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ChooseFI | Financial Independence Podcast
Are You Over-Optimizing? | Jesse Cramer | Ep 555
00:57:50
Effective financial planning resembles both a puzzle and a spider web, where each decision impacts interconnected aspects of one's financial life. Brad is joined by Jesse Cramer and explores the importance of resilience over perfection in financial...
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- [00:00]
Brad
Hello and welcome to Choose a fy. Today on the show, we have our friend Jesse Kramer back for another episode. Jesse is a relationship manager at a financial planning firm in Rochester, New York. He's the host of the Personal Finance for Long Term Investors podcast. And he's just a really interesting guy. He consistently sends me new blog posts and I'm always intrigued by what he's up to. He's just a wealth of knowledge and I think you're going to really like this episode. This is really a background on ultimately over optimizing and is the juice worth the squeeze? I think that's what a lot of us sometimes don't know. We get bogged down in detail. We don't know how to see the forest for the trees sometimes. And Jesse's ultimate contention is how do you make great decisions within an imperfect world? And I think that's what we're all dealing with. There's no life is not simple. We're in a very complex, dynamic system and we have to understand that sometimes, sometimes there's a give and take and when you over optimize in one area, it might cause risks in other areas that you just might not see. I think it's just important to be cognizant of this and I think that's the ultimate takeaway from the episode is how can I learn? How can I keep abreast of what's going on in the world in my financial life and how can I make the right decisions for me, not for somebody else, but for me? I think you're really going to enjoy this episode. And with that, welcome to Choose Fi. Jesse, it is so good to have you back on the show. I'm really excited for this conversation.
- [01:33]
Jesse Kramer
Brad, it is an honor to be here again and yeah, I'm excited to share some cool thoughts, hopefully with the Choose Fi audience.
- [01:39]
Brad
Yeah, well, you rocked it on episode 492. So it was this. You came up with this very interesting thing, rrttlu, which you called the Rudy Lu Investing Framework. And yeah, I know that definitely stuck out to a lot of people. And you said a lot of choose it by listeners went over to your podcast, which has actually been recently rebranded. So why don't you tell us the new name of the podcast?
- [02:02]
Jesse Kramer
Yeah, so for those who kind of were aware of me in the personal finance space, my blog is called the Best Interest. You know, an investment and knowledge pays the best interest. Benjamin Franklin's quote. And then at first my podcast was called the Best Interest Podcast, but working with a marketing team and just trying to find it, make it a little more discoverable. Because if you're just a random person coming off the street, the best interest podcast might not mean anything to you. So at episode 100, we rebranded to Personal Finance for Long Term Investors, which is certainly more boring as a name, but very clearly describes the content that I talk about.
- [02:37]
Brad
Yeah, I like it. It certainly is very fitting. And, and yeah, podcast discoverability is just so hard. I mean, I think all of us who love podcasts. No, it is virtually impossible. Like if you're, if you don't know the exact name of a show, it's very, very hard to find. Unless, yeah, you search for something like that. And actually for anybody out there, I. People usually like my little life hacks. So I'll mention that I found. So I'm still on an Android phone, which my daughters endlessly make fun of me about, but I am gleeful about. So there's no native podcasting app on Android, but I, I found a really great one called Antenna Pod. So it's one word, Antenna Pod Pod. And I used to have an app that actually went kind of dormant. It was called Dog Catcher. And this is the single best podcast app I've found on Android. It's open source, it's free. So, yeah, obviously I get nothing out of anybody going to this, but other than just the sheer fact of knowing that it is the single best Android podcast app that I've found. So total aside, Jesse, if you have an Android phone, I'd highly suggest that. But yeah, I'm downloading your podcast. It's funny because when I move my phone over, I think I lost some of my subscription. So this is actually perfect. I will search for your new term, which is great.
- [03:50]
Jesse Kramer
Awesome. Hey, and speaking of your AMA episodes, sometimes with Cody, sometimes with Rachel, inspired me to do some of the same. And like, they really are. At least I find that when listeners can write in, ask specific questions to you or your experts, like, they're huge hits. So, anyway, you've inspired me on the podcasting front too.
- [04:09]
Brad
That's very cool. I love it. So, okay, let's get to the episode. So what I love about you is you prepare. So we've, we've done a couple episodes now. I've been on your show and you are highly, highly prepared, which is great. And you sent me this incredible email that I think is just the perfect way to launch, really, what'll be a wonderful conversation between me and you and the listeners, of course. And I'm just going to read Your core theme, and then let you launch from there, and you and I will just have a little chat here. So, core theme as you wrote it, a good financial plan is both a puzzle and a spider web. A puzzle in that it involves many different pieces, and it's hard to solve that puzzle well without knowing all about your personal pieces. And a spider web. So much of a plan is interconnected. By optimizing the part of your plan over here, you'll also be impacting aspects over there. And I think this is really the crux of what you want to talk about today, which is, I think a lot of us in the FI community might naturally be optimizers. We'll say generously, maybe over optimizers, it's probably a little closer to home. And that's all well and good, but the world is an interconnected network. It is this spider web. And I think sometimes we lose sight of. Hey, when you optimize this, it might have a detrimental impact on that, and it's not altogether clear. But your contention is we need to really be cognizant of that. So hopefully I set that up nicely, and I'd love to hear you run from there.
- [05:43]
Jesse Kramer
Yeah, no, you. You set it up perfectly. And, yeah, those are two metaphors that I like to use all the time. The puzzle pieces and the spider web. And then a couple more metaphors that just might help illustrate to listeners what we're talking about here is, you know, we have finite resources of time, finite resources of money. And again, going back to the whole spiderweb about, you know, you pull on it over here, what's the ripple over there? A similar metaphor is the blanket that's maybe a little bit too small. And when, you know, when you pull the blanket up to your neck, you're pulling it off your feet. And when you try to wrap the blanket around your feet, you're actually pulling it down. And so it's like you don't quite have enough blanket to fully cover yourself. Because one of the other problems, or just difficulties in financial planning is that the future is uncertain. Right. If we knew everything about the future, Brad, financial planning would be such an easier exercise. If we knew when you died, if we knew what portfolio investment returns would be, if we knew how tax laws would change over time. So many of the questions, I mean, what would we podcast about at that point?
- [06:43]
Brad
I feel like.
- [06:44]
Jesse Kramer
Right. If we knew those answers, I mean.
