Talking Real Money - Investing Talk
Financial talk radio veteran, Don McDonald and former host of Serious Money on PBS, Tom Cock, join forces to talk about real money issues. In each episode, they solve real money problems, dole out real investing (not speculating) advice, and really explain the financial issues that effect all of us. Plus, it's actually fun! Talking Real Money is a podcast designed to provide the real help we all need to enjoy a really great future. Call in with your questions anytime at 855-935-TALK (8255).
Talking Real Money - Investing Talk
The Casino Next Door
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Robinhood says it wants to be everything to investors—but its fastest-growing attractions look a lot like a casino. Don and Tom examine prediction markets, options, crypto, payment for order flow, and the uneasy fit between fiduciary advice and a brightly lit door to speculation.
They explain why gamification and enormous transfer bonuses can be especially dangerous for inexperienced investors. If the goal is long-term wealth rather than entertainment, a boring, diversified custodian still beats a platform built to monetize trading excitement.
Then they answer questions about using bonds during a retirement downturn, combining CD ladders with target-date funds, the trap behind eye-popping mortgage REIT dividends, and better ways to give money to grandchildren.
1:03 — Robinhood and its merry band of revenue streams
3:00 — Vlad Tenev explains the financial supermarket
5:36 — A fiduciary office beside a casino door
8:28 — Monetizing speculation instead of investing
13:14 — Using bonds when retirement begins in a downturn
21:06 — CD ladders and target-date funds
23:36 — The truth behind 17% REIT dividends
27:28 — UTMA, UGMA, 529s, and gifts for grandchildren
In Sherwood stood a yeoman bold, his arrow flew for good, he took from lords the stolen gold and fed the green wood. Now comes a robin sleek and tall who liveth in thy land. He taketh from the small of all and giveth to the grand. He crieth free, and free it's speech, till thou hast read the scroll, thy purse is gold, to sharpen and who stuffeth on the floor. He showers thee with paper flowers for every foolish trade. The house stuff the wind, the merry din is how the cherub's paid. So mark the tail ye merry men, the mark, the mark is thee. Come sit ye down and hear us now. We're talking real money.
SPEAKER_02Well, we heard the minstrel theme is very popular with our listeners,
Minstrel Theme and Robinhood
SPEAKER_02and uh and today's minstrel theme. Well, I bet if you listen to it carefully, and if you didn't, just hit that thirty-second or uh fifteen second back button on your player and go back and listen to the song again. I bet after you listen to the song, you know what we're gonna talk about today. Because it's it's themed to the topic. Themed to the topic. Yes, we're gonna talk about Vlad and his merry band of thieves, also known as Robin Hood. Vlad the money impaler.
unknownNot many.
SPEAKER_02I mean, I I think the last quarter they like made a hundred million dollars or something. I don't know.
SPEAKER_03Well, okay, and this is why it's topical today, right? Because you've heard Yeah, I've gotten kind of huffy with Robin House.
SPEAKER_02You are just furious with Robinhood. This is as hot as I've ever seen you. Anger is a good thing. He's not an emotional person, people.
SPEAKER_03Anyway, here's why. Here's why it it just get back in my face again. It sticks in your craw.
Prediction Markets and Gambling
SPEAKER_03Robinhood saw its transaction revenue from and I love this, event-based contracts. That's what they call it. Event-based contracts.
SPEAKER_02Uh-huh.
SPEAKER_03Let's say what that really is. Gain.
SPEAKER_02Gambling.
SPEAKER_03Yeah. They're betting.
SPEAKER_02Pure gambling. And pure gambling.
SPEAKER_03It's not even these are things like who's going to punt first and who's going to get the first first. I mean, you can do all these prop bets. $156 million in the second quarter of this year. That's up over $50 million from the prior quarter and from practically nothing a year ago. So these are the prediction markets that they're making it easier for you to gamble on. I'm not going to say invest. They're going to say invest.
