On today’s show we dive headfirst into the mailbag, and answer your excellent questions on every facet of investing, saving, and protecting your money:
- Do I need a trust?
- What should I do with these savings bonds?
- Should I take my money out of a 529 college savings plan?
- Can I stop saving money well before I retire?
…and LOTS more. We’re excited to not only bring you those questions, plus our TikTok minute (wait until you hear THIS bride…), AND Doug’s incredible trivia question. Plus, we may rail on too long about fake IDs (just to help parents know how to spot them, of course).
Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.stackingbenjamins.com/201
Enjoy!
Doug’s Trivia
- What is the most popular beer among Millennials?
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Join Us Friday!
Tune in on Friday for a roundtable episode where we’re talking about investing and the five types of wealth with the host of the “Money for the Rest of Us” podcast, David Stein, from AmplifyMyWealth, financial planner Allissa Mazes, and Doc G from Earn & Invest.
Written by: Kevin Bailey
Miss our last show? Listen here: Using Stoic Principles to Win the Money Game (SB1546)
Episode transcript
[00:00:00] bit: Hello there, Peabody here, and this is the way back machine. We’re traveling through time and this is my boy chairman [00:00:08] speak. [00:00:08] Chairman. [00:00:08] Hello, [00:00:09] good boy. [00:00:15] Doug: Live from Joe’s mom’s basem*nt. It’s the Stacking Benjamin Show. [00:00:30] I’m Joe’s mom’s neighbor, Duggan. Today, it’s all about you. We put out a call to action in our Facebook group asking for calls, and you did not disappoint. You guys had so many great questions that we can’t even fit ’em all into one show, especially that one call from Ned asking us if it’s worth it to put a new set of tires on his go-Kart or that one from Mindy about what’ll happen to her home’s value if her partner installs a an above ground pool in the front yard. [00:00:57] I don’t even think we need to do that one anyway, but we’ve got, it’s a good idea. We’ve got a few other gems for you. And forget about using Scarlet Johansson as the voice of ai. We’ll use our own AI bot named og and he’ll do his best impression of a human life form and give you his thoughts. It’s gonna be great for our TikTok minute. [00:01:17] It’s wedding season and one couple may have figured out how to profit from it. We’ll discuss and somewhere in there I’ll share some Inebriating trivia. And now two guys who already have their Crocs off and their feet in the pool, the big D and oh. Ooh. [00:01:38] OG: So just holding onto that for as long as you can. Huh? [00:01:40] Doug: The Big D? [00:01:41] OG: Yeah. [00:01:42] Doug: Yeah. I’m gonna see if it finally sticks. I’ve been working on it for years. What it, we got two weeks of it now. [00:01:47] OG: I mean, we’re doing [00:01:49] Doug: pretty good with, it’s got a chance. You’re telling me it’s a chance. It hasn’t. [00:01:51] OG: It hasn’t gotten cut out yet. [00:01:53] Maybe it has. We’re recording this early. Maybe the editors have already cut it out. It’s like, and now it’s Neighbor Doug. And it’s like that, that weird voice that happens when they try to edit something on TV or something. Anyways, happy Wednesday. It’s hump Day. It’s halfway through July. Amazing. Summer is half over for those who go to school at the end of August. [00:02:15] Labor Day time period. How’s your summer going? Just half done. It’s like you’re, you’re on the other side of it at this point, I think. Hope you haven’t [00:02:23] Doug: wasted it. [00:02:24] OG: Yeah. They, they start school August, like 14th or something. We’ve got, we’re, we’re, we’re under 30 days away and uh, I’ve got a high school senior about to start. [00:02:33] So, [00:02:34] Doug: but all of you guys south of the Mason Dixon line, you were outta school in what, February or something like that? Your kids are done early? [00:02:42] OG: Yeah. Uh, we were done before Memorial Day, the week before Memorial Day. Wow. Wow. But I know, you know, you say South, my sister’s kids go to school in Indianapolis and. [00:02:51] They start August 1st and are out at the same time. Really? Don’t throw dispersion. It might be just south of I 80. Maybe. That’s where it’s Right. [00:03:00] Doug: The new Mason Dixon line folks. South [00:03:02] OG: of the turnpike. That’s an up north bridge, isn’t it? Well, the turnpike. The [00:03:07] Doug: turnpike, yeah. I think of 90 is the turn. I mean, no, they have the [00:03:11] OG: Florida turnpike. [00:03:12] Doug: Yeah, [00:03:12] OG: Florida’s got a turnpike, I guess too. We just call it the, by the name of the highway, you know? ’cause the highways are all named, right. You know, Memorial, whatever called the George Bush. Oh, [00:03:22] Doug: you don’t use [00:03:22] OG: numbers. 75, well 75. Yeah. 75. But some people call it North Central. One twenty one is Sam Rayburn. [00:03:31] So it’s like we sometimes Yeah. [00:03:33] Doug: In the Detroit area, there’s, they’re all dedicated to some famous person, a UAW leader or a, you know, a mayor or something like that. Senator or [00:03:41] OG: something. Sure. [00:03:41] Doug: From way back when and people are like, oh, traffic’s bad on the Fisher Freeway. And I’m like, okay, that is not helpful. [00:03:46] I have no idea. I grew up here. I have no idea what road you’re talking about. Fisher’s [00:03:50] OG: been dead for 85 years. Right. There weren’t roads when Fisher was around. He was the last buggy whip guy. I think he invented roads. And sometimes people will take the names and then put the, the in front of the numbers. [00:04:02] Doug: Oh, right, [00:04:03] OG: sure. Right. So it’s like the Fisher Freeway, whatever. And they’ll say the 75 or whatever. You’re like, [00:04:09] Doug: what? No, it’s just no. You failed the test. [00:04:11] OG: Yeah, [00:04:12] Doug: I think so. Now I’m not even listening to your directions. [00:04:15] OG: Recalculating. [00:04:16] Doug: Turn left out. We are so far off the road on this one. Uh, you know what we’re gonna do today, OG is it’s an all call in show. [00:04:25] I can’t wait for this [00:04:26] OG: mailbox because this is a mailbox episode. A [00:04:28] Doug: voicemail episode? Yeah. Yeah. Voicemail. Voicemail. Sure. No, no. Those are two different things. [00:04:34] OG: Do we, should we vote on them to see who gets the T-shirt? Like, uh, hunger Games? [00:04:39] Doug: Oh, I didn’t even think about it. This is an expensive spendy show for us. [00:04:42] OG: Yeah, it is. This is gonna [00:04:43] Doug: break the quarterly budget. There are lots of [00:04:45] OG: credits. Yeah. Uh, uh It’s okay. It’s okay. We’ll take it out of your, of your salary. [00:04:51] Doug: Okay, look at the time. See ya. Uh, but here’s a, I’m gonna reiterate this. I said this months ago. I had stated this req as a requirement of getting your shirt. [00:05:03] We need a picture of you in the shirt. At least the shirt out in public. Like if you don’t wanna show your face ’cause you’re like too hot and you don’t want people DMing you like crazy. Okay. I get it. O og your face was like, it’s never been a problem for me. [00:05:20] OG: I know, [00:05:21] Doug: but we need a picture of that shirt out in public when you are a fan of a show. [00:05:27] OG: So says the guy that used to have a bag on his head for advertising. Remember those days? [00:05:33] Doug: Uh, [00:05:34] OG: I like it, but [00:05:34] Doug: uh, yeah, it just show us, you know, in your T-shirt at the world’s largest ball of twine or at your mechanics, whatever. But when you get a free T-shirt, we need to post that all over the world to say, look how cool our shirt looks [00:05:48] OG: like in the, uh, the Katmandu Yeah. [00:05:49] In the, uh, alumni magazine where they hold the flag up. Yes. You know, and they’re like, oh, look at us. We’re Purdue alumni and we’ve made it all the way to Chicago. Right. Or [00:05:57] Doug: whatever. Yeah. Or I’m a Texas a m alumni. I made it to the bar. [00:06:03] OG: I’m a Texas a m coach and I changed jobs overnight too soon. Aggies too soon. [00:06:10] Doug: So we’re looking forward to that. [00:06:12] OG: Alright, well let’s get after this. Yeah, let’s get after this. We have a busy show. We’ve [00:06:15] Doug: got so many calls. I think we just need to jump in. But we are, have no fear. We are gonna have our standard Wednesday TikTok minute, and I think you’re gonna love this one, but first a word from our sponsor. [00:06:38] OG Can’t wait. Here we go. We are at the top of the hill of the rollercoaster and we are ready to just dive down into our first call. Stretching. [00:06:48] OG: It’s stretching. Starts off the hammies. [00:06:51] Doug: Did you just get another leg cramp? No, I said I’m stretching. Oh, got it. I just, now you’re doing, Lama [00:07:00] OG: bumped up. Let’s do this. [00:07:02] Let’s [00:07:02] Doug: do it. Uh, let’s do that with Suzanne, who’s got a question about savings bonds. Hit it. [00:07:11] Caller: Hey Joe OG and Neighbor Doug. This is Suzanne. I have a question about the, uh, savings bonds, the series ee. My children received a few hundred dollars maybe in bonds when they were born, and that was, uh, twenty four, twenty two, and 20 years ago. [00:07:28] Wow. What do they do with them now? [00:07:31] OG: Oh, savings bonds, the gift that keeps on giving until it stops giving [00:07:35] Doug: the gift that keeps on collecting dust, [00:07:37] OG: and then it’s the gift that you forget about. My parents were divorced when I was in my early twenties. We’re cleaning up my mom’s house and she says, I have something for your father. [00:07:48] You know how that’s always the, you know, that’s how they addressed each other. Your mother Yeah, that’s right. Your father, you know, that sort thing. Just wait [00:07:57] Doug: till your mother gets home. Yeah. [00:07:58] OG: So she gave me this envelope and I said, well, what is it? She goes, I don’t know. It’s for your dad. And so I opened it up. [00:08:02] It’s a savings bond that Philip Morris