- [06:46]
Brad
Frankly, Jesse, what would we live about? Right. If the future was entirely certain, it would be a pretty boring life. I think some of us want to cling to certainty. But it is really interesting when you think like, I mean, what would you do in life if everything was preordained? That doesn't sound like a, an altogether interesting life in any way, financial or otherwise.
- [07:05]
Jesse Kramer
Agreed. Uncertainty makes everything. It's the spice of life. It makes it a little bit fun. But yes, going back to financial planning, I really do think it's the art of making great decisions or at the very least, good decisions, decisions we're confident in, but within an imperfect world, within an imperfect framework. And therefore our long term goal probably shouldn't be perfection. And I think sometimes something that I see, whether it's just from the FI community or just DIYers in general, is people searching for perfection. I want to make the perfect financial plan. Every single nook and cranny is going to be optimized. But the problem ends up being that over optimization in one area can create risk in another. We have to accept that uncertainty is always going to be part of the deal. And therefore there are a lot of times where resilience, a resilient financial plan, probably beats a quote, unquote perfect financial plan, because resilience is what you're going to build into your plan to allow for that uncertainty to happen and you'll still be okay. So if you kind of imagine all these possible paths before us that we could take, our finances, they're each going to have their own sets of opportunities and risks, a lot of uncertain opportunities and uncertain risks. But every other path, the paths that we don't choose, also have their own opportunities and risks. And so that's what it really comes down to. Choosing a good or even great path for us right now based on the circumstances that we know, accepting the fact that our path probably won't be perfect in time, we'll look backwards and we might see the flaws. There might even be more flaws than we had originally hoped for and anticipated. But that's how I approach financial planning personally. And now, Brad, I'm happy to pivot maybe into some specific examples because this has been a little esoteric so far. Right.
- [08:46]
Brad
And that's, it's funny because that's actually before you get into whatever examples you were going to run with, which I suspect they're going to line up here, I was going to ask you, what areas do you see people chasing perfection in? So perfection is an interesting term and I guess more broadly, what do they define as perfection? Because I think for many people, okay, you could take the die with zero, which is, hey, I'm literally sliding into home plate on my last breath with $0. I suspect very strongly maybe 1% of the FI community fits that definition. But perfection could mean for somebody, and I'm not advocating this, but it might mean my principal balance never drops below the dollar figure it was when I retired or reached financial independence. And I've been able to draw down along the way. For some people it might mean, hey, I get to give multiples of my original money to my heirs. Like again, I'm kind of setting up these maybe extreme examples, but I wonder what perfection looks like to people that you see in your financial planning world.
- [09:50]
Jesse Kramer
Yeah, you just hit on something there, whether you realize it or not. And it's that every person kind of needs to define their own definition, their own axis of perfection, or at the very least, they need to be really honest with themselves about what's important to them. And maybe going back, I know, Brad, I really enjoy your episodes about fitness, right? And so going back to that, if someone out there is saying, listen, my goal is to squat twice my body weight, that's my long term goal. But at the same time I also want to lose 50 pounds and I also want it to be able to run a 5 minute, 30 second mile. You kind of tilt your head and you're like, listen. On their own, each of those might be attainable goals, but they might conflict with each other because if you're going to be strong enough to squat twice your body weight, you might not be light and lean enough to go run a 5 minute, 30 second mile. And so similarly, someone might say, listen, I want to minimize my long term tax drag on my portfolio. I just hate taxes. I want to minimize taxes. Okay, if that's your goal, that's one possible goal. But that might mean that you're so over optimized on taxes that you're actually making suboptimal investment decisions and you're actually reducing your overall long term portfolio returns, reducing your overall net worth. Another person, Brad, might just say, like, I want to be able to sleep every night, not worried about finances. And if that means I have to sacrifice some returns in order to seek out lower volatility, I'm totally willing to do that. But it's hard to be the person who both maximizes returns and also maximizes their sleep, right? Because you know, the risk has to come from somewhere. So that's a little bit of what I'm getting at here. Going back to that blanket example is like, listen, if you're pulling the blanket too close to you in one way, you have to be pulling the blanket off another part of your body in another way.
- [11:37]
Brad
Yeah, I mean, that. That really hits home to me. And I think we've seen a lot of this discussion recently in our community groups on some of our episodes where we've kind of talked about this supposed middle class trap, which hopefully Cody Garrett and I put to bed recently. But a lot of us, we're complex creatures, right? And this is okay. And I hope nobody took my trying to refute that this middle class job exists as saying, like, the psychology doesn't matter because the psychology always matters. It always matters. And the fact of the matter is you have to do what works for you. This is something I've tried to espouse here for a very long time, is that there's no one right path to fi. And I think that is what's so beautiful about what you're here to talk about today, Jesse, is that, look, you have to figure out what works for you. I think that, to me, is step one of any of this because, yeah, there are people who evidently are so worried about selling assets, selling equities someday that they will have reached FI and they. They can't bring themselves to sell equities. I know to. To quote a. A West Wing episode that I love to. You are gesticulating wildly here in the background, which I'm a huge West Wing fan, and that was one of my favorite quotes of all time. Josh Lyman is gesticulating wildly. I mean, you. I want you to run with that.
- [12:56]
Jesse Kramer
Yeah, it's funny because, I mean, Scott, what you're referring to there is in that episode with Scott and Mindy on Bigger Pockets, I think Scott, especially because I've now heard him say it multiple times. The first time I heard it say, it might have been a month before. We're recording right now, Brad, where he said that part of his FI plan or part of his FI goal, or just the way that he personally approaches financial planning, he does not want to sell his assets to fund retirement. He wants to hold his assets forever and only live off the income or the dividends, the interest that those assets shut off. And listen, that's a personal choice, neither right nor wrong. But what it certainly is doing is it's certainly kind of limiting his flexibility, and it's forcing him to accumulate more assets than he would otherwise need if he was comfortable selling those assets to fund his lifestyle. And by a pretty big margin, too. And so something I remember when I first heard Mindy and Scott talking about that and sharing that idea, I kind of thought to myself and said, well, what's the point of scrimping and saving and investing for decades and decades and decades if at the end of the game or at the very least at this big turning point in the game, you say to yourself, well, I don't want to sell these now. I want to hold them forever. And so again, it's a personal choice. It's not. I certainly am planning on selling my assets at some point. I don't have to sell all of them and maybe I will die with something and leave it to heirs or leave it to charity or whatever that might be, or simply I want to have some safety net. I don't want to die with zero. I'd rather have some safety net. So that's the opposite end of the spectrum. Some people want to die with zero. But yeah, going back to just my two cents on the middle class trap, not that it needs to be beaten to death, but you know, if you are trapping yourself because you were refusing to sell assets, I'm not sure if I would call that a trap per se. You know, just, it's a little self inflicted. It's just my two cents.
