Avoid These Financial Blunders in 2025 with Smart Money Moves (SB1629)

Summary

Podcast Summary: The Stacking Benjamins Show – "Avoid These Financial Blunders in 2025 with Smart Money Moves (SB1629)"

Release Date: January 10, 2025
Hosts: Joe Saul-Sehy and OG
Guests:

• Nick Magiulli: Author and blogger behind the Of Dollars and Data blog
• Paula Pant: Host of the Afford Anything podcast
• Dr. Jordan Grummet (Doc G): Host of Earn Invest

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Introduction and Guest Lineup

The episode kicks off with Joe Saul-Sehy expressing his excitement about stepping out of his usual setting to host the show in New York City. He warmly introduces the panel: Nick Magiulli, Paula Pant, and Dr. Jordan Grummet. The hosts set the stage to discuss common financial mistakes and how to avoid them in 2025.

1. The Perils of FOMO in Investing

Paula Pant emphasizes the significant impact of Fear of Missing Out (FOMO) on investors, particularly when they witness others achieving spectacular gains in areas like cryptocurrency or individual stock picking. She explains how FOMO can lead individuals to deviate from their well-thought-out financial plans.

Paula Pant [11:18]: "FOMO is big. And oftentimes you know better, right? You know that you should put the majority of your assets that are in public markets in index funds that are asset allocated in a very specific way... and then you hear about somebody who like made it big on crypto, or you hear about somebody who made it big within video or individual stock picking, and all of a sudden you have all of this FOMO..."

Nick Magiulli offers a strategy to mitigate FOMO by allocating only a small percentage (no more than 5%) of one's portfolio to high-risk investments. This "fun money" approach allows investors to enjoy potential high returns without jeopardizing their overall financial stability.

Nick Magiulli [13:44]: "I would say no more than 5% of your portfolio because you get the kick out of it... If it starts to do really well, pair back to 5%... you'll keep making money and you have no real downside."

Joe Saul-Sehy shares his personal experience with FOMO, recounting how missing out on Nvidia initially led him to impulsively invest in other stocks, highlighting the common emotional pitfalls investors face.

Joe Saul-Sehy [12:34]: "The FOMO, because I missed number one, Paula, I now think I got to grab another one so I can be the hero next time."

2. Establishing and Adhering to an Investment Policy Statement

Dr. Jordan Grummet introduces the concept of an Investment Policy Statement (IPS), a personalized document that outlines an investor's long-term asset allocation aligned with their financial goals. He stresses the importance of regularly reviewing and updating the IPS, especially during tumultuous market conditions.

Dr. Jordan Grummet [17:27]: "This is your time to go back to the basics and say this doesn't really fit my investor statement and so I'm going to stay away from it."

Paula Pant concurs, highlighting how the IPS serves as a roadmap that keeps investors focused on their goals rather than market noise.

Paula Pant [19:19]: "We talked about the investment policy statement and it was actually very much in a context that was similar to this in where your asset allocation needs to reflect your goals."

Joe Saul-Sehy reinforces the necessity of maintaining focus on financial milestones amidst external distractions such as political events or market volatility.

Joe Saul-Sehy [35:36]: "We get so worked up... and we forget there is a lot of stuff we can control."

3. Avoiding Over-Identification with Investments

Nick Magiulli warns against the psychological trap of associating one's identity too closely with their investments. He observes that many wealthy individuals inadvertently treat their investment performance as a measure of their self-worth, leading to decisions driven by ego rather than rational strategy.

Nick Magiulli [21:23]: "I think on the way to getting rich, a lot of people lose themselves in that and they forget about everything else."

He also points out that a significant portion of wealthy individuals' portfolios are often earmarked as bequests rather than funds for personal use, suggesting a disconnect between accumulation and meaningful financial goals.

Nick Magiulli [22:13]: "Over half, if not 60 or 70% of the assets of most, let's say million dollar plus households wind up being bequested... If you asked a 30 year old, a 40 year old... When you're dying, you're not going to spend."

Dr. Jordan Grummet echoes this sentiment, sharing personal anecdotes about family members who prioritized financial security to the detriment of personal fulfillment.

Dr. Jordan Grummet [23:47]: "Most people don't even want to accumulate... but they still don't want to touch the principal."

4. Managing Spending Aligned with Personal Values

The discussion shifts to spending habits, with Dr. Jordan Grummet highlighting the common mistake of spending money on things that don't align with one's values. He advocates for intentional spending, ensuring that expenditures contribute to personal happiness and fulfillment.

Dr. Jordan Grummet [40:24]: "We spend a lot of time spending money on things we don't value... money is a tool and it gets me that thing I value."

Paula Pant introduces the 1% Challenge, which encourages individuals to incrementally increase their savings by 1% each month. This approach aims to make saving more manageable and sustainable.

Paula Pant [45:05]: "Whatever amount that you currently save, whatever that percentage is, next month save 1% more... Over the span of the year, you've increased your savings rate by an additional 12%."

Joe Saul-Sehy shares his and his partner Cheryl’s strategy of weekly financial reviews, where they assess their spending against their values, fostering accountability and conscious decision-making.

Joe Saul-Sehy [46:32]: "We started that weekly meeting that I love that's only 20 minutes long... We're building values together week by week in this 20 minute period."

5. Preventing Analysis Paralysis in Investing

Dr. Jordan Grummet discusses the phenomenon of analysis paralysis, where fear and uncertainty prevent individuals from making necessary investment decisions. He emphasizes the importance of maintaining consistency in investing, regardless of external economic or political turmoil.

Dr. Jordan Grummet [28:21]: "A lot of people are sidelining their money and I think it has long term consequences."

Nick Magiulli reinforces this by highlighting the drawbacks of timing the market based on political events, citing historical data that suggests staying invested yields better returns than attempting to predict market movements.

Nick Magiulli [29:44]: "If you only invested during Democratic regimes or Republican regimes, you would have made far less money than if you just stayed invested for all of them."

6. Implementing Incremental Financial Changes

Nick Magiulli advocates for making small, consistent changes rather than attempting drastic overhauls. He shares his personal success with committing to one blog post a week, which over time, led to significant growth and opportunities.

Nick Magiulli [51:16]: "What's the one change you can do? And just do that every single week... That compounding just starts to take off in ways you can't even imagine."

Paula Pant adds to this by outlining how minor adjustments, such as saving an extra small percentage each month, can accumulate substantial financial improvements over time.

Paula Pant [52:26]: "Whatever amount that you currently save... next month save 1% more... you've increased your savings rate by an additional 12%."

Joe Saul-Sehy complements this approach by suggesting that even small increases in contributions to retirement accounts can have a meaningful impact over the long term.

Joe Saul-Sehy [52:26]: "Don't try to eat the whole elephant. Try to save a little bit more in your 401k this month, the next month a little more..."

Conclusion and Final Thoughts

As the episode concludes, the hosts and guests reflect on the discussed strategies to avoid financial blunders in 2025. They emphasize the importance of disciplined investing, aligning spending with personal values, and making incremental changes to achieve long-term financial success.

Key Takeaways:

• Mitigate FOMO: Allocate a small portion of your portfolio to high-risk investments to satisfy curiosity without compromising overall financial health.
• Establish an IPS: Create and regularly review an Investment Policy Statement to stay aligned with financial goals amidst market volatility.
• Separate Identity from Investments: Avoid tying your self-worth to investment performance to maintain rational decision-making.
• Intentional Spending: Align expenditures with personal values to ensure financial resources contribute to genuine happiness and fulfillment.
• Overcome Analysis Paralysis: Stay consistent with investment strategies despite external uncertainties to harness the power of compounding.
• Embrace Incremental Changes: Implement small, manageable financial adjustments to build sustainable wealth over time.

By adhering to these principles, listeners can navigate the financial landscape of 2025 with confidence and resilience, avoiding common pitfalls that derail financial progress.

Transcript

[Joe Saul Sehi]

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[Nick Magiulli]

Here we go. Hold your ears, folks.

[Joe Saul Sehi]

It's showtime.

[Joe's Mom's Neighbor Doug]

Live from Cumulus Studios deep in the heart of Manhattan, it's the Stacking Benjamin Show. I'm Joe's mom's neighbor, Doug, and today Joe ventures out of the basement, jumps on a big old jet airliner and heads to New York City to talk about getting rich. He's on a mission to find out what mistakes stackers are making along their journey to tons of Benjamins. Joining Joe in the big city, we welcome author and the blogger behind the Of Dollars and Data blog, Nick Magiulli. And the man you just heard here Wednesday Talking about purpose, Dr. Jordan Grummet, aka Doc G. And from the Afford Anything podcast, Paula Pant. And now a guy who knows that every millionaire once googled. What's a 401k. It's Joe Sal Sia.