sent my dad for sending in packs of cigarettes. Do you remember, you probably don’t know this. There’s a whole [00:08:12] Doug: story behind that. I can’t wait. You know, [00:08:14] OG: you collect bottle caps and you send in Pepsi and get a free fighter jet. Well, Philip Morris had send in your cigarette packs, your u your empty packs and we’ll give you a new set of lungs. [00:08:23] We’ll send you a hundred dollars savings bond or whatever. So I send it to him. He’s like, what the hell is this? It’s a savings bond. Dad, you’re That is, that’s [00:08:31] Doug: fantastic. I love that story. [00:08:33] OG: Yeah. Yeah. Could you imagine if Juul was like, look, here’s the thing, send us your empty JUUL cartridges and we’ll send you money. [00:08:40] Could you imagine the outrage right now? Like all the vape people, like, no, no, I have to smoke this. Right. Otherwise, I don’t earn enough for my uh, points. I gotta get my, uh, my points up. [00:08:51] Doug: I can’t stop, mom. I have to go earn my college money. [00:08:55] OG: I know. As soon as I get done with this, I get a hundred, a hundred dollars savings bond. [00:08:59] So savings bonds are debt instruments. They are, if you’re not familiar, you send the government some money and they send you a savings bond. And basically how it works is, let’s say that you wanna buy a hundred dollars savings bond, right? So the bond itself is worth a hundred dollars. You pay 50 for it today. [00:09:16] So it’s the, you know, uh, uh, July, 2024 savings bond. It says a hundred on it. It’s got a picture of somebody on it and it says a hundred, but you pay 50 bucks for it today. [00:09:28] bit: Yeah. [00:09:28] OG: And you go, well that sounds like a pretty sweet deal. I’m doubling my money. Yeah. I’m doubling my money. Well, how that works is the government has figured out what kind of interest rate they have to pay you so that in X number of years it becomes worth a hundred dollars. [00:09:43] And that ranges between 12 and 15 and sometimes as long as, even 18 years before you get that face value of the bond, you can cash it out earlier, but you’ll receive less than the face value. So if you bought it for 50 and a year from now you’re like, I’m gonna cash it out, you probably just get $51 and 50 cents. [00:10:01] Mm-Hmm. You know, back. Then they have, you know, different penalty times. You gotta keep it for a certain amount of times. A lot of people are familiar with iBond because we, you know, they’re kind of all the rage for a couple of years and iBond are face value. So, you know, you buy $10,000 of iBond, you have a $10,000 iBond that day, and they give interest on top of it. [00:10:20] So savings bonds take a while to get to their face value. So in Suzanne’s case, her kids’ savings bonds are probably at the face value. So whatever it is. And then they continue to gain interest until about year 30. And it might not even be about year 30, it might just be year 30 capped. And then after that, [00:10:36] Doug: nothing [00:10:37] OG: done, done year out. [00:10:40] We had a client one time that, you know, dad had passed away. She was whatever in charge of trying to settle the estate and came in with an envelope full of savings bonds that were in her parents’, you know, dad’s parents’ names from like war bonds back in the forties. And I’m like, wow, like the [00:10:54] Doug: Civil War. [00:10:55] OG: Not quite that old, but you know, world War ii. And I was like. These things stop paying interest in the seventies and it’s now 2006. Like it’s, it’s still worth something. Right? And when, the other thing that’s really interesting is the savings bonds tend to feature prominent people of the era. So it’s like, you know, JFK’s on the $500 savings bond or whatever. [00:11:18] So who was on savings bonds in the 1940s? Humphrey Bogar? It’s kind of crazy to look through. You’re like, yeah, it was just like weird, you know, different people. But anyways, the way that you can evaluate these is you can go to the Treasury direct website. So it’s treasury direct.gov, and you can put in the serial number and if you don’t wanna put the serial number in there, you can put in the issue date and the face amount and it will tell you what the interest rate is on that bond. [00:11:44] Based on when it was purchased and how much interest it’s paying every single month and when the maximum time is. And based on that, you can kind of decide there are some savings bonds out there that are paying six, 7% because they were purchased, you know, in a high interest rate time period. If you’ve a 20-year-old. [00:12:00] They were purchased in 2004, 2005, 2002, little higher interest rates, uh, environment, not, it wasn’t the bottom, like maybe 20 13, 20, 15 months. So you may look at that and say, well, this is. A hundred dollars that is guaranteed to pay 6.5% interest. I’ll keep that money for a while. You may also look at it and say, this a hundred dollars is not worth trying to keep track of this piece of paper. [00:12:24] In which case you can take it to the bank, cash it in at the bank. It’s a giant pain in the f*ck process. Yeah. Actually [00:12:31] Doug: talk about that a little bit. ’cause I think a lot of people don’t know that it can be a little bit challenging to cash those in. [00:12:37] OG: Well, it, it just is, you gotta find the right bank that can process it and the right temperament of the teller Who wants to help you process it nowadays if you’re buying a savings bond, no, I mean, see I worked at a bank in the nineties. [00:12:50] I remember. You were stack, you’re like, [00:12:53] Doug: you were never the right teller for them to approach. [00:12:55] OG: Yeah. My first day at the bank, I lost money. I like miscounted the, the drawer. I thought I was fired. Basically, I put money in instead of taking money out, one for one customer, they were excited. Um, the bank, not so much, but anyways, uh, yeah, you have to go to the bank, you take it in, you have, you know, fill out ID and that sort of thing. [00:13:12] You cash in. Nowadays, if you’re buying savings bond, you just do it all online, set up an account. Nobody has an iBond paper, they have an iBond account, and you can do all of those, you know, in that account. Now they may have a way, honestly, I haven’t looked this up. I, they may have a way for you to basically transfer your paper bonds to an online account. [00:13:32] Uh, you could look that up on the Treasure Direct website too. But I. If it’s a small amount, you know, probably it’s a $50 bond. Great. Aunt Alice, you know, here’s your christening gift. It’s $50 bond. You know, probably just cash it out. Yeah. Go hog Wild. At the Sonic, [00:13:47] Doug: at the Sonic I, I remember I had a stack. [00:13:48] That’s about what it [00:13:49] OG: gets you. [00:13:49] Doug: Yeah. I don’t know. I had a stack of ’em from who knows? Elementary school through high school and after college. My mom’s like, you forgot about these. And I was getting ready to move overseas and I needed all the money I could gather. And so I got kind of excited to take, I still remember walking into the bank with them, and all I knew about it was they continued to accumulate even beyond the face value. [00:14:11] The doubling. [00:14:11] bit: Yeah. Yeah, [00:14:12] Doug: the doubling. And so, but she couldn’t tell me. My mom didn’t know how much they kept, but I’m thinking, I’ve got thousands of dollars here. Yeah. It was nice to walk out with a few hundred, or, I don’t remember how much it was, but it was not Mm-Hmm. The, you know, the pot of gold at the end of the rainbow. [00:14:26] I thought it was gonna be, and it’s a shame that you, that I was disappointed by that because it was still like giving somebody, you know, our kids had received bonds from relatives a few times and. My, my takeaway or, you know, as they opened it, I’m like, oh, great, but it was still 50 bucks. They gave my kids 50 bucks. [00:14:44] I mean, that’s not bad that, that’s still a nice gift. It’s just, and they, they locked [00:14:47] OG: it up so your kid couldn’t spend it on a, an Xbox game. That’s what my kids get. Xbox gift cards and stuff. Yeah. It’s a pain in the butt, but it’s a, at least it’s something that’s gonna be set aside for Right, for right. [00:14:57] Doug: Yeah. I just, I think they get a bad rap, but, uh, it’s still a, a pretty nice gesture. There’s just, uh, there’s some strings attached. [00:15:02] OG: Well, the other thing I wanna point out is that, you know, when you do cash it in, you’re gonna pay taxes on the amount of gain that’s interest income. So that’s, uh, fully taxable extra or your income rate if you use it in the year that you also pay tuition for college. [00:15:15] You have an exclusion there of on your tax return. So there is some. Timing things here that you might, you know, if you’ve got, if your kids are rounding into college or around college age and you’re also paying tuition, or they’re helping pay tuition, when they cash it in, they’re gonna pay taxes unless it’s, there’s also a tuition payment in their college education, in which case you can say, oh, I, I used it for college. [00:15:38] Doug: But if it’s in the kids’ name and they make less than the minimum threshold for paying taxes, they’re not paying tax on that, on that interest. Well, yeah. Right. Okay. [00:15:45] OG: Yeah, that’s true. [00:15:46] Doug: Yeah. [00:15:47] OG: But a lot of times they don’t have kids social security numbers back that, you know, so anyway. Cool. Sounds great Suzanne. [00:15:53] Yeah, [00:15:54] Doug: thanks for calling in Suzanne. We will get you a code for your T-shirt where you can buy a uh, Doug 2024 T-shirt. There’s some other ones out there that are apparently kind of cool, but I mean, let’s be honest, really [00:16:06] OG: buy ’em. We give them to you. You can select [00:16:09] Doug: your, yeah, you can select, but really have you got a choice? [00:16:12] I mean, is there really a choice here? Alright, we’re gonna do one more before we dive into our TikTok minute and let’s hear from Derek who has a question