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- [00:01]
Joe Saul-Sehy
Are you someone who tries to drive while distracted by your phone? Someone who props it on the steering.
- [00:06]
OG
Wheel or peeks down at it for a glance or just scrolls and scrolls?
- [00:12]
Joe Saul-Sehy
If so, you could be the next.
- [00:14]
Paula Pant
Person to get into a fender bender.
- [00:17]
Joe Saul-Sehy
Get a ticket, veer off the road.
- [00:19]
Paula Pant
Or even cause a crash that kills you or someone else. Enough already. Put the phone away or pay.
- [00:28]
OG
Paid for by NHTSA this episode is brought to you by Navy Federal Credit Union. We know how fast life moves. That's why we have all in one banking to let you keep on banking on by saving time and money and getting a full picture of all your finances. Plus whether you have credit or not, you can build your credit score with the new ability to report on time bill payments. Learn how you can keep on banking on@navy federal.org Navy Federal Credit Union. Our members are the mission insured by ncua. What a filthy job.
- [01:05]
Doug
Could be worse. How could be raining. Live from the basement of the YouTube headquarters, it's the Stacking Benjamin Show.
- [01:28]
Doc G
Foreign.
- [01:33]
Doug
Doug. And how about we talk about fear? What should you fear and not fear when it comes to investing? We'll dive into fighting fear on today's show. But of course, we already know you don't need to fear that. I'll forget your favorite part of the show. I mean, the fans go so crazy for it. They never let me forget to deliver my amazing trivia question. And now, a guy who's always afraid Andy's ice cream shop might run out of vanilla. It's Joe Saul Sei.
- [02:05]
OG
That would be horrifying. In fact, I have nightmares about that. Hey, everybody. Welcome to the guy that keeps Andy's in business, Joe Zalcai. Average Joe. Money on Twitter. I literally went to Andy's once a few weeks ago, and I'm walking up to the window, and the woman slides the window open and she goes, Texas two step. And I go, how do you know? She's like, that's what you always get. And I realized the person at Andy's knows me, which I don't know if that's good or bad. What is good?
- [02:29]
Joe Saul-Sehy
That's a great thing.
- [02:30]
Doug
You're lactose intolerant. How the hell are you a regular at the ice cream shop?
- [02:35]
Joe Saul-Sehy
It's custard.
- [02:36]
OG
I just love to laugh afterwards.
- [02:37]
Joe Saul-Sehy
Andy's is custard.
- [02:38]
OG
Anyway, it's like 45 minutes that keeps giving after. Yeah. And it is custard. Yeah. But the guy that's not custard. He's amazing. Sitting across from me at the card table. Mr. OG's here. How are you, buddy?
- [02:49]
Joe Saul-Sehy
Custard's okay. There's a great milkshake place that I want to try. I saw it on, like, Shark Tank or the Prophet years ago, and I. And I requested information about the franchise because I was like, this is going to be a banger hit. And I just saw one open kind of where Nebraska Furniture Mart is. No, they rejected me. They're like, you're way too awesome for us.
- [03:12]
OG
So incredible.
- [03:15]
Joe Saul-Sehy
I was like, all right. I mean, whatever. But I'm excited about that, so I might do that today. I've got a little free time after this and not do anything tomorrow, so we'll see.
- [03:25]
OG
Perfect.
- [03:26]
Joe Saul-Sehy
Yeah, perfect. Time for milk shake. You know that my milkshake brings all the boys.
- [03:33]
OG
And I love that. Love that Jim Gaffigan bit about milkshakes. He's like, I'm pretty sure I'm lactose intolerant because I've had three milkshakes and I feel like. Exactly. And speaking of amazing, Paula Pants from Afford Anything is here. How are you?
- [03:48]
Paula Pant
I am fantastic. I don't think I've had a milkshake in years.
- [03:52]
OG
Oh, come on.
- [03:54]
Paula Pant
Well, I mean, I've had ice cream and I've had milk. I've just never thought to combine them.
- [03:58]
OG
Delicious.
- [03:59]
Joe Saul-Sehy
There's a guy on YouTube that does it. He shows you how to do it. Like an actual milkshake. Like.
- [04:03]
Paula Pant
Oh, like, like.
- [04:04]
Doc G
Oh, yeah.
- [04:05]
Joe Saul-Sehy
Like an old school.
- [04:06]
Paula Pant
You actually physically, like, shake it.
- [04:08]
Joe Saul-Sehy
Shake. Yes.
- [04:09]
OG
What Paula doesn't realize is you could do Baileys in your milkshake. Paula, no.
- [04:16]
Joe Saul-Sehy
Maker's Mark at a golf tournament one.
- [04:18]
OG
Time, I was filthy good Maker's Mark in a milkshake.
- [04:23]
Joe Saul-Sehy
Oh, my God. It was like the best of all things combined. And it was a hot summer day halfway through the golf tournament, and by about, like, Holt by about hole number 13, it was like, you're on your third one going, I think I'm lactose intolerant and also drunk. I've had three of these. And they poured them in, like, big Styrofoam containers. You're like, that's a lot of ice cream, but it's also a lot of Booze. It's like 5,000 calories of ice cream and seven shots of Maker's Mark.
- [04:51]
OG
You wake up the next morning, you have diabetes and a 7 step program or 12 step program. 7.
- [04:57]
Joe Saul-Sehy
12.
- [04:57]
OG
However many.
- [04:58]
Joe Saul-Sehy
Somewhere in there.
- [04:59]
OG
Yeah.
- [04:59]
Paula Pant
Can I just say, Paulette, perhaps a former writer of the Stacking Benjamin show, is in the other room and Just texted me. She can obviously overhear us. She just texted me 24 absolute best milkshakes in New York City.
- [05:12]
OG
Oh, you know where you're going? As soon as we're done recording dinner.
- [05:16]
Joe Saul-Sehy
Served, bala, you're headed out.
- [05:18]
OG
It's time to to explore. And the gentleman that explores deeper conversations on the Internet, he not only is the host of Earn and Invest, our brother show, but also is the guy behind the purpose code Doc Cheeseback. How are you, man?
- [05:33]
Doc G
I'm good. You know, in high school, I spent three or four years working for an ice cream shop, so I made milkshakes every day. In fact, we used to basically eat three or four of them, drink three.
- [05:44]
OG
Or four of them. I would eat away all the product.
- [05:46]
Doc G
Yeah, but that was back in the day when I could like take in a few thousand calories and there was nothing like I, you know, it was no big deal. That wouldn't work nowadays.
- [05:54]
OG
Now, Jordan, I look at a milkshake and I gained 10 pounds. I'm like, oh, man. Paula, you've got more from Paulette.
- [06:01]
Paula Pant
Oh, yeah. So I was just looking through this list. So there's a toasted marshmallow shake that's available at Bronson's Burgers.
- [06:08]
OG
There's I'm with the look on Doug's.
- [06:10]
Paula Pant
Face here, the burnt honey vanilla shake. There's a Harlem shake. I don't know what's in that.
- [06:15]
Doc G
Nothing beats Portillo's. Here in Chicago, they do like the chocolate cake shake. So they have one of the best chocolate cakes ever. Like most moist, wonderful chocolate cake. And they take a full piece of cake and put it into your shake. It's actually known throughout the world.
- [06:31]
Joe Saul-Sehy
I'm gonna go get two. That's it.
- [06:33]
OG
Doug doesn't wanna know.
- [06:34]
Doug
God. Let's move along, folks.
- [06:37]
Doc G
We got a show to do here. Come on. No one care your mother in law and her butter pecan.
- [06:42]
Doug
When I'm the voice of reason for this podcast, we've gone off the rails.
- [06:48]
OG
Well, there is a risk that we go on and on too long. Speaking of risk, how about that? We're going to talk about different types of risk according to the CFP board and others. What risks are lurking out there in your portfolio that you might be afraid of? And how do we get around those risks as an investor? We had a great discussion on Wednesday. OG was adamant that there's a lot to fear when it comes to investing. And I was like, no, all we got to do is work around it.
- [07:12]
Joe Saul-Sehy
How that went down today, that's exactly.
