Rick Ferri: Core-4 Portfolios for Simplistic Success (From the Vault)

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Welcome to Fun with Annuities, where

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every single week I welcome a celebrity

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guest expert that can help you maximize

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[music]

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chapter 2 of your life. Listen, learn,

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laugh, and love every minute of the most

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Let's get to it.

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Welcome to Fun with Annuities. I'm your

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host, Stan the Annuity Man, America's

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annuity agent, as you well know. Boy, do

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we have a good guest for you today. Um,

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his name is Rick Ferry. Let me tell you

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a little bit about him, and that is the

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spelling is F R I. I'll have all his

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information, as you know, on my site at

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theanuityman.com. He'll have a permanent

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page there. Um, and I want to just

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welcome all the people on the major

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podcast platforms and on on the Fun with

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Annuities YouTube channel where you can

0:57
see Rick and I looking at each other. He

1:00
is a I tell you what, this is a person

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that is unique and and I can say that

1:05
with confidence. Um, this is a retired

1:10
fighter pilot, former stock broker, adj

1:14
adjunct college professor, founded a

1:17
firm for low advisory fees, and now has

1:20
a hourly consultant advisory firm, which

1:22
he's backed up and booked forever, but I

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mean, he is he's who we're looking for

1:28
from a standpoint of a podcast guest. He

1:30
started his investment career in 1989 as

1:33
a stock broker at a large large Wall

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Street firm kind of like I did with Dean

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Whitter, Payne Weber, Morgan Stanley,

1:38
UBS. And then he um he just said, "Hey,

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I can do it better." And he has core

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beliefs and and some things that are

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going to align exactly with my listeners

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and viewers. Hey Rick, thank you for

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joining Fun with Annuities. I appreciate

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it.

1:53
Thank you. Thank you Stan for inviting

1:54
me. I appreciate it very much.

1:56
So we're not going to talk initially

1:58
about investments. We're going to talk

1:59
about fighter piloting.

2:01
Okay.

2:01
So, can you give us the story there

2:03
because um I went to the Air Force

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Academy briefly in my career, so I know

2:08
what you did and what it takes to be who

2:10
you are. So, can you give us the

2:11
elevator speech on the fighter pilot

2:13
background?

2:15
Well, I graduated from college, the

2:17
University of Rhode Island in 1980, and

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uh back then there was a I want to say a

2:23
13% unemployment rate. and there was not

2:28
a very friendly job market, but one of

2:31
my buddies from high school had gone in

2:32
the military, had a had a good

2:34
experience with that after high school.

2:36
And I was an Eagle Scout and I was

2:38
always into, you know, camping and doing

2:40
things outdoors. So, I decided I was

2:41
going to go into the military and I

2:43
looked around at the various services

2:44
and the Marine Corps aligned with what I

2:47
wanted to do. The few, the proud, kind

2:49
of the do more with less, do everything

2:52
with nothing mentality that they had.

2:55
And so I joined the Marines. Uh I went

2:58
to Quantico uh Virginia officer school

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and they said to me, "Would you like to

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fly a fighter aircraft?" And I said,

3:04
"Sure,

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yeah, what the heck, [laughter]

3:06
right? I never flown before in my life,

3:08
but yeah, we'll try that." So I took the

3:10
exams, my eyes were good, luckily, and

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my, you know, they went through the

3:13
medical thing and was accepted into

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flight school. Uh went down to

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Pensacola, Florida, which is Navy Flight

3:19
School.

3:19
Yep.

3:19
Which is all the Marines go to Navy

3:21
Flight School. From there, um, here's

3:23
the first primary training. And they

3:24
throw you through a bunch of

3:26
drills. This is all the things you see

3:27
on TV about, you know,

3:29
uh, turning off all the lights and and

3:31
putting you in a what looks like a a tin

3:33
can and throwing you under water upside

3:35
down and say, "Okay, get out." All of

3:36
that stuff. So, did all of that and got

3:39
through it all. Took the battery of

3:41
exams and somehow passed. And they did a

3:44
psychological exam and I somehow passed

3:45
that as well. And [laughter]

3:48
they uh sent me to uh to start flying

3:50
airplanes. And I did I did well enough

3:52
so that they sent me to advanced fighter

3:54
uh aircraft later on when they were

3:57
selecting and I went down to Kingsville,

3:59
Texas where I met my my wife of 40 years

4:01
and still married uh and uh got my wings

4:07
about a year and a half later. You know,

4:08
I do a lot of carry landings and a lot

4:10
of air-to-air combat and shooting things

4:12
and you know, just all the kind of

4:13
fighter pilot stuff that you, you know,

4:15
you watch on TV and so forth. did all

4:17
that in flight school and then went off

4:20
to fly initially A4s and then A6s. Uh

4:24
and uh that was what I what I did for

4:27
about eight years until I left active

4:30
duty and and then I went in the reserves

4:32
and I actually retired from the reserves

4:34
after 20 years. But when I left active

4:35
duty, I went to uh and went into the

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investment industry. So I think that the

4:40
the thing that I learned though most was

4:43
uh when I was landing on aircraft

4:45
carriers because it was both day and

4:46
night aircraft carrier operations and

4:49
that has to be so precise, so accurate.

4:53
I mean

4:54
any screw up at all and and you know you

4:57
hit the deck, you hit the water, you hit

4:58
something and so it's very very

5:00
accurate.

5:01
No margin for error. And and when I left

5:04
that environment and I went to Wall

5:07
Street, it was the exact opposite,

5:09
[laughter]

5:10
right?

5:11
You know, that's good enough. You know,

5:13
we don't worry about these things and

5:14
accuracy was never something that we

5:16
were concerned about. And you know, you

5:18
do what you do to to make your money and

5:20
and I that was completely foreign to me.

5:22
I mean, I really didn't understand that.

5:24
So that that was one of my initial

5:27
reactions to uh to Wall Street when I

5:30
when I went there from that fighter

5:32
pilot,

5:34
you know, environment.

5:36
What makes you go there? I mean, what

5:37
made you go into the financial services

5:39
business? What was the drive there?

5:42
Actually had my undergraduate degree in

5:43
business administration with a minor in

5:46
entrepreneurial studies. So I was, you

5:48
know, very much an entrepreneur. I had

5:49
um put myself through college by doing

5:52
uh basically a flea market antique

5:54
business. I would go and buy antiques

5:56
and various things from yard sales and

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auctions and uh you know clocks. I mean

6:02
you name it and I would turn around and

6:03
resell them uh to dealers and res and

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resell them at a booth that I would set

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up. So I was very much into you know you

6:10
could val what is the value of things

6:11
and and what can you sell them for? And

6:14
it it interests me enough to get a

6:16
business degree and also um when I was

6:20
getting out I I still had a very big

6:21
interest in taxes and investing and and

6:24
so forth. I decided I wasn't going to be

6:26
an airline pilot like all my friends

6:27
became an airline pilot.

