Explorez tous les épisodes du podcast The Rob Berger Show
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RBS 161: Can the Bucket Strategy Eliminate Sequence of Returns Risk?
02 Oct 2024
00:23:33
A viewer named Bill emailed me today about the bucket strategy. He has watched my videos on the bucket strategy and understands why I don't recommend it. He wants to know if the traditional approach of a total return portfolio with annual rebalancing negates the sequence of returns risk. It's a great question, and I share my perspective in today's video.
RBS 160: Dividends vs Interest: 8 Crucial Differences Every Investor Must Know
30 Sep 2024
00:15:32
Today we look at the 8 crucial differences between interest and dividends. We'll also look at how one should think about interest and dividends when using the 4% Rule of retirement spending.
RBS 151: 3 Key Social Security Claiming Strategies
02 Sep 2024
00:13:28
When to claim Social Security benefits is one of the most critical questions we'll answer in retirement. In this video, we'll look at the 3 most common strategies and a framework for making a decision. We'll cover strategies if you never been married, married, divorced or widowed.
RBS 060: Claim Social Security at 62 and Invest the Money--Good or Bad Idea?
29 Jul 2022
00:11:06
Several viewers have recently asked me whether it makes sense to claim social security at 62 if you plan to invest the money. At first, it seems like a solid strategy. While your monthly benefit will be lower, you get years of investment returns you'd otherwise forfeit.
It turns out, however, that the issue is a bit more complex. First, depending on your investment returns, claiming social security at 62 may or may not turn out in your favor.
The arguably more important issue, however, is taxes. Claiming social security at 62 could affect everything from how much your social security benefits are taxed to IRMAA premiums or ACA credits. It could also affect a Roth conversion strategy.
RBS 058: Defensive Investing--How to Prepare for a Market Crash (In Advance)
25 Jul 2022
00:32:02
Defensive Investing--How to Prepare for a Market Crash (In Advance)
With stocks, bonds and real estate at all-time highs, it's just a matter of time before we see a market correction, or worse. It doesn't help that our government is borrowing trillions of dollars, funded by a Fed who is buying bonds.
The question for investors is whether we should make changes to our portfolio today in preparation for the coming crash. If we should make changes, what should they be and when should we make them? And then there's the question of when we reverse any changes we make.
In this video we look at a Morningstar study on the diversification benefits of various asset classes based on their performance in past market crashes.
RBS 057: Fidelity Contrafund Review | Growth vs Value | Active vs Passive Investing
22 Jul 2022
00:23:39
The Fidelity Contrafund (FCNTX) is a popular growth stock fund. In this video we take a deep dive on the fund to see if it's worth adding to our investment portfolio. In the process we'll look at growth vs value stock investing, active vs passive funds, and how to evaluate a fund's performance.
Fidelity launched its ZERO index funds in 2018 to much fanfare. As their names suggest, these funds carry no expense ratios, a first in the industry.
As great as a “free” mutual fund may sound, however, many wonder whether there is a catch. Recently a viewer named Samir asked the following questions:
"Could you please share your thoughts on Fidelity ZERO funds vs their fee based funds?Fidelity ZERO International Index Fund (FZILX)Fidelity ZERO Total Market Index Fund (FZROX)Fidelity ZERO Large Cap Index Fund (FNILX)Fidelity ZERO Extended Market Index Fund (FZIPX)
Is FNILX + FZIPX = FZROX ?
ZERO funds have no fees, but other than cost, do you see any reason why one should invest in fee based instead of zero funds?
If you could please create video and share your thoughts, that would be very helpful."
Let’s dive into the details to get a better understanding of the Fidelity ZERO funds.
RBS 055: Can You Retire Early With 100% VTI Using the 4% Rule
11 Jul 2022
00:07:48
A viewer asked whether he could retire at the age of 49 with a 100% portfolio of VTI (Vanguard's total U.S. Stock Index ETF) using the 4% Rule. I think there are at least 3 big concerns with this plan: 1. The 4% rule assumed a 30 year retirement; 2. It found that a 100% stock portfolio could fail a 30 year retirement in some markets 3. A 100% U.S. stock allocation makes a big bet on the U.S. over the next 4 or 5 decades.
However, not all automated investing services are created equal. And some that are marketed as "free" actually have some hidden costs. In this video I take a look at SoFi Automated Investing and Schwab's Intelligent Portfolios to undercover the hidden costs in both services.
