Nate Reineke (00:00)
Hello, physician moms and dads. I'm Nate Renneke, certified financial planner and primary advisor.
Kyle (00:07)
And I'm Kyle Hesley, certified financial planner and retirement investing specialist.
Nate Reineke (00:13)
Kyle, I heard you, we were talking in our team huddle about kind of teaching kids about money and helping them learn how to invest. And I just, had this thought that we have many, clients that we've seen spend 30 years saving and kind of what we might call teaching their money how to grow, but they don't know how or they just fail to teach their kids about money for even 30 minutes.
So I wanted to know, I know you have a couple β sessions kind of coming up with the children of our clients. you've done this several times in the past over the years. Anytime you get the chance, you kind of offer it up. But what is your like go-to strategy for making investing feel relevant to young kids? Even if they're, let's say if they're β in their teens.
Kyle (01:08)
I like to hit them with, I'm gonna take a step, of paint the landscape a little bit here and then I'll tell you what I get into. But the majority of the route that the parents and the children take with investing is usually first job, 16, 17, 18, maybe work, study in college, first couple years of college. They haven't earned income.
Nate Reineke (01:13)
Yeah.
Kyle (01:35)
And so right away, Roth IRA or minor Roth IRA, depending on their age. So how do I get the children kind of on board or excited about it? I talk about the time value of money and the tax free growth in a Roth and using the rule of 72, which is that cool little life hack to like, you get this interest rate return. This is how long it takes to double your money. Um, you know, I do that. I paint the picture out of like, man, you're starting today.
Nate Reineke (01:47)
Mm-hmm.
Kyle (02:04)
And let's say you put this much money in and say you have this much money at this age and then you don't touch it till you're, you know, 60, 65. This is how much money you could have if you don't touch it. But every time you take money out of this account, you're chopping that off at its legs and you're going to lose all that, that potential awesomeness, awesomeness down the road. So that's usually kind of how I like to leave the conversation at the end is like, look at the opportunity that you have.
Nate Reineke (02:24)
Yeah.
Yeah, that's great. I remember when I was in high school, we had to do a senior project. So this will tell everybody. I always tell people I always wanted to be a financial advisor. And they think like, why on earth would you want to do that? Like when you're a kid, but it's because my dad was and I was really interested in it. But I can prove to them because I have my senior project from high school, however many years ago, and it was the title of it was
how to become a millionaire making minimum wage. Because at the time I made minimum wage and I was spending like a few bucks a day on something, I don't remember what it was, like some drink. I was like, you know, go to lunch and take my lunch money and get some food and a drink. And I showed the time value of money of just investing that like $3 a day into getting some return. yeah, I remember the picture of it was like,
It was some kind of sloppy guy, but he had a shirt that just said, I'm rich. I was like, this is for everybody. And literally, I was showing my classmates, people that you're talking to about their age, and they're like, that's not real. It is real. I was so interested in it. Time value money is real. Yeah, so that's awesome.
Yeah, you can kind of show them the big numbers, get them excited about it. I think sometimes where us as parents, we fail is β we don't talk about the cool part. My dad did a good job about this. He wasn't talking about taxes. What do you care about taxes? What do you care about saving money on taxes? You don't pay any taxes, right? When you're a kid, you're like, what's that? β But the cool part is seeing a big pile of money that theoretically you might be able to get.
