at Merriman until the I thought the mid-90s. I could be wrong.

SPEAKER_02 8:21

I think it was the mid-90s, and that was when he started using them, and I started suggesting them occasionally on the show. Occasionally.

SPEAKER_04 8:31

Yeah. And you can only get dimensional funds through an advisor.

SPEAKER_02 8:35

That was the big problem with me suggesting them, is that I knew you had to go to an advisor, and back then one percent advisors were few and far between.

SPEAKER_04 8:44

Yeah, people were getting two.

SPEAKER_02 8:45

One and a half, two that you had to pay to get the funds. So you're paying two, and I think they were about fifty basis points back then for the funds.

SPEAKER_04 8:54

Well, it was spendier and it was more complicated because to do an all-equity portfolio, you needed like sixteen or seventeen funds. Yeah. They didn't have like the core funds where they had, you know, a fund of funds. It was it took a lot of work.

SPEAKER_02 9:06

So it was really not very it wasn't really hot. Um, but with with the when I started working with Merriman, when Tom, who was the marketing director of Merriman, called me and said, You got to come over here and work for it.

SPEAKER_04 9:18

Actually, I I think we can pretty well point to the big change for Dimensional and Merriman when I came on board in '97. It's all Tom. It it's just sh straight up. It's one of the fact of the right.

SPEAKER_02 9:33

If he did, we might understand it.

SPEAKER_04 9:34

No, David, no way. Uh but somebody did tell us once tell me once that we are OGs at Dimensional, so that made me feel good. So Really? Yeah. They really did. They were serious, too, by the way. So this was like a year.

SPEAKER_02 9:47

Well, because for a very long time we suggested Dimensional a lot on sound investing and then on the uh early version of Talking Real Money. But then this guy named Edward Rapetto, who's got a really, really, really. Eduardo Repetto, with a thick Argentine accent. Yes, he does. He left Dimensional, went and talked to the guys at American Century and said, There's this newfangled thing called ETFs, and I want to start some ETFs.

SPEAKER_04 10:16

And this important point right here because he and others at Dimensional, inside of the organization, had said, apparently, this is not I don't know this verbatim, I know it through others. You guys really need to be using these ETFs. This is a we should be doing ETFs. And and inside the hires up or whatever, and he was co-CEO at Waterwest.

SPEAKER_02 10:38

Yeah, at Dimensional, yes.

SPEAKER_04 10:39

Yeah, and they just said, no, we're not gonna do it. Don't need them.

SPEAKER_02 10:43

Well, because they were afraid, and Dimensional is a very conservative company, they were also afraid that it would hurt their relationship with their advisors. May well be. Um, they mentioned it at one of the things, you know, that when somebody asked them about it. They want they wanted to keep that relationship

ETFs and the Flash Crash

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with advisors. But ETFs were were becoming popular. Now we were late adopters of ETFs.

SPEAKER_04 11:05

That's right. Very it came up when we started um Vest then Vestry uh basically in 2010. But then think that through a little bit, what happened very quickly. In May of 2010, you had the Exchange Traded Fund flash crash, where 60% of ETF trades were canceled. A trillion dollars went up. I can remember a client calling me saying, hey, my portfolio just I was just looking, went down by 40%. What do you mean? It just went down 40% like right now. Um, and that was when the market movers did not step in, right? Market makers, yeah. Did not step in to support the price, and things went straight down. So at the time, you and I looked at each other and thought there might be something fundamentally wrong with exchange trade funds. We're gonna wait. We're not jumping into that pool because we had just started this new firm, we were just getting going, and it just felt way too risky to us.

SPEAKER_02 12:04

And we knew mutual funds. I mean, we had decades of experience with mutual funds, they they they were comfortable, and we were an advisor, so therefore we could use dimensional funds and you know offer them to our clients, and and it was good for business. Yeah, was. And uh so it took us a while to come around. But the ETF industry matured. Uh they they got bigger and more people got involved. You got a lot of the big banks getting involved. So you had this much larger pool that I believe reduces the risk of a flash crash. I don't think it eliminates it. I think we could have another one conceivably if the market makers stepped away. But that's less likely to happen as there are more of them.

