The Rob Berger Show

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RBS 032: Vanguard Alpha Framework Apr 15, 2022

Show notes

Vanguard released a paper claiming that advisors following its Alpha Framework can add up to 3% to an investor's long-term returns. Many advisors use this paper to sell their very expensive (1% of AUM or more) services. But is it legit?
Here's the paper: https://www.vanguard.com/pdf/ISGQVAA.pdf
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RBS 031: Vanguard Digital Advisor Apr 13, 2022

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I was convinced I'd live Vanguard Digital Advisor. It seems to check all the boxes. It uses low cost index ETFs. The service itself has a very reasonable cost of about 15 basis points. And it rebalances your investments for you, as you would expect from a robo-advisor.
After using the service, however, I reached a very different conclusion. There were numerous technological issues and its user interface is poorly designed. More importantly, it offers very few features and imposes limitations that make no sense.
Frankly, it's nothing more than a dressed up target date retirement fund and twice as expensive.
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Video Resources
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Vanguard Digital Advisor: https://investor.vanguard.com/advice/...
Betterment: https://robberger.com/go/betterment/y...
Vanguard Target Date Funds: https://investor.vanguard.com/investm...
Morningstar Robo-Advisor Report: https://assets.contentstack.io/v3/ass...
Disclosure: Both Vanguard Digital Advisor and Betterment are advertisers, but they had no input into this video or even knew that I made it. Vanguard Target Date Funds are not an advertiser.

RBS 030: The 3-Tier Credit Card Rewards System -- How I've saved nearly $30,000 from credit cards Apr 11, 2022

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I'm going to cover the three tier system for earning credit card rewards. This is the system I've used over the past couple of years to generate nearly $30,000 in credit card rewards. We save and invest all of our rewards in M1 Finance. This system, however, can be used whether you save and invest the rewards like we do, or spend the rewards on travel or other purchases.
The great thing about this system is that it's very simple, and it will help about 99% of the people maximize their credit card rewards without carrying a dozen or more credit cards.
Tier 1 Credit Cards
Wells Fargo Active Cash: https://www.allcards.com/go/wf-active...
Citi Double Cash: https://www.allcards.com/go/citi-doub...
Fidelity Visa: https://www.fidelity.com/cash-managem...
BofA Premium Rewards: https://www.bankofamerica.com/credit-...
Tier 2 Credit Cards
Amazon Prime Visa: https://www.amazon.com/Amazon-Rewards...
Target RedCard: https://www.target.com/redcard/about
Walmart Card:

RBS 029: The 60_40 Portfolio -- Good, Bad, or Ugly Apr 08, 2022

Show notes

The 60/40 Portfolio--Good, Bad, or Ugly? Article with resources: https://robberger.com/60-40-portfolio/
The 60/40 portfolio has powered retirements for decades. With 60% stocks and 40% bonds, this balanced fund offers equity-fueled growth and fixed income stability.
Today, however, many are calling into question the sustainability of the 60/40 portfolio. Some even argue that it’s dead and that retirees need take on more risk if they want to avoid outliving their retirement savings.
In this video we’ll take a deep dive into the 60/40 portfolio and whether it’s still a viable approach to investing for retirees.

RBS 028: The Life-Changing Magic of Index Funds_Live Q&A Apr 06, 2022

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Video Resources & Timestamps
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0:00 - Welcome to the Financial Freedom Show!
3:50 - Very important question!
5:00 - Including a Bond Index Fund or Bond ETF as part of a retiree's portfolio
8:40 - Favorite local restaurant
9:07 - Talking Real Money Guys/Morningstar
9:57 - GNMA in a bond portfolio
13:07 - Approach to bridge to access retirement accounts
15:43 - Placing HSA dollars into investment vehicles rather than leaving in cash
18:36 - How would one hedge holding other currencies, including digital currency?
20:32 - How to hedge against the weakening U.S. dollar
21:27 - Do I still need a Bond fund?
29:14 - Set schedule for my live shows
30:01 - How high of percentage inequities is best
32:22 - If the market beats the percentage, why would we pay off our loan?
36:01 - Am I better off using a brokerage account?
37:35 - Assessing current equity valuations for excess care
39:57 - Would I sell VTIP for BND or divide the fund equally between both?
42:14 - Modifying a 3 fund portfolio to include more higher risk higher reward allocation
43:42 - How to transfer your portfolio to other brokerages without triggering taxes
46:18 - VIPSX vs VBTLX
50:44 - Index maximalist
54:30 - AUM (Assets Under Management)/Fiduciary
58:38 - SCHY
1:00:52 - Long Term Care Insurance
1:05:04 - Would complexities in a portfolio become moot with Fintech innovation like M1 finance slices
1:05:42 - Sub 3 withdrawal rate
1:08:12 - Should I have a taxable account with M1 or stay with Fidelity?