6:29
Uh I decided I was going to go to Wall

6:31
Street and uh that's what I that's what

6:33
I did.

6:35
And you're one of the pioneers in low

6:37
fee investment advice and portfolio

6:38
management using ETFs and index funds. I

6:41
mean you were the I mean pioneers take

6:43
all the arrows and I'm sure you took a

6:44
bunch early but uh and you and you've

6:46
written seven over I think seven books

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um hundreds of articles people have

6:50
probably read them in Wall Street

6:51
Journal and Forbes and places like that

6:53
he's even won um he even won an award on

6:56
a research paper he did on index

6:58
investing so I mean what were the reason

7:01
I was so happy for you to come on is I

7:03
wanted you to talk about you know how

7:05
your core beliefs then leads into the

7:08
core what you call the core four.

7:11
Number four, portfolios. I think that my

7:13
listeners would be fascinated

7:16
to hear about those six simple portfolio

7:19
models that pretty much any in investor

7:22
can adopt and they can customize um as a

7:25
foundation using that. And you even have

7:27
put together a free website for public

7:29
use on that which we'll have on our

7:31
site. You don't have to write anything

7:32
down. But can you cover I'm assuming

7:34
core for comes from your core views and

7:38
your core beliefs. Am I right?

7:40
Well, the word core, I'm not sure. Yeah,

7:43
I think that

7:44
it came from the idea that investing is

7:47
a whole lot simpler than what people

7:50
make it out to be, especially people in

7:52
the industry who are trying to make a

7:54
living from this

7:56
that uh you know it it's not that

7:58
difficult. And uh and the more you study

8:01
it and the more you're in it, you

8:03
realize the simpler you can make things,

8:05
the better off you're going to be in the

8:07
long term. If you can keep things very

8:08
low cost, if you can keep your taxes

8:10
low, if you could uh just buy it and put

8:16
it away and forget it uh or maybe do

8:19
some rebalancing once a year and you

8:21
just don't do much. I mean the less you

8:22
do the better off you are. The less

8:24
moving parts the better. But you would

8:26
need to be broadly diversified as well.

8:27
So in the core fork idea which I

8:30
developed probably 15 years ago

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initially

8:33
was all what if we were just to develop

8:36
a simple portfolio that might hold four

8:39
funds say two stock funds and two bond

8:41
funds don't they don't even really have

8:43
to be bond bond funds I mean they could

8:45
be CDs they could be u annuities fixed

8:49
annuities and they could be anything as

8:50
long as a fixed income type allocation

8:53
but on the stock side you do a total

8:56
stock market index fund which is a US

8:58
fund that holds all of the stocks on on

9:00
the market and a total international

9:02
fund which holds all the stocks on the

9:04
international market and these are your

9:06
two core holdings along with your two

9:08
bond holdings let's say um and that's

9:12
all you did how would you do and the

9:14
answer is you'd actually outperform over

9:16
90% of everyone else with your

9:17
investment portfolio just doing that

9:19
wow

9:19
if you're not measuring yourself against

9:21
the markets because you're not going to

9:22
outperform the markets you're just going

9:23
to get the return of the markets but

9:26
you'll outperform over 90% of all other

9:29
investors because they're all trying to

9:31
do other things and that's probably a

9:33
conservative number 90%. It's probably

9:35
higher than that. So that was the idea

9:37
of the core 4 initially and uh I talked

9:41
about it for a while and I wrote about

9:42
it in Forbes and then I actually created

9:46
a website a few years ago and what I did

9:47
with that website was I took a couple of

9:50
variations of the core 4. I said, "Well,

9:52
if you want

9:54
a high dividend yielding portfolio, then

9:57
you could buy these four funds. And if

9:58
you wanted a ESG, socially conscious

10:04
portfolio, you could buy these four

10:06
funds." So, it still was just four

10:07
funds. That was the idea. And you could

10:09
just, this is the portfolio, 100% in

10:12
whole, done, finished. Or you could use

10:14
it as the core of something else where

10:17
you might put a little icing on the

10:19
cake, if you will. this is the cake and

10:21
if you wanted to put a little icing on

10:22
the cake, you could add some other

10:23
things to it. So that was the idea. Make

10:25
it simple so that anybody can do it.

10:27
You'd only be paying 1% to a financial

10:30
adviser or 2% high fees. Didn't need

10:34
that. Just just follow this recipe, bake

10:37
your cake the way you want it, and then

10:38
you could add a little icing to it. And

10:40
that was the whole idea, and that's what

10:42
I put out there. If anyone out there is

10:44
like screaming into the uh at their car

10:46
if they're driving or if they're on a

10:48
wherever you're at and you're saying,

10:49
"Wait a minute, that sounds eerily

10:51
familiar to John Bogle and the

10:54
Bogleheads." Uh spoiler alert. Um Rick

10:58
co-edited the book called The Bogleheads

11:00
Guide to Retirement Planning. And he

11:02
even is a host of a podcast called

11:05
Bogleheads on Investing. So he's he's a

11:09
disciple as they say of that simplistic

11:12
type of approach. In fact, he he

11:14
actually will say that simple investing

11:17
is actually a virtue and is really the

11:20
ultimate in portfolio sophistication

11:22
which kind of leads to the whole Steve

11:23
Jobs thing is simple is complex.

11:26
Correct.

11:27
That's correct. Uh simplicity is a

11:30
virtue. Complexity is a cost. The more

11:33
complex you make your portfolio, the

11:34
costlier it's going to be. it it's not

11:37
going to perform as well. The fees will

11:39
be higher, you'll make more mistakes. Uh

11:42
so complexity is a cost, simplicity is a

11:45
virtue. And if you can follow this with

11:47
your investment portfolio and you're

11:50
going to be better off in in the long

11:52
term. I mean, it's it's a marathon. I

11:54
mean, we invest our whole lives all the

11:55
way up until the end. And actually, we

11:56
invest for our kids and grandkids as

11:59
well. So, this is multigenerational. And

12:02
if you can make it simple and make it

12:03
low cost and tax efficient, you're going

12:05
to be better off. And that's that's the

12:07
belief that the bogalheads have, the

12:08
belief that I have. Correct.

12:10
Well, and and what I like about all of

12:13
this is is you I mean the funds and the

12:16
ETFs that Rick is talking about, they're

12:18
widely available everywhere, whether you

12:20
want to do it yourself or with a your

12:22
brother-in-law that's managing your fun,

12:24
whatever, whatever it work, you know,

12:25
whatever works for you. That's what I

12:27
like about it. It's simple. It's tax

12:29
efficient. It's broadly diversified.

12:32
It's low cost. Um, and it works. You

12:35
know, it it works.

12:37
And I was thinking about as you were

12:39
explaining that to a person that's flown

12:42
a uh a fighter jet, a jet, and landed it

12:44
on a um on an aircraft carrier, market

12:47
volatility probably doesn't affect you

12:49
that much. Am I correct?

