The Greatest Financial Advisor You Never Knew You Had

Just stop checking your stuff. The single greatest advantage the index has over you is that it doesn't have a phone, it doesn't know what happened today. Every study of investor behavior points the same direction. The more often you look, the worse you're gonna do. Hello friends, this is Tyler Gardner welcoming you to another episode of your money guide on the side, where it is my job to simplify what seems complex, add nuance to what seems simple and learn from and alongside some of the brightest minds in money, finance, and investing. So let's get started and get you one step closer to where you need to be. Quick note before we start, September's pre-order bonus for my book Real Wealth is something I've wanted myself for years and never been able to find. So I created it. It's called the Real Wealth Money Calendar. 12 months, five action items per month, all on one page. Because most people I know already know what to do. They just don't necessarily know when and they don't have accountability. So this is your 2027 on one page. 60 moves in the month, you actually need to make them. Pre-order Real Wealth at TylerGardner.com/book, let me know you did and your money calendar will be in your inbox in early October. This week, I wanna start by telling you about the best financial advisor I've ever worked with. They've never called me during dinner. They've never invited me to a stake house to discuss a rare and privileged opportunity. They have never worn a quarter zip with a company logo on it. Never said let's circle back and have never once sent me a holiday card featuring their family in matching flannel on a haybelt. They charge me about $3 a year for every $10,000 I give them. They fire their own underperforming employees without me having to ask. And over the last several decades, they have beaten the overwhelming majority of professionals who charge 300 times more than they do. If you've been with me since the beginning, you know where I'm going with this folks. This episode is all about my personal financial advisor, the S&P 500, and they don't even know that I exist. Now, I did a version of this episode about a year ago, but a lot of you were new since then. And this one deserves not only an annual reminder, but also a refresher in the way that flossing and checking your beneficiaries deserves annual reminders and refreshers. We're gonna break this into two sections today. First, why simply owning the S&P 500 is one of the most brilliant financial decisions available to a normal human being. Second, we'll specifically address some of the objections that always follow. Well, fine Tyler, but investing is only half of it. What about the psychology? What about the other complex stuff? Isn't that what I'm paying an advisor for? We'll cover all of that in the next half hour. And, familiar ask before we get into it, if the show has been helpful to you in any way, if you'd consider leaving a review, I would be and already am eternally grateful. It genuinely helps new listeners find the show, and more selfishly, it helps me know I'm not alone in here, talking to a microphone in the Vermont woods while a bloodhound sleeps next to me, and you might hear snoring throughout this episode. Now, let's get into it and talk about why the S&P 500 is the single greatest financial advisor you never knew you had. Part one, the machine that cleans itself. Let's start with a thing almost nobody understands about the S&P 500, which is what it actually is. Most people think it's a list of the 500 biggest American companies, it isn't. It's a curated index hand selected by a committee at S&P Dow Jones indices who meet, discuss, and vote. There's literally a room. There are people in that room, and I find this delightful because the most successful investment strategy in modern history is essentially a very disciplined book club. Now, to even be considered, a company has to clear a set of hurdles. It has to be headquartered in the United States. It has to be listed on the New York Stock Exchange or the NASDAQ, and as of the most recent update, it needs a market capitalization of at least $22.7 billion, a number that gets revised upward over time, which is its own legitimate commentary on the state of the market. It also needs enough of its shares actually available for public trading, so it can't include a company that's 90% owned by its founder's nephew. It needs genuine liquidity. And then there's that one thing that matters most, that hurdle that trips up even some of the most glamorous sounding storylines in history. It has to be profitable. Specifically, positive gap earnings in the most recent quarter and positive cumulative earnings over the four most recent quarters, not adjusted earnings, not pro forma earnings, not EBITDA, which have always thought sounds less like an accounting metric and more like a Star Wars character who dies in the second half of the film, but that's probably just may gap earnings. The numbers you file with the SEC under penalty of perjury. Sit with what that means for a minute, because it's the entire thesis of today's episode. There's a built-in quality filter on this index. A