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- [00:00]
A
Hey, James, good to see you. We have a fun episode today where we are going over Vanguard's Advisor Alpha study.
- [00:10]
B
This is another episode of Ready for Retirement. I'm your host James Knoll and I'm.
- [00:14]
A
Here to teach you how to get.
- [00:15]
B
The most out of life with your money. And now onto the episode and many.
- [00:20]
A
Of you listening slash watching right now. You've heard of Vanguard, but you may not have heard of the Vanguard Advisor Alpha study. How many people, if you had to guess, James, do you think have heard of this study?
- [00:32]
B
People listen to this podcast, are pretty well informed. I'm going to say 40%.
- [00:38]
A
If I had to guess, I'd say 20%. But I think a lot of you are really smart and so you manage your money well. Many of you have an advisor and you still watch listen to our content. But we want to go deeper and show you and give you our insight as to why the Vanguard released this study because they discuss when it makes sense to work with an advisor and when it does not make sense to work with an advisor. Where would you like to start with this one?
- [01:02]
B
Let's talk about what Alpha is. What on earth is, you know, is this Alpha? What, what, what is that Alphabet Alpha? What the Alpha is just essentially in an investment world, kind of like out performance and not just from an investment standpoint, but what is the value added. So as you're looking at that, Vanguard, who we all know of, is a low cost provider. Vanguard's probably done more of this for this industry, for people personally, in terms of their finances maybe than any other company. So Vanguard's incredible and they just allow for these really low cost solutions to be available to the mass public, which is awesome. But what they're saying is, look, there's Alpha here, there's potential to do better here with an advisor. And now obviously Reu and I are advisors. We work with advisors. And so yes, we have a, a dog in the fight here. And so our bias is going to come out. Sure. But we're going to try to look at this objectively to say what do we agree with, with this study? I personally maybe don't fully agree with everything in the study, but how should, how should people think about this if they're going to even think about working with an advisor? So we'll go through what Vanguard said and then we'll add our commentary.
- [02:02]
A
Love it. They say here advisors can potentially add up to or exceed 3% in net returns through the Vanguard Advisors Alpha framework. And once again, Alpha really just is it worth it? If you could work with an advisor and you know for a fact that you would pay them 1% and receive 2% in value every single year will be pretty simple. Working with an advisor because you're like, I know no matter what, I'm going to add 1% in value. I'm happy to pay the fee, but life's not that simple. So they have seven key modules that we'll be showing you and really giving you our insight on today. And I'll go through each of those and then we'll go through them one by one. Does that sound good, James?
- [02:43]
B
That sounds good. I'm going to tell a story real quick before we jump into this. I. I did a video once on my YouTube page of. I forget the exact title, but I think it was something along the lines of, am I crazy for paying my financial advisor $25,000 per year? It was a question we got from a listener and. And I went through. Maybe it was my answer. Here's the things you should be getting for that. Here's the value you should be looking for on that. But the funniest thing is the comments and comments were all about there's no chance you outperform the s and P500 by that amount. Everything shows indexing is the best possible way. And so I think there's a sense of. There's a disconnect. Yes. Are you going to outperform the s and P500 by 3% if you're also owning large cap stocks? Very, very small chance, Less than no. Let's just say no, you're not going to outperform by 3%. That's not what we're talking about. We're not talking about investment performance that exceeds its benchmark by 3%. But what Vanguard did so well, we're going to lay this out is that's only one component of your overall financial strategy. The actual investments and the actual asset allocation sleeve is one piece. And there's other components that we want to look at as well. And when people fail to recognize those components, that's where they really leave a lot to be desired. They leave a lot on the table because they're so focused on this one aspect of planning, they miss the bigger picture. So what's the first thing that Vanguard. The first thing actually kind of coincides with what I just talked about. What's the first thing that Vanguard talks about in their study?
