Risk Parity Radio

Episode 419: Transitioning To Retirement Portfolios, Fiddling With Limited 401k Funds And Applying The Socratic Method To Personal Finance

• Frank Vasquez • Season 5 • Episode 419

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In this episode we answer emails from Chris, Will and Neelix.  We discuss the basics of transitioning from accumulation to decumulation, choosing funds for accumulation from a limited selection, more transitioning questions from an alien, my lawyerly approach to personal finance and why the public personal finance landscape is often not very helpful and leaves much to be desired.

Frank addresses listener questions about transitioning from accumulation to retirement portfolios, focusing on timing and asset allocation decisions for different life stages. The episode explores foundational concepts about when to shift to a less aggressive portfolio and how to work around investment account limitations.

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Merriman ETF Recommendations:  Best-in-Class ETF Recommendations | Merriman Financial Education Foundationj

Breathless Unedited AI-Bot Summary:

Ready to make the leap from aggressive growth investing to a more balanced retirement portfolio? Join Frank Vasquez as he breaks down one of investing's most critical transitions through thoughtful analysis of listener questions spanning different life stages and portfolio challenges.

We dive deep into the essential question of timing: when should you transition from accumulation to decumulation? Unlike conventional wisdom that focuses on market conditions, Frank reveals why your personal financial readiness should be the primary consideration. Learn why calculating your Financial Independence number is crucial and why your current spending patterns offer surprisingly reliable guidance for retirement planning.

For younger investors struggling with 401(k) limitations, Frank offers practical strategies to achieve optimal asset allocation across multiple account types. His clear breakdown of why certain asset classes (looking at you, small-cap growth) deserve caution while others merit emphasis provides actionable guidance regardless of your investment timeline.

What sets this episode apart is Frank's candid assessment of the personal finance media landscape. Drawing from his background cross-examining financial experts, he categorizes financial content into entertainment, sales, and education - explaining why most advice falls short for those who actually plan to spend money in retirement. His Bruce Lee-inspired approach to financial wisdom - "take what is useful, discard what is useless, and add something uniquely your own" - offers a refreshing framework for cutting through the noise.

Whether you're decades from retirement or counting down the years, you'll gain valuable perspective on building a portfolio strategy that serves your actual spending goals rather than following the crowd. Share your own portfolio questions at frank@riskparityradio.com!

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Voices:

A foolish consistency, is the hobgoblin of little minds, adored by little statesmen and philosophers and divines.

Voices:

If a man does not keep pace with his companions, perhaps it is because he hears a different drummer, a different drummer.

Mostly Mary:

And now, coming to you from dead center on your dial, welcome to Risk Parity Radio, where we explore alternatives and asset allocations for the do-it-yourself investor Broadcasting to you now from the comfort of his easy chair. Here is your host, frank Vasquez.

Mostly Uncle Frank:

Thank you, Mary, and welcome to Risk Parity Radio. If you are new here and wonder what we are talking about, you may wish to go back and listen to some of the foundational episodes for this program.

Voices:

Yeah, baby, yeah.

Mostly Uncle Frank:

And the basic foundational episodes are episodes 1, 3, 5, 7, and 9. Some of our listeners, including Karen and Chris, have identified additional episodes that you may consider foundational, and those are episodes 12, 14, 16, 19, 21, 56, 82, and 184. Whoa, and you probably should check those out too, because we have the finest podcast audience available.

Mostly Mary:

Top drawer, really top drawer.

Mostly Uncle Frank:

Along with a host named after a hot dog.

Voices:

Lighten up Francis.

Mostly Uncle Frank:

But now onward to episode 419. Today, on Risk Parody Radio, we're just going to get back to doing what we do best here, which is answer your emails.

Voices:

Yes.

Mostly Uncle Frank:

And so without further ado.

Voices:

Here I go once again with the email.

Mostly Uncle Frank:

And First off, first off, an email from Chris. What? And Chris writes?

