Opening 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. 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, alright?

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. Light in the French. But now onward, episode 540.

Teen Finance Books And Better Alternatives

Mostly Uncle Frank [2:16]

Today on Risk Party Radio, we're just gonna do what do best here, which is attend to your email.

Voices [2:23]

Oh no!

Mostly Uncle Frank [2:26]

So without further ado.

Voices [2:28]

Here I go once again with the email. First off.

Mostly Uncle Frank [2:33]

First off, I have an email from John.

Voices [2:37]

How about John? That's nice and simple.

Mostly Uncle Frank [2:39]

What, are you serious?

Voices [2:41]

Well, yeah.

Mostly Queen Mary [2:42]

John, you want to do that to the kid?

Mostly Uncle Frank [2:45]

And John, right?

Mostly Queen Mary [2:47]

Hi, Frank. And thank you, Mary. Do you have any personal finance book recommendations for teens? My kids are big readers. Not all that into personal finance, but I'd like to get them started. Thanks, John.

Voices [3:01]

Do what? Hey, John! Hey, let's go to the John! Huh, John? Let's go! Wow, wouldn't he outgrow those jokes? Look, kids are mean. Look, I just want them to have a happy childhood too, but long John Silver? I mean, I don't know what to say.

Mostly Uncle Frank [3:16]

Well, John, first, thank you for being a donor to the Father McKenna Center. As most of you know, we don't have any sponsors on this program. We do have two charities we support: the Father McKenna Center for me and Fairfax Court Appointed Special Advocates, or Fairfax Casa for Mary. And if you give to either of the charities, you get to go to the front of the email line, as John has done here.

Voices [3:39]

That is the straight stuff, O Funkmaster.

Mostly Uncle Frank [3:43]

And the easiest way to do that is go to the support page at www.riskperi.com. And there are links to donate directly or to become a patron on Patreon. And we collect that money periodically and send it to one of the charities, alternating depending on the season.

Voices [4:01]

Really top drawer.

Mostly Uncle Frank [4:03]

And if you do give, just make sure you make a note of that in your email or in the subject line, as John has done here, so that we can duly move you to the front of the line. This is an interesting question because I think the answer may have changed in a post-artificial intelligence world.

Voices [4:28]

No 9,000 computer has ever made a mistake or distorted information. We are all, by any practical definition of the words, foolproof and incapable of error.

Mostly Uncle Frank [4:40]

And the reason for that is that all of these basic personal finance books basically say the same thing. And you don't need to read a whole book to understand it. They basically say earn some money, spend less than you earn, and invest the rest in low-cost index funds. And then they start talking about accounts and other things like that. And you could easily just get a list of popular personal finance books, ask an artificial intelligence to summarize them for you, make some videos and slideshows and other things, and that would probably be just as good or better than having your kids read books.

Voices [5:23]

Surely you can't be serious. I am serious, and don't call me Shirley.

Mostly Uncle Frank [5:27]

Especially if they're not really interested in personal finance, because the other problem with giving teenagers books like this is that unless they're earning some income and have some money to invest, it's kind of like, well, that's interesting for someday, but that day is not today, and so it just kind of goes by the wayside.

Voices [5:44]

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

Mostly Uncle Frank [5:48]

The other problem I see with a lot of books and a lot of recommendations these days is pretty much anything written before 2020 is going to be obsolete in one or more respects. And that's because that is the time when we all went to no fee trading, which made ETFs the preferred choice for any investing and not mutual funds anymore. And if you read older books, they'll talk endlessly about these mutual funds. And then that causes people actually make mistakes these days, like buying VTSAX over at Fidelity and paying $79 fees for every time they do the transaction.

Voices [6:25]

That's not an improvement.

Mostly Uncle Frank [6:30]

But if you're looking for some basic materials, I would probably start with If You Can by William Bernstein, which he wrote in 2014, and his four people just starting out. It's a 16-page book in a PDF form that you can find online. I'll link to it in the show notes. That's a basic research, which says everything that these kind of books generally say. Our kids liked Set for Life by Scott Trench, which is a nice book because it's written by somebody who's younger and who actually went through the experience coming out of college and doing the things to get to financial independence as quickly as possible, which included both investing and house hacking in real estate. So I think that's an interesting book to read. It's a lot more interesting for somebody younger to read something like that than something written by some guy who's my age with gray hair and is just bloviating or pontificating, like us old gray hairs are likely to do.

