How to Add 1% to Your Portfolio Without Taking on More Risk (The Systems) SB1849

Summary

The Stacking Benjamins Show — SB1849

Episode Title: How to Add 1% to Your Portfolio Without Taking On More Risk (“The Systems”)

Hosts: Joe Saul-Sehy & Josh “OG” Bannerman, CFP

Release Date: June 1, 2026

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Episode Overview

In this episode, Joe and OG tackle a question on every investor’s mind: how can you boost investment returns by 1% (or more) without adding extra risk? Instead of chasing high-flying investments, they focus on optimizing your overall system—tweaks that deliver real, compounding results over time. The hosts discuss the underrated power of staying invested, minimizing taxes, and withdrawal strategies, with actionable insights for new investors and seasoned pros alike.

OG and Anna also return with another installment of “Financial Basics,” breaking down tax-efficient withdrawal strategies in retirement. And, as always, there’s comedic banter, lightning rounds, and a generous sprinkle of classic Stacking Benjamins humor.

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Key Discussion Points & Insights

1. Turning Efficiency Into Returns: Systems vs. Esoteric Investments

The “Systems Thinking” Mindset

• Joe notes that while many DIY investors are preoccupied with finding a “magic sauce” investment, truly wealthy individuals optimize for process and outcomes, not just returns.

  • “While DIY investors are optimizing investments... really wealthy people, they’re optimizing systems.” — Joe (10:00)

• OG concurs, adding it’s about shaping the outcomes, not just trying to beat the market:

  • “We’re trying to be successful in our financial journey over our lifetime, based on our definition of success.” — OG (16:44)

Staying Invested: The #1 Return Booster

• The hosts stress the single biggest lever for building wealth is staying invested through the ups and downs of market cycles.
• Joe points to news cycles as a dangerous pitfall:
  • “Time gives you the ability to see just how much a news addiction can kill your results because it creates panic selling...and desire to time markets.” — Joe (13:35)
• OG adds an antidote: Look at past headlines and realize most "crises" are forgotten after a year, while the markets have continued to grow:
  • “Every chaos bomb from a news cycle is forgotten tomorrow and has no long-term effect on your portfolio over the years.” — OG (12:20)
• Quote:
  • “Doing nothing is often the rightest answer when it comes to investing.” — OG (15:03)
  • “I used to be a guy that wanted to time the market OG, …what I figured out...every time I watch CNBC, I feel like today’s the day.” — Joe (14:21)

Advisors & Investment Policy Statement as “Shock Absorber”

• Having an advisor or at least a written investment policy acts as a buffer between your emotions and your money.
• “Just having these little shock absorbers in place between you and your ability to jump on your [investment account] and do the wrong thing is half the battle.” — Joe (16:20)
• Being process-driven trumps chasing performance metrics or benchmarks.

2. Tax Optimization: The Silent Return-Killer

Asset Location & Tax Strategy

• Smart asset location (putting the right investments in the right types of accounts) adds up over the long haul, sometimes modestly (0.5%), but compounding magnifies the impact.
• OG emphasizes the value of having a clear, proactive tax plan, noting from Stacking Benjamins’ own scorecard survey that lack of a tax strategy is common among listeners (24:10).
• Tax loss harvesting is debunked as being oversold to young investors; it’s more powerful for those with significant taxable assets (26:07).

Social Security Timing & Planning

• Strategic timing of Social Security withdrawals can substantially alter retirement outcomes. Most people default to drawing at retirement, but delaying can result in a guaranteed annual payout increase (~8% per year).
• “Social Security has a guaranteed rate of return…think of it from the perspective of, I’m not deciding not to take it, I’m just saying, I’m not making a decision today.” — OG (29:30)

Withdrawal Sequencing

• Joe and OG tease the upcoming “Financial Basics” segment, noting that withdrawal sequencing (deciding which “bucket” to draw from first) is often overlooked, yet critical for retirement efficiency.
  • “Which ones do you send first? You send the Roth contingent first...You send the pre-tax money first?” — Joe (25:35)

3. Non-Investment Planning Moves That Boost Returns

Gradual Retirement

• Easing into retirement provides both financial and psychological benefits, increasing returns by extending income streams and reducing withdrawal stress.
• “Delaying retirement partially means more income in your portfolio…can yield huge results.” — Joe (32:54)

Margin of Safety & Sequence of Return Risk

• The obsession with maximizing withdrawals—“living on the jagged edge”—makes retirees miserable and exposed to market downturns.
• Both hosts suggest: spend slightly less than your maximum “safe withdrawal rate” for peace of mind and better outcomes.
  • “Let’s move away from that jagged edge of taking every more money.” — Joe (35:04)
  • “If you have a little bit of margin of safety...there is no more sequence of withdrawals risk. You’re good, you’re done.” — OG (35:27)

Lightning Round: More Return or More Trouble?

• Concentrated stock: “Trouble.” — OG (38:01)
• More leverage: “I mean, I like it, but...trouble?” — OG (38:12)
• Crypto yield products: “Trouble.” — OG (38:25)
• Options trading: “Trouble.” — OG (38:30)
• Rebalancing: “Return.” — OG (38:33)
• Tax efficiency: “Return.” — OG (38:42)
• Checking your portfolio hourly: Joe jokes “Return,” everyone laughs at the trick. (38:45)

4. Financial Basics with OG & Anna: Tax-Efficient Retirement Withdrawals

(Segment begins at 46:22)

Key Takeaways:

• “Tax Control Triangle”: Spread assets across pre-tax (traditional 401k/IRA), after-tax (brokerage), and Roth buckets to maintain flexibility.
• Anna explains, “A healthy tax triangle would be a combination of...pre-tax...brokerage assets...and your Roth bucket.” (47:35)
• Social Security is taxable depending on other income—important to coordinate withdrawals to minimize tax.
• OG: “My Social Security is funded with my taxes, and then I get taxed on my taxes…a good gig if you can get it, if you’re the government.” (48:05)
• IRMAA: Income-Related Monthly Adjustment Amounts for Medicare premiums are triggered by high income, especially after Roth conversions—plan ahead, they look back two years!
• Roth conversions: Don’t rush; best executed near year’s end, when income picture is clear and you can control your tax bracket and IRMAA exposure.
• Anna’s actionable homework: Model your next 3 years’ withdrawals, and (if 10 years from retirement) learn your Roth conversion options.
  • “Make as many decisions that give me as many decisions in the future. We’re solving for flexibility.” — OG (53:15)

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Notable Quotes & Moments

• “Doing nothing is often the rightest answer when it comes to investing.” — OG (15:03)
• “Every chaos bomb from a news cycle is forgotten tomorrow and has no long-term effect on your portfolio.” — OG (12:20)
• “Just having these little shock absorbers in place...is half the battle.” — Joe (16:20)
• “Delaying retirement...means more income in your portfolio. Big returns.” — Joe (32:54)
• “Checking your portfolio every hour: Return.” (Joke) — Joe (38:47)
• “My Social Security is funded with my taxes, and then I get taxed on my taxes…” — OG (48:05)
• “IRMAA—she’s a sneaky girl.” — Anna (47:16)

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Important Timestamps

• 09:00 – Main theme: adding returns by improving systems, not taking more risk
• 10:24 – The underrated power of staying invested
• 16:20 – Advisors and investment policy statements as “shock absorbers”
• 22:35 – The silent killer: tax efficiency & location
• 25:35 – Withdrawal sequencing: sending the right bucket first
• 29:30 – Social Security decisions: no need to rush
• 32:54 – Gradual retirement, income, and happiness
• 35:00 – Spending below “safe withdrawal rate,” peace of mind
• 38:01 – Lightning Round: More return or trouble?
• 46:22 – OG & Anna: Tax-Efficient Withdrawals, Roth conversions, IRMAA explained

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Additional Community Tips (59:00+)

• Listener “Anonymous” shares car negotiation tips, including end-of-month timing and using dealer financing for discounts, but stresses understanding the fine print and dealer incentives.

