Episode 20 of the NewRetirement podcast is an interview with Rick Ferri — CFA, author, and founder of Core-4
— and discusses Ferri’s perspective on investing and the future of financial advice after being in the industry for three decades. They address the difference between investing strategy and investing philosophy, advisors as legal fiduciaries and the Bogleheads community.
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Steve: Welcome to NewRetirement podcast. Today, we’re going to be talking with Rick Ferri who is a financial advisor, author, founder of Core Four, an index fund fan, a Bogleheads podcast host and retired Marine who lives in Georgetown, Texas. Some of our other guests, including Jonathan Clements and Allan Roth, suggested we have him on and we’re going to be discussing his beliefs about investing based on a 30-year career and also cover efficient low fee investing, maybe touch on market volatility and the future of advice. So, Rick, welcome to our show. It’s great to have you join us.
Rick: Thank you for having me, Steve.
Steve: I appreciate your time. So, before we get started, I always like to hear in people’s own words kind of how they got to where they are today and also a little bit about what they’re trying to get accomplished with their time on this planet.
Rick: That’s a good question. We’re all in a race to get something done before we move on.
Steve: That’s right.
Rick: May not really sure what it is half the time but we’re really moving fast to do it. Yeah, so I was like you said, I was in the military for a number of years until I was about 30 years old and then I went into the reserves, stayed in the military reserves for a while but went into the financial services industry about 30 years ago. And I was a typical broker and hired as a broker and at that time, of course, you thought that brokers were very knowledgeable people about investing and the companies they work for were very knowledgeable and they picked good investments for their clients which helped their clients and in turn helped the company which in turn helped the broker.
Rick: And about a few years into that, came to the startling realization that none of that is true. Number one, most of the people who go into the brokerage industry, or a lot of the people, at least back then, had no education in business or finance, in fact, it was very rare. They were basically hired to sell whatever the company wanted to unload. I was getting paid to sell. And nobody kept track of how the clients were doing although the only thing they kept track of was how much money you were bringing in in commissions and fees, that’s all they cared about.
Rick: And determined whether you got the corner office or whether you got an office based on how much money you made for the company, regardless of how much money you made or lost for any client, that was not even in the equation. So, when I realized this, I decided I was going to leave that industry and I went into the RIA business, investment advisor business. And I started charging a small fee to manage portfolios of index funds because I realized also after 10 years in the brokerage industry, had an epiphany after reading John Bogle’s book, Bogle on Mutual Funds back about 20, 22, 23 years ago that it’s very difficult to outperform the market and I wasn’t doing that as a broker, the company wasn’t doing it, not even close, none of the companies were.
Rick: So, if I wanted to do what was in the best interest of my clients, then I should just buy index funds for them which I couldn’t do in the brokerage world. It wasn’t allowed back then, they didn’t have ETFs, basically. There was a couple and I used what I could but it wasn’t available. So, I left the broker industry in 1999 and I started and RIA and started using low-cost index funds and starting charging clients a fair advisor fee for putting portfolios together for them. And over a period of the next almost 20 years, the company grew to about 1.5 billion dollars in assets and almost 20 employees.
Rick: And due to some circumstances that I ended up having to liquidate my position in that. And those circumstances had to do with a business partner who decided that he wanted to own the whole company and not me. So, yeah, we could get into that if you wanted to but it’s not a great story to talk about, quite frankly.
Steve: You know, from your time in the Marines, many huge lessons from that? I mean 20 years is a pretty long career in that space.
Rick: Well, okay, so I used to be a pilot. I flew off aircraft carriers and I went to Pensacola and then went to advanced jet training and then after that, I flew A4 Skyhawks and then A6 Intruders. And you know, when you’re flying jets, there’s no ambiguity on what you’re doing. I mean, you can’t be … You have to be right. When you’re coming aboard an aircraft carrier, you have to be very precise, you can’t be almost lined up or almost on the glide path.
Rick: And I was trained to be very technical and very precise about everything I did. And it kept me alive in the Marines. And when I got to Wall Street, that training made me realize that Wall Street wasn’t that way at all. It was very little integrity, there was very little preciseness, there was a lot of things going on that would have never stood up in the military and there were people who were running companies in the financial services world who would have been in jail, quite frankly, or in Leavenworth if they were in the military.
Rick: So, you know, it was a very different world to step out of the military which had high integrity, preciseness, everybody looking after each other and going into Wall Street which is almost exactly the opposite in every single case. And that didn’t suit me well. But it didn’t mean that I was going to leave the industry, I just needed to try to change it and that’s what I’ve been trying to do ever since.
Steve: All right. I applaud that. I remember during the 2008 downturn, one of the things people were talking about, they made a lot of folks pushing mortgage loans to people that couldn’t afford it and they talked about people are good at recognizing the wrong thing unless their mode of making money depends on it and then very often, it’s a slippery slope to be, okay, I’ll accept different standards because my livelihood depends on it.
Rick: Yeah, and unfortunately, people will believe you if they think that you have … If they have no reason not to believe you. So when you go around and you sell something that it really has no merit to be sold and people shouldn’t be buying it and it doesn’t do them any good, it just does the company you’re repping well to sell it because they get a big commission or fee from maybe somebody else, people are still going to listen to you, Steve, because you’re Steve and they have no reason not to believe you.
Rick: And so they’ll buy these things from you because you said so. And that’s why Wall Street when they go out and hire brokers back when I was getting hired, I mean, I was a fighter pilot, they hired me ’cause it was cool. Oh, I can go out and tell people that and people will go, “Oh, wow,” and maybe give me their money. And then there were all kinds of other people that were from different walks of life, they were hired to become brokers because they had personal credibility.
Rick: And in a way, we were used in many ways. And you know, when you release that you’re being used and you’ve gotta get out of that environment, you can’t change it. So you need to get out of it. But, so a lot of the stuff that’s out there, 90% of it is useless, it’s just designed for the purpose of benefiting the people who are selling it, it’s not for the benefit of the people who are buying it.
Steve: Well, good for you for having the self-awareness to recognize that and take action on it. I think it’s hard for a lot of folks, they get in, start making money in a certain way and they see that’s how the system works and they buy into it. I agree with you that I think my view on the financial services space is that in general, it’s too complicated, it’s misaligned, we actually talked to Bob Merton, the Nobel Prize winner, about this that everything is geared around saving money, piling up the consumer’s money and then most of the financial services, they’re making their money on either how much money you have as AUM or, and that’s more recent, or when you started, it was on transactions, right? How fast can we turn this money around and we make money when someone buys or sells something and so let’s do more of that.
