Fear Sells

Don and Tom unload on sensationalized financial journalism, taking aim at recent articles claiming the 4% withdrawal rule and classic 60/40 portfolios are “failing” retirees. They argue that the media increasingly prioritizes fear-driven headlines over practical investing wisdom, pushing emotionally charged narratives that ignore investor behavior and long-term historical returns. The duo also push back against claims that target-date funds could wipe out retirees, explaining why diversified portfolios remain far less risky than headlines suggest. Listener questions cover Robinhood’s controversial 2% transfer bonus, SEC transaction fees on ETF sales, Roth IRA liquidity concerns, rebalancing discipline, and the dangers of emotionally reacting to politics and markets. Along the way, Don discusses the release of his Civil War novel The Line Uncrossed, while Tom manages to squeeze in Morse code, Rasputin, and model bomber references for absolutely no good reason whatsoever.

0:05 Don and Tom rant about the collapse of quality financial journalism
1:43 Criticism of Money.com article attacking the 4% rule and 60/40 portfolios
2:44 Morningstar’s 3.7% withdrawal study versus the traditional 4% rule
4:21 Why “100% stocks beats 60/40” ignores investor psychology and risk tolerance
5:03 Emotional pain, market crashes, and why most investors cannot handle full equity exposure
6:02 Financial media sensationalism and clickbait retirement headlines
7:32 Seattle Times article warning target-date funds could destroy retiree savings
8:35 Critique of claims that target-date funds are dangerously risky at retirement
9:41 Discussion of Vanguard 2025 target-date allocation and global diversification
12:00 Why diversified global portfolios are far less risky than fearmongers suggest
13:16 Media outrage, sensationalism, and why Talking Real Money avoids scare tactics
14:48 Listener comment about Don’s books appearing on Amazon
15:15 Reality check on book royalties and publishing economics
15:49 Discussion of Don’s Civil War novel The Line Uncrossed
17:19 Book pricing, Kindle strategy, and avoiding Amazon exclusivity
18:41 Transition to listener questions
19:10 Caller asks about Robinhood’s 2% IRA transfer bonus and possible tax issues
20:10 Why IRA transfers and Robinhood bonuses are generally not taxable
21:05 Concerns about Robinhood’s gamified investing culture versus Vanguard’s philosophy
22:03 Risks of getting lured into speculative products after transferring assets
22:59 Caller explains working with a fee-only fiduciary advisor and self-managing investments
24:48 SEC transaction fees on ETF sales explained
25:47 Why the SEC fee is effectively meaningless for ordinary investors
26:15 Listener question about moving Roth IRA money to CDs due to market fears
29:10 Why emotionally reacting to politics and market fears can hurt long-term investing
31:17 Importance of maintaining an appropriate long-term asset allocation
31:41 Tom jokes nervously about a meeting with HR

Transcript

SPEAKER_00 0:05

You're gonna do a really great fundamental future. Dumb and dumb are talking real money.

SPEAKER_05 0:12

Oh man, I hate most of the advice out there.

SPEAKER_04 0:15

These people who give this advice are just Hey Maury, take your finger off the Maury Povitch show or something there for a minute. Crazy.

Podcast Introduction

SPEAKER_05 0:30

Man. Okay, I got it out of my system now. There is so

Bad Financial Advice

SPEAKER_05 0:34

much bad I mean we Tom and I read the financial press. Sadly. Voraciously, so you don't have to. And the financial press in America has fallen b uh There's about two people that you could still read anymore that you should listen to.

SPEAKER_04 0:51

Seriously.

SPEAKER_05 0:52

The rest of them, no. Some of these major publications that have been around, many of them since a hundred years ago. Yeah. Over a hundred years ago. They are just terrible. And this all started when I read an article from the used to be part of Time Life, used to be good, used to give great advice, used to be really interesting. Money magazine, which is just now money. Money. And it's an article by some. Yeah, but that was eight? 2008, dude. That was a long time ago.

SPEAKER_04 1:30

They had actual reporters and stuff.

SPEAKER_05 1:32

That was a long, long time ago. This is a piece written at money.com by a guy named Andrew Hardy. I don't know anything about Andrew Hardy. I don't know Andrew Hardy, but I don't like Andrew Hardy's writing. I think that this is sensationalist. That uh he's young. He's young. He's young.

SPEAKER_04 1:59

He can be 27 years old. I can see his picture. He's young. Yeah, of course.