SPEAKER_02Yeah, they're going to say invest. As a matter of fact, I'll tell you what we're going to do. There was an interview done by Bloomberg Podcasts of a couple like three weeks ago. And um let's let Vlad, the money impaler, explain Vlad Ten Vlad Tenet, who's the uh CEO, uh, explain their business model right now. Listen.
SPEAKER_01Robinhood has begun has begun to diversify and and that's accelerated over time. We now have 13 business lines generating over 100 million in annualized revenue. Their goal to make their businesses as big as possible and win in market share across each of these. So our goal is to be number one uh in all categories that we offer products to customers. Those customers bring more assets onto the platform and they become gold subscribers. They use more of our products, which gives them an opportunity to deploy their assets across all sorts of different areas. Retirement, they can spend with our with our card products, they can earn uh a high rate, including on our FDIC Insured Deposits tweep, also our Robinhood Earn crypto back product, which offers 7% API, and that's been growing really quickly. So we have all of these things that we uh enable you to uh m put your money to work. And then those in turn bring in more customers. And now we also have advisors. So we have advisors joining the network. You can get a human advisor on Robinhood to help give you even more personalized
RIA Conflicts and Casino Doors
SPEAKER_01guidance.
SPEAKER_02Now there was some interesting stuff in there. The 13 business divisions, all of which kind of operate independently, and you can hear it between the lines. They fight with each other to dominate their area. And of course, you know one of those 13 is is prediction markets, one of those 13 is crypto. Yeah. How about options contracts? Options, uh, stock trading, all of these dangerous things. But Tom, the real interesting part of that whole explanation came right there at the end when Vlad alluded to registered investment advisors at Robin Hood. Now, we talk about registered investment advisors a lot. And registered investment advisors are required by the Securities and Exchange Commission to act in your best interests. Wow.
SPEAKER_03So how do they putting them into if you're an RIA at Robin Hood?
SPEAKER_02Well, here's what my understanding is from looking at their form ADV. They claim they're siloing it. That uh they don't recommend their speculative business divisions to those people. But think of it this way. Let's say your registered investment advisor had a had an office on the Las Vegas strip, but it was a very, you know, conservative business office where you came in there and you did stuff and you know, you did your your transactions, you had your well-diversified portfolio, and yet right there, right there in the waiting area of the office is this glittering door, giant door with lights over it. Win big, make millions, free drinks, free food, free everything, everything you ever wanted, all your dreams come true through these doors, and the advisor is going, I can't tell you to go through the door, but if you'd like, I can open it for you. Trevor Burrus, Jr.
SPEAKER_03Yeah, the door to the casino is right there. And this is my objection to the entire thing, frankly, that they hold themselves out as a custodian. Uh, you don't hear them advertise much of their RIA practice. I guess that makes me happy. They also have all these gimmicks all the time. They still have the 3% unlimited match promotion on uh retirement account transfers and 401k rollovers. So if you want to give them your eye. It's a lot of money, by the way. It is a lot of money. And that's unlimited, people. For those of you who really, you know, really can't you just go to Tulalup or Muckle Shoot or do something? But but no, you can't.
SPEAKER_02That's for our friends in Washington. The rest of the country has no idea what to lay-up or muckleshoot are. And they're not going to know those. Tom is so used to doing a radio show in Seattle that's a very good thing. Yeah. Let's say our clients last week were like, Pellagio. Yeah. We just got together.
SPEAKER_03Yeah, okay, thank you. Something that's MGM. So I I took
Why Speculation Wins
SPEAKER_03Hard Rock. Took time to go back and read some of the reviews. People on both sides. The the people that like Robin Hood, the sort of gamification, the excitement of investing, and the people that like the promotions, and the people that are a little hard on them. There was one guy, a financial commentator, who said uh prediction markets are now 20% of everything Robin Hood earns from trading a year ago, it was 2%. I love this. My optimistic read is these people come for speculation and stay for the investing.
SPEAKER_02Yeah, right. No, they come for speculation and stay for the gambling.
SPEAKER_03My worry, he said, is that for a substantial portion of the user base, it never happens. And Robinhood is simply very good at monetizing speculation.