Mostly Mary:

Hey Frank, I recently discovered your podcast. I am a do-it-yourselfer, but without much experience. I've been searching for alternative portfolios to smooth out the ups and downs in retirement. Now, seven years away, attack, speed, attack speed.

Mostly Mary:

Glad I found your work. It has helped tremendously. I'm so excited. I like the golden butterfly. Would you suggest a gradual shift toward it over a few years leading up to retirement, or go cold turkey and switch? If so, at what point in time? Right now, my wife and I hold approximately 85% total stock market and 15% international stock. I appreciate all you do. Thank you, chris.

Voices:

And then he followed it up with yet another. What? Well, welcome to the pleasure dome On our way home, going home where love is warm, long way from home. Welcome to the pleasure dome.

Mostly Uncle Frank:

What you were talking about is generally what we call transitioning.

Voices:

And that's the way. Uh-huh, uh-huh, I like it.

Mostly Uncle Frank:

And we do talk about this very frequently on this podcast. But since you're new here, you wouldn't know that.

Voices:

But you know something, you're all right.

Mostly Uncle Frank:

So in the past year, let me give you these podcasts where we've talked about this and then I will answer your question directly. We've talked about transitioning in episodes 329, 346, 360, 361, 362, 380, 389, and 417. So you may want to go back and listen to those, and that's just in the past year. If you'd like to search the podcast, you can do that from the podcast website at wwwriskparametercom. But probably the easier way to do that is to actually look at the RSS feed, where you'll see all of the podcasts and all of the show notes on one big page. Don't try to open that on your phone. Open it up in a browser in your computer and you can search that whole one page for whatever words you're interested in, including transitioning, and you will find a plethora of material about this topic. So let's talk about transitioning from an accumulation portfolio to a decumulation portfolio, at least in some broad strokes here.

Mostly Uncle Frank:

The issue here has not to do with what is going on in the markets per se, but what's more important is what is going on in your personal life in terms of your finances, and what I mean by that is how close are you to having enough money to retire? Because that's the first consideration. A transition is not going to be appropriate until you've either reached that number. You have enough money to retire given the rest of your resources, or you will, with even some moderate growth, be able to reach that in the next few years. So if you're like 85% there and you have five years to go, you're essentially there in terms of a FI number. The biggest problem most people have here is they haven't actually calculated how much they need and oftentimes they make up reasons in their head why they don't think they can calculate this number. That goes something like I don't know what I'm going to be doing in five years or 10 years.

Voices:

Real wrath of God type stuff.

Mostly Uncle Frank:

I don't know what inflation is going to be. I might break three of my legs.

Voices:

Fire and brimstone coming down from the skies, rivers and seas boiling 40 years of darkness, earthquakes, volcanoes, the dead rising from the grave.

Mostly Uncle Frank:

I might decide I want to open a zoo like the Tiger King or something like that.

Voices:

I might decide I want to open a zoo like the Tiger King or something like that. Human sacrifice dogs and cats living together, mass hysteria.

Mostly Uncle Frank:

The truth is, what you're spending right now is probably a good estimate of what you're likely to spend in retirement, with a few adjustments, and your spending is likely to go down in retirement, either nominally or certainly less inflationary than the CPI. And if your children are leaving the house, that's also a sign that your expenses are about to drop. But that's the first thing you need to do is add up your expenses, your annual expenses right now and over the past few years, and then use that as a basis for projecting what you're going to spend in the future, and chances are it's not going to be that much different.

Voices:

You can't handle the dogs and cats living together.

Mostly Uncle Frank:

I can tell you that our expenses have gone down on a nominal basis over the past five years of retirement. But that is the first question that you need to answer have you reached your financial independence number in terms of having enough money to retire, or will you reach it with moderate growth in the next few years? Then the second question you want to ask yourself is is your current portfolio situation at or near an all-time high? Then this is just the idea that you want to sell high and buy low, because you're going from a more aggressive portfolio to a less aggressive portfolio, and so, ideally, when you've hit your fine number and you're at an all-time high or near an all-time high, that's a good time to transition.