SPEAKER_05 2:05

But his headline, and this is one of those headlines designed to suck you in and scare the living daylights out of you. Yeah, clickbait. How the 4% and 6040 rules are failing modern retirees.

SPEAKER_04 2:18

What? Wait, if you're if you're if you're a retiree, are you really modern? I don't know. I read that up.

SPEAKER_05 2:26

Yeah.

SPEAKER_04 2:26

It's like I don't think I'm that modern, actually. Well, I'm not a retiree, but anyway, close. Uh yeah. This is really good.

SPEAKER_05 2:34

It's a quibble, too, by the way. It's these are quibbles. They're quibbles.

SPEAKER_04 2:37

Total, total, total. Um He says research shows both are outdated. Um that they don't work for everyone. Trevor Burrus, Jr.

SPEAKER_05 2:46

Yeah. Well, let's talk about the research, though. He says the 4% rule, which came about like, I don't know, 30 years ago. Trevor Burrus, Jr. No, more than like 50. Trevor Burrus, Jr.

SPEAKER_04 2:55

No, it was 94. It's in the 70s. I thought it was 19.

SPEAKER_05 2:58

William Bengan. He calls it the financial 4 percent rule. And uh he says it doesn't work anymore because Morningstar did a new study that found that yeah, f a 3.7 percent rate would be better. Trevor Burrus, Jr.

SPEAKER_04 3:13

I gotta ask you, 8.7 percent a lot to like four? To me, it does. It would in my place it would be four. That's a a quibble. That's a good word for it. Silly, silly separation. The the much maligned 64. I won't use the Rasputin joke, even though I'm loving the new book by Anthony Beaver right now about Rasputin. Fascinating look at the Rush, the world.

SPEAKER_05 3:38

Is that Justin Bieber's little brother or dad?

SPEAKER_04 3:40

He's one of my favorite writers, so don't pick on him. I'm sorry. Fascinating look at uh Russia and the early 20th century. Anyway, the 6040, really? It's and by the way, it's always that it's not working. And then I always go like I just go look at like now you can look at a hundred years of returns of the sixty-forty.

SPEAKER_05 3:59

Yeah, it's about eight percent a year.

SPEAKER_04 4:01

Does that sound like it's not working with almost half your money in bonds?

SPEAKER_05 4:04

Well, what's this it what what's this argument for why it doesn't work? This is what really bothers me. His argument is so spurious. His argument. Listen to this. You'd make more money if you had a hundred percent in stocks. Yeah. Really? Oh, please save me from the and what else would you get if you were 100 percent in stocks?

SPEAKER_04 4:38

Heart failure in 2008, you know, a minor stroke in 2001, probably a meltdown in a certain day in 1987. I mean, sure, we should all all be in stocks. Yep. Yeah.

SPEAKER_05 4:51

Yeah. The study that he quoted found that an all-equity strategy would allow you to save less of your income before retiring since your returns would be la larger.

unknown 5:02

Yeah.

SPEAKER_05 5:03

You couldn't see my eyes on that one, but they rolled as did my head.

SPEAKER_04 5:07

There's very few people, very few, because I've talked to so many of you over the last 30 years, very few that can take the downturns, like the 55% you may remember in 2008 if you're old enough, or the whatever it was in 2022 or 2020. All those things are really hard to take, especially if you're in retirement.

SPEAKER_05 5:31

Here's the thing the headline, he could have written a different headline, but it wouldn't have gotten as many views. He could have actually written the 4% rule still comes pretty close to working, and 6040 is better for most people because in this article he says, he quotes from the study, when they said that stocks are very volatile and a 100% stock portfolio, quote, can inflict intense psychological pain. Oh, well then we want that. Let's just go 100 percent equities. We love that intense psychological pain. And the other problem is, quote, one worry is that some investors, some, some investors will abandon their investments rather than stay the course. You think? Yeah.

SPEAKER_04 6:22

This is very uh as you said, it's it's pornography. Can we say that? No, we're supposed to say cheesecake, right?

SPEAKER_05 6:29

Yeah, we're not in the radio anymore. Oh, yeah. You know what? We can't do that.

SPEAKER_04 6:33

No, because it was a guy in his car. I guess it was a radio listener who got mad at the same time.

SPEAKER_05 6:36

It was a radio listener on a Saturday, and and and I'm sorry. Pornography's not one of the words we never say the words we can't say. We do this. That's what we do.