So my dad did this when I was young. He showed me graphs. He knew I was into graphs, but it was like, here's the return and then put it down on paper and result. Look at this pile of money you could have if you were just like not so bad with money. didn't spend all your money on food and Cheetos at the store. You know, so that's pretty cool. If clients are listening, Kyle loves this stuff. So if you have a child that has showed some interest,
Hopefully you're not forcing them into the call because that never goes well. But if they show some interest, you can reach out. Okay, let's get into some questions. β We got three today. First one is from an anesthesiologist in New York. I have a whole life policy and my agent told me it now quote, pays for itself. Does that mean I should keep it? Okay. β
It's important to know that this isn't advice for everybody. Everyone has their own situation. I like to point to one obvious situation where sometimes people should keep their whole life because you'll hear me talk poorly about whole life and how expensive it is and how the returns aren't very good and all that. But there is a situation where some people should keep it and that would be if you don't have insurance. So let's say you bought a whole life policy, you kind of woke up and realized you didn't really want it. You're 45 years old and now
You have some health issues and you can't really get any insurance. Well, you need insurance, especially if you have health problems. So the first thing to do would be to make sure you have enough insurance. You can you're insurable before you even consider, you know, cutting your arm off to get rid of your whole life policy. So that's the first thing. Just just putting that out there. But let's say it's more of a typical situation. You were sold whole life policy and that agent also sold you some other insurance. So you have insurance.
and you're just trying to figure out should I keep this whole life policy? And I'm gonna just talk about one aspect of this, which is this pays for itself thing, okay? And most of these agents who sell a lot of whole life policy are very, very slick with how they sell it, okay? So β they say it pays for itself, so what do you care? Why don't you just keep it? And what they're actually kind of
sort of admitting at this point in my point of view is that β you already paid all the fees that were horrible for you. Why not just keep it? Right. So the painful part is over there saying just leave it there. And this can be true on the face. It can be true if you have enough money in there and you're getting a return on your cash. Technically, the premiums can can just be covered. β
And usually what that means is you have some guaranteed rate of return. So there's a guaranteed rate of return. There's different types of policies like whole life, universal life. Sometimes it's not a guarantee, but let's just imagine it's the typical one. We have a guaranteed rate of return. That is actually for most physicians, at least most of my clients, that is actually the problem. The problem is if you have, let's say, a couple hundred thousand dollars in here, that guaranteed rate of return
isn't very good. It's not very good. It's not a good rate of return. Let's say you get, know, it's because inside of that account, it's the insurance company's general account. And that is mainly made up of bonds, maybe some β really stable real estate. So you're getting 4%, 4.5%. It's barely covering the premium. OK, I can just keep it. But what that means is that your $200,000
will barely grow because it's all going to pay the insurance, all for the grand prize of having whole life insurance that you don't really need. Now, again, there are times where you do need it, but to have a million dollars go to your heirs by the time you retire is not a great prize if you are a typical investor. Like if you are investing in 70 % stocks and 30 % bonds.
you expect a rate of return over the next few decades. It's going to be a lot better than 4%. So put that $200,000 and the premiums, like say the dividends, put that in an investment calculator and see, talk about time value of money, see what that $200,000 would be worth in 20 or 30 years. Or if you're 40, it's not when you retire, it's not 20 years until you're 60, it'd be when you die.
say a 90, it's gonna be worth a lot more with a reasonable rate of return than a million dollars, which is the life insurance that you're supposed to get. So this takes some analyzing, but typically what happens with these policies is there isn't a great reason to keep them other than if I need insurance.
Most of the time, not all of the time, this whole pays for itself thing is just another sort of sales tactic to keep you in the policy. And β it's not that hard to surrender the policy, even if your agent's telling you this, because they've already earned all their money and they're not going to fight you too hard on it. So β the other thing I don't really like about what this money is invested in is you don't really know what it is.
It's kind of like a black box inside the insurance, the company's general account, the insurance company's general account. You don't know what bonds are in there. You don't know what real estate's in there. You don't really know what rate of, you're just getting this 4%. It's like it might as well be, it's borderline cash at this point. β So I, you know, it's extremely low risk. Your cash value won't go down, but it usually can't keep up.
very well with inflation with the premiums you're paying and you don't have any upside, which is the reward for being an investor is the upside. β Just have to say this, but obviously it's not apples to apples because when you pull the money out, you would be taking risk in the stock market, but you're doing that with all your other money generally as well.