about wills and trusts. [00:16:25] Caller: Hey Joe OG and Doug. I’m starting to feel like a nuisance at this point, but I don’t know how to cross the street without you guys. [00:16:32] I’ve been looking at finally getting a will and we met with a lawyer and he mentioned a. He broke down the pros and cons and I researched a bit on my own, like that never goes awry, and I saw people talking about a trust with 24 million in assets. Talk about Stacking Benjamins. My stack is not nearly as high, and I’m wondering if there’s a ballpark figure that should be met in order to jump from a will to a trust. [00:16:55] I do have a child on the spectrum, although I don’t know how much that matters in this scenario. Any help from the original G and Sahi is appreciated. I know I addressed the three of you, so if Doug can just tell me how to pronounce the word so I can mispronounce it intentionally. I think that satisfies all three addresses. [00:17:11] Thank you guys. Have a great day. I already hate this guy. [00:17:15] Doug: Sounds like a good dude to me. Yeah. You guys love him? Yeah. Well, first he has to go down to the library. Yes. Have some milk. Oh, milk. I’ve got a friend who’s from out west. He’s from Washington. He says measure. They measure everything. If you have to ma major a room, [00:17:30] OG: like right after captain, you get promoted to major, right? [00:17:33] Doug: No, God, that would be better. [00:17:35] OG: Right before Lieutenant Colonel that, [00:17:36] Doug: yeah, that would be better though. I could see just doing a soft J on major, but my [00:17:41] OG: daughter says milk a little bit. It’s a little southern. She’s, she’s got a little something. She there, she’s got a whole [00:17:45] Doug: lot of attitude is what that girl’s got. [00:17:47] Oh [00:17:47] OG: yeah. Absolutely. The other one that really is funny is picture. I wanna take your picture. Oh, right. Oh, I don’t have a, a water collection device around here, but I’m happy to acquire one for you if you need one. No, no, with my phone. I’m gonna take your picture with my phone. Woo. Can do that at the live library while you drink some [00:18:04] Doug: milk that’s gonna explode. [00:18:05] Can we just address the wills and trust thing because I, you just got me in a bad mood. Can [00:18:10] OG: we talk about [00:18:10] Doug: insurance? [00:18:12] OG: Okay. So wills and trust, listen, estate planning is one of these things. It’s, it’s an area of financial planning that is required to be discussed as per the CFP board. So dang it, you are required to do it. [00:18:25] But it’s one of these ones that’s less exciting to do because you know, you’re like, well, when I’m dead, here’s what I, you know, you, you’re thinking about all of this, not so fun stuff, but I don’t want you to think about it that way. I want you to think about it instead of, what do I want to do in case something doesn’t go my way? [00:18:42] What do I want to have happen? Because estate planning isn’t just like, I’m dead and I got this big bucket of money that’s all tax efficient for all my heirs, and they’re all like Rockefellers. It’s also things like, what if I can’t make my medical decisions? You know, I’m in an accident and somebody needs to decide this course of treatment. [00:18:58] Who’s the person they’re gonna go to for this? Or who have I decided in advance that I want that person to be, you know, we go, well, certainly my wife would. Here’s another great example for estate planning. That’s part of that. When your child turns 18, you can’t talk to the doctor anymore about your kid. [00:19:15] So your kid goes off to college and they’re Yeah. In a ha ha, have an issue, or they’re sick or they’re have an injury or something and you call, Hey, is my, we can’t, [00:19:23] Doug: it’s the weirdest thing. Yeah. You’re like, it’s my freaking kid. So look, I know he’s 19, but he is not capable at all of making these decisions. [00:19:31] OG: Yeah. Have you talked to him? Trust me. I’m saving [00:19:32] Doug: you from a lawsuit right now. [00:19:35] OG: This, this is the same kid who couldn’t tell gas from break 18 months ago, and all of a sudden he’s like, he’s, he’s qualified to make healthcare and financial decisions. Are you kidding me? And that’s true with financial decisions too. [00:19:47] So maybe you’re outta town and you need to have a financial transaction made. I remember one time I was trying to pay off my, my wife’s car loan, so we had was when we were earlier, early married, she had a car loan at a credit union outta town. And I was in that town and I said, oh, this will be perfect. [00:20:04] We can, I’ll just go in, transfer the money where we had talked about it. And I said, Hey, how much is it? I just was ready to check. And they’re like, we can’t tell you. I said it’s, I’m, I’m husband Bannerman. Yep. Not your name. Sorry. Can’t do anything. It was super, you know, I mean, I get it right? It’s just a normal transaction that I’m trying to do, but they’re CYA themselves, so estate planning has a lot more to do than just, you know, how do I set my family up like the Rockefellers. [00:20:29] But in this case, he’s talking about, I think, kind of thinking about the estate tax limit. So he is talking about $24 million, which is roughly the two person estate tax limit. So where am I gonna start paying tax, where my heirs gonna start paying taxes on my, my net worth when I die? And my, my family’s net worth and that number is $13 million this year. [00:20:50] I think it’s 13.6 actually. And then if you’re married, you can kind of transfer that around so you can get to 26, 20 7 million. So a lot of people look at that and they say, ah, yeah, you know, even on the best days, I’m not at 27 million, so you know, I’m good. But a trust is different than a will because A will tells the court what you’d like to have done. [00:21:10] A trust is a living document that extends beyond you. So, for example, if you have a will and you pass away, your heirs and beneficiaries will go to court and they’ll say, okay, here’s all of OG stuff. Here’s what he said he wanted to do. Some people might say, oh no, I’ve got a different copy of that. I, I, he said he wanted to do that. [00:21:31] Yeah. You know what I mean? There’s a little, might be some consternation. But anyway, the judge looks at it all, it’s all public information. Judge looks at it and goes, all right, I believe that this is the, the correct document, and thus we’re going to make this transaction. You know, this person gets grandfather’s clock. [00:21:44] This one gets the watch, this one gets the cottage, so and so forth you’ve done, but it’s all public and it’s all out in the open. A trust is like your extension of yourself. That continues after you die. So in the trust, you’d say, oh, when I pass away, I would like my assets to be in my trust and I want my sister to be the trustee, the financial trustee who’s in charge of the money. [00:22:08] I want the beneficiaries of the trustee to be my son, but I don’t want him at 18 to get a check for a million dollars. I want ’em to go to college first and if he graduates college, I’d like to give him $10,000. Or I’d like to help him buy his house. Or I don’t want him to have this lump sum. I wanna have some rules around it, just like you would normally do in your real life. [00:22:28] Were you to still be alive during that time? Right. And a lot of people look at it and say, well this is, you know, I was controlling from the grave and that sort of thing. I’m back to our original discussion about our 18 year olds. Like I think my kid’s a pretty smart kid, but he also has no concept of anything in, in terms of like money or Right. [00:22:47] Or how hard it is to make or, you know what I mean? Like that’s why sudden wealth is so crazy. People will. Have never had a million dollars or they’ve never had 10 million. You know, all of a sudden they win the lottery and they have $25 million. I dunno how much that is. They don’t know how much, what’s, that’s, you know, in perspective it’s all the money in the universe. [00:23:05] Right? And we’ve all had that experience too, right? In terms of, you know, when we first got jobs, you know, oh my gosh, I’m making eight bucks an hour, my paycheck’s a hundred dollars, gotta buy a new car. You know? Yeah. So notwithstanding the healthcare of your son, which could be an issue too, right? In terms of, uh, qualifications for benefits and that sort of thing. [00:23:25] What you’re doing by having a trust is you’re keeping everything private. You’re laying out in advance who’s in charge of what and what your wishes would be. Assuming you’re not around how you’d like your money to be handled. Trust of the people that you are trying to benefit in the future. [00:23:43] Doug: So one of the questions, maybe it was subtext, but one of the questions I heard, I think, ’cause I’ve had this question before too, is yeah, but if I only have, like, when I die, if I only have 150,000, can I just say in my will, hey, divide it up equally and, and we’re good. [00:23:58] I don’t need to pay a lawyer for a trust to set that up. Like at what, what point, what’s the breaking point where, ah, you probably got enough money, you wanna, you wanna set up this sort of virtual company that’s gonna blossom. It’s, it’s just gonna come into, uh, being the, the moment you pass this, this trust company, uh, ’cause you’ve explained it like that before on the show, is that it’s a little bit like a, a company that’s there to manage your, your money. [00:24:23] Um, at what point does it make sense, do I have enough to warrant that extra expense at the lawyer and a little bit of extra trouble to sort of stipulate all those rules? [00:24:32] OG: Well, I think that firstly, if all of your assets are primarily financial instruments. Bank accounts, brokerages, IRAs, that sort of thing. [00:24:41] No matter what you do in your will, and no matter what you do in your trust, the beneficiaries of those accounts supersede everything. So if your beneficiary says, I want all my money to