[Joe Saul Sehi]

Thanks dou and happy Friday, everybody. Welcome back to the Stacking Benjamin show. I am Joe Saul Sehi Average Joe Money on X. I should stop saying that because I'm never on X anymore. I'm a blue sky guy, guys. I am a blue sky guy because I don't get fed a bunch of political stuff every single time I go on it. But anyway, you'll find me at Jose L C. Hi, I'm blue sky, but we're not talking about me. This is so weird. I'm in a room, an actual real room with people, as Doug so eloquently said. So let's start off with the. Well, where am I gonna start? We'll go ladies first. The woman behind afford anything. Paul Pant is here. How are you?

[Paula Pant]

I am so happy to be here in person. The energy in person is so different. It's fun.

[Joe Saul Sehi]

So you really liked moving to New York City? You've loved it? Yes, loved it.

[Paula Pant]

One of the best decisions I've ever.

[Joe Saul Sehi]

I got the true New York experience this morning, which was cool. I was on the subway and there was a gentleman sleeping on one of the benches in front of me. And then he decided he had to get up. I thought he was getting up because he was getting off at the next stop. He wasn't. He decided it was time to urinate. So. Which I think is very authentic New York. But I also felt bad for him. I mean, you know what I mean?

[Paula Pant]

Yeah. I hate to say that's part of the New York bingo card, but like, unfortunately, unfortunately, we. We have a big issue here with the unhoused and lack of adequate resources.

[Joe Saul Sehi]

We're definitely not going to solve that problem today.

[Paula Pant]

We are not going to solve that problem today.

[Joe Saul Sehi]

But certainly I did feel bad, but that was New York. I was like. I did check it off. Like I am definitely in New York City.

[Paula Pant]

I thought you were going to say rats actually when you were beginning that.

[Joe Saul Sehi]

I haven't seen a rat yet.

[Nick Magiulli]

Oh, well.

[Paula Pant]

Late.

[Joe Saul Sehi]

I still have 24 hours left in town. And then to my. Paul is on my left and then on my right. Mr. Doc G from Earn Invest is here. How are you, Jordan?

[Dr. Jordan Grummet]

I am loving New York. I hailed a cab. Haven't hailed a cab in years.

[Joe Saul Sehi]

Right.

[Dr. Jordan Grummet]

Where I come from we call them or we Uber walked a few city miles. It's been a nice time here.

[Joe Saul Sehi]

Are you planes, trains and automobiles kind of guy like all the different transportation.

[Dr. Jordan Grummet]

I'm trying. I think as I get older I actually dig public transportation more.

[Joe Saul Sehi]

I do, too. I mean, don't get me wrong, I live in Texarkana for a reason, but public transportation, like getting around where you don't need a car in town, that's really cool.

[Dr. Jordan Grummet]

Nothing beats walking, though. If I could, I would walk everywhere.

[Joe Saul Sehi]

Oh, and it's a beautiful city to walk in as well. Once again, not Texarkana, but close. And across from me, our special guest today, the gentleman behind of Dollars and Data. Nick, Magi's back. How are you, man?

[Nick Magiulli]

Good. Thanks for having me on. It's great seeing everyone in person. I've been on all of your podcasts and now to get to meet you guys all in person is pretty cool.

[Joe Saul Sehi]

Yeah, there are two podcasts which are okay and the Great.

[Nick Magiulli]

Which is the best by far.

[Joe Saul Sehi]

Absolutely. Yeah. Nick, by the way, congratulations there in order. You're engaged.

[Nick Magiulli]

Yes. It just happened so on this. On the 16th of November. So, you know, a few months ago. But yeah, it was. It's great. You know, we did that. We went to Japan. Speaking of public transit, they have the best public transit system in the world. I have never seen anything like it. I don't know any Japanese besides, you know, thank you, you know, hello type stuff. And everything's numbered. It's just a system. Like, it's just numbers. You don't even need to know any Japanese. Super like, oh, I need to go from here to here. Google Maps. It's super easy. So it was. I thought, I went in thinking, oh, my gosh, it's so hard to get around. It was the easiest thing I've ever done. It was much easier than New York or anywhere else. So I big, big fan of the Japanese transit system.

[Joe Saul Sehi]

Yeah, I remember a Jim Gaffigan bit where he was talking about. The comedian was talking about how he doesn't like to be ripped off. So he wants to act like he's from a place and he's like. So he gets in a cab in Tokyo. He's like, oh, I'm back in my old stopping grounds, Tokyo, where I'm from and grew up. I'm going back to see the gang at the Holiday Inn and the address is the pound. So good stuff. But a question for you. You know, it's funny, these life events back when I was a financial planner. And of course, you're with Ritholtz Wealth Management. You guys see this too, Nick, These big life events, they're the time when people get interested in financial planning. There's when they seek out a financial planner. But Also, I found in my life, it kind of changed my viewpoint a little bit just about money and how I manage money and the fact that it's not just me by myself anymore. Have you found. I know it's still early, but have you found, like, your view of money kind of change now that you're engaged?

[Nick Magiulli]

Yeah, I'm thinking about it more in terms of like, yeah, we'll have to create joint accounts. Thinking about both of our incomes are going into there now. And that's just. I mean, you don't have to do it that way. There's a lot of discussion to be had about, you know, couples and how they do money. But yeah, I've already started thinking about it differently and like, thinking about long term beneficiaries. There's all so many other things once you have a family, like, yeah, there's a lot. I'm still at the very beginning of that journey. But like, just thinking about it does change your perception versus, like, oh, I just need to focus on me and my net worth now. There's other people involved. So it's a very different game now.

[Joe Saul Sehi]

Would it have been bad, guys? Would it have been bad if he started with, well, I'm thinking about prenup?

[Paula Pant]

No, that would have been great.

[Joe Saul Sehi]

Well, no, it's good to get there sooner or later. I'm saying if that would have been the first thing out of his mouth, I might have questioned where we were headed.

[Paula Pant]

No, if it was the second at all.

[Dr. Jordan Grummet]

No, it's the second.

[Joe Saul Sehi]

It's the second. I'm fine. The first one, I'd have been like, let's have a chat. Nick. I don't know, but Paul is like, nope.

[Paula Pant]

Yeah, I disagree. Because, you know, for somebody in the financial industry and in the financial space, when I think of marriage, I think of prenup. When I think of a child, I think of 529 plan. When I think of any given major life event, I think of.

[Joe Saul Sehi]

It's like you're at the doctor and they. They hit you in the.

[Paula Pant]

Yeah, yeah.

[Joe Saul Sehi]

What's the thing, Doc?

[Dr. Jordan Grummet]

What?

[Joe Saul Sehi]

What's the thing they hit you?

[Dr. Jordan Grummet]

Reflex hammer.

[Joe Saul Sehi]

The reflex hammer. Thank you.

[Dr. Jordan Grummet]

What is a reflex hammer for 300?

[Joe Saul Sehi]

I don't have any idea.

[Paula Pant]

It's the thing.

[Joe Saul Sehi]

I get it. I got it.

[Nick Magiulli]

It was a show.

[Joe Saul Sehi]

It was a show. Thank you. Welcome back to Joe Gets Schooled on his Own Podcast. Well, we're super glad you're here with us, Nick. We got Nick, we got Paula, we got Jordan, Doc G. And today, our topic that we're going to get into is this. I was just searching, reading some of the brilliant stuff people write on the web. This was written by Jack Raines. He writes at YoungMoney Co, and Jack wrote this piece about you only have to get rich once. He says hitting it big in the market is electrifying, but can you hold on to what you made? And it's funny because it's beginning of 2025 as people hear this starting out on a new year and the one thing we don't want to do is mess it up right. We want to get this right. And so you three are all people that have been investors helping people invest for a long time. I'd love to dig in, get underneath the hood and what are some of the ways that people have messed up that maybe we can help our stackers not do that? That's our topic today. We're going to dive into that first. We want to make sure this stays free for everybody. So we have a couple sponsors that we need to say hello to. We're going to say hello to them and then we're going to dive right in. Well, debt can really take a toll on you between minimum payments and interest rates. It's really stressful and I've been there stackers and at times it feels like you just can't get ahead. Well, Navy Federal Credit Union understands that's a huge stressor and they're here to help. Navy Federal Credit Union has all the financial tools and resources you need to dominate debt. Here's what you do. Put together your strategy. One piece of a strategy might be to lower those interest rates as much as possible so you can sock even more toward those principal payments, right? And right now Navy Federal Credit Union is offering a 0% intro APR on credit card balance transfers for up to 12 months. Plus you can get 250 when you spend 2500 dollars in your first 90 days on a cash rewards or cash rewards plus credit card. Don't let that drag you down. Visit Navy federal.org to start dominating debt today. Navy Federal Credit Union Our members are the mission. Navy Federal is insured by NCUA. After the intro rate expires. Variable APRs are 15.15% to 18% based on creditworthiness. Rates are subject to change. ATM fees for cash advances are up to $1 at non Navy Federal ATMs. How high is the interest rate for.