- [04:05]
A
Love that story, by the way. The first. It reminds me of one other thing I'll mention later, but the first thing they Bring up is asset allocation. And they say that value that varies by client. The first thing that comes to mind is when it comes to asset allocation, many of you are aware of 6,000, 40, 60% equities, 40% fixed income, or 70, 30. That is how a lot of people look at building a portfolio. Now we'll use a simple example with clients and we'll say, hey, why don't you have 100% equities? My goal, that's way too risky. I can never have that. What if I retire? Markets don't do well, and now I need income in retirement. And because I had 100% equities, my portfolio took a big dive and I can no longer meet my income needs, I'd say that'd be a big problem. But if you had a pension that covered all of your needs, meaning you wanted to spend 10,000amonth, and 10,000amonth came in through a pension, and you just knew no matter what, whether your portfolio did good or bad, it just didn't matter. You had your pension, you knew you'd be okay. Theoretically, that person could have 100% in equities and that would really change their retirement. They might get way more growth on that portfolio. And it's because of that. Maybe one simple conversation. So that asset allocation, it really does vary by client. Any other stories or thoughts on that?
- [05:25]
B
I remember one client, Ari, when you actually first joined, you maybe recall she was very much a do it yourselfer, very much in low cost, which was great. That's totally fine. We put together a whole plan for her and she could not separate herself from the. From having a 50% stock allocation and 50% bond allocation. She really wasn't even too concerned about market. She wasn't. It was just like there was something in her head of the 5050 portfolio was the only way you could do it. She was so attached to that. And I remember thinking that there's so much value to be had just by having the right allocation here. It doesn't even have to be 100% stocks. But what are you leaving on the table here? And I want to be careful when I say this, because in some cases the 5050 portfolio is the right thing, either because of a financial, for a financial reason or just because of a psychological or an emotional reason. But neither of these were the case here. And this, this, this woman, she was wonderful woman, but so attached to this that I couldn't help but think, how much are you leaving on the table by having the wrong allocation? Now, most people listening probably Think that's not an issue. That's an interesting thing about the study, by the way, is my guess is a lot of people listening to this, some of these things aren't going to apply to them because they're on this, they're listening, they're doing stuff. Whereas other things I think absolutely will apply to them. But something as simple as your asset location can be the difference in hundreds of thousands of millions of dollars, or millions of dollars, I should say, over the course of your retirement. And people sometimes fail to see that. So I think in Vanguard study they say this adds somewhere between maybe 0 basis points and more, I think. What's the exact number they assigned to this or ascribe to this?
- [07:08]
A
Do you know, on my sheet here, I was literally seeing it. Value varies by client. They actually didn't put a figure in for this. And by the way, what is basis points? I know you mentioned that.
- [07:17]
B
Thank you. One basis point is 1,100th of 1%. So if you get one basis point in interest on your savings account, you're getting 0.01%. Not much is another way of saying that 100 basis points is 1%. So it's. This is the first line item in Vanguard's Advisor Alpha study. And what they say is it just, it's a big fat. It depends. So there's really not anything to quantify there because of course, it depends on the situation. So let's actually go to the second one because this is where we can start to actually, they quantify it more exactly.
- [07:53]
A
Second one, cost effective implementation. And they say 30 basis points. So if 100 basis points is 1%, 30 basis points, you could see 0.3% cost effective implementation. What the heck does that mean?
- [08:07]
B
That just means let's assume you have your asset allocation. Let's assume it's 75% stocks, 25% bonds. Well, how are you getting that? Are you purchasing a mutual fund? Are you purchasing ETFs? We see so many clients or prospects who come our way and it's, hey, I'm not paying an advisor or anything. My investments are free. Okay, cool. Let's do an investment analysis. We do an investment analysis. Little did you know, you're not paying an advisory fee, but you're paying way more than you should for the implementation of this portfolio that you have created. Maybe these are because these funds started in a 401k that was pretty expensive and that just rolled over to an ira. Maybe you purchased a mutual fund because you read some research report on this mutual fund. Whatever it is, there's an advisory fee that you see if you're working with an advisor. And then there's the internal expense ratios of the funds that you're using that you don't see unless you are looking at the prospectus, unless you're reading the fact sheets, unless you're doing the analysis on it. And what Vanguard's saying here is oftentimes for the average person they're surveying in the study, the cost of the investments themselves could be reduced by 30 basis points, or 0.3% is another way of saying that.