go to my ex-girlfriend at the end day on this show, if you put that as a beneficiary, it, I don’t care what kind of will trust, ah, you know, you’d be like, the beneficiary document will win every single day of the week. [00:25:04] Doug: And all of those financial instruments require you to stipulate a beneficiary when you’re setting them up. Right. I. [00:25:10] OG: No, I mean, they don’t require it and there’s no reason. Oh, okay. Alright. I mean they will ask you for it, but you don’t have to put one on there. It’s not got a little [00:25:17] Doug: red asterisk on the field on your computer that says you can’t move forward without filling this out. [00:25:21] OG: Ah, maybe some of ’em do, but, but yeah, it’s not required. It’s, and, and, and it’s changeable, right? You can just, ’cause you put in your wife the first time doesn’t mean you can’t put your girlfriend the second time. Note to self. Note to self. So in that case, when you’re saying, Hey, I’ve got 150 k, it’s in a brokerage account, you know, I got a few knickknacks. [00:25:40] Yeah, will is fine. Really? I would think of a trust as when you’ve got other people that you need to care for. You know, if you’re like, I’m 75 years old, I’ve got two 40-year-old kids who are successful. I don’t have a lot of money, I don’t have or need, you know, and even if I do have a lot of money, you know, it’s, I got one IRA one brokerage account and a paid for house. [00:26:02] Do I need to have a trust? Well, maybe, maybe not. The benefit of a trust, not only that control and that discretion of keeping everything secret is interesting, but also it protects your money from the beneficiaries problems. So your beneficiary could have a divorce, your, the beneficiary could have an accident that causes, you know, an injury to someone else and they’re getting sued. [00:26:28] Hmm. And if it’s in a trust, it’s not their money. Right. To your point, it’s another company. If it’s in a trust that’s, you know, that’s, that’s not my money. That’s the trust money. You know, even though you’re suing me for a million dollars ’cause I was in a car accident, you can take all my stuff, you can’t take that. [00:26:42] So there’s some ancillary benefits there. But again, if it’s a small dollar amount and I don’t know that there’s a threshold of, well if you have 500 you should do it, or a million you should do it or whatever. But if those are issues that are somewhat concerning, then I think it makes sense to, to consider it. [00:26:57] ’cause you’re right, from a cost standpoint, I mean a lawyer’s probably charging. Four, $5,000, you know, 6,000 maybe. Yeah. Three, somewhere in there. Three to six, I bet. Yep. For an estate plan, you know, a full on estate plan. And so some of those things you don’t need, some of those things you can kind of piecemeal, like I said, beneficiary’s gonna take everything, you know, or, or kind of supersede everything. [00:27:17] So it’s like you can just say, well, I’ve got two adult kids, they’re wildly successful. This is such a small amount relative to their overall net worth, that if it goes bye-bye because they’re idiots. That’s not my problem. And it’s also not my concern, just make it a beneficiary. But if you’ve got young children, you’ve got children who have health issues that may qualify for government aid of some kind, they’re maybe not sophisticated enough to keep track of your million dollar IRA, they’re too young or they’re, you know, that’s not their specialty or something like that. [00:27:49] They’ve got other issues, like their spouse is crazy or you know, whatever. Like it may make sense to look at the trust because it keeps that protected for your family. [00:27:59] Doug: It feels a little bit like, I mean, writing that check for six Grant, which by the way was the heavily discounted price on mine. So I don’t know what the actual price is commonly, but my lawyer said he was giving me a huge discount for that money. [00:28:13] But any sounds [00:28:13] OG: like something lawyers would say, [00:28:14] Doug: yeah, well I’m giving you the friends and family discount. Oh this [00:28:17] OG: is the friends and family discount. Uh, normally it’s 10, but we’re not gonna down section. [00:28:21] Doug: Right, right, right. [00:28:22] OG: Big D. [00:28:24] Doug: But uh, it feels a little bit like you’re paying for insurance. ’cause that’s a big check to write for a lot of people. [00:28:29] Right. And you don’t see anything from it right away, but you’ve just gotta go with that same, this is that mentality of it’s the right thing to do and it offers me some peace of mind in the eventuality that something happens. Yeah. Either next week when I’m crossing the street or you know, in 50 years. [00:28:46] OG: Good stuff, Maynard. I like these. I like these Q and As. Yeah. [00:28:49] Doug: God, I don’t, you know, there are weeks when we don’t have any call-ins, all of a sudden we’ve got so many we can’t air ’em all. And that good news is, is that we can save a couple. And if you don’t hear yours on air in this episode, there’s a good chance it’s gonna be coming up in a future episode. [00:29:04] But, uh, we might need to put the urgent call out on Facebook more often because these are fantastic. Before we get to any more calls though, we have to do our Wednesday tradition, which is the TikTok minute. And og we have one that I think is especially, oh, oh, there’s another word. Especially there’s another one. [00:29:24] Oh, supposedly. Supposedly, yeah. Especially now in wedding season. I think this TikTok minute is very timely. So, uh, let’s listen to this. Oh, wait, wait, wait. I gotta ask. Is it brilliant? [00:29:39] OG: Oh, trash. No, [00:29:40] Doug: it’s trash. It’s trash. So you hear a wedding and you immediately think, no, this sucks. [00:29:44] OG: No, I hear TikTok and I hear trash. [00:29:46] Doug: Okay. Yeah, fair. I mean, okay, here we go. [00:29:50] TikTok minute: Hi, invitees to the wedding. After much reflection and tear field conversation with our closest family members, we’ve decided to cancel our upcoming winter wedding. We will further notify this group when we are in a better place to reschedule. We thank each and every one of you for your generous early donations to our money fund. [00:30:06] Can you believe that we have raised over $30,000? Unbelievable. Don’t worry. The money you’ve donated will not be spent in vain, but rather used to word a honeymoon in the coming months. After we regain financial stability and hold calm in our hearts, after a honeymoon, we will announce a new wedding date and reopen our money fund for any further gifts. [00:30:28] Weddings are expensive. We are blessed to have generous family members who gave us these large donations. It will help offset honeymoon costs and to scale and. [00:30:36] Doug: What a psychotic person. Oh, it gets it. It gets so much better. Like if you listen to the, oh, is this still going on? Oh yeah. It goes on for like another five minutes. [00:30:44] What I love so far, I haven’t leave it this far [00:30:45] TikTok minute: without [00:30:45] Doug: you. [00:30:46] TikTok minute: Please stay tuned. In the meantime, I’ll be updating our gift fund registry on Amazon. Oh yeah. She wants more. If anyone would like to give us something to take on a honeymoon, if you have any ideas on where we can go, please pm. Me or Edward as mentioned, we will keep you updated when we are reopening our money fund and have a new wedding date in the works. [00:31:01] Don’t be too sad, the new wedding is gonna be a hit. Love you, Pam. The fact that they even raised that much money is insane to me. So here, [00:31:10] Doug: yeah, [00:31:10] OG: I can’t, I can’t do any more [00:31:11] Doug: of this. Yeah, I know it. Kill it. But then the responses from the family members and from friends are like, are you serious? You A, you raised 30 grand, that’s an amazing number and you’re gonna use it to go on a honeymoon before you get married. [00:31:27] Don’t worry, we’re gonna give you an opportunity to give us even more later when we are getting ready to really, this is [00:31:32] OG: self-inflicted. Oh, a hundred percent. You cannot be mad about this if, if you decide, if, if someone sends me an email, ’cause you know it’s not coming on stationary. Right? If somebody sends me an email like, Hey, I’m getting married, would you like to donate to my thing? [00:31:45] First of all, I would like literally, oh my God, Becky, I would literally block them. [00:31:53] Doug: Oh. But this is the thing now. Like [00:31:56] OG: what the heck, [00:31:57] Doug: what is going on with is this, this, this, this is it now though, and a lot of people are totally good with it. They’re like, look, why it look, we didn’t really balk when there was a wedding registry before and it was, you know, this is our China pattern and, and this is, these are what we want for sheets and stuff. [00:32:12] I mean, that was a normal thing, uh, for like the eighties and nineties and early two thousands. We didn’t have, yeah, nobody bristled. Maybe they did at first, but to my knowledge, you know, when it comes time like, okay, thanks. Now I don’t have to guess. I need to figure out what bedspread to get you. I just know, right? [00:32:28] And if I want to choose it, [00:32:29] OG: fondue set, [00:32:30] Doug: right, which we have and have used three times. But imagine when that first got started, I’m sure people were like, are you kidding me? You’re just telling me what to buy you? That seems a little bit goosh. And now we’ve just transitioned to just gimme the money. It doesn’t feel right to me either, but it is becoming the norm. [00:32:47] But here’s what’s not the norm. I don’t think this is the norm. It’s like you don’t think it’s the norm. It’s pretty common. I don’t think [00:32:52] OG: so. [00:32:52] Doug: I, I think it is. And, but here’s what’s I don’t think sits well with anybody, is a, she got 30 grand. She told everybody how much they got. That is a giant sum of money from just your gift registry. [00:33:02] But then it’s like, we’re