How to Climb the Wealth Ladder (SB1711)

Summary

Podcast Summary: The Stacking Benjamins Show - "How to Climb the Wealth Ladder" (SB1711)

Release Date: July 21, 2025

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Introduction to the Wealth Ladder

In episode SB1711 titled "How to Climb the Wealth Ladder," hosts Joe Saul-Sehy and OG delve into the concept of the wealth ladder, a framework that categorizes financial strategies based on an individual's net worth. The discussion emphasizes the importance of receiving tailored financial advice that aligns with one's current financial standing, rather than generic recommendations that may not suit personal circumstances.

The Importance of Tailored Financial Advice

Joe initiates the conversation by highlighting the pitfalls of generic financial advice often circulated online. He states:

"Why would you do something stupid like that with your money? Or they're giving some well-meaning advice... it truly depends on where you're at your journey." (09:03)

OG reinforces this by explaining that financial strategies should be customized according to one's position on the wealth ladder:

"Somebody who's 20 and just starting out should get different investment advice... Then somebody who's 55 years old has done a great job of saving... Those two people should be invested in different things." (09:48)

Understanding Net Worth Rungs

The hosts outline the wealth ladder by categorizing net worth into specific rungs, each requiring distinct financial strategies:

1. $0 to $10,000
2. $10,000 to $100,000
3. $100,000 to $1 Million
4. $1 Million to $10 Million

Joe clarifies that the ladder is based on absolute net worth rather than individual financial goals:

"It's your net worth. It's 100% your net worth." (19:43)

Investment Strategies per Wealth Level

$0 to $10,000: Laying the Foundation

At this initial rung, the focus is on:

• Building an emergency fund
• Eliminating debt
• Securing adequate insurance

Joe shares a personal anecdote to illustrate the importance of foundational financial steps:

"I was struggling and trying to begin climbing out of debt... the broker... said... I want you to keep focusing on your debt, and then I want you to build an emergency fund." (12:45)

$10,000 to $100,000: Accelerating Savings and Investments

As individuals move up the ladder, strategies become more investment-focused:

• Prioritizing mortgage repayment
• Increasing investment contributions
• Considering insurance deductible adjustments to save more

OG advises against overcomplicating investment portfolios at this stage:

"You're going to lose energy on trying to maintain a portfolio of 10 positions when you have $10,000... the simplicity of dumping into one All World Fund or S&P500 might be sufficient." (18:17)

$100,000 to $1 Million: Advanced Investment Considerations

At this level, the conversation shifts towards:

• Scientific diversification
• Enhanced tax planning
• Introduction of more complex investment vehicles like mutual funds outside of annuities

Joe emphasizes the significance of reinvesting dividends:

"Having that reinvest dividend box checked and not having it checked is a monster amount of money on a $10,000 investment." (18:50)

Doug seeks clarification on identifying one's position on the wealth ladder, to which Joe explains:

"Add up your net worth. If your net worth is from 0 to 10,000, you're on the first rung... 10,000 to 100,000 is the second rung," (19:53)

$1 Million to $10 Million: Strategic Expansion and Estate Planning

At the pinnacle of the ladder, key focus areas include:

• Comprehensive tax planning
• Real estate investments
• Estate planning and charitable giving

Joe highlights the rarity and strategic significance of reaching the $10 million mark:

"How many people in the United States do you think have $10 million or more? 2 million." (28:13)

OG adds a cautionary note about maintaining disciplined financial strategies even at higher net worth levels:

"Don't marry the idea that I need to do something wildly different because I've hit this... What got you here won't get you there." (35:07)

Roth IRA Conversions and New Tax Legislation

A significant portion of the episode is dedicated to discussing Roth IRA conversions in light of new tax legislation. Joe explains the basics of Roth conversions:

"You can do a conversion. You can say, I want to pay taxes on this today in exchange for having tax-free money forever." (50:07)

However, recent changes introduce a new senior deduction that phases out at higher income levels, complicating the Roth conversion strategy for retirees:

"There is a new senior deduction, which is a $6,000 deduction for taxpayers age 65 or older or $12,000 per couple. But here's the kicker, OG, it comes with a phase-out... between $150,000 and $250,000 of modified adjusted gross income." (52:00)

OG and Joe discuss the implications of this change, advising listeners to:

• Consider completing Roth conversions before age 65 to avoid losing the new deduction
• Exercise caution with online tax calculators as they may not yet incorporate the latest legislative changes

Practical Advice and Personal Stories

Joe shares a personal story about receiving misguided financial advice from a well-meaning father-in-law, underscoring the importance of tailored financial planning:

"His broker... wants me to build an emergency fund... but I was more interested in understanding mega backdoor Roth conversions." (12:55)

This narrative serves to highlight the necessity of aligning financial advice with one's specific financial position and goals.

Conclusion

Joe and OG wrap up the episode by reiterating the significance of understanding one's position on the wealth ladder and adjusting financial strategies accordingly. They encourage listeners to:

• Assess their net worth to determine their current rung on the wealth ladder
• Seek tailored financial advice that aligns with their net worth
• Remain adaptable to changing financial landscapes and legislative updates

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Notable Quotes:

• "Some investors think diversification adds alpha, but actually, it's about protection." – OG (26:16)
• "Nick Magiulli talks about trivial decisions being 0.01% of your net worth." – Joe (14:16)
• "Don't ask Joe's mom about Happy Days. She'll remind you that the happiest days are when you're rubbing her feet." – Doug (62:38)

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Resources Mentioned:

• Nick Magiulli – Chief Operating Officer and author of Of Dollars and Data, featured as a guest to discuss the wealth ladder.
• Robert Powell – CFP and Retirement Senior Editor at TheStreet.com, author of the piece on new tax legislation affecting Roth conversions.

For more detailed insights and resources, visit StackingBenjamins.com.

Transcript

[Joe Saul-Sehy]

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[Doug]

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[Joe Saul-Sehy]

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[Doug]

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[Joe Saul-Sehy]

So your dollar goes a long way.

[Doug]

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[OG]

It's Monday. In America it is Monday.

[Joe Saul-Sehy]

How did you know?

[OG]

I can I just look at a little. Little tingle in my spine.

[Doug]

I can tell because we have access to a calendar.

[Joe Saul-Sehy]

Wait a min.

[OG]

Fine folks in Gregorian times put it in order for us.

[Joe Saul-Sehy]

By the way, wasn't it the Romans that came in and fixed the calendar? Like why. Why is October not the 8th month once they changed it to the 12 month calendar?

[Doug]

Because they named it.

[Joe Saul-Sehy]

Why is October the tenth month? Because they what? Doug?

[Doug]

It's named after Octavius, Emperor. Not. It's not after the number.

[OG]

It's not a Spanish name meaning eight?

[Joe Saul-Sehy]

No, I think it is. I think it is.

[OG]

I thought it was named after the mom that was on HGTV that had all the children.

[Joe Saul-Sehy]

Octamom.

[OG]

Yeah, she's doing pretty good from what I understand.

[Joe Saul-Sehy]

Do you notice anything? Og, do you notice anything right now? You notice what Doug's just casually holding out there like all braggy bragged. Look at him all braggy. Bag with his.

[OG]

Did he finally buy one? We've paid him enough.

[Doug]

Oh, you're talking about my coffee mug. This thing just showed up in the mail. I meant to ask you, are we sending these to everybody? Like I have no idea why I would have gotten a stack Benjamin's mug, but I thought that was pretty sweet.

[Joe Saul-Sehy]

We're testing out this vendor but turn it around. Look at this. It doesn't matter what side. If you're left handed or right handed, you can still show off the logo to your friends.

[Doug]

This is innovation in crockery.

[Joe Saul-Sehy]

I know. Not on one side, but on two sides. It says SB Sides.

[Doug]

I didn't.

[Joe Saul-Sehy]

I know, it's incredible.

[Doug]

Figure that out. But it is. I mean, this is great. I think our ratings are going to skyrocket. If we sent these to all, like, nine people that listen to us.

[Joe Saul-Sehy]

We got to see a. How the vendor does. If this vendor is.

[Doug]

I don't.

