Talking Real Money - Investing Talk

In this episode of Talking Real Money, Don and Tom dive deep into the question of whether long-term investing in stocks truly guarantees returns. Challenging the conventional wisdom, they examine research by Professor Edward McQuarrie that reveals 10- and even 30-year periods in U.S. and international markets where investors lost money—especially when adjusting for inflation. Despite these sobering findings, the hosts reaffirm their belief in equity markets, emphasizing diversification and the historical outperformance of stocks over bonds. They also critique opaque, sales-driven investment products like private credit funds and annuities, urging listeners to remain skeptical, informed, and grounded in long-term strategy rather than promises of guaranteed returns. 0:24 David Booth says stocks average 10% long-term 1:20 McQuarrie: no guarantee of gains, even over 20 years 2:27 Long-term losses happened—inflation-adjusted 3:16 Diversification helps but doesn’t solve everything 4:08 Most individual stocks lose money—own them all 6:04 Stocks reward, but not guaranteed 11:43 Investing = optimism about the future 13:02 Market timing fails—psychics underperform 15:25 Private credit fund OCIC = high risk, low transparency 18:06 OCIC fees are sky-high—10%+ annually 19:42 Annuities explained—loss of control, high costs 21:53 Annuities ≠ bank CDs—know the difference 24:52 OCIC loaded with fees, risky loans Learn more about your ad choices. Visit megaphone.fm/adchoices

At Talking Real Money, we emphasize fundamental financial principles like disciplined saving, diversification, and cautious investing—highlighted this episode through insights on wealth distribution in America, noting that successful financial outcomes depend heavily on diligent saving and investing, particularly in equities, businesses, and real estate. We caution against chasing high-dividend stocks, explaining their risks and why they're often poor investment choices compared to a broadly diversified portfolio. Listener calls explored common pitfalls with annuities, especially high fees in variable annuities, reinforcing our advice on avoiding expensive financial products. We discussed efficient strategies like Roth IRAs, clarifying rules around backdoor contributions, conversions, and inherited accounts, emphasizing the importance of strategic tax planning. Ultimately, the path to financial success involves consistent saving, smart asset allocation, and avoiding high-cost investment traps. 1:24 Wealth distribution and how Americans build wealth 2:19 Discussed alarming wealth inequality statistics 3:27 Key to wealth-building: working, saving, and investing 5:20 Listener call questioning high-dividend stocks 6:46 Risks explained about investing in high-dividend companies 9:31 Clarified misconceptions about dividends and cash flow 11:10 Historical examples of high-dividend stock failures 14:21 Listener call regarding variable annuity transfer 16:21 Benefits of transferring from high-fee annuities 18:20 Humorous mix-up about hosts' identities 21:43 Clarification on inherited IRAs and Roth conversions 24:34 Discussed tax deductions for home improvements 25:30 Listener concerns over annuity safety and risk explained 30:07 Caller advised on diversifying using Vanguard ETFs 31:45 Listener call clarifying Roth IRA contributions and eligibility Learn more about your ad choices. Visit megaphone.fm/adchoices

At Talking Real Money, we’re here to reinforce core investing principles: diversify, plan carefully, and never attempt to predict market swings—a point underscored by famed hedge fund manager Ray Dalio, who advocates holding multiple uncorrelated asset classes rather than timing market downturns. Dalio warns of economic shocks comparable to past crises like the dot-com bust but emphasizes preparation, not prediction, urging investors to diversify across stocks and bonds to mitigate volatility. We explore the practicalities of bond investing, noting bond ladders as a potential strategy, though bond funds usually suffice for most investors. Additionally, we caution against market timing, highlighting that missing just a few of the market’s best days over decades could dramatically reduce returns. Ultimately, successful investing relies on consistent strategy and prudent allocation—not reactionary moves based on fear or speculative predictions. 1:58 Dimensional Funds documentary discussion 2:38 Hedge fund manager Ray Dalio’s predictions and strategy 3:58 Dalio emphasizes asset diversification 5:48 Comparing podcast viewership and popularity 8:05 Critique of leveraged ETFs and annuities 11:10 Preparation beats market timing 14:57 Bond ladders vs. bond funds explained 19:06 Bond market volatility in downturns 21:45 Listener question on tax-efficient bond investing 26:58 Dangers of market timing highlighted 31:18 Clarifying listener confusion about RMDs 35:27 Advice on state-specific tax consultation Learn more about your ad choices. Visit megaphone.fm/adchoices

