The Biggest Mistake Investors Make

At FinCon, Chuck Gaffe- moneylifeshow.com sat down with Paul for a wide-ranging conversation about investing and financial independence.Paul shared insights on the rise of index funds, the FIRE movement’s “one-fund-for-life” approach, and how small portfolio adjustments can boost long-term returns. He also discussed timeless investing principles like staying the course, understanding risk, keeping costs low, and diversifying wisely.At FinCon, Paul reflected on everything from the rise of index funds to the FIRE movement’s “one-fund-for-life” strategy. His message was clear: while simple investing solutions can work, small, thoughtful adjustments—like adding different asset classes—can meaningfully improve long-term returns.Paul also emphasized timeless investing principles:Stay the course. Don’t bail when markets turn volatile.Understand your risk. Know how much you can afford to lose before the storm comes.Avoid unnecessary costs. A fraction of a percent in fees can add up to millions over a lifetime.Diversify wisely. A broad mix of assets offers protection and opportunity across market cycles.Whether discussing crypto, ETFs vs. mutual funds, or portfolio allocation strategies, Paul’s advice always comes back to one goal: helping investors achieve financial independence with confidence and peace of mind.You can explore his free resources, podcasts, and articles at paulmerriman.com

In Part 2 of this 4-part series, Paul Merriman compares the accumulation results of the U.S. 4-Fund Portfolio against the S&P 500, using both all-equity and 60/40 strategies.Paul analyzes five decades of data, showing how diversification affects returns, volatility, and long-term wealth creation. Paul also highlights the tables you’ll want to download and follow along with as he explains the numbers:Table B1: Fine-Tuning Table – S&P 500Table B4: Fine-Tuning Table – U.S. 4-Fund PortfolioTable H2a: Sound Investing Portfolios – 100% EquitiesTable H2: Sound Investing Portfolios – 60/40 PortfoliosTable C1 & C4: Fixed Contributions for Accumulation AnalysisNext week: We'll look at the distributions in retirement using the S&P 500 in both the 100% equity and 60% equities/ 40% bonds.

This is the first of a series of 4 podcasts focused on the decision to have all of your investments be all equities vs. a balanced portfolio of equities and fixed income.  In this presentation Paul uses the S&P 500 in  both the all equity and the 60/40 stock/bond portfolio.  He uses the following tables during his presentation.Table B1 Fine Tuning Table: S&P 500 Equity PortfolioTable H2a Sound Investing Portfolios (these portfolios are all 100% equities)Table H2 Sound Investing Portfolios (these portfolios are all 60% equities/40% fixed income) (NEW)Table C1 Fixed Contributions ($1,000/yr: S&P 500 Equity PortfolioIn the next presentation he does the same analysis using the U.S. 4 Fund and Worldwide 4 Fund Portfolios for the equity portion of the portfolio.

Paul starts this letter beginning with a letter from a listener. The letter ends with the reason why our work has had more impact than John Bogle and Benjamin Felix (Both Truth Tellers).  The rest of the podcast is focused on a recent article- ⁠The Evolution of Financial Advice, by Ben Carlson.  The focus is on the math, history and psychology of investing.Paul concludes that most steps to successful investoring are well documented.  But two areas are still open for fine tuning:  Portfolio construction and fund selection. To help in that Paul recommends three Boot Camp Presentations:  Fine Tuning Your Asset Allocation, Fixed Contributions and Fixed Distributions.

On this podcast, Paul Merriman dives into three big investor questions: Why would anyone add bonds to their portfolio—even in retirement? How has the Ultimate Buy and Hold Portfolio performed in 2025? And how much Small Cap Value should an investor add to VTSAX? Along the way, Paul explains why diversification and balance matter just as much as chasing higher returns.During the podcast Paul references ⁠Table G-1b, Fine Tuning Table: S&P 500 vs. US SCV Equity Porfolio - Out-Performance⁠ and ⁠Table H2a - Sound Investing Portfolios: Comparison Data ⁠, Quilt Chart K1a. He also points to Chris Pedersen’s Best In Class ETF Recommendations and his 2 Funds for Life returns table. These resources provide valuable context for comparing U.S. vs. international returns, equity vs. bond allocations, and how small-cap value can enhance a long-term strategy.

Paul Merriman is looking ahead to the 2025 Bogleheads Conference (October 17–19), one of the premier gatherings for long-term investors. The lineup includes Vanguard CEO Salim Ramji, Christine Benz, Bill Bernstein, Rick Ferri, Alan Roth, Jim Dahle, and more. Paul will be there for all three days to connect with listeners, share new projects, and learn from some of the best minds in the field. Even if you can’t make it, all sessions will be available later on the Bogleheads YouTube channel.In this episode of Sound Investing, Paul also revisits key lessons on building lasting portfolios. He explains why small-cap value has historically outperformed the S&P 500, how the Four-Fund Strategy makes diversification simple and effective, and why tax-efficient investing matters for 401(k)s, IRAs, Roths, and taxable accounts. He also highlights the importance of financial education for young people, pointing to NGPF.org’s Question of the Day as a powerful way to spark conversations about money. And, of course, Paul shares a reminder about the risks of hype-driven assets through the story of Bitcoin Pizza Day.To close, Paul adds a lighter touch by reading a poem about cryptocurrency—written in the playful rhythm of The Music Man.

