Your Questions Answered: Saving, Investing & Estate Planning, Stacker Style (Episode 1700!!!)

Summary

The Stacking Benjamins Show – Episode 1700: Your Questions Answered: Saving, Investing & Estate Planning, Stacker Style

Release Date: June 25, 2025

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Introduction

In Episode 1700 of The Stacking Benjamins Show, hosts Joe Saul-Sehy, OG, and their friend Doug dive into a diverse array of listener questions, providing insightful advice on saving for a house, managing inherited IRAs, financial planning for single individuals, the student loan crisis, and optimizing emergency funds. True to the show's reputation for blending financial literacy with humor and relatability, this episode offers both depth and entertainment for listeners seeking practical financial guidance.

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1. Saving for a House

Timestamps: 06:47 – 14:23

Listener Question: Torin asks about the best strategy for saving to buy a new house in three years while retaining and renting out the current home. Should the savings be placed in a conservative account like a high-yield savings account, invested more aggressively, or split between the two?

Discussion Highlights:

• Doug’s Perspective (07:27): Doug emphasizes evaluating the flexibility of the timeline. He suggests considering the potential market downturns and their impact on savings goals. If a 20% market drop would jeopardize the ability to purchase the new house, it might be safer to keep the funds in cash or near-cash instruments. He states, “[...] you have to decide what their threshold is. Is it 30 grand? Is it 300? I don't know.”

• Joe’s Insight (09:26): Joe underscores the importance of assessing how much the investment's returns would realistically impact the goal. He highlights the concept of “juice worth the squeeze,” questioning whether the additional returns from a slightly aggressive investment justify the potential risks.

• Hybrid Approach Consideration (10:21): The hosts discuss the benefits of diversifying the investment approach, balancing growth with safety. Joe advises considering bond funds or other fixed-income products but notes the limited additional returns compared to the increased complexity and risk.

• Key Quote:

  • Doug (09:26): “What do you think the changes have to happen because of it? If you can absorb it and you go, well, in a perfect world, I'm buying a 500000 house, I'm put a hundred thousand dollar down.”
  • Joe (09:26): “What would disappoint you the most? Because we want to avoid that one.”

Conclusion: For short-term goals like purchasing a house in three years, a conservative to moderate investment strategy is recommended, prioritizing liquidity and capital preservation over high returns.

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2. Inherited IRAs

Timestamps: 15:24 – 24:15

Listener Question: Lori from Wisconsin seeks clarity on managing inherited IRAs, particularly regarding Required Minimum Distributions (RMDs) when the inheritance is split among beneficiaries.

Discussion Highlights:

• Understanding RMDs (16:11): Doug provides a comprehensive overview of RMD rules based on whether the original IRA holder was already taking distributions. He explains the 10-year rule and the importance of adhering to IRS schedules to avoid penalties.

• Tax Implications and Planning (19:24): The conversation delves into tax bracket considerations, emphasizing the need to balance withdrawals to minimize tax impacts. Joe advises splitting distributions across years to stay within favorable tax brackets when possible.

• Managing Multiple Beneficiaries (22:33): The hosts highlight the complexities when multiple beneficiaries inherit an IRA, each requiring individual management and adherence to their respective schedules.

• Key Quote:

  • Doug (20:39): “It's like how much are we truly talking about?”
  • Joe (21:26): “What tax bracket am I in and how far away am I from that threshold?”

Conclusion: Inherited IRAs require careful planning to meet IRS RMD requirements while optimizing tax outcomes. Beneficiaries should consider consulting financial advisors to navigate these complexities effectively.

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3. Comment from Kevin on Edward Jones

Timestamps: 25:15 – 30:37

Listener Comment: Kevin, an Edward Jones employee, responds to a previous episode's discussion about the firm’s investment products during market downturns, urging the hosts to conduct more thorough research.

Discussion Highlights:

• Kevin’s Clarification (25:27): Kevin explains that the criticized alternative investment products are available only to select clients and reaffirmed Edward Jones' commitment to long-term investment strategies.

• Hosts’ Response (25:56): Joe and Doug acknowledge Kevin's input, emphasizing the importance of understanding the full context behind financial product offerings. They discuss how specialized products often start catering to high-net-worth individuals before becoming more mainstream.

• Key Quote:

  • Kevin (25:15): “Those alternative investments are only available to a very few specific clients.”
  • Joe (28:05): “We don't like them more than a friend.”

Conclusion: This segment underscores the necessity for accurate representation of financial products and the value of insider perspectives in providing a balanced view of industry practices.

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4. Financial Planning for Single Individuals

Timestamps: 37:42 – 44:48

Listener Question: Michelle, a single individual in her mid-30s, seeks advice on financial planning, focusing on saving for a car, home improvements, and establishing emergency funds, while also anticipating potential future care responsibilities for her retired parents.

Discussion Highlights:

• Doug’s Advice (39:19): Doug emphasizes protection planning, advocating for disability insurance and long-term care considerations. He cautions Michelle about the complexities and emotional toll of providing care for parents, suggesting thoughtful planning ahead.

• OG’s Professional Take (42:15): OG echoes the importance of Michelle being her own financial backstop, highlighting the necessity of advocating for herself in income growth and managing expenses.

• Joe’s Strategy Suggestions (44:48): Joe recommends paying off the mortgage early to reduce monthly obligations, thereby increasing financial flexibility. He also highlights the Rule of 72 to demonstrate the power of compound interest in her savings strategy.

• Key Quote:

  • Doug (40:07): “You’re your own backstop.”
  • Joe (43:52): “You got to build all that flexibility in yourself.”

Conclusion: For single individuals like Michelle, comprehensive financial planning should include robust protection measures, proactive debt management, and strategic savings to ensure financial security and the ability to handle unforeseen responsibilities.

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5. Addressing the Student Loan Crisis

Timestamps: 46:27 – 53:58

Listener Comment: Ron expresses frustration over the lack of bankruptcy options for student loans, comparing it to the flexibility available for other types of debt like credit cards and small business loans.

Discussion Highlights:

• Ron’s Frustration (46:27): Ron advocates for allowing bankruptcy options for student loan debt to alleviate the financial burden on millions of Americans struggling with repayments.

• Hosts’ Clarifications (47:01 – 48:05): Joe clarifies that the show did not advocate garnishing Social Security as a solution. Instead, they discussed broader systemic issues and potential reforms such as increasing the number of trade programs and reevaluating loan guarantees to control college costs.

• Doug’s Input (50:21): Doug discusses alternative pathways to higher education, such as community college and vocational training, to reduce reliance on expensive four-year degrees.

• Key Quote:

  • Ron (46:57): “It's called bankruptcy. Whether it's a poor decision with their credit card, poor decision in embarking on a small business [...]”
  • Joe (48:40): “More people in trades, which we need anyway. And number two, the fact that the guarantee program we might need to rethink.”

Conclusion: The student loan crisis remains a critical issue, with listeners advocating for more flexible repayment solutions. The hosts suggest systemic changes to education financing and expanding vocational training as potential avenues to mitigate future debt burdens.

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6. Optimizing Emergency Funds

Timestamps: 55:07 – 60:08

Listener Question: Vijay inquires about the benefits of keeping an emergency fund in an ETF like SGOV compared to a high-yield savings account, considering factors like yield differences and liquidity.

Discussion Highlights:

• Doug’s Analysis (55:37): Doug evaluates the practicality of placing an emergency fund in SGOV, highlighting its minimal volatility and comparable yields to high-yield savings accounts. He discusses the trade-off between slightly higher returns and delayed liquidity.

• Joe’s Recommendations (58:51): Joe outlines scenarios where higher cash reserves might be necessary, such as volatile careers or financial independence. He reiterates the importance of balancing accessibility with growth potential.

• Key Quote:

  • Doug (55:15): “What do you think about heading that way with your emergency fund?”
  • Joe (59:22): “If you're financially independent, you're living off of your assets. You've always advocated keeping a couple of years in cash so that you've got.”

