Q&A: When Your Crypto Bet Pays Off TOO Well

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28:39Welcome back. Let's hear from Allison. Hi, Paula and Joe. I'm a longtime listener of your show, and I'm calling today with a question about what to do with a large sum of cash that I have on hand. Over the past year, I have sold multiple rental properties, netting me about$1 million in cash. This is currently sitting in multiple high-yield savings accounts at around 4 % and dwindling interest rate. My initial plan was to use this money to purchase a new primary home outright. right. I'm in New England in a high cost of living area, and to give listeners a better picture, a moderate two to three bedroom home could easily run upwards of$800 ,000 to a million dollars in my desired area.

29:23Over the past year, the available home options have also been pretty scarce, and so I've not been too excited to dump that much money into a home that I'm not in love with. I do like the idea of being mortgage free, but another struggle in this area I'm recently realizing is that property taxes are also very high and would still leave me with a sizable expense each month, just adding to my hesitation to pull the trigger on the home purchase here. I'm currently renting a two-bedroom, one-bath apartment for around$3 ,700, which also feels too high for my comfort level long-term, but I'm okay doing this while I'm in decision limbo.

30:00Just to give a bit more financial background, I'm 48 and I currently have about $2.5 million in investments, with$2 million of that in a taxable account and about$500 ,000 in retirement accounts. I previously had a high-income job as a physician, but in January 2024, I left the traditional workforce due to burnout. I did start a small business, a cash-only practice that currently covers my living expenses, but not much more. So I'm not withdrawing from my investments yet, but this is likely going to be a short-term project for me with plans to fully retire in the next five years. During all of my uncertainty, I am watching my index investments grow quite nicely, but the$1 million in cash just sitting in high-yield savings accounts is just puttering along and does not feel optimized.

30:49I know high-yield savings rates are likely going to continue to fall in the coming months and years, so I'm looking at a better way to deploy this cash. It's important to me the money stays fairly liquid as hopefully I will make a decision on a long-term home purchase at some point, and I do not want to worry about getting a mortgage when I'm not employed. My question is, what would you do with this million dollars in cash? Is it too risky for me to put in a two or four fund strategy for the time frame that I continue to be a home renter rather than owner? I have tried real estate investing, but it just felt like not the right path for me, hence the liquidation of my rental properties recently.

31:31Thank you for your time and consideration. I look forward to hearing your advice on the show. Allison, thank you for the question. You know, the first thing that I want to address, Allison lives in a very high cost of living area. And as she said, homes are between$800 ,000 to a million for the type of home that she wants in the type of location that she wants. And she mentioned that the rent that she's currently paying is$3 ,700 a month, approximately. And that is a little outside of her comfort level. And I can certainly sympathize with the notion that we've all been fed the idea that quote unquote renting is throwing money away.

32:10And as a result, people often really dislike spending a lot of money on rent because it feels like quote unquote throwing money away. And I want to address this directly, both for you, Alison, as well as for everybody who's listening to this because, and Allison, I just want to be clear. I'm not putting the throwing money away words in your mouth, but when you said that the 3 ,700 a month made you uncomfortable, it sounded to me like that wasn't a cashflow issue or a budgeting issue, but rather an issue related to, wow, I'm spending a lot on rent. I'd really like to purchase a home. Oh, I didn't have that feeling at all.

32:53Really? Yeah. I had the feeling that it was a cashflow issue that she's like, I don't want that out of pocket expense every single month. Interesting. Okay. Yeah. But to your point, that's a good question, right? What type of issue is this? Right. Well, actually to your point, Joe, she did make the point that if she were to buy a property in cash, property taxes are very high and that would be a high monthly payment. So, you know, I actually retract my statement, maybe from Alison, it might've been a cashflow issue, but I still want to address it for the sake of the broader audience, because I've heard from many people this notion that if I'm spending a lot of money on rent, I'd like to just go ahead and buy a personal residence as quickly as possible so that that way more of my monthly payment can start going towards principal rather than just evaporate as rent.