company can be worth $20 billion beyond every magazine cover, be discussed breathlessly at every dinner party in Palo Alto and still be ineligible because it doesn't make money. Tesla is the old famous example. Across the market cap threshold, years before it qualified, because it couldn't string together the profitable quarters. When it finally joined in December 2020, it entered as one of the largest additions in index history, but the index made Tesla wait. But forget Tesla, because we just got a far better example and it happened on June 12th. Space X went public. Biggest IPO in the history of markets, a $1.75 trillion valuation at pricing, $75 billion raised, demand reportedly around two times over-subscribed, and the stock traded above $2 trillion in valuation on day one. By any measure, that matters to a headline, the largest new public company ever created. Now, ahead of that IPO, Space X's advisors went to the index providers and lobbied for early inclusion, because index inclusion means every passive fund tracking that index is contractually obligated to go buy a ton of your stock. That's not marketing. That's a legally required buyer showing up with a pickup truck. And here's what happened. Nasdaq changed its rules. Futsi Russell changed its rules. And on June 4th, SMP Dow Jones indices, after a full formal consultation, announced it was changing nothing. Not the 12 month seasoning period, not the gap profitability requirement, not the public float requirement, which has a company has to make at least 10% of its shares available, and Space X, and Space X was planning to offer under five. The biggest company ever to go public, asked to come in early, and the SMP 500 said no. Not no, let's talk about it, just no. Space X is now looking at mid-2027 at the earliest, and only if it can produce four consecutive quarters of positive gap earnings, just like everybody else. Now sit with that for a second, because this is your money we're talking about. Every index fund tracking the Nasdaq 100 had to go buy Space X in July when it was fast tracked in, roughly $4 billion worth, funded by trimming a little bit of everything else those funds already owned. So if you hold QQQ, you sold slivers of Apple and Microsoft, and Nvidia to buy a company with a 5% float, and no requirement to have ever earned a dollar. Nobody asked you, it just happened, because the rules got rewritten to accommodate the arrival. If you hold the VOO, or IVV, or SPY, or FXAX, you did nothing, you own zero SpaceX. You're fun to sat there, entirely uninterested, waiting to see the results. That's the filter. That's the whole episode in one news cycle. Two of the three major index providers looked at the largest IPO in history and adjusted the rules to let it in. The third one checked its own paperwork, and said, come back when you're profitable, and bring your dang float. That's like a bouncer who still checks IDs. When the line is around the block, the club owner is screaming, and the guy at the door asking to be let in is worth $2 trillion. Now, in fairness, and I always wanna give you the other side, this could look foolish. If SpaceX compounds beautifully over the next several years, S&P 500 holders will have missed the early run, and there will be plenty of articles about the Staggie Committee that let the future walk by. One prominent ETF analyst said exactly that at the time, more or less, we'll see whether this turns out to be wise. Maybe it won't, but that's not really the point because none of us know. know. The point is that the rule held under maximum pressure in the exact moment when bending it would have been the popular, lucrative, universally forgiven thing to do. Give or take your thoughts on Elon. A quality standard that only applies when it's easy isn't a quality standard, it's a preference. And by the way, this isn't over. Open AI and Anthropic are both reported to be eyeing offerings of their own that would land them near the top of the US market on day one, which means the machine that manages the retirement savings of most of this country is going to get asked the same question again, probably soon, and probably louder. But good news. It just showed us exactly what it plans to do under extreme pressure. This episode is brought to you by Caldera Lab. Quick confession. In high school, my AOL screen name might have been pretty boydurden. And it wasn't ironic, because while other guys were collecting baseball cards and playing real sports, I was collecting skin care products and taking my appearance embarrassingly seriously. The problem was that almost nothing was actually made for me. It was either borrowed from my mom shelf or smelled like a department store had a mild panic attack, which brings me to Caldera Lab. High-performance skin care engineered for men. Science backed and clinically tested. The regimen, which I love, is four steps. The eye serum, for when I look like I've been operating YouTube scripts until 3am because most likely I have been. The base layer moisturizer and the good, their best-selling serum with over 3.4 million antioxidant units per drop. And it's backed by real clinical testing, not marketing claims. 