[Joe Saul-Sehy]

I don't make the decisions. We got to talk to Tina. Tina, can we send these to everybody? Can we send these to all nine people? You know, we can do, though, for free. We don't ask Tina if we can do that is salute the troops like we do every Monday here on the show. So on behalf of the men and women in mom's basement making podcast and on behalf of the men and women who are. I. I'm pausing, everybody, if you're not watching the video because Doug is like doing the extreme.

[Doug]

What if I just left it here the whole episode? So it's just like a talking mug.

[Joe Saul-Sehy]

I think, oh, gee, that would be better. Just your mouth and the mug in front of you. Yeah, I like it better. So on behalf of the men and women make a podcast Mom's Basement and the men and women at Navy Federal who serve our troops. Here's to those troops who kept us safe all weekend. And we'll do the same, I'm sure, this week. So I'll go stack some Benjamins together now, shall we?

[Doug]

Thanks, everybody.

[OG]

You heard of this thing, the eight Minute Abs? Yeah, sure.

[Joe Saul-Sehy]

Eight Minute Abs.

[OG]

Yeah, the exercise video. Yeah. Well, this is going to blow that right out of the water. Listen to this.

[Joe Saul-Sehy]

7 Minute Abs.

[Doug]

Live from Joe's mom's basement, it's the Stacking Benjamin Show. I'm Joe's mom's neighbor, Doug, and advice all over the Internet warns you about what you should and shouldn't do. Today, we dive into a concept called the wealth ladder and identify who should listen to which advice so that you can build wealth faster. And in our headline segment, new tax legislation in the one big beautiful bill creates a potential new wrinkle in your Roth conversion strategy. We'll share how to avoid a potential landmine. I'll also share a TikTok minute teaching you how to stack loads of Benjamins. And of course, I'll share some absolutely mind bending trivia. Mind bending. And now, two guys who know that wealth isn't built in a day, but it can start with payday. It's Joe. Oh, and. Oh, ja, ja, ja, ja, G.

[Joe Saul-Sehy]

Happy non specific time. Of the day Stackers. I am Joe Saul Sehi. And welcome back to the Stacking Benjamin Show. You made it. You first found us. Sit back and relax. Because if you don't know what a Roth conversion strategy even is, as Doug was talking, don't worry, we got your back. We'll explain that and talk about what all the hullabaloo is.

[Doug]

Hullabaloo.

[Joe Saul-Sehy]

But first, the gentleman across the card table from me, Mr. OG, is here. How are you, my friend?

[OG]

Happy to be alive. Happy to be able to do Roth conversion ladders it is.

[Joe Saul-Sehy]

Maybe.

[OG]

Maybe. Maybe. Actually, who knows? Maybe you're going to tell me I can't do them anymore.

[Joe Saul-Sehy]

If you wake up in a morning and you can do a Roth conversion ladder, like you're skipping to work, you are skipping to work. It's a good deal. We not only have that, though. Nick Magiulli coming down to the basement on Wednesday. For those of you who don't know who Nick is, not only is he the cheap cheap. Not only is he the chief operating officer. I almost said cheap operating officer.

[Doug]

Some companies need that out of their coos.

[Joe Saul-Sehy]

If I can get help get it cheap, that'd be great. Barry Ritholtz probably said, I think that's fiction because nothing about Nick Maggi is cheap. He has a fantastic blog called Of Dollars and Data that we've referenced how many times on the show, and this is four. Nick's third or fourth time with us on the show. But he talks a lot OG about this idea of the wealth ladder. So to get everybody warmed up to Nick's appearance on Wednesday, as he mentors us on good and bad investments, we're gonna dive into the concepts and make sure that everyone's ready. And even if you can't catch Wednesday, you know what? Today we're going to help you make better investing decisions. Wherever you're at on the wealth ladder, that's what's coming up. OG excited beyond just tickled pink. His mom says there is not an.

[Doug]

Exclamation point anywhere in OG's being. I think, hey, how you doing today? This Monday morning? OG doing great. Happy to be here.

[Joe Saul-Sehy]

Well, I'll tell you what does get OG excited, and that is talking about building the wealth ladder. But just to calm him down, we. We have a couple sponsors we're going to hear from first so he could relax and kind of lean into this. These sponsors help us keep doing what we do, and you don't have to pay a dime for any of this goodness. So sit back like og and relax. And coming up, we're going to dive into Nick Mol's wealth ladder. This episode is brought to you by Navy Federal Credit Union. Navy Federal can help you find and finance the right vehicle with ease. With Navy Federal's car buying service powered by Truecar, you can find the vehicle that's right for you. As you search through inventory, compare models and you could get an amazing rate when you finance with Navy federal. Visit navy federal.org truecar to learn more. Navy Federal Credit Union Our members are the mission Navy Federal is insured by NCUA Credit and collateral subject to approval. Upgrade your learning experience during Dell Technologies Back to school event with AI PCs like the Dell 14 plus featuring an Intel Core Ultra processor starting at 749.99. Supercharge your studies with features like real time notes, transcription, AI accelerated hardware to run multiple apps without slowing down and extended battery life and more. That's the power of new AI PCs with Intel inside. Discover a smarter way to [e-mail] deals that's dell.com deals let's talk about why this idea is important. You have seen it OG I've seen it. Heck, Doug, you've seen it where people are fighting on the Internet. Why would you do something stupid like that with your money? Or they're giving some well meaning advice. You know what you need to do? You need to go out and buy some gold. Or I think that crypto is for you. When this, when this person knows nothing about you, they know absolutely zero. And to your point, this could be good advice for the right person. But truly it depends on where you're at your journey. Somebody who's 20 and just starting out should get different investment advice and tax advice and estate planning advice and insurance advice. Then somebody who's 55 years old has done a great job of saving. Maybe they've accumulated 3, 4, 5 million dollars. Those two people should be invested in different things.

[OG]

Well, maybe, but you should approach it differently. For sure. I think there's a lot of people who want to look at the future. Use that 20 year old for example. My 20 is a little young, but let's say the 28 year old, they're worried that they're missing out on stuff, so they want to do all the stuff that the 50 year olds are doing. And it's like okay, well you have to do this the right way. If you do it in the wrong order, then you're setting yourself up for the opportunity to have these wild swings in cash flow or results in your plan. Because you're thinking that you're behind. And I think all of this ends up stemming from the sensation of I'm not, I'm not where I'm supposed to be. And one of my main messages is, you're okay, you've got plenty of time to get there. You don't have to, you don't have to do anything extreme. If you are behind air quotes, you don't have to do anything extreme. Just let the process work.

[Doug]

What I like the most Joe, about what he just said is that he correctly stated that people in their late twenties are envious of all the cool things that people in their 50s are doing. I think he nailed it man. And I don't think they realize just how good it is up here.

[Joe Saul-Sehy]

When I was in my 20s, that's all I did was sat around and thought about if I were only in my 50s.

[Doug]

55 year old dude, that dude's crushing it, slaying it.

[Joe Saul-Sehy]

He gets to go to bed at.

[OG]

7:30 about it from the investing perspective, right? It's like oh, the number of people that I've talked to that are not maxing out their 401ks but want to know about how to do mega backdoor Roth conversions. And I'm like, you're not at that spot yet and it's okay. You're saving 5,000 a year in your 401k, that's awesome. Good job. You're not at the spot where you're going to save 50,000 your 401k yet and that's okay too. And I get like wanting to learn about it and educate and that sort of thing but by the time you get there might be different. So focus on the stuff that you're, you know, where you are right now and make those small changes, make those small improvements. You'll get to the spot where it's like oh geez, I'm maxing this out and I have extra and my spouse is maxing out and we're, you know, it's like and, and, and now I'm like now what do I do?

[Joe Saul-Sehy]

I had a personal story when I was first starting out, I was struggling and trying to begin climbing out of debt. And my father in law, a very well meaning man and a smart guy but didn't know enough about money to discern where he was from where I was. He sits me down og and tells me about this phenomenal thing that he puts money into every month where it's for retirement and it grows tax deferred and it turns out he's, he, he's investing in an annuity and he thinks that me at 25 years old at the time, that, you know what, it'd be a good idea if I started one of these too. So I get on the line with his broker at the time, and the broker, God bless him, asks me a bunch of questions about myself and goes, here's what I want you to do. I want you to keep focusing on your debt, and then I want you to build an emergency fund. And then I want you then to call me back and you and I will talk about maybe setting up some mutual funds outside of an annuity. But well meaning people will give you advice because it fits them.

