7 Quick Things You Can Do to Boost Your Wealth in 2018

In this episode of Motley Fool Answers, Alison Southwick and Robert Brokamp want to help you get rich -- well, richer -- with a reasonably small investment of your time, even if you'll have to wait to see results. For the most part, these techniques aren't hypothetical, either. Bro has applied them in his own life -- from cutting expenses to properly rerouting a tax cut.

A full transcript follows the video.

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This video was recorded on Jan. 9, 2018.

Alison Southwick: This is Motley Fool Answers. I'm Alison Southwick and I'm joined, as always, by Robert Brokamp, personal finance expert here at The Motley Fool.

Robert Brokamp: Well, hello, Alison!

Southwick: In this week's episode, Bro is going to list seven things that you can do in under 15 minutes to be wealthier in 2018 and beyond. We're also going to talk about the market's performance last year and pull out a crystal ball for you, so you can learn what to expect this year. Right? Is that what we're doing?

Brokamp: Yeah! Yes, generally speaking, that sounds good.

Southwick: All right! All that, and more, on this week's episode of Motley Fool Answers.


Southwick: Normally this is the point in the show where I would say, "It's time for Answers, Answers!" But, not anymore. Well, we're changing things up in 2018. Instead of kicking off the show with listener questions, we're going to talk about breaking news, or something else interesting that we learned this week. Don't worry! We'll still answer your questions. It's just that we're going to do it once a month in a Mailbag episode. Any objections out there? No?

Brokamp: Chirp, chirp, chirp.

Southwick: OK! So, we don't have a name for this segment. Feel free to send us your ideas because naming things is hard. Bro, what do you want to talk about this week?

Brokamp: I figured since we just concluded 2017 and we're kicking off 2018, I'll talk a little bit about the year that was and what I've read about when it comes to what people expect for 2018.

2017 was a great year to be an investor. The S&P 500 was up 22%. Not only is that more than twice the historical average, it made history because it was the first year, ever, that the S&P 500 made money each and every month. There were a handful of years, previously, where it made money in 11 months, but this is the first time it made it each and every month. A great year -- an easy year -- to be an investor.

As for other types of investments, small caps didn't do quite as well. They earned about 16%. That's still pretty good.

Southwick: Not so bad!

Brokamp: International stocks, as a group, though, did even better. They did 27%, and if you look at emerging markets they earned well above 30%. Diversifying internationally definitely paid off this year.

When you look at the bond market, of course bonds don't do as well, but the overall bond market made 3.5%, which I think is pretty good given that our expectations for bonds are low. As I've said before, I think you could expect maybe 1.0-1.5% above cash. They definitely did that. And interest rates did go up -- especially on the shorter range -- shorter term bonds. To make 3.5% on bonds in a year where interest rates go up I think is pretty good.

Southwick: I feel like ever since we started this show, you've been saying, "Of course, the market goes up, on average, about 10%," but for the next few years I think you need to expect more conservative results.

Brokamp: Right.

Southwick: Not this year!

Brokamp: Not this year! And I'll talk about it a little later. What I like to do at the beginning of every year is look at people's predictions and expectations for stocks, bonds, as well as just general economic stuff. Nobody expected [this], but I read a year ago 22%.

Southwick: I'm not personally attacking you.

Brokamp: No, no, no, that's fine. It's OK. In case you're curious, these were the best-performing five stocks in the S&P 500. The best performer was NRG Energy [NRG]. That's the name of the company. It earned 132%. Then followed by Align Technology [ALGN], Vertex Pharmaceuticals [VRTX], Wynn Resorts [WYNN], and Boeing [BA], which made 89% last year.

Despite the fact it was a good year, 28 stocks in the S&P 500 lost more than 20% led by Range Resources [RRC] losing 50%. Under Armour [UAA]. I know that's tough for a lot of Motley Fool investors...

Southwick: Yes, Motley Fool investors have that.

Brokamp: ... followed by Scana [SCG], Envision Healthcare [EVHC], and GE lost 45% last year. It just goes to show that even in a great year for overall investing, you're probably going to have some stocks or other types of investments that didn't do quite as well as the overall market.

