OG (3:31)

He would do the same thing that he does now where are you? You didn't tell me we're recording right now. Yeah, I did.

Joe (3:36)

Hurry over to the basement, man.

OG (3:38)

Gaslighting. Before gaslighting was a thing, I made gaslighting popular.

Joe (3:43)

How are you my friend? Ready for a Wednesday? Hear that lineup? We're going to talk stocks for the long run and about staying engaged. When you're at work with family, good time to really stay engaged and think about what's important as we're here moving into the holiday season.

OG (3:59)

It sounds like a good idea. As I play on my phone while.

Joe (4:01)

We'Re talking, we had an interesting thing happen before we hit record just now. You know, we have these cameras all over mom's basement and all of a sudden I'm looking into my monitor and I just see, oh geez, face fall away. And I, and I see, I see the ceiling and then I see black. And then I look across the desk and is, is the camera okay?

OG (4:26)

I am going to mess with it later. Yeah, I got all screwed up. So. Yeah, new plan.

Joe (4:30)

Better than the stack of books we used to have? Far better. And you know what? We may need a new stack of books for OG's camera. But you know who needs more money than we do? That is people supporting financial literacy. And we're helping our friend, our new friend Karen Holland, who is just a genius when it comes to helping the youth of the world. The Utes. Yeah, the Utes of America and Canada for that measure. Helping them learn to make better money decisions. It's when you are in middle school that you really have all these receptors working. I spoke with Karen a little bit about this. Well, let's hear just a little snippet. If we look at the long term impact of a child really taking to heart the dim score, it's probably impossible in two minutes to do this, but let's go through some of the dominoes that this helps for the rest of a child's life.

F (5:25)

Okay? So if you. Oh, I could do it. I could do it. If you are a 10, 11, 12 year old who is comfortable asking about a return policy or a warranty, and those are two different things. Or the on time delivered cost of a seemingly small online purchase, or the total cost of attending an event, you almost can't help but become a 17 year old who gets their, their first pay stub and looks at these acronyms and goes, okay, well what does all this mean and how come I'm losing all this money? And then here's where it really starts to come home. You almost can't help but become a 22 year old who when you're choosing your first and subsequent employer asks questions like, okay, tell me about these starting salary pay bands. Where do I sit in the pay band? How do I move through it? Tell me about employer sponsored savings programs and family leave. I mean, one of the things that this can do is it, yes, it solves financial illiteracy. It I think does really good work for income inequality, the gender money gap. Right. We're saying that we need systemic change. Behavior change is what begets systemic change. If you don't experience personal financial stress, you're able to really focus on the task at hand. You're a better spouse, you're a better parent. Right. I mean, financial stress is a huge cognitive bandwidth tax. Let's get rid of it.

Joe (6:49)

So as you can see, Karen's a real badass and has a huge mission that we want to help stacking benjamins.com stacking hopefully G& I believe in this enough. We're going to match the first 500 bucks. And also we have decided that we're going to do kind of a little behind the scenes Q and A with people that give. So if you are somebody that gives, we'll do a zoom call. If we reach $5,000, let's reach 5,000 bucks and then we reach that. You know, you hear about these stretch goals. Oh gee, we'll create some stretch goals. So 5,000 bucks. We'll do a behind the scenes. Take a look early next year, Q and A. Ask whatever questions you want. We'll have some fun. We'll hang out together. But it's all in the name of helping kids learn more about money stacking benjamins.com stacking hope gets you there. And it looks like, man, we're in a. If you, if you go take a look today, you'll see what a race this is against our friends at the how to Money podcast. But let's talk about what's going on today. Not only are we going to have OG go head to head against LA, longtime personal finance columnist Jason's week. Can't wait to hear OG's take on Jason's recent piece about stocks for the long run, a new study says that's the way to go. OG's been saying that's the way to go for a long time. Jason says, well, pump the brake. So what does that mean for you and your money? We're going to talk about that. But first, I'm super happy. Our Wednesday mentor is Katie O she works with some of the top executives in the land. Not only is there TEDx talk on this topic, one that you should watch and that we'll link to in our show notes, but hundreds of thousands of people have watched Katie. She's worked with some brilliant, brilliant people on this idea of making sure that you are fully focused, engaged and not distracted in an age when distraction is easier than ever. This is so important, especially now as we're going into the holidays and all of these distractions. So whether it's to make more money at work, whether it's time with your family, what are you making money for in the first place so that you can focus on the things that matter. Super important. Katie o' Malley coming up next, we've got a couple of sponsors first though, who help us keep on keeping on so you don't have to pay a dime for any of this. And then our sit down with Katie o' Malley in this system, by the way, that Katie's going to talk about og it's so simple. But like all things, it's not easy, right? Simple and easy, two different things, much like investing or staying on track with your personal financial plan. But I love the simplicity, how she breaks it down. Katie o' Malley coming up next. Well, this year, Stacker, give a gift that goes far beyond the moment and invest 529 account. Whether it's a child, grandchild or someone just starting out, you're helping them save for education that could open doors for a lifetime. Invest 529 is a tax advantage way to save for college, trade school or even apprenticeship programs. It's flexible, easy to start, and you can contribute any amount, big or small. And because the money can grow tax free, it's a gift that really builds value over time. So instead of giving something that gets used up or set aside, give the gift that can change a Life. Start and invest529account. Today. Go to invest529.com to learn more and to get started. Investments involve risk. Results vary. Consult with your financial and tax professionals administered by Commonwealth Savers Plan.

Kevin Harlan (10:27)

This is Kevin Harland. This Friday, the NBA on Prime Crew and I are back with another exciting Emirates NBA cup doubleheader. The night starts with Pascal Siakam in the Indiana Pacers meeting Donovan Mitchell and the Cleveland Cavaliers in a battle of familiar foes. Then it's off to Texas as Nikola Jokic and the Denver Nuggets take on Kevin Durant and the Houston Rockets for the first time this season. It all comes your way. This Friday on Prime. And if you're not a Prime member, that's not a problem. Sign up for a free 30 day trial to get started today. The Pacers and Cavs, the Nuggets and Rockets. Coverage starts Friday at 6:30pm Eastern only on Prime. Restrictions apply. See Amazon.com Amazon prime for details.

Joe (11:22)

And I'm super happy she's joining us at the card table. Katie o' Malley's here. How are you, Joe?

Katie O'Malley (11:27)

I'm, I'm doing great. I am just attending the Grace Hopper Celebration here in Chicago, so a conference for elevating women in tech, in stem in the sciences. It was a really, really wonderful day and I get to round it out with you now.

Joe (11:43)

That's exciting. Well, it's like icing on the cake or maybe coming down from the big celebration. What was your big takeaway today though, by the way, at the celebration?

Katie O'Malley (11:53)

Gosh, in speaking with other women who are my age and older, so gen X elder, millennial, born before like 1984, my big takeaway was how different our career journeys would have been if we, we had women like us talking to us at conferences like this when we started on our journey and how grateful we are that it exists now and how excited women are to give back and make it easier for other women who are coming up through the ranks.

