July 17, 2026 • 29 mins
This week Don tackles seven excellent listener questions covering everything from credit cards and emerging markets to covered-call ETFs, annuities, retirement buckets, and whether investors should worry about new additions to stock indexes.
00:51 Summer surge in listener questions
01:15 LitReading success and thanks
02:01 Are credit cards really evil?
05:09 Emerging markets inside international funds
07:44 Paying kids for chores to fund Roth IRAs
10:58 Covered-call ETFs (JEPI and others)
15:47 Helping a friend avoid an expensive annuity
19:40 Should index investors worry about SpaceX?
21:38 Bucket strategy and retirement portfolios
Listen
Watch
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_08 (00:05):
You're gonna do a really great financial future.
Tom and Don are talking realmoney.
SPEAKER_02 (00:11):
Well, welcome to the new normal for the QA show on
Friday, at least for now.
And a surprising new normal itis, too, because summers tend to
be our quietest period here atTalking Real Money.
And now, now it's busy.
We have so many questions.
(00:32):
Tom's got a ton of printed ones,and I've got a bunch of spoken
ones that came in attalkingrealmoney.com using that
little green button that lookslike a microphone in the lower
right hand corner.
Good work getting thosequestions in.
And they're fine questions.
So here's the deal.
Today we have seven of themagain.
And it looks like next weekwe'll have seven again.
(00:54):
So if they keep up at this pace,this could be the new normal.
If you like a little longerepisode, you're gonna love this.
And uh thanks for listening.
By the way, not only thanks forlistening, but thanks to all of
you who uh went over to checkout Lit Reading.
It boy, during the period thatApple featured it, it kicked up
into like the top ten fictionpodcasts in the country, which
(01:18):
was thrilling.
Um, you know, it means peoplewere listening to my stories,
and I love doing these shortstories.
And the sales of uh The Line onCross, the my book, my novel,
have been going very well too.
Thank you for for reading.
So thank you for listening andfor reading and for sending in
your questions.
And let's do the first one.
SPEAKER_05 (01:39):
My name's Dave from Ohio, and I have a question for
you.
So I listened to anotherpodcast, No Names, where they
talk about credit cards likethey're the most evil thing in
the world.
And you don't need credit,shouldn't have credit, credit's
bad, etc.
(02:01):
My wife and I are in our 60s.
We have saved for retirement, wehave emergency cash, but we also
have credit cards.
The credit cards get used hereand there.
There are some perks with them.
(02:22):
We never carry a balance, we'vegone through problems in life,
cancer diagnosis, etc.
We've never had to or want.
Do you agree that credit cardsare evil?
Or do they have a place in yourmonetary life?
SPEAKER_02 (02:49):
Thank you.
Well, I'll name names.
I know it's Dave Ramsey.
The Ramsey folks are a littlestrident on credit.
Now, I it for good reason, inpart.
The good reason is that if youcarry balances, the interest
rates aren't just usurious.
They they almost feel criminal.
(03:10):
When you're getting up to a29.99% rate of interest where
for every dollar of a balanceyou carry, you're paying 30
cents in interest over the year.
That's just bad.
And that's what's bad aboutthem.
But debt isn't bad.
Debt is a tool.
Credit cards are a tool, they'reactually a very powerful tool.
(03:32):
I have a lot of credit cards.
How many of them have a balancethat goes past 30 days?
Zero.
Ever.
Period.
Exclamation point.
However, uh, I get some reallynice little perks.
I like the perks.
I like the simplicity of usingcredit cards.
(03:53):
I like, for example, my Applecard I use all the time because
I don't swipe it.
It's I use Apple Pay with theApple card.
I get points, I get dollars, Iget real money back, and I can
just wave it at things uh asopposed to it and it and it does
a one-time uh uh number.
(04:14):
So I'm protected.
Plus, credit cards have greaterconsumer protection than do
debit cards, and certainlybetter than cash.
You steal somebody's creditcards and they charge up your
credit cards, you're protected.
You don't have to pay it.
Somebody steals your cash, youcan't get your cash back.
(04:35):
It's gone.
Debit card, less protection.
Credit cards aren't inherentlyevil.
If they're used as a toolproperly, like you're doing it,
there's nothing in the worldwrong with them.
Here's the next question thatcame in at talkingrealmoney.com
by somebody who just clicked onthat little green mic.
SPEAKER_00 (04:52):
Hi, Don.
I would write this uh questionto Tom to make him feel a little
better, but it requires fillingout a form, and that is
cumbersome.
SPEAKER_02 (05:04):
I totally agree with you, by the way.
It's cumbersome, and Tom isfine.
Don't worry about Tom.
Go on.
SPEAKER_00 (05:10):
My question has to do with the Emerging Markets
Fund.
Um I am under the impressionthat if I have a uh
international stock fund thatincludes all the stocks in the
world, that that also includesemerging markets.
Is Don, I mean, is Tom sayingthat you should have additional
(05:33):
emerging markets?
I I know he's not saying run outand buy everything that is
mentioned, but the implicationis that there should be maybe a
heavier weight to emergingmarkets than uh one would get in
a um uh total market fund.
I don't particularly want tocomplicate my portfolio,
(05:57):
especially because I do believein a balanced portfolio, and I
currently have a 70-30 uh mix.
So I don't want to have to makethings more difficult.
And I believe you guys arepretty strong advocates for
keeping it simple.
So I just want a littleclarification on how much
(06:18):
emerging market I have in aninternational fund, a total
international stock fund.
Thanks.
And thanks for all you do.
Keep up the good work.
SPEAKER_02 (06:29):
Don't worry about it.
You keep it simple.
What you're doing is giving yousome exposure to emerging
markets.
Now, emerging markets might havea slightly higher expected
return because they're morerisky.
That's the way the market works.
So if you don't have much in theway of emerging markets in a
(06:51):
portfolio, you you might want toadd them.
But if you've got funds like,well, Vanguard is going to be
very light.
Their total market fund is goingto be very light in emerging
markets because it's marketcap-weighted.
You might end up with more at uhdimensional, you will end up
with more, I should say, at atotal fund with dimensional or
avantis.
But is this a big deal?
