Roasting My Subscribers' Investment Portfolios with Graham Stephan

[00:01] Guys here. >> Welcome to another edition of roasting joined by a special guest today, Graham Stephan, and he's going to be going over three profiles that my viewers submitted, that you guys

[00:14] have submitted, and we're just going to get your real and natural reactions. >> So, submission number one, profile number one, we have a 20-year-old in Alabama who is currently a server assistant. I assume that's at a

[00:26] restaurant, and he is currently in school. He earns $21,000 a month, or month. In terms of expenses, he's got $600 a >> Yeah. >> He's got three big goals here: graduate

[00:40] debt-free, max his Roth IRA, and he wants a house down payment in Alabama in about 5 to 6 years. He's got an aggressive risk profile, and he wants to invest for about 45 years. So, right off the bat, what do you think

[00:52] about his income and his goals? >> Income, he's got to get his income up. >> Income, he's got to get his income up. 21,000 is certainly not enough. But, my guess is he's probably going to Yeah, he's he's in college in college. So, I

[01:05] definitely want to see a bump up in the income. His expenses are awesome. I payment in 5 to 6 years. I think being 25 and locking yourself into a 30-year

[01:17] mortgage probably not the best decision if he's settling down and having kids and knows he wants to be in that area, >> maybe I could get my mind around that. >> But, if he's not going to stay there for

[01:30] continue renting. >> I would keep renting. I just think >> I would agree. All right. Well, he'll probably get his income up, you know, after he graduates school is probably my guess. So, we'll

[01:43] let's actually look at some of his assets and values now. So, he's got 2350 portfolio. and he's got a CD that's expiring this month for $23,215.

[01:58] >> in a CD these days? I haven't seen that in years. >> Okay, so you know what's crazy is I was just at the bank 3 days ago and my dad's And so I was trying to find somewhere to park the cash so it that it would earn

[02:12] to sell me a CD. And I was like, "Listen, for a living. I don't need a CD. I know I know what's up." And I just like, "Just give me a money market account that pays me 3.5%. That's all I want. I

[02:25] >> But CDs when you walk into a bank, that's like the number one thing that >> Yeah, it's kind of sad. >> Wow, I remember when I was in high a year. >> that too, yeah.

[02:39] >> Mhm. >> And in hindsight, that would've done really well had you gotten like a 5-year CD at 5% in 2006, >> rode it down, and then the market in 2011 you have your cash, buy in. Man,

[02:55] money. >> Yeah, I think these days though a lot of months, 12 months, right? >> So yeah, the CD, that's a weird one. Uh >> All right, well, it is expiring this month, so I think he is just

[03:08] >> That could be grandma buying this like for her grandkid and it's like, "Ah, there you go." But and that used to be like $10,000 that she put in originally. this month, so he's just going to have some money to kind of play around with

[03:21] is my guess. And this is currently what he holds in his investment portfolio. In his brokerage account, he's got Robinhood, I like the stock, only $55. He's got some QQQ, SCHD, he's got the VanEck ETF SMH, which is the

[03:35] Warp is, we'll have to look that up. >> And it's only $64. >> Yeah, and then the Roth IRA, he's got VT, QQQM, uh AVUV, and then the rollover IRA similar, and the cash is obviously the

[03:48] cash. Just overall thoughts on his portfolio as a 20-year-old right now. >> is really interesting. The QQQM, I believe that's the institutional QQQ with a lower >> It has a lower expense ratio. It's less

[04:01] >> Less liquidity. >> However, what I found, I actually own QQQM and it trades just like QQQ. >> Basically. >> Right. So it's interesting he's like efficient enough to know to invest in

[04:14] >> Mhm. >> Which is really cool. The SCHD >> portfolio by Schwab. But he's also in a tax bracket where he's in the 0% capital gains. So this makes sense right now for him to be getting the dividends without

[04:29] having to pay crazy taxes on it. But at some point he's probably going to want >> Concentrate into something more aggressive. >> Yes. Once he starts having to pay taxes on the dividends, it kind of overcomes a

[04:41] lot of the benefit of the dividend. >> Yeah, I think there's just a huge Reddit >> Yeah, I think there's just a huge Reddit community that loves SCHD, right? And uh should maybe put more of their portfolio in SCHD? Do you think it's someone who's

[04:55] 45 with like a million bucks and it's like, "Hey, I just want that dividend?" just a psychological thing. Because I cuz a lot of people like seeing that dividend. And like on my account in

[05:07] Schwab, like you could give you put money in a dividend stock afterwards like in your estimated earnings over the next 12 months. Like people love seeing like, "Oh, now I get an extra like $100 a year that I get to

[05:20] earn." He's it's so immediate. So I get the appeal of it, but like mathematically it doesn't make sense once taxes start taking more of it out. like the psychology that Sorry. The psycholo- the psychological component of

[05:35] it because you know, it's always nice to daydream SCHD and I was it was just spinning out 5% a year, I could live off of 250k a right? agree. All right. And then he's got some

[05:49] Question number one, he wants to counteract any debt that he could through school. With my Oh, that's not a question. It's graduate debt-free. That's good. He wants to maximize his growth in the

[06:03] IRA for the next 10 years before switching to a mildly less risky I would argue that his positions back here in his Roth IRA It's not that risky. But but really his allocation is pretty

[06:18] he's doing pretty good here. I'd like to potentially use the funds from my taxable account to put a nice down payment on a house in about 5 to 6 >> We did. >> Yeah.

[06:31] to allocate my money when I have so many priorities and goals? I think his number continue investing, keep his costs of living low, and just increase that >> Yeah, I I I don't know why it's more complicated than that. I would I

[06:45] question the house, but beyond that I would just say make possible, just keep investing in the same allocations, and don't change maybe change, Mr. Submission one, is that SCHD holding once you get into a

[07:00] >> All right. Submission number two, we got a 28-year-old in Georgia, computer scientist, project manager. They earn 99k a year plus 18k from a This is This is great for you. Uh good content for Graham cuz he has a

[07:17] lot of rentals or had a lot of rentals. Um $6,500 a month in income, $4,300 a month in expenses, three big goals, retirement, helping parents retire, legacy for future family. 30 years, risk profile medium. Thoughts?

[07:32] rental. >> 20% of his income. >> That's substantial. Like that's pretty good. Uh Uh, the $6,500 a month net, what does that work out to be a year? I I guess with taxes and

[07:47] >> Yeah. >> Uh, $4,300 a month, I mean that's >> He's in Georgia though. Don't you think his cost of living should be slightly >> You would think, but also if he's a single single person

[08:01] maybe >> He's still saving 2.2k a month, right? >> It's not bad. We can get that down a little bit probably. All right. Uh, here's some of his assets and his

[08:14] values. 33k in cash, 194k in investments. I love that. Um, and he I guess he owns about, what is this? 150k worth of equity in the real estate? Cuz he the the property is worth $410,000. What do you think of his

[08:28] estate, 51% cash. >> Really real estate heavy and making $18,000 a year on a $410,000 asset. It's It's It's It seems average to me. Like it doesn't seem like like a

[08:42] >> Was that 1,500 bucks a month? >> Yeah. but it also I'm guessing the 18k also includes paying down that debt and all the property taxes. I'm guessing and all the So, it might be okay. Very

[08:58] cuz he got $200,000 in investments. >> I think he's got too much cash. $4,300 a much? fund? >> Yeah, but he's got the real He's got a

[09:12] real estate. Yeah, one roof. Like that 33k gone. thinking about. So, >> Yeah, he's got to replace HVAC, uh, >> Yeah, he's got to replace HVAC, uh, tenant moves out, he's got to evict. Uh,

[09:24] I would say easily I would keep 20k on the side for that property, easily. >> So, as a percentage of the real estate itself, how much would you keep in cash property? >> Uh, I think I think probably I just

[09:38] >> It depends on >> It's not a percentage, but like an HVAC is going to be the same for a $400,000 home as a million dollar home. It's like cost in the same thing. >> Yeah.

[09:51] >> So, I would I would probably say 20k a property because again, it's like your roof leaks, foundation issues, something. 20k would cover a lot of it. And worst

[10:04] a credit card or something. You have 60 days to pay it off before you pay but you don't want to have to do that. >> Okay. Well, I stand corrected then then the 33k in cash is healthy. All right. Investment portfolio

[10:17] overview. He's got a lot of ETFs, right? So, we're looking at the standard ETFs here. SCHD, popular. He's got SCHG, which I believe is >> I don't know. I have no idea. I'm I'm I'm just guessing.

