You’ve Got a Financial Friend in Me
by SGL Financial
Our 2 Cents – Episode #259
You’ve Got a Financial Friend in Me
A brand-new episode of Our 2 Cents is here! On today’s show, the Lewits dive into what Toy Story can teach us about finance, discuss Dave Ramsey’s 8% withdrawal rate recommendation, and wrap things up with quotes for July.
- Financial Lessons from Toy Story:
- Toy Story may be a childhood classic, but its iconic quotes still have plenty to teach us as adults, especially when it comes to our finances.
- Discover the money lessons hidden in some of the film’s most memorable lines.
- Dave Ramsey’s 8% Withdrawal Rate:
- Can you safely withdraw 8% in retirement? We take a closer look at Dave Ramsey’s recommendation and discuss whether it holds up in today’s financial landscape.
- Quotes of the Month:
- “Who is rich? He that is content. Who is that? Nobody.” – Benjamin Franklin
- “Do not save what is left after spending, but spend what is left after saving.” – Warren Buffett
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Podcast Transcript
Announcer: You’re listening to Our 2 Cents with a team from SGL Financial, Building Wealth for Life. Steve Lewit is the President of SGL Financial, and Gabriel Lewit is the CEO. They’re here to discuss all the latest in financial news, trends, strategies, and more.
Gabriel Lewit: Well, hello everybody. Welcome to Our 2 Cents and uh happy belated fourth of July to you all.
Steve Lewit: It’s kind of mellow.
Gabriel Lewit: Yeah, I I was actually not here in Chicagoland, so I did hear that here in Chicagoland it was a little stormy, foggy, cloudy, um, not the best fourth of July weather this last year. Yeah. But hopefully you had a chance to spend some time with family and friends wherever you were. And if you did get a chance to see some fireworks, I hope they were terrific because it was the 250th year anniversary celebration of the United States. Yeah, amazing. Yeah. Amazing. What a what a run.
Steve Lewit: And we’re still running.
Gabriel Lewit: We’re still here.
Steve Lewit: Unlike the unlike unlike the USA soccer team.
Gabriel Lewit: Well, yes. So gosh, what um if I’m a big soccer fan.
Steve Lewit: That was such a disappointment. Now, folks, I’m not a soccer fan, but 40 million people tuned into that. It’s the biggest TV show they’ve ever had, and the U.S. didn’t show up.
Gabriel Lewit: Yeah, they really did not do great on this last game. If you have watched them in the previous games, this current World Cup, they actually played much better, and everyone was hoping they would step up to the occasion here this year in this round of 16, and they didn’t the occasion got them. Yeah, so it’s kind of too bad. And um, well, guess what? We have another chance in four more years.
Steve Lewit: Yes, we do.
Gabriel Lewit: So just patience is a virtue when it comes to World Cup victories. Yep. Because it’s a long time to wait to potentially redeem yourself.
Steve Lewit: So, what do you got for us today, Mr. Lewit?
Gabriel Lewit: Oh my goodness, folks? Well, we’ve got a great lineup of topics for you. As always, we try to come up with creative ways of talking about your finances as well as you know more practical elements. So, you may not know that uh the movie Toy Story has anything to do with your finances, but I did go see Toy Story with my kids over this July 4th break that I was on.
Steve Lewit: The new one.
Gabriel Lewit: Yeah, Toy Story 5.
Steve Lewit: How was it?
Gabriel Lewit: It was very good.
Steve Lewit: Really?
Gabriel Lewit: I’ll talk a little bit more about it.
Steve Lewit: I love Toy Stories.
Gabriel Lewit: But uh the question is, what does it have to do with your finances? Well, you’re gonna find out. We’re gonna draw some parallels from the storied series here and talk about what it means for your finances. The other thing we’re gonna talk about today is uh some news that Dave Ramsey has promoted an 8% withdrawal rate as a safe withdrawal rate. And uh you actually had someone, Steve, that talked to you about this or asked you about this at a seminar you did recently.
Steve Lewit: Not recently, uh day before yesterday.
Gabriel Lewit: Yeah, well, it’s recently.
Steve Lewit: Well, yeah, I guess, but that’s even to me that’s more very recently. Very recently.
Gabriel Lewit: Okay, and it prompted us to to talk about that here because I think it’s not what it seems on the surface and is a little bit of a dangerous advice, but I’m we’re I’m gonna dig into that. Okay. And then we’ve got some other odds and ends here to share with you to keep you entertained and informed.
Steve Lewit: Okay, I’m gonna dig into it too.
Gabriel Lewit: Perfect.
Steve Lewit: Okay.
Gabriel Lewit: Did I say I?
Steve Lewit: You did.