[Joe's Mom's Neighbor Doug]

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[Joe Saul Sehi]

This high.

[Joe's Mom's Neighbor Doug]

The air is really, really thin up here. The Laurel Road Very High Yield Savings.

[Nick Magiulli]

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[Joe Saul Sehi]

All right, so our topic today, ways you can step in it. I could have made that a positive. I prefer the negative. Paula, what's a way somebody could really step in it in 2025 when it comes to their investing, their saving, their.

[Paula Pant]

Financial plan veer off course as a result of fomo? Oh, FOMO is big. And oftentimes you know better, right? You know that you should put the majority of your assets that are in public markets in index funds that are asset allocated in a very specific way. Blah, blah, blah, blah, blah, blah, blah, blah, blah. And then you hear about somebody who like made it big on crypto, or you hear about somebody who made it big within video or individual stock picking, and all of a sudden you have all of this FOMO and you start fomoing in a way that is against your better judgment.

[Joe Saul Sehi]

It's so easy. It's so easy to do. I mean, I remember I missed Nvidia. I totally, completely missed it. I remember it being a crappy graphics card company and totally missed the whole AI thing until I thought the train had already left. It clearly hadn't. But I was like, well, I'm behind. I'm not going to grab that. But what's interesting is I found right after I missed it, I would go, I'm on like Yahoo Finance. And I'd say, I'd say, hey, this CEO of this company just invested a bunch of money in their own company. And I would go take stupid money and put it in this company because I want the next one. You know what I mean? So the fomo, because I missed number one, Paula, I now think I got to grab another one so I can be the hero next time.

[Paula Pant]

Right, right, right. So you're like almost randomly picking individual.

[Joe Saul Sehi]

Stocks just to make up for it. Yeah, luckily not a not a lot of money. So, Nick, there's the question. Paula posed the question. You get to be our savior. Then I don't know if you have this answer or not, but how do you set up your plan so you stay away from FOMO in 2025?

[Nick Magiulli]

I think the way to do it is you want to have a very small percentage of your portfolio as like fun money. So you can get that out of your system without really betting the farm, so to speak. That's one problem I'm thinking About people, like, trying to get in and like, oh, should I put 30, 40% of my portfolio into this stuff? I'm like, you got to really think about this because it could be 2025, could be the. The 2022 again, we don't know. I hope not. I hope markets keep doing well and perform well and all that. But we saw what happened after 2021. I'm not saying it's going to happen in that exact way, but you saw what happened in 2022, and it was the exact opposite. All those things that were going up overnight, the. The flip side happened. So when I'm thinking about this problem, I'm just thinking about, like, think about over concentration. So not. People are just trying to get pulled in, getting sucked in, but people have already done well, what do you do now with those positions and trimming back, rethinking how to diversify?

[Joe Saul Sehi]

You're saying it's okay to get into it, you know, to go ahead and dive into the thing so you don't fomo, but limit the exposure so you don't get screwed?

[Nick Magiulli]

Yeah, I would say no more than 5% of your portfolio because you get the kick out of it. And like, what I even noticed what you're going to do, and this is my notice as well. Like, I used to have, like, individual stock here or there a long time ago. You know, my main portfolio, 97% of my portfolio was index funds. So on a daily basis, that's moving far more than my individual stock. But I would still check the individual stock price even though it really made no difference. So I was getting that out of my system without threatening. And that's the same thing. Probably most. Most people that are active investors do it as long. I'm assuming they have like, you know, even if they have just a little bit in that. In an active portfolio, because it's like a bed or it's like a. You identify with the investment in a way that you don't identify with the passive investment. Like, I don't. The s and P500 goes down 10%, I don't go, oh my God, I'm an idio. It's like, that's just what happened. But if I bought Nvidia or Tesla or whatever and it goes down, then it's like, wow, I'm an idiot for buying.

[Joe Saul Sehi]

It's on you.

[Nick Magiulli]

Or I'm a genius when it goes up. Right. So that's just my corollary to that. That's how I would think about it.

[Joe Saul Sehi]

Right.

[Nick Magiulli]

Just. I think it's very difficult to just go to zero because some people just can't help themselves and they might do something crazy. So I'm like, hey, take a very small portion, have some fun with it, and don't. But don't know the limits. Don't go beyond that. If it's. It starts to do really well, pair back to 5%. You. If that 5% grows to 10, pair it back to 5 and do it again. And if it keeps working, you'll keep making money and you have no real downside, obviously, in that sense. Right?

[Joe Saul Sehi]

So it is so funny because I'm just like that. 97% of my portfolio is in index funds. 3% is stocks. I have this crazy stock. Paul, I told you about the stock a while ago. It went through the roof. I'm still way up. It's Lumen. I've talked about this live on our show before. It's Lumen. I literally bought it for the same reason I just said earlier. I saw the CEO was loading up, then I loaded up, it immediately went down. I then told everybody how dumb that was because I, by the way, I put, like, a thousand dollars in the stock. I put nothing in it. Right, but still, to your point, Nick, I'm not checking my portfolio. I'm checking the stock I have a thousand dollars in over and over and over. And then somebody in our basement Facebook group goes, joe, wow. With that Lumen, that's fantastic. I'm like, what?

[Nick Magiulli]

What?

[Joe Saul Sehi]

And then I saw that Lumen now was like the piping for AI and all of a sudden, I got really excited. And to your point, Nick, all of a sudden, I'm fricking brilliant. Like, I am great.

[Nick Magiulli]

You knew it. The CEO was loading up, obviously.

[Joe Saul Sehi]

Right? I know. But then I do the math again, to your point, this means nothing to my portfolio. Means nothing. I do the math. You know what Lumen has to do for it to have any bearing on my life? This thing's got to go from, like, $6 to, like, $6,000.

[Dr. Jordan Grummet]

But all joking aside, if that keeps you from doing stupid things with the rest of your portfolio, it's amazingly important.

[Joe Saul Sehi]

For you, which is why I love Nick of Let's make sure the risk that it's going to create my portfolio.

[Nick Magiulli]

Is a lot less ego release valver something. I don't have a good term for this, but that's kind of how I think about it, is like, let it out and just get it out of your system and do it. And I don't do it anymore because I've learned the lesson too many times. I don't even do it. And it's not an identity part for me. I don't even touch it. Like I've not. I will not do another private investment or individual stock the rest of my life. I can tell you that with certainty.

[Joe Saul Sehi]

Not at all.

[Nick Magiulli]

Unless I own 0. Unless I own this like it's my own company. That's the only way I could.

[Joe Saul Sehi]

Right?

[Nick Magiulli]

Nope, won't do it again.

[Joe Saul Sehi]

You wouldn't invest in aluminum? Nope. Nothing.

[Nick Magiulli]

Yeah, nothing against people that do. I just won't do it again. After what everything happened. I'm not doing that again. There's no point. So it's, it's, it's a waste of time to energy and attention. I could be doing other things. It totally is profitable.

[Joe Saul Sehi]

I've checked it three times today. Yeah, I have no money.

[Nick Magiulli]

Are you checking it right now? He's like, actually, I will see, I don't have any notes here. I'm just checking.

[Joe Saul Sehi]

Our listeners can't see this, but I have an iPad open in front of me. You guys can't see it and. Yeah. Oh, look at.

[Nick Magiulli]

Oh, Mark is closed actually, so that's not happening. Maybe after hours.

[Dr. Jordan Grummet]

So Joe, what an illuminating example.

[Joe Saul Sehi]

Nice. Well, what's another way to stay away from FOMO 2025?

[Dr. Jordan Grummet]

Oh, I think it's the individualized investor statement. I mean this is the way we are going to plan our long term asset allocation is we are going to put it down on paper and it is going to match our long term goals. And I think if you have that written down and you review it, especially when things are going crazy and you feel like you're missing out and everyone else is cashing in, this is your time to go back to the basics and say this doesn't really fit my investor statement and so I'm going to stay away from it. I think it just keeps us on course and I think it's the best way to navigate these times that are going to change all the time. Right. Every month, every year, something new happens. Someone else becomes a superstar and how are we going to stay away from that? And we can even write in that pressure valve right into it. Our investor statement can say that 5% and it will not go over 5%. It's a great way of kind of sticking to your guns.

[Joe Saul Sehi]

Wow. It's funny, we just recorded an episode of Afford Anything and we talked about exactly what Doc was talking about. Paula, about begin with the end of mine.

[Paula Pant]

Right.

[Joe Saul Sehi]

And does this meet the Goal number one. But then number two, the thing pros know that a lot of our do it yourself investors don't know this idea of an investment policy statement.

[Paula Pant]

Right, Exactly. Yeah, we were. So we talked about that investment policy statement and it was actually very much in a context that was similar to this in where your asset allocation needs to reflect your goals. What are you investing for? All savings is deferred spending. So are we deferring for retirement? Are we deferring for a 529 plan for a child who is currently 5 years old? Like, what are we doing here? And in the context that we were talking about it on the Afford Anything podcast, we were talking about what to do if you've. Among other things we're discussing if you have a bucket of money that is sufficient for reaching your goals, you could then have additional surplus money outside of that. That is wild card money.