Okay, I'm the insurance person. So Kyle is β sworn to silence about this one. Okay, next question. This one's for you, Kyle. Ophthalmologist in Arizona. How do we reduce tax drag in our brokerage account at Ameriprise? And before you jump in, Kyle, because you're going to talk about cash drag, β I would say that specifically to Ameriprise, I almost took the word Ameriprise out just to make this more clear, but they do have a lot of proprietary funds.
at Ameriprise. So it can be difficult to kind of understand what's causing the taxes in your portfolio and how to unwind it or fix it. β But just since we can't say specifically about their proprietary funds, Kyle, tell us what tax drag is and kind of explain at a high level how we attempt to avoid tax drag in the portfolios that you build.
Kyle (11:54)
Yeah. So tax drag is, mean, so when you're investing, the goal is to grow your money. And when you make certain moves in your portfolio, whether it's buy a certain holding or sell something in a taxable account, there are taxes involved. There's tax efficient ways to invest and there's tax inefficient ways to invest. And same with β
Nate Reineke (12:02)
Mm-hmm.
Kyle (12:23)
buying and selling in a taxable account. so those, all those kind of come together to.
Nate Reineke (12:25)
Mm-hmm.
Kyle (12:33)
They come together to either make your portfolio tax efficient or inefficient. And when you're unnecessary taxes or using tax inefficient investments, those act as like a negative towards, you could think of it as like a negative towards your return or the growth of your portfolio. Because if money's going out for taxes, that's money that you're not keeping or money that you get to retain in your investments. And so,
Nate Reineke (12:49)
Mm-hmm.
Kyle (13:00)
The term drag is that basically it's dragging down your performance in some ways or your results, you know.
Nate Reineke (13:04)
Yep.
Yep. There's lots of drags that can happen in a portfolio. could be a tax drag, could be a kind of a fee drag. There's all these drags and all that means when you hear that, if you're listening to podcasts like this, is you're not getting the most you can out of your return because something's dragging you down. So this is the tax drag. It's huge for physicians because you're in a high tax bracket. That's right. There you go. So
Kyle (13:28)
It's like trying to swim with your clothes on.
Nate Reineke (13:32)
And this is a big fat t-shirt for most most physicians. So how do we try to minimize it? There's you got to pay some time. You're investing in a taxable account. So we call it taxable account. There's going to be taxes every so often. But how do we minimize it? Like, what do we do?
Kyle (13:47)
Yeah, so...
In a taxable account, one investment that you need to be really careful about when you put putting in your taxable account are corporate bonds or treasuries, things like that, because they are taxed at the federal level. β And that's your highest tax burden. And so the income produced from those bonds is tax inefficient in a taxable account.
because as you accrue this income, as it's paid to you in that calendar year, you're in your high earning years while you're saving, you're paying ordinary income tax on those earnings in your high earning years. So to avoid that form of tax drag, you would want to replace your corporate bonds with municipal bonds, which are the state obligations. And those bonds are federally tax exempt, which is great because
Nate Reineke (14:29)
Mm-hmm.
Mm-hmm.
Kyle (14:46)
know, ordinary income tax is your highest tax burden. And typically, and so those bonds are not subject to federal taxes as they pay income. So that allows you to keep more of that interest income in your portfolio. It gets reinvested if you have, you know, reinvestment going and that's less that you have to pay out in taxes at the end of the year. So that's, that's one way. In terms of efficiencies in stocks, there's a, there's a slight efficiency.
Nate Reineke (15:09)
you
Kyle (15:15)
in mutual funds versus exchange traded funds just in the way they are packaged and and are bought and sold within the fund companies. β The simplest explanation is that mutual funds move everything around in cash and exchange traded funds move baskets of securities. So β without getting into too much the technicalities of it, mutual funds have these β capital gains distributions.
Nate Reineke (15:23)
Mm-hmm.
Mm-hmm.
Yeah.
