Podcast Summary: The Stacking Benjamins Show – "Paul Merriman Builds Your Million-Dollar Roadmap to Success" (SB1623)

Release Date: December 27, 2024
Hosts: Joe Saul-Sehy and OG
Guest: Paul Merriman
Podcast Network: StackingBenjamins.com | Cumulus Podcast Network

1. Episode Overview

In this episode of The Stacking Benjamins Show, hosts Joe Saul-Sehy and OG engage in an insightful conversation with renowned financial expert Paul Merriman. The discussion revolves around building a million-dollar roadmap to financial success, delving into effective saving strategies, investment philosophies, and the intricacies of retirement planning. The episode is rich with expert advice, personal anecdotes, and actionable tips aimed at enhancing listeners' financial literacy and empowering them to make informed money decisions.

2. Key Discussions and Insights

A. Non-Traded Real Estate Investment Trusts (REITs)

Timestamp: [11:06 – 18:09]

Discussion Points:

• Valuation Challenges: OG and Doug dissect an article by Bruce Kelly from Investment News questioning the true value of non-traded REITs. They highlight the volatility and lack of liquidity inherent in these investments, referencing historical issues like the 2008 credit crisis where valuations of non-traded REITs were vastly incongruent with their real market value.

• Horror Stories: The hosts recall specific cases such as C & L Lifestyle Properties and Inland Western, emphasizing the risks associated with steep commissions and unreliable valuations.

• Expert Opinions: Paul Merriman chimes in, advocating for transparency and caution when considering non-traded REITs. He underscores that while not inherently scams, these investments require thorough understanding and are often overshadowed by more liquid and transparent investment vehicles like equity real estate or REIT ETFs.

Notable Quote:

Doug [13:05]: "If you're adding real estate to a portfolio, you use an ETF or a mutual fund. Stay away from the non-traded stuff. I can't see how you would use a non-traded REIT at all."

B. SEC’s Plan to Enhance Stock Market Data Accessibility

Timestamp: [11:06 – 24:19]

Discussion Points:

• New Data Feeds: OG introduces a headline from The Wall Street Journal about the SEC’s approval of a plan to provide more detailed stock market data to the public. This initiative aims to democratize access to information traditionally reserved for professional traders and Wall Street firms.

• Implications for Investors: The hosts debate whether increased data transparency will significantly impact average investors’ ability to achieve their financial goals. They express skepticism, noting that while information is valuable, execution and strategic action are critical for financial success.

Notable Quote:

OG [22:27]: "If information was all that's required, we'd all be millionaires with six-pack abs."

C. In-Depth Interview with Paul Merriman

Timestamp: [26:28 – 55:22]

i. Personal Background and Frugality

Paul Merriman shares insights into his early life, emphasizing the importance of frugality and saving from a young age. He reflects on the balance between being financially disciplined and maintaining personal relationships, particularly with his non-frugal wife.

Notable Quote:

Paul Merriman [27:32]: "I was frugal because my wife is not. It set the foundation to build from."

ii. Savings Strategies and Early Investing

Paul advocates for starting to save early, illustrating the power of compound interest. He contrasts saving consistently over a lifetime versus delaying savings, highlighting the significant financial disparity that can result from early investment.

Notable Quote:

Paul Merriman [43:37]: "A dollar a day from the day a child is born. $365 a year for 65 years at 10% is about 1.8 million."

iii. Stocks vs. Bonds: Investment Preferences

Paul emphasizes the superiority of stocks over bonds for long-term investments. He discusses the limitations of bonds in outpacing inflation and the resilience of stocks in providing substantial returns over time.

Notable Quote:

Paul Merriman [44:06]: "Bonds average 5%, stocks average 10%. Every half a percent extra I can get for you will add over a million dollars over a lifetime."

iv. Diversification and Efficient Frontier

The conversation delves into the importance of diversification, with Paul highlighting that owning a broad array of stocks mitigates market risk better than concentrated portfolios. He references Dr. Bessembinder’s study, noting that only a small percentage of stocks outperform T-bills, reinforcing the need for diversification.

Notable Quote:

Paul Merriman [46:04]: "Diversification is truly the only free lunch on Wall Street."

v. Target Date Funds and Retirement Planning

Paul discusses the effectiveness of target date funds, citing studies that show accounts fully invested in target date funds outperform those that are not. He advocates for their simplicity and alignment with long-term retirement goals.