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Takeaways (64:00)

1. Focus on Systems, Not Exotic Investments:
   • Automate and optimize process—staying invested, tax strategies, clear policy—yields tangible, sustainable results.
2. Withdrawal and Tax Strategies Matter:
   • Having a plan for withdrawal sequencing and tax management can add to your wealth without additional risk.
3. Chasing Every Penny Can Make Retirement Miserable:
   • Leave cushion in withdrawals, focus on flexibility and safety, and avoid obsessing over “maximum safe withdrawal rates.”

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Final Thoughts

This episode is a crash course in practical, behavioral personal finance with expert perspective and humor. Rather than risking more for marginal gains, stacking your Benjamins is about being more intentional—staying invested, optimizing taxes, planning smart withdrawals, and building flexibility into your financial journey.

Transcript

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[Joe Saul Sehi]

Hey there Stackers. If you're brand new here, on Mondays we always have a salute, so raise your mugs raising on behalf of the men and women making podcast in Mom's basement and the men and women who are trying to fill their basket with as many Benjamins as they possibly can. Here's to those people that kept us safe all weekend. Thank you to our troops, to our veterans. Thanks all you do. Let's go stack some Benjamins together now, shall we?

[Doug (Joe's Mom's Neighbor)]

Thanks everybody.

[Joe Saul Sehi]

He's the type of guy you get halfway home from the theme park before you're like, oh, where's Doug? Oh no, we have to go back. My wallet's in his fanny pack, so. Oh, do not feel bad for Doug. He's terrible. Every time he tells a story somewhere, a child loses a balloon.

[Doug (Joe's Mom's Neighbor)]

Live from Joe's mom's basement, it's the Stacking Benjamin Show. I'm Joe's mom's neighbor, Doug, and how about we find ways to add money in your pocket without adding more risk? How do you do that? We'll share a framework you probably haven't considered. Plus, Og and Anna are back with some more financial basics this week. How to take more efficient withdrawals from your funds during retirement. Sure, you might not retire tomorrow, but when you want to learn this stuff two hours before, we'll help you get ahead of the curve. And as always, you'll be way ahead of the curve with your friends as I share some shareable and mind bending trivia. And now two guys who will bend your mind toward more confident investing? It's Joe and. Oh, jj.

[Joe Saul Sehi]

Hey there, new and long time stackers. Welcome to the Stacking Benjamin Show. I am Joe Saul Sehi, the co host of the greatest money show on earth. And the guy across the card table does this with me. Mr. OG is here. How are you this fine Monday, my friend?

[OG]

Well, Joe, I'm live from Hollywood Studios today and I can't really talk very long because I got to get on ride of the resistance here. So I'm going to do that. But what do you need from me today, man? Because I got. Chop, chop.

[Joe Saul Sehi]

That sound you're going to hear in the background is the sound of money leaving OG's pocket. Throughout today's episode, I watched a bunch

[OG]

of videos about lightning lanes, lightning lane passes, multi passes, single day passes, priority premier passes.

[Joe Saul Sehi]

You need a PhD.

[OG]

Yeah, well, I. When I got to the point where the lightning lane pass was three times as expensive as the park pass, I was like, okay, something in this doesn't exactly math out. So I'll just stand in line.

[Joe Saul Sehi]

Yeah, get there early, do the thing.

[Doug (Joe's Mom's Neighbor)]

You.

[Joe Saul Sehi]

Well, you're already there early. Look at, we're recording this like 4:00am I know.

[OG]

Yeah, they let me in early. It's unbelievable. I said, do you know who I am? I'm the og. And they're like, pardon me, sir, Right this way. Oh, surprisingly, there was already a line of a thousand people though, so I

[Joe Saul Sehi]

guess that's because they stayed at the resort.

[OG]

They're still in line from yesterday.

[Joe Saul Sehi]

Well, we got a great show and thank you for being here, for showing up because according to Vanguard, you can add 3% to your portfolio if you have a great advisor. And the question that I always wonder is, you know, everybody's looking for this esoteric stuff, right? How do I add 1% to my portfolio and have it not mean any more risk to me? Well, I thought about that OG and I thought there's a bunch of stuff you can do that can add a little tweak here, a little nip and tuck there, and you can come up with maybe a percent, maybe two, maybe three, who knows? But we're going to go over that today. Esoteric, not esoteric. We're going to talk about stuff that works and stuff that doesn't work. How about that?

[OG]

I like it.

[Joe Saul Sehi]

Today we have not only a great episode talking about that, of course we got OG and Anna. We have a couple sponsors who help us make sure that we can keep on keeping on, keep making these episodes. And it's all free to you. The first of which is the Vault. The teams that array and budget simple have gotten together and worked their magic that they've created the power of monarch money budgeting and net worth tracking with rocket money, ability to kill unwanted subscriptions and the credit bureau's ability to keep bad actors from your credit. All of those organizations but in one Swiss army knife. Go to stacking benjamin.com vault to see how it works and to sign up. I think you love it as much as I do. We got a couple more here and then only one other sponsor break in the middle of Doug's trivia. So we're going to hear from them and then OG Doug and I, we're going to dig into how to make more money appear without taking on more risk. Well, if you'd like to stay busy and hunger strikes around noon or when your day's done, you know it's easy to go and make a bad decision when you're exhausted. There's something healthy in your fridge that you should be making. But instead you break your budget. You end up feeling horrible all afternoon or all evening because instead you decide to go out to a restaurant that just doesn't really care about how you feel. Much like a good budget, even eating healthy isn't a willpower problem, it's a setup problem. That's why things change for me when I found factor with factor I can hit my nutrition goals. Feel good all afternoon or evening without the planning, the grocery run or the cooking. Factor is meals built around your goals, whether it's weight loss, overall nutrition, more protein or GLP.1 Support for Strength of workout recovery. Check out Factors Muscle Pro Collection. Every meal is crafted with functional ingredients like lean protein, colorful vegetables, whole foods, healthy fats factor bans over 175 different ingredients. There's no artificial colors or sweeteners, no high fructose corn syrup, no refined seed oils. Just nutrient dense food. What surprised me initially was that it all came and it was fresh. It wasn't frozen. There's over 100 rotating weekly meals including globally inspired flavors like Mediterranean and Asian. So there's always something new to look forward to. Try the newly launched Ready to eat salads. Vibrant ingredients like elote corn. I'm not sure how to pronounce that. I've had it. Tastes good. Is it pronounced elote? I don't know. But I do know the next line, Miso edamame and it's very good. Plus 70 plus add ons to round out your nutrition from green juices to Peanut Butter Energy Bites. It's ready in two minutes. Factor shops, preps, cooks and delivers straight to your door so you more time for anything you love. And guess what? You're going to feel great afterwards. I use factor. I think you should too. You're going to absolutely love it. Head to factor meals.com sb50off and use code SB50OFF to get 50% off and free daily greens per box with new subscriptions only while supplies last until 927 2026. See website for more details.

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[Joe Saul Sehi]

Well, Stackers, you and I both want higher returns, but if the answer isn't taking more risk, what if it's just becoming more efficient? Right? Maybe there's some inefficiencies og that we can get rid of. Almost like on the new Muppets Rock N Roller Coaster. Maybe right now you've got an old minivan with some bricks in the trunk, and instead you want to be like the fast Loop to loop.

[OG]

Well, you know, the Rock N Roller Coaster is scheduled to open today. I've never been on it. I have no idea what you're talking about. Oh, but if I went on the

[Joe Saul Sehi]

old one with the, if I had

[OG]

bricks in my trunk, if you know what I mean. Is that, is that what we're talking about?

