Q&A: Should You Keep Part of Your Money Outside the U.S.?

Summary

Afford Anything Podcast: Q&A – Should You Keep Part of Your Money Outside the U.S.?

Host: Paula Pant (with co-host Joe Saul-Sehy)
Date: December 30, 2025
Podcast Network: Cumulus Podcast Network
Episode Theme: Listener Q&A – Portfolio efficiency, health insurance classification, and the prudence of keeping assets outside the U.S.

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Overview

This episode of Afford Anything focuses on answering audience questions centered on three weighty topics: portfolio construction with an eye to the "efficient frontier," how to handle dependency status for adult children during transition periods (with health insurance and taxes in mind), and—most notably—whether U.S.-based investors should consider holding assets outside the United States for reasons of geopolitical, legal, or institutional uncertainty. True to the show’s character, the discussion is evidence-driven, practical, and full of accessible analogies, with both hosts regularly circling back to the true purposes of financial planning and risk management.

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I. Key Discussion Points & Insights

1. Portfolio Construction – The Efficient Frontier

[02:51-23:48]
Listener "Ally" asks several questions about asset allocation, rebalancing, backdoor Roth logistics, and efficiency.

• 100% Equities: Risk and Rewards

  • Joe notes that many respected voices in finance argue for 100% equities as the fastest route to wealth, if the investor can stomach the volatility:
    • “Number one, don't be afraid of the fact if you have the risk tolerance for 100% equities, that is fine.” – Joe [07:57]
  • The real challenge is behavioral: the dangers of “jumping off the rollercoaster” at the wrong time due to market drops increases as the portfolio and stakes grow with age.

• Defining "Efficiency" in Investing

  • True efficiency starts with goals, not optimization for its own sake:
    • "Efficiency truly is based on something, and in this case, Ally, it's based on what your goal is. When are you going to spend the dollar? I don't know any of that.” – Joe [09:13]
  • Paula and Joe agree that clarity on end goals is needed before assessing portfolio efficiency or rebalancing.

• Issues in Ally’s Portfolio

  • Heavy concentration in U.S. large-cap stocks due to “VTSAX & chill” approach; could benefit from more small-cap and international exposure.
  • Good use of Roth accounts for highest growth assets—Paula agrees this is sound tax strategy:
    • "You have a lot of your highest growth assets in Roth accounts, which are great..." – Paula [15:06]

• Employer Stock Caution

  • Large ESPP (employee stock purchase plan) position is a red flag; employees should avoid excessive exposure to single-company risk.

• Rebalancing Without Taxes

  • Joe: "You can't." Paula: Maybe, if you rebalance by buying in taxable accounts and only sell in tax-advantaged ones.
  • Don’t let tax aversion paralyze you—cutting toxic positions and paying some tax is often the path to more wealth:
    • “My goal is to have Elon Musk's tax bill.” – Joe [16:59]

• Dividend Reinvestment Trick

  • Paula’s strategy: stop automatic dividend reinvestment to create cash for rebalancing without triggering taxable sales. [18:11]

• FIFO vs. LIFO for Tax Management

  • “Which chipmunk are you getting rid of?” – Paula’s playful analogy clarifies why first-in/first-out or last-in/first-out matters for capital gains. [20:32]

2. Health Insurance & Dependency Status

[25:26-41:12]
Listener "Emma" asks whether her soon-to-graduate, 21-year-old daughter can be claimed as a dependent for half the year to qualify for better health insurance subsidies.

• ACA Rules vs. Tax Dependents

  • Under ACA, children can remain on parents’ plans until 26—regardless of dependency or marital status.
    • “If it's an ACA compliant plan, then…a child under 26 can stay on their parents’ health insurance.” – Paula [27:03]

• Partial-Year Dependents – The “Residency Test”

  • For IRS dependency, child must live with the parent over half the year or be a full-time student.
  • Time away at university doesn’t count against residency.
    • “The time that a full time student spends at school does not count against you for the residency requirement.” – Paula [29:55]

• Alternative Health Coverage Arrangements

  • Paula lays out options for 2026—including ACA compliant and non-compliant plans, direct primary care, and health shares.
  • Warns about health share (e.g., Medishare) programs:
    • “Right across the top of every single one of them, it says…not actuarially sound.” – Joe [33:49]
    • Many have strict behavioral clauses or religious requirements.

• Employer HSAs vs. PPOs

  • Joe shares a listener’s story: often, for major U.S. employers, the HSA (with employer contribution and high-deductible plan) outcompetes the traditional PPO, even for those with higher medical spending.

3. Should You Keep Money Outside the U.S.?

[42:52-65:34]
Listener "Anonymous"/"Ted" asks about holding assets abroad, citing institutional trust issues and growing political risk in the U.S.

• The Real Question: Which Jurisdictions Offer the Best Rule of Law?

  • Hosts agree: the foundational concern is whether assets in the U.S. are more vulnerable to loss (seizure, arbitrary government action) than those abroad.
  • U.S. remains the global standard for legal protection of property:
    • “Look at how many assets have come from Norway to the U.S. in 2025—it’s incredible...The rule of law around property ownership is so strong.” – Paula [48:38]

• Global Capital Flows

  • Massive inbound U.S. flows signal broader confidence in U.S. protections, buttressed by opportunity (AI, capital markets).

• Trading Risks, Not Eliminating Them

  • Joe points out that any move to another country simply exchanges U.S. risk for a new set of risks.
    • “You’re trading one risk of one government for risk of another government.” – Joe [47:22]
  • Multinational tax, compliance, legal fees, risk of asset seizure, currency risk, and two different rule-of-law environments complicate the move.

• Costs and Practical Barriers

  • Double taxation (U.S. taxes worldwide income and gains) and high cost for offshore custody or compliance.
  • Most sophisticated solutions are only practical at the multi-million dollar scale.

• Historical Self-Correction

  • U.S. institutions have historically “self-cleansed”:
    • “We have had scandals and changes...and it corrected. Maybe it didn’t correct quickly...but it changed course.” – Joe [50:05]

• Repatriation & Asset Seizure

  • Even “legally” moving money abroad can expose it to successful future U.S. asset repatriation efforts if laws/rules change.

• Diversification within Asset Classes v. Diversification of Legal Jurisdictions

  • Paula and Joe agree: "geo-diversification" of where you hold assets is much less urgent for everyday investors than traditional asset-class diversification (international equities, bonds, real estate, etc.).

• Risk Management—Probability vs. Magnitude

  • Joe: True risk = probability × magnitude. While the magnitude of U.S. institutional collapse would be enormous, the probability, even as things look uncertain, remains extremely low.
    • “It’s not even on the map of my top 25 worries about Ted’s portfolio.” – Joe [61:12]

• Final Recommendation: Not Worth It for Most

  • Both hosts on (literal) record:
    • “Are you for it or against it?...I am against it.” – Paula [54:40]; Joe agrees.