- [14:43]
Brad
Yeah. And, and I love how, how you're trying to be so diplomatic about this. And I have tried to be diplomatic even though maybe some people don't think so, but the real part of me wants to just like go after this because yeah, I mean the diplomacy part is, yeah, yada, yada, yada, it's your choice. But come on, if you've been on a path to FI for 10, 15, 20 years and you've won the game, you've done everything right, and then at the last instant, the last second on the shot clock, you decide arbitrarily, I can't sell my assets. Like, this is insane. Like, this is legitimately insane because it misunderstands that some types of quote unquote income are by definition better than others. Right. Like, you know, you have these like dividend investors who think that's like magical income. And yeah, you're rolling your eyes like I'm, I'm rolling my eyes like dividend income is not magical income. It's simply not. Anybody who tells you that is just lying to you or doesn't understand how the world works. It is essentially forced selling of your assets, just with less flexibility. It's stupidity compared to just actually selling and being able to do all the amazing five things that we can do, which is controlling our tax rate, controlling our exact where do we take this money out to maximize the standard deduction? Like, oh, I only want to take a little bit out of my 401k, which is then taxable income. And because I'm in the 0% long term caps gains rate, I can take some more out of my taxable brokerage. I could take some out of my Roth. Like, guys, this is winning. This is literally what we do in the fight community. We are killing it. You're killing it and then you're just cutting. You're like slicing your Achilles and just hamstringing you. Like it makes no sense. It makes no sense. So if you have come up with a plan for 15 years that says the entire thing is predicated on winning by selling some assets, you have to sell your assets. Like, I'm going to give you the tough medicine for once. You have to sell your assets. It's just, it's very simple.
- [16:45]
Jesse Kramer
Totally, totally. I mean, that is the point of it all. You know the 4% rule. I know, I know. It's off debated and it's changing. And that's really good that it's changing. At the very least that it's a topic for, for conversation. It's based on the idea of selling assets. It was never based on the idea of holding everything forever and only living off of income. Going back to dividend investing. I, I know this is a. Listen, if you're part of this community and you're really into it, you might have heard people talk about dividend investing before. And what I'm about to say is certainly going to irk the dividend investors out there. But this is my metaphor for dividend investing. And it comes from the best man at my wedding who's a choose Fi listener, Trey. Shout out to Trey. And it comes from Trey when he was about 6 years old. And part of that age is certainly going to offend people. When Trey was six years old, he believed that you could take a dirt bike. And I'm showing you visually, Brad, but I'll explain it to listeners. He believed that you could kind of put a dirt bike on its back tire so it's facing vertical. Then you can take a second dirt bike with a second rider, do the same thing. So now you have two dirt bikes that are both vertical and their tires are touching. And if you, he believed that if you rev them full at the same time, they would essentially ride themselves. One dirt bike would climb the other and then the second dirt bike would climb the first one infinitely into the sky.
- [17:57]
Brad
Nice.
- [17:57]
Jesse Kramer
And that is how Dividend investors believe in dividend investing because they believe that you can get this free cash flow and that there's no side effect, that it's like defying gravity. It's like wicked. They're defying gravity and they are flying in the sky and they are holding onto their stocks, they're holding onto their value forever while also collecting this really great cash flow. And as you and I both know well, the cash flow has to come from somewhere. And what happens is that the stock price drops the day that you get your dividend. And just like you said, it's forced selling anyway. You're right. The whole idea, though, of that middle class trap, I mean, some of that idea is predicated on the idea that some types of income, or better than worse than others. And I think one idea that every single investor, DIY member of the FI community, whatever, an idea that can benefit everybody, is the realization that money is fungible. Right. A dollar is a dollar is a dollar. Yes, of course. And we'll get into some of this right now. Like, you should think about taxes and, and some dollars in some accounts have more or less of a tax consequence than others. But. Right. Like at the end of the day, you have to fund your lifestyle some way somehow. And in that way, money's fungible. A real estate dollar isn't inherently better or worse than a stock dollar. But if someone chooses to believe that, I would wager they're probably doing more harm than good.
- [19:16]
Brad
Yeah, I would tend to agree. And that all said, if you find yourself in a position where you simply cannot sell or you believe you will be not able to sell. Okay, well, then you have to know yourself. And I'm not backtracking here by any means. Jesse, I hope this is a tiny, tiny, tiny minority of people and 1% or fewer. Yeah, I mean, but you have to understand, as Cody Garrett says, you're turning assets into income. That's what we're doing. So whether you sell securities, stocks or bonds, mutual funds, et cetera, to get this income, or you sell those same things and buy a business that creates cash flow, or buy rental real estate that creates cashflow, or sell those stocks and put it in a high yield savings account, which creates cashflow. Like, okay, you have to understand you're still selling. Right. Like, the money is not magic. It didn't just come out of nowhere. So you are making a decision, and I think a lot of us would argue you're probably lowering your overall net worth, certainly by putting it in that last option. Right. Because simply the money is not going to grow in a high yield savings account. Yes, you're going to get this income, but the principle is going to be the same if you remove all the interest rate dividend stocks, you know, we're going to rip on them a little more. Almost by definition, like companies are capitulating, they're basically just giving up when they send a dividend. Warren Buffett would say it's like dividend is the worst possible thing you can do with your capital as a company because you have nothing better to do. All of the seven other things you can do, buy new businesses, invest in capex on existing businesses, even frankly, repurchasing shares is by most accounts better than giving a dividend. So it's like you're buying a stock where like the company has given up, they can't grow. They just sort of, by definition almost you're buying a stock that is not going to grow as significantly as a broad based index fund, but you're getting that magical income. And of course I say that with sarcasm. So there's no free lunch is ultimately what it boils down to. And I think this is important because Jesse, this is a big area where I see we spent about 10 minutes on this little sidebar, but this is an area where I see people trying to over optimize and it's just people shoot themselves in the foot.
- [21:22]
Jesse Kramer
Absolutely right. The free lunch that you just mentioned there, Brad. I mean that is a. Oh, there's, there's a lot of misconceptions in the financial planning world that boil down to someone believes they're getting essentially a free lunch and when they look under the hood, boy, it's certainly not as free as they thought it was. I mean, maybe there are some good aspects of it and we can dive into one. Okay, it'll be a little contentious maybe, or I'm happy to get some pushback from listeners.
