Chargeback to the Future

SPEAKER_03 0:00

I chased the tip back. I lost my shirt. Learn the hard way. What a bad stock's worth, brother. You don't have to learn like me. Just tune in and you'll see. Don't spare that dime. Just to hold it tight. We'll steer your money out of the night. Tom and Dun got the honest line. Talking real money. Save your dime. Talking real money. Save your dime. Talking real money.

SPEAKER_04 0:38

Almost live from a Hooverville of the 1930s. That was the lament of the common investor in 1930 or late 29

Stock Bets Then And Now

SPEAKER_04 0:47

or somewhere around there.

SPEAKER_05 0:48

By the way, how many what percentage of Americans invested in stocks in 1929? I just looked this up.

SPEAKER_04 0:54

Actually invested, it was very small. Two and a half percent, it said very, very, very, very, compared to today's about 60 percent. However, there there were actually more people who weren't investing in the stock market, but who were betting on the stock market. Because it became all the rage to bet on.

SPEAKER_05 1:15

Yeah.

SPEAKER_04 1:15

And they were there were literally betting parlors all over the country where they had their ticker. Yeah, where they had their little ticker and they're following along. They're going, hey, look at that. Okay, the uh this stock went up, this stock went down, this stock went up. And people were like make they were paying off their little bets in the bucket shop.

SPEAKER_05 1:31

And wait, does don't we doing that again with some of these prediction markets and totally the same thing? Ugh. But it's worse, I think, today than it was twenty years ago.

SPEAKER_04 1:44

See, everybody always says that. Everybody always says that. It's so funny. Do you think back to some of the old film noir stuff from the fifties and you have all these guys, it's always guys, uh blowing all their money at the track. You know, everybody oh everybody was was they had their bookies, they were betting at the track, you know. That you just if you were playing the lottery back then, you just played it illegally, it was called a numbers game.

SPEAKER_05 2:10

Right. But it still existed. It's nice to know that the state is looking out for us and now makes them state sponsored. Right, so it's state sponsored money.

SPEAKER_04 2:18

It's state-sponsored mobsters.

SPEAKER_05 2:22

God, that that sounds really good, doesn't it?

SPEAKER_04 2:24

It's true, though. It's really true. Hi, everybody, welcome to Talking Real Money, the show with a different theme song every day. Well, not every day. We're gonna have to reuse some of them eventually.

SPEAKER_05 2:36

The Talking Real Money singers are busy, I'll say that much.

SPEAKER_04 2:39

And they are talented, too. They're a you know, they can do any theme. I think for tomorrow, let's see how we're gonna go. What are we gonna call tomorrow? What are we going to do? Tomorrow. What is tomorrow? Tomorrow? Oh no, tomorrow will be a Friday show. Oh, so that'll be the that'll be the QA. Yeah, I think I'm gonna go with um hmm. I think I'm gonna go with something like game show ish. You know, you know, QA, that kind of thing. Fair enough. I don't know. I'm not sure. I I I have to I have to write up the prompt and then come up with some lyric ideas. So then I feed them into AI and say, pretend you're a real person making music and do it cheap. And it says, Okay, I'll do it cheap.

Credit Card Disputes

SPEAKER_04 3:20

Uh hi, again, welcome to the show. Today we're going to talk about something that has to do with money. Something that is pretty common in the world of money, and it has nothing to do with investing for retirement. Well, nothing directly anyway. We're going to talk about credit cards a little bit today and how we are our use of them is evolving. And it actually may th this this topic may partially explain why some people are paying thirty percent per year in interest on credit cards. Because the credit card companies have to cover their costs and make a profit. And they've figured out that, oh, we gotta charge a lot to do that. And one of the reasons why is something that was established many years ago to help avoid getting ripped off, having someone steal your credit card number and charging up a bunch of stuff on it, and that's called the dispute system or chargebacks.

SPEAKER_05 4:22

Yeah, that's d out and out fraud in that case. And by the way, uh that while the 30 percent I think is an outrage and userish interest, um greater still, I think, is the three percent per charge.

SPEAKER_04 4:34

Oh, the merchant uh the merchant fees, yeah. You know, fifty fifty cents and three point nine nine or two point nine nine percent. That's and actually on some cards, some of the luxury cards, the merchant gets charged an even higher percentage. Yeah.