Gabriel Lewit: We.
Steve Lewit: Yes.
Gabriel Lewit: Because it is Our 2 Cents.
Steve Lewit: It is.
Gabriel Lewit: All right. Well, hopefully that sounds interesting for you folks, and we’re gonna jump right in. So, let’s talk about actually before we do that, how was your fourth of July, Steve?
Steve Lewit: It was quiet. Uh I mean, not only from the lack of uh, you know, uh fireworks, but I just it was kind of a mellow uh, you know, I had a cup of dinner with family, and it was quiet. It was great.
Gabriel Lewit: Yeah.
Steve Lewit: It was great. I missed you.
Gabriel Lewit: Yeah, I was well, I was in Pensacola Beach, yeah, Florida.
Steve Lewit: In the sun.
Gabriel Lewit: It was actually, believe it or not, hotter here than it was there for most of the week.
Steve Lewit: That’s what I heard.
Gabriel Lewit: Which I was very happy that I
Steve Lewit: Yeah, I kind of missed you and the kids, you know. It’s like um, yeah, you weren’t there. You weren’t there for me.
Gabriel Lewit: Oh, I’m so sorry. Oh man gosh. I’ll never leave again.
Steve Lewit: I gotta go see my therapist.
Gabriel Lewit: That sounds like it. Right. Uh well, good. I’m glad to hear you had a good fourth of July.
Steve Lewit: Yeah, it was nice. It was very good.
Gabriel Lewit: Yeah. Well, we um let’s go ahead and jump into the show here. So, let’s talk about Toy Story. Uh, and in particular, I saw Toy Story 5 as I had referenced just a moment ago. I actually thought it was very good. If you hadn’t seen it yet, I believe it’s still in the theaters for a little while here.
Steve Lewit: Good reviews.
Gabriel Lewit: Grab your grandkids, grab your kids if you’ve got the younger ones, go check it out.
Steve Lewit: If you can take your inner self, your inner child.
Gabriel Lewit: You sure could. Yep. Um great movies. I don’t know. So, I I actually, believe it or not, have not ever met someone that doesn’t like the Toy Story movies.
Steve Lewit: I mean, maybe they maybe someone’s out there that Well, if they don’t have kids or something, they might not know what they are. But uh, you know, I all you all you kids grew up with Toy Story in me.
Gabriel Lewit: Yeah, so uh again, I thought it was terrific. Go see it if you if you haven’t yet uh on the big screen, and I think you’re going to enjoy yourself. Yeah. Yeah. So, what does Toy Story have to do with your money? Well, great question here. It came out about 30 years ago. There’s five of them, of course, at this point. And there’s some iconic moments, of course, in the Toy Story movies, some lines that most people that have ever seen any of these movies are going to recognize, and we wanted to pick out here to you know talk about on the finance side some of these iconic lines from the movies and then draw some financial parallels from them that you might be able to think about and take away.
Steve Lewit: Iconic line.
Gabriel Lewit: Iconic lines.
Steve Lewit: Iconic. It’s a great word.
Gabriel Lewit: Okay, so the first one everybody who’s ever seen a movie, Toy Story, should recognize to infinity and beyond.
Steve Lewit: And beyond. Oh my gosh.
Gabriel Lewit: Okay, to infinity and beyond. Yes. Now, this is of course Buzz Lightyears. It’s the stock market, to infinity and famous rallying cry.
Steve Lewit: To infinity and beyond.
Gabriel Lewit: Okay. A big bold launch into the unknown. And yeah, what does that have to do with money?
Steve Lewit: Well, my fur I well, I don’t know what you’re thinking, but I I think people think the market goes to infinity and beyond and never lands on Earth.
Gabriel Lewit: Well, let me ask you this. Does the stock market ever do you think it doesn’t go to infinity and beyond? Uh very philosophically speaking.
Steve Lewit: You know, like in a hundred years will the market be at 60 million? I don’t know, but right now, in my lifetime, in your lifetime, the market keeps going up, but it doesn’t go straight up. Like a rocket ship. No, you know rocket ships that don’t go straight up have a problem.
Gabriel Lewit: Mm-hmm. Well, yeah. So, I I I think you could take a lot of parallels or ideas from here, right? You’ve got the market, the stock market. Does it continue to go up? Yeah, over time it generally does. But as you mentioned, it’s not straight up like a rocket ship. Uh, it could also be you could draw the concept of launching into the unknown.
Steve Lewit: Yeah, that’s good.
Gabriel Lewit: Retirement can be a lot like that. Yeah, right.
