Mostly Voices [0:00]

A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. A different drummer.

Mostly Mary [0:19]

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 [0:39]

Thank you, Mary, and welcome to Risk Parity Radio. If you have just stumbled in here, you will find that this podcast is kind of like a dive bar of personal finance and do-it-yourself investing.

Mostly Voices [0:52]

Expect the unexpected.

Mostly Uncle Frank [0:56]

It's a relatively small place. It's just me and Mary in here.

Mostly Voices [1:00]

Are you a good witch or a bad witch? I'm not a witch at all.

Mostly Uncle Frank [1:07]

And we only have a few mismatched bar stools and some easy chairs. We have no sponsors, we have no guests, and we have no expansion plans. I don't think I'd like another job. What we do have is a little free library of updated and unconflicted information for doing yourself investors. Now who's up for a trip to the library tomorrow? There are basically two kinds of people that like to hang out in this little dive bar. You see in this world there's two kinds of people my friend. The smaller group are those who actually think the host is funny regardless of the content of the podcast. Funny how, how am I funny? These include friends and family, and a number of people named Abby. Abby someone. Abby who? Abby normal. Abby normal. The larger group includes a number of highly successful do-it-yourself investors, many of whom have accumulated multimillion dollar portfolios over a period of years. The best Jerry, the best. And they are here to share information and to gather information to help them continue managing their portfolios as they go forward, particularly as they get to their distribution or decumulation phases of their financial life. What we do is if we need that extra push over the cliff, you know what we do? Put it up to 11. Exactly. But whomever you are, you are welcome here. I have a feeling we're not in Kansas anymore. So please enjoy our mostly cold beer served in cans and our coffee served in old Chipton cracked mugs, along with what our little free library has to offer. But now onward to episode 208. Today on Risk Parity Radio we're going to have another special episode where we devote it to just one email and a subsequent phone call from that email.

Mostly Voices [3:35]

Yeah, baby, yeah! And so without further ado, here I go once again with the email. And First off, second off, last off.

Mostly Uncle Frank [3:48]

First, second, and third off, we have an email from Paul, a Paul you've probably heard of, Paul Merriman.

Mostly Mary [3:57]

And Paul Merriman writes, hi Frank, love your podcast. Let me know if there is anything I can do to help. When you have time, please give me a call. All the best, Paul.

Mostly Uncle Frank [4:11]

Well, first I want to thank Paul Merriman for dropping into our little dive bar here.

Mostly Voices [4:15]

Yes!

Mostly Uncle Frank [4:19]

For the three or four of you who do not know who Paul Merriman is, Paul Merriman is a gentleman of a certain age who ran a financial advisory practice for about 30 years or more than 30 years, I believe, dating back to the 1970s. And then he sold his practice and retired about 10 years ago. Now since then he has devoted his retirement to a foundation that helps educate do-it-yourself investors. And he has a podcast and a website, and I will link to it in the show notes. He and a couple other gentlemen do a lot of good research in particular into analyzing all equity portfolios. And they also try to come out with recommendations, what they call their best in class recommendations for ETFs and mutual funds for various market segments. And I'll link to that in the show notes too. That is where a lot of us have learned about the Advantis funds in addition to the standard inexpensive index funds. And so after I got this email, I called Paul at the number he gave me, which I am not giving to you. Forget about it. And we had a nice conversation for about 40 minutes about do-it-yourself investing and financial education. And I have to say he's a very generous and kind man and I hope I have the kind of enthusiasm that he has at his age for what he's doing because that's what keeps people young. And he recounted to me some of the evolution that he's had in his thinking over the past 10 years about what to recommend to do-it-yourself investors, and particularly those who are starting out. He had famously started with the recommendation of what is called the Merriman Ultimate Portfolio that I know many of you have heard of, which is a portfolio of about 10 different equity funds that covers all US sectors and all international sectors. But a few years ago, I think around 2017, it was before Jack Bogle passed away, Paul had a meeting with Jack Bogle who said, you, portfolio looks great. I'll be honest, fellas, it was sounding great. But it's probably too complicated for most people to be able to manage. Do you think you could come up with simpler versions that would get you to about the same place even if they're not exactly the same? And Paul's been thinking about this himself for the past few years. What is the simplest, reasonable portfolio that I can recommend to, say, my grandchildren starting out in their investing life? That will get them on the path and is something they can manage long term. And he's come up with some four-fund variations of various portfolios. But more recently has looked at some two-fund variations to see how simple he can make it. And so he shared this on a recent episode of the Earn and Invest podcast that I will link to in the show notes that he thought a very simple portfolio for somebody starting out would be half S&P 500 and half small cap value.

