Afford Anything Podcast with Paula Pant

Episode: Why You Should “T-Bill and Chill” Instead of Using a Savings Account, with Cullen Roche

Release Date: January 27, 2026
Host: Paula Pant
Guest: Cullen Roche, Founder and Chief Investment Officer, Discipline Funds

Episode Overview

In this episode, Paula Pant interviews Cullen Roche, author and investment advisor, about how to design a personalized investment portfolio that truly fits your life, risk tolerance, and goals. Cullen dissects popular investing models, explains the psychological and behavioral aspects of investing, and introduces the concept of "T-Bill and Chill"—an approach to managing cash that could outperform conventional savings accounts. The conversation goes well beyond formulas, digging into first principles thinking, behavioral traps, and the critical importance of matching your investments to your unique circumstances.

Key Discussion Points and Insights

The Myth of the “Perfect Portfolio” (02:08–03:10)

• The world of finance often promotes a one-size-fits-all mentality around portfolios, which Cullen disputes.
• Customization is crucial: “There is no perfect portfolio for any single individual because everybody's different. Everybody needs to find a portfolio that works for them.” — Cullen Roche (02:08)
• Analogy: Finding your ideal portfolio is like finding your spouse—it should fit your unique life.

Survey of Popular Portfolio Models

The 60/40 Portfolio ("Golden Portfolio") (03:29–07:49)

• Most famous portfolio (60% stocks, 40% bonds); essentially invented post-Great Depression.
• Its strength: Simplicity and behavioral robustness—makes it easier to ride out market volatility.
• Downside: May be too conservative for many, especially younger investors.
• Quote: “Part of the beauty of 60/40 is that it's behaviorally robust. That 40% piece will keep you calm when that 60% piece is making you really scared.” — Cullen Roche (06:13)
• Diversification insight: “Diversification is learning to hate some part of your portfolio all the time.” — Quoting Brian Portnoy (07:34)

The Buffett Portfolio (07:55–12:01)

• Based on Buffett’s own recommendations: 90% in S&P 500 index, 10% in Treasury bills.
• 10% “dry powder” T-bills allow buying opportunities during downturns and behavioral calm.
• Quote: “Buffett would say go out and buy something like VOO, the S&P 500 Index, with 90% and then hold a 10% slug of something like treasury bills.” (10:30)

“T-Bill and Chill” vs. High Yield Savings (13:19–20:48)

• Most savings accounts and money markets just buy T-bills and pass a smaller yield to customers.
• T-bills are often tax-advantaged; banks profit from the spread and tax savings you don’t receive.
• Quote: “The irony…is that typically a high-yield savings account is much lower yielding than the treasury bills are…you're kind of getting hosed on that. It’s a double whammy…they’re not passing on the tax savings to you.” (15:56, 83:43)
• For cash management, be more hands-on: consider T-bill ladders or T-bill ETFs.
• Threshold: At higher cash balances (e.g., six figures for a home down payment), switching from a basic savings account to T-bills is often worth it.
• Complexity caveat: For smaller amounts, the effort may not be justified.

Boglehead 3-Fund and Bernstein “No-Brainer” Portfolios (38:38–47:57)

• Boglehead 3-Fund: Domestic stocks, international stocks, total bond market. Ultra-low cost, diversified.
• Bernstein’s twist: Adds factor tilts (e.g., small cap, value), TIPS ladders for inflation protection in retirement.
• Quote: “The three-fund portfolio…it’s not free, but it’s really damn close to free…beautifully simple, incredibly easy to maintain.” (42:29–44:58)
• Downsides of adding tilts: Increases complexity and triggers more asset-allocation second-guessing (“which haystack?” problem).

Behavioral Insights and Personalization

Income as a Bond Allocation (23:27–26:05)

• Your steady paycheck functions as a synthetic bond allocation, especially meaningful for younger investors.
• In retirement, since income vanishes, you need to adjust—potentially using the "bond tent" method (temporarily increasing bonds near retirement to manage sequence-of-returns risk).
• Quote: “People's jobs are, weirdly, they're like an asset that operates almost like a bond allocation in their portfolio.” (23:33)

Risk and Behavior in Early Retirement (31:09–34:49)

• Early retirees need exceptional behavioral resilience: without job income, downturns offer no new “dry powder.”
• The psychological challenge: Everyone says they’ll “buy more” during bear markets, but almost nobody does.
• Quote: “If you’re in the FIRE movement...you’ve really got to have a really, really robust behavioral profile.” (31:09–33:39)

The Psychology of Spending (56:32–58:17)

• Lifetime savers often struggle to spend down their portfolios—whether during retirement or a sabbatical.
• Recognizing cash as “savings” (not “investments”) and thinking in time horizons can help navigate withdrawals during non-working periods.