- [09:17]
A
Awesome. Sorry to disappoint you, but I do not have a good story on cost effective implementation.
- [09:22]
B
We'll move on to the third point then.
- [09:23]
A
Third point, rebalancing. So they're saying 14 basis points or 0.14%. Do you agree with that? What is that?
- [09:33]
B
Yeah, I do. Here's the hard thing about rebalancing is in a year, like not a year, in a decade like we've had, rebalancing is hurt. Rebalancing, really what that means is you sell from the thing that's done the best to buy the thing that's done the worst. Who wants to do that? Nobody wants to do that. We all know that it's the right thing to do. You sell high and buy low. But it doesn't feel like the right thing to do, especially when, take the example, big tech stocks in the U.S. big U.S. tech stocks have done the best, and they've done the best for several years in a row now. So if you're rebalancing, you're constantly selling a little bit of that to buy a little bit of what's gone down the most. And so after a while, people just stop doing it. Because why would I do this? Why would I keep selling my winners to buy the losers? Especially if there's tax implications involved with that? And you do it because one day you're going to need it. One day you're going to be really glad you did it. One day, if you, if you let that growth continue, your portfolio is going to start getting out of whack. And my guess is a lot of you, if you look at your portfolio today, there's probably a pretty significant concentration and a certain type of asset class. For a lot of you, that's probably big U.S. tech stocks. And part of that is because rebalances haven't happened. Now it's going to feel good not to rebalance until you're, you know, something's gonna happen and you're gonna look back, and I really wish I had taken that time to rebalance. There are so many. This is one of the things that this is not just like an opinion that vanguard has. You can look at rebalancing as in a pretty objective way to say, what's the value of doing it over any time period versus the value of not doing it over any time period. And there's some pretty great, compelling reasons to say this. Not only it can either add to your return or. Or it can reduce risk, or it can do both, depending on the makeup of the portfolio that you have.
- [11:16]
A
I have a story I'd love if you could share. And you're probably gonna know the client I'm talking about when I bring this up. But I heard two words when you just explained all of that, which was recency bias. And we have a client that had a significant portion of peloton stock, if you remember the client that I'm bringing up now, James. And it is really hard to sell any winner. And for a lot of you out there, you know the value of diversification. James and I talk about it divers more than probably most people talk about a lot of things, and you recognize the value. But it's really hard to diversify when you know there's going to be a tax hit. So if any of you are out there and you've got a big stock gain or it turns out you have a property that you think, yeah, I want to downsize, but, well, the tax bill is just going to be crazy. Any story come to mind with that peloton client?
- [12:02]
B
Yeah, and there's a handful of them. So I'll tell it in this way. It was. For those that don't know, Peloton stock did incredibly well. And then it didn't. It did incredibly well during the COVID and lockdowns and all this stuff. And hey, this is all the stock skyrocketed. Now, that's great. The bad news is, okay, you go to sell that stock, it's going to cost a lot of money in taxes because the gains were so high. And so sometimes that's what we see. We see that tax bill in front of us. I don't want to pay that X amount of dollars or whatever percent that comes out to be in taxes. And then I forget the exact percentage, but it's something like 85 or 90% of the stock value is lost over a handful of short months. And so, you know, we get so caught up in the. I don't want to rebalance because the tax implications that we fail to see the bigger risk, which is the catastrophic risk of what if this drops by a material percent, 50%, 60%, 70% and doesn't recover what you are going to be wishing you could go back in time and just pay the taxes on that to then rebalance into a more diversified and more suitable portfolio. But we don't. And so rebalancing is something that doesn't come. It's not something that we do instinctually. We run away from it instinctually. We want to hold on to our winners and not pour into losers. We want to avoid tax liabilities or tax bills, we don't want to incur them. But it's something that empirically has been shown to add value and reduce risk to your plan and is absolutely something that's in many cases, if you can do it by yourself, great. And if you can stay committed to it, awesome. If you can have an objective third party doing that for you. As one small part, I think Vanguard, what you say, 14 basis points was the value they ascribed to this?
- [13:41]
A
Yep.
- [13:42]
B
Relatively small. But having it done is really important because by ourselves or on our own, we're not going to naturally default to doing so.