Joe (12:25)

It's so important, by the way, to attend conferences and especially for our younger stackers, Katie, like to be able to be mentored by somebody, by you or even to, to talk to somebody who's been there, done that, like just go to these events. And yet I talked to some of our younger friends when I'm at our events. Like, yeah, I just, you know, I don't like going to meetings. I'm like, you gotta go, you gotta go.

Katie O'Malley (12:48)

They're not meetings. You're just learning and connecting with folks. And I swear I had to have stopped by at least 45, 50 tables at the Expo and my pitch was I'm here as a career coach. I am looking to be a sponge today and absorb all the information about your companies, what's available, how I can nudge my clients in this direction. Also, what you would be encouraging them to upskill and reskill on. And the sessions, just such incredible speakers. The learning is just next level. So highly encourage plus one double click whatever the kiddos are saying.

Joe (13:31)

Hit the smash the like button on that. Yes, subscribe to that idea. So mom told me before you came down the stairs that you're going to solve all of the holiday fights that we have through better communication in the next 25 minutes. I'm sure that's going to happen, Katie.

Katie O'Malley (13:48)

We'll get close. We'll get some things that you can be practicing behaviors you can engage in prior to sitting down at that dinner table for Thanksgiving, Christmas, or the New Year.

Joe (14:00)

Well, like we told our stackers while you were upstairs, your framework is easy, but it's not simple. But let's dive into it because you start in a different place than I thought that you would start when I watched your TEDx talk. You began it with this wonderful story about you and your friend Jenny. And if you don't mind, I think this is a great jump off point for our discussion. So do you mind sharing the same awesome story you shared in your TEDx talk?

Katie O'Malley (14:24)

For sure. It's one of my favorites. And I'll take you and all of the stackers back to 1992 Northwest suburbs of Chicago. The family had finished dinner. My mom's at the kitchen table reading Better Homes and Gardens, sipping on a crystal Pepsi. My dad was watching ESPN in the living room. My brother was listening to CDs he had just gotten from one of those Columbia house records where you buy the CDs and then suddenly, yeah, insane commitment that you didn't know about when you taped that penny to the piece of paper and sent it for your 10 CDs. Anyway, I digress. They're all doing their activities. And my activity was to be on the phone with my best friend Jenny, just catching up on the day. I really thought we were having a great conversation. And we were on a landline phone, which meant everyone could hear the conversation or what I thought was a great conversation that I was having with her. And we, when I hung up the phone, my mom, without missing a beat, didn't even look up from her magazine, just said, you're grounded. Two weeks starting tonight. And I was beside myself and in shock. I had never been grounded before, ever. And I was 11 years old. So this was my first grounding and experience with it. And I had no idea why. And I was sitting there thinking through the conversation, what did I say? What did I do? Did I lie? Did I say a swear word? Did I tell her a secret? I wasn't supposed to tell her, like, what happened. And when I came up short, I remember, like, tears were welling in my eyes. And I looked at my mom and I just asked, like, why am I grounded? I can't figure it out. And she said, you were on the phone with your, quote, best friend for an Hour. And during that time, you talked about your day at school, your activities, what you had for dinner, what you're gonna have for a snack. And then you got off the phone without even asking her a single question about her day or even pausing to give her a chance to insert herself, to kind of riff on what you were saying, and she's like, that's simply not how we treat people in this house. So you're grounded for two weeks. Wow.

Joe (16:44)

Wow. By the way, mom's a badass.

Katie O'Malley (16:47)

Yeah, mom is a badass. Diane Shirley Goodman o'. Malley. Total badass. And obviously an impactful moment. And what made it even more impactful is that at the time, she was battling colon cancer and passed away just a little more than a year after holding me accountable for that behavior. So it's one of not just my most lasting memories, but one of my last memories of her as well, and just really influenced how I started moving through the world from 11 years old forward and making sure that anyone I ever interacted with, she would be proud of that interaction, that I ensured that person. How we would say it now feels seen, feels heard, feels that sense of recognition and dignity. But at that time, was just treated how we treat people in the o' Malley household.

Joe (17:44)

I can understand wanting to make my mom proud by being a better listener. Mom reminds us all the time upstairs that we can be better listeners. And I know that I want to be that just as a good human being. I want to involve other people. But you coach executives, how does this impact your career? What's at stake when you're not a great listener at work or, heck, even at home with a family?

Katie O'Malley (18:07)

Yeah. I mean, what is at stake? Mistake when we don't listen, Which I think is the most overlooked part of the communications equation. Right. From my perspective, communication did not happen if the message wasn't received and if the other person couldn't hear it, couldn't listen to it. So simply doing a tell isn't communication. It is. It has to be this balanced equation. And what's it mistake when we don't listen is we lose the opportunity to connect with someone at all, much less connect with them on a deeper level and build trust while doing it. We also miss out on the opportunity for true understanding. Just because you heard the words somebody said does not mean that you understood what they were trying to communicate to you. The way that I frame listening in terms of the air formula, which is what I introduced in the TEDx, really helps to make sure we're hitting on those three three dimensions of connection, understanding, and trust. And if you're not doing it at home, if you're not doing it at work, my gosh, the loneliness epidemic is going to hit you even harder than it might already be.

Joe (19:24)

Yeah, that's the downside. But also on the upside, like your potential to have these phenomenal relationships that you never realized were possible, I gotta imagine, is also huge.

Katie O'Malley (19:34)

It's huge. And especially right now, where folks feel not only disconnected from each other, as we're seeing in, in the political landscape and these huge divides, but technology, especially now with AI coming in as rapidly as it is, we're even disconnecting from ourselves. So when people talk about doom scrolling, we're doing it because for some reason it's more comfortable than sitting with our own thoughts and our own feelings, our own reflections on an interaction that we had. And if we're disconnected from ourselves, we can't really connect with other people either. So listening is also about listening to others requires that we listen to ourselves as a prerequisite.

Joe (20:22)

What's interesting, you and I had a nice back and forth before we were able to get together though. So glad that we had. You also drew a distinction for me, which was that this idea that you've mentioned a few times already, connection and having better connection, that does not mean agreement, which means that I can disagree with Uncle Bill across the table, who is the opposite political party of me, and we can still have a connection without agreeing.

Katie O'Malley (20:53)

Mm. One of the things that I'm trying to do right now is pinpoint when this really became the norm, where if I disagree with somebody, then I can't have a connection with them at all. I've just written them off. Now I'll say if people are not disagreeing in good faith and suddenly are throwing ad hominem attacks at you or making you feel unsafe. I am not advocating for the use of the air formula in those moments, but when we show up in a way that models for someone what it can look like to disagree and to do it in a way that helps you to better understand that person, that's where the connection is formed. So like you said, connection is not about agreement. Connection is about being willing to tolerate the discomfort that you feel to really, truly try and understand somebody else. So the goal of listening should not be how do we gain agreement on one meaning, how do we make sure that my perspective is the one that gets elevated in this conversation? It's how am I making sure I leave that conversation understanding one new thing about this person and it's usually trying to understand where the perspective came from instead of trying to dissect and disagree with the perspective itself.