Kyle (15:44)
So when a mutual fund, for example, will rebalance because it's out of balance, let's say you have like a Vanguard target date fund mutual fund, which we wouldn't recommend in a taxable account because first of all, it's got the corporate bonds in it, like we talked about. So the bond side of that fund is really tax inefficient for a taxable account. you know, those target date funds have a target bond stock allocation they're shooting for. And when, you know, that gets out of line, they have to sell some of the one investment, you know, one
Nate Reineke (16:09)
Yep.
Kyle (16:13)
one asset class to buy the other asset class that is done as an actual trade where cash is realized and that creates a capital gains distribution on that mutual fund, which the word mutual, meaning everyone invests in that fund gets the share in the returns also gets to share in the tax burden. And so there actually will be, you'll see a capital gains β distribution to you that's taxable.
Nate Reineke (16:29)
Yeah.
Yeah, you have one more
I know, but before you get to that one, I just want to point something out. The interesting thing to me about tax drag and about the things that you've spoken about, like the mutual funds and the corporate bonds, is they are actually doing their job. Like the mutual fund is doing its job. It's rebalancing, it's selling things, paying you dividends. β The corporate bonds are paying a dividend. The issue here is that you don't
If you don't understand why you bought it, you could think of it as a bad thing. But a lot of things in the investment world are just tools. You have to know how to use the tool. Otherwise, it can be dangerous. Right. It's like you got a chop saw in front of you and you don't know how to make the cut. like it's supposed to cut like, but you put your fingers in there, then you're in trouble. So these are these aren't bad things. They're just β they don't belong in a taxable account. And that's where you shine. You know, they get
Kyle (17:18)
Mm-hmm. Yeah, exactly.
Yeah.
Nate Reineke (17:38)
a big light gets shined on the tax implications of owning them. Whereas that doesn't happen if you own them in your IRA or your 401k because you can trade in there freely, get dividends, reinvest your dividends without any tax consequences as of right now. So β it's important to know kind of why you use these things. A good example with those municipal bonds is that generally you look at them and on the face it looks like they have a slightly lower return than like a corporate bond.
But the reason you would choose them is because the after-tax return is better. So if you choose the right ones, obviously. β So OK, but you have one more, I think. this is more, β it's not necessarily like a set it and forget it. But it has to do with buying and selling inside of a taxable account.
Kyle (18:26)
Yeah, so I call it trading unnecessarily. So oftentimes I see this in β cost basis reports I get from other advisors when a client will switch from one advisor to us or maybe on their tax statements, know, their 1099s, but I'll see like, I'll see a large quantity of short-term capital gains realized.
Nate Reineke (18:29)
Mm-hmm.
Mm-hmm.
Kyle (18:51)
And
it's oftentimes when it's a it's from an actively managed account where they're buying and selling stocks pretty regularly. So they're getting into one stock and then they're getting out of that stock and get another stock and they're kind of reading the tealies and trying to make these moves. And what happens is, is they'll buy a stock and within the long term capital gains period, know, so 12 months or less before they hit that favorable long term capital gains treatment under that 12 month markets short term.
Nate Reineke (19:05)
Yep.
Kyle (19:18)
capital gain that gets realized, which is taxed ordinary income rates, which is not favorable, it's brutal. And so sometimes what happens is an active manager will buy into a company and there'll actually be some positive returns, which in their eyes, they did their job right. They bought a stock that appreciated, but there's some noise out there that says, this stock's going to lose value. And even though I'm not outside the 12 months for that favorable tax treatment, I'm going to sell and get out of it now before.
Nate Reineke (19:22)
Brutal. Brutal.
Mm-hmm.
Kyle (19:45)
it
loses its value and then they realize a short-term capital gains tax. So that's that to me creates tax drag. mean, because there's just realizing that short-term capital gains. But even if it goes beyond the 12 months into a long-term capital gain, β you can still trade unnecessarily outside that that window and still realize even though the tax treatment is more favorable, it still could be unnecessary. So β
Nate Reineke (19:49)
Yep.
Mm-hmm.
Yeah.
