Talking Real Money - Investing Talk

After a bump in crypto-fueled listener calls, Don tackles a mix of practical and philosophical money questions: why Fidelity’s new “stablecoin” isn’t an investment at all, whether a heavily conditioned city 401k match is worth the risk versus a flexible Roth 457, how to safely reposition an 85-year-old’s idle savings without sacrificing liquidity, and why actively managed mutual funds can generate painful surprise tax bills. The episode closes with the return of Bitcoin Bob, sparking a spirited debate over whether Bitcoin is a currency, a commodity, or a “store of wealth” — and whether something that swings 50% qualifies for that title.

0:04 Crypto episode follow-up, listener call surge, and AI voice processing update

1:52 Fidelity’s new stablecoin FIDD — why it’s pointless for investors

3:41 City retirement plan dilemma: conditional 401k match vs. Roth 457 flexibility

8:24 When complicated employer matches aren’t worth the hoops

9:31 Helping an 85-year-old move idle savings — high-yield savings vs. brokerage

11:40 Janus mid-cap fund capital gains surprise and ETF tax efficiency

13:11 Why mid-cap alone isn’t diversification — broader ETF alternatives

15:19 Bitcoin Bob returns: currency vs. commodity vs. “store of wealth”

19:53 Volatility reality check — why Bitcoin fails the store-of-wealth test
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Vanguard lowers fees yet again, pushing its average expense ratio down to just six basis points — a move that underscores how dramatically fund costs have fallen over time. Don and Tom contrast this with shockingly expensive ETFs charging double-digit annual fees and explain why those costs are nearly impossible to overcome. They unpack the difference between pure index funds and factor-based funds like Avantis and Dimensional, clarify common confusion around rebalancing and fund-of-funds strategies, answer listener questions about increasing international exposure, and explain why evidence-based investing includes diversification across bonds and real estate — not just stocks. The episode reinforces a core message: fees matter far more than most investors realize, especially the ones they never see.

0:04 Vanguard cuts fees again — average expense ratio now just 0.06%

1:23 Brief detour into model aircraft before returning to money talk

3:43 Fund expense ratios explained — what investors are really paying

5:00 The shock factor: ETFs charging 12%–14% annually

10:08 Why ultra-high expense ratios are nearly impossible to justify

11:13 Vanguard vs. factor funds — why Avantis and Dimensional cost more

14:41 The invisible cost problem — how expense ratios quietly drain returns

16:03 Militia Long Short ETF (ORR) — high fees, no track record

21:02 Listener question: Increasing international exposure inside IRAs

23:03 One fund vs. multiple funds in taxable accounts — rebalancing clarification

24:09 Why Dimensional and Avantis offer mid-cap, REIT, and bond funds

25:51 Evidence-based diversification beyond equities
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Don and Tom tackle S&P 500 concentration risk and the dominance of the Magnificent Seven, explaining why diversification still matters despite compelling active management narratives. They clarify the difference between currency and investment in a pointed Bitcoin vs. U.S. dollar discussion, then pivot to fixed income strategy—highlighting why low-cost, large-scale bond funds like BND often outperform higher-fee “active” alternatives that quietly take more credit risk. Listener calls cover 401(k) catch-up contributions, bond ETF selection for retirement income planning, and whether using excess RMD funds for Roth conversions really adds value after taxes and IRMAA considerations. As always, the theme is disciplined investing over storytelling.

0:04 Technical chaos intro and why better investing still matters

1:32 S&P 500 concentration risk and the “Magnificent Seven” problem

2:40 The dangerous “but” in diversification pitches

3:43 Small, value, and momentum factors explained briefly

5:33 Active management as narrative creation

9:57 Bitcoin vs. U.S. dollar as currency vs. investment

13:29 What actually makes something an investment

15:08 Bond ETFs for retirement years 5–8: BND vs. Avantis

17:42 Why bond fund size and expenses matter

21:36 Active bond ETFs, credit risk, and hidden tradeoffs

25:38 401(k) catch-up contributions clarified

30:21 Roth conversions, RMD strategy, and tax math realities

34:09 IRMAA considerations and Medicare premium surprises
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Don and Tom dissect a Morningstar article naming the “best core stock funds” for 2026, noting the sharp decline in recommended actively managed funds and the dominance of low-cost index funds. While they applaud the shift away from expensive stock pickers, they argue Morningstar’s “core” approach still leads to unnecessary complexity and heavy large-cap (especially S&P 500) concentration, with little exposure to small-cap, value, and emerging markets. They advocate instead for simple, globally diversified, factor-tilted funds like DFAW, AVGE, or AVGV. Listener questions cover switching from AVGE to AVGV inside an IRA (risk tolerance matters), improving a 32-year-old’s 401(k) allocation (use a Roth IRA to add small/value exposure), and a sharp analogy comparing passive investing to driving with traffic rather than weaving aggressively for no gain.

0:04 Investing in a “wonderful world” by ignoring noise

1:14 AI audio tools that may replace editors (and shorten meetings)

5:06 Morningstar’s 2026 “Best Core Funds” list shifts toward indexing

6:39 Why “core” still means large-cap heavy and incomplete diversification

9:50 The problem with piling into multiple S&P 500 funds

12:14 Why Dimensional and Avantis are missing from the list

13:26 One-fund global solutions: DFAW, AVGE, AVGV

17:44 Listener analogy: aggressive driving vs. active investing

19:08 IRA question: Switching from AVGE to AVGV and risk tolerance

20:34 32-year-old’s 401(k) allocation and using a Roth IRA to add small/value

28:40 Retirement workshop plug and who should attend

30:21 Free fiduciary advice vs. actually hiring an advisor
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In this Friday Q&A episode, Don introduces a new AI audio enhancement tool that dramatically improves the sound quality of listener questions, then dives into a series of practical retirement issues. He tackles whether converting a $2 million term life policy to whole life after a disability makes sense (and what must be guaranteed in writing), explains how to properly freeze a deceased parent’s credit and handle inherited POD accounts and IRAs under the 10-year rule, pushes back on the increasingly discussed “bond trough” retirement strategy by emphasizing emotional risk over theoretical logic, and closes with reassurance for listeners considering retiring part-time in Mexico, explaining how U.S. retirement accounts, tax treaties, and global banking make the process far simpler than many assume.

0:04 Friday intro and new AI tool that dramatically improves caller audio quality

2:01 Whole life conversion offer after disability — “free” premiums and what to demand in writing

5:57 How to submit spoken questions and call-in info

6:22 After a parent’s death: credit freezes, deceased alerts, and final credit reports

7:41 Inheriting POD accounts and an IRA — step-up in basis and the 10-year IRA rule

9:57 AVGE vs. AVGV fake-out and real question: bond “trough” strategy in retirement

11:24 Logical vs. emotional risk tolerance — why most retirees can’t handle 50% drawdowns

13:40 Retiring internationally (Mexico example) — IRAs abroad, tax treaties, and practical
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