Episode 477: Handling Midwest Mom, Some Book Recommendations, And Australians Trying To Beat The Market

In this episode we answer emails from Midwest Nice, Ron and Stefan.  We discuss helping a cautious parent with a high-fee advisor, what services are actually worth paying for in their case, how to invest home-sale proceeds for a 5–10 year horizon, where to learn beyond basic indexing without losing the plot, the McKenna Man portfolio, and best approaches to try to beat the market (beyond don't try).  Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterExcess Returns Channel: Excess Returns - YouTubeTacoma Narrows Bridge Collapse Video:  Tacoma Bridge Collapse: The Wobbliest Bridge in the World? (1940) | British PathéStefan's Sparkline Capital Article:  Buffett's Intangible MoatsBen Felix Video On Leverage:  Investing With Leverage (Borrowing to Invest, Leveraged ETFs) (youtube.com)Book List:Ashvin Chhabra:  "The Aspirational Investor"J. David Stein:  "Money For The Rest of Us"Michael Mauboussin:  "More Than You Know" and "Think Twice"Antti Ilmanen:  "Expected Returns" and "Investing Amid Low Expected Returns"Andrew Lo:  "In Pursuit of the Perfect Portfolio"Ed Thorpe:  "A Man For All Markets"Larry Swedroe:  "Your Complete Guide to Factor Investing"Breathless Unedited AI-Bot Summary:Ever tried to help a parent who’s financially fine but glued to a “nice” advisor and a vague plan? We dig into the real-world tactics that preserve relationships while improving outcomes—think gentle on-ramps like scam protection, account alerts, and sharing your own planning choices. The goal isn’t to win a debate; it’s to earn access, reduce avoidable taxes, and align risk with comfort, especially when pensions and Social Security already cover spending.From there, we get specific about value. If an advisor stays, the highest-return work for many retirees is tax strategy, asset location, and simplification—not performance theater. We talk practical setups like Wellington or Wellesley for low-cost balance, when a deferred QLAC can be a comfort hedge, and why generating more income than you need can backfire at tax time. For listeners sitting on house-sale proceeds with a 5–10 year window, we unpack why hoarding cash invites erosion and why a golden ratio–style mix can cap drawdowns to a few years while keeping growth and inflation resilience alive.Curious investors also get a roadmap for learning beyond slogans. We highlight factor tilts with quality screens, institutional-grade thinkers like Ilmanen, Lo, and Mauboussin, and the simple truth that outperformance usually comes from concentration or leverage—so position sizing and behavior matter more than hot takes. We challenge the myth that a cap-weight index buys the “whole economy,” and we favor building like engineers: learn from failures, control volatility, and design for the stress you’ll actually feel.If this helped you rethink fees, timelines, or tilts, follow the show, share it with a friend, and leave a quick review so more DIY investors can find these tools.Support the show

In this episode we conduct our annual portfolio reviews of our eight sample portfolios you can find at Portfolios | Risk Parity Radio, and compare them with commercial alternatives.  We discuss why factors beat geography, and explain how gold, bonds, and managed futures improved results and withdrawal durability.We also confront the real roadblock to a good retirement: underspending driven by identity and fear, which we heard about in 2025 from Bill Bengen, Michael Kitces and Carl Richards, Morgan Housel and David Bach, among others.Breathless Unedited AI-Bot Summary:The biggest retirement risk most prepared savers face isn’t market volatility—it’s not spending enough. We dig into why identity and fear keep people stuck in “I am a saver” mode, and how to break that habit with a portfolio built for higher, safer withdrawals. Then we open the books on eight sample portfolios and share what actually worked in 2025: factor-driven international exposure, a powerful year for gold, the yield curve’s shift favoring intermediate bonds, and a split decision for managed futures where DBMF led.You’ll hear how the Golden Butterfly and Golden Ratio outperformed classic 60/40 approaches by leaning on uncorrelated return drivers, and why DIY risk parity designs can match or beat commercial funds at lower cost. We walk through the conservative All Seasons mix, the diversified Risk Parity Ultimate, and two leverage case studies: one that shows how