gonna spend some of it so you can then top us back off again when we’re getting ready to get married. That is infuriating. And all of the comments that come after that are, she’s just getting roasted and she doesn’t back down. She does not see the error of her ways. This is a, it’s a whole, there’s ups, there’s downs. [00:33:22] It’s like a novel in the comments section. And, uh, I wish we could play it all. I’ve [00:33:25] OG: decided that everything on the internet is meant to raise ire. Oh, okay. Meaning I [00:33:33] Doug: know what iron means. [00:33:33] OG: You don’t have to define it for me. I think that everyone posts stuff in order to get a reaction. My guess is, is that this is all staged. [00:33:41] This is how I’m gonna keep myself sane. It’s all make belief. He’s [00:33:44] Doug: closing his eyes right now. He’s going into his zen happy place. I’m center. I’m, he’s [00:33:49] OG: centering, centering myself. This is the most ba crazy thing I’ve ever heard of. [00:33:56] Doug: I know it, I know it. I don’t get it. Yeah. [00:33:59] OG: Okay. I need some sanity. Let’s go back to our normal status. [00:34:01] We’re gonna get back [00:34:02] Doug: to, uh, our calls. Alright. So, uh, thank you internet for providing us unending entertainment, but let’s get back and, uh, hear from a stacker. Ethan, who has a question about five 20 nines. [00:34:15] Caller: Hey Jon, OG and Neighbor Doug. I have a three month old son and a 2-year-old daughter, so we’re a little tired around here, but my daughter has a 5 29 2-year-old, has a 5 29 with about 5,000. [00:34:28] And the three month old has nothing yet. I’m just wondering, should I just make that 5 29 with 5,000 the Family education trust fund and just sort of ignore the fact that it’s gotten my daughter as the beneficiary and just be able to change it? Or do you think it’s beneficial to open up a separate account specifically and how would you think about that? [00:34:50] If, if my goal is to help with college, but I don’t plan to pay for it fully, you know, my financial independence is a higher priority because you know, they get the groceries, so thanks. [00:35:03] Doug: Screw those kids. Me is more important. Yeah. Well look, when you’re on an airplane, they tell you to put your own mask on first before the kids. [00:35:10] That’s right. They’re pretty much setting the stage for your, all your decisions in life. [00:35:14] OG: That’s the standard I think, when it comes to 5 29 plans. From an efficiency standpoint, it seems probably easier to just have one account where you’re putting money into it and change stuff. The problem will happen when it comes time to change that. [00:35:28] So number one, you can only change the beneficiary once per 12 months. So if you have two kids going to school at the same time, which you would in theory with a 2-year-old and a and a baby, it’s gonna be a little more challenging to manage that timing of who’s getting what distribution and whose name is on the account at what time. [00:35:46] Even if it’s like, well just have these, you know? The other problem that you run into is what happens if the first one uses all the money, right? Like you’re, you just. For whatever reason. Like, that’s just how that worked out. Then what do you do for the sec Doug? You know this, you’ve got two boys who are athletic and competitive, I’m sure with each other. [00:36:06] And I [00:36:06] Doug: made him fight it out. [00:36:08] OG: My, my kids ask how much is in each one of their accounts, like, they’re old enough to know that we save money and we’re, you know, they’re like, well, how much is in my college? How come he has more? How come he has less? You know what I mean? Like it’s, they, they’re aware of it, you know, and yeah, that’s our doing. [00:36:21] Right? ’cause we’re trying to show them what we have saved. Yeah. And why we do it and all this other sort of stuff. That’s good. But they’re like, why does Caroline have almost as much as us? And I’m like, well, ’cause I like her more obviously. Yeah, that’s true. It’s just, you know, [00:36:31] Doug: you need me to do the math for you boys? [00:36:33] OG: Yeah. Wait till you see the trust. Um, it’s so, you know, if it costs money to have another account, like if there is an annual fee or something like that, maybe there is a few extra dollars, then, you know, that might change the math on this. The other thing to think about is with the new tax laws, the new secure 2.0. [00:36:54] If you’ve had a 5 29 open for 15 years and you don’t use all the money, you can transfer some of those excesses to a Roth IRA for the beneficiary in, in that account. It hasn’t been decided yet, or you know, there hasn’t been some tax ruling on what happens if I want to transfer some to one kid and then change the beneficiary and transfer some to the other that no one’s done that yet to see what they say about it. [00:37:19] Basically, there’s no court case on it, so to speak. So that’s another reason. You know, if you’re like, well, what if my kid goes to trade school or joins Marine Corps or whatever and doesn’t need this money? It’s like, well, you can use it for retirement. You can turn it into a Roth, or you can change the beneficiaries to their kids’ names in the future to make it be a, you know, kind of a family. [00:37:38] Tree type money. So did did, [00:37:40] Doug: I’m gonna interrupt you. Did you use a bad example there, og, which has never happened before, so I, I think I’m, the answer to this is probably no Doug, you’re being an idiot. But you said trade school. It was my understanding that you could use five 20 nines for a whole bunch of different types of educational purposes, not just the, I’ll say the traditional state or private university. [00:38:00] OG: Yeah, I, I, I guess what I meant to say was like a lot of trade schools are more internships and apprenticeships and that’s kind of how you pay for it. My brother-in-Law is a pipe fitter welder guy, and the majority of the cost was born by him working inexpensively for a period of time. Like that’s how he earned his license or whatever was, I’m sure there was some cost to it. [00:38:23] Um, you’re right. You can use it for that. I’m thinking in terms of out-of-pocket costs versus, oh, maybe [00:38:27] Doug: for tools or something, if you have to, but, so that was a really long way of saying you’re right, Doug. [00:38:33] OG: Oh yeah. Okay, sure. But that’s [00:38:34] Doug: really what it boils down to, right? Sure. Whatever makes you happy. Okay. [00:38:38] Let’s move on. [00:38:38] OG: Yeah, so I think I would rather have one account for each kid. I think for a lot of reasons it’s not gonna cost anything extra. It’s easy to see who’s doing what as the kids grow up and you can figure out like, which one’s a smart one? You know, you, you can kind of adjust those contributions, you know, to, to go like, well, I know which one’s, I know which one’s not going to college. [00:39:00] So yeah, I think I’d go with two. There’s no harm in that. Plus it gives people a place to, you know, you can set up a, a thing like the TikTok lady did and be like, I’m trying to fund my kids’ college. Here’s the 5 29 [00:39:11] Doug: again. Oh, you give more opportunities for giving. [00:39:14] OG: Yes. So I think I’m gonna stick with five 20 nines for each kid. [00:39:18] Gives you more flexibility. It doesn’t really cost anything extra to be able to do that. Now we are going to transition to the, uh, I, I don’t know. What do most people say this is the least, their least favorite part of the show? What do, what, what do most people usually say least? [00:39:31] Doug: Well, I don’t know. It certainly gets the most fan mail. [00:39:34] OG: It’s mail. All right. I wouldn’t call it fan mail per se. I couldn’t [00:39:37] Doug: say what the contents of the letter [00:39:39] OG: were, but a bunch of magazine letters cut out. Please stop. I don’t like where this is going. [00:39:44] Doug: I’m just gonna start talking now. Hey, there’s Stackers. I’m Joe’s mom’s neighbor. Doug, this day in 1984 was a dark day in US History. [00:39:53] It’s the day the national minimum drinking age was raised from 18 to 21. I mean, imagine how frustrating that was for everyone who had just gotten a fake ID saying they’re 18. I still have my fake id. My old, my old one, my old fake id. I bought it downtown in Dallas for like 400 bucks. I paid more to get it customized ’cause yeah, I still have all the details memorized. [00:40:16] My name was Bruce Wayne. I was 6 1 200 lean fighting pounds. I lived at 1600 Pennsylvania Avenue in Texarkana, and my birthday was 6/9/69. It’s gotta be the best fake idea I’ve ever made. I framed it. That reminds me, when I first moved here, I gave everyone Joe’s mom’s phone number and address so I could use it as a sort of screening process for anyone trying to contact me. [00:40:42] I didn’t plan on telling her, but eventually had to one day when I had kegs and party equipment delivered to her house. She was about to send it back when I saw the delivery guys leaving and ran right over there to clear the, the whole mix up up. That was a pretty close call, but I forgave her for it because I’m a great neighbor. [00:40:59] Today’s trivia question is, what is the most popular beer among millennials? Millennials, not als, millennials. I’ll be back right after I get the water out of my Crocs. [00:41:25] Hey there, stackers. I’m Texarkana hostess with the Mostess, an Alter Ego Creating Genius. Joe’s Mom’s Neighbor, Bruce Wayne. Although the National Minimum Drinking Age Act went into effect in 1984, it wasn’t until 1988 that all states finally complied. The punishment to each state for not enforcing the new law was a 10% loss of Federal highway funds. [00:41:48] Heck, for 10% of Texas’s Federal Highway funds, I’ll stop drinking. Today’s trivia question was, what is the most popular beer among millennials? The answer ranking fourth most popular overall in the US behind Guinness, Corona and Heineken. According to drinks business.com, blue Moon is the number one selling beer