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II. Notable Quotes & Memorable Moments

• Joe on 100% Stocks:
  “The problem is you will jump off the roller coaster while it’s going down the hill and you will mess everything up.” [06:59]

• On Defining Efficiency:
  "Efficiency begins with the end in mind...if you don’t know your goal, you can’t know if you’re efficient.” – Joe [09:13]

• On Tax Minimization:
  “My goal is to have Elon Musk’s tax bill. ... My goal is more cash. And if I have to pay more tax to get that, then that is what it is.” – Joe [16:59]

• Asset Rebalancing as Chipmunks:
  "Which chipmunk are you getting rid of first? Is it going to be Alvin or is it going to be Theodore?" – Paula [20:34]
  (explaining FIFO vs. LIFO for capital gains, with Joe’s comic interjections)

• Health Shares Warning:
  “...not actuarially sound...if your Medishare program gets into a situation where a ton of people need money at the same time, there’s not enough money in that pool...” – Joe [33:49]

• On U.S. Rule of Law/Diversification Reasoning:
  "You’re trading one risk of one government for risk of another government." – Joe [47:22]

• On Asset Repatriation:
  “If you legally move it to another country and the US government decides to go after your assets, could they repatriate it?...you might not be reducing the risk as much as you think you are.” – Joe [64:09]

• Comedy Callback:
  Paula, on her comedy class progress, after making a joke about medical billing and deductibles:
  “I've been taking stand up comedy for about a month now.” [55:29]

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III. Timestamps – Essential Segments

• [02:51] Ally’s question about portfolio efficiency
• [05:24 - 12:11] Joe and Paula break down 100% equities, volatility, and risk tolerance
• [15:06] Discussion on large-cap concentration and Roth tax strategy
• [16:30] How to rebalance without incurring taxes
• [20:32] The “Chipmunk analogy” for FIFO/LIFO
• [25:26] Emma’s question: part-time dependency for health insurance
• [27:03] ACA rules for keeping adult children on health plans
• [29:55] IRS dependency “residency test” for students
• [33:49] Health shares: regulation, risks, and tradeoffs
• [42:52] Anonymous/Ted’s question: Should I keep money outside the U.S.?
• [48:38] Paula on U.S. global attractiveness and rule of law
• [50:05] U.S. history of “self-cleansing” institutional problems
• [64:09] On asset repatriation risk
• [54:40 & 54:41] Show of hands: Both hosts advise against offshore custody for most individuals

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IV. Style & Tone

The episode maintains Paula and Joe’s signature conversational style: smart, friendly, full of analogies (“chipmunks,” “roller coasters,” “field goals”). Tangents include playful asides about long-term care TV comedies, comedy lessons, and meta-humor about performing visual gags on audio podcasts. The advice is always pragmatic, often coaching listeners not only on what to do but how to think about why they’re doing it.

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V. Takeaways for Non-Listeners

• Don't obsess over portfolio “efficiency” until your goals are crystal clear.
• It's fine to be 100% equities if you truly understand and can handle the volatility. Most can’t (especially as stakes grow)!
• Don't let tax fears prevent smart rebalancing; use accounts and flows to minimize pain, but don’t let tax tail wag the dog.
• Children under 26 can stay on parental ACA plans regardless of their “dependent” status for taxes.
• Health shares are riskier than they seem—cheaper for a reason. Read the small print.
• Don't bother holding money overseas unless you are ultra high net worth and have exhausted more conventional forms of risk management.
• U.S.-based assets remain among the safest legally; moving elsewhere trades one set of uncertainties for another (often less favorable).
• Proper diversification means asset classes and geographies, not legal jurisdictions for most.
• Risk is always about probability and magnitude—save your energy for the risks most likely to impact you.

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Listen for:
• Behavioral pitfalls of risk-taking
• Useful, witty analogies (chipmunks, roller coasters)
• A nuanced answer to a modern, global anxiety about U.S. institutions—delivered with both reassurance and realism

Summary prepared for Afford Anything listeners and the financially curious who didn’t catch the episode.

Transcript

[A]

Joe. Welcome to our last episode of 2025.

[B]

I can't believe it.

[A]

What a year.

[B]

New Year's Eve coming up.

[A]

Do you have any goals for the new year?

[B]

I just want to be in the moment more as much as I possibly can. That is my sole goal. That was my goal in 2025. And 2025 seemed to go very quickly. Seemed to go by very, very quickly. And I just want to live less in the future and more in the now. And that means learning to divorce myself from my phone, to be in conversations, to get rid of notifications. That's my goal.

[A]

Ah, Joe wants a Christmas present. Well, look at that. Look at that. But for the entire year, Christmas all year long. That's beautiful.

[B]

What about you?

[A]

I think 2026 is going to be the year that I start putting a book in motion.

[C]

What?

[A]

Yeah.

[B]

Oh, she said it out loud, everybody.

[A]

For years, people have asked me, when's your book coming out? When are you going to write a book? And I've always said, it's not the right time. It's not the right time. It's not going to come out in 2026. But I think. I think this. No, no, not even close.

[B]

It's coming out in 2028.

[A]

Yeah. At the earliest. Maybe 2029.

[B]

Sure.

[A]

But I think the process begins in 2026. I think it's finally time to shop the proposal.

[B]

That is fantastic. Now, New Year's, do you have you doing anything big for New Year's Eve?

[A]

I'll be in Atlanta by the time this airs. I will have just arrived in Atlanta, so hanging out with some old friends there. Actually, someone from the personal finance world, Letitia Styles.

[B]

Oh, cool. I haven't seen her in forever.

[A]

Yeah, yeah, that'll be great. We don't know exactly what we're doing, but we will be ringing in the new year together.

[B]

This is getting a little personal, but I thought she was in Memphis. She's back in Atlanta.

[A]

She's back in Atlanta.

[B]

Fantastic. Oh, that's great. Yes.

[A]

Yeah, yeah, she. So she and I, for people who are wondering, had briefly, we had a podcast called the Wealth Fast Podcast.

[B]

That's right.

[A]

This was, ooh, maybe 2014.

[B]

It was like the best three episodes ever.

[A]

Yeah. Yeah, exactly. So that was my. My entry into podcasting was with her. So it'll be amazing to see her again.

[B]

Well, that's good. So you have a New Year's Eve date. You know why Google Calendar is so popular on New Year's Eve?

[A]

Why is that?

[B]

Because it has lots of dates.

[A]

Oh, and with that, we will turn to our first question. Oh, I never intro'd the show. Welcome to the Afford Anything podcast.

[B]

Oh, is that what this is?

[A]

The show that knows you can afford anything? Not everything. Every other episode we answer questions from you and the first one today comes from Ally.

[D]

Hi Paul and Jo. Love the show and all that you do. I'm going to talk really fast because I only have three minutes. I'm 45 and about 1.2 million in assets. Single, never married and about 100 invested in stocks which may scare a lot of people. Here's my breakdown Vanguard Brokerage Account VTSAX132K ISCV5K VO5K, my Vanguard Rollover IRA at VTSAX65K IVV25K Voo62K and my Vanguard Roth IRA VTSAX228K ISCV6K and I have a Pre Tax Maro 401K which has Active Stock Fund 218K expense ratios 0.01% Equity Dividend Fund 55K expense ratio is 0.01%. I have the Russell 1270K expense ratio 0. I also have HSA9K in the Russell 1000 and the Russell 2000. I have 90K in my ESPP savings accounts only 12K which is not a lot, but I see brokerage account as my savings where I can sell the assets if I need the money as well as sell my company shares. My questions are how far am I away from the efficient frontier which you spoke a lot about but I'm not grasping it yet. Also, how efficient am I with my asset allocations? I don't think I am in either case. As you can see, I was mainly at VTSAX and Chill type. If I rebalance, what's the best way without incurring any taxes? Also, next year I'll be making more than 150k even after I fully invest the 24,500k in 2026 in my pre tax for 1k due to my salary and bonus. Can I still do a backdoor Roth since I have an IRA account with a balance in it already? I was told it'd be very complicated. Am I out of luck investing in the Roth next year? Also, should I roll over my 401k to my existing rollover a so I have more investment options? The fee is so low in my 401k though. Please help as I've reached over a million in assets but still feeling not feeling confident that my first million was invested correctly or more efficiently, and I want to correct it before reaching my next million. Thank you in advance for taking my question and looking forward to hearing your insights and advice.