The other thing about last year, besides the fact that we made money each and every month, is we're now on the second-longest streak of not having a 5% drop. The last time there was a 5% drop in the market was back in June of 2016. The current streak is 554 days. The longest streak is 593 days, which happened in the '50s. That gives you an idea of how easy it's been to be an overall investor. A lot of people are now asking how long this can go on. It is the second-longest bull market in history.

Southwick: People have been saying that for the last 10 years. How long does this go on?

Brokamp: Exactly. One interesting thing I found, that was pointed out by the Capital Group [which runs American Funds, one of the biggest mutual fund families], is that a lot of bull markets are usually tied to some sort of economic expansion. Everyone pretty much knows that. The expansions, on average, last 60 months. This current one has lasted 100 months. People think that's a long expansion, but it's been a weaker expansion. They pointed out [with] the average expansion, the economy grows about 123%. Right now, we're only at 115%. While it's been a long bull market and a long expansion, it hasn't necessarily been the highest or fastest growing.

That's one way to say that while it's been going on for a long time, it could have room to run; and so, while looking to 2018, when I read tons of projections from various companies and experts for 2018, most people expect it to continue.

Things are looking pretty good. We all know about the new tax law, which should benefit consumers and corporations. According to Vanguard, 80% of developed countries are at full employment, meaning that the unemployment rate is very low. It's a good time to be out there looking for a job. It's a good time to be asking for a raise. In fact, that's really one of the only risks that have been highlighted by most people, and that is inflation. When you have low employment, that puts labor in the driver's seat that can ask for higher wages, which often get passed on to consumers. Inflation is one risk.

And one thing that I noticed a lot this year, that I haven't seen in many previous years, is geopolitical risks, and we all know that politics these days is a little crazier. Traditionally, what you will see economists and folks say is to ignore politics when it comes to your portfolio. This year, just about every forecast I looked at said we just don't know, so while the economy looks pretty strong and things are looking pretty good, you just don't know. It's just a wild card.

Southwick: Yes, you can expect anything or nothing.

Brokamp: You can expect just about anything, exactly.

Southwick: But you can't necessarily prepare for it. You can expect it, but there's not a lot you can do.

Brokamp: Right, and what do you do about that? The same thing you always do and that is any money you need in the next few years should be safer in cash or bonds. Otherwise, just hold on for the long term. Traditionally, on average the market drops about 10% once a year. We haven't seen that in almost two years, now, but expect that. A lot of what I read said that's normal, but because it hasn't happened in a while, people might freak out more than usual when it does happen, and you might see a little bit more panic selling. Otherwise, things are looking pretty good.

Southwick: I've been reading something, too. Do you know what I've been reading?

Brokamp: What have you been reading?

Southwick: It's the new swag website that we have up. A bunch of listeners have wanted a place where they could go and buy Motley Fool shirts, mugs, and whatever; and so, we finally made it. It's Shop.Fool.com. Are you excited?

Brokamp: I'm excited.

Southwick: I am so excited. Fun fact. I designed one of the shirts.

Brokamp: Did you really?

Southwick: Yeah, the one that lists all the names of the shows. It's not a terribly original shirt but, whatever. I designed it. You can buy it on the site. It's Shop.Fool.com. Once you're done reading about what to expect in 2018, you can go there and buy a shirt or a mug. Just because. I don't know.

I also want to give a shout-out to our man behind the glass, because it's Rick's Fooliversary today. Yay! How many years is it?

Brokamp: 19 or 20? 19.

Rick Engdahl: 18.

Southwick: So, Rick has worked at The Fool for 18 years. He's seen a lot of ups and downs, here, at this company.

Brokamp: You've had a lot of jobs at The Fool.

Engdahl: I think I've had all of them.

Southwick: What are some of the jobs you've had?

Engdahl: Designer, front-end developer, brands guy, and the customer experience team. Marketing designer, etc., etc.

Brokamp: You led The Fool's efforts to redo our mission and purpose, didn't you?

Engdahl: I did. The Purpose (unclear: 08:46) and also the Core Values rewrite that we did a couple of years before that.

Brokamp: Well, congratulations!

Southwick: Congratulations!

Brokamp: We're very lucky to have you.