leverage without real diversification can disappoint, and another that demonstrates smart “return stacking” with OPTRA—combining modest leverage, gold, value tilts, and managed futures for equity-like returns with a steadier ride.Along the way, we connect portfolio choices to what matters most: turning savings into a life well-lived over the next decade. A candid listener story reminds us that time is finite, and that a better withdrawal rate is not a luxury—it’s a plan for joy, relationships, and experiences now. If you’ve wondered whether your mix underuses factors, overlooks gold, or over-relies on 60/40 assumptions, this is your field guide to a sturdier, more generous retirement strategy.If this resonates, tap follow, share it with a friend who needs a nudge to spend confidently, and leave a quick review with your biggest portfolio question. Your next ten years will thank you.Support the show

In this episode we answer emails from Tyler, Michael and Jon.  We discuss managing an inherited Roth across a 10-year window and related questions, compare VXUS to targeted international tilts, tax and asset location considerations for traditional and Roth IRAs, and talk about some of the basic ideas for achieving higher safe withdrawal rates.And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.Additional Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterGolden Ratio Portfolio Article:  Beautiful Constants and the Golden Ratio Portfolio – Portfolio ChartsAfford Anything Podcast #618:  They Ran Out of Money. I Didn’t. Here’s Why.Slide Deck:  Afford Anything Episode 618 RPR Basics Slide Deck.pdf - Google DriveVideo Summary:  Afford Anything Episode 618 Video Summary.mp4 - Google DriveAfford Anything Risk Parity Portfolio Blueprint:  Afford Anything frank-vasquez-risk-parity-portfolio-BluePrint.pdf - Google DriveBigger Pockets Money Podcast:  The Secret to a 5% Safe Withdrawal Rate | Frank VasquezSlide Deck:  BP Money Interview Slide Deck.pdf - Google DriveVideo Summary:  BP Money 5 Pct Withdrawals (F. Vasquez).mp4 - Google DriveBreathless Unedited AI-Bot Summary:A surprise inheritance, a strict 10-year clock, and a plan that has to work through whatever the market throws at it—this conversation tackles the decisions that actually move the needle. We break down a practical approach to managing an inherited Roth IRA, why delaying withdrawals can preserve tax-free growth, and how to separate speculation from your core allocation so one risky bet doesn’t hijack your entire plan. Along the way, we show how risk parity portfolios lower sequence-of-returns risk and why the best “edge” is often calm structure, not prediction.We dig into tax location with real-world transitions in mind. During your working years, most of the portfolio belongs in equities; the puzzle appears when you move toward retirement and spread assets across bonds and diversifiers. That’s where location shines: place ordinary-income-heavy assets in traditional accounts, keep the highest-growth assets in Roth, and avoid turning your taxable account into a tax drag. We also talk about securities-backed lines of credit and why reducing portfolio volatility can materially lower margin stress when you’re funding future purchases like rentals.If international stocks feel like a copy of your U.S. exposure, they probably are. We explain how currency drives much of the U.S. vs ex-U.S. gap and why targeted tilts—international large cap growth and small cap value—can be a more effective pairing than broad VXUS. Then we tackle illiquid plays and limited partnerships: categorize by the underlying asset, respect rebalancing limits, and treat truly illiquid positions as separate businesses with independent cash flows.Support the show

In this episode we answer emails from Jenna, Kevin, and Jack Rabbit.  We challenge the myth of “never pay taxes” and show how to transition scattered holdings into a Golden Butterfly framework while keeping taxes manageable. We also examine Bitcoin’s role, review sample portfolio performance, and share new listener-created bonus material on the site.And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.Additional Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterJack Rabbit's Creation re Episode 208 (Advice for Beginning Investors):  A Parable for Beginning Investors in the Land of Oz"Free Steak Dinner" Rant Episode:  Episode 321: A Small Rant About Newman Selling Annuities At Local Steakhouses | Risk Parity RadioBreathless Unedited AI-Bot Summary:You can