100% of participants, including myself, said their skin looked smoother and healthier, and 94% said it made them look younger. I use it every night, and these days the only sentient being, judging me, is my blood hound. Pretty boydurden has been playing the long game since 1998, and consistency beats quick fixes in skin care and in investing. So if you've been meaning to take better care of your skin, this is an easy place to start. Head to calderalab.com/tyler and use code tyler for 20% off your first order, that's calderalab.com/tyler. This episode is brought to you by Delete Me. There's a strange thing about doing what I do. My face shows up on a few million screens a day, which is part of the job, but the job was never supposed to include access to my home address, and it did. A listener emailed me once very kindly to say she'd found my home address in about 90 seconds and thought I should probably know. She was right, and she was being nice about it, but not everyone who goes looking for these things is. And here's what most people don't realize. That information isn't leaked. It's sold. Data brokers legally collect your name, address phone number, even your relatives' names, and sell it to anyone with a credit card. You don't have to be on the internet for a living. You just have to have bought a house or filled out a warranty card. Delete Me is a hands-free subscription that removes your personal information from hundreds of data broker sites, which helps protect you against risks like scams, fishing, and harassment. They've spent 15 years doing this, use their own technology rather than outsourcing your data, have real human privacy advisors, and their wire cutters number one data removal service. And every quarter, you get a report showing exactly what was removed. It's the best email I get. And you can get 20% off Delete Me consumer plans at jointdeleteme.com/tyler20 and use promo code Tyler20 at checkout. That's Tyler at the numbers 2 and 0. JoinDeleteMe.com/tyler20. Part 2. How the garbage gets taken out. Now, on the other end, getting in is one thing. But what makes this index behave like an advisor rather than a museum is that it also removes companies. Companies leave the S&P 500 in a handful of ways. They get acquired. They merge. They get taken private. They shrink until they're no longer representative of the US large cap market and the committee replaces them. They go bankrupt. They get delisted. Every one of those creates a vacancy. And every vacancy gets filled by a company on the way up. Which means the S&P 500 is doing something for you. Automatically, that human beings are famously terrible at doing for themselves. It sells its losers immediately. Not emotionally, not after a family meeting, not after three months of telling itself the story that this is a great company, that the market simply just doesn't understand it yet, that it's a value play, that it'll come back. It just removes them, replaces them, and moves on with the cold efficiency of a hospital changing sheets. And every one of us, without fail, is statistically very bad at this. I was a professional managing other people's money and I was very bad at this. The technical term is the disposition effect, the documented tendency to sell winners to early and hold losers far too long. Because selling a loser requires admitting you were wrong and holding it lets you pretend the story isn't over. We are all sitting on some version of a stock, or a hobby, or a peloton, that we refuse to sell because selling makes the loss official. The index, however, has no such ego. The index has never once said, let's just give it another quarter. So when someone calls the S&P 500 passive, I'd push back pretty strongly on that word. It's ruthlessly active about quality control, and completely passive about your feelings. That's exactly backwards from most humans, including the ones who bill you quarterly to manage your money. And here's something else that should truly comfort you. The Doomsday scenario, where a handful of giant companies collapse and take the index down, is not the index failing. That's the index working. Those companies shrink in weight as they fall, get replaced by whatever's rising, and the index goes on being the index. The S&P 500 of 1980 shares very few names with the index of today, and the index didn't die. It changed the roster, while the Jersey stayed exactly the same. And as Herb Brooks and Micronesiani both know, that name on the front of the Jersey is a lot more important than the name on the back. You have been investing in the entire team, not the individual players. Part three, the International Exposure Argument. Okay, objection number one, and I hear this constantly, but Tyler, you have no international exposure in the S&P 500, and an advisor could help you identify which international markets are underpriced. Fine, here's my honest position, and I'll give you the caveats too, because I'd rather you trust me than agree with me. The S&P 500 today is not a basket of American companies selling to Americans. It's a basket of multinationals that happen to file their paperwork in Delaware, depending on whose methodology you use. Somewhere between roughly a quarter