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- [00:00]
Brian
Always be buying. Is there too much of a good thing?
- [00:10]
Bo
Brian, I am so excited to talk about this because I love when our financial mutants take an idea that we share with them and they grab onto it and they love on it and they make it their own. But sometimes, just like with most things, perhaps there can be too much of a good thing. And right now, one of the questions that we're going to answer is going to deal with that. This question came in from Earl the Squirrel. Earl the Squirrel that asked this question. And Earl said, I'm obsessed with checking my accounts daily. And I have major FOMO if I don't check them daily. Is there a downside to dollar cost averaging on a daily basis instead of on a less frequent basis? Can that be better? As someone who dollar cost averages many, many times throughout the month himself. What say you to the answer? What say you to this question?
- [01:03]
Brian
I feel a little responsibility here. But Earl, every day. Is that what Earl said?
- [01:10]
Bo
Every day.
- [01:12]
Brian
And he says he gets a little sad if he doesn't check his accounts.
- [01:16]
Bo
Major FOMO was the exact language that Earl the Squirrel used.
- [01:20]
Brian
Okay, look, I don't mind being self reflective and given the experience, shares in the fact that I've told you guys that I was doing monthly purchases and then at some point that warped itself to where I was buying twice a month. And I was like, well, twice a month was good. You know what would be really fun? If I did this every week. So I do have monthly, I mean, weekly purchases in my investment in my after tax joint investment account.
- [01:45]
Bo
Okay.
- [01:46]
Brian
And then of course, 401k goes in every month. Some of the other accounts, they get grouped and funded only once, you know, because you can profit sharing, Roth conversions, those things are all one offs. But I think about Earl. I don't know that I've ever heard anybody say they want to do every day daily. So, and I'll give some stats because Earl will probably love this since he's obviously taken this thing from here and he's launched into outer space with taking it and jumping a mile. If you look at the markets since 1937, if you look at on a daily basis, markets are up 53% of.
- [02:24]
Bo
The time on a day by day, about some days, some days are down.
- [02:28]
Brian
It's a little better than a coin flip. If you do it monthly, which is what the majority of, I think people do when we're talking about dollar cost averaging, it's 62.9% of the time it's up.
- [02:39]
Bo
Okay.
- [02:40]
Brian
And then if you do this quarterly because some people get, you know, bonuses and or other things that come through quarterly, it's up 69% of the time. If you're only funding stuff once a year because it's the one off type of things. You know, like I was talking about my, you know, if you're doing backdoor Roth conversions, other things like that, it's up 77% of the time. But this is losing. The question for the forest of all those stats is because what I worry about with Earl the Squirrel is that from a behavioral standpoint, the hyper focus on the daily ups and downs is probably doing more emotional damage and actually hurting the actual completion of his financial goals over the long term than even giving all those stats that I just shared.
- [03:27]
Bo
Yeah. The question that I would have for Earl is if you're doing this, is the juice really worth the squeeze? Are you actually getting a benefit from doing this? It's no different than if you try to watch grass grow or you try to watch paint dry. It's really, really difficult to see that happening. But if you're someone who doesn't check your accounts daily, and maybe you only look at them on a month end basis or you look at them quarterly or I think what's great is if you really only look at your total account balance once a year, when you do your annual net worth statement, you will be amazed at the ground you are able to cover throughout the course of a year. But if you're tracking and watching every day, I agree, Brian, I think that you'd be likely an emotional wreck that on good days you're up and on down days you're down. And if we know that the market on a day by day basis is only about 53% of the time, that means half the time you're happy and half the time you're sad. When in reality, if you look at it less frequently and you see the accounts moving, you're going to be amazed. That man, every time I look at my accounts, I looked at it six months ago and man, it's higher now, or I looked at it a year ago and now they're higher. I think that you're going to have a lot higher likelihood of staying the course and sticking with it if you approach it that way.
