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A Tennis Lesson for Investing

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
August 2, 2021 8:03 am

A Tennis Lesson for Investing

MoneyWise / Rob West and Steve Moore

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August 2, 2021 8:03 am

When studying the book of Proverbs, we find that wealth gained in haste is never a good idea. Instead, proverbial wisdom indicates that patience is a virtue when it comes to investing. On the next MoneyWise Live, host Rob West welcomes investing expert Mark Biller to tell us how to avoid impatience when dealing with the stock market. Then Rob will answer your calls and questions on various financial topics. That’s MoneyWise Live—where biblical wisdom meets today’s finances, weekdays at 4pm Eastern/3pm Central on Moody Radio. 

Rob West and Steve Moore
Rob West and Steve Moore
Rob West and Steve Moore
Rob West and Steve Moore
Rob West and Steve Moore
Rob West and Steve Moore

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Patience is a virtue by Rob West. All too often, patients can be costly especially if you're trying to time the market expert Mark Miller joins us today to tell us how to win at that game without really trying minutes of your calls at 800-525-7000 800-525-7000. This is moneywise live with wisdom for your financial decisions.

Well Mark Miller is the executive editor of sound mind, testing where they found an interesting analogy to investing in of all places, competitive tennis, welcome back. It's great to back with the Rob so let me guess. Stock prices go up and down like a tennis ball going back and forth over the net.

Maybe something like that. Now, although I kinda like your analogy actually now were referring to here today.

Rob is investors trying to beat the market. And just like with tennis players we could say that there are amateurs and there are professionals that are both trying to win at that game.

But you know beating the market is really hard and the inconvenient truth of professional investing is that most actively managed investments and were talking about most mutual funds, advisor portfolios, newsletter, strategies, and so on. And most of them failed outperform the broad market over time and so you know we had this set up where traditional money management is largely based on the assumption that professional managers can consistently beat the market through their research and risk-taking and exploiting the mistakes of other masters and so on. And while some do for a season, at least you know, this assumption has largely been debunked overall. And so for many investors than the secret to winning this money game may be and not trying to win interesting and I suspect this is where we get a tennis lesson exactly right.

So we have to go back to the 70s where this electrical engineer wrote a book on tennis strategy for amateurs is called extraordinary tennis for the ordinary player and in it he talked about how amateur tennis is really a loser's game, which means that most of the points about 80% of the points and amateur tennis are actually one by the other player making a mistake. So for amateur players. He made a very strong argument that the key to winning isn't actually in trying to hit all these winning shots.

It's let your opponent beat himself by not making mistakes yourself and waiting for them to make a mistake tonight contrasted that kind of loser's game and amateur tennis with the very competitive winners game of professional tennis and whereas with the amateurs.

80% of the points were basically lost by the opponent and professional tennis. About 80% of the points were one by one of the players making a particularly powerful or well-placed shot so the experts when points the amateurs lose points that say because obviously we would think that anyone playing tennis would want to win points but in the amateur category that's clearly not what they found. Yeah that's exactly right. It was it was this wild symmetry really of about 80% losers on the amateur side winners on the professional side and so as we tried to relate this to investing. We need to turn to another book which is pretty famous called winning the loser's game by money manager Charles Ellis so Alice took this tennis work and applied it to the investing arena. He noticed that it was about 80% of the stock and bond managers were underperforming their respective markets and so in their efforts to score points if you will for their shareholders. They were kinda doing the investing equivalent of hitting the ball out of bounds or hinder the net and so to Alice, it seems clear that investing had actually become a loser's game interesting.

Well, just around the corner will apply this to today's investment decisions. Should you be seeking active professional money management through mutual funds.

Should you go the passive index approach will apply these tennis lessons in this fascinating research to the investment decisions you're making right now our guest today is Mark Dillard Park is executive editor at soundbite investing stay with us much more to come on moneywise live bag joining us in this segment of the broadcast. Our good friend Mark Miller, executive editor at soundbite investing today were talking tennis well how investing he relates to tennis and market outlook for you to take what you share.

Just before the break about this fascinating research about amateur versus professional tennis and apply it to today's investing decisions, whether we choose active managers or passive indexed approaches which seem to be gaining popularity yeah sure so and I think the kind of put a bow on and what were talking about earlier. One of the things that isn't necessarily obvious to today's investors is just how much the investing landscape has changed and this is one of the things that that Alice was really getting to in his book, which was in.

