Opening Quotes And Show Welcome

Voices [0:00]

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

Mostly Queen Mary [0:18]

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 [0:36]

Thank you, Mary, and welcome to Risk Parity Radio. If you are new here and wonder what we are talking about, you may wish to go back and listen to some of the foundational episodes for this program. And the basic foundational episodes are episodes 1, 3, 5, 7, and 9. Yes, it is still in my memory banks. We have also created an additional resource, a collection of additional foundational episodes and other popular episodes.

Voices [1:07]

We have top men working on it right now. Ooh.

Mostly Uncle Frank [1:14]

Top men. And you can find those on the episode guide page at www.riskparodyradio.com. Inconceivable! All thanks to our friend Luke, our volunteer in Quebec. Zachosh. We'd be helpless without him.

Voices [1:35]

I have always depended on the kindness of strangers.

Mostly Uncle Frank [1:41]

Because other than him, it's just me and Marion here. I'll give you the moon, right?

Voices [1:46]

I'll take it.

Mostly Uncle Frank [1:48]

We have no sponsors, we have no guests, and we have no expansion plans.

Voices [1:52]

I don't think I'd like another job.

Mostly Uncle Frank [1:55]

Over the years, our podcast has become very audienced focused, and I must say we do have the finest podcast audience available.

Voices [2:04]

Really top drawer.

Mostly Uncle Frank [2:07]

Along with a host named after a hot dog.

Voices [2:10]

Lighten up, Francis.

Fundraiser For Fairfax CASA

Mostly Uncle Frank [2:13]

But now onward, episode 505. Today on Risk Perity Radio, we're just gonna do what we do best here. We just answer your emails. Welcome. You've got mail. But before that, since we are getting towards the end of the month for Mary's fundraiser, we need to hear from Mary. And that fundraiser is for Fairfax Casa, the court-appointed special advocates, of which Mary is one. And they work with children going through the foster system in Fairfax County and are appointed by the court for that purpose. So Mary wanted to tell you how things were going as we close out the fundraiser that we've been doing here. And so we'll just find that introductory music.

Mostly Queen Mary [3:54]

We're close to our final goal, and this is the last push to see how much of an impact we can truly make. Every dollar goes directly towards advocating for children in the court system, ensuring that they have a safe, permanent, and loving home, as well as a voice in the process. This is the final window to contribute to this specific campaign, so let's see if we can nudge that total even higher before the clock runs out. If you have already donated, thank you. If you've been waiting for the right moment, now is the time. Thank you for proving once again that this community isn't just about smart portfolios, it's about big hearts as well. The affidavit contained allegations that the child was left unsupervised in a hotel room for days at a time. The room and beds were filled with trash, food, and dishes. There was a strong odor coming from the room, and the child had not been regularly attending school. The child's mother struggled with substance use and had a long history with child protective services in the Fairfax County police. The child's father, who at the time did not have regular contact with his son, asked to be considered for a placement. However, he had a number of challenges to overcome as well, including a substance use disorder and housing insecurity. Over the course of two years, the child's father, who resides in Maryland, secured employment, housing, and successfully completed all court-ordered services. In October of 2023, the child was placed with his father for a trial home placement. The CASA continued to visit the child regularly after his move from his foster home in Virginia to the father's home in Maryland. According to the CASA, the child thrived in his father's home and made a smooth transition to a new neighborhood and a new school. The CASA reported that the father and son have an affectionate, loving, protective, and respectful bond. They enjoy watching sports together and talking about music. In April of 2024, the court granted legal custody to the father and closed the case.

Mostly Uncle Frank [6:31]

So if you'd like to help us out, help Mary out in particular, never mind me.

Voices [6:39]

Idiot.

Mostly Uncle Frank [6:40]

We'll put that link in the show notes to donate to Fairfax Casa, as well as at the support page at www.riskperator.com. And as always, if you donate to Fairfax Casa or the Father McKenna Center, my charity, you get to go to the front of the email line. Just please mention that in your email so we can duly move you to the front of the line. And all of our emailers today have done so, as well as some ones we're not gonna get to today.

Listener Email On Meaningful Giving

Voices [7:09]

The best, Jerry, the best.

Mostly Uncle Frank [7:11]

So now speaking of emails.

Voices [7:13]

Here I go once again with the email.

Mostly Uncle Frank [7:17]

And first off. First off, we have an email from Thirsty Horse.

Voices [7:24]

What kind of a horse is that? I've never seen a horse like that before. Oh no, and never will again, I fancy. There's only one of him, and he's it. He's the horse of a different color, you've a killer about.

Mostly Uncle Frank [7:37]

And Thirsty Horse writes.

