Have you ever wondered whether your retirement nest egg is mired in Tax Drag? If not, it’ll definitely be on your radar after this episode of The Retirement Equals Freedom Podcast.
Host Josh Bretl, founder of FSR Wealth Strategies, is breaking down the intent behind portfolio rebalancing and the difference between sheltered and unsheltered investment vehicles.
We don’t have to live in fear of capital gains or let tax liability on non-qualified investments scare us out of cashing in and enjoying the fruits of the assets we’ve accrued! All we need to do is get our heads out of the sand and create a solid strategy, which is where the professionals come in!
Cohost Dave Schmidt’s portfolio may be heavily tilted towards socks and “Naughty Dip “ingredients, but he still needs to know about mutual funds and why they can upend tax planning.
Tune in and it will all become clear – both how different types of investments have variable tax impacts and why it matters. And even if you don’t wind up following Dave’s recipe, you’ll definitely come away with a better understanding of all the ingredients that go into proactive, tax-savvy investment management. And very likely an undeniable craving for Girl Scout cookies!
Wondering what kept Dave awake through Josh’s rambling? It was a big cup of iced Cometeer's "Counter Culture" roaster. Get $25 off your first order by using this link!
Don’t miss out! You can stay in the loop on all things R = F by signing up for the show’s weekly email at this link!
Click here to learn more about or listen to previous episodes of The Retirement Equals Freedom Podcast. Or join the conversation over at our private Facebook group, which you can find here.
Click here to explore the services that FSR Wealth Strategies offers and schedule a discovery call with one of the team’s CPAs. When it comes to living your best life, it’s never too early to get started!
I'm talking about problems here, and sometimes the
Josh Bretl:first thing you need to do is be aware of problems, and sometimes
Josh Bretl:people like to bury their head in the sand and pretend the
Josh Bretl:problems don't exist, but this money is there for a reason.
Josh Bretl:You've saved it for a purpose.
Josh Bretl:If once you save it and you think, I have no way out, or
Josh Bretl:if I get out of it, I'm going to have a giant tax or whatever
Josh Bretl:it might be, you just leave it there and you're like, "Well,
Josh Bretl:that's my kid's problem," or whoever it might be.
Josh Bretl:Well, why'd you do it in the first place, and why not use
Josh Bretl:this money for your benefit?
Josh Bretl:Why not have a plan in place to make it beneficial to you and
Josh Bretl:to your family and to your kids, and things along those lines?
Dave Schmidt:You don't have to live in fear of capital gains,
Dave Schmidt:and don't let tax liability on non-qualified investments
Dave Schmidt:scare you out of cashing in and enjoying the fruits of the
Dave Schmidt:assets that you have accrued.
Dave Schmidt:You just need to pick your head up, get it out of the sand,
Dave Schmidt:and create a solid strategy.
Dave Schmidt:Which is where today's episode picks up.
Dave Schmidt:We are going to learn about portfolio rebalancing and the
Dave Schmidt:difference between sheltered and unsheltered investment vehicles.
Dave Schmidt:And tax drag?
Dave Schmidt:Yeah, it's a thing and it will definitely be on
Dave Schmidt:your radar after hearing Josh's thoughts on it.
Dave Schmidt:And while I personally may be tilted towards socks and naughty
Dave Schmidt:dip ingredients, I still need to know about mutual funds and
Dave Schmidt:how they can upend tax planning.
Dave Schmidt:This is The Retirement Equals Freedom Podcast.
Dave Schmidt:Your host of the show, Josh Bretl, is the owner
Dave Schmidt:of FSR Wealth Strategies.
Dave Schmidt:For the last few decades, he has been helping fine folks
Dave Schmidt:like you make retirement the best part of your life.
Dave Schmidt:And me.
Dave Schmidt:Well, hey there, I'm Dave.
Dave Schmidt:Josh's longtime friend, co-host of the podcast, and
Dave Schmidt:huge fan of Tom Servo, Crow T Robot, and the rest of the
Dave Schmidt:crew on the Satellite of Love.
Dave Schmidt:All right, enough about me.
Dave Schmidt:Let me let you let me end my introduction so
Dave Schmidt:we can start the show.
Dave Schmidt: FSR Wealth Management is a
Dave Schmidt:located in Elmhurst, Illinois.
Dave Schmidt:Information and opinions contained in this audio
Dave Schmidt:have been arrived at by FSR Wealth advisors.
Dave Schmidt:All information herein is for informational purposes
Dave Schmidt:and should not be construed as investment advice.
Dave Schmidt:It does not constitute an offer, a solicitation or recommendation
Dave Schmidt:to purchase any security.
Dave Schmidt:FSR is not providing legal, tax, accounting, or financial
Dave Schmidt:planning advice in this audio.
Dave Schmidt:These views are as of the date of this publication
Dave Schmidt:and are subject to change.
Josh Bretl:David, it's an exciting week.
Dave Schmidt:Why?
Dave Schmidt:Tell me why.
Josh Bretl:This table that we've been waiting for since
Josh Bretl:Thanksgiving is finally here.
Dave Schmidt:Thanksgiving or much earlier than that?
Josh Bretl:Yeah, I think it was earlier than that, but do
Josh Bretl:you think this table's going to make the podcast better?
Dave Schmidt:Well, it's hard to improve something
Dave Schmidt:that's already perfect.
Josh Bretl:Now, we have no more excuses.
Josh Bretl:We better make some darn good podcast.
Dave Schmidt:Yeah.
Dave Schmidt:Josh, we got this beautiful table.
Dave Schmidt:I'm a little warm.
Dave Schmidt:We got a light behind us here, and I got this warm FSR
Dave Schmidt:thing that you made me wear.
Josh Bretl:You look good though.
Dave Schmidt:Oh, I appreciate that.
Dave Schmidt:So do you, Josh.
Josh Bretl:Thanks.
Dave Schmidt:That gallbladder removal was the best thing
Dave Schmidt:that happened to you.
Josh Bretl:I had a 20-pound gallbladder.
Josh Bretl:I'm 20 pounds lighter.
Dave Schmidt:How about that?
Josh Bretl:Dave, in the last episode, we talked about
Josh Bretl:something, and I meant to have it here for you today.
Josh Bretl:I don't, but hopefully, on our next episode, which
Josh Bretl:I think we're recording tomorrow, actually.
Josh Bretl:The Girl Scout Cookies are in.
Dave Schmidt:That's going to be a huge hit.
Dave Schmidt:You did promise a picture of this alleged 1,900
Dave Schmidt:boxes of cookies in your front room though.
Josh Bretl:I was off by 200.
Josh Bretl:It was only 1,700 boxes of cookies.
Dave Schmidt:Oh, my gosh.
Josh Bretl:I didn't get a picture because we had
Josh Bretl:it spread out throughout the entire first floor due
Josh Bretl:to construction issues.
Josh Bretl:Missy, my wife, is the cookie coordinator for
Josh Bretl:her Girl Scout troop.
Josh Bretl:Now, let me put this in perspective.
Josh Bretl:By Girl Scout troop, these are Daisies.
Josh Bretl:These are first-grade girls.
Josh Bretl:There's 20 of them.
