The short answer is that if you've got a pension that's 80 grand a year,

And I divide that by, let's call it 5%.

That's the equivalent of $1.6 million sitting in bonds.

That's a lot.

As long as this is obviously a state oriented pension.

So I think there's a high degree of safety and stability.

I wouldn't be worried about that going away over time.

sold?

well just remember i

think that that's an important story because the the headline is a little scary and you think oh wow they're laying off 60 000 people a buyout is very very different than that and the of course if you think about it for a minute what is a buyout it's targeting folks that may either already kind of be one foot or that are maybe already one foot out of out the door and it's maybe folks that are only a year or two or three away from retirement anyway so that they're giving a little bit of an extra incentive to be able to pull forward retirement for a year or two so it's not it's not a terrible thing i mean a layoff would be terrible yeah in this case it is a voluntary buyout that the expectation is that there was a smaller version of this earlier in the year.

It was around 9,000 people.

About 30% took it.

I think the expectation here is that it's a much smaller percentage, but even 10% of 60,000 is still 6,000 people.

So it could be a fair amount of people, but it's not a terrible, worrisome...

With cowboys and bulls.

This is why...

There

is some validity to some of these.

And then there's the reason I think that the folklore of what happens at a certain calendar date in markets is that there is a little bit of truth to many of those folklore oriented sayings that people remember.

We're going to get into that.

Okay.

First, I want to start with, and I'm going to thank you guys here, the Clark Howard Show, for a trove of emails and questions that I've been getting really for the last...

The topic's been around now for about a year, and it's a really important topic.

What will you do with it? Search ShowPass Event Incubator, Incubator with a K, or tap the link to apply.

So walk me through that 6% and who is that, who should be thinking this way?

This analogy just came from a real life story.

Again, maybe back, this is in the Northeast somewhere.

My kids are doing all these travel sports and I'm always in a new town and a new location.

It's different from your hometown.

When you're in a brand new spot, but even in your own hometown, I remember if you do not turn on your GPS, you are going to make a wrong turn.

Yes.

Yeah, it's loneliness.

Yeah, it sounds

very much like an inventory game that...

Plays out whether you're talking about fine wine and the release of it or diamonds or diamonds or semiconductors.

And right now, perhaps the most valuable pieces of sand, because these are made essentially from sand and melted silicon.

this is a scenario where these are the most valuable pieces of machinery in the world, probably by square inch or square millimeter.

So it doesn't surprise me that you'd see some inventory, you could call it manipulation, you could call it just the way that companies like Nvidia, which again, how many Nvidia's are there? They're really, they're almost a full monopoly.

And the other thing is that what this makes me think about is that this is, What other company could, if this is true, and I don't think it is, I'm looking, I'm reading about it right now.

Would there be,

So Wes, what actually separates a happy retiree from a miserable one?

There actually, there's a ton of things that separate.

And it's my job really as a researcher in the beginning to pull out the, let's call it lifestyle, financial, part financial, part lifestyle, habits, traits, activities that move the meter.

So where do I see, there's a couple of ways we look at the data as we research.

So we go data first, Then I like to visualize the data, maybe a lot like a chart.

I can read a chart.

And when I get data, if I can get it into Excel form and then either have that drawn out like I did with illustrators in the book, that's when I start to really be able to visualize what the data is telling me.

The internet.

It

sounds like Mark hit the one million dollar mark.

OK, let's say it's Mark.

The answer is yes.

We're in a huge shortage of financial advisors, which is fantastic.

Why is that? So many of these big population-oriented questions come back to demographics, Mark.

And if you think about the world that we live in, we're still in peak 65.

Thank you.

He gets exercise.

Uh, he is literally on TV six hours a day, five hours a day.

Anyway, here's the headline.

"Cramer says high yields are dangerous.

Wes Moss says that's where retirement income lives." And I thought, "Wait a minute.

I, did, did I say dangerous high yields? Where, where is this coming from?" [laughs] And here's the problem with that very, very misleading headline, and I, and I think, I think the article itself did try to explain it more, but what's happening in that headline, and this is really important for all of us to understand.

When you hear the word yield, it is a percentage an investment is paying you.

Mm-hmm.

Hm.

And then you've got oil spike that continues to m- remain persistently high.

