Watch This Before Rebalancing Your Investment Portfolio!

Before you make a mistake,

watch

this

to rebalance Brian. I'm really excited about

this

because I feel like this is one of those shows where we can flex a little bit, we can talk about some Netflix, these are some of the things that we're going to talk about something that's a little more complex, a little nerdier, a little deeper when it comes to financial planning and

investment

management, but we think it's tremendously valuable when it comes to navigating

your

In general, financial life well, I think in terms that people hear who start to show interest in personal finance, but how often people just don't tell them how it's actually done or what the value is, what the purpose is, this is the perfect and content concept to go over because we hear terms like

rebalancing

, but will anyone ever tell you what that really means for

your

portfolio

?

How do you add value to your future self in the long term? We're going to delve into that just like we did with the tax loss harvesting program probably four or five months ago and you guys, I thought, this is too nerdy and you told us no, oh, this is cool, this is what who want this is classic money guy content so we decided to flex like Bo said because he loves to flex so we would bring the content and talk about

rebalancing

so with that let's make a definition vocabulary term real quick Like Webster's, rebalancing is simply the process of realigning your

portfolio

to its intended allocation and this is necessary because assets grow and change at different rates, so without it one's portfolio may not match. with your overall objectives or your overall risk multiplied by risk capacity, so you need to keep your assets where they're supposed to be, not floating in the wind, so that's a great definition, but it's not.

If I was trying to get a little bit more of an introduction to why we actually rebalance. I wanted to break this down into the reasons you would rebalance and the first was to implement changes to your investing. objectives now, that sounds like a very fancy textbook type definition, what does that really mean? Well, it's really interesting, Brian, we were talking about this in preparation for the show, like what's a really good way to put this and when you think about investing, most people who When we started investing, we said we really have two right goals: your goal is to get rich to build wealth to get rich or if you have already achieved it, your goal is to stay rich and the answer to where you are will be.

It affects how you allocate your portfolio and ultimately why you rebalance and how you rebalance over time, so let me put some numbers on this to give people some context when you're in your 20s and you probably have There are not many resources because you are just beginning the journey to creating wealth, it is not uncommon for you to have 80 to 90 percent of your money working to get rich, only 10 of that percentage is probably going to stay rich or not. be poor because the important thing is to be aggressive to achieve your goal because what do you have to lose?

I mean, normally, if you're starting from scratch, you can be super aggressive because you don't have much to lose and you have a lot of time to let it sink in and work there, but keep in mind getting rich instead of staying rich instead of thinking about the person who has really achieved a level of success, you know I shared this data point the whole time I was talking to my daughter about this. You're like man, what a weird dad, this is what you talk about at Cracker Barrel with your daughter, but I was telling her, in talking to her, that it's so unfortunate that the statistic of 70 wealth, meaning millionaires, the 70 percent of it disintegrates into the second generation, that is, the children of millionaires, ninety percent, third generation, that is, the grandchildren of millionaires, is usually gone, the process is completely recycled, so there is a change in your thinking that should happen once you build wealth, figure out where there is enough, where it is, let's change. the allocation to where now, when I'm 60 or 70, might be that 70 percent of my portfolio should reflect staying rich or not being poor, versus 30 percent will be getting rich because that's the part I hope works. and help you get through retirement by continuing to grow in the background, pay attention to those things, they are two different goals and they work differently in your portfolio, so the interesting thing is that goal goes from simply getting rich to figuring out how to stay rich rich.

What happens most to us is that our risk appetite changes while we are in the I really want to get rich phase. I have a high risk tolerance. I want to be aggressive. I want my portfolio to be available, but as I start to get closer. As I retire my appetite for risk starts to decrease and as I retire it decreases even more and then once I'm retired, once I'm living off these dollars, I care less about how much my portfolio goes up and down and how How much it's growing and I care more about stability of portfolio value, so as you move forward on those two goals, I want to get rich, I want to stay rich, our appetite, the way we want to approach risk naturally changes. well inside. of our portfolio we have to make sure that that is reflected, yes, and also affects their stage of life.