SPEAKER_02Yep. I think I totally agree with that. I think they are very good at uh making a lot of money off people's greed. Greed and belief that we are smarter than we are and that the future is somehow predictable. Look at the amount of money lost in this country every day gambling. I mean, it's billions and billions of dollars with the on the the hope that they're gonna win big. When the the all of the data has to point to you're gonna lose. You're gonna lose. Almost all of you are going to lose. A few will win, you will lose.
SPEAKER_03Yeah, and the thing, okay, beyond the gamification, which I think is horrible, it it looks like a a a game of some kind when you go there, but that but they make it easy for people that know nothing to get approved for high-risk trading strategies, options, margin trading. There was a the tragic case of the young man who thought he lost all that money and took his own life a few years ago. Um, and then beyond that, as a company, they've been investigated for this. I don't know where it stands today, but the payment for order flow, who they send the trades to and what they're actually making for handing your trade to somebody else.
SPEAKER_02Yeah, notice that was one of the verses in the song the purse is sold to sharper men who sup upon the flow.
SPEAKER_03You're so good. Uh and you're right, we should all go back and listen to that a
Safer Brokerage Alternatives
SPEAKER_03few more times. I guess at the end of the day, the reason I don't think you should use them is you don't need them. If you're going to use them as a custodian, who would you rather use? Somebody like this or somebody a little more conservative, like a Schwab or Fidelity, which we've criticized.
SPEAKER_02Schwab Actually, if I if I was going to rank them, I'd say Schwab or Vanguard. Yeah, okay. Because Fidelity still plays these silly um commission games with their funds. I mean, they're up there, but I wish they'd just give up on this. They can't give up. They're so addicted to that revenue. They are like Robinhood is going to become even increasingly addicted to predicted prediction market revenue. They're gonna this is what they're gonna push. It's the most profitable thing they have. Do you think they're gonna push their RIA responsible business?
SPEAKER_03No. No. Um and do you want to hire someone because of a gimmick when it comes to your financial services? I don't think so. I mean, maybe your cell phone, but I don't think when you when you're talking about your money, you should be doing that. And then the other part is do you want to sell somebody? You said it so well, the analogy is so good that uh where they might be dressed in the three-piece suit, but at the same time opening the door to the smoky casino floor where you could smoke and make the chip.
SPEAKER_02The air's clean now and it's sparkly.
SPEAKER_03I think there still are casinos where you can go smoke in Las Vegas.
SPEAKER_02Yeah, but most of them, most of them are smoke-free, which is good for our health, but bad for our wealth.
SPEAKER_03Sad day. Sad day where you can go smoke.
SPEAKER_02Because now you're gonna want to hang out longer because you're not choking to death.
SPEAKER_03Exactly. So that's why I this is this will be something, by the way, that that we continue to watch because it's so popular with people under the age of uh 35 or 40. It it it's big, big, big, right? That's where the that money is going. And I'm gonna try to stop you because I think it's going to be harmful in the long term to your financial health. I'll put it there.
SPEAKER_02This is literally the most dangerous thing you can do with your money. Really. And you know, if you if you don't want to invest that money, you don't want to grow that money. Your your goal is to have fun. A lot of people say, well, it's just fun. Well, spend it on a nice vacation like Tom. Tom can tell you a lot of great places to go. He's good at vacationing. Actually, his wife is better at vacationing.
SPEAKER_03She's very good.
SPEAKER_02They're they're good at vacationing. I, on the other hand, pretty much suck at vacationing. I get talked into a cruise once in a while, and then I'm green around the gills.
unknownYeah.
SPEAKER_02I don't know why I do it. I don't know why I do it. I fly fifteen hours to New Zealand and I have fun, and my wife is not happy. You know, it's just I I give up. I'm not vacationing anymore. I'm just gonna write songs. You're doing that well too. Did you notice also one of the verses was he showers thee with paper flowers for every foolish trade? That's the the confetti. I know.
