This episode moves from the origin of “rule of thumb” to why most investing rules of thumb don’t work for real people. Tom and Don explore a Yale professor’s personalized allocation model, walk through tax-smart strategies for funding a child’s car while managing Roth conversions and capital gains, warn about liquidity risks in private credit after restrictions at Blue Owl Capital, explain how to structure IRA withdrawals through disciplined rebalancing, and close by addressing market-timing anxiety for retirees sitting heavily in cash. The through-line: simple rules are comforting, but thoughtful planning beats shortcuts every time.
0:04 What “rule of thumb” really means and why investing is full of them
2:17 60/40, 100-minus-age, and why simple formulas fall short
3:16 Yale professor James Choi’s personalized allocation formula
4:35 Why a 25-year-old probably should be nearly 100% in stocks
6:25 Spreadsheets vs. real-world investors
9:39 Portugal caller: funding a daughter’s car purchase tax-efficiently
13:28 Roth conversions, 12% bracket strategy, and zero capital gains planning
16:46 Rebalancing opportunity: selling VTI vs. Schwab Intelligent Portfolio
19:16 Private credit warning: liquidity restrictions at Blue Owl Capital
23:45 The illusion of “safe” high returns in private lending
26:53 IRA withdrawal strategy: sell winners when rebalancing
29:35 Annual vs. monthly withdrawal discipline
31:34 60/40 vs. 70/30 — how much difference really matters
33:32 Retirement income simplification: fewer funds, easier rebalancing
34:48 Seattle caller: $1.45M in money market and market-timing temptation
36:18 Why market timing fails and when an advisor earns their keep
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