12:50
Well, you know, it was funny when uh I

12:53
came into the investment industry,

12:54
people would talk about risk, and I

12:56
didn't really understand what they were

12:57
talking about. I said, you understand

12:59
what risk is? I mean, I get to go home

13:01
every single night to see my family. I

13:03
mean, this is not a risky business. I

13:04
just don't understand what you mean by

13:06
risk, you know.

13:08
By by the way, I know people are yelling

13:10
at at the uh at the screen and at their

13:12
at whatever they're listening to and

13:13
say, "Stan, please give this site."

13:15
Okay, I'm going to have it on my site,

13:16
but it's the site that we're talking

13:18
about is core core r-4.com.

13:22
core dash, not the word dash, but the

13:25
actual dash4.com. And on there you can

13:28
view free foro portfolios. You can look

13:30
at custom portfolios. Um it's all free

13:34
keyword free. I mean Rick's not playing

13:36
around now. He is I think am I right

13:39
about this? But when you started you

13:41
came from the Wall Street firms you know

13:42
we me and you both could talk about that

13:43
for a whole show but we don't want to be

13:45
negative. Um but when you left there

13:48
you're saying wait a minute this this

13:49
can be so simple and effective that this

13:52
is really an hourly fee type

13:54
arrangement. Is that what brought you

13:56
there? How did you get to being one of

13:58
the pioneers of hourly fee advising?

14:02
Well, a couple of things. I mean, Cheryl

14:04
Garrett from Garrett Planning Network is

14:06
the pioneer of hourly advising. I've

14:08
been a fan of Cheryl's for 20 years. So,

14:09
I give her all the credit for that. I

14:11
just adopted the model uh recently. But

14:14
uh when I left Wall Street uh the

14:16
brokerage industry back in 1999 because

14:18
I was well first of all I wanted to do

14:20
this type of investing for clients and I

14:22
couldn't do it as you know from being in

14:24
that industry back then you couldn't do

14:26
it. There were no ETFs. Well there were

14:28
a couple of ETFs but but it wasn't like

14:29
it is now. They've really shunned

14:31
anything having to do with indexing. It

14:33
was all about active management and high

14:35
fees and return on assets meaning how

14:37
much money you're going to get from your

14:38
client portfolio for you and for us and

14:40
for the firm

14:41
and and it wasn't about you know client

14:43
centric at all really. So when I had the

14:46
epiphany of indexing back in around 1996

14:49
I decided I needed to leave that

14:51
industry but it took me three years to

14:52
do it because I had a contract and I had

14:54
to hang around for another three years

14:55
or I would have would have lost a lot of

14:57
money. I had re redone my kitchen. We

14:59
bought a pop-up camper and you know I

15:01
spent all the money that I got and and

15:02
so therefore uh you know I needed to

15:04
hang out but I did but I just planned my

15:06
escape and left in 1999 and started a

15:09
low fee advisory business which was

15:11
revolutionary at the time. I charged a

15:13
quarter of a percent.25% 25% wow to put

15:16
put people in basically portfolios of

15:18
Vanguard index funds and some ETFs and

15:20
some dimensional funded advisors which

15:22
were kind of like index funds and I

15:24
custody at Schwab and custody at

15:26
Fidelity custody at TD merit trade the

15:28
client's accounts but I only charged a

15:30
quarter of a percent and that really

15:32
took off. I mean, it it was uh it was we

15:36
went up to went up to a billion and a

15:37
half dollars and I ended up getting

15:39
bought out by a private equity investor

15:40
in a rather the ugliest transaction you

15:42
ever want to talk about. And we really

15:43
want to want to talk about it there, but

15:45
it was ter it was a terrible thing that

15:47
uh happened. Anyway, uh but uh when when

15:50
I got bought out eventually by uh this

15:53
fellow, he um he went and took the

15:55
company a different direction

15:56
unfortunately. But uh I was left you

15:59
know without a job and uh short

16:01
non-compete and I said okay now I'm

16:03
going to do really what I have been

16:05
thinking about doing for a long time.

16:06
I'm going to follow Cheryl's lead and

16:09
I'm just going to do advice for the sake

16:12
[snorts] of advice. People pay me now

16:14
by the hour

16:16
for advice and uh that's it. I have no

16:20
skin in the game and I I just do what I

16:24
believe is in their best interest. And

16:26
and I say to them, if I were you, this

16:28
is what I would do. And I it's I'm

16:29
really the truth. That is exactly what I

16:31
would do. I'm not trying to sell a

16:33
portfolio management service. I'm not

16:34
trying to sell any products. I'm just

16:35
trying to help people with their

16:38
financial life. And uh uh I get that

16:41
that's what my business is now. I work

16:42
with one or two clients a day for an

16:44
hour or two a day and and that's it per

16:46
client. You just succinctly

16:49
define fiduciary.

16:51
I hope so.

16:52
That's that's [laughter] what a fid

16:53
people say. What's a fiduciary? Rick

16:54
just Rick just did it. He's doing what

16:57
he would do for himself. He's putting

16:58
your best interest ahead of everything.

17:01
I find it funny that we have to somewhat

17:03
try to legislate people having morals

17:05
and ethics. [laughter]

17:07
Um if you're in the financial business,

17:09
you should by default be a fiduciary

17:11
because that's why you're in it. I want

17:12
to go back to the core four real quick

17:14
and I was digging in last night and was

17:17
really fascinated because when you go to

17:19
that site again, it's going to be on my

17:21
website. You'll just link to it. It's

17:22
free. There's a classic portfolio,

17:24
there's a total economy portfolio,

17:27
there's a global markets portfolio,

17:29
there's an inflation portfolio, there's

17:30
an income seeker portfolio, and even for

17:33
you socially conscious people out there,

17:35
there's an ESG socially conscious

17:37
portfolio. Mhm.

17:39
You pretty much covered the full

17:40
spectrum on that. Which was the first

17:43
one to come. Which was the first one you

17:45
introduced and which one was the last

17:47
that you

17:48
Well, actually the first one isn't even

17:50
on there. The original original classic

17:53
portfolio was the total stock market

17:54
index fund, the total international

17:56
index fund,

17:57
the US total bond market or aggregate

18:00
bond market index fund, and a a US TIPS

18:03
index fund. Sure. Now, for some reason,

18:06
I didn't put that one on there, but if

18:08
there was a pre-classic, that was it.

18:10
And then I expanded it a little bit and

18:12
said, "Okay, let's just do the total

18:14
stock, total bond market, and drop the

18:16
tips

18:17
um and go with uh three stock funds,

18:20
which are the total stock, the total

18:22
international, and a little bit in the

18:24
real estate fund."