[Joe Saul Sehi]

And then who cares?

[Paula Pant]

Right? Yeah, exactly. And then just who cares? Because that particular bucket of money isn't tied to any type of long term goal. It's just throw it out there and see what happens.

[Joe Saul Sehi]

If lumen doesn't matter to meet my goal, I could load up on it.

[Paula Pant]

Right.

[Joe Saul Sehi]

But then again, I think, Nick, you know, with your approach about using index funds and even when somebody gets more scientific like you guys will at your firm, I also think about throwing a lot of money at something that's a bet versus putting it into this excess money into something sustainable that can build wealth that maybe helps my community. Right. Helps the world around me. I don't know which one I would rather do.

[Nick Magiulli]

Yeah, I think Paul hit the nail on the head. It's like, what are the goals? Like if you have a community building goal, what is going to most accomplish that you could put it into? Like, you know, call options and derivatives and maybe you'll build a huge community or maybe you might not build anything. So you have to like, how much.

[Joe Saul Sehi]

Do you care about.

[Nick Magiulli]

Yeah, exactly. So you can. The portfolio. I agree. It should be like matching to the goal set or what you kind of want out of the goal set. If it's like, oh yeah, it would be nice to do this extra cool thing. If it happens, it happens. If it doesn't, no big deal. Then yeah, you can do a high volatility or high variance investment compared to something where like, yeah, I really need to grow this for, you know, my retirement or whatever. One question though. How often. So Doc and Paula, how often do you guys do these investment policy statements? What's like the cadence? Is it annual Is it, Is it something else? How would you know when to update it or relook at it and see? Does anything need to be changed?

[Dr. Jordan Grummet]

I mean, I think you should write it once, look at it every year, and then change it for major life changes.

[Nick Magiulli]

Right.

[Dr. Jordan Grummet]

And so am I retired yet? Yes or no? Is a kid on the way? Yes or no? Like, what are the big things that are. Has there been a death in the family? Unfortunately, yes or no? I think all those are great times to modify. I think you only have to really create it once, but then it's the continuous process of reviewing and modifying.

[Joe Saul Sehi]

I feel like it's like fixing the engine.

[Paula Pant]

Yeah, I would agree with that. I think that's a wise way to do it. And also if you're rebalancing your portfolio annually, that would just be a very natural time to, to reread that statement.

[Joe Saul Sehi]

Is this engine working right and do I need to tweak?

[Nick Magiulli]

Yeah, yeah.

[Joe Saul Sehi]

Nick, let's stick with you. What's another way we could completely mess it up in 2025?

[Nick Magiulli]

I don't think this is necessarily relevant to 2025, but just in general, I think with people who are getting very wealthy, I think a problem I start to see is the identification with the investment to the point where that's the only thing they're focusing on. And I think this is especially true for people who are higher earners. Because you're doing well, it's something that's easily measurable. Like, oh, look, I can see the numbers in my account go up over time. I think it's much harder to compare that to like your health or something. Yes. We could do a VO2 max test or other things, but most people don't have that readily available. Right. So it's the easiest thing to measure. So I think it's because it's the easiest thing to measure. The easiest target. People overly focus on it. So I think on the way to getting rich, a lot of people lose themselves in that and they forget about everything else.

[Joe Saul Sehi]

Instead of being. It's about the goal, you're saying. So it's no longer about the goal. It's. I'm a crypto investor.

[Nick Magiulli]

Yeah. Or whatever it is.

[Joe Saul Sehi]

Well, I'm a real estate investor.

[Nick Magiulli]

Whatever it is, it's like, oh, I'm just going to keep doing this thing because I need to keep growing and keep growing and they're forget like why they got into in the first place. And even what Paul is saying about most portfolios, I think in the US this is maybe A little controversial, but like, what are the goals? If I'm being honest, most wealthy people, the goal, without me saying it, is bequests, they don't even realize it, but most of the goal is bequests. So I would say over half, if not 60 or 70% of the assets of most, let's say million dollar plus households wind up being bequested. So they're not going to spend it, they're not going to use it now to give to their children. It's going to be given away when they die. And so because of that, I know there's tax reasons for that, but I think that's. Is that really the goal you want? And I think most people, the answer is no. If you asked a 30 year old, a 40 year old, hey, guess what? You're going to work really hard and at the end of your life you're going to give away 60% of your money. When you're dying, you're not going to spend. Is that what you want? I think most of them would say no, but I think that's what ends up happening.

[Joe Saul Sehi]

Right.

[Dr. Jordan Grummet]

So, I mean, most people don't even want to accumulate. I mean, a lot of people are trying to figure out ways that, yes, quote, unquote, I want to retire because I have enough money, but I still don't want to touch the principal. Yeah, like most people are still.

[Joe Saul Sehi]

Well, because psychologically, psychologically, once that big pot of money starts draining, you freak out. Even if you've got so much Runway, you couldn't never outlive it. There's no way you're going to outlive it. I saw this firsthand. People would still freak out, like, oh my God, my statement's down $1,000. Well, you've got $2.6 million and you're 78 years old. You're going to be okay. There's plenty there.

[Dr. Jordan Grummet]

I think it's the downside of spending so much time making money. The goal instead of the tool that it's been the goal for so long that even when you get to decumulation, where you should actually be spending down, that's funny. People can't do it because it's been how they've been thinking about this for the last 30 years as they've been accumulating.

[Joe Saul Sehi]

I saw a financial cartoon that was a lot like the political cartoons. You see the same style. And it was a woman and her friend and she's walked into the room and said, now that Larry's retired, this is all he does. And he's sitting with spreadsheets in front of the computer and it was just this sad indictment of the dude has no purpose.

[Dr. Jordan Grummet]

I mean, look, my father in law just died and they worried about money their whole life and he died with more money than he ever imagined having.

[Joe Saul Sehi]

And worried about it till the very end.

[Dr. Jordan Grummet]

I think they worried about it. They made decisions about even his end of life care based on money, which didn't matter.

[Joe Saul Sehi]

You know, clearly sticking with you, Jordan, I feel like especially in the geekier part of the community where we live, the money geek community where we live, we don't undervalue money like the broader world does. I feel like a lot of the broader world makes some decisions that are not at all based on your values, how they spend money. I feel like a lot of the money geeks out there, they're great at valuing the money, but they're not great at valuing the other thing Nick is talking about, which is time, right. That I'm so obsessed with being X kind of investor. I just got to keep building this because it's what I know.

[Dr. Jordan Grummet]

I think time is the most precious resource that we have zero control over, right? So from the day you're born to the day you die, you get a certain amount of time you can exercise, you cannot smoke, you can wear seatbelts, all that may be you might increase it, but you have very little control over it. And so the truth of the matter is winning the game is trying to look at those time slots of life, months, years, days, whatever you want to call them, and filling that time up with like really cool, purposeful, exciting stuff and getting rid of stuff you don't like. And so that's winning the game is, is through the years you want to increase the stuff you love and get rid of the stuff you don't love. Money is a great tool if you're willing to use it to get rid of the stuff you don't love and pursue things you do love. But it's really hard to convince people to do that.

[Joe Saul Sehi]

It is, it is very hard. But is that maybe number one on the 2025 list, Paula, is create this list of what do I want to actually do.

[Paula Pant]

I think the notion behind a New Year's resolution, so we see this not just for 2025, but for the start of any given year is really that clarity around what is it that I actually want to do? How do I want to direct my energy, what do I want to add into my life or what do I want to subtract from my life. That is sort of the spirit of the New Year's resolution. And of course, it's gotten in some circles. It's turned into a bit of a caricature of itself because there's the proverbial, like, oh, this is the year I'm going to lose 20 pounds after this donut.

[Joe Saul Sehi]

I'm going to make the workout matter by adding a donut.

[Paula Pant]

Yeah, exactly. But, I mean, the spirit behind it is that any type of a new start, a symbolic new start, is naturally a good inflection point. It's a time when we're a little bit more motivated to make those changes.

[Joe Saul Sehi]

We're diving into New Year's and setting stuff that sticks again this year, like we did at the beginning of last year on Stacking Benjamins. So stackers, you're going to see a bunch of stuff about that. But do you guys know what the date is? There was a British firm that did this research. What is the date that collectively, on average, we give up on our New Year's resolution?

[Dr. Jordan Grummet]

January 2nd.

[Joe Saul Sehi]

It's a little Mr. Cynical. Wow.

[Paula Pant]

I would guess, like, late January, early February.

[Joe Saul Sehi]

Nick.

[Nick Magiulli]

Yeah, I would say, like, the third week. I'm going 21 days. Like, three weeks in January 12th.

[Joe Saul Sehi]

Okay, two weeks in two weeks.