Steve Lewit: So, I have a client now that that is really struggling. Uh he’s gonna retire. He keeps asking me, Steve, what am I gonna do? And and you know, he looks at it like this this open space, right? That he’s being launched into and he he doesn’t know what to do with it. So that would be like to infinity and beyond. Yeah. Yeah. So, I should send them that.
Gabriel Lewit: There you there you go.
Steve Lewit: I hope you l I hope you’re listening, John.
Gabriel Lewit: Yeah, so you know, the idea is also maybe are you on course or off course, right? Uh, you know, he’s uh in the most recent Toy Story 5 movie, there’s a bunch of Buzz Lightyears. I won’t spoil too much of the show for you, okay? And they’re all trying to find their commander, okay, their lost commander. Oh my. And they find this star in the sky, and and they’re all like, Commander, commander, right? And they’re trying I think I’m saying it right, but they’re trying to l march towards this star, right, to find their star command. Yeah. Okay. Yeah. And think of this as like your guiding light, your north star, right? And then the question is, are you on course or off course? Yeah. Right? They’re heading towards where they want to be. And I think retirement planning is a lot like that, where you’ve got a uh a destination you’re trying to get to. It could be different things, right? It could be a money goal, it could be a timeline date that you want to retire, it could be a specific money or object, like a big house you’re trying to save up for, but you’ve got these guiding North Stars, and the goal is to ensure you’re on track heading towards those so you can reach your destination.
Steve Lewit: And keep going. Well, correct which is the beyond.
Gabriel Lewit: You’re not hopefully you don’t pass away when you get there. So, to yes-
Steve Lewit: Or before you get there.
Gabriel Lewit: Before you get there, yes. And then correct, you would hopefully keep going after that.
Steve Lewit: Yeah, there’s something about beyond that’s interesting to me because it’s so unknown. And I find a lot of people are really are very uncomfortable stepping into the unknown like that. Yeah. It’s like they want to know what’s gonna happen, but that takes all the fun out of it.
Gabriel Lewit: Yes, yes. Okay, you ready for the next iconic quote?
Steve Lewit: I am.
Gabriel Lewit: All right. The next one here is when uh if everyone doesn’t know the characters, you’ve got Woody, the other main character. We just talked about Buzz Lightyear. Well, in one of the movies, I can’t remember which one exactly, Buzz starts to lose his sense of self. Okay, he he doesn’t recognize who he is, what he’s what he’s meant to do, what his purpose is, and Woody brings him back to reality and says, Buzz, you are a toy. Okay.
Steve Lewit: I don’t remember that one.
Gabriel Lewit: You are a toy. And the concept here is uh throughout many of the the shows, these movies, right, is is this concept that these toys play very meaningful roles in the lives of the kids that they are attached to, right, or or that they belong to. And and that is really his new identity, right? So so, Buzz thinks he’s this space commander, right? And then you know he’s on some mission, which he’s he’s not. Right.
Steve Lewit: He’s really a toy.
Gabriel Lewit: But you know, he’s uh he’s a toy, right? That’s his role, right? He has a purpose, and eventually once he realizes this, he can embrace his new reality and and really um you know focus on on what he brings and the value that he has. The idea I think I drew from this is in retirement you can lose your sense of self.
Steve Lewit: Oh, good. Because I I was trying to think of hmm, how does this apply to money?
Gabriel Lewit: You can you know, you start off in accumulation mode, you’re you have a purpose, you’re saving for retirement, right? Buzz, when he comes out of his his box, right? He’s a he’s a commander, right? He’s going after he’s chasing some mission and he then learns he doesn’t have a mission, right? But he’s just a toy.
Steve Lewit: He’s just a toy. Yeah, it’s like you retire and you still think you’re the person uh reasoning. Yeah, you’ve got a reporting to you.
Gabriel Lewit: Your new identity and embrace that.
Steve Lewit: Yeah, it’s good.
Gabriel Lewit: And and he does. Yeah. Yep. And then he has many fun missions thereafter.
Steve Lewit: And I think that identity affects how you invest your money, how you spend your money, your relationships, all of that. It’s not just my identity, it’s like how does my identity interact with your identity? And if neither of us know what our identities are, that’s called uh an argument. Or a divorce.
Gabriel Lewit: Or something. Yeah, it’s definitely something. Yeah, you want to try to figure out who you are, what your new purpose is, and feel good about that.
Steve Lewit: Yeah-
Gabriel Lewit: That’s one of the goals for reviewers.
Steve Lewit: I know a great book about that.
Gabriel Lewit: Yeah. All right, so Buzz is uh gonna be one of our themes here, right? So, another part of the um the movies is Buzz thinks he’s-
Steve Lewit: You didn’t bite on my short advertisement there.
Gabriel Lewit: I I did not. Okay. Well, so Buzz, you know, he’s convinced initially he can fly, right? He’s a space commander, he thinks he can fly. Yep. And uh, well, of course he can’t. He’s just a toy with wings. Okay, and but he he falls and thinks he’s flying. Uh and the the question, you know, the phrase here is this isn’t flying, right? It’s falling with style.
Steve Lewit: Right.
Gabriel Lewit: Okay. Right. It’s falling with style. So, what is this calling?
Steve Lewit: Well while you’re falling, it feels like you’re flying while you’re falling, but there’s a blind spot in that. And the blind spot is that the the floor is coming up at you quickly. And I think what that what I got from that, Gabriel, immediately was that we all have these blind spots that you know we think we’re doing one thing, but we don’t realize what’s really happening. And the what’s really happening is not great.
Gabriel Lewit: I think that’s the connection there. Or just that we think one thing is happening and it’s really another thing. It’s really something else. Okay, and so an example for this would be well, you know, you’ve made a ton of money in the stock market, and you attribute that to yourself.
Steve Lewit: But it’s like you know, I’m a genius. Look, I’m so smart that the market went up.
Gabriel Lewit: Right, but a big part of that is that the market just had a phenomenal run. Right. So so, there definitely could could be some parallels here that you know, maybe it’s your lifestyle, right, looks like one thing, right? Looks really wealthy on the surface, but really masking a different reality.
Steve Lewit: Right, and it goes back to what we were talking about before about thinking you’re this person, which is you know, like Buzz doesn’t see the blind spot that he’s a toy. You know, we don’t I think we’re full of blind spots, at least I am.
Gabriel Lewit: Yeah.
Steve Lewit: You know, every day I’m learning like, oh, I didn’t see that, or I didn’t realize that, or I should you know, I missed that, you know. That’s what life is.
Gabriel Lewit: Yeah, I think that’s a good one. That’s gonna tie in well to our last quote here from the Toy Story movies, which is Woody here, right, says, you’ve got a friend in me. Right? And there’s a whole song, You’ve Got a Friend in Me. I think it’s a theme song in one of the movies as well. I’m not gonna sing it. No, don’t ask.
Steve Lewit: I’m trying to think of it. I know the song.
Gabriel Lewit: Yeah, it’s very upbeat and positive, you know, You’ve Got a Friend in Me. And the idea here is that-
Steve Lewit: Who sang that? Or is it the Beatles?
Gabriel Lewit: Gosh.
Steve Lewit: Can you check it?
Gabriel Lewit: That’s a that’s a good question.
Steve Lewit: I I think it was the Beatles.
Gabriel Lewit: Right, so what the all the toys figure out is that they’re all better together. Okay, they support each other. It’s a song by Randy Newman. I don’t know who Randy Newman is.
Steve Lewit: I think he’s the writer. Who sang it?
Gabriel Lewit: Don’t know. But Toy Story theme song, yeah, You’ve Got a Friend and Me. And anyways, the idea here is you’re better together with your friends, and you might be better together as a client with an advisor.
Steve Lewit: Randy sang it.
Gabriel Lewit: Okay, you’re not paying attention.
Steve Lewit: No, I’m not. I I thought it was the Beatles.
Gabriel Lewit: I don’t know if the Beatles were alive when Toy or What? 95?
Steve Lewit: Yeah. Well, maybe not. I don’t know. Okay. I’m just deflecting.
Gabriel Lewit: All right. Anyways, I’m going back to Earth Buzz.
Steve Lewit: I’m going on a walkabout.
Gabriel Lewit: Back to Earth Buzz. Okay. Uh yeah, you know, you’ve got a friend in me. Well, I think that’s one of the benefits for, you know, should you work with an advisor, should you not? Is one of those big questions a lot of people have about their retirement planning and not to toot our own horn, but you know, you’ve got a friend in me. You know, it’s good to have support. The Toys and Toy Story all support each other. They’re great friends. They all help each other out. You know, going it alone is tough. And I think that’s one of the values of many things that we could potentially assist you with as an advisor and as an advisory firm is being there to be a friend, a support pillar, a helpful guide, and and really help you navigate the challenges that you might face in your retirement planning, both today and in the future.
Steve Lewit: Yeah, what I’m thinking here, Gabriel, is what is a friend? You know, what what does it mean to have a friend? Someone you can call in the middle of the night, someone that’s going to give you an honest answer, someone that, you know, even if they live far away and you’re you’re not feeling well, and they’ll they’ll hop on a plane and come and just be there for you. Yeah, everybody has, I think, a different interpretation of friend, but it all has that connotation of here’s somebody I can trust and get an honest answer from.
Gabriel Lewit: Exactly. Yeah. Exactly. Yeah. Well, to that end, to infinity and beyond.
Steve Lewit: To infinity and beyond.
Gabriel Lewit: Yes, we are here to help guide you. You can have a friend and us anytime. If we can help you with your finances or your financial planning, retirement planning, uh let us know. Call us 847-499-3330 or go to SGLfinancial.com and go see the movie. It’s a great movie.
Steve Lewit: You’re not suggesting you’re not suggesting that we produce like little puppets of us that people can own and put on their shelves.
Gabriel Lewit: No, I was not thinking that. Uh interesting that that popped in your head.
Steve Lewit: Well, internal marketer.
Gabriel Lewit: So yeah, Gabe and Steve bobbleheads, they don’t currently exist, but if you want them, if we get enough demand, who knows?
Steve Lewit: Well, I’ll buy one.
Gabriel Lewit: You buy your own bobbleheads.
Steve Lewit: Well, someone has to.
Gabriel Lewit: We’ll sell one. Don’t worry. Uh one one to Steve. One to Steve, right. All right. Let’s talk about w retirement withdrawal rates, folks. A little more meat uh here to the technical side of the of the investment.
Steve Lewit: Yeah, what’s Dave Ramsey thinking?
Gabriel Lewit: Yeah, Dave Ramsey, you know, smart guy, obviously.
Steve Lewit: Yeah, he’s a smart guy, but he’s kind of like-
Gabriel Lewit: Big audience.
Steve Lewit: Huge.
Gabriel Lewit: Huge audience.
Steve Lewit: Not uh and people are people that like him are like Dave Ramsey believers. He’s like the guru.
Gabriel Lewit: And this and generally I I like uh I’m not anti-Ramsey, anti-Orman, anti-any of these, you know, gurus out there. I I do think everybody should be cautious though with the advice that they listen to because what a lot of people do inadvertently is they listen to just surface level stuff and they take a little snippets and takeaways and then they run with those as if they know the full story. We were talking about blind spots just a moment ago. Yeah. Why so the quote here, right, that’s been all the headlines and all the articles is Dave Ramsey says an eight percent withdrawal rate is a safe withdrawal rate. Yeah. This is what people are taking away. And you had the client ask you this at the seminar.
Steve Lewit: Yeah, I’m at a seminar and I’m giving this nice talk about how to produce income, and one of the options is to use the stock market and use the safe money withdrawal rate. And I posed a question to the group and I said, anyone here know what the safe money withdrawal rate is?
Steve Lewit: And this guy raises his hand and says, Dave Ramsey says it’s 8%. Now, I didn’t know that. I I’ve never read that, and I didn’t challenge him. I didn’t say no, he’s never I just took that, you know, and it was like he did? You know, that’s to me that was that’s like uh no, he really didn’t say that. No, but he did say that.
Gabriel Lewit: He did, yes, and there’s a lot of context behind that, and and not I’m not saying this to be anti-Ramsey because I’m not anti-Ramsey, but I am anti-8% annual withdrawal rates. Let me just put that right out there and say it. I don’t think it’s a good idea, and we’re gonna talk about why. I want to make a statement here.
Steve Lewit: Back up. What is the safe money? What is what do we mean when we say safe money withdrawal rate and for what reason?
Gabriel Lewit: Well, let me reiterate because you were kind of talking over when I was trying to make an emphatic statement here. Okay.
Steve Lewit: I love emphatic.
Gabriel Lewit: But the point that we’re going to discuss here is that I do not believe, and I don’t think you do either, that an eight percent withdrawal rate, despite what Ramsey or anyone else might say, is really a good idea. And we’re gonna dig into that and and talk more about that here for the rest of our show.
Steve Lewit: Okay, since Gabriel-
Gabriel Lewit: Do you agree with that?
Steve Lewit: I I agree with that. Okay. But since you won’t-
Gabriel Lewit: Think of that as our thesis for the rest of our conversation.
Steve Lewit: But folks, all I want you to know is that a a withdrawal rate from a market portfolio is how many people get their income to cover their income shortfall in retirement.
Gabriel Lewit: Sure. Yeah. So, if we need to explain what that means, that’s helpful. I just wanted to start with a thesis again of what we wanted to talk about.
Steve Lewit: I bailed you out, so it’s no problem. Okay. Okay, I got you. I got you. I you uh you got a friend in me.
Gabriel Lewit: Sure do. Sure do. All right. So yeah, so there’s as you had mentioned, you had talked about at your seminar that there’s a four percent give or take annual withdrawal rate that’s generally considered the safe withdrawal rate. That came from a guy named William Bengen. Bill that Bill Bengen, right, that created that rule. And he has actually recently, we talked about this on a recent episode, I think, or somewhat recently.