Josh Bretl:They started selling Girl Scout Cookies two
Josh Bretl:weeks before Christmas and finished mid-January.
Josh Bretl:They sold for a month, the worst month possible
Josh Bretl:because from two weeks before Christmas, no one wants to
Josh Bretl:buy more Girl Scout Cookies.
Dave Schmidt:No.
Josh Bretl:Not at all.
Josh Bretl:I don't know why they do it that time of year.
Josh Bretl:Kids and girls sold some, but some girls
Josh Bretl:sold a ton of cookies.
Josh Bretl:Now, my wife is really organized and she doesn't
Josh Bretl:like people who aren't.
Josh Bretl:I'm amazed she likes me at all.
Josh Bretl:But on Saturday morning was cookie pickup for the
Josh Bretl:entire city of Elmhurst.
Josh Bretl:So, every Girl Scout troop in Elmhurst went to Sandburg
Josh Bretl:Junior High to the parking lot in the back of the school to
Josh Bretl:pick up Girl Scout Cookies.
Josh Bretl:We had the 8:45 pickup time.
Josh Bretl:It started at 8:30 with the 8:45 pickup time, and they give
Josh Bretl:you a sheet of how many boxes any type of car will hold.
Dave Schmidt:Okay, interesting.
Josh Bretl:We have a minivan.
Josh Bretl:We emptied out the seats in the minivan so that it's wide open.
Josh Bretl:We have another friend with a giant SUV, and then
Josh Bretl:we had my smaller SUV.
Josh Bretl:Three of us go to pick up these cookies and
Josh Bretl:these cars are packed.
Josh Bretl:Now, I pull in the Sandburg parking lot.
Josh Bretl:There were three semi-trucks full of Girl Scout Cookies
Josh Bretl:for the city of Elmhurst.
Dave Schmidt:My gosh.
Josh Bretl:Elmhurst is not a big town.
Josh Bretl:I mean, we have a lot of active kids, but 18-wheelers.
Josh Bretl:We're talking-
Dave Schmidt:Three 18-wheelers.
Dave Schmidt:Dear Lord, it's a racket.
Josh Bretl:Now, I didn't get to see how full they were, but
Josh Bretl:I couldn't imagine you'd bring more than one if the other
Josh Bretl:two of them were almost full.
Dave Schmidt:You're not going to pay for a semi
Dave Schmidt:unless it's stuffed full.
Josh Bretl:I was thinking that's just one city.
Josh Bretl:Imagine Chicago and the rest of the country.
Josh Bretl:That's a lot of Girl Scout Cookies.
Dave Schmidt:I thought Maggie alone sold 1,900
Dave Schmidt:boxes, so that's why-
Josh Bretl:No, no, no.
... Dave Schmidt:I was a little more like, "What?"
Josh Bretl:No.
Josh Bretl:No.
Josh Bretl:Between 20 girls, 1700 boxes of cookies.
Dave Schmidt:Ooh, that's still not a small number.
Josh Bretl:You will probably have yours tomorrow.
Josh Bretl:Missy's been organizing them and getting them out, so-
Dave Schmidt:Awesome.
... Josh Bretl:if you don't, you can yell at her.
... Josh Bretl:The construction at our house is actually done, right?
... Josh Bretl:Remember, I've been showing you pictures today.
... Josh Bretl:They've clean it up today, but we've had construction stuff
... Josh Bretl:everywhere, and then piles of Girl Scout Cookies for other
... Josh Bretl:Girl Scouts to come pick up, so it's been kind of funny.
Dave Schmidt:That's what you need in your house that's been a
Dave Schmidt:disaster zone for the last four months, just boxes of cookies.
Josh Bretl:You know what's gotten us through it, Dave?
Dave Schmidt:Yeah.
Josh Bretl:Coffee.
Dave Schmidt:
:Speaking of coffee-
Josh Bretl:I noticed you had a pod in your hands.
Dave Schmidt:Yeah, it's Cometeer Counter Culture.
Dave Schmidt:It's the roaster for this particular blend.
Dave Schmidt:I forgot which blend I'm drinking, Josh.
Dave Schmidt:It's delicious, but it's purply, and I made it ice today
Dave Schmidt:because I love me some Cometeer.
Josh Bretl:I feel like you're really loud today.
Josh Bretl:My ears have you really loud in them.
Dave Schmidt:All right.
Dave Schmidt:Let's just be fair though.
Dave Schmidt:I'm a little not sure how to talk in this new setup.
Dave Schmidt:I'll turn your headphones down a little bit.
Josh Bretl:I don't feel like I'm too loud in my ears.
Josh Bretl:I feel like you're too loud in my ears.
Dave Schmidt:Yeah., That's why I'm turning
Dave Schmidt:down your headphones here.
Josh Bretl:Oh, all right.
Josh Bretl:Do I have time for one more cute story?
Dave Schmidt:Yeah, of course you do.
Josh Bretl:Or should I wait for tomorrow's podcast?
Dave Schmidt:Josh, we don't even have to talk about
Dave Schmidt:anything financially related.
Dave Schmidt:If you just wants it to be cute stories, that's fine with me.
Josh Bretl:I had cute stories today.
Josh Bretl:I'm in a really good mood today.
Dave Schmidt:I know.
Dave Schmidt:I can tell.
Josh Bretl:So-
Dave Schmidt:Thanks for sushi, by the way.
Dave Schmidt:That's how good of a mood you were in.
Josh Bretl:Yeah.
Josh Bretl:Normally I'd worry that my wife would hear that because
Josh Bretl:sushi with Dave at lunch, sometimes she gets jealous,
Josh Bretl:but she doesn't listen to the podcast, so we're good there.
Josh Bretl:No one tell my wife Dave and I had sushi today.
Josh Bretl:You know I'm talented in some areas.
Josh Bretl:I'm not talented musically.
Josh Bretl:I have zero musical talent.
Josh Bretl:Missy has about the same.
Josh Bretl:Alex, my son, who loves and we won't let him listen to
Josh Bretl:the Retirement Equals Freedom Podcast anymore, has become
Josh Bretl:obsessed with the guitar.
Dave Schmidt:Right.
Dave Schmidt:He was taking lessons.
Josh Bretl:Taking lessons.
Josh Bretl:He now owns the guitar we got.
Josh Bretl:He wanted to practice at home, and how are you
Josh Bretl:to say no to a boy who wants to practice at home?
Josh Bretl:I didn't think he'd actually take it seriously, but
Josh Bretl:in their lessons, they are learning a song and
Josh Bretl:it's one of my favorites.
Josh Bretl:You ready?
Dave Schmidt:Yep.
Josh Bretl:So, that is The White Stripes,
Josh Bretl:Seven Nation Army.
Josh Bretl:It's one of my favorite songs.
Dave Schmidt:I've known you a long time.
Dave Schmidt:I never knew you liked The White Stripes.
Josh Bretl:Well, that's because I didn't know what that song
Josh Bretl:was actually called until Alex came home, and he goes, "Dad,
Josh Bretl:I'm learning Seven Nation Army."
Josh Bretl:I go, "Cool, what's that?"
Josh Bretl:He goes, "You know..."
Josh Bretl:I was like, "Oh, that one."
