Welcome And Housekeeping

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 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.

Mostly Uncle Frank [1:14]

Top men. And you can find those on the episode guide page at www.riskparty radio.com. Inconceivable! And all thanks to our friend Luke, our volunteer in Quebec. Sacosh. 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.

Voices [1:44]

I'll give you the moon, alright? 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 [2:05]

Really top drawer.

Mostly Uncle Frank [2:07]

Along with a host named after a hot dog.

Voices [2:10]

Lighten up Francis.

Mostly Uncle Frank [2:13]

But now onward, episode 515. Which is attend to your emails.

Voices [2:23]

That's what I'm talking about.

Mostly Uncle Frank [2:25]

And since the last podcast was so long that it caused problems with our website that our top man Luke had to fix for us. Sackgush. I'm gonna keep this one to a more reasonable length. And therefore I think we're only gonna do two emails today. But without further ado.

Voices [2:47]

Here I go once again with the email. And first

Planning For Incapacity And Continuity

Voices [2:52]

off.

Mostly Uncle Frank [2:52]

First off of an email from Mark.

Voices [2:57]

All hail the commander of his majesty's Roman legions, the brave and noble Marcus Vindictus, who returns to Rome after winning a great victory over the greetings at Sparta.

Mostly Uncle Frank [3:11]

And Mark Wright.

Mostly Queen Mary [3:13]

Anne Mary and Uncle Frank. Thank you for everything you do with Risk Parody Radio. I've been a regular listener since 2021. Shout out to my friend Henry and the Choose a Five group for pointing me your way.

Voices [3:24]

Yeah, baby, yeah!

Mostly Queen Mary [3:26]

Over time, I've come to appreciate that Frank's grumpy man rants are really just tough love from someone who genuinely wants people to succeed. And now, here with a commentary is a grumpy old man. The show has made me a more thoughtful and disciplined investor.

Voices [3:45]

I'm not happy, I don't like this chair, and I don't like this desk, and I don't like being here.

Mostly Queen Mary [3:52]

My question is about aging and financial continuity. Death stocks you at every turn! I searched the archives, thank you, Luke, but didn't find a segment that addressed this directly. How do you think about the what-if scenarios where the primary financial manager gradually loses mental capacity? Why I go in and out of comas all the time, especially in situations like dementia, where the decline may be subtle at first. And it's gone. In our household, I manage the budget and investments. I try to involve my wife with spreadsheets, graphs, and updates, but she's generally uninterested beyond the occasional numbers go up chart. Remember thou art mortal. Remember thou art mortal. She'd much rather be in the garden than discuss risk parity mechanics. We have three kids, ages 13, 12, and 10, and we expect to work another 10 to 14 years until our youngest starts or finishes college. So we have time, but I want to be intentional about planning for the possibility that I won't always be able to manage things myself.

Voices [5:04]

Why? What have children ever done for me?

Mostly Queen Mary [5:07]

As our wise aunt and uncle, I'd appreciate your thoughts on how you approach this risk and what strategies you think are most important to put in place. Thanks again for all you do, Mark. P.S. Please find our small donations to Fairfax Casa and the Father McKenna Center in appreciation for your contributions to this community.

Voices [5:26]

Make that the Spartans that treat.

Mostly Uncle Frank [5:44]

We do have charities we support. One for Mary, one for me.

Voices [5:48]

Who elected you leader of this outfit?

Mostly Uncle Frank [5:51]

Mary's is Fairfax Casa, that works with children in foster care in Fairfax County, and mine is the Father McKenna Center that supports hungry and homeless people in Washington, D.C. Full disclosure, I'm the board of the Father McKenna Center and I'm the current treasurer. But if you give to either one of the charities, you get to go to the front of the email line.

Voices [6:13]

I'm voting for yours truly. Well, I'm voting for yours truly too.

Mostly Uncle Frank [6:17]

And to do that, we'll put the links in the show notes, but you can also find them at the support page at www.riskpartyreadow.com, or you can become one of our patrons on Patreon and give monthly that way. Either way, you get to go to the front of the email line. Make sure you do mention it in your email so that we can duly move you to the front of the line. Okay. I'm with you fellas. But now getting to your email. Yes, I do enjoy the Grumpy Man persona.