[Joe Saul Sehi]

Well, and this is the key to make the car run faster, so to speak. When it comes to what you're doing, I think what most people do, most DIY investors do og is they try to optimize investments. And I will bet, I will bet there's a bunch of people that came to this episode going, oh, good, we're going to add like 1% yield to all of our investments. Or we're going to, you know, figure out like, how to build a filter using AI. It's going to help us find like the magic sauce of the right investments. But while DIY investors are optimizing investments, I feel like when you talk to really wealthy people, they're optimizing systems. And this is where I want to spend most of our time today.

[OG]

Yeah, I would say that. Or optimizing for four outcomes, not the inputs. Yep.

[Joe Saul Sehi]

I gave a lot of thought to this, so. Oh, gee, I love to get your take on what you think about my thinking. I feel like the most underrated return booster. And this will be great if you're new here, especially because the key between really wealthy investors and people who are brand new to all this stuff is simply staying invested. I think staying invested is number one, the biggest return booster of all.

[OG]

Well, I mean, staying invested in Nvidia stock. I think that like that last little prepositional phrase at the end is really the missing link to a successful.

[Doug (Joe's Mom's Neighbor)]

It's easy to forget.

[OG]

Joe, don't worry about successful retirement piece.

[Joe Saul Sehi]

Could be Nvidia, could be the penny stock.

[OG]

Well, probably not that one. But it's funny you took this time angle because I thought that you would. That you were going to say time and you did in some way, shape or form. You took the time angle as I need to continually be invested as opposed to the time angle of I need to start as early as possible. I think there's two sides of the same coin, both worth exploring a little bit further. But what you're talking about in terms of staying invested is not paying attention to short term day to day news cycles. It's even hard to call a day to day thing a cycle. But short term news, things that lead you to believe that it's a long term issue that affects your portfolio. And the way that you can kind of stress test this is go grab a business section newspaper, head on down to the library, get some microfiche access.

[Joe Saul Sehi]

Whoa.

[OG]

Just pull up the Wall Street Journal app or the Apple News app or whatever you've got and go back in time and find a news article from a year ago or from two years ago or from two months ago and just think through the storylines that were going on and how specifically bad it was for investors because of this specific storyline. As recently as war in Middle east or inflation or tariffs or tariffs and inflation or this person's elected and this person's not, or this person's not elected and this person is like every single storyline can be turned into. This is the reason why you need to hit pause. That's the whole objective, is to get people to freak out and do stuff. And because a lot of times with money, doing stuff equals transactions, equals, you know, revenue for the people who are in the business of that. So. But the one thing that you can learn from that is. Now look at those storylines from five years ago and go, oh, yeah, I remember that was, that was all the rage for about 90 minutes. That was the thing that was going to crater everything. And here we are five years later, the market's up whatever percent it is over that period of time. Every single solitary chaos bomb that gets dropped into your lap from a news cycle is forgotten tomorrow and has no long term effect on your portfolio over the years.

[Joe Saul Sehi]

If you just go back in time like that, you can see, I think time gives you the ability to see just how much a news addiction really can kill your results, because it creates the three things that I listed here. Number one, it creates panic selling. Number two, it creates this desire to time markets. Right? Oh, I think based on the news cycle it is here now. I used to be a guy that wanted to time the market OG and what I figured out, what I figured out early on, and this is kind of funny, you know what? I want to time the market the day I happen to watch cnbc. And then I thought, how crazy is, is it that every time I watch cnbc, I feel like today's the day and when I don't watch CNBC for two weeks, it's not the day. But then I go back and I watch and, oh, today's the day I got to make a bunch of moves. I gotta make a ton of moves.

[OG]

Yeah, it's that or reading something on Reddit or playing around with stuff on ChatGPT, which, by the way, is completely funny. But anytime that you're engaged in something, you know, there's, there's a usefulness in taking the next step. I would argue if you're starting to think about your health and you're like, I need to eat a little bit better.

[Doug (Joe's Mom's Neighbor)]

Right.

[OG]

I'm going to really focus on eating a little bit better. Now is probably the time to go grab the Oreos out of the pantry and throw them out. Probably right. Doug's like, ooh, hard pass. Now would be the time to eat all the Oreos so that they're not.

[Joe Saul Sehi]

Yeah, so they're not in there anymore.

[Doug (Joe's Mom's Neighbor)]

Once they're in the cabinet, they're basically in your stomach.

[Joe Saul Sehi]

I got a bunch of M&Ms. Sitting in my car.

[OG]

Yeah, yeah, you'd hate to waste all that money. But nothing is more steadfast than going, I'm throwing the ice cream out that I just paid $6 for the half gallon for. So in some aspects of your life, taking the next step is the momentum that you need to kind of Build the system like you said, Joe. But money is, I think, the exact opposite. Doing nothing is often the rightest answer. If that can be A.

[Joe Saul Sehi]

The B. Rightest answer, I think is what you're looking for.

[OG]

Doug approved. Hashtag Doug approved.

[Joe Saul Sehi]

On our YouTube channel, we have this interview that I keep going back to, which is the stock market maestros, where they talk about the greatest investors out there. You'll love this interview. We will link to it in our show notes page. A key here that maestros do and that advisors do. This is why they work from an investment policy statement, because it's a shock absorber between your news addiction, which you might want to keep. I mean, I don't know why you would, but maybe you do want to keep. Maybe if you get some type of perverse enjoyment from looking at all the things that could possibly go wrong. But it's this little barrier between you and your money that makes sure you're not going to make a move. I mean, this is why some people have advisors. You know, we see all the time that advisors, the advisor, when you take off their. Their fees, well, they don't beat the index. Well, you know what? The adviser might not beat the index OG but they're probably beating you based, based on what all the research shows. Right. Just having these little shock absorbers in place between you and your ability to jump on your Schwab account, your Fidelity account and do the wrong thing is half the battle.

[Doug (Joe's Mom's Neighbor)]

Yeah.

[OG]

There's no way to predict in advance whether or not any investment idea, strategy, model, system, whatever, is going to do better than something else. But I would submit that not only does it not matter to whether or not somebody beats something, and this is with or without advisor help. I think what we're trying to do is we're trying to be successful in our financial journey over our lifetimes based on our definition of success. Joe, what your definition is, it's gonna be different than Doug's and different than mine. But that doesn't make mine better or worse than yours or yours better or worse than Doug's. This is your financial plan. The problem is, is that when we focus only on money, one area of financial planning, because all the other areas are absent, then that's the only thing you can evaluate. I was just talking to our new associate Noah. We call him new Guy Noah. I call him New guy Noah. I don't know what everybody else calls him, but I call him new Guy Noah.

[Joe Saul Sehi]

And it's probably not calling him that.

[OG]

I'd probably not. I haven't even asked him whether or not he likes that. Maybe I should. But anyways, so I was talking to a new guy, Noah, about this.

[Joe Saul Sehi]

In three weeks, this could be former employee.

[OG]

No, it's not.

[Joe Saul Sehi]

No, it won't be.

[OG]

No one loves us.

[Joe Saul Sehi]

It won't be.

[OG]

I can already tell. But he came over from a more brokerage model, like he has some experience. And one of his first questions that he had as we were getting ready for some meetings is he said, what tool do you use to go through all your portfolio performance with your clients? And I kind of chuckled because I said, well, technically we use this tool, but that's not a thing that we spend a lot of energy on. I said, well, what the heck else do you talk about? And it dawned on me that his whole experience had been money. Right? Like the money is the thing that matters. The money. Back to your original kind of overarching idea here, Joe. The money is the tool that gets you to your goal. And if you don't have a clear goal or you don't have a clear understanding of how to get to your goal, then the only thing you're going to have to fall back on is, I don't know, maybe I should beat the Russell 3000. Is that the. Is that. Is that a good goal? Well, not if you miss your retirement by two years and run out of money at 90. Then, no, it wasn't.

[Joe Saul Sehi]

Well, let's define what you're talking about, and I'm not sure exactly what you're talking about, so let me.