Mostly Voices [7:35]

I could have used a little more cowbell.

Mostly Uncle Frank [7:39]

Which probably isn't surprising to most of you because many of you know Paul Merriman as one of the emissaries for small cap value based on the 100 years of data they've used to analyze that and going back to the Fama and French research on that in the 1990s. And he asked me what I thought the simplest portfolio would be for somebody starting out to use to get going. And I said I would go with half large cap growth and half small cap value only because I thought the large cap growth was slightly more diversified from the small cap value than the S&P 500 fund. But honestly, an S&P 500 fund and a large cap growth fund are 99% correlated and are going to perform almost exactly the same over any lengthy period of time. But he also asked me whether I had any content on my podcast, an episode or two that were specifically directed at beginning investors. And I said I'd think about it and I have thought about it in the Truth is, although I talk about it now and again, the answer is I don't.

Mostly Mary [8:45]

That's not an improvement.

Mostly Uncle Frank [8:49]

But we can fix that now, now can't we? And so today we will. Let's do it. Let's do it. And we will approach it as always with creativity and a sense of humor and hopefully some narratives that are Memorable.

Mostly Voices [9:11]

You are talking about the nonsensical ravings of a lunatic mind. And so let's get started.

Mostly Uncle Frank [9:16]

The first thing I would direct you to, or somebody that you are trying to help, is a nice little article from Michael Kitces called the Four Phases of Saving and Investment for Retirement. And I will link to that in the show notes, but it has a very simple diagram that divides your entire financial life from when you first start working and then you begin to save and invest all the way to retirement. And so there are four quadrants or places you can be on this map. The first one is earn, the second one is save, the third one is grow, and the fourth one is preserve. Earn, save, grow, and preserve. That is the straight stuff, O Funkmaster. Now, because this is Risk Parity Radio, we need to rename these into something a little more memorable, and that will form a continuous narrative. And so we are going to use a Wizard of Oz theme.

Mostly Voices [10:22]

That dog's a menace to the community. I'm taking him to the sheriff and make sure he's destroyed.

Mostly Uncle Frank [10:26]

In the first place, earn, we're gonna call that Kansas.

Mostly Voices [10:30]

Inconceivable.

Mostly Uncle Frank [10:33]

In the second place, save, we're gonna call that Munchkinland. Cool. In the third place, grow, those are gonna be the roads to Emerald City. Gosh. In the fourth place, preserve, when you're financially independent, that is Emerald City. And we're going to talk about how you get from Kansas to Emerald City. Now the first thing you need to determine by looking at this map is where are you on this map? Because different behaviors and different things happen in each of these different places. You don't do the same thing in one place that you might do in another. Most of the people that listen to this podcast or a good proportion of them are on the road to Emerald City or are at Emerald City. We're getting very close. Most of the people I want to talk to today are in Munchkinland or they may still be in Kansas. So we're mostly going to be talking about Munchkinland and choosing your road to Emerald City. City. But let's talk about Kansas first. Most of us start in Kansas. I was literally born in Topeka, Kansas. Groovy, baby. So I can say I started there. Life in Kansas is not about investing. It's about earning enough money to pay your expenses. Mee-she-bitch-ee? No, her dog. Ooh, she bit her dog, eh? and you're going to stay in Kansas until your income exceeds your expenses. And the truth is, many people never get out of Kansas or end up back there due to unfortunate circumstances or other issues. You have a gambling problem. Because there are only two methods to get out of Kansas. You either have to increase your income until it exceeds your expenses, or reduce your expenses until it's less than your income. That is the straight stuff, O Funk Master. And if you have trouble doing that, you may need help with budgeting. You may want to go and consult gurus like Dave Ramsey or Amit Sethi. I would probably choose the latter over the former. Because some of these people get very conflicted when they get to Munchkin Land and they appear in a different guise. But once you have created that differential between expenses and income, which my friend Diana Merriam likes to call the gap, and we will refer to it as the gap. Once you have a gap, you can get to Munchkin Land. Total. I have a feeling we're not in Kansas anymore. And it is there in Munchkin Land that you do your planning for your trip down the roads to Emerald City, which will hopefully get you to Emerald City someday. Now Munchkin Land is a very confusing place with lots and lots of distractions. And there are a lot of people in Munchkin Land who are trying to get some of your gap. They see people come out of Kansas who have a gap. We must be over the rainbow.

