The Jester’s Portfolio

Friday’s question pile ranges from the safest bond fund around to the harder question of what retirement is actually for. Don sorts through the choices with his usual preference for simple, sturdy answers.

He weighs the TSP G Fund against BND, checks the bona fides of Raisin and The College Investor, and argues that leaving work makes sense only when something better is waiting on the other side.

Then comes a candid disagreement over 21-fund portfolios, followed by a pension decision for a well-funded couple who can afford to self-insure. The court may have advisors, but Don is still happy being its jester.

Topics
03:26 Is the TSP G Fund enough fixed income?
05:47 Raisin and The College Investor: useful and legitimate?
09:44 Retirement needs a purpose, not just an age
12:37 Twenty-one funds, advisor complexity, and honest disagreement
16:11 Single-life versus joint-survivor pension choices
18:57 Social Security timing, RMDs, and a very strong retirement plan

Transcript

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SPEAKER_09 0:21

Bring me the question carry on week the one that gets heavy at night.

SPEAKER_07 0:28

Nothing's too small and nothing's too strange. We'll hold it up to the light. Ask it out loud, Don will let's see you play. Your issues easier to explain. Making money makes sense. Making money makes sense.

SPEAKER_08 0:49

Talking real money.

SPEAKER_04 0:53

Oh my gosh, I'm having such a hard time deciding which ones I like the best.

Audio Upgrade and Q&A

SPEAKER_04 0:59

I guess I just like music. I like all the genres. I do. I enjoyed that one. That was fun. Um and I I uh I today's actually yesterday's podcast was the first, but today's podcast is the second uh in which I have upped the quality of the audio. I found out that our host, Buzz Sprout, who hosts the podcast, um, compresses it. Because I noticed I was listening back to one and I went, but the music sounds very compressed. And where it loses a little of the crisp, the crispness of the high end and some of the low end. So what I'm doing now is uh a little extra cost to us, but it was very little. Uh now I can put up higher resolution uh 192 kilobit per second stereo mp3 files. So they should be stereo now. So they should sound bigger and better, hopefully. Anyway. Uh that music means it's Friday. That means it's the QA. Uh every Friday I'm gonna try for as long as I can to crank out a different genre QA song along with the different songs for the rest of the show. The response has been really positive, very positive. Yes, a couple who don't like it. One of the big problems with a big audience, and we have a big audience, is not everybody's gonna like what we do. But the whole point in this is mixing things up and your host having a good time too. If I have a good time, hopefully you have a better time. So it's the QA episode. I'm Don. Thank you so much for joining us here on the Talking Roll Money Podcast. A little bit light on the questions still, as a matter of fact, if I don't get a bunch in in the next week, then the next QA show is gonna be artificial intelligence voices reading some typed in questions because we have well, we have about 40 or so typed questions and left after today one spoken question. One. That's about as low as we've ever gotten. Hopefully, it's just the summer doldrums. If you want to speak your questions, I make you sound really good. Just go to talkingrealmoney.com and click on the microphone button in the lower right hand corner and record your question, just like this

G Fund Fixed Income

SPEAKER_04 3:26

one.

SPEAKER_02 3:26

Good afternoon, Tom and Don. This is Tracy from Georgia. I had a quick question regarding the fixed portion of my portfolio. I currently have 30% in the TSPG fund. I was wondering if that was sufficient for my um fixed income portion of my portfolio, or should I diversify that and move maybe half of it to uh an IRA to where I could invest in B D. I wanted your thoughts on whether I should just stay in that fund or diversify that. Thank you and have a good day.

SPEAKER_04 4:05

The G fund is about as good as a fixed income fund can possibly get. There really isn't any need at all to diversify further because bonds, you own bonds for reduced volatility and a high degree of inherent safety. Well, U.S. government bonds in the G fund are both. They are 100% stable and 100% safe. It just doesn't get better than that. BND is very safe and reasonably stable, but it does fluctuate. And there's no need to add that fluctuation to a portfolio that already has it built in through equities. That's where fluctuation is your friend. Because equity funds, yes, while they go up and they go down, have historically gone up a lot more than they've gone down. And that's with good reason. It's because they are owning businesses that can make themselves become more valuable. Bonds don't make themselves become more valuable. You don't make money on capital gains on bonds in any environment except a falling interest rate environment, really. I mean, there are a few other things, but that's the main driver. And you can't, that's just a bet on uh on a zero-sum game for all intents and purposes. As we saw with the falling interests, interest rates many years ago, bond prices just soared, and everybody thought, well, bonds make a lot of money until interest rates went back up, and then they didn't. So, no, just stick with what you have. What you have is absolutely as good as it gets from a fixed income perspective. And let's go to the next

Raisin and Investing Tools

SPEAKER_04 5:47

question.