SPEAKER_04 12:52

Yeah, exactly. There's a bigger group now, so it more security in that way.

SPEAKER_02 12:57

Aaron Powell And the thing that attracted us to ETFs was they had the great diversification, they had very low fees, and they had some tax advantages. And and by the way, they allowed any of our listeners to get into the factor funds, and this is where the story gets interesting, into those funds that we discovered and really we have spent a ton of time reading the research on factor investing from Fama French et al. Uh, and we're convinced that having a value and small and profitability and even a momentum tilt improves, has the potential to improve returns, has historically shown that it has improved returns in the past. We don't know what the future brings. So we that's why we suggest Avant we suggested Avantis so much. And it took a while to add dimensional to that because dimensional was late to the party.

SPEAKER_04 13:56

They dragged their feet. Uh, you didn't mention one other thing that seems now like no big deal, but has for many years early in the ETF business, you didn't have to pay to trade them. You could just buy and sell. Now we're not traders, as you know, but that was kind of like, oh, okay, that's pretty much.

SPEAKER_02 14:12

Yeah, because well, I think Schwab's fee, we got a reduced fee, but Schwab's fee was like $80.

SPEAKER_04 14:17

If you just walked in and said, I want to buy a DFA fund, yeah, they charged a lot. So it was expensive.

SPEAKER_02 14:22

An advisor

Why Avantis Beats the Skepticism

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had to pay that.

SPEAKER_04 14:24

Exactly. So that brings us kind of to today, and we get comments from many of you that suggest kind of going back to Don's history, that something's going on here between you guys and Avantis, for example, because you recommend them all the time. You always say, use an Avantis, use an all equity, you know, A V G E or use their small cap value AVUV, et cetera, et cetera. So it's something there's something smelly here. It doesn't smell the smell test.

SPEAKER_02 14:51

And we've trained you well to be skeptical. Which is good. Which you should be. Yep. And you should even be skeptical of us. So here's the problem. It's impossible to prove a negative. We can't prove that we don't have to be a big thing. I just posted my bank account to the to the to the bank. Well, even then, you could have another bank account you were getting it. You know, so we we cannot prove Bitcoin.

SPEAKER_04 15:14

They pay me in Bitcoin.

SPEAKER_02 15:16

So all we can say is you've listened to us for a while, we hope. And folks who have listened to us for a while probably know we're trying to to tell the truth, the whole truth, and nothing but the truth, as often as we can.

SPEAKER_04 15:32

But let's give you a little truth because this comes up. So they're like, well, wait, one of the things that we've trained you well around is the cost, the expense, right? Mm-hmm. Which we think you should pay attention to. And this is one where people say, Well, wait, you recommend AVUV, the uh Avantis U.S. Small Cap Value Fund, but if I went and bought VBR, which is the U.S. small cap value index from Vanguard, the cost is one fifth. It's only five basis points, and the AVUV is 25 base points. But you guys, this is what it's why we think there's something smelly going on here.

SPEAKER_02 16:06

Yeah right? So You're suggesting a higher fee fund?

SPEAKER_04 16:10

Yeah, it does it doesn't fit with who you guys are and what you say. So I went back and looked. Um, the price-to-book ratio on AVUV is 1.4, and on the uh the Vanguard funds 1.8. So there's a greater value tilt. The number of stocks in AVUV, 789. That is smaller than VBR, 839. So not substantially, but maybe enough. We already mentioned the expense ratio, but here's the part that basically everybody always wants to know. Well, what about the performance? Which one's done better? Well, five years is as far back as you can go look at both of them. AVUV, their five-year annualized return, 11.7%, which is amazing. Um, and then you consider Vanguards, right? Again, this is the index. This is not a factor tilt. This is it, it doesn't have a value orientation that we would like to see, et cetera, et cetera. VBR, 8.5%. So about 3% less per year. Now, that's not going to happen all the time. Might not even happen for the next five years. I don't know. But the point of the matter is this is why. And it's not just the performance, it's the style in which it's managed. These are very different funds. The way they're operated is different, their belief system is different, and that's why we recommend them. So it's important for you to understand those differences, if you will, and why we've decided to work with that particular fund over the Vanguard fund in this instance.