Voices [7:27]

Well, whenever I'm confused, I just check my underwear. It holds the answer to all the important questions. Call me Abraham Simpson. Grandpa, how'd you take off your underwear without taking off your pants? I don't know.

Mostly Uncle Frank [7:45]

Another good recent book would be Pfeifer Dummies by Jackie Cummings Koskey. I think that's more directed at somebody who's just starting out in a job and who's kind of afraid of money.

Voices [7:56]

We got a scary one for you this week.

Mostly Uncle Frank [7:58]

But it's a good resource. Actually, the book I would recommend they read, which is not really a finance book, is So Good They Can't Ignore You by Cal Newport. And that is about getting started in a career. And the idea of that book is don't worry about finding your purpose or finding some grand passion in life. Just go out there and develop some skills and you'll figure out your passions and purposes from that. So that was required reading in our house when our kids graduated from high school. And I think they all benefited from reading that. I think that's more important than any kind of personal finance book they can read.

Voices [8:39]

I invite you on that journey. Once you look back on it, you will never turn back. You'll never go back to the old ways and the old language and the old neglect. Never. And it starts as simple as an apple a day. It starts as simple as the first book of your new library. It starts as simple as the first journal that you get and make the first entry that when people see it will say this is the beginning of a study of a serious student. They're going to be healthy, they're going to be powerful, they're going to be rich, they're going to have it all. Look, they've committed themselves to a whole new journey. I'm asking you to do that. But what's easy to do is what? Easy not to do.

Mostly Uncle Frank [9:16]

But I think here's what makes a whole lot more sense these

Learn By Doing With Teen Accounts

Mostly Uncle Frank [9:20]

days. Rather than focusing on having them read books and just learn some information, it's better to learn by doing now in this area. And so I think what you should do is open them both accounts at Fidelity, regular brokerage accounts or Roth accounts if they have earned income. Put some amount of money in there. It could be $1,000, it could be $500, just something to work with because you can make investments for as little as one dollar in there. We have no fee trading, we have fractional shares. And so there's no reason that teenagers can't start practicing using the accounts themselves. Because this is the way we actually learn. This is the way Montessori is taught. This is the way Boy Scouts works. You learn by doing, and hopefully by making some mistakes with small amounts and in small ways, because they're going to learn a whole lot more from that kind of experience and you sitting down with them doing it than they will by reading any kind of books.

Voices [10:26]

That's a fact, Jack!

Mostly Uncle Frank [10:28]

And what you would want to do there is you start with some amount of money, you take some part of that and show them how to invest in an index fund or a couple of index funds. I would pick something like V U G or S PMO and AVUV as the two funds to invest some money in. But you should also have them invest some of the money in whatever they want. And that includes individual companies. Because again, the purpose of this is practicing using these accounts. The biggest problem I see with personal finance is the fear factor that people are unfamiliar with things, so they're afraid of them, so they don't want to touch them. This is exacerbated by the way financial media and the financial services industry work. Ah, the sweet smell of an old day sucker. Because to me, they give people objectively bad advice.

Voices [11:25]

Am I right or am I right or am I right?

Mostly Uncle Frank [11:29]

If you listen to a lot of finance podcasts that are run by financial advisors, always be closing.

Voices [11:38]

Always be closing.

Mostly Uncle Frank [11:41]

What they'll tell you is something like this don't worry about anything. Just put all your money in a target date fund to begin with. Don't learn anything about it. Don't learn anything about index funds. And just keep doing that for a decade or more. And then when you get a lot of money, then come over and talk to us because it's too complicated. And we'll walk you through it and we'll help you.