[OG]

Me neither sometimes, Joe, because I can

[Joe Saul Sehi]

hear some of our stackers that are screaming at their device, well, if the money's not important, then what the hell are we doing here? Back when I was an advisor, we wouldn't chase the performance of the portfolio, we would chase the goal. So we would have benchmarks around. Are we ahead of the game or behind the game when it comes to the goal? Number one, is this goal still relevant? Number two is, are we head or behind? If we're behind on the goal, is it our asset allocation? Is it what we did? Or is the culprit the fact that the market's just down and there really is nothing that we could have done differently about it? In which case, what are we going to do differently? Are we going to change the goal? Are we going to put more money in? Which is cool, because then instead of chasing performance, what we chased was goal attainment, which meant that we were always doing the right thing. We were holding when the market went down and we Were looking for ways to create more income streams, which is super important thing that by the way, when we created new income streams and the market was down, guess what? When the market was up, we still had those income streams. We still created more money. So we look for, is there a raise, is there a side hustle we've wanted to do for a long time that we're not working on? Like we'd have these fantastic conversations around do we value this goal enough to create new ways to attain it? I think that's what you're talking about here.

[OG]

Yeah. I mean, because at the end of the day, nobody cares whether or not you average 8% or 8.2% over your lifetime. The thing that you care most about is did I meet my financial independence goal? Did I not run out of money in retirement? Did I give money to the people in places that I care about in a manner in which I wanted to do that? Was I impactful to other people in my life? And so those are the standards by which you measure yourself, not what did my mutual fund do compared to the other mutual funds in the world? Now don't get me wrong, to your point, Joe, in terms of a little bit of pushback here, that's a threshold issue. You got to be in the ballpark. If the market's up 10 and you're up 2, that's a problem, right? I would also argue, by the way, if the market's up 10 and you're up 18, that's also a problem. It's just a different type of problem. But you gotta be in the ballpark. But more specifically, you need to be in the ballpark of your return goal for your financial plan. If your return goal is I need 6%, go get 6. Like live a life of leisure and not have to worry about the daily ebbs and flows of the stock market as much. Because six is your number, I would argue that you should be fully invested. And if six is your number, to reach your goal, you need bigger goals so that you know you can power compounding and over your lifetime and have really, really big impact. But if your financial goals get you there with 6%, then why are, why are you trying to get 10 or 12? Like what the heck, what are we doing? Absent a goal, absent a solidified, dollar denominated, time bound, specific financial goal, you're going to fall back to whatever it is you think you need to fall back to. And the media generally will tell you the thing to fall back to is your portfolio performance.

[Joe Saul Sehi]

I want to talk a Little bit about another way that I thought people make create excess return without taking more risk first. One, definitely staying invested. What's that?

[OG]

I said leverage.

[Joe Saul Sehi]

Well, it's funny. We'll get to leverage here in a second. Oh, all right. But I think this is the silent portfolio killer nobody talks about at parties.

[OG]

We.

[Joe Saul Sehi]

Which is. I kind of groan as I say this, but I do think number two is a little bit of. Of paying attention to taxes. When I look at inefficient portfolios, I think there's some cleanup that we all can do with our portfolio around asset location. Like, do I have the right type of shelter for my money? I can very quickly create a little bit more return without any more risk just by having the right asset. Asset location.

[OG]

I hear what you're saying in terms of, like, a little bit of return and, you know, just being a little bit more intentional. But, Joe, you have to also remember the power of compounding that half a percent over your lifetime and making those small changes as it relates to where the money is. And you kind of talked a little bit about taxes, which I'll circle back to in here a second. Those little bits of additional benefits pile up, but the problem is you don't see the pile up happening. And in our life, we don't get to see the here's what would have happened, here's what did happen comparison. You know what I mean? There's not like this was the path you were on until you made this asset allocation change. You don't get to compare yourself to it because it didn't happen. So there's no record of that in the future. So it's hard to produce that I told you so in terms of how did we make this better by being more intentional, because it just is where it is now, you know, so it's hard to kind of prove that backwards. But I do want to talk about taxes for a quick second. So we started doing this scorecard early March, just as a way for stackers to evaluate where they are. So it's just stacking. Benjamins.com Scorecard you can evaluate where you are, and I don't think the value is in necessarily figuring out where you are relative to other people. It's figure out where you are, then go do some things different, then go back and evaluate where you are again and see the change in your own life. That's the benefit of the scorecard. So you can take it multiple times. But the number one thing across the board we've had, I don't know maybe close to 500 people do it now in two months across the board. The number one thing is I have no tax strategy or my tax strategy is not aligned with what I think it should be. Or I'm tired of getting surprise tax bills, the occasional tax refund, but mostly surprise tax bills. I think that this is a bigger issue in the public than what we think both in our firm and then also kind of on the show. I think this is something that we could spend a little bit more time on. I think maybe in future seasons. This has been pretty eye openening for me to learn kind of what's on everybody's mind in their commentary and in their notes.

[Joe Saul Sehi]

Well, the good news is you're going to be covering some withdraw sequencing on today's episode here right after the break. So we're going to be talking a

[OG]

little bit about that because of course

[Joe Saul Sehi]

I am because I think that's that was big on my list here of ways just when you're in retirement, you know, you've got all of these. You think about people that are going to generate jump out with parachutes out of a plane. It's like your money. Which ones do you send first? You send the Roth contingent first, you send the pre tax money first. You send the others.

[OG]

But I also think there's the tax benefit of making sure that it's growing correctly.

[Joe Saul Sehi]

Yeah.

[OG]

You know, along the way. So this is an emerging area for consumers to pay attention to.

[Joe Saul Sehi]

What do you think about tax loss harvesting? Because I think it can be important. But let me be clear here. I feel like these Robo advisors, so many people use like Betterment and Wealthfront, they emphasize their marketing around 20 something year olds and I think they're the wrong people to be marketing tax loss harvesting toward. They barely have an opportunity there. But somebody with half a million dollars invested og might have a great opportunity for tax loss harvesting and isn't thinking about it.

[OG]

I think that if you have a purpose for it, it's super helpful. If you're piling up your losses with a strategy for a particular outcome like say for example that you have an investment portfolio, you know, a regular brokerage account and you also have rental and you're going to sell your rental property in 10 years from now when you retire. Well, undoubtedly you're going to pay capital gains taxes on that rental property. The capital gain taxes from your rental property can be offset with capital losses from your brokerage account if you manage it correctly and thus having a more tax advantaged sale at the time. I Think in the long run it's beneficial. In the short run, it can seem a lot like, well, I'm just taking money out and putting back in. And now, yeah, I capitalized that loss, which was nice, but now I just started over with a lower basis because I just sold that thing and bought a new thing. And now that new thing, when it gets back to even money, now I pay taxes on the whole thing. Not just a little bit that it would have been if I just let it sit there. That's why I think you got to have a plan for the losses that you're capitalizing, not just let me just pile these up for no particular reason. They can help for distributions, they can help for, you know, lots of different reasons. But have a plan for what you're, you know, why you're doing it. Why are you adding complexity? This is the question, if I add this complexity, because that's another layer in the, in the math. If I add this complexity, what's the payoff?

[Joe Saul Sehi]

The next area where I think we can add return has nothing to do with your portfolio at all. This is more around planning. And I think there's some things that we can think about. Like as an example, planning when you're going to take Social Security. Oh, gee, lots of discussions. Do I take it early? Do I take it late? Like financial advisors say take it late. People tend to take it early because they think of retirement as a one time event. And I'm just going to get it all done at once, right? I'm going to retire this year at 65 and I'm going to, at 65, take Social Security so I don't have to think about this again. And it's on autopilot. But Social Security timing can really change. Your portfolio dynamic can change the amount of money you have available.

