Overdone Models?

SPEAKER_03 0:05

We're gonna do a really great financial future. Dumb and dumb are talking real money.

Model Portfolios Explained

SPEAKER_01 0:12

What is a model? A model. It could be a uh well, it could be a small airplane that somebody made in their garage. That could be a model. It could be somebody walking a runway in uh Paris. That that's a model. Uh it could be behavior, a model citizen. That's a model. Or, you know, when it comes to talking real money, it could be a model portfolio. Today's episode, all about models. Model portfolios. Do you need them? Should you have one? How do you get them? Who's making them? What are good? What are bad? We're gonna cram all of that into about 10 minutes. I'm done. That's Tom. This is the Talking Real Money model podcast.

SPEAKER_02 0:57

Yeah, you know, and the thing about the model play on words is I use it at home. I'm gonna go out to the garage and work on my model. It just gets a big eye roll, you know, like uh okay, we can't hilarious. Yeah. Again. How many eye rolls can you do in one day? But I got it coming. So I the thing about model portfolios is I don't think many people understand that really at the end of the day, if you're working with an advisor who's not using a model portfolio. And by that I don't mean everything's not built for you individually, but there is a set of investments, a set of rules that go with that. There's not, I get they don't get to pay.

SPEAKER_01 1:33

I need you to step back. I need you to step back, though, because that's where the confusion comes in. A model portfolio sounds like a cookie-cutter portfolio that applies to everybody, but that's not what a good model portfolio should be. It's it's more of the, well, it's the I'll I'll date myself. It's the little metal parts of the erector set that you they're all they're all to the right scales, and you use those parts to create the Ferris wheel or whatever it is you're trying to build.

SPEAKER_02 2:04

Exactly. You'll date yourself, by the way, because no one else will. That's why. Uh but the My wife still dates me. Okay. But the thing about that is a model portfolio has picked out the the investment options. It it's a series of exchange traded funds, could be mutual funds. For some people, it's stocks. We don't buy that approach. But it doesn't have the nobody here in the building has the option of saying, oh, I'm gonna take uh DRAM, uh, the hottest ETF ever, and put that in the portfolio. Nobody gets that option here. I wouldn't hire any firm that wasn't using the model approach, okay?

SPEAKER_01 2:42

Because then if you don't use the model, which has been vetted hopefully by academic research and a more and a research department, uh, analysts and all those guys, uh the the risk is you get put in the latest hot thing that the advisor has read about or has been pitched by a wholesaler or a a uh regional director or something of the company.

SPEAKER_02 3:09

A series of ideas. Don't want that. But uh according to what we just read, model portfolios are now used by more than 80 percent of fee, and they call them fee-based advisors. I would never use a fee-based advisor.

SPEAKER_01 3:21

Right. Those are the ones well, like for example, uh Merrill Lynch has uh a fee-based advisory. They're fee-based, not fee-only.

SPEAKER_02 3:31

Troubling. Because there you could be sold a commissionable

Private Assets Risk

SPEAKER_02 3:34

product. But okay, so but there's still problems with model portfolios because what goes into them, it turns out, is it becomes rather important if that's the same.

SPEAKER_01 3:43

You mean the devil's in the details of the model.

SPEAKER_02 3:45

Exactly. So uh when we read recently that Morningstar is partnering with people like um Apollo and Franklin Templeton to build six model portfolios that will use traditional exchange-rated funds. And guess what else they're gonna throw in there? Oh, alternate, alternative uh portfolios, like you already know the stuff, right? Private investments, private equity, private real estate, private lending, private credit lending. All those things are gonna be added in. So now you're going to own what you thought was a diversified portfolio, and they're gonna have exposure to the public and private markets. I don't like that because it's just it it's bearing bad stuff in there that uh that you might not be aware of.

SPEAKER_01 4:31

And again, here's a great example. This is a company. Morningstar is a company that has for literally decades been providing us with great information that we use to help educate you. Uh Vanguard is another company that has provided great products for investors like you. But both of them both of these companies appear to be kind of jumping the shark a little bit in search of magical excess profits somewhere. They're they're they're they're overstepping their sensible bounds, in our opinion, and getting into things that could be really dangerous potentially for their users. And these private products are a great example, Tom, because there has been a lot of news recently about a lot of investors. They're not flooding money, they're not flooding into these things, they're not pouring money into them. They're desperately trying to get their money out of some of these private equity products. Trevor Burrus, Jr.

