Welcome to Mr. Stillman's Opus with John Stillman. Of course, Rosewood Wealth Management and, of course, Rosewood Wealth Management is where you'll find John most of the time. John, I know that you love going to the grocery store. I mean, I don't mind it.
I don't know if I would say I love it. You don't actually enjoy grocery shopping? I guess it depends on what I'm shopping for. Well, the retirement grocery store is something that we can discuss today. And I'm just wondering if you can explain to us, how is planning for retirement like going to the grocery store? Well, first, let me say that you won't remember this, but I remember this was probably at least 10 years ago, probably more, at least midnight, probably later. I'd had to run in the Food Lion, which is close to your house. I'd had to run grab something at Food Lion. I think I was sick and I was getting some kind of medicine or something. And you were in there at midnight, on a weeknight, just kind of aimlessly shuffling up and down the cookie aisle. Are you sure it was the cookie aisle? I was like, Ron, you have to be on the air at six in the morning. Why are you at Food Lion after midnight?
I don't remember you having a very good explanation for that. I'm sure my wife had sent me there to get something. Probably so. I'm kind of a night owl.
If I didn't have to get up so early in the morning to do a radio show, I would be up like that every night. But first of all, if you go to the grocery store, and it's the same with retirement planning, you need to know what you need. Well, you know how they always tell you not to go grocery shopping without a list, right?
And also don't go hungry because everything looks good, right? So if you go without a list, what's going to happen? First of all, you're going to forget stuff that you needed. You're going to be all over the place.
Yeah, you're going to get homes, ah, I forgot the garlic cloves or whatever. You're also going to buy stuff that you didn't need. Right. Because as you're trying to remember everything you need, you're going to be going up and down all these aisles trying to make sure you didn't forget anything. You're going to see other stuff in the process that looks like something you probably could talk yourself into getting.
Right. So you're going to get stuff you don't need, and you're going to forget stuff that you do need. So let's apply that same principle to retirement planning. So often people don't know what they need their money to do. They just assume, well, I want it to perform well.
Okay, well, what does that mean? Do we want long term growth? Do we need a hedge against long term care costs? Do we need that money to create income for you? A little bit of all of these things, like what is it you need your money to do? And so often people will come in with a few hundred thousand dollars and say, how would you invest this? Well, I don't know.
What do you need it to do? Let's make a list. Let's make a grocery list of everything that you need this money to accomplish for you. That then is going to dictate how the money should be invested. It's not just some argument of, well, I can make your money perform better than this guy over here.
What kind of meaningless discussion is that? Until we know what it is you need that money to do, how can we gauge whether it's performing well or not? Well, that makes perfect sense. Also, I guess when you go to the grocery store, and certainly this would apply to retirement planning as well, make sure everything fits together. Yeah. So again, let's say you're operating in the grocery store without a list, which I know you never do.
No, never. You just kind of aimlessly walk around and you fill up your cart with a lot of stuff that looks good, but maybe it doesn't necessarily go together. Right. So you might end up with a really nice looking pineapple and you'll have some some cheeses and maybe a tub of yogurt, maybe some of those cookies that you were looking at that late night.
That I can't remember. None of these things are individually bad. It's just they don't go together to make a meal.
What kind of meal are you going to make out of cookies, pineapple, yogurt and cheese? I'm sure there's something, but it's probably not very good. Well, same problem that people have in their portfolio. You have this hodgepodge of different products that you've collected over the course of your life, and all of them might have their individual merits, but they don't fit together cohesively. Let's say you went to a dinner workshop and you got an annuity from this guy over here. You went to another dinner workshop and you put a couple hundred thousand in these mutual funds with this lady over here. And you end up with this non-cohesive portfolio where all the pieces aren't working together. They're just things that don't really have any direction or specific use. And so that's the same as having your cart full of stuff that doesn't really go together to make a meal.
It could be that you have all carbs. Maybe it's different products, but at the end of the day they're all doing pretty much the same thing. Or maybe you have products that are doing a lot of different things, but maybe some of those things aren't jobs that you need done for you. So you just have to be careful that you don't have this random assortment of groceries in your shopping cart or in your financial cart. There are some people who go to the grocery store and have a, well in the old days they'd have a calculator in their hands. These days I suppose you could probably add it up on your phone, but some people meticulously add up every item before they put it in their grocery cart. And they know exactly how much they're going to be paying when they go to the checkout counter. I am not one of those people.
But you also, in retirement planning, you should know how much you're paying. Well, so when you go grocery shopping, and I don't know how much of the grocery shopping you do in your house. A lot. I'm guessing you're probably responsible at least for the fudgesicles.
I know you always have fudgesicles in your freezer. I'm actually responsible for most of the grocery shopping in my house. How did you end up with that job?