Voices:

That is the straight stuff. Oh funk master.

Mostly Uncle Frank:

Now. We did ours about five years before we pulled the plug on employment, and I see you're seven years away. So you're getting into the area where you should be considering this and doing these calculations and the advantages. The closer that you get to it, the more your expenses are going to converge on what you expect them to be. Now, assuming those two things are true, you've reached a FI number and you're at or near an all-time high.

Mostly Uncle Frank:

You could make the transition in one fell swoop if you wanted to, and that would be the easiest way to go about this, usually, because oftentimes there are tax reasons or other reasons, depending on what your account set up, where these assets are and those factors that play into how this transition actually happens in practical terms. But the general rule is once you have won the game, you can stop playing with all of your chips. That's from William Bernstein, because even in a retirement configuration, particularly if you're not taking money out of the portfolio, it's still going to grow. It's just going to grow more moderately and with less volatility than it would have if you were to leave it in 100% stocks Now. You could also do it more gradually, but it's probably going to be more work actually to do it that way, but neither choice is wrong.

Mostly Uncle Frank:

What you really want to be in a position, though, is everything is all lined up where you want it to be in a retirement configuration before you stop working. That's the goal, and if you can do that three years before retirement, great. If you can do it five years before retirement, great. If you can do it five years before retirement, great. If you could do it now, that would be great too, because the other thing you can consider is, if you have a pot of money that covers your retirement expenses, you can convert that to your retirement portfolio, and then, the rest of the new money coming in, you can invest it any way you want to, or you can just spend it. You can do whatever you want with it. So some people still want to have some kind of aggressive portfolio, and so you could use the new money to create this new aggressive portfolio if you really wanted it. That would be appropriate for somebody who wanted to die with the most money possible.

Voices:

What's with?

Mostly Uncle Frank:

you anyway.

Voices:

I can't help it. I'm a greedy slob. It's my hobby.

Mostly Uncle Frank:

Because if you continue to accumulate in retirement with a high percentage of equities in your portfolio, the goal of that kind of portfolio is to accumulate the most possible at death.

Voices:

Death stalks you at every turn.

Mostly Uncle Frank:

And if you don't want to do that, well, you can put it into your retirement portfolio or you can put it in cash. Some people like to do that. You have a lot of options once you've determined what that retirement number is and then allocated the necessary assets to cover that to your retirement portfolio. So that is just an overview. As I mentioned, things will vary depending on how your assets are organized, what tax brackets you're in, so on and so forth. But if you want to hear about different people's situations and what I've said about them before, go back and listen to those episodes I mentioned, and then you can even search transitions in the prior ones, because I only went back one year on this for you. Hopefully that helps, and thank you for your email.

Voices:

Here's a horoscope for everyone Aquarius you're going to die. Capricorn you're going to die. Gemini you're going to die twice.

Mostly Uncle Frank:

Second off. Second off we have an email from Will Danger, will.

Voices:

Robinson Danger, danger.

Mostly Uncle Frank:

And Will writes.

Mostly Mary:

Hi Frank, Thanks for all the great content on your podcast.

Voices:

You are talking about the nonsensical ravings of a lunatic mind.

Mostly Mary:

My wife and I are in our late 20s and have $90,000 invested between my 401k and Roth IRA. Our current portfolio is $50,000 in the 401k split 75% VIIIX and 25% VIEIX and $40,000 in the Roth split, half and half between VTSAX and VSIAX. My wife is a stay-at-home mom and we're at the upper limits of what we can save, so a Roth for her or a 401k aren't an option right now. I'd like to move towards an accumulation portfolio that's 50% large cap, 50% small cap value. What makes this tricky is our contributions to the 401k will be about three times higher than the Roth each year due to employer match and Roth limits, and the only index funds available are VIIX and VIEIX. There is a small cap value fund ASVDX available, but it has a high expense ratio and has underperformed historically.