- [04:44]
Brian
Well, here's the key takeaway. Everything we're trying to share with you is how can we take the emotion out of the transaction? Because most people are horrible at controlling their emotions. The whole fear, greed battle that's constantly going always be buying the whole superpower of this is that it makes the good habit of building wealth as easy as possible, but then it makes the bad habit of overspending and waiting until you're investing only what's left over. You're actually getting ahead of that by paying yourself first. That's why I love always be buying. But if you're doing this in a detrimental way, where you're doing it on a daily basis, it's giving you emotional stress in a lot of ways. You are using ABB all wrong. And I would ask you to revisit that, because what this is really supposed to be working on is making it automatic for the people and giving you that inevitable walk towards wealth.
- [05:40]
Bo
Love it. Megan, is today a Tumblr day? Is she saying no? No, it's not What Megan says, no, you know what? I'm giving y'all Tumblrs anyways, even though Megan said absolutely not. So, Earl the Squirrel, if you would like your Koozie Tumbler Tumblr, Koozie quack, quack, quack. You can write winner W I N N E R. It's the only time I'm gonna spell it@moneyguy.com we would love to get that out to you.
- [06:06]
Brian
By the way. I think the chaos is because we're missing. We're missing key member today. We're missing this. I look over at the chair. I even thought about pouring some of my flavored water out on the curve. Because, I mean, I the reason. Because it was weird, you introducing the question like that. Ruby rocks it. I don't know if I say, I don't know if we didn't turn the lights on just because she wasn't over there. And we're all trying to say the power, but it feels kind of dim and dark over there. How funny, how funny it would be.
- [06:33]
Bo
If they just, like, cut over to her camera. And it was just a sad.
- [06:39]
Brian
But ribeye, we're thinking about you and I think a lot of you guys, when we do these live streams now, we're filled with people. We got people over here, we got people over here, but we actually all have a good time with each other. It is one of those things when we lose one of the key cogs out for a while. A glorious thing, growing the family. It's a good thing. And we have no announcements on that yet. She is working this morning, but she's hanging out at the family. But we miss Rebi.
- [07:07]
Bo
So, Ruby, if you're out there watching, hey, we miss you here. All right, you ready for another Question.
- [07:10]
Brian
Yeah, we can do this.
- [07:11]
Bo
All right, let's go. This question is from Devo. Devo said, hey, money guy, thoughts on gambling on stocks. I give myself $100 a paycheck to gamble on individual stocks for fun. I'm in my 40s with 200k invested and allocate over $1000 a month into target date funds. This is what it sounds like, Devo saying, hey, I'm doing what the money guys tell me. I'm saving consistently. I'm at the point in my career or my savings journey where I'm using target retirement index funds. So it's kind of set it and forget it where I can choose, okay, when do I think I'm going to retire and need this money and how much can I save? And that's all I've got to think about. And I'm doing that part and that part's chiseled off. Is it okay if $100 every paycheck, and I don't know if you're paid bi weekly or if you're paid monthly or maybe weekly, is it okay if I take that money and I gamble? Devo's words on stocks. I'm going to tell you, Brian, when I read this question, I don't have a problem with that because to me it's no different than if Devo said, hey, can I spend $100 per paycheck to go golf, to go to the movies, to go pursue any other hobby that I might have. It just so happens that it sounds like Devo's hobby is trying to guess which stocks are going to do well and which ones are.
