Paul Merriman: We are Talking Millions (EP.147)

It takes only a handful of smart choices to convert regular savings into a secure future. Today we welcome famed financial educator Paul Merriman onto the show to discuss how the right habits and investing approach can add millions to your retirement nest egg. After chatting about his personal and professional background, we dive into Paul’s investing philosophy

and how it’s been influenced by the work of Eugene Fama. A significant theme in this episode, we then talk about why Vanguard’s portfolio allocation ensures that clients have the smoothest possible emotional relationship with their investments. This leads to a discussion on the benefits of simple versus complex funds and how simple funds fit with the preferences of many do-it-yourself investors. Linked to this, Paul explains why it’s emotion and not strategy that gets in the way of successful investing before exploring the challenges of sticking to portfolios that are heavily weighted in small-cap value stocks. Reflecting on his career as an advisor, we ask Paul about his difficulties in working with clients as well as the role of financial advisors. Later, Paul unpacks some of the top habits and beliefs that lead to investing success; a key focus of his new book, We’re Talking Millions. We wrap up our conversation by touching on target date glide paths, how Paul’s foundation educates investors, and the relationship between money and a life well-lived. With such an illustrious career in financial education, tune in to benefit from Paul’s investing advice.

Key Points From This Episode:

• We introduce today’s episode with financial educator Paul Merriman. [0:00:17]
• Paul shares details about his personal and professional history. [0:03:16]
• How Eugene Fama’s work impacted the way that Paul built his firm. [0:06:55]
• What PWL Advisors went through to access Dimensional’s products. [0:08:21]
• Insights into the fateful chat that Paul had with Jack Bogle in 2017. [0:09:08]
• How Paul helps his clients balance fee frugality with expected returns. [0:13:29]
• Exploring the trade-offs between simple and complex funds. [0:16:49]
• Paul compares his former buy-and-hold strategy with his simpler new approach. [0:19:06]
• The costs of do-it-yourself investors having an overly-complicated portfolio. [0:22:46]
• The rationale underpinning the small-cap value strategy. [0:27:20]
• Why it’s so difficult to only invest in small-cap value stocks. [0:25:36]
• What Paul would say to clients who want to ditch their small-cap value stocks. [0:37:32]
• Paul reflects on challenges when communicating with investors. [0:40:39]
• We ask Paul about the value of financial advice and financial advisors. [0:46:32]
• Discover the habits that every investor should follow. [0:51:29]
• What Paul is trying to achieve with the Merriman Education Foundation. [0:58:21]
• Pros and cons to target date glide path funds. [01:02:00]
• We chat about Paul's radio show from the previous decade. [0:50:35]
• Hear Paul’s top lessons on the relationship between money and a life well-lived. [01:08:51]
• How Paul defines success. [01:16:29]