I actually enjoy it. And I'm usually home at the end of the day. And my wife tends to work late because I go to work really early and she has always gone in later. That started way back in the day when we had kids. She would take care of them in the morning and I would take care of them at night.
So it kind of evolved from that. On a separate note, I'm just now putting the pieces together as to why you guys have been able to stay together so long. You always were gone in the morning. She was always gone in the evening. She never had to see you.
That's true. It's really worked out well. I've always said she's a really tolerant woman because she's been nearly 36 years. 37 years.
That 45 minutes a day that she has to put up with you is manageable. And half of that I'm asleep. So you said you're not the person that knows exactly what the total is going to be when you get up to the register. I have an idea but I don't really know. Exactly. So you wouldn't go up to the register expecting it to be $22 and it's actually $100. No. You're not going to be that for all.
Certainly not. You might expect it to be $20 and it's closer to $30. Yeah. But that could happen or you might think it's going to be $60 and it's only $48 but you're not going to miss by a multiple of four or five.
I'll have a good idea. Yeah. So anybody that's going to go grocery shopping is going to have a rough idea of how much those groceries are going to cost. You're not going to be taken completely aback when you get up to the register and find out that it costs four times what you thought.
That just doesn't happen. Well in the financial world people often have no idea what it's costing them to have the financial products that they own. It's like they're not paying any attention to the price tag of the stuff that they're throwing in their cart. So in a lot of cases you end up paying $100 for financial groceries that you thought were costing you $20.
Yeah. Because you didn't understand the costs or the fees associated with those particular investments. So it's just one of those things you want to be paying attention for. Don't just be aimlessly grabbing financial products off the shelf. Be sure you understand what they're costing you. Another thing and the last thing I want to ask you about here, the way grocery shopping and preparing for retirement are sort of the same thing, the cheapest option isn't always the best. I mean we know that with food and I guess it's that way with retirement planning as well. Well and also the most expensive option is not always the best.
No. You really have to look at it on a case by case basis. Let's use the grocery store example. Sometimes you have the store brand and the name brand. In a lot of cases those two products are exactly the same thing. They're made at the same factory in the same plant. They just have different packaging.
That's literally the only difference in some of those cases. If the packaging was gone, a chemist couldn't tell you the difference in one product or the other. Now that's not the case in all of those products. There are cases where the name brand is going to be a lot better than the store brand. Or it could just be that there's a higher cost product but it's higher quality, natural ingredients instead of artificial preservatives and processed stuff. So there are times where you should go with the cheaper product because it's literally the same thing. There are other times you should go with the more expensive one because it really is a better product.
Well again, same thing in the financial world. Sometimes you're paying more than you should be paying and for no good reason. It's like you're buying the name brand when you could get the generic brand that's exactly the same thing. This applies with prescriptions too. A lot of times you can get medication, get the generic brand and it's the same thing.
The chemistry is exactly the same and does the same thing for you as the name brand. But it costs 20% as much. Yeah, if that much. So sometimes you should go with the cheapest option. Other times you might want to pay more.
Maybe the advice that you're getting from a particular advisor justifies a higher management fee than you could get somewhere else where the service is terrible. I always like to compare it to the landscaper. So let's suppose you have a landscaper who says, Alright, I will cut your grass for $100 a month.
And he comes by and he does that. He cuts your grass for $100 a month. And you compare that to another landscaper who says, Well, I charge $140 a month.
Well, if you're just looking at it on the surface, you're going to go with the guy who charges you $100 a month. But what if the guy who charges you $140 a month is also going around and picking up any trash in the yard. He's scooping the dog poop for you before he mows.
He weed eats well around the bushes. He runs the edger on the sidewalks and along the driveway. He comes by in the spring and trims your hedges. If you have snow in the winter, he'll still come by and scoop some of the snow for you and make sure that your driveway is clear. He's doing a lot other than just cutting the grass. And so when we look at that as not being an apples-to-apples comparison, now we understand why, Yeah, this $140 for all of that actually seems like a better deal than the guy who's just going to mow and nothing else for $100. Right? So in the financial realm, you have to understand not only what you're paying, but also why you're paying it.
It's more about value than it is the actual price. Well, going to the grocery store and preparing for retirement, there are a lot of similarities there. You need to look for some of the same things. Thank you, Mr. Stillman, for pointing all that out. Always a pleasure, and we'll see you at Food Lion tonight.
After midnight. This is Mr. Stillman's Opus. You can also read John's blog, The Financial Beat, here on rosewoodwealthmanagement.com. I'm Ron Stutz, along with John Stillman of Rosewood Wealth Management. Thanks for listening.
Whisper: medium.en / 2023-11-27 02:43:25 / 2023-11-27 02:48:56 / 6