Mostly Queen Mary [7:40]

Hi, Mary and Frank. Third time mailing in. Since my last email, I took about half a year off and recently joined a new job. Most of our funds are now in close to golden ratio portfolio.

Voices [7:53]

A number so perfect. Perfect. We find it everywhere.

Mostly Queen Mary [7:58]

During my break, I read or listened to many of the books Frank recommended in the episodes about the second half of one's career and the five invitations from episode 204. While the financial topics covered in every episode keeps my tools and talent updated. We have the tools, we have the talent. I find the tangential conversation, like Frank and Ginger's book review of the top five regrets of the dying on Choose Fi inspirational, particularly Frank's story of Mamie McCoy and the question, have you come to your death knowing you have done the thing you needed to do? Among the narratives you've discussed, I often zero in on the starfish thrower. When I initially heard about Mary's work as a CASA, I thought it was related to your backgrounds as lawyers. The series of stories over the last few weeks helped me understand the role better, and when I looked it up, there are CASA organizations across the country. There seems to be a range of ways one could help at varying levels of commitment from financial donations to mentorship through organizations like Big Brothers, Big Sisters, to being a CASA to becoming a foster parent. I'm curious to hear both of your thoughts on how you decided on the level of time and emotional commitment you dedicate to your activities. Did you actively participate in these before your retirement? Tamari, based on your experience, what attributes make for a good CASA? What about the attributes of good foster parents? Thanks for everything you do, Thirsty Horse. P.S. I'll let Mr. Your Greatness in this endeavor will echo for a very long time into the unknowable future, puzzle out the donation amount. I've also attached a copy of the employer match of our last donation from my past employer. I'll work on matching this donation from my current employer.

Voices [9:41]

Really top drummer.

Mostly Queen Mary [9:44]

Be the change you wish to see in the world, Mahatma Gandhi.

Voices [9:49]

What we do in life echoes an eternity.

Mostly Uncle Frank [9:55]

Well, first off, thank you for riding to our rescue, Thirsty Horse.

Voices [10:00]

You see, I've been through the desert on a horse with no name. It felt good to be out of the rain.

Mostly Uncle Frank [10:08]

Thirsty Horse has made a very generous contribution based on Euler's constant. Denoted by the letter E. Shirley, you can't be serious. I am serious. And don't call me Shirley. Which is, of course, related to things like exponential growth in finance and any kind of exponential growth.

Voices [10:31]

Change the polls from plus to minus and from minus to plus. I alone succeeded in discovering the secret of bestowing life. Nay, even more, I myself became capable of bestowing animation upon lifeless matter.

Mostly Uncle Frank [10:54]

And Thirsty Horse has donated Euler's constant times a thousand. Which is incredibly generous. Of course, Thirsty Horse is quite experienced with these types of donations, having donated a multiple of the golden ratio to the Father McKenna Center in the past. The Golden Ratio secrets. The Golden Ratio. I really do appreciate your presence and all of your generosity. It's very gratifying to have people that have essentially been listening to this for years. And I feel like we've all grown a little bit together. Or become a little more insane, depending on how you look at it.

Voices [11:39]

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

Mamie McCoy And Living With Purpose

Mostly Uncle Frank [11:45]

And it sounds like you were doing well, and I'm very happy for it. Now you mentioned somebody I hadn't talked about on this podcast. Her name is Mamie McCoy. I'll give you a shortened version of what that is so people know what we're talking about. So a few months ago, I did a podcast on Choose FI with Ginger Gray, and we did a book review of the top five regrets of the dying. And as part of that, I talked about my friend Mamie McCoy, who I would describe as one of my most formative friendships as an adult, and really taught me something about living and dying. No, I knew Mamie for 10 years, so if I were to go off to start talking about her, I might be here for hours. I'll give you a shortened version here and you can go listen to some more of it on the Choose FI podcast. Just to understand who Mamie was and how I ended up meeting her, Mamie was born in South Carolina on a farm in 1915. And she came to DC with the African American migrations that happened in the early part of the 20th century when people were leaving farms and going to cities to find work. And the work she found was as a domestic servant for what she used to call the white folks up on Connecticut Avenue. So if you've seen the movie The Help or read the book, that is what Mamie's job was for most of her working life. And she did live quite a life. She was kind of a party girl when she was young. By the time I met her, she had survived three husbands and she had a glass eye. And she was 80 years old. So this was in 1995 when I was a rather junior attorney at the time. I decided to take on a pro bono case and got one through legal counsel for the elderly, and it was her case. Her case was unusual. Her house had been seized by the federal government due to some drug activity from some of her younger relatives and a shooting. So it was a big legal mess for a few years there that we eventually sorted out. And what happened was we got a little bit of money from the federal government for the house, which they auctioned off. It was actually not inhabitable really. So there wasn't a whole lot of money we're talking about. And she moved into senior housing in an apartment complex that, if you're familiar with DC, it's in the southeast quadrant off of Alabama Avenue near the Suitland Parkway. So in Anacostia, where most of the poorer people in DC live. So when I got the money, I asked her what she wanted to do with it, because I thought my part in the case was probably coming to an end. It wasn't a whole lot of money, like twenty thousand dollars. But she said, she asked me, Could you take care of it for me? And so that was the real beginning of our friendship. And I would go see her every month for about the last seven years of her life, and just help her take care of things. Now, during that time she also found out that Mary knows how to cook, in particular knows how to make baked goods. And Mamie was a connoisseur of baked goods from the time that she had spent working for all those white folks up on Connecticut Avenue. So if you gave her a cake or a pie, she would taste it and she could tell you what kind of flour was made out of, what kind of shortening it was made out of, what was the kind of sugar used, and a number of other things that you probably wouldn't expect. So when I would go over there, she would say things to me like, Do you think Mary could make me a sweet potato pie or red velvet cake? Or a number of other things. And Mary would make these confections and I would duly transport them over there. Sometimes Mary went as well. When I was out of town, Mary would go see Mamie, and sometimes she would take the kids. And what I observed about Mamie is that she was a much happier person than most elderly people, and most people in general, even though I mean she literally had nothing other than little that little bit of money we were able to get in her social security and Medicare. And I thought to myself then, and I always think to myself now, why is that?

