So Money with Farnoosh Torabi

Episode 1925: Best of So Money 2025: Building Wealth and Securing Retirement
Date: December 31, 2025

Episode Overview

In this special “Best of” episode, Farnoosh Torabi curates some of the most insightful, practical, and transformative money conversations of 2025. The theme is building wealth and securing retirement in a rapidly evolving financial world. Farnoosh and her guests dive into the impact of alternative assets like crypto in retirement accounts, frameworks for smart decision-making at every stage of wealth, avoiding common investment pitfalls, and the growing trend of “micro-retirements.” Throughout, Torabi emphasizes financial literacy, proactive planning, and adapting to new realities without falling for hype or making costly mistakes.

Key Discussion Points & Insights

1. Crypto and Alternatives in Retirement Plans

Guest: Tess Wearsmith, Investing Educator
Source: Episode 1876
Timestamps: [04:10] – [09:14]

• Crypto and private equity are starting to appear as potential 401(k) investment options due to new legislation:
  • "One of the things that was passed was legislation, an executive order that basically said we want to make sure that alternative assets are available for regular investors, for regular Americans with 401(k)s." – Tess Wearsmith [04:16]
• Benefits and Risks:
  • Alternative assets bring opportunities for diversification and potentially higher returns, but also come with higher risks and costs. Historically, such assets were reserved for accredited or institutional investors.
  • Most Americans already don’t fully understand what they’re invested in or the fees they pay. Education is critical before choosing new, riskier options.
  • "Personally, I think most people... shouldn’t be putting more than 5ish percent... into alternative assets because they are what's called super speculative." – Tess Wearsmith [08:44]
• Actionable Advice:
  • Now is the time to get fluent in the basics of your retirement accounts—asset allocation, fees, and asking the right questions when new choices appear.

2. The Wealth Ladder: Matching Your Strategy to Your Stage

Guest: Nick Maggiuli, Author, “The Wealth Ladder”
Source: Episode 1856
Timestamps: [10:39] – [16:50]

• The Wealth Ladder Framework:
  • Personal finance is not one-size-fits-all; strategies must adapt as your net worth grows. Maggiuli introduces a 6-level ladder for building wealth.
• The 0.01% Rule:
  • Use your net worth to determine what amount of spending is “trivial” and won’t move the needle.
    • "If you take your net worth and divide by 10,000... that’s like, a trivial amount of spend." – Nick Maggiuli [11:10]
  • Gives you “spending freedom” benchmarks at each stage, reducing decision fatigue and allowing guilt-free lifestyle upgrades at the right time.
• The 1% Rule for Opportunities:
  • If a side hustle or opportunity won't increase your net worth by 1%, it may not be worth pursuing, especially at higher wealth levels.
    • “At some point, if you can do other things that can generate more money, you should be doing those other things, right?” – Nick Maggiuli [14:05]
  • As your net worth grows, focus moves from labor income to income-producing assets and projects with higher upside.
• Farnoosh’s Take:
  • Rules like the 0.01% and 1% are useful starting points to cut out indecision and align your money moves with your current financial reality, but always personalize for your context.

3. How Not to Invest: Mistakes That Destroy Wealth

Guest: Barry Ritholtz, Co-Founder & CIO, Ritholtz Wealth Management
Source: Episode 1840
Timestamps: [23:04] – [31:12]

• Learning from Mistakes:
  • Ritholtz recounts buying Apple stock at $15, watching it triple, selling, and then realizing he missed out on outsized long-term gains due to selling too soon—highlighting the challenge of letting winners run.
    • “I could have just let it run…not the foresight to stay with it and let it fully unfold.” – Barry Ritholtz [24:49]
• The Cowboy Account:
  • To satisfy the urge for high-risk/high-reward plays, Ritholtz suggests maintaining a “cowboy account”—3% or less of your net worth—for speculative investments like crypto or hot stocks.
    • “If you’re always looking for the dopamine hit, then take 3% of your net wealth and play with it. If it crashes and burns, thank goodness it was only 3%.” – Barry Ritholtz [25:18]
• Speculating with Crypto:
  • Crypto (especially Bitcoin) is best treated as a tech stock—potentially interesting, but not essential—appropriate only for a small, speculative allocation.
    • “If you want to speculate with it, sure. Just make sure it’s small enough to not hurt you if it goes south.” – Barry Ritholtz [27:12]
• Investment Posture Near Retirement:
  • Don’t panic as you approach retirement—longevity risks mean you may need to keep a sizable equity allocation longer than past generations.
    • “If you're 65, you shouldn't plan on just being retired for a few years. You probably have another 20, 25 years to go. That should affect your risk tolerance.” – Barry Ritholtz [29:04]
  • Instead of shifting to ultra-conservative portfolios at retirement, consider pushing back those changes and maintaining growth assets if you’re in good health.