Conclusion: While ETFs like SGOV offer marginally higher returns compared to high-yield savings accounts, the primary consideration should be liquidity and ease of access. For most, maintaining an emergency fund in a high-yield savings account remains the most straightforward and secure option.

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Key Takeaways

1. Prioritize Safety for Short-Term Goals: When saving for specific short-term objectives, such as buying a house within three years, leaning towards conservative investment strategies minimizes risk and ensures funds are available when needed.

2. Manage Inherited IRAs with Care: Understanding and adhering to RMD rules is crucial to avoid penalties. Beneficiaries should consider individual financial situations and seek professional advice for optimal tax outcomes.

3. Comprehensive Planning for Singles: Single individuals must account for being their own financial backstop, focusing on protection planning, proactive debt management, and strategic savings to ensure financial resilience.

4. Student Loan Debt Needs Attention: The current system lacks flexibility for student loan debt relief. Systemic changes in education financing and increased vocational training opportunities are potential solutions.

5. Emergency Funds Should Balance Access and Growth: While placing emergency funds in ETFs can offer higher returns, high-yield savings accounts typically provide greater liquidity and simplicity, making them preferable for most individuals.

6. Ongoing Financial Education is Vital: Engaging with diverse financial topics through resources like The Stacking Benjamins Show empowers individuals to make informed decisions tailored to their unique circumstances.

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Notable Quotes

• Doug: “You’re your own backstop.” (42:15)

• Joe Saul-Sehy: “What would disappoint you the most? Because we want to avoid that one.” (09:26)

• Ron: “Whether it's a poor decision with their credit card, poor decision in embarking on a small business [...]” (46:57)

• Michelle: “My 401k is valued around 270,000 and about 30% are Roth contributions.” (37:42)

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Final Thoughts

Episode 1700 of The Stacking Benjamins Show successfully navigates through complex financial topics with clarity and humor, making it accessible for listeners at all financial literacy levels. By addressing real-life listener questions and providing actionable advice, Joe, OG, and Doug continue to solidify the podcast’s reputation as a trusted and engaging resource for personal finance enthusiasts.

For those eager to delve deeper into their financial plans or seek personalized advice, the hosts encourage reaching out through StackingBenjamins.com to explore further resources and services.

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This summary captures the essence of Episode 1700, providing a comprehensive overview of the discussions and insights shared by the hosts and their guests.

Transcript

[Joe Saul-Sehy]

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[OG]

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[Joe Saul-Sehy]

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[Joe Saul-Sehy]

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[OG]

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[Doug]

We are back we are back we are getting Doug back and we're the three best friends that anybody could have we're the three best friends that anyone.

[Joe Saul-Sehy]

Could have we're the three best friends Friends that anyone can have and we'll.

[Doug]

Never, ever, ever, ever, ever leave each.

[Joe Saul-Sehy]

Other we're the best friends that.

[OG]

Live from Joe's mom's basement, it's the Stacking Benjamin Show. I'm Joe's mom's neighbor, Doug, and earlier today we realized we've got stacks of mail sitting around here. So today our special Wednesday guest is you. We'll answer questions from Stacker Toren about saving for a house and Vijay about emergency funds. Stacker Lori from Wisconsin asks us about inherited IRAs, and Michelle wonders about specifics single people should know about financial planning. But you think we're stopping there? Nah. Nah. We also made room for comments from Stacker Kevin, who wants to clarify the situation at Edward Jones that was in the media, and Stacker Ron, who has thoughts about the student loan crisis. And don't you worry yourself even a little bit, because even after all that goodness, I'm still going to top it off with some of my incredible trivia. And now two guys who love our stackers so, so, so much they almost took out a second mortgage to buy everyone coffee.

[Doug]

Almost. Almost.

[OG]

It's Joe and oh, jj.

[Joe Saul-Sehy]

You know what happened, Doug? We're like, we're not made of money. We can't buy two cups of coffee. Like, are you. Are you kidding me? For both listeners. Hey, everybody happy, Happy.

[OG]

I get. I get what you did there.

[Joe Saul-Sehy]

Yeah, how about that? Welcome back, everybody. Sit back, relax. You found us. It's going to be a super, super fun episode because we are taking your questions today. Got a little behind Doug in the mailbag. Got a. I got to.

[OG]

Took our eye off the ball.

[Joe Saul-Sehy]

Yeah, sorry about that, guys.

[OG]

Bringing on all these awesome guests, researching all kinds of stuff. Whoops. Look at all those fans talking about.

[Joe Saul-Sehy]

Retirement and, and international investing. But you know what? Today we're going to do a little potpourri because your questions are delightfully all over the place. And a guy, whenever I think delightful, I think of him across the car table. Mr. OG is here. How are you, buddy?

[Doug]

Do you guys have the. Or is it not in style anymore to have the actual. The potpourri, the crunchy. You know, I'm talking about like the crunchy flower snack bowls.

[Joe Saul-Sehy]

I don't see them anymore.

[Doug]

Yeah, I don't see.

[Joe Saul-Sehy]

I don't see them in places.

[Doug]

No, I just had like the Glade plug ins or something. Yeah, Febreze spray.

[Joe Saul-Sehy]

We got to go back to that. I thought you were going to talk about those little sticks that you had when you were in college that, you.

[OG]

Know, the patchouli incense sticks.

[Joe Saul-Sehy]

The little incense sticks that were nice. I actually saw those in a store.

[Doug]

That was a thing in the 70s, maybe when you guys were in college.

[Joe Saul-Sehy]

But easy, easy. We got a great show today. We're going to talk about so many things. Doug, you mentioned a bunch of them. Emergency funds, inheritances. Uh, we're going to talk about nefariousness in the brokerage community, student loans, financial planning for single people. Just so, so, so many great questions you guys brought to us. If you've got a question, you know what? The mailbag. Now we're going to move a lot toward emptying it today. This is Decky benjamin.com voicemail.

[Doug]

We're going to impact zero.

[Joe Saul-Sehy]

Yeah, we're not there yet, but we are closing in. So ask your question and hopefully later on this summer or early in the fall, we'll be able to answer your question. But first, before we hear from all the goodness you stackers have brought our way, we've got a couple of sponsors who make sure that this is free and you don't have to pay for any of this goodness. We're going to hear from them. And then we're into the mailbag with your. Your questions. 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 and 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.

[OG]

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[Joe Saul-Sehy]

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[OG]

And save hundreds because Progressive offers discounts for paying in full, owning a home and more.

[Joe Saul-Sehy]

Plus, you can count on their great.

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[Joe Saul-Sehy]

So your dollar goes a long way.

[OG]

Visit progressive.com to see if you could save on car insurance, Progressive Casualty Insurance Company and affiliates. Potential savings will vary. Not available in all states or situations.

[Joe Saul-Sehy]

We just got a letter. We just got a letter. We just got a letter. Wonder who it's from. All right guys, let's not dilly dally. Let's begin this shindig with a great question from Torin. Hey Torin.

[Doug]

Hey Joe. And Og Question about saving for a house. So in three years I may have to buy a new house. I would like to keep the one that I currently own and rent that out. So selling is not an ideal option while I save for that house. Since it's possible it's in the more short term, does it make sense to put that money in a more conservative investment like a high yield savings account? Or is it better to do a more aggressive approach with investing in the stock market since I may not need that money in three years after all? Or is there a hybrid approach where I should put some portion of the money in a more conservative investment and a portion of that money in a more aggressive investment?

[Joe Saul-Sehy]

Appreciate your help, Torrin. Thank you. Thank you. Thank you so much for the question. OG maybe a house in three years, but it sounds like that timeline might be flexible. Does he invest the money or just go high yield savings?

