Afford Anything - BONUS: Stagflation, Stocks & Social Security - What’s Next for Your Money?

Host: Paula Pant
Guest: Rob Berger
Date: September 15, 2025
Duration: ~20 minutes (excluding ads/intros/outros)

Episode Overview

In this special bonus episode, Paula Pant sits down with Rob Berger—personal finance educator, YouTuber, author, and former lawyer—to tackle the major financial questions on listeners’ minds in late 2025. They discuss where the economy stands amid inflation, the possibility of stagflation, high market valuations, what the Fed might do next, the state of Social Security, asset allocation advice for all ages, as well as the financial mindset for retirees and young adults.

Key Discussion Points & Insights

Setting the Stage: Economic Uncertainty (06:44–09:10)

• Current Environment: CPI numbers are higher than expected, mortgage rates have had their biggest weekly drop in a long time, but uncertainty looms.
• Rob Berger's Perspective:

  “It reminds me of the curse, ‘May you live in interesting times.’ We kind of live in interesting times.” (07:21, Rob)

• Inflation is ticking up, but employment numbers are weak, putting the Fed in a tough spot due to their dual mandate of price stability and maximum employment.
• Stagflation—a term from the 1970s, meaning stagnant growth with stubborn inflation—is being whispered, but Rob thinks it's too early to call that.
• Regarding rate cuts:

  “My prediction would be they’ll still lower by 25 basis points, but who knows?” (08:54, Rob)

  • The Fed’s future moves are highly uncertain; even experts are mostly guessing.

Stock Market Valuations & Diversification (09:10–12:56)

• The S&P 500's high valuations are due mainly to the "Magnificent Seven" (big tech/growth companies) carrying the index.

• “Trees don’t grow to the sky, the stock market just doesn’t keep going up and up … eventually you see some form of correction and that will happen. We just don’t know when.” (10:58, Rob)

• While broad index funds are still useful, Rob notes that excessive weighting towards a few mega-cap stocks means investors should diversify beyond just S&P 500.
• Suggested diversification: include international stocks, small/mid-caps, value stocks, and REITs to get broader exposure.

Asset Allocation Rules of Thumb (12:56–14:57)

• For long-term investors: Rob prefers a 90% stocks / 10% bonds split; 100% stocks is often "a bit rich," 80/20 is fine for others.
• Approaching retirement: shift to 60/40 or 70/30 stocks/bonds, with adjustments for pension or Social Security income.
• Important to mix nominal and inflation-protected bonds:

  “I do think it’s important to have both inflation-protected bonds… and regular bonds. It’s important, particularly given all the uncertainty around inflation.” (13:51, Rob)

• On TIPS vs. nominal bonds:

  “TIPS is like a regular bond, but you're also buying an insurance policy against rising prices. That insurance isn’t free… so I just bet on both.” (14:20–14:57, Rob)

Social Security’s Future & Late Retirement Planning (14:57–20:13)

• Social Security trust funds are projected to become insolvent in 7–9 years, resulting in an estimated 23% cut in benefits if nothing changes.

• “I personally believe, maybe I’m too optimistic, that between now and then the government will figure that out… but you have to be prepared for the ‘what if?’” (16:12–16:37, Rob)

• Advice for those 55–60 and underfunded for retirement:
  • Make decisions sooner rather than later (spend less, save more).
  • Consider working longer, but remember, health and job market are unpredictable.
• On "investing more aggressively" late in life: Rob cautions against large risk increases right before retirement without fully considering the potential for life-altering losses.

  “What will your life be like if your portfolio loses 40% in that time?” (19:08, Rob)

Young Adults, Gen Z, and the American Dream (20:13–24:01)

• Rob redirects energy away from generational comparisons, focusing instead on personal agency:

  “My focus is always, what is it that you can control?... You can control what kind of education and training you get, what kind of work you want to do, how you spend your money…” (21:00–21:40, Rob)

• Makes it clear life is about trade-offs—most people can’t have it all at once:

  “They have to decide what’s most important to them, because… most people can't have it all. That’s just a reality.” (22:31, Rob)

• Action plan for a 25-year-old:
  • Prioritize: Is homeownership, marriage, or starting a family most important?
  • Budget and make sacrifices as necessary—cut costs or change jobs if needed.
  • Accept the necessity of tough choices and recalibrating as life unfolds.

The Dangers of Prediction & What’s Next (24:01–26:07)

• Rob resists specific 2026 predictions, citing that “the biggest prediction is something unpredictable is going to happen.” (24:57, Rob)

• “The big mistake folks make is thinking they can predict these things and then make significant changes… Occasionally it pays off, just like… winning the lottery. But I think most of the time… they’re sorry they went down that path.” (25:37, Rob)

• Morgan Housel is quoted: “The study of history is the study of surprises.” (26:01, Paula)

Notable Quotes & Memorable Moments

• On today’s peculiar market:

  "Oftentimes those [Fed] mandates are working at odds with one another.” (07:45, Rob)

• On asset growth limits:

  “Trees don’t grow to the sky.” (10:44, Rob)

• On Index Fund Concentration:

  “That index fund is so heavily weighted toward a handful of companies… But that doesn't mean your portfolio has to be.” (12:36, Rob)

• On late-stage retirement risk:

  “If your portfolio loses 40% in that time, what would your life look like?” (19:08, Rob)

• On American Dream realities for young adults:

  “…most people can’t have it all. That’s just reality.” (22:31, Rob)

• On crystal balls and humility:

  “Something absolutely totally unexpected is going to happen and it’s going to change all of these predictions.” (24:35, Rob)

• On learning from the past:

  “The study of history is the study of surprises.” (26:01, Paula quoting Housel)

Timestamps for Key Segments

| Time | Segment Description | |------------|------------------------------------------------------------------------------------------------| | 06:44–09:10| Economic overview: CPI, Fed, inflation, and the threat of stagflation | | 09:10–12:56| Market valuations, Magnificent Seven, diversification issues, and asset allocation | | 12:56–14:57| Bonds, inflation protection, and practical allocation strategies | | 14:57–16:56| Social Security’s future and political context | | 16:56–20:13| Retirement advice for ages 55–60, late-stage asset allocation, and work/spend decisions | | 20:13–24:01| Gen Z challenges, prioritization for young adults, and American Dream commentary | | 24:01–26:07| 2026 predictions: why humility is key and the inevitability of economic surprise |

Additional Resources

• Find Rob Berger online: robberger.com and his YouTube channel, Rob Berger Show
• Free cheat sheets and guides: affordanything.com/assetlocation

This episode stands out for its calm, rational take on market uncertainty and the humility that both Rob and Paula bring to the table when discussing financial planning, social security, and generational economic anxiety. The conversation is practical, reassuring, and refreshingly non-alarmist—tailored for listeners seeking grounded, actionable perspectives amid unpredictable times.