[10:34] he's got some individual stocks here. >> Vixis. I like Vixis, Nvidia, Google. Google's been on a tear lately. >> SCHG is the >> Okay. >> So, it's it's 0.04% expense ratio. Very

[10:51] very nice. We like that. And in terms of the holdings here, let's give me a It mostly holds, you know, the top the top the top dogs. Nvidia, Apple, Microsoft, Amazon, Google. Tesla.

[11:06] See, it depends on when he invested in some of these companies, but I'm seeing SanDisk, Meta, uh, >> Some sort of quantum stock, QTRM.

[11:20] it's so far I I I think this is great, you know? This might continue to >> I think it's great, but I think he's got a lot of holdings here. Do you think >> No, he's it's >> I almost think there's much overlap

[11:33] obviously VOO is a really small position, but SCHG, he's got a lot of SCHG and SCHD just across the board. >> I think it matters, you know. I I think it's he's having fun with it. He's picking individual stocks, a few grand

[11:48] here and there in the big picture. You know, if one under over performs, difference. >> Looks like he's got some crypto as well that he did not really list earlier. So, what's your thought and a thrift savings

[12:00] government. Um but crypto, thoughts? Bitcoin? 13K? just >> It's about 10 almost 10% of his portfolio. 13 out of What is it? >> No, but it is I would I would count um

[12:15] >> true. Okay. >> So, it's really he's like 4% crypto. I don't think that's bad. Maybe 5% crypto. I don't think it's terrible. Um if that's a risk he wants to Like he's he's in uh

[12:28] Listen, he's also in the government. Yeah, so I would say it's fine. I I wouldn't go like 50K in crypto, but I would say for what his portfolio is, totally fine. >> All right, let's look at his questions.

[12:41] on his risk tolerance and sector allocation? So, I think on three we should give him a number. So, okay. So, on three we'll rate his portfolio out of 10. So, like on you know, have you seen the uh Tip to Tip China

[12:54] >> That's where they go they do a meal review where they do basically like um if the meal is a 7.5, let's say, you know, on three they'll go 1 2 3. I'll say 7.5, you go 7.2. And so, like you get the you get the rating

[13:09] >> And then we we can discuss. >> Okay. >> So, on three say your rating, it's going to be x.x. Like 7.2 or 8.8 or whatever it is. >> So, it has to be can't just be an even

[13:21] number. >> You You can choose 9.0 if you'd like. >> But Okay, so it's but but buh. >> Okay, yeah. On three? >> 8.0 >> Oh, okay.

[13:33] >> I thought it was like pretty good for Why would you give it Why is it not a 10? >> Um I would just say it doesn't seem like there's a ton of it seems like he's just going

[13:47] for some of the the hypie stuff lately, but I don't know if that's because like he's in it and is really like if he's early it >> Yeah. >> last few months or is did he buy them

[14:02] up? So, I think a lot of that would depend on the reasons for owning, but it just >> he bought Sandisk last week, you'd just >> I'm like oh, of course, of course. Yeah, exactly. So, it it depends on when

[14:15] on this. >> I was just thinking for his age and his portfolio size, like I just thought he's just killing it. Like a 28-year-old with 400k or more in assets, like >> Yeah, big big big picture he's doing

[14:27] >> Yeah, big picture I think you're doing great, Mr. submission number two. You current portfolio goals and savings rate, what is your coast fire time horizon? I think you probably already there, depending on what your annual

[14:39] expenses >> Well, it's 4,300. >> 4850 >> 51k, so he needs a portfolio of 1.29 million dollars by the time he wants to coast fire. That's annual expenses times

[14:54] 25 at the 4% rule. He's got 400k right now as a easily 1.29 >> Yeah, how many years is that to compound? Cuz if it doubles every seven, we'll call it every eight. So, it's

[15:08] going to double double double double. So, we need four to eight eight to So, that's really 15 years. >> I think yeah, I think just based on my quick eye test eye glance test or whatever, he's definitely there. Back of

[15:21] napkin math, I think he's already at Coast Fire. I think that um if if anything like he could probably chill out now, but that. >> So maybe that is your time horizon goal,

[15:34] and then >> Depends on what the interest rate is. >> Cuz that's also tax deductible against the rental income, taxed at ordinary >> So it might be better not to pay down the mortgage, but it depends what it is.