SPEAKER_05 4:48

I having been on the other side of that now with my wife and the pizza, I was shocked when I first learned that. Um the reason this comes to mind is more and more of you are doing a thing called chargebacks, which is when you ask your bank to reverse a credit or debit card transaction. Um, and not always just because theft or fraud. By the way, those transaction disputes last year increased 29% from 2021. And some of that is just more use of the cards, right?

SPEAKER_04 5:16

You make fewer. And I'm telling you, fraud, uh credit card fraud has not increased by that amount. So a lot of that has to be a thing that I call, well, it is gaming the system.

SPEAKER_05 5:29

Well, yeah, and the article goes to that end. They say that some of it is uh confusion among consumers over tran how transactions on their monthly statements correspond to their actual purchases. We'll talk about that in a second, but also an increasing will willingness, especially among young shoppers, to engage in a little bit of fraud of their own. We'll talk about that a little more.

SPEAKER_04 5:58

But it is technically the the the chargeback system, the dispute system, was designed to protect you from outright fraud, not just for not liking something.

SPEAKER_05 6:10

Yeah. I mean it was designed really for somebody uh that had their wallet stolen or their credit card number taken from it happened to me once in a restaurant, I think, where somebody actually had taken the number uh from a credit card charge I did in a restaurant, and then they went and used it for a time.

SPEAKER_04 6:24

And then, yeah, it happened to me in New York City in Brooklyn with my Apple card of all things, which supposedly generates a different card number each time. Every time somehow they did it, and within ten minutes, I was getting notices that I was being charged for things at target three doors down.

SPEAKER_05 6:41

Yeah. No, I mean it is amazing how fast it is now. And it says most disputes now this court of the credit card industry have been what they call cards not present transactions, which still amazes me because my wife can do it. My wife can figure it out to use my credit card uh, you know, a thousand miles away without the card. I still have yet to figure out how she does that, but she's magic. On the phone. I guess she's pretty good. They're on the phone. And some of this the credit card comp not the part that we want to talk about, but some credit card companies are saying the complexity of online payments in which a purchase can bounce through different platforms and vendors and processors until the merchant that appears on your card statement has no certainable connection to the party you thought you were transacting with. I've done that before where I've cut and pasted, put things on the internet like who is this?

SPEAKER_04 7:28

Well, yeah, we we we run into it with the business card all the time because you know I'll buy software and it'll come through a company called FastSpring, which does these transactions. And you look and you go, okay, Fast Spring, you great. That could be like a hundred different companies. What's this for?

SPEAKER_05 7:45

Exactly. Um it won't surprise you to know that uh a lot of the disputes these days are for subscription charges. Well, we all have tons of those these days. Crazy. Uh I really like Apples because I go in there and I can look and see what the subscription is, how long it runs, how much it is. It's really nice the way they put it all together for you right there on your phone. Um it says consumers end up unwittingly agreeing to monthly transactions that look abusive once they notice them. Uh-huh. Yeah.

SPEAKER_04 8:14

The trick is noticing them. And by the way, that's a little uh subtitle in this whole thing. What do you do to uh avoid these? Read your statements. Yeah. They're online. They're on your phone. Right.

SPEAKER_05 8:28

Read

Gray Areas And Chargebacks

SPEAKER_05 8:29

your statement. Trevor Burrus, Jr. But the the the point of the piece is, and I think correctly so, is the the aspect of the gray area here, right? That many people are using this. Well, the article says if you buy a light bulb, it either turns on or it doesn't. Okay. Then you could say legit purchase or not. But um now when you get into the other places, airlines, hotels, restaurants, salons where you didn't end up feeling great about the experience, and then you go to your credit card company and go, I I didn't get what I was supposed to get, so charge that back. That's a whole different piece of business there.

SPEAKER_04 9:03

Yeah. The way that used to work, I think, back in the olden days, and since we're olden, we can remember those days. Exactly. Didn't you, if you got a bad meal in a restaurant, didn't you say, uh, excuse me, um, this really tastes terrible. I'm sorry, sir. Would you like something else? Or would you like me to take that off your bill? That's what we used to do, remember? Yeah. Exactly. Now I think I think there's a confrontation fear.

SPEAKER_05 9:29

I think you're right. People don't bring it up. I think.