Southwick: Here's to 18 more years!

Engdahl: Heh-yah-ah-ahh!

Brokamp: That was an exclamation of joy.

Southwick: I think I hear joy. I think I hear a little joy in there.


Southwick: So, today in our series to kick off the New Year we're tackling wealthier in 2018 and to get you there, Bro has "Seven Things That You Can Do In Under 15 Minutes." Now, originally when we talked about this episode, I was like, "Bro, could you come up with maybe five things in 15 minutes?" And Bro was like, "No! Why not seven, because you can do one a day."

Brokamp: One a day and you'll be so wealthy.

Southwick: Oh, I can't wait to find out exactly how. So, what is the first thing that people can do on day one? If they are going to tackle one a day, what does day one look like?

Brokamp: Let me kick it off by saying a lot of these are things that I have actually done over the last year, or the last few years, that have helped me financially. Last year, in particular, was a big year for selling things. No. 1, sell something. We in the Brokamp family always, every year, go through our stuff, determine what we no longer need, and sell it on Craigslist. It's a pretty easy thing to do, and it works well for us.

My wife has also started to sell books on Amazon using Fulfillment by Amazon. You can sell books and all kinds of things. We've made several hundred dollars doing that. And my 13-year-old daughter opened her own Etsy shop... and she's made fifty dollars doing that. It's remarkably easy to open an Etsy shop selling her homemade slime and little clay charms.

Southwick: What is her Etsy shop? We can send some business her way. You've got a podcast, here!

Brokamp: It's Lunar Moon Creations...

Southwick: There we go.

Brokamp: ... featuring homemade slime. Zoe's homemade slime.

Southwick: For all our listeners' slime needs.

Brokamp: So, we just got through the holidays. Chances are you've got lots of stuff you either didn't want or it replaces something you no longer need. Maybe you got a new phone, and so you have an old phone. You may have gotten gift cards that you no longer need.

All of these things can be sold. We all know about Craigslist and eBay. There are lots of sites that specialize in what you can sell. Things like Decluttr and Gazelle, which are good for selling technology [phones, CDs, DVDs]. Cardpool and Gift Card Granny for gift cards. Poshmark for fashion -- things like clothing, jewelry, and handbags. If you have a specialized thing, just use Google and you'll probably find a specialized site where you can sell it.

Southwick: Day two in, "Seven Things You Can Do In Under 15 Minutes."

Brokamp: No. 2 is to save on food. According to the Consumer Expenditure Survey from the Department of Labor, food is the No. 3 item on everyone's budget. For the average family of four, they're spending more than $11,000 on food split roughly between at-home food and going-out food.

Depending on your habits, there are all kinds of ways to save on food. A couple of times in the past I have done shopping comparisons for my Rule Your Retirement newsletter comparing shopping at the local grocery store, to Costco and Sam's, to buying stuff online. Almost every time buying at a Costco or Sam's pays off tremendously.

Buying online can also pay off depending on what you're doing. We have recurring purchases for things like paper towels, toilet paper, coffee and stuff like that. We get it cheaper, but it also shows up at our house every time, so we don't have to run out to 7-Eleven and buy paper towels.

One thing I think is a great idea is deciding you're going to spend the next week or month just eating what you already have. Americans waste about 25% of their food and most of that is because of food that they bought but then it went bad because they didn't use it. Other than things like milk or stuff like that, try to use the food that you already have. There are sites like Supercook.com, where you enter whatever ingredients you have...

Southwick: Oh, yeah!

Brokamp: ... and it will throw out some potential recipes for you.

Another one I think is to keep track of what you already have, so that you're not doubling up on stuff. For example, you can use an app like Out of Milk, which keeps track of an inventory of what you have, as well as a shopping list that can sync across other people in the household so you're not both out buying milk at the same time. If you wonder if you have enough milk, you can check the app.

Southwick: How does it know if you have enough milk?

Brokamp: Well, it takes some effort to update it, but you keep track of the things that you have.

Southwick: That probably makes more sense across a large family, where the person who finishes the last of the milk goes to the app and is like, "Out of milk, Mom."