Josh Bretl:So, now, I looked it up and I wanted to play it,
Josh Bretl:but I thought, "How are you learning that already?
Josh Bretl:You've had three weeks of lessons.
Josh Bretl:How is that possible?"
Josh Bretl:I thought maybe he just had an amazing teacher or he
Josh Bretl:had some sort of weird sick ability to learn the guitar.
Josh Bretl:No, no, they tell him he's playing that, and I don't
Josh Bretl:know what noise is actually coming out of the guitar, but
Josh Bretl:he's really into it and he loves it, and it's kind of
Josh Bretl:cool to see him going with it.
Josh Bretl:He gets the fingers going and it's kind of cool.
Josh Bretl:It's better than when I played the trombone in fourth grade.
Dave Schmidt:Right.
Dave Schmidt:I played to clarinet.
Dave Schmidt:Now, how is Zachy and his harmonica doing?
Josh Bretl:Zachy and Maggie said they're going
Josh Bretl:to be part of Alex's band.
Josh Bretl:He can play the guitar.
Josh Bretl:Maggie's going to sing, so she can scream into the
Josh Bretl:microphone, and Zach's going to be the harmonica player.
Dave Schmidt:I mean-
Josh Bretl:I can't wait for that podcast when
Josh Bretl:we bring those three on.
Josh Bretl:Dave-
Dave Schmidt:Yeah, Josh.
Dave Schmidt:Yes.
Josh Bretl:We were discussing what we want to talk about
Josh Bretl:today, and over the last few episodes the last couple months,
Josh Bretl:we've spent some time on social security and 401[k], Roth
Josh Bretl:conversions, Secure Act 2.0.
Josh Bretl:We've gotten really tax heavy and taxes are super
Josh Bretl:important, but I want to talk about something we
Josh Bretl:have not talked about, but it's still tax related.
Alex:Hashtag tax nerd.
Josh Bretl:I can't get away from it.
Josh Bretl:This has to do with people's investments.
Josh Bretl:When we pick investments for people, when you're
Josh Bretl:picking investments inside of an IRA or 401[k] or Roth
Josh Bretl:IRA, it's actually a lot easier than when you're not.
Josh Bretl:Yeah.
Josh Bretl:The dumbfounded look is well deserved on that one.
Josh Bretl:So, imagine you have this IRA, or you have this
Josh Bretl:401[k], or even this Roth.
Dave Schmidt:Sure.
Josh Bretl:Yeah.
Josh Bretl:Now, your picture, it's like a box, and inside of this
Josh Bretl:box, you can pick whatever investments you want.
Dave Schmidt:I dreamed of this moment.
Josh Bretl:You do and one of the things or variables
Josh Bretl:you don't have to take in consideration or at least not
Josh Bretl:very heavily is the tax impact internally because you know
Josh Bretl:in a Roth, all the growth is tax-free, or inside of an IRA,
Josh Bretl:the transactions inside of the investments aren't taxed.
Josh Bretl:Okay?
Josh Bretl:But there's a large number of people that have some
Josh Bretl:significant assets that aren't inside of an IRA or 401[k] or a
Josh Bretl:Roth IRA or anything like that.
Josh Bretl:So, they're in what we call non-qualified
Josh Bretl:or brokerage accounts.
Dave Schmidt:I was hoping you would take a longer break, so
Dave Schmidt:I could answer that because I actually knew the name of those.
Josh Bretl:If you wanted me to breathe, you just say breathe.
Josh Bretl:So, you can say that.
Josh Bretl:Should we do it again?
Josh Bretl:Yeah.
Josh Bretl:Those accounts that aren't inside IRAs.
Dave Schmidt:Would those be called like...
Dave Schmidt:Well, cool kids call them NQAs, but non-qualified
Dave Schmidt:accounts, Josh?
Josh Bretl:Non-qualified.
Josh Bretl:Actually, we just call them NQ, non-qualified.
Dave Schmidt:Oh, you just dropped the A's.
Dave Schmidt:Okay.
Josh Bretl:But you're right, Dave.
Josh Bretl:That is what the cool kids call them.
Josh Bretl:When we have money inside of non-qualified accounts,
Josh Bretl:we're not just looking at the diversification, the
Josh Bretl:tax, the investment holding.
Josh Bretl:we have to take into consideration the tax
Josh Bretl:impact that we have there.
Dave Schmidt:Don't we always though, Josh?
Dave Schmidt:I feel like it always is about taxes.
Josh Bretl:It always is about taxes, but this is
Josh Bretl:something people forget.
Josh Bretl:Advisors forget about this.
Josh Bretl:So, let me put something in perspective here.
Josh Bretl:There's a theory out there called tax drag.
Josh Bretl:Doesn't that sound sexy?
Dave Schmidt:I mean, if taxes weren't depressing enough, you
Dave Schmidt:add the word drag after it.
Josh Bretl:This is tax drag.
Josh Bretl:Tax drag is the impact, the negative impact
Josh Bretl:on an investment.
Josh Bretl:If you didn't have that tax drag, that's how much
Josh Bretl:better your investments would perform with everything
Josh Bretl:else being the same.
Josh Bretl:So, the same investments inside of an IRA versus not an IRA, you
Josh Bretl:could be losing 1% to 2% a year in tax drag, and that's just an
Josh Bretl:estimate based from Morningstar that comes out to play.
Josh Bretl:So, sometimes I actually think it could be higher.
Dave Schmidt:MorningStar, they make breakfast sausages.
Josh Bretl:Oh, do they?
Dave Schmidt:Yeah.
Josh Bretl:I thought that was Jimmy Dean.
Dave Schmidt:But there's also a MorningStar brand.
Dave Schmidt:They also do tax stuff like-
Josh Bretl:no, Morningstar is probably the preeminent
Josh Bretl:investment research company.
Josh Bretl:Preeminent is the wrong word.
Josh Bretl:It's one of the largest investment research
Josh Bretl:companies in the world.
Josh Bretl:If you haven't heard of their breakfast sausage though,
Josh Bretl:it's delicious For example, if you have an investment
Josh Bretl:that pays you dividends...
Josh Bretl:Dave, do you want a dividend is?
Josh Bretl:We talked about this before the show.
Dave Schmidt:We did, but I got to be honest with
Dave Schmidt:you, I was shoving my face full of sushi, so I kind of
Dave Schmidt:was half paying attention.
Josh Bretl:A dividend is profit that a company earns.
Josh Bretl:So, if Apple earns a profit or any company, any stock
Josh Bretl:you own earns a profit, the way a shareholder gets their
Josh Bretl:part of the profit is from dividends that come out.
Josh Bretl:So, if an investment pays dividends, those
Josh Bretl:dividends are taxable to whoever receives them.
Josh Bretl:So, receiving dividends is a good thing because
Josh Bretl:hey, you got income, but B, that income is taxable.
Josh Bretl:So, there's a negative to that.
Josh Bretl:Not all investments pay dividends.
Josh Bretl:There's two ways that investments grow.
Josh Bretl:They grow via dividends or income.
Josh Bretl:Some of them will pay interest or things like
Josh Bretl:that, but they also grow via capital appreciation.