SPEAKER_04 9:31

And so it's better, it's easier just to go back to Apple or Chase or City or whomever and say, uh, please just pull they didn't give me my dinner.

SPEAKER_05 9:40

I can remember one time with my father when we were out at a not a particularly great meal, and they asked him if he wanted a doggy bag, and he looked up without pausing and said, No, we love our dog. Uh so maybe that was enough. We didn't get a production price. But I always thought that was good. So um so by the way, the article points out that if you actually do this fraudulent if you actually got what you were supposed to get, and then you go back to the company and tell them, you go back to your credit card company and tell them, sorry, I don't I I want you to charge that back. That technically is a crime. They say that's fraudulent if you do that.

SPEAKER_04 10:14

Yeah, but the reality is these guys get so much of this stuff that they're not going to charge anybody. And everybody knows that. Trevor Burrus, Jr.

SPEAKER_05 10:21

They're they're blaming, by the way, the economy for a lot of this. This would not surprise you to know that when consumer sentiment is low and that people are worried about their future, their money, et cetera, th there's a rise in prop what they call property crimes where people feel by the way, it's it's easy, right? They consider uh businesses rapacious, right? Greedy. So, oh, we'll just go ahead and take that out of their pocket because uh, you know, it wasn't quite what I thought, and and I really prefer not to pay for it.

SPEAKER_04 10:52

Yeah. And oh, by the way, I just ran into that. I was trying out a new online editing service, you know, for podcasts, because I edit a lot of podcasts. I mean, it's kind of what I do. And there wasn't a trial, but it said 30-day money-back guarantee.

SPEAKER_05 11:10

And you had to give them the card to get it?

SPEAKER_04 11:12

I use PayPal.

SPEAKER_05 11:14

Okay.

SPEAKER_04 11:14

Um, yeah. So I had to give them the the fee, but it's it said 30-day money-back guarantee, no questions. I went back to their website and it said uh to cancel, click here. I clicked there and it took me back to to PayPal and no way to cancel. You're stuck. I'm stuck. So then I sent the merchant a note. No response. So I sent the merchant another note. This happened just in the last week. Really? No response. So um it's either the they're just really slow or they're not on the up and up. This one will be, I think, within the next week or so, a legit request for a chargeback. Yeah. Oh, and by the way, the article came from Bloomberg Business Week.

SPEAKER_05 12:01

You kept saying the article, but Amanda Mo. This this is their issue where they look at fraud, scams, et cetera. I love this issue, so I wish they still mailed me a magazine, but they don't do that anymore. So um Does anybody mail you a magazine anymore? Yeah, referee magazine.

SPEAKER_04 12:19

Referees annually every month. Oh, is it monthly? It's monthly. Wait. How is there enough information about soccer refs?

SPEAKER_05 12:28

They're just and stuff in there. No, no, no. Oh, it's all refs.

SPEAKER_04 12:32

Oh, oh, so it's lacrosse, too.

SPEAKER_05 12:36

Uh I've never seen maybe. Oh yeah, baseball, of course.

SPEAKER_04 12:41

Football, of course. Sure. Yeah. Okay. All right. Now I could see filling a quarterly, maybe, but a monthly?

SPEAKER_05 12:47

Monthly.

SPEAKER_04 12:48

It's something I look forward to as well. Is there that much breaking? Is there that much breaking news for referees?

SPEAKER_05 12:54

All kidding aside, I'm hoping my picture's in there because the guy was just out of the game. There's a photographer I know that.

SPEAKER_04 12:59

Tom's gonna have the cover of referees monthly.

SPEAKER_05 13:02

Then I can say I made it. Okay. He's the cover boy. Trevor Burrus, Jr. Exactly. So okay, but back to this.

SPEAKER_04 13:07

Were you wearing your little sh your little short uniform? Yes. I had more of the short uniform. You guys, you're gonna have to get this issue. You can see Tom's very pale legs.

SPEAKER_05 13:18

If that's the only criticism you have of him, I'm okay, because one other guy said, Hey, really, don't put your legs in the picture and have a LinkedIn thing from a few years ago. He goes, You should cover those up or something. Like, come on. Um

Chargeback Success Rates

SPEAKER_05 13:28

All right. But let's so there's a couple of interesting numbers here. He actually said that in the comments. Yeah, he actually said that.