- [21:47]
Brad
We're already being contentious here, Jesse. Just, just go for it.
- [21:49]
Jesse Kramer
This is the most controversial episode in Choose Fi history.
- [21:52]
Brad
No, literally, totally inadvertently, but we're on a roll.
- [21:56]
Jesse Kramer
Tax loss harvesting. Now, tax loss harvesting, I want to say is one of these areas of financial planning where there's totally a place for it and done well, it is a good quiver arrow, I should say, to have in your financial planning quiver. But when I see people write about it and again usually what it is, it's people writing in on say that the Facebook groups or on Reddit or something like that, I see a lot of people over indexing, over optimizing into tax loss harvesting in a way that ends up being probably neutral at best, potentially even detrimental at worst. And now my thought here, Brad, is would you say that, like, the audience at this point doesn't need a definition of taxless harvesting? Do you think they're familiar enough with the AMA episodes and questions you've done before?
- [22:39]
Brad
Probably, but just give a very quick, very quick background.
- [22:43]
Jesse Kramer
Yeah, so I mean, super two sentences that it's the practice where investors sell some of their assets at a capital loss to offset other assets that they sell at capital gains. So otherwise, if you just realize capital gains, you'll owe some taxes on those gains. But if you also intentionally realize losses, the losses offset the gains, you minimize the taxes that you'd owe, commonly employed to enhance after tax returns. So you have a taxable brokerage account. Something like tax loss harvesting can make a lot of sense.
- [23:16]
Brad
Sounds about right.
- [23:16]
Jesse Kramer
Fair enough.
- [23:17]
Brad
Yep.
- [23:18]
Jesse Kramer
So a couple reasons why this practice maybe isn't as. As good or is sometimes either abused or just misused is probably the best word. It's not abused, it's just misused. I will say I think the wash sale rule is significantly harder to avoid in practice than in theory for those who don't know. Right. So if you try to execute tax loss harvesting, you have to make sure that you don't buy or sell a substantially identical asset 30 days before or 30 days after you execute your sale. So you've kind of got this like 61 day window. 30 days the day you do the thing, 30 days after. And the part where I see people trip themselves up, it applies to all accounts, all investing accounts from which the owner controls or benefits. It includes your spouse's accounts. It includes things like dividend reinvestment. So let's say we're sitting here, Brad, we happen to be recording on June 24, and let's say because of what's been going on in the world, I could go off and tax loss harvest today. Well, maybe I'm not aware, but on May 31, the stock that I want to tax loss harvest today, I had dividend reinvestment going and it shut off a dividend 25 days ago that automatically got reinvested into that stock. If I try to tax loss harvest today, it's going to be a wash sale and I am not going to get the benefit of it that I intended. So in order to properly tax loss harvest, you need a lot of awareness of all your investing accounts, all your spouse's investing accounts, retirement accounts, everything. And so it's Just one of those reasons again, where if the juice is worth the squeeze, if we're talking about situations when you're doing five and six figure or more types of sales to prevent thousands, if not tens of thousand dollars of taxes, by all means, like it's probably worth doing all the monitoring and et cetera, et cetera, et cetera. But if we're talking about kind of de minimis amounts, I'm not sure it's worth it. I'm happy to get into a couple examples though, where I really think tax loss harvesting is good is worthwhile. But when the typical person, all they use tax loss harvesting for is they say, here's my taxable brokerage account, I have some assets at a loss, other at a gain, and I'm just going to execute tax loss harvesting. What they've done there, especially if they're kind of repurchasing a substantially equivalent asset, they haven't changed their asset allocation at all. Part of the goal is you maintain the same asset allocation. And what they've done by realizing some gains and offsetting with some losses, they have not changed the cost basis of their portfolio. They haven't changed the cost basis of the portfolio at all. What they've done is that instead of realizing the tax, instead of paying the tax now, they've simply kicked the tax can down the road until a future year. Or maybe if they're close to death, maybe they permanently eliminate that capital gains tax through the step up in basis. Which is fine. But what most people do is they kick the can down the road. And yes, from a time value of money point of view, I would rather pay $1,000 in taxes 10 years from now than $1,000 right now. But for the hassle and the risk that they incur through a wash sale or whatever, it may be the fact that they aren't fundamentally changing their portfolio construction at all. It's just that's a set of truths that I think the average DIYer should be aware of before they dive headfirst into tax loss harvesting.
- [26:38]
Brad
Yeah, that's an interesting one. And yeah, I don't think we'll go into all the positive examples because yeah, there undoubtedly are, but I mean, you've opened my eyes in the sense that really it's about having all of your money. I'm thinking about a company like Wealthfront, which I have a small test account there because I like to test these things. Obviously I'm a podcast host on a personal finance show. I've had accounts at M1 Finance and Wealthfront and they do cool stuff. But one of the neat things about Wealthfront was they do automatic capital loss harvesting. Now interestingly, as you are making me realize, okay, I have plenty of accounts in taxable brokerages. I have them spread across multiple brokerages. And you're talking also a spouse. So this doubly complicates it. And if anybody in that 61 day period had a dividend, reinvested, or made an automatic purchase that they might not have thought about, well, that renders the whole thing moot. And then your capital loss that you theoretically just harvested is a wash. You literally do not get to take that capital loss on your tax return. So then, right, if you've harvested cap gains to offset it, then you literally have just created a taxable event for yourself which is less than ideal. So not saying not to tax loss harvest, but man, Jesse, that's an interesting one. And it's funny because I think what most people think of when they think of tax loss harvesting is okay. I just have to make sure that I put it in a similar type of asset, but a little bit different. So most people think they can get by with, hey, I'm in a total stock market fund and then I can sell that and buy an S&P 500 fund. And I think most people the current thought, and I don't have any knowledge on whether the IRS has, has upheld this. I suspect that it has based on how prevalent this concept is. But that, that's okay. And that does not run afoul of the wash sale rules. But that really is the open and shut conversation on wash sale, not what you brought up, which is, I think a lot of people just simply don't have all their money in one spot, don't have visibility into it. And I think right, by over optimizing one spot, they're actually hurting themselves, not helping themselves.