Brokamp: Right. We have a white board on our refrigerator where people are supposed to write that stuff down. It doesn't always happen, but generally that's one way we've been able to keep track of that. Then if you're going to use this app, you just transfer it to the app and see what's missing.

Of course, there are coupons. Tons of couponing sites that will help you. And then the other one is to eat out less. Or, if you are eating out, find cheaper ways to do it, like getting online deals. Places like Groupon, LivingSocial are often offering deals where things are discounts. One of the gifts I gave to my wife for Christmas was a date night where you got two movie tickets and a $100 gift certificate to a restaurant for $35.

Or you can go to those aforementioned sites that sell gift cards. For example, if you're Steve Broido looking for the Olive Garden, you can often buy a gift card that's worth $25 for $15 or $20.

Southwick: Very cool. What is day three of seven days of doing things in under 15 minutes? This title is much clunkier than I intended it to be for this episode.

Brokamp: This is something that we mentioned two episodes ago, and that is hopefully make the most of lower taxes. Two episodes ago we talked about the new tax law and some of the ramifications of it, and I encourage people to invest whatever savings you have immediately. That's really what this is about.

The tricky thing is right now nobody really knows how it's going to play out. We're going to start getting our paychecks based on our last W-4 that we filled out already, because nobody has the new W-4s. The IRS is supposed to release guidelines about all this and the new tax withholding tables, but they're not going to do it for another couple of weeks, which means it will take until February for everyone, including the payroll companies, to process it.

I think you should assume you're going to get a tax cut and just save more money right now. Sign up for more savings in your 401(k), your IRA, your 529. Once the tax tables are available, then figure out how much of a tax savings you are going to get and then adjust accordingly.

If you think you're going to get lower taxes and can save more to your traditional 401(k) or IRA, the great thing is just by contributing, you're also getting a tax deduction, so you're basically using a tax break to increase your tax breaks.

Southwick: Very nice. What is the fourth thing you can do to be wealthier in 2018 and beyond?

Brokamp: No. 4 is get a better credit card. According to NerdWallet, the average household owes almost $16,000 in credit card debt which is up 8% from last year.

Southwick: Really!?

Brokamp: Yes, and we have all heard that the Federal Reserve has raised rates. The credit card companies have taken advantage of that and now the average APR on a card is 16.3%, an all-time high.

So, just doing some simple math of that rate on the average card balance, you're paying almost $2,500 interest alone on a card. I talked about using your tax break to invest more. If you have that much credit card debt, you should be using the tax break to pay off that debt.

It's also a good opportunity to try to get a lower-rate card, so you're not paying as much interest, or if you are someone who pays off your balance every month, see what else is out there. See if there's a better cash-back card for you. Maybe better travel miles. Something like that. Lots of sites make this very easy to do nowadays.

I mentioned NerdWallet. The Motley Fool has a credit card center. Just go to Fool.com/creditcards. We have an article there called "The Best Credit Cards of 2018." All kinds of lists of what you're looking for [no fee, best miles, and things like that]. See if there's a better card out there for you.

Southwick: Are we on day five, now, or on the fifth thing?

Brokamp: We're on day five.

Southwick: What's the fifth thing?

Brokamp: Oh, and it's so exciting. I mean that sarcastically. It is review your property insurance, and by that I mean homeowners and auto insurance. I know it's so boring...

Southwick: Can you really do it in under 15 minutes?

Brokamp: I think so. You want to call who you are with, now, and ask how to get a discount. There are all kinds of ways to get discounts. It might be if you have a smoke alarm system. If you have kids at home and they have a good grade point average. If you bundle your insurance. There are all kinds of ways to get some sort of discount.

Another way is to raise your deductible. By raising your deductible from $500 to $1,000, you could cut your premiums by as much as 25%. Of course, that means if you have an accident you'll have to pay more out of pocket, but in my opinion, insurance is really to cover big-ticket expenses [not for small things]. Plus, every time you make a claim, they're going to raise your premiums later, so it's better to have the high deductible, now, and then pay lower premiums and bank the cash. Once you get that from your current provider, call around and see if they can match that.

But because this stuff is so boring, people don't really review it every year, so whatever you're paying is probably based on old information. For example, you might be paying insurance on something you no longer own, or insurance on a house or a car that doesn't have the same value it used to have. It's always good to review it once a year and see if you can save some money.