Steve Lewit: A while back, yeah.
Gabriel Lewit: That he had even changed that to 4.7%, and I’m not even really in favor of that if we were to dig back into the weeds. Morningstar, a big research institution, uh, their 2026 report actually says 3.9% is their safe withdrawal rate, uh, going against what Bill Bengen said in his update at 4.7%. But if you were to pull all the various research firms out there, all the expert advisors, CFPs, anybody that really does this for a living, you’re not gonna find many people that tell you 8%’s a safe withdrawal rate. It just really goes against the grain of pretty typical standardized financial guidance from-
Steve Lewit: I would go further than that, Gabriel. I would say you’re not gonna find any. Anyone that understands uh how a portfolio performs and it’s up and down would say that that’s a great rate. Not only financially, numerically, but emotionally, it’s just it’s a killer.
Gabriel Lewit: Yeah. Well, let’s let’s talk about that. So, there is some caveats first and foremost to Dave’s eight percent annual withdrawal rate recommendation, if you will. But it in his words, it would only something you could do if you were first and foremost one hundred percent stocks allocated to your portfolio.
Steve Lewit: Yeah, you no bonds, no safety, you have to let your portfolio run up and down uh so that it earns the I think ten percent that he’s projecting that kind of portfolio would earn over time.
Gabriel Lewit: Yeah, so so this is too simplistic, but what a lot of people think is the following. If the S&P averages ten percent every year and I take out eight percent, uh how could I go wrong? You can’t go wrong, right.
Steve Lewit: With that logic, you can’t go wrong. Well, except the logic is wrong.
Gabriel Lewit: Let’s review why that logic is not right, because the S&P might average ten percent, but it doesn’t mean it goes up ten percent every year. So, let’s use a quick example. If we have one year where the S&P is up twenty and the next year it’s flat at zero, what was our average?
Steve Lewit: Ten percent.
Gabriel Lewit: Ten percent. Okay. So, if we had a twenty and a zero, and then another zero and then a twenty, okay, we’d have a what for an average?
Steve Lewit: Ten percent.
Gabriel Lewit: Ten percent. But what did we have in that very simple example there? We had two zero percent years.
Steve Lewit: And we’re taking money out during those two zero percent years. So if you take money out from your portfolio, Gabriel, and the market’s recovering, and that money isn’t there to recover, what’s the problem with that?
Gabriel Lewit: Well, it’s called sequence of returns risk, but the next time you make money, you’re making out on a smaller percent. Okay, so we can get in some of the math behind here. So the averages very quickly become irrelevant, is I think the point here.
Steve Lewit: Totally.
Gabriel Lewit: Okay, to how this works. You can’t just say it averages ten and I take out a so I’m always up. Because in this example, you wouldn’t always be up. Okay. Now it’s even worse if those aren’t zero years. Let’s say those are negative years. In 2001, 2002, uh 2000, right, when the stock market burst because of the uh dot com crash, there was three negative years in a row. Three in a row. Okay. And followed by, of course, a rebound, then we had two thousand and eight. So, if you choose the example of a lost decade, which okay, you could argue is unlikely, but they have happened multiple times if we get into the history. If you were to take out eight percent from your portfolio every year during the 2000, 2010 decade, okay, you would be I I’ll just put it right here, you’d be out of money. Mm-hmm. Okay, you’d there’d be nothing left.
Steve Lewit: Because it can’t recover if the uh you’re pulling money out, it it’s like trying to fill I’m trying to think of you’re good at analogies. Give us a sports analogy.
Gabriel Lewit: For for what?
Steve Lewit: For this, what it’s uh akin to. Oh come on. This is your this is this is
Gabriel Lewit: I can’t do analogies on the spot. That’s not how it works.
Steve Lewit: Give us something iconic.
Gabriel Lewit: Iconic. No, it’s it needs to be an iconic analogy.
Steve Lewit: Iconic analogy.
Gabriel Lewit: Well, I’m gonna fall flat on that one for you here today. But but here’s the point is I don’t have to give you too many examples. I can give you one example, and that’s enough for me right there to say I don’t like the idea, right? If if during a lost decade, this approach results in you completely depleting your portfolio by following it, that to me does not create a secure, reliable, dependable retirement strategy because we have had lost decades before, and there is very non-zero percent chances that we can have another one, especially if this AI bubble were to burst.
Steve Lewit: Yeah, and the question and a question that I have is why would you want to take that risk?
Gabriel Lewit: It’s a huge risk.
Steve Lewit: Why bot why bother? There are so many better now. Here’s the deal, Gabriel. If you’re a stock market person and and you’ve limited your selection of investment products to the stock market, you’re not using buffered products, you’re not using guaranteed products, you’re not using annuities, you’re not using investment grade life insurance. Your deal is I just use the stock market, and then you gotta play with these
Gabriel Lewit: You know what? I do have an analogy. I just thought of an analogy.