I think a lot of investors would think well if all this is true then why why are there all these active managers you know how did this industry develop the way it has an and one of the things Ellis points out in his book is that a few decades ago, the industry is totally different. You know the active investment manager. At that point was competing with a totally different group of investors.

There were a lot more amateur investors. Lotta cautious custodial type managers and so was a much easier game for the professionals.

Quite honestly, because they're competing with lower competition. Basically, it was easier to beat the market when that's just simply not the case anymore. You know today's investing arena. You've got thousands of professional investors, hedge funds, mutual funds, pension funds that are in there all day every day in an incredibly intense and competitive way. And so that's really that the biggest reason why think Ellis is saying that especially for individuals trying to compete in that arena is super difficult and the odds of an individual just actively kinda winging it and picking stocks in doing that kind of stuff you just have to realize who you're competing against. On the other side of those trades and it's a very difficult playing field. As a result of all that is his main argument is that investing for individuals has really become a loser's game like amateur tennis. So just like an amateur tennis playing that loser's game means minimizing your mistakes and being patient not trying to hit all these winning shots not trying to figure out all of these you know clever investment ideas and strategies you don't have to try to win points all the time as an investor. Instead, he's suggesting the. The more amateur loser's game approach for today's individual investor so Mark, what is that look like for the average amateur investor to play the loser's game.

Yeah, I think the obvious application that Rob is to rely primarily on low-cost index funds, and those index funds offer a lot of distinct advantages. One of which is there very easy to set up into a simple portfolio maintenance on that kind of a strategy is very easy because usually all it needs is maybe once a year annual rebalancing of a few funds and you know this type of basic approach has done really really well over the last especially dozen years or so and that's really the big reason why index funds become so popular in 401(k)s and other retirement plans anywhere really where individuals have to figure out their own investing path. Yes, we of course though don't want to throw the proverbial baby out with the bathwater that you're not say Mark that all actively managed funds underperform correct yeah that's right. And you know to be fair some kind investing relies primarily on active strategies. So I'm kinda talking against my own book here but you know one thing that I think it's easy to forget, partly because indexing has performed so well in recent years is there are periods where that flips and reverses you know that the entire decade of the 2000's. The S&P 500 index provided negative total returns for that whole decade.

He put money in at the beginning of the decade you are down at the end of the decade, and that was a time when our active strategies did really really well. So there are some cycles to this performance back and forth. Even though indexing over time has outperformed as a whole active management. I guess Rob you know we'd be more inclined to use this information to point out that there is a diversification benefit, at least potentially to including more than one approach in your portfolio, you might want has some index funds and some actively managed strategies or funds in again though, I think the big take away for today is that individual amateur investors are just going to have a really difficult time trying to be active on their own. If you don't have a specific process that you have some reason to believe is going to provide an edge then you just have to think about who's on the other side of this trade that I'm making right now.

And chances are it's a high-powered institutional investor with all of the their research and and that money can buy at his fingertips. And you know you're playing against professionals. Most of the time when you're trading in the market well.

It also underscores the opportunity to have some professional expertise that's helping you navigate this talk for just a moment Mark about the work that you do at soundbite investing in actually being that screening to select those mutual funds. Yeah so are approaches tend to be mechanical so were trying to take a lot of the emotional decision-making out of the process and were looking for these small edges that have held up over time that we can implement in a mechanical way were not trying to hit the ball out of the ballpark, but if you can string together a lot of singles and doubles. You can do really well as a long-term investor very different from a short-term trading strategy that's not what were talking about and some people can do that well. But that's not a game that we try to play but we do think there are places where individual investors can pick up an edge by applying consistent discipline and I would say that that discipline oftentimes. But what really both the buy side, but also a sell side discipline to force yourself to get rid of investments when certain indicators say it's time that can be a really big part of an investment process both to protect an investor and just to keep the performance gains piling up consistently over time. Good, but Marcus is been really helpful and I think about you as folks think about taking a properly diversified long-term view of investing, they need to recognize the investment landscape has changed, but there are more opportunities than ever to avail yourself of professional expertise to help you navigate this because this is a high calling managing God's money would certainly want to follow biblical principles that handle his money away that seeks return to it in a way that's wise as well Mark, we appreciate you as always stopping by today has been fascinating as we compared Dennis to investing Bridget to be here, absolutely.

Thanks Remi on our books. If you want to learn more about Mark Miller at soundbite investing. You can read about today's topic and their investment The article is called the loser's game that can make you a winner. Delighted to have you with us today and moneywise live from last taking your calls and questions today as we turn away from active versus passive management and tackle whatever's on your mind will do it from a biblical perspective that's with this program is all about recognizing God owes it all. We are stewards and how can we accomplish what he has for us using his resources because here's the bottom line.