Mostly Mary:

The options I can see available are the following One, invest all of the 401k in VIIIX and all of the Roth and small cap, knowing that our portfolio will increasingly be weighted towards large cap as time goes on. Within 20 years it will be closer to 75% large cap, 25% small cap value. Two, invest 50% of our overall portfolio in VIIIX, the rest of the 401k in VIEIX or ASVDX and all of the Roth and small cap value. Vieix gives me more mid-cap exposure than preferred and I am not a fan of ASVDX. Do you have any suggestions on which approach you would take if you were in our shoes? Any other ideas to consider? Also, would you invest the Roth in AV, uv or VIOV? Please consult your crystal ball if you are unsure. Thanks for everything, will. Your crystal ball can help you. It can guide you.

Mostly Uncle Frank:

Well, the good news, will, is, regardless of whatever you do here, you're going to be fine because you're investing in 100% equities and low-cost index funds, and so the exact combination is really not as critical as the fact you are doing that and not investing in target date funds or doing something screwy with individual stocks or managed mutual funds, et cetera.

Voices:

Never go in against a Sicilian when death is on the line.

Mostly Uncle Frank:

So this is going to work either way you go. So this is going to work either way you go. I guess if I were you, I would probably go with option one that you mentioned invest all of the 401k in VIIX, which is the same thing as VTI or VTSAX, really, and then put all the Roth in a small cap value fund. Because two things you mentioned that within 20 years it'd be closer to 75% large cap and 25% small cap value. That actually may not be true, and the reason it's not likely to be true is you guys are going to be making more money through time and so you are going to have more room to invest outside of the 401k. So you're not only going to have your 401k and your Roth IRAs and you can have one in your wife's name even though she's not working, because you're working and you're married. So don't forego that opportunity. Make sure you're also putting money in her name in an IRA, and once you fill those two things up, then you can fill up ordinary brokerage accounts and you can put all kinds of small cap value or else you want in those accounts, because they're not restricted by the options in the 401k. So I'd be thinking about it in terms of that going forward in the future and looking at 20 years out.

Mostly Uncle Frank:

I did not look up ASVDX, but I'll take your word that it's a high fee fund that has underperformed historically, in which case I'd say, yeah, don't bother with that, forget about it. Vieix is that extended market fund from Vanguard. It's okay, but what I really don't like about it is it seems to tilt towards small cap growth, and small cap growth is definitely not where you want to be. That's the one sector in the style boxes. If you go over to Morningstar, you can see the style boxes and you should take a look at that. The one sector you probably want to stay out of is the small cap growth sector because it is the most speculative and has the worst risk reward kind of ratio to it. When you're looking at that style box tic-tac-toe board is what it looks like you want to kind of stay out of the lower right-hand quadrant. Keep most of your investments sort of to the left of a line that goes from the bottom left to the top right a diagonal line that goes from the bottom left to the top right a diagonal line and then don't put too much in large cap value during accumulation, because that is really the thing you want to have in retirement if you're going to have it at all. It's just lower risk and lower reward overall, so you will reach your goals either way, but I would go with option one of the two you presented.

Mostly Uncle Frank:

You also asked about AVUV or VIOV in the Roth. I'd probably go with AVUV. These days I think the best-in-class ETF recommendations that Paul Merriman makes in his site are pretty good and they do use a nice process for coming up with those. That's very analytical. But again, any of the funds that are listed there in their best-in-class recommendations are going to work pretty well. I think they go with AVUV as the US small-cap value fund that they give their highest recommendation to.

Voices:

I gotta have more cowbell. I gotta have more cowbell.

Mostly Uncle Frank:

So I'd probably pick that one, but you can't go wrong either way with any of these. Hopefully that helps, and thank you for your email.

Voices:

Last off.

Mostly Uncle Frank:

Last off an email from Neelix I'm not a fighter, I'm just a cook.

Voices:

Who sometimes imagines himself to be a diplomat.

Voices:

On the contrary, mr Neelix, you are much more than that.

