Alternative Investments: First Things First

This week's blogpost - https://bahnsen.co/3Ur0bda On the Thoughts on Money (TOM) podcast, host Blaine Carver with colleagues Brett Bonecutter and Steve Tresnan discuss Steve’s article “Alternative Investments: First Things First,” explaining what alternative investments are, why The Bahnsen Group uses them, and key mechanics clients often find confusing. They frame alternatives as tools for diversification when stocks and “boring bonds” may not offset each other, and as a way to access the broader economy of mostly private companies. They outline the “holy trinity” of private alternatives—private equity (owning private businesses), private credit (lending to them), and private real estate—emphasizing trade-offs like reduced liquidity and the importance of manager execution and due diligence. They compare closed-end drawdown funds (capital calls, vintages, J-curve, long time horizons) with evergreen/open-end structures (easier funding, limited periodic liquidity, reporting lags), and explain fees such as “2 and 20” and why costs can be higher due to labor-intensive processes. 00:00 Welcome to TOM 00:24 Why Alternatives Matter 03:26 Diversification Beyond 60/40 07:10 Private Markets Opportunity 09:26 Liquidity Tradeoffs Explained 13:39 Three Core Alt Categories 15:34 Private Equity Value Add 19:43 Are Alternatives Riskier 21:30 GPs vs LPs Basics 22:40 Manager Selection Matters 30:35 Capital Calls and Drawdowns 34:46 Evergreen Funds and Liquidity 36:48 Valuations and Reporting 40:09 Fees Two and Twenty 44:30 Wrap Up and Resources Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/4zzGteu Trevor Cummings hosts the Thoughts on Money podcast with Sarah Leitzke and Blaine Carver to discuss open enrollment and why people should thoughtfully evaluate benefits rather than defaulting to last year’s choices. Drawing on client conversations, they focus on three under-discussed protections—life, disability, and long-term care—and frame insurance as proactive “protection” against meaningful, not merely hypothetical, risks. They explain life insurance uses for young families (often beyond employer coverage), business-owner liquidity and buy-sell needs, estate equalization, and legacy/tax planning alongside Roth conversion strategies, noting death benefits are typically tax-free. They argue disability risk is more probable than premature death and that group plans can be insufficient due to caps, taxation, and narrow definitions, while individual policies may better cover income. For long-term care, they compare traditional policies (with frequent premium increases) to hybrid life/LTC options, cite 2025 median care costs (about $80,000/year in-home), discuss partial coverage targets, and urge confronting risks now and resourcing advisors with enrollment materials. 00:00 Welcome and Introductions 00:19 Name Pronunciation Banter 01:19 Open Enrollment Confusion 03:01 Why Protection Comes First 08:44 Long Term Care Reality Check 10:43 Life Insurance Use Cases 15:58 Business Owners and Liquidity 21:07 Legacy and Tax Strategy 24:34 Disability Insurance Gaps 31:46 Modern Long Term Care Options 35:57 Handling Premium Increases 38:05 Final Takeaways and Wrap Up Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/4jJ3yGu On the Thoughts on Money (TOM) podcast, host Blaine Carver with Brett Bonecutter and guest Joel Pietila (Associate Director of Planning) discuss Joel’s article, “The Utility of Money,” exploring how financial planning should account for personal values beyond maximizing wealth. Yoel shares a pumpkin patch story to illustrate choosing meaningful “kairos” moments over quantitative “chronos” measures, and the group applies this to retirement decisions where clients often struggle to shift from saving to spending. They cover diminishing marginal utility, noting that the same dollar amount matters far more to someone with little than to someone with substantial assets, and discuss “moving the inheritance forward” via annual gifts, trusts, matching savings, intra-family loans, and charitable giving to see impact during life. They also highlight peace-of-mind choices like paying off a mortgage and encourage clients with plan flexibility to spend more in their “go-go” years. 00:00 Welcome and Introductions 00:31 Utility of Money Story 04:07 Chronos Versus Kairos 06:42 Switching From Saving 09:59 Diminishing Marginal Utility 14:49 Gifting and Legacy Planning 19:28 Moving Inheritance Forward 23:51 Teaching Money Values 27:34 Give While Living 30:49 Spending and Peace of Mind 34:00 Wrap Up and Takeaways Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/4ywqFrr Host Blaine Carver talks with Brett Bonecutter and financial planner Matt Gregory about Gregory’s article, “What Could The Election Actually Do To Your Money?” Gregory says election anxiety commonly shows up in planning as questions about taxes, inflation, Social Security, healthcare, investing, and ultimately whether clients will be okay, and that advisors should uncover the “question under the question.” They discuss how fear is amplified by media, and how planners can make concerns actionable by stress testing assumptions (inflation, healthcare, taxes, Social Security benefits, spending) rather than making knee-jerk portfolio changes. The Bahnsen Group currently uses 2.5% long-term inflation and 5.5% healthcare inflation, revisiting assumptions annually. They note markets historically perform well across political outcomes, and that tax planning (including Roth conversions) should consider bracket changes and Medicare impacts. The episode ends with tentative election predictions and a reminder to focus on 20-year plans. 