- [07:14]
OG
What we're going to do on the show. But before we get to that, we have a couple sponsors that make sure that this is all free and you get all this shake discussion with no shakedown for money. How about that, huh? Yeah, you're welcome. We're going to hear from them and then we're stirring the milkshake on Risk. Let's do it. Every day when we're on the road, people around us endanger themselves and others by using their phones while driving. They think they're hiding it, but we've all seen them and we know exactly who they are. For instance, there's the sneak a peeker who darts their eyes between the road and their text. There's also the got a ticketer looking upset because they just got a ticket for using their phone while driving. And what about the fast grower who can't drive five minutes without updating their social feeds? Or the night lighter who has that mysterious glow illuminating the inside of their car after dark? Any of these sound familiar? They remind you of yourself or someone you know? Rethink your behavior before you find yourself becoming the fender benderer, the veering off the rotor, or worst of all, the driver who killed someone. Put the phone away or pay. Paid for by NHTSA this episode is brought to you by Navy Federal Credit Union. We know just how fast your life moves. You've bills to pay, mouths to feed and not a lot of free time. That's why we crew created an all in one banking experience that lets you keep on baking on it can save you time and money with new lightning fast direct deposit setup and it offers checking accounts with ATM refunds and no service fees. Plus whether you've credit or not, you can build your credit score with the new ability to report on time bill payments and with personalized financial insights on my making sense, the ability to view all your accounts in one place, custom notifications and 247 fraud protection. You can get a full picture of your finances. So if you want an all in one banking experience that lets you keep on banking on, sign up today. Learn more@navy federal.org Navy Federal Credit Union Our members are the mission insured by ncua. All right, let's talk about these different types of risk. What I'd like to do is I'm going to bring up one of the types of risks that I have. I've got nine different ones on this sheet in front of me and I just want to talk about a the risk, what people worry about with this risk and then how do we put together a better portfolio that kind of mitigates that risk. All right, so Doc, let's start with you. Let's talk about one that I think is probably the obvious one on this list. It's market risk. Market risk. This is the one, you know, people hear I'm afraid of the stock market, Right?
- [10:00]
Doc G
Yeah. I mean, I hear this all the time. In fact, my mother in law, who is from another country came to the US and was petrified of ever investing her money. Now they eventually invested in real estate, but now that she's older, we talk about taking her excess cash, they sold all their buildings and putting it into the stock market and she's just convinced that she's going to put it in and lose it right away. So this is a real fear for people, especially those people who either haven't been in the stock market before or haven't studied it. It's this idea that the stock market is the place you go to lose everything.
- [10:37]
OG
Oh, gee, when Doc is talking, I mean, real estate is a market to the stock market's a market, but real estate's just another market by another name.
- [10:46]
Joe Saul-Sehy
Well, I mean, this is why using language and the words that we, the exact words that we use really, really matter. If you said, I'm going to go put my money in the stock market or worse, I'm going to go play the market, what does that just sound like in terms of, you know, it just sounds like a game or Bellagio.
- [11:08]
OG
Yeah.
- [11:08]
Joe Saul-Sehy
Or gambling or you know, just. It doesn't sound. If I said I'm going to invest in the 500 biggest companies in the world, that feels a lot differently than saying I'm going to go play the market. You know, it's like, what are you doing? I'm going to head down to the lotto store and go play the market real quick. You know, that's a different thing than I'm going to be a part owner in one of the, you know, in some of the 500 biggest companies in the world. Those don't go bad. Those are easy.
- [11:35]
OG
Yeah.
- [11:35]
Doc G
And I think that, you know, the interesting thing, and this is the conversation I have with my mother in law all the time is people don't realize actually the risk of not doing anything. Right. So she's like, well, my money's in a bank account, it's safe there. So she's 82 years old, so she's got an argument.
- [11:49]
Joe Saul-Sehy
She's people at First Republic, she's 82.
- [11:53]
Doc G
Years old, so she has an argument there. But you know, her family members have lived into the hundreds. And so this money might have to last for a while. And so, yeah, I think a lot of it is the language as you're talking about.
- [12:03]
OG
Well, back on the specific words that Og used, Paula, you know, play the stock market. You don't hear anybody say play the real estate market. And to his point, if we're Talking about the 500 biggest companies in America, is, is it because we don't take the time to realize what's behind the quote, stock market, where real estate. I can see this piece of real estate. I know what it is, I know it's there. So when I think about Coca Cola, I don't think about playing the stock market, but I think about real estate. I see the property.
- [12:31]
Paula Pant
Right. There's a couple of things going on. One is to your point, Joe, with real estate, it's tangible, it's visceral, you can see it, you can touch it, you could lick the walls, you can taste it.
- [12:43]
OG
There's a milkshake that keeps giving lead paint so delicious.
- [12:47]
Paula Pant
It engages the five senses in a way that a piece of paper or these days some pixels on a screen don't engage the senses in that same way. And so I think there is that psychological component in which real estate feels more real because of its tangibility. I think a lot of people to that matter also enjoy gold for exactly the same reason. You know, you hear about more people interested in gold versus say cattle, because unless you live in some very specific places, you, you can't put cattle in, in your own property, whereas you can put gold on your own property.
- [13:23]
OG
Doug's like, dare me, dare me, I'll put cattle in my property.
- [13:27]
Paula Pant
But I agree with the word choice is important because let's take it a step further. It's not just I'll invest in the 500 biggest companies, it's I'm going to become a part owner.
- [13:37]
Joe Saul-Sehy
Owner.
- [13:38]
Paula Pant
Yeah. I'm going to become a part owner of the 500 biggest companies in the world.
- [13:43]
OG
Well, and that's exactly where I want to go next. Paul, let's stick with you. Is that step one to getting around your fear of this risk of the stock market is realize dig a little deeper. And I own this company.
- [13:56]
Paula Pant
I don't know if it's step one in the sense of a linear progression, but I think it's one piece of the puzzle because I think another big component of it is, you know, this goes back to Dr. You said your mother in law came from another country. In many Countries around the world, that ownership is something that can, depending on the laws of the country in which you reside, is something that's a little bit easier to take from you. Now, that's also true with real estate. Like real estate can be. Can be seized by the government, but in a lot of places where currency gets rapidly devalued or where assets get seized, I think there's a little bit of hesitation or a lot of hesitation that's based around that. That's based around the not knowing just how secure your ownership of this asset is. And so I think another piece of that puzzle is understanding the laws of the United States in terms of under what conditions can these shares get seized from me?
- [14:56]
OG
Buy them by. I had 50 jokes. I'm sorry, I'm just thinking about on stacking, Benjamin saying, on afford anything. Last week, we talked about accredited investors, and it's just, sir, we're seizing this from you. You are not fit to own this. Own this stuff. Oh, gee, how do you. You know, because you hear this all the time in your practice. I'm sure playing the stock market use those words.
- [15:20]
Joe Saul-Sehy
How.
- [15:21]
OG
How do you begin to build the case that. You know what? We don't need to play quote. Play the stock market. We need this quote, market risk in. In your portfolio.
- [15:29]
Joe Saul-Sehy
Well, I think it's all about the language. It's like the word risk, right? Like we use the word risk or we'll say, like the risk. My risk tolerance, dude, my risk tolerance is zero. I don't want to take risk. Like, that sounds ridiculous. You know, when I went skiing with Doug, he's like, look, dude, we could do it like a double flip off this. I'm like, I don't want to do that with you. That seems very risky, you know? And then he would do it, and then I would just slowly meander down the hill, and then he'd be all mad because it took forever to get to get to him.
- [15:57]
OG
But does this sound like fan fiction?
- [15:59]
Doug
I mean, he did become a fanboy.
- [16:00]
Joe Saul-Sehy
Doug is a very good skier, and I am jealous of his because he's not good at any other sport. When I play with him, it's just so frustrating. Like, when you play golf, you're like, oh, I will totally kick this dude's ass at anything. And then he skis. You're like, this doesn't seem right. Something is a miss in the universe.
- [16:15]
Doug
Which one of these things doesn't.
- [16:17]
Joe Saul-Sehy
When you say the word risk, you think, like, chance of loss. And I don't think that there's a chance of loss, you know, and I'm going to diversify. I'm going to say, like a caveat here if you're diversified. But I think there's a big risk of volatility. I think that people make mistakes with money because their expectations of what they think will happen and what actually happens aren't aligned correctly. And those, they work both directions of that. If you're looking at your investment account from 2024 and you're like, well, I heard the S and p was up 28%. I'm only up 21. This is BS. That means that you weren't correctly aligned with your, your portfolio was. Your, your expectations and how you invested your money weren't the same and your comparison is incorrect. Or if the market's down 20%, you're like, what the heck? How am I down? I just lost 200,000. That's another one, by the way. I just lost 200,000. No, you didn't. But, you know, I'm down 20%. Like, what the heck? You're going to make a bad decision because your expectations aren't aligned with reality. There's plenty of people out there who, the market goes down 20%, they're like, okay, no matter what it is, stocks or real estate for that matter, Paula, you can speak to this. Real estate doesn't go up in a straight line. There's periods of time where a real estate market or whatever will be a little soft. And if you don't expect that, you're going to be in a world of hurt, you know, whether it's a cash flow issue or something like that. So I think another piece of this, Joe, is expectations with what's actually going on. Like, does your money match your expectations? Maybe that's how I'll finally succinctly, succinctly get there.