(07:13):
There really isn't a factorpremium that I can quote you.
So I'm not saying emergingmarkets is like value or small
cap or profitability or or or uhmoment momentum.
So I'm just not going to push itvery hard.
Keep it simple, keep it sane,keep it doable for you, and I
(07:35):
think what you're doing soundsgood.
Thanks so much for your call andkeep them coming, or type them
into Tom if you don't mind theform.
Now for the next one.
SPEAKER_01 (07:45):
Hey, Don.
Just want to get your thoughtsabout a website that my friend
told me about.
The website is calledhalfmore.co, h-a-l-fm-o-r-e.co.
And this is a website whereparents can create an online
account to document householdchores that a child did and how
much they were compensated fordoing those chores.
(08:06):
The website would then runpayroll and generate a W-2 tax
return uh to uh uh uh to use foruh documentation for earned
income.
The child would then take theearned income to create a
child's IRA account at thebrokerage uh company of their
(08:26):
choice like Fidelity orVanguard.
Um just want to see what yourthoughts are regarding this
website, if you had anyexperience with it or similar
websites that do the same thing.
Um almost seems a little toogood to be true.
Um appreciate your thoughts.
Thank you for the good work.
SPEAKER_02 (08:44):
Aaron Powell You know, it's not too good to be
true.
Uh and by the way, I was notaware of half more until you
brought it up.
It's uh I think it's ten bucks amonth.
It's you know reasonably priced.
It's if you're using it morelike an accounting tool, I think
it's fine.
You've got to be very, verycareful with this chore job
divide.
What's a job and what is achore?
(09:04):
The IRS does not allow you topay your children a W-2 or a
1099 wage for regular oldhousehold chores, like making
their bed or doing their dishes.
You know, I I guess you could ifif your kid is doing yard work
(09:25):
or heavier household cleaning.
Yeah, maybe, because the IRSdoes say that certain household
tasks can be recognized, uh, andit's I think it's under their
publication 926.
If it was something you'd hiresomebody to do otherwise, and
(09:47):
that you're and you're payinglocal market rates, and then of
course you use half more to dowhat is required in the
documentation.
And you've got to meet state,you've got to meet uh federal
and state labor laws, too.
So can you do it?
Yeah.
Do you need to be careful?
Of course.
Uh and yeah, if your kids aredoing extra work over and above
(10:12):
their their regular, just it'spart of the household chores,
stuff that you might hiresomeone to do, that's legit.
But if you've if you've got athree-year-old and you're paying
them to put their fork in thedishwasher, no, no, that's just
regular kid training.
So I just think you have to be alittle careful and a little
(10:33):
sensible about it, not try togame the system.
All right, we have anotherquestion standing by.
Of course, this one came in attalkingrealmoney.com using the
button in the corner and amicrophone in your computer or
your iPhone or whatever youhave.
And even if it sounds terrible,have you noticed everybody
sounds good?
AI made everybody sound good.
I've got this cool tool thatmakes everybody sound good.
(10:55):
So let's make the next one soundgood.
SPEAKER_07 (10:58):
Hi guys.
My name is Dave from Texas.
I had a question today aboutcovered call ETFs.
Uh, I've been listening to youfor a really long time.
I'm completely on board withjust broad, broad coverage ETF
index funds that are low-fee.
I've got my U, I've got myinternational, I've got my US um
(11:19):
little dividend and a little uha little bond, and I'm happy
with my completely vanilla safeinvestments.
But these covered call ETFs justkeep coming up as a stream of
income.
Um I know uh I think I think uhDon one time was like, oh,
they're great right till they'renot, and they stop.
But uh as long as I've beenaware of them in my adult
(11:40):
investing life, uh, for example,Jeppy, J E P I has been cranking
out 8% for two or three years,month after month after month,
um of of real income.
So anyway, I was wondering ifyou just go deeper, a deeper
dive into uh covered call ETFs,which seem to be uh kind of all
over the place.
Thanks.
SPEAKER_02 (11:58):
Your conclusion is flawed.
It's not income.
You're giving what you are doingwhen you write covered calls is
you're giving up your futuregrowth potential for a portion
of that uh and some semblance ofdownside protection.
That's what you're doing.
You're not, this is not anincome stream.
This is just a way of basicallytaking out some of your capital
(12:19):
gains along the way.
And and let's do a faircomparison.
Let's go way back, let's find acovered call writing fund that's
been around around longer thanJEPI.
Let's use PBP, which is theInvesco S P 500 buy right e buy
right ETF.
So they buy stocks, right callcalls.
Uh that one goes back to 2007,so we've got a long history.
(12:42):
Let's compare their 15-yearreturns uh with the 15-year
return of, well, since this isthe S P 500, let's be very
comparable and use, I was goingto use VTI, but let's use VOO.
I think VOO.
Yeah, yeah, V O O is a good one.
Because that's the S P 500.
(13:03):
So we'll go as apples to applesas we can.
The 15-year average annualreturn for VOO, the S P 500
fund, has been 14.2% per year.
The 15-year average annualreturn for PBP, the covered call
(13:25):
writing fund, has been sevenpercent per year.
Half.
Half.
You're giving up upside to getthose call premiums.
And there is some downsideprotection, but how great is
that downside protection?
Well, it's not that great.
(13:47):
Th the the good news is that uhPBP goes clear back to 2007, so
we can look at what its worstcase scenario has been at 2008.
And when we look back to thatchart, you'll discover that PBP
lost about 41% between the highof 2008 and the low of 2009.
(14:13):
So that was better than the SP500 did.
The SP had a uh high to lowdecline of about 57%, but it
still was a pretty substantial,pretty scary scenario.
And you gave up huge returns,doubling your returns over that
period of time.
(14:34):
Is that worth it?
I don't think so.
And the thing is that thesefunds work really well in
markets that are sideways toslightly higher.
They don't work real well inrapidly rising markets or in
rapidly declining markets.
They're gimmicky.
You don't need another gimmick.
Why do you need another gimmickwhen you could just, let's say
(14:54):
you just did the SP 500, whichis not what we would suggest,
but you just did that every yearand you took out half the gains,
half the average annual return.