[Dr. Jordan Grummet]

I want to be thoughtful about this idea. And we say this a lot about, like, what do we want to do? I'd love to change the conversation to who do we want to be?

[Joe Saul Sehi]

I thought he was gonna say, who do we want to do? It's not that kind of show, man.

[Dr. Jordan Grummet]

But the truth of the matter is, the to do list can last forever. And what we all know is when you actually accomplish some of those to DOS, you start creating new to DOS. But I love this idea of thinking about 2025 as becoming the people we want to be. So it's not whether you go to Italy or Japan or those kind of things. It's whether you're the person who likes new experiences and new places and meeting new cultures. And you can do that locally. You can do that state to state. And, yes, you can do it outside of the country, too. But the truth of the matter is there's always going to be another place to go. And so I love this idea of really changing it into, like, who do I want to be? And how do I start pursuing those actions that more align with that thing?

[Joe Saul Sehi]

Let's keep it with you. We've heard Paula's. We've heard Nick's. What's something else that we don't want to mess up in 2025 with our money.

[Dr. Jordan Grummet]

I think analysis paralysis, oh, look, there's a presidential election. People are talking about all sorts of scary things like tariffs and tax cuts and how's it going to affect me and what am I going to do? And I hear so many people who get so anxious that they do nothing. They have money, they're making money, they're in the accumulation phase. And if you read Nick's book, which is a wonderful book, just keep buying. Like when you're in the accumulation phase, you want to keep buying. You don't have time to get so paralyzed by changes in the world that you're leaving your money on the sidelines. And I think a lot of people are at risk for that in 2025 because we feel as a country more confused than ever. We don't know what's going to happen. We don't know what's going to happen with our economy, with the stock market, with our jobs. And so I think a lot of people are sidelining their money and I think it has long term consequences.

[Joe Saul Sehi]

Oh, yeah. And you can totally see, Nick, I can hear it in my brain, somebody going, you know what? I'm going to see how this plays out and then I'm going to put my money back in the stock market.

[Nick Magiulli]

That's a classic thing. It'll definitely happen. I mean, there's probably even, I bet it's politically motivated, if we're being honest. Like it was politically motivated a few years ago and it was politically motivated before that. So it just seems like this pendulum of people getting in and out of markets. But obviously, you know, you've seen all those election things, like it's if you only invested during Democratic regimes or Republican regimes, you would have made far less money than if you just stayed invested for all of them.

[Joe Saul Sehi]

Yeah, right.

[Nick Magiulli]

So it's the same thing over and over again. But I mean, thank you for the plug, Jordan. I'll pay you after the show.

[Joe Saul Sehi]

Yeah, but how do you get out of that? Because there is a lot of fear. I mean, you know, our big news organizations are built on fear. Right. About. Oh, well. And you look at cheese, the state of tv, quote, news today, which is talking heads on one side or on the other side. I feel like it's a football game. We want Republican or we want Democrat and we're going to talk about how much we have to fear the other side. How do we get that out of our brain so we can focus on actually getting ahead in 2025?

[Nick Magiulli]

Yeah, I think the at least I'm going to say this from a US Perspective, because I'm assuming that's kind of where this fear is coming from, is like a new President Trump's coming, etc.

[Joe Saul Sehi]

But it's still. But as an aside, no matter where you live, I'm sure somebody has a similar fear in their country.

[Nick Magiulli]

Yeah, Yeah. I think. Well, at least in the US when I think about it, it's like, let's just see, like, let's hope our institutions are as strong as they are such that anyone. You know, there's that. That old Warren Buffett joke about, you know, you want a company so good that even an idiot could run it because even one day, one will, or something. Right? That's the joke. I'm not saying President Trump's idiot. You get the point. It's the same analogy of, like, who knows who's going to come in, who's going to. I mean, he's been president before. We survived that. Obviously, there was. Everyone wants to say a lot of stuff. We got through that. So I'm a little less worried about the future. Of course, there's tons of uncertainty, but people think, oh, Elon Musk is going to come in and cut 80% of government jobs. I don't think that's going to happen. You know, GDP, our 25% of our GDP is government jobs. You do that, you can just. You'd see a massive drop in GDP would be a nightmare. So. So I don't think something like that's going to happen, but I do think there's any more scrutiny, there's going to be more uncertainty for those working in the government, things like that. So there is some legitimate fear in those very specific circumstances. But I think the institutions will protect a lot of these things from happening, from these massive. This is not Twitter, right? This is not X, where you can come in and just cut 80% of jobs because you are allowed to do that because it's a private company and you're allowed to do that if you own the company. But in the case of the US Government, it's not really the same. So I think that's my counter to that. It's like, I know there's a lot of uncertainty, but we have institutions and things that'll protect from very massive, sweeping changes very quickly. At least I think so. I would hope so.

[Joe Saul Sehi]

My friend Paul Olinger, a comedian who has the Reasonably Happy Podcast, recently rebranded as Reasonably Happy Paul, had a wonderful piece on Facebook that just said after the election, he said, we'll see. And then people that were very pro Trump were like, oh, it's going to be great. It's going to be whatever. And then all Paul wrote was, we'll see. And then people on the other side are like, no, we got to be afraid of this. We got to be afraid of this. And to your point, Nick, then he wrote, we'll see. And it was wonderful. Just going, you know what? Let's see. But even then, Paula, I still think I can't do anything about that.

[Paula Pant]

Right.

[Joe Saul Sehi]

You know, I can't. There's. There's nothing I can do.

[Paula Pant]

Well, and I wonder if that's why people are prone to excessive speculation about what might happen in the future. Because I think that it gives people a false sense of control. If you think that you can make predictions about what's going to happen and then make moves today based on what you believe will happen in the future, it kind of gives you this illusion that you have some degree of control over it, when, in fact, statistically speaking, you're more likely to put yourself into a worse position. An example that I can think of to just, just reflect back on the last few years, there were a lot of people who said, well, prior to when interest rates rose, people said, well, as soon as interest rates rise, home prices are going to fall. And if you actually took, like 10 seconds to look at the data, you would actually see that historically there is a slight positive correlation between interest rates rising and home prices rising, historically speaking. And so there was just no way precedent for believing that home prices would fall when interest rates rose. And yet people wanted to believe it, so they did. And what was quite sad was that people who wanted to buy homes decided that they would just wait for prices to drop. And so then they'd waited and waited and wait, and they're still waiting. You hear these stories of people who even sold their home in 2017, because how could prices get it? It's already so expensive. How could prices go higher? I'm just going to sell now. I'm going to wait for it to drop, and then I'll buy back in. Right. So anyway, so I think that that, that kind of excessive speculation about the future is a way that we try to find a sense of control, feeling some certainty. Yeah. In an uncertain world.

[Joe Saul Sehi]

It's funny. It's why I like the old Jack Welch phrase where he said, accept reality the way it is, not the way you hope it would be or wish it were. Something like that. Which is a great, great way to look at the world. Which is why back when I was a financial planner, I would have clients that would come in and they want to talk about that type of a topic. Oh, my. Do you see what's going on with Intro? What's going on with this election? What's the stuff? And I would immediately go to their financial plan. I would look at the milestones we built for every year, and let's say, Nick, you're my client. And I'm like, okay, right now we have to be at $35,000 in your 401k. You have to have 15,000 in your kid's college fund. Where are you at? And then you would go, oh, well, I brought my stuff with me. Look at this. I'm at 37,000. Okay, we're ahead. So we have some choices here. And immediately refocus the entire thing away from all this BS to Nick. What do you need to do to stay on track for your goal? And guess what happened to the election to interest rates? All that. All of a sudden Nick's like, oh, well, maybe I can save less this year. Yes. Or do you want to retire earlier? Yes, I prefer to stay on the gas. Or if Nick's behind, we'd say, nick, what do you want to do? He's not going to talk about Trump or interest rates. He's going to talk about, well, I'll go ask my boss for a raise. All of a sudden, we focus instead on the stuff that we control, which I think is to your point. We get so worked up, Jordan, and all this Pot 3 stuff, as Covey talks about, that we forget there is a lot of stuff we can control.

[Dr. Jordan Grummet]

Well, what's fantastic is most of the answers are knowable. So we don't know what's going to happen in the future, but we know how to best risk mitigate. We know how to make the best decisions we can for what we do know. And that's actually really empowering. And I think we forget that we get caught up in the mindset of all these things that could happen, and we forget that these things are knowable. Like there are reasonable ways to invest and reasonable ways to both accumulate and decumulate, and the knowledge is out there and the people that help us are out there. And so I'm actually very optimistic because in this place where we feel there's so much we can't control, there's some really good basic things we can do, especially financially, that we can.

[Joe Saul Sehi]

I think that's a great last word for the first half. Well, stay stretched out, Jordan. Because we're going to go the opposite direction for round two. We're going to do this again. We got our top three. We're going to get three more. Starting with Jordan here in just a minute.