Joe (22:16)

Some of our younger stackers might wonder what the heck does this have to do Joe with our money? Love, Katie, Love the story about Jenny. What that Texas have to do with your money. And I'm thinking, but I'm 57 years old, Katie, so I kind of want to spell out for a second for our stackers, really what you just said from a financial perspective, like the ability to listen and understand your boss's point of view, even if you don't agree with it, I think can lead you to a better strategy to navigating a boss. Number two, when you and your spouse disagree about things or your partners or your friends being able to to handle that when somebody's an investor, if you're negotiating, if you're negotiating a property, if you're buying a piece of property or you're hoping for a raise, these are areas where you can begin to make headway on why are these things happening the way that they're happening in my life as an investor even.

Katie O'Malley (23:15)

I love all of those examples and yes to all of it. Because what I think you're also talking about is how are we building long term relationships? Because what we also know is that 86% of jobs right now are being offered to candidates that engage in some form of networking. And that networking often necessitates that you have a good relationship with the person person that's going to be the bridge to connect you to the person that is hiring for the job that you want or is a client that you might want to onboard and bring into your company or into your investment portfolio. And so when people have these types of experiences with us where they feel like they've been truly listened to, that is one of the best impressions that you can make on someone. Because I encourage all of your stackers to think about when was the last time you felt like someone was truly listening to you? And now I want you to bring up an image of that person in your mind and think about what it's making you feel within your body. Chances are it's a warm feeling, it's a good feeling. You want to figure out a way to return the favor. This is how you are depositing, right? Listening is a deposit into the bank of goodwill that you will one day get to make a withdrawal from.

Joe (24:35)

It's funny, as you're talking, Katie, I'm thinking about a very specific person. Like when you were saying, when's the last time who's a person. There's this person in my life. She's just a friend. Her name's Megan Schrader. I'm going to say her full name because Megan, I love this about you. In fact, what's funny is, and I'm going to tell a story about Megan, Megan, when I first met her, I thought was the nicest person. I thought she was amazing. And what I learned over time, Katie and Megan, I don't mean to out you, but that she has practiced this. Katie, like it is a technique and she's really practiced it. And we spend most of the time talking about me. And I like her so much because we talk about me. But once, here's the deal, Megan and Katie and all our stackers is that once I got onto that, my goal with you, Megan, right now is always to knock you off your game because I don't want to talk about me 247 anymore.

Doug (25:34)

I want to hear about you.

Joe (25:36)

And so, Katie, it's so funny that this is not something that you just do naturally. It takes some practice. So let's get into, if you don't mind, let's get into the AIR methodology. What does ERROR stand for and how does it work?

Katie O'Malley (25:48)

The AIR formula, A stands for attention, I for intention, and R for recognition. And two things are happening simultaneously as you're applying this. First, we're looking to apply AIR to the person that we're speaking with. So, Joe, in our conversation, I'm trying to give you my attention and intention to understand what you're saying and recognition, which we'll talk about what that actually looks like. It's not just praise, but then also mirroring that back onto yourself and applying attention, intention, recognition to what's happening within you as you're listening. Because more often than not, it's our thoughts and emotions that are getting in the way of us being able to really listen, to understand and deepen a connection.

Joe (26:41)

Is this the deal that you learn on a very much lighter basis, Katie, than you practice it? But in like comm101 classes, they talk about sender, receiver, but there's noise in the middle. And that noise in the middle, I'm not hearing you because I'm getting too emotionally wrapped up. And whatever ticks are going on or whatever's going on in the sideline.

Katie O'Malley (27:01)

Yep. Whether it's directly related to what that person is saying or sharing or just something that's happening in your own life. Right. And so when I talk about attention to self, what I really encourage People to practice is somatic inquiry. So what physical sensations are you experiencing in your body when you enter the conversation or when that person is starting to speak? And for me, I know I am not ready to listen. It's like a cue when my heart starts pounding. To me, it's like from Looney Tunes. Pepe Le Pew is what I imagine when his heart starts, like, beating out of his chest. That's my cue that no matter how hard I try, I'm not really going to be able to engage in the air formula in the way that I want to because there is something, whatever emotion or thought it is, that's getting in the way. And I always. People are like, oh, that's so hippie dippy. Listen to your body. No somatic experiencing and inquiry. It's. We're one being and it's all interconnected with our. With our nervous system. And I always say everything is a feeling before it's a thought. Everything is a thought before it's a behavior. But it's so difficult to catch the feeling and the thought. So typically we're just reacting to what we hear instead of being intentional about what it is we want to do. And that's where the I comes in. Your intention is the constant in the air formula. It never changes. Your only intention when you are listening to somebody else is to do your very best to understand what they're saying. And this means doing the opposite of what we've been socialized to do, which is either think of the questions that we want to ask when someone is still talking to us, or think about what we want to say based upon what they're saying. And when we do that, we stop listening. And we tend to miss out on a lot of good information, likely even points of agreement, because we're so wrapped up in what it is we want to communicate or what information we want to generate.

Joe (29:15)

My sister was at a town hall meeting last night and was sharing with me about a. An issue they were having. They were trying to build pathways in this natural area and some people were getting worked up because it's an old forest growth area and some old, beautiful trees. She admitted that the guy they were talking to about it, the. The expert. When somebody on the council said, well, are we going to have to cut down some of these beautiful old trees? The guy immediately said, oh yeah, we're going to cut trees. And my sister said, I got so wrapped up in the tone. I got so wrapped up in not just the way he phrased it, but the emphasis, which he had like, oh yeah, we're taking down some trees. Oh yeah, it's going to suck. Oh yeah, you're going to hate it. That the rest of what he said, which made a lot of sense, she goes, I didn't even really hear him at first. And he had to then repeat it over and over because he later on said, you know what? Whenever we try to make an improvement that helps our community, there's always going to be these horrible things that happen and that some people don't like. And we try to minimize that as much as possible. But to your point, because at the beginning, right, he'd phrased it in a certain way. Bam, my sister stopped listening.

Katie O'Malley (30:29)

Exactly. And this is where that expert would have benefited from the R in the formula, which is recognition. So the council person said, so are you saying we're going to have to cut down some of our beautiful old trees, giving recognition to that person and the people that she represents? The best thing he could have said in that moment was, I'm sensing that these trees are an important part of your community and your community's history. Am I getting that right? And that person who asked the question would then realize, he's hearing me, he's trying to understand why this is so important. Which then if he would have gone on to say, sometimes when we make improvements, we have to do X, Y and Z. And it can be painful, and I know it's going to be painful based upon how important this is to you all. And we have to balance that tension. Right? But it makes such a difference to be able to, to give someone the dignity of. I'm trying to get why this matters to you before I'm telling you how we're going to get it done.

Joe (31:45)

I can imagine Katie, if he'd approached it that way, they still might not have agreed. She still might have said, no, I really love the trees. But at least they have a chance then of chatting with each other just because they were. He's. He's recognizing her feelings about the matter and she's able to then express herself without fearing that she's not going to be able to get through to this.