[A]

Whew.

[D]

I made it under three minutes. Thank you so much.

[A]

Wow.

[B]

Our speed talker, Alec.

[A]

That was incredible.

[B]

Nice job.

[A]

I have a very thorough understanding of your assets.

[B]

Now, I think, Paula, if you don't mind, because I'm the person.

[A]

Yeah, you're Mr. Efficient Frontier.

[B]

I introduced the Efficient Frontier to the afford anything audience. So why don't I, why don't I dive into this one? Because I think there's a lot to chew on and obviously I. I know, Paula, you'll have good stuff, too. There's a ton to unpack here. Ali, you did a great job of talking very fast, and so we need to break this down into digestible pieces. And the first piece was the comment that you made that you're 100% in stocks and that may scare a lot of people. 100% stocks, according to Even recently, just three different groups that I've seen. I'm going to quote people that I've heard this from in the last two weeks. First of all, my co host, OG has said this. This the whole time that we've been doing the Stacking Benjamin show. He's always been. 100 stocks is the answer, with a caveat that I'll get to in a second, Ali. Second, there was a recent conference where a Vanguard researcher talked about how 100 equities is also the answer. But then he talked about deviating from that for the same caveat I'm about to bring up. There's also a white paper that came out from a top research group that just happened showing that historically, 100% equities was the right answer. So it shouldn't scare people to be 100% equities. That truly is or has been. We never know the future. Right. But historically, it has been the key to getting where you want to go faster. That doesn't bother me. I'll tell you what does bother me about 100% equities. It bothers OG it bothered the Vanguard researcher. It also in this white paper, it was the big, huge caveat. The problem is 100% equities is the biggest freaking roller coaster ride ever. And the problem isn't that the equities won't make it. The problem is you will jump off the roller coaster while it's going down the hill and you will mess everything up because of the fact that it's it is going to be such a moody, moody portfolio that most people can't stay on. So start with 100% equities and work backward. How much risk can you actually take to not blow up your plan? My portfolio is not 100% equities because I don't have a gigantic risk tolerance.

[A]

Mine is 100% equities, but I view rental properties as my bond allocation. Yeah, I view my rental properties as the income portion of my portfolio.

[B]

Yeah, mine, I have some REITs that are, that are, but truly they're an equity form. So those are kind of, those are also equities. But I have a small, like 5% portion of my portfolio that's in other assets. Number one, don't be afraid of the fact if you have the risk tolerance for 100% equities, that is fine. Now, there is a problem. And the problem, Paula, is that most people, in their head, when they're young, they can take the risk of 100% stocks because of the fact that in your brain, you kind of view your job and as the bond portion of your portfolio because you have this consistent income stream coming, which means that researchers in this white paper talked about the fact that early in your career, you're probably not going to jump off the ship when you're on 100% equities. But as your career is winding down and in your brain, even if you're not going to spend the dollar tomorrow, the fact that in your head, you don't have that security of a paycheck anymore, the feeling of your portfolio going up and down, number one, the portfolio is bigger, a lot bigger. So you see bigger changes. When you get a 1% change, it's a much, much bigger change than when you're 25. When you're 60 years old, it's much bigger. And then the second thing is your brain is constantly saying, what if I do need it? What if things change and I need it. So you're much more likely, if you're 100 equities at 60, to make a mistake and blow up your portfolio than you are at 25. Your risk tolerance just naturally is going to be a little less because of the nature of life, the fact that you don't have that steady paycheck coming in, which I find just interesting psychologically. So it's behavior that's going to change things. So your main question here, though, Ali, is, is my portfolio efficient? The answer is 100%. No, it isn't efficient. Now, what you want us to do is help you get more efficient. And I can't do that. And the reason I can't do that is really the same reason. You know, recently Starbucks fired their CEO who had been there less than a year. He was a McKinsey consultant. This guy, Paula, was an efficiency expert. And if you're solving just for this nebulous efficiency, but you really don't know what the end goal is, you even an efficiency expert isn't going to be able to write the ship. Efficiency truly is based on something, and in this case, Ally, it's based on what your goal is. When are you going to spend the dollar? I don't know any of that. And with a portfolio the size of yours, I think beginning with this is 100%. Paula, a financial planner question. This is a hundred percent, a thing where Ali, I'm happy to help. We can go over the efficient frontier a little bit. But where the efficient frontier should always start is where on the grid do you need to be based on your goals and working with an advisor on that goal setting and crystallizing and finding out what those goals cost, getting some pushback on them. And then, you know, your goals fight against each other. Which one is more important than the other one. Like having all of this kind of therapeutic stuff to get crystal clear in your mind about what you're efficient toward first, I think is where you're going to begin, I do not know. And this is maybe why you're not grasping the efficient frontier. And generally when people don't grasp it, Paula, it's this issue. They're like, well, I don't know if I'm efficient or not. Well, efficiency begins with the end in mind. And so we start with a goal. We then point that goal toward a rate of return we need. Because your goals can have a very simple equation. Ally it's going to be my goal requires X amount of money times Y amount of return. And once I know what those two factors are that equal the goal, then I go to that return on the efficient frontier and I go to reach that return with the least amount of risk. This is my asset allocation. Historically, this is where it's been.

[A]

What if the goal is simply more? What if there isn't a specific goal but it's just, hey, highest return possible.

[B]

Yeah. Then go with the most volatile stuff you can find. And, and by the way, in financial planning, that was always the conundrum was when somebody would come into my office like, yeah, I don't care about any of the goal setting. I just want more. Just give me More. And the problem is somebody that says they want more, Paula, also nearly 100% of the time were the people that didn't accept less. Because when you say I want more, what happens? You're going further out on the continuum on the efficient frontier line which, the efficient frontier line ally being new to it, let me tell you what it is, its return and standard deviation. So the further right you go, the more standard deviation you get. What a standard deviation mean? That's the ocean, that's the up and down. There is no such thing as more up without more down. And when somebody said I just want more, I just want more, I just want more. And you go out on the standard deviation and the first thing that happens is the market goes down and you get less. Those people were always, Paula, the most upset because they weren't getting more. They're like, I told you I wanted more. I didn't want to cut it in half. Volatility is a two way street. Volatility. People like I don't like volatility. Well sure you do. You 100 love volatility. Like when you're bragging to all your friends about how kick ass your 401k is done or the company you work for that company stock, that's because of volatility. Volatility is a great thing. We just don't want the downside that comes with that. But there is no free lunch. So when somebody tells me they want more, my stomach immediately clenches like do you really want more? Because if you really want more than go invest in a restaurant and be right.

[A]

Ouch.