among those born between 1981 and 1996. [00:42:13] You know, my peers. And now back to Big D and og. [00:42:22] What do you think? og? I mean, a blue moon. You buying it? I’m sorry I wasn’t listening. We’ve gotta gotta disabuse you of that habit. [00:42:35] OG: I. Blue Moon. Uh, I, it’s, it’s an okay beer. What’s the subject matter? What are we talking about? Beer. The [00:42:41] Doug: number one selling seriously, dude, the number one selling beer among millennials. [00:42:46] Okay. Is Blue Moon you good with it? [00:42:50] OG: Seems like a stretch, but Okay. [00:42:52] Doug: I agree. It’s just from drinks business.com. So I think it’s highly unlikely. It sounds like an official government entity. I don’t think they’re taking money from anybody. You [00:43:00] OG: think that’s a, uh, paid advertisem*nt sponsored by Blue Moon. [00:43:04] Right. [00:43:05] Doug: And then, and then let’s talk for a second about, uh, your fake id. Uh, how did that go for you? Because you, you have never missed an opportunity to talk about how much younger you are than Joe and I. So what was the fake ID situation like when you were at that point in your life? [00:43:21] OG: So, mine never worked for anything. [00:43:26] The one that, uh, the one that I made for a friend of mine worked really well ’cause he had a beard. Also he was very likable and I think the seven 11 guy was just like, yeah, whatever. It’s just a bunch of kids, you know, not getting in trouble. So that worked out fine. The military Id seemed to work really well because [00:43:43] Caller: yeah, [00:43:44] OG: it just had a bunch of stuff on there that just looked really super official and it’s, it was written, you know, the military likes to write their, their dates jacked up with the year first, and, you know, you know the old, old way of doing it. [00:43:56] So it’s so like you took like a decoder ring to figure out what the hell it even said. But it was like, oh yeah, I’m in the military. They’re like, oh, well, hey, yeah, supervisor, right? Yeah. ‘ [00:44:04] Doug: cause you figure anybody in the military, probably that’s the [00:44:06] OG: screwed up thing, right? It’s like you can go, like, do a bunch of stuff for the, for Uncle Sam and come home and not get, not be able to have a beer. [00:44:13] I don’t. I don’t get that. Although, to be honest, again, back to 18 year olds, my 18-year-old who’s, well he’s 17 now. He don’t need to be drinking beer at 18. There’s no doubt about that. You don’t think he can handle his, his hooch? I’m sure he cannot. But decision making is pretty weak at 18, I think. So. You think, uh, yeah, it’s 19 and 20 and 21 and 26, right. [00:44:38] And 34. Right. [00:44:39] Doug: It is, frankly, [00:44:40] OG: basically everybody younger than you are today are a bunch of idiots. That’s what I’ve decided. [00:44:44] Doug: Look at all those idiots. Get off my lawn. Yeah. Yeah. Well, our, uh, fake ID situation back in my day was astoundingly easy in Michigan. Anyways, uh, first of all, I didn’t really need one ’cause. [00:44:58] I’m not stretching the truth much to say I looked mostly like this when I was in high school. I had a little patch of gray in the front of my hair and everything, and I worked at this store where everybody was older than me. We had to wear ties. We, we had to kind of dress up a little bit and there was a drug store right next to us that’s sold beer and we would just go over there and, and get beer like after work on our break. [00:45:19] You know, you just buy breaks, whatever food and so on your break. Yeah. Buy beer on the break. Lunch. Yes, that happened. But, but so, because everybody else, you know, looked older and I was just with them, I didn’t get carded there very often, but, mm-hmm. It was still so incredibly easy in Michigan back then, because our driver’s licenses. [00:45:39] bit: Yeah. [00:45:40] Doug: A, they didn’t rotate ’em. That’s kind like they do now. And BI don’t know if this, if they were like this when you were younger in Michigan, but they were this matte finish and the background was kind of flesh tone, flesh color, like a, whatever that call that. Mine was blue, [00:45:54] OG: but it was laminated, like old school laminated with a picture that was stuck on it. [00:45:58] So you could like literally just swap out the picture. Oh, I don’t even remember those. If you were skilled enough. Yeah. If you were skilled enough with a X exacto blade. Oh, you could, you know, we didn’t [00:46:07] Doug: even have to go that far. So, because it was this matte finish with, and the background color was kind of at tope. [00:46:12] And I don’t know what you call that color. Pinkish off white, flesh down. We would just take foundation makeup from, you know, your mom or whatever. And oh, by the way, all of the printing on it was dot matrix. So you would just, if you were born in 68, you would just use the little bit of makeup and cover up the left side of the eight. [00:46:33] You were 63 immediately, or if you were 69, you would just cover that part up and then use a pencil to add in the tail of the two. And you were born in 62. It was so easy to make a fake ID back then manually, no exact toe knives needed. I didn’t need use it that often once in a while, but everybody did it just because you want to do, nowadays it’s even easier. [00:46:55] Kids are just going online, typing in who they wanna be, Bruce Wayne, and they get a an ID that shows up for and for not much money, like 25 bucks or something. And they’ve got a perfect looking. [00:47:06] OG: I feel like this is a, this is something we should not be advocating on. The Stacking manage. [00:47:10] Doug: You think there’s a lot of 18 year olds listening to us right now that are getting ideas from how to get a good fake id? [00:47:16] Well, [00:47:17] OG: I hear what you’re saying. You’re saying as adults, we should be aware that kids can do this. That’s it. [00:47:22] Doug: We’re teaching the parents how to recognize. Yes. [00:47:25] OG: Yeah. Remember when all the texting slang was out and it was like, if you’re looking over your shoulder, parent over shoulder. Oh right. Be right back. [00:47:33] That’s what BRB means. This is like the whole like national campaign of like, this is what all those letters mean that your kids are texting [00:47:40] Doug: how, how to tell if your kid’s an arms dealer for a rogue nation. [00:47:45] OG: Yeah. With little texting things. Right, [00:47:48] Doug: right. Hey, let’s get back to our callers ’cause we still have several to get through. [00:47:52] Okay. Let’s hear from our next caller. It’s Katie who has some questions about selling her house and student loans. [00:48:00] Caller: Hi Joe and Oji. It’s Katie again. I called a while back on an episode that also featured Jean Chotsky. I don’t remember the exact number. My husband is now a physician and we had to move to Philadelphia for his residency from Maine, which required us to sell our house ’cause we did not wanna be landlords. [00:48:16] Luckily, the sale of that home gave us about a hundred thousand dollars profit once everything was all said and done with closing costs. Our rent here is only about $2,000 a month and we have two paid off cars and expect our expenses to remain around 3000 a month. I have about $87,000 in Vanguard with V-T-I-V-T-S-A-X and about 8,000 in HSA from my prior job. [00:48:37] My husband has been in medical school, so these are my contributions to our retirement fund. We’re wondering what to do with this windfall of money. Do we hold onto it until I can find a job? I have about $11,000 left of my student loans. Do I just pay those off and be done with it? My husband hopes that in 10 years he will qualify for PSLF. [00:48:55] So we’re making the minimum payments on his student loans now as they are large as a physician. So what do we do with this money? Do we put the whole lump sum in Vanguard? Do we wait until they have a job? Kind of feels weird just having it sitting in savings. And also, since I know you guys are both from that state up north, go Buckeyes [00:49:15] OG: and deleted. [00:49:17] Okay, next question. [00:49:18] Doug: Wow, we’ve made a horrible error. You really gonna do it. You really just wanna move on to the next question. Who else [00:49:25] OG: is, uh, who else is on the list? Probably find another one. What was the, um, I don’t remember what the record was. The score was anyways. Uh, I’m sure somebody can look it up. [00:49:37] The things with the stuff. I didn’t come here to play school. I came here to play football. Oh. Says Cardell Jones. Anyways, come on. Uh, be nice. All right, fine. Be nice, be nice. Katie wasn’t nice, [00:49:53] Doug: but I’ll be nice. She woke up and chose violence. Yeah, [00:49:56] OG: I think so. So first of all, congratulations on career progression, getting the, you know, the internship, uh, residency, I guess is a better way to say that sucks to have to move from Maine to Philly, although Philly’s cool. [00:50:08] Philly’s a cool town. It’s in Maine, but it’s a cool town. Some history there. I’ve heard somebody broke a bell some years ago. Last week we learned that, uh, that was the reading of the Declaration of Independence was the first place. That’s right. That’s right. Philadelphia President Nixon did it. Yes. One of them. [00:50:26] I don’t know if it was him. So the question is, I’ve got this money, I’ve got some debt, I’ve got some financial goals. What’s the order of priorities here? Like how should we do this? I think that if you have any consumer debt or student loan debt, that really needs to be a priority. Cars are paid for, sounds like no credit cards. [00:50:43] So Katie’s got her student loans, I think she said $11,000. I like having those paid off. I would advocate paying off or as much as we could for husbands. I understand maybe he qualifies for a loan forgiveness program. So maybe just kind of hold that in reserve. So maybe what I would do is firstly make sure that your emergency fund is topped off. [00:51:04] If you’re managing your expenses well, you think it’s gonna