- [17:47]
OG
And I think that's interesting because then the question is, is what should my expectation be? Which is a great question to ask. It's a great place to start. What should my expectation actually be with this investment? We could spend by the, the entire hour on this. But I got a lot of different types of risks here because I feel like that's the one we always concentrate on, right? Market risk is the one thing we all think about, and yet it's these other ones, I think that often bite us in the ass. Because the second one on my list here, Jordan, is liquidity risk. Kind of the opposite, right? My money is not available when I need my money to be available. This is a problem that I see rear its head over and over and over.
- [18:27]
Doc G
But that's a problem of advanced planning. We all realize that if you plan carefully, that shouldn't be the case. Right. If you need that money within the next five years, it should probably not be going into the equities market. Right. So there's shorter term investment. There are things like treasuries and CDs and ways to money markets, ways to increase your liquidity for money you're going to need for short term. Whereas a lot of times we're talking about, you know, money that we want to invest for long term, 10, 15, 20 years. So between having an emergency fund for unexpected things and then planning out like I'm going to be buying a house in two years and I'm going to be buying another car in five years, we can plan out to make sure that we are not taking that money and putting it in to an illiquid investment. But the money we're saving, for instance, for retirement, we should feel free to put it in a little bit of a higher risk, higher return type investment, in this case equities.
- [19:24]
OG
But then we see, Paula, people that are planners. Heck, on the afford anything show, you and I take calls and people are planners. When og you and I hear we take calls from people, we hear people are planners. But Paula, I feel like even when people plan to Doc's point, I think we kind of get caught up too much in the O word. Optimization.
- [19:47]
Doug
That's the O word. I've been doing it wrong.
- [19:55]
OG
Doug has maybe a different word. But you know, these uber planners get caught in this liquidity trap because we're so busy thinking about optimization.
- [20:03]
Paula Pant
Right. Right there. There's certainly people who will so over optimize around expense ratios or around tax advantaged account. The tax advantaged accounts one is actually a big one because of course, if you have the option to put money in some type of a tax advantaged account, that seems like it would always be preferable to a taxable account.
- [20:22]
Joe Saul-Sehy
Right.
- [20:23]
Paula Pant
If the choice is get a tax benefit versus don't get a tax benefit. You know, who would say I'd like to forego the tax benefit? Yeah, right. But what you get with a taxable account is flexibility. I mean, for a certain cohort of people who can max out all their tax advantaged accounts and then still have money left over for taxable, it's not an issue. But for the next cohort of people who have to choose between the two, they're not hitting their maximum. It can be a really Painful trade to say, you know what? Here's money that could otherwise get a tax benefit that I'm going to choose, you know, and I'm going to choose to forego that benefit for the sake of flexibility. And it's. That's, I think, particularly difficult when that flexibility is just some hypothetical that may never be needed.
- [21:07]
OG
Yeah. But then the sad thing is you always end up needing it when you think you won't.
- [21:10]
Paula Pant
Yeah.
- [21:10]
OG
Like, oh, I'm not going to need that money. Oops, my bad. Oh, gee. This liquidity risk, I think, though, in some people's head, they overestimate it because, I don't know, I remember. I'm sure this still happens. I'm not going to invest this money because I think I'm going to need it. And so you end up not getting any return on your money because of the fact that you're like, well, what if something happens?
- [21:29]
Joe Saul-Sehy
Yeah, I think that it's less than people who don't have enough cash. Right. Like we were talking about on Wednesday, that you can have people that save too much or not enough. And most of the time it's the people that don't save not enough. But it's the same way with cash. Most people don't have enough cash. That's a hard thing to get. You know, a good cash reserve and build it up. Fewer people have too much. But the interesting thing about cash that we've experienced in my career is that once you kind of get a taste of it, it feels really good, like it's really tasty.
- [22:04]
OG
You mean just having some money sitting idle?
- [22:06]
Joe Saul-Sehy
Well, when you have 10,000, you go, Gosh, you know, 10's great, I feel. But 20, 20 would. Oh, he's so comfortable. And then you get a little taste of 20, and you're like, 20 is nice, but I wonder what 40 would be like. And then you get 40, and 40 is even more comfy than 20 was. And you kind of dream about 70, but that's crazy. And then 70 comes and goes, and all of a sudden you just have this, like, ongoing thing. And people who are going through this go, yeah, eventually I'll stop. It's like, okay, sure. It's like Joe at Andy's. It's not going to happen. There is no stopping once you're there. So you have to draw a line in the sand. Eventually it's too much. And the reasonable place to stop is at. If you've got an addiction to cash, around two years. If you're starting to think in your brain like, well, I probably need to set this, you know, in 2027, I might be going on that trip. So I should probably. I'm going to get a car in 2030, so I probably should have that money set aside. Paula's laughing. Is this you, Paula? Do you have an addiction?
- [23:06]
Paula Pant
I can see it, like, well, because especially when you, when you form these buckets, you know, where you're saving different buckets for different very specific goals. It's like, well, I'm going to get a teeth cleaning.
- [23:18]
Joe Saul-Sehy
Exactly. You can really get. You can get super granular or you can get super future focused and be like, well, I know I'm going to need a car in 2037, so shouldn't that be in cash? It's like, well, I mean, no, you got a while to go. You know, that money should be invested. So I'm a big fan of having a line in the sand. And, you know, and this is for people that have built the emergency fund. You've got the three months, you've got the six months. Maybe you've got a year. Now you're starting to kind of drift into, like, just, I'm piling up cash for no reason. Draw a line in the sand. Go, Look, I've got 200 grand in cash. That's it. Like, everything above 200 has to be invested henceforth, forevermore, until you start digging into that too. Now it convinced me that you need 200. Dig into the 200.
- [24:00]
Doc G
Is this really an issue when you're in accumulation, though? Because I feel like your income, I feel like your income is a high driver of liquidity or can be. Especially for people who have enough money to be saving up for 200, 300. My worry is when I'm in the decumulation phase, that's where I could be like, okay, I don't have any money coming in anymore. I feel like I need to be cash heavy. But if you're an accumulation, I think we underestimate the role of income as a liquidity factor.
- [24:27]
Joe Saul-Sehy
Well, you're 100% correct. In my experience, with people who are spending money from their portfolio, they don't keep a lot of cash. It's really weird because it's the exact opposite. They'll spend all the cash they had and then just be like, I'm just going to take a little bit out every month for my portfolio versus the alternate. In your mind, you're going, well, I would want to have lots of cash because I don't have any income. That's not my experience. In terms of working with retirees anyway. And you're right, it is a subset of people. This isn't the vast majority of people coming in, walking in, going, I've got all this cash laying around like Script McDuck wading through it. What do I do?
- [24:59]
OG
This is a problem. Problem of the Uber planner, the type of person that listens to this show. Right?
- [25:03]
Joe Saul-Sehy
But it doesn't have to be 200 grand either. It could be the person that makes a hundred thousand a year and their emergency fund should be 15, and now it's 20, and now it's 22. 5. And now it's 25. It's like, okay, we got it. You're good with cash. Stop. Get that money. And I like to think about it like a waterfall of buckets. You know, once that bucket's full, it just has to overflow into the next bucket. And if you keep on trying to put a bigger bucket there, you're never going to get that overflow into the next bucket, which is your long term, you know, medium term or long term savings. So just draw a line in the sand. Go at 25 grand, you know, on the 30th of every month, I'm going to look in the account. If it's 26, a thousand, going long term, if it's 24. The flip side of that, by the way, is if it's 24, a thousand is coming back from long term. You get to work both sides of it. But the line in the sand really helps.
- [25:51]
OG
Jordan, I like the fact that you shone a light on liquidity risk. Really important for people in decumulation phase. Like, really important, because if you don't have enough liquidity in front of you, man, you might be pulling money from volatile assets and you don't want to play that game, which I think is.
- [26:03]
Doc G
A real fear we're talking about, maybe fears we shouldn't have. A real fear, right, is that you hit that sequence of returns risk issue during the accumulation, which is what we're really talking about when we're. When we're talking about these things.
- [26:14]
OG
Let's take one more. We'll stick with you. Concentration, risk. I think this is a thing that really, doc. Is much, much more prevalent with new investors.