Mostly Voices [14:05]

And they want to sell them something or give them something in exchange

Mostly Uncle Frank [14:09]

for some of their gap. Always be closing. And so it's like this giant bizarre, a bizarre bizarre, with some stuff you do want and a lot of stuff you don't want or don't need.

Mostly Voices [14:25]

My name is Sonia. I'm going to be showing you the crystal ball and how to use it or how I use it.

Mostly Uncle Frank [14:33]

Now let's talk about some of the stuff you will want or need for your trek to Emerald City and then we'll talk about some of the stuff you probably do not want or do not need. You need somebody watching your back at all times. the first people you'll need to go see is the lollipop Guild. We represent the lollipop Guild.

Mostly Voices [14:59]

The lollipop Guild. The lollipop Guild. And in the name of the lollipop Guild. We wish to welcome you to Muchkinland. Now, the lollipop Guild. is a little bit misnamed.

Mostly Uncle Frank [15:17]

They don't really sell lollipops so much as they are tailors. And what they specialize in making there are pockets. They'll put pockets on the clothes you're already wearing. These are special magic pockets that are designed to hold the magic coin purses that you'll be getting a little later here in a different shop. Now, in our world, we call these pockets accounts. They are not investments, they hold investments. Similarly, the pockets in Munchkin land are not magic coin purses, they will hold magic coin purses. So what kind of pockets do you want them to be sewing into your clothes? There are basically three kinds that you probably want to have, and I would recommend that you get at least one of each of these. One is a pocket or account that goes with your employer. In our world, these are called 401ks or 403bs. And if you have more than one source of employment, you may have more than one. At some employers, you can also get what is called an HSA, but that's more like that little miniature pocket above the big pocket in your jeans. So that is one kind of pocket you want to have and sign up for. The next kind of pocket you want to get there is called an IRA, and they come in two kinds, a traditional IRA pocket or a Roth IRA pocket, and you can have one or both. Now they have all different kinds of brands for these pockets. I suggest you use the pockets that you might find at Fidelity, Schwab or Vanguard. Those are your most reliable brands. Doesn't mean that those are the only brands, but those are the most reliable ones and they're easy to use. Now, a third kind of pocket you can get is called an ordinary pocket. Sometimes it's called a taxable brokerage pocket, but you can also set those up at the same place you set up your IRA pocket. and you might not have much use for it right away, but I suggest that you set it up anyway, because you'll want to have it eventually going forward, so you might as well get that pocket right now. Now, I should say that the Lollipop Guild and their shops are somewhere that you can access from wherever you are on your trip from Kansas to the Emerald City. just won't have much use if you're still in Kansas. But you may want to stop back there along the way occasionally, depending on what goes on in your life. So you don't need to feel like you need to get every kind of pocket available right away, or be too selective about which pockets you get, because you can go back there and exchange them or get different ones whenever you want. But I would suggest you get those three pockets. your 401k or 403 pocket, your IRA pocket, broth or traditional or both, and an ordinary brokerage or taxable brokerage pocket. But now we will leave the lollipop guild and go see the Lullaby League.