SPEAKER_00 5:47

Hi, Don. I have a question about the company called Raisin, which I'm sure you're familiar with. They find high-interest CDs and money market funds and savings accounts for people. And um I wanted to know what your opinion of it is. I don't recall you guys discussing it on the program, but maybe you have, and I I just didn't I just didn't notice or pay attention because I wasn't really uh looking for something like that. But now I have a friend who, a young friend, who is just starting out uh in her savings journey, and I thought it might be something that would be good for me to recommend to her. Um it also led me to when I was looking into the raisin uh reputation, whether it was a good company, uh I I I mean I think Clark Howard probably is uh a pretty uh reliable source for having looked into it and recommends it with some knowledge of the legitimacy of it and so forth. But I also saw a uh YouTube from a company called the College Investor, Navigating Money and Education, and that had a lot of uh information and I wondered if you were familiar with it, and I wanted to get your opinion of these two well, I'll call them websites because that's basically what they are, uh the Raisin and uh the college investor, because I don't want to recommend something to this uh young person without knowing that I'm telling them that this is a uh legitimate and uh trustworthy uh resource for them. Thanks a lot.

SPEAKER_04 7:37

Well, you're very welcome, and thanks for the question. Yeah, I ha I have heard of Raisin before. Uh Raisin is it's like Bankrate. It's uh a way to find the highest yielding savings vehicles. It's not a great place to get investing knowledge, but it has the same banks basically that Bankrate has. It shows you the highest yielding savings accounts out there and CDs and the like, and it's legit. They uh they get a they get a little bit of a kickback from the various banks with whom they place money. And I'm seeing, let's see, right? Like when I recorded this, the highest high yield savings rate is 4.15, and that's been that way for a while. Uh the other, the college investor, is not one I'd ever heard of, but I'm looking, I've I went through it and I spent a little time looking through. It's really generic. It's not bad advice. I didn't go through all the advice, but the investing advice does not look bad. It looks very reasonable. It basically what they tell you in the investment pages is to build a portfolio of Vanguard funds, either just VT and BND or get into a few of the other funds and build a bigger portfolio. You can add internationals, you can add REITs, you can but they they don't get very fancy. I they really it's a very simplified portfolio idea, which is not bad. I mean, we do the same thing. I'm not criticizing, I'm just not familiar with them across the board, and their expertise seems to be in student loan debt. The the investing advice, the other financial advice is really generic. So both legit. I don't see anything illegitimate about either one of them, and I don't see anything bad about either one. Uh good tools as part of a toolkit for investing, but not the be-alls or end-alls. Thank you so much for your question. And uh let's grab another thing that somebody spoke at talkingrealmoney.com. Hello,

Why Retire at All?

SPEAKER_04 9:48

Tom. Hello, Don.

SPEAKER_01 9:50

Um, or just listening to your um podcast, and you guys talk about retiring, and you go, ah, why do you want to retire? You're not gonna do anything. What are you gonna do the next 30 years? So it's easy for you guys to say that when you have a talk um talking job, just talking and having fun.