[Progressive Insurance]

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[Joe Saul Sehi]

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[Nick Magiulli]

Hey there, Ryan Reynolds here. It's a new year and you know what that means. No, not the diet resolutions. A way for us all to try and do a little bit better than we did last time. And my resolution, unlike big wireless, is to not be a raging and raise the price of wireless on you every chance I get. Give it a try. @mintmobile.com Switch $45 upfront payment required.

[Paula Pant]

Equivalent to $15 per month.

[Joe Saul Sehi]

New customers on first three month plan only. Taxes and fees.

[Paula Pant]

Extra speed slower above 40 gigabytes on unlimited.

[Joe Saul Sehi]

See mintmobile.com for details.

[Dr. Jordan Grummet]

I'm Liz, the chief mom officer. And when I'm not busy being the breadwinner of my family of five, I'm stacking. Benjamin.

[Joe Saul Sehi]

All right, man. Doc, you are on the clock. What is, what's the second way that you believe we could screw up 20, 25?

[Dr. Jordan Grummet]

I think we spend a lot of time spending money on things we don't value. And I think we buy the latest, the biggest, the greatest. As I was saying before, I think we think we can buy our way into being who we want to be. And a lot of times we end up buying things that don't serve us. On the other hand, when you feel very clear about what you do value, it's very easy to say, this money's a tool and it gets me that thing I value and let's use it that way. And you have more leftover because you're not spending it on things that just aren't that important to you.

[Joe Saul Sehi]

But that dopamine hit Nick is real, man. You get the new thing. It's pretty cool for about five seconds. How do you, how do you, how do you stop from buying stupid stuff?

[Nick Magiulli]

I mean, I guess you have to know your values. Like, what do you actually value? Like, I do spend money on. I don't want to say I spend stupid money on things I do value, but I don't spend any money on things I don't value, you know, I like going out to restaurants and stuff. So that, and especially in New York City, it's so expensive. A glass of wine is now regularly over $20.

[Joe Saul Sehi]

It was amazing last night. Paul and I were out to dinner last night and it was incredible. We had a wine list at this moderately priced restaurant, but two thirds of the wine list was over a hundred dollars for a bottle.

[Nick Magiulli]

Yeah, I mean, the bottle price, that doesn't necessarily shock me. But just even for a glass now, it's like crazy how I mean, as.

[Joe Saul Sehi]

You divide by 4, 20, 22, 25. Yeah, yeah.

[Nick Magiulli]

So. So that's normal now. And so. But like, I expect to spend that now. I've already had it into my mental model of going out and seeing why, you know, even though, like, you know, you go to Spain and a glass of wine's like three to five years. Yeah. It's like if that, you know, and so it's like, oh my gosh. And it's same quality, basically. So I go out, I expect that. So I expect to spend more in certain areas, but I just don't spend on the things like you have to remember, like, how much I actually care about these things. I do not spend on those things. And so it's just. Go back to your values and there's nothing wrong with. I think, think another reason we have these talks is like, there's nothing wrong with spending money. I think the issue is spending money on things.

[Joe Saul Sehi]

Great point.

[Nick Magiulli]

Don't end up liking. And so I think that's the. What is, what are those things? And how do you figure out what those things are? That's a bigger question, a bigger decision.

[Joe Saul Sehi]

We have good friends that love to go to Michelin star restaurants and then rip them to shreds afterwards. And I got sucked into it twice. And the whole time they're like, this is miserable. I'm like, why am I spending this kind of money to sit across from you talking about how miserable? Don't get me wrong, I'm having fun. I have more fun if they weren't there. But like, we talk about it all the time. Our group of friends were like, we're not going with them to another Michelin star restaurant. Like, I'm not doing it.

[Paula Pant]

Wow. Because when you said rip them to shreds, I thought you meant roast them in a funny way.

[Joe Saul Sehi]

Not at all.

[Paula Pant]

Oh, man.

[Joe Saul Sehi]

Not at all. Just like, oh my God, that sucked. Oh, that was horrible. Oh, I didn't like it, man. Every once in a while we find.

[Nick Magiulli]

Do they like, I Guess where's that? Let's go there.

[Joe Saul Sehi]

Astrid and Gaston in Lima, Peru, they actually loved. And we got halfway through dinner and they were like, this is best meal. Don't get me wrong, it's probably the best meal I've ever had too. But they were like, this is amazing. And I'm like, I love hanging out with you when you're positive the one.

[Nick Magiulli]

It's funny that you knew the only restaurant. I think it's so funny. Like, you like, knew and you was like, in another country. I mean, you must have dined with these people a lot.

[Joe Saul Sehi]

I've dined with them a ton.

[Dr. Jordan Grummet]

It was a wink, wink. I have some friends.

[Nick Magiulli]

Quotation marks.

[Joe Saul Sehi]

Thank God they don't listen to the show because they're like, oh, Joe, you're a jerk. Well, I didn't say them by name.

[Paula Pant]

To Nick's point about getting normalized to hybrid prices in high cost of living areas like New York. Earlier today, Joe told me, he was like, oh, I spent $80 on a cab ride. And I just looked at him and it took me a moment to process. I was like, oh. And the implication is that he thinks that's expensive. Oh, that's why he's saying that.

[Joe Saul Sehi]

True.

[Paula Pant]

Because I'm so normalized to it. I was like, yeah, it was crazy, right?

[Nick Magiulli]

I was like, it depends where. Like from the airport. Oh, yeah, yeah, that's very normal. Yeah. If you were like in just Manhattan, unless you like went up to the Cloisters and came down to Financial District and even then I would be shocked if it was 80. Think it would be a little less than that.

[Joe Saul Sehi]

Well, tell me now. Thanks for telling me now. You should have told me ahead of time, by the way. Isn't that something too, when you spend money, like the expectation, Nick, to your point, like you go in and you expect you know what the bill's going to be and you can then do the mental model of is it worth it to me? Is this something I value enough to spend $20 on a glass of wine?

[Nick Magiulli]

Yeah, exactly. I mean, it's funny because I've slowly seen this creep up where I remember, you know, wine was regularly 12 to $15 a glass and then 15, 20. Now there's places where it's regularly 20, 25. And I've seen places where, you know, there's one place that I actually love this restaurant, but it's a very cheap tasting menu. It's very high quality, but all the wine is super expensive. And they know people get wine, so they're it's like 45 a glass. I'm like, they're basically, it's coming back to them as if they had a 200 tasting menu instead of a hundred dollar tasting menu. So it all comes back to them in the end. But it's like just a different pricing model to get people in the door. And then it's like, oh, yeah, that is a little pricey for wine, but I'm not going to not have wine, so I just end up having it.

[Dr. Jordan Grummet]

Right.

[Nick Magiulli]

So it's, it's interesting how people do pricing mechanisms, but yeah, it's very interesting to me how you think about that, Paulo.

[Joe Saul Sehi]

How do you make sure that you're not spending money on stuff you don't value?

[Paula Pant]

You know, I think similar to our earlier answer about how do you not fomo? It's you account for a little bit of fun money. It's like the, with the diet, it would be the equivalent of cheat day, right. Where you have that built in that one day a week where you can have the pastries I only cheat on.

[Joe Saul Sehi]

Why ending days.

[Paula Pant]

Exactly. I think the same is true with the way in which you spend where you have some bucket of money or some pool of money where you're like, you know what? This is the money that I spend on Amazon. And I know that some of the items I buy on Amazon, you know, I get dish soap there, you know, kitchen sponges, paper towels, like, okay, some of that is our genuine necessities. Some of it is like, what in the heck is. You know, you like look back over that and you're like, what on earth is this? But that's okay so long as you know that overall that bucket is contained.

[Joe Saul Sehi]

I love this whole idea, though, because this is when Cheryl and I were getting our money together and finally getting good with money. We started that weekly meeting that I love that's only 20 minutes long. But you know what the first thing we do, Paula, is we go through just the bank app and how we spent money the week before. Because just on a week by week micro basis, we're like, oh, yeah, that wasn't worth it. That was stupid. And other things are like, wow, that was great. And so we're kind of building values together week by week in this 20 minute period of did we value that or not?

[Paula Pant]

Right.

[Dr. Jordan Grummet]

I love. There's some tactical stuff too that you see people do all the time. Like we used to do spending pauses, right. So we'd be with the kids, or we'd be out and be like, oh, I want to Buy this thing that was not on the list of things we wanted to buy. Or maybe it was expensive. It's like, okay, we'll consider it and if we really want it, we're going to come back next weekend.

[Joe Saul Sehi]

Yeah.

[Dr. Jordan Grummet]

And so just putting that space. Pause. Another thing is buying used. I mean, a lot of times I can find exactly what I want used and it's happening the price or a quarter of the price. And even if that ends up being a bad purchase, you've at least saved yourself a lot of money. So if it wasn't something you valued, at least you didn't spend full price. I think there's some, there's some like little things you can do. A lot of times it used to be. Not anymore, but back in the day when we didn't have such ease to money. Like, it would be like, don't carry cash. Yeah, that used to be such an easy way. Like, so I wouldn't go get a Snickers bar at the vending machine because I didn't have cash. Unfortunately, they've gotten so smart. Now, obviously you can pay with your phone or.