A viewer recently sent me a portfolio with nearly 20 ETFs and mutual funds. She didn't create it. An advisor from a major bank recommended it. Ridiculous.
The truth is that the number of mutual funds you own tells you nothing about how well diversified the portfolio is or what types of investments you have. A single mutual fund can give an investor exposure to U.S. stocks, bonds, international stocks, REITs, and even commodities.
The fewer mutual funds you have, the easier it is to understand and manage your portfolio. This becomes really important when you go to rebalance your investments. It's also critical as you head into retirement and start making withdrawals from you investments each year.
In this video, I explain why for the vast majority of investors, all you need is 3 funds.
RBS 050: Investing During A Market Crash | Live Q&A
RBS 049: How to Evaluate Your Investments | A Portfolio Checkup Using Free Online Tools
27 Jun 2022
00:38:37
I've received hundreds of emails from viewers asking me questions about their investments. They want to understand whether their investment portfolio is sound. While I'm not a financial advisor, I do believe do it yourself investors can evaluate their own portfolios with the help of some free tools.
In this video I walk through how I evaluate an investment portfolio. I could also be useful for those just starting to invest. I hope you find it helpful in your own investing journey.
In this video we look at a portfolio of a viewer who is 10 years from retirement. Her advisor has her invested in a 50/50 portfolio. We'll look at the "Smart Sector" and Momentum ETFs she has, consider the impact of the 50 basis point fee, and examine whether a 50/50 portfolio makes sense.
RBS 047: How to Invest for Short-Term Goals
22 Jun 2022
00:11:54
Investing for short term goals of 5 years or less can be tricky. Savings accounts pay about 0.50%, but stocks can lose money in the short term. Many saving for a down payment on a house face this problem.
In this video I'll cover an approach that can enable short-term savers to benefit from stock market returns without taking excessive risk of losing money over the next few years.
RBS 046: How to Invest in a Roth IRA--A Beginner's Guide
A Roth IRA is arguably the single best way to save for retirement. One question I receive frequently is how to invest in an IRA. And specifically, is a 3-fund portfolio a sound approach to investing in an IRA. The short answer is that it's an excellent approach for beginners just starting out.
There is one situation, however, where I would make an adjustment. If you also have traditional retirement accounts, I would use them for the bond allocation, reserving the Roth IRA for stock ETFs and mutual funds.
RBS 052: How Investment Fees Lower Retirement Spending (and invalidate the 4% Rule)
06 Jun 2022
00:10:43
The 4% Rule of retirement spending is used to plan spending in retirement. The rule says you can spend 4% of your nest egg in the first year of retirement. In subsequent years you adjust the amount by the rate of and inflation. Following this approach gives you a ver good chance of not running out of money in retirement.
The 4% Rule, however, assumes no investment fees. Add even a small amount of fees and your spending in retirement must go down. Add 1% or more in fees, and retirement spending must go down a lot.
In this video, we look at just how investment fees lower how much you can spend in retirement. We look at fees ranging from 0.10% to 3%.
RBS 045: Investing for Retirement in an Uncertain World _ Live Q&A
RBS 044: How to Invest in an HSA (Health Savings Account)
23 May 2022
00:13:27
A Health Savings Account (HSA) offers better tax advantages than any other type of account. The catch is that the money must be used for Qualified Medical Expenses to avoid taxes (and a possible 10% penalty)
In this video I walk through 3 aspects of HSAs, 6 strategies on how to use an HSA, and how best to invest money in an HSA based on the strategy used.
RBS 043: How to Set Up a 3 Fund Portfolio in Vanguard
20 May 2022
00:13:25
This video walks through how to set up a 3 Fund Portfolio in Vanguard. We then compare that to setting up the same portfolio in M1 Finance and Betterment.
Should a well diversified portfolio include international stock funds? That's the question I'm covering in this video. I'll first walk through several reasons an international stock fund is NOT necessary. Then I'll explain why I nevertheless invest in international stocks. Finally, I'll cover what I think is the most important factor as you decide what is best for your investment portfolio.