[Doug]

Well, he got me with the maybe and that's really the most important piece. I think the way that I would look at this is I would say what happens if you need it in three years and the market's down 20%? Are you in a position in three years to go, I'll just rent for a year and wait it out? Or does that radically change your new house approach down the line? Does that mean that you can't get one? Does that mean you can't take the new job? Does that mean that you, you have to sell the house that you don't want to sell? What are the dominoes that fall? If the market doesn't behave in the manner in which you hope it behaves, and if you can't absorb it all, then you have to go cash or something like cash. If it's like, well, it could be three, but if I get there and it's not, I'm not ready. I'm happy with renting for a year and let the market do its thing. Or it might be three, it might be five, it could be never, but you never know. I'm much more open to investing it because of the unknown, but just you gotta be okay with what happens. If you saved a hundred grand and all of a sudden you got 80, what do you do?

[Joe Saul-Sehy]

Yeah, I like the way you turn that upside down. What most people think. Because most people start off with what's optimal. And optimal, as we talked about on Monday, is so much in the eye of the beholder and it's got, there's so many factors. I definitely love your way of thinking, which is which one would disappoint you the most? Because we want to avoid that one. And clearly if you get to three years and it's down 20%, you go, yeah, I can't do that because, you know, I may seriously have to move. I can't wait. Well then you just answered your question. What would disappoint you the most? I think is, speaking of optimal, a much more optimal way to answer questions than which one is the best case scenario. Look at avoiding the worst case scenario.

[Doug]

What do the behavioral economists say? That losing feels twice as bad as winning feels good. Yeah, statistically or however you want to say that, you know, emotionally. So yeah, I don't even think about it like disappoint because I'd still be disappointed if I was down 20 and I didn't need the money. But what are the changes that have to happen because of it? If you can absorb it and you go, well, in a perfect world, I'm buying a 500000 house, I'm put a hundred thousand dollar town. But if I get there and I only can put 80 down, whatever, I don't care. Like, yeah, it's a little bit bigger mortgage payment, I'm fine with it. I might have to pay pmi. I don't care, I'm fine. You know, if you're Good. With all that then, full send, man. But if it's like, no, no, I absolutely need to have 100 grand and if I have 99.5, I am toast. There's no way I can afford it. There's no way I can get this done. I can't take the job, I can't move across the country, you know, like whatever. I have to sell the house. I don't want to sell catastrophe. Then, then yeah, you have to pay cash.

[Joe Saul-Sehy]

There's also degrees then of investing OG because if he's not looking at three years, then the next obvious question is, okay, what's the maximum length you would go? Turns out it's five or it's six years. I think that's different than if he looks at 10, isn't it? I mean, is this a case when I go from high yield savings to bonds? Because then I'm notching up the potential return, but I'm also keeping that risk in check.

[Doug]

No, not in my opinion. Because the yield curve does not benefit you for lending money longer than shorter. A lot the difference between lending money to the bank. So if you buy a six month CD or a two year cd, you get an increase in your rate, right? Because you're locking your money up for two years. If you do a two year CD versus a five year cd, it's not the same rate of change as six months to two years was. If you go five to ten, it's darn near flat. So you lock your money up for 10 years, but you don't get much more return.

[Joe Saul-Sehy]

Yeah, but I'm talking like a bond fund where his expectation might be six and a half versus four.

[Doug]

That's my point. A six year bond pays the same as a two year cd. So why would you add the, the risk, the potential, the fixed income product when you could have a guaranteed product of a CD or, or high yield savings with virtually the same outcome. The other thing that people do with this stuff sometimes is they look at that yield number or return number or something like that and don't really factor in return on what it's like. It's like, well, no, no, my, my Savings account gets 4.1 and yours only gets 3.9 minus so much more superior to yours. And it's like, well, we both have 10 grand, so it's like 20 bucks.

[Joe Saul-Sehy]

You know, I mean, how much are we truly talking about?

[Doug]

What are we talking about here? You know, it's like I've got $50,000 in this account and I can get 4% or I can get 5%. I mean, it's not zero, but it's not like life altering family tree dynamic money.

[Joe Saul-Sehy]

Yeah. And I think that, you know, and they call this in the business, the risk premium. Right. I think, Torren, that's the first thing that I do is what OG is talking about right now is I take a look at how much money in real dollars will investing this actually bring me. And is that, is that a game changer? Because if it's not, then I don't want to be disappointed. Back to the original part that we talked about. If it, if, you know, investing in the s and P500 ors and P, maybe large cap value or something like that would be potentially appropriate for this, then. And it adds 500 bucks, 400 bucks versus the downside of I could lose 500 bucks.

[Doug]

Yeah. This is juice worth the squeeze. Yeah. The benefit of compounding at market rates happens in 20 years, not in two. You just don't, I mean, you just, you just really don't see it early on.

[Joe Saul-Sehy]

Yeah. And I wanted to talk Torrent about one other thing that you said, which I find this interesting, that he doesn't want to sell the house. He wants to use it as a rental. And I think OG for a lot of people, they're just experimenting with being a landlord. I think this is a great way to begin that journey. Just dip your toe in a little bit. And I don't know if Torrent's doing it because he wants to or because he needs to, but I think you can learn a lot of lessons about whether real estate is for you or not in this situation by going with one property.

[Doug]

Yeah. I have a dilemma hearing the words like I can't or I never or whatever, because it's like, well, I mean, you could, you're just choosing not to. You know, you got to keep the power to yourself. You got to be the one in charge of it. When you say I can't, you're putting the, you're putting the power on somebody else. And maybe, maybe he really can't. Maybe it's not his house.

[Joe Saul-Sehy]

Yeah. Maybe there's some extenuating circumstances you can't tell us about. But.

[Doug]

Yeah, so that would be the case. But if really I choose to not sell my house, now you're deciding to do it. And having, like we talked about the other day, there's a thousand ways to make money. There's also a thousand ways to lose it. And I have experimented with being a landlord and I absolutely hated it. So, so Best wishes to you and yours and I hope you are successful because, I mean, we were successful financially, but I hated every flipping second of it. I know you were successful, Joe. With yours too. Like you made money on yours. You just.

[Joe Saul-Sehy]

I did.

[Doug]

You just hated it.

[Joe Saul-Sehy]

But no thank you.

[Doug]

Yeah, you just hated it.

[Joe Saul-Sehy]

I hated every minute.

[Doug]

Every minute.

[Joe Saul-Sehy]

Wanted nothing to do with it. We're going to have an episode coming up, by the way, Torren, in August. Paula's going to be our friend. Paula Pan and Afford Anything is going to be launching her new course. She does every year of my first rental property. So that might be a episode that you're going to want to listen to in the future as Paula does a deeper dive with us on when you own that first rental property, how to go about making that happen and avoid some of the mistakes that policies quite often.

[Doug]

Yeah, maybe if we would have got her course we wouldn't have sucked so bad at it.

[Joe Saul-Sehy]

That's right. If we. I totally, man. I learned so many things then. And then afterwards, once we really started talking more and more about real estate, I'm like, oh yeah, I messed up.

[Doug]

That's what you're supposed to do.

[Joe Saul-Sehy]

I messed that up. Oh yeah. Capex didn't know what that was. Let. Let's say hi to Lori in Wisconsin. Or how do you pronounce that? Doug, how do you pronounce Wisconsin?

[Doug]

Wisconsin.

[Joe Saul-Sehy]

There we go. Lori, we're doing it like the home team. What's on your mind, Lori?

[Doug]

Hey, Joe, Og and Doug. This is Lori from Wisconsin. Last year you answered a question for me that I emailed in about my daughter Roll. Todd, you shamed me just enough about the email that today I'm trying a voicemail.

[Joe Saul-Sehy]

So here goes.

[Doug]

Could you go over some basics about inherited IRAs? I have a friend who just got a small IRA inheritance from her mom that was split between her and her siblings. I told her about having to empty the account within 10 years, but I'm also curious about how RMDs work when the inheritance is split between beneficiaries.

[Joe Saul-Sehy]

How does each person know what and.

[Doug]

How much and when they have to take money out of the account? I know inheritances are a big topic, but I thought maybe you could give us a brief overview, especially about the inherited ira. Thanks much and have a great day.