Kyle (20:14)
Now what is necessary? mean, there are necessary times to rebalance. And for us, it comes down to risk management. So, you you have your target allocation, you know, let's say hypothetically, you're 80 % stocks, 20 % bonds, and the stock market does really well and you're up at 90 % stock, 10 % bonds in your taxable account. Well, you you're well, you're off your target, which in our eyes is you're bearing too much risk in this account. Stocks equal risk, too much stocks equals
Nate Reineke (20:17)
Mm-hmm.
Kyle (20:42)
you know, unnecessary risk for you. So you want to lock in those gains. You want to realize some capital gains and you want to reinvest those, but you want to, you know, you want to sell, sell the stock shares that had that long-term capital gains treatment to get the tax treatment you can get. But, β so it's not to say that you should never ever rebalance, but you should rebalance within your parameters or within your discipline investing that you have, you know, Hey, this is my target. This is
Nate Reineke (21:02)
Mm-hmm.
Kyle (21:12)
This is, far enough off my target that this warrants a rebalance and let's trade the most tax efficient lots I can trade to get me back to my target and just to reduce as much of the taxes as you can. β
Nate Reineke (21:17)
Mm-hmm.
Yeah. Yeah.
I'm looking to make locking in your gains cool again, because everyone is, β you know, I guess decades ago, like trading inside of accounts seemed normal. Now everybody's on the buy and hold train, which is fantastic. But they go so far that they never want to sell anything to lock in their gains. And the beautiful thing about locking your gains is it goes the opposite way, too, which is you basically β rebalancing is another way of saying I'm going to buy
Kyle (21:46)
Mm-hmm. Mm-hmm.
Nate Reineke (21:55)
β low and sell high. Because if you get out of balance because your stocks went up, you should sell high. But how much do you sell? That's where you get into the weeds. But if you just have, β you've set up a strategy for yourself to be 80-20, then you know when to sell and you know when to buy and you can have less regrets about how you're investing. It's because your strategy is just doing what it does. And then stocks go down, you're going to sell some bonds.
and you're going buy more stocks and now you're buying low. So there's dollar cost averaging and then there's rebalancing. But rebalancing is kind of the opportunity zone, I would think. β And so, you know, I hear a lot of people, never want to sell. They just don't want to. They don't understand the rebalancing β aspect of this. there's only, I believe that you should rebalance and do this whole β
Kyle (22:33)
Mm-hmm.
Nate Reineke (22:52)
buy low, sell high thing, even though that's not the reason you're doing it, but it's a nice little added benefit. β But also the only other way around this is if you have new money. So if you really don't want to sell, bring some new money to the table and buy some bonds and β or buy some stocks so you don't have to buy or sell anything. But β that's good. there's three kind of main pillars. It's bonds, β ETFs,
and unnecessary trading. β So that's how you can be pretty tax efficient in your portfolio. β Last question here, and I'm going to tackle this one, but Kyle, you can jump in. I'm not really looking to change up my portfolio, but can you tell me why I shouldn't be buying things like gold or Bitcoin? This is from a retired physician in Illinois.
β So I think we've answered this a few times about just our thoughts on gold and Bitcoin and just those types of assets in general. But people keep asking. So I'm going to keep answering it. I wanted to point out, know, we don't hate. I like talking to Kyle about investing because you don't really you don't take a super strong stance against something like this.
for all we know, β these things will go up and they'll stay up. We don't know. So we don't hate gold. We don't hate Bitcoin. β And I know many β prudent investors that believe you should hold some gold. It's not a horrible thing to do. It has a really, really long history. I'm not really concerned about gold going to zero. I think it's a nice inflation hedge. β
If you're worried about things like the debasement of the US currency or just chaos in general, could be a hedge against that. Crypto is pretty new. I don't know if it'll go up or down, but the jury's out on it if it will ever go to zero. I kind of don't see it going to zero. There's some value of having it in the world, I guess. But why we don't buy it is not a prediction about whether or not it will go up or down.