I mean, this shows it in so many ways. We probably could have put ages under this too because I know when you're in your 20s, you're in that gladiator phase of your life where you want to conquer the world you want. You can take those risks because your risk tolerance can be very high as you get a little older. wisdom beneath you and you've built up some assets, it's not uncommon, you know, especially at post 40, where you're no longer in that world-conquering gladiator that you're thinking about, you're much more of a thinker, there's more wisdom there. and that smooths it out, your portfolio should also reflect that, so what we do is we rebalance and it allows us a natural mechanism to do this.

You've probably heard us talk about this a lot, but we love target-date retirement funds. index funds because they paint a very clear picture of what should happen naturally in your portfolio, he went and pulled out a sample Glide pass. Now these are from ages 20 to 75 based on Schwab Target retirement rates and you can see that for someone who is in their 20s. It's a strong equity allocation, it's going to be very, very aggressive, but as someone progresses through their life cycle as they get closer to age 55 60 65 70, their risk appetite decreases, so The amount of risk within your portfolio should now decrease somewhat.

The people in the chat Brian are already saying hello, but just because you're retired doesn't mean you have to be completely conservative, it doesn't mean you have to eliminate all risks and that's completely true, however, we would say that a retiree who lives off his portfolio should have a portfolio that looks different than someone who's just starting their career, the way you get from one point to another is through this process we call systematic rebalancing, yes, and that's going to change, I loves. Let's share the tool that helps make this happy path more possible. I mean, it actually provides a process or procedure where you're not stuck with the same asset allocation when you start at age 23 until the end. 65.

By the way, if you want to impress when you go to the next party, just say: oh yeah, I love Target's varieties of retirement index funds because, have you seen the glide path? You will be very impressed because they will be a glide path is the coolest word I have ever heard in my life, so now that you heard it, we didn't give you the definition because we want the first type of hook, hook, you see the picture of this, do you? what is a glide path? It ties and bows exactly well. We love these Target Indexed Retirement Funds because you really only have to do two things while you're at the beginning of your journey.

How much can I save? When I need it? I do not have to. I focus my mind's calories on anything else while I'm in the building process. Now in a minute we're going to share why this changes later on, as you get more wealth, reach critical vehicle mass, or that bowling pin point I'm talking about. about you don't have to do that while you're at the beginning, just think about focusing on what you can save when you need it, let Restless be just an education that you'll use at a later time. Now I think it's important. to mention that you and I go to very different parties, we just go to very, very different parties, well that's because you guys are at the Gladiator parties, you're all trying to figure out how you're going to storm the next Fort. or take charge of something.

I'm in that wisdom element of my life where we're talking about a broad path, it's the topic of conversation. Okay, so obviously why do we bounce? One is to navigate those changing

investment

objectives to move from what I want to get. rich i want to stay rich another reason we rebalance another value that can add to your portfolio is that it allows you to manage the taxes of your portfolio we all know that one of the things that is a certainty that none of us can avoid is the fact that We will experience taxes, especially if in this country we know that we are going to have to pay taxes.

I think it was probably Benjamin Franklin who said that there are only two things that are certain: death and taxes, so if it's a certainty, if it's something that we know we're going to deal with we want to make sure as we think about the rebalancing, right? is there any way? Is there a mechanism we can do that will help us from a tax perspective? Well, the good thing about money. Boy, we love giving case studies, so you know why telling people this is powerful for rebalancing for tax purposes. It's easier if you actually have an illustration to see how it works and Bo, I loved it.

Daniel did this, he was trying to pull. a little bit your way, but two birds, one stone, two birds, one stone, so think about this, let's say Tim is an investor and he has two hundred thousand dollars in a taxable investment account, so there will be some natural tax. drag associated with that, let's say the target allocation in this account is 50 S P 500 and 50 International, so this is an all stock portfolio or a hundred thousand dollars invested in each of them, well, let's say we go through a year like 2022 or maybe the market wasn't as strong and the S P 500 loses 20 percent and the international fund loses 30 so now instead of having a 200,000 account, Tim has a 150,000 account and Instead of having 50 50 allocated, you have 47 percent in your account.