[B]

Exactly. Just don't mess it up because you'll get a huge return or you'll blow all your cash.

[A]

Right. Can I just say a couple of things that I noticed right off the bat when I hear her numbers. One is that and Ali, you mentioned this in your question. You have a lot of assets in large cap. That's the first and most obvious thing that I notice. And you I think are aware of that as well. As you mentioned, you're a bit of a vtsax and chill person or historically you have been. And what that means is that you are over concentrated in large cap. And also it's very easy to be over concentrated in large cap because large cap for the last couple of years have done the best. And so without something else to rebalance into, without small cap to rebalance into, I think a lot of people who are listening to this are probably over concentrated in large cap. I'm certainly, I was just Reviewing my portfolio balances the other day, I'm also over concentrated in large cap. Welcome to the club. The question is, what do you want to diversify into? I certainly think more small cap exposure could help. I think that one thing that you're doing really well is you have a lot of your highest growth assets in Roth accounts, which are great because you want the biggest growth coming out of those Roth accounts. So that tax location, I think you're doing quite well. You do have a lot of money in your espp. That's always a little bit of a red flag because of the fact that you've got a lot of concentration in just one single employer. So that's the other piece of it. Those are sort of the most obvious pieces that I noticed.

[B]

Yeah. And just to be clear too, Ali, because if somebody's new to the show and they haven't heard all the discussions we've had on this. Yeah, you're going to be okay doing it the way you're doing it. It isn't the end of the world. Not being incredibly efficient, you can do much, much better, I believe. I feel like when I first brought this up, a lot of people freaked out that, oh my God, I'm doing it wrong. I'm like, no. J.L. collins, simple path to wealth that was truly written for his daughter and I think helps people not freak out about the markets. The simple path to wealth will get you there. It won't get you as far as you could easily go with just a little bit more work, but it will get you there and you will be fine. So if you do nothing, Ali, you're going to be fine. I wanted to also comment about her text question.

[A]

Oh, yes. Yeah, yeah. How do I rebalance without incurring taxes?

[B]

You can't.

[A]

Well, hold on, let me. I'm gonna play devil's advocate here. If she sells assets in tax advantaged accounts and if she rebalances inside of the taxable brokerage account purely by purchasing more rather than by selling off gains, then she could.

[B]

I think if we begin with the attitude that that's not the goal and then we try to minimize taxes as much as possible, I think that's a much better headspace to be in. Which is why I said you can't. Because I think that while there are some ways to get close or maybe get there, I think we remember the goal is to have more money. The goal is not to pay less tax. I'm not going to be afraid of making the move to get rid of a position that's problematic. That also has a tax consequence. As I see people get. I see people hang on to the wrong thing and have less money because they're so worried about the tax I want. My goal is to have Elon Musk's tax bill. I have no idea what this dude's tax bill is, but it's got to be bigger than mine by far. Assuming that I'm right, then my goal is more cash. And if I have to pay more tax to get that, then that is what it is. So I always want to be tax efficient. But I think if I start with I want more money and not I want to avoid tax, I think it's a healthier place to be.

[A]

I will say, though, that if the goal is to avoid tax, I mean, I'll tell you what I do. The money that's in my taxable brokerage account, I stopped reinvesting dividends. And so rather than reinvesting dividends, all of those dividends turn into cash, and then I use that. And of course, I still have to pay taxes on it because that's the nature of a taxable brokerage account. But the cash that I use from those dividends, I then use to purchase other assets inside of the taxable brokerage account. And by doing that, plus if I've got, depending on my budget, if I've also got my own money to make new contributions into taxable brokerage, I, through a combination of those two things, make new purchases in taxable brokerage that over time have the effect of rebalancing. But not reinvesting dividends is a great start because oftentimes we can go too deep in a position by virtue of that dividend reinvestment.

[B]

I feel like if we begin with a goal of I want to avoid taxes, what happens when we get to retirement is we don't change. We're still the same person. And when it's time to start pulling money out and live and spend it, do the things that you want to do because that's your new income stream. I've seen people reticent to do that. No, I don't want to pay the tax, which means less life. I really don't want to be in that headspace. I want to be in the headspace of it's a necessary evil. Let's minimize it as much as we possibly can. Do everything. We can have a strategy to hopefully pay none. But if I know that the tax monster is going to sometimes get me, okay, so be it.

[A]

Yeah, well. And you've Been investing Ali long enough that certainly, at a minimum, make sure that you're paying long term capital gains and not short term capital gains. I think that'll be relatively easy to do given how long it must have taken you to build that portfolio.

[B]

Yeah, she's done a great job of saving.

[A]

Yeah, absolutely fantastic. When I say make sure you're selling long term capital gains, not short term, check to see if the account is set up as FIFO or lifo. First in, first out or last in, first out. The difference between FIFO and lifo, it's like this.

[B]

FIFO is a dog.

[A]

Oh, I was actually gonna say a chipmunk. Oh, so you're close. Yeah. So imagine that you get three chipmunks, Alvin, Simon and Theodore. But you don't get them all at the same time. You get Alvin first, you get Alvin in October, you get Simon in November, you get Theodore in December. And then the following year you decide you're going to sell your chipmunks. If it's fifo, the first in, first out, you're selling off Alvin first. And if it's lifo, you're selling off Theodore first. And the reason that I always use that example is because Alvin, Simon and Theodore always go in that order. Like nobody's ever Simon, Theodore and Alvin. That's just weird, right? We all understand it's Alvin first, then Simon, then Theodore. That's FIFO versus lifo. Which chipmunk are you getting rid of first? Is it going to be Alvin or is it going to be Theodore? The reason that matters is because if it's Theodore, then you might be at risk of selling off some short term capital gains.

[B]

Plus Theodore is the low key one. You want to keep him around. Like really?

[A]

He's your favorite chipmunk.

[B]

I just don't like the idea of giving away my chipmunks.

[A]

Sounds like you're holding on to your assets to not pay the tax bill.

[B]

Maybe so. I gotta have a little sadness in my life if I'm going to pay the tax bill. Goodbye, Alvin.

[A]

Ali, you're doing a lot of things right. You're in broad market funds, low fee funds. You have a variety of funds. You know, you mentioned IVV and vts. X. Like even inside of the broad market category, you do have a variety there. I would just be aware of large cap concentration, be aware of domestic equities concentration. So think a little bit about how much exposure you want to have to small cap and to international. It could be worth exploring, potentially raising your allocation in those two areas. Reconsider how much stock you have in your own company. But overall, you have the framework of a very healthy portfolio. So congratulations on building it and thank you for the question. By the way, if anybody wants to hear some of our previous discussion on the Efficient frontier, because we 2025 was our efficient Frontier year. It was, it really was where we deep dived across a series of episodes. We will link in the show Notes to a handful of the episodes that we've produced this year on this topic. If anyone who's listening is like, wait a minute, what is the Efficient Frontier? We'll link to those episodes in the show notes, which you can [e-mail] Episode 676 well, thank you Allie for the question and Happy New Year's. We're going to take a moment to hear from the sponsors who make the show possible. When we return, we'll hear from Emma, who has a question about health insurance. Close your eyes. Exhale. Feel your body relax and let go.

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Than Windows is you don't miss blinds.com's year end blowout sale happening right now. Save up to 15, 50% sitewide plus a free professional measure. Rules and restrictions may apply. Welcome back. Our next question comes from Emma.