[OG]

Oh, but even that advice that you got, the first part of that is you need to pay off your debt and build an emergency fund. That's where you are on that. And if you would have, or where you were with that and if you would have said, no, no, no, no, no, no, you don't understand. I want to know about mega backdoor Roth conversions, right?

[Joe Saul-Sehy]

I want to know about this annuity thing.

[OG]

Yeah. Or the triple tax free nature of an hsa. Shouldn't I be doing that? You're like, well, I mean, yeah, but you also have $80,000 of student loans, so you can have all the tax free money in the universe while you're paying freaking 8% on your student loans. You're not making any progress. Your net worth is going backwards, bro. Like, do the thing where you are. It's totally fine.

[Joe Saul-Sehy]

I'm going to bring up some concepts we're going to ask Nick about as he mentors us on Wednesday, just so that we all get these locked down, because I think these are really important for us to get. And I know that we only get to spend maybe 30 minutes with people like Nick on the show. What Nick is going to talk about on Wednesday is what level of financial decisions in your life are trivial. A proxy for this on any level of wealth is if you take 0.01%. So not 1%, but 1/100th of 1%.

[OG]

1/10Th of a percent of your net worth.

[Joe Saul-Sehy]

Not. Not 1/10th, 1/100th of 1%.

[OG]

Okay, so 1/100th of a percent then would be a dollar on 10,000.

[Joe Saul-Sehy]

Yeah. Which is why for your first $10,000, Nick talks about OG. There are no trivial decisions because a dollar right on $10,000 a dollar is a big deal. Those types of decisions are, are every decision is a big deal. And when you've got a ten Thousand dollar net worth. You need to worry about the emergency fund. You can't have any debt escalation to any degree because you don't have the wherewithal then to just wipe it out whenever you want. You need as much insurance as you can get because of the fact that if something bad happens that insurance companies are working on your behalf. When you get to a hundred thousand dollars now, you can make decisions at the grocery store and not worry about them that much. Some people might go, well, that's kind of conservative. I think Nick does this on purpose because if you start off with just what won't harm you and then work the other way versus the way most people look. OG which is what's my biggest opportunity? Oh, I've got a hundred thousand dollar net worth. I'm going to take 25,000, loan it to my buddy who owns a restaurant. That is a horrible decision because your trivial decisions should be at the grocery store. A $10 decision at a million dollars. If you have a million dollar net worth, you know how everybody says that glass of wine is a waste of money at the restaurant? At a million dollars, who cares? Because you can blow a hundred bucks and a hundred bucks to somebody with a million dollar net worth completely, completely trivial. You get then to $10 million, $1,000 extra on travel. Big deal. Not that big a deal.

[Doug]

Yeah. No matter how high you go up the ladder, it's always a bad idea to lend that money to your buddy with the restaurant. Never, ever, ever do that.

[Joe Saul-Sehy]

If you're being conservative and you want to invest in companies. And of course you know it's Nick, so he goes through all the data on this. It is at $10 million that you can very easily feel comfortable with buying businesses. It is well within your comfort zone to go buy a business and it's going to be fine. And I know OG again to your point, you don't have to buy a business to get where you want to go. But at $10 million, if you want to go invest in a business, and maybe not Doug the restaurant, that's a fine idea. But let's go back to somebody with that first 10,000 bucks. I think for somebody with that first 10,000 bucks, like I think the emergency fund's important. But I also think people with that first 10,000 for their long term money, I think they also overthink, diversification. I think that if you're diversified in just an exchange traded fund or a mutual fund, you're fine. But I think, you know, somebody with less than $10,000 going into a Target day fund or going into a, you know, bonds because they worried about the ups and downs. I think if you're working on that first 10,000 bucks OG that just get into something like the s and P500 or the total stock market. And I think that might be all the diversification you need with your long term money.

[OG]

I agree. I think when you're just getting started, the biggest components of building your plan the right way is making sure that you've got enough cash on hand, which sounds very counterintuitive to long term investment growth. But the way that you get to invest money is by having cash to cover your emergencies and keeping it simple. The sexiness of fractional shares makes it seem like, oh, it doesn't matter, I don't have to buy a hundred shares of this ETF to make a trade. It doesn't cost anything because everything's commission free now. Why can't I have 10 different ETFs? And it's not that you can't, it's just there's no efficiency gained. You're going to lose energy on trying to maintain a portfolio of 10 positions when you have $10,000 in your investment account versus the simplicity of dumping into one All World Fund or 1s&P fund or something like that.

[Joe Saul-Sehy]

For somebody who's regardless where they are on the wealth ladder, I think there's a key box that I've seen people accidentally not have checked and I just saw a great graph on this recently. I'll try to share it in the basement Facebook group this week. But it's the difference between investing in the s and P500 and investing in the S&P500 and making sure that you reinvest dividends like over a 30 year period. OG the difference. Having that reinvest dividend box checked and not having it checked is a monster amount of money on a $10,000 investment.

[OG]

Well, I think what they're comparing it to is taking the dividends in cash as you get further up, I guess what he's calling the wealth ladder. I would argue that you don't want your dividends reinvested and you want to be in charge of where you want to put that money. But from a simplicity standpoint, you let me put it this way. You can't take the dividends in cash, not do anything with it. If you need to automate it so that you don't let it sit there for a year, then automate it.

[Joe Saul-Sehy]

I think if you're in step one of the ladder. Step two of the ladder. Reinvesting that dividend is a huge, huge thing.

[Doug]

Hey, can I pause you guys just to help reset this for some of our listeners? Because we've been talking about rungs on the ladder almost as a factor of 10, 10,000, 100,000 million, etc. How do I know where I am on my ladder? I can anticipate you're about to say, well, Doug, it depends on what your policy statement is and where your goals are.

[Joe Saul-Sehy]

No, it's your net worth. It's 100% your net worth.

[Doug]

So how do I know if I'm on the second rung or the 20th rung?

[Joe Saul-Sehy]

Add up your net worth. If your net worth is from 0 to 10,000, you're on according to Nick. These are Nick's numbers.

[Doug]

So these numbers are sort of absolute, regardless of your end goal.

[Joe Saul-Sehy]

These are Nick's numbers about how you invest your wealth. Okay, he's gonna Wednesday, break it down. 0 to 10,000, 10,000 to 100, 100,000 to a million. Just keep adding the, you know, the next, the next zero, and that's where you're at. Okay, second ladder step, 10,000 to 100,000. I'm trying to think, oh, gee, what changes when you get to 10,000 to 100,000? This might be the spot where you can raise your deductibles on your insurance, maybe to save a little bit of money. Did I say that right, Doug? Insurance. I think it's in insurance.

[Doug]

Insurance, the emphasis is on, sure, we'll cover that loss.

[Joe Saul-Sehy]

I think it's in.

[Doug]

Sure, not in.

[Joe Saul-Sehy]

Does much else change between 10,000 and 100,000 for somebody that rung?

[OG]

Number two, I would argue that if you were at a month of cash reserve, you want to get to three. If you were at three, you probably want to be at six and have that piece done. From a net worth standpoint or investing standpoint, I don't see much of a difference between 10,000 and 100,000. Again, you're trying to keep your life simple, not complicated.

[Joe Saul-Sehy]

$100,000 to a million is, I think, where the rubber starts meeting the road. I'm being a little more precise. What changes do you think? And I think this is probably the majority of our listeners are in this area. Don't get me wrong, Stacker. If you're starting out, man, can't wait to have you in that $100,000 to $2 million net worth area. But for this group of people, if we're just looking at that net worth, what am I really Focused on then.

[OG]

Does he mean investment net worth or total? Because there, for a lot of people, this could be your house too, included in this.

[Joe Saul-Sehy]

Yeah, it's interesting because for people in these first three rungs of the ladder, a big part of their net worth is in their personal home, is in their personal home and in their 401k. And then it's actually when people get past a million dollars OG where you see that personal house becomes less, rental real estate becomes bigger. By the way, these are statistics of people today, just the way things naturally happen to be people investing more in that. But personal property is a big piece of that puzzle. Somebody between 10,000, a million. Maybe part of it's what you talked about, getting that mortgage paid off.