[Joe Saul-Sehy]

Awesome, Lori, thank you so much for the question and for stepping up with the voicemail because guess what's going to happen now. Tina from our team is going to send you a code and for being part of the show we pay you in swag.

[OG]

I thought you meant. What's going to happen now is we're going to talk about her incredible Wisconsin accent.

[Joe Saul-Sehy]

Delightful.

[OG]

It was so good. I'm not kidding. I loved it. I loved it.

[Doug]

The other thing that I heard was.

[OG]

I'm not even making fun of it.

[Doug]

A little bit of a Roll Tide in there.

[OG]

I know she squeaked that in there, too.

[Doug]

Former Alabama.

[Joe Saul-Sehy]

That threw us.

[Doug]

It's fantastic. I mean, I love Alabama. It was a great way to start 2024 and a great way to end 2024. Michigan beating Alabama on January 1st and on December 31st. I mean, it couldn't have been a better way to kind of bookend the whole year.

[Joe Saul-Sehy]

So Lori's on her way to Texarkana to thank you.

[Doug]

And as they say, roll Tide, let's keep that roll going. We're good with this. We like this little thing. Inherited IRAs, they're kind of fun. So a couple of things, you know, and this is really the nitty gritty stuff of making sure that you do this stuff right. Because at the end of the day, the IRS doesn't really care that you didn't know if you said, well, I didn't know that I was supposed to. Well, tough patooties. Here's your penalty. Not our fault that you didn't figure this out. And so a couple of things to remember. The first thing that you have to think about is, was the person who you inherited the IRA from, were they already receiving RMDs? So were they over the age of 73? That sends you down one path. If they were not, that put you on a different path. If they are already receiving RMDs, then you have to follow a different schedule. And again, this is something you can do on your own. You can use some AI tools if you want to double check your math. If you want to hire a CPA or financial planner, this is a really good use for that. But a lot of this is diyable. If you get yourself a head start, you have to, like you said, take the money out within the 10 years. And you have to take out a certain amount every year. So there's a schedule that the IRS produces based on your age. And then you run the balances. It's a December 31st balance times this number. Well, it's actually divided by this number. And then that tells you how much you have to take out. Companies like Fidelity, Schwab, whatever, they won't tell you what these numbers are. You have to do this yourself.

[Joe Saul-Sehy]

But the good news is it isn't hard and it accelerates it a little bit because what they're trying to do is look at a percentage of the assets that you're taking out every year.

[Doug]

So.

[Joe Saul-Sehy]

So it may feel like it's accelerating a little bit over that 10 year period.

[Doug]

Well, and for a person that's inheriting the ira, let's make some general assumptions here. Let's assume that mom was 70, got hit by the bus and the kid that got the money's 45. It's all based on life expectancy. So the life expectancy of a 45 year old's a pretty long time. So it's a really small amount that comes out, you know, in year one and in year two, and then the balance has to come out in year 10 or it has to be all done by year 10. So there's a minimum amount, the required minimum distribution RMD. There's no rule that says that you have to only do that. You can do any amount, which goes.

[Joe Saul-Sehy]

To why planning on this I think is so important, og especially if it's a big number.

[Doug]

Well, yes. So if you get to a situation where it's like mom had $3 million and I'm 45 and it's in an IRA and I got to take out this little teeny tiny bit. Oh, okay. You know, it's like a little bonus, like 50 grand. Like woohoo. I made 50 grand not recognizing that that 3 million turned into 3.3 because it grew by 10%.

[Joe Saul-Sehy]

Bam.

[Doug]

And in 10 years from now, the 3 is going to turn to 6 if you invest it correctly. And in 10 years from nowS, you're taking 6 million out that year.

[Joe Saul-Sehy]

So much money lost to the IRS.

[Doug]

And now it's 50% to taxes. So yeah, it does take some planning. If it's a big number, if it's a small number. Back to our conversation with the first question about juice worth the squeeze. Let's say that the balance of the IRA is 30 grand. Do we really need to be dragging this out over the next 10 years? 10 years of tax filings, 10 years of paperwork, 10 years of separate accounts, 10 years of making sure that you do it the right way, otherwise there's a big penalty, or can we just pay the piper and move on with life? And I think there's a balancing act there. You got to decide what their threshold is. Is it 30 grand? Is it 300? I don't know. But somewhere in there you got to think like, is it worth taking $200 a year out of this thing and all the stuff that goes into it, you know what I mean? Because that's what it would be.

[Joe Saul-Sehy]

Sure. Your time is not worth that.

[Doug]

I mean, to give you an idea, just for people that haven't ever looked at this, the RMD for a 73 year old is 3% of the account value the first year. And so back that down to a 40 year old, it's going to be 1%. You know, it's a really small number. It accelerates, like you said, it gets. It's a higher percentage every year because your life expectancy is decreasing. But, but yeah, if it's a small number, it might make sense just to kind of pay the piper and be done with it. If there's multiple people. Our other question was, how do you deal with this with multiple people?

[Joe Saul-Sehy]

Well, before we get there, Og, just one more thing there, Lori. When you're doing your planning, one thing you're going to want to look at while you're doing that planning is what tax bracket am I in and how far away am I from that threshold? So part of that planning is going to be I'm going to take out X amount up to the next tax bracket this year.

[Doug]

Sure.

[Joe Saul-Sehy]

So I'm not paying any more tax. And listen, if I'm a long way from the tax bracket below me and I don't expect over the next 10 years that I'm going to get there, I'm just going to fill up the tax bracket every year as much as I can so that I minimize that tax in year 10. If it's a big number and to Og's point, if it's small, I would still check the tax bracket to see if you want to split it maybe between two years. Sure, if you're going to pay a little bit more tax, but if not, then go ahead and take it all out in one year and get it done with.

[Doug]

Yeah, I mean, there's some power of tax deferral and people would say that and that sort of thing, but you gotta weigh all that out with your time and the cost of the CPA and, you know, paperwork and all that sort of jazz. So when there's multiple people as beneficiaries, each person has their own account. Joe's got an inherited ira, Josh got an inherited ira, Doug's got an inherited ira, all from Mom. We all are different ages. Some of us are profoundly younger than others. So we're going to have a much smaller rmd. God, they didn't. Neither of them looked up from. From that. I thought for sure it's going to zing them with the old guy joke, and they didn't get it. But we're following along. That's fine.

[Joe Saul-Sehy]

We're just too old. It just went right over our head.

[Doug]

They just went right over your head.

[Joe Saul-Sehy]

Couldn't hear you. You're talking to me.

[Doug]

Got to turn up my hearing aids. But anyways, each person has their own schedule that they got to follow and their own tax responsibility to do it. When you split it up, when you know if the money's at Fidelity and you say, hey, by the way, mom died, and here's all the beneficiary information, and they split it up. Each beneficiary has their own account. Each beneficiary is their own person, assuming that they're an adult anyway, and off they go. They got to do their own thing so the other people are not impacted by other people's decisions, so to speak. Yeah, I think she said something like, my friend inherited the small IRA Small. Inherited ira. Small is relative. It all is, like you said, based on tax brackets and that sort of thing. But when I see this, I see the juice, worth the squeeze thing, and I go, do we really want to be taking 400 bucks a year out for the next 10 years when we can just take 50 grand out right now and put it in our brokerage account and let it grow, do its thing, you know? Anyway, sorry about your friend's parents passing. Yeah, that sucks. Or a family member, I guess you can say it was parent, but just.

[Joe Saul-Sehy]

A couple things I've seen from people, and for some people, this may be obvious, for some it isn't. If it's a spouse, it's a whole different set of rules. So this is for non spouses?

[Doug]

Yeah, there's no rules for spouses. Yeah, I mean, if you're a spouse, then the account turns into yours, and there's some limited circumstances where you wouldn't want to have that happen, but the vast majority of the time, you want it to be considered your own.