SPEAKER_04 13:35

Where you edit the legs out. Yeah, exactly. Um a torso floating in the middle of the field.

SPEAKER_05 13:41

What do you what do you guess the success rate is for chargebacks? If you if you go to your credit card company and tell them I didn't get what I was supposed to get, I don't know, but I would guess it's pretty high.

SPEAKER_04 13:53

Yeah, I would guess it's really high because I gotta tell you, as as a as you you know, your wife was a merchant, I was a credit card merchant. When we would get a chargeback, and off times they were ridiculous, you know, they were just ludicrous. They got the thing and it just, you know, they didn't like something and they didn't return it. And we had to jump through so many hoops, spend so much time filling out paperwork, sending it back, and still ninety plus percent of the time, they went and gave the money to the customer, even though the customer absolutely didn't deserve it.

SPEAKER_05 14:27

Yeah. I think it happened to Danielle a couple of times. But so 96 percent. I mean, another thing to consider.

SPEAKER_04 14:32

I hate the pizza, but I didn't think it tasted as nice.

SPEAKER_05 14:35

That pepperoni wasn't as nice as I thought. Yeah, I i this is another reason, by the way, I think to use credit cards instead of debit cards.

SPEAKER_04 14:41

They don't have the same defense.

SPEAKER_05 14:43

Trevor Burrus, Jr. They don't. And remember, a credit card you're using the bank's money, debit cards come right out of your account. So there's a difference there. Um but I will point out something. You you just suggest you just said you did the right thing. Before you just go to your credit card company, you need to go to the merchant. Yeah. You need to go and tell them this is why I'm you know, I don't want to pay for this.

SPEAKER_04 15:01

Aaron Powell And generally in fact, I think I I can't say with absolute certainty this is all the time, but there's there's usually an 800 number on your credit card street.

SPEAKER_05 15:10

I think there is for that company.

SPEAKER_04 15:13

Or a a phone number of some sort so that you can call them, or if if it's not a company that does the clearing for a thousand other companies, you should see the company's name and you can go to their website possibly and you know go to the right. Hopefully they answer in English. Most most honorable merchants are going to take care of their customer. Now, I'm a little worried about this editing software company that I'm dealing with. Trevor Burrus, Jr.

SPEAKER_05 15:37

No one responding. So, and by the way, I would suggest strongly that if you have buyers or more either for a subscription or some other service you didn't like, this is not how this is not the appropriate way of handling it.

SPEAKER_04 15:51

No. And I, by the way, speaking of merchants, I can't speak highly enough, and I know that they are hated in retail, I cannot speak highly enough of Amazon and their policy. It is very clear-cut, it is very simple, and it is very, very fair. And that is, you buy something for us from us, if you don't like it for any reason, you can return it within 30 days on their dime.

SPEAKER_05 16:23

They my wife does this a lot, yeah.

SPEAKER_04 16:27

This this right there will eliminate almost all disputes. Yep. You it's a very clear-cut policy. Thirty-one days? No.

SPEAKER_05 16:34

There's only another one other retailer, two other that I know of that do that. Costco? Nordstrom. Used to do Nordstrom.

SPEAKER_04 16:42

Yeah, Costco is almost all things. They don't do it for televisions anymore. Oh, okay. But basically, no. Because people were buying 80-inch TVs before the Super Bowl and then returning them the week after. We are a wacky bunch. We are a wacky bunch.

Free Dinner Pitch Problems

SPEAKER_04 16:59

And we appreciate this wacky bunch of listeners questions that come in regularly now in really good quantity, that Tom gets on pieces of paper and then either gets on the phone and talks with you, or just plain old reads them on the show like this.

SPEAKER_05 17:17

Yeah, and uh this comes from uh Blanco, Texas. That's white, Texas. Must be. And this time of year, I bet it's white hot. Ah, huge fan. He says, I love you guys. Well, I'm very pleased with my financial advisor. I couldn't resist the offer of a high-end dinner sponsored by, and I'm not going to give the name.

SPEAKER_04 17:36

Oh, darn it. Come on.

