PFO Investor

You really can't do math. 1. You become a multimillionaire quicker with the Roth IRA, and you get to keep it. If you know anything, there are multiple ways to access these funds before 59 1/2, if that is really important to you, which you are drastically over emphasizing the importance of. 2. Your taxable account must be sold in order to be spent, this is a taxable event. So you are paying taxes on the dividends, and you are paying taxes again when you sell. This is not an efficient investment strategy. If your assumption is that you will just live on the dividends, great, you still have to pay taxes on those too. The total cost to you is 317,485/1,720,131=18.5%, not 10%. 3. Investing in taxable over Roth is misguided enough, to add in dividend investing is like driving a car with a brake on. You are paying more in taxes than you need to, and you are losing hundreds of thousands of dollars in opportunity cost, that could have been compounding for you. This is a horrible investment strategy that will lead to lower long term returns than just owning the market.

I can’t do math yet you claimed tax drag is a 20% hit when it’s actually a 10% hit—selling after 30 years is not a good assumption for multiple reasons. $180,000 is a page refresh when you’re a multimillionaire 😂 And being a multimillionaire at 40 is still better than being a multimillionaire at 60

Because paying less in taxes is better than paying more in taxes.

@BrattoBiz @OptimizedPort 1. You arent anywhere near the Family Office world, and bringing it up as some veiled ad hominem attack on me is irrelevant, and revealing of your true motives of your engagement bait OP. 2. You cant do math.

It's factored into my decision, i've published numerous articles, videos, etc. on it. Even at 0.5% (mine is much lower but w.e.) it is not a 20% difference, far less. I think the latest video I did I used 0.5% and struggled to care. Interesting a CIO of a Family Office cares or finds Roths relevant to discuss. The Family Office folks I've talked to IRL don't even talk about retirement accounts.

@BrattoBiz @OptimizedPort Insignifcant? Try again. You failed to include the tax drag, and the loss of compounding as well. The tax drag over 30 years is 0.525%/year, and results in a difference of ~20% more wealth for the Roth IRA investor. Not insignificant at all.

@OptimizedPort Sure, pay an insignficant amount more in taxes, in exchange for time freedom. Time is the most valuable asset.

@egr_investor The worst is when you meet people who are famous in your industry and realize, they are not that great. When they say, don't meet your heroes, its true.

Great speakers, obviously. But is this actually a class or just prestige theater? Hard to tell how much students are learning versus just being exposed to a rotating cast of famous names. Mostly vanity, imo.

@MaciejWasek 🤣🤣🤣 Most investors get into trouble when they start adding, because there is a limitless number of assets that can be added, and combinations that can be backtested. It is amazing how powerful a simple index approach is when it is followed consistently.

@PFOInvestor Global stocks and some bonds…next two tweaks would be adding global SCV tilt and Gold😅

99% of investors should just follow a simple portfolio of 1-2 funds that allow them to hold the global equity market, and earn their fair share of market returns. Ignore the noise of people, and companies trying to sell you a different strategy. This is the way.

@egr_investor @benjaminfelix

Can you win at bingo without sending someone a @benjaminfelix video? Technically so, but it’s more difficult!

Morgan Stanley: "We downgrade global equities to EW from OW and take UST and Cash to OW from EW. Uncertainty around magnitude and duration of oil supply disruption means outcomes for risk assets have become increasingly asymmetrical."

Government bonds rise as investors start to fear growth slowdown more than inflation. via Bloomberg

Market participants expecting a quick end to this war are going to be disapointed. No deal can be reached with religious zealots who will not give up, ever. They are playing the President, in an effort to regroup. He should not fall for it. It is important for the President to see this through militarily. No TACO here. economist.com/united-states/…

@egr_investor Now if you shorted this...

Say it with me now: “bag holders” $VCX

@Reformed_Trader Absolutely right. Iran has not been a good neighbor in the region. There is large support for regime change. x.com/SpecialReport/…

Something that I haven't seen discussed as much as I think it should is how much the region surrounding Iran is supportive of the war on Iran, or at least not openly against it. Past conflicts in the region involving the US has often been frowned on by the surrounding countries. It almost seems as if the region is in more support of the war than most people in the US. It also begs the question if this is only Israel's war as many have claimed. I know that is going to give me pushback, but it's something that has given me pause when thinking about the current conflict.