[F]

Hi Paula, this is Emma. I'm calling to ask about healthcare since open enrollment is around the corner. We are a family of four, two adults and two kids age 15 and 21. Our 21 year old is a full time student at a university. So here's the deal. She will be graduating in May of 2026. The hope is she will get a full time job after she graduates. Now my health care broker said we can claim her for half the year on our taxes and then she can claim herself on her own taxes on the second half of the year. I would love to do this as it would allow her to be on our health insurance and qualify as well for a better premium subsidy. My question is, can this be done since my healthcare broker seems to believe that it can.

[A]

Thank you, Emma. Thank you for the question. We are in open enrollment season right now. There's a lag time between when we receive questions and when they air. So we are currently in open enrollment. If you haven't signed up for health insurance in 2026, you've. You gotta go. It's time now Emma, to your question. Yes, a person can be a partial year dependent, but there are a variety of qualifications that they need to meet and we're gonna discuss that in just a moment. Before we go into the qualifications that somebody needs to meet in order to be a partial year dependent, my first question to you is that I don't fully understand why it's necessary given that a child under the age of 26 can remain on their parents health insurance plan.

[B]

That confused me as well. We maybe need more data. Is it something specific about this insurance policy? Yeah, which I wouldn't understand because if.

[A]

There'S a law, if it's an ACA compliant plan, then I don't understand why. I mean. Right. There's a law went into effect that allows children under 26 to remain on their parents policy and that child does not have to be a dependent. You know, so it's independent of whether or not the child is a dependent. It's independent of the child's marital status.

[B]

Independent of whether they're dependent.

[A]

It's a great sentence.

[B]

Yeah. Marital status, financial independence, job. Right, you name it.

[A]

Yeah, exactly. Like if, if you're a child under 26, you can stay on your parents plan. So I don't, I don't get why this is necessary.

[B]

But if for whatever reason it is necessary, the IRS still has a few tests to make sure that they are a dependent. So you said graduating in May. The big one that's going to apply to you is the residency test. To be a dependent, the child has to have lived with you for more than half of the year. So if your daughter is going to be at home for the month of June until July 1st, you're good. If not, then maybe they don't meet the dependency credit. But again, that might all be moot because of the fact that until age 26, they should be allowed to be on your plan anyway. The other reasons, by the way, a child can be a dependent if they don't live with you. They are either a full time student, they're permanently and totally disabled. By the way, this is all right off the IRS website. And Paul, I can send you the link so we can link to this. And also, of course, they are a child of yours. And there is a bunch of different ways that a person could be classified as a child of yours. And there's a ton of options that the IRS gives you that are acceptable as a, quote, child. So as long as you pass the relationship test, the age test. Now, the age test for dependency is 24 years old if they are a student and they're not permanently disabled. Otherwise it's under age 19 if they're fully employed. Maybe what the healthcare broker and you are getting tripped up by is this dependency test that she will no longer be a student anymore. I don't know.

[A]

But she doesn't have to be a dependent in order to stay on a parent's health insurance plan.

[B]

Yeah, so we are a little confused. But the good news is I think that if you're armed with all this data, you should of course talk to your tax expert, not just your favorite podcasters about this one, because this is very intimate and you want to make sure you get this right.

[A]

If, however, for whatever reason, you do want her to be a partial year dependent. The nice thing about the residency requirement is, Joe, as you said, the time that a full time student spends at school does not count against you for the residency requirement. Which means that if she's going to be in school as a full time student for the spring semester, then the number of months that she would need to live with you in order to meet that residency requirement would be, you know, not too burdensome.

[B]

Yeah, just the time she graduates until July 1st.

[A]

Right. Well, it would need to be over 183 days.

[B]

But, and to be clear, those days include the time that she is is.

[A]

In school as a full time student. Right. As long as it totals over 183 days, then at least you'd meet the residency portion of that requirement.

[B]

Takes a lot of fingers to Count up to 183.

[A]

Takes 183 fingers.

[B]

Might have to bring a few friends over.

[A]

Yeah, yeah, yeah. You'll need 18.3 friends.

[B]

Well, depending.

[A]

That's true. That's true. You can't assume all your friends have.

[B]

Ten fingers, have different numbers of digits. We don't know.

[A]

Before we sign off from this question, since we're on the topic of health insurance, I do want to float some of the options that you have out there for anybody who's trying to figure out what to do in 2026.

[B]

Great time to do that.

[A]

Yeah, exactly. So, of course it's open enrollment. You can sign up for a health insurance plan either through your employer, if one is offered, or through the marketplace. In the marketplace, there are ACA compliant plans and, and there are also non ACA compliant plans. Right now, for the sake of time, we won't go through the distinction between the two, but there are, for anything that is ACA compliant, must meet this list of 10 particular rules that are set out. So things like it's got to cover preventative care, it has to cover maternal care. There's a certain set of rules that define an ACA compliant plan that's available, but you don't necessarily have to get it. And you can buy a non ACA compliant plan and those are often cheaper. Those are a couple of options that you have. There's also the option, and this is controversial, but there are some people, particularly in the financial independence community, who choose to do this. There's also the option of enrolling in a direct primary care physician plan. So it's a direct primary care physician subscription, also sometimes known as concierge care. It gives you access to members only on demand appointments with a general practitioner. So there's the option of enrolling in something like that and then also enrolling in a health share and using that as a one, two strategy. The reason that is controversial is because if you enroll in a health share, you get access to a pooled bucket of money that might pay for your health care costs, but you do not have the same legal protections that you would get if you were to enroll in insurance, because insurance itself is a highly regulated industry. That regulation is why it's Expensive. But that regulation also gives you a certain level of legal protection that you don't get from a health share. So if you do choose to go the health share plus concierge care route, it is a valid option. Many people in the fire community do it. You would save a lot of money by doing it. But there are trade offs. The point of the show is everything comes with trade offs. That discount does not come free.

[B]

Yeah, people see these all the time. In fact, I've seen people in the personal finance community who signed up for these and then I talked to them about what these share programs, these meta share programs really are. And it surprised the hell out of them. Like these people are enthusiasts. They had no idea what type of risk they're taking on when something costs a lot, lot less. And you think that it's just this, this mispriced thing. It's not. It, it never is across the top. I think the thing you need to be aware of with these sharing programs is the fact that right across the top of every single one of them, it says the words not actuarially sound. They're required to say not actuarially sound. What does that mean? That means the actuaries figure out how big that pool of money needs to be for catastrophic conditions that come along and then everybody needs money at the same time. This says that if your Medishare program gets into a situation where a ton of people need money at the same time, there's not enough money in that pool to handle everybody. That's the trade off, is that when you need it. Now have I seen that happen before? No, I have not. I can't think of a case. I'm sure there are because some of these are really small associations. So I'm sure that it has happened. I don't recall it ever happening. But I think I gotta know that going in that, you know what I'm in. This thing that's not built on really a firm footing, it is built a little bit on sand, which is how you're getting away with a cheaper price.

[A]

Right. The other thing is that many of these health shares, not all, but many, have certain moral codes or moral requirements and will not pay for something that might be the result of immorality. For example, if you, heaven forbid, drive drunk and get into a car accident, it may not pay for that.