and roughly 40 percent of S&P 500 revenue comes from outside the United States. Goldman Sachs pegs foreign sales at about 28 percent of revenue. S&P Dow Jones indices own historical foreign sales reports have run considerably higher in the low to mid 40s. Other shops land around 41 percent. Why the spread? Well, because companies report geographic revenue inconsistently, and different analysts handle the gaps differently. I'm telling you that rather than picking whichever number best serves my argument. The honest version though, it's a lot. Somewhere between a quarter and 40 percent and in technology alone, it's over half. In semi-conductors, roughly two thirds, and you all know how much you love the semi-conductor story right now. So when you buy the S&P 500, your dollar is going to work in Seoul and Stuttgart and Rio. It's just doing it inside companies governed by U.S. securities law, audited under U.S. accounting standards, and reported in dollars. Now, the honest caveat. Revenue exposure is not the same as currency exposure, and it isn't valuation exposure. If international stocks are cheaper than U.S. stocks, owning American multi-nationals doesn't get you the discount. So if someone holds international funds for valuation, or genuine currency diversification, I'm not going to tell you or them, they're foolish. That's a real argument made in good faith, and it's what many professionals do who actively tilt their portfolios towards international markets, whose capes ratios are lower than historical averages. What I will say is that the version of the argument that goes, "You have no exposure to the global economy," is simply false and has been for a couple of decades. Your S&P 500 fund sells software in Berlin, chips in Taiwan, sneakers in Shanghai, and burgers in essentially every country that has roads. You are diversified globally, you just got there through a different door. Part four. The thing everyone loves to hate. Concentration. Now, this is a big one. This is the objection of the moment, and it arrives in my inbox roughly 40 times a week. The index is dangerously concentrated. The top 10 companies are an enormous share of it, so this isn't diversification, it's a tech fund waiting to collapse. I'm going to make three arguments here, and again, because I care more about your trust than about I'm going to give you the strongest version of the other side too, which almost nobody selling you an alternative will ever do. Argument 1, just so you know, concentration is not new. It is in fact the historical norm, and the recent past was actually the anomaly. Throughout the 1950s and 60s, the top 10 stocks regularly made up around a third of the total index. During the nifty 50 era, when investors decided that about 50 blue chips were one decision stocks you could buy and simply never think about again, the top 10 climbed above 40% of the index. By late 1972, the top 5 stocks alone were roughly 23% of the market cap. Go back further and researchers estimate the top 10 were near 40% around 1900, a century and a quarter ago. Then concentration fell, below 20% by the end of the 80s, in 1990 the 10 largest companies, IBM, Exxon, General Electric, Philip Morris, made up roughly 19% of the index. It rose to roughly 23% to 27% at the.com peak, unwound again, and sat in the high teens and low 20s for years. As recently as 2015, the top 10 were under 20%. So when someone tells you concentration is unprecedented, what they usually mean is that it's unprecedented since the last time it happened, which is a completely different sentence. Argument 2, and this is the one I really want to land. The index is market cap weighted, which means itself corrects without anyone deciding anything. So when you hear that a giant company is now a huge percentage of the index, the anxious interpretation is, well, I'm dangerously overexposed to that company. But the mechanism that created that weight is the same mechanism that will unwind it itself. Nobody S&P decided to make that company 7% of your portfolio. The market did, by pricing it that way, and if that company stumbles, it's price falls, it's weight falls with it, and the money doesn't evaporate from the index. Other companies simply become a larger share of what remains. I do want to be careful here, because this can be oversold. Market cap weighting does not protect you from losses. If a company that's 7% of the index falls by half, you're going to feel that. Roughly 3.5% of your equity value can be gone, and no rebalancing mechanism refunds it. What market cap weighting does is guarantee that the index reorganizes itself around the new reality, without requiring a human to make a call, pay a tax bill, or be right about the future. The correction is automatic, continuous, and best, free. And in the long run, that's what matters, because the alternative is somebody deciding when to trim, which brings me to argument 3. There's no such thing as being overweight the S&P 500, and I mean that quite literally. Retroweight is a relative term. It requires a benchmark. When a portfolio manager says they're overweight technology, they mean relative to the index. When they say they're underweight energy, they