@SheTalksFinance @mylattice24 Holding these slices individually assumes you know better than the market, which you don't.

@mylattice24 We're not talking about diversification here, we're talking about performance of a multi fund equity portfolio vs. a simpler 2 fund equity portfolio.

Breaking out the styles/asset classes allows you important flexibility and control. Financial situations change. Markets have big shifts that favor certain tilts. Tax location is important. Far more benefits to separate funds.

@egr_investor @JohnvsAll2024 Agreed. Intl. Investing is just another opportunity to load up on small cap, and value stocks according to Sinquefield.

Interesting paper. Thanks for sharing it! If I understand correctly, using 1970–94 data, he argues that plain-vanilla EAFE diversification wasn’t compelling for U.S. investors; international small/value did more to diversify U.S. portfolios. The takeaway is to “globalize your factor tilts” if you choose to take them. Do you agree?

When an adviser buys a growth stock index fund, a value index fund, the S&P 500, a small-midcap index fund, a developed markets fund, and an emerging markets fund, that's called "slice'n dice". It's done to create complexity for job security, because TWO FUNDS would have sufficed: VTI and VXUS.

@econofreight @andyantiles_ And...wheres the money? Under his mattress? No, it is in a money market, which currently pays 3.69%.

@PFOInvestor @andyantiles_ Inflation… 6 months at 3% annual is 500k

Just got off a call with a guy who just got a $34m inheritance from his parents Not in real estate value… Not in stocks… But in cold hard cash. The kid is 23 and makes $200k/year as a software engineer Has no idea whatsoever what to do with this money What would you do with it? Here’s what I suggested (I’m not a financial advisor, and this is not financial advice) Invest $12.5m into $VOO (S&P500 ETF) Invest $12.5m into $QQQ (Nasdaq ETF) Buy a $5m primary residence in cash And with the last $5m, buy section 8 real estate properties. I connected him with the sourcing company I use, and over the next 12 months They’re going to source him 150-180 rental properties This will create enormous tax deductions that will eliminate his income tax for years And he’ll earn ~$600k-700k in annual recurring cashflow And the $5m he puts into down payments will turn into $25m of equity once the federal government pays off all the debt in 30 years Simple playbook to ensuring that $34m turns into multiple 9 figures and true generational wealth

@econofreight @andyantiles_ In what?

@PFOInvestor @andyantiles_ Your 6 months of waiting cost 500k lol

@econofreight @andyantiles_ How is it going to lose 10-15% of its value, while he takes 6 months to get a proper strategy in place? I have been helping the ulta-high net worth manage their money for the better part of 25 years. Manging this kind of money takes intention, you don't just gamble it on QQQ.

@PFOInvestor @andyantiles_ 😂😂 so it can lose 10-15% of its value while he waits? Gotta put it in something right away.

Agreeed. But Intl markets are a bit different. Smaller companies better capture the diversification of those specific regions. Most large cap Intl stocks are just multi-nationals providing little or no benefit to a US investor. Value stock premiums in intl markets are also a product of market structure. Rex Sinquefield lays this out nicely, without small cap, and value, most US investors do not even need to invest internationally: jstor.org/stable/4479891

@PFOInvestor @egr_investor @Rick_Ferri There has been no value premium for US stocks over the past 30 years, but it has been there for Ex-US stocks. I agree with your main point though. Avoiding complexity, behavioral mistakes, and costs shouldn't be ignored. testfol.io/?s=bDRnP2c65r9

@OptimizedPort All the alpha is from the 2000-2003 divergence, during the market crash, if you failed to catch that, you underperformed. If you run it from 2004-Present, the results are very different.

Wasatch Micro Cap Fund $WMICX just casually obliterating the market over the last 30 years, even on a risk-adjusted basis, and even after a very high fee of 1.64%: