Sound Investing

Do you want to create a financial legacy for a young person, especially a newborn? This podcast and video explains Paul’s plan for his new granddaughter, which is adaptable by any investor. [Podcast listeners are encouraged to watch the video and/or view the Slides and Tables below]. Paul is joined by Daryl Bahls, Director of Analytics for The Merriman Financial Education Foundation, and Chris Pedersen, Director of Research. Daryl uses “the numbers” to explain possible outcomes and help you assess the variables of a long-term investment plan for the life of a child or grandchild. You will learn: How to create a fund for your grandchild, child, or other youngster you want to help, which can build a lasting legacy. How to put some money aside that can compound tax free or tax deferred for the rest of their life and cause them to likely remain true to your original goals. How this process works, which theoretically is pretty simple. How to consider the personal and variable outcomes of this method. How to use the Tables that simulate for variables. Paul turns over presentation to Daryl around :15 Chris Pedersen joins in around :45 Daryl Bahls—Tables: Slides:  Fund For A Grandchild—How to create a lasting legacy for your grandchild Return Tables: Fund For A Grandchild Read: How $10,000 Will Help My Newborn Granddaughter Have a Better Retirement: https://paulmerriman.com/how-10000-will-help-my-newborn-granddaughter-have-a-better-retirement/

Ever wonder how the “Sound Investing” podcast is funded? Along with all the prolific work produced, over the past decade, by the mostly-volunteer Merriman Financial Education? Paul lays it out in this podcast, including his plans for 2023. Learn how you play a huge part in the how Paul’s retirement plans evolved into the myriad of financial education tools for DIY investors and outreach to university students and professional organizations.  He invites your participation, questions and feedback. If you are not already a subscriber to his free twice-a-month newsletter, or have not downloaded your free pdf and/or audio copy of We’re Talking Millions—12 Simple Steps to Supercharge Your Retirement,  visit https://paulmerriman.com/signup/ Call To Action! Here are a few simple ways to support the financial education work of The Merriman Financial Education Foundation, a registered 501(c)3. In so doing you help better the lives of individuals, families and communities, creating more opportunities for all. Subscribe to our weekly “Sound Investing” podcast, available on your favorite listening platforms and leave a review. Tell us what you think! Subscribe to our YouTube Channel, and hit the thumbs up, subscribe, leave a comment and share the link with your social media and friends. Use our M1 Finance affiliate link to set up a brokerage account and use our portfolio suggestions. If you fund your account with a minimum of $1,000, our foundation will receive a one-time affiliate fee —at no cost to you—which helps support our financial education projects. Follow us on Facebook, Twitter and LinkedIn Buy our latest books, We’re Talking Millions! 12 Simple Ways To Supercharge Your Retirement and  2 Funds for Life: A quest for simple & effective investing strategies; all the profits help support our work. Support our mission by making a tax-deductible donation to the Foundation. Thank you!

Paul Merriman is a compulsive list maker and his Thanksgiving list is his favorite of the year.  In this podcast, he covers a range of subjects for investors related to real wealth and giving thanks. He describes getting up very early on Thanksgiving Day to spend a few hours listing names of people for whom he is thankful. While many of the people would be unknown to our audience, others are responsible for helping our Foundation reach and be of service to those who find our work helpful.  One such essential behind-the-scenes person is Angela Moore, Senior Editor at Marketwatch.com. Angela is responsible for putting the final touches on the hundreds of “MarketWatch" articles by Paul and Rich Buck. Her kind guidance and care plays an important role in the success of our Foundation reaching and educating investors.  Angela was recently interviewed by Ari Parker on "Legacy—Aging With Purpose.” Listen to her speak about “The Value in Money and Memories" at: https://cms.megaphone.fm/channel/legacy?selected=CAC1135958443. We think you will understand why we feel very fortunate to have Angela as our MarketWatch editor. Paul believes successful investing is largely a long-term series of random events, much as lives can be. To illustrate this point, he recalls an unlikely meeting of a fellow high school graduate as he was standing by himself watching the 1961 "Seafair Parade" in Seattle. That casual conversation ends up being a single step responsible for his Foundation’s work 60 years later. He also shares a single sentence that summarizes the steps young investors should take, inspired by the encouraging responses he received in recently speaking with college students at Rutgers and Western Washington University. Paul suggests this article by Ben Carlson, one of our Foundation’s Truth Tellers  “Who Wants to Be a Billionaire” is an excellent read filled with an interesting list of “real wealth" measurements.  https://awealthofcommonsense.com/2022/11/who-wants-to-be-a-billionaire/    Along this same line, Paul also recommends a book  for anyone in their 20s and 30s seeking to learn the most-important basics of investing. Spending Your Way to Wealth by Paul Heys, a director of our Foundation, does a terrific job of addressing the real wealth we accumulate.  We heartily recommend this book. You can get it at Amazon or—for a discounted copy with a personal autograph—take a look at Paul Heys’ site: https://investorship.com/financial-services-clients/