Steve: And it’s not 100% aligned with what the consumer wants which is, hey, keep my costs low, let’s do this as efficiently as we can, let’s manage risk as best we can. But, the good news is, it does seem to be changing, right? So I if I think Vanguard is and I was listening to John Bogle podcast which was amazing to hear him at 89. You know, pretty spry, clearly communicate his history and why he’s done things. But you know, if it feels like the right things are winning in the end with Vanguard accumulating a billion dollars a day and it’s all around low fees and index investing and everything else, so some good things are happening. And you’ve been part of that, that’s good.
Rick: Well, been trying. Again, I feel like I’m the guy with the big lighter following, the torch bearer. There’s a lot of us, you mentioned a couple. Jonathan Clements and Allan Roth and there are a good deal of people out there that are trying to continue to get this message out. And there’s always going to be pushback from the part of the industry that wants to continue to survive and make a lot of money by selling other stuff and it could be from the insurance industry, it could be from the mutual fund companies and the ITF industry. The advisor industry in many ways, I think, is moving toward selling stuff people don’t need just for the sake of charging a 1% AUM fee.
Rick: And so you know, if you’re really doing what’s in the best interest of the client, you’re going to act as a fiduciary, even when it comes to your own fees, that’s a really important point. I think there’s a lot of advisors out there who will raise the red flag any time they see a one or two basis point fee that maybe shouldn’t be there in mutual fund company. By basis point, I mean a .1%. So they’ll raise a red flag and they’ll start screaming about fees.
Rick: But when you ask them, “How can you justify charging 1% to somebody who’s got two million dollars and charging them $20,000 a year, just to manage a simple portfolio,” and they come up with all kinds of justification. You’re not justified in doing that. So, you know, the advisor community is guilty of not self-reflecting on their own fees and doing what’s in the best interest of the client. But they’re quick to jump on everybody else, though.
Steve: Yeah, I mean the tension exists out there. One of the things that I saw from you on Twitter was … See what I’ve got here, on October 5th of 2018 you said, “Tim Buckley, CEO of Vanguard presented to 250 Vanguard investors last night. I was there, one of his big initiatives is to democratize financial advice by driving advisor fees to index fund levels. Fasten your seatbelts, folks, change is coming.”
Rick: That’s right. It took Vanguard to force mutual funds to start lowering their fees and start acting a little bit more in the clients’ best interest and now Vanguard is attacking the advisor industry saying, “Look, how many times do you need to do a financial plan for a client? You don’t need to do one every year, you don’t need to meet with the client every quarter to go over their performance of four index funds. Why do you need to do all of this? It’s just wasting the client’s money.” So, you know, they’re coming after the advisor community and they’re trying to highlight that.
Rick: You know, there are some issues with what Vanguard is doing as well that are borderline maybe not in the best interest of clients but you know, they’re doing more good than bad if you will.
Steve: Sure. I know they also have that study that says what’s the advisor alpha that many advisors wheel out? It’s like a, an advisor brings 3% of value, I think 1.5% is from coaching and then the rest is from tax efficiency planning, blah blah blah.
Rick: It’s a lot of nonsense.
Steve: It’s interesting that they have both. They’re bringing out their own kind of low costs advisory solution, personal advisory service but they’re also pumping up the advisors. By the way, for what it’s worth, I don’t wanna be … Yeah, there are all kinds of folks in financial services, there are very bad folks who are just selling stuff that doesn’t matter and is in the wrong interest of consumers and then I think there are a lot of advisors that do add value, around coaching, getting people to act.
Steve: So I mean, my takeaway so far from being in this space is that a lot of this is around behavior and helping people actually move, get off the needle. And that’s where having a human coach or advisor can be super valuable. Now, what they should be charging and what’s an appropriate price and how should you be … Like you pay your CPA, you pay your lawyer, you pay your tax guy hourly to give you specific help around certain things and then they stop charging you versus the advisor model is, “Hey, I wanna build a trust relationship, which is important, but then I wanna keep taking a rake on your hard-earned money forever.” Which is great, I mean, I get why they love the business model but it does feel like that’s going to change. It’s going to come under more pressure.
Rick: So, as a fiduciary, shouldn’t you be analyzing that? I mean, isn’t it your duty to look at your own fees and self-reflect and say, “If I’m charging this $500,000 $5,000 a year, and I’m charging that $2 million-dollar client $20,000 a year, am I doing four times the amount of work for that $2 million dollars than I am for that $500,000 client?” And the answer is no. You’re not. You might be doing a little bit more work because maybe there are a couple more accounts involved but you’re not doing four times the amount of work. So why are you getting paid four times the amount of money?
Rick: As a fiduciary, you should be looking at that. And let’s look at the other side of that, by the way. And in defense of the advisors. Let’s say you have somebody who has a $200,000 account and you’re charging them 1% and so they’re paying you $2,000 a year but this particular client is calling you every week, that behavioral coaching needs to be constant, you’re spending a lot of time with them, there’s a lot of things going on in their lives that need to have changes in their financial plan. You should be getting paid more than $2,000 a year but you’re not. You’re undercutting yourself by only charging 1% AUM.
Rick: For those clients, there should be a minimum fee. There should be a minimum fee of maybe 4, 5,000 dollars if you’re going to provide this kind of coaching and there should also be a maximum fee, maybe $10,000 dollars. And there can be some variation and that’s fair pricing. That’s bringing both AUM and flat fee pricing together and meeting in the middle. But you find people who are doing 1% AUM do not want to hear that. They just don’t. And I think that they need to reflect back on the fact that they are fiduciaries and as part of their role, they need to be looking at all fees, including their own.
Steve: Yeah, I think … I mean, you have the same problem with real estate. You can sell a house for … Fees have been, what? 5%, 6% on the house transaction forever and you could sell a house in upstate New York for 300,000 bucks or you can come here in Northern California, sell a house for three million bucks. Their fees don’t change that much. But it will.
Rick: Let me just say that, the real estate agents are not fiduciaries. I’m talking about a legal fiduciary. As a registered investment advisor, you are a legal fiduciary and you must follow fiduciary rules. Legally. Now, you know, brokers don’t have to do that because they sell products and they make commissions so they’re not subject to fiduciary rules. Same thing with the real estate broker. They’re not subject to the fiduciary rules.