- [26:23]
Doc G
Yeah, I mean, we've talked about it a lot, you and I as well, on this podcast. Like, if you want to hit it out of the park, concentration is good. The problem is you also could go to zero. Most of us want to be good investors, not great investors.
- [26:37]
OG
Right.
- [26:37]
Doc G
We want to be good Investors, we want to diversify broadly so that we just get those market returns, because that's good enough for most of us, especially if, like, we're in a good job and we're making good income and we're really looking at the long term. But the other side of that is if you want to hit it big, that's speculation, that's concentrated risk. But some of the most wealthy people out there are the ones who did concentrate the risk either in a business or in a specific type of asset, and they either were exceedingly smart or got really lucky. But for the rest of us, I think we have to be looking at broad based within an asset. So they're talking about things like index funds when we're talking about equities, but also without, especially as we get further and further along, whether that be bonds, whether that's real estate, whether that's other types of assets to further diversify.
- [27:26]
OG
Where do we see, Paula, people in your community really stepping it with concentration risk?
- [27:30]
Paula Pant
I think that happens a lot when people are new, because oftentimes when you're new, you don't have, you don't have a whole lot of assets. And so it kind of can feel a little bit silly to be diversifying when you just don't have that much to begin with. There are a few kind of inflection points that will get people to begin investing. Sometimes it's you're 22, you've just graduated college, it's your first job. That might be the impetus that gets you into a 401k for the first time. But for others, it might simply be that you got excited about a particular asset and that excitement drove you to begin investing. And I think we see a lot of this with crypto right now. So that enthusiasm around crypto, the good part of it is that it's gotten people interested in generally the world of investments. The bad part is that some subsection of them are people who don't have many other types of assets. So they've got concentration risk entirely in crypto. And that's their next diversification is like sports betting.
- [28:33]
OG
It's got to be hard og to talk people out of concentration risk when they work for a company. Because you work for a company, you're proud of your company. You wear the T shirt every day. You're like, you know what? I'm gonna invest in my company because I know my company. I go to work there every day. I talk to this. I know the CEO is brilliant. Here we are. Rock and roll. And why Wouldn't I invest more there? Concentration risk has got to be hard to talk that person down.
- [28:55]
Joe Saul-Sehy
Well, I don't think anybody's job is to talk anybody down, is to talk about what the dominoes look like in the directions of both good things and not so good things. So in some cases, you can diversify future savings and investing outside of your company, or maybe you can buy some protection, whether it's like basically insurance on your company's stock, and if it's going to go down, you can kind of be okay with that. Now, that's not available to a lot of people because it's considered a hedging transaction for companies, but there's ways to do it. I think the biggest thing is having a plan going into it. Paula was talking about the person who gets out of college and they started their job and, you know, you get the signing bonus or you get the RSUs, and you're like, cool. That's not the problem. The problem isn't the RSU transaction. The problem is the RSU transaction that happened in 1997 that you're still dealing with in 2025, because you're like, I didn't know what to do with it then. I didn't know what to do with it the year after or the year after or any year in between. And now I've been there 30 years and I'm about to retire. And, oh, by the way, all this money's in this company. And now it's like, it's very difficult to unravel that, especially if it's just a regular stock transaction, because now we see the other end of that, which is it's going to cost me 20 cents on the dollar to get out of it with taxes. Right. Capital gains. The biggest thing is when you get it, if you have company stock or you have a company investment program, it's easy to figure out the strategy to get in. You also need to figure out the strategy of what's your selling strategy on the way out? Are you going to sell 10% of it every year no matter what? And that's going to help diversify you. Are you going to sell last year's grants when you get this year's grants so that you keep the same weighting, Are you going to create a spreadsheet and say, okay, no more than, you know, X percent of my net worth is going to be in. In this one particular company or sector. There's no right or wrong way to do it. But the idea is, is that you want to. You Want to have you have the strategy for going in. You also need the strategy for selling on the way out that you can implement to keep it within the plan.
- [30:53]
OG
There's so many reasons we get concentrated. Either we like the sector, we like the investment. Paula, like you were saying, we, we work for the company. Oh, gee, like you were just talking about. I mean, so, so many reasons why we get concentrated. We've got a few more after the break. We're going to talk about other types of risks. I actually have six more. We've gone through three. We're going to play the fast game on some of these. But at the halfway point of every Friday show, we have this crazy, amazing competition between our three frequent contributors to the Stacking Benjamin show. That is og, Paula and Jesse, who is AKA Doc G today. Jordan, you're on Team Jesse. You want the good news there or the bad news?
- [31:35]
Doc G
It's all bad news. This is trivia. This is me we're talking about. It's all bad news.
- [31:39]
OG
Well, the bad news I think could be reflected in the score. You're not, you're not winning. Doug, what is the score at this juncture?
- [31:46]
Doug
We're in a precarious state after last week. There was some controversy over the question and the answer. The contestants started to try to take a takeover of the whole segment. They were negotiating points as though they could administer themselves like they could just pick how many points they wanted to win or lose. I had to step in and arbitrate and allowed a half point to be awarded to both Jesse and Paula. And so now OG, still in the lead, wearing his all black outfit and holding that sickle like the scepter of death that he is.
- [32:24]
OG
Talk about fear.
- [32:25]
Doug
He has five points. Jesse as just half of that at two and a half points. Paula bringing up the rear at one and a half points.
- [32:32]
Paula Pant
I have a question. When we get to the end of the year, as part of on behalf of the coalition to defeat og, which Jesse and I have formed, am I permitted to donate my points to Jesse?
- [32:43]
Doug
You are not.
- [32:45]
OG
Paul is already presupposing she's at last place we are in April and she's like, yeah, I just want to.
- [32:52]
Paula Pant
Can I get a tax write off for the donation?
- [32:54]
Doc G
You just need to make OG go first so Paul and I can sandwich him on each other.
- [32:58]
Doug
Always goes first.
- [32:59]
OG
OG's gone first every time for the last like two and a half years.
- [33:02]
Joe Saul-Sehy
Threatened me with a good time.
- [33:04]
Doug
I caught that inappropriate joke. Og.
- [33:06]
Joe Saul-Sehy
Thank you. Somebody did. At least.
- [33:09]
OG
I'm probably glad I talked over it then. All right, so I just heard something.
- [33:12]
Joe Saul-Sehy
About getting sandwiched, and I was. I got all. I got all. All flustered.
- [33:17]
OG
That's what's at stake here, is getting that out of your brain. Can Doc G help team Jesse go to three and a half and really close the gap? Can Paula engineer her way into a tie for second place? Ken. OG Pull further ahead. Doug's got the question. What are we talking about this Friday?
- [33:36]
Joe Saul-Sehy
Doug?
- [33:41]
Doug
Hey there, Stackers. I'm Joe's mom's neighbor, Doug. And spring is sprung, hasn't it? That means our friends in Canada and the northern states only have three feet of snow left. And in Texas, well, the rains have arrived. One guy who's associated with spring is Johnny Appleseed. Well, Johnny was just his stage name when he played drums in his high school metal band. His real name was John Chapman, and he was an American pioneer nurseryman. Who knew that was a job I could get in the early 1800s, who introduced trees grown with apple seeds to large parts of Pennsylvania, Ohio, Indiana, Illinois, and Ontario. Apparently, that's a state now. Heck, now that I think about it, we're kind of like the Johnny Appleseeds of personal finance, aren't we? I mean, we're spreading financial education and fun. So we're 48 different countries. You're welcome. So, as a tribute to spring, financial literacy, and Johnny Appleseed, let's ask this question. How long in feet is the longest apple peel ever recorded? I'll be back right after I go plant the seed in Joe's mom's head that we should have chocolate chip cookies after we're done recording.
- [34:52]
OG
That's a good seed. That is a good seed to plant. All right. OG Longest unbroken apple peel. Peel.
- [35:03]
Joe Saul-Sehy
So I'm picturing this as somebody started peeling it, and they just went, I'm going to keep doing this.
- [35:08]
OG
It's with a knife. Yeah.
- [35:10]
Joe Saul-Sehy
And they just kept on doing it and went, holy crap, this is a record.
- [35:13]
OG
Let's go talk to Guinness.
- [35:14]
Joe Saul-Sehy
Let's go have a Guinness. I mean, okay, so I think you'd.
- [35:20]
OG
Have to have a couple of Guinnesses in you just to think this would be fun.
- [35:23]
Joe Saul-Sehy
I know, dude. The judges allow what brand of apple? This was.
- [35:30]
OG
An appley apple. Very appalicious.