Josh Bretl:Amazon is a great example of that.
Josh Bretl:Amazon doesn't pay dividends, but their stock price
Josh Bretl:keeps going up and up.
Josh Bretl:Amazon is not going to have as much tax drag as a
Josh Bretl:blue chip company that pays large dividends like an
Josh Bretl:AT&T, something like that.
Dave Schmidt:Blue chip?
Josh Bretl:Blue chip means some of the larger old-school large
Josh Bretl:companies out there that have been around for a long time.
Josh Bretl:They call them blue chip.
Josh Bretl:Sometimes those dividends can become negative.
Josh Bretl:Now, I really want to focus though on mutual funds.
Josh Bretl:We've talked a little about mutual funds in the
Josh Bretl:past, in prior episodes.
Josh Bretl:Mutual funds are an excellent way to diversify your assets.
Josh Bretl:It allows you to hold multiple investments with just one in
Josh Bretl:holding, but mutual funds can be extremely tax inefficient
Josh Bretl:as well as expensive.
Josh Bretl:So, mutual funds cost money, and the different kinds of
Josh Bretl:internal causes, the overhead cost to own mutual funds
Josh Bretl:can be anywhere from 0.25% all the way up to 1.5%.
Josh Bretl:So, on top of what your advisor charges you, they might also
Josh Bretl:be charging mutual fund cost.
Josh Bretl:That's money that you don't have to pay, and that's not
Josh Bretl:tax drag, that's a fee issue.
Josh Bretl:But then, inside of the mutual fund, you have no
Josh Bretl:control over what happens.
Josh Bretl:So, companies that pay dividends that are held
Josh Bretl:inside of a mutual fund, those mutual funds distribute the
Josh Bretl:dividends to whoever owns it.
Josh Bretl:So, if you own a mutual fund and that mutual
Josh Bretl:fund receives dividends, you're going to get it.
Josh Bretl:That shows up in your tax return and you know that.
Josh Bretl:That's okay.
Josh Bretl:So, there's income producing dividends.
Josh Bretl:There's mutual funds that focus on dividends.
Josh Bretl:There's mutual funds that don't, so things along those lines.
Josh Bretl:But then something else that's actually more tragic
Josh Bretl:that occurs is that mutual funds will have what we call
Josh Bretl:capital gain distributions.
Josh Bretl:All right?
Josh Bretl:Give me a second on this one because I'm
Josh Bretl:going to set it up here.
Josh Bretl:Capital gain is when you buy something for one price.
Josh Bretl:Let's say you bought it for a hundred and it's
Josh Bretl:sold for a higher price.
Josh Bretl:You sold it for $150.
Josh Bretl:The capital gain is the difference between
Josh Bretl:what you bought it for and what you sold it.
Josh Bretl:So, that case would be $50.
Josh Bretl:That amount is taxable to you.
Josh Bretl:And people understand that.
Josh Bretl:The people are okay with that.
Josh Bretl:But mutual funds are weird because you can buy a mutual
Josh Bretl:fund, hold onto it forever and have to pay capital
Josh Bretl:gains every single year on it, which is weird because
Josh Bretl:what happens is inside that mutual fund, they are
Josh Bretl:constantly buying and selling their internal investments.
Josh Bretl:So, when they buy and sell, those capital gains like
Josh Bretl:dividends get pushed out to the people who own the mutual funds.
Josh Bretl:Last year, 2022, I think people are in for a really
Josh Bretl:rude awakening when they do their taxes this year, and that
Josh Bretl:is because last year, 2022, the stock market was down.
Josh Bretl:Almost every single person, if you're invested in
Josh Bretl:stocks, lost money last year.
Josh Bretl:But that in theory, we you would think, "Hey, one
Josh Bretl:benefit, no capital gains."
Josh Bretl:But another thing that occurs when stocks are down the way
Josh Bretl:they were, a lot of investors will flee mutual funds.
Josh Bretl:They'll sell their mutual fund, and when they do that, the money
Josh Bretl:manager of the mutual fund has to sell their investments inside
Josh Bretl:that mutual fund in order to pay the people money who want out.
Josh Bretl:Well, that's going to trigger internal capital gains.
Josh Bretl:So, they'll have capital gains inside those mutual funds
Josh Bretl:that they have to distribute.
Josh Bretl:So, you may have lost money on your mutual fund.
Josh Bretl:Your mutual fund could have gone down 10%, 15%, 20%, but
Josh Bretl:you're still going to pay a capital gain distribution,
Josh Bretl:and it could be huge.
Josh Bretl:I think it's going to be a really rough year
Josh Bretl:for people in those.
Josh Bretl:So, that's a tax drag that occurs inside
Josh Bretl:those mutual funds.
Dave Schmidt:I think I made the right decision not investing in
Dave Schmidt:traditional stocks, but instead investing in Bombas socks.
Josh Bretl:Do you mean the Bombas socks stock
Josh Bretl:or the socks themselves?
Dave Schmidt:No.
Dave Schmidt:I mean, you say stocks.
Dave Schmidt:I'm just thinking of socks and how comfy my Bombas.
Dave Schmidt:Some people say Bombas.
Dave Schmidt:I say Bombas.
Josh Bretl:Bombas?
Dave Schmidt:Yeah, Bombas socks are right now.
Dave Schmidt:So, I'm kind of dozing off as you're talking
Dave Schmidt:about these mutual funds.
Dave Schmidt:I'm like, "Stocks equals socks."
Josh Bretl:Well, I don't think there's a sock mutual
Josh Bretl:fund, but if there is, it's-
Dave Schmidt:well, find it.
... Josh Bretl:all yours.
Dave Schmidt:Thank you.
Josh Bretl:But a lot of this can be very inefficient,
Josh Bretl:and a lot of these distributions are paid out
Josh Bretl:towards the end of the year.
Josh Bretl:So, all of a sudden, you do your tax planning in
Josh Bretl:October, November, and-
Dave Schmidt:it sneaks up on you.
Josh Bretl:It sneaks up on you in December.
Josh Bretl:In December, boom, you're hit with this giant capital gain.
Dave Schmidt:Is there any way to predict it?
Josh Bretl:There is.
Josh Bretl:The mutual funds will start putting some predictions out,
Josh Bretl:come Octoberish and they'll tell you the dates are going
Josh Bretl:to be declared, all that stuff, but until they actually
Josh Bretl:pay them, it's not final.
Josh Bretl:So, you have to really think about that because
Josh Bretl:there's some serious tax implications inside of those
Josh Bretl:accounts when that occurs.
Josh Bretl:It can be extremely inefficient when that happens.
Josh Bretl:Let's just put this into perspective.
Josh Bretl:If you hold a mutual fund that pays a $50,000 capital
Josh Bretl:gain, which is not unheard of, that could be very common.
Josh Bretl:$50,000, if you pay a 15% federal tax, a 5%
Josh Bretl:state tax, that's 20%.
Josh Bretl:All of a sudden, heck, you just lost 10,000 bucks in taxes.
Josh Bretl:And yes, in theory, in the future, you don't pay that
Josh Bretl:money in the future, but all said and done, you'd rather
Josh Bretl:not have to pay that money.