Rick: Investment advisors are. That means they are supposed to be looking at all cost to the client, including their own. So it is different. It is a different level.
Steve: Yeah. Well, I think the core problem is that you’re asking the person responsible as the advisor to negotiate against themselves. Now, fine, they should do it, right? But, how are they going to find the appropriate price? So it may be that you have to have a third party. It’s either going to come from a third party that looks at it that’s separate or competition which is emerging now. So we’ve had the Robo financial portfolio managers, Personal Capital, and Betterments of the world and so forth that are optimizing around the portfolio and now I think you’re going to start to see more services that are around, “Hey, let’s bring more efficiency to planning and advice,” and that will enable more at a lower cost. And so hopefully that will emerge. I mean, you’re starting to see it. There are firms out there.
Rick: And then you’ve got people like me, big mouthed like me, who are making an issue of it and continue to make an issue of it and will continue to make an issue of it, just like John Bogle has been making an issue about mutual fund fees for 45 years. And that the mutual fund companies have a duty to their investors and they have to separate the management of the company, the mutual fund company, from the management of the funds. They shouldn’t be the same people who are on the board of directors, he’s been saying this for years ’cause of conflict of interest.
Rick: You have the same thing here with the advisor industry. You got the advisor making the decisions for themselves on what fee is appropriate and maybe that’s not right.
Steve: Yeah, yeah. I think that’s the core issue. You can’t ask people to negotiate against themselves, you have to have some other way to benchmark their stuff and have people be educated. The consumer themselves has to be educated and know that there are other alternatives and see what’s realistic. And I think they’re starting to see that, that is starting to happen, right?
Rick: It is happening. But it took Vanguard 12 years before the Vanguard S&P 500 fund, the first index fund created in 1975 actually got one billion dollars under management. It took 12 years to get there. And it was a very rocky road along the way. So, you know, this concept of there are other ways to charge advisor fees and that maybe AUM is not the best thing. Sure, it’s going to take another 45 years maybe, a whole generation but it’s going to happen. And I think that the smart advisors are going to begin to work this into their own models. Or they’re going to end up retiring at 65 or 60 years old and selling their broker business and they’ll do okay. But the next generation, the young people in their 20s and 30s had better been thinking about these issues because they’re going to be the ones affected. And evaluations of their companies are going to be affected 20, 30 years down the road.
Steve: Well, for what it’s worth, that’s how we’re thinking about it. We rolled out our own separate RIA to provide packaged collaborative planning around the digital plans that people can create on our site and it’s priced flat, fixed fee for things like planned checkups and then we envision just charging flat subscription fees that people agree to and that are not tied to assets or anything else. So kind of like an hourly model, I think you’re starting to see more firms start to do that kind of stuff.
Rick: Yeah, it’s a separation between the day to day asset management and you could do day to day asset management under a low AUM fee, I don’t have any problem with that. That’s the way Vanguard does it, even with their mutual funds. But the fee for doing day to day asset management, portfolio management has to be down 20, 25 basis points, roughly, that could be fair.
Rick: And then anything other than that that you do for the client, above and beyond the portfolio management and whatever the SAC requires that you do for the client to know your client and have the right allocation and so forth, anything above that, any kind of insurance planning, tax planning, estate planning, what 529 plans should I put my grandchild’s money into? All of that advice part should be built separately from the AUM from managing an investment portfolio.
Rick: Two different fees.
Steve: Totally agree. And you know, historically, what’s happened is people, advisors give away the plan and a bunch of service upfront as kind of the loss leader, build trust but the real point is to get access to the assets and manage the assets and keep that going for decades.
Rick: Isn’t that deceptive, though? We get all over the brokerage industry for saying how you do the financial planning and do this other stuff but all they want is the commission. I mean, we’re very quick to shoot at the brokerage industry and say, “Look at them, look at what they’re doing, that’s just not fair to the clients,” and yet, a lot of advisors are doing the same thing with this loss leader called a financial plan, just to get the assets in. You have to look at how an advisor is paid, that determines what they are.
Rick: Even if our financial plan is done, if an advisor is paid based only on AUM fees, they’re a money manager. I don’t care what they call themselves. They’re not doing financial planning for financial planning fees. They’re just doing money management. It’s no different than a broker doing a financial plan for the purpose of selling an insurance product. It’s the same thing. So, it needs to be separated and I think that’s what I’m trying to get that message out.
Steve: Sure, well, we’ll see how it evolves. I will say, it does also go, probably I think human nature, for a lot of folks, they wanna have somebody there to coach them along and be that trusted person that they can count on. And I think that has a lot of value.
Steve: It’s really just how they’re paid and everyone being on the same page, that this makes sense and you know, is it fair?
Rick: Is it fair. Is it fair? That’s the bottom line. Are you doing, as the advisor, are you doing the work that the client is paying for? Or, are you doing too much work and the client isn’t paying for it? It goes both ways. It has to be fair from both sides.
Steve: Ultimately, I think it’s going to come back to the consumer. They have to be aware, ask questions, they started to do this with funds, right? They’re saying, “Okay, I don’t wanna pay a 1% load on some mutual fund when I can get an index ETF that does the exact same thing for 17 or 12 basis points or whatever it is.” So, they’ll probably, hopefully, start to look around and say, “Okay,” as they do in the rest of their lives, what are my costs, does that make sense? We’ll see.
Rick: You’ve got companies like Betterment out there that are getting people on board with low fee asset management which we didn’t have 20 years ago, we didn’t have it 30 years ago. So the younger people, the millennials and so forth are being exposed to index fund portfolios, low fee asset management fees at a much, much younger age than my generation. I’m 60 years old, a baby-boomer. So my generation had nothing like that. So I think that that also, those products, the services that are out there exposing young people to low asset management fees and low alternatives to financial planning, again, the next generation, 30 years from now, that’s when this … You’re going to see a massive C change. And it’s going to take that long, as it did with index funds.
Steve: Right. Well, hopefully, things … Feels like things are accelerating, we’ll see. We’ll see if … Once it gets going, I mean Vanguard, it’s a machine now, they’re getting a billion dollars a day and they’re dwarfing the rest of the industry. Hey, just real quick before … You know, I’d listened to that podcast, your first Bogleheads podcast with John Bogle, Mr. Bogle and what do you think his biggest contributions are to the financial services space?