be 3000 a month? Maybe. I like to have 30,000 in. In high yield savings, maybe $3,000, $6,000 in your checking account. That’s kind of a good, uh, really, really good, fully funded emergency fund. I think I would like to pay off the student loans. I know there’s some argument there of like, well, what if the interest rate is a little bit low? [00:51:28] I don’t know. I like paying off Katie student loans. Student loans suck. Basically anything you have to pay payments on sucks. Sucks. It just sucks. So I’d pay those off. And the rest of it, if you’re thinking, well, maybe some of this could be used for another house down payment in the future, or you know, if there’s some student loans that aren’t forgiven, if your timeframe on that is greater than five years. [00:51:50] I heard you say 10 for the the public student loan forgiveness program. Then I would invest the money. I think investing it for a 10 year period and then reevaluating what the loan balance is on the, uh, student loans. If you’re not able to forgive some of those, that might be a good option. If you’re, you know, how long the residency’s gonna be? [00:52:08] Probably three, four years. And then, and then you’re moving again. So there’s probably not, maybe you’re not moving, but, but, you know, kind of a transition at that point. So maybe you’ve got a three to five year time horizon before you’re settled and buying another home, or thinking about buying another home. [00:52:25] I, I like that. In terms of the timeframe of getting the money invested, just lump sum it in. It was lump summed into, this is the way I think about it. It was lump summed into the equity of real estate, you know, six months ago, right? It was one single investment. Now just make it a diversified investment. [00:52:44] Invest it, pay off some debt, build up the cash reserve, dump the rest in the market, have it done by nightfall. Have [00:52:53] Doug: it done by nightfall. What are we in the old West? In a Fortnite? [00:53:00] OG: No, you can’t say. Can’t say have it done by nightfall. [00:53:03] Doug: I don’t know. You might as [00:53:03] OG: well. Well, why drag it out, right? The money’s just sitting in your account like click, click, click, transfer, pay done. [00:53:09] Boom, boom, go out to dinner, do that. Find a nice restaurant. Go spend a couple hundred bucks on a nice meal, whatever your pleasure. Seafood steak. Maybe have a martini [00:53:18] Doug: lobster [00:53:20] OG: in Pennsylvania. I, I think, well, [00:53:21] Doug: they’re still in Maine. She says she’s in Pennsylvania. Oh, they’re already in Pennsylvania. Okay. [00:53:26] OG: Yeah. All right. Yeah. Yeah. I don’t know that I would be eating if I was from Maine. I don’t know that I’d be ordering lobster in Pennsylvania. That might be, that’s not [00:53:34] Doug: a great idea. But a Philly cheese steak, one of the good ones I hear there’s like two places. Interesting date [00:53:40] OG: night. Yeah, yeah, you could do that anyways. [00:53:43] Pay off your debt if you’re okay with the husband student loan debt ’cause you’ve got a plan or you think that the plan will work out, that’s great. Be okay with the fact that if it doesn’t work out the way that you hope you’ve got 10 years of this investment growing, that maybe that’s what it’s used for at that point, or the, you know, another house down payment in the future. [00:53:59] But, uh, yeah, pay off the loan. Build up the cash reserve, dump the money in, go to dinner, get a cheese steak. [00:54:05] Doug: I like that. Get a cheese steak. That’s some of the best advice we’ve had. Hey, uh, we gotta move because we’ve still got one more caller to get to today and that is Austin. Maybe the whole city. I don’t know. [00:54:19] Uh, who has a question about fire? Sounds like he’s got, he might’ve called the wrong number. Should have called 9 1 1, but he called us. [00:54:28] OG: I was thinking it’s about the temperature of Austin right now. It’s like how hot is it? It’s fire. You know, interestingly, I was having this discussion with my brother the other day. [00:54:38] I have a weather station in my backyard. And apparently the official temperature is taken in the shade at chest level. That’s the official, you know, it’s not like in the sun where you would be if you were outside. It’s like you have to go into the shade and then that’s the official temperature everywhere, or [00:54:59] Doug: just in places that are hotter than the surface of the sun. [00:55:02] OG: No, apparently that’s the official temperature is in the shade and that’s where the heat index temperature is taken. Also everywhere you can imagine being, yeah, that’s the official way to do it, huh? Because I guess maybe not everywhere has sun all the time. So you can always have shade, but you can always have sun. [00:55:18] Okay. I don’t know. But to me it seems like if you’re gonna measure the temperature, you go, Hey, how hot is it? And you go outside and wherever you happen to be when you go, how hot is it? That’s, that’s the temperature. You don’t have to be like, well, hold on, let me find a tree. Okay. Is this. Okay, we’re in shade now, you know? [00:55:34] ’cause when you are outside, sometimes you’re in the sun. I think you should anyways. Geez, my, my weather center is in the sun and the other day the heat index was 121. Nice. In the sun it was, I’m not sure the surface of the sun temperature, but, but it’s close to that. [00:55:53] Doug: It’s within an, yeah, an allowable variation. [00:55:57] So [00:55:57] OG: Austin, Dallas, similar climate. So he might be, uh, asking a weather question. [00:56:05] Caller: Hey, Joe and og, this is Austin from Minnesota. I keep telling my wife, I think eventually I’m gonna learn something from listening to you guys. So I’m calling in, in again to see if we can finally move the needle on some things. So here it goes. I think we’re coast fire and I know you guys love this subject, but we have $575,000 in investments. [00:56:26] I’m 30 years old. Uh, my wife’s 28. Those investments are about 250,000 tax deferred, 170 Roth, 150 taxable. Uh, we spend about $75,000 a year. Our income right now is about $240,000, but it’s potentially gonna change with potential, looking at going down to one income and things like that in the future with kids. [00:56:48] And I’m wondering, are we coast fire? Should we keep contributing? If so, how much are the assumptions around Coast Fire regarding rate of return, rate of withdrawal inflation, things like that. Like what is realistic? I don’t wanna be overly conservative or overly liberal. I just kind of want to get a baseline for where, where we’re at and where we’re understanding we save a lot and we’re trying to spend some money in other areas of life that might not go into investments. [00:57:11] Like we save over 30% in a good year. But I’m wondering if we can back off on that because, you know, I, if things get really comfortable, I, I could think about taking Doug to the Sizzler or something like that. I want to help you guys out for helping me out. Anyways, you all have a great day and uh, appreciate asking the question. [00:57:28] OG: And scene. You have reached the maximum amount of words we’ve heard quite enough from Austin. It’s time to be done. Oh, a Sizzler gift card that might be sent to the Big D at Stacking Benjamins dot com. Much appreciated. Coast fire. Golly. Oh, just like this. Uh, as I look at my phone, excessive heat warning for Texas. [00:57:52] Hey, who knew? Apparently, you know, 121 will do that. So, I guess Coast Fire, and I’m gonna mess up the terminology here, but I’m figuring it out. I guess that means that you’ve saved enough that you don’t have to save anymore and you can let your money just keep growing and then you’re good sometime in the future. [00:58:12] Doug: That’s how I would interpret it. Or at least back off on the, on your savings rate to be a little less aggressive. Yeah. Which I think is kind of the nature of his question, because I [00:58:23] OG: got fired at 500,000. I was like, whoa. Right. I don’t think so, bro. Right. But that’s not that he, yeah. Okay. So I think this is an important thing when it comes to planning, especially for great savers, great income earners. [00:58:36] As much as you can, as early as you can. Save as much as you can. It’s like you have all this opportunity and what you’re trying to do is build in flexibility for the future. I don’t know what Austin’s plan is in terms of retirement time and that sort of thing, but he said he’s spending what, 75,000 a year? [00:58:55] Is that to give or take what you heard? Yeah. I heard 70 5K. He’s 30 years old. Let’s say that he’s gonna work until he is like a normal 65-year-old or maybe a normal 60-year-old. That’s 30 years away, right? He’s been alive for 30 years. He is got another 30 to go, and then he is gonna retire and be fully retired for the 30 on the backend. [00:59:13] If we just add inflation for 30 years on $75,000, 70 5K in 30 years from now is $185,000 at 3% inflation. Well, I. Right now it’s like 3.5. Two years ago it was nine. You know, so maybe three is a conservative number. But if you’re using those rules of thumb, those back of the envelope calculations and saying, okay, cool. [00:59:38] How much do I need to have to be able to pull 180 5K out of my portfolio? You know, we talk about a 4% rule. [00:59:46] bit: Mm-Hmm. [00:59:46] OG: Or people talk about a 4% rule. I don’t like these rules of thumb, but it gives you a ballpark. If you need to pull 180 5K out, add inflation to it every year for the rest of your life, you need a portfolio of about four and a half million. [01:00:00] So the question is, does 500 K sitting in an account right now equal four and a half million in 30 years? [01:00:07] Doug: I don’t dunno. Let’s take a look without ever touching it in the ensuing years between now and then. [01:00:14] OG: Yeah. Without touching it. So what he would have to achieve over the entirety of that 30 years is roughly a seven and a half percent rate of return compounded for the next 30 years. [01:00:26] Seems