It actually has nothing to do with it. We don't know if it'll go up or down. The reason we don't buy it is it does not have an internal rate of return. It doesn't have an internal rate of return. that means, assets like stocks and bonds, we just talked about it. They pay dividends. They earn money. These companies that you're buying into or the bonds that you own, they can pay out money because they earn money. They have a service that they provide.
that people pay for. You you can buy an Apple phone. It really comes down to that. Whereas Bitcoin and gold, they do not have that. It's just not part of the makeup of what they are. So really the only way to make money on gold or make money on Bitcoin is you buy it and someone else is willing to pay you more than what you bought it for. And we just don't believe in buying things like that.
It's really that simple. It's no prediction. I don't have to get in any debate about Bitcoin at all because I just don't believe in buying things like that. There's lots of things like that. I don't buy any of them. So ultimately, I think we would just prefer owning a slice of the entire global market, which Bitcoin and gold are part of in a way. Some companies have Bitcoin. You probably own those companies if you own a index fund.
So you do have a little bit of Bitcoin in a synthetic way. We just don't buy them directly. Do you have anything to add to that?
Kyle (26:47)
Yeah, I was going through a continuing education course β about Bitcoin and β non-fringible tokens and things like that. And I was surprised by how much fraud there was involved with that because it's so new and it's unregulated. And there were so many different schemes and frauds that were happening. And that makes me really nervous. β
We always say that, I mean, I always say that Bitcoin and things like that is, it's the deep end of the pool in terms of risk and speculative investing. so β our clients just don't need to take that level of risk to reach their goals. They just don't need to. So why would you take on that kind of risk if you don't need to take that kind of risk? β And the other thing I say about Bitcoin is when you look at it as a percentage of all the investible
Nate Reineke (27:28)
Yeah, they don't.
Kyle (27:43)
options out there in the world. total all the stocks in the world, all the bonds in the world, all the gold in the world, all that, and you put Bitcoin over it as a fraction. It's tiny. I mean, it's tiny relative to the investments in the world. people rushing out to put 5%, 10 % of their portfolio in Bitcoin, that doesn't make any sense to me because you're kind of over weighting. If you think about index investing, you're buying way too much of it. You know what I mean? You should have like at the most 1 % of your portfolio in Bitcoin if you're even going to go into the deep end of the pool.
Nate Reineke (27:53)
It's super tiny. Yeah.
Mm-hmm.
Yeah.
Yeah. And if you chose to go into the deep end of the pool and buy 1 % and it doubled, it doesn't really do much for you. You got 100 % return on 1 % of your portfolio. It seems like you're going into the deep end of the pool mainly out of like FOMO or just boredom. And honestly, if someone really wanted to do it, okay.
Kyle (28:12)
So that's...
Nate Reineke (28:40)
I'm not really concerned about it. don't I have yet to. Well, that's actually not true. I've met someone who has the majority of their net worth in Bitcoin. The majority of people are talking about just just dipping their toe in the water. It's not going to do it much either way. So, again, I don't hate it. I I guess if you really wanted to, I don't buy it. I don't recommend buying it. But but yeah, I'm with you. I heard someone I think was Ray Dalio talking about this was several years ago. So maybe he's changed his tone on it.
on Bitcoin. But he said if a β big government wanted to squash it, they could buy it all like that. Like it's not a very big β asset class or it's not a lot of money. If someone could buy all of it, a big government like the US could buy it all if they wanted to.
Kyle (29:27)
I haven't heard that before, but that's interesting to think about. Right, right.
Nate Reineke (29:29)
I don't know how that mechanically would work. I don't know if they could because
I think the Bitcoin people probably wouldn't sell. But theoretically, the amount of money that represents in our world economy is really not a lot.
Kyle (29:37)
Right. β
Yeah, I think β just to switch gears, the only thing about gold that I had to say was that if you look at the trailing returns on it, β it's actually fairly volatile. I think a lot of people think that gold is really stable and doesn't fluctuate a lot or just kind of creeps up slowly or something like that. But it's actually got fairly volatile periods to it. I almost
Nate Reineke (29:56)
Yeah.