Voices:

You are perhaps the most resourceful individual I have ever known.

Voices:

I always thought you just tolerated me.

Voices:

You do have some annoying habits.

Mostly Uncle Frank:

And Neelix writes.

Mostly Mary:

Hey, frank, love the show. It's the perfect soundtrack to my daily commute, especially when you're duking it out with other bloggers like Karsten. It's hilarious how you call him biased while simultaneously showering him with praise for articles about oh I don't know gold and small cap value, which, coincidentally, you also happen to love. If I didn't know you were a lawyer, I would definitely think you were a lawyer. Just kidding, Mostly we use the Socratic method here, but seriously, you do a great job pointing us towards better portfolio construction At times, you may feel that you have found the correct answer.

Voices:

I assure you that this is a total delusion on your part.

Mostly Mary:

I'm about 10 years away from early retirement at 55, I hope, currently rocking an 85% stock portfolio. Because clearly I like to live on the edge and you won't be angry, I will not be angry. So I've gone and done something slightly less insane for the future. I opened a Fidelity account and started a risk parity fire portfolio for my golden days where I will live off the safe withdrawal rate.

Mostly Mary:

It's only got five grand as seed money, but the allocation I've set is 33% large cap value, 33% small cap growth, because don't we love a cowbell?

Voices:

I'm telling you, fellas, you're gonna want that cowbell 25% 10-year treasury, for a bit of safety.

Mostly Mary:

5% gold, because soundbite, I love gold.

Voices:

I love gold.

Mostly Mary:

And 4% cash equivalent, because, guess what? I will have to pay other bills Now for the million dollar or hopefully much more question do I keep feeding my existing aggressive growth portfolio or do I throw all my future funds at this new, slightly less bonkers fire portfolio? I'm torn. Help me, frank Neelix, hail them.

Voices:

Whoever you are, I found this waste zone first. We're not interested in this debris. Mr Neelix, prepare to fire phasers. Our target, mr Neelix, fire.

Mostly Uncle Frank:

Well, let's talk about your personal portfolio questions first, and then we'll start talking about personal finance, media and gurus, etc. So, looking at what you've got here, I think you've got things a little bit mixed up, or maybe you just wrote them the wrong way. In your email you said you have 33% large cap value and 33% small cap growth. I think you've got those mixed up.

Voices:

That's not how it works. That's not how any of this works.

Mostly Uncle Frank:

You want those in large cap growth and small cap value Because, as I just mentioned to Will, the last emailer, you probably want to stay away from the small cap growth category unless you're actually doing some stock picking, and this is not the show for that.

Voices:

Not going to do it Wouldn't be prudent at this juncture.

Mostly Uncle Frank:

Large cap value is something you can include as part of your value allocation in a retirement portfolio, but I'd consider it more as an add-on than some kind of necessity, as I've mentioned in many other podcasts. In terms of the portfolio you want to get to for a good retirement portfolio with a high, safe withdrawal rate, you want to split your equities into growth and value as the first denominator, or first differentiator, I should say, and then you can consider things like size factors, sectors, what country they're from, all those other things, but the first thing is to split between growth and value, although stay away from small cap growth in general, gosh, okay, then your overall question was do you keep feeding your existing aggressive growth portfolio with all your future funds into your new, slightly less bonkers fire portfolio, as you described it?

Voices:

Dogs and cats living together mass hysteria.

Mostly Uncle Frank:

And I think this goes back to the answer to the first question we had is where are you in the process of accumulating enough money to retire, is the big question. Have you accumulated enough already or do you still need to accumulate considerably more? And so all of my answers to the first email or apply here that you should add up your annual expenses, use those to help you determine what you're likely to be spending in the future and for most people it's not likely to change that much and more likely to go down than up, especially after you take into account taxes. And so here you do run into this kind of preference kind of thing that, if you think you can just kind of glide in and you're getting close to that number, yeah, you could build up the new portfolio and leave the old one alone for a while and then transition more of it later. Or you could make the shift earlier.