SPEAKER_04 6:45

I thought you were sending more code to the ship off the top or something.

SPEAKER_05 6:50

To all the ships at sea. That's the Titanic. S O S. Isn't it it's SOS is I know V. What?

SPEAKER_04 7:03

I know V.

SPEAKER_05 7:04

You know V? What is V?

SPEAKER_04 7:06

D di di da, right? Did di- did da, right?

SPEAKER_05 7:10

No, wait, I didn't do that right.

SPEAKER_04 7:12

Because that's from World War II, right? Anyway.

SPEAKER_05 7:15

Okay.

SPEAKER_04 7:15

We're strong.

SPEAKER_05 7:16

I can't believe we're doing a Morris Code episode now.

SPEAKER_04 7:19

What is that? I only know the one letter. It's gonna be a short message.

SPEAKER_05 7:22

We are so childish sometimes for old people.

SPEAKER_04 7:25

You want childish now?

SPEAKER_05 7:26

I'm really very Benjamin Button-y.

SPEAKER_04 7:29

We're moving backwards. Um I'm calmly reading my Seattle Times on a Sunday morning. You're not trying to be the good citizen I am being informed.

SPEAKER_05 7:40

Are you reading it on paper, Tom?

SPEAKER_04 7:42

That's got the paper right here. Um it's I get that on Sunday, and then as you Don already knows, I get the Wall Street Journal Monday through Saturday, which I really enjoy. But I really did not enjoy this. And my blood pressure is supposed to be lower on the weekends, but it shot right. I should have tested

Target Date Funds Critique

SPEAKER_04 8:00

it. Managing said it and quote, don't forget it funds. There's an article from reprint from the uh from Brian O'Connor in the New York Times.

SPEAKER_05 8:09

Don't forget it funds. These that would be target dates?

SPEAKER_04 8:11

Target date funds. Now, I have from time to time criticized them, but only unless you have, like you criticize cash. I have only done that because they make you have an asset allocation. So you tell them am I going to retire next year? They're gonna tell you, here's how much you have in stocks, here how much you have in bonds. I it it I think it it could lead to a problem.

SPEAKER_05 8:30

But not a serious problem. Not a serious problem. Just not the perfect portfolio.

unknown 8:35

Yeah. Okay.

SPEAKER_04 8:36

But when people say completely stupid, idiotic, inflammatory things as I'm about to read you. I know why the New York Times runs the quote, because it's wow, you read that. I read it to Paul Merriman, he didn't think it was right. He said, No, they didn't say that. I said they did. Here's what they said baby boomers and target date funds are in jeopardy of losing their lifetime savings.

SPEAKER_05 8:59

Okay, wait, wait, hold it a minute. They are in jeopardy of losing their lifetime savings.

SPEAKER_04 9:06

That's the quote from Ron Sears, who's president of the pension consultancy Target Date Solutions of San Clemente, California. He says the typical fund is mostly invested in risky assets at retirement, and he added, people in those funds won't know that until the stock market crashes.

SPEAKER_05 9:26

Wait a minute.

SPEAKER_04 9:27

They get less risky as time goes by, right? I looked up the 2035, the Vanguard 20, no, 2025, pardon me. 2025, because wouldn't that be the people that just retired? Yeah. Yeah. Yeah. Half of the money is in riskier assets. Right. That would be stocks because you want to have some growth when you're retired. Half is in bonds, which not perfect. Yeah, they have some volatility from time to time, but they've been kind of the calm during the storm. I find this quote to be outrageous. I looked up Ron, of course, he has a book that he wrote a year ago on this exact topic.

SPEAKER_05 10:09

We all have a book we wrote years ago.

SPEAKER_04 10:11

Oh, you I have a quote about that coming up about your book. Um target date funds have operated too long without clear benchmarks, leaving both fiduciaries and investors guessing. Well, that that's not really true. Right. You can go online and find out exactly what the asset allocation is. That's not a guess. And he he calls this exposing near retirees to dangerous levels of risk. I don't think a 50-50, yes, it it declined probably 20 percent in the last major, I guess you could call I guess you could call the spring of 2020 a major downturn, although it turned and went right back up so very quickly. Um but the last real lengthy bear market, of course, 2008.