Katie O'Malley (32:10)

Person and would likely reciprocate in the same way that he showed up for her. Every time we give someone recognition, it serves as an invitation for them to show up for us in that same way too. And in doing that, instead of following up with a question, question, this type of recognition gives dignity in a way that follow up questions never can because questions will take us where we want to go. Not necessarily where the speaker is trying to take us. And he might have been able to generate not just more information from her, but maybe commentary from your sister, other community members, because she probably shut off because she was, like you said, so taken aback by how he showed up in that moment. But also it was probably poking at something that was really meaningful to her as well and feeling disrespected instead of dignified.

Joe (33:09)

I want to ask questions about all three of these, about attention, intention, and recognition. But starting off with attention, I like this idea of feeling how you feel, feeling how you know the Pepe Le Pew. If you. Heart. Heart beating. Or. Or I think about some conversations I've had where my heart is racing or I'm sweating, so my body's giving me these clues when I'm feeling like I'm not able to engage it 100% because I'm Pepe Le Pew and my heart's beating out of my chest. What's the action I take? Do I disengage and wait to come back after I figure out what the hell's going on with me internally? Do I apologize and try to reframe? Like, what do I do when I'm feeling these internal feelings that really aren't allowing me to hear the message the way I want to?

Katie O'Malley (34:02)

Yeah. So first, thank you for summarizing and paraphrasing that. So. So. Well, you have a couple of options. Truthfully, the more you practice this, the easier it becomes to bring yourself back to the baseline that you want to operate at. But the first step is just an awareness that it's happening at all. So once you get to that awareness that it's happening, if you feel like you can't get yourself back to a place where you can have a productive experience where you're trying to understand and not debate or try and persuade someone, being able to say, and this is. This is where vulnerability comes in, and people get a little itchy around that. But being able to say, I'm having a pretty strong reaction to what you're sharing, and I'm not quite sure why. I'm wondering, can we come back to this? Because I really want to understand what it is you're trying to share with me, and I know I don't have the capacity to do it right now. And you would be surprised how people respond to that. Right. And it's usually with compassion and understanding for you and feeling respected because you're communicating to them. I want to understand. I want to hear you. I recognize something is getting in the Way for me.

Joe (35:26)

You talk a lot about courage. I've heard you talk about courage in other places. Obviously, the name of what you do is encourage. So is this courage that you're talking about having the courage to tell somebody exactly what's going on inside of you?

Katie O'Malley (35:42)

Yes, exactly. It's the courage to do that. And when we're talking about attending to someone, yes, it is that. And when there's also courage in the recognition piece, which is where I say, this is where we have to understand another person's lived experience as their truth. Right. This is where we're putting agreement to the side and just trying to understand where they're coming from and where this idea or perspective is rooted. But then we also have to be willing to understand what's getting in the way of us being able to really understand them. And this is where we start to dig into our judgments, assumptions, unconscious biases. One of my favorite examples for me, and I'll never forget the first time I told this in a classroom at University of Chicago, Booth School of Business. And it was like crickets in the classroom with these 40 students. And I'm like, oh, my gosh, am I about to get fired? Or what is happening? And what I realized is they couldn't believe that I had shared a story so seemingly vulnerable with them. So what it was I was talking about listening, the suspension of judgment and assumption. After I finished graduate school, I was hired at the University of Texas, Austin in to work in their Leadership and Ethics Institute and do leadership development and coaching.

Joe (37:06)

My son went to UT with the students.

Katie O'Malley (37:08)

Oh, yeah?

Joe (37:09)

Yeah. How about that? What years was he there?

Katie O'Malley (37:12)

Yeah.

Joe (37:13)

Oh, my goodness. He's 30 now. So 2017 was when my kids graduated. Yeah, he was an engineering student, so maybe not.

Katie O'Malley (37:21)

But maybe not. But we served the whole undergraduate population. Sure, maybe.

Joe (37:25)

Oh, that's fascinating.

Katie O'Malley (37:27)

Ask him. I would love to know. But I got down there and Joe, when we were talking, products of the Midwest, right? So born in Chicago, moved down to St. Louis from. First job out of college was in Minnesota, went to college in Ohio. Just a product of the Midwest. Right. But I had never lived below the old Mason Dixon line. And there is a difference in culture. And I remember when I got the job, folks saying, you know, you're moving to Texas. Just be aware. I'm like, but I'm moving to Austin. It's fine.

Joe (38:02)

Austin's weird. It's not.

Katie O'Malley (38:04)

Austin's weird. And it's fine. And so. So I get there, and within the first month, I'm going through These so many orientations, meeting with brilliant faculty and administrators, being in, like, all of these meetings to orient me to the 40 acres. And I started realizing I was tuning out in those meetings, and I couldn't figure out why. I'm like, I. I am a listener. Like, what. This is what I spent three years training up to do with my master's degree in counseling. I know I don't know everything there is to know about this institution. There's no way. Why am I checking out? And it turns out as I started to reflect on all of those different meetings and one on ones was that I was tuning out whenever I was in conversation or listening to someone speak with a Southern accent, because I had been socialized both overtly and covertly through media and family, that people from the south were not as smart as people from the North. Now, is that true? Absolutely not. I didn't even know I had that bias because I was never confronted with a Southern accent on a regular basis throughout my life. And so being able to say this was getting in the way of my base. Like, not even controversial stuff, just basically basic understanding around the university how these things can serve as barriers to really building connections and relationships to others, all because of roots we didn't even examine prior to having this awareness. Right. And so the recognition piece not only asks us to recognize another person's lived experience and where they came from as likely what is rooting or grounding their perspective or idea, but we have to do the same for ours to see where we're getting in our own way. And so when I shared that story with the students, I was like, anyone else have something like this, or is it just me? One student raised their hand after about. It felt like 10 minutes. It wasn't. It was probably 20 seconds. One student raised their hand and shared, then another and another. We all have it, but are we willing to be courageous enough to recognize that we do?

Joe (40:26)

This idea reminds me so much and is parallel to, I believe, this idea of having a growth mentality.

Katie O'Malley (40:33)

Yeah.

Joe (40:33)

Of instead of defending yourself and why I feel the way I feel really questioning it. And. And also the idea that my mom says, your mom's a badass. My. My mom's a badass, too, Katie. Which is this idea of the only change that you can make is. Is inside. So examining you before you examine. Because I feel like too often today, we start off with, what's wrong with that other person I'm talking to, instead of, how can I change this? And by changing the way that I give attention to starting with what's limiting me from being in this conversation, I think is so important. It also strikes me that the second piece of air, the idea of intention, like there's this understanding. I would think that on two levels is what you're leading me to kind of see that I can't just understand the words. I'm trying to understand much more deeply, where is this person even coming from? Which means there's this depth of understanding that, man, I gotta listen. I'm listening even for visual cues, I would think to get a much deeper understanding of not just the words, but the context.

OG (41:44)

Yeah.