Voices [15:50]

Does that make you different than most everybody else? And the answer's yes. Somebody says, Well, why is that?

Mostly Uncle Frank [15:57]

What choices was she making that made her a happy person? One of them was she was very social. So when we would take her one of those cakes or pies or something like that, she wouldn't just keep it in her apartment. She would go downstairs to the common area and invite all the other ladies there, and they would sit around and eat those things. And she always loved to tell them, My lawyer's wife brought me a pie. She always referred to me as her lawyer and as Mr. Frank. She couldn't ever handle my last name, so she called me Mr. Frank. But the other thing she had was clarity about what she wanted and what was important to her. And she was a religious person and had a strong belief in the afterlife. So she did not believe that her death was going to be the end of her existence. And she referred to it as my homegoing. But she wanted to be prepared for her homegoing. So when we talked about what she wanted to do with that money, what she wanted to do was make sure that she had a nice casket and she had a nice cemetery plot. So we spent a lot of time doing that, shopping for this stuff. I was driving Miss Mamie.

Voices [17:13]

Now, Miss Daisy, you need a chauffeur.

Mostly Uncle Frank [17:23]

And while I suppose a lot of people would find this kind of morbid, this isn't the way people of her generation thought. And she was very happy being able to make those preparations. And once we had the plot picked out, she saw where the trees were. We picked out the casket. It was kind of a blue-gray metallic casket. Once we had made those arrangements, she was satisfied that that was the thing that she needed to do before she went to her home going. So she was ready. And what I learned from that is we needed to be conscious about the fact that our lives are finite and to contemplate what we think we need to do before we run out of time. And then as soon as we can get on whatever that is, we should get on it. So I think that's the curse of people like most of us who are future focused and good planners and things like that. That we really need to learn something from the majority of the population who happens to be present-focused like Mamie was. And so in this context, once you've accumulated enough money, and the things you were doing to accumulate that money no longer serve you or are interfering with your ability to do other things you want to do before you leave this earth, it's time to put that down.

Voices [18:54]

Put that coffee down.

Mostly Uncle Frank [18:57]

What I see is oftentimes people who have a lot of money have more problems dealing with this because they tend to act like their job is to shepherd this money around or grow this money or do something with the money for the money. Or they'll make the claim that they don't really know what they want to do. They need to think about it. They need to ruminate over it. But it is money they have and peace they like. It's like, well, they probably just need a kick in the pants, really.

Voices [19:32]

Do you think anybody wants a roundhouse kick to the face while I'm wearing these bad boys?

Mostly Uncle Frank [19:37]

Which usually comes in the form of somebody close to them dying or them getting some kind of disease or disability. But you shouldn't wait for that.

Voices [19:46]

Are you stupid or something?

Mostly Uncle Frank [19:49]

You need to get on life as soon as you can.

Voices [19:51]

I am not interested in death! The only thing that concerns me is the preservation of life.