pretty doable, right? You know, that’s in the ballpark. S and p does 10. Maybe you don’t average the s and p, you have some diversification. Maybe there’s some good years and then some nuts. Good years. You gotta factor in taxes on some of that brokerage account money. So seven and a half seems pretty reasonable, but at this point, it seems to me that you’re giving up all of your future flexibility by letting off the gas today. [01:00:51] ’cause everything has to work exactly perfectly for you to hit this number, right? If, if you average 7% for 30 years, instead now your portfolio is off by half a million dollars, you’re you’re short by 12% of your goal. Is that okay of a dispersion? What if you only average six and a half? What if your, uh, you need to have, have a, have a medical expense and you have to make a withdrawal out of your portfolio in five years from now? [01:01:19] You know what I mean? Like there’s, you’re not giving yourself a lot of margin of safety. There’s a great book. You can never find it. It’s outta print. Every place that has a copy will only let you look at it in the place that the copy exists. So it’s just Constitu constitution? What is it is? Yes. It’s called The Margin of Safety. [01:01:39] It’s a book by Seth Klarman. Wow. And I suspect you can probably get a reprint on Amazon these days. I’m sure there’s some company that’s plagiarized it and turned it into buy it on Amazon. But the original book and the whole concept, it’s around investing and investment modeling, but the idea is, is building yourself enough margin of safety that you can be wrong. [01:02:00] Tony Robbins wrote a financial book with some planning people some years ago, and it got some press and some love and some hate. But one of the things I was, I was listening to a talk the other day on a podcast and he was talking about this and he said that the traitors try to achieve a five to one risk to reward number, right? [01:02:19] Like if I’m gonna invest $5, or I’m gonna invest a dollar, I’m trying to get five, because on occasion I might get three. On occasion, I might get two. On occasion I might lose money. But if my goal is to get five, it gives me a lot of margin for those ones that don’t play out right? I can have one deal that’s successful and four other deals that aren’t. [01:02:39] I’m still making money. And so when I look at planning and I look at people who are in a position financially to, to save and invest, my concern about letting off the gas a little too early is you’re not giving yourself enough margin of safety. Like, imagine if for the next four years you just kept your foot on the gas, you kept on saving 30% of your, you know, $250,000 income. [01:03:04] Your money goes from 500 K to a million and now you’re 33 or 34. Where does that trajectory go? All of a sudden now you’re so far out past the breakers, it’s totally fine if there’s some fluctuation in the, you know, you’re good. You’ve given yourself enough safety there. So I think mathematically it’s probably fine, but my guess is life will happen sometime over the next 30 years and you’ll go, dang, I’m like hanging on by a thread now. [01:03:32] You know, I kinda wanna do something. This is a great benefit for everybody who’s like young listening about investing and starting and stuff. You know, how much should I do? And all this. The power of time is unbelievable. This guy’s got $500,000, which is good money but’s, not retirement money. It’s good. [01:03:53] If he literally didn’t save another dollar, if there’s, he’s gonna land somewhere in the three and a half to four and a half to $5 million range. Think about how crazy that is. All of his savings until 30, and by the time he is 60, he’s got three and a half, four and a half, four, you know, 5 million bucks. [01:04:08] That’s insane. At this point though, for him, I would really, I would really like to see just a little bit more margin there to give yourself some flexibility. We talk to a lot of people every week, and one of the common themes is this letting off the gas thing, right? Like, hey, two incomes, one spouse wants to stay home with the kids or take a part-time job. [01:04:28] Mm-hmm. You know, Mm-Hmm. Have a little bit more family time. Or, I want spend a little bit more. I want to enjoy some of the, some of the success that I’m having. You get the opportunity to do that, the more margin that you build. And so if you don’t have something committed to right now, if you’re like, well, you know, you know, maybe I should keep going because eventually you’ll get to that spot. [01:04:48] I talk to people all the time and my favorite thing to do is to sit down and figure out what that savings rate needs to be to kind of keep that margin, keep that safety net, if you will, and be able to do those other fun things. And I feel like, Austin, where you’re at right now, maybe you’re just a smidge, smidge too close to the edge, if that makes sense. [01:05:07] Maybe, maybe just a little bit more. Yeah, I don’t know. [01:05:12] Doug: So enjoy the fact that you, you may have at least gotten to a threshold now that you’re in great shape, but you’re not outta the woods. Keep pushing a little bit more, maybe back off a little bit on that savings rate of 30%, but not much. I think that’s what I hear you saying. [01:05:28] Keep at it. [01:05:29] OG: Yeah. Well, yeah, you, I mean, if you have some committed projects, right? If you’re like, well no, next year we wanna go to Italy with the family and, and instead of saving 60 grand, we’re gonna save 30 and spend 30 on this trip. Like, cool, do that. That’s fine. You’ve gotta committed thing. But if you’re just like trying to grasp at things. [01:05:47] Because you go, well, I think I’m good. Maybe I should try to find some other stuff to do. Why bother? What? Let, let, trust me, if you have kids, they’re gonna grow up and you’re gonna go, I need to be at home. Oh yeah. Or you’re gonna say, I really wanna do this trip with my family, or I want to, you know, help this organization that I really care about. [01:06:02] Like, something will slap you in the face. You don’t have to try to go find it. That’s We’ll be there. That’s right. You know, it’ll drive you, like drive [01:06:08] Doug: into your living room. [01:06:09] OG: I was drive right through the garage. It’ll show up right in your lap. I’m home. And that’s the gift that keeps on giving insurance premiums insurance. [01:06:18] But we’ve got clients who have had job offers that, you know, was move closer to family, but lower income. So it’s gonna change their savings rate. Go from two income to one, da, da, da. Can I take that job? Like that’s a thing that you wanna have the flexibility to, to go, oh wow, I can consider this. Most people wouldn’t say, oh, I have a $250,000 a year job. [01:06:38] Let me go entertain this a hundred thousand dollars job. That’s not a thing that most people consider doing, but you can do that if it provides some family utility and personal utility if you’ve got that reserve, that excess built up. So if you’ve got the flexibility right now to continue to save, I would just hammer, you will not be mad that all of a sudden you’re financially independent at 50. [01:07:01] You know what I mean? And your boss comes in and goes, Hey, we gotta let you go. You’re like, cool. See you. Bye. Yeah. Right? You want that level of flexibility or the cross country move, or the spouse that works part-time to be with the kids more, whatever. So give yourself the opportunity to have the flexibility in the future. [01:07:16] Doug: Yep. I like it. I like it. og. Normally this is the point of the show where we would head to the back porch and drink a couple of beers, but, uh, I feel like we’ve been on the back porch throughout this episode. Had a great time talking about what, fake IDs. Yes. Uh, weather stations, uh, all kinds of other stuff. [01:07:34] So, uh, I think we’re just gonna, gonna [01:07:35] OG: wrap. [01:07:36] Doug: I think it might be time to wrap. Like zip it, sip it, sip it, sip it. Dug an o. Oh, just like that. Can [01:07:44] OG: you do [01:07:44] Doug: more of [01:07:45] OG: that? No, you’re making fun of me. So let’s go in the way back machine [01:07:52] now that we’re at the way in the way back machine, and I understand you meant rap as in WRAP. Hey, Doug, what should we have taken away from today? [01:08:02] Doug: Well, og, here’s what we should do based on what we learned today. First, wondering if it’s worth it to establish a will and trust even if you don’t think you have a bank account like a Walton. [01:08:11] The answer is yes. It may cost you a little now, but consider it an insurance protecting your family from financial headaches later. Second, think you may have enough savings to be qualified to join the Coast Fire community. Well, first of all, I don’t think they’re gonna let you in the club until you talk about it while you’re doing CrossFit, but financially, if you’ve got half a mill in the bank and can let it sit there untouched for 30 years, yeah, maybe, but you’d be counting on everything working perfectly. [01:08:38] Maybe think twice before letting off the savings gas pedal. But the biggest to do. I gotta ask Joe’s mom if she’s gotten any important emails for me. I’ve been using her email address as a spam filter, thanks to all of our amazing stackers who called in with questions today. The only thing we like better is when you send us a 12 pack of your favorite regional IPA. [01:09:02] Keep those coming. This show is the property of SB podcasts, LLC, copyright 2024, and is created by Joe Saul-Sehy. Joe gets some help from a few of our neighborhood friends. You’ll find out about our awesome team at Stacking Benjamins dot com, along with the show notes and how you can find us on YouTube and all the usual social media spots. [01:09:25] Come say hello. Oh yeah, and before I go, not only should you not take advice from these 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, Duggan. We’ll see you next time back here at the Stacking Benjamin Show.