So essentially, you have yourcake and you're eating it too.
You would have been taking outabout 7% and you would have been
adding to your portfolio about7% per year.
Not saying that's what youshould do again, but I'm just
(15:17):
saying, look what you could havedone.
No, covered call writing fundsare just a big gimmick, and
there are always gimmicks thatare being sold to somebody
somewhere for some reason.
We believe and are hugebelievers and will continue to
be huge believers in the totalreturn scenario.
Make your portfolio make as muchmoney as you can comfortably
(15:38):
make within your risk profile,and then take from the profits,
whether they're income or growthprofits, take from both.
Thanks for the question, and wehave another.
SPEAKER_03 (15:50):
Hi, Don and Tom.
This is Russ from Memphis,Tennessee.
Love your show, been listeningfor a long time.
Um I have a question dealingwith money matters and
relationships.
I have a good friend that iscoming into 300k from
inheritance.
She's a teacher, and theinvestment person at her school
(16:10):
that handled her 403B has herthinking hard of uh investing in
her 300k into a non, I thinkit's uh qualified uh annuity.
I suspect this is not her bestmove.
Can you can how can I get her toconsider other options?
(16:31):
And uh, what would you suggestshe do?
Thanks.
Uh I hope you can come up withsome good answers on how to keep
everything headed in the rightdirection.
SPEAKER_02 (16:43):
Well, generally speaking, we believe that
insurance and investing shouldnot be combined.
We're not against insurance, perse.
I don't like it for some cases,but I don't believe that
insurance and and investingbelong together in 99.9% of
(17:03):
instances.
Adding insurance to aninvestment doesn't make it
better, it makes it worse, itmakes it more expensive, it
makes it uh more profitable tothe people who sell them,
though, because they're soeasily missold.
The regulation of insuranceproducts is really lax when you
(17:25):
compare it with securities.
Plus, the the fees can be, well,very opaque.
They're not easily disclosed ordeter or determined.
So I would steer clear ofanybody who's selling any kind
of a product, period, butparticularly if it's an
insurance product, there'sprobably no benefit.
(17:46):
Here's what I would suggest.
I would suggest you get her tolisten to this podcast.
Maybe, maybe she'll uh start tosee what we believe and why it's
so powerful.
That if you pay less, you shouldmake more.
And you have to build aportfolio that's right for you.
(18:06):
That you can't, there's no suchthing as high returns and and
low risk.
They just don't exist.
But it's a lie that insurancepeople like to say.
They speak it with their mouthsbecause they know no one is
going to read the 200 pages ofdisclosure documents in which
they say, yeah, there's risk,but we we don't really want to
tell you what it is.
It's not real clear.
(18:26):
Uh it's obfuscation.
So uh I would suggest that.
You might want to get her a copyof uh my book, Financial
Physics.
You can get a Kindle copy forthree bucks at Amazon.
And uh just please have her runit by any decision by somebody
else who doesn't have a vestedinterest in selling her a
(18:50):
product.
And that is tricky in thefinancial industry because
everybody's selling something.
I mean, to be honest, even weare, but we try to make that
what we we try to make what wedo for a living very
transparent.
And I can tell you that if shewas to call us with the
particulars of the product she'sbeing pitched, we could probably
(19:12):
find something that was a wholelot better for her and give her
a lot of great questions she canask.
Uh like, what kind of an annuityis this?
Is this a an indexed annuity?
Is this an income annuity?
Is this a variable annuity?
What kind of a commission doesthe person selling it get?
(19:32):
They'll lie and say none.
That's a lie.
If they say none, then then youknow they're a liar right off
the bat.
So, but have her listen.
I think we'll help.
Thanks for your question.
And I think we have two more.
Yeah, we do, two more.
Here's the next one.
SPEAKER_04 (19:49):
Hi, Tom and Don.
This is John from Florida.
I see that the indexes areadjusting their rules and
putting SpaceX into more thanone index right away.
How can an index investor avoidbeing forced into buying into
this big money loser?
SPEAKER_02 (20:05):
Thanks.
Don't be a straight indexinvestor.
That's the only way, because theuh the total market indexes are
going to have it in because it'spart of the total market.
It's part of the uh the NASDAQ100, so it's in the Nasdaq 100.
It isn't, I don't believe, inthe S P 500, because that's a
selected index.
(20:26):
But indexes that just emulate amarket, like the total market
indexes, they're gonna have it.
Now, you could go with somerules-based funds, which is why
another reason why we likedimensional and Avantis.
They do not buy IPOs in thefirst year because there is
(20:47):
academic research that showsthat IPOs, generally speaking,
of course, there's always theexception to the rule, that
story that gets everyoneexcited.
They're generally speaking, IPOsdon't add value.
They are hyped at the beginning,and they're best avoided for a
(21:07):
while to let the dust settle andsee where they end up in the
various factors that Avantis andDimensional use to choose their
stocks.
They're rules-based, but theydon't just blindly put in every
stock in a particular market.
So that's really the best way todo it is to have rules-based
funds like those from Avantis orDFA.
(21:27):
And there are a few others, butthose two are the big, big, big
players in that space.
Thank you.
And let's grab the last questionthat came in at
talkingrealmoney.com using therecord your question button in
the corner.
Hey guys.
SPEAKER_06 (21:43):
I just started listening to your show about a
week ago.
Um, and uh I'm already excitedabout what I'm hearing and I'm
looking over some of your uhpast podcasts and really really
excited to get into what youprovided here.
Um I'm actually Calling you hereon what would be my first day of
retirement.
(22:03):
It just started today.
I've been planning on things fora bit, but I have a question
around the bucket strategy.
I've been reading Christine Benzand How to Retire book.
My question is in she's providedsome sample or model portfolios.
(22:23):
Some of them are split by fundfamilies or fund types.
My my curiosity is if most of myfunds, retirement funds, are
going to be in Fidelity, isthere any reason why I should
not reach over and follow someof what her picks are from
Vanguard?
Are there extra expenses?
I just don't know what that willlook like.
(22:46):
So that's the that's the firstpart.
And then second part is if ifyou know of any other resources,
whether they're books, otherthings I can read about the
bucket method, um, it just seemsto be a little bit um more
simple uh and somethingstreamlined and something that I
think is going to be easier towrap my head around and keep
track of.