Rick: Well, he’s got so many contributions. Accountability is making the financial industry accountable. And they never wanted to be accountable. Ever since they’ve been in existence, they have not been accountable. So I think that he is forcing accountability and accountability for the fees they are charging, accountability for the performance that they’re not getting. So, he’s highlighted, he’s focused people’s attention on the lack of accountability in the financial services industry and did it by setting up a company that basically has accountability called Mutual Benefit Company called Vanguard, that’s managed for the benefit of its shareholders, its shareholders are the Vanguard investors. And I am one, by the way, full disclosure.
Rick: So, he’s always done it, not by just talking about it, he has done it by doing it with Vanguard. And it’s been super successful and it’s been a grassroots growth. It has been. It’s not like they had a lot of money to advertise, the whole industry was hoping that Vanguard would go under in the 1970s, they didn’t. They came out, they survived and because of that, and now that they’re getting a billion dollars a day, it’s validated his message.
Steve: Right, it’s been amazing from the podcast, I mean, obviously, we’re aware of index funds and low fees and kind of what Vanguard does but to hear it in his own words about how they got started, they had to license their S&P index. First, I think they were paying 25,000 bucks a year to get the right user to build the fund around it. And I think the biggest … One of the huge things for me is that he did choose to take the company and make it a mutual benefit company for everybody and so because the funds own Vanguard and the investors own the funds, their interests are aligned around driving down the costs of investing. So everyone’s completely aligned and that’s what’s worked.
Steve: He, by choosing to do that, probably gave up several billion dollars, I don’t know, a huge amount of personal wealth, right, to-
Rick: He’s talked about that. He has talked about how much money he would be worth, maybe, if he kept Vanguard as a private company. Now, remember, Vanguard was actually part of Wellington Asset Management so the ownership of Vanguard, I’m not sure how operationally or legally, if he would have been the owner or not, might have been Wellington who actually owned the company, but you know, you’re absolutely right. But then again, if it was full of profit company, would it be the Vanguard that we know today? I would say no, it wouldn’t be. It would look a lot more like fidelity.
Steve: Yeah, right. Well, it’s been a big, huge several decade A/B test between what’s the right business model. All right. Last thing here. He just wrote an op-ed piece saying that hey, index funds may be getting too big, Bogle sounds the alarm that the share of corporate ownership by index fund will continue to grow over the next decade and warns that it’s only a matter of time until index mutual funds cross the 50% mark and if that were to happen, the big three, Vanguard, State Street and BlackRock might own 30% or more of the US stock market and effective voting control. I do not believe that such concentrations would serve the national interests. Any thoughts?
Rick: Yeah, so, I mean, he’s really looking long-term so he’s saying that if Vanguard, BlackRock and … What’s the other one?
Steve: State Street.
Rick: State Street owned 30% of the equity that they would collude together and vote together and therefore control the world in a way. A little bit of a stretch for me, not going to happen in my lifetime, not going to happen in your lifetime, wouldn’t worry about it. And I just think that if it ever actually got to the point where you had some real academic evidence that maybe this was occurring or could occur, I think that we have laws that already would step in to take care of that. So, you know, he only made those comments because of some research that was done but I forgot who the Ph.D. professor was who did the research study but it was in the article that you were reading. They were just raising the red flag.
Rick: Okay, you know, I mean maybe. And maybe there would be some negative negativity to that of some sort but look at the positives that indexing have created for investors and so if this small negative happens to maybe occur, we don’t even know if it will occur or can occur but if it does occur and we have to fix it in some way, the laws I think are in place that could do that. But also, you don’t wanna do anything to indexing and the general nature of it because it’s been such an incredibly large monumental benefit to investors to have index funds.
Steve: Okay. Last question here on financial advice since we’ve been talking about this. Do you think that there is any transformative model along the lines of what Vanguard’s done that causes huge change? I mean, you’re rallying, you got people like yourself and other folks kind of cheerleading like, “Hey, let’s be real fiduciaries here, let’s bring change that way,” and you got competition. Do you see anything else that emerges that’s like, “Hey, here’s a different way of doing this,” that fundamentally changes the whole industry?
Rick: Well, you’ve got the government. You’ve got the courts. And if there is a fiduciary rule, if it ever happens. There will be case law. And that will drive innovation in the industry, drive more people to different models will come out. So, I think a fiduciary rule of some sort is in a way the first step of the government getting involved in this. And part of being a fiduciary, as I say, is looking at all the fees and I think that will circle around, eventually, to make changes to advisor fees.
Steve: Yeah, okay. Well, we’ll see what happens. We’ll be watching. I wanna talk to you in a second about what you’re doing now with Core Four but first, I wanna ask you just a few questions from our users. The kinds of questions, these are specific to people but the kinds of things they’re asking about so for instance, and I know we can’t deliver financial advice on this but you know, kind of general thoughts on this. There are a lot of people out there that are sitting in cash, even since 2008. And if they’ve been doing that and they’re cash heavy and they still have 10 to 20 years until they retire, any thoughts about what they should do?
Rick: If you’ve got that long, again, you’re talking about quite a while before they retire or once they retire, they’re going to live another 30 years, we hope. So you don’t be in too big of a rush to jump out of a market just because it’s gone down 10% after going 200%. But interest rates are moving higher, I shouldn’t say that. I hate to use the words moving because it’s predictive. They have moved higher. And the Fed said that interest rates are going to move higher still. And if we have three more increases, we’re looking at money market rates being over 3%.
Rick: And you know, banks will have to compete against that. So there’ll eventually be CDs that are yielding 4% and if you believe that 4% is all you need to reach your financial objectives, you know, you could shift on any shift money into a less aggressive portfolio and leave it there for the rest of your life. You know, people have done very very well here in the last pull market since 2009.
Rick: Again, you more than doubled your money with dividends reinvested, it’s more like 250% gain. That doesn’t happen in every 10-year period. So, you know, if you wanted to take some money off the table and put it in something that’s yielding 4%, even if it’s an investment grade corporate bond fund which is already yielding 4% right now, that’s perfectly fine but we’re not going to do market timing here. We’re just simply saying, “I didn’t expect to have as much money as I have now because I didn’t expect the market to go up like it did but it did and so here I am, I’m ahead of the game. Let me take some off the table and let me lower my allocation to equity and put it in something that gives me a 4% compounded return with relative safety.” And so it’s perfectly fine.