SPEAKER_03And they do that well, like I do vacations
Listener Questions Begin
SPEAKER_03well.
SPEAKER_02They do that well. So uh the other thing we do or try to do every episode, and we continue to do because you are very responsive, is answer your questions. You can send them in at talkingrealmoney.com clicking the button that says ask a question, and then one of two things happens to those questions. Either Tom goes, Oh, this is a good one. I want to have a talk with this person, and he picks up his phone and he calls you and records it, and then I make it sound even better and put it on the show like this. Hey, thanks, Don.
SPEAKER_03And we're very happy to have a regular number of callers, slash listeners, slash questioners. And one of those is Andy, who joins us from Zanesville, Ohio. Not Zaynyville, because that'd be more fun, but uh that'd be too crazy, maybe. Anyway, uh, all kidding aside, thank you for being on the program. And how can we help you today?
SPEAKER_04Well, I appreciate you calling me Tom. Uh I I love listening to your show every day on the radio. I listen to several financial podcasts, but your yours and Don's are the one I listen to most regularly. I never miss one.
SPEAKER_03So wait, there's other financial podcasts? Oh my god, I didn't know that. Okay, well, I'll take that up with the powers that be and see what I can do about it. So, but thank you for your kind comment. All right, enough joking around. What uh what do you want to
Retirement Withdrawal Strategy
SPEAKER_03know today, sir?
SPEAKER_04So my question is um, I'm about four years from retirement. Now, whether or not I fully retire at 65, we'll we'll see, but I want to have that option at least. Um so I'm looking at the withdrawal strategy and I I like your flexible 5% withdrawal strategy that you guys talk about. Um however, I guess I'm thinking to myself, if they have a if there's a market correction and say it goes down 30%, um if I say on a $1.8 million dollar portfolio, that's you know, five percent would be ninety thousand a year. So if you have a thirty percent decrease, now you're down to sixty-five thousand dollars a year that I'd be pulling out to live on. To me, that's a pretty significant decrease. Uh my thought is, well, isn't that the poor the purpose of having the bond portion of your of your portfolio so you could just withdraw from that and just uh let the stocks recover and then you don't have to adjust your spending as much?
SPEAKER_03Yeah, it's a great question, by the way. So and and to what is your current stock to bond ratio?
SPEAKER_05Right now it's about 75 25. Okay. It should be 70-70.
SPEAKER_03Okay. So at a 70-30, a 30% decline would be pretty precipitous because um you could have a 30% decline in stock, certainly, um, but not in a it'd be very unusual to have one that sharp in a 70% stock, 30% bond portfolio. So that would be pretty significant. So um, but back to your question, like, well, yeah, you're right, 5% flexible, but I still have all these fixed income that I can draw on. You're exactly right. The first, and I want to mention one thing because this comes up a lot. And this is the reason that that we really suggest anybody within, certainly within five years, maybe within 10 years of of retirement, has a plan because every plan is idiosyncratic, right? Um, mine's different than yours, yours different than mine. I mean, my wife took Social Security a little earlier, I'm waiting until I'm 70. I mean, there's a whole bunch of factors that range into all these things, the fixed income sources plus the portfolio, et cetera. So there really isn't one set way. And you mentioned the 5% flexible. We also talk about a 4% fixed. Uh, the 5% flexible works better for the long haul, obviously, because you're just taking out 5% of the portfolio amount. But as you correctly point out, that could be a whole lot less in some of the down years, and that would be painful. Um, the purpose behind it is just to kind of show you in a general sense how it works out under different with different strategies under different market conditions. That's it. There isn't there isn't right or wrong. And you're exactly right. You could pull from the bonds and wait for the stocks to go back up. Um, you know, and if you're properly diversified, that could be pretty quickly. And if if recent history is anything, I mean 2022 and 2020, the market rebounded pretty quickly. So yeah, I you're you're right. That we just show you the the 5% flexible as a as a potential strategy. When we work with people, we sit down and it's a year-by-year kind of gambit, right? Because you really want to know, well, how's it look next year? How's it look the next year? And and in fact, we run it a thousand times uh, you know, in in the projections just to see kind of every market condition. Um, I like the fact that you're thinking