Mostly Voices [18:50]

And in the name of the Lullaby League, we wish to

Mostly Uncle Frank [18:55]

welcome you to Munchkinland. Now the Lullaby League runs an incredibly large, messy store of magic coin purses. Looks like the shop in Diagon Alley where Harry Potter got his wand. You're a wizard, Harry. Except it's like 15 times that size. And they are all very enthusiastic in there about their magic coin purses. And that's kind of the problem that there's so much enthusiasm going on there, it's hard to determine what you really need, because you only need a couple things in here and there are tens of thousands of things in there. So what are These magic coin purses. Well, these are the investments, we would say, that go in the accounts that we were just talking about. You're going to take your magic coin purses and put them in those pockets that you've had sewn into your clothes. Now we can talk for days on end about all of the magic coin purses in that store.

Mostly Voices [20:03]

I could stand up here and talk on and on like some bow weevil sitting on a stump bragging to a dog in heat.

Mostly Uncle Frank [20:11]

But I want you to avoid the noise, the clutter, and go find the aisle where they have the plain colored coin purses, which are also known as index funds. Because what you will find is some of these coin purses are very expensive. They have all kinds of designs. Some of them have holes in them. Some of them claim to do special tricks. Some of them glow. You can't handle the gambling problem. And it's all very overwhelming and confusing. Now I want you to go and find the green ones, the plain green ones. The plain green ones are the ones that invest mostly in the biggest, most famous companies. And they will have names like Total Market Fund, like S&P 500 fund or large cap growth or large cap blend. Some other variations you may find is that some are labeled mutual funds and some are labeled exchange traded funds or ETFs. They actually have the same stuff in them. What are called ETFs are just made out of a slightly more modern material and they open and close a little bit differently, but they don't function any differently. overall. Look at the prices on the bottom of them, what are called expense ratios. You want the ones with the expense ratios of 0.1 or less. You want to avoid ones with expense ratios that are much higher than that. Particularly be wary of anything that says it's fancy and has an expense ratio of 1% or more. Danger, Will Robinson! Danger! The most important thing to realize is that all of these kinds of green coin purses are going to work almost the same, and the only real difference is how much they cost. Now thinking about those pockets again, that pocket that is your employer 401k or 403b may have a limited number of coin purses that can go in there, but just pick the one, the best one, that can go in there. that is this simple plain green color. Now if this process has exhausted you so far, you can actually stop right now and continue on with just one green coin purse. Because like the shops at the Lollipop Guild, the shops at the Lullaby League, you can come back to from anywhere you are on your journey from Kansas to Emerald City. Now, if you still have a little stamina left and would like to choose another coin purse that's a different color, go look at the gold ones, the plain gold ones, goldish yellow. These are all coin purses that specialize in small companies. Now, like I said, you don't absolutely need this one now, but if you'd like to pick it up because you're probably going to want it later, get the one that says small cap value on it. There'll be a number of them that say small cap value.

Mostly Voices [23:19]

I'm telling you fellas, you're gonna want that cowbell.

Mostly Uncle Frank [23:23]

And again, look for a low cost one. And they also come in both mutual fund and ETF construction, but they both work about the same. Now just a couple of precautions here. You may be tempted to wander around in other aisles because this is a very curious place and there's a lot of stuff in there. Expect the unexpected. But it's not a good idea to be picking anything out of a different aisle right away. You will have a chance to read about what's in these aisles and decide whether they are appropriate for you later along your journey. No more flying solo. You don't need them right now and they will not make you go any faster. Forget about it. Now on the end of the index fund aisle, in the Lullaby League store, you're going to find some special display cases. These are new. And what you'll see in there are multicolored coin purses that advertise that they change color from time to time.

Mostly Voices [24:26]

That was weird, wild stuff.

Mostly Uncle Frank [24:30]

And they're kind of like prepared or processed food because they're advertising, look, we have everything here in one. And you don't need to shop for individual ingredients. You may know these from our world as something called a target date fund. And while it's trendy and does work, it will not work as well as picking the raw ingredients yourself and may discourage you from learning how to cook for yourself.

Mostly Voices [24:59]

Fat, drunk, and stupid is no way to go through life, son.