Steve: Sure. All right. I think that does go to … I think you’ll start to see a lot … Historically, everyone’s been focused on accumulation, right? Save money, invest to some huge number, no one, you know, the financial services industry doesn’t really talk too much about what the right number is, just as much as humanly possible. And you know, I think more and more people are going to be turning and saying, “Okay, well, how do I generate income for a long period of time at least, and how do I cover my guaranteed minimum … How do I cover my minimum needs in a pretty risk-averse way so that I’m not going to outlive my assets and I’ll have enough income to at least get by.” So I think that will become a bigger part of the dialogue for folks and being thoughtful about how to put that together is important.
Steve: I mean our users are typically 50 plus. They’ve got some material savings, over a million bucks and they obviously been saving and planning their whole lives. Still, they’re getting a little nervous ’cause they’re looking forward and saying, “Oh, well, I might live quite a long time here, health care costs, things like that. How do I hedge the stuff, like a volatility inflation?” Any thoughts for folks in terms of positioning themselves to be … To weather this stuff?
Rick: I mean, there’s no general answer for this. And I hate making rules of thumb and you hear a lot about your age and bonds and all of that and I don’t really believe in any of that because everybody has to come up with the strategy that works for them. And it works for them two ways. It works for them because it gives them the required return to get to where they need to go, might be 4%, might be 5% but the portfolio has a high probability of giving them that required a return.
Rick: It also works for them because they’re able to stick with it through all market conditions. So I can’t say when I talk with the client, we’re talking about strategy here. Let me differentiate that between philosophy and strategy. Philosophy is I believe in low cost, I believe in index funds, I’m not trying to beat the market, I’m not trying to time markets, I’m trying to set an asset allocation that will get me to where I need to go in the long run and I’m not trying to be active out there, trying to outperform. I’m trying to keep my cost down, my taxes down, do what I can do. That’s my philosophy, it’s the John Bogle philosophy, the Boglehead philosophy, the Vanguard philosophy, whatever you wanna call it. That’s what it is.
Rick: Now, a lot of people have that philosophy, millions and millions and millions and millions of investors had that philosophy. But I bet you I couldn’t find two investors out of those millions and millions and millions who had the exact same portfolio, the exact same allocation to cash, the exact same allocation to stocks, the exact same allocation to certain sectors within the stock market. Some clients might have some CD money tucked away, somebody else might have an annuity, a fixed annuity tucked away somewhere else.
Rick: When you really get down to it and you put two people together and you look at them, there are no two portfolios that are identical, they just don’t exist. That’s strategy. That’s strategy because each person has a strategy that they’re enacting for their own personal needs. And this is where the financial advisor comes in. The financial advisor’s primary purpose in life is to find out what strategy that this client should use to get them to where they need to go and to help the client implement it if the client wants help implementing it.
Rick: So that’s strategy. So with your question, what should people do? Find the right strategy that works for them.
Steve: First, make sure that they’re set on their philosophy and they understand it, what is active, what is passive?
Rick: Well, that’s true. I would say that … You know, there are people now that are doing passive investing through Betterment and other means that might be in a life strategy fund at their work that is low cost, they don’t even know they’re doing passive, they don’t know. But they just know they’re in this fund because that’s the default fund that the company put them in. But they’re actually doing passive in that fund.
Rick: And I think a lot of the education is, “Hey, do you know how you’re investing, let me explain to you how you’re investing. You’re investing passively, you’re investing this way.” And they go, “Oh, well, that’s pretty good. I’ve done pretty well doing that.” Yeah, good. You’ve just shortcut a whole lot of agony to get to that point.
Steve: Well, here’s a quick story for you. Do you know Rob Berger of Dough Rollers?
Rick: Yeah, sure, I heard about it.
Steve: So, I saw him at FinCon. He sold his company and got a chunk of money.
Rick: He did, I did not know that.
Steve: So he sold his business, he made a chunk of money and people were asking him, “What do you do with it?” And he said, “I chucked it … not chuck but I put it all on the market in the exact same portfolio I’ve always had and that was it.” So obviously, he’s well aware that we’re at historical highs on a relative basis, right valuations but you know, he’s sticking with it. He’s like, “Look, I’m not going to time the market, I have a belief in what I’m doing long-term, this is what I wanna do,” he popped it in there and since then, the market’s come back a little bit. But I’d be curious to see what he says, I’m sure, I can imagine he’d be like, “Whatever, I don’t care. This is my belief system, my philosophy and I just put it in there, right?”
Rick: You might not be right over the next say three or four years but you’re going to be right over the next 10 or 15.
Steve: Right, yeah, exactly. Great. Well, that’s super helpful. I did read that on your site, you’re talking about the philosophy that you choose and then it goes into your strategy and then how that goes into the discipline of actually sticking with it. And it is so hard, I think that’s my big takeaway from talking with people like Jonathan Clements and different behavioral finance people where humans get in trouble is they cannot manage themselves. And I was telling Jim O’Shaughnessy about this who was an active person. He’s like, “Look, I trade against the fact that the humans can’t control themselves.” The human behavior will always be the same. People will freak out and they will sell.
Steve: It’ll be interesting if there was a huge drawdown, one giant experiment will be if there’s a giant drawdown, do people who are passive index folks, can they stick with it and just ride it out or will they sell?
Rick: That’s been the question at Betterment for a long time. Betterment has never gone through a big downturn, you know, maybe a few 10% drops but Betterment has only been around since I wanna say 2010 or so, I don’t know when Jon Stein started Betterment but I think it was back then. First time I ran into Jon Stein was at FinCon, as a matter of fact, I think it was the very first FinCon conference, I can’t remember the year. But I think they had less than 200 million under management, it might have been only a little over hundred million.
Rick: And I met him and I talked with him. And I think I recall talking about this. You know, what you’re doing is very interesting, I wonder how these new investors who are just following your strategy are going to react when there’s a strong market downturn. And again, this was maybe 2011, 2010, there hasn’t been one. So, you know, it’s a good question. I will say that most of the clients that I had during 2008, 2007 time period when the market went down as it did, we lost maybe … I’d say I lost maybe 4% of clients total who liquidated. And then maybe another percent of people who we need to lower their asset allocation. And those are not perfect numbers.
Rick: But 95% of people did nothing. They just allowed us to rebalance, they allowed us to do what we did. And that’s all we did is follow the set of instructions. I mean to me, it was great. Wow, look at the market going down, oh, please, keep going down so that we can rebalance and buy the stocks cheaper. And I was all over the place, talking about this and people thought I was crazy and they thought it was the end of the world and I said, “This is the best time in the world for baby-boomers. You should be taking … Don’t reduce your asset allocation to equity. By gosh, leave it the same. And if you’re young, you should be … Go have the equity.”