At Talking Real Money, we consistently emphasize that investing requires diversification, low costs, planning, and acknowledgment that predicting the future is impossible—a lesson humorously highlighted by the saga of Argentina's 100-year bond. Originally mocked after Argentina defaulted in 2020, this bond, offering an initially enticing 7.9% yield, remarkably bounced back following political reforms under Javier Milei, outperforming both U.S. Treasuries and Austria's similar bond, which lost around 80% of its value. This underscores that obvious, high-risk investments can sometimes yield surprising returns, but also emphasizes that bonds, even seemingly safe ones, can exhibit volatility akin to stocks, as evidenced by the 30% drop in U.S. Treasuries in 2022. For retirement portfolios, bonds should primarily provide stability, not speculative gains, and investors must carefully manage strategies such as required minimum distributions (RMDs), transferring old plans into current employer plans to strategically delay taxes. Ultimately, market unpredictability reinforces our fundamental belief that the future remains uncertain for investors and pundits alike. 1:40 Argentina's 100-Year Bond 2:19 Comparing Bonds: Argentina vs. Austria 3:46 The Risks of Long-Term Bonds 5:05 Lessons from Argentina's Bond 7:16 Rethinking Fixed Income Strategy 9:12 Future Predictions on Bonds 11:11 Listener Questions Begin 12:10 Understanding RMDs for 403Bs 14:54 The Debate Over Financial Advisors 15:59 Comparing Investment Strategies Learn more about your ad choices. Visit megaphone.fm/adchoices

On this Friday's episode of Talking Real Money, Don McDonald continued his weekly tradition of answering listener questions, covering practical financial concerns in a straightforward and engaging way. He tackled questions ranging from understanding bid-ask spreads when purchasing ETFs, to choosing the best short-term investment options, such as high-yield savings, CDs, and money market funds. Don also clarified the subtle differences between various Vanguard money market funds, providing guidance on picking the right option based on security and yield. Additionally, he discussed managing retirement withdrawals effectively, particularly addressing conservative strategies for individuals close to retirement who want to protect their principal. Throughout the episode, Don emphasized the importance of balancing risk and returns, maintaining discipline, and using diversified, low-cost investment strategies to manage finances sensibly. 1:23 Understanding Bid-Ask Spreads 6:25 Short-Term Investment Strategies 9:59 Choosing the Right Money Market Fund 13:37 Political Discussions on Social Security 17:10 Managing Retirement Withdrawals Learn more about your ad choices. Visit megaphone.fm/adchoices

On today's Talking Real Money, Don McDonald welcomed two special guests from Dimensional Fund Advisors (DFA)—founder David Booth and co-CEO Dave Butler—to discuss their unique investment philosophy and the importance of tuning out financial noise. The conversation centered around DFA's documentary, "Tune Out the Noise," which emphasizes an academically-based investment strategy focused on sensible, disciplined investing rather than market timing and stock picking. Don and his guests explained the distinct difference between DFA's approach and traditional active or passive investing, highlighting DFA's strategy of combining the strengths of indexing with flexible, thoughtful trading to enhance returns. They also discussed how the rise of ETFs and technological advancements are reshaping the investment industry, making it easier for investors to access diversified, low-cost portfolios. Finally, the episode stressed the critical importance of managing emotional reactions to market volatility, reinforcing the value of staying disciplined and diversified to achieve long-term investment success. 2:34 Tune Out the Noise Documentary 4:23 Dimensional's Unique Investment Philosophy 7:31 Adding Value Over Indexing 8:20 Early Challenges and Data Evidence 11:25 The Role of Nobel Laureates 15:24 Active vs. Passive Investing 19:04 The Future of Active Management 23:32 Evolution of the Mutual Fund Industry 26:02 Technology's Impact on Investing 28:28 Behavioral Aspects of Investing 30:47 The Rise of ETFs 32:37 The Trust Factor in Finance 35:22 Tuning Out the Noise Learn more about your ad choices. Visit megaphone.fm/adchoices