International Holdings and 53 percent in your S P 500, you could argue that it's out of balance and you probably need to, quote, rebalance your portfolio. Whatever you add to that, well, I think it's interesting because we're actually without What it means that we did this in a financial mutant way is because the easy way to rebalance this is to look at your U.S. stocks and your international stocks and take them back to the same allocation, but the problem is that if I did it that simple way, it would only generate about fifteen hundred dollars of taxable losses that I could recover now if I have already candidated it in the introduction of the program if I combined this rebalancing strategy with harvesting of tax losses where you bought something similar but it's not the same to actually pass the IRS rules, you could take advantage of this tax rebalancing opportunity to generate a huge tax savings, yes, that's right, instead of selling five thousand at a time stake and buy five thousand of the other, you're saying you could sell the entire account, you could sell both, buy something demo, something similar but not identical, and you'll have a huge loss benefit that you can use both this year and for many years to come. in the future, so remember.

Balance can be a great thing that not only allows us to tie into our overall investment goals and objectives, but it can also be something we use especially in years like last year to help us save on taxes because it allows us to use another financial tool . like tax loss harvesting and I was going to say that because a lot of people would say you guys are optimistic, why would you bring up something pessimistic like a bear market and the market is going down 20? Let me tell you the other side when things are good and that's why I love when you put together these financial tools when the markets are good and now you're up 20 or 30 percent, you could combine the rebalancing when not just the lost crop that you made during the bear market because some of those best performing months of the year are right after the bear market and you get into that first initial part of the bull market.

You could compare that to charitable giving. That isRight, because you can donate appreciated shares to your favorite charity. Then you know because you probably set that basis much lower, as long as you hold it for a year, it's a huge tax benefit. This is the way I have told you when I donate to charities. I love donating appreciated entries. I love tax loss harvesting and if Looking at the winning component, when do you actually do this? You use rebalancing as a kind of trigger point because you're going to be consistent, you're going to have a period of time where you're looking at this and you're going to know. driving action that makes all of this possible again when we think about our financial life and being a financial mutant and buildinguh, security is really a combination of many small tasks, they are small tasks that we end up adding up over time.

What I think is surprising is that most people think of rebalancing and it's strictly a question of investing, oh okay, rebalancing investing, here we are doing a whole section that talks about rebalancing the pot really not Not only can the infection affect your investment portfolio, it can also affect your taxes, and if you can think about it that way, you'll be surprised how much these small changes can have. big impact later on your finances you can accumulate these things. I love that if you can change small things in your behavior you will get big results in the long term.

Hey, it's almost like we're talking about compounding, that's always something that we work on here, let's talk about number three, the third reason we rebalance is to adjust to the changing financial world that we live in now. I want to be very clear that this is not market timing when we say adjust to China's changing financial world. We're not saying, oh, I have to rebalance and I have to go from all stocks and now I have to go to all conservative investments, so I have to go from all conservative investments to all stocks. Remember that when we move forward in our investment life cycle it is a slippage.

The road is not a Glide Cliff, so if you find someone who is constantly switching their wallet between an 80 20 wallet and a 2080 wallet or I go to cash out and then run out of cash, I would say that's not really the case. By rebalancing you are not using it as an investment tool, you are timing the market and studies would suggest to us that you are probably not setting yourself up for long term success, but let's give some examples here. Let's talk about what are some of the big macro things we're talking about, something that comes directly with Mambo interest rates.

I'm talking about one of the biggest and hardest things to do as a professional financial advisor, an asset allocator for our clients over the last while. 10 to 15 years is that we have had historically low interest rates, the problem with taking cash to virtually zero to stimulate the economy is that anyone who is approaching retirement, the only way to capture it, can't get a return on its from buying cash bonds, the returns aren't there, the only way you could really try to capture a good long term return was to really go further out of your risk spectrum and still allocate assets, but its going a little further of what it has historically done. capturing yield that you could then spend in retirement, luckily this is one of those positive lemons turn into lemonade moments when interest rates have risen so rapidly to combat inflation.

Now it is not uncommon that your cash, bonds and other things can become historic. Reasonable rates of return again you can now get more than four percent on your cash. It is not uncommon for bonds to return to five percent with a six percent rate of return without taking on much risk. This allows you to have much more balance in your asset allocation, so I love it. pay attention to those big macro events because if you're not paying attention you wouldn't notice. Hey, maybe this is the time to rebalance and adjust some of these changing things, like higher interest rates.