Rick: And everybody thought I was crazy but the fact is no, these are just cycles in the market, they work themselves out over time. And you know, if you believe in capitalism, you believe in markets, you believe in the system that we have in this country and all around the world, it’s moved towards capitalism, not away from it. That these things that occur in the markets are transitory and eventually, they work themselves out and stocks go back up to 16, 17, 18 multiples, sometimes they go higher, sometimes they go lower. When they are lower than that, you shouldn’t be selling. You know? That’s the last time you wanna sell.
Rick: When the stocks are high, relative multiples are high and you’re retiring and you might wanna take some money off the table and reallocate some more into bonds permanently for the rest of your life, sure, absolutely. But I remember back in 2008, people were retiring and they wanted to reduce their asset allocations to stocks and I wouldn’t let them. I said, “No. No, stay 60%. You need to stay 60%.” They said, “Well, I’m supposed to get out of stocks because I’m retiring.” Stay 60%. And they did, you know, for the most part, as I said, 95%. And it worked out.
Rick: So, you know, these are just transitory things. And in the long run, stocks outperform bonds, bonds outperform cash. It might take 20 years, 30 years to do it but most of us hopefully have 20 or 30 years. And not follow the instructions. Stay disciplined which is the third leg of the stool. You know, your philosophy, if you have the right strategy, discipline, staying with that strategy, the discipline of staying with that philosophy is critical, it’s one of the three critical keys, the three elements of successful investing.
Steve: Yeah, well and that goes to, I think, a huge component of the value here that we’ve talked about which is the human managing the behavior, having the advisor almost be a fireball for keeping the consumer from shooting themselves in the foot which is what they’ve done historically. Now that people have seen more volatility and people have more investors that lived through 2008 to 2010 or 2009, they’ll see that it can look like the world is ending and it actually works out okay.
Rick: Interesting, though, there’s a lot of young people in their 20s who watched their parents go through 2007, 2008 and they decided that they weren’t going to go into stocks. This is not any different than the generation that watched their parents lose everything in the Great Depression of 1929 to 1932, 33. The generation after that who were investors, who watched their parents lose everything, they didn’t go into the stock market. And it took until around the 1950s, late 1950s, early 1960s before you saw more people come back into stocks. And so these big generational shifts also occur.
Rick: So I was actually shocked. I mean, young people who were telling me or told me that they didn’t wanna be in stocks because they watched their parents lose money, I’d say, “It’s unfortunate your parents lost money, they shouldn’t have. They shouldn’t have. They didn’t have a philosophy, they didn’t have a strategy, they didn’t have the discipline and they maybe had an advisor.” I mean, it’s lots of different types of advisors out there. They maybe had an advisor who is worse than they were. You know, when I was a broker, you know, my office manager would get up in front of all of the brokers every Friday and we’d have an office meeting but the meeting was all about how to generate revenue for the firm and the bottom line. So if the market was going down, he’d say, “If your clients wanna sell stock, you agree with them, you sell. And if your clients think this is a buying opportunity, you agree with them and you buy.”
Steve: You’re just acting for whatever they’re doing.
Rick: Yeah, you’re just a window to their emotions and the way we make money in this industry is getting them to do, to act one way or another and therefore, we make commissioned dollars on that. And if they ever say, “I don’t really like this particular investment, it’s not performing well,” it’s a great opportunity to get them out of that and to get them into something else, some other mutual fund that has a 6% load. And, you know, they’ll forget over a two- or three-year period that they paid 6% load and they’ll be ready to pay another 6% load and that’s how that industry works.
Rick: So there are two different types of advisors. So when you’re talking about the advisor who is handholding the clients and educating them and coaching them, that is the right type of advisor, that’s somebody who’s being a fiduciary. Unfortunately, I think they are a minority. You’ve got maybe 100,000 or maybe even less, maybe 60,000 fiduciary advisors out there and 550,000 people who are doing something else.
Steve: Yeah, right. Yeah, salespeople or whatever it is.
Steve: Okay, oh good. Well, hey spread the word. So I’d love to talk to you about Core Four and what that is and where you’ll go with that. Can you just give us a quick overview of what it is and how it works?
Rick: Yeah, about 10 years ago, we were talking on the Bogle Heads Forum which is an online forum at bogleheads.org for anybody to get on and read. It’s all free, it’s a peer to peer free advice, it’s all very good, high-quality advice, no commercialism. And we were talking on there about simple portfolios and how to create a simple portfolio. And I came up with this idea of a four-fund portfolio with US stocks, international stocks, real estate through real estate investment trusts and then an aggregate bond fund. So that would be your bond portion.
Rick: So three stocks, one bond. And I looked at it and I said, “Oh, I think I’m going to call this Core Four.” For lack of a better word. This is my core four portfolio. So I started writing about the core four and I put it out there, and it’s all free. I mean, I wasn’t running any money based on Core Four, I was just putting it out there for the general domain. I said, “This is a simple portfolio, it’s four separate asset classes.” And you do have some real estate exposure in the stock market but not a lot, most of the real estate … The real estate is probably 15% of the US economy. It’s only like 3% of the stock market so you could increase your exposure to real estate by buying a 10% position and say.
Rick: And so I had that in there and I said, “You got real estate, you got US stocks, you got international stocks, all very low-cost index funds, you’ve got this total bond market index fund which you’d have treasuries and corporates and mortgages in there. It’s all very low cost. You have an allocation to those four funds and you just implement it yourself and you rebalance once a year and you forget about it.” And that’s it. Called Core Four. And the next thing I know, the idea of the core four was self-managed, low cost, low maintenance and understandable because they’re so distinct, the asset classes, US stocks, international, real estate, and bonds, that it’s easier to … It makes sense and easy to understand. And I kind of left it and I didn’t do anything.
Rick: Well, over the next seven or eight or nine years, I keep getting calls to be interviewed by various journalists about the Core Four portfolio. And I keep reading the Rick Ferri Core Four Portfolio says this and the Rick Ferri Core Four Portfolio says that at all these different places and I realize that a lot of people actually were using it and they were running with it. So, after I sold my company, I decided to go out and trademark Core Four and create some other Core Four portfolios, maybe for different folks. There’s like an ESG portfolio for people who are socially conscious, Core Four, there is a high-income portfolio for people who are on higher income.