SPEAKER_05 10:58

Yeah, and the thing about the uh the the the lit lengthy bear markets is, for example, 2000 to 2010, 2001-2010, that was a lengthy U.S. bear market. It was. That was a lengthy one. That was like, you know, ten years of losses. But if you had the international stocks in that portfolio, you would have had gains over that entire time. That horrible, scary when you lost a lot of money time, you would have made money over that period of time. And guess what Vanguard's target date fund has for its two equity holdings? Two. It only has two equity holdings in the whole portfolio. Vanguard's total bond index, I'm sorry, Vanguard's total stock index, and Vanguard's total international stock index. Yeah. That's it. So you've got some global diversity. You have about twelve thousand stocks. Okay. So how risky is it on a long-term basis? Well, um unless the global economy fails, it's not. Short-term, sure. You could suffer a short-term loss, but you're not gonna if the market, the whole global market goes down at a record, you know, but better than 50 percent, the whole global market in a year. Never done that. Uh I'm talking global. In that scenario, with this portfolio, you'd be down 25 percent. That's not losing all your money. That's not losing your life. And that's what he implied.

SPEAKER_04 12:28

Yes, that doesn't imply it. He says it straight out. Um and and to have half of it in fixed income. So even if the other half went away, you'd still have fifty percent of your money. That would be a blow. But it wouldn't be gone.

SPEAKER_05 12:43

No, no, no. If the other half went away, the both halves are gone. You might as well not have either half. I say Because if all twelve thousand companies in this portfolio, in essence the global economy, you won't have anything to buy anyway. Zero value. We have no money left in the world. We are in a barter system, and I'm telling you, most of us are gonna be dead. So it's not gonna matter. Trevor Burrus, Jr.

SPEAKER_04 13:08

Other than me, because they won't find me. I'm so far away from anything that it'd take them years or you can be out there sipping water out

Robinhood Transfer Bonus

SPEAKER_04 13:15

of the lake.

SPEAKER_05 13:16

Eating raw fish. Eating raw fish. Yeah. Well no, you got trees. You can cut them down and burn them. Ooh, burning trees.

SPEAKER_04 13:26

You know, you see me cutting one of those trees down, I'd be dead for sure. That thing would kill me in a those 120-foot. Anyway, not gonna happen. Ron, Ron, Ron, Ron. You know, I get it. You're doing this because it's like everybody else, right? That's what we're saying about the financial media. It is about getting people excited. It is about getting eyeballs, right? It is about saying the most outrageous thing you can to get. We could do that here, too, by the way.

SPEAKER_05 13:52

If we did that, we would pass stacking Benjamin's in popularity.

SPEAKER_04 13:56

We could do that. We could make outrageous we could say outrageous things, but it's not doesn't serve the purpose of which education should be.

SPEAKER_05 14:09

Bitcoin and insurance. Or annuities.

SPEAKER_04 14:12

Yeah, we're we're 50-50 on insurance, because you know I'm overinsured, so Okay, on annuities.

SPEAKER_05 14:18

We're like uh 1090 on annuities.

SPEAKER_04 14:21

Oh, yeah, for sure. Well, we're we're okay with we've I don't want to go back into it, but we're a couple of annuities or one we're okay with, but the rest of them don't.

SPEAKER_05 14:28

So you have anybody else you're mad at, or shall we move on?

SPEAKER_04 14:32

This is the Tom I'm go get angry show. Yeah, I'm okay now. Uh I do have a nice comment. It comes from John in Cleveland, Ohio.

SPEAKER_05 14:42

He writes lovely rock and roll hall of fame uh subtle Cleveland Clinic Place.

SPEAKER_04 14:47

Oh, yeah. He writes about Don's paperback book on Amazon. I just typed your name, Don, and your books popped up. Thought you'd like to know. I bought the Kindle version. Now he doesn't say which book.

SPEAKER_05 15:00

That was nice. Because it's funny. Um if anybody thinks that uh writing a book and putting it up online is uh is a way to make money. Um you're not rich yet from that? I just pulled up my my my royalties on financial physics in May so far. Yes? You want to you want to hazard a guess? $1.72. 35 cents. Okay. Well I this uh last month I think I got like $25.

SPEAKER_04 15:37

Whoa. Oh, maybe because the mention at retirement or something?

SPEAKER_05 15:40

I think no, I think because we mentioned it on the show. Uh-huh. And and I got a few downloads.

SPEAKER_04 15:45

And is your other is the the Civil War book available for purchase now?