SPEAKER_05 17:38

You really want me to? I do. Okay. Teamwork. I love this name. Teamwork Financial Group in Texas. As anticipated, the dinner was excellent. My wife and I sat among another dozen couples who appeared to be capable of filtering or digesting information shared by Teamwork. Apparently not. I was appalled when the pitch started, and the presenter laid out reasons for partnering with their firm. Number one, you we use as an investment strategy that will return 12 to 15 percent annually. What what? Yeah. Number two, why would anyone invest in mutual funds? You never know what they really own, and they're very expensive.

SPEAKER_04 18:21

Oh, yeah, six one hundredths of one percent.

SPEAKER_05 18:23

You buy the wrong ones, they are. Um speaking of that, I just saw American Funds ad where they're comparing the industry average they said for uh stock mutual funds they claim was 99 basis points, where they only charge 60. Like 25 years ago.

SPEAKER_04 18:41

Yeah, that doesn't sound right.

SPEAKER_05 18:43

Number three, we believe that annuities are the smartest moves for retirees. Number four, as part of our services, we will provide you trust preparation services at no cost. So they must have a they have a lawyer on staff. Well, or they have a they have a trust they can just say, go ahead.

SPEAKER_04 18:59

Yeah, relationship.

SPEAKER_05 19:00

Game set match. He says I was done. However, I was shocked to see a number of guests eagerly engaging with various company representatives. They filled out their personal information, net worth on a form provided by Teamwork.

SPEAKER_04 19:11

Wait a minute. So they're selling annuities and they're claiming fifteen percent? 12 to 15. So it might be as low as well as high as fifteen. Okay. Wow, that's a lie. Yeah. I mean, that on its face, that is just that's not that's not even fibbing. That's lying completely.

SPEAKER_05 19:31

That's just oh straight up baloney. Um Lance, thank you for that. Thank you. You went through one of those, not well, I guess it's been a few years. Well, wait a minute.

SPEAKER_04 19:40

Didn't I I read this one? Didn't he didn't he confront the guy?

SPEAKER_05 19:44

No, he did not confront.

SPEAKER_04 19:45

This is not the one? Oh, we had one I think once where they confronted the guy and asked what the commission was, and they actually told them. They actually disclosed the commission on these annuity products, and it was like eight percent.

SPEAKER_05 19:58

Good racket. You know.

SPEAKER_04 20:00

But here's the thing, okay? There is no safe investment that pays twelve to fifteen percent. No.

SPEAKER_05 20:06

I can say that Wait, there's no investment that pays twelve to percent. No, no, no, no, no, consistently.

SPEAKER_04 20:12

No, I d okay, you gotta that consistently pays it? Maybe, but it's gonna be very risky and it it's a lucky bet. You can't say you can't make a blanket statement like there are none. But there are, I can say, there are no safe investments that can pay you right now 15% per annum.

SPEAKER_05 20:34

And what is safe, by the way? What is that?

SPEAKER_04 20:36

Well, safe means low volatility or no volatility. Actually, for most people, it means no volatility. And that's what they're pitching with these annuities. They're saying you have no downside risk. The value of your portfolio, the money you put up with us will not go down in value. Just won't. And you can make 12 to 15 percent. I'm sorry, but that is a lie, you guys, a teamwork. If you said that, now we're again, this is hearsay. This is not a court of law, and of course they're innocent until proven guilty. Uh, but if somebody said that, that person lied. And people have been known to lie in this industry. They really have. So, um, yeah, and if it's a dinner, if it's a free dinner, you gotta know there's there's always a quid pro quo. If they're giving you dinner, their expectation is that if they sign you up, they're gonna make a commission that will more than cover the entire cost of that dinner just from you.

SPEAKER_05 21:38

Yeah, I think you're right. And from Newman, Georgia. By the way, do you know the most prevalent name used by uh folks who left slavery after the Revolutionary War? Where do you come up with these absurds? I just heard this on a podcast. It must have been George. Nope. It was Freeman and Newman. Newman, Freeman.

SPEAKER_04 21:58

Newman and Freeman. Make sense. All right.

SPEAKER_05 22:04

Josh writes us from Newman, Georgia. Hey, Tom. And say hello to Don for me, too, he says. I really enjoy the show and have thought about writing in and trying to decide what question to ask. And when you put out the offer that anyone writes in this week, we'll get a book. No more free books, by the way. I decided this is the time it's not. They hate me in the back office here. You send out a lot of books. I know. I told you you would. I should have listened.

SPEAKER_04 22:31

You haven't listened to me in like 30 years. Why would you start now?