Money is a tool to accomplish God's purposes.

It's a means to an end. I would put forth that it's not an end in and of itself and its most effective when it's a means to an end and that into something other than us when we use it to meet the needs of our family, but also when were a pipeline into God's activity through our giving, but there's clear principles laid out in Scripture about how we should handle God's money. What is it look like to save it well and giving generously and use it prudently live with contentment and I would say hold it loosely as well. We want to explore all of these themes in the context of your financial question so give us a call today. We got the blinds open.

Here's the number 800-525-7000. That's 800-525-7000. We Artie got a number of calls lined up.

We have room for you as well but were going to begin today in Iowa and Kevin. Welcome to the broadcast. How can we help you. Hi, I have a small 401(k) account last year had 21,000 minute when I just got the statement other day I lost about $3000 so I don't know much about investing so I didn't know what I can do with it. Yes, very good. So this 401(k) is with the company that you no longer work for is that right yeah I wish I work for a bank and it taught bankers trust their retirement okay yeah very good and have you moved to a new company that also offers a 401(k), no, no, I'm not disabled. I see I'm sorry to hear that you got to basically I think the best option is for you to roll this out to an individual retirement account, an IRA where you then would open up yourself to any number of investment options any stock, bond, mutual fund exchange traded fund, essentially, that you like and even other asset classes.

If you want to do so gives you ultimate flexibility over what it's invested in and what you're going to pay to do that, depending on whether you do that yourself in a passive approach or choose an actively managed mutual fund or even if you are bidding on the asset level you have you hired somebody to manage it for you. You have control over the fee structure and how you handle that moving forward.

What is the balance roughly in this 401(k), its 18 towels okay right and you know I think at this point. What I would be looking to do is perhaps one of two things. If you wanted to be a little bit more hands-on, but with a guided approach. Our would be delighted to help.

Through the sound by the best newsletter you get plenty of recommendations based on your age and risk tolerance goals and objectives on some very high quality, low-cost mutual funds that you could select and you could purchase those once you rolled this out to an IRA at really at the custodian of your choosing. You could put it at a Vanguard or Charles Schwab or TD Ameritrade really any of the low-cost brokerages. The other approach would be more passive where you're basically deploying an investment strategy.

I've talked about this so often on the broadcast is what is commonly referred to these days as the Robo advisors and for asset levels. I would say certainly less than 50,000.

It allows you to get a very high quality, low cost index fund approach so indexes are basically tracking major market indexes so the S&P 500 the 500 largest companies in the US the Russell 1000. The Dow Jones industrial average. These are all indexes and there's an index that tracks just about everything, including bonds and precious metals. What would happen if you open an IRA at one of these Robo advisors as you would answer a series of questions and then a very low cost index approach to investing would be deployed on you for you with any money in there and then it would be rebalanced regularly as well as if you ever add anything to it but you certainly wouldn't have to. The great part is it's low cost, but you be very well diversified, so you wouldn't be highly concentrated in one sector of the market are one industry you get the the broad moves of the market. Over time, but in a an allocation that's appropriately diversified for your age and stage of life. Meaning you're not taking any unnecessary risk. As you move forward and I think this would be a very effective approach for you. You could do that. It probably I would recommend either betterment or the Charles Schwab intelligent portfolios either of those two would work. You'd open the account first. The IRA at the institution of your choosing. And then once you did that you get the surrender paperwork from your 401(k) plan administrator you put on their the account number and title and location of the new IRA and then they would just simply mail a check to that custodian. It would be deposited as a nontaxable event and then you could you deploy those funds or they would do that for you based on the information you provided so that would probably be what I would think would be a very simple approach that would give you an investment strategy that wouldn't relying on wooden rely on you to actually select the investments but obviously you'd be the one putting the information and does that make sense though Kevin yeah yeah I'm not sure where you have information or to get a hold of some of these are yeah I mean you could just Google swab intelligent portfolios are better meant you could read reviews on both of them at nerd wallet to go to nerd type in both of those Schwab intelligent portfolios, betterment, and you could get a review on both of them you'll see they're both highly rated for having very high quality, very customer service oriented user-friendly but very low cost as well and then once you make your decision. You just go directly to their websites open that IRA account and then request that rollover paperwork from your current 401(k) to check that out if you have questions once you do give us a call back but I think it'll be a very low cost, passive investment strategy will make sure this is going to call Helen moneywise guidelines are open 800-525-7000.