Voices [6:51]

I don't like television. In my day we had radio and you couldn't see anything, and it was primitive and lousy, and we liked it. We liked it fine.

Mostly Uncle Frank [7:04]

Mostly because I think it's funny, but it also does suit my more argumentative side and the fact that I've been a lawyer for decades, which brings a kind of sharpness to the discourse.

Voices [7:17]

We use the Socratic method here.

Mostly Uncle Frank [7:20]

I think many people find it jarring or unpleasant because they're used to the way that the financial media works and popular personal finance, which is to treat everything like some kind of today show talk show where everybody just says nice things about each other. Even if they really don't mean them.

Voices [7:40]

Hi friends! It's me, Brie! Today, let's sing a unicorn song together.

Mostly Uncle Frank [7:49]

I think if you really do care about financial topics, you should approach them with more intellectual vigor, I would say, and be able to state your premise and then support it with whatever data or other reasons you have for holding that view, because that ultimately allows people to compare various views and decide which ones they prefer. But I'm used to arguing my case, and so I will continue to do that.

Voices [8:14]

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

Mostly Uncle Frank [8:21]

So this is a very good question you've brought up, and I think it is one of those questions that really depends heavily on the situation involved and the particular people involved, really. Because the truth is all of us are gonna become incapacitated at some point, or just be dead. Which is just as likely in the case of men in particular.

Voices [8:45]

You know, at my age, the mind starts playing tricks. So ah death! That's only the cat. Oh death! That's Maggie again, Grandpa. Oh, where were we?

Mostly Uncle Frank [8:58]

Death And so, yes, you do need to have some kind of a backup plan. But what that plan is, as I mentioned, does depend largely on the people involved. So for us, the most complicated thing is actually the taxes, and we have accountants, tax repairers that have worked with us for many years, and so that is going to continue. In fact, our file has been passed to a younger person at our accountancy. As far as the investments themselves are concerned, Mary and I do keep a joint spreadsheet that tracks our net worth and some other spreadsheets that track other things. With that net worth spreadsheet, there is actually instructions on a different tab about how to manage the investments. And because we are not doing some complicated bucketeering thing, the instructions are relatively simple about selling from the things that are high, watching the percentages, and rebalancing occasionally. Another thing I've been working on slowly but surely is consolidating all of our accounts into one or two places, hopefully mostly at Fidelity, and Interactive Brokers would be the two places. We've still got some accounts floating around at Empower, which was the 401k provider, and my employer, Mary's got an e-trade account. We have recently moved her old TSP over to Fidelity, but it's all in the works as far as all that is concerned, but I think that's also going to help. Because just knowing where things are is the first step on the battle. You should also have a password protector provider that consolidates all your passwords in one place. And all of our accounts are joint accounts. So that yes, if I started acting strangely, Mary would be able to actually get into them and do something about them at that time. I intend to rely on our children as backup helpers. They're all quite capable. We have two engineers and one financial professional who is working on a CFA. So we've got some family capability there.

Voices [11:01]

One, two, three, four. Hi, Patrick. Counting up your change for a pack of mermaid man and barnacle boy trading cards? No, I'm thinking about buying this book on counting. Three, four, what's gonna happen next? Five? Holy super happy fun time! This book's good! I'll take it.

Mostly Uncle Frank [11:25]

And it's funny, one of the reasons I created this podcast in the first place, since I didn't think anybody was gonna listen to it, was simply to lay down the principles I wanted them to know about in terms of managing portfolios and retirement portfolios in particular. So they've got thousands of hours of me talking about this. Now I realize that doesn't help most people.

Voices [11:46]

Rex quando we use the buddy system. No more flying solo.