[OG]

Yeah, I think the difference between a hundred thousand and a million is so profound, it doesn't take long to go that path. But I think the mindset is wildly different. You know, along the way, I would break this down into a couple of different groups. I think the 100 to 300 is where you start really seeing some acceleration of your investment portfolio. And I'm thinking not real estate. Right. Let's just exclude that for a second because obviously that could sway it quite a bit. One to three, you start seeing some really big traction going on. And then that kind of three to five number. And then it seems like you go from five to a million pretty quickly. And for those who are in the middle of that, they're going. It doesn't seem very fast, but, you know, measure backwards and look at how long it's taken you. If you've been saving money and investing, like, put a chart out and go, well, it took me 12 years to get to 100. It took me four years to get to two. It took me another two years to get to three. It took me 18 months to get to five. That shortens every time because you're starting this snowball of compounding. But yeah, I think from an investment standpoint or kind of financial planning perspective, I want to make sure that we've got a really good handle on debt and cash flow between 101 million. If Lord willing, the only thing you have is your house, I think it really makes sense to consider how you want to pay that off. I've never met anybody who's paid their house off. That's like, dang it, I really wish I had a mortgage. And I know that there's the math that says, well, my house is at 3%. Isn't it better? It's like, yes. However, look at that mortgage payment and how much money you have to make and how much money you're not saving, you know, and not investing on an annual basis. And then I think from an investing perspective, maybe halfway through this 100 to 500, maybe somewhere in here, you start thinking about some additional diversification. It's not going to hurt, but I don't know that it helps that much. And so you want to be careful in saying, okay, at this level now is when you get to like play the game because it's not really, you know, that's not really what you're doing. You know, if you look at Paul Merman's thing, he's like, okay, if you put it on the S and P, you're good, right? Like, you're golden. But if you add 10% to this, you know, you're golden plus, you know.

[Joe Saul-Sehy]

Fractionally better, a little bit better.

[OG]

Like you are adding so much little marginal benefit by adding diversification that really what you're doing is you're trying to prevent a scenario where you're going to make a big mistake because the sector or the part of the economy that you're invested in goes through a recession. You know, if you've been s and P500 the whole time, right? 2015, you started investing, it's 2025. You're 10 years into it. You've only put money in the S and P. You've only experienced the US Market going up, except for like a little teeny blip here and there of COVID in 2019. Right. 2022, as these numbers become bigger, you know, the swings in your portfolio become greater. From a dollar standpoint, the percentages are the same. S and p was down 20% in 2022. It'll be down 20% again someday. Right? But we don't spend percentages, we spend dollars. And when you look at your portfolio and you go, you had $10,000 and it went all the way down to eight, you didn't think like, oh my God, that's 20%, right? You just went, eh, down two grand this year. But when you have a million dollars and it goes down 200,000 to 800,000, still 20%, right. The experience is profoundly different. And so the benefit of diversification at that point where you start adding different economies, international or emerging market or big companies, and small companies being a little bit more specific around that, the benefit is there's likely to be a sector where it hasn't affected that. Minus 20. And now it gives you an opportunity to start reinvesting people get excited about.

[Joe Saul-Sehy]

Diversification because they think that it's adds alpha, that it makes your portfolio grow faster. You're saying it's exactly the opposite, OG it's, it's because you now have something to protect. Now you have.

[OG]

Yeah, I mean, I think statistically it does help you, right? I mean, you could look at the risk return curve and just say, like, okay, if I want to be the riskiest and the highest return, I would put all my money in small companies. But what's the trade off? The trade off is every so often they lose 2/3 their value.

[Doug]

Whoops.

[OG]

And there's not a lot of people around that have experienced it with any real money to see what that is. I talk about technology stocks all the time, and those of us who are investing in the late 90s and early 2000s remember this anecdotally, but never really experienced it because people who are 70 with tons of money in the market right now were 40 with not tons of money in the market. You know what I mean? It's been so long now that we really failed to appreciate how impactful and what, what it really means when you say, well, I'm just going to put all my money in tech stocks because that's the future. Just give yourself the dollar amount and track that. In the 2000s, the first decade, the NASDAQ went down 78% and it took 15 years to get back to even. My 13 years to get back to even money From March of 2000, I.

[Joe Saul-Sehy]

Was thinking, yeah, just track it from 2000 to 2002 and see how you felt.

[OG]

Well, that's fine, because I think people will look at that and go, I could stay the course. Oh, you know, and it's like, okay, cool, good for you. But tell me you're going to tell me you have a million dollars in tech stocks right now and you'd be okay with it going down to 180,000 or 200,000. A million down to 200, and it stays down at 200 for the next 13 years. And sometime in 2038, you get back to a million. But I promise, from 2038 to 2050, it's going to skyrocket. You know what I mean? Like, like we can't conceptualize that there's not a person in the universe that's going to watch 80% of their portfolio go down and not do something about it.

[Joe Saul-Sehy]

I think at half a million, I like how you break these up to OG But I think at half a million is where tax planning really.

[OG]

Oh, From a planning standpoint, yeah, absolutely.

[Joe Saul-Sehy]

Half a million is where tax planning starts to rock. Looking at your tax triangle stacking benjamin.com tax triangle if you want to see graphic of what we're talking about with the tax triangle starts to make sense. Half a million but then a million to 10 million. OG when you get above that million dollar mark and now you're growing into 10 million. And by the way, a lot of us think 10 million is rarefied air. Here's something I learned from Nick that I didn't know. How many people in the United States do you think have $10 million or more? 2 million. 2 million divided by 50 states, that's 40,000 people per state. And what also strikes me about this too, where you know, Nick is really focused on net worth here but we will talk about income and the quickest way to grow your net worth that.

[OG]

Nick to save a lot of money.

[Joe Saul-Sehy]

Hammers well make more money historically when he looks through all the data and this is where Nick shines. When you look at the data, you and I have gotten lots of pushback. Why do you focus so much on income? This is a finance show. Because making more money makes this so much easier. It makes it so, so, so much easier. And all of Nick's data proves it out even more than I thought. But if there's 2 million people, 40,000 people in every state, if we just divide the states evenly that have done this before. I go back to our first interviews of 2025 with Alex Hermosi and he says, oh gee, if you don't have $10 million, you're paying an ignorance tax. And I remember that like it was a slap across the face. Like what he's like, if 40,000 people have done it, all 40,000 people in your state that have done it are not smarter than you. They're not smarter than you. You're as smart as many of those 40,000 people. And yet they've done it. And you haven't done the research to find out how to do it. I found that pretty powerful.

[OG]

You're right, that is a little slappy facey.

[Joe Saul-Sehy]

It's so smart.

[OG]

I'm not sure that I will drink all of the Alex Kool Aid on that. I'll take a little sip just to see what it tastes like. Little blue raspber berry perhaps Just a dip. Yeah, just a sip. But I do think that the way to look at this is if there's a level of success, whatever that means to you, whether it's investment, career wise knowledge, that you haven't achieved that you want to. There is likely a recipe card already in existence and there's lots of different recipe cards to do it. You mentioned, hey, if you've got a million dollars of net worth or $10 million, maybe you can go buy a business. Okay, that's not a, that's not like a normal common coffee table conversation with people like, hey, so did you guys buy a Laundromat this week? I did. You know, like, that's not a thing. But you can learn about that. Hell, you can just let your million dollars compound in the market for a handful of years and you'll get to 10 million. The thing that just blows my mind is, you know, we talk about Warren Buffett being one of the greater and investors of all time, mostly because, in his words, he used a lot of time on his side, happened to grow up in the greatest country and the greatest economic boom in that country ever. He got lucky, basically, is what he talks about. But his net worth when he was 50 was $60 million. And that's a lot of freaking money, right? That is a lot of money. His, his problems at.01% or whatever, like nothing. But he also still made the decision of which, you know, Hagg McMuffin, he was going to have in the morning, you know, was he going to have a hash brown or not have a hash brown based on how the market was doing? Right? So he was frugal even then. But now you look at his net worth and it's. Whatever it is, I don't even know $100 billion or 10. It's some insane number. How did he get from 60 million, which is crazy, to a hundred? It's just time. So the faster that you let that compounding muscle work, the more likely it is that some of these higher numbers that you see or you hear about are realistic in your life. You know, you don't have to spend all your money. You can save some of it along the way, but there's a recipe card for it. And if you want to be successful and your level, your definition of success is tied to a net worth number. And you're like, how do I get to 10 million? There's a path for that, you know.