Hope you stay with us were back with much more just go back to moneywise live around West wisdom for your financial decision you here on moneywise live more delighted to get supplies open 805 five 7000 love to hear from you.

Just a minute, will be going to Annette in Tampa Susan in Chicago. Ryan's in Maryland, but first aid and is 14 years old is a high school freshman calling from Rome, Georgia Aiden were glad to have you on the program today.

How can I help you all absolutely I and wondering what I love. That will tell me how did you accumulate this hundred dollars was it again after you work in what would you do it well may and money Korea excellence tell me about your interest in investing is been something you've been interested in for a long time. Is there somebody that's kinda guiding you tell me a little bit about your background out. Well I bought the stock market like Lakeside, I don't like you got it where I had a online investing handbook.

Yeah, that's great.

Well, that's a great resource. It would've been the one I would've suggested you read because it's got a great practical information, but it's also biblically based, and you know the Bible has a lot to say about money Aiden so I want you not to be not only to be financially literate, but I want you to know God's heart as it relates to money because it really is essential in terms of how we think about it you know you are being very wise in how you approach this because you've been given this reason, resources, and you know the first thing you want to do is say what is God want me to do with this and we see clearly in Scripture. I think that we should be thinking about taking a portion of it and returning it to him. And so I would if you haven't already. Consider perhaps what he might want you to get out of this amount you could use the Tide the 10th or whatever amount the Lord lead you to give as you talk it through with your parents and then you might want to think about the portion that you'd want to spend right now, if any, not that you have to and then obviously the remaining amount you would look at saving so give save and spend.

If this is what's left to save. Then investing it as long as you don't plan to touch it for some time now. Typically I like to say enough you can invest this money, you should be thinking seven years or more. The good news is you're going to get more money you can have more birthdays. You may start a part-time job here in the next couple years if that's something your parents want you to do and you have the opportunity up so that be additional resources.

Even if you invest this, but I just want you to think in terms of the long term because investing is not about short-term wins in the market. We don't know where the markets going to go the stock market meeting those companies that make up the various markets out there today so we don't try to jump in and jump out and make a quick return.

That's what the Bible calls a get-rich-quick scheme. We need to be thinking about what the Bible refers to a steady plodding which is a long-term perspective, not where you do that well the good news is there's more options than ever. Aiden for somebody was just starting out like you with a small amount of money wanting to get it invested, but doing it on a low cost basis. You may or may not have heard of something called acorns. If not, I'd mention that to your parents is something to check out acorns doesn't require any minimum deposit you have to have at least five dollars in your account to trade and they'll assess a monthly fee of usually one dollar to five dollars at the most per month and I realize that's a lot with the amount you're talking about but as it grows obviously to be a much smaller percentage, but that would be one option. Another would be a Charles Schwab intelligent portfolios and betterment. Neither of them require a minimum deposit but it's it's for their digital Robo advisor investment solutions so I think as you look at that it's not going to be a situation where you're going to go in and buy a company like Amazon or Disney or any one of those. What I would rather you do is follow the model of Scripture which is to be properly diversified. So you'd want to own a large number of companies in that way if one of them does bad in another does good and another one does good.

You know you're not trying to pick the winners and losers. You're just capturing the moves of the market over time. So those would be my three that I would look at if I were you acorns Schwab intelligent portfolios and betterment have your mom and dad look at that they're probably going to have to open what's called a custodial account. Meaning it's their account until you reach the age of majority here in Georgia, which I believe is 18 and at that point, that would be your money but you could still feel be involved in it. Your name would be listed on it and as you deposit this amount, and any other funds that you're taking a long-term perspective with it would automatically be invested in a fairly aggressive your portfolio just because of your age, but I think it be something fun for you to watch and you'd learn a lot along the way. Does that make sense all right will you check those out now with your mom and dad and tell them what I've said.

If you have any questions once you guys do a little bit of research on those three that I mentioned, you don't hesitate to give us a call back and listen so proud of you, but haven't.

I think this is going to be a great experience and you're gonna be really well positioned as you enter into adulthood with some experience on how to handle God's money really well and will certainly be praying that the Lord will give you some wisdom.

I called back anytime we appreciated a let's head to Maryland. Next, Ryan has been holding Ryan how can assist you in the process of building my credit currently I'm at 750 and when I was taking different tips on how to grow it. I had some telling me to try and increase my credit limit, which was only 3000 I try to do that but they said you don't use enough of the credit we've Artie given you know I started to use a large portion of that for everyday items and then they came back and said you have used more than 30% of your credit not to look at either.