Southwick: I like the idea that I can just call someone up and say, "Help me save some money."

Brokamp: Right. A lot of times you'll find out you have riders that you didn't need. You've been paying for towing coverage even though you belong to AAA. There's all kinds of things like that you should review and maybe get rid of.

Southwick: What about the sixth thing you can do in under 15 minutes to have a wealthier 2018?

Brokamp: No. 6umber six is eliminate or reduce a recurring expense. We all know what these things are. It could be a gym. It could be cable. It could be a phone. Subscriptions. A lot of times these things are employee benefits like Pre-Paid Legal, or some sort of extra insurance coverage, or anything that's coming out of your paycheck and you just forgot about it. I bet that if you look at three months' worth of bank statements, credit card statements, and paychecks, you're going to find something that [a] you're paying for that you no longer want or [b] someone you can call and negotiate a better deal.

We've talked on previous episodes about cable bills. This past year I called my cable provider about slow Wi-Fi speeds. I ended up getting a faster Wi-Fi speed and a lower price before I was done with it. So, give it a try. See what you can reduce or eliminate.

Southwick: And if you want to dig into the archives of Motley Fool Answers, we also have an episode with Ollen Douglass, The Motley Fool's CFO, on how to negotiate your bills. You can search for that episode to get more tips on wheeling and dealing, as it were.

Engdahl: Can I throw something in there?

Southwick: Yeah!

Brokamp: Sure. Please do.

Engdahl: This is tying two of your tips together. If you are someone who pays off your credit cards [and you go shopping for a better credit card, sign up for it, and start using it exclusively], then soon all those subscription fees that you forgot about start popping up on the old credit card and they reveal themselves to you. And you say, "Hey! I didn't know I was still paying for that! I can get rid of that, now." It works really well.

Brokamp: Or you can just cancel that card, and then those things disappear.

Engdahl: Well, that gets a little messier, because then you start getting notices from people that you're not paying them. This way they pop up. It's like, "Oh! I was paying for Babysitter.com?" Who knew?

Southwick: Were you really?

Engdahl: Well, that was a year or two ago, but yes, that happened. I was paying like $25 a month and I had no idea.

Southwick: $25 a month?

Engdahl: It was one of those free trials. You sign up for a free trial to use once and then you forget to [cancel it]. Yes, stuff like that pops up. I know you could just read the statements all the way through every month or whatever, but nobody does that.

Brokamp: Yes, it's very difficult.

Engdahl: Just switch cards and suddenly the only thing left on that card pops up.

Southwick: Babysitter.com.

Brokamp: Babysitter.com.

Southwick: My kids are in college! Not yet. And what is the seventh and final thing that our listeners can do?

Brokamp: And that is get a better return on your portfolio, and this could be the most powerful thing depending on how much money you have. If you have $100,000 in your account and you could get an extra 1-2%, that's $1,000-2,000. That said, it's easier said than done, in a lot of ways.

One way that you could be getting a slightly higher return is because the Federal Reserve has raised interest rates, it is easier to get a little bit more on your cash. A lot of us have a lot of cash sitting in our bank accounts earning nothing. It is easier, these days, to get 1.0-1.5% going to a high-yield account or maybe a short-term CD. That's worth doing, especially if you have several thousand dollars in cash.

The other way to do it is to look at your investments, particularly your mutual funds. It's been a particularly tough time for actively managed funds to beat index funds, so I don't think that you should just automatically get rid of an actively managed fund if it has underperformed over the last year or two. But if you have a fund, and the expenses are 1-2% a year, and it hasn't beat the market over three to five years, it might be time to reconsider that fund. That's one way to save 1-2%, which falls to your bottom line. That means you'll have that money in your portfolio this year, but then you earn more on that every year. That's really the gift that keeps on giving.

Southwick: What about loads? Are mutual funds with loads still an issue these days? Is that something we should look out for?

Brokamp: It is. It's more likely to happen if you go to a financial advisor who works for a traditional brokerage. Edward Jones, Merrill Lynch, Morgan Stanley, and those types of folks. A load is a front-end commission, usually. It can be what's called a back-end load if you sell out of that fund within a certain number of years. They're also often a company with insurance products like annuities.