SPEAKER_02 5:29

And they can't. Uh there's for a variety of reasons, right?

SPEAKER_01 5:32

Well, illiquidity.

SPEAKER_02 5:34

Yeah, that would be the biggest one, of course. You know, I struggle with uh people like Jim Zettler, who is the president of Apollo, when he says the next generation of model portfolios will blend public and private markets and offer investors greater diversification, more yield, and reflect the full breadth of the economy. Now, you know what they're really saying here is read between the lines. Look, fewer and fewer companies have been going public in the last 20 years. So all of these smart ideas, the big, the hottest stuff is private. So you need to make sure that your portfolio is exposed to those, right? Because there are fewer publicly traded stocks. Well, think that through a little bit. Uh why are they waiting? Well, they may be waiting because they don't want to go through the rigmarole of going public, which is not an easy thing. But for many of these companies, they're not going through it because they're probably troubled in some fashion, or they haven't been tested in a variety of markets, or a lot of other things. Or it's an idea, can you say pets.com, that uh that probably doesn't deserve your investment.

SPEAKER_01 6:39

And the other thing that we these private equity products and private lending products and private money products uh that are run by companies like Apollo, which is a big hedge fund manager, a big uh private equity manager, these things are expensive. You don't get this on the cheap like you do VT for you know six what is VT these days? Six basis points.

SPEAKER_02 7:04

Let's just say we'll say that.

SPEAKER_01 7:06

With with Apollo, you you they typically charge individual investors. Now I don't know what they're gonna charge through Morningstar. That was not released. Don't know the number. But they typically charge somewhere between one and a half and two percent a year to their individual investors, and then they have what is called the carry. Uh and that is twenty percent of the profits the fund makes, sometimes over and up or above a certain percentage. If they make under that, then they don't share the profits. If they make over that, they share the profits. But this is a very, very expensive proposition. And there's just not great evidence that the old two and twenty model and the private equity selections uh in aggregate outperform just buying the cheap old market. Trevor Burrus, Jr.

SPEAKER_02 8:02

Yeah. The publicly traded cheap old market. By the way, I I struggle even more when people like Franklin Templeton's CEO Jenny Johnson says we're living in an environment of persistent inflation and structural uncertainty.

SPEAKER_01 8:17

Now What the heck does that mean? Structural uncertainty. Are we about to have a mega nationwide earthquake and we're worried about buildings falling down?

SPEAKER_02 8:28

What is struggling check your crossing? Okay, did Jenny ever read history? And persistent inflation. I mean, inflation's at somewhere around three and a half percent. That's fairly, if you look back a hundred years, pretty average. I mean, inflation averages about three percent. So that's

Inflation Claims Debunked

SPEAKER_02 8:45

a silly thing. But here's a bigger struggle for me, frankly, that they are saying that in these interval funds, they expect the uh the private portion, which it could include equity, credit, real estate, all those things, to be somewhere between 12 and 20 percent of the portfolio. Now, that sounds even uh if you're gonna have any exposure, it would be for me very, very small, but 20% of your portfolio to be in private things were, again, as you point out, more expensive, less liquidity, and it has to be riskier, right? Just by the nature of it.

SPEAKER_01 9:17

Yeah, and I want to come back to Jenny's inflation thing because I think fla facts are just lovely things. When you talk about an inflationary environment, are you nuts? Were you born in 1995? In 1974, the U.S. inflation rate. The rate was, according to the Federal Reserve, 11.1%. In 1974, I mean 1979, the inflation rate was 11.3 percent. But wait, there's more.

SPEAKER_02 9:51

Yeah.

SPEAKER_01 9:52

In 1980, it was thirteen point five percent. Now, that was an era of persistent inflation because from the average inflation rate over the uh the the 20-year period from 1970 to 1990, so if you average all of it in, the low and the high, it still was four and a half percent. Higher than today's rate.

SPEAKER_02 10:18

Indeed.

SPEAKER_01 10:19

For 20 years.

SPEAKER_02 10:20

That was persistent inflation. And the bridge is held. Uh so you had the structural integrity as well. Uh those are silly reasons. And I I there's a person named Benjamin Schifrin, who's the director of securities policy at Better Markets, says, and this is where I completely agree. The private funds industry now wants to get its hands on the trillions of dollars in retail investors' retirement savings.