Voices [12:01]

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

Mostly Uncle Frank [12:08]

That is not helping anybody. There's no reason a teenager or even somebody younger than that can't learn about how to invest in basic index funds and what that means and why you do it and can't be experimenting with other things. Because that is the better way to learn. It's not to approach finances as this scary, feary thing that we're all going to need help with. Because chances are nobody needs any help with this other than to get going and to learn how to use the accounts before they get to retirement ages or somewhere around there, really. Other than learning how these all these accounts work because that's the complicated thing and learning how taxes work. So I'd probably go have them read If You Can by William Bernstein, sit down and talk to them about the fact that it is obsolete, that not everything in there is the right thing to do these days, but you're gonna show them the right things to do these days, and then you sit down and go to Fidelity, which I think is the easiest way to do this, set up those teen accounts for them, put some money in there for them, and show them how to do it and have them do it.

Voices [13:13]

We all do it, we love to do it. I just did it and I'm ready to do it again.

Mostly Uncle Frank [13:20]

So that they have an account that they are actively monitoring, looking at, investing with, and that's how they're gonna learn this.

Voices [13:29]

Alright, I'll give it a try. No, try not. Do or do not. There is no try.

Mostly Uncle Frank [13:38]

And then if they do have jobs, then you're talking about putting money in Roth accounts. And perhaps you match that or give some money to match that. We matched or gave them whatever they earned to put in a Roth account. So if you earned $2,300 one year, you got $2,300 from us, in addition to the $2,300 you earned to put in this Roth account, and that was used to invest. But I just think that post-2020 and post-the advent of artificial intelligence, reading how to books about this topic or almost any topic is not really the best way to learn it anymore. It just isn't. So what they should be learning is how to use artificial intelligence to bring up these topics, summarize books, and get information that way, and then also how to implement that at a brokerage account with real money.

Voices [14:30]

Rex quando we use the buddy system. No more flying solo. You need somebody watching your back at all times.

Mostly Uncle Frank [14:38]

You may also have them listen to episode 208 of this podcast, which is really the only one that's specifically designed for beginning investors. And has a Wizard of Oz theme to it. So hopefully they'll appreciate that.

Voices [14:54]

Please, sir. We've done what you told us. We brought you the broomstick of the wicked witch of the west. We melted her. Oh, you liquidated her, eh? Very resourceful. Yes, sir. You loved her off the rap of the greatest of us. If you say the greatest house, you'll keep your polish.

Mostly Uncle Frank [15:45]

So good luck with your pedagogical endeavor here. It should work out well if you make it interesting enough. Giving money to a teenager usually makes it interesting.

Voices [15:58]

It's time for the grand unveiling of money.

Mostly Uncle Frank [16:02]

So hopefully that helps. And thank you for your email.

Early Retirement Reality Check

Voices [16:11]

Second off.

Mostly Uncle Frank [16:13]

Second off, we have an email from David. And David Wright.

Mostly Queen Mary [16:24]

Frank, many thanks to you and Mary for everything you do to help those of us who are well off enough to think about these issues, and more thanks for the work you both do for people in much greater need. I'm a 48-year-old attorney with a successful solo practice. My wife is 44 and works in the nonprofit world. She makes $88,000 a year. My compensation is lumpy. The worst years are just over $100,000, and the best was over a million. We have $3.62 million saved.

Voices [16:57]

I like the cut of your gib. What's a gib? Ha ha ha ha. Promote that man.

Mostly Queen Mary [17:04]

We are shifting into a modified golden ratio with about 50% in equities, appropriately split, 25% in long-term treasuries, 15% in gold, and 10% in managed futures. About 71% of our savings is in a traditional brokerage, about 25% in IRAs, and about 4% in a Roth. Our annual spend is $204,000, but that includes $30,000 in additional payments on our mortgage every year. The mortgage has $188,000 left on it, and with the additional payments, we will be done in four years. If we dialed back to minimum payments, our spend would be $174,000 and we'd have 10 years left. And if we paid it off, we'd be at about a $154,000 annual spend. I have three questions if you'll indulge me.

Voices [17:59]

What is your name? My name is Sir Lancelot of Camelot. What is your quest to seek the Holy Grail? What is your favorite color? Blue! That's easy!

Mostly Queen Mary [18:15]

First, we're basically there, right? I am so burned out. It will take a couple of years to wind up my firm, and I'd like to start the process. My wife says she plans to work at least another five years, and we expect a $750,000 to $1 million inheritance in the next 15 years, but I don't want to have to rely on either. We should also get about $50,000 a year in Social Security if we each claim at $62.