[B]

Yeah. If it's religious based. A lot of these are religious based.

[A]

Right. I mean, and please don't drive drunk anyway. But know that there are certain ethical standards, behavioral standards, that a person must meet. And if you end up suffering a health cost consequence that the health shared determines is reflective of conduct that they do not approve of, then they may deny your claim because of that. That immoral conduct, drunk driving being one one of many examples.

[B]

I see this type of program, Paula, and the concierge service that you mentioned as kind of a field goal, like both ends. On one hand, the concierge service is freedom from care. I've got a doctor, I'm on call. I can go get the stuff done, whatever I want. I don't have to worry about insurance paying for it. I'm just going to pay for it. Some of these programs are super expensive, like incredibly expensive. But you get great care. You get it right when you need it. You're not messing around. And then MetaShare is I'm going to cut just about every corner. I'm going to cut every single corner that I can and get where I need to go. I've seen some people too, you know, this year especially looking more often at catastrophic care and now that catastrophic care coverages can, some of them are eligible for HSA inclusion, which in the past they weren't. So that's a change in the legislation that happened last summer. You know, you can even cut a corner that way where you're in a plan that's actuarially sound. It's not going to pay for much, but it's there. If the worst case scenario happens, you know that it will be there.

[A]

It would be interesting to run the numbers on direct primary care plus a health share, plus a catastrophic care plan versus a ppo. Yeah, exactly. And then particularly if you factor for also the tax benefits that you get from HSA contribution, it would be interesting to run the numbers to see if that, that one, two, three punch of those three, like how that would math out against conventional health insurance.

[B]

Speaking of running the numbers, one, a.

[A]

PPO or a pos. Yeah, which is truly a pos.

[B]

A person in our audience wrote me and said that even in 2025, Paula, the company they work for, which is a major top 50 employer in the United States, he could not do the math where the PPO versus the company's subsidization of the hsa. So they put some money in the HSA for you, plus the major medical that they had, there was no way the PPO ever won. He, he could not make the PPO beat the hsa. And he said our company is driving us toward the hsa, which is great. Which is fantastic. I think for Everybody, I used to think the HSA and the major medical policies were only for people that were super healthy. And I had a healthcare expert say, well, no, if you're, if you're not healthy at all, you will get to those maximums. You'll get to the amount that you need to spend very quickly. And now you have insurance for the rest of your, you know, the rest of your year, whatever that is. So if you go to the doctor, a lot of the HSA still might win with the major medical. And if you don't go hardly at all, well, then it could be a huge win and you save the money into the HSA and let that money accumulate. So either way, this health expert was like, don't, don't rule out the HSA and major medical. If you are somebody who has a history of needing to see a physician a lot.

[A]

Yeah. November and December are always the most frustrating months to get medical bills because you're like, man, my deductible is about to reset.

[B]

Just.

[A]

Yeah, yeah. Do I really have to get sick or injured in, in like Q4? Can we just, can we defer this injury to Q1?

[B]

Because just hold it together, body.

[A]

Yeah, hold it together. Just wait until January 1st.

[B]

Not the way life works. I swear to God. Your body's like, oh, you're almost at. Okay, I'm going to do this one more time. Thanks, universe.

[A]

Yeah, yeah. Your body's like, oh, you said it was December 15th. Well, here we go.

[B]

Hold my beer.

[A]

Yeah.

[B]

As I wreck Paula's holiday. Yeah.

[A]

I will say so what I've done. And I. Every year I'm experimenting with what I'm doing with health insurance and health care. 2025, I did not have health insurance. I was a member of the health share. 2026, I have changed my mind on that and I've decided that I will enroll in ACA compliant health insurance. I am enrolled in an hmo, which is cheaper than a PPO or a pos. But I am certainly spending, even with an HMO policy, a lot more money in 2026 than I did in 2025. But I'm getting more coverage and taking on less risk exposure as a result of that.

[B]

Spend more coverage, but a lot of HMOs still find a way to be a POS.

[A]

Yeah, yeah, exactly. All right, well, thank you, Emma, for the question. Congratulations to your upcoming graduate. We're going to take one more break to hear from the sponsors who pay for my health insurance so that you.

[B]

Can be healthy enough to show up.

[A]

At the mic and when we return we will hear from an anonymous caller.

[G]

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[A]

Welcome back. Our final question today comes from Anonymous.

[C]

Hello Paula and Joe. You can call me Anonymous. I've been a long time listener and I really appreciate how you keep discussions grounded in evidence and timeless financial principles. That said, I have a question that's been on my mind recently. I've always believed that this time isn't different, but I'm increasingly convinced about what feels like a slow erosion of institutional trust in the US Especially around agencies and structures that underpin our financial system. From leadership changes at the key government institutions to growing political influence in economic policymaking, I'm starting to wonder if it's prudent to have a small portion of assets physically and legally outside the US I'm not talking about exotic offshore schemes, just a legitimate way to invest in broad index funds or ETFs through a brokerage account based abroad as a form of geopolitical diversification and personal contingency planning. Love to hear your input here. Thank you very much for your time.

[A]

Anonymous that was not where I thought your question was going to go. When I heard the initial premise of the question before you mentioned assets outside of the us I did not think you were going to go there. I thought what you were going to say was I'm wondering if it's prudent to have physical assets such as gold.

[B]

Bars in my basement.

[A]

Yeah, yeah. Or buried in my backyard. Yeah, that. That's where I thought the question was.

[B]

Going to go about that. He's an international Man.

[A]

Yeah.

[B]

We need a name, though, first. Paula.

[A]

Yeah, we've got to name them before we tackle this. Anonymous, what should your name be?

[B]

You know, he's talking about problems in the world, and some of those things are above my pay grade. But one thing that's not above my pay grade, Paula, is problems in financial planning. And when we list top five things that are problems in financial planning, it's kind of wild because right now, on the top of everyone's mind, of course, has been inflation. Right. Where five years ago, if you ask people about inflation, inflation didn't make the top five. But one that's always been on the top five and we still haven't solved it is the issue of long term care. I think long term care is a big issue. Well, Netflix just released season two of this awesome series that I absolutely loved. I can't wait to watch season two. It's called A Man on the Inside. And it stars Ted Danson, who, his wife has passed away, he's older, and this detective pretends she's his, quote, daughter. And they have him go into this assisted living facility to solve a crime, to solve a problem. And so he's pretending that he is a resident of this assisted living facility. And you can just see the comedy, of course, because he goes in with one feeling about assisted living, and by the end of season one, he really likes it and he makes great friends. So I think we call him Ted because of long term care.

[A]

That's it. Wow, that was such a long walk. I had forgotten that we were giving him a name. By the time you got to it.

[B]

I was like, what are we talking about?

[A]

Yeah, yeah. I'm like, wow. He, he asked a question about where he should house his assets, but now we're talking about long term care. I'm sitting here thinking that something related to long term care is your answer to his question. All right. No. Where we were going with that is that anonymous name is going to be Ted.

[B]

That is exactly. We were going.

[A]

Okay. The geopolitical premise of the question, erosion of trust in US Institutions. I'm making the inference that the reason that that is set up as the premise to the question is that the, the underlying motivation is the question, will my assets be protected? Is there sufficient rule of law such that my assets will be protected? Because, and I hope I'm understanding that premise correctly, there are many countries in the world in which your assets could be at risk of seizure. There are many governments that will sometimes very arbitrarily seize a person's assets.