Choosing Service In Retirement

Mostly Uncle Frank [19:58]

So that's one of the things I learned from Mamie. She passed away in 2005 at age ninety. And yes, I was there when they laid her out in that casket, and then put her in the plot that we had picked out. But I do suggest that you go back and listen to that choose if I episode that I'll put in the show notes. Cause there's more than that to the five regrets of the dying. But now getting to your other questions, our thoughts on how he decided the level of time and emotional commitment to dedicate to our activities, mine with the Father McKenna Center and Mary's with Casa in particular, I think you're talking about. For me, the Father McKenna Center was kind of serendipitous. Been drawn like a magnet back to that space actually in all the time I've been in DC and in what goes on there. Because we had been parishioners in that church in the 1990s and they actually held services in the basement where the Father McKenna Center is, and our eldest was actually baptized in that space. And then when our kids attended Gonzaga High School, they naturally volunteered there. Two of our children did their Eagle Scout projects with the Father McKenna Center. And it also has special meaning to me because I had a brother who was mentally ill most of his life and was homeless part of the time. So a lot of the clients that we have there remind me of my brother. And so when he died in 2018 and I did his eulogy, I actually mentioned the Father McKenna Center at his eulogy. But how I actually got on the board was complete serendipity because I had retired in spring of 2020, and later that year they were soliciting looking for new board members, and they didn't reach out to me, they actually reached out to Mary to see if she would be interested.

Voices [21:41]

Mary, Mary, I need your hugged And she said, I think this one is for you. See you soon. Idiots It's for you.

What Makes A Strong CASA

Mostly Uncle Frank [22:07]

And so that's how that came to pass that I joined the board in 2021. Now I'll let Mary speak more to her experience, but she had been contemplating becoming a CASA for a long time. She was aware of the organization. And it was really just a matter of getting our kids through high school and then through college. Because she really didn't want to start doing that until she knew she had all the time in the world or necessary to devote to it. But what else would you like to say about that, Mary? I'll just turn this microphone over to her now.

Mostly Queen Mary [22:38]

So my thoughts on what makes a good CASA is that you have to have certain core competencies. You have to be able to be objective and impartial, because a good CASA has to be able to step back from the emotional weight of a case and provide a factual and unbiased report to the court. So while you advocate for the child, your recommendations have to be rooted in evidence rather than your personal feelings. Another thing is that you have to be resilient and have commitment. These cases can last for years, so you have to be able to look at long-term goals and accept that there may be setbacks on the way. And your long-term commitment provides the stability that many foster children lack. A third core competency is effective communication. You have to be able to switch back and forth among diverse groups. You have to be able to talk comfortably with a child and gain their trust. You have to be able to interview parents and social workers, reach out to teachers, doctors, and therapists, and learn to communicate with them all and develop a good relationship with each person in the case. You also have to be curious about things work, so you need strong research and investigative skills. You have to be willing to learn on the fly, and I'll give you an example of that is within the first few months of my first case, I found out that one of the children was going to have an IEP or an individualized education plan meeting. And I had never been in an IEP meeting in my life. Our children don't have them, and I wasn't sure how it would work. So I did a lot of research before the first meeting and was surprised to come across the term owls in my first meeting. And I wondered, uh, have I come to the wrong place? Are we in Hogwarts? And no, we were not. It turns out that that is an acronym for oral and written language skills, which was one of the tests that the children had undergone before the IEP meeting. So you have to be willing to learn and open your horizons to new things. You have to be a diligent fact-finder, reviewing school records, medical reports, and talking to everyone involved in the child's life to make sure that no detail is overlooked. There are some essential soft skills that you need as well, and I usually talk to new cases about this in terms of being patient, polite, and persistent with the appropriate social skills. You will often work with families from backgrounds very different from your own, so you need a high level of self-awareness and a willingness to learn about and respect different cultural perspectives in order to build trust. It's also crucial that you can connect with a child's experience but still maintain professional boundaries. Finally, you need to have patience because the legal and social services can move very slowly. A good Casa understands that permanent solutions take time and that you have to be a steady, committed force despite bureaucratic delays.

Voices [25:44]

I fear neither death nor pain. What do you fear, my lady? A cage. To stay behind bars until use and old age accept them. And all chance of valor has gone beyond recall or desire.

What Great Foster Parents Do

Mostly Queen Mary [26:08]

So Frank and I have never been foster parents, but from my observations of foster parents over my years of being in a CASA, I think that good foster parents share some common attributes. Those core attributes are one that they're emotionally flexible and patient. Children in foster care often come from backgrounds where they've experienced trauma or instability. And a good foster parent is able to understand that acting out in the foster home is a form of communication and that foster parent responds with patience rather than frustration. A good foster parent is a team player. They have to collaborate with social workers, therapists, teachers, and oftentimes with the child's biological family. The ability to communicate clearly and work towards the ultimate goal, which is often reunification with the biological family, is essential. A good foster parent also provides stability and consistency. Foster parents have to provide a safe physical home, a predictable routine, be consistent with rules, schedules, and emotional responses to help a child feel secure in what might otherwise feel like a very uncertain situation. Another core attribute of an effective foster parent is having empathy. It's important to provide love and support, but also that empathy sometimes needs to be empathy without expectation, because it is common that the foster parent won't receive immediate gratitude or affection or affection in return for that empathy. Oftentimes the foster children need time to build trust with the foster parents before they can reciprocate emotionally, and the foster parents need to be patient with that. Finally, you need to be a strong advocate for the child. As a foster parent, you are often the primary voice for a child's need. That means you have to be willing to speak up in meetings, you have to be patient with navigating school systems, and you have to be patient but also persistent in ensuring that the child receives any medical, dental, psychological, or therapeutic supports that they need.