SPEAKER_05 15:49

Uh let's see. When does this show air? Um, in two days. Or three days. On the 22nd on Friday. And when am I getting my copy? I still haven't seen the book. Well, by the time this airs, you will have it. It's coming today. So that'll tell people. Yeah, it's it's coming today. It's I looked up its tracking number. You're the I sent you I sent it to you priority mail.

SPEAKER_04 16:13

Whoa.

SPEAKER_05 16:14

You were chomping at the bit.

SPEAKER_04 16:15

Well, I want to read it. I'm stopping every I am stopping Rasputin. You're giving up close to death for you. I'm moving right. I'm excited to read it. This is exactly the kind of stuff I love. You know I love history. And I love when you when you you fix the fictionalized history. It's to me it's fantastic.

SPEAKER_05 16:32

Did you like the the the the Shara books? Yeah. Jeff Sherra and it's yeah, those were so good. Well, this is kind of in that it's not as much war as it is the life.

SPEAKER_04 16:44

Right, no.

SPEAKER_05 16:45

It's a book that is based on, based on, loosely based on what my grandfather, great-great-grandfather went through in the Civil War when he enlisted in the Union Army at age fourteen and ended up imprisoned at Andersonville.

SPEAKER_04 17:00

And is it true? Because I just read this yesterday, I think it was on Instagram, that John Ham is gonna play him in the movie.

SPEAKER_05 17:07

I would hope not. No?

SPEAKER_04 17:09

Okay. That's what I thought I read.

SPEAKER_05 17:12

Oh, okay. Anyway, it's called The Line Uncrossed. And it's gonna be available online at I think all the major booksellers online, uh, either in a uh ebook, Apple, Amazon, Kobo, Nook, uh, or a hardcover at Amazon or Barnes and Noble.

SPEAKER_04 17:37

What's it gonna be hardcover cost?

SPEAKER_05 17:39

$28.99.

unknown 17:41

Wow.

SPEAKER_05 17:42

I know. Crazy. I know. Paperback $16.99.

SPEAKER_04 17:48

You'd be proud now pretty much every I read everything on my Kindle with rare exceptions.

SPEAKER_05 17:53

And then this is where I I have room to keep the price down because of the there's no physical costs. And that's in the Kindle or the Nook or the uh Apple Book version, which is $4.99.

SPEAKER_04 18:05

No, that makes total sense.

SPEAKER_05 18:06

I was gonna do Kindle Unlimited, where you people could get it free, but I didn't know. I wanted to let people be uh get it in you have to give Amazon exclusivity.

SPEAKER_04 18:17

You didn't you wanted to have other people uh be able to read it otherwise?

SPEAKER_05 18:20

I wanted to uh you know other people who have different readers to be able to read it, not just Kindles.

SPEAKER_04 18:25

Aaron Ross Powell How many more fancy galas can Jeff Bezos go to?

SPEAKER_05 18:30

Oh yeah, look at that. He sponsored the Met.

SPEAKER_04 18:32

I saw that.

SPEAKER_05 18:34

Did you see any of the pictures from the I don't know why I'm doing this? Oh, yes. How could you miss it? Is it like Halloween?

SPEAKER_04 18:41

Yeah, it's a little out there. Trevor Burrus, Jr.

SPEAKER_05 18:43

It's a high-end Halloween. Anyway, uh we gotta get to questions. These questions, all of our questions come in to us from Talking Real Money on the ask a question button or contact us button. And if you type them up, then uh Tom either reads them on the show or he actually picks up the phone and calls people.

SPEAKER_04 19:02

And we go to Pat, who's calling us from beautiful Liberty Lake, Washington. Hey Pat, how are you? Really good, Tom. How are you doing today? I'm doing fantastic. Love this time of year, love these longer days. Because you know, one of these days, when I drive to work, it's going to be light outside, but uh it's still still a few weeks away, but there's that period of time in the summer, which I absolutely love. So thank you for asking.

SPEAKER_03 19:27

So, what's up? Well, my question is I've been hearing, you know, little blurbs here or there about Robinhood and how they'll give you a 2% transfer bonus. And I've never done anything with Robinhood, don't really know much about them other than the whole meme stock thing back a few years ago. And I was just wondering, well, I had a couple specific questions. If you do a transfer, and and by the way, currently all of our my wife and I's money is in Vanguard, and whether it's CDs or ETFs and they're all Vanguard ETFs. My question is if I were to move money to get the bonus, is that money taxed? And um that's the that's the real big question. Is it taxed? Of course, it could impact Irma and put us into a different tax bracket. What's the problem?