33:43As Alison pointed out, property taxes are a big expense and they never go away, even when the home is purchased free and clear. Insurance costs, maintenance, repairs, the opportunity cost of not investing that money elsewhere. Allison has two and a half million dollars in other investments. I assume that that money is invested well. And there's an opportunity cost that comes with not having that million dollars that she's holding onto that would be used for a home. This is going to be exactly where I'm going. Right. Is calculating what that opportunity cost is while she waits. What's the cost of waiting?

34:23Right. Oh, okay. So I'm going to talk about that opportunity cost, but in a different context, which is the opportunity cost of tying that money up in a home. If Alison purchases a home, pays the opportunity cost of having that million tied up in the home, pays the ongoing costs of property taxes, of insurance, of maintenance, of CapEx, of all of those things, then is that actually better than renting? That is the question that I want to address here. And the way that you would calculate that, is it actually better to own your personal residence rather than to rent, is by calculating something that's called the price to rent ratio.

35:02And the formula is very, very simple. It is the price of the home divided by the annual rent cost if you were to rent something comparable. So Allison, I'm going to just to walk through the math of this, I'm going to make the assumption, which may or may not be true, that the$3 ,700 a month that you are currently paying for rent is for the type of home that's comparable to the$800 ,000 to$1 million price point of home that you would buy. Now, that may or may not be the case, right? It might be that for$3 ,700 a month, you're renting something that's just not comparable in either direction. You're renting something that's far more luxurious or you're renting something that's far more meager.

35:48I don't know. That's only for you to say. But let's just assume that she is renting something currently that is comparable to the type of home that she would buy. Now,$3 ,700 a month is$44 ,400 per year. For the sake of easy math, let's just round. We'll eliminate the 400. We'll round that down to$44 ,000 per year, 44 ,000 annually that she is spending on rent. $1 million divided by 44 ,000 is 22. Now,$800 ,000 divided by 44 ,000 is 18. There are a few decimals after that, but rounded to the nearest whole number. Now, why that matters and why there is a big distinction between 18 as one answer versus 22 as the other answer is because if your price to rent ratio is 20 or greater, renting is a much better idea.

36:46If your price to rent ratio is 15 or less, buying is a much better idea. And if your price to rent ratio is between 15 to 20, if it's 16 through 19, you're in the gray zone. So if the type of house that Allison wants is$800 ,000 and comparable rent for a place like that would be 3 ,700 or 44 ,000 a year, at a price point of 800 ,000, she's right there in the gray zone where she could rent or buy, depending on how long she wants to stay in the area, the argument goes either way. But if we're talking about a million dollars for that property and she could comparably rent it for$3 ,700 a month, she's actually better off staying a renter.

37:31It's great when you can apply some math to these decisions anyway, because it's such an emotional time. You can hear it in her voice, you know, that I have left this career because of burnout, going to retire in the next five years. There's a lot of emotional stuff going on there, I'm fairly certain. So to be able to use some math, I think it's really important because often it's the emotional decision that ends up being the one that you regret later. I can see the spreadsheet in my head. We know when you want to retire. We know how much money you're applying to that goal. We know how cashflow is going to change except for this one thing.

38:11So with all of that, my first question is, how is the rest of the plan doing? Because I think that will also affect what you decide to do, whether you decide to buy or keep renting or retire in five years. Like, what does that give you? I don't know what that gives me, but I know that that is data I want as I'm making this decision. Because then I know how to deploy the million dollars. I know more. I may decide that I want to put less money toward the house because more money is needed toward my long-term ability to beat inflation over time. And I can't have it in a house that's going to appreciate pretty much at a rate of inflation and it's a primary residence.

38:54So once I buy it, I'm not going to want to count it. I don't want to have to move because I messed up and I bought too much house. That will affect what I do with a million dollars. And then second, almost like we said with Satoshi, once we know that the goals are okay and she's fine with the two and a half million, renting as long as she wants, she can afford then to sit with that money in a high yield savings account and not worry about it. She can worry more about making sure that she's out looking for that house and a limited supply environment, like a lot of communities, not just where she is.