00:00 Welcome and Setup 00:50 Why This Article 04:54 Questions Under Questions 07:13 Fear and Media Noise 09:32 Inflation Stress Tests 13:59 Do Elections Move Inflation 17:22 Taxes and Roth Moves 23:47 Social Security Reality 29:37 Investing Around Elections 35:38 Should You Change Anything 37:50 Stress Testing Metaphor 40:10 Predictions and Wrap Up Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/4s5VJwC Trevor Cummings hosts the Thoughts on Money podcast with Brett Bonecutter and Blaine Carver (“Joe Bob”) to explain bond yields and interest rates through a scripted “table read.” They frame interest rates as the price of money, shaped by supply and demand, time, risk, and expectations for inflation and growth. The discussion distinguishes loans from bonds, explains why investors buy Treasuries, and clarifies maturities, the yield curve, and why the 10-year note is a benchmark influencing mortgage pricing via mortgage-backed securities. They note Treasury rates are set by auctions and that the Fed targets the overnight federal funds rate, mainly affecting the short end while markets price longer maturities. They address how rising yields lower existing bond prices, why predicting rate moves is difficult, why recent yield spikes may relate to bond supply (including corporate issuance tied to AI), and how current yields improve forward bond return prospects despite recent declines. 00:00 Welcome and Setup 01:00 Table Read Begins 01:17 Price of Money Basics 03:03 Loans vs Bonds 04:49 Treasuries and Yield Curve 07:10 Who Sets Rates 08:39 Investor Takeaways 10:06 Fade Out and Debrief 10:57 Why This Article 13:46 Why Bonds Move 17:12 Fed vs Market Dynamics 26:40 Bond Portfolio Math 30:16 Opportunities and Levers 33:34 Fed Signals Explained 37:43 Wrap Up and Call to Action Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/4AXYRyJ Trevor Cummings hosts the Thought Someday podcast with Brett Bonecutter and Blaine Carver to discuss his blog post, “The Cost of Paying Later,” focusing on the cultural shift toward “buy now, pay later” financing from firms like Affirm and Klarna for everything from small purchases to luxury items. They argue people fixate on monthly payments rather than total cost, making commitments easier and leading to “death by a thousand cuts” as multiple payments and subscriptions accumulate, especially with frictionless tools like Apple Pay. They note interest rates can range from 0% to 30% and question disclosure, delinquency, and why consumers choose these services over credit cards. Trevor emphasizes the importance of counting the full cost and trade-offs, balancing cash flow versus balance sheet, and recognizing how financing and easy credit can distort behavior and reduce flexibility over time. 00:00 Welcome and Setup 00:17 Buy Now Pay Later Boom 02:56 Monthly Payment Mindset 06:07 Keeping Up and Comfort Creep 09:02 Rates and Disclosure Questions 10:36 Layaway Versus Instant Credit 12:19 Is It Dangerous Socially 16:50 Why Not Use Credit Cards 19:38 Frictionless Spending Traps 20:53 Textbook Math Versus Behavior 24:49 Should Versus Could Afford 30:15 Balance Sheet Versus Cash Flow 37:32 Opportunity Cost and Compounding 39:58 Practical Takeaways and Wrap 41:44 Final Thoughts and Sign Off Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/4hpwdik Brett Bonecutter hosts “Thoughts on Money” solo to discuss “Profits: Vice or Virtue?” inspired by David Bahnsen’s book and moral defense of profit amid renewed cultural debate over socialism versus capitalism. He argues free markets are not defensible because greed is useful, but because properly earned profit rewards value creation and serving others. He critiques conservatives for leaning on “greed is good” and notes socialists frame their case as empathy and equity versus capitalist greed, viewing free markets as manipulated and profit as exploitation. Bonecutter concedes profit can come from fraud, coercion, cronyism, or lack of competition, but defines virtuous profit as evidence of transformational value through voluntary exchange (illustrated with toothpaste). He says profit-seeking drives progress, competition and cooperation coexist, profit-and-loss signals resource allocation, profits act as a wealth engine, and this system best expands opportunity and addresses poverty without promising utopia. 