Josh Bretl:Now, the one thing that your favorite breakfast sausage
Josh Bretl:company does not look at, they don't look at the capital gains.
Josh Bretl:For that, you have to go direct to the mutual fund itself.
Dave Schmidt:Jimmy Dean?
Josh Bretl:Jimmy Dean and the Jimmy Dean fund.
Josh Bretl:They have a much better sausage.
Josh Bretl:I like the Jimmy Dean.
Josh Bretl:Now-
Dave Schmidt:By the way, not to go on a tangent, but I'm going
Dave Schmidt:to go on a tangent, have you tried my naughty dip before?
Josh Bretl:Dave, this is a clean podcast.
Dave Schmidt:Oh, I know, but it's a naughty
Dave Schmidt:dip I serve at parties.
Josh Bretl:No, I am not sure.
Josh Bretl:Maybe I have.
Josh Bretl:Well-
Dave Schmidt:it's real simple.
Josh Bretl:What's that?
Dave Schmidt:A log of Jimmy Dean sausage.
Josh Bretl:A log.
Dave Schmidt:A log.
Josh Bretl:Do you cook it?
Dave Schmidt:A brick of cream cheese, a can
Dave Schmidt:of RO-TEL tomatoes, cook them all up in a pot.
Dave Schmidt:Dip big Fritos into it.
Dave Schmidt:You'll thank me later.
Josh Bretl:Dave, this could be a cooking episode
Josh Bretl:for our email subscribers.
Dave Schmidt:You think so?
Dave Schmidt:Dave's naughty dip?
Josh Bretl:Dave's naughty dip.
Josh Bretl:I think that'd be a lot of fun.
Dave Schmidt:Yeah.
Dave Schmidt:You're doing all these sophisticated cocktails.
Dave Schmidt:I'm like, "Let's do some sausage and cream cheese."
Dave Schmidt:It's on brand.
Josh Bretl:Now, let's get a little bit more in depth here.
Dave Schmidt:Please do.
Dave Schmidt:Why are we talking about all these things, Josh?
Josh Bretl:Why are we talking about this?
Dave Schmidt:Yeah.
Dave Schmidt:Why are we talking about this because it
Dave Schmidt:seems pretty negative?
Josh Bretl:I'm talking about problems here, and sometimes the
Josh Bretl:first thing you need to do is be aware of problems, and sometimes
Josh Bretl:people like to bury their head in the sand and pretend the
Josh Bretl:problems don't exist, but this money is there for a reason.
Josh Bretl:You've saved it for a purpose.
Josh Bretl:If once you save it and you think, I have no way out, or
Josh Bretl:if I get out of it, I'm going to have a giant tax or whatever
Josh Bretl:it might be, you just leave it there and you're like, "Well,
Josh Bretl:that's my kid's problem," or whoever it might be.
Josh Bretl:Well, why'd you do it in the first place, and why not use
Josh Bretl:this money for your benefit?
Josh Bretl:Why not have a plan in place to make it beneficial to you and
Josh Bretl:to your family and to your kids, and things along those lines?
Josh Bretl:One thing people worry about is they look at the mutual
Josh Bretl:funds, get out of mutual funds.
Josh Bretl:They'll say, "We're getting into stocks,"
Josh Bretl:or they'll say, "Hey..."
Josh Bretl:Especially what we've seen in the last 10, 15 years,
Josh Bretl:the last year was down, but if you've held stocks for
Josh Bretl:a long period of time, then you've seen large gains.
Josh Bretl:So, let's say you bought Amazon 10 years ago and you
Josh Bretl:put 50,000 bucks into it.
Josh Bretl:That's a lot.
Josh Bretl:Maybe you put 20,000 bucks into it and it's now worth $200.
Josh Bretl:Well, the difference on that is taxable to you.
Josh Bretl:So, people's thought process is, "Well, I'm
Josh Bretl:just not going to sell it.
Josh Bretl:I'll just hold onto it.
Josh Bretl:If I hold onto it, I don't have to pay the taxes."
Josh Bretl:Which is true, you don't have to pay the taxes, but
Josh Bretl:you just lost use of all that money, and that to me
Josh Bretl:is really counterintuitive.
Josh Bretl:You're cutting off your arm to save your finger.
Dave Schmidt:Yeah.
Dave Schmidt:Why'd you do it in the first place?
Dave Schmidt:You invested that money for a reason.
Josh Bretl:That's a good problem to have.
Josh Bretl:Let's celebrate this.
Josh Bretl:Let's do something cool with it.
Josh Bretl:I like to tell people, here's the issues that we have.
Josh Bretl:Here's the issues we want to address, and quite often people
Josh Bretl:aren't thinking about them.
Josh Bretl:The reason we talk about this is because I want
Josh Bretl:you to use your money.
Josh Bretl:I want you to use it in its best purpose and for
Josh Bretl:whatever you want to achieve.
Josh Bretl:We call it the Retirement Equals Freedom Podcast.
Josh Bretl:We don't call it the Retirement Equals Don't
Josh Bretl:Use Your Money Podcast.
Josh Bretl:I mean, you want that...
Josh Bretl:That was really kind of cheesy.
Josh Bretl:But you want that to be for your own good.
Josh Bretl:I don't know why I feel like I have to look at
Josh Bretl:you as I talk, but I do.
Josh Bretl:But that money's there for a purpose.
Josh Bretl:I told this beforehand, this is going to be a two-part series
Josh Bretl:or two-part episode because I want people to understand
Josh Bretl:that they can use and they should use their money.
Josh Bretl:So, in the next episode, we're going to talk about how
Josh Bretl:we fix all these problems.
Josh Bretl:What can you do if you want access to that money?
Josh Bretl:You don't want to have to die with it.
Josh Bretl:You want to have it for your life, or maybe
Josh Bretl:you don't realize that possibilities are out there.
ALF:Why must you needlessly complicate everything?
Dave Schmidt:I simply ask, why are we talking about
Dave Schmidt:all these negative things?
Dave Schmidt:And 18 minutes later we get the answer.
Josh Bretl:That was an important answer.
Dave Schmidt:I know.
Dave Schmidt:I'm just messing with you, Josh.
Dave Schmidt:I'm just messing with you.
Dave Schmidt:Cool.
Dave Schmidt:All right.
Dave Schmidt:What else we got here?
Josh Bretl:Oh, we are going to talk about
Josh Bretl:one more problem here.
Dave Schmidt:Mo' money, mo' problems.
Josh Bretl:More money, more problems.
Josh Bretl:Now, let's talk about the theory of rebalancing.
Dave Schmidt:Do you want to hear my theory of rebalancing?
Josh Bretl:Yeah, you got a theory on rebalancing?
Dave Schmidt:It's not appropriate for this
Dave Schmidt:podcast, but I do.
Josh Bretl:Well, you already talked about your naughty dip.
Dave Schmidt:Yeah, I did.
Josh Bretl:Now, here's what a rebalancing is.
Josh Bretl:Okay?
Josh Bretl:A rebalancing is something that's technical in an
Josh Bretl:investment nature, meaning, "Hey, I'm going to have
Josh Bretl:5% of this, 25% percent of this, 13% of this."