mean relative to the index. The index itself isn't a position, it's the measuring stick. Saying the S&P 500 is overweight big tech is like saying your ruler is too long. Or do what? The market's actual composition is the definition of neutral. Everything else is a bet against that neutrality. Now, that's a semantic point, I don't want to hide behind semantics, so let me steal man the other side properly. The strongest version of the concentration argument is this. Today's top 10 weight of roughly 40% is genuinely high, higher than the dot-com peak on most measures, and it has roughly doubled in a decade. More importantly, the top 10 share of the index's weight has been running meaningfully above the top 10 share of the index's earnings. Weight has risen faster than fundamentals. That gap is real, and that's the honest thing that I would worry about. And there's precedent for what happens next. Research from the CFA Institute points out that the unwinding of 1990s concentration contributed to the loss of decade, where the cap weighted large cap index delivered negative returns over 10 years from 2000 to 2010, while the middle of the market did much better. Something similar followed the 1960s concentration peak. So the person telling you this could mean a decade of flat returns for the S&P 500 specifically is not some quack because that exact scenario has happened twice. So here's how I hold both truths at once, and it's the actual takeaway. Concentration risk is real, and the honest response is not to abandon the index. It's to know your time horizon. A loss decade is devastating if you needed the money in eight years and had 100% of that money in stocks. But it's a rounding error and frankly a buying opportunity if you're 35 and contributing every two weeks and don't need that money for 30 years. Every one of those lost decades was followed by recovery for people who kept buying and holding. The people that destroyed needed the money during it or sold during it, and that's not an index problem, that's a money management problem, which is why I've never believed the answer to market structure anxiety is portfolio cleverness. It's structural discipline about your own time horizon. This episode is brought to you by Thrive Market. I spent this past winter in Sedona eating out almost every single day, and though I want to tell you it was glorious, it was not. By week two, I would have traded any meal on the menu for one night at my own stove. Because I love cooking. It's the best hour of my day and the best time my family has together. What I hate is the grocery store. I'll be deep in a flow state writing a newsletter, and the thing that breaks it is realizing I need two ingredients, 45 minutes, a parking lot, and a cart with one wheel that has its own agenda. So I stopped going. Thrive Market replaced my grocery run entirely, chumps, simple mills, fishwife. It shows up at my door and I never have to leave my desk. And I trusted. Thrive restricts over 1,000 ingredients, even Whole Foods only restricts 300. They're doing the label reading so I don't have to. After pricing, weekly sales, price matching, and free delivery on qualifying orders make the $5 a month membership a no-brainer. Use ThriveMarket.com/tyler to get $30 off your first two orders. You cannot get this deal on the website. It's only through my link. And that right there covers your membership fee. So sign up before this exclusive offer ends. That's ThriveMarket.com/tyler. This episode is brought to you by Gelt. Most of you listening probably already work with someone for taxes. But if you're a solopreneur, a real estate investor, or a high net worth individual who CPA has gone completely radio silent since April, this is for you. A great CPA gets in touch with you. They call in July asking if you've thought about something. They don't wait until next March just to react. The moves that actually reduce your tax burden happen right now. GTE elections, escorp timing, K1 cleanup, and prior year retirement contributions. Gelt is built around exceptional tax professionals focused on your strategies and your relationship powered by cutting-edge technology that handles the rest, designed for those who demand talent and welcome innovation, and know the difference between ordinary and extra-ordinary everywhere. Gelt is taking on new clients this quarter, including an extension rescue program for anyone who filed an extension, and needs a deadline safe handoff. And for new clients, they will help model your prior year retirement contribution opportunities, and help you fund what's still on the table before October 15th. Visit joingelt.com/tyler to get started. That's joingelt.com/tyler. Part five. Why it works, some unglamorous reasons. Let me rattle off just a few other reasons why this thing wins. Because they're less about philosophy and more about basic long-term math. First cost. You can own the entire index for about three basis points. On a million dollars, that's roughly $30 a year. The typical active fund charges between half a percent and a full percent, and the advisor charging one percent on top is charging roughly 300 times the funds fee for the privilege of choosing it. As I