[Joe Saul-Sehy]

And to reset again, back to the beginning. Each of these wealth ladder points Nick is going through, if you wait until this point, you won't blow yourself up. So by focusing on saving as much as you can, but having adequate insurances and your emergency fund, zero to 10,000, you won't blow yourself up. 10,000 to 100,000. Getting that primary residence down, throwing as much money into investments as you can. Now maybe raising your deductibles to save a little bit of money. A hundred thousand to a million. Begin thinking more clearly about more scientific diversification, both from the upside and the downside at half a million. Looking at, at tax planning, these are to not blow yourself up at a million dollars. And this is interesting because you'll see a lot of people get here before this og buying individual pieces of real estate. This is the point where Majuli goes, if somebody's giving you real estate advice, you've less than a million dollar net worth. Good chance that that illiquidity could blow you up. If you've got more than a million dollar net worth, less likely that's going to blow you up. So a million to $10 million is where real estate enters the picture for Majuli.

[OG]

I remember seeing a YouTube short or something. You know, Kyle Bass is or heard of him.

[Joe Saul-Sehy]

I have and I'm scrambling to place how I know.

[OG]

So he's a hedge fund guy here in Texas. Dallas, Fort Worth, Fort Worth, yeah. Famously made a bunch of money subprime. A little cuckoo for Cocoa Puffs. But you know, he's, he's got some, he's, he's been successful, right. He's got a recipe card.

[Joe Saul-Sehy]

Right.

[OG]

You don't have to like drink all his Kool Aid, but maybe just have a little taste. But I saw this thing the other day that he was doing. He's like, if I was investing, if I was starting out or whatever, he's like, I would buy 100 and 500 acre plots of land just outside major metropolitan areas. 25 years and it's like, well, yes, of course you would, Sir. You have $17 trillion. That makes a lot of sense for you to own a bunch of farmland just outside the city limits of all these big cities and US of A. And go, I'll just wait for urban sprawl to catch up. Some idiot will want to build houses here sometime in the next three decades. Also true, you know, but probably not the greatest investment for the person who's got, you know, 800k in their 401k going, I think, I think I'm ready for the next thing. Probably not buying 100 acres of farmland, you know, just outside Dallas to hold for the next generation and especially not.

[Joe Saul-Sehy]

For the people that are the vast majority of TikTok consumers. Right. Somebody just starting out and they're on that first rung of the wealth ladder.

[OG]

Kyle Bass said I should take all my money and buy this, this plot of hunting ground up.

[Doug]

And Sweetheart, sweetheart, you're 13.

[OG]

You're watching TikTok. You're acting like 13.

[Joe Saul-Sehy]

A million to 10 million tax planning becomes, I think, also crucial, not just the real estate portion. What else between a million and 10 million can you think of?

[OG]

OJ this is such a wide range. I think the thing that you want to be cautious of is marrying the idea that I need to do something wildly different because I've hit this, you know, this pull up bar versus what got you here won't get you there. Right. So you got these two competing thoughts of, well, you know, I got to do something different. I got a million bucks. Now it's like, well, do you? I mean, you did a pretty good job to get to. You're 34 years old. You got a million dollar net worth. Like, do you sure you want to mess with the formula? Like, it seems to be working pretty good also. There's an opportunity to do other things now. Right. And so how do you marry those two things together? I think you have to be really cautious on, as grandpa would say, getting too big for your britches.

[Joe Saul-Sehy]

Yeah. I think the big thing here for me is I think it's time to really, really, really focus on. And I know you should have an estate plan from the beginning, but I think your estate plan decisions begin to change as you get closer to $10 million.

[OG]

Yes, that changes. Your charitable giving changes. Hell, your time choices change. Like, you're closing in on 5 or 7 or $10 million net worth. Are you like, are you thinking, well, maybe now's the time to really pull back? You know, if you're 45 and you've accumulated $5 million of net worth, I mean, you've done so with pretty good discipline. Are you about ready to start trading your time back a little bit? I think you have some really tough decisions to make as you're crossing that kind of marrying two concepts here. But as you're crossing those fire numbers, you're starting to get to, well, what else do I want to do now? Because I don't have to keep shoveling money into this plan because I've got 5 million bucks and I'm 40 years old or I'm 45 or I'm 50, life planning, I think, becomes more important. There you go. That's what I was looking for.

[Joe Saul-Sehy]

Yeah. And this is a danger that people face, which is when I'm on wealth ladder point number one, I think some things are going to make me happy. And when I'm on wealth ladder step 4 million to $10 million OG it's a whole different number of things that make me happy. Like, you know, if you go back to that 0.01% of your net worth, you're struggling. You know what camping is, is a lot of fun and you learn that camping can be a great time to just recharge and get away. When you have a 10 million dollar net worth and a thousand dollars isn't going to change anything, you may decide to go different places and do different things and you'll often see people that give judgment to the way I'm going to feel later on in my life. They might make some long term decisions that don't pan out when your net worth begins to accelerate. Fascinating discussion. We're going to dive more into this on our 201 newsletter and of course on Wednesday with the man himself, Nick Magiulli. I'm glad we were able to go into some of the concepts and hopefully for a lot of you, make some start thinking really, where am I at on the wealth ladder and what am I paying too much attention to that maybe I shouldn't be paying this much attention to? Or is there something that I'm avoiding that should be a part of my financial planning discussions? Coming up in the second half of today's show, we we've got a a TikTok minute with some relationship advice and the big beautiful bill has maybe a little Achilles heel. We're going to cover those. But Doug, before we get there, you've got some trivia about today's date and history. Is it a birthday today? Is that what it is?

[Doug]

Big giant question? I don't know either, Joe. Let's find out together.

[Joe Saul-Sehy]

I haven't read it yet.

[Doug]

Hey there Stackers. I'm Joe's mom's neighbor, Doug, and today's the birthday of the amazing late actor and comedian Robin Williams. Williams is known for a ton of roles, but the one which launched his acting career was arguably his role as Mork on the classic show Mork and Mindy. As Mork, Williams played an alien who's trying to understand human culture. But here's a question. Mork and Mindy is a spin off series from another even bigger hit show from the 70s. Which one? I'll be back right after I go practice combing my hair. I heard it makes me look great while I'm jumping sharks.

[Joe Saul-Sehy]

This episode is brought to you by Progressive Insurance. You chose to hit play on this podcast today. Smart choice Progressive loves to help people make smart choices. That's why they offer a tool called Auto Quote Explorer that allows you to compare your Progressive car insurance quote with rates from other companies so you save time on the research and can enjoy saving savings when you choose the best rate for you. Give it a try after this [e-mail] Progressive Casualty Insurance Company and affiliates not available in all states or situations. Prices vary based on how you buy. Small business owners State Farms there with small business insurance to fit your specific needs. Whether you're starting a new venture or growing an existing one, State Farm helps you choose the right coverage to protect what matters most. Working with a local State Farm agent helps you understand your coverage options, offering local support to help you achieve your goals. Focus on turning your passion into a thriving business, knowing your insurance can change as your business grows. State Farm here to help you succeed with your business like a good neighbor. Stay Farm is there. Close your eyes, exhale, feel your body relax and let go of whatever you're carrying today. Well, I'm letting go of the worry that I wouldn't get my new contacts in time for this class. I got them delivered free from 1-800-contacts. Oh my gosh, they're so fast.

[OG]

And breathe. Oh sorry.

[Joe Saul-Sehy]

I almost couldn't breathe when I saw the discount they gave me on my first order. Oh sorry. Namaste. Visit 1-800-contacts.com today to save on your first order. 1-800-contacts.