SPEAKER_01 10:46

Well, here's what happens generally, generally. They run out of smart money that's gullible enough to go with them. The big money, the the the ultra-rich. Finally, the ultra-rich are going, wait, why are we buying into these products when you're not even beating the market in aggregate again? Why are we pouring our money in? They're pulling their money out. We see that happening right now with some of these. The the smart money is pulling their money out or trying to, and they're having a hard time doing it. And then the industry comes after you. You're the last one they come after. You're their last resort, and your advisors, your trusted managers of your money, many of them are going to fall prey to this morning star product. And I'm not saying it's illegal. It's not. I I I'm not saying it's totally ethical, because I don't think it is. But it's, of course, it's capitalism. It's a free market. They can do what they want to do, and we can, in that same free market, warn you that this kind of stuff could. Could. We don't know that it will, but it could really bite you later. We just don't want. Honestly, I know we're uh we're capitalists too. We'd like for our firm to make money, yeah, yeah, yeah, whatever. But really, truly, honestly, our main focus is really making sure you're taken care of, and that's why we bring this stuff up. So there we have it. Now something funny happened. It's probably just from us being whiny.

SPEAKER_02 12:26

There's a bit of that going on, yeah.

SPEAKER_01 12:28

But but over the summer, uh, or as as summer got started, the questions waned a little. And we let you know that the questions had waned. Complaining began. We we complain. And um this show was recorded just days before Tom goes on an epic vacation throughout the Mediterranean, trying to recapture the glory of what was once the Roman Empire.

SPEAKER_02 12:53

That's right. You didn't I already I'm got my toga all ready to go.

SPEAKER_01 12:57

So Toga. And so uh just so we get caught up, suddenly all these questions poured in. This is airing in July after you get back from vacation, but we had to record them in advance because he would be on vacation. So we got to go through a whole bunch of questions right now that came in at talkingrealmoney.com just by hitting that button that says ask a question upper right.

SPEAKER_02 13:22

Yeah, and I want to point something out. I want to point something out here. We take all comers. We don't we don't edit the we're gonna edit one just for length.

SPEAKER_01 13:29

Well, okay, we sometimes edit for brevity.

SPEAKER_02 13:32

Yeah, right.

SPEAKER_01 13:32

But other than that, or I edit for your mistakes. If I hear you guys like a couple of my caller ones that was like I restart they restart and I go, okay, I'm gonna take that.

SPEAKER_02 13:41

I wish you'd edit my mistakes.

SPEAKER_01 13:42

No, no, no, no.

SPEAKER_02 13:43

No, I know you love keeping them.

SPEAKER_01 13:45

No, they're way too much fun.

SPEAKER_02 13:47

So we take

Fee Debate Continues

SPEAKER_02 13:48

them all. And this one is um, you know, an interesting, a fascinating, and uh sensitive, I'd say, topic. So and I went and asked a few people in our company about this too. So just to give you uh that, Joseph from Eatonville, Washington, he writes, hello, Tom and Don. Recently on your June 10th podcast, a listener asked and questioned the AUM fee, assets under management fee. That's where advisors, this is my words, charge a percentage of the money they manage for you. So and you may have heard Mr. Ken Fisher say, the more you make, the more we make. Uh-huh. Yeah, uh, and we go on. You both explained that the flat fee or hourly is not as holistic and basically could never do or cover as much as an AUM fee covers. This is not true.

SPEAKER_01 14:33

I just, you know, I don't think we said that. I think it was misinterpreted, but go ahead.

SPEAKER_02 14:38

Let's finish. And uh, this is not true, and not an honest and fair statement for your listeners. There are many flat fee and hourly type advisors who would do exactly what some AUM advisors do, as not all AUM advisors are like Apella. I know this to be true. If you remember me, I'm the guy who ended up interviewing 15 firms before deciding on the direction I wanted to go, and Apella was one of them. They scored well, by the way, as did others, some AUM, some flat fee, and one hourly. I will say that hourly was harder to find as being complete in advertisement, but there are a lot of flat fee advisors giving as much as any good AUM advisors for less cost, especially if you have a larger portfolio. My hope is that you both will correct yourselves on the air for your listeners as to what has been been telling them is a bias and not true in today's world. Thank you both for what you do, keeping doing what's right and be honest.