39:31You know, Paula, it's a tight market. Very tight market. When that perfect house comes around, that she can jump on it. But the cool thing is, if the goals are taken care of doing what she's doing now, she can also wait, right? One of my favorite Warren Buffett phrases is the great thing about investing is there's no such thing as a called strike, meaning that's a baseball reference. People don't know baseball. If a ball comes right down the middle and you don't swing, the umpire will say strike one, you get three strikes. So there is a called strike in baseball to move the game along. Imagine if the dude just never swings.

40:06But in this case, if she knows that she's okay with it in a high yield savings account with deteriorating interest rates, Alison, I totally agree with you on all that. But imagine that you can afford to wait and it's okay to wait. It's fine. That's a powerful place to be. Right. The need to have a liquid lump sum eliminates what would in other instances be options for how to manage cash in a manner where you want to keep it as cash or cash equivalents, but you want to manage against losing it to inflation. You know, laddered CDs, for example, that's one of many ways in which people manage cash or cash equivalents, but also eke a little bit of additional yield out of it.

40:53But that wouldn't be appropriate here because she needs It's a lump sum. Grab it right. She's going to need to maybe essentially grab it all at once. Yeah, the whole freaking amount. And it might be on a dime. Like particularly with real estate, sometimes you wake up one morning, you look at your phone, you see a text message. And it's, hey, this house came up. Let's make a move right now. And by the time you go to sleep that night, you're under contract. Real estate is a game of wait, wait, wait, wait, wait, wait. Yeah, exactly. Got to go now. Got to go now, no, no, no, no, no. Exactly. A lot of waiting and then hyper fast action.

41:34You know, and so for that reason, if she wants to have pre-approval, she wants to already have that done. She probably already does. But make sure with your lender that you have pre-approval and that that's updated as often as the ask the lender how often you're going to need to update that pre-approval that's still good so she can pull the trigger right now without having to call a bank or anything. Just, yep, I'm going. I've got it. Second thing is she also wants to figure out if there were to be financing, what would be that number that fits the budget? Which is why I go back to the other goals, right?

42:06How much money is she going to need every month to meet her obligations, including this potentially a mortgage or not a mortgage? Right. So if she does end up with a mortgage, then how much would that be? What's that maximum? I'm sure she's already done all those calculations, even though she prefer to use cash, but I would be locked in. These are my numbers. I know exactly where I am with all of these things. So to your point, so that I can go today, which brings up my final answer to her last question, four fund strategy or two fund strategy. Oh, God, no. Oh, God, no. Not in a million years.

42:45Yeah, I was thinking that too. Yes. Now we're gambling. Exactly. The only case in which I think it would be acceptable to put money that you might need for the short term into equities would be if you have a greater multiple of that money than what you actually need. So, for example, and I've heard some people take this approach with their emergency fund or their cash reserves. They'll say, you know what? What I need is to build cash reserves of$10 ,000. What I'm actually going to do is build reserves of$20 ,000. And now I can invest it in a total stock market index fund. And even if it drops by half, I'll still have it.

43:34I'm okay with withdrawing money. Exactly. Right. I'll still have the base that I need. Wow. I just wouldn't do that. I just wouldn't do that. I think for the average person, I would not recommend that for behavioral reasons, but mathematically it works. Sure. Yeah. Because the chance that you're actually going to use that money is pretty slim. I mean, when somebody finally gets the discipline to actually have an emergency fund, they just don't touch it often. And so in a case like that, where you've got a big buffer or a margin that's in your checking account so that it can accommodate the natural volatility of your spending, including those car repairs, those large deductibles, those things that come up.

44:17And in addition to that, you also have some cash reserves set aside, some additional cash reserves set aside. Mathematically, it makes sense to oversafe for that so that then you can give it equity exposure. behaviorally, I don't think is a strategy that's suited for beginners. And in any event, it's tangential to the conversation that we're actually having right now. Yeah. I mean, I'm thinking of other downsides to this, which is my meat and potatoes analogy. I don't want the meat touching the potatoes because that's gross. I would probably then keep my emergency fund in the same account as all my other long-term non-IRA money.

44:54And the the ability then to go, well, I'm just going to this one time go over that number and go into my long-term money, but I'll replace that later on with, you know, whatever the head game is you're going to play with yourself that day. I don't want to do that. So I'm even thinking, I'm like, well, if I did that, I'd need a separate account, probably with a completely different institution. So I'm thinking of Schwab is my long-term money and M1 finance or Vanguard or whoever, or fidelity, it doesn't matter, is going to be my reserve fund. And then I think I just added another layer of complexity to my plan.

