Economics Matters by Laurence Kotlikoff Podcast Finding the Holy Grail for Investors -- MaxiFi Planner's Upside Investing 3 2 1× 0:00 Current time: 0:00 / Total time: -41:54 -41:54 Audio playback is not supported on your browser. Please upgrade. Finding the Holy Grail for Investors -- MaxiFi Planner's Upside Investing Larry Kotlikoff Jun 18, 2024 3 2 Share Transcript In this episode of Economics Matters -- the Podcast , I cover Upside Investing . There are two holy grails in personal finance. One is building a floor to your living standard. The other is investing in the market with no downside risk to your living-standard. My company's MaxiFi Planner's Upside Investing report does both. Unlike Wall Street's phony asset-bucketing strategy, which purports to set a floor to your income, Upside Investing builds a floor to your bottom line -- your household's sustainable living standard. It does so by combining a spending strategy with an investing strategy. The spending strategy is simple. Spend only out of safe assets, such as inflation-indexed Treasury bonds called TIPS (Treasury Inflation Protected Securities). The investment strategy entails investing in stocks (the S&P 500), but treating them for spending purposes as entirely lost until they are found, i.e., sold, with the proceeds used to buy additional TIPS. When you run MaxiFi's Upside Investing report, the tool does two things. It generates a living standard floor based on your safe resources. Second, it runs Monte Carlo simulations showing you the range of upsides to your living standard floor that your stock investments may permit. The more assets you invest in stocks, the less you have available to invest in TIPS and vice versa. Hence, the higher your upside, the lower your floor and the lower your upside, the higher your floor. Check Out MaxiFi Planner No other software does Upside Investing. It's not simple. Indeed, it took us decades to develop the methodology. There is one other remarkable lesson I convey in the podcast. You can put a relatively small share of assets into the stock market and still have a shot at a remarkably high upside to your living standard. This is due, in part, to avoiding sequence of return risk. Since you let your stocks ride for years prior to conversion, you don't do what conventional planning recommends, namely spend the same amount in retirement no matter whether your stocks are or are not tanking. Stated differently, conventional planning maximizes sequence of return risk. Upside investing eliminates it, at least until your conversion period begins. Subscribe Share Future-Proof Your Finances! Economic Matters - The podcast is hosted by Laurence Kotlikoff, a Boston University Economist, a NY Times Best Selling Author , President of maxifi.com , and Author of Money Magic . Stay Connected: Facebook , Twitter , LinkedIn Apple Podcasts Google Podcasts Spotify iHeart Amazon Music Discussion about this episode Comments Restacks Economics Matters by Laurence Kotlikoff Podcast Economics can make a massive difference - collectively and personally. Listen in as we chat with some of the most influential leaders in economics across the globe. Economics can make a massive difference - collectively and personally. Listen in as we chat with some of the most influential leaders in economics across the globe. Subscribe Listen on Substack App RSS Feed Appears in episode Larry Kotlikoff Recent Episodes Naill Ferguson, the Preeminent Economic Historian, Talks Geopolitics -- Yesterday's, Today's, and Tomorrow's Aug 10 • Larry Kotlikoff Jack Schibli of Lane Generational Explains Why the Stock Market Runs Largely on Autopilot and the Equity-Investing Danger this Presents Aug 2 • Larry Kotlikoff The Brilliant and Captivating Justin Wolfers Talks Economics and the Economy Jul 31 • Larry Kotlikoff Economics Matter's First Substack Live! Talking Social Security's Extreme Insolvency with Pam Krueger, Founder and CEO of Wealthramp, and… Jul 29 • Larry Kotlikoff Brilliant Investing Requires Thinking and Looking Outside the Box -- Steve Laffey Is an Extraordinary Investor. This is a Podcast You Can't… Jul 23 Economist John Goodman, Father of HSAs and One of America's Most Influential Policymakers, Talks US Healthcare Reform Jul 16 • Larry Kotlikoff Bruce Mehlman Joins Economics Matters to Discuss the Long-Term Economic Impact of the War in Iran, Geopolitics, Economic History, and His… Jul 2 • Larry Kotlikoff Sebastian Mallaby Returns to Discuss AI and his Latest Bestseller: The Infinity Machine. Jun 25 • Larry Kotlikoff