- [08:30]
Brian
So you guys know I usually write down a few notes. I wrote down three quick things. I wrote, sure, have at it. And then I wrote number three because this is the thing I don't mind, like you said, a hobby. But here's the thing that I would ask you is check yourself before you wreck yourself. And the fact of does this cause stress for you? Meaning that when the stock goes up, you're like, hot diggity dog. You're super happy on those days. But when the stock goes down, because I'm sure you're not buying the S&P 500 with these, you're buying individuals high flying, highly volatile stocks. If you find yourself on the days that those stocks are down 6 or 7%, you go home and you're kicking dirt and you're getting in fights with your loved ones, ask yourself, is it worth it? Because here's what I find so interesting about individual Stocks, and I'm guilty of this myself, is that we've had people on when we've met with them and they've actually hit some high flyers, is that you're never going to be content because if you hit it, you're going to likely after the stock is up three, four, maybe five fold, you'll eventually take your profit. And then if it goes up 10 to 20 fold, you're going to be like, I missed out. Why did I sell that stock? That could have been the one where I turned $10,000 into a million dollars. I'm an idiot for selling that. And then it could go the other way, is that you hit one or two, and then you decide, you know what, I've made good money on these. I'll roll it into this high flyer, and then you lose 40% pretty quickly, and you'll just cuss and kick the dirt on that too. So it's just be careful, because if you fall in love with these individual stocks and you're setting a place setting at Thanksgiving this year for them, and you're passing the gravy dish by and saying, hey, Nvidia, would you like an extra helping of this as well? That is a problem because you're emotionally, you're treating them. This is supposed to be an investment. It's supposed to not have emotion. It's supposed to be just something that grows and builds in the background. But unfortunately, when you do individual stocks, you do find yourself getting emotionally attached to them.
- [10:44]
Bo
Yeah, I think just like with gambling, it can be a very slippery slope. It may be 100 bucks paycheck right now, but maybe you do have some luck and you start to believe that you have some skill at this. So then you increase it to 150 or 200. Then it goes on and on. You just have to make sure that you understand your own unique personality, that you don't fall into that trap. And then I would argue, you said you're in your 40s. You realize that every dollar you can put away at age 40 has the chance to turn into $7 by the time you get to age 65. So even though it's quote unquote, only $100 each, one of those hundred dollars could turn into 700 by the time that you get to retirement. So there's nothing wrong with doing this on a small scale. But me personally, I like seeing my money grow and compound and turn over.
- [11:31]
Brian
But you've done this, too. We all done this. We have a no hypocrite policy around here. So I mean, we're all guilty of this as well. I'm just saying, just know yourself. Check yourself before you wreck yourself.
- [11:41]
Bo
Is that what you're saying?
- [11:42]
Brian
Yeah, that's what you're saying. All right.
- [11:44]
Bo
Hey, Devo, if you would like a Tumblr, you can write winneroneyguy.com and we'd love to get that out to you. Even though Megan said no. All right, let's go.
- [11:54]
Brian
Poor Megan over there. Megan, you ought to sit in the hot chair over there so we can turn the lights on.
- [11:58]
Bo
Like, I wasn't going to be able to give away tumblers.
- [12:00]
Brian
Or wait, y'all can take turns. We'll just put each of y'all over in the chair and flash the camera on. And there's only one of you that gave me a thumbs up. Everybody else is like, oh, my gosh, why are we in here?
- [12:10]
Bo
All right, you ready for another question?
- [12:12]
Brian
Sure.
- [12:13]
Bo
This one is from Emoney says, what.
- [12:15]
Brian
Would happen if I'd have said no?
- [12:17]
Bo
Well, we would just shut it down and we'd just go home. Emoney E Money said, hey, can you rank different account types based on what is best and worst to inherit it? I'm specifically interested in where HSA falls. I think this is a really interesting question because there has been some legislation over the past couple of years that has impacted how we leave assets to our heirs, or if we are heirs, how we inherit assets. And not all accounts are created differently. So I think it'd be interesting, Brian, if you could talk a little bit about what are the best accounts for people to inherit. And as we think about legacy planning and leaving assets behind to future generations, if we want to maximize and optimize that, what kind of accounts should we think about? And then what are some other benefits that maybe it's not even like an inheritance thing, but what are unique benefits that each of the account types, when you think about the three buckets, might have from someone who's inheriting these assets.
- [13:14]
Brian
Yeah, I'm gonna go. I'm sure you'll fill in the gaps on me and whatever, but it's easy. And by the way, this did change the stretch. IRA rules have changed a lot. Now you really have, unless you're developmentally disabled or other issues or a spouse. IRAs now get 10 years. They've now codified and corrected a lot of this because there was a lot of gray area over it. But the IRS has finally come out. I would still say Roth, because tax free growth is pretty spectacular, Even if it's 10 years that's a long period of time to get some tax free growth.