On today's Talking Real Money, Don and Tom dug deep into some surprisingly terrible mutual funds—those wealth destroyers that somehow manage to lose investors piles of money year after year. They highlighted the infamous ARK funds, which collectively burned through billions, and even exposed a Fidelity long-term treasury bond index fund that unexpectedly landed among the biggest losers over the past decade, illustrating precisely why they've been cautioning against holding long-term bonds. Alongside their usual listener Q&A, they shared practical tips on safely managing cash between high-yield savings and money market accounts and clarified how much cash to keep handy in checking. Politics briefly entered the scene, sparking a discussion on managing risks amid increasing national debt—spoiler alert: don't panic; stick to a disciplined, diversified plan. Finally, they praised a savvy grandmother setting up Roth IRAs for her granddaughters, reaffirming their belief that a simple, globally diversified fund like AVGE can help secure financial futures with minimal fuss. 1:20 The Reality of Mutual Funds 2:38 Understanding Value-Destroying Funds 4:17 The Importance of Avoiding Bad Investments 7:35 Long-Term Treasury Bonds: A Cautionary Tale 10:02 Choosing the Right Savings Account 13:32 Managing Your Checking Account Balance 16:09 Navigating High-Yield Accounts 17:48 Retirement Planning and TSP Allocation 22:04 Inheriting Wealth: A Financial Strategy 23:14 The Need for a Financial Plan 24:45 Managing Risks in a Political Landscape 28:36 Grandparenting with a Roth IRA 30:52 Investing for the Next Generation 34:17 Evaluating a Cross-Border Portfolio Learn more about your ad choices. Visit megaphone.fm/adchoices

Hosts Don McDonald and Tom Cock discuss timely market volatility, emphasizing the importance of maintaining diversified global portfolios rather than reacting to short-term market shifts. They address listener concerns, including the complexities of decumulation in retirement and the critical value of seeking personalized financial planning from fiduciary advisors, particularly during life's transitions. Using real-life scenarios, they illustrate how seemingly minor financial decisions, like the timing of Social Security, can have significant long-term impacts, reinforcing the necessity of detailed, personalized advice. They underscore the challenge of finding genuine fiduciary advisors amidst misleading industry claims and encourage listeners to rigorously verify advisor credentials and fiduciary status. 0:34 Introduction to Timely Financial Discussions 4:44 Market Sentiment and Performance Analysis 7:41 Listener Call: Financial Concerns 12:00 Navigating Taxes and Annuities 14:57 Personalized Financial Planning Importance 17:46 The Challenge of Finding Good Advisors 19:04 Fiduciary Responsibilities and Advisor Selection 24:50 Decumulation Strategies for Retirement 33:01 The Value of Professional Financial Guidance Learn more about your ad choices. Visit megaphone.fm/adchoices

Hosts Don McDonald and Tom Cock emphasize the critical importance of hiring a fiduciary financial advisor, legally required to act in your best interests and transparently disclose conflicts of interest, such as fees and commissions. They caution listeners against advisors who misleadingly claim fiduciary status and advise verifying credentials through reliable resources like FINRA's BrokerCheck. By reviewing documents like Form ADV Part 2, investors can clearly identify conflicts of interest and fee structures. Highlighting examples from Ameriprise Financial and Appella Wealth, they illustrate the contrast between firms with extensive conflicts and those genuinely fiduciary-focused. The hosts underscore maintaining diversified, low-cost portfolios and avoiding market timing. They encourage investors to utilize available educational resources and thorough advisor vetting to secure their financial well-being. 0:32 Introduction to Fiduciary Responsibility 2:11 Finding a Fiduciary Financial Advisor 6:39 Verifying Advisor Credentials 8:39 Researching Financial Firms 11:23 Understanding Fees and Compensation 13:23 Conflicts of Interest Explained 16:43 Importance of Due Diligence 21:39 Listener Questions on Investment Strategies Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s Friday, and you know what that means — Q&A day! We tackled five great listener questions, starting with a deep dive into why that seemingly “safe” $71,000 annuity actually shortchanges you compared to a basic 4% Treasury ladder or a modest balanced portfolio. Then we crunched the numbers on HSAs and proved that investing the tax savings can indeed leave you ahead — despite what your accountant might say. Municipal bonds made an appearance, too, as we broke down the breakeven math for different tax brackets. A retiree asked whether to realize capital gains or convert to a Roth — and spoiler alert: his instincts were spot-on. Finally, we wrapped with a listener concerned about owning small-cap value in retirement, and we emphasized the importance of building a balanced portfolio, not just collecting investments from headlines. 1:02 Annuities Explained 6:10 HSA Insights and Strategies 7:01 Understanding Municipal Bonds 10:20 Tax Strategies for Retirees 16:26 Addressing Portfolio Overhaul Concerns Learn more about your ad choices. Visit megaphone.fm/adchoices