optimize a portfolio to the comma and still miss the point if the tax tail is wagging the rest of your life. We dive into a common blocker—fear of realizing gains—and replace it with a better plan: build the mix you actually need, then minimize taxes over years with smart account placement, specific-lot sales, and well-timed gain harvesting. From there we lay out a practical route to a Golden Butterfly structure—growth and value stocks, long Treasuries, gold, and short-term bonds—implemented primarily inside tax-deferred accounts to keep the brokerage account’s changes light and intentional.Along the way, we tackle a hot question on Bitcoin. Our take is grounded, not tribal: no income, high volatility, and shifting correlation that often mirrors high-beta growth. If you must touch it, keep it tiny so it can’t steer your long-term outcomes. More important, we reframe risk tolerance: being comfortable with swings isn’t a destination. Decide whether your target is maximizing lifetime spending or terminal wealth, then right-size volatility and liquidity to fit that goal. Finance comes first; the personal is how you stick to it.We round out the conversation with a market scoreboard—gold’s surge, equities’ strength, managed futures’ late-year pop—and a transparent look at model portfolios, from classic all-weather to a measured, levered stack that’s built for accumulators who accept higher swings. We also share a listener-made “graphic novel” twist on a past episode now posted as bonus material. If you’re ready to shed tax paralysis, align your assets with your life, and use diversification that actually works across regimes, this one’s for you. If you enjoyed it, subscribe, leave a review, and tell us: what’s the next move you’ll make to simplify and realign your portfolio?Support the show

In this episode we answer emails from JT, Phil, and Glenn.  We revel in the updates to the TestFolio tools, weigh how tilting toward small cap value can lift safe withdrawal rates but also reduces overall diversification, return to KBWP and how property and casualty insurance companies can provide value-tilted diversification, and discuss the tracking results reported on the About page at the website.Links:Testfolio 5% Withdrawal Backtest Comparison:  testfol.io/?s=74fuq6N5WWdTestfolio Comparison of SCV, LCG, LCV and SCG:  testfol.io/?s=4eqimbZveGXWeird Portfolio:  Weird Portfolio – Portfolio ChartsTestfolio KWBP and BRK-B Analysis:  testfol.io/analysis?s=l34pkinSxdeFund Seeder Tracker Site:  FundSeeder - Empowering Top Traders with Capital and InsightsBreathless Unedited AI-Bot Summary:Ready to push past rules of thumb and actually pressure-test a retirement portfolio? We dig into how far a DIY investor can tilt toward small cap value to raise a safe withdrawal rate, what history really shows across 30- and 50-year windows, and why correlation—not bravado—decides whether you can keep spending through ugly markets. Using new Testfolio features with 100-year factor data, we compare the Golden Ratio and Golden Butterfly against more value-heavy mixes and pinpoint where the extra “cowbell” helps and where it just adds stress.We also open a less-traveled door inside equities: property and casualty insurers. Whether you own them through KBWP or direct index the top names, this sleeve has delivered rare intra-equity diversification, often keeping pace with broad markets while zigging in years like 2022. We share the practical trade-offs—expense ratios vs. tracking error, simplicity vs. tax loss harvesting—and explain when the ETF is the smarter, lower-hassle choice. If you already own Berkshire Hathaway for your value core, you’ll hear why insurers can complement or substitute without bloating overlap.Context matters, so we pull back the curtain on our publicly tracked taxable account and why it can look extreme in a bad year and strong in a good one. The whole-portfolio view is far steadier, closer to a risk parity blend of stocks, long treasuries, and diversifiers like gold and managed futures. The takeaway: if you want a withdrawal rate you can live with, build for multiple regimes—blend small cap value and large cap growth, keep long bonds for deflation shocks, and add real diversifiers that cut correlation when you need it most. Subscribe, share this with a DIY investor who loves data, and leave a review to tell us where you’d tilt next.Support the show