18:25
But again, you can mix and match these

18:27
however you you need to. it they it's

18:30
all as I wrote on the website you either

18:32
take them as they are or you modify them

18:35
to your needs um but the idea is

18:38
simplicity be simple be low cost be

18:42
consistent uh stay the course be tax

18:45
efficient all the good bogalhead type

18:47
philosophy

18:48
sure

18:49
that goes behind uh these these

18:52
portfolios and there's also funds that

18:56
do it all you could you could just buy a

18:58
balanced index fund fund or life

19:00
strategy fund from Vanguard and

19:02
pretty close to the same thing only you

19:03
don't have to manage the portfolio

19:05
yourself they'll do it for you right

19:07
there through the life strategy fund so

19:08
there's other ways of doing it as well

19:10
to be very simple but this is the idea

19:12
be simple be low cost

19:15
with that being said with over 5,000

19:17
mutual funds and over 2,000 ETFs you

19:19
know and counting you know choosing

19:22
amongst those can be really hard to do

19:25
um on your site you list kind of a like

19:28
a fourstep five. It's actually a

19:30
five-step process.

19:32
Can you kind [clears throat] of go

19:33
through that knowing that and everyone

19:35
knows that everyone's situation is

19:36
customizable, but can you go through the

19:38
steps the five steps that you laid out

19:40
and once again it's on his site, but I

19:42
think the the viewers and listeners

19:43
would be interested for you to explain

19:45
it since you came up with it.

19:47
Well, great. Could you tell me first

19:49
what the steps are and

19:50
absolutely [laughter] gonna do it? I'm

19:53
successful because I don't remember

19:54
everything I wrote. Select a portfolio

19:56
strategy.

19:59
So this would be the asset allocation

20:02
between stocks and bonds. So you have to

20:04
make a determination whether or not

20:07
you're going to be aggressive or whether

20:08
you're going to be conservative because

20:10
you want to be consistent with this. So

20:12
your strategy is going to be am I should

20:15
be should I be aggressive? Should I be

20:17
80% in stocks? Should I be conservative?

20:19
Should I be 50% or 40% in stocks? So,

20:21
you first have to decide what the cake

20:24
is going to look like and and how

20:26
aggressive you're going to be or how

20:28
conservative you're going to be. And

20:29
that's based on two factors. Number one,

20:31
what kind of a rate of return do you

20:32
need? Do you need a higher rate of

20:33
return? Do you need a higher rate of

20:34
return? I mean, you

20:36
are you required to get a higher rate of

20:38
return because you're really not able to

20:39
save that much and you really need to

20:41
get more and that you would need to have

20:43
a uh a higher allocation to stocks. Um,

20:46
but then also your ability to handle

20:50
risk because if even if you need to get

20:52
a higher rate of return, if you can't

20:54
handle the volatility that that implies,

20:57
then you're going to not get a higher

20:59
rate of return because at the worst time

21:01
of the market, you're going to pull the

21:02
plug and capitulate and jump out and

21:04
that's going to going to hurt you. So,

21:06
it's a combination of two sides of the

21:07
the coin. It's your emotional, do you

21:09
understand yourself emotionally? And

21:11
then technically do you understand how

21:13
you know what kind of rate of return

21:15
you're looking for to to come up with

21:17
the strategy that you need the uh you

21:19
know the asset allocation.

21:21
Step number two is is choose a stock and

21:24
bond mix. Now you do have a link to the

21:25
Vanguard questionnaire on there which I

21:27
think is is is

21:29
good. Okay.

21:30
So let me let me let me reverse

21:33
let me back up that. I apologize. So so

21:35
the strategy would simply be active or

21:37
passive. Uh so I apologize for that. So

21:39
this is actually I already answered step

21:41
two. So this is step one. So step one is

21:43
are you going to be active or passive?

21:44
And that's simply are you going to use

21:45
lowcost index funds or you going to try

21:47
to outperform the market and clearly I

21:49
say the benefit to you is to use lowcost

21:51
index funds which leads us into number

21:52
two which is the asset allocation

21:54
question of how much you should have

21:56
between stocks and bonds.

21:57
Sure. And then number three is to just

22:00
select your funds. I think that's the

22:02
one that people are going to go wait a

22:03
minute. Didn't you just say Stan there's

22:04
5,000 funds and 2,000 ETFs? And the

22:06
answer is yes I did. Mhm.

22:08
Select your funds. That's where you can

22:10
help. Correct. With this with this site.

22:12
Sure. Sure. So

22:15
99% of those funds are not needed,

22:18
unnecessary, redundant. You know,

22:21
they're there for some other purpose

22:22
other than to make you money. They're to

22:23
make somebody else money.

22:25
The funds you want to concentrate on are

22:26
the total market index funds,

22:30
US total market, the international total

22:32
market. And you could go and screen

22:35
total stock market index fund list,

22:38
total international index fund list, and

22:40
you'll come up with these databases

22:41
that'll you'll be able to screen for

22:42
this. Uh there's not that many of them

22:44
out there. Fidelity has them, Schwab has

22:47
it, Vanguard of course has it, some ETFs

22:50
like uh State Street has it, uh

22:53
Eyesshares has it, and they're all very

22:54
very similar. You look at the underlying

22:57
index that they're follow that they

22:59
follow, and they're all very similar.

23:00
They all have at least 2500 stocks all

23:02
the way up to 4,000 stocks that they're

23:04
all low cost. So really any of those

23:07
would work well. Uh same thing on the

23:09
international stock fund. You do a total

23:11
international be the same thing. You'll

23:13
get a a laundry list of funds and ETFs

23:17
that track the entire international

23:19
market, which is maybe 6,000 other

23:23
companies not in the US. Fidelity has

23:25
one, Vanguard has one. There there's

23:28
there's a number of them out there. Some

23:29
of them include emerging markets. Those

23:31
are the ones I like. So, it's both

23:32
developed markets and emerging markets

23:34
in one fund. So, there's

23:37
probably five or six really good very

23:40
lowcost funds that are available by

23:41
different vendors that different fund

23:44
companies that are that are available to

23:46
you. And on the bond side, there's total

23:49
bond market is offered by Vanguard, by

23:51
Fidelity, by Schwab, Eyesshares, State

23:54
Street. uh there there's black rock has

23:58
I mean there's a lot of different uh

24:00
total bond market funds and again on the

24:03
fixed income side it could be different

24:04
doesn't have to be bond fund it could be

24:05
a CD ladder it could be annuities fixed

24:07
it could be any could be a lot of

24:08
different things on the on the bond side

24:10
but um there's these are the core funds

24:14
that you're looking for and

24:17
the differences between them are not

24:19
much the fees are all very very low like

24:22
in the stock funds they might be 03 3 to

24:25
maybe 0.05%. They're all very low.

24:28
International might be a tad higher than

24:30
that. Bond funds are all going to be

24:32
very low. And so you can tell when

24:34
you're looking at the fund the expense

24:35
ratio really whether you've got what

24:37
you're looking for because if the

24:39
expense ratio is very low around, you

24:41
know, less than 0.1% you're probably

24:43
fishing in the right lake. This is what

24:45
you should be looking for.

24:48
You've partnered with a firm that offers

24:50
something called the portfolio

24:51
visualizer, which is step number four,

24:53
analyzing your selection or ongoing

24:55
analysis of the selections.

24:57
Yeah.