[Joe Saul-Sehy]

And the second question we sometimes get is, ooh, I don't have an IRA of my own. Can I just add to this one versus opening? Nope. This is going to be a different game that you're playing. So you cannot add to an inherited ira.

[Doug]

Yep.

[Joe Saul-Sehy]

Great question, Lori. Thank you so much for hanging out with us and also for the voicemail.

[Doug]

Yep.

[Joe Saul-Sehy]

Yeah. Great job on the voice.

[OG]

Great job. It's a great job. Go talk to your mom.

[Doug]

Who's.

[Joe Saul-Sehy]

Who's the Comedian. We love that. Does that. Doug, the Midwest comedian.

[OG]

Charlie Barrons.

[Joe Saul-Sehy]

So good.

[OG]

He is hilarious. I love that guy.

[Joe Saul-Sehy]

So, so, so good about the Midwest. Nice. No. Hey, I mowed your lawn. Hey, I reshigeled your house. I took your wife off to dinner. What? Wait, what? Helping each other. Next up we have Kevin. Kevin heard our episode where we're talking about the, at the time downturn in the market with the tariffs and some of the companies and how they responded. We profiled a piece that came from Investment News which detailed how Edward Jones had responded to the downturn in the stock market with some guaranteed products where we thought that maybe they guaranteed that you'd cap your upside and really some, some sketchy stuff. Well, Kevin wanted to comment on that.

[Doug]

I was listening to your episode from I believe May 14th. I actually work for Edward Jones. I'm not in the exec team or anything like that, but I think you.

[Joe Saul-Sehy]

Guys could do a little more research.

[Doug]

On the article you guys had. Those alternative investments are only available to a very few specific clients. There's nothing Edward Jones has done to abandon our long term investment strategy, especially regarding the stock market. But I think you guys should know that there's definitely more to it than that. Do a little more research, figure out what details you're actually putting out there.

[Joe Saul-Sehy]

Before, you know, going through and saying.

[Doug]

Things like what we did on the 14th. More than happy to talk further about it. Let me know.

[Joe Saul-Sehy]

Thank you, Kevin. Thanks for hanging out with us and thanks for, for the message. Our headline segment is what comes out from the news and from your PR department. I'll say this while I, I love you calling us and calling into us and telling us that, you know, maybe that all wasn't right. We're not the Edward Jones PR department. We're not the people that put this out into the media stream. Our job is to look at the things that are reported on and go, do we agree with this or not? This was a piece that was reported on by very responsible people and your PR department talked about it. So I think instead of calling me, I think the better people to call would be your PR department say, listen, you're screwing me over with all these people and, and you're making us look bad. That is not my job. My job is responsibility to make sure that I'm finding responsible sources, which I did, and to make sure that we give a take about how this might be bad, which we did. I love the enthusiasm. I love the fact that you didn't like that headline. I wouldn't like it either if somebody's talking about my company. And I knew there was more to the story. But listen, Edward Jones has a massive PR department. I know that because I used to work in the PR department for American Express. They are massive. And the fact that if this was wrong, that it got out into responsible media, that your exec team was letting crappy products like this go, but it wasn't the full story, I don't think that's on me. That is not on me. That is definitely. I'm in the ever Jones PR team. And really, oh, gee, that is frustrating. You know, when you work for a company and then you see a headline about your company, I mean, how many, you know, back in the day when we worked with American Express, you'd see a headline about that or about Ameriprise or about any of the companies that we work for, and you go, oh, man, this story is so much deeper than this.

[Doug]

I think when you look at the space of investment products, the whole idea for different types of products always starts at the higher level. I mean, we're seeing this with the 401k article we had two weeks ago, right, where it was like, hey, you get to do leverage in your 401k or you get to buy private equity in your 401k from earlier this quarter. You know, when we talk about that, that didn't start at the mainstream investor level, right? That started with, oh, no, no, that's just for the people that have 10 million. That's just for them. And then it just trickles down, right? It's no different than what happens in the NBA. All of a sudden the college players do and. And then the college players do it and the high school players do it. You know what I mean? While I appreciate Kevin's perspective of like, hey, this was. This is an isolated thing or this is really only for the. It's. Yeah, it probably was. And to your point, Joe, you know, hey, if they didn't want people to know about it, they shouldn't have. They shouldn't have released it in the news. But these types of products, and it's maybe not a slight at Edward Jones, although, you know, we think it's really silly that they have this stuff. I think it's silly that any company has it, frankly. So it's not them, it's everybody. But you're right, it doesn't affect the mom and pop customer that you have right now. Right now. It doesn't. But it's coming. And to your point, Joe, I think it is our responsibility to say, hey, this is a product that's out there. Yeah. It only affects people that have 10 million bucks right now. But pay attention because this is coming your way.

[Joe Saul-Sehy]

We like Vanguard. We like Fidelity. We've talked about crazy happening, in love with them. We talked about crazy stuff that they've done. That is our role in the machine.

[Doug]

We don't like them more than a friend.

[Joe Saul-Sehy]

And Kevin, by the way, if. If as an industry insider, I mean, if you've got a greater take on any of this stuff and want to give our stacker some insight to it, certainly call back. Yeah, I mean, don't stop calling back. But I do want to draw a line between what is my job and what's your pr? My job is not that we're Jones PR department. I just want to be very clear. I'm not Fidelity's PR department. I'm not Vanguard's PR department. Not even involved in American Express's PR department anymore. If it appears in responsible media and your CEO comments in the piece, then that's fair game for the Stacking Benjamin show, frankly, and I think for anybody else, but love it.

[Doug]

And to be clear, we. We don't just think EJ is screwing the pooch here. We'll also take shots at LPL and Charles Schwab and Fidelity and Vanguard and all these people who.

[OG]

But good on him for calling us, you know, calling us out on it and standing up for his own firm.

[Joe Saul-Sehy]

I love having this discussion, too, about how the sausage gets made. All right, in the second half, we've got questions from Michelle. Michelle earlier had written us about what advice do we have for single people. She wanted to put that in a voicemail. We get a great question from her. We had a fantastic question again about emergency funds and what kind of distinguish in between high Yield savings accounts and some other choices. For that we'll get OG's professional take on that. And then a comment from Ron, who we've been talking a lot about lately about the student loan crisis. And Ron has a take that he'd like to share as well. That's coming up in the second half of this amazing potpourri episode. But, Doug, speaking of amazing, it's a kind of an amazingly sad day upstairs because Mom's got all the curtains drawn. She is not in a great mood.

[OG]

It's dark. You're right. Hey there, stackers. I'm Joe's mom's neighbor, Doug, and it is a tough day in the basement. Joe's mom is, like Joe said, candles all over the house, curtains are drawn because today is the anniversary of Michael Jackson's death back on June 25, 2009. Jackson was of course one of the top artists of all time, and it would take us hours to list all of his accomplishments. But here's here's two he was a Grammy winning artist, like multiple. He probably won like 100 Grammys, I think. And his Thriller album sold an incredible 38 million copies in 1984 alone. And it's still the best selling solo album of all time. That's incredible all these years later. It really is. Here's today's question. While a song he performed with Paul McCartney called say Say say is listed by Billboard as Jackson's number one one song ever, which Jackson solo hit did they rank as number two? Or in other words, his best hit as a solo artist? I'll be back right after I go tell those kids on the corner to beat it. I mean, just beat it kids.

[Joe Saul-Sehy]

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[OG]

Hey there Stackers, I'm Backward Walker and Guy who Looks Loves Pepsi but not Enough to Get Burned by it Joe's mom's neighbor Doug Jackson's death truly was a tragedy, and his doctor served two years in prison for involuntary manslaughter. But even with a life cut short, Jackson still reigns supreme as the king of pop music. So which solo song does Billboard call his best? That would be a little ditty that spent 24 weeks on the Billboard chart and seven of the those at number one. It was none other than Billie Jean. And now back to Two Guys who Aren't My Lovers. I think everybody figured that one out. There are just some dudes I know aren't the one. Joe and OG.