So if you have anyrecommendations, I'd appreciate
(23:08):
that as well.
SPEAKER_02 (23:09):
Aaron Powell Well, the bucket thing, it's just sort
of a way of making it soundeasier than it is.
Instead of saying you need afund that does this and a fund
that does this and a fund thatdoes this, you want a bucket
that does this and a bucket thatdoes that and a bucket that does
this other thing.
Uh buckets are fine.
Uh I'm not a big fan of a lot ofthe bucket.
(23:31):
Oh, how how do I say this?
There are a bunch of bucketbooks out there, and I'm not
real fond of their particularway of doing things.
Uh there's there are there's alot of confusion too that comes
with it.
I think Christine's work is verygood.
I think um Larry Swedro's workis not bucket focused, but it's
really it's really good stuff onhow to build portfolios.
(23:53):
If you want the basic, basic,basics, check out my cheap book,
Financial Physics.
Uh it's very basic.
And what it basically says, allof the good stuff out there
says, is build the portfoliothat's right for your situation,
for your risk profile.
That's an important term.
(24:14):
Risk profile.
That means how much risk you canstand taking.
And by risk, we when we'redealing with mutual funds,
diverse portfolios, we just meanvolatility because there's
little or no inherent risk ifyou have a properly diversified
portfolio.
We're talking about the abilityto withstand volatility and to
stay invested, and the need totake risk.
(24:38):
A lot of people don't need tohave all these buckets of
various risky securities becausethey're set.
Why take risk?
You don't need to take.
You're not gonna win the richestman award.
Musk already has that.
He he's wrapped that up for now,anyway.
So uh uh build a portfolio thatthat makes sense for you, and it
(25:01):
can be as simple as emergencymoney and then stock, fixed
income ratios that fit your riskprofile.
That's it.
Now, as far as Vanguard orFidelity, you're gonna get fine
funds from Fidelity if you'redealing with mutual funds.
If you're dealing with ETFs,then the good news is at
(25:21):
Fidelity's brokerage, you canuse Vanguard's ETFs, you can use
Dimensional's ETFs, you can useAvantis's ETFs, you can use all
of these products that we thinkare very, very good products.
As a matter of fact, we wouldsuggest you lean more heavily
toward Avantis and Dimensionalfor the equity side, and maybe
more toward Vanguard or Fidelityfor the bond portfolio, probably
(25:44):
Vanguard for the bonds becausethey're so cheap.
But use their ETFs.
You don't have to be loyal toFidelity's products if you're a
Fidelity customer, because theylike Schwab are a broker or like
Vanguard's brokerage.
They're a broker.
You can own anybody's ETFs.
So uh let's see, was thereanything else I think again?
Larry Swedro's stuff is great.
(26:06):
I think Christine Benz is great.
Um I I I really I likeMorningstar's research, not
necessarily all of theirsuggestions.
Um, but I don't think you needto focus too much on buckets.
Really, there are three buckets.
There's the the emergencybucket, the income bucket, and
the growth bucket.
That's all.
(26:26):
You don't need a speculativebucket, for example.
That's just why do you why doyou want to play with your
money?
Isn't it too important to playwith?
Unless you like going to Vegas,and then that's not a bucket,
really.
That's entertainment.
Thanks for your question.
Thank you all for yourquestions.
Keep them coming attalkingrealmoney.com.
Use that little green button inthe lower right hand corner or
(26:48):
click on the button up top thatsays ask a question.
And if you need some help, youwould like to spend a little
time talking with a fiduciaryadvisor who is not gonna charge
you or sell you anything.
We promise you you can meet withone of our Appella advisors for
free for nothing for a fewminutes to kind of take a peek
(27:10):
at what you have, to maybecompare that annuity with maybe
better alternatives out there.
Uh see if you're on track forwhere you want to be in the
future.
Just go to talkingrealmoney.comand click on the button that
says meet an advisor and set upan appointment.
You can even set it up with Tombecause guess what?
He's back from vacation finally.
(27:32):
Doesn't mean he isn't going onanother one in a month, because
I think he is, but he's back fora little while.
Thanks so much for listening.
I appreciate you being there.
I'm Don, and every Friday I'mtaking questions in which we're
talking real money.
SPEAKER_08 (27:47):
The opinions and views expressed on this podcast
were current on the daterecorded.
Opinions, estimates, forecasts,and statements of financial
market trends that are based oncurrent market conditions
constitute our judgment and oursubjects change without notice,
including any forward-lookingestimates or statements which
are based on certainexpectations and assumptions.
Although information andopinions given have been
obtained from or based onsources believed to be reliable,
no warranty or representation ismade as to their correctness,
(28:08):
completeness, or accuracy.
Information presented on thepodcast is not personalized
investment advice from ApelloWell.
The views and strategiesdescribed may not be suitable
for everyone.
This podcast does not identifyall the risks, direct or
indirect, or otherconsiderations which might be
material to you when enteringany financial transaction.
We hope you realize that theinformation provided on
(28:30):
TalkingRail Money is forinformational, educational, and
hopefully enjoyable purposesonly.
The podcast is not trying to getyou to buy or sell any financial
products or securities.
Instead, the program is providedas a public service by Apello
Wealth, a fee-only registeredinvestment advisor.
Please see Apello Wealth ADBPart 2 and on our website for
information regarding Apellos,fees, and services.
A public capital, LLC, DBAApello Wealth, is an investment
(28:51):
advisory firm registered withthe Securities and Exchange
Commission.
The firm only transacts businessin the states where it is
properly registered, or excludedor exempt from registration
requirements.
Registration with the FCC or anystate securities authority does
not imply a certain level ofskill or training.
Apello does not provide tax orlegal advice, and nothing either
stated or implied here should beinferred as providing such
advice.
Thanks for listening, and pleasevisit talkingrealmoney.com for
(29:13):
more information and importantdisclosure related to
performance of any specificindex or fund quoted in this
podcast.
You're gonna do a really great financial future.
Tom and Don are talking realmoney.