Mostly Uncle Frank:

10 years out is pretty early, so probably wait at least another three years before really looking at it, because things could change in terms of when you really want to retire. So either one is fine, just as long as you do get your portfolio set up so that you have that retirement money in your retirement portfolio several years before you actually pull the plug, because your biggest risk is having some kind of big drawdown right before you retire. And that is also why you want to do this when your current portfolio is at or near an all-time high, because then you know you are selling high.

Mostly Uncle Frank:

Buy low sell high Fear. That's the other guy's problem. Now getting to the fun questions about my presentation style and what I'm doing here.

Voices:

You mean, let me understand this, because maybe it's me. I'm funny how I mean funny like I'm a clown. I amuse you, I make you laugh.

Mostly Uncle Frank:

So my background is as a lawyer and I spent most of my career working with and cross-examining financial and technical experts and these are everybody from people that appraise real estate to people who have won Nobel Prizes in economics. So my approach to personal finance is as a lawyer, cross-examining experts.

Voices:

You can't handle the truth.

Mostly Uncle Frank:

Which means the first thing I do is separate the ideas of somebody from the person, which is actually not the way personal finance is generally presented.

Voices:

You need somebody watching your back at all times.

Mostly Uncle Frank:

So I generally like lots of people in personal finance land. I like most of them, except for the ones that are actually selling things.

Voices:

Always be closing, always be closing, always be closing.

Mostly Uncle Frank:

The Ned Ryerson's of the world.

Voices:

You know, whenever I see an opportunity now, I charge it like a bull, ned the Bull, that's me. Now, you know, I got friends of mine who live and die by the actuarial tables and I say, hey, it's all one big crapshoot. Anywho, tell me, have you ever heard of single premium life? Because I think that really could be the ticket for you.

Mostly Uncle Frank:

But I'm going to apply the Bruce Lee principles to whatever some finance guru is saying, which means take what is useful, discard what is useless and add something that is uniquely your own. What the hell that is uniquely your own, what the? But let's step back and talk about how the personal finance media landscape is presented. Generally, most of personal finance is personality-based, which leads to two fallacious reasons for doing something. One is the appeal to authority oh, this person is famous, they must know things, they've written some books. Therefore, let's just do what they say.

Mostly Uncle Frank:

Or the appeal to popularity, which also goes with this fame, culture kind of thing. Everybody else is doing it this way. That's what we do in our personal finance club, or whatever we want to call it. It's the popular thing to do. Therefore, that's what we should do. Both of these are well-known fallacious arguments, fallacious reasons for doing something based either on mere authority or popularity, and they do also represent a form of intellectual laziness that you're not willing to really grapple with the raw arguments of what is being presented, aside from the personality or the group that is being presented in. I'm not a smart man. If you're going to be a good lawyer, you need to quickly get beyond appeals to authority and appeals to popularity, and I believe the same is true with just about any kind of decision making you can make, at least if it's important to you. Yet you only want to use appeal to authority or appeal to popularity where you really don't care about the decision that much, as in what to eat at this restaurant.

Voices:

Who wants an orange whip? Orange whip, orange whip, three orange whips.

Mostly Uncle Frank:

And then when I look at sort of the personal finance media landscape, it falls into three kind of categories. One is the purely exploitative, for entertainment purposes. These things sound a lot like Jerry Springer, and people that fall into this category include Susie Orman and Dave Ramsey and this hammer guy that's popular on YouTube these days, and a little bit Ramit Sethi, although he's nice about it. But the idea for those kind of shows is let's actually go out and find somebody who's doing kind of stupid stuff.

Voices:

Are you stupid or something? Mama says stupid is as stupid as it is.

Mostly Uncle Frank:

And then tell them how stupid they are and the whole audience will obviously be able to see how stupid they are and the whole audience will obviously be able to see how stupid they are and what the answer is, and and it's easy and we all agree, but fundamentally it's a kind of exploitative entertainment what do you want to buy?