Mostly Uncle Frank [11:51]

But the central idea is record this stuff somewhere. It doesn't need to be on a podcast, it can simply be in some kind of investor policy statement or something like that. But as we age and if we need their help, one or more of our children will be able to step up and help us with that stuff. Patrick, just how dumb are you? It varies. Which is what me and my siblings have been doing for my parents. Now, if you know that story, you know that they essentially ran out of investments money some time ago. So they've been living in a house that Mary and I own. As they've gotten into their nineties though, and more recently, they have declined and are unable to run even their regular finances. So a couple of years ago, we had them sign a power of attorney, putting my eldest brother in charge of their day-to-day accounts. And so he deals with all of that stuff now. And has been dealing with it for a few years. And we recently moved them out of the house and into assisted living. Because they are 97 and 92, and that's where they need to be now. For my dad, it's been kind of a slow decline, but for my mother, the past couple of years, she has declined substantially in her short-term memory. One thing I've really learned from watching that is that whatever habits you take into your later years are the ones you're going to be able to work with, that you're not going to be able to really learn new tricks. She's having a lot of trouble now dealing with smartphones and things like that because she never learned to use them earlier. And what that tells me is we do need to make sure that our investment life is really kind of on autopilot. So the same thing's happening every month. And that's still going to evolve over the next decade because we haven't started Social Security or things like that, but eventually it will fall into some patterns, I can imagine, once we get there. But let's suppose you don't have any of the family or other resources that I've been talking about, and you just need to hire outside help. This is what my friend Optimus Bill has done. I am Optimus Bill. He's recognized that his wife has really no interest in managing finances, so it's going to make a whole lot more sense if there's somebody there just to take over, and somebody younger, too. So he hired himself a young financial advisor who specializes in risk parity style portfolios. Look, it's Macyver. On a fee-for-service basis, of course, and not some AUM nonsense.

Voices [14:27]

I drink your milkshake. There it is!

Mostly Uncle Frank [14:53]

Death Now at your age, you may also have a sibling you might trust. Perhaps somebody who would be getting custody of the kids should both you and your wife die at the same time. This is frequently part of estate planning. And at your age, that's kind of where all of this goes right now, as part of estate planning. But that's more about the unlikely event that you'd both get killed at the same time. And that is a very good reason to have a local estate's attorney who can help you construct the proper will and any trust you might need. And then a lot of the stuff that I've been talking about in terms of where are the accounts, what is the basic plan, how does that work. This is a good reason to write down an investor policy statement, even if you don't think you need one personally, because whomever is going to inherit this stuff needs to at least have some understanding of why it's structured the way it is. So there are many good ways with dealing with these kinds of questions, depending on the human resources that you have about you. But I think the first thing is to make sure that whomever is going to take over this stuff knows where it is, has access to it, either through joint accounts or passwords or other mechanisms, and then that you've written something down about it somewhere that they also have access to so that they have some idea of what's going on with it. And as you do get more to regular retirement age, you might consider whether you want to hire somebody to be a backup or helper or assistant, however you want to phrase it.

Voices [16:27]

You must be Igor. No, it's pronounced Igor. But they told me it was Igor. Well, they were wrong then, weren't they? Uh you were sent by Herr Falkstein, weren't you? Yes. My grandfather used to work for your grandfather. Oh nice. Of course the rates have gone up. Of course. Of course. I'm sure we'll get along splendidly. Oh. Sorry, I uh you know, I don't mean to embarrass you, but I'm a rather brilliant surgeon. Perhaps I could help you with that hump.

Mostly Uncle Frank [17:06]

What hump? So hopefully that helps. I'm glad you're enjoying the show and all my grumpiness. Thank you for being a donor to both Fairfax Casa and the Father McKenna Center. And thank you for your email.

Voices [17:23]

Today, everybody, spoiled run. When I was a boy, we didn't have these video games. We made up room games like chew the bark of the tree. You and your friends would find a nice little tree and you start chewing the skin off of it. And there were no winners, and everybody was a loser. And running your teeth and left your chest and scarred and nutted and left the win and wovers and we liked it. We loved it. Second off. Last off.

Listener Meet-Up And Portfolio Shifts

Mostly Uncle Frank [17:57]

Second off and last off, we have an email from Eric.

Voices [18:01]

Hi, number of mine, number of mine, notch, notch, number of mine, sign them all.