SPEAKER_04 20:19

Yeah, there's no that would be a direct transfer, and then the bonus is not going to be a taxable event either. I mean, the so Robinhood's just decided to buy people's business. Yeah, we've talked to people who've done this, who had sizable IRAs, for example, and uh they moved it over and got that 2% bonus. So there's no tax. There'd be no tax, obviously, to moving the Vanguard money to Robinhood. I mean, my only caution here is, and you mentioned it just briefly, the meme stock thing, the kind of excitement around investing, the the way that they view all this, it absolutely makes my skin crawl. I I compared to Vanguard, 180 degrees. I think Vanguard is responsible. I think they've been fair to investors for many years. And remember, investors own Vanguard. They're the Robin Hood, nah, that's owned by the shareholders. So there's a difference there. And I worry that, yeah, you move the money over. I think it has to stay there at least, I believe, five years. We looked this up with five years. Yeah, five years. You know, and and and I just worry that you're gonna get there and all is good, and I'm smart because I've been at Vanguard, and then somebody's gonna call and say you really should do this, or somebody's gonna promote something, and somehow you end up in something that you know really does not make good sense. And it sounds like you've made a lot of good, good uh decisions with your money. That's my longer-term worry. I don't trust, I don't trust Robinhood in any way, shape, or form. Um, I think, again, the the idea here is I I I do believe what uh what an academic once said that you know investing should be boring like watching paint dry or watching grass grow. The people that can do it that way, that don't watch it day to day and don't get worked up when their account's up or down for that matter. Are the people that I see are successful. Um, they don't let money kind of drive their life. Sure, it's there, but they're not looking at it all the time. They're not worried about it. Robinhood would prefer the opposite. They want you to look at it all the time. They want you to get all excited, want you to celebrate the big wins, whatever it is. So I do worry that some people that have been really great investors, and I think if your money's at Vanguard, you are a great investor. And so they get into Robinhood and they get this bonus, and then something happens along the way where Robinhood, something so enticing, whether it's private equity or private credit or whatever special offer that's going to pay you, you know, 10% or whatever they got to do to uh to get you to buy some other product. That's my only worry. But but Pat, no, it is it's a legitimate offer. We have looked into this. There are people that we know that have done it, and um and they're okay with all that. So if you're if you feel like you can hang on and uh not not get sucked in by the siren calls of Robin Hood, I guess it's an okay move.

SPEAKER_03 22:59

Well, I I appreciate the info. I actually wanted to call. We're meeting with our financial planner, and she is a true fiduciaire. We just pay her a quarterly fee. You meet with her quarterly next Monday, and I wanted to get your opinion. And then, of course, my wife, I always say I'm married up both in looks and brains. She always has she always has lots of questions. Yeah. And so I thought I'd call and see get your opinion before we present it to our financial planner, and I talk to my wife about it.

SPEAKER_04 23:28

Yeah, so I mean, with obviously, if you move the money to Robinhood, then that person who's managing your money probably can't do it or can. I don't know. Can they can they keep an eye on what they're doing at Robinhood too and get paid on that?

SPEAKER_03 23:39

Well, actually, I manage it. All we do is we consult with her and she tells me where to rebalance because we're currently well, target 60, 40, but we're currently 68. But would that be 42? Yeah. So we need or 32. So we need to do some rebalancing that. But um, I do all of that with her with

Listener Questions

SPEAKER_03 24:00

her advice, of course.

SPEAKER_04 24:01

Yeah, no, I mean, so I mean, she could very well, of course, then look at your accounts at Robinhood very much the same. So yeah, I mean, and I think that's good to have kind of the second chair on all that. There's somebody else that's looking at the rebalancing. Yeah, it's amazing how much I just looked today, actually, at my account, and how much the markets have gone up here in the last few months. It's insane or a month and a half. It's kind of crazy. So um, no, I kind of like that approach. Robinhood, uh, you know, they're trying to move in to become a custodian, you know, like a Schwab or Vanguard where people have their money there and they do own all those things. Again, my my worry, my concern in the long haul is they suck you into something else. But uh I I like the fact that you have, you know, somebody else who's in your life who's gonna tell you, no, that that's really a bad idea, and here's why. I think that's a good thing to have.

SPEAKER_03 24:49

Okay. Very good. You've answered my question.

SPEAKER_04 24:51

Thank you very much for your time and appreciate you listening.