45:30In any event, that's a bit of a side tangent off of addressing. What are you guys talking about? Yeah, addressing Allison's question. My point is that those kinds of more sophisticated games for how do I manage a large sum of money that I'm intending to keep in cash don't apply here because of the fact that Allison is going to need this money in a relatively short timeframe. And also, assuming that she buys this home, she's going to A, need the money in a relatively short timeframe and B, she's going to need immediate and instant liquidity. Those more sophisticated games, they just don't apply in this case.

46:08She's got to keep this in cash. So the answer I want to know, Alison, is what's the cost of waiting? What is the cost? Can she afford to wait even if interest rates continue to deteriorate? If she can, then don't worry about it. I want to say one other thing, Allison, and that is I want to applaud you for knowing yourself well enough to understand that rental property investing or real estate investing is not for you. I think you and I talked about this on a recent episode in which somebody asked about... It was almost FOMO. Like, I think I should get into real estate, wasn't it? Oh, no. My answer was about FOMO.

46:45His question was about syndication. Oh, that's right. Yes. So his question was about syndication. And in my answer, what I said was there is no quote unquote best, right? It isn't that syndication is better or worse than flipping houses, which is better or worse than long-term buy and hold rentals, which is better or worse than those are like strategies. But then there's also, So, you know, verticals like offices or warehouses or commercial units or multifamily residential, none of them are better or worse than any other. They all have different pros and cons. They all have different risk profiles.

47:23They all have different attributes. and if you decide that you're excited about one of them, it's natural to go down that rabbit hole and do a bunch of reading and do a bunch of due diligence and get super into it. And if that's the case, then you're actually excited about it. You're doing it for the right reasons. But by contrast, if you, as Alison did, you try it and you're like, I just don't enjoy this. you know, this is just not for me. It is perfectly, not just fine, but wonderful to remove yourself from this asset class that you're just not that into to break up with it because it's not quote unquote better or worse than some alternative asset class that has a similar long-term return profile.

48:18Is that, I agree with you on real estate. What's funny is, in my head, is we never talked about the inverse. Can you really do that with the stock market? Can you really say, I'm not going to use the stock market to reach my long-term goal? You can certainly avoid individual stocks, but if you live in the United States or if you plan to retire in the United States, you need some equity exposure. I don't think you can avoid the stock market to some degree and real estate at the same time. You certainly could be all in on real estate. I would question that strategy because of the illiquidity, but you could just be all in on real estate and avoid stocks.

48:56But I don't think you could avoid real estate and stocks. I think you got to kind of pick what percentage of each I'm going to use, but where I would caution people on eliminating stocks completely and going 100 % real estate, I could see people doing it the exact opposite. But that is interesting to me. I suppose, this is just as a purely academic thought exercise, I suppose you could do it. I would not recommend this, but it would be theoretically possible to do it through ownership of private businesses. Individual businesses. Yeah. You could do it that way. Yeah. I've mentioned standard deviation.

49:32Yeah. Your risk goes way up then. Exactly. Your standard deviation is like, yeah. Open a restaurant. Good luck. It is theoretically possible. You could do it that way. You could do it purely through private business ownership. You could. With zero. You definitely want to have an exit strategy though. Which is what most small business owners lack. Right. Yeah. Completely lack. I can hear Allison's worry, but I really just get the feeling she's in a pretty good place. I feel that way as well. That was why when I first heard her question, I didn't initially interpret cashflow worries. Yeah. It was only your prompting, Joe, and then upon further reflection that I could reinterpret her question as, oh, maybe she does have a few cash flow concerns.

50:17And that's why I think that for Allison, if I'm interpreting that correctly, historically, back when I was a planner, that was what helped my worrier clients. Math. Cold, hard math. Just these are the numbers. because I think for a lot of people, when you see the numbers, especially since, right, physician deals with science a lot, I think for someone like Allison, running through those exercises would give her a lot less worry about whether she can afford to keep the money in a money market while she waits on this thing that she clearly wants. But you're right, Joe. It's powerful to be able to say, you know what, my money might lose a little bit of purchasing power and that's okay because it's worth the goal.