Rick: And so I created six different Core Four models and I created the website called Core Four which is core-4.com. And I said, “Here it is, go do with it as you will, here are some funds that would fit each of these categories and this is how you use it. Here you can even backtest it through portfolio visualizer if you wanted to. Here is everything, go out and be happy and use it.” And so that’s what it is.
Steve: Nice. And do you see it becoming a business or is this really an educational thing to help people?
Rick: Yeah, so my big thing though as I’ve been turning … You know, I turned 60 this year is a portfolio simplification. I’m going to go through them, if you don’t mind, give me a minute to go through the four stages of index investor education, there are four stages to it. Okay? And if you don’t mind, I’m going to talk about the four stages, okay? So the very first stage is darkness. And in darkness, you really have no idea what you’re doing. You’re just taking the advice of whoever tells you to go buy this or you might read a Money Magazine article. I hate to pick on Money Magazine but why not? Go buy this stock or go buy that mutual fund or you might get a broker who says, “Go do this, go do that.” Or a coworker might say, “Go do this.” And you’re not really giving it any thought, you’re not aware how it all works. You’re just basically allowed to do what other people tell you to do. That’s being in darkness, so that’s phase number one or stage number one is darkness.
Rick: The second stage is called enlightenment. And what happens in enlightenment is you become aware. You say, “I need to learn about what I’m doing,” and you start to ask questions. Instead of just accepting answers, you begin formulating and asking questions. And if you do that enough, and if you start studying, you start reading and you start looking and you start measuring and that’s the really important part, you start measuring your performance and what you’re buying and what you’ve bought against appropriate market benchmarks which you’re reading about and learning about, eventually, you’re going to come to the realization that you’re not doing very well.
Rick: And eventually, if you keep on going with that, you’re going to realize that the reason, you’re not even keeping up with the markets. And then, you’re going to start reading about indexing and index funds and it’s going to occur to you that if you want to do better, what you gotta do is do what the markets do. And so, therefore, all you should do is go buy index funds and nothing else. The aha moment. Enlightenment, it’s like the clouds clear and an array of sunshine hits you in the face, you’re like, “Oh, I get it, I see it. This is it. Low cost, indexing, yeah, I see it, I understand.”
Rick: But, unfortunately, what happens is a lot of people, once they get to that stage, they go to the third stage and the third stage is called complexity. Complexity. They make it much much more difficult than what it needs to be because they start reading all about index funds and they start reading about factor investing and reading about optimal asset allocation and they try to come up with the perfect portfolio, the perfect plan, the perfect funds. Should I have 13.2% in emerging markets or 13.4%? I just can’t make up my mind, I’m going to lose sleep over it.
Rick: And this can go on for years and so their portfolio kind of changes and it shifts and, “Oh, I should have commodities, no, maybe I shouldn’t have commodities and I should have a high yield or no, I shouldn’t have a high yield.” And they’re back and forth but they’re making it way, way, way too complex. But if you do that enough, as I did, you get to the fourth stage. And the fourth stage is simplicity.
Rick: None of that stuff makes any difference, really. In the end, what matters, what is your stock allocation, what is your bond allocation, how much you’re going to hold in cash? Whether you should have the S&P 500 as your stock allocation or a global equity index fund as your stock allocation or the total US stock market fund as your allocation doesn’t matter very much. On the bond side, whether you have a laddered CD portfolio or you have a total bond market portfolio or you have a corporate bond index fund portfolio, whatever it is, as long as you’re consistent with it, it doesn’t matter. And the bottom line is, you have your allocation to stocks, your allocations to bond, you have the cash allocation that you need to live on. And you don’t change it and you make it all very simple again.
Rick: And therefore, you can be disciplined about what you’re doing and disciplined about the philosophy and now you’ve gotten back to … You’ve got the philosophy, you now got the simple strategy and now you have the discipline in order to keep both of them because you’ve made it simple and so those are the four stages of index education.
Steve: That is super helpful to hear in your own words, that’s awesome.
Rick: I’m writing it … I’m writing a book on this called The Education of an Index Investor so hopefully, it will be out in a few months. So anyway, that’s … I forgot how we got onto this.
Steve: No, no, no, no, it’s good. Well, actually, back on this, to say that someone’s gone through those four stages and then doing the right things and then they get to, “Hey, I’ve been accumulating my money but now, I wanna start to decumulate this.” Do you think people should stick with that and just draw off or use some kind of bucketing strategy or use some annuitization on layering of income? What’s your … And it obviously depends on how much money you have and what your needs are and anything else.
Rick: It gets back to strategy. I mean, your strategy for a distribution, you’ve had a strategy for accumulation, now you need a strategy for distribution. I can’t say do this. I can’t say, a rule of thumb, everyone should do 4%. I can’t say that. You need to figure that out for yourself, is it putting some money in a single premium deferred annuity or single premium immediate payout annuity. Maybe. Is it just taking 4% off the portfolio, maybe? I know you had Allan Roth on. Alan believes that when you sell some stock fund, it’s the same as taking a dividend and he’s right.
Rick: I mean, so how you do that, how you get the money that you need to live on out of your portfolio, again, is your own strategy and you have to come up with your own strategy in order to stay disciplined about doing it. You know personally, for me, I haven’t even decided that myself yet. How I’m going to take money out of my portfolios to live in retirement. Hopefully, I won’t have to take any money out for the next 10 years out of my retirement portfolio. So I haven’t had to think about it. But anyway.
Steve: Yeah, well, I think there’s actually a lot of data that shows that people that do save when they go to retire they keep accumulating money until they pass away and they end up with a lot more money than they anticipated. I do think we wanna see that. I think the savers that are out there, I think we’re going to see many people that end up with huge piles of money.
Rick: I tell a lot of my clients this when, you know, over the years, I said, “You’re going to die with more money, much more money than you have right now.” And they would ask questions like … They were kind of silly questions in a way or should I gift my grandchildren $500 at Christmas time or should I wait and give it to them as their inheritance. You know, give them the money. When you’re dead, you’re going to have so much money, they’re going to get so much money anyway, it’s not going to make any difference, just give it to them.
Steve: Right. We talked about Merton a little bit as well, the people that have money and have saved it up, they can make better use of it in many cases for their family if they felt more comfortable about the right time and how to deploy it, what’s their strategy for deploying it and sharing it, if they wanna do that, if that’s in their interest. Along the lines of, “Do I give someone a gift or do I help someone buy a house,” and things like that ’cause the reality is, as you get older, you don’t necessarily need as much money. You actually end up spending less money and so you have a population of people that have millions of dollars but actually, they’ve just been great savers and everything else.