SPEAKER_05 24:54

So we got that, and then we've got this. This is the different version of the same questions, kinda, but Tom just reads them. And then I get stumped by some of them. Thanks, Tom.

SPEAKER_04 25:04

Yeah, this one you're not going to get stumped by because we already looked into it, because it came up and you and I discussed it, and I was like, never heard of that. Um I lost track of who sent the question, but the question goes like this. I just noticed that Vanguard charges an SEC fee. Now I think that refers to the Securities and Exchange Commission, not the conference in the South.

SPEAKER_05 25:24

Yeah, it's a football fee. I I didn't know. Um to help pay for those big stadiums.

SPEAKER_04 25:29

The players. I think you've got to play a lot for the players now. Um he said Vanguard charges an SEC fee when you sell any ETF exchange traded fund. I assume everyone does, but there's no fee to sell mutual funds. I've never heard this fee discussed here. Please explain.

SPEAKER_05 25:45

Yeah.

SPEAKER_04 25:46

Um The SEC charges a very small fee on sell transactions as well.

SPEAKER_05 25:51

Ladies and gentlemen, it is such a small fee that I don't even know why we're talking about it.

SPEAKER_04 25:55

Trevor Burrus, Jr. $8 per million sold, it's right.

SPEAKER_05 25:58

$8 per million or eight cents on $10,000. Or on a thousand dollars, less than a penny.

unknown 26:09

Yeah.

SPEAKER_05 26:10

On a thousand dollar transaction, less than one penny.

SPEAKER_04 26:15

Again, why do we just really nothing to worry about?

SPEAKER_05 26:18

Um Classic nothing burger with nothing on it.

SPEAKER_04 26:24

From Bainbridge Bain Brain Brainbridge Island where uh Paul Merriman writes resides, yeah. And by the way, there was a kid from there uh who pitched uh Major League Baseball the other night from Bainbridge. Don't remember his name, but there you go. So it's famous for two things now.

SPEAKER_05 26:38

Paul Merriman and sometimes you get the dumbest facts on talking real money.

SPEAKER_04 26:42

The most least important fact. At least I'm not talking about my new model. Oh, no, no, no, no, no.

SPEAKER_05 26:49

Such criticism for talking about the model airplane thing.

SPEAKER_04 26:53

Oh, somebody said they're never listen again. Oh, okay. Then I'm I'm stopping it right there. Okay. Stop. John writes us uh I'm really excited about the H E seven seven H E 177. Really gonna be grateful. Very hard to find.

SPEAKER_05 27:06

A Heckler, uh uh Hemelhoff, uh H. E. What does that stand for?

SPEAKER_04 27:10

That should be easy. That part's easy. H. E? Yeah. Four-engine German bomber. Hard to find the model, too. Um John from Bainbridge. Okay. Ron and Don. He says Ron and Tom.

SPEAKER_05 27:23

I guess that's a little uh I think that's funny. That's a joke. I think that's funny, yes.

SPEAKER_04 27:28

As a longtime listener, I found you both to be entertaining and informative. A bit of background. He says she is in her late 70s and I am in my early 70s. No, late 60s.

SPEAKER_05 27:39

I think he's referring to his spouse, but I may be wrong.

SPEAKER_04 27:41

Okay, he says she's in her late 60s and I'm in my early 70s. Okay. Have plenty of equity in our home. I work part-time and she is still full-time. Well, first of all, I'm going to congratulate you, John, for making that happen. I've never made it work. Uh we have not touched our other two iris, self-directed, and see no reason until required by law. I assume there you're referring to the required minimum of distributions. My question. Right? Wouldn't that be the required by law part? Yeah, I don't know if it's required by law. I guess it is by ordinance.

SPEAKER_05 28:11

Um, it's an IRS rule, so that that has the force of law.

SPEAKER_04 28:16

Okay. They're gonna come and shake you down if you don't do it. My question in my wife's company 401k account, she has both a traditional and a Roth IRA. Taking money out is a couple of weeks process. So my wife would like to take some out, 30,000 from her Roth account, since it's post-tax, and move it to a local bank CD for better ease of use if needed. Ease of access, pardon me. Would you consider this a prudent move as there should not be any tax ramifications? She is concerned. Okay, here's the part that I get worried about.

SPEAKER_05 28:46

I was gonna say there must be more to the story coming.

SPEAKER_04 28:50

Yeah, she is concerned about the market. Guess what she's concerned regarding?

SPEAKER_05 28:55

The market.