In this episode we answer emails from Anonymous from New Jersey, James, and Brad.  We answer a donor’s six-part retirement plan, from mortgages and liquidity to 403(b) constraints, ETF trading, asset location, asset swaps, and tax‑savvy withdrawals. Then we discuss the risks of staying in an accumulation portfolio for too long and the options for obviating a crash before transitioning. And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.Additional Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterHow To Do An Asset Swap Video from Risk Parity Chronicles:  How to Do an Asset SwapTax Planning Book:  Amazon.com: Tax Planning To and Through Early Retirement: 9798999841599: Garrett, Cody, Mullaney, Sean: BooksBreathless AI-Bot Summary:Ever wonder whether paying down a mortgage before retirement is actually the safest move? We make the counterintuitive case for liquidity first: keep cash flexible during the messy early retirement years, when housing changes, college timelines, and new expenses collide. With a real listener case study, we show how a mortgage can be a tool, not a trap—and why you can always accelerate later once the dust settles.From there we dig into a pain point for many educators and nonprofit pros: weak 403(b) lineups. We break down why insurance-driven menus lag, how to advocate for better providers and funds, and when it makes sense to roll to an IRA for full control. You’ll also learn how to keep tracking simple, why monthly check‑ins beat daily dashboards, and how consolidating at a service‑oriented custodian streamlines everything. On execution, we explain why ETFs beat mutual funds for rebalancing speed and precision, plus how to convert Vanguard mutual funds to ETFs without tax surprises.Taxes and withdrawals get the spotlight too. We clarify asset location—shelter ordinary income, let capital appreciation work in brokerage and Roth—and outline “asset swaps” that let you sell what’s up while managing tax impact. For those still accumulating, we talk strategy for a smoother glide into a risk parity portfolio to reduce sequence risk, and the trade-offs between earlier protection and maximum growth. We wrap with a market scoreboard across stocks, bonds, gold, REITs, commodities, preferreds, and managed futures, and report on sample portfolios including Golden Butterfly, Golden Ratio, Ultimate, and leveraged variants.If you value actionable, no-nonsense guidance for DIY investors, you’ll find ideas you can use right away—whether you’re five years from retirement or still building your base. Subscribe, leave a review, and share this with a friend who’s wrestling with 403(b) choices or planning a tax-smart withdrawal strategy.Support the show

In this episode we answer emails from Anonymous, Pete, and Wilhelm.  We discuss how MiFID reshapes investing for U.S. citizens retiring in the EU, the commodities fund HGER and the "Desert Portfolio."Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterIBKR MiFId Client Page:  MiFID Client CategoryPortfolio Charts Assets Page (for finding funds):  Assets – Portfolio ChartsAnimal Spirits Podcast re HGER: Talk Your Book: How to Invest in Commodities - Animal Spirits Podcast | Podcast on Spotify Testfolio HGER Analysis:  testfol.io/analysis?s=dcDPCTQc1j6HGER Fund Page:  ETF | Harbor Commodity All-Weather Strategy ETF (HGER) | Harbor CapitalPortfolio Charts Safe Withdrawal Rates Chart:  Withdrawal Rates – Portfolio ChartsBreathless Unedited AI-Bot Summary:Planning to retire in Europe while keeping a U.S.-style portfolio? The moment you change residency, MiFID rules can block purchases of U.S.-domiciled ETFs, turning routine rebalancing into a headache and putting your safe withdrawal rate at risk. We break down practical steps to keep your plan intact, including using Interactive Brokers to run a two-sleeve setup—sell-only in the U.S. account, buy in an EU account with UCITS equivalents—and how to make rebalancing work without creating a tax and paperwork nightmare. You’ll hear the pros, cons, and tradeoffs of each path so you can navigate regulation with confidence, not guesswork.We also examine a smarter way to think about commodities. Legacy benchmarks like BCOM haven’t evolved with investor goals, and that’s where HGER’s rules-based design stands out with a quality and carry overlay that often elevates gold. But if you already hold gold, does a gold-tilted commodity fund add diversification or just overlap? We compare HGER to PDBC, highlight correlations with stocks and gold, and explain why managed futures can deliver broader, more resilient diversification across commodities, rates, and