Video Outline
- U.S. vs. International - Performance (Portfolio Visualizer) - Current Valuations (VTI vs VXUS--Morningstar) - Reasons NOT to own international stocks 1. Warren Buffett & Jack Bogle - Warren Buffett Portfolio--https://robberger.com/warren-buffett-... - Bogle on Investing - https://www.morningstar.com/articles/... - https://jasonzweig.com/invest-globall... 2. International stocks may have lower valuations for a reason 3. The U.S. is the best place to invest - entrepreneurial - Soundest institutions - Excellent governance - Well diversified economy 4. U.S. companies do business around the world (so we already have int'l exposure) - About 50% of revenue and earnings come from abroad 5. Diversification may not be that great - U.S. Small Cap Value may provide more diversification - https://www.morningstar.com/articles/... 6. Many countries are unstable politically, economically or both - Why I own international stocks
RBS 149: 12 Things You Must Know About A Backdoor Roth IRA (Including If It's Worth The Hassle)
31 Jul 2024
00:19:26
Today we take a deep dive into a Backdoor Roth IRA. This strategy enables high-income earners to get money into a Roth IRA. We'll walk through what you need to know, and crunch some numbers to see if a Backdoor Roth IRA is worth the hassle.
Jack Bogle, the founder of Vanguard, argued that one should not rebalance their investment portfolio. He believed that doing so lowered long-term results. In this video we'll understand why he believed rebalancing was unnecessary, along with good reasons to rebalance a portfolio. I'll also cover how I use what's called Opportunistic Rebalancing in my investment portfolio.
RBS 038: Living Off Dividends in Retirement -- Not so Fast
09 May 2022
00:27:57
Living off dividends in retirement seems safe. Because you never have to sell shares of stocks, ETFs or mutual funds, you can never run out of money. Yet it's not quite that simple.
In this video we'll look at four major problems with living off dividends. Then will discuss why focusing on Total Return is a much sounder approach to investing in retirement.
Finally, we will look at some reasonably safe ways to increase your dividend yield if you must.
RBS 037: Managing Withdrawals in Early Retirement
29 Apr 2022
00:07:01
A viewer emailed me the following question:
"Rob - I hope this finds you well. I'm a fellow large law firm attorney, and I find your approach relatable and sound. I have a question regarding early retirement. I'm contemplating retiring in my early 50s. Currently all my bonds are held in 401K/traditional IRA vehicles, which ideally I would like to not touch until much later in retirement (i.e., when RMDs kick in) to take advantage of the tax deferral benefits. Since my brokerage account is 100% in equities, this could leave me exposed in early retirement if the market tanks and I don't want to have to sell equities at a low price. Is the answer just to build up 5 to 7 years worth of expenses in cash and municipal bonds in my brokerage account or am I missing something obvious? Thank you!"
It's a great question. And I do think there is an easier approach. Simply sell the stock funds in the brokerage account each year as necessary for distributions. And then rebalance. If stocks are down, this will involve selling bond funds in retirement accounts and using the proceeds to invest in stock funds.
Rebalancing after taking annual distributions avoids the problem of selling stocks in a down market. And this is true even if the distributions are taken from stock funds.
RBS 035: Opportunistic Rebalancing -- How to Rebalance Your Investments Like the Pros
25 Apr 2022
00:15:50
Rebalancing an investment portfolio doesn't need to be difficult, and it can actually increase your returns over time. Specifically, one study shows that Opportunistic Rebalancing can improve your returns by as much as 0.50%.
In this video, we look at that study and walk through how Opportunistic Rebalancing works. I'll cover some things to consider as you construct your investment portfolio, and give you a free tool that makes rebalancing easier.
RBS 035: Retirement Annuities -- Should You Buy an Income Annuity (SPIA) in Retirement
22 Apr 2022
00:37:18
Should you use some or all of your retirement savings to buy an income annuity? That's the question we look at in this video. Called a Single Premium Immediate Annuity, these annuities don't come with all of the fees and complexities of other annuity products. Yet it can still be difficult to decide if you need one, when you should buy it, and how much you should invest.
In this video I'll share annuity calculators, an annuity formula and a number of resources that can help you decide whether an income annuity is right for you in retirement.
Rick Ferri's Core-4 portfolios are built using low cost index ETFs and mutual funds. With just four funds in each portfolio, Rick has created 6 portfolios for just about any investor. One Core-4 portfolio is designed for those worried about inflation, while another for those seeking income. He also has his Classic Core-4, ideal for long-term retirement funds.
In this video we explore all 6 of Rick's Core-4 lineup, along with specific funds you can use to implement any one of them. They are ideal for those wanting a Lazy Portfolio.
Vanguard released a paper claiming that advisors following its Alpha Framework can add up to 3% to an investor's long-term returns. Many advisors use this paper to sell their very expensive (1% of AUM or more) services. But is it legit?