- [13:50]
A
Yep. My favorite quote in here from this study says the most significant opportunities present themselves not consistently, but intermittently, often during periods of either market duress or euphoria. Which brings us to what I would argue, and James can give your insight on the 4th and I would argue once again, largest value when working with an advisor, which is behavioral coaching, which they put in the category of 100 to 200 basis points, aka 1 to 2%.
- [14:21]
B
Yes, that's the big one. And it's the same. It's the, you know, which of us think we're below average at anything?
- [14:28]
A
Yeah.
- [14:29]
B
No one. Which of us think we have blind spots? No one. Or even if we say, yeah, I'm sure I do, we say that. But then we really think about like, where are they? I don't know. I mean, that's the nature of blind spots. They wouldn't be called blind spots if we literally didn't had the ability to see them. So all of us are that way. You know, I, I told this story before of a client and yes, I get this, this is a one off thing. The timing was very unique. But I was talking to a prospective client and this prospective client had gotten spooked out of the market. I forget exactly when I think it was 2017, 2018, they had sold off because they were really concerned about a big Market downturn. And then the market did nothing but grow but climb for the next two, three years. And we were meeting at the beginning of 2020 and they had about three million, three and a half million dollars in their portfolio. And they said, we just want to find the right opportunity to get back into the market. You know, we've missed out on the run, but we know there's another downturn coming. As soon as the market drops 20, 30%, we're going to get back in. That's going to be our re entry point and then we're going to stay invested. And if you this was the beginning of 2020, you recall something happened at the beginning of 2020. This thing called the novel coronavirus started to spread. We started to see news images, we started to hear of cases here. All of a sudden there's lockdowns. All of a sudden things are going crazy. The market had its fastest ever. It was the fastest ever bear market that we had. I called that client or that prospective client, said, hey, this is what you told me you were waiting for. You literally said the words, I'm waiting for a market downturn, a bear market, so that I could get back into the market. This prospect emailed me and I've saved this email because it was literally on the day it was on. Gosh, let me know if you remember. But it's like March 12th or something was the bottom March 17th. I forget exactly when it was, but the bottom of the market responded to me, said, hey James, thanks for your email. We still think this thing has way further to go, yada yada, the worst is yet to come. The next 50 days, the market, its best ever. 50 days that it's ever had. And that, that was just a behavioral thing of I could look at this as an outside objective third party and say we need to get invested. Like there's not, there's no better time than right now. Of course there's uncertainty, of course the future is unknown, but that's. You don't have markets dropping 30% because everything's super certain and guaranteed. You have them dropping like that because there is a huge degree of uncertainty. And because there is a huge degree of uncertainty and because we are who we are as humans hardwired a certain way, we're just inclined to do the wrong thing at the wrong time. And now of course, most people aren't going to have that opportunity. So yes, I'm going to get right in right now. I was in cash and all of a sudden I've got this golden Opportunity to get back into the market. I just tell that story to highlight the fact that. What's the quote of we have found the enemy and he is us, or something like that. I'm butchering the quote. But we are our own worst enemy when it comes to investing because we make emotional decisions, because we worked hard for our money, we've saved our money, we have sacrificed for that. And to have that subjected to the irrational, seemingly irrational whims of the market in the short term is challenging and it causes us to do bad things. And so what Vanguard's saying is simply having someone that can help protect you against bad things is worth an enormous amount. And the quote that you shared, Ari, is perfect. This doesn't happen. You know, sometimes people ask, why would I pay an advisor? What can they really do for me? Every year that's going to add up. To quote Vanguard, the most significant opportunities present themselves not consistently, but intermittently, often during periods of either market distress or. Or euphoria. One single decision for this person I was talking about cost them at this point, at least seven figures.
- [18:21]
A
Crazy.
- [18:22]
B
What's the bigger cost? This isn't a sales pitch for advisors, by the way. This is just dissecting. This isn't for our route. This is for anyone else. This is just talking about the value of advice. Do you think they would have rather paid an advisory fee every year for 30 years or missed out on a seven figure opportunity just because they didn't take some very simple advice to reenter the market when the time was right?
- [18:45]
A
Beautifully said, powerful stories. And that's why we get to do this the next 1. Asset location, 0 to 60 basis points. So 0 to point 6%. Now, asset allocation, that's what we went over, number one. Is that the same thing as asset location? Did they make a typo? Because this is a pretty big study.
- [19:05]
B
Seems like that, right? No, typo. Asset allocation is what's the different mix of stocks, bonds and different types of stocks and bonds. That's going to largely be the number one factor that determines what return you get. What types of assets are you owning? That's going to, for the most part, drive the return you can expect. Asset location says, where do you hold those assets? Another way of thinking about that is if asset allocation determines the return you're going to get, asset location determines the amount of that return you're going to keep after taxes. What I mean by that is where do you hold your different investments? Do you hold your bond fund in your IRA or your Roth IRA or your brokerage account. Do you hold your large cap growth fund in your ira, your Roth ira, your brokerage account? Some of these assets are taxed more efficiently. Some of these assets are taxed less efficiently. The reason there's a range. There is. If you're in a super low tax bracket and all of your money's in an Iraq, there's no benefit to asset location. All of your money's in that one account. And even if you did have a brokerage account, you're in a super low tax bracket, tax consequences aren't major. You're in a higher tax bracket and you have some brokerage accounts, some Roth accounts, some pre tax accounts. Now all of a sudden you're on that sliding scale. Asset location becomes far more valuable. Up to 60 basis points in Vanguard study to say, are you not just holding the right things, but holding them in the right account?
- [20:28]
A
Yeah, I think one of the biggest thing, once again, not a sales pitch for advisors, but that an advisor, anyone advising in any capacity, whether it's you to your peers or any, is telling someone what not to worry about, that they may have been worrying about for many, many years. And I have a story where someone reached out who said, I'm really into optimizing my money to whatever degree necessary. I said, any degree. They go, yep, I just want to make the most of what I've worked so hard for. I said, what have you done? They said, well, I'm big on asset location. You might not know, but it's different than asset allocation. I said, tell me more. They said, yeah, all my money's in a Roth ira, so I'm just asset location. That's my thing. And I was like, you may not need to worry about that word ever again if you only ever have a Roth account. And they're like, so we discussed it, obviously, and they're like, oh, so like, I've been reading articles and this and. And all I was thinking was, could that have been more time with family or retiring earlier or whatever it is? The difference is that's someone who's really smart, who in their field, I'm sure is brilliant and then wants to be smart in another field. And James, a very smart guy. I think I'm a smart guy. If we wanted to go do surgery tomorrow, we would struggle. Not because we're not intelligent, because we just don't know it. And so I could read about doing any surgery for as long as I'd like. I'm sure I still would mess it up. And so it's all about Going, okay, what's most valuable? Is it getting asset location optimized or is it making the most of your time?
- [21:54]
B
Yeah, yeah. Hopefully you do both. Optimize the location and spend your time doing what you want to do.
- [22:01]
A
Love it. Next one is a big one and we're Almost done here. Sixth one here. Spending strategy, slash withdrawal order, 0 to 120 basis points. James, have you ever done a video on withdrawal strategies? I don't think so.
- [22:15]
B
Done a handful of them, yes. Why are they beneficial? What's the importance of that?
- [22:20]
A
So these withdrawal strategies, how are you going to pull income in retirement? Most people go, well, it's pretty simple. I mean, I just worked for 40 years and I got a paycheck and I just, you know, I don't get to keep all of it, which kind of makes me angry. But I know I want to make sure that people are fighting fires, that I have roads and this and that and then 401ks and insurance premiums. So I end up with a certain amount of money, and that's what I live off of. Retirement doesn't work that way, though, because you may have a 401k and a Roth IRA and an inherited account and a brokerage account. So the order in which you withdraw and the timing of which you withdraw really changes your retirement. The story I'll tell real quick where I saw a big mistake is I saw someone reach out and say, I really want to retire and live my optimal retirement to the degree where they were not going to take trips, even if they were in a great position to do so because it was going to slightly increase their tax burden. And we had a conversation and they just never came around where they were like, oh, I see, my life would be better, but it's always coming back to, yeah, but my tax burden would be higher. So sometimes it makes a lot of sense to recommend, hey, you should retire earlier, you should withdraw from this account. Yeah, the tax liability might be higher, but you'll enjoy your life way more. And you're still going to be more than okay. In other situations, it's, hey, if you want to retire, you're really going to need to pull from this account over that account. And it makes a big difference, which is something that a lot of people do not need to worry about. Where if you're in your 40s right now, watching, listening, you're worrying about your withdrawal strategy, you can start to set yourself up well for that. I'm not saying don't do that, but the order of what you withdraw Today, that's one of those things that I would say. You don't need to be worrying or maybe freaking out about that quite yet.