currencies. If you’re after true crisis defense, a blend of gold and managed futures may beat a traditional commodity sleeve.To round it out, we stress-test the “desert portfolio”—high treasuries, modest equities, a touch of gold—and explain when its calm ride helps and when it lowers your long-term sustainable withdrawal. If your real objective is durable retirement income, consider upping equity exposure, adding value tilts, and relying on uncorrelated diversifiers that keep you rebalancing through drawdowns. Subscribe for more DIY-friendly portfolio tactics, share with a friend who’s eyeing an EU move, and leave a review to tell us what cross-border investing questions you want answered next.Support the show

In this episode we answer emails from Adam, Cha Cha, and TJ.  We discuss how cash and short-term bonds affect safe withdrawal rates, why the Golden Butterfly’s allocation is a preference not a rule, and how to build a growth-first plan when you’re starting late.  And we wish Happy Birthday to Mick the Mugga Mugga.And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.Additional Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterMany Happy Returns Podcast Featuring Tyler:  How to Pick Your Perfect Portfolio, with Tyler from Portfolio ChartsVideo Summary of Recent Bronnie Ware Interview:  https://drive.google.com/file/d/1XO1H7719LTel-WrwUABpMaAzdFk6-juv/view?usp=sharingCatching Up To FI Podcast:  Financial Independence - Catching up to FIExcess Returns Podcast:  Excess Returns Podcast | Excess Returns Podcasts - Helping Make You a Better InvestorSwedroe Factor Investing Book:  Book Review: Your Complete Guide to Factor-Based Investing | CFA Institute Enterprising InvestorBreathless AI-Bot Summary:Worried your portfolio is heavy on cash but light on purpose? We unpack the real trade-offs behind short-term bonds, money markets, and the Golden Butterfly’s famous “comfort cushion,” then show how a few precise tweaks can lift safe withdrawal rates without blowing up your sleep. Listener questions drive the heart of the episode: how much cash is too much, whether VTIP truly hedges better than VGSH, and why cash management rarely changes outcomes even though it feels reassuring.From there we shift to a late-starter’s dilemma: chasing 8–10% average returns over a decade without gambling. We get practical about the only two ways to beat the market, why stock-picking “wins” often just mirror factor exposure, and how to use a simple, research-backed pairing—large-cap growth with small-cap value—to seek higher expected returns. We also cover when international tilts help, how currency drives comparisons more than people think, and where bonds, gold, and REITs fit as you move closer to financial independence.Our take is direct and usable: minimize inert cash, diversify for shallower drawdowns, and reserve complexity for places that pay. Build growth while the gap to FI is wide, then add ballast on purpose as you near the goal. If you want a sturdier plan and a quieter mind, this conversation clears the noise and spotlights the levers that matter.Enjoy the show? Follow, rate, and share it with a friend. Send your questions to Frank at RiskParityRadio.com, and if it helped, leave a quick review so more DIY investors can find it.Support the show

In this episode we answer emails from Patrick, Kyle, and Dave.  We discuss the advantages of using risk parity style portfolios for higher withdrawal rates, how to manage a sleeve of individual REITs, the joys of giving in its various forms, a risk parity style portfolio in a Donor Advised Fund, and reverse glide paths.  We share how planned generosity, donor-advised funds, and employer matches can make retirement more meaningful.Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterKitces & Carl podcast about "Frugal Bob":  Helping Retired Clients To Actually Start Spending And Enjoying Their Money - Kitces & Carl Ep 178Bigger Pockets Money Test Risk Parity Style Portfolio:  We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)Choose FI Podcast #574:  Top Five Regrets of the Dying (Book Club with Frank Vasquez and Ginger) | Ep 574Kitces Reverse Glidepath Article:  The Benefits Of A Rising Equity Glidepath In RetirementBreathless AI-Bot Summary:Most retirees don’t fail because they spend too much; they struggle because their portfolios weren’t built for withdrawals. We unpack how risk parity, smarter rebalancing, and a reverse glide path can protect early-retirement years while keeping growth on the