Interest rates are a great example, another really interesting one. For example, they're just valuations within market cycles, it's not unusual that maybe we just went through a big recession and maybe interest rates are low and you start thinking, you know what? In a low interest rate environment where the cost of capital is low but the economy is I'm looking to improve perhaps rather than having much of my portfolio in large US companies. I think American small businesses could do better coming out of this bear market if they have that position and if they believe that's something that could happen.

Rebalancing provides a mechanism where you can take advantage of that where you can see the price/earnings ratios we are already in the bear market where we are in the bull market how do I factor my portfolio performance against capital appreciation? Systematic rebalancing gives you automatic timing. where you can see these things and take advantage of them as they present themselves within your portfolio, well, I mean one that always encourages me and I'm looking to see if there have been times in the last 15 20 years where you could compare the treasure to 10 years with the dividend yield of the S P 500 when those things are getting very close to each other, you're like what you know, what you pay attention to, that doesn't mean like Bo said, its glide path is not enough of a glide clip , but it is something that they need to be in tune with what is happening in the macroeconomy so that they can know what that means for their asset allocations.

It's just another indicator and you can use rebalancing as a trigger point to incorporate another financial tool to enhance your investment journey. Another thing it allows you to do is look at big macro events like geopolitical events, whether they're international conflicts or things happening in other countries that could impact. your portfolio again, this is not a mechanism to time the marketer to try to make quick moves, but if you are systematically rebalancing you can ensure that your portfolio does not get completely out of control over the last decade, it has not been uncommon for Los US domestic markets have performed well internationally.

If you had a domestic and international portfolio and didn't rebalance, you'd probably be heavily overweight the domestic market right now and expect underweight. International rebalancing allows you to better ensure your portfolio is in line with where you wanted to be. In the long run, it allows you to keep an eye on those other things that happen that could affect your final rate of return, but Bo, I don't know if we just got lucky or if we really planned for it, but it's a perfect transition. When you hear people all the time share the concept, man, when you invest, here's a key tenant that you have to get right.

Barlow sells Alto, yes that sounds so easy, we even had one of our first Tick Tock React videos, one of the greatest. The reactions we got was there's this couple and bless them, but they, that's what they said, all you have to do is buy here, look, see the picture and then sell it after it's gone up a little bit and then that is. You can quit your day job and do it. It sounds that simple. I mean, yes, it does, but that's not the way we all do it. From an emotional standpoint from a market cycle from an economic standpoint, it's just not that easy unless you have something that forces you. your hand and prompts you to look at your winners and losers and rebalance, but the good thing about that, Brian, is that it naturally leads you to the next question, right?

You may be thinking, okay, rebalancing sounds great in practice. . I understand the Academy, but wouldn't it hurt me? I mean, if what I'm ultimately doing when I'm rebalancing is selling the things that are working well and buying the things that haven't worked so well, wouldn't that hurt me? my overall performance, wouldn't it be better if I did nothing well? Luckily, here at the Money Guy show we like to show you the numbers we like to dive into, so we asked Daniel to put together some analysis on this, yeah, this is cool. had a concept like I wonder because I want to show our audience that what we share isn't just talk, so let's show them some facts and when this illustration came out we thought, man, this is why I love what we do. make a living, so Bo, I don't want to steal your thunder, guide them because when I first saw this graph I thought, man, those appearances, those lines look very similar, but give them the full content, yeah, so what we're searching.

Here we are looking at two 60 40 portfolios that started in the year 2000, but we look back at the last 22 years of investing and what you can see is that one of the portfolios, the dark line, is rebalanced annually 60 40. Back to 60 40 annually, the lighter green line never rebalances, so this thought of okay, what I'm going to do is I just want to make sure that, or if I'm going to rebalance, it's not going to hurt my long-term performance, what you can see is during this 22 year period during which we saw the bubble burst.com, we saw the Great Recession, we saw covid, we saw 2022 and then we saw a lot of really positive bull markets in There too, the overall difference is not It's so big, right?