Mostly Uncle Frank [25:03]

And so I would avoid those two. and stick to a plain green coin purse and perhaps a plain gold one to go with it. You may want or have a couple different green coin purses, but you should consider them as all the same kind of thing as if they were all one kind of coin purse because they're not going to perform any differently really in any way that is meaningful or that you can predict. Okay, so we're done at the Lullaby League. store. There's only one other thing we need to absolutely get here in Munchkin Land, and that is a pair of ruby slippers to walk in. You'll get those from the Good Witch, Glenda.

Mostly Voices [25:47]

There they are, and there they'll stay. And these are magic slippers.

Mostly Uncle Frank [25:51]

They have what is called the magic of compounding built into them. But you have to use them in the right way because they work in concert with the pockets and the coin purses. Give me back my slippers.

Mostly Voices [26:05]

I am the only one that knows how to use them. They're of no use to you. Give them back to me. Give them back. Keep tight inside of them. Their magic must be very powerful or she wouldn't want them so badly. Now we haven't talked about the roads to Emerald City, but let's start talking about that a little bit now and we'll go back and forth.

Mostly Uncle Frank [26:26]

This combination of your pockets, your coin purses, and the ruby slippers are designed to help you walk along the yellow brick road.

Mostly Voices [26:36]

Follow the yellow brick road. Follow the yellow brick road. Follow the yellow brick road. And the way it works is this.

Mostly Uncle Frank [26:47]

You need to use that gap to make yourself move. And you take your gap, you stick it in the coin purses, you keep them in your pockets, and as you get more gap money, you keep feeding it. As you do that, you will find that the ruby slippers walk slowly to begin with, but they start getting faster and faster and faster the more you put into these coin purses from your gap money. And they will start going so fast that the Last half of your journey to Emerald City will take only as much time as the first couple miles took. Because that is the miracle of compounding. And so the most important thing at the beginning is to keep feeding the coin purses. After you get a third of the way or half of the way there, you won't even really need to feed the coin purses anymore and you'll still keep going. Time is money, boy!

Mostly Voices [27:42]

But you need to avoid derailing yourself.

Mostly Uncle Frank [27:46]

Because what happens sometimes is people think, well, maybe I should take my coin purse out of my pocket and spend it or do something else with it.

Mostly Voices [27:57]

Okay, but what if I want something but I don't have any money? You don't buy it. Well, let's say I don't have enough money to buy something. Should I buy it anyway? No. And that will slow you down or even send you backwards.

Mostly Uncle Frank [28:11]

Or sometimes people see bad weather. and the coin purse starts feeling lighter than it used to. That is also the time you need to keep feeding the coin purse. Because as long as you keep moving, you will get there in a reasonable time. Now, 20 or 30 years ago, the yellow brick road was not nearly as popular because it's for people who want to walk to Emerald City by themselves using these methods. But as more people walked that journey and told other people about the journey, it's become more and more popular. And so you'll find a lot of other people along the way, and they're cheerful people who love to share their experiences. You will also find a series of little free libraries along the way with lots of different information. about all that stuff you saw back in Munchkin Land and the stuff you're likely to see as you get towards Emerald City and into Emerald City. Now you'll also see some ads and other things that are not worth reading that people have left strewn around, but you do want to read the materials as you go and talk to other people along the path of do-it-yourself investing about those materials. A lot of those materials now come in audiobook form. A lot of them are called podcasts, so you can listen to those while you're walking along too. And so if you just do what I told you, you will get to Emerald City in a reasonable period of time. It is the most reliable way to get there in a reasonable period of time. Doesn't mean it's the fastest way to get there. Doesn't mean it's the only way to get there. It just means this method works the best for most people. But now we need to go back to Munchkin Land or talk about going back to Munchkin Land and talk about some of the things there that you probably want to avoid or not get involved with. Not gonna do it. Wouldn't be prudent. You will find a lot of hucksters back there on one particular side of the road who are going to try to get you to get into one of their carts, which they say will take you to Emerald City. And as part of their pitch, they will be saying things like, it's too dangerous to walk to Emerald City by yourself, and that you might fall down, and that you need 30 coin purses instead of one or two, or they'll try to convince you you'll get lost. But the truth is, if you have a map and you follow your map, you're not going to get lost and you're going to be stronger for having walked there than you would be for not having done it. Stronger and smarter about your finances. Have you ever heard of Plato, Aristotle, Socrates? So what kind of carts and wagons and things will you see there? First there are some oxt-drawn carts or wagons. These are very old. They are typically run by banks, more often by insurance companies.

