Welcome back to the early retirement podcast. I'm your host, Ari Taoblieb, and today we are talking about

asset allocation, what is the perfect asset allocation? How do you think about it? So this episode is not

prompted by a listener question. It is one that I thought would be helpful. So some episodes,

I'll go through a listener question. Please do keep submitting those. That's how I make these episodes

that I hope you all find so helpful. And it seems like it has been because the reviews keep coming in, the ratings, the show keeps growing and I have to thank all of you because I truly could not do this without you. If you haven't already checked it out, there is an e-book, a complete guide to an early retirement. You can always find that in the description below. You can also find a tax guide. Now that tax guide is also in the ebook. So if you don't want to do two separate downloads, feel free to check that out there. And I'm doing all of this and more on YouTube. So feel free to check out YouTube. If you want to see more video content or you want to just see my face as I'm going through this. I know sometimes it can

be easier to follow along with numbers. For other people, they just say, Ari, I know it's on

YouTube, don't care. Love listening on the podcast app. I can mow my lawn. I can garden. I can

work out. I mentioned this on previous episodes, but some of you are working out to this podcast.

Kudos to you. I listen to a history podcast when i

work out but that's only because i nerd out over that stuff and when i'm on the elliptical or the

stair master that's what gets me home it's inspiring to me to see what people went through in history so

a little bit of a weird fun fact about me but there there you go. Didn't think that was coming out,

but I share it all with you guys. So I want to talk about asset allocation today, and here's where I want to start. And here's why it's so important to me. Here is the best asset allocation, ready, and it doesn't have to do anything with numbers. The best asset allocation is one you can stomach and one you can agree with. If you have an asset allocation that you go through, let's just

pretend that your're a client who reaches out to me. Now, I would never ask questions like the following, but just humor me for the example. If I said, okay, John, Lisa, what is your risk tolerance on a scale of 1 to 10? They might go, I don't know, I'm a 4 or I'm a 5.

Now, why do I hate that question? Well, I hate the question because maybe you had a bad day

and you're like, maybe I'm a 3, but the other day I was feeling good about my finances, so I'm an 8. And, you know, it depends on where I'm at in life. So the risk tolerance on a 1 to 10, that's when we're getting cookie cutter and I'm anti-cookie cutter I'm anti-fluff but you guys probably

already know that.

When it comes to, okay, what do I need to think about when it comes to acid allocation? Okay, so there's risk tolerance, but here's why bring this up at all. If I come and we say risk tolerance, got it, it's a scale, you know, between a one and 10, you think you're maybe around a five and it makes sense to you but you say you know what i'm a five and it shoots down

allocation for you and let's just and 10, you think you're maybe around a five. And it makes sense to you, but you say, you know what,

I'm a five and it shoots out an allocation for you. And let's just pretend that it shoots out the

software that we put in. We talk about your goals. And it says, okay, John, Lisa, you want 75%

equities, 25% fixed income based on this conversation. But if that allocation, the amount of stocks to bonds to

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