Imagine a world where investment firms actually worked in your best interest and financial regulators had your back—yeah, keep dreaming. The reality is getting worse, not better. The latest proof? A flood of sketchy "investment opportunities" dressed up as safe and innovative. Take the new PRIV ETF, which claims to focus on "investment grade" private credit—except 95% of its holdings are junk-rated. Or BlackRock sneaking Bitcoin into its model portfolios, giving investors exposure to one of the most volatile assets around without them even realizing it. And, of course, the structured finance industry is partying like it's 2006, bundling up risky loans and convincing investors they’re solid bets. The lesson? You cannot rely on regulators, Wall Street, or even common sense prevailing. You need a real investment strategy—not a collection of ideas—and a healthy dose of skepticism. Because if it sounds too good to be true, it is. 0:11 A Sensible Investment World 1:51 The Rise of Risky Funds 3:50 Bitcoin in Portfolios 5:45 The Return of Old Schemes 7:18 The Investor's Responsibility 9:45 The Importance of Strategy 12:13 Listener Questions Begin 14:22 ETFs vs. Mutual Funds 16:26 Bonds in 401k vs. Taxable Accounts Learn more about your ad choices. Visit megaphone.fm/adchoices

Another day, another batch of money myths to bust. In this episode of Talking Real Money, Tom and Don take a sledgehammer to the idea that becoming a millionaire requires some kind of magical stock picking, insane work hours, or pure dumb luck. Spoiler: It’s mostly about spending less than you make, investing consistently, and avoiding financial landmines (like high-interest debt). A listener asks whether bonds are still the best diversifier in a portfolio, which leads to a deep dive into why no investment is a perfect hedge against stocks—despite what the Wall Street wizards want you to believe. Fidelity gets a well-deserved roasting for pushing annuities inside IRAs (seriously, why?). And for those considering Tesla stock or any other hot-shot investment, let’s just say: strap in, because that rollercoaster is a wild one. Along the way, they take on listener questions, reminisce about financial talk radio, and remind everyone that no one—NO ONE—can predict the future, no matter how much they charge for their “insight.” 0:41 - Debunking millionaire myths: It’s not about luck, Amazon IPOs, or working 80-hour weeks. 1:45 - The Millionaire Next Door and the modern rise in millionaires (2020–2023). 2:48 - The top millionaire habits: underspending, steady investing, and avoiding debt. 3:13 - Don’t ignore “free money” (employer 401k match) as part of your wealth strategy. 3:36 - Understanding risk-adjusted investments (not market trends or headlines). 4:12 - The dangers of high-interest credit card debt (current rates around 20%). 9:19 - Listener question: Are there better alternatives to bonds in a portfolio? 11:52 - The myth of negative correlation: Bonds don’t always move opposite to stocks. 14:30 - Real estate, commodities, private credit—are they good alternatives? (Mostly no.) 17:37 - Why hedge funds fail at providing a true alternative investment strategy. 18:24 - Listener question: Should an annuity be inside an IRA? (No, and beware of sales tactics.) 20:06 - A listener asks about tools to analyze asset allocation across different accounts. 23:32 - A caller asks about his mom’s annuity; Fidelity gets called out for bad advice. 28:08 - The risks of annuities vs. safer alternatives like CDs. 31:41 - Listener question: Should I invest my cash-back rewards in Tesla or AVGE? (Tesla is a rollercoaster.) 34:29 - Individual stock risk: Why even major companies (like Walgreens) can collapse. 37:36 - Nostalgic discussion about financial talk radio, Bob Brinker, and Financial Fysics. Learn more about your ad choices. Visit megaphone.fm/adchoices