If you look at 264 percent total return performance compared to 268 percent total return, then you start to think well, yeah, that looks like a lot of calories were spent, the other thing I thought was How interesting because I know we have listeners of podcasts that can't see all of our pictures is that if you look at this graph, I see that from the beginning it seems that in most economic cycles the never rebalanced underperformed. rebalancing, so that's good, you say, hey, burn those calories. I'm making more money. I'm more active, that's a good thing, but recently, because we've had a big S P 500 run, really after the Great Recession, it's been a rocket up and you can see that yeah, you know maybe you should hold on. your winners forever, but it's actually calming down again because we've been through this 2022 bull and bear market where there's really only a four percent difference.

So does that mean we're making content that doesn't really move the needle? That's what it looks like on the fist, but let's think about this again in practical terms. We're talking about 60 40 portfolios and this is just 60 S P 500 100 40 Very simplified allocations from the US Treasury. Well, let's think about two retirees, let's think about Trina and Tina and say that they retired in the year 2000 with a million dollars invested and they were going to aim for a 60 40 portfolio over their retirement life cycle and they both live off this money and they listen to Money Guy content, they say you know a four percent withdrawal rate should be sustainable in the long run term, so we will live on forty thousand dollars a year.

The year we have a million-dollar portfolio, we will earn forty thousand dollars a year or four percent in retirement, but we will behave slightly differently. Trina goes to rebalance once a year. She will do the anal rebalancing, but Tina will never. I'm going to rebalance, she says, you know, I don't think it makes a big difference, the numbers don't look that different, how does this work? When you really look at the dollars in this scenario, there is a pretty big difference. In just two years of living off these dollars, in July 2002, that is the lowest point of the bubble burst.com, you can see that Tina has a balance of approximately six hundred and fifty thousand dollars in her wallet, where Trina has 740,000.

That's over a hundred thousand dollars difference, which I have to believe living that. You're thinking, oh man, I'm getting nervous because the four percent withdrawal rate I had now is so much higher than when I started my retirement. Well, I love it. creates a trigger point, think about this if you are trying to figure out why one has a better Alpha than the other. I love it when you do the rebalancing. I mean, we run this on Watch Hearts, so it's not even using the human component of making sure I get my winners vs. losers on buy low and sell high.

This is just doing a systematic process. I think the difference is actually greater because this allows you to take money out of your wallet. Hey, I don't want to sell these stocks at a 25 percent drop, you know, I want to, I want to put out my more conservative stuff and then I'll be opportunistic. In reality, there is an alpha component above and beyond what we have. They're even showing up here, so I'm surprised that just two years into this we already have such a huge variation on this. I can't wait to see where the rest of this illustration goes.

Yeah, so let's move on to the next scary moment. Great Recession, if we look at the value of these two portfolios on March 9, 2009, Trina now has a portfolio of six hundred and fortyOne thousand dollars. Tina only has a wallet of five hundred and twelve thousand dollars. Now remember that they are still achieving forty. thousand dollars a year, so what was a four percent withdrawal rate for Tina has now doubled to almost an eight percent withdrawal rate again in these cases in real life, when that happens, you have to start to get very, very nervous thinking, holy cow, I only have five hundred thousand dollars, I'm taking out the 40,000.

Man, I wish I had that extra hundred and thirty thousand dollars that Trina has in her wallet, so the rebalancing is moving away here, I want That is, it was less than a hundred thousand dollars difference after two years. but fast forward now we are at 130,000, you can see you are being rewarded for using this tool that allows you to take steps to liquidate and rebalance the portfolio, that is powerful stuff, now let's look at the end. look to the end now at the end of last year 12 31 20 20 22. Tina's portfolio has grown, it has been a positive market, she has around 1.27 million dollars within her portfolio, however, Trina, who you were rebalancing annually you were sticking to a system taking advantage making sure a portfolio matches your goals you have a portfolio of over a million and a half dollars that's almost a quarter of a million dollars difference just by rebalancing annually .

Going back to this, we show her what if she places them next to each other. another rebalances every year, one just does absolutely nothing and allows. In the race of the winners we saw that there was only a four percent difference between the two, so that shows us and this is taking the path that Beau was talking about, no You get penalized for not cutting some of those winners, I think a lot. of people say man because trees don't grow to the sky, that's one thing why this strategy works, you combine it with someone who is making money and you can see that this is dramatically different and it all goes back to your statement you said before, small, small changes.

Differences can have great and dramatic rewards for you in the future. That's why we tell people to start saving young. That's why we tell you to be active with your financial decisions. Because every small decision you make is accumulated with other small decisions. then you get time, that component is there in the future and we think, these are two different paths, the same things happen with your friends and your family, they say why he or she has resources and I'm broke it's because all these things they're piling on top of each other, pay attention to these deep dives because this can be something that is a skill set that will serve you well in the long run, okay Brian, so we've talked about what rebalancing is, We've talked about why do it and some of the benefits and some of the big impacts it can have but here's the big question that everyone wants to know okay, I'm sold, you've got me, I'm in, but how do I do it?

How do I do it? go? about rebalancing What are the things I need to know if I want to make sure I'm rebalancing my portfolio systematically and consistently? Everyone will have questions, so let's go ahead and get these out of the way. The first is how often should I do it. Yeah, and look, I'll tell you in the content meeting we were talking about, man, is this something you should do on a daily basis? is something that you should do weekly, monthly, quarterly, annually, where is the real perfect sweet spot because I think there is As a former tax preparer, you know I prepared taxes for 16 years, as part of my journey to becoming a financial advisor and grow this practice, is that too many good things can be done because people who carry out daily transactions with anyone.

Who has ever had a client who is a day trader? If I were rebalancing daily, I think transactions cost tax compliance, it's too much, so I'm going to go ahead and tell you that I think daily, weekly, it becomes a little bit. Now it's scary, I think the most important thing when you talk about monthly, quarterly and annually, the most important thing is if you are consistent, that's it, now you are consistent with your behavior. I think that's somewhere between those three, as long as you make sure the behavior is consistent. What is happening is where you need to live now.

I think it's interesting and we'll talk about this in a moment. There is a difference between looking at a rebalance and actually rebalancing, so you can say you know each one. I'm going to look at the rebalancing twice. a year, what that doesn't mean is that you're actually going to trade twice a year because then you have to answer the next question: what triggers a rebalancing. How will I know when it makes sense for me to go back to Target? Is it going to be a period of time like every six months? I'm going to make an exchange.

Am I going to add some tolerance bands? Saying, "Okay, I know I want to be assigned 50 here, but if it goes to 45, I'm going to buy more if it goes to 55. I'm going to sell a little bit or it's just going to be something that I set it and forgot automatically. I'm going to go back at 60 40 every year, once, click button, it has to answer that question for you: what triggers rebalancing? Now we already talked about there are some planning things you can do, like loss harvesting, donations We're not even talking about avoiding capital gains, which is another big planning question.

You can do at the end of the year every year to save your taxes, maybe it's event driven, but you have to answer that question: with what How often do I do it and then how do I know when I'm going to pull the trigger? start moving the money right and you make a great point because we see a lot of you that are clients that came to us because you see that money has content. I don't want any of you see this, but like Hey, how can I? because I don't see in my quarterly reports that you guys are pulling the trigger every month to rebalance, that's why a lot of you have asked about this in the past and every quarter we are definitely reviewing the asset allocation. but it doesn't mean that we're actually pulling the trigger every quarter because sometimes there's a slight variation, which leads to the third point we were talking about is that now all rebalances are treated equally if you invest three to four percent in an asset class and now it's between one and two percent different now that you're talking about this, this could easily be a 30 to 40 percent spread which is probably something you should talk about okay versus let's take something like an S P 500 large cap that could be 45 to 55 percent of your portfolio, is it that important that you've gotten to 56 or 57 percent?

I would tell you that, from a materiality point of view, it is a much smaller threshold, so it should be coherent, but it is not coherent either. You don't need to be so over the top that you're busy doing nothing when it doesn't add much value. Okay, great, so I can answer these questions, but now I want to think practically. How do I plan on doing this? I know that technology has made it easier to be an investor. Technology is something that has been a great help in the financial world and now I know that there are things that I can do or have a robot. do it, I can pay for a service and I can just set it up and I have to think about it.

I can just tell you what to do and I can have a robotic rebalancing or a robotic advisor doing that is that the solution is a solution that we Everybody knows I'm the biggest kid in the room. I may be the oldest person here, but I'm definitely the biggest kid, so I love children's fables and you think of Goldilocks and the Three Bears and their poor journey to find the right adaptation. chair, bed and of course the right porridge and you hope to find it also with the rebalancing because I want to review a fable for you in the world of investments.