I had never heard of Erin Moriarity before she contacted me about having a conversation with her on “Erin Talks Money.” When I visited her Youtube channel I immediately realized what a powerhouse she is. She has over 200,000 subscribers to her Youtube channel and her videos are terrific. She has over 800 videos on topics most young investors or beginners at any age need to see. 36 videos on budgeting, 133 on retirement, and much more. Recently she started interviewing old experienced “experts." Her first two guest interviews were Ed Scott and Bill Bengen. I felt honored to be a part of a team who want to help teach her followers. Plus, if you read the comments on the YouTube video it’s obvious she has a large group of loyal followers. By the way, her followers made me feel very welcome."Erin, that was an absolute Masterclass in investing! Thanks for bring Paul to your channel. I enjoyed seeing how comfortable you and the guest were and how the conversation naturally flowed between topics. I’m going to make sure my kids view this. Advice and insights for LIFE!""Excellent video, Erin! How do we know Erin is a force in investing advice? Look at the people she's had on her channel! I'm thankful to Erin not only for the great advice, but she is someone I can show my daughters, ages 21 and 25, and go "Look at Erin. If she can invest and make good choices w her money, so can you!". This means the world to me for them to see someone they can relate to, who disseminates complicated ideas and concepts in an understandable way. And BTW, I confirmed I'm subscribed to her channel “0:00 Introduction & Meet Paul Merriman 2:14 The Power of Starting Early (For You & Your Kids) 7:14 100% Equities for Young Investors & Avoiding Overexposure to the S&P 500 14:02 Predicting Future Returns, Compounding & Patience 22:27 Market Cycles, Psychology & Preparing for Bad Times 25:12 Choosing the Right Portfolio Complexity (Levels 1–3) 34:08 Traditional vs. Non-Traditional Index Funds & Vanguard Loyalty 41:34 Why We Own the Whole Market & The Case for 60/40 46:19 Staying the Course, Chasing Returns & Capturing Extra Gains 57:00 How Investing Has Changed & Automatic Enrollment Benefits 1:01:45 Knowing When You Have Enough & The Rise of Hourly Advisors 1:08:44 The 3 Things Every DIY Investor Should Do & Closing ThoughtsWatch the video here

What’s holding investors back from building real wealth? Talking Real Money, hosts Don McDonald and Tom Cock take aim at the 10 most damaging myths, lies, and mistakes that cost investors big—often millions.You’ll learn:Why "having a guy" isn’t a strategy—it's a setupWhy predicting the market is like calling a psychicHow starting too late can cost you over half a millionThe hard truth about individual stocks, expensive advisors, and false promises of risk-free wealthWhy diversification, low costs, and understanding your real risk profile actually workDon McDonald, a 34-year financial talk radio veteran, and Tom Cock, the former host of Serious Money on PBS, join forces to cut through financial jargon and expose what really works. In every episode, they solve real money problems, share smart long-term strategies, and bring clarity to the complex financial issues that affect all of us.Talking Real Money is designed to give you the real help you need for a really great financial future—and yes, it’s actually fun to listen to.Bonus shoutout: Don McDonald also generously donated his time to narrate the audiobook version of Paul Merriman’s bestselling book, “We’re Talking Millions!” His voice brings the content to life with clarity, energy, and heart. He’s not only a brilliant communicator—he’s also a phenomenal reader. Listen to the audiobook here.