[OG]

If everyone just took a look at their investment accounts and said, okay, this is my bucket of money here. But then also subsequently looked at their Social Security as a separate bucket of money. Just like you go, well, I've got my IRA and I've got my Roth and I've got my brokerage account and I've got my real estate portfolio. I've also got my Social Security bucket. Once you kind of layer in the facts along each one of these things, I think it becomes pretty obvious what most people should choose with the asterisk of. But this is why you do planning for yourself and not just read what's in Newsweek and decide what to do based on it. Because at the end of the day, that bucket. And Social Security has a guaranteed rate of return. Your bucket in your. Maybe your IRA and Roth don't have a guaranteed rate of return, but could grow faster. So this is the trait. The other thing that's interesting about Social Security is you don't have to make a decision at 65 or 66 or 63 when you retire. You're just saying, I'm not making a decision today. And that's different than I'm making a decision at 70. You have to make the. I mean, there's no decision to make at 70 if you make it that long. But what I would encourage people to do is, as you're thinking about your withdrawal strategy, as you're thinking about your cash flow in retirement, think about Social Security as a bucket that has a guaranteed return between 63 or 62 and 70. And you can map out what that guaranteed return is. And then just think of it from the perspective of, I'm not deciding not to take it. I'm not deciding to take it. Don't get the decision fatigue of, like, I have to make this decision today. No, just don't make a decision because you can make the decision tomorrow. The fact is, you're trying to give yourself the most opportunity to make the most decisions in the future. Some people might call this. Well, you're just being lazy. I don't think so. I'm saying I don't have to make this decision today. I'm not going to. What am I going to eat for dinner in six weeks from now? Don't know, don't care. Don't have to make the decision today.

[Doug (Joe's Mom's Neighbor)]

So if I decide not to decide, I get to check something off my to do list for the day is what I'm hearing.

[Joe Saul Sehi]

Doug likes where it's going already.

[Doug (Joe's Mom's Neighbor)]

I like it.

[OG]

If you are a checklist person, if you've got the premium subscription to todoist and you have mental satisfaction, I'll say it that way. I just love making boxes checked off then. Then, yes, you should make a. You should every day.

[Doug (Joe's Mom's Neighbor)]

I'm the kind of person that if I do something that's not in the checklist, I write it on the checklist just so that I could check it off.

[Joe Saul Sehi]

Right. Doug's to do list is 10 things. Do not make the bed. Do not shower. To do not. He's like, damn, I just woke up. I got 10 things knocked off my list.

[Doug (Joe's Mom's Neighbor)]

Yeah.

[OG]

Successful for the day.

[Doug (Joe's Mom's Neighbor)]

Can make decisions without any fatigue.

[OG]

Like I'm Tony Robbins looking at a

[Joe Saul Sehi]

happy retirement, which for those of you that have seen me speak has been on my mind a lot lately. And, and I love talking about this at events and in my keynote talks. We see a lot of people who have studied personal finance, like Christine Benz over at Morningstar, talk about. Retirement comes to people in different ways, and we often don't get to choose. OG but if you do get to choose, not going suddenly from mattering in the world of work to suddenly having to figure out where you do matter is a huge mistake. If you can avoid it. If you can't avoid it, you can't avoid it. Right? We all, it comes differently for all of us. But if you can, trying to find a way to maybe go part time first, that maybe quarter time and working your way has two different, two different things that happen. Number one, you, you, you generally tend to be happier, and the transition is easier because you give yourself time to kind of, you know, put your feet in the pool before you jump in and figure out where these other areas of your life are going to build purpose and excitement versus the huge amount of time that you had working hours. But then second, also, that delaying retirement partially means more income in your portfolio. So when it comes to happiness and also to return, going slowly into retirement can yield huge results.

[OG]

I will let you know, because I am not anywhere near that. So I will take your word for it. What are you doing going slowly into retirement, Joe? Is this, is this foreshadowing? Well, for me, every day is retirement for you because you get to hang out with us.

[Joe Saul Sehi]

Yeah, I, I actually, the concept of retirement for me is why would I do anything different than what I do right now? I feel like Paul Merriman. Paul Merriman.

[OG]

What would I do differently? Right. Like, I already do what I want. I already hang out with the people that I want.

[Joe Saul Sehi]

There is no such thing.

[OG]

I kind of feel the same way.

[Joe Saul Sehi]

Luckily for me, in hindsight, I was able to make that with a lot of help. I was able to make that decision at 40 years old. Most people don't have that ability, but for me, that was big. But I do see this a lot. You know, our friend Bill Yao over at Catching up to fi. Bill just negotiated a raise with the group that he works with and a cut in his hours. So he's going to make more per hour and he's going to work less hours as he starts transitioning into retirement. That's the best of both worlds, if you can do that.

[OG]

Yeah.

[Joe Saul Sehi]

And the last thing I want to bring up in this area, OG before we move on, is that there's a lot of pontification by financial pundits and people online and their substack and their blog post and on their websites about sequence of return risk and how horrible this can be. Well, the conclusion that I see is that if you make your spending every single dollar that you have available and, and try to notch up the amount of spending you can make every year, you're going to have a miserable existence. Because every single thing that could go wrong, you know that news cycle that people are online following, you become the angry frustrated person that's waiting for the other shoe to drop the entire time that they are retired. So looking at spending a lot of time focused on what is my quote, safe withdrawal rate and trying to take every penny increases sequence of return risk, which makes a miserable retirement. I think if you want to have a better financial outcome and not have more investment risk, let's move away from that jagged edge of taking every more money.

[OG]

Is that your advice?

[Doug (Joe's Mom's Neighbor)]

Well, just figured out be more rich.

[Joe Saul Sehi]

No, actually can go the opposite. I mean There are two things, right? Be more rich is number one. But number two is if I can spend $5,000 a month, let's just make the number 4,500. Let's find a way to back away from that jagged edge.

[OG]

Yeah. The other thing I would point out about the sequence of returns risk, this is another phrase that I'm starting to hate more and more.

[Joe Saul Sehi]

I hate it so much I'll just

[OG]

call it being unlucky. That's going to be my new phrase, the being unlucky time. The fact is, is like that that period of time only exists for a short while to your point, if you've given yourself a little bit of margin of safety. Because if you have the million dollar portfolio, the 4% rule says 40k. If your money can double, which it should double faster than inflation doubles historically. Right. So inflation's going to double 20, 25ish years. That's kind of the pace of doubling for inflation. So if your spend is 40, to get to 80 might take a quarter century or maybe 20 years, but it's going to be a while. The doubling of your money should happen in 10, 7, 12, somewhere in there. So maybe you have two doubles of your portfolio in the time that you're spending. Doubles once you follow. So the first double of your portfolio, the million to 2. If your spending has gone from 40k to 45k, there is no more sequence of withdrawals risk. Right? You're good, you're done. Because you have so much Margin of safety. And I think what you're talking about, Joe, is If you're spending 50,000 on your. On your million because some Obscure Perplexity Research AI tool said that the new withdrawal rate's 5% if you get lucky. And so you just kind of get your lips right above water at 50K. And now the portfolio dips a little bit to your point, you're going to be all freaking out the whole time because you're right on the edge. And the other piece of that is if you're trying to manage it now, you have higher percentage of your portfolio in fixed assets to avoid the sequence of withdrawals risk, which then in fact makes your portfolio as a whole grow slower than it would have if you'd have just had a little bit smaller.

[Joe Saul Sehi]

You're miserable.

[OG]

Need.

[Joe Saul Sehi]

You're miserable and you have less money

[OG]

and it's growing slower. So you're never. You're not getting out of it fast enough to like, you know, put your whole head above water instead of your lips. So it's like this big psych spiral of. Of. I don't know what's.

[Joe Saul Sehi]

There's several other ways that you can make this happen. I thought we'd put a few more of these into a lightning round, everybody. So. Oh, gee, I'm going to ask you, is this more return or more trouble? Ready? Here we go. More return or more trouble? Concentrated stock positions.