[Joe Saul Sehi]

Well, but that's still, that still works with me because anything that I put on a card is accountable. When we have that 20 minute meeting, Cheryl sees it. Cash is still dangerous for me because it's not accountable. And so I know me, I'm the opposite of what Dave Ramsey says. Dave Ramsey says, don't carry credit cards, carry cash. I never, I have a 20 bill in my wallet right now. That never happens. Never ever happens.

[Dr. Jordan Grummet]

He is hot to spend it.

[Joe Saul Sehi]

I am. Let's go. We gotta finish this episode. Yes. Enough of you, Doc. Nick, your turn, let's go.

[Dr. Jordan Grummet]

That might get him a half a.

[Joe Saul Sehi]

Glass of wine at Nick's favorite place. Yeah, yeah.

[Nick Magiulli]

For the. Okay, I know it's going to come across crazy. I mean, I go to places that are. Where wines, you know, 25 bucks and stuff. But I don't. Like, I have a very weird spending profile. Like, if you looked at my spending, you're like, what, you spend this much on restaurants? I've never, I'm 35 years old, never owned a car, never paid for car insurance. I've been a renter my whole life. You know, it's like all these things. It's like my spending profile is very unique. I don't spend a lot on clothes. Like These are like $20 jeans off Amazon. Like I don't spend a lot on that stuff. So when you look at my profile, it's mostly restaurants. And some travel, and that's about it. Groceries are obviously like relatively cheap, so relative to everything else in the bundle. So if that's. It's food, it's. Food is most.

[Joe Saul Sehi]

If you're, if you're wondering who Nick Magiuli is, if you go in a restaurant and he's the guy in the high end restaurant and cheap pants, just walk up to him and go, Nick. And you're probably right.

[Dr. Jordan Grummet]

It's an interesting point though, because if you live and work, for instance, in New York, it's kind of priced in. Because if you are working, let's say in corporate America, in New York, you're probably getting paid more too. I had this funny conversation where I was talking to my cousin and I had gotten to a conversation with my cab driver on the way to my aunt's house. And we were here in New York and he kind of mentioned, well, I was a doctor in training and I decided I could make more money eventually in pharmaceuticals because, like, I could make tons of money being a cab driver. I'm like, really? He's like, yeah, you can make six figures easy being a cab driver. And I was telling this, this to my cousin who lives in New York, real life, he's like, yeah, but six figures, this isn't that much.

[Joe Saul Sehi]

Oh, yeah.

[Dr. Jordan Grummet]

And here's the thing.

[Joe Saul Sehi]

Thing.

[Dr. Jordan Grummet]

It's a lot when you don't live in New York City.

[Joe Saul Sehi]

Yeah.

[Dr. Jordan Grummet]

And live somewhere where the cost of living is much lower.

[Joe Saul Sehi]

That's the $80 cabaret right there, Nick.

[Dr. Jordan Grummet]

For you, it's priced in to not just your salary, but what you're used to. To then spend more on food.

[Nick Magiulli]

Yeah, yeah.

[Dr. Jordan Grummet]

Whereas people like us, we come here and we're on vacation, it's like, what, $80 for, you know, cab ride. It's a big difference.

[Joe Saul Sehi]

Nick, what's the next way we can mess up our money in 2025?

[Nick Magiulli]

I think making really big changes. So once again, we've talked about, you know, there's a lot of uncertainty next year. I think a lot of the changes you want to make are gradual. And I think gradual steps is the way to go. I think when you try and change, like, let's say you're like, okay, you know what I've had, I had a great run in this one individual stock. I'm going to get out of it. I think going all the way to zero is not the answer. I think you want to phase out of that. Because if you go to zero and then it goes up more, you're going to be Like, Maggie's an idiot. Obviously, if you hold all of it, you don't sell any of it. It goes down. You're going to feel like, like, so you wanted. Like, it's always like this regret minimization you're chasing. So you're like, okay, what's the amount I can sell where no matter what happens, I'm okay? And that's, I think, a lot. Even with changes, a lot of big changes. I know some people can go cold jerk. I'm gonna go from zero to working out five times a week. I think that's not the way. I think the way is how do you go to make a small change? You make a very small change and stick to it, though. I actually only had one successful New Year's resolution, and it was back in the beginning of 2017, and my resolution was, I wanna write one blog post a week. And now it's been almost eight years and I've not missed a single week. So they do work. But guess what? I didn't say I need to write a blog post and have a podcast and do this and do that. I've built my entire, whatever financial creator career I have off one blog post a week. Most of just keep buying was blog posts. Right. And obviously I reformatted them, made them cleaner. But that's not the point. It's really just doing that one simple thing. What's the one change you can do? And just do that every single week or whatever cadence it is, depending what you're trying to change. And that will lead to bigger changes in your life than just about anything. So I really believe in small changes, but done over a very long time. And that compounding just starts to take off in ways you can't even imagine.

[Joe Saul Sehi]

We just had Josh on the show. Josh Brown, who you work with, and Josh was talking about that too. That I think. Didn't he start doing that? Just write one blog post a week?

[Nick Magiulli]

He's done so much content, but, yeah, he was.

[Joe Saul Sehi]

But I think that's kind of how he started. And it opened up doors.

[Dr. Jordan Grummet]

Yeah.

[Nick Magiulli]

And then he started. He was writing more than that. And then he started going and cnbc. And so he's done so many different content things over time, but it's just like sticking to the thing. Like, they have such a strict schedule with, like, okay, we do this show on Monday, we do this show Thursday, we do this thing on this. I post the blog on this day. And, like, they're very structured about that. And obviously that's their role as a CEO, he's like, he's marketing.

[Joe Saul Sehi]

Sure.

[Nick Magiulli]

Our approach and like that's what he does and for himself and for, for the firm. And so yeah, it's, it's just small changes and one of the things that I can do sustainably. So I think going from 0 to 100, some people at work, some people are going to make that change and identify differently and they're just going to be like that forever. But I think when you do that, it's too big. And that's why most people give up by day 12 instead of sticking through with it.

[Joe Saul Sehi]

Well, and I'll put a positive spin on this, Nick, for people in 2025, Paula's that are freaking out about these big goals and how much I have to do. I also like Nick's approach there too. Don't try to eat the whole elephant. Try to save a little bit more in your 401k this month, the next month a little more, this month a little more. Like, I feel like that approach works in reverse as well.

[Paula Pant]

Right, right. In fact, I have the challenge that I put out to my audience that it's 1% challenge. It is exactly that. I developed this as a response to all of the people who would write to me and say, look, I just can't save anymore. I just can't. I can't do it. And so my challenge to them I was like, whatever amount that you currently save, whatever that percentage is, next month save 1% more. And so that is $10 per every thousand dollars that you earn. If you bring home $5,000 per month next month, just try saving an extra 50 bucks. If you do that consistently. Right. Let's say that, let's say your take home pay is 5,000amonth. January, you find an extra 50 bucks worth of savings. February, you increase that. Now you've got an extra hundred bucks worth of savings. March, you've got 150 bucks worth of savings. Keep that up. And over the span of the year, you've increased your savings rate by an additional 12%.

[Joe Saul Sehi]

I love this one. OG has talked about this one before on the show and has talked about all of his years as a financial planner. And they will do that approach. And everybody's like, well, what happens if I can't do it? He goes, you know what, you just call me, I'll help you lower your 401k or whatever the thing might be. I'll help you get through it. We could even try starting out in a savings account. And he's been a financial planner. I think for 20 years, maybe more than that. You know, it's funny, you know how many times people have called to get back that money they didn't think they could save when they do the 1% challenge, you're talking about never, nobody ever, ever, ever has done it.

[Dr. Jordan Grummet]

You know, it's funny because I think what we're talking about, and I think this is important investing just as well as in behavioral finance, we're talking about sizing decisions. And I feel like we're so bad at sizing decisions. So when it comes to behaviorally, we tend to oversize. We go too big and it frustrates us and we don't get anywhere. And I think this comes back to a little bit of what we were talking about in the first half. When it comes to sizing of our investments, it's the same thing. If you're really worried about risk or blowing things up, it's mostly that you're not sizing correctly even. It doesn't even matter what you're investing in. It's if you're sizing appropriately. So if you are like gaga over crypto, I'm not saying don't invest in crypto. I'm saying make the appropriate sizing of that asset allocation.

[Joe Saul Sehi]

It's not all or nothing, right?

[Dr. Jordan Grummet]

And this gets back to the 5%. Like you can do almost anything with 5% of your portfolio and be okay. And if you're going to go for one of these higher risk types of asset, you just got to size it.