Voices:

hey, everybody, suzy o here. Now can I afford? It has been gamified, which means you're going to get to listen to the caller. You're going to say, show me the money to yourself anyway, and then you're going to get to approve or deny it. You think you're going to be right or wrong. Let's go and try it right now.

Mostly Uncle Frank:

Yeah, and usually the things at issue are just things like you know know, people being in ridiculous debt because they're keeping 100 canaries in their barn or something silly like that. The next category and these do overlap a lot is the sales category. People are fundamentally selling you something.

Voices:

A, b, C, a, always B, b, c. Closing, always be closing.

Mostly Uncle Frank:

Either in terms of products that they are promoting or referrals that they're coming up with. Oftentimes, it is actually the sponsors on the program that they are funneling their audience to, because only one thing counts in this life Get them to sign on the line which is dotted and generally the goal there is just to attract clicks and eyeballs. Present something that is interesting enough that you'll attract a big audience and then you can sell things to them sitting out there waiting to give you their money.

Voices:

Are you gonna take it?

Mostly Uncle Frank:

that's what most of financial media is actually about. It's presented more like sports or something like that, or the style pages and then finally, at least in popular personal finance, and that's really what I'm talking about here. I'm not talking about professionals talking to each other. The final category is people that present themselves as educators.

Mostly Uncle Frank:

The educator, media personality and most of your personal finance gurus present themselves this way, and they write books and they make appearances and they have media outlets which range from TikTok to books these days, and most of these people are very well-meaning and they may be promoting their book or their course or their club or something like that, but their idea is to try to present good information to each other. But this group is kind of like their own kind of club. Nobody in the educator side of financial media really wants to criticize anybody else in the same field, because they all appear at the same conferences and so differences are always minimized. People want to be on each other's programs, cross-promoting, so on and so forth, and so if you want to belong to that club, you have to play nice in the sandbox with everybody else in the club.

Voices:

I want you to be nice.

Mostly Uncle Frank:

There's kind of an unwritten rule that true conflicts are not really allowed, so they end up always we'll agree to disagree and the disagreements are minimized or papered over or people will say well, you know, it's kind of personal and you can just do what you want. And that is typically how podcasts are run these days in personal finance land. People get their guests on and there are not critiques that are thrown or comparisons that are made, so you never get down to deciding which arguments are better and why. On the level of a kind of cross-examination that I would do, all conflicts are left unresolved, so everybody can go on their merry way and promote their merry things.

Voices:

Whoa, that's the thing you should see, but don't worry you can sometimes.

Mostly Uncle Frank:

Unfortunately, what that tends to play into is this appeal to authority and appeal to popularity that these folks rely on to attract and maintain their audiences. And all that's probably fine if you want to take a superficial approach to this. But if you are a real DIYer who wants to do the best thing for their own finances and really manage your money particularly when you're talking about getting to retirement and drawdowns and things like that you need to go beyond this kind of popularity thing where people really are never questioning each other's ideas and deciding one way or the other whether this idea is the best one in this particular situation, Because typically you're talking about a certain idea that's applicable in one situation but not applicable in another situation. And then the other thing that you run into, particularly with the educator media types, is that fundamentally they're all hoarders in the end and their personal approach to finances has everything to do with accumulation and almost nothing to do with decumulation, because their real plan is just to not spend much money in retirement.

Mostly Uncle Frank:

And if your plan is to not spend much money in retirement, then you can do whatever you want with your assets. You can have 20% in stocks like a William Bernstein, or you can have 80% in stocks like a JL Collins, or you can have a core four portfolio like Rick Ferry, or you can have a Merriman Ultimate portfolio like Paul Merriman and then have another portfolio on the side that's managed by somebody. Or you could be like Karsten, who's essentially living off dividends and some trading profits and spending well under 3% of his accumulated assets, and you can have tips, ladders and piles of cash and bucket strategies and all manner of stuff there's $250,000 lining the walls of the banana stand.