Josh Bretl:And you're planning your diversification, and when you
Josh Bretl:plan out a diversification, you also plan out a tolerance.
Josh Bretl:Because investments go up and down, so you're going
Josh Bretl:to say, "Hey, I want between 5% and 8% of this, and I
Josh Bretl:want between 7% and 9% of this," whatever it might be.
Josh Bretl:And if it gets out of those tolerances, quite often,
Josh Bretl:a rebalancing will occur.
Dave Schmidt:Does this have to do with risk?
Josh Bretl:It helps limit risk.
Josh Bretl:Actually, there's some really great studies to prove the
Josh Bretl:benefits of rebalancing, and sometimes rebalancing
Josh Bretl:occurs just on time.
Josh Bretl:They say, "Hey, we're going to rebalance every quarter,
Josh Bretl:every month, every year."
Josh Bretl:And they're going to say, "Every month, we're going to rebalance
Josh Bretl:to this threshold, 25%, 25%, 25%," whatever it might be.
Josh Bretl:You can come up with that.
Josh Bretl:But those rebalancing triggers buys and sells.
Josh Bretl:We already talked about the capital gain distributions.
Josh Bretl:Sometimes those capital gain distributions occur when
Josh Bretl:you're buying and selling.
Josh Bretl:So, what we look at is we say, "Hey, inside of a mutual
Josh Bretl:fund, you can't control when they're going to rebalance.
Josh Bretl:You can't control."
Josh Bretl:Hey, this got out of whack and we're going to rebalance
Josh Bretl:this way or because of time they're going to rebalance.
Josh Bretl:All of a sudden those will trigger capital
Josh Bretl:gain distribution.
Josh Bretl:So, when we have highly volatile years, those capital gain
Josh Bretl:distributions can occur as well.
Josh Bretl:Does that make sense?
Dave Schmidt:Yeah.
Dave Schmidt:Whenever you say control, I think of, just own it baby.
Josh Bretl:You ready for a sneak peek of
Josh Bretl:next week's episode?
Dave Schmidt:Always.
Josh Bretl:With technology, nowadays, mutual funds
Josh Bretl:have become less important.
Josh Bretl:You can own these assets yourself.
Josh Bretl:The S&P 500, we can own it for cheaper than
Josh Bretl:buying a mutual fund.
Josh Bretl:And then, you have more control.
Josh Bretl:You've got more control over the rebalancing.
Josh Bretl:You can set the limits.
Josh Bretl:You can set the thresholds.
Josh Bretl:There's some really neat studies that show if you change
Josh Bretl:the tolerance from a 5% to a 10% rebalancing, you don't
Josh Bretl:actually negatively impact the performance long term,
Josh Bretl:but you can have a huge impact on decreasing the tax track.
Josh Bretl:And when you're part of the mutual fund, guess what?
Josh Bretl:You don't own that.
Josh Bretl:You don't control that.
Josh Bretl:But when you own it individually, boom.
Josh Bretl:That boom really sounded stupid.
Dave Schmidt:I'm actually happy.
Dave Schmidt:I have a note here.
Dave Schmidt:I'm glad you brought the S&P 500 because I do have a note
Dave Schmidt:about the S&P 500 because-
Josh Bretl:you wrote a note about the S&P 500?
Dave Schmidt:I did and you'll find out why because I'm
Dave Schmidt:reading through these things.
Dave Schmidt:I'm getting nervous that we may have too much invested in our
Dave Schmidt:Arby's Beef and Cheddar fund-
Josh Bretl:what?
... Dave Schmidt:to where we'll be taxed so much.
... Dave Schmidt:See?
Josh Bretl:Well, even with the increasing prices of
Josh Bretl:the beef and cheddar, it's no longer five for five.
Dave Schmidt:I know.
Dave Schmidt:It's like five for six or five for seven.
Dave Schmidt:But the beef and cheddar fund was trending on the S&P 500.
Dave Schmidt:I don't know if you saw that.
Dave Schmidt:I was reading that yesterday.
Josh Bretl:Wow.
Dave Schmidt:Mm-hmm.
Dave Schmidt:On the Twitter.
Dave Schmidt:Yeah.
Josh Bretl:Arby's beef and cheddar.
Dave Schmidt:It's a fund.
Dave Schmidt:Yeah.
Dave Schmidt:I didn't know if you knew that.
Josh Bretl:Compliance is going to love this episode.
Josh Bretl:Hi, Debbie.
Josh Bretl:Dave, we've talked a lot about the problems.
Josh Bretl:I gave you one little solution that's kind of a tidbit for
Josh Bretl:next week in how we implement that, but I think next week...
Josh Bretl:Not next week.
Josh Bretl:I think on the next episode, we're going to really shine
Josh Bretl:some light on some things that you can do to take
Josh Bretl:advantage of the tax situation to minimize the tax drag.
Josh Bretl:Everyone's looking for a bigger rate of return.
Josh Bretl:People are looking for the next investment.
Josh Bretl:Should I be in Amazon or Apple?
Josh Bretl:Should I be in Sears or Montgomery Awards?
Josh Bretl:Should I be in whatever and whatever?
Dave Schmidt:Should I be in the Retirement
Dave Schmidt:Equals Freedom Podcast?
Dave Schmidt:Right.
Josh Bretl:Yeah.
Josh Bretl:I mean, our stock is huge, but they're looking for that
Josh Bretl:extra 1% to 2% in performance on their investments when
Josh Bretl:just get rid of the tax drag can make a huge difference
Josh Bretl:inside those investments.
Dave Schmidt:All this tax drag has got me dragged down.
Dave Schmidt:Yeah.
Dave Schmidt:What?
Dave Schmidt:What?
Dave Schmidt:Okay.
Dave Schmidt:[singing].
Dave Schmidt:To the escalator.
Dave Schmidt:[singing]
Dave Schmidt:Oh, yeah.
Dave Schmidt:We got more room back here to dance.
Dave Schmidt:Well-
Josh Bretl:we do.
... Dave Schmidt:we will.
Josh Bretl:We're standing.
Josh Bretl:We're getting there.
Josh Bretl:We're really getting there.
Josh Bretl:It doesn't matter because we haven't put anything
Josh Bretl:up on YouTube yet.
Dave Schmidt:That is true.
Dave Schmidt:My big question is, are you prepared with a question?
Josh Bretl:I am.
Dave Schmidt:I thought I caught you off guard.
Josh Bretl:Nope.
Dave Schmidt:Okay.
Josh Bretl:I'm prepared.
Dave Schmidt:By the way, were you done talking about
Dave Schmidt:all these more problems?
Dave Schmidt:Because I just kind of cut you off at the knees.
Josh Bretl:Yeah.
Josh Bretl:Well, I don't think if he wants to hear anymore about
Josh Bretl:the problems of owning assets since I have a taxable account
Josh Bretl:without thinking about it.
Dave Schmidt:I'm watching her ticker.
Dave Schmidt:I'm like, "Yeah, if they haven't tuned out by now..."
Josh Bretl:All right, Dave.
Josh Bretl:Yeah.
Josh Bretl:This is a really deep, really important Get
Josh Bretl:to Know Josh & Dave.