Mostly Voices [31:31]

Do you have life insurance, Phil? Because if you do, you could always use a little more, right? I mean, who couldn't?

Mostly Uncle Frank [31:39]

And their pitch is that we will keep you safe. Bing! And you won't have to walk. You can ride in this cart. cart all the way to Emerald City. Bing again. And all we ask in exchange for that is your gap. Bing. We'll take care of everything else. Bing. They sound kind of like this.

Mostly Voices [32:02]

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 I think that really could be the ticket for you.

Mostly Uncle Frank [32:17]

And then you'll find another set of carts that are horse-drawn carts. They have names on the side of them like Edward Pryse and Amara Jones. And they have ads up all over Munchkinland. Some of them have more ads than others. But their pitch is kind of the same as for the ox-drawn carts. They want you to give them your gap money, and they will let you ride along, and they claim to get there faster than the Oxtedrawn carts. Ah, the sweet smell of an all-day sucker. And then there are the newfangled carts that have just come around recently, and these are actually pulled by robotic animals. Look kind of like llamas. Tina, you fat lard, come get some dinner! And they will say that you can ride in our carts and will get there even a little bit faster than the horse-drawn carts or the ox-drawn carts. And you won't have to do anything, just give us your gap. These are also known as robo-advisors. Now, what do you need to know about all of these cart pullers and why you probably don't want to get in these carts or wagons or jitneys or whatever they're putting out there today? Well, it's a trap. It's a trap!

Mostly Voices [33:46]

It's a trap! It's a trap! It's a trap! It's a trap!

Mostly Uncle Frank [33:54]

It's a trap on several different levels that you may not appreciate. While you're in Munchkin Land listening to their pitches. The first part of the trap is that these carts cannot go on the yellow brick road. They have to go on a longer road called the cart path. Because the yellow brick road is for nimble people who can walk, not people that need to ride in carts. And so the cart path goes a longer way, crosses back and forth across the yellow brick road at various intervals. but actually takes longer to get to Emerald City than the Yellow Brick Road does. Assuming you're staying on the Yellow Brick Road and using your ruby slippers the way I told you. Follow the Yellow Brick Road. And along that way, you have to make many stops. The reason you have to make many stops and why it takes so long is that you have to feed all these animals and the people that are driving the carts. And so a lot of your gap money just goes to that and is not anything you get to keep or anything that gets to grow. And that's why it takes longer. But it gets worse than that. It not only takes longer, they don't actually take you to Emerald City. Where they take you is this. There is this gigantic field of poppies not too far from Emerald City. Poppy, poppy, poppy. And all of these carts go there. They don't go straight to Emerald City. They go to this little place in the field of poppies. that make you feel kind of sleepy and zoned out. Something with poison in it, I think, with poison in it, but attractive to the eye. And although it's not far from Emerald City, what happens to the people that ride in the carts is their legs get so atrophied riding all the way that they are unable to actually walk that last distance. to Emerald City. So they're stuck in this poppy field. Now, of course, then the cart sellers offer them other carts and modes of transport to take them to Emerald City. How convenient.

Mostly Voices [36:33]

They're sitting out there waiting to give you their money or you're gonna take it. But they're not going to tell you that when you get in the cart at the beginning. Because only one thing counts in this life. Get them to sign on the line which is dotted.

Mostly Uncle Frank [36:49]

And for the pleasure of taking you from the poppy field to Emerald City and carting you around in there because you can't walk anymore, they'll just charge you an annual fee. And they had these big long straws that they stick into your coin purses to Suck it out as they go.

Mostly Voices [37:09]

My straw reaches a grooooooools through and starts to drink your milkshake. I drink your milkshake. I drink it up.