Steve Lewit: Thank God.
Gabriel Lewit: Okay. You asked, I’ll deliver.
Steve Lewit: Okay. Yes.
Gabriel Lewit: It’s kind of I don’t know if it’s the best analogy, but you know, would you go skydiving?
Steve Lewit: No.
Gabriel Lewit: Why? It’s pretty safe.
Steve Lewit: It’s very safe.
Gabriel Lewit: It’s very safe. Most people don’t die when they go skydiving.
Steve Lewit: It’s a great analogy. Uh no, I won’t go because uh I fear uh something once in a while, something goes wrong.
Gabriel Lewit: What about bungee jumping?
Steve Lewit: Uh uh not a chance.
Gabriel Lewit: And you don’t like heights either.
Steve Lewit: I’m afraid.
Gabriel Lewit: And this is why this is a great analogy.
Steve Lewit: It’s a great analogy.
Gabriel Lewit: Most clients in retirement do they like risk?
Steve Lewit: No.
Gabriel Lewit: They do they want even if it works.
Steve Lewit: They like risk for a part of their portfolio.
Gabriel Lewit: Do they like having their portfolio go up and down 30, 40 percent swings at a time? Up and down.
Steve Lewit: Only when their income and the quality of their life is successful.
Gabriel Lewit: I’d even go more and say, no, they don’t. They don’t most of most people, most being keyword, do not want to see huge swings in their portfolio. Yep. Especially because they understand that there is a chance that that risk could result in bad things happening to their money. Yep. Okay, and it’s similar in the world of skydiving, in the world of bungee jumping, is I mean, there’s risk there.
Steve Lewit: Well, let’s take two things. There’s significant risk. Let’s take uh two thousand. And not everybody likes that. Let’s take two thousand and eight as an example. Okay, the market’s down fifty-one percent in thirteen months. So, if you had an all-stock portfolio, you’re down fifty-one percent, and you had a million dollars in there, thirteen months later it’s worth five hundred thousand. And you’re pulling money out. And you’re pulling money out.
Gabriel Lewit: And you’re just gonna be like, oh, I have no problem with this.
Steve Lewit: Yeah, Dave says Dave says I’m gonna be okay.
Gabriel Lewit: You have no clue when it’ll recover, if it’ll recover.
Steve Lewit: I don’t get it. Yeah.
Gabriel Lewit: So, folks, we won’t. This isn’t anti-Dave. Just want to reiterate that. Dave’s got some great advice.
Steve Lewit: Kind of.
Gabriel Lewit: Well, just anti this particular advice. Yes. Okay, because I like a lot of what Dave Ramsey says on many things. But this one, Dave, I’m going to politely and strongly say is is not advice we want people to be following. But you know what this does.
Steve Lewit: Thumbs up or a thumbs down.
Gabriel Lewit: It’s a thumbs down for me.
Steve Lewit: Thumbs down, yeah.
Gabriel Lewit: Uh there are many other ways to give yourself security, predictability, and still create greater wealth, which I’m guessing is the whole point of all this, right? Is the idea that you can make greater wealth, right, and and have you know better returns here, you know, in case the market doesn’t crash. But it also you’re playing with fire a bit. A lot. A lot of it.
Steve Lewit: Yeah. I keep asking myself, well, why do that?
Gabriel Lewit: There are other choices that are far more secure and less risky and will match what you’re comfortable with.
Steve Lewit: And produce more wealth, frankly.
Gabriel Lewit: Yeah. Yeah. So, like if you to continue my analogy, put a final bow in it, go on a roller coaster. You want a thrill? Yeah. The roller coaster generally has zip pretty much zero percent chance of anything happening.
Steve Lewit: I won’t do that either.
Gabriel Lewit: Okay. Well, that’s a different story.
Steve Lewit: Yeah, no. I have a lot of fear.
Gabriel Lewit: You’re an anti you’re anti-fun. You’re anti-fun.
Steve Lewit: No, I’m not anti-fun. No, well, maybe, but I’d love to go on a roller coaster. Every time I look at that, I say again, hey, I almost got on a helicopter.
Gabriel Lewit: Now that’s that’s not a good idea.
Steve Lewit: No, I I was at the Grand Canyon and we I we booked the helicopter, and I said, I’m really gonna get on this thing, and I’m gonna fly around in the helicopter, and the weather got bad, and I said, Thank God. I never got on.