In this episode of "Talking Real Money," hosts Don McDonald and Tom Cock address recent market volatility, emphasizing that despite headlines about markets "nosedives," the S&P 500 is still up 10% over the past year and only down 4.4% year-to-date, while globally diversified portfolios have fared even better with minimal losses. They criticize alarming financial media headlines that cause investor panic and warn that emotional reactions to market fluctuations are more damaging to portfolios than market corrections themselves, which historically last about 100 days. The hosts field caller questions about retirement account allocation strategies, including keeping bonds in traditional IRAs while holding stocks in Roth IRAs to maximize tax advantages, and explain investment terminology such as large/mid/small cap classifications and value versus growth distinctions. They also address Dave Ramsey's claim that investing $100 monthly from ages 25-65 would create a millionaire, calculating that with a 10% return it would yield about $637,000, though Ramsey likely assumes a 12% return based on the American Funds Investment Company of America's historical performance, which they argue sets unrealistic expectations for future investors. 0:04 Market reactions and recent trends - S&P 500 up 10% over past year despite media negativity 2:50 Baby Boomers and market concerns - critique of alarmist headlines about retirement portfolios 5:05 Investing strategies for volatile markets - importance of discipline and avoiding emotional reactions 6:14 Understanding portfolio allocation - caller question about bonds in Roth vs. traditional IRAs 10:15 Dave Ramsey's $100/month millionaire claim - analysis of investment return calculations 19:44 Importance of risk tolerance - historical performance of American Funds with significant downturns 23:31 Evaluating old retirement plans - advice on moving a $45,000 government retirement account to an IRA 26:22 Investment terminology explained - definitions of large/mid/small cap, growth vs. value stocks 32:59 Understanding bond investments - short-term (under 3 years), intermediate (4-10 years), and long-term (10+ years) 35:28 Engaging with financial education - information about speaking engagements and consultation opportunities Learn more about your ad choices. Visit megaphone.fm/adchoices

In this episode of "Talking Real Money," hosts Don McDonald and Tom Cock discuss generational investing habits, highlighting concerning trends among Gen Z investors who start investing at age 19 but often engage in high-risk behaviors like options trading (36%), cryptocurrency (42% of males), and margin trading (25%). Unlike Baby Boomers who typically began investing at age 35, Gen Z relies heavily on questionable financial advice from social media "fin-fluencers," with approximately half using platforms like TikTok for investing guidance. The hosts worry these gambling-like behaviors could lead to devastating losses and eventual disillusionment with investing altogether, contrasting this approach with their recommended strategy of long-term, diversified investing in index funds like Vanguard Total World Stock Index. The episode also addresses listener questions about optimal places for liquid savings and strategies to manage retirement income to avoid IRMAA Medicare surcharges, emphasizing the importance of tax planning in retirement. 0:04 Generational wealth distribution and control among Baby Boomers 2:06 Investment start ages across generations (Baby Boomers: 35, Gen X: 32, Millennials: 25, Gen Z: 19) 3:56 Concerning investment behaviors of Gen Z - options trading (36%), cryptocurrency (42%), and margin trading (25%) 7:23 Risks of relying on social media for financial advice and the problems with "fin-fluencers" 9:38 Long-term index fund investing versus short-term gambling approaches 14:39 Listener question: Where to keep liquid funds in today's interest rate environment 16:02 IRMAA (Medicare surcharges) planning and tax-efficient retirement withdrawal strategies 19:39 RetireMeet 2025 resources and financial advisory services Learn more about your ad choices. Visit megaphone.fm/adchoices