Voices [18:44]

Ask me the questions, Bridge Keeper, I'm not afraid. What is a capital of Assyria?

Mostly Queen Mary [18:52]

Second, I've tried to piece this together from years of listening, but what should go where? Treasuries should go in IRAs, right? Since we only have about 25% of our money in IRAs, should they all be in treasuries? Then gold in IRAs after that? And the Ross should be all in growth, right? Third, what do I do with this mortgage? Keep the spend at $204,000 a year and pay it off in four years? Dial back to minimum payments for 10 years and spend $174,000 a year? Just pay the dang thing off and get our spend down to $154,000 a year. I suspect this is the part of personal finance that is actually personal, but I'm torn. Thank you again, David.

Voices [19:44]

What is your name? It is Arthur, King of the Prisons. What is your quest? To seek the Holy Grail. What? Is the air speed velocity of an unladen swallow? What do you mean? An African or European swallow? I I don't know that.

Mostly Uncle Frank [20:04]

Alright, interesting scenario you put forth here. And the answer to your first question is, are you basically there? The answer is yes.

Voices [20:13]

You are correct, sir. Yes.

Mostly Uncle Frank [20:17]

You have 3.6 million invested that could support 180,000 annually at a 5% withdrawal rate, and that assumes no other income. Now, you have all kinds of other income, as you mentioned here, that you're still working, your wife is still working, your assets are still accumulating, and your expenses are expected to go down from 204K to 154K over the next several years. So to me that means you have enough and you're gonna have some buffer here. And that's not factoring in either the inheritance you may be receiving at some point and Social Security, which you'll definitely be receiving later. But I would sit down and get very granular on your expenses now just to make sure everything is lined up. Because those expenses do need to include taxes, and I know that will change when you stop working, less taxes to pay. But you also want to know is how much of your expenses are of a mandatory nature. Your shelter, your health care, your food, utilities, transportation, all that sort of stuff. Because for maximum flexibility, you really want that to be about 60% or less of your total spend. So go get out the account statements from the past year or two or three, if you haven't already, and go through all that stuff and figure that out, and that will make you the most comfortable and is the best kind of planning you can do at this point. And I think the other thing you should definitely do is price your health care. Go on the exchange if you're not using that already and figure that out. And you might want to be doing some tax planning around that, but since You're self-employed, you probably already have a lot of this stuff in place. Or maybe you get health care through your wife's employer. I don't know. It is just something you need to consider because it's a major expense. Alright, second question.

Asset Location And Mortgage Choices

Mostly Uncle Frank [22:15]

This one's much easier. Should your treasuries go in the IRAs? The answer is yes.

Voices [22:21]

Yes!

Mostly Uncle Frank [22:22]

What you're really looking at is things that pay ordinary income. And bonds are usually the culprit. Managed futures also fall into that category if you have any of those. And REITs fall into that category if you had any of those. And so you would fill up your traditional retirement accounts with that money first, because then that ordinary income is not appearing on your tax bill every year, and you're only taxed when you take money out of the IRA. And you are correct that you would put your growth stocks, or any stocks, actually, in the Roth account. And then you kind of just put the gold wherever you have room for it. The truth is, since you have 71% of your invested assets in a traditional brokerage account, most of everything's going to end up in there anyway. And you probably will end up with some ordinary income payers in the taxable account, but that's just the way it is. It won't be the line share of them, that's for sure. And your third question getting to this mortgage. And yes, in this case, I think this is kind of a personal decision, and there's probably no wrong answer. From a mathematical perspective, what matters is what the interest rate is on the mortgage. Because if it's really low, then you probably don't want to pay it off. Particularly if the rate of the mortgage is less than the rate you've been getting out of your bonds, even short-term bonds, then you definitely wouldn't want to pay it off. Now you didn't mention what the entire balance was on it, but I'm surmising that if you needed to pay $30,000 extra on it for four years, that's $120k plus whatever you would have ordinarily paid on it. That the entire balance is probably $200,000 or less. And with your very large brokerage account, I'm inclined not to pay it off simply because I know that anytime I really want to, I could just take money out of the brokerage account and pay it off. It's not like you have to take it out of an IRA or something. But that's really kind of six of one or half a dozen the other. And any of your three choices, pay it off in four years, pay it off right away, or just pay it off over ten years or all fine. If you do choose to pay it off all at once, though, I would probably turn around and get a HELOC on it before you retired. Simply because then you'll have some extra liquidity there that you can use. Now, given your very large taxable brokerage account, I would also consider putting that at a place where you can get a low-rate margin account like an Interactive Brokers, or I guess Robinhood these days and M1 these days have lower margin rates as well. Again, not because you necessarily use that, but just to have that as liquidity in case you wanted to use it.