Mostly Uncle Frank [37:27]

But that leads me to probably the most important point about why you don't want to ride in one of these carts all the way there. It's a more subtle trap, but a trap nevertheless. It's a trap! As I mentioned, if you ride in the cart, your legs become atrophied and you're unable to walk the rest of the way. But you're also unable to take part in the little free libraries that you would have found along the Yellow Brick Road and all of the helpful people that you would have found along the Yellow Brick Road. All you'll get when you ride in the carts is a lot of propaganda and fear stories and other drama presented to you by the people that operate the carts to entertain you along the way, but also to keep you in fear and ignorance because they don't want you to be able to walk to Emerald City. They want to keep you in that cart, keep getting your gap. That's how they do their business.

Mostly Voices [38:31]

But just try to stay out of my way. Just try. I'll get you, my pretty, and your little dog too.

Mostly Uncle Frank [38:40]

And so by not walking on the Yellow Brick Road, you're actually depriving yourself both of the strength in your legs and of the knowledge you would have learned on that walk. And it's that strength and knowledge that'll help you live A great life in Emerald City as opposed to being one of those people that has to be dragged around in a cart because they don't know anything and their legs are atrophied. Are you stupid or something? Stupid is, stupid does, sir. But that's enough about the cart pullers. Now let's talk about what you see on the left sides of the road in Munchkinland, which are the Whirlygig operators. And they have their own set of hucksters out there. What does Matt Damon say on that Bitcoin commercial?

Mostly Voices [39:27]

Fortune favors the brave.

Mostly Uncle Frank [39:31]

Who are much more exciting than the hucksters on the other side of the road. Because what their pitch is, is that you shouldn't take a cart to Emerald City and you shouldn't try to walk on the yellow brick road to Emerald City. What you should do is get into one of these whirly gigs and see if you can fly there as fast as possible. Now die! Die! And these whirlygigs come in all shapes and sizes. They're all some kind of flying machines. And they rank from completely illegitimate or almost completely illegitimate to things that you can actually fly and use if you know what you're doing. And the truth is that some of these whirlygigs do make it to Emerald City. But oftentimes it's just a small percentage. And so you'll see a promoter saying, Look, somebody went in one of our whirly gigs and made it to Emerald City in the time it takes to walk just a quarter of the Yellow Brick Road. But what they won't tell you is that 90% or more of the people that got into that whirly gig actually crashed somewhere else. Some back in Kansas. And it's gone. Some back in Munchkin Land. Great.

Mostly Voices [40:51]

We can just put that into your retirement account and make it go to work for you and it's gone.

Mostly Uncle Frank [40:58]

Some somewhere on a cart path or on the Yellow Brick Road. And it's gone. And so the percentages of success for a lot of them is not actually that high. We recently saw some Crypto whirly gigs crash in spectacular fashion into bankruptcy, including Celsius and Voyager a few months ago. My dad said he listened to Matt Damon and lost all his money.

Mostly Voices [41:24]

Yes, everyone did, but they were brave in doing so.

Mostly Uncle Frank [41:28]

And those people who put their money there are either back in Kansas or just getting out of there. We can do this.

Mostly Voices [41:35]

We just have to be brave. But not too brave or else Matt Damon will come and take all our money.

Mostly Uncle Frank [41:42]

Some other whirly gigs known as MLMs or multi-level marketing tend to have a success rate of about 2% with most of those whirly gigs crashing back in Kansas. Uh, what? It's gone. It's all gone. And you will also encounter some whirly gig promoters who are giving you this system to go back into the lullaby league store and buy and sell coin purses, and those don't have a very good track record either.

Mostly Voices [42:10]

The money in your account, it didn't do too well, it's gone.

Mostly Uncle Frank [42:13]

Now, there are some whirly gigs that can and do make it to Emerald City on a more reliable basis, although not nearly as reliable as walking down the Yellow Brick Road. And these are generally more complicated. You have to learn how to fly them and learn how to fix them along the way. if they have trouble. And these include your real estate whirly gigs and some other small business kind of whirly gigs. Now, if these intrigue you, the best thing to do is stay a little longer in Munchkin Land and actually go to Whirly Gig School, where you learn how to operate these things properly and fix them. And some of the more honest promoters will actually Tell you that as well. Bow to your sensei.