51:03What a flex. Right? If she decides that that goal is worthwhile enough. Yeah. All right. Well, thank you, Alison, for the question. Next, we'll hear from Jocelyn, who has a similar question. Jocelyn also has quite a bit of money,$250 ,000, that she wants to use as a down payment on a home in three years. But what should she do with it in the meantime? We're going to answer that next.

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53:09Welcome back. Let's hear from Jocelyn. Hi, Paula. I wanted to call to ask you what you would do with money that you want to use in three years. So normally I would put it all in a high yield savings account, but there's a couple reasons why I'm thinking that putting the whole thing in a high yield savings account isn't the right move. So I have about$250 ,000 saved up that I want to put as a down payment towards an upgraded house. Right now, we own a house that is worth about$700 ,000. And because we locked in a low COVID interest rate, I'd love to hold on to this house as a rental, but I don't necessarily need to do that if it's not the right financial move three years from now.

54:14I want to buy a house that's about 1.2 million dollars but I don't necessarily need to put 20 percent down on it I would ideally like to put 20 percent down on it but if it wasn't the right move at the time, I'd be open to putting down less on the upgraded house. So with the potential that I could use the about$200 ,000 in equity that we have in our house, maybe$250 ,000 in equity that we have in our current house and that we also could put down less if needed, I'm thinking that I should put$100 ,000 of this$250 ,000 in a high yield savings account because that's what I need to put down and then put the rest in stocks in a barbell allocation similar to your approach.

55:25Then if the market was down, I wouldn't necessarily need to draw down on the stock portion, but it would help me to keep up with inflation, especially if there were a tariff war in the next three years. Wondering if that makes sense or if I'm overthinking this And it really should all be very conservatively put into a high yield savings account, given that my goal is so close out. Thanks for all that you do. It's funny how similar this question is, Paula, but how different it is. Exactly. Should we elaborate on that for a moment? At a 30 ,000 foot view level, what are the core differences between Jocelyn's question and Allison's question?

56:15Because I can understand that for many listeners, they're thinking, wait, isn't this kind of the same scenario? We'll do this draft style. I'll do one, then you give one. How about that? Oh, okay. Okay. My first one is that because of impending retirement and the fact that cash flow-wise, Allison wants that number to be as small as possible. Jocelyn is comfortable with the flexibility of that number maybe being bigger. I would question that. Like, how big can it be? How much money can that mortgage be if she doesn't have enough money? What are the parameters? I would ask that first. But I think just the fact that this feels much more flexible to me means we're going to answer this a lot differently.

56:58So Jocelyn's question also more flexible to me, but for a different reason, which is that she talked about wanting to buy this home in three years. Yeah. Allison's desire to make a purchase is much more immediate. Could be now. Right. Exactly. Also might be in three years, but it needs to be now. Right. So Jocelyn, she wants to buy this home in three years. It feels like there's a little bit of flexibility to that timeline as well. Yeah, she might be able to not use any of this money. I'd be curious to just explore what these numbers are. Like, what's the difference? If you don't use the money, if you use the money, what's the long-term impact?

57:34Again, much like the place where they're the same, I would go through the same thing, Jocelyn, that we told Allison. How are your goals otherwise? Because when you have this goal, it isn't in a vacuum. What you use this money for could impact another goal differently than it will on your house. So what's the impact on the house? If you don't use it for the house and use it towards some other goal, how will it impact that goal? I want to know those answers first. Hmm. I liked Jocelyn's suggestion, you know, where she said, I'm going to hold$100 ,000 back in a high yield savings account. We'll keep that safe.

58:13Keep it secure. Now I've got the minimum down payment locked down. I've got some security around that. And let's play with the other$150 ,000. Let's see where this goes. I still don't think I don't go to Satoshi's Bitcoin. I don't do that. I also don't do the two fund or the four fund. But this has my go-to written all over it, which is an incredibly low risk investment that is volatile, but over a slightly longer period of time - Are you going to say Ginny Mays? Will do better? I think this is a good thing to look into Ginny Mays. I knew you were going to say Ginny Mays. I think it truly is. There's a little bit of risk there, but not much.