Mostly Uncle Frank [28:20]

And there you go. Thank you, Mary.

Voices [28:23]

Why? What have children ever done for me?

Mostly Uncle Frank [28:27]

So thank you for writing in and bringing up these topics. I know they're kind of off topic from what people might expect to hear on a podcast about portfolio construction. But that's just kind of how this podcast has evolved, and I'm glad it has evolved this way that we not only talk about how to construct a portfolio to allow you to spend the most money, but why you might want to do that. Because I didn't think people really needed to know that when I first started this podcast, but I guess they do. And I'm happy to share what I know about it, and hopefully you'll get something out of it. So thank you for being a generous donor to Fairfax Casa and the Father McKenna Center. Thank you for being a loyal listener for many years. And thank you for your email. Well, we won't beat about the bush, my friend.

Voices [29:13]

I'm not going to stand this sort of thing any longer. Which leaves me no alternative but to raise your salary. I haven't taken leave of my senses, Bob. I've come to them. From now on, I want to try to help you to raise that family of yours. If you'll let me. Well, we'll we'll talk it over later, Bob, over a over a bowl of hot punch. I don't deserve to be so happy. I can't help it. I just can't help it. Second off.

Mostly Uncle Frank [30:21]

Second off, we have an email from Mark.

Voices [30:26]

All hail the commander of his majesty's Roman legions, the brave and noble Marcus Vindictus.

Mostly Uncle Frank [30:33]

And Mark Wright.

Mostly Queen Mary [30:35]

Dear Frank and Mary. Oh, this is another dear Mary and Frank. We're getting in the groove here.

Voices [30:42]

Yeah, baby, yeah!

Mostly Queen Mary [30:44]

Dear Mary and Frank, I want to thank you for your for your financial insights, but even more for your generous spirits. I thought I had lived my life in a generous way, but after listening to your podcast, I realized I could and should be doing more. Your idea of giving away 1% of your portfolio each year has inspired my wife and me to do the same. While we are not there yet, we are moving in that direction. Your suggestion to not only donate money, but to also get involved in the cause itself has significantly improved my semi-retired life. In the past, my wife and I have donated money to our local humane society, but thanks to you, I now go to the shelter regularly to help out. My life has been enriched by the animals and the kind people working there. We have always lived beneath our means, saving around 20 to 25% of our earnings, resulting in a significant portfolio. Additionally, we have my pension, my wife's Social Security benefits, and a small part-time dog grooming business that we enjoy and do not plan to stop running in the near future. These sources, not including our savings, cover approximately 85% of our expenses. Your eloquent rants about fear and miserly ways have helped me realize we are not at a risk of running out of money.

Voices [32:01]

Uh what? It's gone. It's all gone.

Mostly Queen Mary [32:04]

I realize we are very fortunate to be in this position and that luck played a big role. We assist our adult children by gifting them money that they can use as they see fit. We're happy that they use it to fund their Roth IRAs and to travel together.

Voices [32:18]

I don't care about the children. I just care about their parents' money.

Mostly Queen Mary [32:23]

In the next five to ten years, we foresee giving larger gifts for house down payments and to help out extended family, resulting in some lumpy spending years. My question of sorts: we are able to fund our current standard of living, including regular travel with our entire family, and our current gifting levels, with around a 3% annual withdrawal. As we increase our gifting closer to 1% of our portfolio, that number will be closer to 4%. Given these low withdrawal rates, our allocation is around 85% equities split evenly between VIOV and VUG, 13% in VGLT, and 2% in cash. Although I have never sweated market swings, I thought the VGLT might add just a bit of diversification. Considering our situation, does this sound reasonable? Scrooge McDuck like? A gambling issue? Or just plain wrong? Thanks again for all you do. Sincerely, Mark.

Voices [33:24]

Wrong? Wrong! Right? Wrong! All this money and nothing to do and nobody to do it with. You were uh saying something, little boy? Mr. Howell, now that I'm a member of the club, what can I do? I had more fun with a club steward. Well, you haven't got the knack of being idly rich. You say you should do like me, just snooze and dream. Dream and snooze. The pleasures are unlimited.