SPEAKER_01 15:31

Okay, let's let's talk about the three kinds of fees that we're talking we're we're discussing here. One is the AUM, that's a percentage of assets under management. That's what Appella does. Starts at 1%, but it goes down the the more money you have. So the fee reduces over over larger assets. Then there's the hourly, where you pay someone. Generally in the industry today, it's about four to seven hundred and five. I've seen seven hundred hours. Then there's the flat fee where you pay a few thousand dollars, and it's usually a few thousand dollars a year, depending on the complexity of your situation. Um they are all, they all have benefits, they all have detriments. Um and let's start with I want to start with the den of the benefits and detriments of the flat fee. I mean, one of the the y it's great because there is no financial incentive for the advisor to raise more money to try to get their fee up. But it requires that the client write an actual check. It's kind of like writing a check to the IRS every year. You may pay with this, you may pay a little less, maybe, but not always, and you got to write that check. The other thing is, is when it comes to a smaller account, we've looked at a lot of these flat fee programs and look at the number. Um as a as run it as a percentage of the assets that they'll be managing for you. If you're under a million dollars, these flat fees can be much higher than the AUM uh uh setup. Hourly means you have to pick the time you're gonna talk. You you you decide when you're gonna use it, uh need advice. Generally, you're you're gonna try and go cheap. You're gonna only talk to them when you really need help. Now, is there anything wrong with that? Not if you're good at what you do, and if you've got control and you've got a plan and you're all set up, hourly can be great. Then there's AUM-based, and AUM-based is the what Ken Fisher talks about. You we make more money, you make more money, but that's really you know, that's only part of the picture.

SPEAKER_02 17:54

It is. Okay, so let's let's just talk about what you may need as a consumer, right? I mean, if you're young and you're growing your assets, and you could pay somebody an hourly rent, you know, a certain amount and they build the portfolio, and away you go.

SPEAKER_01 18:10

Yep. I think that's actually a very viable way to go for someone in the and and that's why we don't bad, you know, that's why I take issue with the with the the correspondence recollection of the comments. I don't think we said you should not use these things um because I I think hourly works really well in the accumulation phase of life.

SPEAKER_02 18:30

Yeah, and and we have a very inexpensive sort of accumulator program here. We have an advisor who handles it. I forget what the rate is. We it's still an AUM charge, but it's less than the 1% because you don't need as much, right? That makes sense. Um to the AUM side, though, uh, and I asked around the company. I asked Jim Scanlon, our uh CEO, I asked Jason Gentile, our director of wealth, and their take was kind of what you know what what he said here, that it that the AUM approach feels more holistic. But you're right. The other could be as good. It depends on the relationship, it depends on your needs, et cetera. This is and what Jason said, I think was spot on. We feel like our clients are aligned with us. That the what we're offering is in alignment. It it's it is the planning, it is the tax planning, it is the portfolio design, it is which all those things. And we've done this for a long time and it's worked for us. Again, it doesn't mean that the other approach wouldn't be perhaps cheaper and might not be just as good. That I don't know.

SPEAKER_01 19:33

Here's the problem. Here's the problem. There are great, and and this was mentioned in the in the note. There are great AUM advisors. Great ones out there. Not very many, but there are some great ones. There are great hourly advisors, there are great flat fee advisors, and yet in the majority are the bad ones in every one of those categories, but more more likely in the AUM category, because folks, that's where the Americes and the Ed Jones and the Merrill Lynches and the Morgan Stanley's, that's where all of them reside in their in their their fee-based businesses. But remember, these guys, some of them charge, according to their form ADV, up to three percent per year. That's just bad on the face of it.

SPEAKER_02 20:27

Yeah, it really is. So, Joseph, I hope we've answered this. We're happy to take this question up again. It's a good one. Again, um, I think in our practice, this has worked well and is continuing to work well. I think our clients would say so as well.

SPEAKER_01 20:40

But um again, there's a lot of And we're trying to be really, really, really fair about it. Initially, Tom and I, when we started Vestry, we were doing 90 basis points, nine tenths of one percent. And here's the problem it may sound like an awful lot of money when you look at it as it is a percentage of your money, but when you see what the costs of running a registered investment advisory firm are behind the scenes, you you you would you would be shocked. And we really had to go to one to make us a little bit of money. Us, the the owners.

SPEAKER_02 21:13

Now that we don't have to look at that anymore. I can't like it.