SPEAKER_02 (00:11):
Well, welcome to the new normal for the QA show on
Friday, at least for now.
And a surprising new normal itis, too, because summers tend to
be our quietest period here atTalking Real Money.
And now, now it's busy.
We have so many questions.
(00:32):
Tom's got a ton of printed ones,and I've got a bunch of spoken
ones that came in attalkingrealmoney.com using that
little green button that lookslike a microphone in the lower
right hand corner.
Good work getting thosequestions in.
And they're fine questions.
So here's the deal.
Today we have seven of themagain.
And it looks like next weekwe'll have seven again.
(00:54):
So if they keep up at this pace,this could be the new normal.
If you like a little longerepisode, you're gonna love this.
And uh thanks for listening.
By the way, not only thanks forlistening, but thanks to all of
you who uh went over to checkout Lit Reading.
It boy, during the period thatApple featured it, it kicked up
into like the top ten fictionpodcasts in the country, which
(01:18):
was thrilling.
Um, you know, it means peoplewere listening to my stories,
and I love doing these shortstories.
And the sales of uh The Line onCross, the my book, my novel,
have been going very well too.
Thank you for for reading.
So thank you for listening andfor reading and for sending in
your questions.
And let's do the first one.
SPEAKER_05 (01:39):
My name's Dave from Ohio, and I have a question for
you.
So I listened to anotherpodcast, No Names, where they
talk about credit cards likethey're the most evil thing in
the world.
And you don't need credit,shouldn't have credit, credit's
bad, etc.
(02:01):
My wife and I are in our 60s.
We have saved for retirement, wehave emergency cash, but we also
have credit cards.
The credit cards get used hereand there.
There are some perks with them.
(02:22):
We never carry a balance, we'vegone through problems in life,
cancer diagnosis, etc.
We've never had to or want.
Do you agree that credit cardsare evil?
Or do they have a place in yourmonetary life?
SPEAKER_02 (02:49):
Thank you.
Well, I'll name names.
I know it's Dave Ramsey.
The Ramsey folks are a littlestrident on credit.
Now, I it for good reason, inpart.
The good reason is that if youcarry balances, the interest
rates aren't just usurious.
They they almost feel criminal.
(03:10):
When you're getting up to a29.99% rate of interest where
for every dollar of a balanceyou carry, you're paying 30
cents in interest over the year.
That's just bad.
And that's what's bad aboutthem.
But debt isn't bad.
Debt is a tool.
Credit cards are a tool, they'reactually a very powerful tool.
(03:32):
I have a lot of credit cards.
How many of them have a balancethat goes past 30 days?
Zero.
Ever.
Period.
Exclamation point.
However, uh, I get some reallynice little perks.
I like the perks.
I like the simplicity of usingcredit cards.
(03:53):
I like, for example, my Applecard I use all the time because
I don't swipe it.
It's I use Apple Pay with theApple card.
I get points, I get dollars, Iget real money back, and I can
just wave it at things uh asopposed to it and it and it does
a one-time uh uh number.
(04:14):
So I'm protected.
Plus, credit cards have greaterconsumer protection than do
debit cards, and certainlybetter than cash.
You steal somebody's creditcards and they charge up your
credit cards, you're protected.
You don't have to pay it.
Somebody steals your cash, youcan't get your cash back.
(04:35):
It's gone.
Debit card, less protection.
Credit cards aren't inherentlyevil.
If they're used as a toolproperly, like you're doing it,
there's nothing in the worldwrong with them.
Here's the next question thatcame in at talkingrealmoney.com
by somebody who just clicked onthat little green mic.
SPEAKER_00 (04:52):
Hi, Don.
I would write this uh questionto Tom to make him feel a little
better, but it requires fillingout a form, and that is
cumbersome.
SPEAKER_02 (05:04):
I totally agree with you, by the way.
It's cumbersome, and Tom isfine.
Don't worry about Tom.
Go on.
SPEAKER_00 (05:10):
My question has to do with the Emerging Markets
Fund.
Um I am under the impressionthat if I have a uh
international stock fund thatincludes all the stocks in the
world, that that also includesemerging markets.
Is Don, I mean, is Tom sayingthat you should have additional
(05:33):
emerging markets?
I I know he's not saying run outand buy everything that is
mentioned, but the implicationis that there should be maybe a
heavier weight to emergingmarkets than uh one would get in
a um uh total market fund.
I don't particularly want tocomplicate my portfolio,
(05:57):
especially because I do believein a balanced portfolio, and I
currently have a 70-30 uh mix.
So I don't want to have to makethings more difficult.
And I believe you guys arepretty strong advocates for
keeping it simple.
So I just want a littleclarification on how much
(06:18):
emerging market I have in aninternational fund, a total
international stock fund.
Thanks.
And thanks for all you do.
Keep up the good work.
SPEAKER_02 (06:29):
Don't worry about it.
You keep it simple.
What you're doing is giving yousome exposure to emerging
markets.
Now, emerging markets might havea slightly higher expected
return because they're morerisky.
That's the way the market works.
So if you don't have much in theway of emerging markets in a
(06:51):
portfolio, you you might want toadd them.
But if you've got funds like,well, Vanguard is going to be
very light.
Their total market fund is goingto be very light in emerging
markets because it's marketcap-weighted.
You might end up with more at uhdimensional, you will end up
with more, I should say, at atotal fund with dimensional or
avantis.
But is this a big deal?
(07:13):
There really isn't a factorpremium that I can quote you.
So I'm not saying emergingmarkets is like value or small
cap or profitability or or or uhmoment momentum.
So I'm just not going to push itvery hard.
Keep it simple, keep it sane,keep it doable for you, and I
(07:35):
think what you're doing soundsgood.
Thanks so much for your call andkeep them coming, or type them
into Tom if you don't mind theform.
Now for the next one.
SPEAKER_01 (07:45):
Hey, Don.
Just want to get your thoughtsabout a website that my friend
told me about.
The website is calledhalfmore.co, h-a-l-fm-o-r-e.co.
And this is a website whereparents can create an online
account to document householdchores that a child did and how
much they were compensated fordoing those chores.
(08:06):
The website would then runpayroll and generate a W-2 tax
return uh to uh uh uh to use foruh documentation for earned
income.