4. Micro-Retirement: Redefining How We Rest

Guest: Dr. Annie Cole
Source: Episode 1829
Timestamps: [32:29] – [40:01]

• Micro-Retirement Trend:
  • Rather than waiting 40 years for a traditional retirement, more people are taking planned “micro-retirements”—intentional breaks from work to rest, travel, retool, or care for family.
    • “Micro-retirement is really just taking a break from work. It can take lots of different formats… but the goal is the same: to take care of yourself, replenish, and just focus on me.” – Dr. Annie Cole [32:36]
• Financial Planning for Micro-Retirement:
  • Approach micro-retirements intentionally:
    • Define outcomes (rest, mental health, transition)
    • Plan finances backward: estimate costs, use PTO, save up, consider gig/freelance work if possible
    • Don’t tap into core retirement accounts for short breaks
• Job Market and Narrative:
  • If re-entering the workforce, craft a narrative around the break that highlights personal growth and renewed value. Use terms that fit the times but present your time off as an asset.
    • “I would focus on what you got out of it that is making you even more amazing for the job you're coming into.” – Dr. Annie Cole [37:14]
• If a Big Break Isn’t Possible:
  • Take advantage of PTO, company benefits, small breaks, and daily self-care to counteract burnout. “Think really small if financially it's just not an option. You have lots of tiny things you can still do.” – Dr. Annie Cole [39:23]

Notable Quotes & Memorable Moments

• “Already most Americans… have no idea what they're paying in fees in their 401(k) in the first place and don't really know what they're invested in already.” – Tess Wearsmith [05:33]

• “If you take your net worth and divide by 10,000… that's a trivial amount of spend.” – Nick Maggiuli [11:10]

• “I could have just let it run… not the foresight to stay with it and let it fully unfold.” – Barry Ritholtz [24:49]

• “If you're always looking for the dopamine hit, then take 3% of your net wealth and play with it. If it crashes and burns, thank goodness it was only 3%.” – Barry Ritholtz [25:18]

• “Micro-retirement… can take lots of different formats… but the goal is the same: to take care of yourself.” – Dr. Annie Cole [32:36]

Key Timestamps

| Segment | Guest | Topic | Timestamp | |---------|-------|-------|-----------| | Crypto in 401(k)s | Tess Wearsmith | Risks, fees, investor knowledge | [04:10] – [09:14] | | The Wealth Ladder | Nick Maggiuli | 0.01% Rule, 1% Rule, financial stages | [10:39] – [16:50] | | Avoiding Investing Mistakes | Barry Ritholtz | Selling winners too soon, cowboy account, retirement risk | [23:04] – [31:12] | | Micro-Retirement | Dr. Annie Cole | Building in breaks, job market, self-care | [32:29] – [40:01] |

Final Thoughts

Farnoosh wraps up with an emphasis on intentionality—whether in learning your retirement basics, making career moves, investing or scheduling rest and renewal. In a changing investment and labor landscape, the best way to build lasting wealth is to match your strategies to your unique context and to stay curious and pragmatic, not just optimistic or fearful.

“Smart investing often looks boring. It’s discipline. It’s avoiding the big mistakes.” – Farnoosh Torabi summarizing Barry Ritholtz [31:12]

Links to Full Conversations

• Tess Wearsmith (Ep 1876)
• Nick Maggiuli (Ep 1856)
• Barry Ritholtz (Ep 1840)
• Dr. Annie Cole (Ep 1829)

(Find episode links in the So Money show notes.)