B (7:57)
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.