- [35:33]
Joe Saul-Sehy
Apple Crab Fuji. Honeycrisp. Well, so it matters.
- [35:39]
Doug
Whatever the biggest apple is is probably the one they used. I doubt they used a crab apple like you used to put in your slingshot as a kid.
- [35:48]
Joe Saul-Sehy
Yeah, horse apples. We have those in Texas. Don't eat those Are brutal juju. All right, so let's see. The biggest apple in the world ever was probably about that big. That looks to be. So center the diameter. What's PI times radius squared? What does that have to do with anything?
- [36:09]
Doc G
Let's give a number.
- [36:11]
OG
Doug, you want to reach across the table and choke them for me?
- [36:15]
Paula Pant
PI R squared. PI R squared.
- [36:17]
Joe Saul-Sehy
PI R squared.
- [36:17]
Paula Pant
PI R squared.
- [36:18]
Joe Saul-Sehy
You got it. I'm going to say that the answer is in feet. It is seven and a half feet.
- [36:27]
OG
Seven and one half feet. Jordan, you think it's high or low?
- [36:34]
Doc G
I think that's low. I think if you cut it really, really thin.
- [36:39]
Joe Saul-Sehy
Oh, I didn't think about that.
- [36:42]
Doc G
You could really carry it out. So I'm gonna say I'm gonna shoot for the moon here. I'm gonna say 20ft. Give Paula some chances here. Like 20ft.
- [36:53]
Joe Saul-Sehy
Feet.
- [36:55]
OG
Seven and a half and 20ft long. Paula, what are you thinking?
- [36:59]
Paula Pant
Well, so I agree that it's functionally a question of how thinly can you slice it, because, dang it, I missed.
- [37:06]
Joe Saul-Sehy
That whole piece of the pie.
- [37:08]
OG
Piece of the apple.
- [37:11]
Paula Pant
Making an apples to apples comparison here. The thinner that you can slice it, the longer this could be. But even with the largest apple, I mean. Okay, so for those of you watching on YouTube, let's say the largest apple was roughly the size of this 28 ounce coffee mug.
- [37:26]
Doug
Look at the flourish she used as.
- [37:28]
OG
She had the cup.
- [37:29]
Doug
All right, Vanna.
- [37:30]
Paula Pant
And then you imagine What a. A 1 millimeter shave, right All. Well, actually, you know what? Now that I'm saying that out loud, because 1 millimeter is pretty darn thin. All right. Okay, let's go 7.51.
- [37:49]
OG
7 points. So you get a chance of one.
- [37:53]
Doc G
Of us beating him.
- [37:53]
Doug
So you want to go in the middle between the 7.51 and OG's or DOC's 20. Is that what you're. That's what you're going for here?
- [38:02]
Joe Saul-Sehy
Well, since when do we get clarification on answers?
- [38:05]
Doug
I just.
- [38:06]
Joe Saul-Sehy
Everyone's teamed up against OG now all.
- [38:08]
OG
Of a sudden, I think, so that's the final answer. I get it.
- [38:11]
Paula Pant
It's a. It's a broad coalition, right? But by uniting coalition votes. It's like Parliament.
- [38:18]
OG
7.5 for OG, 7.51 for Paula. Docji at 20ft, surprise, surprise. He's way up higher. Who knew? Doc G, who often, on a scale of 1 to 10, will guess a million. So you're back there. We're gonna see, though, if maybe this time he's closest. Who knows small business owners. State Farm's there with small business insurance to fit your specific needs. Whether you're starting a new venture or growing an existing one, State Farm helps you choose the right coverage to protect what matters most. Working with a local State Farm agent helps you understand your coverage options. Offering local support to help you achieve your goals. Focused on turning your passion into a thriving business. Knowing your insurance can change as your business grows. Stay Farm here to help you succeed with your business Like a good neighbor, Stay Farm is there.
- [39:10]
Paula Pant
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- [39:27]
Joe Saul-Sehy
A different future is closer than you.
- [39:30]
Paula Pant
Think with Capella University. Learn more at capella.edu. fastest 25% of students cost varies by pace, transfer credits and other Factors. Fees apply.
- [39:40]
OG
McDonald's meets the Minecraft universe with one of six collectibles and your choice of.
- [39:45]
Joe Saul-Sehy
A Big Mac or 10 piece McNuggets.
- [39:47]
OG
With spicy nether Flame sauce. Now available with a Minecraft Movie Movie Meal. I participate in McDonald's for a limited time.
- [39:54]
Joe Saul-Sehy
A Minecraft movie only in theaters.
- [39:56]
OG
Oh gee, you open at seven and a half feet. The good news is if it's less than seven and a half feet, you got it. What are you thinking? Pretty. Pretty excited about that?
- [40:02]
Joe Saul-Sehy
No, I was thinking like an apple peeler and I was thinking how many times can I make a lap around the apple with a, you know, with a apple peeler or you know, whatever. Potato peeler or whatever.
- [40:12]
OG
Yeah.
- [40:12]
Joe Saul-Sehy
And I did not take into account the fact that you could make that really, really, really tiny and like a little ribbon, like an artsy way of doing it. Like, like a great chef would do or something. And yeah, it's going to be. It's going to be way more. I think it's a huge. If I would have thought about that, I would have picked a big number, like a thousand feet or something.
- [40:33]
OG
Paul, how does that make you feel?
- [40:35]
Paula Pant
I think the real answer is probably actually closer to OGs. So I would say like 10, 10 to 12ft is probably the real answer. So I'm feeling good with 7.51 as my guess.
- [40:46]
OG
All right, Jordan, how you feeling at 20ft?
- [40:48]
Doc G
I'm feeling some. A hole was cutting like the smallest little thing you can imagine. So I'm, I'm thinking 20ft. Might even be on the low side I'm going to go against. I'm thinking it's going to be big.
- [41:02]
OG
You're thinking that a hole helped you win. That's what you're thinking.
- [41:05]
Doc G
I'm always wrong, but I'm feeling better about this one.
- [41:08]
OG
Well, let's see. Doug is Jordan wrong again? Paula got this one or does Og got it with the under?
- [41:18]
Doug
Hey there, stackers. I'm chocolate chip lover and guy who knows you have to ask five times for what you really want. Joe's mom's neighbor, Doug. Ah, Johnny Appleseed. While stories persist to this day of angry frontier women accusing Johnny Appleseed of spreading his seeds willy nilly, it turns out that's not what happened. Apple seed was very carefully planted his nurseries across Ohio, Pennsylvania and nearby states wherever husbands couldn't catch him while he wore pauper's clothes. That was by his own choice. Historian Paul Aaron argues Chapman was actually a successful businessman. He bought many of the parcels, parcels of land on which he planted his seeds and ultimately accumulated about 1200 acres across three states. Planting seeds creates lots of real estate based wealth for Johnny. So in celebration of Johnny and planting some money seeds. Oh, I see the speculate. That's more specific. I get it. Our question was how long was the longest recorded apple peel in feet? I cannot tell you how disappointed I am in the three guesses that we received today. I'm going to be lobbying for new panelists in future Friday episodes. While I won't tell you the exact number just yet, this is OG's favorite part. I will tell you that the correct answer is 152 and a half feet more than what Doc G guessed. 160. 64.99ft more than what Paula guessed and 165ft more than what OG guessed because the correct answer is 172 and a half feet, making Doc G our unlikely winner.
- [43:12]
Doc G
Yeah, I started to realize at the end there was some guy who was just like, you know, have you people.
- [43:17]
Doug
Ever seen like a potato peeler and how thin you could make that little string if you did it?
- [43:22]
Joe Saul-Sehy
Really?
- [43:23]
OG
I know when OG came to that realization, he's like, no, I would have gone way, way, way, way bigger. Yeah, Y. Yeah.
- [43:28]
Joe Saul-Sehy
I might not have said a thousand, but I might have got to 100. That's a lot.
- [43:31]
OG
What was the number again, Doug?
- [43:32]
Doug
172.51.
- [43:34]
OG
72. That's a big old peel, if you know what I mean.
- [43:38]
Doug
And how many times were they trying and then they'd get to like 160ft, and it would break. They had to go through a whole orchard to get to that final one.
- [43:48]
OG
If finally they get to 172 and they're like, enough, I got to do something else. I got to appeal a pair or something. Yeah. So Doc G gets Team Jesse to.
- [43:56]
Paula Pant
Step closer for a coalition victory.
- [43:59]
OG
If you gift your points, you guys are tied with OG now collectively, two on two on one.
- [44:06]
Doug
No, not allowed.
- [44:08]
OG
Not gonna happen. But it's nice to think about.