Mostly Uncle Frank [33:48]

Well, first off, thank you for being a donor to Fairfax Casa. And all you do. Sounds like you've done a good job with your finances, and now you're doing a good job being intentional about what to do with them in the second half of your lives.

Voices [34:05]

I want money and power, and money and power, and money and power.

Mostly Uncle Frank [34:13]

Dealing with your financial question first. Finally, somebody's gonna deal with a financial question around here. Yes, I do think adding BGLT to an all-equity portfolio or something close to it is a good idea. That will essentially give you recession insurance. So if we see a 2020 or a 2008, you'll expect that to go up substantially in value. So instead of your portfolio going down, you know, a maximum of 40 or 50%, it's more likely to go down only like 20 or 30%. And that's really the main function it's going to perform. And the base rate for recessions is about one in seven or about 15% of the time. At least that's what Jamie Diamond tells us. And so does the data.

Voices [35:01]

Hey Jim Baby! I see you brought up reinforcements! Well, I'm waiting for you, Jimmy Boy.

Mostly Uncle Frank [35:09]

But you are a correct that at a 3% withdrawal rate, you're not gonna have any trouble as long as you don't panic.

Voices [35:15]

You are correct, sir, yes!

Mostly Uncle Frank [35:18]

And even at a 4% withdrawal rate, I don't think you're gonna have much trouble, but if you wanted to ensure that you didn't have any trouble at a 4% rate, you would reduce your equity holdings to about 70%. Or just be prepared to spend less when things aren't going well. Which is probably the simpler way of dealing with this. Your split between small cap value and large cap growth is also going to be helpful in diversification scenarios. Say like 2022 or like the early 2000s or the late 1970s. I should say that that may actually get you to 4% by itself. I have not run the numbers for you, though. Getting to your more interesting lifestyle questions. Yes, I have found, and Mary has found, that being involved with the charity is more fun and more rewarding than just giving money to something. We do some of both. You can't be involved with everything that you might give money to. We certainly aren't. But for me, as a personal goal, I also want to live what I call a more integrated life. Because the life I lived when I was practicing law was very compartmentalized. That obviously when I was at work, I wasn't doing anything with Mary and wasn't doing anything with the kids. Oftentimes when I was with the kids, I wasn't doing anything with work or with Mary. When I was with Mary by herself, there wasn't any kids and there wasn't any work. And these days a lot of these things kind of flow together, particularly our joint participation in this podcast and then supporting each other in our charitable endeavors. But that's one of the reasons I don't like traveling or doing much without her there. Because we already spent enough time apart. So yes, I encourage people to think about their charitable endeavors, both in terms of time and in terms of other resources and other activities. And then finally getting to the 1% solution or the 1% goal. Yeah, if I had a uh mission like uh Chuck Feeney did with the Billionaire's Pledge, Chuck Feeney is Warren Buffett's hero and is famous for giving away something like eight billion dollars in the second half of his life, but also being the impetus for what it's called the Billionaire's Pledge to get billionaires to commit most of their fortunes to charitable endeavors and other things like that. Which Warren Buffett has done. My thinking is that we may not be billionaires, but we do have excess resources. And since we like to have numerical goals, I think giving away 1% of your portfolio every year is a really good goal to have. And it's going to be eminently doable if you've got like a 5% withdrawal rate. Because that's kind of where we are now. And when I say giving it away, it can not just go to charities, it can go to family. Just the idea that you are spending money, but not really on yourself, but on some other people or some other cause or some other thing. And you're putting that as a budget item at about 1% of your wealth. And that way each year, when you're looking at it, you might change your mind as to what you want it to actually go to. But if you've already kind of mentally allocated that, I think it's gonna help people be able to spread the wealth and spread the joy a little bit better than if they do not have a specific numerical goal.

Voices [38:38]

I don't think you're happy enough. That's right. I'll teach you to be happy. I'll teach your grandmother to suck eggs. Now, boys and girls, let's try it again. If you ain't the granddaddy of all the liars.

Mostly Uncle Frank [39:09]

So I'm not going on a crusade about that, but I think it is a good and reasonable goal to keep in mind. And I'm glad you've adopted it. So I'm glad you're getting some things out of the podcast. A little bit of financial help, which you don't seem to need very much of, and some maybe some inspiration as to what to do with the money and how to go about that. Because we can all use a little more inspiration.

Voices [39:32]

Show me the money! I need to feel you, Jerry! Show me the money! Jerry, you better yell! Show me the money! Show me the money's black man!

Mostly Uncle Frank [39:50]

So hopefully that helps. Thank you for being a donor to the Father McKenna Center and Fairfax Casa. And thank you for your email.

Voices [40:00]

The little quickness of nature that's very funny. Let's get Mikey, yeah.

Mostly Uncle Frank [40:48]

And Mike writes.