[Joe Saul-Sehy]

But the kid is not my. Oh man, Billie Jean. There's a the Civil Wars. You know the band Doug? The Civil Wars.

[OG]

I don't.

[Joe Saul-Sehy]

They're a country folkie band. They do wild sound. Yeah. And they do this wild remake of Billie Jean in that kind of country folk.

[OG]

Yeah.

[Joe Saul-Sehy]

Yeah.

[OG]

You know what, I don't know if that's just kind of the in thing to do in that genre, but I've been getting a lot of that pop up either in my like the Made for Me playlists or in my reels. I've been seeing a bunch of covers by people with floral dresses and banjos and kind of that whole Americana country theme. So I mean, write your own material.

[Joe Saul-Sehy]

There's a banjo band that's known for covers and they've done a Seven Nation army, but they have one album that is completely. It's all AC DC covers and it's so funny with the banjo. She was a fast machine. She kept a motor clean Woman. It's so fun. It's so how does it go?

[Doug]

But how does it go?

[Joe Saul-Sehy]

Yeah, yeah, keep going Joe. Ruin your reputation all in one fell swoop by singing?

[OG]

You don't have a musical reputation, Joe. I'm not sure you've got much to ruin.

[Joe Saul-Sehy]

I probably I might as well go ahead. Just burn whatever foundation I have to the ground. Yes, instead of doing that, let's hear Michelle. Please, Michelle, Save this.

[Doug]

Hey Joe, Og and Doug, this is Michelle. You recently read my email on the Back Porch with a couple topic suggestions. In an effort to appease Doug and his concern about the state of my wardrobe. I'm calling about one of the topics I mentioned. So here's the question. Is there anything different a single person should consider in financial planning? A little about me I'm in my mid-30s, currently single with no kids. I have an awesome, though sometimes expensive dog. I also have an amazing nephew and a niece on the way. My 401k is valued around 270,000 and about 30% are Roth contributions. I max out my HSA each year and it is valued around 10,000. My only debt is my mortgage, though most likely I will need to replace my car in the next one to three years. Right now I'm focused on increasing my cash reserve for a future car down payment, home improvement projects, and 6 to 12 months of living expenses. My parents recently retired from their corporate jobs and their investments are expected to cover all their needs. Most likely I will be the one to provide any future care needs my parents have and I currently live one and a half hours from them. I also have longevity on both sides of my family. Any advice is greatly appreciated. Thanks.

[OG]

Hey Michelle, is that enough details for you? Oh gee. Holy cow.

[Joe Saul-Sehy]

That's fantastic. I mean, that is. I love that. I mean, now we can kind of dig into the financial plan. Like that is fantastic stuff. Michelle, thanks so much for calling and what a great topic. Og. I have a few things but not much because she's single, but there's a lot going on here.

[Doug]

A couple of things that I thought about were around protection planning and it's interesting that she said that she would be expected to provide assistance, like healthcare assistance to her folks if they have enough money. And I would wonder why. I mean, notwithstanding the fact that you maybe you want to do that or maybe that's your current profession. You know, you're a nurse or whatever and you have that expertise. But if they have enough Money, like why would you want to have to do that? I think that sounds more glamorous than it actually ends up becoming.

[Joe Saul-Sehy]

But what do you mean by glamorous? Like she's worried about it, but it's not going to be a big deal.

[Doug]

No, the other way around I think, I think you look at and go, oh no, I would love to help mom if she was sick and I could take care of her until you realize like that could be a 12 year process of 24,7 care. Yeah, that's not as good as you think.

[Joe Saul-Sehy]

Would be tougher.

[Doug]

Yeah. So I would, I would rethink that with your folks, honestly. But they're also kind of dovetails into how you think about it for yourself. Because if that's the expectation that your parents have for you, who is the person that's going to do that for you then assuming that you have the same life expectancy and the same.

[OG]

She said she has an awesome dog.

[Doug]

Yeah. I think that's one major thing to consider in terms of protection planning is further healthcare costs and or responsibility of healthcare. Things down the line. That's down the line, right. Long term care stuff is like 60 plus. That's when you think about that maybe 55. A more immediate thing would be disability. You know, if you're sick or hurt and you can't work for an extended period of time, have another person that can pick up the slack or work extra shifts or whatever. That would be a major piece that I would look at from a planning standpoint as well. And then further down the line from a planning standpoint, the only difference is you just have to think about how do you want to handle your estate. Given that the normal way of doing it, of everything goes to my spouse. And if not my spouse, my kids and if not my kids, then my grandkids, you know. So there's gonna be some different dynamics there of well, I've got some nieces and I've got some nephews and some of em I like and some of them I don't. And you know, this one's done well with their life and is responsible and this one hasn't. And you know what I mean, you have a little different dynamic there, I suspect. But again that's, you know, you're 30 now, that's like age 70 stuff. Right. But in the meantime you can just make sure that beneficiaries are right on your accounts and probably now you list mom and dad or maybe you know, brothers or sisters or something like that. If mom and dad are Good to go. But from a planning perspective, I don't really see a profound difference. With two people in the family, you don't spend twice as much. So it's not like you get a half off discount on retirement. It's, you know, there's something there. But yeah, you still have to save money, you still have to invest, you still have to live within your means, manage your debt appropriately and that sort of thing. Maybe not as much margin of safety if there's not two incomes, but I've seen plenty of two income families go sideways just as quick as a single.

[Joe Saul-Sehy]

So that's, well, that's the thing is being single, you are the backstop. I mean there isn't somebody else that you can go, well, they might be the backstop, they might not be the backstop. You are the backstop.

[Doug]

Yeah.

[Joe Saul-Sehy]

So I love that you led with disability for today, long term care considerations for later, the idea that your estate plan, once again, much later as well. But also I think the only thing I'd add on the short term is, you know, you got to get the raise. The income stream is going to come from you, it's not going to come from anybody else. So just advocating for yourself and learning how to get the raise, making sure that you're able to do that is going to be important over the course of your 40s and 50s. But I love how well she set herself up. I mean mid-30s and 270,000 in the 401k. Oh gee, while you were talking, I was doing that rule of 72, the mathematical magical number where if you take the interest rate you think you're going to get divided into 72, it tells you how many years it takes it to double. So let's say she said mid-30s, let's say she's 35, then she gets 9% over a long period of time. Definitely a can do number every eight years. That means her money is going to double when she's 43, when she's 51 and when she's 59, if she looks at retiring, let's say at age 60. So the 270,000 she saved already with those three doublings, the first double sends it to 540,000, second to a million 80,000, and then the third one, 2.1, almost $2.2 million she's already saved without having to save another dime. So this phrase, you know, I hate all the cute phrases, but this quote, coast Phi also becomes a cool thing. And that's not, you know, there's nothing to do with your question about being single, but also, you know, choosing your adventure. Michelle, what do you want to do? Because you've done a great job of setting yourself up with that, and I love the money in the HSA as well.

[Doug]

Yeah. The single piece of this is, like you said, you're your own backstop here. So you have to advocate for yourself. You also have to take a little bit more measured risks than if there's two incomes where one person goes, I think I want to go start this thing, and I think it might work, but I don't know. But by giving yourself the head start, by having a bunch of money saved already, maybe you're able to do that. Maybe you're able to try the thing in your 50s because you've saved so much money and given yourself enough, so you've got to build all that flexibility in yourself, basically, is what I'm saying.

[Joe Saul-Sehy]

Well, one thing that gives her room to do OG she mentioned she didn't tell us how much she owes on the mortgage. But, you know, we've talked about how the happiest retirees, they know the math, but they pay off the mortgage early. And maybe, Michelle, if you get far enough ahead that you know you're going to be okay for retirement, maybe you can look at paying off that loan earlier, which buys you even more flexibility. Because if you have to be your own backstop, you want the commitments every month to be as low as possible.