say, over and again, costs are the only variable in investing that are guaranteed, known in advance, and entirely within your control. Everything else is probability, but the fee is a certainty that you can control. Next, tax efficiency. Index funds trade rarely, so they distribute capital gains rarely. So in a taxable account, you're not paying tax on somebody else's trading enthusiasm. Your funds generate turnover and turnover generates tax bills that arrive in December like an uninvited relative. Third, no manager risk. When you hire a star manager, you're taking on the risk that they leave. Retire. Get promoted into management. lose their touch or become famous, which my experience is the most dangerous of the five. The index cannot leave for a competitor. Next, you have no key person risk in your own life. What this means is if you get hit by a bus, your spouse inherits one fund if you own the S&P with an obvious purpose rather than 41 individual positions and a note that says just call Gary. And the big one, the one that data has been screaming for 20 years, the spiva scorecard that we go over almost every week, published by S&P for over two decades now consistently shows that roughly 90% of actively manage US large cap funds under perform the index over 15-year periods net fees. Not some, roughly 9 in 10, and that's before we account for the fact that the ones that survive to be measured are the winners of a survivorship contest, because the losers conveniently get merged out of existence and stop appearing in the data. The index isn't magic, it's just that the alternative is a competition that almost everybody loses and the entry fee is high. Part 6, a quick recap of our three bucket system and how it applies here. So how do I actually implement this? In some way I've described it many times because it hasn't changed and for me I don't think it ever will. I don't think about asset allocation in terms of age or what the market is going to do next. I think about it in terms of when each dollar has a job to do. The question will never be how older you. The question will always be when do you need this specific money? Bucket 1, anything you need under two years should be 100% risk off. Money market, high yield savings, tea bills, zero stocks, not 10%, zero. This is your emergency fund, your roof fund, your kids fall tuition, your down payment. The market can be down 30% when you need it and the only reliable protection is not being invested in the first place. Bucket 2, anything you need in two to ten years is just on a sliding scale and the math I've made as simple as possible. Take the number of years until you need it, multiply by ten and that's your percentage in stocks. The rest goes risk off, money marketer tips. So if you need it in three years, 30% stocks, 70% risk off. Needed in seven, 70% stocks, needed nine, 90% you get the point. As time passes, you gradually shift. It's a glide path you can compute in your head, which is the entire point. Because a strategy you can't remember is a strategy you're not going to follow. The bucket 3, anything you need in over ten years, is 100% stocks. And you can put all of it in an S&P 500 fund. Because over ten plus your periods, the historical record for broad US equities is overwhelmingly positive. And the primary risk is in volatility, it's you, selling during volatility. Which is why buckets one and two exist in the first place. They're not about your returns. They're about making sure you never have to touch bucket three at the wrong moment. And notice what this system does. It converts an emotional question, am I comfortable with risk into a factual one? When do I need this money? I don't care how comfortable you are with risk. Comfort changes with headlines. Your daughter's tuition date does not. Part seven. But what about behavior? All right. Here's where the emails start. Because everything I just said is the easy part. And the moment I say it, someone very reasonable and well-intentioned replies, "Sure, Tyler, but the investing piece was never the hard part. The hard part was behavior. That's what an advisor's really for. They stop you from doing something stupid in March of 2020. I want to both take that seriously and mock it immensely. Because it is the industry's strongest remaining argument. And it's not an altogether stupid one. But yes, I still am going to mock it relentlessly. Let's start with a quick history lesson. For decades, the advisor's pitch was performance. Higher us will beat the market. Then the data got so embarrassing because Spiva kept publishing, Vanguard kept growing, and regular people figured out what an expense ratio was. And so with impressive marketing discipline, the industry needed to and did pivot. The new pitch became, well, we're not here to beat the market. We're here to manage your behavior. We add value in the moments when you'd otherwise be a panicking ding-dong. There are even several studies quantifying this. But note these studies are usually, read, always, produced by firms in the business of selling advice, which is a detail worth noticing when you see the number cited. Three responses to this and then what I actually believe, which is more