The first part of this broadcast describes the investment strategy Paul and his wife are giving to their latest grandchild. After Paul describes the strategy, Daryl Bahls, Director of Analytics for The Merriman Financial Education Foundation, shares tables that represent the 95-year potential financial implications of this investment. Then, Chris Pedersen, our Director of Research, Daryl and Paul address the following questions: · What’s the best way to compare the risk and return of different combinations of equity asset classes? · How should someone move a major part of their portfolio from bonds to equities?  Dollar cost average or make a lump sum investment? · Which is better: the 10-fund portfolio or Chris’ 2 Funds for Life? · What kind of problems are investors having at M1 Finance? · What ETFs is Chris considering when he reviews his picks next year? · What kind of returns should we expect from small-cap-value funds in the future? · How should future returns of a globally diversified total market fund, like Vanguard Total World ETF (VT), be compared to the Worldwide 4 Fund Portfolio? · Why do you recommend different ETFs for taxable and tax-deferred accounts? · What do you plan to do to help investors make the best of their 401k investment choices?   See: New Tables by Daryl Bahls: Fund for Granddaughter (R4) No-Nonsense Portfolios 'Quilt Chart' (1970 to 2021) 7-Sound Investing Portfolios (50-50) - 2022 (color) (Paul makes reference to Table H1) Get your copy of: 2 Funds for Life—A quest for simple & effective investing strategies by Chris Pedersen at Amazon (https://amzn.to/3BxTFoM) or other online book sellers.

Paul provides a crash course in beginning investing in this presentation (with slideshow) to professional members of the Youth Business Alliance so they can use these principles and tools to educate and empower their students in financial literacy. This is the video (or podcast) to share with your teenage and older children, family, friends and anyone wanting to understand why and how to invest over the long term. Paul covers the 12 big decisions—each worth about a million dollars—that every saver/investor needs to make to set and stay a course for financing their retirement. These decisions, or steps, are further elaborated in his book, We’re Talking Millions, available for free in pdf and audio at his website. Paul’s goal is get this book into the hands of a million reader/listeners. Even if you’re a seasoned investor, you will find value in reviewing these steps for yourself and those you might share it with to empower them to become a sound investor as well. Get you free pdf or audio book: https://paulmerriman.com/signup/ or buy the print, eBook or audio book: https://amzn.to/2KH36Kr The Youth Business Alliance (https://youthbizalliance.org) was formed in 2012 and provides a year-long four-part course to high school youth. In the YBA program, students learn soft skills, workforce readiness, financial literacy and entrepreneurship skills to prepare them for their career trajectories. In addition, students hear from volunteer guest speakers every week who speak about their life stories and professional careers and field trips to get behind the scenes visits to local businesses.