Specialized Portfolios and Advanced Topics

Vice & Virtue / ESG Portfolios (60:51–66:05)

• ESG and values-focused investing is an emotionally satisfying way for some to stay invested.
• Cullen is critical of ESG as a form of “stock picking,” preferring direct donation if you want impact.
• Quote: “One man's vice is another man's virtue...you're getting into these subjective debates about what is a vice or what is a virtue?” (63:58–64:05)
• Unintended consequences: e.g., today’s oil company could be tomorrow’s renewable energy leader.

Risk Parity and All-Stock (100%) Portfolios (70:06–79:21)

• All-Stock: Maximum long-term returns, but highest volatility. Suitable only for those with long horizons and high behavioral fortitude.
  • Quote: “You’re attaching yourself to probably the highest return instrument in the economy and...the longest duration instrument as well.” (70:23)
  • Caution: Consider loss of job/income—reassess equity exposure when “synthetic bond allocation” disappears.
• Risk Parity: Made famous by Ray Dalio. Aims to equalize risk across asset classes for smoother returns.
  • Complex, often higher fees, and actual results haven’t always surpassed simpler models like 60/40.
  • Most suitable for those willing and able to manage complexity—often nearer or in retirement.

Asset Allocation—Always an Active Choice (50:39–53:36)

• Everyone makes active choices, even when “buying the haystack.” Deciding degree and kind of diversification is inherently personal.
• Beware the temptation to “get rich quick”: high risk often comes from financial desperation.

Notable Quotes & Memorable Moments

• On Behavioral Portfolio Design:
  “My buddy Brian Portnoy says that diversification is learning to hate some part of your portfolio all the time. And that's super true with 60/40…” (07:34)

• On Portfolio Complexity:
  “You can get so diversified across so many things that you’ve actually made the whole process counterproductive.” (41:51)

• On “T-Bill and Chill”:
  “Your cash is where you should be more hands on. And so it’s the short-term instrument that weirdly, I think people think of it in a lot of ways the opposite.” (14:40)

• On Early Retirement Mentality:
  “If you’re in the FIRE movement…you’ve got to have a really, really robust behavioral profile.” (33:39)

Notable Timestamps

• 02:08 – Why there’s no one-size-fits-all portfolio
• 03:29 – The 60/40 portfolio history and psychology
• 07:55 – The Buffett portfolio and the rationale behind “dry powder”
• 13:25 – What is T-Bill and Chill and why high-yield savings can be a trap
• 20:11 – When (and for whom) T-Bill and Chill makes sense
• 23:27 – Income as a synthetic bond allocation—especially for the young
• 38:38 – The Bernstein “No-Brainer” and Boglehead 3-Fund portfolios
• 42:29 – Breaking down the Boglehead 3-Fund
• 60:51 – Virtue & Vice portfolios and ESG investing dilemmas
• 70:06 – Pros and cons of all-equity portfolios
• 73:52 – The logic and complexity of risk parity portfolios
• 79:21 – Why bond performance and interest rates matter more now than before

Three Key Takeaways

1. There is No One-Size-Fits-All Portfolio

   • Your “perfect” portfolio is the one that suits your unique needs, time horizon, risks, and personality.

2. Diversification is Uncomfortable by Design

   • If part of your portfolio is underperforming or frustrating, that’s a feature of good diversification, not a bug.

3. Cash Management Deserves More Attention

   • “T-bill and chill” shows that even so-called “safe” options like savings accounts can quietly cost you in lost yield and tax efficiency. Be hands-on with your cash for better results.

Closing

Paula teases part two of this conversation for the following week, encouraging listeners to subscribe and follow Cullen Roche at disciplinefunds.com for more insights.

Full episode highly recommended for anyone rethinking their portfolio’s purpose, structure, or cash management strategies.