Katie O'Malley (41:45)

And the intention to understand it can feel kind of vague and squishy. And so when you're. When your intention is to understand, the initial formula that I like to give for folks is your goal is to be able to paraphrase what you've heard them say, state something you observed about their affector physicality, and then offer a reflection of feeling. What it can often sound like, for example, and this is the example that I give in the TEDx, if someone is telling you about their weekend, when they get to the end, do not ask what was the best part? Or what are you doing next weekend? Right. That's taking you where you want to go, not necessarily where they want to take you. Instead, you're going to paraphrase what you heard, state what you observed, offer a reflection of feeling. And if you're focusing on being able to do that, your intention to understand is going to stay, stay put and stay clear. And so it would sound something like. Can I share our pre taping conversation, Joe? Okay, so when Joe and I were on four, he was telling me a little bit about construction that was happening in.

Joe (43:02)

In his home or destruction.

Katie O'Malley (43:04)

You pick your destruction, pick your poison. Joe, when you were telling me about the improvement projects in your house, it sounds like there is a lot going on in terms of contractors, painters, and unexpected repairs that needed to be made that must be causing you some stress and disorientation. I noticed you said sigh a breath of relief when you shared with me that it should all be wrapping up this week.

Joe (43:38)

That's wild.

Katie O'Malley (43:40)

What's wild about it?

Joe (43:42)

Well, well, I think what's wild is that you're reflecting back, but you're not telling me that's what you heard. You're asking me if you heard me correctly, which I also like too, you know, because then we're gaining again, we're not agreeing. And I love that you pointed that out earlier. We're just. Did I hear you correctly is, is this exactly what. What the feeling was?

Katie O'Malley (44:04)

Did I?

Joe (44:04)

And it wasn't just about the words. It was about the emotions that you saw me emote, which, hell, yeah. I'm so glad it's almost done. I can. Look at me. I can't lose much more hair, Katie. It's almost all gone. It's already gray. It's not going to get any grayer. I don't know. I don't know what happens next if I just keel over with all this stuff. It's actually very beautiful, but it is great that it's ending. That is fantastic. So walk us through again, the framework, because you went through that a little quickly. If you could just. We do this, then we do this, then we do this.

Katie O'Malley (44:35)

So as you're listening, to understand your intention, the best way to stay on track is to be able to paraphrase what you heard, state something you observed typically about that person's demeanor or physicality that might give you a clue into what they're feeling. And then that third part is reflecting back feeling, which is the hardest part to do. We spend quarters upon quarters in graduate school learning how to get this right. And so what I'll say is, you're probably going to get it wrong most of the time because you haven't been trained to do this. But what matters is that you tried, right? So you go to a foreign country, you try to speak the language of that country, and people are more likely to give you the benefit of the doubt and be kind in. In how they interact back with you. It's the same principle here. You're probably going to get a lot of it wrong, but they see you trying to understand them.

Joe (45:34)

Megan Schrader must have been in your class. She must have been. I swear, this woman is a ninja at this stuff. And I just hope someday to be like you and like her. But. But I love the idea of trying because I'm not going to know as somebody across from you, I'm just going to know that you cared and that you tried to find this common ground. I'm going to ask two quick questions before we say goodbye. So, number one, let's talk about at work, and then let's talk about at home before the holidays. If this becomes the culture at work, which we can't. We can only control ourselves, but we can certainly, if we act a certain way. If I'm around Meghan Schrader, I'm trying to talk about her all the time. She's trying to talk about me, we end up having a wonderful conversation and the people around us see that and then we're learning from each other. If we practice this type of listening at work, how does the workplace change?

Katie O'Malley (46:28)

I think it changes the main way. My deep seated belief that I believe work would change if more people showed up like this is that retention and satisfaction among employees would go through the roof. When we listen in this way way like we've talked about, it leads to greater understanding, connection and trust. Those three things lead to sense of belonging in a community and people do not readily leave their community. So if you are having trouble with retention, my first question would be how do people communicate in your organization? So that is number one. Number two, I think what it also.

Joe (47:11)

Can I say actually Katie, before we get to number two because number one just strikes me these are real dollars in the organization. The cost of a new employee is through the, it's huge the productivity cost when there's no communication. It always cracks me up that these are called soft skills. When these are big numbers on the bottom line that we're adding by practicing this type of listening.

Katie O'Malley (47:32)

Yeah. And you hit on the second one. It's productivity. Even though it, it's going to feel like a huge investment of time on the front end, which I promise you it's not. We're adding minutes, not hours. When we communicate in this way, it's going to reduce the number of emails, slack messages, gossip and chatter between folks because you've heard yourself, you've heard each other clearly the first time or made that really solid attempt to instead of making assumptions, making judgments, having to go back and do decks proposals over again, smooth something over with a client. Using this with clients. Holy cow. The type of relationships you can build, also increasing overall productivity. And so it's retention and engagement of employees, but also their ability to be productive. Both things that bolster the bottom line.

Joe (48:27)

Just imagine going to work every day if you're working with with clients or working with customers and you feel like you know them and they know you a little better. Like what a fun workplace to go into, which is how I measure life and how fun, how fun it is. But I've got a more important one for you because we opened this by talking about the holiday. So I'm sitting next to Uncle Larry, Katie, and he won't stop talking about crypto and I'm about to lose it. How does this type of listening help me through the Thanksgiving table, Katie?

Katie O'Malley (49:02)

Oh, Uncle Larry. I mean it's so you're feeling it, you're getting that Racing heart. You're starting to sweat. You can even name it. Hey, Uncle Larry, I'm pretty sure we disagree when it comes to crypto. And it's also apparent to me this is something that you really believe in and you're super passionate about. I want to better understand where that passion is coming from. It's not. I want to understand crypto and blockchain and mining and all of it and the huge energy expenditure of these data centers that are taking away all of the Midwest water. Not that I have an opinion on this or anything, but I want to understand your passion around it and why this matters so much to you. And my guess is Uncle Larry is going to feel a sense of agency, autonomy. Those are the things he's going to name. This is going to lead me to financial freedom, which is something I've never experienced before. And you can say, you know what, we actually agree. I love having agency and autonomy. It's why I have my own businesses. Right. I'm trying to be have financial freedom by the time I'm 60 as well. I'm wondering if I can share with you how I'm getting there and see if that might not be helpful to you.

Joe (50:19)

And we've moved it now to a discussion about financial independence, which I know our stackers love and Uncle Larry loves. I mean, why is he so in the crypto?

Katie O'Malley (50:26)

Yeah.

Joe (50:27)

And we don't have to talk about mining anymore or going through water. Katie, thank you so much for being a mentor for us today. We will link, by the way, to your TEDx doc. Everyone, you should go watch this TEDX talk. I've told you that not tens of thousands, but now over a hundred thousand people have watched Katie's TedX talk. I can't imagine, by the way, being on that stage, Katie, and my heart beating. I might have stopped the TEDx talk and went, you know what? My heart is beating through my chest. We can't do this right now. I'll be back another day.