- [28:48]
Jesse Kramer
Yeah, I agree with that. I agree with that. And if anyone wants a just a quick litmus test just to see if it's like a worthwhile pursuit, one of my personal tests is to ask myself, or to ask people I'm working with or listeners, whoever, well, hey, will this act for fundamentally change your overall asset allocation? Because if yes, then you might as well tax loss harvest while you're doing it. So what do I mean? You're selling your second home. You inherited a small cabin in the woods when your grandfather died and now you want to sell it. You are going to realize some capital gains through the sale, let's say. So you're fundamentally changing your balance sheet in some way and these capital gains are going to be imposed on you anyway. Well, you might as well try to realize some losses to offset those gains. Or another common one, and this one probably applies to a good amount of listeners, is let's say you work in tech, you work at a startup, you are paid in equity, you are over concentrated in your your company's stock and you've decided it's time to diversify. Well, you're fundamentally changing your portfolio. You are changing your investment side of the portfolio. You are going to be realizing gains to do so. Okay. You might as well also realize some losses there and try to balance that out. So there are some awesome ways obviously to execute tax loss harvesting. It's a great arrow in your quiver. It's just again, it's something you don't want to over optimize it in a way that ends up being detrimental.
- [30:10]
Brad
Thanks for listening to Choose a Phy and for all your support of our mission here. The absolute best way to support Choose a Phy is when you sign up for your next rewards credit card to use our cards page at choose a buy.com cards. I keep this page constantly updated so it should always be the top resource for you. And thanks for being part of our community and for your support. All right, what's the next area that you see a lot of people trying to over optimize?
- [30:35]
Jesse Kramer
A similar one is the asset location dilemma, which depending on how you use it, how you approach it, how you prioritize it, it can be a tax trap or it could be an amazing tax strategy. So Again, the quick 30 second explanation here is that as many of us know, some types of accounts, qualified Accounts, Retirement Accounts, IRAs, 401ks, et cetera, Roths, et cetera, those accounts do not have they're tax free. They're tax free on an annual basis. Capital gains dividends inside those accounts, tax free, they aren't taxed. Taxable brokerage account though on an annual basis, any sort of dividends, income, capital gains in that account gets taxed. So the thought process here is, well, and this is something I know you guys have done a great job talking about before, you say, well listen, if I'm going to own different types of assets anyway, let's just use stocks and bonds as an example. I know that bonds tend to have a lot of annual income as a percentage of the overall bonds value and that income will be taxed if it's in a taxable account. Therefore, I'd rather shelter my tax inefficient bonds inside of an account where there's no taxes actually charged to me, like a qualified account. Therefore, I'd rather keep my stocks, which tend to be more tax efficient, especially if they're in like an ETF wrapper or something like that. I'd rather keep my stocks inside my taxable account. And listen, this is a good strategy and it can be done well. And a lot of the advice that I see online, it is done well. But we want to be careful not to always let the tax tail wag the investing dog, as it were. So a big part of my personal thought process is that the first thing we want to do as DIYers people in the FI community is you want to make sure that your asset location in each account is properly matched up with the timeline and goals for that money. And then once you do that, then you can start to consider if asset location really is a valuable thing for you. And maybe the last thing I'll just say before kind of tossing it back over to you, Brad, and getting some of your thoughts is that there's this really good Vanguard study from 2022 where they wanted to dig into the actual nuts and bolts value that someone gets from proper asset location. And so the baseline for this study was they took someone who has assets in a taxable account in traditional accounts and in a Roth account. So all three account types that many of us benefit from, and the baseline is that someone is 60, 40 in all three of those accounts, 60% stocks index fund, 40% bond index fund. And then they compared that to situations where this same hypothetical investor just totally optimized as far as they could for asset location. And on average, that investor benefits somewhere between 10 and 20 basis points per year of after tax returns. So instead of receiving say an 8% average annual return, they might receive 8.15%. So yeah, there's some benefit there. There's some juice to squeeze out there. But maybe what I'll get into after you share some thoughts is just, you know, we want to be cautious and careful not to over optimize.
- [33:40]
Brad
Yeah, okay, that's very interesting. So, yes, some people are certainly listening to that saying, oh, I wouldn't mind 8.15% return. I know, I know. The value of we always talk the other side is watching your fees, right? It's very important to not have significant expense ratios or assets under management because small differences in return can make a massive difference when compounded over 30, 40, 50 plus years. So there clearly is a benefit to doing this. But I Guess my question to you, so what is the downside of over optimizing here? So you know, you talked about timelines and such. We definitely have had guests come on and talk about this. And it does sound very common sense too, which is, hey, if you have something that you know is going to spit off a lot of income, current income, like bonds, for instance, maybe it is better to have that in a retirement vehicle as opposed to a taxable brokerage account. So that makes intuitive sense to me. And like you said, this Vanguard study says, okay, you are going to get a better return, but you are cautioning. The entire point of, of the episode is, hey, we're cautioning maybe over optimizing. So give us the downside of this. In essence.
- [34:50]
Jesse Kramer
Yeah, I mean, the first few downsides that just come to mind, maybe they're a little simple in nature. They're also just kind of logistics in nature. But it's liquidity and accessibility and timeline issues, it's rebalancing issues, it's stuff like that. So what do I mean? Well, an optimized asset location strategy, if that's the one access that you're really pushing hard on, you're almost guaranteed that each account's kind of investment timeline is no longer going to match the timeline in your financial plan. So if we take a taxable brokerage account, for example, it is, as we know it, is the most flexible account. And yes, we have rule of 72T and rule of 55, and we have some good strategies to access qualified accounts early if we want. But everyone who's pursuing fi their taxable account likely plays a pretty big role in the near term. Right? When we're talking about those early years of retirement, when we're just talking about how they're going to maintain their lifestyle and cash flow for the early years, their taxable account plays a big role there. And if they are matching up assets with those future liabilities, that probably means that those near term liabilities won't be funded from stocks. They'll be funded from bonds or cash or some other lower volatility, lower return asset from a taxable account, because the taxable accounts the one with flexibility. But wait a second. If we're optimizing for asset location, we're probably not going to have any bonds or any cash in our taxable account. We're only going to have stocks in our taxable account. Now this isn't the end of the world, Brad. I will say, because something that someone can do is they can say, well, I'll Optimize for asset location. If I need money this year, I will sell some stocks from my taxable account. But then what I'm going to do is I'm going to go over to my qualified accounts where my bonds reside and I'm going to trade an equivalent amount of bonds over there for stocks over there. So on net, across my entire balance sheet, I haven't really sold any stocks. I sold some from my taxable account, but then I bought the same amount in my qualified account and over in my qualified account I ended up selling some bonds there. And that is technically it does work. It's just one of those things where yeah, you're kind of by over optimizing on asset location, you are now certainly under optimizing in terms of just simplicity and logistics and accessibility and those kind of things. So that's one example, another good example that I'll dive into only because it's something I, it's, it's pretty corner case, but it's worth considering is thinking about long term estate planning. So this is again, this applies maybe more to older listeners, someone sick, something like that. But when asset location is the topic, I think to myself, well, how do assets get passed down and taxable accounts get passed down with a step up in basis, Capital gains essentially get erased for lack of a better term. IRA accounts get passed down if it's not going to a spouse, if it's going to a child or a grandchild or something like that. IRA accounts get passed down in the form of an inherited ira. And maybe this is actually something I should bring up in the next topic if we dive into Roth conversions. But the point is there are some questions that we ought to ask at a certain point in life. We ought to ask ourselves. Not necessarily how are we investing for me and my lifetime, but how are we investing for the person or the entity who will receive my assets upon death. And again, if you over optimize, say an asset location, you might not be considering questions like that.