SPEAKER_04 10:12

Well, okay, yes, but I mean, our jobs aren't just, trust me, there aren't just talking and having fun. There's a a lot more involved. It's not like you just talk and suddenly we have magical podcasts. And uh, but yeah, I mean, we love our jobs. And that's the qualifier that we throw in now and again is that you know, if you have a job that you love, why do you want to stop doing it so you can what golf? I don't know. If you unless you love golf, then it's fine. What I'm saying is that the advice that everybody should retire at 62, 63, 65, 67, whatever the age is, is kind of irresponsible. You should retire when you need to retire. And you should retire when you have something that you want to do that's better than what you're doing now. And that you that is something that needs to be considered before you get to your 60s. What am I gonna do then? That's why we ask that question. What are you gonna do? Are you just gonna sit on the couch and watch TV? Or do you have something about which you're passionate? Are you gonna get out? Are you gonna volunteer? Are you going to write the novel you wanted to write? Are you going to start podcasting? Are you going to take up a new skill of a new hobby of some sort? If if that's if you've got something you could be passionate about for the next two or three decades, that's great. But remember, it's not what it used to be. It wasn't that long ago that 65 met you were almost dead. Most people were dead, right around 65. Now you can, if you're healthy, you can reasonably expect to go well into your 90s. And that's a lot of time not working. And I believe that's what we do best as human beings. We work. And we generally try to work in things we enjoy. It doesn't always work out that way, but maybe retirement is an opportunity to work at something you're more passionate about, to get out of whatever the grind is that is bringing you down and find something where you might make a little bit of money and have a lot more fun. Just make sure you have something to do. Thanks for your comments. And I think the next one is comments to.

Too Many Funds?

SPEAKER_04 12:36

Here's the next.

SPEAKER_03 12:37

Hi, Don. This is Greg from Indiana. I'm calling with a comment to an answer you gave on the July 31st QA. Dave from Rhode Island called stating his advisor had him in 21 funds and asking whether or not this was too many funds to provide global diversity. Your answer was that you thought the advisor was trying to make himself appear valuable, and that you thought it was overkill. My wife and I have accounts managed by Appella in Bellevue. Our managed brokerage account has 21 funds. Granted, one of those funds is a leftover from some tax loss harvesting caused by a dividend that came in after the fund was sold, but that still leaves 20 funds in the account. Also, our Appella managed traditional IRAs has 16 funds each. At the end of your answer to Dave, you did pull back a bit by saying if it's a good advisor, it's not a big deal. My wife and I are very happy with Appella and think they're a good advisor, but it seems to me your answers to questions and your advice are not always in alignment with the advisors at Appella, at least in the Bellevue office. Again, this is a comment, no real question. We do enjoy listening to your show and have picked up a lot of valuable insights along the way. Thank you and take care.

SPEAKER_04 13:54

Bye. I I love comments like this. Now, see, this is the thing. I when you when you call this show, when you uh call in your questions, you're gonna get my opinion on Friday. You're gonna get my opinion. Now, um uh Tom and I talk all the time. We've known each other for 40 years, but the reality is I still think that's too many funds. And I've argued this, I've heard the arguments, and it's not hurting anything. It's it's not. I do think there's a modicum of stature pumping that that happens with these portfolios. I I do, I do. That's my honest opinion. I don't think it hurts a darn thing. That's all I was saying is it I don't necessarily buy the argument that it's essential, although I have seen the numbers and it does slightly, potentially it m based on the past, helped a little teeny tiny bit, just little fractional increases potentially. And it also makes rebalancing uh a more precise process. So I I think 20 is too many. Yeah, I do. But again, what's the harm? No harm, no foul, the portfolio is being managed for you. It really is too many if you're an individual and you're trying to run it yourself. That's enough to make you nuts. But if you have an advisor doing it, yay. Um and if I was king, I wouldn't have portfolios that big, but I'm not king. I'm just the jester in the courts. Uh but uh again, not any problem at all. And if you're getting great service, which we pride ourselves on, and and and I know you have a great portfolio in the grand scheme of things, so I think it's awesome. I wouldn't do it. But I think it's awesome. Thanks so much for your comment. And because that last one was a comment, I'm gonna leave myself with even fewer questions by throwing in this final

Pension and Social Security Choices

SPEAKER_04 16:10

question.