Katie O'Malley (50:59)

Can I tell you as I was, I was the first one to take the stage that night, and I was standing to the side and the Pepe Le Pew heart was happening. And we have a choice, right? The tipping point between excitement and anxiety is a razor's edge. And I just, I put my hand on my heart and I said, heart, I know you think you're anxious. You are excited. This is going to be so much fun. We're going to have a great time out there. I got you. And sometimes we just need to talk to our bodies. Like we would talk to a friend who needs our support, got on the stage and went at it and you did.

Joe (51:41)

And I loved it. I I loved every second of it. What's funny is, is that I was there for the whole thing. And what I mean there I'm hearing the messages because I was thinking in this age of not of attention deficit disorder that we all kind of have and our devices I think make it worse. What an important message that you learned from being grounded by by by mom. And we'll also link to encourage coaching.org where you've got resources and people want to know about you and your practice.

Katie O'Malley (52:13)

Love it. Thank you so much.

Doug (52:19)

Hey there Stackers. I'm Joe's mom's neighbor, Doug, the historian behind all of this basement goodness. Today, let's take you back to this date in history 2019. I know pre Covid history way way back there. On this date a single was released that made a ton of Benjamins for this singer songwriter and also set a new record. Blinding Light went on to a whopping 90 weeks on the Billboard charts, shattering all records for the most time on this iconic list. Here's the question what Benjamin Stacker wrote Blinding Light? I'll be back right after I tell Joe's mom that I'm a star on this podcast baby.

Katie O'Malley (53:08)

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Joe (53:33)

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Katie O'Malley (54:15)

Foreign.

Joe (54:18)

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Doug (54:39)

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Joe (54:41)

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Doug (54:46)

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Joe (54:50)

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Doug (55:03)

Hey there, stackers. I'm star podcaster and guy who's also somehow managed to keep this beautiful, well tanned ego in check. Joe's mom's neighbor, Doug. On today's date in history, a star song was born. Blinding Light was released today, way back in the year 2019, and went on to 90 weeks on the Billboard charts, breaking all records for longevity.

Katie O'Malley (55:27)

Wow.

Doug (55:27)

And I thought two minutes was long. I mean, I've definitely been told that numerous times, but 90 days? I mean, that's impressive. Here's our question. Who wrote Blinding Light? If you said it was Benjamin Stacker, Abel Makonin? Tesfay, you're probably one of those creepy stalkers because most people just know him as the Weeknd. But nice job, creep. Now celebrate by bringing me some hot chocolate, which it's freezing down here in the basement. And while you do do that, I'll turn this back over to Joe at OG.

Joe (56:02)

Hello, darlings.

Katie O'Malley (56:04)

And now it's time for your favorite.

OG (56:06)

Part of the show, our stacking Benjamin's Headlines.

Joe (56:09)

Our headline today, like so many headlines that we've had, comes from the brilliant writer. I don't think it's a mistake to call this guy brilliant. OG Jason Zweig from the Wall Street Journal. Jason writes, should you just buy stocks until you die?

OG (56:24)

Yes. Period. Over. Yay. Good article, Jason. Way to be, bud. All right, next topic.

Joe (56:31)

Jason says Tina is back. Tina stands for There is no alternative. Years ago, when interest rates were near zero and investors were acting if stocks were the only choice, market strategist Jason Trenner of Strategic Research Partners popularized the term the Tina market. The latest argument for Tina comes from a newly updated analysis by a team of researchers who find that retirement savers shouldn't own any bonds at all.

OG (57:02)

Took a whole bunch of money and people to figure that out.

Joe (57:05)

I do like it, though, when Imperial Research agrees with what you've been preaching for the entire 15 years we've had this podcast.

OG (57:12)

Okay?

Joe (57:14)

Instead, according to this line of reasoning, investors should keep one third of their savings in US stocks and 2/3 in international stocks. I disagree with that. The researchers advocate you should hold all stocks all the time, not only when you're young and saving for retirement, but even after you retire for as long as you live. If only stocks were a sure thing. Chasen writes, in financial markets, nothing ever is. You can't just take an analysis of the past, no matter how careful it is, and assume you can extrapolate it into the future.

OG (57:45)

Okay.

Joe (57:46)

To reach their conclusions, Scott Cederberg, a finance professor at University of Arizona, and his colleagues Zihan Anarkaluva at Emory University and Michael o' Doherty of the University of Missouri analyzed stocks and bond returns from 39 countries from 1890 through 2023, taking the longest available period during which each was classified as a developed market. That's up to 134 years for such markets like the US and the UK and as short as four years for Colombia. Their central finding across the decades and across the globe. Bonds have historically tended to go up and down in sync with stocks over long periods, making them poor diversifiers while offering low returns to boot. Well, let's just stop there for a second. Let's not talk about stocks versus bonds. You're not having bonds at all, but bonds, bonds is poor diversifiers when you look at the long term. OG that's, that's pretty interesting. Something that I'd never considered. I just thought you're succumbing to a lower return locked in guaranteed if you go with bonds, but the fact that it doesn't really decrease volatility as much as you would hope by diversifying your portfolio also is a conundrum.

OG (58:57)

Well, I mean, if you just look back in 2022, most famously, or most recently, I should say, the storyline at the end of 2022 was 60 40, stock bond mix didn't save you. And that's the most recent example. But it makes sense that the fixed income market in the same economy that you're investing in, the stock market, would largely behave somewhat similarly to the big picture economic conditions that are going on. So said a different way, if the economy is strong, companies are borrowing money responsibly. They're paying that money back with interest responsibly and on time. They're using those proceeds of the borrowing to finance expansion and grow more customers and all that other sort of stuff that, that all checks. And if you'd say, well, that makes a ton of sense, it also must make sense the other way too, right? If the economy is not doing well, companies run the risk of not being able to pay back their loans, defaults or paying them not on time, they have to borrow with worse terms, just like a normal consumer, right? If your credit score sucks and you go, I need to borrow some money, the bank goes, well, we can give it to you, but it's going to be on our terms, not yours. And that's why people say whenever I need money, the bank's always a jerk about it. When I Don't need money. They're like, how much do you need? Because that's the cycle. Right? That's why you want to think about that stuff in advance. So I believe that one might come to the conclusion that all you're doing is you're getting maybe a smoother ride by having the lower performing asset class in there, the fixed income, because you're not seeing the wild swings of all stock, but you're still on a little bit of a roller coaster. And it's not providing any benefit to the long term return stability of the long term return. You're just getting a smoother ride because you're taking less volatility. It's not giving you a better return by having that. You just get a smoother return even as you talk.

Joe (61:13)

I'm thinking about 2008. In 2008, there was nowhere to hide there either in that huge downturn. Bonds certainly didn't save you at all. God forbid you have money in money market fund versus a money market account that wasn't FDIC insured. You even lost money in cash during that time.

OG (61:31)

Yeah, but I think people look at it and say, well, the stock market was down 20, I was down 10. So that's good.

Joe (61:36)

Okay.

OG (61:37)

It's like, well, of course you were because you only have half your money in stocks. Unless you were levered two to one, why would you expect to have a return that is dissimilar to your proportionate weighting of your exposure in that area?

Joe (61:52)

You want the big kick in the pants on bonds?

OG (61:54)

Oh, sure, give it to me. Not that I need it.