Voices [25:09]

I want to, but I do not say it.

Mostly Uncle Frank [25:12]

Because if you have three million dollars in a margin account, you could turn around any day and say, okay, I need $200,000. I'm just gonna take it out and pay off this mortgage or do whatever with it. And it really would not be that big a deal. The debt would just get transferred to the margin account at that point in time. The real issue there would be the relative interest rates. Anyway, it looks to me like you guys are in really good shape here. You have a lot of good options, and I would not worry about getting any particular little detail wrong about when you pay off a certain debt or something like that. But it is definitely time for you to plan your exit from the working world if you are as burnt out as you say.

Voices [25:52]

I uh I don't like my job, and uh I don't think I'm gonna go anymore. You're just not gonna go? Yeah. Won't you get fired? I don't know. But I really don't like it, and uh, I'm not gonna go. So you're gonna quit? No uh, not really. Uh I'm just gonna stop going.

Mostly Uncle Frank [26:17]

So hopefully that helps. And thank you for your email.

Managed Futures Primer And Closing

Voices [26:30]

Last off.

Mostly Uncle Frank [26:31]

Last off, we have an email from Trevor.

Mostly Queen Mary [26:35]

No way.

Mostly Uncle Frank [26:36]

And Trevor writes.

Mostly Queen Mary [26:39]

Hi, Frank. Good morning, sir. Just wanted to say thank you for everything that you do. I've learned a massive amount of information from listening to you. Words cannot express my gratitude and the education that you've provided to me and countless others.

Voices [26:53]

No more fun, solo.

Mostly Queen Mary [26:55]

The reason for this message is to bring your attention to an article that Makeda published about managed futures. I thought you might find it interesting and I wanted to share. I found the article through Larry Swedro, Makeda 2025 white paper, Trend Following Strategies. I'm not sure how to attach the paper here, but Larry Swedro wrote an article on April 16th, 2026, free article on Substack, and inside Larry's article, he attached the paper. That's how I accessed it. Thank you for everything you do, sir. Sincerely, Trevor.

Mostly Uncle Frank [27:27]

Wow, wow, ooh, it's very nice. Well, Trevor, I'm glad you're enjoying the podcast too. And I took a look at this little article. I think that's a very nice little article. It's only 16 pages long, but it does cover all the kind of basics about managed futures, how they work, why they work, what's going on with that today. I mean, it is more focused on somebody who is looking for an actual CTA, which Makeda is, to manage an account for them. And as we know, you can go get an indexed version of that through a fund like DBMF now.

Voices [28:03]

Yeah, baby, yeah.

Mostly Uncle Frank [28:05]

But in terms of explaining what they are and why you would want them and how they are undiversified from both stocks and bonds, and therefore improve your efficient frontier and diversification of your portfolio. This little article explains all that quite well. So I will link to it in the show notes so everyone can check it out.

Voices [28:25]

And uh I'll go ahead and make sure you get another copy of that memo.

Mostly Uncle Frank [28:28]

Okay. Thank you for your contribution to our resources, and thank you for your email. But now I see your signal is beginning to fade. If you have comments or questions for me, please send them to Frank at RiskPardyRare.com. Then email us frank at riskperty rare.com. Or you can go to the website www.riskperdyradio.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, and me some stars and 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 [29:12]

Knights, I bid you welcome to your new home. Let us ride to Camelot. We land to the table. We land to the table. We do the table in the table. We done the camera. We have the jammed camelot.

Mostly Queen Mary [29:42]

The Risk Parody 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.