RBS 027: The True Cost of Actively Managed Mutual Funds Apr 04, 2022

Show notes

The True Cost of Actively Managed Mutual Funds (according to Vanguard founder John Bogle)
Actively managed funds are expensive. And it's not just the expense ratio. From transaction costs to tax inefficiencies, and cash drag to load fees, the cost of actively managed funds all but guarantee they will underperform an index fund over the long-term.
In this video we take a look at a portfolio sent in by a viewer. The portfolio was recommended by PNC Bank. For just a $100,000 account, they recommend almost 20 funds, many with expense ratios over 1.00%. On top of that, PNC wanted to charge 1.24% to manage this mess.
Resources mentioned in the video
John Bogle's article: http://johncbogle.com/wordpress/wp-co...
Personal Capital: https://robberger.com/go/personal-cap...
Tools & Resources
Morningstar: https://robberger.com/go/morningstar/...
📚 My Book (of course): https://amzn.to/2MsRJ9B
📈 Personal Capital: https://robberger.com/go/personal-cap...
💰 M1 Finance $30 Bonus: https://robberger.com/go/m1finance-bo...
🏆 Best Investment Tracking Apps: https://bit.ly/3wSbKZa

RBS 026: The Two 5-Year Roth IRA Rules Explained_Here's How They Work Apr 01, 2022

Show notes

There are two different 5-year rules for Roth IRA accounts. One applies to Roth IRA accounts and determines, in part, whether the withdrawal of earnings is subject to income tax. The second applies to Roth IRA conversions and determines whether a withdrawal will trigger the 10% penalty tax.
In this video we walk through both 5-year rules. We'll cover what they are, how they work, and what it means for retirement savings.
These are complicated rules, so be sure to check out the resources below. And as always, consult a tax professional before making any decisions.
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Video Resources
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IRS Publications--
https://www.irs.gov/publications/p590b
https://www.irs.gov/retirement-plans/...
https://www.forbes.com/sites/bobcarls...

RBS 025: Thoughts on Roth Conversions and Required Minimum Distributions (RMD)_Live Q&A Mar 30, 2022

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Timestamps
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0:00 - Welcome to the Financial Freedom Show!
0:30 - Roth Conversions
15:13 - Reverse mortgage
16:24 - Is there a minimum where Roth Conversion doesn't make sense?
18:04 - BUFOX
21:47 - 11 stocks
25:26 - Thoughts on investing for college/529 Ohio/VTEP
27:05 - Defined Benefit Pension Plan
31:29 - Is there a downside of leaving target date funds in my portfolio?
33:42 - Why can't we invest non earned income into a Roth IRA?
34:37 - Good Morning Washington
35:33 - 90/10 or 80/20 for investing kids savings
36:32 - Timing the market
38:04 - Roth Conversions make sense if the market takes a downturn
38:50 - VB & VBR
40:56 - Accessing Roth Conversion after 5 years
42:35 - Transitioning from predominantly index fund investing to disciplined individual value stock investing in Roth
44:46 - Schwab vs Vanguard for retirement accounts
48:19 - Married couple Roth conversion
48:56 - Fulfilling promises to viewers
51:05 - Cash reserves account
52:17 - Betterment
54:58 - Qualified donations
56:41 - Tips on spending money during the accumulation phase
57:57 - Good asset allocation in stocks
1:00:25 - Most advantageous method to determine the profit or loss for tax reporting in a taxable account
1:01:58 - Changing allocation since my account is no longer a Roth
1:

RBS 024: TIPS vs I Bonds -- What's the Best Way to Hedge Against Inflation Mar 28, 2022

Show notes

TIPS vs I Bonds--What's the Best Way to Hedge Against Inflation?
TIPS (Treasury Inflation Protected Securities) and I Bonds both protect investors against unexpected inflation. Both bonds are also issued by the U.S. Government and are exempt from state and local taxes. Bu that's about where the similarities end.
There are key differences between TIPS and I Bonds that investors should know. We look at 8 key differences, along with the pros and cons of adding each to your portfolio.
As a bonus, we look at how one of them can help you save for a child's education.
Resources:
https://www.treasurydirect.gov/indiv/...
https://investor.vanguard.com/mutual-...
https://www.treasurydirect.gov/indiv/...

RBS 023: VOO and Chill_Is An S&P 500 Index Fund Portfolio A Smart Idea Mar 25, 2022

Show notes

You'll often hear the phrase VOO and chill or sometimes VTI and chill. VOO is the ticker to Vanguard's S&P 500 index ETF (VTI is Vanguards total U.S. market ETF). The idea is to invest all of your money in the S&P 500 (or perhaps the total U.S. market) and just relax.
After my video showing my 2021 portfolio tracked the performance of the S&P 500 (more or less), many asked why I bothered with multiple asset classes and individual stocks. Why not just VOO and chill?
This video explains why, and more importantly, walks through some concepts that might help you decide what's best for your portfolio.
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