- [44:11]
Paula Pant
We'll decide by December.
- [44:14]
Doc G
There's no. No sandwiching and no two on one.
- [44:19]
OG
No seed spreading either. Doug. Yeah. A whole different deal. Hey, let's get back to our different risk because, Paula, the next one on my types of risks, many of these now that people don't think about at all because they're too enraptured with the concept of market risk. Credit risk is a thing.
- [44:36]
Paula Pant
Credit risk like on. On debt instruments that you purchase?
- [44:40]
OG
Well, yeah, And I'll tell you, you and I answered a question about this. OG you and I answered a question about this. People that want to do private equity, right? I want to invest in private equity. Those people need to think about credit risk, Paul.
- [44:49]
Paula Pant
Right. There's credit risk and private equity. There's credit risk in, in junk bonds. I mean, there's credit risk. Anytime that you are taking the lender side of the deal, this kind of goes back to what we were talking about earlier. You know, if you invest in equities, you're becoming a part owner of a company. But in bonds or in many other types of deals, you are becoming a lender. And you need to think about the credit worthiness of the underlying entity. And it's not exactly credit risk, but it's related. Depositor risk is another form that, or at least it's a cousin to credit risk.
- [45:26]
OG
You talk about you deposit an institution, and is that institution going to be good for it?
- [45:31]
Paula Pant
Exactly, exactly. And I'm thinking again about crypto in this particular case, because in traditional banking, there are a lot of regulations that protect financial institutions. And there's FDIC insurance there. There are protections, but that doesn't exist in the world of crypto. And many people have lost their. Many depositors have lost their deposits when the underlying institution went under.
- [45:53]
OG
Jordan, you're nodding.
- [45:54]
Doc G
Yeah, I mean, I feel like you can mitigate credit risk. Right. And this is the difference between investment and speculation, I think. Like, so you're talking about credit risk of a bond, right? You can look at, see what that bond is rated. Is it a Government bond? Is it a private bond? Is it a junk bond? I mean, you can kind of mitigate that risk. And the more you get to the riskier asset, the more you're really looking at a speculation as opposed to an investment. I think there's also deposit risk can be somewhat mitigated, depending, obviously, when you're talking about your bank account, whether it's FDIC insured, et cetera. But when you talk about the credit risk, I feel like we're moving much more out of the tried and true investment space and moving a little bit more to the speculation or concentrated risk space. And so that's a decision, but that's a very clear decision that you're looking for, maybe higher returns, but you're willing to take on a little bit more of an asymmetric risk. And so I see credit risk as an issue, but I feel like it's an issue you can mitigate, especially if you are not concentrating risk.
- [46:53]
OG
That's interesting. Oh, gee, though, I think I agree with what Jordan's saying, but I feel like it's often an uneducated investor who's like, I don't like market risk, so I'd rather take this risk that they don't even recognize as credit risk.
- [47:04]
Joe Saul-Sehy
Yeah, I mean, obviously, if your money's sitting in a bank account, there's, you know, unless it's over a quarter million dollars, there's. There's no risk with that. Paula's got something there when it comes to the depositor risk of crypto in the wallet, and I'm too stupid to know any of that stuff, so I'm just going to use crypto words like blockchain and defi. Does that make me sound like I know what I'm talking about?
- [47:28]
OG
I think about hot wallet versus cold wallet, which sounds like, oh, yes, it sounds like planting too many seeds in the wrong field.
- [47:35]
Doc G
Yeah, that's what I say. That sounds like a problem with your lactose intolerance.
- [47:41]
OG
I'm sorry I can't come out today. I got a little case of hot wallet.
- [47:45]
Joe Saul-Sehy
It's like the thing I saw on Reddit and crypto. People will get this one. It says, mom, I saw a sticky note on your desk with 12 random words. I threw it out. That's your crypto passphrase that they give you your wall passphrase. Like 12 random words. Do not put this. Anything electric, electronic. Write it down.
- [48:03]
OG
Is that the guy in England was. It isn't in England where he's trying to get the rights to go through The.
- [48:08]
Joe Saul-Sehy
Still trying to do it. Still trying to. Well, it's not a dump anymore. They made it into a park.
- [48:12]
OG
Oh no.
- [48:13]
Joe Saul-Sehy
Now he's trying to rip the park up and he's suing him for whatever. Anyways, I don't think that that's a big issue. I think it's a bigger issue when you start getting into esoteric type things. Like you mentioned private equity that all the rage. I don't know what seven years ago was private lending when you could do like micro loans and you could like create your own bond portfolio of lending money to people. And how great is that in 25 increments?
- [48:40]
OG
Like, oh, it's funny OG you saw how much people didn't understand credit risk by the way that that has evolved. Yeah, I mean the way that those companies have completely evolved is because of people not getting a lot of money.
- [48:55]
Joe Saul-Sehy
12%, it's like. But the guy was an F rated borrower.
- [48:59]
OG
So I said this on Kickstarter projects all the time.
- [49:02]
Joe Saul-Sehy
By the way, Kickstarter is another good example.
- [49:03]
OG
Yeah, Kickstarter, Kickstarter. People like, oh, where's my thing, dude, you are helping fund the thing with people you don't know. There's no insurance on this product. You're not guaranteed a seat at the table by Kickstarting anything. Yeah, Wild. Oh gee, let's stick with you because I think a lot of people aren't going to know this. Risk, reinvestment risk. It says on here. Is this the risk of reinvesting?
- [49:27]
Joe Saul-Sehy
Pass. What's the next one?
- [49:28]
OG
Yeah, I know. Reinvestment risk. Anybody?
- [49:30]
Joe Saul-Sehy
I think the idea here is really around the fact that if you have your. There's two things here. One is you're having your money, your dividends reinvested, your capital gains reinvested. And sometimes when that cash is being paid out, it's being paid out for a bad reason, not a good reason. And if your investing is always on auto reinvest, you're like turning around and going, oh, I know you're trying to give it to me, but here's it back. And that may not be what you want to do. I also think about investment or reinvestment risk in the sense of. Apple is a great example of this obviously great stock performer over the last 20 years or whatever. Not so great the 25 years before that. But they famously, I think now they finally pay a dividend, but they famously didn't pay a dividend forever. And so what was happening was you're an owner of Apple, you're Making, you know, you're getting profits from Apple, but the board of directors is saying, we're not going to give you any of that cash yet. We think it's best that we reinvest this money, not give it to you guys yet. And now that paid off. Right? That worked out. Apple did a good job of reinvesting everybody's money. But if you're investing in a company or it's a ETF or product or whatever that doesn't have dividends that are paying out, you're trusting that the people who are taking the profits of the company, which you should get some of, they're saying, well, we want to put this back in the company. You're basically abdicating the responsibility to them, which could be a good thing, but it might also be a not so good thing.
- [50:56]
OG
But you are giving that, that decision to somebody else.
- [50:58]
Joe Saul-Sehy
Yeah, that's what it means to me. I don't know if it's good or.
- [51:00]
OG
Bad, but there's a risk when it's not you. I want to do a speed round with these last four Doc. Here's. Here's one that people didn't worry about, I think, until just a couple of years ago. Inflation risk.
- [51:10]
Doc G
Yeah, I mean, inflation risk. But again, the question is in terms of what. I mean, if inflation is your future fear, investing in businesses that are growing long term is probably your best hedge. And so the easy way to do with that is the s and P500 at a diversified basket of stocks that are growing in the United States and are thriving or being involved more directly in entrepreneurship, which is a lot more risk. But being part of a building, budding business is kind of your best way, I think, to stay. To stay, you know, is the best salve for inflation risk. And so I think equities are a great way to do that. A broad based basket of. Of equities is. Is probably what's going to serve you best long term.
- [51:56]
Doug
Hold on. Oh, gee. Say the word that spelled S, A, L, V, E. Salv. Is that how you say that?
- [52:06]
Paula Pant
Salve?
- [52:07]
Doug
Have you been, as everybody say that word?
- [52:08]
OG
Sal.
- [52:09]
Joe Saul-Sehy
I would say salve.
- [52:10]
Paula Pant
Yeah.
- [52:11]
Doug
I say sav.
- [52:13]
Doc G
I think either of them work.
- [52:15]
Paula Pant
What, like salmon? The ella silent?
- [52:18]
Doug
Yeah.
- [52:19]
Paula Pant
Wow. I've always said salve.
- [52:23]
Doc G
You've officially blown Paula's mind.
- [52:26]
Doug
I mean, sounds like.
- [52:27]
OG
I think it is sav.