[Doug]

Yeah. I started using Monarch this year mostly just to have a couple months of data, just to see. And then. And then it seemed like every month there was like, well, that's just one thing. You know, it's just this one thing this month. Just this one thing this month. But it is pretty profound. I did get a little analytical with it this year to see how much we spend in interest, just, you know, interest on a couple houses. And if you carry a credit card balance or if you have a car loan or whatever it is, it's like you see that stuff pile up, and then you start looking at that going, how much money do I have to make just to pay the freaking interest? You're saying it doesn't make sense to pay off your mortgage. I look at that completely differently. I knew it in my soul before I saw the data, but now I look at it and I go, I have to make thousands of dollars every single month just to pay the interest to the bank to have this house. Like, the faster that it just decreases the overall stress. Right. I don't have. It's like Oh, I don't have to make this money. I don't have this responsibility. So I'm a big advocate for paying the house off at a measured clip for sure.

[Joe Saul-Sehy]

Michelle, great to hear your voice after the fantastic letter a few months ago. Congratulations on a nice job so far, saving and really doing some nice proactive stuff on your financial plan. Next up, we've got Ron, who you know, we've been talking about the student loan crisis a bit and talking about, heck, on Monday's show we talked about more people going into the trades and going maybe not college. And also talking about how college costs just keep going up and up and up and up. Ron had some thoughts on the student loan crisis.

[OG]

Hi, my name is Ron and I enjoy listening to the Stacking Benjamin's podcast. Recently you mentioned a student loan crisis where the millions of people are behind in their student loan payments to the government. The solution seems to be what we allow every other person who is in financial trouble to do. It's called bankruptcy. Whether it's a poor decisions with their credit card, poor decisions in embarking on a small business, or wrong decisions in.

[Joe Saul-Sehy]

A major corporation, we allow them to.

[OG]

Go bankrupt seven years the free and clear. Yeah, they have some limitations and so on, but in today's world that seems to be rather minimal. But student loan debt, you people said it yourselves. You are interested in basically garnishing their Social Security, I believe is one of your statements. Let's have them allow them to do bankruptcy just like every other person who made a financial mistake and not put them in debtor's prison. Again, I enjoy listening to your show.

[Joe Saul-Sehy]

But I have the comment that had to be made. Thank you, Ron. Fantastic. And you can hear he's a little passionate about this topic. I just want to correct one thing, Ron. We didn't say you should garnish people Social Security. Yeah, yeah, that's what happens.

[OG]

I was, yeah, I used the word garnish. OG talked about how it's going to come out of your Social Security. You'll find you don't have as much at the end of the party. Yeah, as you thought. And I said kind of like garnishing your wages, but the two don't really go together. It's not the same.

[Joe Saul-Sehy]

We did not, Ron, present that as a solution. Just FYI. One solution we talked about is if people decided not to go to college and there wasn't so much societal pressure to go to college, then colleges, through the law of supply and demand, will not have a free lunch. And if we stopped Guaranteeing these loans, knowing that colleges can just charge more and more and more and the government will guarantee it. Heck, that gives them carte blanche. I mean they can go ahead and raise prices. We propose those two things. More people in trades, which we need anyway. And number two, the fact that the guarantee program we might need to rethink. But, but this idea of bankruptcy. Oh gee. I mean he's, he's not wrong. People go bankrupt and because they messed up with their credit cards.

[Doug]

Yeah. I honestly haven't given much thought to how to solve this problem, both in the short run of the trillion dollars that people owe presently and, and over the long run of how do we fix it moving forward. I can see the pros and cons to both sides of it, which are eventually this just gets passed on to taxpayers if you do allow a big bankruptcy type thing. Although frankly, is that how you want to start your adult life? Is. You know, I don't know. I don't, I don't have a good answer for it, but I do recognize that this is a, a major problem. And I would actually add one more to what you were saying, Joe, around solutions for this and maybe just kind of dovetails into what you were talking about or, or around the societal pressures. I don't understand why there's so much negativity toward doing the community college or the pre college classes in high school where they're part of your normal curriculum. It really kind of is a very one side or the other type of. Either you're really pro that or you're really anti that. And it's funny because in just talking with people around this because, you know, it's what's in our life right now. The things that I hear from parents, just kind of anecdotally the things that they say is really interesting. They'll say like, well, you know, I really wanted Johnny to get the full college experience and going to community college, you just wouldn't get that. And I'm like, what part of college experience are you miss the drunk frat parties? Is that part of the. And honestly I think there are some parents that think that that's a rite of passage, you know, like no, no, no. You haven't lived until you've thrown up in somebody else's shoes before. You know, and it's like, I'm okay with my kid, not experie ever in his life.

[OG]

We make that joke. It's easy for a lot of people make that same joke. What about, you know, being hungover and all of that? That's an easy joke, but I think, honestly a huge benefit for both of my guys. Going away to college wasn't that part? Of course it was the living alone and having to manage your daily life. Living alone versus staying with your parents and, and doing community college. So I think you can get that experience and still go to community college. Just get your butt out of the house, get a job, go to community college and, and get an apartment.

[Doug]

Yeah. Or what's the problem with that experience happening at 20 instead of 18? I mean, there's, there's countries that have mandatory military service, right? You got to do a certain amount of military service time between high school and advanced school, college, whatever. I'm not saying that that's a solution. I'm just saying, like, there's lots of ways to grow up. We have for some reason decided that 18 is the grow up age. It's like, well, you're 18, you got to grow up.

[OG]

It's like, well, we're almost 10 years early.

[Doug]

Have you, yeah. Have you been around 18 year olds? Because.

[OG]

They'Re not even starting.

[Doug]

No offense to my son, but he's, he just, he was like, I don't know how to reschedule my apple. My genius bar appointment for Thursday. Can you help?

[OG]

Oh, my God.

[Joe Saul-Sehy]

One thing at a time, dad. One thing at a time.

[Doug]

And so, you know, I'm happy to help him with it, but we have adopted this as the thing, right? And there are some people who say, like, oh, no, I don't want to have. I don't want to put that pressure on my kid to have to do all those college level courses in high school. Okay, fair enough. Just like there's people on the one side that go, why wouldn't I have my kid do all this college level work in high school? It's free. My taxes are paying for this. Why wouldn't I have? If they're able and confident and smart enough to do that at that time. It's like for some reason there's this, like you said, Joe, there's this societal weird thing that happens. Like, well, I can't because Johnny needs to go away to grow up.

[Joe Saul-Sehy]

Or even like you said when we were talking about this before about college, OG I think on one of last week's shows we were talking about, you know, even your son going, well, yeah, he's not going to college. Like, you know what I mean? The kind of whisper campaign against kids that don't go to college. Like, there's something less.

[Doug]

When I was in high school, I mean, this isn't new, by the way. When I went to high school and I joined the Marine Corps, I signed on the line in February, so I was still in high school. You know, I was, you know, you signed up early, basically like, I'll leave on this day. And I was in the school play. I was in the school musical that year, that spring. And I had to go do like a physical test, you know, some other stuff at the training center. Anyways, so I told the play director, I said, hey, I can't go to practice today. I got to do this thing down in Lansing. And he said, what college thing? I said, well, actually I joined the Marine Corps, so I've got to do this thing. And he said, you did what?

[OG]

Hmm?

[Doug]

Oh, you know. And I said, well, anyways, I gotta go do this thing the next day. I didn't go to a class. Every time I sat in a class, the teacher would go, you need to go see Mr. Smith right now in his office. And I did like this rotating, like it was like it went around at that school. Joining the military was like, no, no, no, no, no, we don't do that here. You go to college from this school.

[OG]

Yeah. I mean, look at one of the key stats that people look at when they look for what school districts move into. And it's the percent of high school graduates that go to college.

[Joe Saul-Sehy]

They go to college.

[OG]

It's a major metric.

[Doug]

It certainly is.

[OG]

You screwed your whole town over, OG.

[Doug]

I'm just saying 30 years ago, 30 years ago this was still a thing.