about it with four years left. I don't want you to worry too much about it because if you're a regular saver and you're properly invested, you're doing everything you can to pull for that. Um I would urge you to to probably have a professional look over your shoulder to make sure you're kind of doing everything you can today and that you're headed the right way. But I wouldn't, I wouldn't fret about whether it's 5% or 4% or 6%. I think it was um uh Christine Benz from Morningstar who once said, you know, the only withdrawal rate we'll know was correct is after you're gone. Because, you know, my parents, for example, they didn't spend all their money, they left some to some to us. I use some for my business. I mean, other people did other things, but but there there was no, you know, kind of end up with zero uh portfolio design. So you never never really know. But you're you're thinking is right. And and by the way, it's it's just overlooked, I think. That's why you have fixed income. Fixed income, for example, because I just did some research on this from 2000 through 2009, where the SP 500 lost money, a diversified portfolio, by the way, made about 6.5% a year. But fixed income made about 3.5% a year during those tough times. So if you're just in the SP and you're losing money over the long haul there in that decade, at least the bonds were holding steady and giving you some return. So you're right, you could be pulling from that, waiting for those stocks to return. So your strategy is right. So your question is actually, you know, absolutely correct. You could pull from the bonds. I guess my suggestion to anybody is the 4% fix, the 5% flexible, those are just designed to kind of show you what it would look like through good times, bad times, et cetera. But there really isn't one that's set for you because your retirement is about your situation, not about some example that we're showing you.
SPEAKER_05Yeah, and realistically, I'll I'm hoping to hold off on security till 70. So it'd really only be for five years or so and then.
SPEAKER_03Yeah, and I do, by the way, and I do urge people in their early 70s, especially if they don't retire to 70, to go do the things they want to do. Because the number of people that we run into that get into their late 70s that don't want to travel to Europe, they don't want to do things that are physically more demanding. So I would be telling you if you were our client, go spend your money, go enjoy it, you know, because that's we don't know how much longer our lives are going to be and you want to get out and do it. So, but yeah, you're right.
SPEAKER_05Nice cookies.
SPEAKER_03Exactly. So yeah, but you're you're you're correct. The bonds are there for that purpose. Bond, uh I give you another example. If you had a million dollars in a portfolio, say, and 60% stocks, 40% bonds, that means you have $400,000 in bonds. You could pull on that for a generally for a long period of time while you're waiting for stocks to recover, should they go down sharply at the beginning of retirement. So, Andy, I think your retirement, your, your, your planning sounds good. You're thinking exactly right, and you know, keep working on it. I think you're gonna have a great retirement ahead of you.
SPEAKER_04Great. I appreciate it.
SPEAKER_03Thanks for thanks for sending in your question and thanks for for being a listener.
Dead Tree Questions
SPEAKER_02So there's that. There's the recorded call, which we love. Uh, and then there's the uh the the the the another meme for our show, the dead tree killing uh uh segment. Tom took a life tree of its own. Yeah. Took on a life of its own, like the model military aircraft museum. For a time. That's a time. Everything has its has its time. Now Tom's gonna take his dead tree questions and read us a couple.
Target Date Fund Mix
SPEAKER_03From Taylor's South Carolina, Shelley says, I'm 59 and a half and I'm retired. In the process of transferring my retirement funds to a target date fund at Vanguard. I have about a million dollars, not including my paid-off home of $415,000. 25% of the $1 million is in a five-year CD ladder. 2% in high yield savings count, the remainder in the market previously with an advisor. No debt. My intention to take Social Security at $70,000, which is a long time from $59.5, which will be an estimated $3,000. I consider the $250 in the CD ladder as my save fund. I think that's reasonable. Question I am considering enrolling in the target date fund 2035, which consists of 46% of total funds, and the remaining amount, Roth, in the 2035. 2040. Risk tolerance on your site 51, tolerance group number three. Please evaluate the above. I look forward to hearing your response on the podcast. So, okay, question. So if remember, if you have a million dollars and you have a quarter of it in a CD ladder, that's already 25%.