[Doug]

Hey there stackers. I'm old television show lover but guy who's never been comfortable taking a three hour boat ride anywhere. Joe's mom's neighbor Doug It's Robin Williams birthday today and in celebration of the late actor and comedian, we're looking back to one of his early roles, Mork from the classic show Mork and Mindy. But what huge Benjamin earnings show did Williams first appear on as Mork? The Answer Robin Williams first appeared as Mork on alongside well known actors like Henry Winkler, Marion Ross, Tom Bowsley and Ron Howard on the show you know as Happy Days. This wasn't the only series Happy Days spawned. While there were five altogether, Laverne and Shirley and Joanie Loves Chachi went on to big success. Hey, speaking of success, let's help you successfully manage money better. Back with Joe and OG.

[Joe Saul-Sehy]

Og Bork of Mindy before your time a little bit.

[Doug]

Not much.

[OG]

Not much. Yeah, I mean I remember being on.

[Doug]

Man that was must see tv. I wanted to move to Boulder as soon as I started watching that show. And that was before Boulder just became.

[Joe Saul-Sehy]

Denver was It because of Mor. You just wanted to live closer to Mindy.

[Doug]

Mindy, yeah, yeah, she was something.

[Joe Saul-Sehy]

Because you were 13 years old, cute as a button.

[Doug]

I don't even think I was that old. In fact, I know I wasn't that old when that show was on.

[Joe Saul-Sehy]

You were already in love.

[Doug]

So in love.

[Joe Saul-Sehy]

Yeah.

[Doug]

Oh, my goodness. Yeah. And then I found out she was a Michigander. Originally from Michigan.

[Joe Saul-Sehy]

Well, see, there you go. Even better.

[Doug]

By the way, so is Robin Williams. He wasn't born here, but he had spent a big part of his childhood here.

[Joe Saul-Sehy]

But he got to Michigan as soon as he could.

[Doug]

As soon as he could. And that's where he got all of his humor and his intelligence. Yeah, duh. Obviously. You know what's crazy is the phrase jump the shark came from Happy Days Fonzie. You know, late in the series. I think it was like, season eight or something. And they, you know, they get to California and Fonzie's on water skis, literally jumping over a shark. That's where the phrase came from. But why we didn't all say, hold on, like, three seasons before that they brought an alien on the show. That wasn't the moment where the show started to lose its way.

[Joe Saul-Sehy]

What are we going to do? We're going to bring an alien in. That'll do it. That'll kick the ratings.

[Doug]

The phrase should be we're jumping the mork or something, but we shouldn't have waited three or four more seasons to win. Fonzie got on water skis and a leather jacket.

[Joe Saul-Sehy]

Time for our TikTok minute. This is the part of the show where we shine a light on a TikTok creator who is either saying something brilliant or air quotes brilliant. Today, og we have somebody giving. Giving relationship advice. Do you think that this relationship advice is going to be brilliant or air quotes brilliant?

[OG]

Well, relationship advice on Tik Tok. Let me think about this. I'm gonna say that the person has no idea what the f they're talking about.

[Joe Saul-Sehy]

This is advice from a senior citizen who sits in her nightgown in her bed.

[OG]

Your algorithm, dude, is something else named Baddie Betty.

[Joe Saul-Sehy]

Tina sent this to us and said, this cracks me up. So, no, I'm not following.

[OG]

The stuff you guys search for on the Internet just never ceases to amaze me. You know what? I'll really get my gander.

[Joe Saul-Sehy]

Watching a senior citizen lady give relationship advice from her bed. And she's wearing sunglasses. She's like the. The Hollywood advice giver. Betty. Betty. And you think it's not that good. I mean, with that setup, how can this be bad? Betty is giving some advice to a young lady who is. Is having some difficulties. And, well, Betty's teaching her how to turn this into a Benjamin Stacking situation.

[Doug]

The guy I'm seeing won't commit to.

[Joe Saul-Sehy]

Me, but he pays for everything. Should I stay? If he's not committed to you, you're not committed to him. Get yourself five other men who also pay for everything. Now you have six sources of income. Bam.

[Doug]

Problem solved.

[Joe Saul-Sehy]

Oh, gee, if Mrs. OG isn't committed to you enough, just find five more and you'll have six sources of income. How great would that be?

[OG]

Yeah, it reminds me that, you know, it was. I don't know if it was a joke comedian like where I heard this, but it was like, I could never have an affair because I can't keep one woman happy. How in the hell try to keep two?

[Doug]

Yep. Amen, brother.

[OG]

It's so much work to do what I just.

[Joe Saul-Sehy]

Anyway on the same idea, by the way of advice. That sounds good, Stacker. Brian in our Facebook group the Basement shared a meme of a guy who says, every morning I go to the most popular coffee shop in town. I wait in the line, which is a mile long. When I get to the front, I sell my spot to an impatient person in the back for 20 bucks. I do this about 15 times before the lunch rush. It's called line arbitrage. Makes money every morning. Just selling the spot for 20 bucks sounds brilliant. Not the money making up, not the money making opportunity either of you are looking for. No, I'm okay, Brian. Thanks for sharing that.

[OG]

That was good coffee at home, Brian, right? Latte factor, bro.

[Doug]

I have to break it to Tina, but that betty character, she's 100% AI generated.

[Joe Saul-Sehy]

Well.

[Doug]

Now, it doesn't mean that the advice is wrong. It just means that the, you know.

[OG]

My favorite AI thing right now, absolute favorite, is the Bigfoot on Reddit. Have you guys seen that?

[Doug]

No.

[OG]

Oh, my gosh. It is so awesome. I'm gonna find some stuff and send it to you guys because it's so. It's like a vlog, but it's a yeti. He's like, hey, what up, fam? So we're gonna climb up to this tree.

[Joe Saul-Sehy]

Don't do that. After I just put coffee in my mouth.

[OG]

And then the other one I saw. So I haven't. I don't do socials very often, but I have dipped my toe back into Instagram. But I found this one on Instagram. Where it's a. It's an AI of a young lady doing the Oregon Trail. And she's like, all right, day two. Uncle Jack looks like he's pretending to be dead so he can get on the horse. We've walked six miles so far. Only 2,000 miles to go. Somebody's already engaged. Or they have dysentery. I'm not sure which. In the wagon next to me, I'm not sure what's happening. Like, I found this farm boy. He's really attractive. Like, it's just. I think what they're doing with the AI vlogging thing, where they're taking historical air quotes, historical things, and putting. It's like. Like they got one for Moses. And he's like, guys, check this out. I can make the water separate by holding my arms up. This is amazing. He's, like, running down the. The Red Sea, you know, all he's like, it's completely dry here. Watch what happens. Water, no water. Water, no water.

[Joe Saul-Sehy]

I like the AI where they take that sheriff who had his, like, 10 seconds of fame when he's like, let me break it down for you. If you do this in this county, you're going to jail. But now they have him using AI say a bunch of stuff. Let me break it down for you. If you're somebody driving slow in the left lane, I'm gonna pass you on the right, and then I'm sending you to jail. Yes, absolutely. If you're somebody that whistles in a grocery store, some tune that I don't understand, you're going to jail. Let me break it down for you. So funny. But the AI makes it look so, so good.

[Doug]

I just. As you gave that example of driving slow in the left lane, it just dawned on me we are not using our considerable reach of this show to promote those kinds of the correct social norm. So I'm just going to say it now. Get out of the left lane.

[Joe Saul-Sehy]

Everybody think it's no big deal going fast enough.

[Doug]

You're not.

[Joe Saul-Sehy]

You're causing so many wrecks, too, or potential wrecks.

[Doug]

Yeah, you really are. And actually that. I just saw that. That I don't know if it was the National Highway Traffic Safety Administrator, you know, if NHTSA, if they put it out. But somebody driving 10 miles slower, not below the speed limit, just slower than the rest of traffic, they caused considerably more wrecks than people who are driving 10 or 20 miles an hour faster in the left lane.

[Joe Saul-Sehy]

I see everybody rush around them on the right, and there's all the people that should be in the right lane and then they try to get in line. I don't know. Let's go on to our headline. Hello do darlings.

[OG]

And now it's time for your favorite.

[Joe Saul-Sehy]

Part of the show, our Stacking Benjamin's Headlines. Our headline today comes to us from thestreet.com before we get into this, this is going to be about Roth IRA conversions, which we talked about earlier, OG but for somebody that doesn't understand this strategy at all, let's just break down. Speaking of break it down, let's break down exactly what is a Roth IRA conversion? How does it kind of fit in your strategic thinking?