24:58
Without thinking that people are going

25:00
to go down the rabbit hole here because

25:01
we don't want them to do that obviously,

25:03
[laughter]

25:04
um, tell us how that works and and how

25:06
you've simplified that.

25:09
Well, the portfolio visualizer again is

25:11
a free website and you could just type

25:12
in these exchange traded fund symbols in

25:15
there and if you wanted to know what the

25:19
performance was, which some people do,

25:22
personally me, I I don't care what the

25:24
performance was. It makes no difference

25:26
to me. I I that's in the past. I I have

25:28
a good idea why I'm investing in these

25:30
funds for the future. But I mean, if you

25:32
really wanted to know, you could type

25:33
them all into this free website,

25:35
portfolio visualizer, and you could see

25:37
this portfolio achieved x return with x

25:40
amount of risk and had so much downside

25:42
and so much upside during, you know,

25:44
various market cycles and and you could

25:46
look at it. Now, I don't really believe

25:47
that that's

25:50
I mean I I can't even recall the last

25:52
time I actually calculated. People do

25:55
calculate that. I have people who who I

25:58
get I get on the internet and I can find

26:00
people who calculate what what the rates

26:02
of return are of those portfolios, but I

26:05
don't and nor do I care because I'm not

26:07
it I I guess I'm after 35 years in the

26:10
industry and seven books and CFA and MBA

26:13
and all this other stuff that I've done

26:14
and masters of science and finance and

26:15
blah blah blah blah and all the research

26:17
I realize that

26:20
that's not that doesn't really give me

26:21
any information at all. you know what

26:24
that happened. If I'm doing low cost and

26:26
I'm doing diversification and I'm doing

26:29
low taxes and I'm going to stay the

26:30
course, I know what I'm expected to get

26:32
out of that going forward. It doesn't

26:34
really matter what happened over the

26:36
last 5 years or 10 years. And quite

26:37
frankly, it's really a distraction to go

26:40
down that road. But since some people

26:42
want to see, then it's there. And I did

26:45
link up with them. Again, it's all free.

26:47
It's not like there's

26:49
any kind of a

26:50
cost to doing any of this. That's what I

26:53
love. It's no gotchas. Once again, let's

26:55
before we get to step five, because I'll

26:57
let you knock that one out of the park.

26:58
Step one is select a portfolio strategy.

27:01
Step two is choose a stock and bond mix.

27:04
Step number three is select your funds.

27:06
Step number four is analyze your

27:08
selections. And step number five, Rick,

27:11
invest your core four portfolio.

27:14
Yes,

27:15
that's it. Now, now I know you're solid.

27:18
You're you're [laughter]

27:19
pull the trigger. So in other words,

27:20
don't just analyze, pull the trigger,

27:22
right?

27:22
Procrastination, it's it's the last

27:24
phase. So uh let me kind of talk about

27:26
the three phases of this or the three

27:28
steps to getting this done. The first

27:29
step is the philosophy, which is the you

27:32
know what you had talked about uh

27:34
you know whether you're going to be

27:35
passive or whether you're going to be

27:36
active. If you're going to do index

27:37
funds, you're going to be passive low

27:38
cost. So that's the philosophy that

27:40
you're using. You're not going to try to

27:41
outperform. And then there's the

27:43
strategy. And the strategy is what we

27:44
had talked about how to select the

27:45
funds. how to select your asset

27:46
allocation and then how to select the

27:48
funds and all of uh everything you need

27:50
to do and if you want to test it or look

27:52
at it, whatever, but come up with what

27:53
it is you're going to do. Now's the hard

27:57
part. Now's the hard part. And the hard

27:59
part is do it. Get actually do it. Get

28:03
it implemented and maintain it. This is

28:06
excruciatingly

28:08
difficult. The other stuff is

28:10
interesting. I mean, there's an epiphany

28:12
of the active versus passive side, step

28:15
one, where you say, "Oh, wow. I get

28:16
this. This is great. This is wonderful.

28:18
I'm I I get the whole idea. The clouds

28:20
lift. I I get the whole thing." And then

28:22
you start digging into the details of,

28:23
"Okay, how do I do this? How should I do

28:25
it? What should my portfolio look like?

28:27
What funds should I use? How do I mix

28:29
all this stuff together?" And you get to

28:30
that point. This is what I should do.

28:32
That's kind of, you know, stimulating,

28:35
brain stimulating, if you will. But now

28:37
comes the hard work, and that is do it.

28:40
do it. Wow.

28:42
And that's what that's that's in life. I

28:44
mean, it's it's hard it's it's hard to

28:45
pull the trigger. Um, of the seven books

28:48
that you've you've written, and I'll

28:50
read them off to the to the listeners

28:51
and viewers. And once again, we'll have

28:53
the link straight to his uh his Amazon

28:56
site so you can buy them. Um, and the

28:58
books are titled All About Asset

29:00
Allocation. Um, another one's called All

29:03
About Index Funds, another VETF book.

29:07
Fourth one is The Power of Passive

29:09
Investing. Fifth is protecting your

29:10
wealth in good times and bad. Fifth is

29:13
serious money, straight talk about

29:15
investing for retirement. And then the

29:18
the the final one, the boghead's guide

29:20
to retirement planning. Two of those

29:21
jumped out at me, Rick, which is

29:24
protecting your wealth in good times and

29:25
bad. And then the serious money straight

29:27
talk about investing for retirement.

29:29
Most of the people that are listening to

29:30
this either thinking about retirement,

29:32
in retirement, can trying to dispel

29:34
retirement, but at least going in that

29:35
direction. And then the other one, so we

29:38
need to talk a little bit about that,

29:39
but the good times and bad which seem to

29:41
always be around. Can you discuss the

29:44
current environment and what people, you

29:47
know, the fears people have? You talk to

29:48
them just like I do. And

29:49
sure,

29:50
what's your advice, Mr. Fighter Pilot?

29:53
Well, this too shall pass. [laughter]

29:56
Uh,

29:58
look, you investing it doesn't come

30:00
without risk. If you don't want any

30:01
risk, well, you can't you can't invest

30:04
without risk because even if you left

30:06
your money in a money market fund,

30:08
inflation is eating it away

30:10
right now. So, you have inflation risk.

30:13
It's just living has risks. So, uh money

30:17
has risks. Burying your money in a mason

30:19
jar is risky. So, it's it's not uh

30:26
this environment is not different than

30:28
any other environment. It's always

30:30
unknown. There's always something you

30:33
could point to that's bad. You could

30:34
always point to something that's good.

30:36
That's what makes a market.

30:39
We have uh you know interest rates right

30:42
now are h I I I never say are going

30:46
anywhere. So I can't say

30:48
little tongue and cheek. I cannot say

30:50
interest rates are going up because we

30:52
don't know that. Now we think interest

30:54
rates are going up but we don't know

30:56
interest rates are going up and so many

30:58
people have been hurt

30:59
because for 15 years they thought

31:02
interest rates were going up and

31:04
interest rates went down. Uh so now

31:08
interest rates have gone up. They've

31:10
gone up a lot in the first quarter. In

31:12
fact more so than in the last 40 years

31:14
they've really people who have had money

31:16
in bonds bond funds have lost more of

31:19
their temporarily because things are

31:21
self-correcting in the bond market.