[Joe Saul Sehi]

Right.

[Dr. Jordan Grummet]

I think what we're really talking about in a lot of these decisions are how we look at sizing. And a lot of times we go way too to the extremes and don't, don't come to the middle enough.

[Paula Pant]

So what he's saying is size matters.

[Joe Saul Sehi]

I was thinking about, I was thinking about a new brand. I was thinking of invest in anything, but not everything. I just, I just came up with that. I don't know.

[Dr. Jordan Grummet]

I love that.

[Joe Saul Sehi]

I love. Yeah, Paula, you've got the last one. How do we can we mess up 2025?

[Paula Pant]

Doubling down on bad decisions? Oh, you know, let's say that you chase an individual stock, you know, you buy it, the value tanks, but you want to recoup your losses. So you're like, look, it's down.

[Joe Saul Sehi]

I should put more in.

[Paula Pant]

I should put more in. So that, that way I'm, you know, I'm going to just dollar cost average, my average share price.

[Joe Saul Sehi]

Nick Mitchuli says just keep buying.

[Paula Pant]

Yeah, yeah, exactly.

[Joe Saul Sehi]

Come on.

[Nick Magiulli]

Does not apply for individual stocks. I apologize for the listeners.

[Joe Saul Sehi]

You should say that even faster. It doesn't apply to individual stocks. Your results, maybe.

[Nick Magiulli]

Results may. Very important.

[Joe Saul Sehi]

Yeah.

[Paula Pant]

So, yeah, doubling down on those bad decisions. And sometimes that happens. You know, the example I just gave, of course, was individual stocks. But you also have this for major life decisions. Sometimes, you know, you'll know you're doing this when you hear yourself trying to justify a decision to others when they didn't ask for that justification. And what you're actually doing is you're trying to justify it to yourself. Somebody might very casually ask you a question about, oh, you know what, why did you. I know you, you've been applying for jobs and you were trying to choose between, like, these three different companies. What made you choose this one? And all of a sudden you're like, well, I, you know, and you, you find yourself really justifying it. That's when you're trying to talk yourself into it, right? And so sometimes that doubling down on bad decisions, you start over identifying with that bad decision that you made. You start extra embracing it because you're trying to convince yourself that you did the right thing.

[Joe Saul Sehi]

It's the opposite of the whole growth mentality thing, right? You're like, you're trying to prove to yourself, I'm not stupid. I'm not stupid. This is going to go great. And this is going to be, I'm this hero of my journey and this thing's going to rebound for God knows what reason. Right. One of my favorite books in the 90s, it was a very, very dry book. But this guy, he traded futures in Chicago at the mercantile. It was crazy, the risk he was taking. It was called trading rules. What I like about it was all of his rules. And the way around this was your stock price is what it is today, right now. That's all you know. That's all you can know. And if it goes down, it is down for a reason. It might be somebody overseas sold a bunch of it. We don't know why they did it. Might be that analysts think it's a crap stock. But if you're gonna dou down and buy more because your little tiny brain thinks it can outsmart all these external forces that you know nothing about. Are you kidding me? All you know is that's the price today. Do you like it or not? And that, that's what got me out of making those moves, Paula, because I was, I was like, yeah, yeah.

[Paula Pant]

There's a certain freedom that comes when you really deeply internalize the vastness of the market.

[Joe Saul Sehi]

How small I am.

[Paula Pant]

Yeah. The smallness of you in the scope of the vastness of the market, it's. It's humbling when you really reflect on it.

[Joe Saul Sehi]

Saying again, size does matter. Yeah.

[Paula Pant]

Yeah.

[Joe Saul Sehi]

All right. I think that's a great place to end it. I don't know why. Let's see what all of you are doing. We'll have our guest of honor go last. So let's start here. Paula, what's going on at the Afford Anything podcast here in early 2025?

[Paula Pant]

Oh, on the Afford Anything podcast. Well, Joe, you and I were. Were. And currently, as we're recording this, are in person in New York. And so if you go to YouTube, YouTube.com afford anything, you can see, Joe, you and me recording in person just.

[Joe Saul Sehi]

How beautiful we are, Right?

[Paula Pant]

Yeah. But it's rare that we get a chance to have that face to face Q and A episode. So we answered three questions from listeners sitting in the same room in the same chairs that you.

[Joe Saul Sehi]

Same chairs we're in right now.

[Paula Pant]

Yeah, in. Right now. Go to YouTube, YouTube.com afford anything. You'll be able to watch it. And I think there's a. There's something about, you know, you and I typically record virtually, so there's something about actually watching that energy in the same room that I. Yeah.

[Joe Saul Sehi]

And it's so cool that the Cumulus team did for us. We got Tanya back there who's taking care of business for us. Jay, outside Mike. Just a great team that made this happen for us.

[Paula Pant]

Yeah.

[Joe Saul Sehi]

Jordan, what's going on at Earn and Invest? You were just on the show talking about some book.

[Dr. Jordan Grummet]

Yeah. So what's going on in the show is what's going on in my life is the book dropped January 7th. The purpose code, how we get purpose wrong. How we can take it from something big, pie in the sky and anxiety provoking, and make it something we can own in an attempt to be more happy and fulfilled. So that comes out January 7th.

[Joe Saul Sehi]

Earn and Invest came out January 7th.

[Dr. Jordan Grummet]

When this drops January 7th, earn and invest.compurpose.

[Joe Saul Sehi]

Can we predict where it is on the New York Times bestseller list right now? Probably number one.

[Dr. Jordan Grummet]

If it's anywhere even close, I would be ecstatic. But honestly, if it helps someone and if it makes purpose seem approachable to you, that is good enough for me.

[Joe Saul Sehi]

It's great. And by the way, you described it, as a guy who's described this once or twice before, I might have talked.

[Dr. Jordan Grummet]

About this before to somewhere between 0 and 5,000 podcasters. I'll let you decide.

[Joe Saul Sehi]

I still have. I know PTSD is a real thing, but, you know, I have, quote, PTSD from my book tour a couple years ago. Like, oh, but am I saying this again? Did I say that in this interview? Or is it a different interview? Like, Nick, you must have gone through that too.

[Nick Magiulli]

Oh, yeah, 2022, it was like 60 podcasts. It was so much.

[Dr. Jordan Grummet]

Yeah, that's like a weekend for me.

[Joe Saul Sehi]

There were all those podcasts and then the best one.

[Nick Magiulli]

Yeah, yeah, yeah. Everyone knows, you know, afford anything, so.

[Joe Saul Sehi]

Oh, look at the. We don't have time to talk about what's going on at Dollars of Data. What's going on Dollars and Data. What do you got coming up here?

[Nick Magiulli]

So I'm, I'm still blogging, doing my thing. You know, a lot of stuff. My personal life's got engaged and all that, so it's been very fun. But I am working on other project. I'm not announcing it yet. I'm waiting until all the ducks are in a row, but I'll be announcing it next year. It's a. It's another book, but that's. We'll leave it at that for now. So we're kind of just getting everything all put together. But it's going to be very exciting. So very.

[Joe Saul Sehi]

But the blog is fantastic. It's a must read of dollars.com and we'll link to that. Afford anything, Earn and invest in this purpose code book on our show notes page. Guys, thank you so much for hanging out and helping us not mess up 2025.

[Dr. Jordan Grummet]

Maybe we didn't mess up a podcast too.

[Joe Saul Sehi]

Well, let's see. We didn't mess it up, but this next person can. Doug, what should we have learned on today's show?

[Joe's Mom's Neighbor Doug]

So what's stacked up on our to do list for today? First, take some advice from our panel. You're gonna make mistakes, so start making them. Getting him out of the way early is better than worrying about making sure every move is the right one. Second, don't invest to hit a home run. By turning investing into gambling, you're much more likely to lose. But the big lesson, if you're planning to get rich, the real mistake is not inviting Doug to go with you to New York City. Because sure, your wallet might grow, but without me, your fun meter, yeah, flatline. Thanks to Nick Magiulli for joining us today. It's always great to hear from Nick. You'll find his Of Dollars and Data blog wherever you find your web browser. Thanks to Paula Pan for hanging out with us today. You'll find her fabulous podcast Afford Anything wherever you listen to finer podcasts podcasts. And finally, thanks to Doc G for joining us yet again. That guy should score some frequent flyer points this week on Stacking Benjamin's. You'll find his new book the Purpose Code wherever you listen to books. This show is the property of SB Podcasts, LLC, Copyright 2025 and is created by Joe Sal Sehi. Joe gets help from a few of our neighborhood friends. You'll find out about our awesome, awesome [e-mail] along with the show notes and how you can find us on YouTube and all the usual social media spots. Come say hello. Oh yeah. And before I go, not only should you not take advice from these nerds, don't take advice from people you don't know. This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor. I'm Joe's mom's neighbor, Douglas, and we'll see you next time back here at the Stacking Benjamin Show.