[OG]

Trouble.

[Joe Saul Sehi]

More leverage.

[Doug (Joe's Mom's Neighbor)]

Lightning. Lightning don't you get?

[OG]

I mean, I like it, but trouble?

[Joe Saul Sehi]

Crypto yield products.

[OG]

Okay, that's. This. These are just words you made up.

[Joe Saul Sehi]

So you're saying more trouble.

[OG]

Yeah, sure. Okay.

[Joe Saul Sehi]

Options trading.

[OG]

I mean, trouble. Are we getting anything here that's worth it?

[Joe Saul Sehi]

Rebalancing.

[OG]

Okay, that one's worth it. I don't remember the other one because I've said troublesome or return return.

[Joe Saul Sehi]

Yes, yes. Tax efficiency.

[OG]

Yeah, Return.

[Joe Saul Sehi]

Checking your portfolio every hour.

[OG]

Return.

[Joe Saul Sehi]

There we go. Everybody.

[Doug (Joe's Mom's Neighbor)]

Wait, what?

[Joe Saul Sehi]

Just going to see if we catch that. I almost didn't. I was already rolling on the.

[Doug (Joe's Mom's Neighbor)]

Okay, great job, OG and next.

[Joe Saul Sehi]

Nice. Wait, wait.

[Doug (Joe's Mom's Neighbor)]

What?

[Joe Saul Sehi]

All right, we will link to all these on our show notes page@Stacky Benjamin.com if you want to add more return to your portfolio. Of course, we have another step in this process coming up right after the break. OG and Anna and their segment of the Financial basics. We also have all the past financial basics and the guides associated with Those at our YouTube page. YouTube.com stacking Benjamin. All right, that means, Doug, it's time for your trivia question and you're going to riddle us about an entrepreneur who if he were alive, we'd be celebrating a birthday today.

[Doug (Joe's Mom's Neighbor)]

Hey there Stackers. I'm Joe's mom's neighbor, Doug. And what a day. First, it's Monday, the day I get rolling on all my goals. And then second, there's the OG and Anna segment coming up, which I can't get enough of. But best of all, I get to share another dose of incredible trivia that you can share with all you of of your friends. But how about this one? An icon of industry was born on today's date back in 1831 named Clarence Studebaker. Early in his career, he built the nation's biggest fleet of horse drawn carriages. But that's not what he's known for. Later, after Clarence's death, the company he formed became the Studebaker Corporation, which made what I'll be back right after, after I go get the Fiji water for OG and Anna's segment. It's gonna be great.

[Joe Saul Sehi]

I had a breakfast mentoring meeting yesterday with a young woman who was just amazing. She is graduating from college with a degree in wealth management and she reached out hoping for some pointers. And listen, if somebody's in Texarkana and wants to go into this beautiful field of personal finance and helping people get their money together, that is incredible. But even more incredible is how she reached out, how she was trying to network and I was having a discussion that finding the right person and avoiding the wrong person for a role, that's what can make or break an organization. And we just don't see that many qualified people. So how do you find them? Well, Indeed sponsored jobs is a boost whenever you need to find quality talent. If you're hiring Indeed is all you need. You can stop struggling to get your job post even seen on other sites. You'll match with quality candidates with Indeed. Sponsored jobs. Get matched with and higher quality candidates who can drive the results you need. Reach candidates who meet your specific criteria like skill, certifications or location. Drives me crazy when I'm matched with all kinds of people who aren't a fit. I don't have that kind of time. People are finding quality hires on Indeed right now in the minute I've been talking to you. Companies like yours made 27 hires on Indeed. According to Indeed data worldwide, sponsored jobs posted directly on indeed are 95% more likely to report a higher than non sponsored jobs. Spend less time searching and more time actually interviewing candidates who check all the boxes. Less stress, less time, more results when you need the right person to cut through the chaos. This is a job for Indeed. Sponsored Job and here's what's cool. Stackers. You're going to get $75 in sponsored job credit to help get your job the premium status it deserves@ Indeed.com podcast just go to Indeed.com podcast right now and support Stacking Benjamins by saying you heard about Indeed right here at stacking Benjamins. Indeed.com podcast terms and conditions apply. Hiring do it the right way with Indeed. As you know, I love living in Texarkana. But you know what I really don't like a lot is the heat. Except when it comes to how I get dressed. I want pieces to feel lighter, more breathable things that are easy but still put together. And that's why I keep coming back to Quint. They focus on high quality essentials that feel and look amazing. Think breathable linen, soft, organic cotton, well made basics, but without the luxury markup. It's that rare balance where everything feels elevated but still effortless. Quint's European linen pants and shirts, the perfect warm weather upgrade to add to your rotation starting at just $34. Their tees are soft and easy to wear and their lightweight cotton sweaters are perfect for cooler summer nights when we head north. Everything at quince is priced 50 to 80% less than similar brands. They work directly with ethical factories. Cut out the middleman so you're paying for quality, not brand markup. Quince goes way beyond clothing. Custom upholstered sofas, ceramic cookware, premium bedding. It's kind of brand you end up recommending to everyone for everything. You've heard me talk about Quints so much. Somebody on Spotify even said all I want to hear is you talk more about your pants, Joe about how much you like your Quince pants. On my recent trip to New York City, just so I don't talk about the pants. You know what? It's the cashmere sweater that I absolutely loved and got to support that thing. Not only to a Yankee game but also a nice dinner out with our friend Crystal Hammond and the whole South Sea High clan. Elevate your summer wardrobe. Go to quince.comsb for free shipping on your order and 365 day returns now available in Canada too. That's Q-U-I-N-C-E.comsb and you'll get free shipping and 365 day returns.

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[Doug (Joe's Mom's Neighbor)]

Hey, bear stackers. I'm water getter and student back Joe's mom's neighbor, Doug. Clarence Studebaker. See what I did there made the connection? Yeah. Clarence Studebaker learned how to be a blacksmith in his father's shop when he was young. And he worked in a threshing factory, learning both metalworking and how to operate a factory. He and his brother built the biggest supplier of wagons to the U.S. army at the time. Later, after Studebaker had passed away and the wagon industry was rolling to a stop, the company made the transition, staying in transportation to creating Studebaker Automobiles. Did you get it right? Of course you did. And even if you didn't, your friends aren't going to know. See if they know the answer, but do that after you hear this segment from Og and Anna.

[OG]

Okay, everybody, Episode four of season two, tax Efficient Withdrawals. In season one, we built the tax control triangle. Three buckets pre tax brokerage Roth. The whole point was to spread your money across these different tax buckets so that they have different tax treatments so that you have options in retirement. Today we're going to talk about the question that a lot of people want answered. All right, cool. So I got all these buckets of money. Now how do I take the money out?

[Anna]

Yeah. So we're going to think about this in the form of a distribution ladder. So we're going to look at the different buckets that you have, how those are going to help manage your taxable income, keeping you right in tax bracket and how those are going to affect different decisions too, or different issues that can come up. Some things we'll think about is the tax triangle. Like you said, we'll look into provisional income, Social Security taxation, how your income impacts Irmaa Great. Aunt Irma.

[OG]

Aunt Irma. Yep.

[Anna]

And we'll talk about Roth conversions too. Like do we need to do these? How much are we doing them for? All of that?

[OG]

Yes, all of it right now. All right, so before we talk about withdrawals, we got to know what we kind of where we are. So as we think about this tax triangle, what's a healthy tax triangle look like?

[Anna]

So a healthy tax triangle would be a combination of Having that pre tax bucket money that you have have not been taxed on yet. We're going to have a bucket of brokerage assets where it has been previously taxed coming out, and the only tax is then going to be capital gains and then the last bucket where it's been taxed before and it's going to come out tax free, which is your Roth bucket, typically.

[OG]

And all of this can be found in our season one guidebook. It's an episode six. So if you haven't seen that section or listen to that segment, you can go back and find it and it's kind of pencil out kind of where you're at right now.