Mostly Queen Mary [40:50]

Hi, Uncle Frank and Queen Mary. We make small monthly donations to the Father McKenna Center and just made a small one-time donation to Fairfax Casa. Besides those, we are very grateful for the education and insights you have provided Lowe these many years. Groovy baby! I have two questions. First off, do you know of any brokerages which allow you to automate the maintenance of our portfolio? E.g., rebalancing on calendar and or guardrail triggers, and making distributions based on a percentage of asset value instead of a fixed dollar amount. None of the robo advisors I have seen offer this flexibility. Last off, I'm using 80% as the value of any assets in a traditional IRA as a default to allow for the anticipated tax burden and ignoring Social Security from a portfolio management perspective. Am I really messing up here or just missing out on some tweaking opportunities? Thank you again for significantly advancing our education in this area. Mike.

Voices [41:55]

Wow, that's messed up.

Mostly Uncle Frank [41:58]

Well, thank you also for being a donor to Fairfax Casa and the Father McKenna Center. We can't have too many of those. Do I know of any brokerages to allow you to automate the maintenance of your portfolio? Well, I know M1 used to do that. That was their calling card and how they were set up. That you would create this pie portfolio and then they would rebalance it for you periodically. But honestly, I'm not sure this makes a whole lot of sense for most people. Because you may have and are likely to have funds at more than one place, if you've got, say, 401k or IRA somewhere, and then you have a brokerage account somewhere else. And then my experience has been the way you actually end up doing your transactions often has something to do with taxes, and that you can't really just have this thing automated. You don't want it off making transactions that you then need to deal with on the tax side and but you haven't thought about or done intentionally. As a best practice, I would not recommend using anything that is auto maintaining or auto-rebalancing pieces of your portfolio or even the whole portfolio if you could put it there. Because the truth is it's just not that difficult to do manually, and you probably want to do it that way anyway. All you really need to do is put a reminder on your calendar that it's time to look at this and rebalance it or do something with it, whether you're doing it on an annual basis or a quarterly basis or even a monthly basis. We actually just look at stuff on a monthly basis because our monthly expenses can be very lumpy. Like right now, we're doing these renovations, so we're spending a whole lot more money than we usually do. And the amount of work it actually takes to make the transaction, since you can do it on your phone or computer in a few minutes, it's just not worth automating. It would be like automating the same groceries to come to your house on a regular basis. As a practical banner, that's probably not going to work very well because you're not going to be eating the same things all the time and you're going to be out of. Town part of the time. So this desire to over-automate portfolio stuff is mostly ill-conceived in my mind, particularly on the tax planning side. And I mean, you can see the way we manage the sample portfolios, it just doesn't take that much work. Because we've got some guardrails there, we've got some that are rebalancing on calendars, we got some that are rebalancing annually. There's a bunch of different schemes that we're using for those portfolios as examples, but none of them take a whole lot of work in the end, and there's really no good reason to feel like you have to automate something like that. To me, a lot of this obsession with automation is actually just sales and marketing from various organizations or entities that will automate this thing for you.

Voices [44:46]

Always be closing. Always be closing.

Mostly Uncle Frank [44:52]

Well, maybe you don't really need it automated or want it automated because it's just not that big a deal to begin with. So I would just commit to doing it manually, and you're gonna find that it's not a big deal and only takes you a few minutes a month or half an hour every few months, however you want to do it.

Voices [45:08]

Am I right or am I right or am I right? Right, right, right.

Mostly Uncle Frank [45:12]

Alright, your second question. I'm using 80% as a value in any assets in a traditional IRA as a default to allow for anticipated tax burden and ignoring Social Security from a portfolio management perspective. You know, that's a really terrible idea that just leads to bad forecasting, and it's very confused.

Voices [45:31]

That is the worst idea I've ever heard in my life, Tom. Yes. Yes, it's horrible, this idea.

Mostly Uncle Frank [45:38]

And I'm surprised when I see financial advisors doing things like this. It's like you never went to basic accounting. Assets are assets and liabilities are liabilities. You don't mix them up.

Voices [45:50]

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

Mostly Uncle Frank [45:54]

So, for example, you don't look at the value of your house and then make a subtraction for the future property taxes you're going to pay to value what it's worth. Rather, you would put taxes and other expenses on the expenses or liability side of the ledger as a future liability. The other reason it's a dumb idea is it's almost certainly not the right number, anyway. Because you're supposed to be smart about how you manage things like this. So for a traditional IRA, if you take QCDs out of that when you're over 70 or take advantage of a big health care deduction, if you're using it for long-term care or something, you may not be paying any taxes on that thing at all. In fact, by assigning it a 20% rate, I don't know where that comes from, you're basically setting that as an anchor point that you don't mind paying 20% taxes on that. Well, I would mind. I think I could manage the account a little bit better with the other assets I have to minimize that burden. And again, you have to do this tax planning every year. You can't avoid it. Because the laws change, your income changes, all sorts of things change, and this is something that you need to commit to doing every fourth quarter of every year. That you're looking in October at what you have, what your income's gonna be that year, deciding on things like conversions or other withdrawals. And that's just not something that can be automated away. Somebody's got to do it. Either you need to do it or pay somebody to do it. To me, this is just kind of a stupid calculator thing or stupid financial advisor thing that somebody came up with and somebody thought it was a good idea, and they must not have been accountants because that's not how you do accounting at all.