Steve: And then you have a bunch of people that could use it but they haven’t earned it yet. I mean-
Rick: They didn’t save it.
Steve: They didn’t save it. That’s a whole … We leave the whole family dynamic out of this for now. Well, that’s super helpful to hear. So, as we wrap up here, any kind of key influencers or communities, obviously Bogle Heads that you mentioned, right? You’ve been active in that for a long time.
Rick: Many, many years, yeah.
Steve: Any other great resources out there for folks as they go on this path of getting educated and trying to do the right things?
Rick: Well, I will give another plug to the Bogle Heads because you brought them up and I have originally brought them up. This organization is amazing. There is no commercialism in it and they will not allow any commercialism. It is one investor helping another. And people might think that, well, what does an individual investor know? I will tell you the cumulative knowledge of the Bogleheads in the forum, it far exceeds, far exceeds the professional knowledge of Wall Street by a number of-
Steve: Order of magnitude.
Rick: Orders of magnitude. You go on the Bogle Heads forum and you ask a simple question and you say, “Look, here’s my portfolio, this is my situation, this is my age, this is how much I’ve got or whatever and these are my 401 key choices, what do you think I should do?” You will get the best investment advice for free that you can get anywhere. Bar none.
Rick: So, I don’t think a lot of people actually know of the Bogleheads or might think that it’s funny, I know that there are some advisors, believe it or not, that are absolutely death-hate the Boglehead because those advisors are charging commissions and fees and all the things that the Bogleheads hate. So, therefore, they hate the Boglehead. So anyway. So I think that that’s a good place to start and they, of course, got a big library of books and here are your go-to resources and all of this. And now, we started the podcast, the Bogleheads on investing podcast and you know, it’s all good. And it’s all free. And it’s all for one purpose. To help individual investors make sound investment decisions.
Steve: Yeah. Yeah, I had Jim Dahle from White Coat Investor on the podcast, recently recorded. And I know he’s really active in the community as well. So, maybe you can do me a favor which is … Dahle sorry, Jim Dahle. Just pronouncing his name.
Rick: That’s okay. I think his name is Jim Dahle. Dahle isn’t-
Steve: I think it’s pronounced Dolly. D-O-L-L-Y.
Rick: Oh, is that how he pronounces it, okay. They didn’t realize that.
Steve: I would say we’ll have to edit this part out, we’ll probably leave it in as like, hey, we got it wrong. That guy’s been … He’s been doing a ton of good stuff, by the way, he’s a pretty interesting guy.
Rick: I remember, when he was going to write his book, The White Coat Investor, I was talking with him, I believe it was in San Diego, must have been 10 years ago and when he was thinking about writing the book because I had written a couple of books at that point, two or three books. And so we had a discussion about it. And you know, that’s when The White Coat Investor, I don’t know if his blog was … Yeah, I mean, he was just doing something on the Bogleheads as the White Coat Investor and then he started his own blog. Yeah, he’s become very successful.
Steve: He’s got a million visitors a month. So he’s doing a lot of good things. And I told him this, too. I got myself banned from Bogleheads because I had a user … some of our users were on there and asking a question about a software and I read the best practices and said, “Hey, if you identify yourself as the founder and address just the question and answering and clarify it, that’s okay,” I tried to do that, this was several years ago that. And they were like, “No,” and he’s like, “Well, I’ve gotten myself banned too but he can get himself unbanned.”
Rick: But I’ve been banned, too, so don’t feel bad.
Steve: All right.
Rick: I was banned, I recall being banned one time. And you know, they give you … You can come back on if you want.
Steve: I feel like I’ve been banned for like … Maybe we can see. We’ll see.
Rick: Well, what happened to me was, I wrote a blog. When I first started blogging, I don’t know when it was, 10 years ago, I put the blog on my business website at the time, my RIA business website. And I went on to Bogleheads and I said, “Hey, go read this blog, this is what it says,” and it directed people over to my business website. Immediately got banned.
Steve: Banded, right exactly.
Rick: So, what I did was I went out and I started a new website, I called it … The website is rickferri.com and still exists right now. And not a lot on there but it exists. And I started blogging on that and I blogged on Forbes. So because I wasn’t blogging on a commercial website for a business because it was just my personal website-
Steve: That was okay.
Rick: And because I was blogging on Forbes which is media website, that was all fine. And so all these rules are sort of written as you move along, you learn how to … But I’m back in good graces again and you know, as you said, other big Boglehead contributors are Jonathan Clements and Allan Roth, Bill Bernstein. And so you’ve got a lot of people on your show already that are community.
Steve: Okay, if there are any Boglehead listeners out there, what I want is for people to check out our or actually give feedback on what we’re doing around planning ’cause we’re trying to deliver this low cost, very efficient, well, it’s free, a planning tool that works for anybody. But, you know, that’s my … So I will be upfront about my agenda but I do think there’s a huge amount of knowledge out there and it’s clear that it’s spawned a lot of great things. So hopefully, people can get behind it.
Steve: I mean, people, there is some discussion of it and we’ve had Bill Bernstein on. I think that was pretty well received in the Bogleheads community, there was a lot of discussion about his podcast and there probably will be of this one.
Rick: No. I hope so. But who knows.
Steve: Let’s see. All right. So awesome. Well, this has been super helpful and great to hear in your own words kind of your point of view and I think it’s also refreshing, one thing we have on here is a lot of folks that are financially independent so they can say and do whatever they want and hearing what they see and do, it’s always enlightening. If they’re focused on purpose or if they’re focused on bringing, kind of shedding a bright light on the practices of an industry or whatever it is, it’s always interesting to hear how people look at their lives and how they’re spending their time. So that’s been great.
Steve: So any questions for me?
Steve: No. All right. No worries. It’s all good. All right. So thanks, Rick, for being on our show. Thanks, Davorin Robison, for being our sound engineer. Anyone listening, thank you for your time, hopefully, you found this useful. Our goal at NewRetirement is to help anyone plan and manage their retirements so that they can make the most of their money and time and if you’ve made it this far, I encourage you to check out bogleheads.org, check out Core Four, core-4.com where you can find Rick’s work. And also, check out our site and planning tool at newretirement.com where you can build your own plan for free. And if you wanna, take advantage of our premium advanced tools and personal support. And finally, you can check out our Facebook group and invite us on Twitter at NewRetirement. So that’s it. Appreciate your time.