[Anna]

Yeah. So you kind of want these fully balanced if possible. Obviously, depending on where you are in your financial journey, like that's possible or not possible.

[OG]

And this can affect taxation on a bunch of stuff you mentioned before. Social Security and taxes on Social Security. I feel like a lot of people don't really realize that your Social Security is taxed. It kind of seems a little screwy. Right. Like, so my Social Security is funded with my taxes and then I get taxed on my taxes. I mean, it sounds like a good gig if you can get it if you're the government, I guess.

[Anna]

Yeah. It is kind of crazy. It's like the same as like unemployment income.

[OG]

I have the same, the same feeling about that.

[Anna]

The big piece here is that it can be taxed at different amounts, like different parts of your Social Security. It can be a lower amount if you control your other income sources. It can be a higher amount if. If that gets out of control. So it's like figuring out how do we optimize this and control your situation so that your Social Security is taxed at the least possible amount.

[OG]

So I should just have all my money in a Roth then? Because none of that counts.

[Anna]

Yeah, 100%. Yep.

[OG]

I mean, if we could all go back in time and only put money in our Roth, that would be fantastic. But really it's about, you know, balancing like we said before, so that you've got options along the way. The best scenario is deferring taxes in your 401k, for example, pre tax, when you're a high tax bracket, paying taxes on that at a low tax bracket when you convert it to a Roth potentially. And you do all this in between the time that you retire and when RMDs kick off or when Social Security starts. And Social Security can start between 62 and 70 for most people. You can see how complicated this can start getting as you start layering in these different decisions along the way, and if you're not paying attention to it, one of the areas that I think catches a lot of people by surprise is this whole thing called irmaa. This is our great friend Aunt Irma. I R M M A She's sneaky girl. What the heck is Irmaa and why do I give a crap? And you know, what does it have to do with withdrawals?

[Anna]

It's basically an additional premium on your Medicare premiums if your income gets above a certain level. So you're going to take Medicare at 65. This can start. IRMAA can start looking back at your income at age 63. So if you're like, oh, cool, I'm retired. I'm going to do Roth conversions, I'm going to convert a bunch of stuff over. Well, and you're not thinking about Medicare at that point because you're 63, you're still using Marketplace or whatever, and you're two years away. This can kick you in the butt when you're 65. And now your Medicare premiums go from like $300 a month to $800 a month. Yeah, it's important to consider that. Yeah, Per person.

[OG]

Could be. Per person. Yeah, yeah.

[Anna]

Or higher than that, too. But it's important to consider how that's going to be a piece of this puzzle when you're doing distributions in retirement or doing Roth conversions. How those can. How those can impact then your. Your Medicare premiums.

[OG]

All right, so transitioning to Roth conversions then, because you kind of talked a little bit about that. Like, obviously we got to be thinking through tax brackets, Social Security, taxation, IRMAA issues, RMD things. Is the juice worth the squeeze here? Or are we just kind of chasing ourselves, you know, in a circle?

[Anna]

For certain people it is. And that's like a big decision to figure out, like, who is the right candidate for this. It comes down to, like, what is your total income for the year? This is why we don't do Roth conversions until November. Typically, we're not gonna know what your year looks like. Hey, if we wanna do Roth conversions in March, but then you tell us in August that you're gonna buy a house and we need to take money out or we need to move stuff around. Like, well, we just totally screwed up, you know, something that could have been really helpful for you. So it's important for us to do this at the end of the year when we know what your total income is. We're gonna keep you below Irmaa. Increases, we're going to keep you below a certain tax bracket. Like, there's a lot that goes into Roth conversions. It's not just, you know, picking a number out of the sky, and that's what we're going to convert.

[OG]

And all of this kind of ties together in the workbook. You'll find that we've got three years modeled out for. Well, three years for you to model out in terms of your withdrawal sequence. Table your 1, 2, 3, kind of mapping out how much should come from each bucket. This is not set in stone. This is not, you know, a contract, you know, for life. It's really just kind of giving you an opportunity to jot down your thoughts here of where do we think we're going to be in terms of these next couple of years of withdrawals, you know, if you're at that stage of your life and, and this is kind of where that whole tax triangle pays off. You know, if you're 30 right now and you're going, I don't care. I don't know what we're listening to this for. I got 30 years before I have to take any withdrawals. Well, this is the decision tree that you can make when you're in your 30s and 40s of like, where am I saving money so that I've got the flexibility when I'm 50 or when I'm 55 or when I'm 60 and I'm financially independent and I retire? Where's my cash flow going to come from? All of financial planning, I think, is really just built around how do I put myself in the best possible scenario to have future options available to me. Yeah. Make as many decisions that give me as many decisions in the future. You know, and some people think that's a little silly because, you know, you're kind of never ending decision tree. But it's flexibility. We're solving for flexibility because if there's one thing that I think that I've learned over the years, nobody can predict the future. I can't tell you what the stock market's going to do tomorrow. I can't tell you what tax rates are going to be tomorrow. I can't tell you who's going to be president tomorrow. None of this stuff is predictable. We can have guides. We can have an idea. But the idea is we want to make sure that at the end of the year we can visit from a tax standpoint, let's say, and say, hey, this is what we think 20, 27 is going to look like. Or here's what 2026 has shaped up to be? What changes can we execute on in these last 60 days of the year? Homework for today then, Anna, is what

[Anna]

first pull that tax triangle snapshot from season one so that we talked about those different buckets. Let's start with that. Like, if you're still in the financial journey where you're getting to the point of withdrawals, you're not there right now. Let's focus on like, how can we control this right now? How can we make this more balanced? The other thing that you can do is if you are within 10 years of retirement, you think you're somewhere around there. Start looking into Roth conversion math. It's going to creep up on you. You're going to want to kind of have a little bit of a handle on this and you're going to want to calculate like, where is the gap that I can do Roth conversions. I'm, you know, at this, this piece of the, the tax bracket. I have X amount of dollars that I could convert to tap out on this, this bracket. How much could I do? So that's kind of what you want to start calculating.

[OG]

Kind of start modeling that out before you get there. Because yeah, you're right. At the end of the day, this stuff just shows up super fast. You know, you think 10 years, but for those of us with 19 year olds, they were nine just a second ago. So 10 years goes by pretty snappy. If you have no idea what we're talking about in terms of the guidebook, it's because you don't have it because you didn't get one and you're not cool. And only the cool kids get guidebooks. So if you want to be a cool kid, you're going to go to stackinbenchments.com basicsguide and you put your name and email in. We'll send you an email with both of them. Season one and season two. You can go to YouTube and follow along in season one if you're a little behind and then catch up on season two as they get posted there. They're in the show every Monday. Have been for the last, I don't know, 12 or 13 weeks, something like that. Golly, have we been doing this this long? But that's where we have all the stuff, all the homework that you can fill in and kind of follow along. So. Stackingbenchments.com BasicsGuide Next week we're gonna talk about stock options, RSUs, ESPP, incentive options, non qualified options. Well, we're probably gonna basically scratch the surface on that. Cause Joe only gives us, like, this much time to cover that much stuff. But it'll be a fun topic for sure. So tune in next week for those. And I guess back to you, Joe, in the studio or basement, wherever you happen to be. Hi, I'm David Stein.

[Joe Saul Sehi]

When I'm not talking to other people about money on money for the rest of us, I'm Stacking Benjamin. Let's mosey out on the back porch, Doug, because there's something that before we get too into just what's going on in the community, something all our community members want to be well aware of.

[Doug (Joe's Mom's Neighbor)]

Yeah, I mean, I felt as one would. I felt incredibly honored when I got a friend request on Facebook because that. That didn't happen that often to me. And I was really excited when I saw one from the Stacking Benjamin's inner Circle. And then it dawned on me. Hold on. I am the core of the inner circle. Like, if anybody's already in the inner circle of Stacking Benjamin's basement, it's this guy. So how am I getting an invite to join the inner circle? And then I started to smell a dead fish. Right.