It's another Friday Q&A: 1:38 Inherited IRAs Explained 3:34 Understanding Short-Term Bond Funds 5:35 Tax Implications on Dividends 6:40 The Role of Mid-Cap Investments 8:43 Withdrawal Strategies in Retirement Learn more about your ad choices. Visit megaphone.fm/adchoices

In this episode, Tom and Don explore retail investors' behaviors influenced by users of platforms like Wall Street Bets, highlighting the risks faced by inexperienced traders in high-stakes options trading. We discuss poor investment habits driven by overconfidence, the gambler's fallacy, and behavioral finance pitfalls such as confirmation bias. We reiterate the importance of diversification and long-term strategies over trend-following. Then, we address listener questions on retirement planning and fiduciary advice. 3:08 The Gambler's Fallacy 7:01 Confirmation Bias in Investing 13:27 Understanding Risk in Investing 16:11 Listener Questions and Answers 21:02 Retirement Planning Strategies Learn more about your ad choices. Visit megaphone.fm/adchoices

Today, Don and Tom discuss essential personal finance and retirement planning strategies. They consider the future Social Security and the need to delay benefits for better payouts while advising young listeners to establish emergency funds and utilize 401(k) and Roth IRA benefits. The hosts caution against misleading bank promotions and provide personalized insights on listener questions regarding insurance policies and tax implications. 2:05 Concerns About Social Security 5:03 Social Security and Retirement Planning 5:29 Social Security Class Announcement 7:30 Investing for Young Adults 8:28 Emergency Funds and 401k Options 10:33 Real Estate Considerations for Young Adults 14:06 High-Yield Savings Accounts Discussion 24:10 Gimmicks in Banking Rates 28:33 Roth Conversion and Capital Gains 35:04 Market Performance and Emotional Investing Learn more about your ad choices. Visit megaphone.fm/adchoices

In this episode, we examine the intersection of politics and investing, highlighting how emotional decisions can cloud judgment. We discuss politically-themed ETFs, like the Defiance MAGA ETF, emphasizing that economic factors, not political trends, influence stock prices. Listeners are cautioned against allowing political affiliations to dictate investment strategies, as this can lead to underperformance. Using Walgreens as an example, we underscore the importance of diversification over individual stock investments. We answer listener questions about tax regulations and advocate for low-cost index funds and ETFs for long-term success. 2:16 Don's and Tom's Politics 4:34 Should You Invest Politically? 8:08 The Risks of Individual Stocks 21:43 The Fall of Walgreens 30:44 Fidelity vs. Schwab: A Comparison 33:48 Understanding Zero Coupon Funds Learn more about your ad choices. Visit megaphone.fm/adchoices

In this episode, we examine the key principles of constructing an investment portfolio, focusing on asset selection tailored to individual needs. We address listener questions about foundational components like stocks and bonds, featuring Paul Merriman's four-fund model for balanced diversification. The conversation includes the value of international investments and real-life scenarios illustrating successful strategies. We also discuss the implications of tax-efficient fund choices and my perspective on using traditional investments over Roth accounts for children. 0:34 Portfolio Population Basics 2:24 Diversification Discussion 6:09 International Investments 13:12 Social Security Insights 18:13 Early Retirement Experiences 23:10 Roth Accounts for Kids Learn more about your ad choices. Visit megaphone.fm/adchoices

In this Q&A episode, Don and Tom address listener questions about comparing Vanguard funds with Avantis Global Equity Fund, review an Army officer's retirement portfolio, provide debt management guidance for a young professional, discuss options for handling an old 403(b) plan, and explain fund benchmark comparisons for Dimensional Funds. [0:04] Introduction and explanation for Q&A format change [3:07] Comparing Vanguard funds to Avantis Global Equity Fund (AVGE) [7:34] Army officer's retirement planning and investment portfolio review [16:34] Debt hierarchy guidance for young professionals [18:11] Managing an old employer 403(b) plan at Fidelity [21:54] Understanding Dimensional Funds performance vs benchmarks Learn more about your ad choices. Visit megaphone.fm/adchoices