Learn about the benefits of investing in TIPS, how Allan Roth's hourly fee model challenges traditional financial practices, and the importance of using tools like Maxify for tax-efficient financial planning
Diversify investments beyond domestic assets for optimal retirement planning
Deep dives
Alan Roth's Financial Planning Approach
Alan Roth is an hourly-based financial planner who prioritizes integrity by charging clients for financial advice rather than product commissions. He emphasizes simplicity in investing, advocating for cap-weighted index funds. Roth's career journey, from corporate finance to launching WealthLogic LLC as an hourly-based financial planning firm, reflects his commitment to helping individuals make informed financial decisions.
Tips Ladder and Retirement Planning
Roth advocates for a 'tips ladder,' a strategy that involves investing in Treasury Inflation-Protected Securities (TIPS) with varying maturities to ensure a steady income stream in retirement. The 'laddering' approach involves purchasing TIPS with staggered maturity dates to provide a consistent cash flow over time with built-in inflation protection. By combining TIPS with a strategic asset allocation, individuals can effectively navigate retirement planning complexities.
Diversification and Behavioral Finance in Investing
Roth stresses diversification beyond domestic assets, recommending total international stock index funds and cautioning against overemphasis on US-based investments. He acknowledges behavioral biases that can hinder rational financial decision-making, highlighting the importance of aligning investment strategies with individual risk tolerance and long-term goals.
Balancing Risk and Security in Investment Portfolios
By balancing risk with security, Roth advises on constructing investment portfolios with diversified assets, including global REIT index funds and a mix of international equities. His guidance aims to minimize regret and address behavioral tendencies towards frugality while ensuring financial security and optimized spending in retirement.
Maximizing Retirees' Financial Peace of Mind
Roth's emphasis on securing retirees' financial peace of mind through tailored investment strategies, such as the tips ladder and diversified asset allocation, reflects a holistic approach to wealth management. By integrating behavioral finance insights and practical investment solutions, Roth empowers individuals to navigate retirement complexities and achieve long-term financial well-being.
Professor Kotlikoff is joined by Allan Roth, an expert on TIPS, or Treasury Inflation Protected Securities, and how to ladder them. He's also founder of Wealth Logic, LLC. An hourly based financial planning and investment advisory firm. He's an author, teacher and amazing font of knowledge on all aspects of personal finance. And, having advised huge companies, he's spending his "retirement" helping the little or, at least, littler folk. (Btw, my company's MaxiFi Planner Premium and Pro software does Upside Investing.) Allan is Please tune in to this fascinating episode of Economics Matters -- the Podcast.
Topics Discussed:
This is the perfect time to consider purchasing TIPS - Their yield hasn't been this high for decades
TIPS can be used to build your living standard floor and experience only upside to your living standard.
Allan's pride in being mocked on a semi-regular basis by some financial professionals for his hourly fee model and its obvious inability to make him rich.
Economics Matters - The podcast is hosted by Laurence Kotlikoff and moderated by Alex Kotlikoff.
Laurence Kotlikoff is a Boston University Economist, a NY Times Best Selling Author, President of maxifi.com, and Author of Money Magic.