SPEAKER_01 21:17

Somebody else's somebody else takes care of all those expenses. I'm good

Roth And 401k Strategy

SPEAKER_01 21:21

with that. That's good.

SPEAKER_02 21:22

Uh, from Parsons, Kansas, John writes, Dear Don and Tom, thank you for the excellent show. Question. If I have ten exchange traded funds and mutual funds at, let's say, Vanguard, with an expense ratio of point one zero each, does that mean the total expense will be one percent for the entire portfolio? Do you simply just add them up?

SPEAKER_01 21:43

No. No, because it's one tenth of one percent for each fund. So the total for the entire portfolio is one tenth of one percent. That's what you're paying. You're paying one tenth of one percent. Let's here, I'll do it this way. Got you've got ten accounts, each of them with $10,000. Well, let's use $100,000. One tenth of one percent is a thousand dollars. Is that right? Is that one percent? No, it's one hundred dollars. Sorry. I'm using a hundred thousand, right?

SPEAKER_02 22:17

Oh, we can charge a thousand, that's sure. No, let's go.

SPEAKER_01 22:20

So you got ten of those, each charging you a hundred dollars. That's a million dollars in funds. The total charge across the whole portfolio is a thousand dollars. One tenth of one percent. Yep.

SPEAKER_02 22:32

Okay.

SPEAKER_01 22:33

You don't add them up. That's it. That's pretty simple.

SPEAKER_02 22:36

Okay.

SPEAKER_01 22:37

We're going for four questions today. Four questions.

SPEAKER_02 22:40

Gotta keep working. Candia, New Hampshire, Chris writes. Probably Tom and maybe Don. I don't know what that means, but it's funny. Uh I'm a big fan of the show to have been listening for several years. My wife, 43, and I, 38, are right on the edge of the Roth IRA income limit. And since that's there, what is the Roth? What is that this year for the city? I don't know. I'm going to say $195,000 for a couple, something like that. If you make more than that, you cannot put money directly into a Roth IRA and you'd have to use the backdoor.

SPEAKER_01 23:16

Itches for a full contribution, ladies and gentlemen. A modified adjusted gross income. Gotta make sure that that's in there. That's right. Of $250,000. $250. At $260,000, you're totally out.

SPEAKER_02 23:32

You're out. Okay. Fair enough. Okay. So uh he continues. Chris does. I would like to have a plan to deal with our IRA balances before this becomes a problem. Our 401ks use Fidelity Index Funds for S P, International Large Growth, US Small Blend. So we use our IRAs and Roth IRAs to capture the rest of the asset classes in Paul Merriman's 10 fund portfolio. If we rolled the IRAs into our 401ks, if we rolled the IRAs into our 401ks, we'd significantly reduce our tilt to small and to value instead of contributing $7,500 to each Roth, wouldn't a conversion from an IRA to a Roth that has a tax bill of $7,500 accomplish the same thing in retirement. I haven't heard this option recommended. Wait a minute.

SPEAKER_01 24:17

Yeah, I'm not understanding the question. I think what he's talking about is I don't know why you'd want to put it into his 401k and lose the small value tilt and looks like that.

SPEAKER_02 24:26

But if he does that, if he cleans it up, you're only 38. If he cleans that up now and he's under the income limit, then he could start making regular Roth contributions and then buy the small value and all the stuff that you don't have to do. Wait, wait, wait.

SPEAKER_01 24:40

Well, okay. Uh hold on. How is money in an IRA? How is moving the IRA into the 401k going to reduce his income?

SPEAKER_02 24:48

No, no, no. I'm not that two separate things. Not conflating them. No. Okay. No. Um, in fact, it's going to increase his income because you move money from an IRA to a Roth, that's the same as taking income. Right. Yeah. No, what he's asking about is it doesn't make sense to sort of clean in my mind, he's asking, should I just clean things up? Get rid of the IRA? Now I just have to.

SPEAKER_01 25:09

The regular IRA.

SPEAKER_02 25:10

Yeah.

SPEAKER_01 25:12

No. That's my no, no, you lose his small value tilt. But then he won't be able to do the back door, is my take. Oh, because of the pro rata rule. Correct.

SPEAKER_02 25:23

That's what it's like.

SPEAKER_01 25:24

How much is in his IRA?

SPEAKER_02 25:25

He doesn't get into that.

SPEAKER_01 25:26

Um I mean, it really would depend. I mean, because it's a pro-Radder rule. It means you don't have to take it, you don't have to pay taxes on the whole thing.