generous than you might expect. First, advisors are human too. The behavioral coaching argument rests on this unstated assumption, which is that your advisor is a calm, rational actor out of an econ 101 textbook and you're a panicking mammal. Your advisor is also a mammal. Advisors have biases, they have mortgages, they have their own kids applying to colleges, they watched the same March 2020 that you did, except they watched it while their own revenue, which is a percentage of your falling account balance, fell alongside it. Their income declined exactly when your anxiety peaked. There's also the deeper issue, it isn't their money. Stay the course is much easier to say about somebody else's life savings than your own. That's not cynicism. It's human. I've been in the chair. I told clients to stay calm on days I went home and did not feel calm at all. And since I'm the one making this argument, I made my own mistakes with my own money in the same years I was paid to prevent other people from making theirs. The professional is not immune. You're just professionally obligated to sound immune, which is a very different thing. Second, remember, you can always just call Doug. Let's price the behavioral coaching service honestly. Suppose you have a million dollars and you're paying 1% a year, that's $10,000 annually. If the primary value being delivered as the industry now openly claims it is, is talking you off the ledge, then you're paying $10,000 a year. For reassurance during the roughly handful of genuinely scary market episodes per decade, which works out to something in the neighborhood of $10,000 for a phone call. Now you also have a friend named Doug. I don't know your Doug, but everyone has one. Doug is reasonable. Doug is known you for 30 years. Doug is not impressed by you, which is his single greatest asset as a counselor. And I'd wager that if you called Doug and said, "Hey Doug, the market's down 20% I want to sell everything." Doug would say, "Why don't you come over and have a beer with me instead." Even better. You could pay Doug 500 bucks a year. You could pay Doug in lunch. You could pay Doug in the ancient currency of also being there when Doug's world wobbles, which is, I'd argue, better than money and definitely better than a quarterly zoom. And here's what I actually mean by this beneath the SaaS. The reason the advisor works in that moment isn't some professional insight. It's that a human being is standing between you and the cell button. And you just had to talk to them first. That's the mechanism. It's added friction plus accountability. That's available to you for free from any reasonable person who cares whether you're okay. Even better, build the friction into the system so it doesn't require a phone call at all. Bucket one and bucket two are that friction. If the money you need soon is not in stocks, the panic has nothing urgent to act on. Structure beats willpower and structure doesn't charge you ten thousand dollars. And the third argument I'll address, well what about the more complicated stuff as all of my assets grow? The more fair rebuttal from advisors is, well, behavior isn't all we do. What about Rothkin versions? Social security timing? Your math thresholds, estate planning, asset location, those are genuinely complicated. They are. And this is where things have changed enormously. Faster than the industry's marketing has updated. You now have access for roughly the price of a couple of coffees a month to a tireless thought partner that you can model your Rothkin version ladder against your Irma brackets. Explain how your ACA subsidy cliff interacts with your withdrawal sequence. Match claiming social security at 62 versus 67 versus 70 under different longevity assumptions. And then do it again from scratch when you change one assumption. And you can do this at 4 in the morning without so much as picking up a phone. Yes, I'm talking about AI. And to all advisors who say AI can be wrong, guess what my friends, so can humans. And from first hand experience, AI is far more accurate than any human I know throughout the course of a day. Whereas the professional you're paying 10,000 a year to probably runs that analysis once, most likely also on new software using you guessed it AI and presents it in a bound folder with some colorful charts. And AI made those two. Now the honest caveats, and they matter, these AI tools absolutely can be confidently wrong. They can hallucinate a rule, miss a recent tax change, or produce a beautiful co-culture and completely incorrect answer with the same tone they use for correct ones. So here's the workflow that actually works. Use AI to understand the landscape, generate the right questions, pressure test your logic, and verify anything decided. of against a primary source, the IRS, the Social Security Administration, your plan documents, or a professional you pay by the hour or a flat fee for the year for that specific verification. That last part is key. Pay for expertise by the hour or by the service for a defined question or project the way you'd pay any other professional. What you shouldn't do is rent expertise perpetually as a percentage of assets you already own