Kyle (30:08)
In terms of risk, almost think of like a gold, like say buy a gold ETF that has, you know, it's backed by real gold store or something like that. I would almost treat it as almost like a, like a stock, like in my mind in terms of the risk, I'm not saying I would put it in my stock sleeve. I'm saying as an investor and I'm thinking about the type of risk I'm taking on it. I think a lot of people think of it as like a capital preservation type tool. I think that's cause of the debasement of the U S dollar and that whole concept of having gold.
Nate Reineke (30:31)
Mm-hmm.
Kyle (30:36)
I think that's a misconception that lot of people have. I think you need to go into it more thinking like, hey, there's risk involved with this. like you said, it ever going to go? It's a long running asset. Yeah, thousands of years. I don't see it ever going to zero, but you do have to know that, just like anything, you could get into it at a certain time and it could lose value and it can hold that loss for a while. just be aware of that as you go into it. And again, just like with Bitcoin, would
Nate Reineke (30:46)
Thousands of years. Yeah
Kyle (31:05)
I would say if you are going to add gold into your portfolio, don't go too crazy with it. β Maybe 5 % or something like that or 10%, depending on your comfort level and what your goals are. And then the last thing I'll say is, I kind of put these two assets that we're talking about, asset classes, almost with priceless art. But it's almost like,
Nate Reineke (31:12)
Mm-hmm.
Mm-hmm.
Kyle (31:34)
If you have a certain amount of wealth, like, you know, you're in the tens and tens of millions of dollars worth, net worth, then maybe you need to diversify even further than the rest of us. You know, maybe, maybe you do need to add in 10 % gold. Maybe you need to add in Bitcoin. Maybe you need to go out and buy a Monet. You know, I mean, maybe you need to go buy a building, you know, a New York sky or, you know, loft or something, you know, or a co-op or something like, but we're talking like,
Nate Reineke (31:41)
Mm-hmm.
Hmm.
Yeah.
Yeah, right.
Kyle (32:04)
You know ultra wealthy people. mean, maybe maybe you need to diversify further and that's kind of what I how I think about it is that You know our clients Myself, I'm never gonna I don't think I'll ever and personally my personal opinion I'll never be at that level of wealth where I need to add in these more speculative asset classes I don't need to diversify further than you know Owning my home having stocks and bonds, you know having my cash savings
Nate Reineke (32:06)
Yeah.
Mm-hmm.
Kyle (32:34)
I
don't need to diversify beyond that, in my opinion. That's just my thoughts about it.
Nate Reineke (32:36)
Yeah. Yeah.
Yeah, it's interesting. I think a lot of this is kind of like mental gymnastics to try to figure out if you if you can allow yourself to do it. So if you're to do it, just do it. Just don't do it too much money. Right. But it's funny that you compared it to art because I'm pretty sure gold is taxed like art, like a collectible. Gold is interesting. It's taxed like a collectible. It acts like a stock, but you buy it sort of like for bonds.
Kyle (33:00)
It is, it's taxed like a collectible. That's right, yeah.
Right, and doesn't end, and it doesn't pay in income. Yeah. Yeah.
Nate Reineke (33:11)
It's just it. Yeah, and it doesn't pay an income. So lots
of people have it. Not a big deal by a little bit, but it makes things a little complicated. Yeah. That's right.
Kyle (33:21)
Talk about tax drag, you know, don't be putting your gold fund in your taxable account. It's taxed
like a collectible.
Nate Reineke (33:28)
right. Okay, that is it for today, everyone. Thank you for listening. If you liked this episode, please be sure to subscribe so you don't miss out when a new release comes out every week. You can also leave us a rating. If you'd like to work with us, you can visit PhysicianFamily.com to schedule an interview. If you aren't ready for that, you can always send us your questions. Send it to podcast at PhysicianFamily.com. We'll answer it even if it doesn't make it on the show. Until next time, remember, you're not just making a living.
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