Voices:

Why didn't you tell me that? How much clearer can I say there's always money in the banana stand. No touching, no touching.

Mostly Uncle Frank:

Because none of that really matters. If you're not spending your money, that's your strategy Don't spend money.

Voices:

Oh boy, I'm rich, I'm wealthy, I'm independent, I'm socially secure, I'm rich, I'm rich, I me.

Mostly Uncle Frank:

So for people like me that came into this looking at all these people and saying, well, how do I spend more money in retirement?

Mostly Uncle Frank:

And if all the people you're looking at aren't spending their money in retirement and don't plan to, you kind of have to look harder and elsewhere to find the people that are actually planning on spending your money and stop looking at things just because they're popular or there's an appeal to authority going on, that you actually need to look at the data and the arguments and the portfolios and the methodologies, not on the basis of what any particular person says about them, but on good data analysis and Monte Carlo simulations and other mathematically-based techniques.

Mostly Uncle Frank:

But while you're doing that, a lot of those good techniques data mathematics are found in the works of many of these people and that's why you get back to applying the adages of Bruce Lee, which, whenever you are confronted with experts and expert material, the best approach is to take what is useful, discard what is useless and add something that is uniquely your own. The best, jerry, the best. It is partially confrontational, but it's not directed at any particular person, but on which ideas are good and applicable to people who want to spend their money in retirement, and which ones are really only for people who don't want to spend their money in retirement.

Voices:

I wonder how that crazy duck ever made out with that genie. Hey, what do you know, poil, it's mine. Understand mine, mine, all mine, go, go, go mine. Do you hear me? Oh brother, blow sesame.

Mostly Uncle Frank:

I'm rich, I'm a happy miniser and since this is just a retirement hobby for me and I don't have any aspirations to become a media personality, doing the circuit, if you will, and writing books and so on and so forth At least not at this stage of my life Ask me in 15 or 20 years, I'm not concerned with scratching anybody's back and worried about whether mine gets scratched or whether I get excluded from the conference or the club or whatever it is so.

Voices:

after the third week I sent him a telegram and says please accept my resignation. I don't want to belong to any club that will accept me as a member.

Mostly Uncle Frank:

Which has the wonderful side effect of attracting a very intelligent and discerning audience.

Mostly Mary:

Top drawer, really top drawer.

Mostly Uncle Frank:

Who really cares about this stuff and has similar goals to mine and sends me all kinds of excellent topics to talk about. That goes without saying.

Voices:

Oof.

Mostly Uncle Frank:

So never be surprised when I both criticize and praise somebody at the same time, because I wouldn't feel like I was doing my job as a good cross-examiner if I did not take that approach, which is to make this about ideas and not about personalities. So hopefully I was able to answer your questions. That gives you a little better understanding of what's going on around here, at least when I'm not just goofing off.

Voices:

You want to be a public nuisance? Sure how much does the job pay? I've got a good mind to join a club and beat you over the head with it. Ha ha.

Mostly Uncle Frank:

Ha ha, and thank you for your email.

Voices:

You come in here with a skull full of mush and you leave thinking like a lawyer.

Mostly Uncle Frank:

But now I see our signal is beginning to fade. If you have comments or questions for me, please send them to frank at riskparityradiocom. That email is frank at riskparityradiocom. Or you can go to the website wwwriskparityradiocom. Put your go to the website wwwriskparityradiocom, put your message into the contact form and I'll get it that way. If you haven't had a chance to do it, please go to your favorite podcast provider and like subscribe. Give me some stars, a follow, a review.

Mostly Uncle Frank:

That would be great, okay, thank you once again for tuning in. This is Frank Vasquez with Risk Prairie Radio Signing off to see.

Voices:

But don't worry, you can start soon. Music, music, music, music, music, music, music, music music music, music, cool Go Go.

Mostly Mary:

Please consult with your own advisors before taking any actions based on any information you have heard here, making sure to take into account your own personal circumstances.

People on this episode

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Frank Vasquez

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