SPEAKER_02 25:34

Or you could do it over time, too. Um, but then he goes on. He said, I've just discovered my 401k is a brokerage link options. From what I can find in the documents, there's a hundred percent annual fee, and it can manage up to one half of my 401k, currently four five fifty that five hundred and fifty thousand dollars total. I don't like the unnecessary fees, but this seems worth it for the extra exposure to small value emerging markets. Is there anything to be wary of?

SPEAKER_01 26:00

Was it a hundred dollars? Because you said a hundred percent. Particularly if the funds he's using are higher expense funds and he can get really low-cost ETFs through the direct brokerage option.

SPEAKER_02 26:22

Here's the thing. Um yes, I think brokerage link makes sense. Again, I'd have to look at all of the funds available in your current 401k before I said absolutely. But I still, at your relative young ages of 43 and 38, want you to commit a sizable amount of the savings into Roth, whether that comes in your Roth IRA or in your current 401k, because you want to have those different buckets when you get to retirement twenty years down the road. It's gonna be anything.

SPEAKER_01 26:50

What about the thought? Um What about since they're putting uh a lot of money away and they're right at the limit, they really can't make the Roth anymore or the contribution. Why not uh start move all your 401k contributions to the Roth option?

SPEAKER_02 27:10

Which you could do, right?

SPEAKER_01 27:11

Which you could do. So you could still get a Roth um and still do the regular IRA and get what what you're doing is you're swapping deductions possible. Well, no, you wouldn't get a deduction for the IRA anymore. No. Not anymore. But uh I don't know. I I I I think I might go with the Roth and the 401, though, if that's an option for you. Trevor Burrus, Jr.

SPEAKER_02 27:28

That is. Then then you build the Roth there. You use the brokerage link to get the proper exposure to the other asset classes that you correctly point out you don't have.

SPEAKER_01 27:36

And then you can gradually, if you want to, start converting that uh IRA slowly so that you do some tax management along the way. You don't creep up a bracket.

SPEAKER_02 27:44

Yeah, I agree. So we've got one more here. Got time to do that.

Best 401k Brokerage Option

SPEAKER_02 27:48

We have what the heck? Farmington, Connecticut, Shane writes, Hi, Don and Tom. My wife and I aren't satisfied with the investment options in her 401k. I understand the traditional advice in this situation is to at least invest the minimum to get the match and then put the rest in your brokerage account. However, my wife is very well compensated, and contributing the minimum to get the match actually max out it maxes out the 401k. Max the match ends up being $20,000, which is great.

SPEAKER_01 28:18

I don't care what the options are. I honestly I hope I want the free $20,000. A lot of money. That's a lot of money. The options can't be that bad. Okay, let's assume. What do we have any of the options?

SPEAKER_02 28:32

Well, her 401k is through T Row Price.

unknown 28:35

Okay.

SPEAKER_02 28:35

Not the fees that give us pause, he says, but the prevalence of active funds without broad diversification and with turnover rates of greater than 50%, including one with a whopping 230% turnover. The index offerings are all Spartan Index Pools, uh, which I understand are collective investment trusts. I found it hard to find information about their holdings.

SPEAKER_01 28:54

So Oh, do those, do those, do those, do those, do those. These collective uh uh trusts are they're they're yeah, they're not as transparent. They're not transparent, but they said they're but they're indexes. Okay? Therefore, portfolio transparency is not an issue.

SPEAKER_02 29:12

Yeah.

SPEAKER_01 29:13

What's the issue is the fee transparency, and generally speaking, these collective trusts have lower fees than comparable mutual funds because they have less regulation. Yes, I love those. I mean, I'm already good with that one.

SPEAKER_02 29:28

Uh the question is the 401k Prospectus offers a self-directed brokerage through a Schwab Personal Choice Retirement Account. Sound familiar? Oh, that was the previous one. No, because this sounds like exactly what I'm looking for. Prospectus says T Row Price will charge us $50 a year for this, but this is going to be the only fee if I stick to ETFs. I can't find a list of the investments available in the Schwab Personal Choice account. I think it's anything at Schwab Choice.

SPEAKER_01 29:51

Everything is available in that. So A V G E, D F A W, VT, all of those, all of those ETFs. Now, not all the mutual funds, but the ETFs are all available because they trade as regular stocks. That is the best option of them all. It's $40. We just said do it for $100.