SPEAKER_02 17:40

And uh, you know, I looked at AVGE versus VT. AVGE is the Avantis all markets. Global equity. Global equity fund. And VT is Vanguard's international, their global equity fund. It's the whole market. And these two are a little are a lot closer together because they're broader uh funds. They own more securities. Correct. And Vanguard's is dirt, dirt, dirt cheap at six, six basis points. Yeah. Uh whereas Avantis is 0.23. Yep. So you're paying a little bit more. But are you have you gotten more from AVGE? And because of that higher value small tilt, even though early on in AVGE's history, they were fighting against this uh, you know, magnificent seven market here in the U.S. Been tough. They, over the past three years, which is the only in-common period they have, have have made about three-quarters of a percent more than VT. Which, if you step back and look at that, after higher fees.

SPEAKER_04 18:41

You'd well, not just the fees, but you'd be surprised because the the world has been dominated, as you said, by the Meg 7. The world's been dominated by semiconductor. There's been some sectors that have really outperformed. So you might say, well, that would impact AVGE more than it would VT. So that's uh that's interesting. By the way, for those of you who want one last piece of uh evidence that Avantis, I think, is a good fun family. It's one here to stay. They now manage 110 billion. I was surprised that I didn't realize it gone over 100 billion. So this is somebody they they've only been around for since 2019. So that's a pretty pretty quick growth. And uh congratulations to them. And no, we don't get anything from them. We never are gonna get anything from them, but uh we're gonna we're we're gonna tell you the products we think are best.

SPEAKER_02 19:26

You're just gonna have to take our word for it because we we really don't want to lie to you. We really try not to, and uh we've tried not to for for a long time, and we don't get anything from them. We are our entire compensation, every penny we get paid for doing this show comes from Appello Wealth, the company for whom we work, by whom we are employed. We are both full-time employees of Appello Wealth. Okay. I think that covers it all, don't you? Yes. Oh, good. I didn't I want to make sure you were happy because that might be a bit of a reach, but I'll go with the other. I don't want to go on to the next segment and have you do a grumpy phone call with somebody who sent in. It's all grump all the time. You know that. And here's how the phone calls work these days. You don't actually call us. Here's what you do. And you gotta do this first part. You ready? You need to go do this first part. Go to our new and improved talkingreal money.com website. So much easier to navigate. The podcasts are right there, the question buttons and all. Just ask a question there. Hit the ask a question button, type in your question, they go to Tom and they make him happy when he gets them. They make him so happy that he hits print on his computer, and sometimes if it's not down for maintenance, it prints on the gigantic printer at the office that seems like overkill, but it's it's doing what he needs done. He needs listen, please, this is important. He's getting older and he desperately needs paper in his hands. And he prefers it when that paper isn't blank because then he doesn't have to pretend there's a paper.

SPEAKER_04 21:11

I still notice the difference right now, but coming soon, maybe not.

SPEAKER_02 21:16

So he reads them on the podcast sometimes, but other times he goes, Oh, this is the kind of question that should have a conversation around it. And then he gets you on the phone like this.

Tax Planning for Retirement

SPEAKER_04 21:30

Thanks, Don. Yeah, we'll go to the phones right now to St. Regis, Montana. Sounds amazing. Anton joins us here on Talking Real Money. Anton, how are you today?

SPEAKER_03 21:42

I'm fine. Thanks, Tom.

SPEAKER_04 21:43

Thanks for being a part of the program. How can we help you?