On this special Q&A episode—recorded July 29 2025—Paul Merriman gears up for his August 2 keynote at the Garrett Planning Network Retreat, where he will address more than 100 hourly financial advisors about the future of financial literacy. He invites listeners to email questions for the panel ([email protected]) and then dives into ten wide‑ranging listener questions that benefit investors of every age and stage.What you’ll learnAdding QQQ to the 10‑Fund “Ultimate Buy‑and‑Hold” portfolio: upside vs. hidden downside.Toughest markets Paul has faced—from the 1966–1981 whipsaw to the 1987 crash—and the timeless lessons they teach.Global diversification in 2025: 50/50 vs. 70/30 U.S./international and why volatility, not return, drives the decision. Table B4, Table B3a and Table B3bSmall‑Cap Value vs. S&P 500 performance: 1975‑1999’s 5 % premium, 2000‑2025’s 2.6 % edge, and what it means going forward.Avantis + DFA split for deeper diversification (cost, holdings, tracking error).Risks of an all‑Small‑Cap‑Value portfolio and when a worldwide all‑value approach makes more sense.Using DFA International Small‑Cap Value (DFISX) inside a 403(b) for a Two‑Fund strategy.Vanguard STAR vs. Vanguard Wellington: balanced‑fund showdown and why Wellington’s 60/40 mix wins in the long run.Rebalancing at age 62: tax‑smart moves, asset‑location tactics, and simplifying with target‑date or balanced funds.Anatomy of the Ultimate Buy‑and‑Hold strategy: 10 equity asset classes, why it started in 1994‑95, and how four‑ and two‑fund variations stack up. Sound Investing Portfolio Returns (1970-2024) 50/50  and  Sound Investing Portfolio Returns (1970-2024) 70/30Paul backs every takeaway with real‑world data—from DFA, Avantis, Vanguard, and Russell indexes—illustrating how disciplined asset allocation can tame the brutal drawdowns that crush performance when investors chase recent winners. You’ll hear why trend‑following protected clients in 1987, how dividends rescued returns in the 1966–1981 “go‑nowhere” market, and why low‑cost indexing plus global value exposure remain his bedrock recommendations.Got a question for Paul’s hourly‑advisor panel? Email it before July 31 and help shape the conversation on transparent, client‑first advice.Listen now to sharpen your strategy—whether you’re building wealth, 20 years from retirement, or fine‑tuning a 50/50 portfolio in your 60s.

In this episode, Paul Merriman shares insights into upcoming events, including his presentation at the Garrett Planning Network Retreat, as well as his reflections on asset allocation, government bond strategies, and the benefits of various portfolios for different life stages. Tune in for a deep dive into how different funds and asset classes perform over the long term, and how to optimize your investment strategy, regardless of age or risk tolerance.Key Topics Covered:1. Long-Term Returns ComparisonPaul compares two small-cap value funds: the Vanguard Small Cap Value Fund (VSIAX) and the DFA Small Cap Value Fund (DFFVX). To find long-term returns for these funds, Paul uses Morningstar’s chart function, which allows users to view the maximum (MAX) historical data for any given fund, helping to compare the performance of these funds since their inception 2. Best Asset Allocation for RetireesThe best asset allocation for retirees typically depends on individual factors, such as risk tolerance and life expectancy. Generally, Paul suggests a moderate equity allocation of 40-60% in stocks, with the rest in fixed income, for retirees who have enough saved up to comfortably fund their retirement .3. Asset Allocation for an 83-Year-Old RetireeFor an 83-year-old retiree, Paul discusses a more conservative portfolio with two-thirds in bonds and one-third in equities. This conservative approach, which mirrors the allocation in Vanguard’s target-date funds, aligns well with retirees who are less reliant on aggressive growth but still need some equity exposure to combat inflation .4. Why Use Three Government Bond Funds?Paul advocates for a diversified bond strategy that includes TIPS (Treasury Inflation-Protected Securities), short-term government bonds, and intermediate-term government bonds. This combination offers a balance of safety, growth potential, and reduced volatility compared to using just one bond fund, and provides a more stable return over time.5. How the Worldwide 4 Fund Portfolio WorksThe Worldwide 4 Fund Portfolio is structured with 25% in large-cap blend (U.S), 25% in large-cap value (INTL), 25% in small-cap blend (INTL), and 25% in small-cap value (U.S.), giving you a diversified mix of U.S. and international equities. This approach optimizes for both size and value, ensuring a balanced exposure to market growth, volatility, and global investment opportunities.6. Should a 26-Year-Old Use the 2 Funds for Life Portfolio Yes, a 26-year-old could benefit from the 2 Funds for Life Portfolio, which typically includes the A TARGET DATE FUND and a small-cap value fund. This strategy allows young investors to focus on equity growth, benefiting from the long-term appreciation potential of small-cap value stocks while minimizing risks associated with bonds at an early stage7. Managing the 2 Funds for Life Portfolio with S&P 500 & Small-Cap Value For someone using only the S&P 500 and small-cap value fund, Paul suggests a flexible allocation approach. You might start with a 50/50 split, or adjust according to your risk tolerance. The small-cap value fund tends to be more volatile but offers higher returns over time, while the S&P 500 provides more stability with lower volatility .8. Can There Be a 3 Funds for Life Portfolio?Yes, a 3 Funds for Life portfolio could include the S&P 500, large-cap value, and small-cap value. Paul suggests mixing these three equity asset classes to achieve a balanced portfolio that offers growth potential without overexposing yourself to risk.⁠Resources:1928-2024 Quilt Chart (K1a)⁠⁠Sound Investing Table (H2a)⁠Chris Pedersen’s 2 Funds for Life Table: For more detailed insights, visit ⁠Chris Pedersen’s 2 Funds for Life table⁠.