The child would then take theearned income to create a
child's IRA account at thebrokerage uh company of their
(08:26):
choice like Fidelity orVanguard.
Um just want to see what yourthoughts are regarding this
website, if you had anyexperience with it or similar
websites that do the same thing.
Um almost seems a little toogood to be true.
Um appreciate your thoughts.
Thank you for the good work.
SPEAKER_02 (08:44):
Aaron Powell You know, it's not too good to be
true.
Uh and by the way, I was notaware of half more until you
brought it up.
It's uh I think it's ten bucks amonth.
It's you know reasonably priced.
It's if you're using it morelike an accounting tool, I think
it's fine.
You've got to be very, verycareful with this chore job
divide.
What's a job and what is achore?
(09:04):
The IRS does not allow you topay your children a W-2 or a
1099 wage for regular oldhousehold chores, like making
their bed or doing their dishes.
You know, I I guess you could ifif your kid is doing yard work
(09:25):
or heavier household cleaning.
Yeah, maybe, because the IRSdoes say that certain household
tasks can be recognized, uh, andit's I think it's under their
publication 926.
If it was something you'd hiresomebody to do otherwise, and
(09:47):
that you're and you're payinglocal market rates, and then of
course you use half more to dowhat is required in the
documentation.
And you've got to meet state,you've got to meet uh federal
and state labor laws, too.
So can you do it?
Yeah.
Do you need to be careful?
Of course.
Uh and yeah, if your kids aredoing extra work over and above
(10:12):
their their regular, just it'spart of the household chores,
stuff that you might hiresomeone to do, that's legit.
But if you've if you've got athree-year-old and you're paying
them to put their fork in thedishwasher, no, no, that's just
regular kid training.
So I just think you have to be alittle careful and a little
(10:33):
sensible about it, not try togame the system.
All right, we have anotherquestion standing by.
Of course, this one came in attalkingrealmoney.com using the
button in the corner and amicrophone in your computer or
your iPhone or whatever youhave.
And even if it sounds terrible,have you noticed everybody
sounds good?
AI made everybody sound good.
I've got this cool tool thatmakes everybody sound good.
(10:55):
So let's make the next one soundgood.
SPEAKER_07 (10:58):
Hi guys.
My name is Dave from Texas.
I had a question today aboutcovered call ETFs.
Uh, I've been listening to youfor a really long time.
I'm completely on board withjust broad, broad coverage ETF
index funds that are low-fee.
I've got my U, I've got myinternational, I've got my US um
(11:19):
little dividend and a little uha little bond, and I'm happy
with my completely vanilla safeinvestments.
But these covered call ETFs justkeep coming up as a stream of
income.
Um I know uh I think I think uhDon one time was like, oh,
they're great right till they'renot, and they stop.
But uh as long as I've beenaware of them in my adult
(11:40):
investing life, uh, for example,Jeppy, J E P I has been cranking
out 8% for two or three years,month after month after month,
um of of real income.
So anyway, I was wondering ifyou just go deeper, a deeper
dive into uh covered call ETFs,which seem to be uh kind of all
over the place.
Thanks.
SPEAKER_02 (11:58):
Your conclusion is flawed.
It's not income.
You're giving what you are doingwhen you write covered calls is
you're giving up your futuregrowth potential for a portion
of that uh and some semblance ofdownside protection.
That's what you're doing.
You're not, this is not anincome stream.
This is just a way of basicallytaking out some of your capital
(12:19):
gains along the way.
And and let's do a faircomparison.
Let's go way back, let's find acovered call writing fund that's
been around around longer thanJEPI.
Let's use PBP, which is theInvesco S P 500 buy right e buy
right ETF.
So they buy stocks, right callcalls.
Uh that one goes back to 2007,so we've got a long history.
(12:42):
Let's compare their 15-yearreturns uh with the 15-year
return of, well, since this isthe S P 500, let's be very
comparable and use, I was goingto use VTI, but let's use VOO.
I think VOO.
Yeah, yeah, V O O is a good one.
Because that's the S P 500.
(13:03):
So we'll go as apples to applesas we can.
The 15-year average annualreturn for VOO, the S P 500
fund, has been 14.2% per year.
The 15-year average annualreturn for PBP, the covered call
(13:25):
writing fund, has been sevenpercent per year.
Half.
Half.
You're giving up upside to getthose call premiums.
And there is some downsideprotection, but how great is
that downside protection?
Well, it's not that great.
(13:47):
Th the the good news is that uhPBP goes clear back to 2007, so
we can look at what its worstcase scenario has been at 2008.
And when we look back to thatchart, you'll discover that PBP
lost about 41% between the highof 2008 and the low of 2009.
(14:13):
So that was better than the SP500 did.
The SP had a uh high to lowdecline of about 57%, but it
still was a pretty substantial,pretty scary scenario.
And you gave up huge returns,doubling your returns over that
period of time.
(14:34):
Is that worth it?
I don't think so.
And the thing is that thesefunds work really well in
markets that are sideways toslightly higher.
They don't work real well inrapidly rising markets or in
rapidly declining markets.
They're gimmicky.
You don't need another gimmick.
Why do you need another gimmickwhen you could just, let's say
(14:54):
you just did the SP 500, whichis not what we would suggest,
but you just did that every yearand you took out half the gains,
half the average annual return.
So essentially, you have yourcake and you're eating it too.
You would have been taking outabout 7% and you would have been
adding to your portfolio about7% per year.
Not saying that's what youshould do again, but I'm just
(15:17):
saying, look what you could havedone.
No, covered call writing fundsare just a big gimmick, and
there are always gimmicks thatare being sold to somebody
somewhere for some reason.
We believe and are hugebelievers and will continue to
be huge believers in the totalreturn scenario.
Make your portfolio make as muchmoney as you can comfortably
(15:38):
make within your risk profile,and then take from the profits,
whether they're income or growthprofits, take from both.
Thanks for the question, and wehave another.
SPEAKER_03 (15:50):
Hi, Don and Tom.
This is Russ from Memphis,Tennessee.
Love your show, been listeningfor a long time.
Um I have a question dealingwith money matters and
relationships.