- [24:02]
B
Yeah, the withdrawal strategies is a big one. I think people under underestimate this before they retire because when you're working it's simple that you just save and you invest in something typically that's through your 401k and it's just automatic and markets up, market's down, no big deal, keep doing it when you retire. That's not the case when you retire. It's where does money come from that you're gonna live on? Is it dividends? Is it interest from bonds and savings? Is it selling some of your stock? So capital gains, great, gotta figure that out. Next step is how do you coordinate that? You know what if that's coming from your brokerage account versus what's coming from your IRA versus what's coming from your Roth ira, then what about how do you make that decision dynamic based upon what the market's doing? How does that change if you retire and the market's up 20% that first year versus how does that change if you retire the market's down 20% that first year. Do you freeze spending in terms of don't give yourself a cost of living adjustment. Do you decrease what you're spending? Do you increase what you're spending? Does that become the new baseline? Do you do that as a one time? So there's all these questions. It seems so simple of okay, retire and take out 4% per year of your portfolio. To use a common rule of thumb, on the surface it's simple. But then you start drilling down into that and how do you optimize it? Is the question taking the money simple. But too often people take the money they do in the wrong way and it ends up costing them. As Vanguard's looking at here, between 0 and 120 basis points of value by having the right approach to this. So that's where so much of this depends. I get, I think if I'm someone listening this, I'm a little bit like that. That seems exaggerated. You know, I'll go back to 3% in advisor alpha. That seems exaggerated. Can someone really save me from behavioral standpoint, 200 basis points, can they really add 120 basis points on the withdrawal side? Some of you maybe not some of you I know for certain. Some people it's much more than that. So this is one of those episodes that is, is a little bit, I don't know the right word is, but Some people are gonna say this is just. That study's ridiculous. And in some cases, I agree. No, no one's going to add 200 basis points of value if you're really solid investor, you're not, you know, making crazy panicky moves every time the market goes up and down. But even if just half of this applies to someone, even if just a third of this applies to someone, there's something listed that's. Or that's not listed on here that I want to get to once we've wrapped up the seventh one. So let's actually go to that next. What's the, what's the final one, Ari? You think it's return versus income investing, Is that right?
- [26:29]
A
You got it. Total return versus income investing, where they say value varies. So we can certainly dive on. On this, which is that total return of, hey, what am I really getting from this actual investment versus what a lot of people like of. Should I prioritize dividends? How to think about that? But do you have a better one you want to go over?