Joe (61:57)

After inflation, Cederberg and his colleagues determined that bonds earned 0.95% annually, far below the 7.74 for stocks and 7.03 on international stocks.

OG (62:09)

Yeah, it just depends on what fixed income you're looking at. I mean, corporate Treasuries or corporate fixed income rather is going to pay a much greater return than U.S. treasuries would. U.S. treasuries largely considered the risk free rate. You know, if you're thinking back to your finance classes or you're trying to decide what's a metric to consider, largely people would say that a U.S. treasury, right, a five year, ten year bond, whatever they'd say that's a risk free rate. You can put your money in there. You've got as close to 100%. I don't want to say 100%. You've got as close to 100% return potential as you can get because it's backed by the US government. So we would consider that the risk free rate. So anything above that in terms of risk is going to have a commensurate amount of return. So generally we think cash and treasuries pays 3, but inflation is 3, right. So you're getting 0. They say 0.9, so that's about right. Corporate fixed income. So if you lend money to Apple or Google or General Motors or whatever, you got to buy some fixed income with big U.S. companies, probably getting 6. Inflation's 3, so you get 3. And if you're owning those companies instead of lending to them, you get 10, inflation's 3, you get 7. So your argument is, I think is, or the argument here of this article is pretty spot on. It's 7, 3 or 0. Those are real numbers to consider, not 10, 6 or 3. Because inflation is a thing.

Joe (63:38)

Zweig says this means for most people who save for retirement target date funds that hold this gradually tapering mix of stocks, bonds and cash could come up short because of that. Another reason why we've never advocated for target day funds. But then Zweig turns the corner.

OG (63:54)

You know who does advocate for target day funds?

Joe (63:56)

Joel and Matt. Yep, I'm sure they probably do. Don't get me wrong. I don't know if they probably like.

OG (64:02)

20, 30 Target Day funds. Even.

Joe (64:07)

Those losers and their target day funds.

Katie O'Malley (64:11)

Joel.

Joe (64:12)

Who names, who names their kid Joel? By the way, if you do name your kid Joel and if your name is Joel, you're probably fine. But at least your name isn't Lars Guard. I mean Joel Lars Guard. Like who, who would do that to a kid?

OG (64:23)

I mean, there was a considerable amount of time in my history where I thought your name was Joel.

Joe (64:27)

So that's everybody. My uncle thought my name was Joel, for God's sake. I was 40 something years old. My aunt Ruth died. My uncle Dick Star sends out the next year's Christmas card and it's to Joel. I'm like, okay, but you know what, I went after him. I'm like, no, no, no, I am not a Joel. Joel's do the how to money thing. Like gross. Yeah, no, thank you.

OG (64:45)

Target day funds.

Joe (64:47)

Jason, though, turns the corner on this and says this message comes at a time when investors are already taking Tina. There is no alternative to the limit. At the S P 500's record close a few weeks ago, 68.90 US stocks were valued at 40.5 times their long term earnings, adjusted for inflation, according to data from Nobel Prize economist Robert Schiller at Yale University. That's the highest ratio in a quarter century, that is, since the bursting of the dot com bubble in 2000. Cederberg, the guy that did this study, even says, with valuations where they are, this may just be a tougher investment environment for current retirement savers. Cederberg also says, we're not trying to pretend that putting all your retirement money into stocks isn't risky. He adds, it's an incredibly risky proposition. In fact, Cederberg and his colleagues looked at more than three dozen global markets back as far as 1841. And over all possible 30 year horizons, investors in those markets who held a domestic all stock Portfolio underperformed inflation 12% of the time. So it can, it can happen. If you're domestic all stock, kind of like we talked to Vijay about on, on Monday, don't do that.

OG (65:59)

Well, and I hate the word risk here because risk assumes that you have a chance of loss and you don't. You still own shares in this company. And especially if you're globally diversified, you have shares in thousands and thousands of companies. So your risk of your account going to zero is zero. It's not going to happen over a 30 year time horizon. You may trail inflation if you're only invested in your own country for 30 years. That's the Japanese issue that we talked about on Monday. And you know, clearly countless other scenarios, I think they said what they say 12% of the time. So that's an 88% chance of success. I mean, that's pretty high. That 88% of the time you outplace inflation. That's pretty good. But I think about this more just big picture. And fundamentally, if you were a stock investor, let's say you started investing when you were in your 20s and you put money in your 401 and you bought Contrafund and you bought Fidelity Magellan and you know, and now you switched over to ETFs and you've got an S&P ETF and you've got a small cap ETF and you've got an international ETF and you've just kind of done your thing for 30 years and now you're 55 years old, right? You're like just a smidge younger than Joe. And, and you're like, okay, what? Just, I'm adding facts to the case. I'm building the story. People are like, okay, I can see myself as a slightly younger Joe. And you've been successful, right? You've done all this stuff, you stuck through it thick and thin. Your portfolio has grown. You've seen all the chaos that can happen over a 30 year investing career and now you get to retirement, you go, yeah, all that stuff that made me wildly successful to get to this point, I'm going to stop doing that. Like, why?

Joe (67:44)

Why?

OG (67:46)

The only risk you have is, and I acknowledge this is very big. The only risk you have is being unlucky. It's being the guy or gal who retired on January 1, 2008. Market just kind of take you back in time. October 15th of 2007, the market hit an all time high. By January of 2008, you're only how many days away from that? You know, it wasn't straight up from there. It was pretty benign. But you're less than 90 days in front of an all time high. And you're like, I'm feeling pretty good. You know, it was crazy in 2000 with Y2K and 9 11. Okay, cool. But we're out of that now. You know, we're good. We're at an all time high. I'm going to retire, put my money in the market. It's been in the money market. I'm going to live in my 4%, move on with life. And you wake up on January 1st of 2009, but just one year later and you have 37% less money and you still stay the course. And you're like, you know, it is what it is. Like, this is just part of the deal. And you get to the middle of March of 2009 and now you have 50% less money. Like, oh, crap, just escalated in a hurry. So that is the big risk. That's the single risk, I think, as it relates to stock investing. And so if you can overcome that.

Joe (69:07)

Yeah.

OG (69:07)

And everything's okay.

Joe (69:08)

Well, can I stop you right there for a second? Because this is what Jason points out in the piece. The big problem with this is that. And he's got great words for this.

OG (69:19)

Getting unlucky is not great.

Joe (69:21)

Tina feels friendly right now as stocks flirt with record highs, as they always do, by the way, Jason. But over a lifetime investing as if there's no alternative to stocks will demand that you have the patience of a tortoise and the emotions of a stone. I like that though, because it does it 100 does. And you've said this before, OG this is the right way to invest. And by the way, even after I read this and, and Jason has a bunch of times when bonds beat stocks, by the way, most of those were in the 1800s. And while we often say, well, you and I often say there Is no new. New. I will say there are incredible differences between this market and that one. And what I'm not talking about is, well, no Bitcoin. And it's all. No, no, that's the old stuff happening again. This is the way that markets work are different. There are different rules in place that weren't in rules place then. There are different guardrail. There's so many different. There's different products. There's more people that are in the markets like, which are good and bad. Sure. The market's just systemically different. So to say that most of the time bonds beat stocks. Oh, yeah, those were in the 1800s. Jason. I'm sorry, that doesn't make your case. It doesn't make your case. But I do love the fact that if you're going to invest all in stocks, number one, that's the right way to go. But number two, as you just pointed out, OG it's going to be a tremendous, tremendous roller coaster ride. And can you stand that? And if you can't, it's okay. Just design your portfolio with more safeguards and don't go all stocks.