So I'm trying to figure out what the best next move. Do I get a different type of credit card so I just keep doing what I'm doing and paying it down every month. I have seen that work or do I do something different.

My end goal is to be approved for a sizable small business loan either commercial property or just traditional business loan. Got it. Yeah I would continue doing what you doing. I wouldn't run balances up above 30%.

I really, really using it for budgeted items. But what's reflected on the credit report is probably the high a balance. The balance at the end of the cycle prior to you coming in and paying it off and so you want to see if you can get that limit up such that the regular budgeted spending you're doing on the car before you pay it off is below 30% would be even better than that. If it was below 10% of that limit, which may require that you go ahead and open an additional card again as long as you're using it for budgeted items. Keeping those balances that are being reported below 10% of the limit.

That's key. The other thing that's probably affecting you as the credit mix. If all you have is just a credit card that's a revolving account without an installment account like Carlo but I don't want you to go on borrow bunch of money that just so you can improve your credit score because you're already had a 750 so if you just continue doing what you doing and only borrowing away. The sense over time, the history that you have the credit mix and you know the below balances below 10%.

I think will do everything you need and you really should qualify for the top tier credit, even where you are now so I hope that helps you Ryan. We appreciate your call today. Phone lines open 800-525-7000. This is my wisdom for your financial decisions are delighted to have you along with us today and moneywise live bringing biblical wisdom for your financial decisions.

We love to hear from you. Got a few lines open today. Here's the number 800-525-7000. That's 800-525-7000. Whatever's on your mind. Whether it's savings related. You will get on top of that spending plan to be set up at budget you've been looking to put in place and try to figure out how you control the flow of money. Perhaps it's getting related or retirement, whatever it might be.

We love to hear from you again. 800-525-7000. Let's go right back to our phones in Tampa Florida is a net were so glad you called today and at how can help you might call what we pay off our house and we Being contribution to our Roth IRA. My husband and I and eight yeah investment wear financial nature reach out and said that he probably thought Tyler. Good idea will be to impact on long-term care. We are you now relate 50 and analysis 180 think that's a good idea. What shall we wait on the week turned 60. Yes, it's a great question. Are you or your husband still working my husband yet.

Okay a very good and does he believe you're on track for retirement. In terms of what you already put away and what you plan to put away during your husband's remaining working years to have enough to supplement Social Security and maintain your lifestyle on my husband would like to hire earlier than 65 462 and he said we are right on time. Put that okay very good will, by the way, congratulations and all you've done the planning of the saving you've obviously limited your lifestyle in order to do all of that and the fact you've already paid off. The house is for nothing McMillan that that's really exciting. I do think that long-term care insurance would be a great next step. You know, the American Association for long-term care insurance says that really you know your mid 50s is the most cost-effective time to buy.

I realize it seems early, but keep in mind these policies only get more expensive as you get older and if you were to wait another five or 10 years, you could be diagnosed with an illness during that time that would make you uninsurable or make it more costly to she could to secure the insurance in the first place. The key would just be whatever policy you pick up you want to make sure that it carries inflation protection because you know a policy without that obviously is going to lose buying power over time. If you don't have that inflation protection built in such that when you need it. Down the road if you do by the way, more than 70% of 65-year-old's and beyond will use long-term care at some point if you needed at that point, you know, it may not cover you know what you were expecting it to just because the buying power would be so much less. So I would look at that you want to make sure that it fits well within the budget and that you have room for it to increase because although they can increase your policy alone.

They can increase all of the policies just based on industry trends. The cost of medical care you as it increases over time, and we have seen certainly some some increases in these types of policies in the past. So what I would do is your next step in that is perhaps you could you'll have your financial professional. Recommend upon a policy. I'd also perhaps seek out an independent insurance agent who is a specialist in long-term care who can go out across all the companies and find the best policy for you depending on your medical condition and the medical underwriting that's done. One policy may be better than another, more cost-effective, just based on who you are, yet your eat everything from your height and weight and age, but also to your medical history. Certain companies treat certain things differently, which is why you don't want to ever just quote it with one company. So I think that's a great next step and you guys are really well positioned for the future. Does all that make sense that one company that you recommend are no I don't because it really does depend you want to be with somebody who's really committed to this space and the others were down to just a handful of carriers that really are, you know the best in long-term care insurance and that's why I'd find an independent agent who really specializes in this space if you don't know of someone you could connect with a certified kingdom advisor in Tampa and asked for a referral and to do that you just go to our website moneywise and click find a CK.