- [13:50]
Bo
Yes, as you build Roth dollars right now, not only are those dollars growing tax free your entire lifetime if you don't use them, but it's your lifetime plus 10 years for your non spouse beneficiaries.
- [14:01]
Brian
I've even seen people who have estate planning issues that have done that for the sake of let's go ahead and fund some after tax so we can get some more Roth assets. Next I put taxable, I mean, because I like the step up in basis.
- [14:15]
Bo
What's a step up in basis?
- [14:16]
Brian
So when you pass away, if you've got a bunch of embedded gains, if you sold them while you're alive, you have to pay capital gains tax on it. But if you pass away with those appreciated assets, your beneficiaries could inherit them tax free. And this is why I get mad when people all of a sudden on your deathbed, if you sign over the deed of your house to your kids. No, don't do that. Because more than likely Your house appreciated 50% over the last five years like everybody else's did. You want to have your beneficiaries inherit and get that stuff up in basis taxable assets. And by the way, I'm thinking about in traditional investments. But as you heard, this applies to real estate as well. So that's always a great thing to inherit. And then I guess you could then start talking about and this gets into the things that will have asterisks and some rules to them is traditional IRAs and savings accounts, those are harder to invest. Yes, you get the 10 years potentially. But there's also required minimum distribution rules that you have to pay attention to beneficiaries. I guess I would say maybe I would put the HSA before those because think about this, I'm doing this in real time. Sure, those have RMD requirements and other things that's going to complicate those being.
- [15:31]
Bo
401Ks and IRAs and so forth.
- [15:33]
Brian
Whereas in Health Savings Account, the first of all the estate, before you start making distributions, you should see how many expenses you can actually get that money out within the estate completely tax free. Are there medical expenses that need to be reimbursed?
- [15:47]
Bo
If the decedent had been tracking their.
- [15:49]
Brian
Medical expenses, if you're tracking expenses, the estate could go file the tax free distribution and turn that money into essentially taxable money gets distributed out to the beneficiaries. If there's large HSAs and they didn't track and the estate didn't claim what was qualified medical expenses. You the beneficiary could still inherit these assets and then you're just going to pay it's going to be like a quasi retirement asset. You're going to have to pay income taxes on the distributions but no penalty, but no penalties. And I don't think it, I'm not sure on the RMDs on that or the 10 year holdings. I think it's just going to make you distribute it pretty quickly and then that leaves to the retirement. I don't know. Those are kind of a toss up because I like that 10 year stretch is pretty valuable somewhere in there that's the gray zone. That's the personal and personal finance too.
- [16:39]
Bo
Yeah. So I think what I love is you recognize that different types of accounts are taxed and treated differently as they become part of your financial plan. But when you do move not just from the make wealth stage and not just into the maintain wealth stage, but once you get into the multiply wealth stage and you do begin thinking through these things, there is a lot of fun planning you can do to think about. Okay, what are the best ways I can leave an inheritance behind for my kids or my heirs or my beneficiaries? And emoney the fact that you've been thinking about that shows you probably financial mutant, right?
- [17:14]
Brian
Well this is also I mean this is why it's good to I say that complexity will naturally find you. You don't even have to go looking for us. It's just you'll know when it slaps you across the face and you go gosh, hadn't I even thought about it? But you can see I was my eyes probably even lit up because it is a fun exercise to start thinking about how you're going to navigate the jigsaw puzzle of complexity on different account structures. Each choice you make is going to have a different result and you're trying to balance the pros, the cons and really help people navig decision. It's fun for us to kind of optimize that and imagine if you could have somebody in your corner who has those skill sets, who has that aptitude. And then while you're in your hardest of times because realize if you're the executor or whatever, you have a loved one that passed away. So you might not even be in your clearest of mind because you had such a huge life event. Isn't it nice to have somebody that can kind of help you navigate that even when you're probably who has your same mindset has that financial mutant mentality, but just doesn't have the pullback or the struggle of some of the emotional stuff that you're going to be dealing with in the realities of life.