Let's first talk about the robo-advisor that brought the machines. Everyone seems to be talking about all the machines and how they will replace us humans, but this is what I know about machines when I look at all these Robo advisors that came on the scene and start marketing that we are rebalancing, I don't know if They're telling you the newspaper the weekly um they're talking about tax loss harvesting being a former tax preparer. I can tell you that they do it too much if I'm Goldilocks. I say, oh, that's too much because they send you these 1099 forms at the end of the year and you say I'm going to leverage a lot of accounting and I don't know if there's a lot of alpha just from being driven to that activity, so if we say that's too much, golden eagle, Ox will go to the next bowl of porridge and try it and this is the do it yourself and look, there are a lot of you because we give away tons of free content. and you're going to say well, I'll do it myself and I think it's great.

First I want to invite you to take the journey. We always tell you to look at those Target indexed retirement funds because they just take this out of your control you focus on how much you can save when you need it, but those of you who are beyond that point but are still do-it-yourselfers themselves, they are thinking that I will do it myself, there is research that proves it. You might have intended to do so, but unfortunately, according to this article, we found a hidden retirement risk. 85 percent of workers aren't rebalancing their 401K, so you might mean to, but somehow they do it.

Well, it makes sense that we're all busy. everyone thinks they know, okay, I'm going to start investing, I'm going to take this New Year's resolution seriously, I'm going to be active in my portfolio and then the kid stuff happens, the work thing happens and then the school thing happens. church. and then all of a sudden you're going in a thousand different directions and it's November and you're like the holy cow. I haven't even looked at my portfolio at all this year and we just don't do it and then you fall into one of those case studies where that 60 40 portfolio you thought you had is no longer more than a 60 40 because it's so easy to We who like the financial things in our lives that are not on fire simply fade into the background. and unfortunately, rebalancing is usually not something that is on fire for most investors, it is something that is thought of as an afterthought and not given much attention, so it just falls, so you already do it we have done too much.

Doing very little, Goldilocks is perfect of course, leads back to the cycle of abundance, why not hire someone on the professional side to get paid in a very reasonable way to make sure you are constantly rebalancing the fact that you are taking this constantly? Keep in mind in your overall tax plan that you are constantly implementing this when it comes to your charitable giving goals and all the other things that influence your retirement dates, this all gets complicated as I have shared with you many Many times we can give so much free advice because I know the desire of humans is that we want our lives to be simple and we want to set it, forget it and create automatic and inevitable wealth, but the reality is that once you create that inevitable wealth your life gets complicated like that and that's why I can I can take you there I can invest in you I can just share the abundance Cycles because naturally the cycle will make your life complicated and then you will remember who planted the seeds and that's why this is worth it and that's why we work with people all over the country, so if you love what you've heard here and you're like man, I like financial advisors who are willing to get their hands dirty and actually dig into what's going on with tax planning how it all influences this on my path to retirement how am I going to incorporate this into retirement strategies that's what we do we're not the sales people that you meet when people go to parties and say, hey, what do you do?

I always cringe when I want to say I'm a financial planner because they say he's going to take out a life insurance policy or sell me something. No, I love just answering questions. I think you guys can tell we've built a whole platform because we're technical, everyone who works here knows I did a studio tour yesterday, Bo, and they were there, there was a couple and, um, their clients and they told me : "Man, you guys, you're carrying me, I mean, you're doing so good, I mean, and it would make my heart want to sing. I wish, if my heart could sing, better than my voice, we'd be, you know, there's a reason we live by.

Nashville may be famous for that, but it's one of those things that makes me so happy that we love working with clients. I encourage you, Bo, if you're at the beginning of the journey. Keep subscribing. Yes, we love it giving away free content, it doesn't even matter if it takes you 10 years to get to that level of success that you need us to, just keep taking the free stuff, we don't care, if you want to speed up you can always visit moneyguy.com resources to get it for free. deliverables, if you want to get in the fast lane or accelerate your finances even faster, check out our courses at learn.moneyguy.com.We have something for everyone, it's very deliberate because we want to reach you where you need to be reached. you can start accumulating those small decisions that will have a big impact on your future.

I'm your host Brian Preston Mr. Bo Hansen money God team rebalanced