SPEAKER_03 21:47

Well, my question is around tax optimization. My wife is 79 and I'm 70. We currently live quite comfortably on about 9500 a month. Uh this income comes from a Combination of uh Social Securities, pensions, RDs, and some small payments that we receive. So all but um sixteen hundred a month of my pension have colas built into it. Um for us, the most unusual feature to our financial life is that we have no ongoing housing costs. We split our time between spare rooms at our adult kids' homes and then travel, with the biggest block of time being uh snowbirding the winter in Arizona. I'm also converting 15,000 this year from an IRA into a RAF. Um we to give numbers to it, we have a liquid net worth of between 550 and 575,000. Um of that, about we keep about 40,000 in cash in a high yield savings account. Um part of uh quarter of that's dedicated to uh vehicle repair maintenance. The remainder's our emergency travel market loss protection fund. Um we have 160 or so in pre-tax retirement accounts. Uh and my wife in that age where she has RMDs, we spend off about 6,000 in RMDs. Um that money's well balanced or well diversified and easy to rebalance. I've got another uh 86,000 in a Roth that uh that I'm finishing up converting uh this year. I'll put about 15 grand to finish the conversion. Uh the remaining 276,000 is in a Vanguard taxable brokerage account, and this is our problem child in our portfolio. The problem is that uh probably not unusual for people is that with uh S P 500 having done so well over the last years, uh it's kind of uh representing too high a proportion at 51% of our total. Um our goal is to get that to 30 percent of that. And uh but our current position, like I said, is 51%, and we'd like to have our uh our bond portion in that fund be 25%, and right now it's less than 1%. Uh we have uh we have 26% in small cap, and our goal for that is 20%. And then uh between uh international fund and emerging markets, uh we've got 22%, and our goal is it is 25% for that. So we're pretty close there. Uh the purpose of the brokerage account is uh is multi-purpose, is uh to provide income for us for the surviving spouse, whichever one of us outlives the other. Uh our pensions are life only, so we're gonna we'll probably need to draw on that, whichever one of us survives.

SPEAKER_04 24:59

Um let's go back. Let me interrupt you there real quick so it gets a good point of inflection. So um just to just to get a bigger picture look here, let's just say for sake of argument, if you take away the 40 in cash, now you're left with somewhere around half a million roughly that's actually for investments. What are you what are you trying to accomplish in terms of your stock to bond ratio? 7525. 7525. So it doesn't sound like you're a long way off on that, because even if you have a very small bond allocation in the IRA, um you have a little intaxable, correct?

SPEAKER_03 25:36

We uh we're well we're well balanced in all of in our pre-tax and ROFs.

SPEAKER_04 25:44

Except here's a way I'd look at that. So here's here because this is really uh I would here's a way I would do it. I'd say, look, I want what, a hundred thousand of the of the five hundred to be in bonds. I would simply rebalance the IRA to have those bonds in there. Because you can do anything there without any tax ramification. You're gonna be stuck a little bit with the the money in the taxable because you don't want to run around and sell all that, right? And c create a big tax hit.

SPEAKER_03 26:13

Yeah, we uh I think our numbers are smaller than a lot of people you talk to. So I have some room in that we have some room in that zero percent. Okay.

SPEAKER_04 26:22

So I would take advantage of that first, and I'd probably I'd probably do the S P 500 to sort of clean that up. Um the sell that down. But then I would say, okay, if I really want to have $110,000 for sake of argument in bonds, I would go ahead and make sure I just had that in my IRA. That's a good idea. And then because you look at your portfolio in totality, now you're still gonna have a lot more in stocks than you want in that taxable, but that's okay because you look at the big picture and you're gonna have the right balance. Then maybe as you said, over time, uh take the cap gains as high up as you can without having to pay any tax on it, since you said you're in the zero bracket there for those for uh up to a certain level. I always forget the number, and then you clean that up over time. I'm also a little concerned or questioned your Roth conversion strategy since you're gonna be b taking money out of those that that IRA anyway here in a few years. Tell me more about that.