Dave Schmidt:Deep thoughts by Josh.
Josh Bretl:What's your favorite flavor of Girl Scout Cookies?
Dave Schmidt:Really?
Josh Bretl:Yeah.
Dave Schmidt:Oh, man.
Dave Schmidt:I'm excited.
Dave Schmidt:Let's try these two new ones that we were talking
Dave Schmidt:about the other day.
Dave Schmidt:Other than a freshly made piña colada I loathe
Dave Schmidt:coconut, but Samoas, there's something about Samoas.
Josh Bretl:Caramel, chocolate, coconut.
Josh Bretl:Oh, yeah.
Josh Bretl:Now, we're talking.
Dave Schmidt:Yeah.
Dave Schmidt:I love them all.
Dave Schmidt:Don't get me wrong, but Samoas feel like a guilty pleasure
Dave Schmidt:that once a year I'll have them.
Josh Bretl:Oh, yeah.
Dave Schmidt:Now you did the other episode
Dave Schmidt:say frozen Thin Mints.
Josh Bretl:Yeah, but I'm going to make a surprise.
Josh Bretl:I love frozen Thin Mints, and I didn't realize this, and
Josh Bretl:you guys got to discover this.
Josh Bretl:There was a s'more flavor that got introduced a few years ago.
Josh Bretl:I love s'mores.
Josh Bretl:I love all things s'mores.
Josh Bretl:I didn't realize that there are multiple Girl Scout bakeries in
Josh Bretl:the country, and in different regions of the country, there's
Josh Bretl:different s'more cookies.
Dave Schmidt:Wow.
Josh Bretl:Mm-hmm.
Josh Bretl:We were actually up in Michigan.
Josh Bretl:You and I, with our friends a couple years ago, and
Josh Bretl:we no longer invite Chris up to Michigan anymore.
Josh Bretl:Just don't tell them about it.
Josh Bretl:But we were out for breakfast and there was a little girl
Josh Bretl:selling Girl Scout cookies at the breakfast restaurant,
Josh Bretl:and we bought a box of the s'mores, and they were the
Josh Bretl:non-Chicago s'mores, and they are out of this world.
Josh Bretl:So, I like the s'more cookie not made in Chicago.
Josh Bretl:If you are somewhere in the country and you want to send me
Josh Bretl:some of the non-Chicago s'more cookies, I would love that.
Josh Bretl:They're covered in chocolate and they have a graham cracker
Josh Bretl:inside and a marshmallow middle.
Josh Bretl:Oh, my god, they're out of this world.
Dave Schmidt:The Chicago ones are not terrible-
Josh Bretl:they're not bad.
... Dave Schmidt:but they taste-
Josh Bretl:they're good.
... Dave Schmidt:more like a duplex, and
... Dave Schmidt:they do a true s'more.
Josh Bretl:Yeah.
Josh Bretl:The Chicago ones are good.
Josh Bretl:I'm not saying I don't like them.
Josh Bretl:I'm just saying my favorite are the non-Chicago
Josh Bretl:made s'more cookies.
Dave Schmidt:If non-Chicago made s'more cookies were sold
Dave Schmidt:in Chicago, we'd be saying things like, "Ain't nobody
Dave Schmidt:got cash for that," because all of our spare cash would
Dave Schmidt:be going to s'more cookies.
Dave Schmidt:All right.
Dave Schmidt:Yeah, that's good.
Dave Schmidt:What?
Dave Schmidt:There was something else.
Dave Schmidt:Oh, yeah, Dave Relates to Retirees.
Josh Bretl:Yeah, DR2R.
Dave Schmidt:It's time for DR2R.
Dave Schmidt:Josh, are you ready?
Josh Bretl:As ready as I'm going to be.
Dave Schmidt:I'm going to have to admit something to you.
Dave Schmidt:Today's DR2R was somewhat inspired by our good friend
Dave Schmidt:who emailed us a few days ago.
Josh Bretl:Huh?
Dave Schmidt:Do you remember who that was?
Josh Bretl:I do.
Josh Bretl:Mr.
Josh Bretl:Mark Thomas-
Dave Schmidt:Señor-.
... Josh Bretl:the rebounding king of York High School.
Dave Schmidt:He was called?
Josh Bretl:The dirtiest player I've ever met.
Dave Schmidt:He was called the rubber band of our team
Dave Schmidt:by the Daily Herald, rubber Band or the Glue because
Dave Schmidt:he held us all together.
Dave Schmidt:I can't remember.
Dave Schmidt:But he wrote it in a pretty-
Josh Bretl:it's not because he's tall and
Josh Bretl:lanky and stretches real-
Dave Schmidt:and awesome.
Josh Bretl:Yeah.
Dave Schmidt:He wrote in a pretty feisty email asking for
Dave Schmidt:more credit for me when I talk about the different ways that
Dave Schmidt:I was able to score points.
Dave Schmidt:He just wants more credit.
Dave Schmidt:So, Mark, here's your shout-out if you will, but
Dave Schmidt:Dave relates to retirees.
Dave Schmidt:Here's how I relate it.
Dave Schmidt:Mystery Science Theater 3000.
Dave Schmidt:Yeah?
Josh Bretl:Okay.
Dave Schmidt:MST3K.
Dave Schmidt:For those of you that aren't aware of MST3K-
Josh Bretl:right here.
Dave Schmidt:Yep.
Dave Schmidt:All right.
Dave Schmidt:This story goes like this.
Dave Schmidt:Joel is trapped on the satellite of love and shot out into outer
Dave Schmidt:space as part of an experiment run by the Mads, M-A-D-S.
Dave Schmidt:The experiment is to see if they could drive one person
Dave Schmidt:insane by forcing them to watch a bunch of really bad movies.
Dave Schmidt:That's the plot of the show.
Dave Schmidt:Joel watches these bad movies by himself and
Dave Schmidt:decides, this is boring.
Dave Schmidt:I'm going to build some robots.
Dave Schmidt:So, he builds Crow T.
Dave Schmidt:Robot and Tom Servo.
Dave Schmidt:And together they watch really bad movies on
Dave Schmidt:the satellite of love.
Dave Schmidt:Joel and his robots have no choice.
Dave Schmidt:They are trapped on the satellite of love.
Dave Schmidt:See where I'm going with this?
Josh Bretl:I hope so.
Dave Schmidt:Joel is unable to fix his situation.
Dave Schmidt:He's in outer space.
Dave Schmidt:He cannot get out of this predicament.
Dave Schmidt:What I'm trying to elude is this.
Dave Schmidt:Elude, did I use that correctly?
Josh Bretl:Mm-hmm.
Josh Bretl:Mm-hmm.
Dave Schmidt:Okay.
Josh Bretl:As much as any MST3K listener or watcher
Josh Bretl:can elude to anything.
Dave Schmidt:You had a frog in your throat right there.
Josh Bretl:I did.
Josh Bretl:Yeah.
Dave Schmidt:So, dear listener, retiree, soon to
Dave Schmidt:be retiree, what I'm trying to say to you is this.
Dave Schmidt:Do not be like Joel and his robots.
Dave Schmidt:You do not have to be stuck on the satellite of love, or
Dave Schmidt:you don't have to be stuck with all these taxes for NQAs.