SPEAKER_05 22:34

By the way, we're going to give your uh your uh historical fiction book out to clients who come to the event here shortly. Did you remember?

SPEAKER_04 22:40

Did you buy a bunch of the lines on crossing? We did. Here we did. Oh my goodness.

SPEAKER_05 22:44

Look for a big check coming. Big jump in sales.

Bunching Charitable Donations

SPEAKER_05 22:48

Here's my question from uh Josh. He says, uh I have struggled to determine a good way to calculate whether it makes sense to bunch my charitable donations. I have enough to itemize each year, but wondering if bunching would save on taxes to make it worth the trouble. I have state and local tax to hit the current 10K salt limit and then have roughly 30 to 40K in charitable donations. Trevor Burrus, Jr.

SPEAKER_04 23:12

Well, that's good because you need to cut down on your sodium intake a little bit. Trevor Burrus, Jr.

SPEAKER_05 23:15

That's a lot. As married filed jointly with a standard deduction of around 32,000, anticipate a marginal rate of 24. Is there a simple formula to determine how bunching my charitable donations would impact me over two years versus itemizing each year?

SPEAKER_04 23:31

All you have it's uh actually there is a relatively simple solution. Please for any given year, go find the tax table, the U.S. the IRS tax table and find out where the bracket drops are.

SPEAKER_05 23:44

Yeah, right there.

SPEAKER_04 23:45

And then kind of do a rough estimate on what your taxes are and go, okay, if I added next year's charitable contribution, will I take all of my income or my highest income down to the next lower bracket? If the answer is yes, bunch. If the answer is no, spread 'em.

SPEAKER_05 24:01

Yeah. Great answer. Uh from Overland Park, Kansas. Don't they mean overfly park, Kansas? Okay. Uh, maybe not. I'm sorry.

Retirement Allocation Choices

SPEAKER_05 24:12

Scott writes, I'm 59 and a half, planning to retire in September. Wow. You're a month away.

SPEAKER_04 24:19

Retire. What I don't I wonder what it feels like to retire. That's right. I have no clue what that feels like.

SPEAKER_05 24:24

Me either. My question is: I plan to maintain a 60% stock, 40% bond portfolio in retirement, but just drawing from the portfolio, would it be smart to go to 50-50 to lessen the sequence of return risk during the years prior to drawing Social Security? In other words, of course it would.

SPEAKER_04 24:43

Of course it would. But here's what it would also do. It's going to reduce your sequence of return risk and it's going to slightly reduce your expected returns, which can affect your withdrawal rates depending on what your rate of withdrawal is. So it comes down to that thing we talk about all the time, which is the risk profile, not risk tolerance. Risk profile is a combination of tolerance for risk and need to take it. If you have a portfolio that's gonna support you comfortably at 60-40, and then you run the numbers and it's gonna still support you comfortably at 50-50, then it's a no-brainer. You go to 50-50.

SPEAKER_05 25:24

Yeah. Good advice. That's really good advice. Oh, I'm on a roll today. You're on a roll today, so I hate to get in the way, so I won't. Uh because I got no argument there. Vinton, Virginia, Ron, writes Dear Ton and Don and Don. Dumba Dumba. I have listened to your podcast for years and I'm not going to edit any of this out.

SPEAKER_04 25:44

No.

SPEAKER_05 25:45

Of about half a dozen, you never edit my bad stuff. Half a dozen financial podcasts. I listened to yours is the best.

unknown 25:52

Yeah.

SPEAKER_05 25:53

That's really nice. You know, I talked to a woman yesterday that said um listening to our podcast changed her life. And I said, I hope for the positive. I know I said I hope for the positive, but you thought was funny. It ruined the positive.

SPEAKER_04 26:04

I assume it was for the better, but she she wouldn't tell me. I live in the poor house, my husband's in jail. Exactly. The kids and foster families.

Managing RMDs At Vanguard

SPEAKER_04 26:12

That's not funny.

SPEAKER_05 26:13

I turned 73 this year, so I have to start taking my required minimum distributions. My IRA is a hybrid version of Paul Merriman's ultimate buy and hold portfolio. I don't know what how how could you hybrid Paul's portfolio?

SPEAKER_04 26:26

You change something. I see.

SPEAKER_05 26:27

Uh eight ETFs and Wait a minute.