SPEAKER_03 27:22

Um I started uh four years ago. Um I had I had uh an traditional IRA and I started to uh move it in a five-year plan. I see. Figured I figured I would get it. Uh how have that as uh as our as our Roth money is that you know, so we're diversified between uh variety of taxation things. We okay. And then the Roth that comes out tax free. So we wanted to have I wanted to have all three buckets available to manage our to manage our taxes.

SPEAKER_04 28:11

Yeah, that's which is good, which is great. But what so what how much in just real quick, what's what's your tax rate? How much are you paying on those conversions? Uh it's all 12% money. Okay, which is good too. But and that but I uh here's the thing, I I struggle with that a bit because now you're gonna you're spending down your your your cash to pay the tax before you have to pay it. Right? If you wait until 73, you're gonna start taking it out and pay it pay it then. So I I'd I'd I'd I'd be I'd question that strategy a little bit, but but I think the bigger picture, again, for me would be saying, look, we want to be 75-25, which I think is great. Um let's look at let's look at this portfolio in totality, let's figure out what bonds you need to own, rebalance the IRA to that, take the zero rate as you put it correctly on the capital gains, sell down that SP 500, buy some of those other asset classes. It sounds like your your thinking is good there. You want some small, you want some international emerging markets, and then sort of rebuild things like that over time to get you back to a correct asset allocation.

SPEAKER_00 29:17

Good idea, thank you.

SPEAKER_04 29:18

I think that's how I would do it. Um, but I but you're making a lot of great decisions. I love your lifestyle that you're uh you're going seeing all the people that you love in your life and you're seeing them on your terms and moving around. And uh you you I I I we really appreciate you listening and then reaching out

Layered Income Pitch

SPEAKER_04 29:36

to us.

SPEAKER_03 29:36

Thanks, Tom.

SPEAKER_02 29:37

And Tom, take care. And then some of the questions just get read, which again makes him so happy. Go ahead, be happy for us.

SPEAKER_04 29:47

Oh, I'm so happy. Mark, thank you for writing us from Federal Way, Washington. I he writes, I'm getting spammed in my Facebook feed with ads. Yes.

SPEAKER_02 29:58

Um, aren't we all? We went and shopped for rugs the other day. We were looking at it online, and Debbie goes, Now my Facebook feed is filled with rug ads. Yeah, love it.

SPEAKER_04 30:09

Well, you you really I don't your hairline looks pretty good. I don't know why you're getting one, but okay. We feel like it'll make you feel make make you happier. That's a joke. Folks, that was a joke. Uh two pay joke. Those hosts laughing at their own jokes. Yeah. Okay, I'm getting spam Facebook feed from ads from the likes of Investors Journal stating I could get more income from the layered income portfolios. It allows you to ditch the 4% rule, invest in ETFs, uh get rid of all that stuff. Instead, they state I should be invested in non-correlated layered income portfolios. I would have to subject myself to providing contact information and listen to a pitch from a financial advisor to learn more, shockingly, which I don't want to do. Well done. Um, I'm wondering if you have some insight on what these pitches are about. Layered income portfolios. Is that like a three-layer dip that you get at a party or something?

SPEAKER_02 31:01

No, it's what it is. It's one of these things that uh I all of these financial pitch people out there are sitting around trying to come up with clever names for things. This is a marketing name. This is not a thing that is like known, you know, that they're teaching in the certified financial planner course. It sounds really highfalutin. Um, it's just creating what they're doing instead of building a portfolio that is well rounded and from which you take out income, they're creating an income portfolio that consists of short-term bonds and T bills, intermediate bonds, dividend stocks, REITs, then covered call writing, of course, and probably an annuity. So they're creating a complex portfolio that has some probably some commissioned products in it. Uh we don't know, I don't know how they're charging. I don't know who this is.