Dave Schmidt:Seek out help from somebody that can help you with these NQAs.
Dave Schmidt:So, that dear friend, is how I relate to retirees.
Dave Schmidt:For those of you who are familiar, secret agent, the
Dave Schmidt:super dragon, Josh, you can have your full house moment
Dave Schmidt:now because I know you're going to go home tonight.
Dave Schmidt:Pump up Netflix and watch MST3K.
Josh Bretl:I'm really glad you tied that together at
Josh Bretl:the end because for 99.9% of that, I was going,
Josh Bretl:"What is he talking about?"
Josh Bretl:I have never been so lost.
Dave Schmidt:Yeah.
Dave Schmidt:It's pretty simple, Josh.
Dave Schmidt:It comes down to choice.
Dave Schmidt:Joel had no choice.
Dave Schmidt:Retirees, you have choices.
Dave Schmidt:You need to own your retirement and find
Dave Schmidt:someone that can help you.
Josh Bretl:You know, Dave, you said it for me, but let me
Josh Bretl:back up a step and needlessly complicate everything.
Josh Bretl:Growing up with you, I watched you play video games.
Josh Bretl:I wasn't bored.
Josh Bretl:We've sat there.
Josh Bretl:We've talked.
Josh Bretl:We had friends.
Josh Bretl:When Mystery Science Theater came on, I would leave.
Josh Bretl:I would leave.
Josh Bretl:I don't care about it.
Josh Bretl:I don't watch it.
Josh Bretl:It has no interest to me whatsoever.
Josh Bretl:So, when you were talking about that, I didn't even know the
Josh Bretl:concept to the plot behind it.
Josh Bretl:So, I didn't follow most of what you said, but the ending I
Josh Bretl:did, and you are exactly right.
Josh Bretl:Just because I don't understand it, just because I quite
Josh Bretl:frankly don't enjoy it, doesn't mean it doesn't exist,
Josh Bretl:and it doesn't mean that you're stuck sitting there.
Josh Bretl:So, like you said before, Joel, get yourself together.
Josh Bretl:You're not stuck there.
Josh Bretl:You don't have to watch these horrible movies over
Josh Bretl:and over and over again.
Josh Bretl:Do what I do and leave Dave's house.
Josh Bretl:You don't have to do that.
Josh Bretl:But also, as Erin likes to say, just because you're in a place
Josh Bretl:now, it doesn't mean you're going to be there forever.
Josh Bretl:There are ways to fix it.
Josh Bretl:You just may not know it yet.
Josh Bretl:How you got there doesn't need to be your future.
Josh Bretl:A lot of people have gotten to where they are in retirement
Josh Bretl:and they're quite successful, or at this point in life and
Josh Bretl:they're quite successful, and they think that how they
Josh Bretl:got there is how they're going to get into the future.
Josh Bretl:So, if you did it yourself, if you have an advisor who put
Josh Bretl:you in that spot, it's okay to ask for a second opinion.
Josh Bretl:There's just things that have become more complicated, and
Josh Bretl:unfortunately, as life goes on, life needlessly complicates
Josh Bretl:it for us kind of like...
ALF:Why must you needlessly complicate everything?
Josh Bretl:Kind of like MSTK3000.
Dave Schmidt:Mm-hmm.
Dave Schmidt:MST3K.
Josh Bretl:Yeah, whatever.
Josh Bretl:That's fine.
Josh Bretl:It all works.
Dave Schmidt:I give you props for trying.
Josh Bretl:And NQA.
Josh Bretl:All right.
Dave Schmidt:Do you remember the names of the robots?
Josh Bretl:No.
Dave Schmidt:No.
Josh Bretl:Not at all.
Dave Schmidt:You're going to see a picture of them
Dave Schmidt:in next week's email.
Josh Bretl:I look forward to it.
Dave Schmidt:Crow T.
Dave Schmidt:Robot who is inspired by a bowling pin.
Josh Bretl:I mean, we are recording on the longest episode
Josh Bretl:ever, and we're going back renaming robots right now?
Dave Schmidt:Yeah.
Dave Schmidt:And then, Tom Servo, who's inspired by a gumball machine.
Dave Schmidt:So, it'll all make perfect sense.
Josh Bretl:Oh, I mean, this is better than slip job, and
Josh Bretl:who was the video game people you talked about last time?
Dave Schmidt:Oh, my gosh, ToeJam & Earl.
Josh Bretl:Oh, yeah, that's right.
Dave Schmidt:Which by the way, just wait until you hear the
Dave Schmidt:end of ToeJam & Earl, or I'm sorry, the end of the episode.
Dave Schmidt:It's going to be fantastic.
Josh Bretl:Dave, that was a long episode.
Josh Bretl:We went through a lot of really minute stuff and was fun.
Josh Bretl:Next week or next episode, I should say, we're going to have
Josh Bretl:some solutions for people, not just problems because I hate
Josh Bretl:when people tell me problems and don't give me solutions.
Josh Bretl:So, like your Dave Relates to Retirees, we're going to
Josh Bretl:teach people how that they can actually just get up
Josh Bretl:and walk out of your house.
Dave Schmidt:Oh, snap.
Josh Bretl:Ooh, man.
Josh Bretl:Although, if there's Puddin' Cakes there,
Josh Bretl:we're really in trouble.
Josh Bretl:But with that, if you do see this and you feel stuck, you
Josh Bretl:have money that you can't use because there's a possible
Josh Bretl:taxation on it, let's talk.
Josh Bretl:Talk to someone who knows what they're doing.
Josh Bretl:The person who got you here may not be the one that needs to
Josh Bretl:take you to the finish line.
Dave Schmidt:That's deep, man.
Josh Bretl:Yeah.
Dave Schmidt:Like Joel leaving Earth's orbit,
Dave Schmidt:Josh and I, will say bye.
Josh Bretl:Bye.
Tom Servo:It ain't supposed to be commercial, man.
Tom Servo:It's jazz.
Joel:Well, how would you describe jazz anyway, Tom?
Tom Servo:Oh man.
Tom Servo:If you have to ask, you'll never know.
Crow T Robot:Yeah, whatever.
Crow T Robot:Let's go.
Crow T Robot:Let's win.
Tom Servo:Right Daddy.
Tom Servo:One A two, A 1, 2, 3, 4 Secret Agent.
Tom Servo:Super Dragon, take it Crow Daddy.
Crow T Robot:Secret Agent Super Dragon.
Tom Servo:Yeah, grab an 8, Joel.
Joel:Secret Agent Super Dragon.
Tom Servo:Now Secret Agent-
Joel:Oh, wait, wait a second.
Joel:Uh, I mean, it just goes on like that, huh?
Tom Servo:Uh oh.
Tom Servo:Crow takes a trumpet solo now.
Crow T Robot:I, I, I only picked up the
Crow T Robot:trumpet a few minutes ago.
Crow T Robot:I only know two notes.
Tom Servo:Yeah, that's not my fault if you
Tom Servo:chops ain't together.
Crow T Robot:Hey, chop on this pal-
Joel:like red, wait to say Cut it out.
Joel:Guys.
Joel:Listen, I've-