[OG]

Well, when you put money in your retirement plan, generally speaking, if you elect nothing or if you've been doing it a long time, it goes in pre tax, which means that the money that you are putting in your retirement isn't taxed today, it's going to grow tax deferred. And then when you take it out down the line, you're going to pay taxes on it. Well, you can do a conversion. You can say, I want to pay taxes on this today in exchange for having tax free money forever. So a Roth IRA is 100% tax free forever. So you can say I want to take my IRA money or my pre tax money and I want to make it tax free. And you check a box and magically it happens. Now the downside is that you get a tax bill at the end of the year for that conversion. So if you say, oh geez, I got 100,000 in my 401, I want this to be tax free forever, I'm going to convert it to a Roth. Now it's just like you made an extra $100,000 this year. So you're going to have, you know, you're going to get a 1099 that says $100,000 of income and then you put that on your tax return and that'll work out to be, you know, whatever it is in your tax situation. But you know, 20, $30,000 probably of tax bill, not a penalty to do this. So you're not going to pay a 10% penalty to conversion, but you are going to pay income taxes. So the strategy around Roth conversions is if you can time it when your income is really low, you're putting money in your IRA at a high tax rate and then you take it out at a low tax rate and convert it to a tax free bucket. You know, you can do some arbitrage there.

[Joe Saul-Sehy]

And that takes us back to a concept that I mentioned earlier, called the tax triangle and setting your investments up so that you have as much tax flexibility as possible. So that'[e-mail] tax triangle to take a look at how all that works. Well, Roth IRA conversions just got more complicated. This says cfp Robert Powell, who's the retirement senior editor at the street, wrote this. Here is what this gets into, OG is that there is a new tax break that seniors get, which is a new senior deduction, and that is a $6,000 deduction for taxpayers age 65 or older or $12,000 per couple. But here's the kicker, OG it comes with a phase out. The deductions reduced to zero, between 150,000 of modified adjusted gross income and 250,000 of modified adjusted gross income. So if you're somebody who is doing these over age 65, doing Roth conversions, doing a Roth conversion over age 65, and you've done the math on your tax bill, you're essentially losing this deduction, which means the amount of money that you're actually going to be behind is going to be more than it used to be because you're not going to qualify for this deduction, which is brand new under the new bill.

[OG]

Yeah. So what you're saying is you got to be aware of if you're retired and you're receiving Social Security, you already have some income. And this is kind of part of the, you know, the campaign promise that Trump had. Right. Which was Social Security is going to be tax free. That was his. That's what he said. They didn't get it tax free, which I think probably honestly should be tax free. I don't know. I don't know. Do you have an opinion about this?

[Joe Saul-Sehy]

I think if we receive a benefit.

[OG]

I mean, I paid taxes into the system to get this thing later to pay taxes on it. I feel like it should just be tax free, you know, especially. But anyways, okay, I digress. We digress, as they say.

[Joe Saul-Sehy]

This is kind of a workaround, though, is what I think you're losing.

[OG]

Yeah. So he wanted it to be 100% tax free. Instead they said, well, we'll just give you another credit, which is going to affect the taxability of this. But to your point, if you start adding additional income sources on there, you have a pension, you take money out of your IRA to live on. You want to do a Roth conversion, be aware of this new bracket air quotes that's happening between 150 and 250 of. If you get between there, you're Going to start losing this credit or this deduction, rather, that could be pretty impactful. So, you know, that's, you know, $12,000 on $100,000 of income is pretty decent, you know, pretty decent thing. So when you're thinking about your Roth conversions, if you're doing those, be mindful of this new, this new line in the sand which will affect the calculations.

[Joe Saul-Sehy]

If you checked out on this discussion because you heard it was for people age 65, I think you might want to go back and replay it because, oh, gee, what this truly means is if you're doing Roth conversions, you get those done before age 65. So it's one less thing that you need to worry about. Like have that in your back pocket already.

[OG]

Yeah, I mean, it's certainly going to change. And people ask me all the time, like, okay, so I got my plan done. I'm good. Right. It's like, well, you know, planning is the thing. It's not a plan. It's not a noun, it's a verb. These are two different things. The plan is the steps that you're going to take for the next six months or 12 months. But if you haven't noticed, like, stuff changes. The market three months ago was down 20% in like seven days and then rebounded so that it's at an all time high. If that doesn't make you go, I got to think about my plan, you know, I don't know what will. And then huge tax law changes, and now people are saying, oh, no, no, these are, these are permanent tax law changes. Okay, okay, sure, sure, sure, sure, buddy.

[Joe Saul-Sehy]

Everything the government does is permanent.

[OG]

Yeah, okay. No, no, you don't understand. It says permanent. Yes, until the next Congress. Very permanent for the next 18 months.

[Doug]

You know, we've talked about this before too, OG where a lot of times the value of the plan is the planning process. It's the behavioral changes that come about as you're working your way through thinking about the plan.

[OG]

Yeah.

[Doug]

And then step two is you can't let it sit there and collect dust. It's an. It's a verb, it's not a noun.

[OG]

Yeah. You have to be thinking about these things. And, and as you're working through your retirement income planning, as you start thinking about that in your 50s, this is a piece of it. To your point, Joe, of like going, all right, well, hold on. There's a new thing. There's a new sheriff in town at this age 65 thing. This affects how I'm going to think about Roth conversions up until 65 and beyond, honestly. But maybe it just slows your rolls just a little bit. A lot of calculations to be done on that. I think a lot of the. Be careful. This is my only little caveat right now. Be careful of the online tools that are doing the calculations on this already. I'm not aware that all of them are up to date quite yet. You know, it takes a little bit of programming and people have to. Thousand pages. Right. You got to read through that and get all this into the software. So be careful of the advertisements of. Oh, the calculator is good to go. I mean, it's only been two weeks. It's. They're getting there. Give it a few more months to work out the bugs before you sign off on the free online calculator of tax.

[Joe Saul-Sehy]

Yeah, the number's around 900 pages. And most of it is. A lot of it is tax. So we're going to see over the next few months, people working through a.

[OG]

Lot of these things, coming up with different strategies and things that are. I just read about one today about charitable giving and how, you know, there's some good things that are going on in the charitable giving world in terms of tax deductions and some not so good things. A lot of stuff still to come on this.

[Joe Saul-Sehy]

We will link to this as well and our show notes [e-mail] and this piece, if you'd like to dig in more and see actually what Robert, the author of this piece, went into around this issue. Let's mosey out on the back porch. This is the part of the show where we talk about our community and lots of cool stuff, Doug, happening in the community right now.

[Doug]

I've been sitting here chomping at the bit. I thought if I just wait patiently, let these guys talk about their tax planning and all of that stuff, we can get to the good part, which is the back porch. I want to shout out to a couple of our stackers. First of all, let's congrats to Stacker Nancy in Houston.

[Joe Saul-Sehy]

She remember meeting Nancy when we. Nancy was at our. The book tour in Houston. Yeah, it was fun chatting with Nancy.

[Doug]

That was cool. It was a cool venue, too. I drawn a blank on the name of it right now. And I remember that OG and I bounced. Had to bounce a little bit early, but it was a great location.

[Joe Saul-Sehy]

I just remember beer talking to Nancy. I remember beer.

[Doug]

Yeah, yeah, yeah. Well. And from where we were sitting, kind of where we had that makeshift stage set up, all I could do was see where they were serving the beer the whole time. I was so distracted that whole time. Like Homer with donuts.

[Joe Saul-Sehy]

Beer. So what's Nancy up to, Doug? Yeah.

[Doug]

So Nancy wrote that her husband is celebrating what she calls a milestone birthday. I don't know why that's in quotes. They're all milestones, Nancy. But she writes, we are planning his party and it was so nice to see that our work and our processes were set up for our finances at the beginning of our journey is going to allow us to spend like OG she's got the. The emoji that's like the smiley face but instead of the smiley face, it's dollar signs for the eyes, dollar signs for the tongue. She put four of those in there. That's how much she knows you spend OG and she says and enjoy the experience with our families.