- [52:28]
Joe Saul-Sehy
Wow.
- [52:29]
OG
Yeah, I think it is. I don't know. Anyway, stackers. This is the important part of the show. If you want to write in and let us know how to pronounce that word. Let's go on, Paula. Here's the next one, horizon risk, which is that you're looking at this to be 20 year money and something happens, it disrupts your plan, right? Like I get laid off, I need a new car, I gotta use it for something else like horizon risk. I think this blindside is a real thing, right?
- [52:52]
Paula Pant
Well, so horizon risk in that regard is, it's related to, but distinct from liquidity risk. So if you believe that you have a 20 year time horizon and then whoops, you don't, that can absolutely mess up your plan. And so I think horizon risk is really similar to liquidity risk. It's the risk of, I don't want to say poor planning because that sounds kind of a judgy element to it. It's the risk of inaccurate planning. So it may be that you planned well, but there's a difference between doing something well and doing something accurately.
- [53:27]
OG
It's interesting too, because I think sometimes horizon risk and concentration risk go together. Like if I've got, if I've got a concentrated position, I really need 20 years for this thing to work out. And then the horizon changes. That's where I'm effed. You know what I mean? Sometimes you take these two different risks together and they play off each other to create this, this, you know, giant toilet, this spiral. I don't know. On that note.
- [53:52]
Paula Pant
Toilet risk.
- [53:53]
OG
Toilet risk. Toilet risk. OG is next.
- [53:55]
Joe Saul-Sehy
No, next is actually out of my house tomorrow.
- [53:59]
OG
You do with this colonoscopy. He's got toilet risk. Do not go near OG's house tomorrow. Longevity risk is a real one. OG in CFP world, I think a lot of people may not be familiar with longevity risk.
- [54:12]
Joe Saul-Sehy
Well, this is just simply the idea that you're going to live longer than what your plan is. And a lot of it has to do with the fact that we look at life expectancy through the eyes of the people that have been before us. I'm fortunate in that one side of my grandparents lived to be in their late 90s, super healthy. Just great grandparents. The best model of grandparenting and life and health and all that stuff that you could possibly have. On the other side of my family, my grandma and grandpa passed away. My grandpa did very early, but then my grandma did with kind of a long illness, still lived into her 80s. But if your experience has been, well, my grandma and grandpa died in their 70s, so therefore I probably you are discounting the fact of medical advancements and treatment and stuff like that. I was just talking to somebody earlier today. In the last month and a half, I've had my regular physical, and then I also did a CT heart scan with contrast dye, which for anybody who's never done that, it is like you are burning from the inside. So just when they tell you it's a little hot, it's not hot. It's like melting your insides hot. For 15 seconds, I thought, this is how I go. But what's really cool is not just the CT part of it, but then they overlay it with AI. And I sat in my doctor's office, and with a little apple pencil, he literally drove. Drove the little bot. So be it. Through my arteries of all my. You know, all the arteries of my heart going, okay, this is. This artery.
- [55:36]
Doug
What the.
- [55:36]
Joe Saul-Sehy
Okay, there's a little spot right here. And then. Wow. And. And now with that level of accuracy, we can go redo that test in five years from now and overlay the two. And. And the computer will say, here's what's happened. It's not just, you know, it's not just the technology, and it's not just a great trained physician to read it, but now it's the technology on top of the technology going, you know, so how many lives is that going to save? What is that going to do? In terms of longevity, we discount the. The longevity of health, the rate of change in healthcare, if that's a good. Good way to put it. Now, technically, during COVID life expectancy went down. You know, that's kind of a weird dynamic, but I suspect that that's going to kind of recover itself a little bit. Think about what happens if you live longer than what your plan is and what differences, what changes might you make in your planning if you lived another 10 years beyond what you originally thought?
- [56:28]
Paula Pant
Well, what's interesting, Oji, you mentioned life expectancy went down during COVID If you look at aggregate life expectancy in the United States, it's actually gone down not just in Covid, but overall, due largely to two factors. One is obesity, and the other is opioids. And so the risk of. In the broad aggregate, the risk of either obesity or opioids putting you in an early grave is huge. And therefore, for some cohort of people, there's actually much lower life expectancy. I keep saying the word cohort. I think that's, like the third time I've said it on this episode. I need a new word for those.
- [57:00]
OG
That have the bingo going for some group.
- [57:03]
Joe Saul-Sehy
Yeah, no, that's true. But you also have to account for the fact that people who are, and this isn't fair because it's just how it is, unfortunately, generally people who have more money also have better healthcare.
- [57:16]
Paula Pant
Yeah.
- [57:16]
Joe Saul-Sehy
That doesn't mean that they're not addicted to opioids or they're not unhealthy, but they're unhealthy and they can pay to fix it. That's not fair. But it is what it is. So if you have money and you're healthy at 65, so if you've avoided obesity, if you avoided heart disease, if you've avoided a lot of that stuff and you're 65 and you have money, you better plan for a 30 year time horizon because there's a really good chance you're going to live a long time.
- [57:43]
Doc G
But I would argue if you look at the data, the longevity risk is not dying without enough money, it's dying with too much money. Because usually the people who are 65 years old who have money and know what an asset allocation is and have heard of even the concept of longevity risk, those people will all die with way more money than they ever planned. And at least at this point now, that may change in the future, but right now we tend to see many more people in that group, the kind of people who are listening to this podcast. Many more of those people are going to die with too much and not too little.
- [58:13]
Joe Saul-Sehy
Listen to this guy acting like he knows something about death.
- [58:16]
OG
I know, right? Back off, medical doctor.
- [58:19]
Doc G
Just spend it on all, don't save it all. Settle down, spend it now.
- [58:23]
Joe Saul-Sehy
Podcaster.
- [58:24]
OG
Last one on this list is foreign investment risk. And oh gee, there's a bunch of different things we can worry about with foreign investments.
- [58:30]
Joe Saul-Sehy
Well, not anymore because they're the only things that are going up. So no risks. Investing foreign.
- [58:37]
OG
That's great.
- [58:38]
Joe Saul-Sehy
All overseas. No, I mean, obviously the biggest thing there is currencies. And Paula pointed out different economies and different rules and different ownership requirements and the rule of law is different in different places and that sort of thing. So you got to be careful if you're investing in a specific thing. This is why diversification and abdicating the responsibility to a fund manager, even if it's an ETF fund manager, is so much worth, is so worth the money because you're going like, I don't know which one of these 7,000 European companies to buy, let's have this guy do it for 7 cents on the thousand, you know, and they can make sure that we've got one of everything. And somebody checked to make sure that the company really exists and there's a board of directors and, you know, and if it blows up, so be it, you know, so don't go into areas no different than Paula. Wouldn't show up in an unknown town and just go, well, just. This looks like a nice house. I'll just buy this rental property real fast without, you know, knowing what's going on in the community. Right. That's a big risk.
- [59:35]
OG
This has been fantastic. I know that. We started this discussion on Wednesday show. We're talking about danger.
- [59:40]
Joe Saul-Sehy
Ultimately, there's no danger with investing whatsoever. So get your money invested.
- [59:44]
OG
That is the takeaway was takeaway has to be.
- [59:46]
Joe Saul-Sehy
There's no danger.
- [59:46]
OG
There's no danger.
- [59:47]
Joe Saul-Sehy
Oh, gee's right. Again.
- [59:48]
OG
Risk is different than danger. Yeah, that's where we take this. But I love that. To end the week, really a reasoned discussion on risk. And thanks to all of you for partaking in it. Let's talk about what you're doing this weekend, this fine April weekend. OG what do you got going on, my friend?
- [60:02]
Joe Saul-Sehy
Oh, this is. We are wrapping up the final week of baseball season. So it's weird. In Texas, the high school baseball season's over, so we've got one more game next week. It's senior night, so we're going to have fun with that one little. It's always in Michigan. Haven't even got their gloves out of storage yet.
- [60:19]
Doug
We haven't.
- [60:20]
Joe Saul-Sehy
Texas baseball's over. I know.
- [60:21]
OG
My niece just had. She's in Grosse Pointe, Michigan, and had her first track meet last week. Just had a first track meet. And I'm like, in Texas. We're almost done.
- [60:30]
Joe Saul-Sehy
Alex decided where he's going to college. That's cool.
- [60:33]
OG
And can we announce it?
- [60:34]
Joe Saul-Sehy
I don't think he'll care if we. I mean, what is. I don't think anybody's listening that will care. He's going to Texas A and M, so he's going to be right.
- [60:41]
OG
That's fantastic.
- [60:41]
Doc G
Congrats.