I have a good friend that iscoming into 300k from
inheritance.
She's a teacher, and theinvestment person at her school
(16:10):
that handled her 403B has herthinking hard of uh investing in
her 300k into a non, I thinkit's uh qualified uh annuity.
I suspect this is not her bestmove.
Can you can how can I get her toconsider other options?
(16:31):
And uh, what would you suggestshe do?
Thanks.
Uh I hope you can come up withsome good answers on how to keep
everything headed in the rightdirection.
SPEAKER_02 (16:43):
Well, generally speaking, we believe that
insurance and investing shouldnot be combined.
We're not against insurance, perse.
I don't like it for some cases,but I don't believe that
insurance and and investingbelong together in 99.9% of
(17:03):
instances.
Adding insurance to aninvestment doesn't make it
better, it makes it worse, itmakes it more expensive, it
makes it uh more profitable tothe people who sell them,
though, because they're soeasily missold.
The regulation of insuranceproducts is really lax when you
(17:25):
compare it with securities.
Plus, the the fees can be, well,very opaque.
They're not easily disclosed ordeter or determined.
So I would steer clear ofanybody who's selling any kind
of a product, period, butparticularly if it's an
insurance product, there'sprobably no benefit.
(17:46):
Here's what I would suggest.
I would suggest you get her tolisten to this podcast.
Maybe, maybe she'll uh start tosee what we believe and why it's
so powerful.
That if you pay less, you shouldmake more.
And you have to build aportfolio that's right for you.
(18:06):
That you can't, there's no suchthing as high returns and and
low risk.
They just don't exist.
But it's a lie that insurancepeople like to say.
They speak it with their mouthsbecause they know no one is
going to read the 200 pages ofdisclosure documents in which
they say, yeah, there's risk,but we we don't really want to
tell you what it is.
It's not real clear.
(18:26):
Uh it's obfuscation.
So uh I would suggest that.
You might want to get her a copyof uh my book, Financial
Physics.
You can get a Kindle copy forthree bucks at Amazon.
And uh just please have her runit by any decision by somebody
else who doesn't have a vestedinterest in selling her a
(18:50):
product.
And that is tricky in thefinancial industry because
everybody's selling something.
I mean, to be honest, even weare, but we try to make that
what we we try to make what wedo for a living very
transparent.
And I can tell you that if shewas to call us with the
particulars of the product she'sbeing pitched, we could probably
(19:12):
find something that was a wholelot better for her and give her
a lot of great questions she canask.
Uh like, what kind of an annuityis this?
Is this a an indexed annuity?
Is this an income annuity?
Is this a variable annuity?
What kind of a commission doesthe person selling it get?
(19:32):
They'll lie and say none.
That's a lie.
If they say none, then then youknow they're a liar right off
the bat.
So, but have her listen.
I think we'll help.
Thanks for your question.
And I think we have two more.
Yeah, we do, two more.
Here's the next one.
SPEAKER_04 (19:49):
Hi, Tom and Don.
This is John from Florida.
I see that the indexes areadjusting their rules and
putting SpaceX into more thanone index right away.
How can an index investor avoidbeing forced into buying into
this big money loser?
SPEAKER_02 (20:05):
Thanks.
Don't be a straight indexinvestor.
That's the only way, because theuh the total market indexes are
going to have it in because it'spart of the total market.
It's part of the uh the NASDAQ100, so it's in the Nasdaq 100.
It isn't, I don't believe, inthe S P 500, because that's a
selected index.
(20:26):
But indexes that just emulate amarket, like the total market
indexes, they're gonna have it.
Now, you could go with somerules-based funds, which is why
another reason why we likedimensional and Avantis.
They do not buy IPOs in thefirst year because there is
(20:47):
academic research that showsthat IPOs, generally speaking,
of course, there's always theexception to the rule, that
story that gets everyoneexcited.
They're generally speaking, IPOsdon't add value.
They are hyped at the beginning,and they're best avoided for a
(21:07):
while to let the dust settle andsee where they end up in the
various factors that Avantis andDimensional use to choose their
stocks.
They're rules-based, but theydon't just blindly put in every
stock in a particular market.
So that's really the best way todo it is to have rules-based
funds like those from Avantis orDFA.
(21:27):
And there are a few others, butthose two are the big, big, big
players in that space.
Thank you.
And let's grab the last questionthat came in at
talkingrealmoney.com using therecord your question button in
the corner.
Hey guys.
SPEAKER_06 (21:43):
I just started listening to your show about a
week ago.
Um, and uh I'm already excitedabout what I'm hearing and I'm
looking over some of your uhpast podcasts and really really
excited to get into what youprovided here.
Um I'm actually Calling you hereon what would be my first day of
retirement.
(22:03):
It just started today.
I've been planning on things fora bit, but I have a question
around the bucket strategy.
I've been reading Christine Benzand How to Retire book.
My question is in she's providedsome sample or model portfolios.
(22:23):
Some of them are split by fundfamilies or fund types.
My my curiosity is if most of myfunds, retirement funds, are
going to be in Fidelity, isthere any reason why I should
not reach over and follow someof what her picks are from
Vanguard?
Are there extra expenses?
I just don't know what that willlook like.
(22:46):
So that's the that's the firstpart.
And then second part is if ifyou know of any other resources,
whether they're books, otherthings I can read about the
bucket method, um, it just seemsto be a little bit um more
simple uh and somethingstreamlined and something that I
think is going to be easier towrap my head around and keep
track of.
So if you have anyrecommendations, I'd appreciate
(23:08):
that as well.
SPEAKER_02 (23:09):
Aaron Powell Well, the bucket thing, it's just sort
of a way of making it soundeasier than it is.
Instead of saying you need afund that does this and a fund
that does this and a fund thatdoes this, you want a bucket
that does this and a bucket thatdoes that and a bucket that does
this other thing.
Uh buckets are fine.
Uh I'm not a big fan of a lot ofthe bucket.
(23:31):
Oh, how how do I say this?
There are a bunch of bucketbooks out there, and I'm not
real fond of their particularway of doing things.
Uh there's there are there's alot of confusion too that comes
with it.
I think Christine's work is verygood.