00:00 Solo Intro and Theme 01:48 Thesis Profit as Virtue 03:27 Moral Framing of Socialism 05:51 Why Greed Argument Fails 10:12 Socialist View of Profit 15:19 Five Points Overview 15:24 Profit Creates Value 21:00 Progress Through Competition 28:04 Profit and Loss Signals 30:46 Wealth Engine Explained 32:43 Profits and Poverty 34:58 Closing Takeaways Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/4hc81Qi Trevor Cummings hosts the Thoughts on Money (TOM) podcast with blog author Blaine Carver discussing why investors underperform market returns due to behavioral mistakes. Carver cites Morningstar data showing a 2016–2025 S&P 500 annual return of 9.9% versus 8.7% for the average dollar in U.S. mutual funds/ETFs, and a Dalbar 30-year study ending 2021 showing equity investors earning 7.13% versus 10.65% for the S&P 500, attributing the gap largely to poor timing decisions and performance chasing. They explain time-weighted versus dollar-weighted returns, then outline four biases: recency bias, prospect theory/loss aversion, herd bias, and self-deception. Carver suggests investors know their tendencies, follow a disciplined philosophy—highlighting dividend growth investing—and avoid interrupting compounding, and argues advisors can help reduce emotional errors and opportunity costs. 00:00 Welcome and Topic Setup 00:30 Defining the Behavior Gap 02:44 Time vs Dollar Returns 05:08 Bias One Recency Chasing 06:22 Heuristics and Randomness 11:22 Narratives Fuel Bubbles 14:06 Bias Two Loss Aversion 19:43 Bias Three Herd Mentality 25:00 Bias Four Self Deception 25:42 Self Deception Explained 26:08 Know Your Conflict Style 27:38 Marriage Mirrors Behavior 28:51 Specialists Beat Ego 30:51 Advisor Trust Framework 32:38 Investor Game Film 34:06 Time Horizon Advantage 36:12 Dividend Growth Discipline 37:48 Hulk Smash Mistakes 40:23 Dividends Over Drawdowns 42:52 Transparency And Report Cards 44:33 Why Hire An Advisor 46:55 Never Interrupt Compounding 47:38 Final Wrap And Call To Action Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/4AhW7vM Trevor Cummings hosts Thoughts on Money with Brett Bonecutter and analyst Ishan Chhabra to discuss Chhabra’s article “Good Company, Bad Stock,” focusing on how a strong business can still be a poor investment when purchased at the wrong valuation. Using a Red Vines analogy and Walmart from 2000–2011, they show how high expectations (Walmart at ~44x earnings) can lead to weak stock returns (~1% annual) despite strong fundamentals (EPS compounding ~12%). They explain valuation tools—primarily P/E, but also EV/EBITDA, price to free cash flow, sales, and book—plus ways to benchmark multiples against a company’s history, competitors, and sector. The conversation covers earnings quality, share dilution, market “darlings,” value traps, and a quadrant framework balancing business quality vs expectation risk, with emphasis on dividend yield, payout ratios, dividend growth, capital allocation, and management credibility. 00:00 Podcast Introductions 00:20 Good Company Bad Stock 01:16 Candy Price Analogy 02:50 Walmart Valuation Lesson 04:58 Business vs Stock Results 06:06 Valuation Metrics Overview 07:28 Earnings Quality and PEs 11:19 Benchmarking Valuations 13:30 Market Sentiment and Re-Ratings 16:44 Client Psychology and Darlings 21:47 Treadmill and Value Traps 23:04 Restaurant Popularity Analogy 23:20 Popularity Changes Rules 23:52 Risk Quadrant Framework 25:11 High Quality Low Expectations 26:16 Dividend Due Diligence Metrics 28:32 Reading Management Signals 32:38 Explaining Valuation Simply 39:46 Cheap for a Reason 45:15 Wrap Up and Listener Call Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost: https://bahnsen.co/4A77CpN Trevor Cummings hosts a Thoughts on Money podcast discussion with Blaine Carver and Brett Bonecutter on how modern environments—especially social media algorithms and targeted ads—shape financial decisions, using the Stanford Prison Experiment as an example of behavioral influence. They critique an Instagram “real estate guru” video promoting “regular rich” via two rules: pay off all debt (including a mortgage) and save $2 million, assuming an easy 10% return to generate $200,000 annually. The team argues this advice can be dangerous due to liquidity loss, opportunity cost, tax implications, sequence-of-returns risk, inflation, and unrealistic assumptions about consistent returns and diversification. They compare such simplified messaging to Dave Ramsey’s action-oriented psychology, discuss shortened attention spans, and warn that AI and social media provide influence without accountability, urging caution and personalized advice. 00:00 Welcome to TOM 00:30 Instagram Advice Risks 00:57 Targeted Ads and Listening 02:04 Stanford Prison Experiment 05:34 Social Media Influence 07:35 Doomscrolling Explained 07:48 Why I Quit Social Media 09:45 Influencers Without Accountability 12:04 Regular Rich Video Breakdown 14:50 Adjacent Truths in Finance 17:57 Dave Ramsey Comparison 19:26 Short Attention Span Dilemma 21:14 How to Assess Advice 23:19 Two Themes and Debt Rule 24:01 Mortgage Payoff Tradeoffs 24:59 Liquidity And Emergencies 26:00 Opportunity Cost Math 27:30 Tax Deductions And Incentives 27:51 The 10 Percent Return Myth 28:40 Sequence Risk And Inflation 29:58 Diversification And Trust Deeds 31:56 AI Advice And Prompts 36:29 AI In Client Relationships 44:22 Accountability And Role Models 46:59 Wrap Up And Disclosures Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com