58:53And you will, over those longer periods of time, more flexible periods of time, get more for it. Plus, this is a case where, differently than what I said before, because I know that this money could be used but doesn't have to be used. Right. If it's up, she can decide then to apply it. if it's not up, if the Ginnie Mae's down a little bit, she can afford to not put it toward the house now and wait for it to come up later and maybe have an early mortgage payoff strategy with interest rates. Let's say interest rates continue to go down. If they do, then she could refinance later on and add this to the new.

59:32She's got lots of flexibility with that money. So because of the flexible term, the fact that she doesn't need it, but she wants it toward this, that's this Ginnie Mae all over to me. Wow. Okay. So let me actually push back on that a little bit. I don't bring it. Given the fact that Jocelyn has so much flexibility, right? Like I think one of the distinguishing factors between her question and Alison's question is there's a lot more flexibility in Jocelyn's plan and in the uses, both the timeline and the uses of the money. Given that level of flexibility, why wouldn't she invest that entire$150 ,000 in equities, right?

1:00:10As long as she's keeping that minimum down payment secure in a high-yield savings account, then why not put the entire$150 ,000 in equities? That's why I didn't leave with that. I didn't leave with that because my first answer was, how are the other goals doing? Because if the other goals aren't doing well, then I'll take the risk of equities. I'll put it out there. but the other goals are fine. Then I start thinking about, okay, the happiest retirees have paid off mortgages and I know the other goals are okay. Well, then now I really am going to focus on the mortgage. I'm going to focus on making this not a cashflow suck for a long time.

1:00:48So if I can get away with it, I would then go with a Ginnie Mae. So you come from the school of thought of don't take on any more risk than is necessary. Yeah. Yeah. That's the difference between us. You're from the school of thought of don't take on more risk than is necessary. And I'm from the school of, well, it sounds reductive to say it like this, but I'm a little bit more from the school of thought of, okay, let's see how big can we grow this? Well, it's funny because I said this the last time you and I were together, Paula, I mean, not physically together like today, but the last time you and I were chatting that when When it comes to risk, I like the broader argument.

1:01:30Like I'm going to take risk and other facets of my life. I'm going to do things on the Stacking Benjamin show and push the envelope. I'm going to try out new things. I'm going to see if we can help somebody that we hadn't reached before by doing something crazy. So risk-wise there, I'm not, how much risk do I need to take? Let's go for it. Because maybe we find somebody and help them become financial alert that we couldn't find before. But with my investments, then I take that money and I go, why do I need to do that? I don't need to do that. If I know the statistics on happiest retirees and the happiest retirees have two big things.

1:02:08Number one is they have a lot of things that are not hobbies, but we'll call them super hobbies. So these passions that they do, usually it's five or six, right? Over and above their work. And then the second thing off is they know the math around debt. They understand leverage and they still, despite that math, pay off loans early, which I think is really powerful when you think about that. These are not dumb people when you're a happy retiree. I think these are people that successfully were able to save enough, do enough, get where they wanted to go. And they go anti-math. Why would you do that?

1:02:41So then I think if the end game here is happiness, not more chips, then I'm playing for, okay, now that money's free to pay down the mortgage. And if it is free, then I'm going to bet a little bit on a Ginnie Mae. I'm not going to bet big time on equities. I'm going to take the opposite argument. Well, you're wrong again. Well, I'm going to bet big on equities with that$150 ,000. And I want to be clear, of the$250 ,000 that she has, this hinges on the assumption that that$100 ,000 is kept in a high right? I'm going to expose that 150 ,000, the other 150 to a high level of equity risk, because I know that three years from now, if the market's down, cool, leave it, let it stay invested.

1:03:31But 10 years from now, statistically speaking, that's probably going to be up. And at that point, she can pull that money out. Very high probability, by the way, not a small probability, very high probability. There's a very high probability 10 years from now that it's going to be up and she can at that point or at any point prior to then pull that money out and make a giant lump sum payment towards the home. So I don't see this as being in conflict with a desire to pay off that home in cash. I think that's going to give you so much mind share. I think the mind share suck of that strategy over time.