Notable Quote:

Paul Merriman [50:20]: "Target date funds are very similar to a pension fund... It amazes me how many young people do not understand the power of the target date fund."

vi. Paul Merriman’s New Book

Paul introduces his latest book, co-authored with Richard Buck, titled "12 Simple Ways to Supercharge Your Retirement". He outlines the book’s focus on actionable financial strategies that can lead to significant wealth accumulation over a lifetime.

Notable Quote:

Paul Merriman [39:53]: "Every one of these should mean an extra million dollars in your pocket over your lifetime."

3. Listener Interaction and Q&A

Timestamp: [63:36 – 66:46]

Question from Listener Matt:

"Is there really any reason to rebalance? I mean, I do it, I've done it once, but for years and years I didn't do it because I just figured, what's the point?"

Hosts’ Response:

• Doug: Emphasizes the importance of rebalancing to maintain portfolio alignment with investment goals and risk tolerance. He suggests that rebalancing once a year is sufficient and helps in buying low and selling high.

• OG: Highlights Modern Portfolio Theory and the concept of the efficient frontier, explaining how rebalancing keeps investments on track to meet financial objectives with optimal risk.

Notable Quote:

Doug [65:45]: "Low and sell high. Easier said than done, but rebalancing will help that."

4. Trivia Segment

Timestamp: [56:11 – 75:37]

The hosts engage listeners with a trivia question related to the anniversary of the Boston Tea Party:

Question:

"Since today is the anniversary of a huge tea party in Boston way back in 1773 when Joe's mom was born, am I right? It was a huge tea party. Huge. How huge was it? If we were throwing a tea party today and wanted it to be a success, in what country would we throw it? Which country drinks the most tea per capita?"

Answer:

Turkey is the leading country in tea consumption per capita, with nearly seven pounds per person annually.

Notable Quote:

Doug [62:32]: "Could have had that one."

5. Key Takeaways

Timestamp: [68:39 – 69:35]

Joe’s Wrap-Up:

1. Action Over Information: Success isn't solely about having information; it's about taking actionable steps to improve your financial situation.
2. Leverage Million-Dollar Opportunities: Implementing Paul Merriman’s strategies can significantly enhance your financial portfolio.
3. Trust Expert Advice: Following proven financial strategies from seasoned experts like Paul Merriman can lead to substantial wealth accumulation.

Notable Quote:

Joe [69:11]: "I just did a little research on old Paul Merriman and you know what? My bad. Just go with his ideas. Guy probably knows what he's talking about."

6. Conclusion

The episode concludes with the hosts expressing gratitude to Paul Merriman for his invaluable insights and encouraging listeners to explore his book for comprehensive retirement strategies. They emphasize the importance of financial literacy and proactive money management, reminding listeners to consult with financial advisors before making significant financial decisions.

Final Notable Quote:

Joe [71:14]: "Special thanks to Paul Merriman for joining Joe today to discuss his new book. We're talking 12 simple ways to supercharge your retirement."

7. Additional Segments

• Advertisements: Skipped as per instructions.
• Casual Banter and Anecdotes: While present throughout the episode, these were condensed to focus on the core financial discussions and insights.
• Closing Remarks: Hosts wish listeners a Happy Hanukkah and tease upcoming episodes with more financial tips and surprises.

8. Recommendations for Listeners

• Read Paul Merriman’s Book: "12 Simple Ways to Supercharge Your Retirement" offers actionable strategies that can potentially add significant wealth over a lifetime.
• Start Early and Save Consistently: Leveraging the power of compound interest by saving and investing early can lead to substantial financial growth.
• Diversify Investments: Spread investments across a broad range of stocks to mitigate risk and enhance returns.
• Utilize Target Date Funds: Simplify retirement planning by selecting appropriate target date funds that align with your retirement timeline and risk tolerance.
• Regularly Rebalance Portfolios: Maintain investment alignment with financial goals by rebalancing your portfolio annually or as needed.

Final Note: This episode serves as a comprehensive guide for listeners aiming to build a robust financial roadmap, emphasizing the importance of informed decision-making, strategic saving, and diversified investing to achieve long-term financial success.