SPEAKER_04 28:56

The world political political. She may need to have more liquidity to elevate her and thus her need to have more liquidity to he says elevate her concerns, I think he means decrease her concerns.

SPEAKER_05 29:07

Okay. Wait, okay, hold

Tax Ramifications Discussion

SPEAKER_05 29:09

on, hold on. We we've talked about the retirement accounts.

SPEAKER_04 29:12

Yeah.

SPEAKER_05 29:13

Did they talk about any other accounts that they have?

unknown 29:16

No.

SPEAKER_04 29:16

So it's an IRA, by the way. So if your money's in an IRA, first of all, in terms of access, pretty easy to access an IRA.

SPEAKER_05 29:24

Yeah.

SPEAKER_04 29:24

Especially if you're self-directing. I mean, you don't have to call for our clients, you call us, we get you the money. That's pretty easy. But for you, pretty easy to go online, say, send it here. You should have a bank that's hooked up right to it. It should be pretty direct. Um if you take money from a Roth and move it to your bank, no, there's no tax ramification to that. But why not just in your Roth at wherever brokerage you held put it in a money market? Short-term money, same difference, yeah. Same difference, yeah. It's right there. And then the day you need it, you or the day the But I have to say I'm not buying the excuse.

SPEAKER_05 29:58

You don't think I'm not sure what you're doing? No, I'm not buying the logic because your portfolio should have been already set up. Oh, yeah. Already established, uh invested in the proper assets for your tolerance for risk. Sure. Um so you don't adjust it based on how the world feels at any given time, because let me tell you, when the world feels really good is when we we make mistakes of getting in too much, and when the world feels bad, we get out too much. And when the opposite should be happening.

SPEAKER_04 30:39

And in your portfolio, if you kind of have it sounds like you have the money you need for retirement. Yeah. Maybe it's just scaling back the risk, but staying there. You wouldn't get next year when something else happens and makes, as Don said, the world looks like it's great again, you wouldn't go more into stocks. You have a fixed asset allocation. It could change a little bit over time to less risk.

SPEAKER_05 30:59

I would not say go into money market unless you need liquidity, though. And you don't because you said you don't want to use that money.

SPEAKER_04 31:06

I think that's spot on. So don't market.

SPEAKER_05 31:08

If you lose your jobs and now you need to draw some income from your IRAs, then you do it.

SPEAKER_04 31:16

Yeah. I think that's it right on. We were just talking about that at dinner the other night about how life would change for me if I were to lose my job. I have a meeting with the head of HR or the chief people person, they call him now, in a couple of days. So I was what's next. I don't know. Oh, did they call a meeting? Yeah. Uh-oh. You're not on the Is it on Friday? Yeah, and there was a big moving van outside the door. I'm looking at the phone.

SPEAKER_05 31:44

Oh no, you don't want to meet you don't want a meeting with the head of HR on a Friday. That's a bad omen. Hi, I'm Don McDonald, and I'm Don McDonald. Welcome to Talking Real Money. Thanks for watching. I'll be seeing you. You're welcome, Don.

SPEAKER_04 31:58

The the good news is the nice weather's coming to the lake now, so see ya.

SPEAKER_05 32:01

So if you get laid off for the summer, you don't care.

SPEAKER_04 32:03

That's good. Yeah.

SPEAKER_05 32:04

All right. We're done. Are we done? Did you have a few minutes? We're done.

SPEAKER_04 32:07

Thank

Closing Remarks

SPEAKER_04 32:08

you for the questions. Appreciate them.

SPEAKER_05 32:09

If you want uh a little more help than we can provide in the short time we have on the show, go to talkingrealmoney.com and meet with one of our fiduciary advisors for free for nothing with no obligation and no high pressure sales pitch, period. None. And uh please tell friends, two or three or four of them. Oh, and Tom, when you get the book after you're done reading it, I want you to leave an honest review on Amazon. You know you're getting five stars. Well, no, you gotta be honest. It's required by the law.

SPEAKER_04 32:37

It's gonna be a great book. I already know it. I already you already sent me some of the the galley or whatever it was to read.

SPEAKER_05 32:42

Okay. So whatever. You'll have it. You'll have it before the general public, so congratulations. It's exciting for me. So all right, everybody, thanks for being a part of the program. We really appreciate you being there. And remember, in addition to pretty much everything else that we ramble on about, what we're what we're here supposedly doing is talking real money.

SPEAKER_02 33:04

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