Southwick: Those can be like what? 4% or 5%?

Brokamp: Right. To the degree you can, it's almost always better to avoid that. It's difficult, because that's the way some financial advisors work. Some of them are very good and that's just the way you have to do it. I have a situation with my sister-in-law who inherited some money. Her financial advisor charges loads, and so she was very uncomfortable investing the money because of that. I told her she had to be comfortable doing it on her own and going to a place like Vanguard, or just accepting that that is an expense of doing business with this financial advisor and hopefully that financial advisor provides enough value to compensate for the load.

Southwick: Above and beyond.

Engdahl: I know another way to improve your portfolio returns.

Brokamp: What's that, Rick?

Engdahl: A little thing called Motley Fool Stock Advisor.

Southwick: Oh!

Brokamp: Hey!

Southwick: Yes, of course. Stock Advisor. For those of you who may be new to the podcast, The Motley Fool has a newsletter that comes out once a month called Stock Advisor. It offers advice on how to get started investing. We make recommendations on what stocks to invest in. Am I legally allowed to say that Stock Advisor has done really well?

Engdahl: I think so. We say it all the time.

Brokamp: That sounds good.

Southwick: OK.

Brokamp: It's done well.

Southwick: We'll stop there. It has. It's gotten pretty gosh darn good returns. I don't know if the SEC can come after me for that. I'm sorry. Can you please define "gosh darn good" returns for us, ma'am? What, exactly, percentage-wise, are you talking about there?

Anyway, if you do want to learn more about Stock Advisor, or even subscribe to Bro's newsletter to get more Bro [his is called Rule Your Retirement], you can go to Fool.com and learn all about how to subscribe and get more Foolishness in your life.

So, there you go. "Seven Things You Can Do In Under 15 Minutes." Just one a day. Come on! That's nothing!

Brokamp: Everyone's got a day to do that.

Southwick: It's 15 minutes in a day to have a wealthier 2018 and beyond. And obviously we'll have more advice throughout the rest of the year on how to be wealthier.

Brokamp: Absolutely.

Southwick: Because that's what we're here for.

Brokamp: That's what we do!

Southwick: That's what we do!


Southwick: Our listeners are a fun and smart bunch, and so today we wanted to share with you guys a letter that came in. It was actually sent to the Rule Breaker Investing podcast, but we're stealing it from them...

Brokamp: We're stealing it.

Southwick: ... so finders keepers. The letter comes from Dave with his advice on how you can go from saving nothing to 40% of your salary.

Brokamp: That's quite remarkable.

Southwick: Here we go. "Back in 1975, one of my instructors took a few minutes to talk about finances. He had a recommendation. He suggested that when we graduate we take five dollars out of our $625 per month that we were going to receive as Second Lieutenants and do so without fail or changing the amount until we were promoted to First Lieutenants.

"He asked us how much we would have. Knowing it would take two years until we were promoted, we quickly figured 24 times $5.00 plus interest would be around $125. He commented that yes, it would not be much, but the goal of the first two years was to develop the habit of saving.

"He then suggested that upon getting a raise -- actually two raises, one for the promotion and one for two years of service -- that we save half of the increase and use the rest to pay additional taxes and increase our standard of living. He pointed out that if we could make ends meet on a Second Lieutenant's salary in our 24th month, then we could make it during the 25th month on that amount plus half the increase. He said to do this throughout our career and we would have a sizable sum by the time we retired.

"It made sense to me. I did not have a career of military service, but I followed his advice with my civilian pay. When I was about 55, my wife and I went out with another couple, and the husband asked if we had saved anything yet for retirement." Wow, 55.

Brokamp: Hm!

Southwick: "He said that they were concerned, as they had not started yet."

Brokamp: Oh, boy.

Southwick: "I related the story of my instructor's suggestion, and said we were probably saving about 40% of my gross salary." They were shocked. The next day I came home, and my wife greeted me with music to any husband's ears. She said, "You're right." I had no idea what she was speaking of and was almost afraid to ask what I was right about.