[B]

It's a risk transfer, not getting rid of the risk. You're trading one risk of one government for risk of another government.

[A]

Right. And so I think then the question becomes which nation has the strongest rule of law when it comes to preservation of assets?

[B]

Well, he didn't really ask us where, though, Paula. He didn't ask us what country. He just said, should I? So I don't know if we got a debate whether it's the Bahamas or Switzerland, you know, that he goes to. I had two thoughts about this, just short ones. While you're thinking about this thought. Number one is if you're worried about companies in the US and you're worried about institutions not playing fairly or whatever that may be, well, then you buy international positions. But I don't think that's the question. Right. The question isn't buying international questions. The question is I have my money, my Schwab account, and all of a sudden it's gone because some government official decided to take my money. So I, I want to have some money in a different spot, like in.

[A]

An offshore account, Cayman Islands kind of a thing. I hope we're understanding that premise correctly.

[B]

I think that is the premise.

[A]

If you look at global capital flows, there is so much capital inflow to the United States. I mean, there's also a ton of inflow to Dubai and the uae, but there is tremendous inflow to the United States. Look at how many assets have come from Norway to the US in 2025. It's incredible. And the reason so much global capital flows here is because of two things. Number one, the opportunities here are so immense. And number two, in order for those opportunities to exist, the rule of law around property ownership is so strong that risk of arbitrary asset seizure, which a person might face in China does not exist here in the way that it does in other nations. And for the US to remain competitive as a nation that continues to attract global capital, which it must be, we must continue to attract global capital in order to thrive. Otherwise China's going to eat our lunch. Those asset protections must remain in place. So I see. If you're worried about rule of law, I see the US as one of the strongest places to keep your money.

[B]

I think so too. I think this is where the system historically has been self cleansing. We have had scandals and changes where the United States was going down the wrong path in the past and it corrected. It maybe didn't correct quickly, it didn't correct in the time frame people wanted to, but it changed course. And so you look at this kind of back and forth that the nation has gone through over what, 250 years and it hasn't been a steady ship. I think the feeling that it's been a steady ship is kind of feeling of what we wish that it had been. But, but you look at how turbulent different decades have been, I don't think there was been a time where there hasn't been a significant number of people, the United States going this is going nowhere. Good. This is going, this is going nowhere. So I think it's easy to worry about that. I think you can do whatever you want to do. I mean, you can definitely ted do this. You could easily do it. And if it worries you enough, you could. The problem that I see is that you are changing the set of problems that are in front of you for another set of problems that you may not recognize. You have double taxation. First of all, the US Is going to tax you on those assets outside of the US and you're going to get taxed by the foreign country as well. So you're going to have that. You're also going to need to follow very carefully the rules of that country. There are financial advisors and institutions which handle that type of thing, which means you're going to have potentially some significant fees that'll be charged to help you do this correctly. Either that or you're going to have to really dig into the knowledge base. And then I think, Paula, what you said up top, which is, you know, you're going to have to know the forfeiture and seizure rules especially, you know, most countries have a two tier system. So understanding the two tier system, if you're not a citizen of whatever country that you're housing your assets in, I think is really important to know before you, you go, right.

[A]

And of course that's going to, you know, I'm thinking about Qatar right now. You look at the, the tremendous success across the uae, the success that Dubai, Abu Dhabi, Doha, like you look at how successful they have been in attracting foreign investors, foreign capital. And it is because in part, international investors do have a certain level of security in knowing that their assets have a certain level of protection there. But is that level of security from the Qatari government significantly stronger than the level of security from the US Government, such that it would be worth the cost of asset transfer? I don't know that it is. I think the evidence behind that is the amount of global capital inflow that is coming into the US which is enormous and actually is continuing to accelerate, particularly as we move into an AI Future in which it looks very much like the EU is going to be the big loser here because they have so over regulated that they are so far behind the AI curve that, and I am not an AI expert, but would shock me if they in the next five to 10 years could even remotely keep up with the AI fueled expansion that you're going to see coming out of the United States and out of China. There's a lot of evidence that points towards the US and China being the two dominant players in the coming decade. And between the two, you certainly do not want to keep your money under the ccp.

[B]

My brain continues to think of other things to worry about, which are exchange rates, forex exchange. Yeah, I don't think, Ted, I would tell you not to do it. I just know that you're trying to solve one problem by creating a bunch of other problems. And that's not always bad, right? I mean, that's, that's not always bad. You may get to 10 years from now and you're like, oh, thank God I did that. I don't know. All right, show of hands, Paula. Are you for it or against it? Are you for it? Raise your hand. Are you against it? Raise your hand.

[A]

I am against it.

[B]

I'm against it.

[A]

Yeah. Those of you watching YouTube could see the hands.

[B]

Yeah, I like doing show of hands for an audio podcast to keep you guessing which hand went up. Somebody's walking their dog. Damn it.

[A]

Most of our YouTube views come on mobile. Actually, something like 70% are on mobile.

[B]

There it is. So you get to look down.

[A]

So they might be seeing the show of hands even if they are walking their dog. And then because they're staring at the screen, they walk directly into a tree.

[B]

Yes.

[A]

Then they get injured right before the new year. So it comes on their 2025 deduct.

[B]

Damn it, Paula. You can tell Paula's having fun with comedy classes because that was a good callback.

[A]

Oh, why thank you.

[B]

It was a good callback.

[A]

Thank you.

[B]

Great. Comedy essential.

[A]

Been taking stand up comedy for about a month now. Well, thank you, Ted, for the question and thank you for sparking such a dynamic and thought provoking conversation. And I hope that we understood your premise correctly. I'll admit there's still a lingering question in my mind and I think the reason that question exists in my mind is because I was so surprised at the direction that the question took. There is certainly a lack of faith in many institutions. Media, for example. There's a tremendous lack of faith in major media institutions. And that has given Rise to things like podcasting, where you can sit down and have a, a long form conversation with somebody. You know, rather than getting a 15 second new sound bite, you get a two hour deep dive. And in the span of one or two hours with someone, you get to see who they really are. I mean, that that comes out in a two hour interview in a, in a way that it just doesn't in a 10 second sound bite. To a certain extent, people will criticize the role of podcasts in today's society, but I do think that lack of faith in some standard institution, I'm thinking about media specifically, has given rise to something that I think is very positive, a development that is very positive, which is consumer demand for a two hour conversation, a one to two hour conversation with officials, experts, decision makers, thinkers. You know, you've taken what was once a university lecture series and democratized it and made it free and available to the public. And on that note, universities as well, like there's a lack of faith in the standard university system. And while that system must exist, I think what a lot of millennials were taught, we millennials grew up in an era where we were taught that if you don't go to college, you won't have a future. And I think it is a very positive development that now there is a recognition that college is great for people who want to become dentists, doctors, engineers, lawyers. Absolutely. You need a college degree and then after that a graduate degree. But you can also have a wonderful career as an electrician, an H Vac technician, a plumber. And in an AI world, that is something that AI is unlikely to be able to replicate that combination. You know, they say that jobs that are purely cognitive are likely to get replaced by AI much faster. But jobs that have some combination of cognitive ability plus physical dexterity, such as being an electrician, those are the jobs that are much more protected. So, you know, when we look at doubt in institutions such as the media or the university system, there's certainly a lot of discord and tearing at the social fabric that has happened. But I think there are also positive developments, such as the two that I just described, that have come out of the fact that we question things now that we did not question 30 years ago now how that translates. You know, when we talk about media and higher ed, we're talking about private institutions or state schools as well. But that is a very different conversation than when we discuss public, purely public, you know, federal institutions. And then it becomes a question of how strong is our rule of law and Again, is Qatar's rule of law any stronger? Is Oman's rule of law any stronger? Is Saudi Arabia's rule of law any stronger?