Mostly Uncle Frank [18:05]

And Eric writes.

Mostly Queen Mary [18:07]

Hi, Frank. It was nice meeting you a few weeks ago while biking along the W and O D trail. I made a donation to Fairfax Casa and the Father McKenna Center today.

Voices [18:17]

It's top drawer. Really top drawer.

Mostly Queen Mary [18:21]

Thank you for the great work you and Mary are doing to serve others. I've been listening to the podcast for about a year, and I think it helped inspire me to do some volunteer work for the first time in my life. It has been very gratifying.

Voices [18:34]

Yes!

Mostly Queen Mary [18:35]

Better late than never, I suppose. I love the podcast, and it has helped me challenge some of my long-held beliefs about portfolio construction.

Voices [18:43]

That is the straight stuff, oh funkmaster.

Mostly Queen Mary [18:46]

I am slash was probably the classic example of a boglehead.

Voices [18:51]

What can I put you down for? Nothing. You wish to be anonymous. I wish to be left alone. Since you ask me what I wish, sir, that is my answer. I help to support the establishments I have mentioned. Those who are badly off must go there. Many can't go there, and some would rather die. If they would rather die, they'd better do it and decrease the surplus population.

Mostly Queen Mary [19:16]

I am gradually trying to diversify my portfolio so I own more than just Total US, Total Market International, and VBTLX. Not all the way there yet, but moving in the right direction. Count me as someone who loves the clips. Even if I know they are coming, they still make me laugh out loud.

Voices [19:38]

The best, Jerry, the best.

Mostly Queen Mary [19:40]

I love the drink your milkshake. I love the drink your milkshake clip where you mash it up with house music. Gets me every time. It discusses the utility of hoarding. Again, nice meeting you. If you want the occasional company riding on the path, feel free to reach out.

Voices [20:31]

Your wife interested in uh photography, eh? Photographs, eh? He asked him knowingly. Photography, yeah. Yeah. Snap, snap, grin, grin, wink, wink, nudge, nudge, say no more.

Mostly Uncle Frank [20:43]

Well, first off, thank you for also being a donor to Fairfax Casa and the Father McKenna Center. Because it has also moved you up to the front of the line. And it was a very serendipitous meeting that we had on the bike path. The story on that is both Eric and I live close to the Washington and Old Dominion Trail, which runs from Shirlington, Virginia all the way out to Percivalville. It's 45 miles long. But there I was at the stoplight in Vienna, waiting to cross Maple Avenue, and a voice comes up behind me and says, Are you Frank Vasquez of Risk Parity Radio? And I said, Why, yes, I am. And it was Eric. And so we rode together for about 10 miles that day and had a nice chat. And if I'm inspiring people to go volunteer for their local communities or local organizations, that's even better than anything else I could do here or contribute here.

Voices [21:42]

You are correct, sir. Yes!

Mostly Uncle Frank [21:45]

And you know it's funny, I'm actually doing a bike ride this week with another listener, Michael from the Baltimore area. We're gonna ride from BWI down the path to Annapolis and probably have lunch there.

Voices [21:58]

Well Loddy frickin' die It should be a very nice week for that as well.

Mostly Uncle Frank [22:05]

I do try to ride about a hundred miles a week when the weather is nice. And it's usually by myself listening to podcasts, but I do enjoy company, so long as you're willing to put up with the fact that I ride relatively slowly for somebody who rides as much as I do. I'm only likely to average about twelve or thirteen miles an hour, so you may need to be patient, especially if you're younger.

Voices [22:30]

Squidward! Still riding to work on a machine, I see. Don't say anything, Squidward. Remember your karma. What? Ah.

Mostly Uncle Frank [22:44]

So I'll make a bold prediction and say I bet we will be riding together in the future, Eric.

Voices [22:50]

A really big one, yeah. Which is huge.