SPEAKER_02That's 25% of your portfolio fixed income already. Yeah.
SPEAKER_03So then if you go with the 2035, which I'm betting is 60% stocks, 40% bonds. That's just my guess. Um be looking it up right now. Vanguard 2035.
SPEAKER_022035 is a uh no. No. No, it's a 66.
SPEAKER_03Okay, so a little more. But still, then you throw that 250 back in, then you are getting closer to your risk tolerance score of 50, right? Because you've added the money in the CD with the target date fund. So yeah, I think you're kind of meeting your where you are. Yeah, so which is where your Roth should be because you should have more risk. Right. So I'm good with this whole thing. What's your take?
SPEAKER_02I think it sounds great. No, I think it's great. It's cheap, cheap, cheap, cheap, cheap, cheap. My gosh, these funds are cheap. Uh what are they getting now for the third? That's crazy. Eight one hundredths of one percent.
SPEAKER_03They must have closed the old Bogle cafeteria.
SPEAKER_02I mean, that is so, so cheap.
SPEAKER_03So, yeah, this is a this is a really good idea.
REITs and Dividend Traps
SPEAKER_03I like it. Yeah. Shelly, keep it up. Uh, Jay from St. Petersburg, Florida. Hi. An elderly relative was talking about REITs, real estate investment trust, such as AGNC and ARR. I wonder how you compare them to VNQ and others. They have a significantly higher dividend. Can you analyze the risk aspect of them and provide your opinion? I think he's providing his opinion right about now.
SPEAKER_02Oh my God. Let's start with the Armor Residential REIT. Okay. This is a specific REIT. You see, the Vanguard REIT Fund is a fund of funds.
SPEAKER_03Yeah, it has many REITs in the many REITs.
SPEAKER_02In fact, it has all of the REITs, basically. They try and all of the publicly traded REITs are in there. I believe it's the whole market. The uh VR pays, yeah, pays a well a much higher dividend. Um it pays a dividend of how much? 17 and a half percent. Excuse me? 17 and a half percent. Do you want to know how?
SPEAKER_03I'm just speechless. I don't know where you're gonna be able to do. You want to know how? Well, they're giving you somebody else's money.
SPEAKER_02Let's go back in time, shall we? Let's go back to 2009. Back in 2009, ARR traded for $395 a share. Paying that. 2009. 2009.
SPEAKER_03Yeah, okay.
SPEAKER_02Okay, 2019, it traded for $101 a share. So it took a bit of a hit. Oh, yeah, one quarter of its value. Wait, fast forward. 2026. Today, when we recorded this in August of 2026. $16.32. I can't run that number yet, but it's not good, I'll put it that way. Well, it's like one eighth. Um so the thing has gone from $400 to $16, $17. So $400,000. Yet you collected a really nice dividend along the way. Right. That was just your money coming back to you. Yeah. That's this is what I'm saying. No, both of these, both of the the uh REITs you're talking about uh are paying ridiculously high dividends. The what was the other one's symbol? I I forgot already.
SPEAKER_03A GNC. And while you're looking that up, VNQ is the Vanguard REIT fund, which you get at 13 basis points, diversified, low cost, and so if you want to own REITs, I think that's a good way to own them. These are individual REITs, these other two that are traded popularly.
SPEAKER_02Yeah, the ARR is buying actual real estate. AGNC is buying mortgage notes. They're just buying government backed mortgages. And here's the problem. They're paying 13. What is the rate on mortgages right now? Six and a half? Six and a half, six and a half, six and so if they're paying thirteen and the securities they're buying are yielding six. Somebody's really not being nice to you. No, they're just giving you your money back. And let's let's again, let's just look at that uh long-term chart for AG and C. Going, let's go back to uh 2012, its high was 33. Yeah. Now this one's not as bad because it's not individual real estate, it's mortgages. But 33 in 2012, 14 years later, $10.70.