- [18:22]
Bo
Love it. Emoney, that was a fantastic question. If you would like. Emoney, I feel like I recognize your name. I feel like you have one of these. But if you do not have a Tumblr, you can reach out to winner WI. I'm not going to spell it@moneyguy.com winneroneyguy.com we'd love to get that to you. I can. So. Okay, so right now I see Matt flailing. You want me to tell them? You want me to tell them the. Alright, we're supposed to announce something. This is why we don't. If we don't have Rebi here, we totally forget that. You know what we're supposed to announce?
- [18:51]
Brian
I have no idea what we're supposed to announce.
- [18:53]
Bo
So right now there is a huge, huge sale going on.
- [18:59]
Brian
Yeah, that Right? Yeah. Y'all get in there and get that.
- [19:01]
Bo
A huge Black Friday sale going on where right now we're doing something that we have never done before. We have dropped the prices on some of our courses and tools in a way that we've never done before.
- [19:12]
Brian
We've actually gone insane in the fact that Bo did this, by the way, because we had an idea of what we were going to do for Black Friday. And then Bo goes, no, no, no. Why don't we, since we're already at this point, just go ahead and unleash it at this.
- [19:27]
Bo
Because I feel like more people need it. More people need to have access to our tools, to the things that we're able to use. So I wanted to make it very easy for people to get it in their hands.
- [19:37]
Brian
Since we're. We didn't talk about this, obviously, since I'm like, I have no idea what you're going to talk about, Bo. Hey. But I will say, even though we're doing some the world's best pricing on any of the things we've ever done with financial order of operations, all the other stuff, I think it's crazy. We didn't even plan this. I was kind of surprised. I was just out there doing my typical thing. I was trying to go read Amazon reviews. I'm such an idiot.
- [20:01]
Bo
That's what you do in stock.
- [20:02]
Brian
I can't help myself. If I get bored, I go on Amazon, I go on Goodreads and I read reviews. While I was on Amazon looking at reviews, I was like, Holy cow. I've never seen the price that cheap. So Millionaire Mission right now on Amazon is below 20 bucks. I've never seen it that price. I don't even know how all this stuff works. I'm such a noob when it comes to publishing, so I don't think it's anything to do with my publisher. I think Amazon is just like, hey, let's see if we can push these things. I think when I checked it this morning, we're getting close to 40% of the books that they're selling at this discount price had sold. So get in there. Let's see if we can get it to 100%, because maybe then Amazon will order even more. I like that thought. That'd be kind of cool.
- [20:41]
Bo
If you want to know more, you can go to learn.moneyguy.com I believe that our sale ends on December 2nd. Is that right?
- [20:50]
Brian
Sorry to step all over the other deal.
- [20:52]
Bo
I'm sorry. Go to moneyguy.com blackfriday if you want to see all the Black Friday deals, you only have 13 days left to do this. It's the biggest sale we've ever had on all of our products because we want them to get in your hands. Ruby would be so proud of us right now.
- [21:08]
Brian
She'd be proud of you. Me, I'm over here muddying the water talking about Millionaire Mission, telling you I don't know what's going on.
- [21:15]
Bo
We're having a huge sale, and Brian just sent everybody to Amazon.
- [21:17]
Brian
So give that. Give that website again. It's moneyguy.com blackfriday that's right.
- [21:22]
Bo
Moneyguy.com blackfriday yeah, y'all go check that.
- [21:24]
Brian
Out and then go to Amazon after that.
- [21:28]
Bo
Oh, Rebi, if you're watching, we need you back. We already need you back. All right, we're doing questions. You want to answer another question?
- [21:35]
Megan
The Money Guy show is hosted by Brian Preston. Abound Wealth Management is a registered investment advisory firm regulated by the securities and Exchange Commission. In accordance and compliance with the securities laws and regulations, Abound Wealth Management does not render or offer to render personalized investment or tax advice through the Money Guy Show. The information provided is for informational purposes only and does not constitute financial tax, investment or legal advice.