Retirement Hoarding And Fear-Based Planning

Mostly Uncle Frank [22:55]

Well, let's get to this article you sent me that uh I will link to in the show notes. It's called The Many Utilities of Retirement by William Bernstein and Edward Macquarie. It's from Advisor Perspectives, which is kind of an online magazine. You find these kinds of articles. And this article really is emblematic of this boglehead hoarding culture that I often talk about, and how it attempts to justify itself, and also why it's really not probably a good approach to the your second half of life in terms of maximizing your well-being and not fixating on money, which is what it really represents. Basically, the whole thing is one big attempt to justify hoarding behaviors and dying with the most money possible.

Voices [23:42]

Donate to the children's fund! Why? What have children ever done for me?

Mostly Uncle Frank [23:47]

Now, the first thing that boglehead hoarder types often do in these discussions is set up a straw man. And that's what we see here on the first page of this article. And the straw man used here comes from Life Cycle Economics. This also relates to the book Die With Zero that is often used as another straw man. That there are only two choices, either die with zero or die with the most money possible. Which is not true at all, but it makes a convenient straw man.

Voices [24:18]

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

Mostly Uncle Frank [24:22]

And I'll just read what it says here first, though. He writes, which brings us to life cycle economics. If utility comes only from consuming goods, services, and experiences, and the goal is to maximize utility, then the rational retiree seeks to spend all their money while alive. You're penalized for every dollar unspent, bouncing the undertaker's check is optional, but you should at least come close. For purposes of this discussion, we assume the retiree has already set aside explicitly mentally any planned bequests. Under life cycle theory, dying with millions of dollars unspent, the richest person in the graveyard, is a gross violation of the maxims of rational choice. Okay, using life cycle theory from economics is just a big, spat, stupid straw man.

Voices [25:16]

Are you stupid or something?

Mostly Uncle Frank [25:18]

Because this is one of these erroneous assumptions from economics. So life cycle theory, or the idea behind life cycle theory, is that you want to use consumption smoothing over the course of your entire life and figure out how to spend money over your entire life to maximize your utility in the economic sense, which is related specifically to consumption. The problem with it is it doesn't make any sense because first you cannot assume you'll know how long you'll live. The other assumption it makes is that you'll know your preferences for your entire life well in advance. So when you are age 20, you will know what your 80-year-old self wants to consume and do. You'll know all about how many kids you had, whether you got divorced or not, every single facet of your life, you'll know in advance. Obviously, nobody knows that. So this kind of theory is useless for planning purposes, and it is not what people are doing when they are trying to spend their money and live the best life.

Voices [26:24]

Hello, hello, anybody home? Huh? Think, McFly, think.

Mostly Uncle Frank [26:30]

What they should be comparing this against instead of this stupid economic life cycle theory straw man is somebody who is trying to live their best life by avoiding the five regrets of the dying, and specifically using money for the four things beyond basic needs that are shown to improve your well-being, and those being relationships, experiences, particularly ones that put you in a flow state, paying other people to do jobs you don't want to do and buying your time back, and then charitable giving. None of those things are really covered by this life cycle theory. So, what does he do to go on from this? He sets this up as a fear problem.

Voices [27:18]

Real wrath of God type stuff with two choices.

Mostly Uncle Frank [27:22]

So he writes, We beg to differ. Not everyone dreads being the richest person in the graveyard. Think about that. Dreads being the richest person in the graveyard. That is setting this up as a fear metric. That's not what we're talking about. That's what he wants to talk about because he's measuring things in terms of what do you fear, as opposed to what do you want to do in life. It's a fear-based view of life.

Voices [27:50]

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

Mostly Uncle Frank [27:58]

He goes on to write, many in fact worry about the opposite, fear of running out. Foro or fear of running out of money. And he lists all the common fears: health and long-term care costs, running out of money, inflation, insufficient savings, retiring with debt, blah, blah, blah, blah, blah.

Voices [28:16]

Human sacrifice, dogs and cats living together, mass hysteria.