SPEAKER_03So a third.
SPEAKER_02Yeah. Yeah. Lost two thousand dollars. Your money is coming back to you. Yeah.
SPEAKER_03No, these are not good products, and um, tell your elderly relative not to use them. All right, Lance writes us from Blanco, Texas.
Gifting to Grandchildren
SPEAKER_03Can't express how much I enjoy and have benefited from your show. I only wish I'd found it sooner. Me too, Lance. My question is one I hear kicked around frequently. It's a topic my wife and I have probably overthought to death. Our three children have delivered my wife seven. Wait. I don't understand the seven. Oh, is it seven children and they have four grandchildren over the last couple of years. Okay. Yeah.
SPEAKER_02All right.
SPEAKER_03Given the fact that we've been very blessed, fortunate, lucky, I agree, in regard to our finances, off the record. Oh, off the record, so I guess I'm not supposed to say. Uh we'd be off the record, Tom. Well, the wrote. What kind of reporter are you? He said off the record and then put the amount. Um, we'd like to begin gifting ten thousand dollars birth gift and a thousand for Christmas, a thousand for a birthday each year. I want to be your relative. That's really nice. Uh trying to figure out. Trying to figure out the best way to do this. Looked at the Utma, Ugma, and 529s. Yeah. Uniform transfer to minors, uniform gift to minors, 529. Don't like the restrictions on those options. So considering others, uh, number one, open a series of sub-tiered accounts through our financial advisor.
SPEAKER_02Okay. Well, one, that's not a gift. That's you keeping the money earmarked for them, but it's not a gift yet.
SPEAKER_03And you could take it back anytime, right?
SPEAKER_02Yeah, you could take it back anytime. Sure. Kid makes you mad.
SPEAKER_03Um, allow the advisor to manage the accounts until the time we and the parents like to see the cash distributed. Advisor would apply the fee to the sub accounts at the current asset rate at 50 basis points. Number two, open a series of accounts in our names with Fidelity or Vanguard and use the same contribution cadence using target date mutual funds. As I said, I feel we've overthought which of these two options we should move forward with. And if you're thinking we're off track by accepting the tax consequences instead of choosing one of these options, you have a better solution. We'd love to hear it.
SPEAKER_02No, there aren't any. There there are two options. One, you can give it in one way, shape, manner, or form to them through UTMA, UGMA accounts. That's a true gift, but by law, it has to become, if it's a gift, it has to become their property at the age of majority. That's it. That's the downside. The other is the uh the 529 or similar types of accounts where there you still maintain control. You do.
SPEAKER_03As the donor account, it's your account.
SPEAKER_02You own the account, but there are big benefits potentially for the kids for education. And it's not just college. This could be trade schools, this can be certifications, this can be all kinds of stuff. Uh so I might do a combination. I understand you want to maintain control. You already have an advisor. I would your advisor's charging a very fair fee. I think I might go with that because your advisor can build something that's very appropriate and specific for part of it, but part of it I think I do a 529.
SPEAKER_03Remember, the 529 is not just uh education anymore. Now it's retirement, too, because you can move some of that money into the Roth.
SPEAKER_02And later, if you do want to give it to them, all you have to do is pay the taxes. Yep. So on the gains. On the gains.
SPEAKER_03Yeah. It's that simple. So yeah, no, I like that. Um again, the the first thing you should consider is the purpose of the money. In my family, I give it for education because I believe in education. I think everybody should get one if possible. Not everybody does. Doesn't work out, that's fine. But then, and now with the the changes of the 529, if they don't, they could still move that into their Roth IRA once they have income, which I'm hoping they will have at some point. So uh I like it, but that doesn't mean you couldn't just do the Atmar Agma because if you want to let them buy a car when they turn 18 or something, that's a way to do it.
SPEAKER_02Maybe do all three. Do a little in one, a little in another, and a little, yeah. Anyway, um I have a question for you before we go.