31:23
Remember those bonds come due, they get

31:25
reinvested. Money coming in now, the

31:28
dividends and interest coming in from uh

31:30
cash paying securities get reinvested at

31:32
higher rates. So it becomes

31:34
self-correcting, self-writing. Doesn't

31:36
happen right away, but it does happen.

31:38
So this is but this is a shock to a lot

31:41
of people uh who had not seen bonds lose

31:45
money. I saw it back in 1994. Pretty

31:47
substantial losses in fixed income.

31:49
I was there.

31:50
Yeah. But not as bad as actually it is

31:51
now. It's a little bit worse now. Uh at

31:54
least up until today. And again, I don't

31:56
know what's going to happen from this

31:58
moment forward, but that's what has

32:00
happened. And stocks have come down

32:05
some. And there there is a relationship

32:08
between higher interest rates and lower

32:11
stock prices. So the fact that interest

32:13
rates have gone up and the price of

32:15
stocks have come down some is no

32:17
surprise. If interest rates continue to

32:20
go higher, it could be stocks will will

32:23
continue to go lower. However, if it

32:25
doesn't that that doesn't happen on the

32:27
plus side, you've got a tremendous

32:29
amount of cash sitting on the sideline

32:32
from that needs to be invested. Even my

32:35
client's portfolios just overly stuffed

32:38
with cash and waiting to invest in bonds

32:43
and stocks. trillions of dollars out

32:46
there in the banking industry waiting to

32:47
be invested in stocks and bonds. So

32:49
there's this avalanche of money out

32:52
there that could come tumbling into the

32:54
market if say there was a ceasefire and

32:57
whatever whatever the catalyst is you

32:59
know in the UK it doesn't matter what it

33:01
is they'll this could everything could

33:03
reverse um we just don't know we don't

33:06
know those things so how do you invest

33:08
with all of these

33:11
uh known unknowns and unknown unknowns

33:14
and all all of that how do how do you

33:16
invest well you have to have an

33:18
allocation that you and stick with

33:19
between stocks and bonds through all

33:22
market conditions. You have to be very

33:23
low cost. Just be tax efficient. Do some

33:26
tax loss harvesting in your taxable

33:27
account. If you've lost some money, take

33:31
the lemons and turn them into lemonade.

33:33
Go from one Vanguard total stock market

33:36
index fund to an iare total stock market

33:38
index fund. Go from a Vanguard total

33:40
bond market index fund to an iShare

33:43
total bond market index fund. It's not a

33:44
wash sale because there are two

33:46
different fund companies there. So you

33:48
can take the tax loss and you can use

33:49
those tax losses to offset gains or

33:52
ordinary income up to $3,000 a year. So

33:54
you just be smart about how to use these

33:56
tax make make the tax loss an asset if

33:59
you will and take advantage of doing

34:00
that. So there are things you can do to

34:02
take advantage of uh the this downturn

34:05
that has occurred in the market. As far

34:08
as changing your investment strategy,

34:11
that you don't want to do, particularly

34:13
when things are either red-hot or have

34:16
taken a beating. That's not when you

34:18
want to change your investment strategy.

34:20
You don't want to become brave in a bull

34:21
market and you don't want to get scared

34:23
in a down market. You just have to

34:25
maintain, stay the course, and things

34:28
eventually self-right after a while. But

34:31
it does sometimes take a while. If you

34:35
have money that you need to buy a house

34:36
with or you're going to be doing

34:39
something else with that money, it

34:40
probably shouldn't be in the stock or

34:41
the bond market anyway. It should

34:42
probably be sitting in a bank somewhere

34:44
earning very low interest but and

34:47
probably in below inflation interest,

34:49
but that money is for your spending

34:51
needs. And I don't really even count

34:53
that as far as your investments. So, you

34:55
got to differentiate monies as well.

34:58
long-term money you need to be very

35:01
patient with and the short-term money

35:02
you just need to be very safe with.

35:05
One of the things I was reading uh I was

35:07
reading a bunch of your stuff um over

35:09
the weekend actually and one of the

35:12
things that jumped out to me is

35:13
something you said about the there's

35:14
some three attributes that successful

35:17
investors have and and you have

35:21
cultivated this over your you know 35

35:24
years of talking to people and helping

35:25
people and listening to people. Um there

35:29
are three and I want you to cover each

35:31
of them but it's number one is is

35:33
embrace a passive philosophy. Number two

35:35
is create a portfolio strategy

35:39
and then the hardest one maintain

35:42
discipline.

35:43
Now for a marine like you that's that's

35:44
an easy one for for the rest of us.

35:46
Sure it is. [laughter]

35:48
That's an easy one.

35:49
Well a lot of my Marine Corps friends

35:51
unfortunately uh who were flying jets

35:53
unfortunately are not around today

35:55
because they didn't maintain flight

35:56
discipline. But um okay

36:00
uh sadly but uh

36:01
let's let's cover P you know we kind of

36:03
talked about passive philosophy and we

36:05
and portfolio strategy.

36:07
Can we talk a little bit about the

36:09
discipline and and the dieh hard

36:11
discipline that you talk about sticking

36:14
with the plan? That's easy to say

36:16
because we've all started and stopped

36:18
and started diets and written [laughter]

36:20
down you know first the year goals but

36:22
investing this is legit. This is real.

36:24
This is game time. How do how do you

36:26
tell people to do that?

36:28
Yeah. So, you know, the three things,

36:29
the philosophy, the strategy and the

36:31
discipline are really taking what you

36:32
initially started with about the five

36:34
things and I sort of boiled them down to

36:35
three. So, took, you know, took the

36:36
asset allocation side and the fund

36:38
selection side and I packaged it

36:40
together into strategy. So, I took that

36:42
and made it five and I made it three

36:44
here. So, you can see the evolution of

36:46
this as I try to get even simpler and

36:47
simpler

36:48
uh when describing the approach.

36:50
But again, discipline is two sides. The

36:54
first first side is getting it invested.

36:57
You have to actually implement it. So

36:59
the first part of discipline is now that

37:01
I've got the strategy, I've got my plan.

37:02
I know what I want to do. Getting it

37:05
implemented is difficult.

37:07
How do you tell people to to get over

37:09
that hump? I I mean, what do you tell

37:11
them? You have a person on the phone and

37:13
they just keep heming and honing. This

37:14
is, you know, you've had a couple of

37:16
conversations with them. I

37:18
can't I can't get them to do it. I I

37:20
can't. It's it's like it's like a uh a a

37:23
physical trainer who says you've got to

37:25
come in and work out if you want to get

37:27
in shape and they say, "Yes, I'm coming.

37:29
I'm coming. I promise I am. I'm coming.