Mostly Uncle Frank [28:21]

And he writes, put it another way, for many, worrying about money produces industrial grade disutility. With enough money, it's no worries, mate. So then he sets up this fear metric and he calls it omega. I am my own beginning, my own ending. And he talks about high omega retirees, which are basically the boglehead hoarder types. And he writes, the high omega retiree is mortified at the thought of shrinking the nest egg by thousands of dollars for a few hours of extra luxury. Sure, upgrading to business class nicks only a small fraction of the wealth today, but what about tomorrow? High omega types can't get past the aforementioned six angry horsemen of old age. That laundry list of things that might cost you money that we just talked about. And he writes, the disutility of seeing wealth drop overwhelms the utility of consuming more goods, services, and experiences. And there you see the straw man again. Because if you know anything about well-being, you'll know that consuming more goods, services, and experience is not the secret to well-being. That's not the choice.

Voices [29:32]

That's not how any of this works.

Mostly Uncle Frank [29:34]

The choice is having better relationships. That's how you improve your well-being. And that is through the four mechanisms that we talked about before. Any writes, this very apt description. The high omega retiree fears that vengeful market gods or personal misfortune might send them spiraling down a white knuckle toboggan ride towards cat food and worse. The calendar always reads 1929. Dying with zero is a guess and a hope, a wish, not a plan.

Voices [30:07]

Ray, yeah. We're in an airport. People fly out of airports. What do you think we were doing here this whole time? Yeah, flying is very dangerous. 1987 there were 30 airline accidents, 211 were fatalities, 231 were deaf.

Mostly Uncle Frank [30:19]

Again, focusing on the fear as the reason to hoard money, and contrasting with this straw man of dying with zero, which is not the real goal on the other side.

Voices [30:31]

That's not how it works.

Mostly Uncle Frank [30:34]

And then he goes on to try to explain or justify why measuring your life by this fear metric, omega, makes sense. He says, problem solved by omega. That's the heading. Traditionally, people who willfully die with millions of dollars unspent are derided as misers.

Voices [30:53]

What's with you anyway? I can't help it. I'm a greedy slob. It's my hobby. Save me.

Mostly Uncle Frank [31:00]

RPIG is a jab, as in you are a pig. Standard economic theory ignores that for some people, unspent wealth provides a utility all its own. Think about that. Money is the goal there. He's saying money is the goal.

Voices [31:19]

Oh boy, I'm rich! I'm wealthy! I'm independent! I'm socially secure! I'm rich! I'm rich! I'm rich!

Mostly Uncle Frank [31:28]

Goes on to write, Omega explains why dying with millions may not be a tragedy, but something to exult over. I never had to worry about money. I lived my entire retirement down to my last days in a state of wealth, which is not where I started out in life. Or penuri. I always mispronounce that word. It is easy for them to imagine how excess spending plus a few bad breaks could bring that happy financial edifice tumbling down.

Voices [32:22]

American Flight 625 crashed April 27, 1976.

Mostly Uncle Frank [32:27]

And then for some, a few million kept in treasuries provides more lifetime utility than flying business class on vacation to be met by a private driver who shuttles them to and from the Ritz.

Voices [32:39]

We don't have to take American, there's a there's a lot of flights. Yeah. Take another airline. Cotton Air crashed November 15, 1987. Flight 17, 13, 28 casualties.

Mostly Uncle Frank [32:51]

Okay, so Bill Bernstein actually is that person. He has one-third of his wealth in a 30-year tips ladder to take him to 104. And that's what he plans on living on. The remainder of his wealth is two-thirds invested just in stocks that he's never going to touch. Never going to touch. He's going to die with it and then give it to somebody else. That's his plan.

Voices [33:16]

Now there's a there's a delta right there. I mean, it leaves a midnight ray, you know, but Delta. How's the Delta crash? August 2nd, 1985, Lockheed L 1011, Dallas Fort War, Trevor Wind. All airlines. All airlines have crashed at one time or another. That doesn't mean that they are not safe. Quantas? Never crashed. Well that's I mean, that's gonna do me a lot of good, right? You see, Quantus doesn't fly to LA out of Cincinnati. You have got to get to Melbourne. Melbourne, Australia, in order to get the plane that flies to Los Angeles. Do you hear me?

Mostly Uncle Frank [33:55]

And he seems to think the choice is that, or go have drivers and stay at the Ritz. As if going having private drivers and staying at the Ritz is what people are really trying to do with their money.