SPEAKER_03Oh gosh, yes. No. It's can you set aside?
SPEAKER_02I know you have copies of The Line Uncrossed, my novel. Many. And and uh Financial Physics, right?
AI Voices and Contest
SPEAKER_03Yes.
SPEAKER_02I'm doing something on tomorrow's QA show. Uh a couple of weeks ago, I was really getting low on recorded questions, the ones you speak uh when you go to talkingreal money.com using the mic button. Well, because I begged again, I got a lot of them, but Tom sent me a few written questions that hadn't yet made it to tree killing form. And uh I was gonna use some of those and have AI voice them. Yeah. But I don't really need them, but I have them. So here's what I'm gonna do over the next couple of weeks. Uh at least tomorrow for sure, and maybe over the next couple of weeks. I'm gonna have real human questions where you've spoken them. Yes. And I'm going to sneak in one where I have a different AI voice read the question.
SPEAKER_03And our job is to decide who is the first one.
SPEAKER_02I am not gonna tell you which one of the five or six calls questions is AI. So here's the contest. The first person who goes to talkingreal money.com and sends me, you know, with the the contact button, the contact form, sends me the correct one. Yeah. First person who does it. And if you multiply, you can only have one entry per person so somebody can't tell you. It's Bill. No, it's Jim. It's no, it's you're you're I gotta have your email address and I'm wait, I can eat my wife email. I'm counting on you not to cheat. It's two dang books, folks. That's all you're gonna do. Both books? Both books. The entire Don McDonnell collection.
SPEAKER_03Wait, wait, wait, let me hear this right. I'm gonna send them two books. You're sending them nothing.
SPEAKER_02Right, because you guys will pay for the postage and I don't want to do it. Because we've got people. That's right. We've got people there. Appella has people. They do. So and you've got the books and the people and the mailing envelopes.
SPEAKER_03I if you're asking for permission, the answer would be no. But uh I'll do it.
SPEAKER_02I'm not because he's gonna do it. So anyway. Stop you. Um here's so tomorrow's I'm gonna try it myself.
SPEAKER_03I'm looking forward to it.
SPEAKER_02Yeah. So one of the questions is going to be spoken by AI. You'll never be able to figure it out. It's got to be. I'm telling you, the I I already recorded, I already uh had it done, and I went, that sounds just like the people who call it.
SPEAKER_03I think it
Vacation Talk and Closing
SPEAKER_03it really does. It's scary.
SPEAKER_02Kind of like the music. And uh so ask us your questions at talkingrealmoney.com. Uh if you want to meet with one of the Appella advisors who's including me. Including Tom.
SPEAKER_03I'm looking for some conversations. Had one today, it was great. Let's get them going. I like it.
SPEAKER_02Click on Meet an Advisor, that little button there. And there's no cost, no obligation, no high pressure sales pitch.
SPEAKER_03Push the button that says interrupt Tom's vacation. I'll get to it as soon as I can.
SPEAKER_02Yeah, well that means it could be months.
SPEAKER_03I don't think so. You're taking another trip soon. I think uh well, I'm going to California to drop the girl. With an achen in my heart. And then I'm going to Nashville for the uh uh conference. And then um I don't want to say what I'm doing in December. I'll get in trouble.
SPEAKER_02So let's just Oh my gosh, you're going on another incredibly expensive Christmas vacation, aren't you?
SPEAKER_03Aloha, Mr. Han.
SPEAKER_02Oh, you know, I should use some of my vacation club points to go to Alani.
SPEAKER_03We've talked about this, but every time you look, it's like eight million because it's I go at the high seasons. You do go at high seasons. Yeah, you need to go like uh when is the low season in Hawaii? I don't even know when that is. July or July?
SPEAKER_02Probably now because of hurricanes.
SPEAKER_03Okay, yeah, it sounds good. Sure. Cheaper because you may or may not actually have blown away. Yeah, exactly.
SPEAKER_02Thanks for being there. I'm Don, that's Tom, and what are we doing? We're talking real money.
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