37:30
I'm going to do it. I'm going to do it."

37:32
And they never do it. Right. It you can,

37:34
you know, lead a horse to water, but you

37:35
can't make them drink kind of thing. I

37:36
can show you what you need to do. I can

37:38
help you create the plan. I can't do it

37:41
for you. Now, here's where advisers come

37:43
in where they say they can do it, but

37:45
they can only really do a small portion

37:47
of it because it might be 401k plan that

37:49
needs to be implemented. You may have to

37:51
buy some CDs or do some other things.

37:52
Some paperwork has to be done. If they

37:54
even as an adviser, if the if the client

37:56
doesn't do the paperwork, doesn't follow

37:58
through. There's nothing you could

37:59
actually do about it. So, the the first

38:02
phase of this is actually get it done.

38:04
Get it done. Now, I've got some clients

38:05
who are very very good at it. They've

38:07
taken this plan that I helped them

38:08
create and they they went and they got

38:10
it done.

38:11
And then there's the other half. The

38:14
other half are exactly

38:15
call me up a year later and say, "Well,

38:16
America, you're going to really upset

38:18
with me. I really haven't been very

38:19
good. I kind of got some of it done, but

38:20
not all of it." And then we go through

38:21
it all again and say, "Okay." And I

38:23
write out, "This is what you need to do.

38:25
You need to do this, this, this, this,

38:26
this." And I send it to them, and in a

38:27
year later, they call back and they send

38:29
me their portfolio, and it hasn't really

38:31
changed very much, right? So, it's like,

38:34
I can't do anything about that. I I

38:36
honestly can't. one you you you at some

38:40
point it gets done maybe and if it gets

38:42
done

38:44
that's the biggest hurdle I mean by far

38:47
once you get it done

38:50
maintaining it is easy you know once you

38:53
go to the gym a few times and you start

38:55
working out it's easier to get in the

38:57
car or and go to the gym because you're

38:59
you get into a routine and it makes it

39:01
so much easier but this is the

39:04
implementation

39:05
phase of discipline is absolutely the

39:10
hardest phase of investing. It's not the

39:13
philosophy. It's not coming up with the

39:15
strategy. That's all fun and

39:16
interesting. It's the excruciating pain

39:19
that it seems like people sometimes have

39:20
to go through to actually get it

39:22
implemented. But once it's implemented,

39:24
once it's done, then they're pretty much

39:27
it's easy to maintain. It's really not

39:29
difficult at all. Do you think that

39:31
market timing or interest rate timing is

39:33
the the killer of discipline a lot of

39:37
times?

39:39
Yeah, let's talk about this and let me

39:42
frame it in a either when you're going

39:46
to implement the strategy and you've got

39:48
a bunch of cash. Are you going to do a

39:50
lump sum?

39:52
You're gonna do it all at once and one

39:53
day you're gonna go in and you're gonna

39:55
do all the trades and you're gonna get

39:56
it done in one lump sum

39:58
or you're gonna dollar cost average

40:00
where it might put some in now, three

40:02
months later you put some more in, six

40:04
months later you put some more in and so

40:05
forth until it's all actually done. Now

40:08
it sounds a whole lot more palatable to

40:11
people who

40:13
you know who are looking at the market

40:14
and saying oh the market's high or maybe

40:17
the market has come down and I think

40:19
it's going to come down further. you

40:20
know what if interest rates go up and

40:22
this and that because really palatable

40:24
to them to do dollar cost averaging.

40:26
Well, let me tell you, it's usually not

40:28
the best way of doing it. And here's

40:30
why. It doesn't get done. It doesn't get

40:34
done.

40:36
What they'll do is look, if you're going

40:39
to do the lump sum, let's cover that

40:40
first. If you're going to do the lump

40:41
sum, it's painful. Excruciatingly

40:44
painful. And you might as well get it

40:46
into your mind that if you do the lump

40:48
sum and you take it all and you

40:49
implement it in one day, you make the

40:51
change and you do it all in one day, you

40:53
might as well just get it into your

40:55
head. The next day the market's going to

40:57
crash. You might as well get it into

40:59
your head cuz it's going to you just

41:02
expect it to. Now, we don't know whether

41:04
or not it will or not. But you're

41:06
sitting here saying, "When should I do

41:07
this? When should I do it?" Okay, I'm

41:08
going to do it now.

41:11
you might as well have in your head that

41:13
your timing is the worst it could

41:14
possibly be and the market's going to

41:15
crash because if it does then it meets

41:18
your expectation [laughter]

41:21
and if it doesn't it's like wow I

41:24
actually went up you know this is

41:25
incredible I didn't screw myself okay so

41:29
you do it one time it's one pain point

41:30
that you have to get over and it's a big

41:32
pain point to get it invested and no by

41:34
the way statistically that's what you

41:35
should do mathematically you should get

41:36
it all invested at once and don't worry

41:38
about it but people want to be able to

41:40
do the dollar cost davage because it

41:41
just sounds more sounds better. Now,

41:43
let's go to the dollar cost average

41:44
person. Okay, now I got to invest a

41:46
million dollars. I'm going to put

41:47
$250,000 a quarter for the next uh four

41:51
quarters. I'm going to start today. I

41:53
put it in today. Ah, I got my I got a

41:55
quarter of it invested. Three months

41:57
from now, I have to go through the same

41:59
excretionary pain.

42:02
Yep. in three months maybe that money

42:06
will get invested or maybe I don't like

42:07
what's I see right going on in the world

42:11
maybe I don't like this election that's

42:13
coming up maybe I'm going to wait and

42:15
other it doesn't get done so dollar cost

42:18
avenue is a great idea and if you could

42:20
do it automated where somebody else does

42:22
it for you or computer does it great

42:23
where you have no say in the matter

42:25
that's great like a 401k yeah the money

42:28
comes out of your checking your your

42:30
check or your pay paycheck and it goes

42:32
directly to the 401k and it gets

42:34
invested. Okay, you don't touch the

42:35
money. That's great. Somebody else does

42:37
it. It works. But when you have to do

42:39
it, it doesn't work. It's hard to do.

42:41
But once you rip the band-aid and

42:42
implement it all all at once, it's done.

42:45
You're not going back. You're not going

42:47
to change anything. You're you should

42:49
expect bad things to happen after you

42:52
rip the band-aid off. There's going to

42:53
be some bleeding [laughter]

42:55
potentially. And uh and you just expect

42:59
that. Just expect that you're going to

43:00
be wrong in your market timing. expect

43:01
that the market's going to work against

43:02
you as soon as you rip the band-aid off,

43:05
but but here's the thing about ripping

43:06
the band-aid. Once you rip the band-aid

43:08
off, it's off. It's it's done. The

43:09
account's invested. Yes, there may be

43:11
some bleeding, but you're not going to

43:12
change it. It's finished. You you've

43:14
allocated. You're you're invested.