for advice you receive quarterly. In closing, where I actually land, as I've said many times before, there are genuinely excellent advisors. I do not dislike the concept of someone helping you when you need it. I know many of these advisors. They do real planning, they charge a flat fee or an hourly rate, they tell clients things clients don't want to hear and they earn every dollar. If you found one of those people, keep them, send them a nice note, they're rarer than they should be. There are also people for whom delegating is right. If money makes you anxious to the point of paralysis, if you know you'd never rebalance, if your spouse has no interest and you want a professional in place for the day you're not there, those are all legitimate reasons. But notice that every one of those reasons is about you and none of them is about their ability to pick investments or be your own personal dog. That's the shift I want you to make. The old pitch was where better at this than you. The new pitch is will keep you from yourself and the new pitch can be a service worth paying for at the price of a service, not at the price of a percentage of everything you own forever escalating automatically as your wealth grows through no additional work on their part. The question is never should I have help? It's am I paying the right price for the right help that I need at this time. Here's your final action list because I want to leave you with something to actually do because philosophy without homework is just a podcast. First, look up the expense ratio of every fund you currently own. This week, add them up, weighted by how much you hold. If that number is above about 0.2%, I want you to ask what you're getting for the difference. If you're paying an advisory fee on top, add it and look at the combined number as a dollar figure, not a percentage because percentage is high, dollars confess. Two, sort your money by date, not just risk tolerance. Under two years, risk off. Two to ten, years times ten in stocks. Over ten, all stocks. Write down actual dollar amounts. Most people discover they're taking on too much risk with near money and too little with far money, which is precisely backwards. Three, go pick a dog. Actually, pick them. Tell them out loud. Hey, you're my dog. And if I ever call you saying I want to sell everything, your job is to take a walk with me first. Naming the person in advance is most of the work and offering to be their dog, which is what makes it a relationship instead of a favor. Four, if you're paying someone a percentage, ask them one question in writing, what specifically do you do for me that justifies this fee beyond selecting investments? A good advisor will have a substantial answer and you'll feel better. A week one will send you a list of ten reasons why they're better than AI and that list will have been generated by AI. And five, the one that matters the most, just stop checking your stuff. The single greatest advantage the index has over you is that it doesn't have a phone. It doesn't know what happened today. The more often you look, the worse you're going to do. To sum it all up, the S&P 500 fires its own losers, hires its own winners, demands profitability at the door, does business on every continent, rebalances itself continuously without your permission, charges you almost nothing for the service, generates almost no tax drag and cannot be lured away by a competing firm. No, it's not a perfect advisor. It's concentrated right now more than it has been in decades and that's a real risk that time horizon, not cleverness is the answer to. It'll have terrible years and they have a terrible decade. It won't hold your hand, ask about your kids or carry even slightly whether you're okay. But for the actual job of turning your savings into more savings over long periods of time, it beats almost everyone who's ever tried to beat it and it does the whole thing for $3 per 10,000. Take the money you would have spent on the alternative and go spend it on something that makes your life actually better. That's the entire point of money. And again, if any of this was useful, would truly appreciate your considering leaving review on Apple or Spotify or sharing it with a friend who might need to hear it. This is how new listeners find the show and it's how I know that this endeavor in free financial literacy is truly getting you one step closer to where you need to be. As always, hope this gives you something useful to think about throughout the week ahead. Thanks for tuning in to your money guide on the side. If you enjoyed today's episode, be sure to visit my website at tylergardener.com for even more helpful resources and insights. And if you're interested in receiving some quick and actionable guidance each week, don't forget to sign up for my weekly newsletter where each Sunday I share three actionable financial ideas to help you take control of your money and investments. You can find a sign up link on my website, tylergardener.com or on any of my socials at social cap official. Until next time, I'm tylergardener, your money guide on the side. And I truly hope this episode I've got you one step closer to where you need to be.