Gabriel Lewit: Yeah, so um well, I think that’s about what we wanted to cover today. There’s we don’t have too much time left. So let me end with I said there’s a couple odds and ends. Well, those odds and ends are just two fun quotes for you to round out our show.
Steve Lewit: Go for it.
Gabriel Lewit: Okay, because we like to give you some some topics here. Let’s start off with uh I’m actually in the spirit of um Fourth of July, we’ll go with a Benjamin Franklin quote.
Steve Lewit: Ooh, yeah.
Gabriel Lewit: Okay. And Benjamin says, who is rich? He that is content. Who is that? Nobody.
Steve Lewit: Have you ever read any of his writing?
Gabriel Lewit: Uh not not particularly.
Steve Lewit: He was a pretty wise guy. He was a wise man. I don’t mean a wise guy, like in Jersey.
Gabriel Lewit: No, smart man.
Steve Lewit: Jersey. Smart man. Yeah, that’s yeah. Who is content?
Gabriel Lewit: Who is rich? He that is content, who is that?
Steve Lewit: Gabriel, how many people? Do you know anybody that is content with their life?
Gabriel Lewit: Uh Buddhist monk Zen Masters?
Steve Lewit: Yeah, I wonder about that too.
Gabriel Lewit: I haven’t met one in person, but I assume.
Steve Lewit: I have.
Gabriel Lewit: Maybe maybe the Pope? I don’t know. I don’t know. Uh yeah, I mean, maybe it’s just ingrained, but yeah, contentness is not one thing that I see very often.
Steve Lewit: No, most people don’t.
Gabriel Lewit: Everybody wants more.
Steve Lewit: Most people don’t have peace of mind. They’re they’re rocking and rolling.
Gabriel Lewit: But if you can’t the concept here is if you can find contentment or as much contentment as you can, you will feel richer than you probably are on the balance sheet because you are content with what you have. Different kind of rich. Okay, different kind of rich. All right. Now, last one here is from a smart man also named Warren Buffett. Ever heard of him?
Steve Lewit: Yeah, I I I I think I remember his name.
Gabriel Lewit: Yes. He says, Mr. Warren says, do not save what is left after spending, but spend what is left after saving.
Steve Lewit: Yeah, that’s great. Yeah. Yeah. Yeah, I love that. Yeah.
Gabriel Lewit: The thumbs up on that one.
Steve Lewit: Oh, definitely.
Gabriel Lewit: So, let’s say again, do not save-
Steve Lewit: You save first.
Gabriel Lewit: Do not save what is left after spending, but spend what is left after saving.
Steve Lewit: I love that quote. Yeah, because what most people do, Gabriel, they prepare a budget and then they look at their earnings and they say, Oh, uh based on my expenses, I can save this amount. What they should do is say, I’m gonna save this amount, like 10% a year. Yeah. Now, how can I work my life around that? And that’s a whole different way of creating wealth.
Gabriel Lewit: Yeah. Well, we could actually and maybe Producer Gabby here, you can write that quote down. We could we could expand upon that. Because I actually I don’t know if we’ve ever talked about that, but there’s some philosophical planning points that are based around once you have a plan, once you know you’re on track, it can and it can enable you to to spend more, and that quote really embodies that. There’s some interesting talking points there. Yeah.
Steve Lewit: Good ones, Gabriel.
Gabriel Lewit: Thank you. Thank you. Um, I’m glad I was able to come up with an analogy that pleased you on the fly.
Steve Lewit: I’m so relieved because uh it’s one of your finer uh abilities that I want to promote out into the world.
Gabriel Lewit: Just the analogy man.
Steve Lewit: Okay. Yes.
Gabriel Lewit: Well, folks, if you have any questions for us that we can help you with with your finances, if you are looking for some guidance, uh let us know. Here we can uh definitely assist. Give us a call, 847-499-3330, or go to SGLfinancial.com. We can set up a time to talk anytime, complimentary, no cost whatsoever.
Steve Lewit: You think the Guerin kids would want to go see Buzz Lightyear again with me?
Gabriel Lewit: Again? Uh I don’t know. That’d be a good question. But yeah, go see Toy Story 5, a great movie. And other than that, have a phenomenal rest of your week and day, and we’ll talk to you all on the next show.
Steve Lewit: You stay well, everybody. Bye now.
Gabriel Lewit: Bye now.
Announcer: Thanks for listening to Our 2 Cents with Steve and Gabriel Lewit. For any questions about your finances, give SGL a call at 847-499-3330. Or visit us on the web at SGLfinancial.com and be sure to subscribe to join us on next week’s episode.
Disclosure: Investment Advisory Services are offered through SGL Financial, LLC, an SEC Registered Investment Adviser. Insurance and other financial products are offered separately through individually licensed and appointed agents.