SPEAKER_02 30:10

$50, $50. If I say Oh, $50.

SPEAKER_01 30:12

$50. I'm sorry. $50. I know I just misheard.

SPEAKER_02 30:22

I think it's right. I think it's just some of the limitations in the mutual funds. Is this oddly exactly what we're looking for?

SPEAKER_01 30:28

Oddly, it's exactly what you're looking for. Yeah. Or the collective trust. You know, if you if $50 bothers you, which it shouldn't, because your wife is highly compensated, and now suddenly what you do is you take a mediocre plan, you get the free $20,000, and you make it a great plan for $40. $50. Why do I keep saying $40?

SPEAKER_02 30:49

I don't know. I corrected.

SPEAKER_01 30:51

I have got $40 in my head for some. Yeah, I'm I'm oh, that's it. That's my subsidy. Yeah. If $50 bothers you, let's take it down to $40, shall we?

SPEAKER_02 31:02

Exactly. You're selling like that.

SPEAKER_01 31:04

I don't know why I thought it was $40. No, that's a good option. Now watch, I'm gonna leave my mistake in too, though.

SPEAKER_02 31:09

Okay. I'm gonna check to make sure you am. Uh so no, I think that's a very good option. And uh by the way, congratulations on the 20K. I just read again, I hate to pick on them, but um Costco's match $500. Doesn't matter what you make, doesn't matter what you're putting in, five hundred dollars in your 401k.

SPEAKER_01 31:27

Well, you know, I was just at Costco and the prices are so good that I can see why they can't afford to do that. I got a bottle of avocado oil, and I was in it's funny, I went to Costco yesterday, and then I went to Publix to get a few grocery things. And I saw the same bottle on the shelf, except it was a little shorter. It's a smaller bottle because of course it's smaller. I paid, I think it was $18 for the avocado oil at Costco. At Publix, it was $23 for a smaller bottle. See? So, you know, Costco can't afford much more than that, apparently. I'm gonna let you say that. So And I got gas? Not you know, I didn't have the hot dog. That you know, I know there's gas from that.

SPEAKER_02 32:13

Buck fifty for the dog.

SPEAKER_01 32:15

I went to the gas station at Costco. My gosh, it felt good to fill up at $3.46 a gallon.

SPEAKER_02 32:21

Wow.

SPEAKER_01 32:22

Three forty forty six a gallon.

SPEAKER_02 32:25

You could pay at least two dollars more than that here. Uh I still see six dollars from around town. That just over, it's peace and the hormouse is open.

SPEAKER_01 32:36

And it's so funny, we went in to get uh some olive oil because their olive oil is so good, and Debbie had a hearing aid thing she needed to deal with, and and we ended up walking out with uh $250 worth of stuff.

SPEAKER_02 32:47

Uh it's surprising, right?

SPEAKER_01 32:48

That that I swear stuff just jumped in my cart on the way out of the store. It's like, how did that get there?

SPEAKER_02 32:55

There's two reasons I don't go there. Number one, things like that. Number two, there's that many people around. So I just don't know.

SPEAKER_01 33:00

No, and I I found the key. We went on a Wednesday at 2 p.m.

SPEAKER_02 33:04

You take the break after lunch, blah, blah, blah, everybody's home.

SPEAKER_01 33:07

Wednesday at 2 p.m., I found the day because we go in there on a Saturday or a Sunday.

SPEAKER_02 33:12

Forget it. No way.

SPEAKER_01 33:13

And I start feeling a little anxious and suicidal.

unknown 33:17

I couldn't.

SPEAKER_01 33:17

I want to jump from the top of one of those really tall shelves.

SPEAKER_02 33:20

I'd still suggest that if I were you.

SPEAKER_01 33:22

So Okay, good idea. Thank you all. We appreciate you being there and keep sending those questions in because we'll get them answered. We will eventually we're working on them. You can also speak them and they go to the Friday podcast. And uh, by the way, the Friday podcasts are, you know, the the the questions coming in for those have been great, so keep that up and keep listening and keep telling your friends because the more the merrier, because everybody out here in the United States of America and beyond. Oh, yeah, Toy Story came out a couple of weeks ago. Yes, it did. To America and beyond uh needs to be what? Talking real money.

SPEAKER_03 34:02

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SPEAKER_04 34:16

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SPEAKER_03 34:25

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