[Joe Saul Sehi]

It's so frustrating, isn't it? So frustrating. The inner circle is the basement. The bad groups, if you're new here, like, what are bad groups? Benjamin's After Dark groups. I always forget that we have to not use the acronym because people. If somebody said that to me the other day, I was like, oh, we have a bad group meeting in. In. In. In Boston coming up, and I'm trying to make sure that I'm. I'm able to attend. And, And. And somebody I knew is like, what's a bad group? Like, oh, oops. Yeah.

[Doug (Joe's Mom's Neighbor)]

But this inner circle thing, should I be honored? Or is this like the. My home warranty is expired, and it looks official, but it's not really.

[Joe Saul Sehi]

Tell them. Tell them no Stackers. Tell them. No. We definitely want to stay away from scammy stuff with people that. That we don't know. There is no such thing called the Stacking Benjamin's inner Circle.

[Doug (Joe's Mom's Neighbor)]

Well, I mean, there. There is, but if you get the invite, it's coming from me. If you get the invite to join the inner circle, there's only one guy that's coming from.

[Joe Saul Sehi]

I mean, look at the way we name stuff. The bad groups, the basement.

[Doug (Joe's Mom's Neighbor)]

Yeah, yeah, we are anything but elitist.

[Joe Saul Sehi]

Have. Have none of that.

[Doug (Joe's Mom's Neighbor)]

Hey, can we transition to. Talk about a great post that I saw a few days back. Well, now it's probably a, you know, 10 days back. Ish. But about car purchases. Can I, can I dive into that for a minute, Joe?

[Joe Saul Sehi]

Sure, yeah.

[Doug (Joe's Mom's Neighbor)]

So this was by anonymous member. We have a couple of those. But it's, it's a legit question that I think a lot of people are interested in. So if you didn't see this post.

[Joe Saul Sehi]

Well, it's a comment, right? It's a comment.

[Doug (Joe's Mom's Neighbor)]

Well, I guess you're right.

[Joe Saul Sehi]

I don't think there's a question.

[Doug (Joe's Mom's Neighbor)]

You're right.

[Joe Saul Sehi]

It's somebody that knows the auto industry pretty well based on at least know

[Doug (Joe's Mom's Neighbor)]

the retail side of the auto industry. Yeah, for sure. So this was a tip that Anonymous put out there and that's where all the best tips come from are from the anonymous people. But they said a thought about car purchases and tips mentioned by Joe and beth in episode 1841. If you are buying a new vehicle, the time of the month matters. Dealers. Dealers will often dig a bit deeper at the end of the month. I've done this on several vehicles and saved big. We buy new and run it to the ground. Subarus outbacks, ford f150s et cetera. I always check the kbb edmonds and consumer report msrp and sales price ranges for the make and model we're looking to purchase in the exact trim and color. Then they start calling and emailing the sales managers at local dealers within a 60 to 90 mile radius around the 20th of the month. It helps to stay firm that you want the lowest out the door price and you want it detailed in writing. You can do all of this. This is me adding in my two cents. You can do all of this without ever leaving your house. Like dealers now very much will negotiate, you know, based on email and over the phone. They would never used to but now they're starting to.

[Joe Saul Sehi]

This was the key to the last three, last two, sorry car purchases I negotiated after we had a discussion with Phil Rosen from Edmonds on the show. Do it all via text and email.

[Doug (Joe's Mom's Neighbor)]

Yeah. Another great tip that Anonymous puts in here is make sure you ask if that minimum price, the out the door price that they're offering you includes a finance incentive because a lot of times that price is only going to be valid if you use their financing and

[Joe Saul Sehi]

but boy and their take on this was great though. Go ahead and use the financing even though it might suck.

[Doug (Joe's Mom's Neighbor)]

And here we go. And what is the minimum finance amount to get the incentive? I have financed $8,000 to save 1,000 and you pay it off on the very first statement which by the way you got to find out if you can do that without a penalty because there are some of those finance contracts that you can enter into with automotive, well, with dealerships, and you're not allowed to pay it off. Super.

[Joe Saul Sehi]

And the cool thing here is to think about the dealer's motivation because in this case, Doug, the dealer doesn't care when you pay it off. You can tell the dealer what you're up to. The dealer does not care. This is a third party. The financing arm is a whole different party. And they're giving the dealership, which is generally usually independently owned, they're giving them an incentive to get the financing in place. So if there is an early payoff, you, you can go ahead and ask the person and say, hey, I, you know, I want to pay this off as soon as possible. When's first, first moment I can do that.

[Doug (Joe's Mom's Neighbor)]

I think you're mostly right there. Depending on how they are incented by the finance arm, it could be Chrysler Financial or it could be a completely third party. But depending on how they're incented, they may not be super forthright and open with you because they want that kickback to them for signing you up as a finance person. But I think generally you're okay just be it. Like you just said, being open and honest. So Anonymous is saying, so even if you have other financing and you were going to put a chunk down, it may help to play the game. By pitting dealer against dealer via email and phone and being willing to jump through a few hoops at the end of the month has helped me save thousands. Some dealers will not play, but I've always, I have always found one that will because they want to hit their sales numbers for their brand incentive at the end of the month. So this is why you start this process around the 20th of the month. That gives you some, you know, 10 days, ish to nail down the deal. So, yeah, I mean, I just, I think, I love this post. This is community helping the community. And I wanted to put a spotlight

[Joe Saul Sehi]

on this fantastic post. I would love it if we've got anybody in the car dealership industry or anybody who's worked there before to talk about those incentives, because my understanding has been that they get incentive for you to take out the loan. Doug, I never thought about the fact that, you know, hey, maybe they go, hey, it's got to stay on the books for three months.

[Doug (Joe's Mom's Neighbor)]

Yes.

[Joe Saul Sehi]

Or got to stay on the book for six months or whatever it is.

[Doug (Joe's Mom's Neighbor)]

Yep. Because that's how the financing up the only way the financing arm is making the money in most cases or the you know, they've got a certain number of months to hit basically their to turn it profitable.

[Joe Saul Sehi]

Would love to know that. Either write to me [e-mail] or do a post in the basement for our Facebook. The basement is the inner circle. There is no other. There is no such thing. If you get invited to the inner circle, tell them no and report it because that's not us.

[Doug (Joe's Mom's Neighbor)]

It'll go on their permanent record. Yes, like your parents threatened you.

[Joe Saul Sehi]

This goes on your permanent record, Right?

[OG]

All right.

[Joe Saul Sehi]

Well, we do have a permanent record at the end of every show and that is what are the three things you should have taken away from this particular episode? Doug, what would be on our top three here?

[Doug (Joe's Mom's Neighbor)]

Well, Joe, first, take some advice from our featured conversation. Looking to add returns to your portfolio? Stop thinking about esoteric investments and start thinking about systems. Easy steps like an investment policy statement and tax strategies can add tens or hundreds of thousands to your end results. Second, take advice from Anna and OG by focusing on your withdrawal strategy, your money is spent more orderly, which means more living for you without any more work. I love less work. Putting that on my to do list do period. Less period work, period. Wow, another task accomplished. I'm rolling. But the big lesson, don't ask Joe's mom about sequence of returns. If you haven't trimmed her shrubs over the weekend, she'll tell you that first, you don't trim the shrubs means you risk not being invited to Monday night's cookout. And third, then not having the opportunity for the cake that's served afterwards. That's horrible. Sequence of return risk. So you know what I'm doing right now? Grabbing the shears. This show is the property of SP Podcast, LLC, Copyright 2026 and is created by Joe Sal Sehai. You'll find out about our awesome [e-mail] along with the show notes and how you can find us on YouTube and all the usual social media spot spots. Come say hello. And oh yeah, 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.

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