- [38:12]
Brad
Yeah, that's interesting and it's funny because I think a lot of this is like you said at the outset, it's, it's in the eye of the beholder, right? Because some people might be saying, oh wow, that sounds like a huge stress to have to over optimize. Where do I have this money and how is it going to be passed down? I don't understand any of these rules. But again, I think your larger point is there are some things where the juice is worth the squeeze, right? So that's something that could make a massive, especially if you're talking potentially millions of dollars, that could make a massive difference in terms of potential future tax liability to your heirs, et cetera. Like you said, step up in basis. There's a step up in basis on a lot, and there's very little tax ramifications. But an inherited ira, as I understand it, when you take distributions from that, that is taxable income, correct?
- [39:05]
Jesse Kramer
Correct, Correct. So the current inherited IRA rules, if, if you were to die today, it might be a little different if someone died in the past five years. Like one of the annoying things over the last, like five or ten years with like, secure act and stuff like that is that depending on the date of death, the inherited IRA rules were a little different or a little nuanced. But the, the IRS has tried to simplify them going forward. And so if I were to die today, well, first off, spouses, the inherited IRA rules don't apply to spouses, which is kind of nice. Essentially, they just get to inherit the IRA as if it were their own. There might be some nuance there that I'm missing. And this is where, you know, talk to your personal CPA to make sure that I get all this right. But if a child or a grandchild or a friend is going to inherit my IRA from me, they will have 10 years from my year of death. They will have 10 tax years to fully empty that account. They can basically take those 10 years in any way they want. They can wait until year 10 and do it all at once. They can chop it up into 10 equal slices and take it one at a time. And that person, when they withdraw whatever size slice that they want, it will be income. It will be realized income to them. Again, assuming this is a traditional ira, right. I never paid a dollar of tax on that money during my life. But the IRS still wants its cut. And this is where I'll pivot quick, if that's okay with you, Brad, to the Roth conversion part of today's conversation, which we'll dive more into. But Roth conversions are a wonderful tool. I see them and recommend them frequently. And whether it's someone who's in early retirement taking advantage of their low income years, someone in normal retirement taking advantage of lower income years and trying to prevent large required minimum distributions later on RMDs, or whether it's people who are like you or I, our age, Brad. And all we're trying to do is execute backdoor Roths, which involves a Roth conversion. It's a wonderful strategy, but especially for an older person, they might be considering making a roth conversion at 22 or 24% in the federal bracket. Okay, fair enough. Let's say that's true. Well, if that person were to pass away, let's say, and they've decided that their grandchild who's 20 years old is going to receive part of that inherited Ira, well, that 20 year old probably isn't earning anything. Very low income, and maybe for a few years will be very low income. And in theory, they could inherit that IRA upon death of their grandfather, let's say, and they could distribute a lot of that IRA in the 0 or 10 or 12% brackets. So it's like, why would grandpa do a Roth conversion to intentionally realize 22 or 24% taxes when maybe in the next few years he might pass away and the grandchild will pay a much lower tax rate? Now that is super corner case, super nuanced. And I will say some trusted estate attorneys and some CFPs who I know personally would say, no offense, Jesse, but we don't really make planning decisions based on the inheritor. We much rather just make planning decisions based on the fact that the living person is in front of us and still breathing, which is fair. And maybe one other quick sidebar, because you made me think of something there, Brad. It's funny that if you talk to an asset manager or someone who's just trying to optimize your portfolio, they're going to just focus on investments. If you talk to your CPA tax preparer, they're only going to focus on minimizing your taxes. If you talk to a trusted estate attorney. Right. They're really going to be thinking through the lens of, you know, minimizing estate tax or a smooth transition of assets. And that's where it gets hard because I think the truth is you kind of need to balance all these different things all at once. Going back to our opening statement, this really is a balance. You're trying to find a balance between these different priorities. So depending on who you listen to, depending on where you're getting your advice or your information from, you know, if all you do is listen to CPAs, you might be coming at this conversation today from a very different lens of just minimize hacks, minimize tax, minimize tax. So I'll leave it at that. I can see your wheel spinning.
- [42:56]
Brad
Yeah, no, that's a really good one. And that'll, that'll take us to the next part of the conversation, which is, okay, how do we learn enough to figure out who to listen to or how to how do we trust our instincts if we don't have instincts on this or we don't have a sense of what is over optimizing and under optimizing because oh, I heard right. And it might just be I heard on a podcast, I heard on a website, I heard from my cpa, I heard from my whoever. So that to me I'm going to let you run with that. But I did want to just double back real quick just lest we scare anybody. I think for most people on estate taxes, the estate tax is really one of these things in the public consciousness and politics that is so misconstrued. Almost nobody pays any estate tax at all. I mean, it's fleetingly you could round to zero on the number of US Households that pay estate tax each year because the lifetime exclusion is so massive. So, so massive. So when you hear something like the death tax thrown around like it's mostly complete nonsense. And I mean it's great marketing, but it's also be clear. It's incredible marketing and is that wonderful scare tactic. But nobody pays that. So most assets, like we talked about. Jesse well, a to my knowledge, again, if it's under that exclusion, the recipient of the estate, whoever gets the money, not the person who passed away, they do not pay tax upon that, that death or getting that money. I can think of no instance that I know of if they're under that exclusion. But like we're saying, there is a step up in basis in a lot of senses, which is wonderful. That means, hey, my father bought these stocks, bought Berkshire Hathaway 50 years ago for $1,000 and now it's worth $700,000 a share for the A shares and never sold it. Right. So in my bizarre example, there's a $699,000 unrealized capital gain that my father would have had if he ever sold that, he would have had to pay capital gains tax on that. But because he passed while still owning that share and it was then given to me in the estate, it steps up in basis to the fair market value on the date of death. So in that case, my basis, which is a lot of people call cost basis, would be $700,000 on that Berkshire Hathaway A share in that case. So if I happen to sell it the next day for $701,000, I would just have a $1,000 capital gain in that case. I guess it would be short term. My example broke down a little bit, but nevertheless only a $1,000 capital gain as opposed to in that case, a $700,000 capital gain because I got that stuff up basis. So a lot of people are worried about an estate tax. They really shouldn't be. They really, really shouldn't be.