We appreciate your call today, very, very much. Let's head to Chicago, Illinois. She says Susan, thank you for your patience. How can I help you great things 10 years ago and I have IRA beneficiary account and about 750,000 total in them. I don't very consciously with really good financial advisor and most of it happening in many we don't lose any of the principal.

I had about 35,000 mutual fund and looking to get a new car and I don't know it back to me to take the money out of the IRA penalty and I know you think taxes are like auto loan yeah yeah great question.

Is this a car that you really need right now. Or could you wait to the fall even to to buy this I pretty much need it now. The reason I'm asking is you may have seen in the news that it's not a great time to buy a car. Both the new cars and used cars or prices are up just because their supply constraints on new cars so a lot of dealerships just have a severely limited inventory and it has a lot to do with chips that they can't get to in the manufacturing process and then that supply constraint on the new car side has caused used cars to be really elevated in value. In fact, and latest report I saw said that were 40% higher across the board on used cars that we were pre-pandemic.

Now we've just started seeing indications that car prices are beginning to come down. It was expected. We thought this was going to be a transitory meeting just limited in time and I think that's what were already beginning to see and I think as we get into the fall, though, come down even more. But the bottom line is if you need a car you need a car and as long as you do your homework and perhaps even be willing to travel to find the car you want. Once you settled on the make and model, then do your research in the last car I purchased, I flew to Ohio and spent the night in a hotel, bought it and drove it home because I saved several thousand dollars. By doing that. So you just need to be willing to do your research in terms of how to go about that. You know you know if you've got the the margin in your monthly budget to take out a small loan. You've got access free cash flow and that that would allow you to pay it off quickly by perhaps even doubling up on the payments, then I'd say go for it. If your monthly cash flow is constrained though because you have a sizable account. Sounds like you live modestly you I don't think there's any problem pulling it out. I think the key is just which you know would give you a greater peace of mind. Do you have enough surplus in your monthly budget that you could it'll pay that the car loan off quickly or is your monthly income constraint pretty close but you know, while I am working on one. I could try to get naked Carla need to get it paid off at least four years before. I want to retire.

Yeah, I think, is always get that paid off by then that would be ideal because then that keep your lifestyle as low as possible you could do something in the middleware and I see here.

You have 9000 in savings. I don't want you to go down to zero because I want you to have an emergency fund there, but perhaps you know if you're going to spend well how much do you plan to spend if you been shopping around around anything really but I know I get my trade-in on the car that I'm hoping I wouldn't have anything more than 18 to 20 extra okay.

Would you have available okay and is the 9000 you have available your mark for the car or is that the total of your savings at that only thing okay all right you know so perhaps you split the difference and you get 10 for your trade-in. You pull 10 from the IRA and then you finance 10 and just focus on paying that off as quick as you can. That would keep your tax liability to a minimum. But give you a small monthly payment that you could pay off quickly. I think something like that would make a lot of sense.

You I'd I wouldn't want you to spend down that emergency fund. I want you to hang on to that. So I would either go you know splitting the difference with 10 1010 or just pull the full amount that you need beyond the trade-in out of your IRA because the amount that you have keep you debt-free and it'll keep you in a great position, but at a minimum. Let's make sure you can pay it off. By the time you retire. Okay I like $10,000 mortgage at a very low rate, but it might take money. The irate half my mortgage when I actually do retire if I don't have the monthly payment what you think the balance will be on the mortgage.

When you get to that point I would say probably 90, 90,000 yeah and then have you run the numbers to see based on your let's say you had 650,000 let's it grows to 700 after you pull the hundred out for the house. Is that enough plus Social Security. If you were to try to take around 4% a year to cover your expenses. Okay, I do some planning to just make sure that but if so, I like that idea. You're probably gonna want to spread it out over a couple of tax years so you don't push any portion of that up into a higher bracket, but I think clearly, if you can get that paid off. By the time you retire or shortly after.

That's can be something give you greater peace of mind greater flexibility and allow you to keep your expenses as low as possible, then it's just a matter of managing that folio on a conservative basis.

So you've got the income that you need plus Social Security and it sounds great position so I like that plan.

I would proceed that Carol in Chicago. I'm sorry we didn't get to you. But if you stay on the line will talk off the air and Susan, thank you for your call moneywise live is a partnership between radio and moneywise media on Rob West on behalf of Dan Anderson Rios Jim Henry T were so glad you were along with his back tomorrow will do it all over again. God's word back is

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