"She said that when she heard my story, she thought it was quite an exaggeration to say 40%. She said she'd never added it up, but did so that morning. We had some money going here and there, but she was shocked to find out it added up to 42%. She said she would have believed 30%, but obviously not 40%. In all my years, I have never heard of anyone else following that approach. I have suggested it numerous times, but know of no emulators, though I think my youngest daughter and her husband have been close to following it."

Brokamp: That's pretty remarkable.

Southwick: Bro, how much do you guys think you save? Because, you're right. This is remarkable.

Brokamp: It's remarkable and I think what's also kind of cool about it is if you're a habitual saver and you have these multiple accounts, you're not exactly sure. I'm pretty sure we save 20% when you add in the college saving that we do. I'm pretty sure we do that.

What's really cool about his story, though, is when it comes to retirement planning he's going to have two benefits. First of all, to save that much he has to learn to live on less, which means he gets by with lower expenses. That means he needs less money in retirement. He's saved a lot of money over the years, but then he doesn't have to take as much out each year in retirement because they learned to live on less. It's like a double benefit of saving a lot of money.

Southwick: And learning to just get by...

Brokamp: Right.

Southwick: ... with less. I think there's also another benefit, here, because he talks about having a youngest daughter. Even if he feels that he has not passed on this 40% rule, he probably has passed on, generally, a life of saving and being smart about your money. Whether he sees it now or not, I'm sure he has by example.

Brokamp: And I'm sure he and his wife have had the discussion of how much of that to share with the kids, because it's pretty impressive. There are very few people that are able to do that, so I'm sure they're very proud of it and they want to pass it on to their kids. Some people are uncomfortable sharing that much information with kids, but my guess is that they've done enough to convey the value of saving to their kids.

Southwick: Why do you think people have a hard time talking about even a good thing like this? Even the amount of money they save with their kids?

Brokamp: As a percentage, I think probably people are comfortable with that. I think people are less comfortable sharing with their kids how much money they have saved, because then kids have the idea that if you have that money somewhere, you can spend it. Why not get me a new car? You have this much in your 401(k). Why do we not go to Europe?

Southwick: Are we suddenly observing dinner at the Brokamps?

Brokamp: Something like that. As my colleagues know, that was an ongoing discussion with my son up until this Christmas, that is. But yes, I think that's part of it. I would not want my kids to feel like I don't have to save because my parents have some money and I will inherit it one day. I want them to think they're starting out from scratch. We'll always be there to back them up if they need it, but there's got to be a certain amount of financial independence, there.

Southwick: Just tell them you want to be buried with your money. You want it converted to jewels and gold, and you want to be buried in it.

Brokamp: Yes.

Southwick: And you love them dearly. Well, thank you, Dave, for sharing this with Rule Breaker Investing and not us, even though we took it. If any of our listeners have a story like this that they want to share about how they've been able to save money or learn how to invest, we would love to hear it so we can share it with everyone else. Our email is answers@Fool.com. You can just send it there, and it will get to all of us.

Engdahl: Or RBI@Fool.com.

Southwick: Or RBI@Fool.com.

Engdahl: It turns out we read their inbox, too.

Brokamp: Exactly.

Southwick: When David Gardner's not looking, we sneak a peek. Well, that's the show! Like I said, our email is answers@Fool.com. Again, if you want to get some sweet Motley Fool podcast swag, you can head to Shop.Fool.com. Check it out. There's only like a handful of things there. I guess we'll add some more things as time goes on, but at least there's some things, there, to show off your Motley Fool pride as one of our dozens of listeners.

The show is edited faithfully by Rick Engdahl. Congratulations, again, on your Fooliversary! You're a true Fool, through and through. And for Robert Brokamp, I'm Alison Southwick. Stay Foolish, everybody!

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Alison Southwick owns shares of Costco Wholesale. Rick Engdahl owns shares of Alphabet (A shares), Alphabet (C shares), Amazon, Costco Wholesale, Etsy, and Under Armour (C Shares). Robert Brokamp, CFP has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Align Technology, Alphabet (A shares), Alphabet (C shares), Amazon, eBay, Under Armour (A Shares), and Under Armour (C Shares). The Motley Fool recommends Costco Wholesale, Etsy, and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.