Voices [34:07]

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

Mostly Uncle Frank [34:10]

If that's what you're trying to do with your money, you're just as stupid as he is for hoarding it.

Voices [34:15]

Stupid as stupid does, sir.

Mostly Uncle Frank [34:17]

That's not how you use money to improve your well-being. At least not on a long-term basis. More importantly, what's really going on here is this hoarding of money is being substituted for therapy.

Voices [34:34]

You and I are gonna get on this plane. We're not gonna take the plane. He's okay, he's okay, he's okay, we're not gonna take the plane.

Mostly Uncle Frank [34:51]

Just instead of dealing with the fear, why the fear is irrational and where the fear comes from, these hoarder types are papering it over with piles of dollar bills. That's not a good solution. If you're worried about comparing your state of wealth now to where you started out in life, that is a problem you have with your past and not having been able to deal with it or rationalize it. Fear is the path to the dark side.

Voices [35:25]

Fear leads to anger. Anger leads to hate.

Mostly Uncle Frank [36:10]

Neither Bill Bernstein nor any of these other gurus are ever in danger of running out of money. This is an irrational phobia that they have, and that many are following because they think that's the way to live. The way that therapists help people get over phobias is called exposure therapy. You practice spending the money on things that are likely to actually improve your overall well-being for the rest of your life. And those are not consuming things. Those are relationships. Those are giving money away. Those are flow states, those are buying your time back. It's not private drivers and staying at the writs.

Voices [36:54]

It's one of the most insanely idiotic things I have ever heard.

Mostly Uncle Frank [36:58]

That's a straw man.

Voices [37:00]

Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.

Mostly Uncle Frank [37:10]

What using this omega fear factor is doing, it's a recipe for living a mediocre life.

Voices [37:18]

That and a nickel get your hot cup, a jack squat.

Mostly Uncle Frank [37:24]

Because what do you think happens to your relationships, particularly your primary ones, with your partner and your children when they view you as a miser and a hoarder of money? Do you think it helps your relationships?

Voices [37:40]

Are you crazy? Or just plain stupid?

Mostly Uncle Frank [37:45]

Do you think it increases or decreases the possibility that you may get a divorce? And what does Charlie Munger say about why he gives the money to his children? Somebody said to him, Do you think it's a good idea to give them so much money? And Charlie Munger says, Well, it might not be a good idea, but if I don't give it to them, guess what?

Voices [38:06]

Guess what?

Mostly Uncle Frank [38:08]

They're going to hate me. They're going to hate me. Do you want to take a chance on your children hating you because you're a miser?

Voices [38:18]

Stupid is, stupid does, Ms. Blue.

Mostly Uncle Frank [38:21]

And that's the funny thing. I don't think the word relationship is mentioned anywhere in this article. Because you probably have to admit that hoarding money and living in fear and exulting over how much you can accumulate until you die is not going to be good for your relationships. And anybody who specializes in relationships or well-being is going to tell you that flat out. This is a bad strategy for well-being. Using fear as the main metric, wherever that fear comes from, you grew up poor or something. Holding that around and using that as the basis to live your life is not living a good life.

Voices [39:12]

The same Alice you swore to love to all eternity over Jesus. She is not changed by the harshness of the world. But you are. Then you no longer love me. You no longer love me. Well I understand this. In words, never what? In a way, you have changed. How do I change towards you? By changing towards the world. This isn't such a terrible thing for a man to struggle with something better than he is. Another idol has replaced me in your heart. A golden idol. It's singular. The world who can be so brutally cruel to the poor professes to condemn the pursuit of wealth in the same breath. You fear the world too much. With reason. But I I I I am not changed towards you. Aren't you?

Mostly Uncle Frank [40:01]

It's going to cause you to experience one or more of the five regrets of the dying. So if maximizing Omega is the gold standard of the Boglehead Hoarder Plan, you can see it's a really bad plan for living the rest of your life. It's not a good plan for the use of your money.