Mostly Voices [43:04]

Bow to your sensei.

Mostly Uncle Frank [43:07]

But the disreputable ones will just try to get you in whatever contraption they've got on the lot as soon as possible. Get your gap money.

Mostly Voices [43:16]

It's time for the grand unveiling of money.

Mostly Uncle Frank [43:23]

And won't worry about whether you crash or not because they know most of them are gonna crash anyway. I don't care about the children.

Mostly Voices [43:26]

I just care about their parents' money.

Mostly Uncle Frank [43:30]

But as with the Lollipop Guild tailor shop and the Lullaby League store, you can always come back to Whirly Gig School from wherever you are in the Land of Oz.

Mostly Voices [43:51]

Or even in Kansas.

Mostly Uncle Frank [43:55]

But for right here and right now, it's just enough for you to know what's there, and about the possibilities, and more importantly, the probabilities of flying a whirly gig to the Emerald City versus walking on the Yellow Brick Road. And just one other thing I almost forgot to mention. You may hear this noise from time to time in this land we've constructed. And that noise is the financial media. And they come out every day and wander around and bellow to try to attract attention and scare people. You should feel free to ignore them, but you should also recognize that they are in cahoots with some of the cart pullers and with some of the whirly gig operators. And if they have any goal at all besides attracting attention, it is to get you to ride in carts or fly whirly gigs. Am I right or am I right or am I right? Right, right, right. Don't react to them and don't fall for it. Fortune favors the brave. So now let me just sum up some points for your trip to Oz and trying to get to the Emerald City. First thing you need to do is get out of Kansas. You do that by having a gap between income and expenses. And then you get to go to Munchkinland. where you want to avoid the distractions and just do what you need to do to get on the Yellow Brick Road at that point. And all you need to do is this. You need to go to the Lollipop Guild, get those pockets that you're going to put your coin purses in, and just set those up. They'll put them right in your clothes. They don't even charge you for doing it. Then go to the Lullaby League store, Get yourself at least a simple green coin purse, and perhaps a nice golden one to go with it. Then get your ruby slippers, and you are ready to set out on the Yellow Brick Road. No fuss, no muss. And we could talk more about all the things you might encounter on the Yellow Brick Road, or as you get to Emerald City. But that's beyond the scope of just getting going here. But just one preview of that, as you begin to walk on the yellow brick road, one of the first things you will encounter is a scarecrow that looks like Christopher Walken. And he's gonna ask to check out your coin purses. And if you have some green ones in there, he's gonna say, that looks good, that looks good. But if you don't have a golden one yet, he's gonna say something else to you. I'm telling you, fellas, You're gonna want that cowbell. And he's going to keep hounding you about it all the way down the yellow brick road. It doesn't work for me. I gotta have more cowbell. I gotta have more cowbell. Until you get one of those golden coin purses. Because you will need one of those by the time you get to Emerald City. It's just a matter of when you get it. Guess what? I got a fever.

Mostly Voices [47:28]

And the only prescription It's more cowbell.

Mostly Uncle Frank [47:32]

And now I see our signal is beginning to fade. I hope you've enjoyed this little frolicking detour. I did it all for Paul Mermin. The best Jerry, the best. And his grandchildren. We will be picking up this weekend with our regularly scheduled programming. if you can dodge a wrench you can dodge a ball and now if you have comments or questions for me please send them to frank@riskparityradio.com that email is frank@riskparityradio.com or you can go to the website www.riskparityradio.com 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 review. That would be great. Mm, okay. Thank you once again for tuning in. This is Frank Vasquez with Risk Parity Radio signing off.

Mostly Voices [48:37]

You ungrateful creatures think yourselves lucky that I'm giving you audience tomorrow instead of 20 years from now. The great Oz has spoken. Pay no attention to that man behind the curtain.

Mostly Mary [48:54]

The Great End has spoken. The Risk Parity Radio Show is hosted by Frank Vasquez. The content provided is for entertainment and informational purposes only and does not constitute financial, investment, tax, or legal advice. 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.