I think um Larry Swedro's workis not bucket focused, but it's
really it's really good stuff onhow to build portfolios.
(23:53):
If you want the basic, basic,basics, check out my cheap book,
Financial Physics.
Uh it's very basic.
And what it basically says, allof the good stuff out there
says, is build the portfoliothat's right for your situation,
for your risk profile.
That's an important term.
(24:14):
Risk profile.
That means how much risk you canstand taking.
And by risk, we when we'redealing with mutual funds,
diverse portfolios, we just meanvolatility because there's
little or no inherent risk ifyou have a properly diversified
portfolio.
We're talking about the abilityto withstand volatility and to
stay invested, and the need totake risk.
(24:38):
A lot of people don't need tohave all these buckets of
various risky securities becausethey're set.
Why take risk?
You don't need to take.
You're not gonna win the richestman award.
Musk already has that.
He he's wrapped that up for now,anyway.
So uh uh build a portfolio thatthat makes sense for you, and it
(25:01):
can be as simple as emergencymoney and then stock, fixed
income ratios that fit your riskprofile.
That's it.
Now, as far as Vanguard orFidelity, you're gonna get fine
funds from Fidelity if you'redealing with mutual funds.
If you're dealing with ETFs,then the good news is at
(25:21):
Fidelity's brokerage, you canuse Vanguard's ETFs, you can use
Dimensional's ETFs, you can useAvantis's ETFs, you can use all
of these products that we thinkare very, very good products.
As a matter of fact, we wouldsuggest you lean more heavily
toward Avantis and Dimensionalfor the equity side, and maybe
more toward Vanguard or Fidelityfor the bond portfolio, probably
(25:44):
Vanguard for the bonds becausethey're so cheap.
But use their ETFs.
You don't have to be loyal toFidelity's products if you're a
Fidelity customer, because theylike Schwab are a broker or like
Vanguard's brokerage.
They're a broker.
You can own anybody's ETFs.
So uh let's see, was thereanything else I think again?
Larry Swedro's stuff is great.
(26:06):
I think Christine Benz is great.
Um I I I really I likeMorningstar's research, not
necessarily all of theirsuggestions.
Um, but I don't think you needto focus too much on buckets.
Really, there are three buckets.
There's the the emergencybucket, the income bucket, and
the growth bucket.
That's all.
(26:26):
You don't need a speculativebucket, for example.
That's just why do you why doyou want to play with your
money?
Isn't it too important to playwith?
Unless you like going to Vegas,and then that's not a bucket,
really.
That's entertainment.
Thanks for your question.
Thank you all for yourquestions.
Keep them coming attalkingrealmoney.com.
Use that little green button inthe lower right hand corner or
(26:48):
click on the button up top thatsays ask a question.
And if you need some help, youwould like to spend a little
time talking with a fiduciaryadvisor who is not gonna charge
you or sell you anything.
We promise you you can meet withone of our Appella advisors for
free for nothing for a fewminutes to kind of take a peek
(27:10):
at what you have, to maybecompare that annuity with maybe
better alternatives out there.
Uh see if you're on track forwhere you want to be in the
future.
Just go to talkingrealmoney.comand click on the button that
says meet an advisor and set upan appointment.
You can even set it up with Tombecause guess what?
He's back from vacation finally.
(27:32):
Doesn't mean he isn't going onanother one in a month, because
I think he is, but he's back fora little while.
Thanks so much for listening.
I appreciate you being there.
I'm Don, and every Friday I'mtaking questions in which we're
talking real money.
SPEAKER_08 (27:47):
The opinions and views expressed on this podcast
were current on the daterecorded.
Opinions, estimates, forecasts,and statements of financial
market trends that are based oncurrent market conditions
constitute our judgment and oursubjects change without notice,
including any forward-lookingestimates or statements which
are based on certainexpectations and assumptions.
Although information andopinions given have been
obtained from or based onsources believed to be reliable,
no warranty or representation ismade as to their correctness,
(28:08):
completeness, or accuracy.
Information presented on thepodcast is not personalized
investment advice from ApelloWell.
The views and strategiesdescribed may not be suitable
for everyone.
This podcast does not identifyall the risks, direct or
indirect, or otherconsiderations which might be
material to you when enteringany financial transaction.
We hope you realize that theinformation provided on
(28:30):
TalkingRail Money is forinformational, educational, and
hopefully enjoyable purposesonly.
The podcast is not trying to getyou to buy or sell any financial
products or securities.
Instead, the program is providedas a public service by Apello
Wealth, a fee-only registeredinvestment advisor.
Please see Apello Wealth ADBPart 2 and on our website for
information regarding Apellos,fees, and services.
A public capital, LLC, DBAApello Wealth, is an investment
(28:51):
advisory firm registered withthe Securities and Exchange
Commission.
The firm only transacts businessin the states where it is
properly registered, or excludedor exempt from registration
requirements.
Registration with the FCC or anystate securities authority does
not imply a certain level ofskill or training.
Apello does not provide tax orlegal advice, and nothing either
stated or implied here should beinferred as providing such
advice.
Thanks for listening, and pleasevisit talkingrealmoney.com for
(29:13):
more information and importantdisclosure related to
performance of any specificindex or fund quoted in this
podcast.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Betrayal Weekly
Betrayal Weekly is back for a new season. Every Thursday, Betrayal Weekly shares first-hand accounts of broken trust, shocking deceptions, and the trail of destruction they leave behind. Hosted by Andrea Gunning, this weekly ongoing series digs into real-life stories of betrayal and the aftermath. From stories of double lives to dark discoveries, these are cautionary tales and accounts of resilience against all odds. From the producers of the critically acclaimed Betrayal series, Betrayal Weekly drops new episodes every Thursday. If you would like to share your story, you can reach out to the Betrayal Team by emailing them at betrayalpod@gmail.com and follow us on Instagram at @betrayalpod and @glasspodcasts. Please join our Substack for additional exclusive content, curated book recommendations, and community discussions. Sign up FREE by clicking this link Beyond Betrayal Substack. Join our community dedicated to truth, resilience, and healing. Your voice matters! Be a part of our Betrayal journey on Substack.