- [45:44]
Jesse Kramer
Correct. Totally agree with that. I mean, the estate taxes only applies to a, especially at the federal level. Applies to a fleetingly small minority of people at the state level. Some states, I will say, do have estate taxes that are worth considering or at least will apply to more people. I can tell you one. And here in New York, for example, our estate tax is a cliff, meaning, right. If you are a dollar over the limit, the estate tax now applies to your entire estate. Right. If you're a dollar under the limit, nothing, nothing. You aren't taxed on anything. If you're a dollar over, everything gets taxed. So, okay, here in New York it can be pretty important to just get your ducks in a row. And even if you're vastly under the federal estate limit, it can still just be worthwhile to consider, okay, upon my passing, you know, where are my taxable assets going? And is someone going to really benefit from the step up in basis that they receive? Where will my qualified, especially traditional assets be going? And will those people who receive them, say via an inherited ira, will they really get the benefit that they want? I mean, let's say you have two adult kids you're leaving your money to, one of them is very successful and a high earner. The other one took a different route and is maybe earning much less money. Well, all of us being equal, you'd rather pass and let's say just trying to be a fair parent, you want to share your assets with them. 50. 50. Okay, totally fair, totally reasonable scenario. Well, you would probably rather, and they would probably rather have the higher earning child receive your taxable assets with a step up in basis and your lower earning child can receive a larger share of your qualified assets because they will end up paying less tax on it anyway. It's just little stuff like that. Again, it's just, it's worth being aware of these things. And maybe one of the challenges, as you were kind of segueing there, Brad, is you're saying, well, how do we make sure we're not over optimizing or under optimizing? How do we keep all these things in balance? And my first gut response is it goes back to the idea that perfection isn't the goal. Right. I think we have to admit to ourselves that our plan will never be perfect. And even if we were to make every perfect decision right now, the fact of the matter is that a year's worth of market changes or a year's worth of tax law changes might take today's version of perfection and just render it obsolete. So my personal take is like, of course, continue learning. Especially, you know, the DIYers, the FI community. Keep on learning, listen to good sources, try to just expand your knowledge base piece by piece, piece by piece. And then with the knowledge that, you know, say, I'm not going to be perfect, but I'm going to try to create a plan that I can live with that gets me to my goals, that I believe takes a few different things into account, many different things into account, and then revisit it. However often you need to revisit it to make yourself feel good, revisit that plan. A financial plan shouldn't be static, right? I think it needs to be dynamic because the world is dynamic and you need to be able to roll with the punches. But at the end of the day, admitting to ourselves that, like, yeah, I'm not going to be perfect, but I'm going to be pretty good and I'm going to be good enough to live the FI lifestyle I want. I'm going to be good enough to do these things in life that I want. I think that's an important admission that we need to make to ourselves to find success.
- [48:54]
Brad
Yeah, that definitely resonates with me. Right. Because, well, a couple things, I guess most importantly, we need to keep learning. And I think this has been one of maybe the keys to my kind of life, success as it may be, is I just learn. I just try to take in information. Even Jesse, when it doesn't seem like it's especially pertinent right now. And I think that's kind of what you're saying is, and I'll find this with people who, who listen to podcasts sometimes. Friend of mine, I'm not talking about choose or I necessarily, but but just podcasts in general is like, oh, I didn't like the title of that episode or oh, I didn't think it was going to apply to me. And it's like, okay, well that's all well and good, but a, you know, podcasters can only put like six words in a title and it's an hour long podcast and they like can't possibly cover everything for first, that's kind of my public service announcement. But second, you never know when you're just going to seed your brain with something that can really help you. And frankly, if you listen to an hour podcast, most of us are listening to it in 1.25x or 1.5x or something like that. And you're, you're spending 40 minutes on it and you learn one or two things. Like that's actually a pretty good use of, of your entertainment time. So maybe, maybe, maybe create like a simple Google spreadsheet or something, which is, hey, I learned something today. I know this sounds like a little extra work and it is a little extra work, but I'm thinking about, I don't know, like randomly starting new businesses. I love the podcast. My first million. And they introduced me to another one called the Corner Office. And it's not C o R N e R, it's this guy's last name, which is K o E N E R I believe. And it's just fantastic. It's just, it gives me like a ton of business ideas. And frankly, Jesse, am I going to take action on any of these in the next week, month, year? I don't know. I doubt it. But you never know. And you never know when that little piece of information might help you in your life somehow. And I think this to me is really the cornerstone of learning things is like you simply can't know when it's going to help you. But there's no argument that having more information is worse than having less. And I think personal finance is a perfect example. Like there are just thousands of little pieces of information that you ideally could know. Do you need to know all thousand or multiple thousands? No, of course not. But the more that are just kind of like rummaging around in your head somehow and you can make a cohesive picture like, well, then you have a little more information than you did the day before. And I think that again, it's not over optimizing, it's not saying to succeed in your personal finances, you have to spend thousands of hours learning all this stuff because that's antithetical to what I believe.
- [51:37]
Jesse Kramer
Right, right.
- [51:38]
Brad
And I know you too. Like, I optimize for simplicity in most cases. And I think personal finance is actually really easy. But that's easy to say for me because I do have a lot of these pieces of information in my head.
- [51:49]
Jesse Kramer
Totally, totally. I got a shameless plug, but. Right. An investment in knowledge pays the best interest. Right. That's how I got the name for my blog. It's this Benjamin Franklin quote, an investment in knowledge pays the best interest. And there's so much truth in putting together these puzzle pieces in your knowledge set. Right. Whether it's about financial planning, personal finances, it could be about Cooking. It could be about fitness. It could be about whatever the thing is that you want. And just like you, you kind of alluded to something there that I really liked, Brad, which is you kind of get these factoids. They start rummaging around and floating around in your head. And one important thing is just that, like, if you can develop this little sixth sense or just this little awareness that it's like, ooh, this particular choice might have unintended consequences or externalities that I'm not aware of. Or, like, I think I heard something one time that, like, if you do this, there are some side effects. I better go look it up. Like, that's the instinct that I think is important to develop. Again, it's not that you need to know everything, but you just kind of have to develop an instinct for when you ought to dig a little deeper, when you ought to do a little more research. I mean, Listen, Google or ChatGPT, like, the Internet is this amazing resource, you know, and it's so cool when it's like you Google something and you're like, oh, that was on episode 233 of Choose Fi. I'm going to go back and listen to it now, right? And then you listen to you guys for 45 minutes and boom, there's your answer. But you're right, we don't need to make this complex, per se. But what we need to just be aware of is that, yeah, it's back to the spider web. If you tug on it over here, you might be jingling the web over there. And it's just. It's good to know that up front.