table. Along the way, we share listener stories that show what happens when a 100% stock believer embraces diversification and discovers the joy of giving—through donor-advised funds, employer matches, and a simple plan to distribute one percent or more each year.We start with a real allocation shift: blending large growth, small value, long Treasuries, gold, managed futures, and a small sleeve of REITs to reduce sequence risk. Then we get tactical. For individual REIT holdings, we treat the sleeve as one allocation and only rebalance when the sleeve moves versus the rest of the portfolio. Inside the sleeve, focus on outliers—trim oversized winners, reassess laggards with deteriorating stories—and keep transactions light to minimize taxes and churn.The heart of the episode explores how generosity reshapes retirement planning. Using a donor-advised fund to “stress test” withdrawals at high rates teaches mechanics and builds confidence, while employer matching turns donations into leveraged impact. We talk practical tools—automating gifts, donating appreciated shares, setting “use-by” dates on giving accounts—and nontraditional forms of giving that create work, support local businesses, and deepen relationships.We close by breaking down the reverse glide path championed by Michael Kitces and echoed by Bill Bengen: start retirement with lower equity exposure and increase it over time. Our working template moves from the low 40% equity range toward 60–70% as years pass—an evidence-informed band that historically supports higher safe withdrawal rates and tamps down sequence risk. Paired with risk parity diversification and a deliberate giving plan, it’s a path that funds a life you actually want to live.Support the show

In this episode we answer emails from Grant, Brian, and Mourad.  We unpack Grant's various gambling problems with leveraged ETFs and Bitcoin wrappers, owning gold in CAD or USD for Canadians, the role of preferred shares and Mourad's recent visit to the Father McKenna Center.Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterChoose FI Podcast #574:  Top Five Regrets of the Dying (Book Club with Frank Vasquez and Ginger) | Ep 574Mary's CASA Case Adoption Story:  The Johnson’s Foster Care & Adoption StoryPortfolio Charts Global Analysis:  What Global Withdrawal Rates Teach Us About Ideal Retirement Portfolios – Portfolio ChartsBreathless Unedited AI-Bot Summary:Ever been tempted by a product that promises steady price, double‑digit yield, and exposure to the hottest asset on earth? We take a hard look at leveraged ETFs, Bitcoin‑linked strategies, and engineered income, then draw a clean line between thrill and risk you can actually carry. Grant checks in with a levered twist on the Golden Butterfly, swapping UPRO for TQQQ and TNA, and we explain why the Russell small cap complex often hides junky growth that fails to diversify when you need it most. If you want real balance, pair concentrated growth with genuine value or defensives, not a label that only looks like value on a factsheet.We also break down MicroStrategy’s stock behavior versus spot Bitcoin and explore STRC, the “preferred” fund aiming to keep price near par while dialing a high payout. The headline yield is labeled return of capital, which may defer taxes but doesn’t manufacture wealth if the underlying can’t out-earn distributions. When the tide turns, structures like this tend to leak value, especially if they rely on direction and volatility to cooperate. If your goal is Bitcoin exposure, owning a spot ETF is usually cleaner and more predictable than chasing premium/discount dynamics or engineered yield.For Canadian listeners, we make the case for treating gold as a currency and holding it in CAD to match real-world spending, reducing the noise of USD/CAD swings. Bonds are different: long U.S. Treasuries remain premier crisis ballast thanks to reserve currency demand. We review a thoughtful 50% equity risk‑parity‑style allocation targeting a 5% withdrawal rate, flag why a heavy preferred shares sleeve can be a drag, and suggest shifting part of that into long duration Treasuries, more gold, or a true diversifier like managed futures. Want portfolios that survive the cycle? Favor transparent exposures, honest hedges, and tools like Portfolio Charts to pressure‑test your mix across currencies.If this helped sharpen your plan, follow the show, share it with a friend who loves complex wrappers, and leave a quick review so more DIY investors can find us.Support the show