SPEAKER_04 26:29

Wait a minute. Okay. You take the portfolio and you go, I think I'm going to move this out and move this in.

SPEAKER_05 26:36

Okay, but why would you do that? Either you follow the advice. Unless you think you're smarter than the advice. I see. Okay. I don't want to own those stocks because they don't go up. Uh my IRA is at Vanguard and on their website, they say they will handle taking your RMDs for you, and they have several pages talking about it. The thing is they're not clear how they do it. Do they take the same percentage from each ETF or from the portfolio as a whole? Can you get them to rebalance your portfolio once a year by taking your RMDs? So does Vanguard's service now I imagine this is their 30 basis point service where they you really don't get a personal advisor, but you they do some work for you. I could be wrong, but um that's my guess. And a good by the way, just a good practice, Ron, if if if we're rebalancing, would be you're starting with a 6040, for example. And during the year stocks go up more than bonds, right? Because they generally do three out of four years. So now you would be selling some of the stocks, and then you would look at the ETFs that hold stocks and saying which ones of those went up to get out of sync. You'd be selling them and get back to the correct percentages and then pocketing that money. Um so it it'd probably be more than one ETF, but it wouldn't be the same percentage from each, because then you just get more out of whack depending on what happened during the year.

SPEAKER_04 27:57

Yeah, but it's I think it's gonna really depend a lot on the question, the basic question, and that is how does Vanguard take money from the IRA to meet the RMDs? Um and and my understanding, and I could be wrong, Vanguard merely now they might do this under their advisor service, and then that becomes a very individual thing. But my understanding was with your regular just brokerage account, they're only going to calculate the RMD. And then they're gonna basically leave it up to you as to what to liquidate. So that you're right. I think that has to fall under the advisor account. Yeah.

SPEAKER_05 28:41

Makes sense, right.

SPEAKER_04 28:42

And my guess, and I'm this is a guess, I I'm I have not asked them this question, but I know that with our advisory service and with any other that's worth its salt, if they are managing your RMDs for you, the liquidation thereof, there should be a rebalancing component involved. Absolutely, because there'd be no reason not to. So sim just next time you email or chat with or talk to one of the personal advisors at Vanguard, just ask that question. Don't go digging for it. We we we spend so much time trying to find it when the simplest course of action, if we're paying somebody for a service, is to just ask like speak words out of our mouths that we forgot how to do.

SPEAKER_05 29:33

That's crazy.

SPEAKER_04 29:34

Yeah. I know. Somebody nobody answers the phone anymore.

SPEAKER_05 29:38

Boy, isn't that a lot there?

SPEAKER_04 29:40

Emails and FaceTime. FaceTime once in a while. My kids will FaceTime me, but they don't call on the phone.

SPEAKER_05 29:45

Yeah, won't happen. So okay, that that uh those are all good answers. But yeah, so I mean again, but doing it correctly would mean first looking at the stock to bond ratio, and then inside of that ratio, which ones have gone up more than the other.

SPEAKER_04 29:57

But if you're if you're paying an advisor at Vanguard, that's their job. If they don't do that, then they're not worth paying. No, absolutely not. They're not worth paying. That should absolutely be part of their job. And I imagine it is. It should be. Love your questions, keep sending them in. Go to talkingrealmoney.com, click the button up in the upper right hand corner that says ask a question, uh, or click the microphone in the lower right hand corner and speak your question for the Friday QA podcast that I do. In addition, if you want a little time with a real live, honest to goodness, 100% fiduciary advisor who doesn't sell commission products ever, and who isn't going to ask you for money ever, and who isn't going to put the uh you know the full court press on you, twist your arm, make you become a client, then go to talkingrealmoney.com, click on the button that says meet an advisor, and you can spend a little time going over your portfolio with one of our really honest advisors who isn't going to try and sell you something. Okay. Spend a little time, not spend a little dime. You can spend a little time, not spend a little dime.

SPEAKER_05 30:56

Going back to our theme for today. Oh, that was the tie-in for the end of this all.

SPEAKER_04 31:01

Very depression era way to uh take out uh this show, which we call what is the name again? Talking real money.

SPEAKER_02 31:10

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SPEAKER_01 31:23

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SPEAKER_00 32:06

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SPEAKER_02 32:10

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