SPEAKER_10 16:11

Morning, Don. Uh me and my wife have recently retired. Uh, we're about 66 and a half years of age, and I am leaning on taking uh the single life annuity option uh for my spouse, which is about $1,800 a month, versus the 100% joint survivor, which is $1,500 a month. I recently started my pension and chose to take the single life uh annuity, which is $450 per month. We have a net worth of about $5.4 million. And in addition, our house is worth about $500,000. We spend about $15,000 a month. And 19% of our assets are in traditional IRAs and about 69% in Roth IRA. We are pulling money out of the traditional IRA to live, to live on and uh to decrease our required minimum distributions at 73 years of age. We both are presently fairly healthy. We haven't taken Social Security benefits yet. We are uh looking to take the higher earner, which will wait till about 70 years of age and get $4,000 a month. And and also then the other uh my wife will take uh hers at full retirement age, and uh that's about $3,100 a month uh at uh so thank you so much for your thoughts on this. Uh we love your show and we're just trying to decide uh you know, taking a pension uh uh and also the social security benefits. Thank you so much. Enjoy your show.

SPEAKER_04 17:43

You're welcome. Thank you. Um that's a lot to take in. There's a lot going on there. But man, here's the bottom line. You you're in a great place. You're in a great place. And usually the the single life options are not optimal, but in your case, they're fine. They may very well be because in essence you've built a joint option. Um so yeah, I think you can afford to take that that single life pension. Um and you're way, way capable with uh that other monies, huge amounts of money, five million, to uh to basically self-insure if the bet doesn't work out on the survival aspect. I I do like delaying the larger Social Security benefit to 70 because that just gets you the bigger checks. And that bigger check carries on to the survivor. Um taking the smaller benefit is fine, but you know, because you have enough, but why not? Why if you you don't need it, delay it. Take the take the free money. And uh remember, don't uh don't take money out of your IRA simply because you're worrying about RMDs down the road. The they're they're just they're gonna be small. You just manage your withdrawals according to your tax bracket, you're you know, avoiding Irma and all that. Um, but uh you're in just terrific shape. Absolutely terrific shape. You're in a position that anyone would find enviable. So good for you. Good planning, paid off. You guys are in a great, great situation. Thanks so much for being there, listening to the show, calling in. And please call in your questions. I know it's not really on a phone. Well, it could be on a phone. You can go to talkingrealmoney.com on your phone and click the mic button in the lower right hand corner and then just speak your question. And it saves your poor fingers all that typing. And if you're like me, you know, you're not a great typist, it's easier to speak them. And I make them sound pretty, and then we put them on a Friday QA. And I do need a few, or AI's gonna take over the Friday QA too. Thanks for being there. If you oh, oh, oh, yeah. The plug. Such as it is. Yeah, we're gonna give you something for free. That's our sales pitch. Uh, if you would like someone to look over your situation, if you'd like to figure out if you're on the right track, you got just a more complex question, we make the services of our fiduciary advisors, 100%, no commission, uh, available to you for free with no high pressure sales pitch ever. Promise. Just go to talkingrealmoney.com and click on the button that says Meet an Advisor. Thanks for listening.

SPEAKER_08 20:32

I'm Don McDonald, and we're Talking Real Money.

Closing Disclosures

SPEAKER_05 20:47

Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice, including any forward-looking estimates or statements which are based on certain expectations and assumptions.

SPEAKER_06 20:58

Although information and opinions given have been obtained from or based on sources believed to be reliable, no warranty or representation is made as to their correctness, completeness, or accuracy.

SPEAKER_05 21:07

Information presented on the podcast is not personalized investment advice from Oppello Wealth. The views and strategies described may not be suitable for everyone. This podcast does not identify all the risks, direct or indirect, or other considerations which might be material to you when entering any financial transaction. Past performance does not guarantee future results, and profitable results cannot be guaranteed. We hope you realize that the information provided on Talking Real Money is for informational, educational, and hopefully enjoyable purposes only. The podcast is not trying to get you to buy or sell any financial products or securities. Instead, the program is provided as a public service by Apello Wealth, a fee-only registered investment advisor.

SPEAKER_06 21:40

See Apello Vox, ADB, to any other website for information regarding Appellate's fees and services.

SPEAKER_05 21:45

Apello Capital, LLC DBA Apollo Wealth, is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in the states where it is properly registered, or excluded or exempt from registration requirements. Registration with the SEC or any state securities authority does not imply a certain level of skill or training. Apello does not provide tax or legal advice, and nothing either stated or implied here should be inferred as providing such advice. Thanks for listening, and please visit talkingrealmoney.com for more information and important disclosure related to performance of any specific index or fund quoted in this podcast. I think I need a nap.