Chris Pedersen, Director of Research for The Merriman Financial Education Foundation, joins Paul Merriman to explain and elaborate on his ideas and tables published as the cover story in the AAII Journal(October 2022), titled, “Double Your Lifetime Purchasing Power in 20 Minutes.” As Chris states in this broadcast, the article particularly pertains to people doing open enrollment, especially if they have an employer-provided 401k program. “For those who invest in defaults of the 401k programs, most typical across the industry, and do that for 40 years of their career, and then do fixed 4% withdrawals in retirement, and you look at all the cash flows in and cash flows out, and the standard investment, which is a target date fund, and then you adjust for inflation and you ask, ‘What was the impact on how much they have to spend over a lifetime?’ It doubles their spending power, even adjusting for inflation, just by investing in a target date fund, which is kind of unbelievable.” Read Chris’ article at: https://www.aaii.com/journal/article/21644-double-your-lifetime-purchasing-power-in-20-minutes You may be asked to enter your name and email for full access. You can join AAII (American Association of Individual Investors) risk-free for a month or become a member for a small fee. The AAII is an independent nonprofit corporation formed in 1978 for the purpose of assisting individuals in becoming effective managers of their own assets through programs of education, information and research. Podcast listeners should know there is a slideshow available on the YouTube video version. Call To Action! Here are a few simple ways to support the financial education work of The Merriman Financial Education Foundation, a registered 501(c)3. In so doing you help better the lives of individuals, families and communities, creating more opportunities for all. Subscribe to our weekly “Sound Investing” podcast, available on your favorite listening platforms and leave a review. Tell us what you think! Subscribe to our YouTube Channel, and hit the thumbs up, subscribe, leave a comment and share the link with your social media and friends. Use our M1 Finance affiliate link to set up a brokerage account and use our portfolio suggestions. If you fund your account with a minimum of $1,000, our foundation will receive a one-time affiliate fee —at no cost to you—which helps support our financial education projects. Follow us on Facebook, Twitter and LinkedIn Buy our latest books, We’re Talking Millions! 12 Simple Ways To Supercharge Your Retirement and  2 Funds for Life: A quest for simple & effective investing strategies; all the profits help support our work. Support our mission by making a tax-deductible donation to the Foundation. Thank you!

The focus of most of the work we do at The Merriman Financial Education Foundation is to help investors put together portfolios that we believe will produce higher rates of return per unit of risk. In this podcast we look at the math of making more money, as well as specific decisions that are likely to lead to better returns.   The podcast references our following Tables: Fine Tuning Your Asset Allocation, Sound Investing Portfolios and Fixed Distributions and Flexible Distribution.  The math portion of the podcast focuses on the impact of small increases in return, along with small increases in annual investments and a lifetime of accumulating, distributing and passing money to others. The discussion covers the tables in this PDF. Leaving the simple math, Paul uses historical returns to compare hypothetical returns and the choices investors must make. Everyone of these choices is likely a million dollar decision: Save vs. spend Start saving early vs. waiting Selecting stocks vs. bonds Select a few vs. many companies Choose the S&P vs. other equity asset classes Choose the S&P vs. combinations of equity asset classes Add 10% more equity Taxable vs. tax-deferred Tax-deferred vs. tax free Load vs. no-load Index funds vs. actively managed funds Buy and hold vs. market timing Target date funds vs. do it yourself Target date funds plus small cap value Gifting one million dollars with $365 vs. major gift at death The make or break decision of distributions

Paul Merriman, Chris Pedersen and Daryl Bahls each share his studies and comments about rebalancing a portfolio—how often, how much change before rebalancing, and when does it make sense not to rebalance? They also answer listener/viewer questions and Paul makes a special offer for a free chapter from Larry Swedroe’s book, Your Complete Guide to a Successful & Secure Retirement. (See details in ‘Links’ below). Q&A Which asset classes should be in taxable accounts and which in tax-advantaged accounts?  To answer this oft-asked question, Paul recommends Larry Swedroe’s book, Your Complete Guide to a Successful & Secure Retirement and encourages investors to read Chapter 10 from the book, “The Asset Location Decision." See “Links” below for details to buy the book and access the free chapter. “Is there a rebalancing bonus?” Chris answers this question and illustrates his answer with the chart, “Is There a Rebalancing Bonus? … Not Much.”  See this chart and others mentioned below. “I want to help my 36-year-old daughter establish a retirement portfolio. What do you think of using Vanguard Life Strategy Moderate Growth Fund (VSMGX)?” Chris answers by suggesting a better answer may be a Target Date Fund and shows the Vanguard Target Date Fund Glidepath. See this and other charts and tables mentioned here. “Can I expect to invest in the funds you recommend today and hold them for the rest of my life?”  Daryl’s answer is yes, using our 4-Fund portfolio. He shows why by comparing the Total Market Index funds to our “No-Nonsense Portfolios” in Table 1a: “No-Nonsense Portfolios for Sound Investing: Equity Asset Allocation” and Table 2a.1, which shows “Comparison Data,” drawing special attention to our U.S. Only 4-Fund Portfolio over the Total Market Index and S&P 500.  Daryl also offers a third Table, “No-Nonsense Portfolio Performance Rankings by Decade (1970-2021). See these and all charts and tables mentioned here. MORE LINKS Rebalancing: The implications of adding a small amount of small-cap value to a Total Market Index portfolio. See this Table. You can get your copy of Larry Swedroe’s book, Your Complete Guide to a Successful & Secure Retirement at: https://amzn.to/3gb3noz. If you purchase via our link, it may result in our Foundation receiving a small commission that supports our financial education outreach at no additional cost to you. Read this FREE chapter from Larry’s book, “The Asset Location Decision,”  courtesy of Mr. Swedroe and publisher Harriman House.