Voices [40:22]

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

Mostly Uncle Frank [40:29]

Now you might say, well, surely these Boglehead guru types are happy people. You can see they're happy people. They're out there doing things and writing things. That's because the gurus are famous people. They get enjoyment from that. They get into flow states from that. They have relationships from that. But you can't compare yourself to somebody who's famous. Take fame off the table. What if all you have is money and relationships and not fame or power? What are you gonna do? What are you gonna choose?

Voices [41:11]

The false grail will take it from you. I have no idea what it looks like. Which one is it? Let me choose.

Mostly Uncle Frank [42:22]

That what they are really doing is not so much financial advice. They are either exploiting fears or catering to fears. And that is actually how their business models work.

Voices [42:35]

Because only one thing counts in this life. Get them to sign on the line which is dotted.

Mostly Uncle Frank [42:42]

That is what they're getting people to pay for. Either by scaring them at a free steak dinner or some other seminar or what goes on in financial media.

Voices [42:53]

Always be closing. Always be closing.

Mostly Uncle Frank [42:59]

Or coddling and catering to them to make them feel good as a client.

Voices [43:04]

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

Mostly Uncle Frank [43:08]

Which is why so many financial advisor actual financial plans are very cookie cutter things, or they even farm out the portfolio construction to BlackRock or somebody else. You can buy this stuff off the shelf now, and that's what a lot of advisors do. They're not even doing the finance, they're just doing the fear management. Now they will call this managing behavioral risk. Yeah, that's a nice technical term for it, and it's accurate, but it comes down to managing fear. And that's where this article actually concludes. I'll read you this paragraph. The takeaway for financial planners Many clients derive legitimate utility from never to be spent dollar wealth, and experience disutility from a program of spending that steadily reduces wealth as retirement proceeds. They don't Want a spending path that takes their wealth anywhere near zero. Again, nobody's talking about going to zero. It's not a binary choice of die with the most money or die with zero. But you can see what it's saying that a financial advisor's primary job is to cater to these fears, which makes sense from a business model planning.

Voices [44:24]

And I have a straw, there it is. That's a straw. Watch it. My straw reaches a cruise through and starts to drink your milkshake. I drink your milkshake. I drink it up!

Mostly Uncle Frank [44:51]

It also makes it easier to sell things like annuities and other insurance products.

Voices [44:56]

You know, whenever I see an opportunity now, I charge it like a bull. Ned the bull, that's me now.

Mostly Uncle Frank [45:02]

As well as come up with these Kakamami bucket strategies, which are really designed as fear management programs as opposed to being financially sound. But thank you for flagging this article for us, Eric, because it does confirm a lot of what I've been saying. That to these boglehead hoarder types, every problem is solved by a single hammer, which is accumulation. Accumulation until death. And what they are really doing is not maximizing their own well-being. They're trying to solve a fear problem that they should be trying to solve some other way. Because hoarding money is actually going to be detrimental to your relationships and other measures of well-being that you could be pursuing if you weren't wound up in the fear from your childhood trauma or whatever it is.

Voices [46:06]

Fear is the path to the dark side. Fear leads to anger. Anger leads to hate. Hate leads to suffering.

Mostly Uncle Frank [46:17]

Because if your plan is primarily fear-based and you're trying to solve it by hoarding more money, chances are that is going to lead to other people hating you, which could be your kids, could be your spouse, could be other people that you're trying to be close to. It's going to damage those relationships. And it's going to lead to suffering. Their suffering and yours. So if you want to have a better life, you better make better choices that are not based in fear.

Voices [46:50]

Get out. And don't come back until you've redeemed yourselves.

Mostly Uncle Frank [47:05]

Hope to see you on the bike path, Eric. And thank you for your email.

How To Reach Us And Reviews

Mostly Uncle Frank [47:10]

But now I see our signal is beginning to fade. If you have comments or questions for me, please send them to Frank at RiskPartyr.com. Email is Frank at RiskPartyr.com. Or you can go to the website www.riskpartyRare.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 Perity Radio. Signing off.

Voices [47:48]

The world is not m just a passing through. You gotta come off to the house. There's nothing in the world that you can do. You gotta come on.

Disclaimer And Sign-Off

Mostly Queen Mary [49:31]

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.