- [26:47]
B
I think both of those are totally valid. So that's the final piece. So, like applying the right type of investment strategy to the person based upon everything from their strategy to their temperament and everything in between. At the end of the day, it's this. It's. If someone is going to decide to work with a financial professional, you want to make sure it's worth your money. Well, what does that come down to? Well, sure, there's rebalancing stuff, sure there's asset location stuff, sure there's asset location stuff, withdrawal strategies, all those things. The. The thing that's most important to me, it's funny, is that as I get older, I'm 35 years old, so I say that like, you know, I've had tons of life experience to realize that the. The cheapest solutions to a lot of things end up being the most expensive in the long run. Oh, that really cheap, I don't know, repair job I got for my car that blew up on me that ended up costing way more money when everything else had to be repaired. Oh, that. That new drywall that I put up for super cheap that ended up being really expensive when something fell through. And now the whole. Yeah, I'm just the. It's happiness at the end of the day, I think is the key difference in a really good advisor to adding value to clients. There was actually a study done by Herbers and company that said financial consumers happiness drastically increases over $1.2 million in assets once they've hired a financial advisor. So this isn't saying everyone, but there's there. They plotted a direct correlation of as your money grows, we have this sense of, okay, I'll be fine. You know, you talk a lot about goal post planning. I'll be fine. Once my million dollar portfolio turns to two, just be so much easier. You know what? I'll be fine. My $3 million portfolio turns to five. I'll be fine. My $5 million portfolio turns to 10. We think that, and then we start to realize that's a lot of pressure. You know, the, the, the impact of one bad decision when I have 5 million or 10 million or 20 million or 50 million, that is enormous. One bad decision. And the pressure of that, how, how as your net worth grows, so too does the complexity of that, so too does the responsibility of all that in this thing that we thought would bring us more peace, more contentment, more happiness. I will say it can if it's managed correctly. But if it's not, the. There's this sense of overwhelm and this sense of, oh my goodness, this is a lot at stake. That's all on my shoulders. And the biggest benefit, this wasn't for everyone. This study specifically showed net worth or investable assets over $1.2 million is when they really started to notice a really significant jump here. And I think it actually capped out at the 6 or 8 million dollars mark, if I remember correctly, was people were happier when they had a good financial advisor help them with these things. So, yes, the rebalancing should be done right. Yes, the asset location, yes, the withdrawal strategies. Yes, all those things should almost be table stakes. Table stakes is the wrong word. Those should just be a given. The biggest benefit is can you live happier, a more joyful, more present life? Because you can do what you want to do knowing that you've got a really solid financial planning team helping you do the other stuff that you no longer have to worry about.
- [29:56]
A
Beautifully said.
- [29:58]
B
I said this was gonna be a sales pitch for advisors. It kind of turned into a sales pitch. So sorry about that. But it's not the intent going into it.
- [30:04]
A
Yeah, clearly we don't like what we do for a living.
- [30:07]
B
Yeah, well, we obviously get a lot of joy out of it and get a lot of joy out of working with wonderful people who can do that. Like our favorite part, we've got some slack channels internally where we get to see clients traveling and living their lives and doing all these things. And it's so cool to see they tell us this, this isn't us putting words in their mouth. We feel more confident in our ability to do these things because you are handling the financial aspect. We don't have to worry about that. And then we get these really cool pictures of them living, of them being happy. So we obviously clearly believe in it and want people who are just even thinking about this. Like, how do you even think about an advisor? Whether you're working with one or not, still worthwhile to know what that, what that looks like.
- [30:47]
A
Love it. I think we did Vanguard a service and for those of you who don't know, like we use Vanguard products, we like Vanguard and Vanguard is saying we don't think everyone needs an advisor. Here's what makes sense. We're saying the same thing. We don't think everyone needs an advisor. We think it can help and that's why we're advisors. So that's what we want to make sure we went through in today's episode. Anything else, James?
- [31:08]
B
I'm all good on my end. Anything else on yours?
- [31:10]
A
That's it. Thanks, guys.
- [31:12]
B
Thanks, Hari. See everyone.
- [31:13]
A
See ya.
- [31:16]
B
The information presented is for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments or investment strategies. Investments involve risk and are not guaranteed. Any mention of rates of return are historical and illustrative in nature and are not a guarantee of future returns. Past performance does not guarantee future performance.
- [31:36]
A
Viewers are encouraged to seek advice from a qualified tax legal or investment advisor professional to determine whether any information presented may be suitable for their specific situation.
- [31:47]
B
Hey everyone, it's me again. For the disclaimer. Please be smart about this. Before doing anything, please be sure to consult with your tax planner or financial planner. Nothing in this podcast should be construed as investment, tax, legal or other financial advice. It is for informational purposes only. Thank you for listening to another episode of the Ready for Retirement podcast. If you want want to see how Root Financial can help you implement the techniques I discussed in this podcast, then go to rootfinancialpartners.com and click Start Here where you can schedule a call with one of our advisors. We work with clients all over the country and we love the opportunity to speak with you about your goals and how we might be able to help. And please remember, nothing we discuss on this podcast is intended to serve as advice. You should always consult a financial, legal or tax professional who's familiar with your unique circumstances before making any financial decisions.