RBS 148: 8 Ways Retirees Can the Fear of Investing in Stocks
29 Jul 2024
00:17:37
It can be scary for retirees to invest in the stock market. At the same time, investing in just fixed income can expose us to the risk of running out of money. So in this episode I walk through 8 things to consider if you are nervous about investing in stocks.
I was convinced I'd live Vanguard Digital Advisor. It seems to check all the boxes. It uses low cost index ETFs. The service itself has a very reasonable cost of about 15 basis points. And it rebalances your investments for you, as you would expect from a robo-advisor.
After using the service, however, I reached a very different conclusion. There were numerous technological issues and its user interface is poorly designed. More importantly, it offers very few features and imposes limitations that make no sense.
Frankly, it's nothing more than a dressed up target date retirement fund and twice as expensive.
Disclosure: Both Vanguard Digital Advisor and Betterment are advertisers, but they had no input into this video or even knew that I made it. Vanguard Target Date Funds are not an advertiser.
RBS 030: The 3-Tier Credit Card Rewards System -- How I've saved nearly $30,000 from credit cards
I'm going to cover the three tier system for earning credit card rewards. This is the system I've used over the past couple of years to generate nearly $30,000 in credit card rewards. We save and invest all of our rewards in M1 Finance. This system, however, can be used whether you save and invest the rewards like we do, or spend the rewards on travel or other purchases.
The great thing about this system is that it's very simple, and it will help about 99% of the people maximize their credit card rewards without carrying a dozen or more credit cards.
The 60/40 portfolio has powered retirements for decades. With 60% stocks and 40% bonds, this balanced fund offers equity-fueled growth and fixed income stability.
Today, however, many are calling into question the sustainability of the 60/40 portfolio. Some even argue that it’s dead and that retirees need take on more risk if they want to avoid outliving their retirement savings.
In this video we’ll take a deep dive into the 60/40 portfolio and whether it’s still a viable approach to investing for retirees.
RBS 028: The Life-Changing Magic of Index Funds_Live Q&A
———————————— Video Resources & Timestamps ————————————
0:00 - Welcome to the Financial Freedom Show! 3:50 - Very important question! 5:00 - Including a Bond Index Fund or Bond ETF as part of a retiree's portfolio 8:40 - Favorite local restaurant 9:07 - Talking Real Money Guys/Morningstar 9:57 - GNMA in a bond portfolio 13:07 - Approach to bridge to access retirement accounts 15:43 - Placing HSA dollars into investment vehicles rather than leaving in cash 18:36 - How would one hedge holding other currencies, including digital currency? 20:32 - How to hedge against the weakening U.S. dollar 21:27 - Do I still need a Bond fund? 29:14 - Set schedule for my live shows 30:01 - How high of percentage inequities is best 32:22 - If the market beats the percentage, why would we pay off our loan? 36:01 - Am I better off using a brokerage account? 37:35 - Assessing current equity valuations for excess care 39:57 - Would I sell VTIP for BND or divide the fund equally between both? 42:14 - Modifying a 3 fund portfolio to include more higher risk higher reward allocation 43:42 - How to transfer your portfolio to other brokerages without triggering taxes 46:18 - VIPSX vs VBTLX 50:44 - Index maximalist 54:30 - AUM (Assets Under Management)/Fiduciary 58:38 - SCHY 1:00:52 - Long Term Care Insurance 1:05:04 - Would complexities in a portfolio become moot with Fintech innovation like M1 finance slices 1:05:42 - Sub 3 withdrawal rate 1:08:12 - Should I have a taxable account wi
RBS 027: The True Cost of Actively Managed Mutual Funds
04 Apr 2022
00:20:50
The True Cost of Actively Managed Mutual Funds (according to Vanguard founder John Bogle)
Actively managed funds are expensive. And it's not just the expense ratio. From transaction costs to tax inefficiencies, and cash drag to load fees, the cost of actively managed funds all but guarantee they will underperform an index fund over the long-term.
In this video we take a look at a portfolio sent in by a viewer. The portfolio was recommended by PNC Bank. For just a $100,000 account, they recommend almost 20 funds, many with expense ratios over 1.00%. On top of that, PNC wanted to charge 1.24% to manage this mess.
RBS 026: The Two 5-Year Roth IRA Rules Explained_Here's How They Work
01 Apr 2022
00:15:38
There are two different 5-year rules for Roth IRA accounts. One applies to Roth IRA accounts and determines, in part, whether the withdrawal of earnings is subject to income tax. The second applies to Roth IRA conversions and determines whether a withdrawal will trigger the 10% penalty tax.