In this presentation to the Boston Bogleheads® Chapter (Sept. 12, 2022), Paul presents the “10 most important new lessons learned by The Merriman Financial Education Foundation.” The foundation is celebrating its 10-year anniversary of helping the DIY investor make sound investment decisions for a lifetime and become the best advisor to the most important investor on earth…you!  Paul also gives an overview of the 12-million-dollar decisions covered in his book, We’re Talking Millions: 12 Simple Ways to Supercharge Your Retirement. Stay tuned to about 1:20 for some great questions: •  Does Total Market Index or S&P 500 approximate your 4-Fund approach and which has better returns? •  Are there target date funds that approximate the 4-funds in the equity portion? •  How do you approach international funds in the 4-fund approach? •  What is it about small-cap value companies that gives a premium? •  Can you define ‘value’? •  Is there an advantage to the 4-fund strategy if you’re retired, with a 15-year horizon? • Which of your Best-in-Class ETF recommendations should I follow? • Regarding equities and taxable accounts versus tax-advantage accounts, do you mirror the 4-fund across both types accounts and will I have a large tax liability in the taxable account? Watch the slideshow About The John C. Bogle Center for Financial Literacy (https://boglecenter.net/): It is a non-profit organization dedicated to improving financial literacy. The Center’s mission is to expand the legacy of John C. Bogle, the founder of Vanguard, by promoting the principles of successful investing and financial well-being through education and community. Bogleheads® is a registered trademark of the John C. Bogle Center for Financial Literacy. The Center envisions a world of well-informed, capable, and empowered investors. Community outreach is achieved through the Bogleheads forum, wiki, and blog, as well as in-person and virtual Bogleheads chapters worldwide.

Inspired by a conversation with George Sisti, Paul's good friend and trusted Truth Teller, Paul makes the case that successful investing is 99.9% defense. (See article referenced below). The good news is: almost every one of these defensive steps are easily applied to managing a portfolio. And once you set the process in motion, it should be relatively easy to stay the course. Of all the defensive steps we should be able to control personally, there is one hurdle for investors that often leads to serious, and likely costly mistakes: maintaining the commitment to buy-and-hold in bear markets! While buy-and-hold sounded realistic when the portfolio was established, the experience of losing 30% (average bear market loss) is a difficult pill to swallow.  Human nature is shouting, “Don’t be a patsy! Why sit there and watch your life savings disappear without a fight or flight to safety?” Paul discusses the best ways he knows to help control the temptation to cut your losses. See Mentioned Link: The 12 Best Retirement Investing Lessons:  https://paulmerriman.com/the-12-best-retirement-investing-lessons/ George Sisti,CFP™, is a certified Financial Planner™ practitioner and the founder of On Course Financial Planning, a fee-only Registered Investment Advisor firm. https://oncoursefp.com/ You can read more by and about George at: https://paulmerriman.com/george-sisti-certified-financial-planner/ Call To Action! Here are a few simple ways to support the financial education work of The Merriman Financial Education Foundation, a registered 501(c)3. In so doing you help better the lives of individuals, families and communities, creating more opportunities for all. Subscribe to our weekly “Sound Investing” podcast, available on your favorite listening platforms and leave a review. Tell us what you think! Subscribe to our YouTube Channel, and hit the thumbs up, subscribe, leave a comment and share the link with your social media and friends. Use our M1 Finance affiliate link to set up a brokerage account and use our portfolio suggestions. If you fund your account with a minimum of $1,000, our foundation will receive a one-time affiliate fee —at no cost to you—which helps support our financial education projects. Follow us on Facebook, Twitter and LinkedIn Buy our latest books, We’re Talking Millions! 12 Simple Ways To Supercharge Your Retirement and  2 Funds for Life: A quest for simple & effective investing strategies; all the profits help support our work. Support our mission by making a tax-deductible donation to the Foundation. Thank you!