43:16
You're in the program now,

43:18
and now you can go forward. um dollar

43:22
cost averaging, you have to rip the

43:23
band-aid off like four times or eight

43:25
times because you're putting this money

43:27
in over a period of staging it in over a

43:29
period of a year or two. And it just

43:32
ripping the band-aid off once is hard

43:33
enough, but having to do it four times

43:35
or eight times is just way too hard for

43:37
most people.

43:38
Couple couple final questions because

43:39
this has been fascinating. I could talk

43:41
to you forever, but I am interested with

43:43
someone of your background and knowledge

43:45
and just outlook on things. What's your

43:48
take on Bitcoin right here? Not the

43:50
blockchain technology is obviously I

43:52
think that's legitimate technology, but

43:55
the the Bitcoin tulip bulb, whatever you

43:57
want to call it. I'm I'm fascinated to

43:59
know what someone like you thinks about

44:01
that.

44:02
Well, I don't know what the value of a

44:03
Bitcoin is. Uh to me, there is a cost to

44:07
mining a Bitcoin and that is a really

44:10
fixed cost based on the amount of power

44:11
that you have to use to to mine a

44:14
Bitcoin and also the amount of capital

44:16
you have to put in

44:17
Sure. a hard hardware to to get this

44:20
thing going. So there there is a cost to

44:22
mining a bitcoin. And to me at least the

44:25
value of a bitcoin should at least equal

44:27
the cost to mine it much like if you

44:29
were going to be mining copper or gold

44:31
or anything else. I mean at some point

44:32
if it's not economical to mine bitcoin

44:36
anymore then people would stop mining

44:38
bitcoin until it did become economical.

44:40
So there must be some value to it

44:43
because it is the currency in which

44:44
these miners are paid for figuring out

44:47
the algorithms and confirming the trades

44:49
and so forth in the blockchain. So there

44:51
must be some value to it. Uh and to me

44:54
it's it's it's the it's the the the cost

44:58
to mine it. So be there's so many miners

45:00
out there and you could get into the

45:01
business pretty easily.

45:02
Sure.

45:03
Uh by just downloading some basically

45:04
free software and you know buying some

45:06
computers but then hooking it up to the

45:08
to the grid. But the bottom line is it's

45:10
hard to

45:11
uh you know what is that cost? Is it

45:13
35,000 36,000? I mean there's a hash

45:16
rate that that tells us what the cost

45:17
is. So then maybe that is the value the

45:18
true value of Bitcoin and things kind of

45:21
fluctuate from around that. I I I don't

45:23
know. Now, as far as using this in a

45:25
portfolio,

45:26
if you're going to treat Bitcoin as a

45:28
currency, some sort of a global currency

45:30
that um you it's important for some

45:34
countries, you know, third world

45:36
countries or emerging markets if you

45:38
want to be politically correct. Uh you

45:40
know, this is a really uh an important

45:42
uh technology that helps them transact

45:44
business.

45:45
But um

45:47
yeah, it's it's got a long way to go in

45:48
this country in developed markets.

45:51
And I say to people, if you're treating

45:53
this as a currency, then are you going

45:56
to put it alongside of your portfolio of

45:59
yen and uh sterling and euro and Deutsch

46:05
mark? Are you going to add it to that

46:06
currency portfolio? And they look at me

46:08
and go, "What are you talking about?" I

46:10
said, "Well, you're telling me this is a

46:12
currency."

46:14
So that means you must have a currency

46:15
portfolio, correct? And they like they

46:19
never thought about that. I'm

46:20
like,"Well, how can you not have a

46:23
currency portfolio if you're talking

46:25
about buying currency, this currency?"

46:27
And so they said, "Well, I I I don't

46:29
really want a currency portfolio. Never

46:30
really thought about having should I

46:31
have a currency portfolio?" I said, "No,

46:33
you don't need a currency portfolio." In

46:35
fact, if the world starts transacting in

46:36
Bitcoin, if big companies start

46:38
transacting in Bitcoin, it'll be part of

46:41
the balance sheets of corporations,

46:42
it'll already be in your portfolio.

46:44
There'll be companies like Coinbase and

46:46
so forth that'll be in the total stock

46:47
market index fund. You're going to have

46:48
exposure to it. Sure.

46:49
You don't really have to go out and buy

46:51
Bitcoin to do that. In fact, if you own

46:53
a total total stock market fund, you

46:55
already own a little bit of this

46:56
already. So,

46:57
that that's that is a a very good point.

47:00
Definitely. One more question, but

47:02
before I do that, I was writing down

47:04
just kind of who you are. I'm just

47:05
fascinated with the character that you

47:07
are and and the personality that you

47:08
are. Uh, which is I know my viewers and

47:11
listeners are just loving this. But one

47:13
last question, but before that I wrote

47:14
down fighter, pilot, entrepreneur,

47:16
visionary, 40-year husband, boglehead

47:20
leader, Rhode Island Ram, I see I know

47:22
the mask, [laughter]

47:23
former Marine, investment advisor,

47:26
expert, CFA, MBA, fiduciary,

47:30
and all-around good guy. And with that

47:31
being said, and I left out a bunch.

47:33
Yeah, I used to be the Rhode Island

47:34
table tennis champion, too, at one time.

47:36
See, there you go. Ping pong expert.

47:38
[laughter]

47:39
Table tennis. Ping pong in the south,

47:41
you know. But um I do this with all of

47:43
my celebrity guests at the very end and

47:44
I never tell anybody this beforehand,

47:48
but I think you can handle it, Mr.

47:50
Fighter Pilot. You've seen [laughter]

47:51
something you you can do it. So we're,

47:53
you know, we're going to come in and

47:54
we're going to land this thing on the uh

47:56
on the deck of the moving boat. Mic drop

48:00
moment.

48:01
What would you tell people if you had

48:03
the mic for 30 seconds to a minute?

48:05
Words of wisdom from Rick Ferry.

48:08
Yeah, all this money stuff is not

48:09
important. uh your family is the most

48:11
important thing and if you take care of

48:12
your family everything else will will

48:14
work out. Uh happy wife, happy life. I

48:16
firmly believe that and uh that's where

48:18
you should be concentrating your

48:19
efforts. All this investment stuff, I

48:21
mean I wish I learned about indexing a

48:22
long time ago so that I could have just

48:23
done it with my portfolio, forgot it and

48:25
got on to those more important things.

48:28
Tell you what, if you didn't write that

48:29
one down, then re rewind the tape.

48:32
[laughter] So, uh Rick, really

48:34
appreciate you being on and fascinating

48:36
conversation. hopeful hopefully you'll

48:38
join us again in the future. Um I do

48:41
want to thank everyone who's watching on

48:43
the fund within Annuities YouTube

48:44
channel and listening on all major

48:45
platforms to fund with Annuities which

48:47
is surprisingly one of the fastest

48:49
growing business podcasts in the country

48:51
and the reason is because I have people

48:52
on like Rick Ferry. So thank you. My

48:55
name is Stan the Annuity Man and I'll

48:57
see you next week.

49:00
[music]