[15:48] >> All right. Submission number three, 24-year-old married man in Texas. Young man, married, but that's probably normal for Texas. Grocery manager, I like this. They earn 130k combined. Eight making 8k a month and spending

[16:03] >> years old. >> Now looks like he's got some goals. >> He's got some goals here. Pay off roof loan ASAP and max out Roth IRA every rental income or he's got a house. After roof, pay off house, okay. Save

[16:17] medium. 40 years. Let's go straight into his assets and values. 12k in cash, 49k investments. owed in real estate. >> 276. So that's basically he's just got

[16:32] >> Yeah. Yeah. >> Looks like a new new new purchase. >> I mean overall thoughts, I I think you just because of what we discussed with

[16:44] estate. But that's just me. should be pouring it into his investments and his cash to bring out to waiting. Yeah. >> it seems really real estate heavy.

[16:59] >> Hey, for his investment portfolio overview, he's got VXUS. I actually don't know what IAU is, but looks like he also has some silver >> Mhm. >> Ah, only $189

[17:12] >> Oh, so IAU is actually the iShares Gold Trust. So he's got about 17K in in precious metals here. precious metals here. Um

[17:24] IRA, that might be too conservative. >> I tend to think so, too. But again, it depends on when he bought this. Did he buy gold when it was a thousand and now it's, you know, 4,000 or did he buy it after the run-up? Like a lot of these, I

[17:36] you where he is now, but where was he a year ago? >> Right, right. So, if you bought it at 5.5K per per gold ounce, that's maybe right? >> Yeah.

[17:49] >> Mhm. balance fund. You know, for 401Ks, I just think just make it simple. Just kind of concentrate into one fund, S&P 500 or large cap would be

[18:03] >> Um I'd kind of consolidate that, would be my opinion, but so far, I think he's doing okay. Would you change the precious metals out? Like let's say he bought them this

[18:15] the Roth IRA anyways. >> What would you swap it out for? Again, I just S&P probably. Well, let's say he's sitting on 12K of gains. Let's just swap it out anyway? And what would you swap it out for? More

[18:28] >> I think S&P. You know, even if it goes down, like this to me that's just too conservative long term, unless he has a plan short term with that gold. really outperformed the last 2 years, but if you look back, you know, 10 years

[18:43] a while. So, he's got a lot of question well, statements and questions. Let's just go to his question, on his current investments in there? Are they sufficient to support these

[18:56] >> Yeah, it seems like he's concerned about current economic uncertainty and >> he owns the gold. >> Yeah, I I worry that that fear will 10 years because he'll be hedging himself against something where it's

[19:08] money and keep pumping the markets, he's going to be sitting there thinking, "Oh, to my gold." But the market's going to rip up higher. also the type where as soon as he buys the market, it's going to fall. And he's

[19:22] stayed in gold. I knew it." >> So maybe he could sell his gold position and dollar cost average. Sure. >> Or or sell half sell half of it and move the other half into the S&P. >> I think half is a good a good starting

[19:35] have two to four children in the next 10 >> Mhm. >> Um and lastly, he's unsure how far a I agree. I don't think a million bucks by time he's 65 is going to go that far.

[19:48] >> Probably not, but it's a it's a start and you you know, you could get still matters. That's right. >> No, you don't You know what's funny? Um

[20:00] a while ago, I uh went to Chipotle instead of buying the there was a grocery store in like the same complex. Yeah. >> bought the avocado for like a dollar. It

[20:13] >> cut it and just >> And then just showed up Wait, did you show up to Chipotle with the avocado? >> No, I should have. [laughter] No, I just just cheaper. >> we should run a side business where we

[20:25] sell avocados outside of Chipotles and just be like, "Hey, here's an avocado >> Ah, it would do really well. >> $1.50. I don't know how much they charge for guac cuz it's been so long since I I

[20:38] >> I think it's like I think it's close to three bucks now, to be honest. $2.50 or it >> skimp you on it. They just like they and some lime in there. It's >> It's the lime that they do in that.

[20:51] sometimes they just they don't give you a lot and you always have to ask, "Can I get more of it?" But you don't want to be that guy who's everything, "Can I get It's like they're just trying to do their job, but they are skimping.

[21:05] >> Well, you hear hear it here first. Bring your own avocados to Chipotle and thank you Graham for coming on the channel for this portfolio roast. I hope that you enjoyed it. >> So, from Graham and Humphrey and guys,

[21:18] we'll see you guys later. Thanks for being here. For the next video, just uh click somewhere up here. All right. Peace out.