1:04:03You're going to continually reevaluate it. You're going to continually rethink about it. Rethink about it? Rethink about it. Is it be rethink about it? It's rethink about it. Yeah, but I like that as a synonym for re-evaluate it. You're going to rethink about it. Yeah. So, yeah, that's why I wouldn't do that. I also have found that generally the simplest plan is the best plan because I want to save my mind share for other things as well. So, but that's interesting. Yeah. And, you know, it's fine. You're wrong. I would go to the Bellagio. That's where I would go. So, yeah, Jocelyn, those are your two answers.

1:04:40either the more conservative approach, which is what Joe is championing. I wouldn't call it conservative. I just call it right, Jocelyn. Yeah. So I guess, would it be accurate, Joe, do you think to characterize your approach as a little bit more playing defense and mine is a little bit more playing offense? Absolutely. Yeah. Yes. So Jocelyn decide, do you want to play defense or do you want to play offense? Can I tell you why I think we have the difference there? Yeah. I mean, A, part of it is going to be our personalities, our risk tolerance and who we are. I think the other part is I have been in the room with a lot of different families at the same time.

1:05:15Not literally us all in the room at the same time, but I'm working with 150 families at the same time. As a financial advisor. I have seen things go wrong on a consistent basis. Literally once a week, something's going wrong for one of my clients. And so seeing, I think that law of large numbers has turned me more defensive than I used to be. And I noticed that. I noticed that in online communities, financial communities, mine is always like, wow, you want to really do that? I can tell you a story. And I know that the probability is it won't happen to you, but I do know that this downside will happen to somebody and you'll go, man, I regret that.

1:05:54So that I think is the difference. And by the way, you know, I'm teasing about right and wrong, but it doesn't make it right. I think it just shows you why I'm going to be more, let's pump the brakes. There are very, very good reasons to take a defensive strategy. I have selectively taken defensive strategies in certain components of my financial life and selectively taken very aggressive strategies in other components. Yeah. I'm very defensive in my financial plan with my assets, which is why they have not grown as quickly as maybe they could have if I would have taken bigger bets, a.k.a. my brother-in-law.

1:06:33Right? Right. But with my career, I've taken big bets. I quit a job that was just about to go from paying well to paying really, really, really well at the age when people don't do that. You were 40 at the time. I was 40. I was getting into the cha-ching years and didn't want to do that. So I've been much more risk friendly with career moves, with moving my family halfway across the country, with deciding to live anywhere during the pandemic, as you know, with becoming a digital nomad and being a guinea pig. So it's really interesting. Right. And that is, it goes to, if you're going to dial up the risk in one arena of your life, you counterbalance that by dialing down the risk in some other arena.

1:07:18Which is funny because we've talked about my brother-in-law a few times today. He's the opposite. I would say very conservative with his home life, with the decisions he makes there. His career and his home. Yeah, not right or wrong. But I think because he's so conservative and he knows, hey, my cash flow is going to be, you know, I'm going to spend very little money. I'm going to be very frugal. He's naturally very frugal. He naturally is a planner. And I really love that about him. But that also allows him to flip what I'm doing. And he's very aggressive on the other side. Right. How about you?

1:07:54Well, so I... You're just aggressive. No, you know, I made the decision to pay off all of my rental properties. I have seven rental units. They are all that's defensive. Yeah, they are all paid free and clear. And they've been paid free and clear since my mid 30s. And they were low interest rate loans, right? I bought them during that low interest rate decade. The reason that I did that, you know, and everyone's like, why the interest rate is low and you're in your 30s. Why would you do that? And the reality is, if I were a tenured professor, I would have made the decision to hang on to those mortgages.

1:08:34If I were a tenured professor, I would still have every single one of those mortgages. Very similar. Right? But I'm not a tenured professor. So you need the certainty. Right. I'm an entrepreneur. I am a business owner. I have a lot of volatility in my day-to-day job, in my career. And as a result, I'm dialing up the risk in the work that I do and in the impact that I bring to the world. And in order to be able to do that, I have to dial down the risk in other arenas. That's why I'm fascinated a lot lately, as you know more than most people. This is what's on my mind right now. Expanding risk and thinking about risk in a much broader context than just my funds.