In this video we walk through both 5-year rules. We'll cover what they are, how they work, and what it means for retirement savings.
These are complicated rules, so be sure to check out the resources below. And as always, consult a tax professional before making any decisions.
———————————— Timestamps ———————————— 0:00 - Welcome to the Financial Freedom Show! 0:30 - Roth Conversions 15:13 - Reverse mortgage 16:24 - Is there a minimum where Roth Conversion doesn't make sense? 18:04 - BUFOX 21:47 - 11 stocks 25:26 - Thoughts on investing for college/529 Ohio/VTEP 27:05 - Defined Benefit Pension Plan 31:29 - Is there a downside of leaving target date funds in my portfolio? 33:42 - Why can't we invest non earned income into a Roth IRA? 34:37 - Good Morning Washington 35:33 - 90/10 or 80/20 for investing kids savings 36:32 - Timing the market 38:04 - Roth Conversions make sense if the market takes a downturn 38:50 - VB & VBR 40:56 - Accessing Roth Conversion after 5 years 42:35 - Transitioning from predominantly index fund investing to disciplined individual value stock investing in Roth 44:46 - Schwab vs Vanguard for retirement accounts 48:19 - Married couple Roth conversion 48:56 - Fulfilling promises to viewers 51:05 - Cash reserves account 52:17 - Betterment 54:58 - Qualified donations 56:41 - Tips on spending money during the accumulation phase 57:57 - Good asset allocation in stocks 1:00:25 - Most advantageous method to determine the profit or loss for tax reporting in a taxable account 1:01:58 - Changing allocation since my account is no longer a Roth 1:
RBS 024: TIPS vs I Bonds -- What's the Best Way to Hedge Against Inflation
28 Mar 2022
00:15:38
TIPS vs I Bonds--What's the Best Way to Hedge Against Inflation?
TIPS (Treasury Inflation Protected Securities) and I Bonds both protect investors against unexpected inflation. Both bonds are also issued by the U.S. Government and are exempt from state and local taxes. Bu that's about where the similarities end.
There are key differences between TIPS and I Bonds that investors should know. We look at 8 key differences, along with the pros and cons of adding each to your portfolio.
As a bonus, we look at how one of them can help you save for a child's education.
RBS 023: VOO and Chill_Is An S&P 500 Index Fund Portfolio A Smart Idea
25 Mar 2022
00:12:49
You'll often hear the phrase VOO and chill or sometimes VTI and chill. VOO is the ticker to Vanguard's S&P 500 index ETF (VTI is Vanguards total U.S. market ETF). The idea is to invest all of your money in the S&P 500 (or perhaps the total U.S. market) and just relax.
After my video showing my 2021 portfolio tracked the performance of the S&P 500 (more or less), many asked why I bothered with multiple asset classes and individual stocks. Why not just VOO and chill?
This video explains why, and more importantly, walks through some concepts that might help you decide what's best for your portfolio.
RBS 022: When Can I Retire--How to Determine If You Can Retire
23 Mar 2022
00:11:41
A viewer recently asked me if he was able to retire in two years. He provided his investment balances, projected expenses, and pension income. In this video we'll evaluate his situation to determine if he can retire.
To determine if you can retire, it's important to evaluate both your expenses and income in retirement. This can be challenging for several reasons:
1. Expenses are at best an estimate 2. Medical expenses can be a wild card 3. One-time and periodic expenses can be difficult to calculate 4. Future income (social security, pensions) may not start for years 5. Estimate how much of your investments you can spend each year is at best a rough estimate.
To help, I walk through two free tools in the video:
RBS 147: How to Retire Before Taking Social Security | Bridge the Social Security Gap
26 Jul 2024
00:23:23
In this episode, we'll examine how to retire before taking Social Security. This is an ideal strategy for many to maximize Social Security retirement benefits.
RBS 019: The Dave Ramsey Portfolio vs Low Cost Index Funds
23 Dec 2021
02:04:21
Dave Ramsey is perhaps best known for his baby steps and helping countless people get out of debt. Among low cost index fund investors, he's also known as recommending expensive mutual funds with front loaded sales charges. While fees are important, what matters even more is after-fee returns. And that raises an important question--
Does Dave Ramsey's approach to investing outperform a portfolio of low cost index funds?
In this episode, we'll look at American Funds, which appear to be Dave's fund family of choice. We'll compare their returns with low cost index funds over the past several decades to see which one comes out on top.