The Stacking Benjamins Show: The Case for International Investing & The True ROI of Emergency Funds (SB1690)
Hosted by Joe Saul-Sehy and OG | Released June 2, 2025
Introduction: Setting the Stage for International Investing
In episode SB1690 of The Stacking Benjamins Show, hosts Joe Saul-Sehy and OG delve deep into the intricacies of international investing and explore the true return on investment (ROI) of maintaining an emergency fund. With their signature blend of humor and financial insight, they aim to demystify these critical aspects of personal finance for their listeners.
1. The Case for International Investing
a. Current State of International Markets
Joe kickstarts the discussion by highlighting the fluctuating performance of international markets in 2025. Referencing data from JustETF.com, he notes:
"Poland is up a third. Almost exactly a third, 33.32%. Greece is number two at 26.6." ([09:03])
This stark contrast to some underperforming economies underscores the potential benefits of diversifying beyond U.S. borders.
b. Historical Performance Comparison
Joe introduces a compelling analysis from Morningstar analyst John Recanthaler, who examined global investment returns across two distinct 50-year periods: 1900-1950 and 1950-present. Recanthaler's findings reveal that:
"From 1950 till now, using 10 years as a time frame, you had been better off investing internationally during the worst time since 1950." ([09:59])
This historical perspective challenges the notion that international markets are inherently riskier than their U.S. counterparts, especially over extended investment horizons.
c. Diversification and Correlation Benefits
OG elaborates on the benefits of diversification, emphasizing:
"There is a benefit to having assets that aren't correlated. The Poland economy may be doing something different right now than is happening in the US economy... That's a huge benefit for people, especially people who think that the stock market is risky." ([14:14])
By investing internationally, investors can mitigate risks associated with market volatility in a single country, ensuring a more balanced and resilient portfolio.
2. Allocation Strategies for International Investments
a. Developed vs. Emerging Markets
The hosts distinguish between developed and emerging markets, discussing their unique opportunities and risks. Doug explains:
"Emerging market countries are countries that you would say are up and coming... It provides a greater return expectation than emerging market large." ([25:28])
Understanding the differences helps investors tailor their portfolios to balance growth potential with risk tolerance.
b. Active vs. Passive Management
Joe and Doug address the debate between active and passive investment strategies internationally. Doug advocates for a passive approach:
"I pick passive. That's just what I pick." ([28:14])
Conversely, Joe acknowledges cases where active management, such as that offered by Franklin Templeton, might outperform, yet he personally prefers the simplicity and consistency of passive investing.
c. Suggested Allocation Percentages
Determining the right percentage of international investments is crucial. Joe suggests:
"Using portfolio visualizer... starting at 50, 50 and see what happens. See what happens at 60, 40." ([31:12])
Doug concurs, recommending flexibility based on individual financial goals and risk appetite, emphasizing the importance of staying the course despite short-term market fluctuations.
3. The True ROI of Emergency Funds
Shifting focus to emergency funds, the hosts challenge the conventional view that the ROI is merely the interest earned in savings accounts.
a. Benefits Beyond Interest Rates
Joe posits that the real ROI encompasses the financial flexibility and security an emergency fund provides:
"The freedom from worry, ability to be more aggressive with the remainder of your portfolio and your ability to self-insure are the true return on your emergency fund." ([58:02])
This perspective highlights how emergency funds can indirectly enhance overall financial health by enabling strategic decisions without disrupting long-term investments.
b. Adjusting Insurance Deductibles
Doug expands on leveraging emergency funds to optimize insurance costs:
"Having an adequately funded cash reserve allows you to make other choices. It allows you to change your deductible..." ([46:44])
By adjusting deductibles based on the size of the emergency fund, individuals can balance premium costs with out-of-pocket expenses during claims, effectively maximizing the utility of their funds.
4. Listener Question: Setting Insurance Deductibles Based on Emergency Fund
Listener Jeff from Cleveland poses a question regarding the relationship between emergency funds and setting insurance deductibles. The hosts respond by emphasizing:
"If you're first starting out and you don't have much of an emergency fund, deductibles should probably remain low. It's when they get bigger that you then ask yourself... how much of this risk do I want to shoulder." ([49:23])
This advice underscores the importance of aligning insurance choices with financial preparedness, ensuring that premiums and deductibles are manageable based on one's savings and risk tolerance.
5. Trivia Segment: A Lighthearted Break
In their trademark playful banter, Doug presents a trivia question about Grover Cleveland's marriage in the White House, leading to humorous exchanges about historical inaccuracies and pop culture references. This segment not only entertains but also reinforces the hosts' relatable and down-to-earth approach to financial discussions.
6. Community Updates and Takeaways
Concluding the episode, Joe and OG share updates from their community, including graduations and personal milestones, fostering a sense of camaraderie among listeners. They summarize the key takeaways:
- Increase Portfolio International Exposure: Diversifying internationally can enhance returns and reduce risk through uncorrelated assets.
- Understand the True ROI of Emergency Funds: Beyond interest, an emergency fund provides financial security and flexibility, enabling smarter insurance decisions.
- Leverage Community Insights: Engaging with the Stacking Benjamins community offers valuable advice and support for financial growth.
Conclusion: Empowering Listeners to Make Informed Financial Decisions
Episode SB1690 masterfully balances informative financial analysis with engaging dialogue, empowering listeners to consider international investing as a viable strategy for portfolio diversification and to recognize the multifaceted benefits of maintaining a robust emergency fund. With actionable insights and relatable anecdotes, Joe and OG continue to make financial literacy both accessible and enjoyable.
For more resources and detailed discussions from this episode, visit StackingBenjamins.com and explore their comprehensive show notes.