So the move from four to over five, I know that's a really big move for rates, but I don't see it out there as some big dysfunction, broken bond market panic.

It's just a function of a really strong economy creating more inflation, Fed's raising rates.

The market knows it.

Rates have gone up.

What matters for us, for you, is that yield is the biggest predicator for how bonds do over time.

Mm.

Explain that to the folk.

A reserve currency allows a country to print and go into debt because they have the ability, the world perceives they have the ability to create money in a monetary system and be able to still pay their bills even though they have debt.

That's it.

If you can't do that, you don't have a quote reserve currency.

And there's really only...

Call it a, there's a very small handful of these.

And I was explaining, it was actually a good question.

money.

And commissions-

Instead, you could just lean into a world where there are lots of different options to generate income, and to unlock the power to some extent, not just in the expansion of, of y- the price of the securities of the funds of the ETFs you have, but unlock this idea that, "Hey, I'm gonna trade in some of the growth for more consistent income." And if you look at where we are in the world today, and I wanna give some examples here, the S&P 500 yield is only about 1.2%.

Not a lot of dividends from that.

On a million dollars, you're gonna get 12 grand in dividends.

But if you start going up what I call the yield ladder, and I used to do this on my radio show almost every week, it's like, "What gives me 1%? What can I get paid 2%? How do I get four?" And so you just look at the landscape, and I'm not advocating or recommending anybody runs out and buys these, but if you look at the utility ETF, a basket of utility companies, now you're talking about 3% approximately in just in the cash flow.

That's helpful.

You go up the yield ladder and you look at some of the energy companies.

Consulta tu médico si los síntomas persisten.

And these people are just congenital

liars.

Yeah, look, it is not, we go back to concentration.

We talked about it with Wendy's.

Would it be better if we grew at two and a half or three? Let's say if we grew at 3%, and the 12 main major industries in the United States all grew at exactly 3% and the whole economy grew at three, that would be wonderful.

But you're right, we have this 20, 30, 40% growth out of the technology sector, particularly the hyperscalers, the call it a dozen or so companies that are spending all the money.

And it is very concentrated.

Is that the American dream now?

Mm-hmm.

So it's probably really, really getting to you.

But I also think, I- I'm gonna solve your paralysis right now.

You do not need to be paralyzed around a rule of thumb.

Our financial community gives you a list of all the good things you should do.

You should max 401[k], you should backdoor Roth max, you should fund your HSA, your kids' 529 plan should be full every year, you should pay off the mortgage.

Yeah, those are all things that we would like to do, but we can't necessarily do all of them all at the same time, so we have to choose.

Mm.

So there's two sides to the coin there.

Yeah.

Nobody's asked me about the unhappy side.

So what a great place to start.

And it's, what do we want to avoid? And what we will want to avoid once we have gotten, well, it would be the opposite of all the habits of the happy retirees.

One, you don't hit what I call the money green zones, which are, these are a lot of financial research, Bob studies, what people say they think they should have.

Hey, how much do you think you need to be able to stop working? And we get numbers every month or so.

Do you run across any of that?

Mm-hmm.

Just you should be 100% stocks all the time.

If you don't do that, you're crazy.

You should always do a Roth conversion, otherwise you're crazy.

You should never take Social Security until you're 70.

You're crazy.

That maybe makes good radio, but it's just not great advice, because it, it is not couched, it's not customized.

Many, many thanks in advance."

Does your firm only invest clients' money in ETFs? Should boomers look to convert from mutual funds to ETFs? Are there any inherent benefits other than real-time trading?"

You know, that's good, that's a c- cool thought, John, in Florida.

I don't know that that's the case, that most boomers are in mutual funds and not in ETFs.

I don't know that that's the case.

Every single year, I...

You have seen money leave mutual funds and go into ETFs.

So if you look at the data, it's not less money is overall in mutual funds and ETFs combined, it's that the percentage shifts every year more, and more, and more towards ETFs.

Mm-hmm.

And crude has gone up, what, up to 100,

which they don't like? Yeah, pretty close.

I mean...

The way this market has been working is energy prices up, crude oil up, markets down pretty much all year long.

Anytime we've gotten back to that, $80 per barrel, 75, 80, market loves that.

Anytime we get over 90, 95, market doesn't like it.