- [53:21]
Brad
Wow, Jesse, that. That sounds like the perfect kind of energetic close to the episode that feels like the exact point we want people to take away. And, yeah, I think an episode like this, sure, we gave a lot of examples, right. And you dove into a bunch of things. But it's really the larger point of, okay, you can't over optimize in every area. It's just simply. It's not going to work. There's always some give and take in life, and you need to be aware of that. You also need to figure out what works for your life, what helps, where you want to optimize. And that might simply be, hey, I don't want to optimize. I want to just optimize for the sleep well at night test, which I've repeatedly said here on the podcast. And that's just something that's important to me now. Does that mean, Jesse, that I'm throwing my hands up. And I'm not doing anything savvy with my finances. No, of course not. But it means, okay, I need to really think about this. And maybe while I don't spend a lot of time thinking about my personal finances now, because mostly they're on autopilot maybe every six months or a year, I do step back and say, hey, do I still want to be doing this? Like, for instance, I actually just sold both of my rental properties that I had down in Georgia. And actually, this is really cool because this was originally envisioned by Stephen Boyer of campfi Creation fame as a future fi co housing community. And interestingly, it is coming to fruition. The first people are moving down there. I kind of call them settlers, but the first people have moved down there, and it's real. This is happening. So I own two rental properties in that community, and they've been wonderful rentals, but it just was time. I actually sold one to someone who's moving down there, and I sold one to somebody else who's just going to continue using it as an investment until someone wants to move into it, and then they'll sell it to them. But for me, it was a sleep well at night test, because while these properties have been really pretty easy for me in the grand scheme of things, I realized, like, I just simply don't want to have rental real estate. And that was an optimization for me, and I think that's fine. I think I'm very happy with that as a decision, and I think that's what we need to do. Is what I would counsel as my last word here, Jesse, is everybody should just take a periodic look at their assumptions, take a periodic look at what does my financial life look like? What am I spending time and energy on? And just say, okay, look, that served me when I set this up. Is that still serving me today? And the answer might be an absolute yes. And that's wonderful. And the answer might be, oh, you know, maybe. Maybe not so much anymore. Maybe I want to pivot in some way. Might be, hey, I want to double down and buy 20 rental properties. That's great, too. I'm not arguing against rental properties in any way, but I'm optimizing for simplicity now. So, yeah, that was a massive win for me. And I think it's just kind of a cool illustration as we end the episode on just how you can look at your financial life and say, okay, is there time? Is there a time and a place to rethink this? I think that is what I personally would love for people to get out of this.
- [56:28]
Jesse Kramer
I totally agree. You know, is the juice worth the squeeze? And your answer is allowed to change, right? Life is dynamic. The future is unknown. We don't know what will come. This whole process is not a static process. It's a dynamic process. We're always allowed to revisit our assumptions, revisit our answers or our plan based on those assumptions. And yeah, can't thank you enough for having me on, Brad. This was a really fun conversation.
- [56:53]
Brad
Yeah, I always love having you on. And we mentioned this earlier. So where to contact you because I'm fanatical about making sure people know. Exactly. So it's Best Interest Blog. So there's no the there. It's just Best Interest Blog is your website. It's phenomenal. And people can find your podcast there, but they can also just search for the new name of the podcast, which is personal finance for long term investors. You do have a hyphen between long term. Hopefully. Hopefully. Hopefully the podcast apps are smart enough to find it without that. And I suspect they are, but maybe not put a hyphen in there. So I know it's a great show and I hope people check it out. I know a lot of people checked it out the last time you're on episode 4 92. Anywhere else people can find you or reach out to you.
- [57:38]
Jesse Kramer
Those are the big two. And I the the third small thing that I do, but it's, it's the way that I think a lot of people just keep in the loop is if you go to Best Interest Blog, I send out a very quick weekly newsletter with my new articles, my new podcasts, and good stuff I find from all over the Internet. So that's the way a lot of my audience kind of keep a pulse. But those are the three things. The blog, the podcast and the newsletter.
- [58:00]
Brad
I love that. And people can find the signup link just on your homepage of Best Interest Blog.
- [58:04]
Jesse Kramer
Exactly.
- [58:05]
Brad
Awesome. Jesse, this has been great. I really appreciate your time.
- [58:08]
Jesse Kramer
Thank you, Brad. Likewise. Thanks so much for having me on again.
- [58:11]
Cody Garrett
Thank you for listening to today's show and for being part of the choose to Buy community. If you haven't already. The best ways to get involved are first, subscribe to the podcast. So you're listening to this on a podcast player. Just hit subscribe and then subscribe to my weekly newsletter. I actually sit down every Monday and write this by hand and I send it out Tuesday morning. So just head over to choosefi.com subscribe and it's really, really easy to get on the the newsletter list right there and I would greatly appreciate it. It's the best way to get in touch with me. You can actually just hit reply to any of those emails and it comes directly to my inbox.
- [58:47]
Brad
So that's the way that I keep.
- [58:48]
Cody Garrett
A pulse of the community and and how we keep this the ultimate crowdsourced personal finance show. And finally, if you're looking to join an in real life community, we have choose a FY local groups in 300 plus cities all around the world. So head to choose a vi.com local and you'll find a list of all of Those cities in 20 plus countries.
- [59:08]
Brad
All across the world.
- [59:10]
Cody Garrett
And if you're just getting started with VI or you have a family member or friend who you think would be interested in two easy ways, choose a Fi episode 100 is kind of our welcome to the Fi community and even though it's a couple years old at this point, it still stands up and it's a really great just starting point to get an understanding of what is financial independence. What are we doing here? Why are we looking to live a more intentional life where we save money and use it as a springboard to.
- [59:37]
Brad
Live a better life?
- [59:38]
Cody Garrett
And then choose if I created a Financial Independence 101 course that's entirely free. Just head to choosefi.comfi101 and again, thanks for listening.