[Joe Saul-Sehy]

Oh, congrats to your husband, Nancy. And great job from a long term. Long term stacker Nancy.

[Doug]

I got a couple more, Joe.

[Joe Saul-Sehy]

Deal. Let's do it.

[Doug]

Kind of keep going.

[Joe Saul-Sehy]

Do it, man.

[Doug]

Also congrats. Stacker Carrie has done what looks like Duolingo for 500 days. She writes. She writes while not life shaking. Been working on brushing up on my French for a while. Just like thinking in that way daily. I was nearly fluent as a late teen and I'd like to get there and then some. Part of my retirement plan is to have good chunks of time in France. Whose isn't Carrie. In a recent trip part in France, I was struck by how overwhelmingly kind everyone was to me when I worked through speaking their language confirmed my wishes to spend more time there.

[Joe Saul-Sehy]

We met Carrie also on that same book tour. We were in Chicago, we were in Aurora. Carrie came up and introduced herself and Carrie, congratulations. She was duolingo for 500 days straight.

[Doug]

Yeah, I think I couldn't understand what they were saying because they were trying to speak in French. So I just tuned that one out. And then finally thanks for the picks from stacker Jennifer who took her SB Swag to Pictured Rocks.

[Joe Saul-Sehy]

She was asking you advice, Doug, about how she should go to Wisconsin. You said go to the Peninsula.

[Doug]

Yeah, she actually has. I think there were a couple other pics she posted to not I think maybe near the Mackinac Bridge and maybe one other. But. But yeah, that's. I was glad to be able to be travel guide for her. And then finally Stacker Kate who shared pics of their little baby Rio. What a badass name by the way. Rio. So cool.

[Joe Saul-Sehy]

His name is Rio and he dances in the sand.

[Doug]

Okay. 80s guy. So pics of their little baby Rio wearing a stacking Benjamin's onesie. I'm wearing one right now, Rio, so you're not that cool. Keep the photos coming. As SB takes on the world, we're taking over slowly. You've got the mugs coming. We got onesies.

[Joe Saul-Sehy]

Yeah, we'll see how people can get the mugs. The mugs are really cool with the logo on both sides. Tina's working on that, but as part of our test, she said, should we send one to Doug? I said, oh, hell no. So she overruled me and apparently sent you one anyway. All right, that's going to do it for today, Wednesday. This was the prelude, everybody. Nick Magi is going to be here to talk about the wealth ladder. Super excited to welcome him. We also have Doc G riding along as guest co host of this podcast on Wednesday. So a ton going on, but still more to come today because maybe the biggest part of the show is Doug condenses it all down and shows us what should be on our to do list from today's show.

[Doug]

That's right, Joe. First, take some advice from our featured topic. While some investments are great when you're beginning in life, others make sense when you are well on your way to riches. Rather than taking generic advice from well meaning people who don't know where you are on the road, take a minute to check how far up the wealth ladder you really are. Great news. We'll have more on that soon. When the man behind of dollars and data. Mick. Mick McNajuli.

[Joe Saul-Sehy]

Mick Najuli.

[Doug]

When Mick Najuli joins us.

[Joe Saul-Sehy]

That's good.

[Doug]

Wait, you don't want me to do second in the big lesson?

[Joe Saul-Sehy]

Oh, why not?

[Doug]

I got more. Joe. Second, converting. Converting your Roth ira. If you're receiving the new senior deduction, maybe pump the brakes and put a few more dollars in the till for the irs. But the big lesson. Don't ask Joe's mom about happy days. She'll remind you that the happiest days are when you're rubbing her feet. Yeah, that's as unhappy as it sounds. This show is the property of SB Podcasts, LLC, Copyright 2025 and is created by Joe Saul Sehive. Joe gets help from a few of our neighborhood friends. 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 spots. Come say hello.

[Joe Saul-Sehy]

Oh, yeah.

[Doug]

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.

[Joe Saul-Sehy]

So you know what the best feeling on earth is, guys? Is when.

[Doug]

Yes, Joe, I absolutely know what that is. I have children. You've living now. You want to ask that again? What's the second best feeling?

[OG]

I love my children a lot too, actually. I would say loving on your children. That's probably number one. Yeah.

[Joe Saul-Sehy]

8:00Pm on a Sunday, kind of severe thunderstorm rolling through and it's raining inside your wife's closet and down your fireplace. That is the best feeling a human being could have. Is all this rain inside your house. Call my builder. We're doing some work on the back of our house. And he goes, yeah, we, we're getting ready to replace the back of the roof. So it matches the new addition. So the roofing. And we found some rotted wood around your chimney. And so we took off all the flashing and we put in some tarp. We put a tarp over it and apparently the wind was high enough that it blew the tarp off. And our house just water damage all over the place. It's great. But what is amazing, Two things that are amazing. Number one is everybody showed up. We had five guys at our house Sunday night at 8:30. I feel bad for all these people because, you know, you got a family, got stuff you're doing, and I'm very grateful.

[OG]

A better job shouldn't feel so bad. If they're like, yeah, you know what'll hold? You know what'll hold? A bunch of rain. A piece of plastic.

[Joe Saul-Sehy]

Well, I still do feel bad, especially.

[OG]

If there's like one guy in the group that was like, guys, I don't think this is going to hold. And then the other four, like, no, it's fine, dude. This is what we always do. I don't know.

[Doug]

It's going to hold.

[OG]

Isn't it supposed to rain tonight or something? I mean, should we, should we do something? Maybe we do this tomorrow after. No, no, no, let's knock it out right now. He's like, I don't know, guys. And he's like up there going, you sons of. I knew it. I knew I told you guys. Shut up.

[Joe Saul-Sehy]

New guy, our contractor, the of course general contractor said when I said, I just, you know, I feel gratitude and also just, you know, it kind of sucks for these guys. He goes, the amount of money I pay them all year, they better be out here within half an hour. Like, he was like, nope, they better be here. But three of the guys were from one of these restoration companies, emergency restoration, where if there's a fire or if there's smoke damage or whatever the. The case was, they were out here working. So for them, it's business as usual. But it also. What a job to be in. So now there's fans all over the entire house. They are going to be cutting out. There's blue lines all over the ceiling. In different areas where they found water damage. They take this gun, this infrared gun, and you can see as they scan my ceiling where the water is on the other side of my ceiling. It's. It's really fascinating. What's wild is most of our house is one type of wood flooring that they don't make anymore. And it's one thing that I've hated since we've had our house. I just don't like the wood. The wood flooring look. And the good news is they're going to be replacing it all, because in one section of my house, it got wet underneath it, and there's nothing they can do. So now we're going to be moving. Now, not only do I have an addition going on the back, but we're going to be playing musical furniture as moving company comes and moves all our stuff to one room while they replace that floor, and then all the stuff to the next room while they replace that floor. It's going to be a great time.

[Doug]

So what. What color of deep shag carpeting are you getting?

[Joe Saul-Sehy]

Yeah, Bright red. Like, the brightest red I could possibly get. You know why, Doug? Because that's the shag carpeting I had in my bedroom when I was a teenager. It was this red and black. And not only did it go across the floor and under my waterbed, because, of course I had a waterbed.

[Doug]

Of course you did. That's exactly what I was picturing.

[Joe Saul-Sehy]

And not the new waterbeds, where, you know, it's a bunch of pockets. And they don't. No, it was the one bladder. Yeah, right.

[Doug]

Just one giant bag that always had.

[Joe Saul-Sehy]

The one little air pocket that you couldn't find. So it was this sloshy mess. But not only did it go across the floor, Doug, it went up the wall. Up one of my walls was shade.

[Doug]

Stop at the mirror on the ceiling.

[Joe Saul-Sehy]

The disco ball. Yeah. Did you see that? Did you see that? Was it an Airbnb listing where these people rented a house from somebody that apparently was a bachelor or bachelorette. And it was a beautiful house, except in the master bedroom, where there would be, you know, some stupid phrase like gather or whatever. It literally said pound town.

[Doug]

And there was this strange swing hanging in the corner.

[Joe Saul-Sehy]

Imagine renting. You're with your family. Maybe the grandparents come along for the trip.

[Doug]

Come on in here, kids. I think this is where the Puppy Pound is.