SPEAKER_04 31:58

Well, we don't know who it is, we just know the product.

SPEAKER_02 32:00

Is it what did he say it was called investor journal?

SPEAKER_04 32:02

No, he said it's called layered income portfolios. It the ad is in investors journal.

SPEAKER_02 32:08

That's not the maker of the investor journal. Okay. All right. So this is just a sales pitch, and it's nothing. It's the there's there are a lot of people. In fact, we're gonna do a future program on the difference between creating an income portfolio and creating a total return portfolio. There's a difference between them. And uh we we tend to lean more toward the total return portfolio because they have income streams in it, but we'll get into that later. This is just ignore this, it's gimmicky, it's salesy, and it's probably not gonna be good for you.

SPEAKER_04 32:44

Probably I think that's fair, probably expensive, would be my guess as well. Um and again, if here's the thing though, that this is a interesting point that he makes. If the people making the pitch are not willing to share with you here's what this is all about, without you saying, Oh, I I want your name, your phone number, blah, blah, blah, I think that's kind of weird.

SPEAKER_02 33:05

I gotta tell you, I honestly hate it. I run into that all the time when I'm looking at like new services. Like if I'm looking, well, we recently we changed we changed web hosts and we changed uh uh web hosts and podcast hosts. And sometimes when I go to some of these sites that they say they don't have prices. They say, set up a meeting. We'll do a price. You know when they say they're gonna set up a meeting, that the price is ridiculous.

SPEAKER_04 33:31

Well, just be transparent. I I tell them right now.

SPEAKER_02 33:35

Let me make the decision.

SPEAKER_04 33:36

Did you say new podcast host? So I'm this is it for me at finally getting the retirement here. I actually prefer to be a good idea.

SPEAKER_02 33:43

I've been trying to hire my daughter to do it because I figured she worked cheaper.

SPEAKER_04 33:46

She'd be better. She'd probably on top of the phone. Well, she's younger. Yeah, a little more vitality.

SPEAKER_02 33:51

Yeah.

SPEAKER_04 33:51

Um anyway, yeah, great pitch there, uh layered income portfolio, but we'll leave it for now.

SPEAKER_02 33:57

Yeah, we'll uh we'll bury that under another layer of skepticism. Good for you for the skepticism. See, that's healthy skepticism. You got questions? We're gonna try and get answers for you. All you need to do is go to talkingrealmoney.com and make Tom happy by typing in your question at the ask a question form. If you want to make Don happy, this could this sort of be a referendum on who they like better. Uh if you want to make Don happy, then in the lower right hand corner is a microphone. You hit that and you speak your question, and I answer those on the Friday QA podcast. So you've got so many choices, so little time. Go to talkingrealmoney.com. All the stuff is there. It's uh fun and fast. Everything you need, like that. You don't, you just uh the all the fluff is

Closing and Disclosures

SPEAKER_02 34:45

gone. Thanks for listening. Please tell a friend or two or ten. Oh, by the way, if you really do want to talk with somebody, we'll be really transparent with you. We are not going to charge you to speak with one of our advisors, to get a look at your portfolio, to get some ideas, and then you're not gonna get beaten with a high pressure sales pitch.

SPEAKER_04 35:05

I think outside of compliance.

SPEAKER_02 35:08

He used to use electrical stimulus devices. It was telling him that that wasn't just stimulation, that that was near execution, and he he decided to pull turn the volume, the the uh the voltage down. I know it's a V it's a V-word, Don, another V-word. Sorry.

unknown 35:26

Yeah.

SPEAKER_02 35:27

And uh so uh for the two old white guys sitting around waiting to die, I'm Don. That's Tom. This is talking real money.

SPEAKER_01 35:35

The opinions and news expressed in this podcast were current on the date recorded. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and our subject to change without notice, including any forward-looking estimates or statements which are based on certain expectations and assumptions.

SPEAKER_00 35:49

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SPEAKER_01 35:58

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