Voices [47:38]

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

Mostly Uncle Frank [47:42]

What you should be doing as far as taxes are concerned, taxes are an expense and you need to estimate them every year. The easiest way to do that is to look at the taxes you paid last year and then determine whether your situation's going to change or not. Estimating taxes is not hard. At least you're not trying to do it twenty years in advance. But you will generally find that they are going to be less than they were when you were working. So because you're not paying FICA for most people. And then if you've properly tax-located your assets, you're probably only going to be paying the capital gains tax rate, which in most cases is going to be zero or fifteen percent, at least on your assets that are outside of these retirement accounts. So no, never assign assets a value that is based not on the assets themselves, but on some expense, a related expense. Just keep those things completely separate. And the other thing I seriously dislike about that idea is this anchoring it causes. Basically, it's uh an excuse for hoarding, is the way I see this usually used. It's, oh, my my assets aren't worth it that much. I'm just gonna dock them and then give me an excuse to keep hoarding money because I'm calling this 80% of what it actually is.

Voices [48:59]

Forget about it.

Mostly Uncle Frank [49:01]

That is bad forecasting techniques. You are supposed to use base rates for a reference class. You're not supposed to make up conservative assumptions and ram them through a calculator because it's just garbage in, garbage out.

Voices [49:15]

There was this sound like a garbage truck dropped off the Empire State Building.

Mostly Uncle Frank [49:24]

And that's probably enough ranting on that.

Voices [49:27]

And his name is John C.

Mostly Uncle Frank [49:35]

And I also would count Social Security, at least if you're over fifty, and particularly if it's going to be a large part of your retirement assets or income. What you really need to account for there is when the cash flows are gonna start and how that's going to affect your other assets, conversions, etc., and so forth. The further away it is, the less meaningful it is, and the closer it is, or the more immediate you're gonna take it, then the more meaningful it is. But what I notice is in both of your questions, what I notice here is a lot of this stuff seems to have come up, say, in the past decade or so, with these new calculators and ways of automating things. People seem to be making up more things to do, or these quote, shortcuts, unquote, that are usually generally very unhelpful. But I guess I I mean I come from a world where you just had the spreadsheet and the numbers and you put the numbers on the sheet. And you weren't trying to make all these goofy adjustments and other machinations. In some respects, I do blame the financial services industry because this is what gets put out in the financial media, for instance, things like, well, just assume that your retirement expenses are going to be 80% of what you're earning now. That never made any sense. I'm not a smart man. Your expenses are your expenses, they're not based on your income.

Voices [50:59]

At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought.

Mostly Uncle Frank [51:09]

Another stupid thing is adjust your macro allocations in your portfolio based on your age or 100 minus your age. That's another stupid shortcut idea.

Voices [51:20]

Everyone in this room is now dumber for having listened to it.

Mostly Uncle Frank [51:25]

So whenever you hear one of these ideas, it's usually a bad idea because it doesn't actually reflect anybody's reality in particular, and just doing the actual work on a spreadsheet or whatever is just not that much work. So just sit down and do the work. Stop trying to have shortcuts.

Voices [51:45]

I award you no points, and may God have mercy on your soul.

Mostly Uncle Frank [51:51]

And that is especially true for anything dealing with expenses, because that's where more calculating gets you better answers. That is something you control. So, sorry to sound like lecture daddy there, but sometimes I do need to be lecture daddy.

Voices [52:10]

The beatings will continue until morale improves. Daddy is home.

How To Send Questions And Support

Mostly Uncle Frank [52:15]

Anyway, hopefully that helps. Thank you for being a donor to the Father McKenna Center and Fairfax Casa. And thank you for your email. But now I see our signal is beginning to fade. If you have comments or questions for me, please send them to Frank at RiskPartyRadio.com. Then email us frank at riskparty.com. Or you can go to the website www.riskpartyradio.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 follow, a review. That would be great. Okay. Thank you once again for tuning in. This is Frank Vasquez with Risk Party Radio. Signing off.

Voices [53:12]

The wheel screens. It's all days, and it's the wisdom.

Mostly Queen Mary [54:19]

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.