[B]

Do you think his question, though, is more about diversification, about, sure, they may have risks, but they're different risks. It's almost like having different asset classes. He's talking about having different government entities. So while he's putting some money at risk under one regime, he's also deflecting some risk from another form of government.

[A]

It could be, but there would be so many risks associated with transferring a sufficient quantity of assets.

[B]

That was my next question to Ted, was how much money are we talking about?

[A]

Right.

[B]

Because when I was a financial planner, you know, we need to be significant millions of dollars to really begin thinking about, to me, the risk of regimes versus all the other risks that we talk about.

[A]

Right, exactly.

[B]

You know, it's funny because when we talk about risk management, which is, you know, Paula, is one of my favorite topics as well, I mean, that's really where my love of the efficient frontier comes from, is risk management is just the idea that risk is made up of two things, probability and magnitude. Right. So we are still, you can look at all the systemic changes that Ted talked about in his question, and we are still a long, long, long, long way. Like, think about all the dominoes that would have to still turn now. Could they turn quickly? Potentially, maybe. I just think that we've got a lot of dominoes to go before we get to the point that the probability of what Ted's talking about happens. Certainly the magnitude would be huge, unbelievably huge. So gigantic magnitude. But probability doesn't put it on the map of my top 25 things I'm worried about, about Ted's portfolio.

[A]

What would be in that list of top 25?

[B]

Well, long term care, which is why.

[A]

Yeah.

[B]

Which is why I brought up Ted. What are you going to do about long term care? Like, I would worry about that. And if you're, if you're still working, disability, like, what if you get disabled? All these things that could happen to you. What if you're unemployed? Unemployment risk, I think, is higher now than it was three years ago. For a lot of people listening to us right now, the risk that you're unemployed is huge. If we see the Fed reduce interest rates two more times in early 2026, we may see inflationary pressure again. Right. Even though the inflationary numbers have been a little lower over the short run, I think that inflation rears its head again. Right. As we're Starting to get used to the fact that a Big Mac costs way more than it did just a couple of years ago. Inflation could take off again. So I think that's a big risk.

[A]

Yeah. And it's likely the Fed will reduce interest rates because employment, as we close out the year, the employment rate is now 4.6%, which is, you know, about half a percentage point higher than it's been for the last many years. You've heard me on the first Friday episode say, hey, unemployment is at 4.1%. Oh, it's ticked up a little bit now. It's at 4.2%. Okay, well, now we're at 4.6.

[B]

Right.

[A]

And that is, that is uncomfortably close to how high, you know, the, the highest that we really want it to be.

[B]

Well, and you can also then throw in what Ted was talking about, the political pressure from the executive branch to have a Fed that's going to lower interest rates. As we change Fed chairman, I think we might get a Federal Reserve that's a little friendlier toward lowering interest rates than maybe Jerome Powell.

[A]

And those reduced interest rates could reduce unemployment and spur new jobs and spur the economy. It may or may not also lead to inflation. So, yeah, that is.

[B]

Yeah, there's no free lunch.

[A]

That is definitely a concern. Right.

[B]

There's no free lunch.

[A]

That's why the Fed has that dual mandate. So that is going to be one of the major macro stories to look for in, in 2026.

[B]

So there's a handful, Paula. Yeah, I just went, well, bam, bam, bam, bam, bam. There's a bunch. I'm worried about all those.

[A]

Yeah. And if you transfer assets to another nation or a portion of your assets to another nation, what's the inflation rate there, and how is that going to be controlled over the span of the next 40 years?

[B]

Well, and the other question is already, and we've already seen this from federal officials, if the United States decides to seize your assets now, because he said legally move it to another country. If you legally move it to another country and the US Government decides to go after your assets, could they repatriate it? Historically, you've seen the FBI go after assets that are housed in other countries.

[A]

I didn't even think about repatriation of assets. That's a great point, Joe.

[B]

So you might not be reducing the risk as much as you think you are. So don't do it legally. Ted.

[A]

That is not the takeaway.

[B]

You heard this on a Ford Anything.

[A]

Not. I do not. I, Paula Pan hereby disavow Joe's statement.

[B]

Paula, what are you doing? I want nothing to do with that statement.

[A]

Yeah, and with that, Joe, we close out 2025 and go into the new year.

[B]

I can't believe it. 2025, as we said at the top of the show, just went too fast, Paula. It went too fast. I've enjoyed every minute of hanging out with you. I've enjoyed hanging out with the Afford Anything community. Thank you for all the nice notes people have had for me and for us. It has been truly a good year. It's been a really good year, Paula.

[A]

Yeah, yeah. It's been an incredible year for this community. I've loved hanging out with you, Joe. I'm excited to hang out more in 2026 to answer more of these questions and bring financial knowledge to the world.

[B]

It's really about the dad jokes, but I'll go with financial knowledge, too.

[A]

Well, Joe, where can people find you as we head into 2026?

[B]

Boy, Paula, we're kicking it off on January 2nd with the first time ever stacking Benjamins has released two episodes in the same day.

[A]

Whoa.

[B]

Yeah. We are going back to our number one episode of 2025, and we are replaying them on Friday. So if you missed it the first time around, you will get this. I flew out to Las Vegas and I interviewed a gentleman named Alex Hermosi. And for people that don't know who he is, he teaches people how to make more money. And whether you work for somebody else or you work for yourself, the episode title is was how to Make a Hundred million dollars in 2025. This works in 2026. And there's a reason why. It was one of our most downloaded. Well, not even one of our most. It was our most downloaded up two episodes of the year, but we're kicking off 2026 with that. And then next week, we kick it off with new material from a woman you and I both love, Laura Vandercam. Time management expertise. Because if we're going to have the goal that I have of trying to be present more often and get more life out of 2026, nobody I'd rather kick it off with than Laura Vanderkamp, because as you know, Paula, she knows all that stuff. And that's at the Stacking Benjamin's podcast, where finer podcasts like Afford Anything can be found.

[A]

Beautiful. Well, I'm looking forward to listening to all of that. Well, thank you, Joe. And thanks to all of you for being part of the Afford Anything community, for being with us in 2025 and for continuing this fi r e journey in 2026. As a member of this community, please do three things. First, join our newsletter affordanything.com newsletter completely free affordanything.com newsletter second, chat with other members of the community affordanything.com community all of it totally free. Third, open up Spotify, Apple Podcasts, Pandora. Open your favorite podcast playing app. Make sure that you've hit the follow button. And while you're there, please leave us up to a five star review. These reviews are incredibly important in helping us bring amazing guests onto the show. Thank you again for being part of this community. Being an afforder. I'm Paula Pat I'm Joe Salsihai and we'll meet you in 2026.