[Joe Saul-Sehy]

Yeah.

[Doug]

And it was a little different, but still. So I don't know. There's no right answers here.

[Joe Saul-Sehy]

And Ron, obviously we're not going to solve this on the Stacking Benjamin show in a.

[Doug]

It'd be cool if we did. Right. Like we just gotta solve this. It solved it.

[OG]

And we'll just keep talking. I bet you we stumble on something.

[Doug]

We probably figured out and then a.

[Joe Saul-Sehy]

Whole nation will unify behind it and everybody will get on track and agree on the same thing that we decided easy here on the show. Yeah. Generally on Stacky Benjamin's of course we're about. These are the rules. What do you do about it? And certainly one thing you can do is declare bankruptcy. So there it is. Let's finish this off with vj who is only last because he was. Of all the questions we took today, the last one to ask a question alphabetical. Get tears. It'll be both ways, I guess. Yeah. Vijay, you're. If you would have been first in line. I love OG when you were talking about your son that you guys were what, third in line at graduation? Yeah, third in line at graduation. Then Doug, he had to sit through that entire boring kid by kid thing, the rest of it after his kid.

[Doug]

And then you feel bad because you're like clapping. And then you're like, I'm done clapping. And then the people behind us had their kid, they're like woo. And I'm like yay. Because I didn't want to be not clapping for their kid.

[OG]

But they were buying up proximity bias.

[Joe Saul-Sehy]

There is definitely an upside to be in an S. I suppose there so. But anyway, Vijay, thanks for the question. Let's hear what's on your mind.

[Doug]

Hey Joe OG and neighbor Doug. I've got a question about emergency funds. Is there a reason not to keep your emergency fund in an ETF like.

[OG]

SGOV instead of a high yield savings account?

[Doug]

I understand that like instant access might be one concern, but beyond that, is there anything else I should be thinking about? The yield difference might not be huge for small balances, but if someone's keeping a year's worth of expenses in there, that could add up to a few hundred bucks. So curious to hear your thoughts. Thanks and see ya.

[Joe Saul-Sehy]

Thank you. Hilarious with the classic Doug sign off. Too badass. Call OG s gov. For people that don't know this, the iShare 0 to 3 month treasury bond. This thing has barely a live person's heartbeat when it comes to volatility. So what do you think about heading that way with your emergency fund?

[Doug]

Yeah, I mean if you look at the underlying investments, then you would sign off on that as a cash holding. Right? Because it's 0 to 3 month US treasuries, that's totally acceptable from a savings standpoint. The only issue is the liquidity like he brought up. Meaning it's going to take you a couple of days to get the money, which honestly if you're thinking about this like a tier you probably want. In his example, he said a year of cash reserve. So maybe you've got one or two months worth of expenses in your checking account. Maybe you've got a month of expenses in your savings account and that just kind of keeps the float going of paycheck going in and bills going out at a asynchronous time. And then maybe in his case he's got nine months of emergency fund money. Yeah, that totally is fine. And in a Treasury ETF for actual treasury bill or bond itself, like whatever floats your boat or a savings account and you're right, it's not that big of a difference. I think you can find good savings accounts right now in the 4% range. SGov, probably paying a little bit more than 4.5% would be my guess in terms of dividends. So you're picking up a half a percent. And just like you said, if that's 100 grand, you know, that's $500 a year. The question of course is, is all of that juice worth the squeeze? So if you're talking about a bunch of money and it's 5, 600 bucks a year, I can see why it would make sense. If your emergency fund is three months and you're going, well, I've got 10 grand in this account, is it worth it? Probably not. I like to have the simplicity of keeping everything where it's supposed to be. And what I mean by that is you're going to have bigger issues trying to move money from one place to another to cover stuff in your emergency fund. Like let's say for example, you're trying to over optimize everything and you say, well, I don't need a month worth of money in my checking account, I need a week's worth of money in my checking account and then I'm going to take money from my savings account, I'm going to put it in my checking account when I get paid, you know, and I'm going to do all this stuff right so that I can make it all exactly optimized so I have the most money in my savings account or most money in SGov. And then you miss one Friday of doing it because you're sick or you're traveling and on Monday you get hit with two $35 overdraft charges because you didn't get the money in fast enough even though you've got it. Like what, what did you gain from that? Also, how much is your time worth and having to manage your cash flow on a day to day basis, I would much rather have two months worth of money in my checking account, a month in my savings account, link those two together and then check the balances on the 30th of every month, you know what I mean? Like batch that transaction or batch that time into one thing. So if he's talking about a year of cash reserve or a two year cash reserve, where he's really super funded is his emergency fund and he's like, oh yeah, I'm, you know, I would need to, I would know that there's a problem weeks in advance that I would need this money. And so I'm okay with the fact this can take a couple days and that sort of thing. Absolutely. Have fun. Get after it.

[Joe Saul-Sehy]

There are some people that might wonder why you would have that much money in emergency fund. I can think of three reasons. Number one, if the career you're in is very volatile and it's going to be difficult to find another job and you're living off a decent amount of that money, a decent percentage, that's number one. Number two is Paula Pant has talked about the fact that she's got two different emergency funds. She's got one for her, but also her real estate business. And if she has vacancies over a number of months, then she needs to keep some money also there. So that can also equal maybe a year or more.

[Doug]

Well, and remember also that your spending and my spending are different numbers. And so when you say like Your cash reserves $100,000 and some people go like, oh my God, that's so much money. And some people, she's like, that's three weeks, that's like a month and a half. You know, I'm a little underfunded right now. It's a little light. So it's not the absolute dollars I think is what you're saying. You know also.

[Joe Saul-Sehy]

Well, and then there's the third one, which of course is if you are financially independent, you're living off of your assets. You've always advocated keep a couple of years in cash so that you've got.

[Doug]

If you're getting close to retirement or retired, you should have two, two years worth of your portfolio distribution sitting in cash. And SGOV is a great place for that or money market fund. Again, all of those are fairly similar. You're not going to pick up or lose anything in any one of them.

[Joe Saul-Sehy]

One thing to look out for when I was looking at this on Morningstar is that while SGOV hasn't lost money, the index that they compare it to has lost money before. So you can have loss of principal. So if losing principal from time, it ain't going to happen often. But if losing principle is the deal breaker for you, you don't want sgov. Thank you so much Stackers, for the comments, for the questions, for your enthusiasm. Just absolutely. I love what all of you are doing. Some people doing kick ass stuff, guys. If you've got a question for the show, it's stackybenjamins.com voicemail. And if your goal is not just to answer one question but really to dive into your financial plan and do this better. OG and his team are taking clients this summer, so head to stacking benjamin.com OG that's linked to he and his team's schedule. And you know what? You can. Instead of getting one question answered, you can get your financial plan all dovetailing the way that you want it to. Great episode today. Always love those. It's been a while since we've done a mailbag episode.

[Doug]

We haven't done it one in a while.

[Joe Saul-Sehy]

Yeah, yeah. Doug, put a pin in this. What are maybe the three big to dos we should have today?

[OG]

Well, Joe, first, take some advice from our answers to Vijay and Tovin. Whether saving for a house or building your emergency fund, think safety first and then growing your stack. You want money there when you need it. Second, remember our advice to Michelle and Lori. By working ahead of time on your estate plan, life is much easier for everyone involved who's still around after you've passed away. Hey, pay it forward. But the big lesson. Don't bother asking Joe's mom to turn down the Michael Jackson music. Seriously, it truly is loud. I can't believe our microphones aren't picking this up. But, Ma, don't turn it down. Oh, geez. On his way up there right now to dance. Thanks to you for joining us today for our mailbag episode. Have a question for the show? Leave your [e-mail] voicemail we'll also include links in our show [e-mail] this show is the prize 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.

[OG]

And before I go, not only should you not take advice from these new 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.

[Doug]

Okay, I've sat here trying to think of something pleasant to say after that, and I can't.