1:09:17How risky are my funds? Right. Where should I be taking risk in my life? I think it's a much better question. Yeah, exactly. So Jocelyn, those are two answers for you. Joe has the defensive answer. Ginny May. It's the best one. I have the more aggressive answer. Do you want to play defense? Do you want to play offense? That's a question that you need to ask yourself. And that question will be contextualized in what else is going on in your life. Ticker symbol for Ginny May is very simple. G-N-M-A. Yeah. If you're going to use the ETF, it's just G-N-M-A. Yeah. Super simple. Yeah. So easy to remember.

1:09:51G-N-M-A. It has a Good Morning America feel to it. It totally does. It really does, yeah. It's like they could do GMA, like that whole thing, and pebble like a little carrot. Yeah, exactly. Well, Joe, we have done it again. I can't believe it. And we did it live. In person. Yes. For those of you, if you're listening to the audio version of this, go to our YouTube channel, youtube.com slash afford anything, so you can see the video version of this, because it's fun. It's fun to be here in the same room. It's fantastic. Like Joe, like actually seeing your face, looking at your, it's different virtually.

1:10:25It's so. So different. Yeah, exactly. There's life behind those eyes. There's character. We got our friend Jay back here. Yeah. Big thanks to Jay. Exactly. Mike was here earlier setting up this beautiful studio. It's a great place. Right. Exactly. Having the whole team here. So yes, please, for those of you who are listening to the audio version, head over to YouTube. Check us out there. While you're there, please hit the subscribe button and hit the notification bell so that you - I think we can say smash. Smash. Smash that button. Smash the button. Smash the button. Smash all the YouTube buttons.

1:10:57Joe, where can people find you if they would like to hear more of you? Three days a week, the Stacking Benjamins Show. We are kicking off 2025 with a cool episode that, Paula, you already know about. We're abandoning the usual variety show format of Stacking Benjamins because I flew out to Las Vegas, interviewed a gentleman named Alex Harmozi. Alex Harmozy and I chatted about how to make a hundred million dollars a year and man it was such a dense interview we're bailing on everything no trivia from Doug no nothing we are taking that interview we're playing it and we're chopping it up and OG and I are walking through going okay here's what he's really saying here and here's how you think about this so go back in your feed to January 1st because this was a powerful interview and a fantastic discussion with a guy like OG who knows how to parse the type of stuff that, because Alex Harmozy says things almost like Cody Sanchez, very flippantly.

1:11:52We'll go, oh, you just do this. Oh, you just do this. And we're like, okay, stop. Our stackers, our forwarders, they don't really know how to do that. So we're going to get into the nuts and bolts of how to do that. Maybe by the end of the year, you won't make$100 million, but we'll certainly, I can guarantee this, if you take a third of what Alex Harmozi talks about, you will make more money in 2025. That's amazing. I'm very, very excited to listen to that episode. Andy's got some guns. Yeah, yeah. He's jacked. Yeah. I wanted to tell him, you know how we told Allison it's okay to leave that money, maybe, probably, in a high yield savings account for a while.

1:12:26I wanted to tell Alex, it's okay to miss the gym one day. It's going to be all right. Well, thank you, Joe. On that note. On that note. On that note. And thank you to all of you who are listening. If you enjoyed today's episode, please do three things. First and foremost, subscribe to our newsletter, affordanything.com slash newsletter. It is revived. It is active. And you will get insight there that you don't find anywhere else. So for absolutely fresh, unique insight delivered directly to your inbox, go to affordanything.com slash newsletter. Number two, make sure that you're following us on your favorite podcast playing app.

1:13:11And while you're there, please leave us a review. Talk about what you enjoy about this show. That is so incredibly helpful. We love hearing from you. And number three, most importantly, share this with your friends, your family, your neighbors, your colleagues, your dog walker, your babysitter, your brother-in-law. Share this. Share this with the people in your life. Thank you so much for tuning in. I'm Paula Pant. I'm Joe Solcihai. We'll meet you in the next episode.