So another flare up, and it's not just today's flare up.

it up as we speak oh boy

If you want to submit a question to Wes, please go to wesmoss.com slash ask.

Let's start with this.

So first of all, I understand for the last couple of years, the K-shaped economy has been the agreed upon vernacular.

And I've talked about it.

Clark talks about it.

And it's not totally wrong.

It's very exaggerated, in my opinion.

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In the survey, you ask people if they agree with this statement: "I have enough friends." Eighty-one percent of the happy retirees said yes, but only thirty-eight percent of the unhappy retirees agreed with that statement.

That's a whopper statistic.

Enough is a number.

Enough is an actual, maybe you could call it a moniker for a number in a lot of these different categories, because we could always have more.

We could always have more friends, or we can get more sleep or have more money.

You could always say, "Well, sure.

That's a good idea.

When do you think the average person with, say, a moderate risk tolerance should start being like, "Okay, now is the time to begin preparing my portfolio, maybe doing some de-risking as I get closer to retirement"?

Wow.

And I start with economic data or market data or historical data or demographic data a- as another example, or a study, and then I try to draw a picture of that, literally a visual.

And then I usually have the narrative on podcasts and radio, and that's really what has happened with these books.

Particularly with my first book about money and happiness and early retirement called You Can Retire Sooner Than You Think, I really wasn't aiming to write a book.

I wanted to study the population and to find unhappy retirees and see what they do and find happy retirees and see what they do.

And then really that was for financial content because it was so important to me to emulate the population that we all wanna be like.

Of course, it's not just about money.

So tell us about the updated Money Green Zone.

work for.

Well, the two accelerants of that right now, Clark, are artificial intelligence has actually pushed workers in their 50s out sooner than they would have expected.

That's another variable.

And then being a caretaker.

Our parents get to be, let's say they're 80 and now they need full-time caretaking.

That's another big thing that makes people stop working before they thought or had planned.

So in the retire sooner method, there's really only one, there's only one major area that deals with the levels we need to get to.

There's something about the American psyche that people don't get that.

So then if saving and investing more money, having a bigger nest egg, a bigger pile, isn't the antidote to the increased anxiety so many of us feel about saving for retirement? Is it completely non-monetary related? Is it just maybe more silent retreats and meditation? Do you have any thoughts on maybe what it looks like to ramp down some of those anxious feelings towards this concept? Yeah.

Joel, I think it's a combo of, and what I write about in the book, the method, the retired student method is about having the financial foundation and the education to wipe away the fear.

So yes, part of it is money.

And I spend some time in the book talking about that.

And I approach it maybe the opposite way, as opposed to how much money do you need to do all the things you want to do and create enough income? I ask it more and present it in the book from a standpoint of who has a sense of peace of mind and happiness already.

And then what are those asset levels? So I'm looking at it backwards.

I'm saying, okay, who's the group that is feeling good and they have low levels of anxiety and they're happy retirees? And by the way, the book, I define the kind of happiness, the brand I subscribe to is more the, it's like the Aristotle brand of happiness, which is, fulfillment, purpose in your life versus fun and lack of pleasure, which is like the hedonistic way to look at it.

But I'm curious, does that mean that like retiring earlier is is better for everyone? And how how early are we talking?

When people only focus on this number, just the flat-out number, what is it that they're missing?

They're missing what I would consider the other 80% of retirement.

I think it's a critical one in five.

So if there's five things that are the formula, and this is also something the research informed me on, if we nail each one of these five, collectively, money is only one of the five.

So that's 20% of the whole battle.

But if we nail all five...

My research suggests or tells me that you have a 96% chance of ending up in what I would call the happy retiree camp, or I call them HROPs, happiest retirees on the block.

Can you imagine that at the front of Barnes and Noble, a book by Wes Moss called meh, no change.

The mystery.

I get it.

You're an author.

It's a mystery.

Okay.

But if you are, that means your parents are 75 or older.

And you also probably...

little more optimistic than me.

Love that.

So let's call that $2 million at least.

It's probably more than that, but let's just say $2 million.

I know we're talking California dollars.

But even at a 5% cap rate, uh, rental rate, that's 100 grand, and it's probably really steady and even, meaning that you have plenty of demand to be able to rent it out.

And that's 100 grand a year.

Now, you've got other costs.

Lucky Larry.