- [60:42]
Joe Saul-Sehy
Yeah. An Aggie. And for everybody who's A M Aggie people, you know, I'll send you a cell number because they just come out of the woodwork with their rah raris and whatever. They got their big little chest that they do. So some people call it a cult.
- [60:57]
OG
But that's what I was gonna say. When does he get the batch of Kool Aid so he can start drinking the cult water that they have down there in College Station?
- [61:04]
Joe Saul-Sehy
If I had one wish, though, with a M, I wish they would redo their sports branding. I Mean, no offense to the fine folks at Adidas, but look, you're a big sec school. Can't you get, you know, a Nike Jordan deal? Like why, why we got to wear Adidas gear? No offense. The Adidas gear sucks. Let's go. Let's get some Nike gear.
- [61:23]
OG
There goes that big Adidas sponsorship.
- [61:26]
Joe Saul-Sehy
His nil money is gone.
- [61:27]
Doug
He doesn't like that because then it highlights his man boobs. He wants Nike. It just, it fits his upper body better.
- [61:33]
Joe Saul-Sehy
Work hard to get this man figure. It's a great weekend.
- [61:36]
OG
Paula, what's to save us? What's going on at Afford Anything this fine week?
- [61:40]
Paula Pant
So I'm in Panama. I'm in Panama for. That's a song. I don't know.
- [61:48]
Joe Saul-Sehy
Stop it.
- [61:49]
Doug
Oh my God.
- [61:50]
Doc G
Oh, boy.
- [61:51]
Doug
Like a babe in the womb.
- [61:52]
Paula Pant
So on the Afford Anything podcast, we've had a couple of travel themed episodes. So we had Nomadic Matt on the show. His expertise is budget travel. So he talks about how to travel the world on 75 per day, which if you decide to actually live that way, that's a cost of living of 27,000 a year, whether you're living that way or whether it's literally just a one week or two week vacation. Nomadic Mat talks about how to travel on 75 bucks a day. Then we have Jillian Johnsrud on. She is a mom of six who talks about long term, you know, multi month travel with as a family of eight. And then I'm doing a show from Panama. Like that I'm recording from Panama. That's episode 600. So all of that ties in with the Panama theme, the travel theme while.
- [62:39]
OG
You'Re swimming down the Panama Canal. We talked about that last week.
- [62:41]
Paula Pant
Yeah, swimming just backstrokes down the Panama.
- [62:44]
OG
Canal with your microphone. That'd be fantastic. And by the way, I can't wait. I just keep thinking I love Nomadic Matt and his work, but Angelian's work, frankly. But 20 years from now when Nomadic Matt's name has changed to finally settle down Matt.
- [62:58]
Paula Pant
I think he will forever be nomadic. Some people are have a nomadic spirit.
- [63:03]
OG
That is on the Afford Anything podcast to just pause and hit subscribe or follow or whatever. The verbiage is on the platform where you're paying attention to us right now. Speaking of what's going on at Earn and Invest, Jordan.
- [63:17]
Doc G
Well, as you listen to this, we'll be in the middle of a rewind week, but what's really happening is a format change. So for years and years and years, I've been doing two interviews a week. We have now moved to one interview a week. That is the Thursday episode, but a Monday episode preceding that Thursday episode is a solo episode where I do a 10 things episode. So it's usually 10 things about a topic that is has come from that Thursday episode. So I talk about 10 things about a topic. And then we have the Thursday episode, which is an interview which somehow touches on that Monday episode. Been doing this for about a month. It's been really great. I've gotten a lot of good feedback, and it's kind of nice to do the solo thing occasionally. Just get behind the mic and talk for 30 minutes about something that's important to me.
- [64:06]
OG
It's so interesting. And I know whenever I hear you speak at a campfire or economy or wherever it might be, like, people are like, I want to hear more of that. So I'm excited to hear where you go with those episodes.
- [64:17]
Doc G
Well, it's a real different feel. As you guys know, we spend a lot of time trying to get the best out of other people by asking really good questions, making these really good conversations. So it's nice to turn it around a little bit and go a little bit deeper into what I think about these things and try to develop these deeper conversations, which hopefully the community then has.
- [64:34]
OG
Yeah, back and forth, really, with the community. Almost like you're chatting one on one with the listener. That's really cool. And that's it. Earn the best. Pause this and go follow. Subscribe to earn and invest. All right, that's going to do it for today. Thank you so much for hanging out with us. If somebody needs to hear about these different types of risks, please share it with them because this was a fantastic conversation. Hopefully people will stop saying things like, go play the market like they're playing a slot machine, or, I'm gonna go invest in all that foreign stuff, or I don't. I'm looking through these different types of risks. No risk of milkshakes, though. We need more and more milkshakes. And it looks like Paula is about to go on a field trip with our friend Paulette.
- [65:11]
Paula Pant
Right?
- [65:11]
Joe Saul-Sehy
Yeah.
- [65:12]
Paula Pant
I mean, we've got the 24 absolute best milkshakes. That's a strong statement.
- [65:17]
OG
Can we go through each of those so we can see Doug's eyes roll.
- [65:19]
Doc G
Back in his head?
- [65:20]
Paula Pant
There's the apple pie shake. That's at the Brooklyn.
- [65:23]
Doc G
I bet that's good.
- [65:24]
Doug
Oh, my.
- [65:25]
Paula Pant
The churros shake.
- [65:26]
OG
The what shake?
- [65:27]
Paula Pant
Churros.
- [65:28]
Joe Saul-Sehy
Churros.
- [65:29]
OG
Churro shake. Oh, my. I'm in. Let's go.
- [65:32]
Paula Pant
Let's see, there's Ralph a Chino. I guess that's when you Ralph the Brooklyn cheesecake shake.
- [65:41]
Joe Saul-Sehy
Oh, yes.
- [65:42]
Doc G
See, Joe, we got to go back to New York. We got to saying we got to go back to New York.
- [65:46]
OG
Road trip, Jordan. Road trip.
- [65:48]
Doug
This is like Joe, did you ever see the movie Best in Show?
- [65:51]
OG
It totally is where he's going on about all the types of nuts, all the different nuts.
- [65:54]
Doug
You got your macadamia, your hazel, or she got your Brazil.
- [66:02]
OG
Doug, get us out of here, man. What should we have learned on today's show?
- [66:05]
Doug
Well, Joe, here's what's stacked up on our to do list for today. First, take some advice from OG apparently, you're supposed to choose your words carefully when you're investing or something. Oh, gee, what are the words I'm like, not allowed to say? I guess?
- [66:20]
Joe Saul-Sehy
Oh, I'm not sure what those words are, but I'm just thinking about churros and apple pie and going to Panama.
- [66:27]
OG
That's really where we have to focus right there.
- [66:30]
Doug
Second, Paula taught us all about investing in real estate and how to put cattle in your New York City. Walk up to get farm subsidies. I don't know. She was going on and on. Paula, can you walk us through that again?
- [66:40]
Paula Pant
Yeah, so you can get a crush. Crunchy cereal shake.
- [66:43]
Doug
Oh, for God's sake. But the big lesson, don't try and deposit chocolate chip cookie seeds in Joe's mom's brain. Turns out she'll plant her foot right in your. Not a great exchange. Thanks to Doc G for joining us today. You'll find Doc G's book the Purpose Code in stores everywhere. And you'll find his podcast Earn an Invest wherever you're listening to us now. We'll also include links in our show notes@stacking benjamin.com thanks also to Paula Pant for hanging out with us today. You'll find her fabulous Joe's mom kicked me again. You'll find her fabulous podcast Afford Anything wherever you listen to finer podcasts. And finally, thanks to OG for joining us today. Looking for good financial planning help? Head to Stacking Benjamin's document for his calendar. This show is the property of SB Podcasts LLC, Copyright 2025 and is created by Josal Sehive. Joe gets help from a few of our neighborhood friends. You'll find out about our awesome team@stackingbenjamins.com 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, Doug. And we'll see you next time back here at the Stacking Benjamin Show.
- [69:13]
OG
Doug, get us out of here, man. What should we have learned on today's show?
- [69:16]
Doug
Well, Joe first. Oh, hold on.
- [69:32]
OG
You know what? Now, Paula.
- [69:33]
Paula Pant
No, but it's catchy.
- [69:35]
Doug
It's catchy.
- [69:36]
Doc G
Do you know who Van Halen is?
- [69:39]
Paula Pant
I've heard the name.
- [69:40]
OG
And now we can't play this episode on any. Any place.
- [69:44]
Joe Saul-Sehy
Too bad. YouTube. It's already live.