OG (70:59)

Yeah, well. And that's the biggest thing. It's the behavior piece of it that is the hardest to predict. I can't tell you how many times I've talked to people that are like, you know, no, no, no, I stayed the course. You know, 2008, 2012, 2018, Covid, I stayed the course. And I go, yeah, but did you have 3 million bucks then? Well, no. Okay. Yeah. It's really easy to stay the course when you got 100 grand in your 401 and it goes down by 20 grand and you're like, okay, yeah, it's part of the deal. It's different. When you have 2 million in your 401k, it goes down by 400,000.

Joe (71:28)

That's still, by the way, somebody 30 right now here in 20 grand is like, oh, my God, that would hold. Yes. That sucks. I mean, that 100% sucks. But think about the. It goes down by a million.

OG (71:38)

Yeah, yeah. Or you've got 4 million in your 401k and it's a minus 30 year and now you have 2.8. Like, that is breathtakingly awful. That's sleepless night stuff. But that's the trade. And so the way that you avoid the being unlucky going into retirement with all stocks is you have to have two, some people would say three years worth of cash for your distributions. And to most people that seems pretty reasonable. And some people Might even look at that and go, well, wait a second. If I'm taking 4% on my portfolio because the Internet says I'm supposed to do that and you just said I should have 2 to 3 years worth of cash. So 2 times 4 is 8, 3 times 4 is 12. So I should have between 8 and 12% of my portfolio in cash, wouldn't I then be 8812 or 92 8. Yes, you would be. That is exactly right. So that takes off that unluckiness. People call it sequence of returns risk. But if you don't have enough money, so there are some people that maybe their living expenses are 150,000 a year and they have 10 million. Right. Do they have a sequence of returns risk? Not a chance. Not even close. The market could go down by half and they're still good. Right. So they don't need to have that extra money in cash. If you're the person that has a million bucks and you're living on 40 grand and if you had to live on 38, life would suck, you have that. And so the way that you offset that is you take a little off the table by having that money sit in cash for when the time happens, when the market does go down by 20 or 30 or 40%. Because it's going to happen. And so by default you end up by being ballpark 90 10. And I use cash instead of fixed income. But you could use fixed income too. I like cash because it's a known, known. Put my money in my money market fund, it's going to get four and a half percent. I know it's going to happen. I put in treasuries. I know put. I'm going to get four and a half percent. I know it's going to happen.

Joe (73:40)

Why take the risk if you don't need to?

OG (73:42)

Yeah, there's nothing gained there.

Joe (73:44)

I will link to this piece. It's fascinating because I love Zweig's cautionary tale here og but what it comes to at the end for me is watch out for the roller coaster ride. It will be a roller coaster ride, but science shows that this is the way to invest. And when it hasn't been, has been deep in history. I'll call it ancient history. I don't think the 1800s are ancient history, but you know what I mean. And just different times when you look at investments in the way that they respond in markets, especially financial markets versus I think it's a little different with something like gold where gold can be just traded back and forth regardless of the market. The bond market is completely different now than it was in the 1800s, but I love the cautionary tale of this is the way to invest, but it's going to be a ride Stackers there's another thing here. If you're somebody who's obsessed with these safe withdrawal rate numbers, the best thing you can do for yourself is to get away from needing that maximum drawdown. Like it's the best thing that you can do for yourself because that buffer where you're not taking every last dollar can help you also do the right thing with your money. Have the emotions of a stone and the patience of a tortoise. I love the way he writes and get away with it. We'll link to this, of course, Wall Street Journal unfortunately folks behind a paywall, but Jason's week always worth paying for. Excellent, excellent writing from Jason. All right, that's going to do it for today. Except for this on the back porch. We are currently in open enrollment season. And don't forget we've got a guide that helps you with that. Our guide you purchase one time, you have it forever. We update it every month as you've heard us report every month on the show. We currently have three guides, one on taxes, one on workplace benefits, and one on college planning. But with open enrollment right now our Workplace Benefits Guide has a checklist right at the beginning, one page where if you follow this checklist, it will go through every single thing that you want to think about. You will be far better off when it comes to picking the right things. You don't have to read the entire guide right away, but if you're staring this list of benefits in the face stacking benjamins.com guides and click on the workplace benefits. We have some bundles if you decide to buy two or all three, so check those out too. If you're also worried about taxes or putting yourself or family members or friends through college. I love people to put their friends through college. I don't know why I said who puts their friends through college?

OG (76:20)

If there is somebody, I've got another one going.

Joe (76:24)

If you're not here specifically though, because of open enrollment, you really need a plan that is more robust. OG and his team are taking clients and it's time to think stackers about 2026. Where are you at? Did you get where you wanted to be in 2025? Would having an actual financial plan help? Hopefully that's why you're here. But if you want great people in your corner, stacky benjamin.com OG that's the line to schedule meetings with OG. You heard Anna from OG's team on Monday's show. Stacking benjamin.com OG gets their calendars all right, that's it for today. Doug. You got it from here, man. What should we have learned on today's show?

Doug (77:03)

So what's stacked up on our to do list for today? First, take some advice from Katie o'. Malley. Focus that begins with a plan. Just get working and you'll be focused and intentional before you know it. Second, stocks for the long term, 100%. But realize Jason Zweig isn't wrong. This isn't a smooth ride. Build your plan on risks you can stomach, not what you think you should stomach or based on what's possible. But the big lesson, Joe, is that I'm just like the weekend I I'm blinded by the lights. Not emotionally though. Literally. I'm literally blinded by the lights after mom replaced the bulb over my recliner with one of those hundred watt LEDs. Holy, was that bright. I fell out of the chair when I turned it on. Couldn't see anything for about a half an hour. But but the upside is there's a permanent outline of my body burned into the Barcalounger. It's permanently mine now. Dibs. Thanks to Katie o' Malley for joining us today. You'll find Katie's work at encouragecoaching.org we'll also include links in our show notes@stackingbenjamins.com Coming up on Friday. You know those cool apps to help you manage money like Tiller and Griffin? Well, we'll talk to the founders of those apps about the good, bad and ugly of fintech? How do you get the most out of your favorite apps? How do you choose the good ones? What perspectives can we learn from the people trying to help you become better with money? We'll share stories from these founders and include longtime fintech veteran Ryan Ruff from Array as well. And he's going to help us share a huge Stacking Benjamin's announcement. Don't miss it. This is going to be great. This show is the property of SB Pilot 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.

Joe (79:11)

Oh yeah.

Doug (79:12)

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.