Should You Be Managing Your Family and Finances like a CFO?
In this episode of Motley Fool Answers, Alison and Robert welcome a special guest to the show -- Douglas McCormick, author of Family, Inc.:Using Business Principles to Maximize Your Family's Wealth.
Tune in to find out why he believes every family is inherently a business that requires asset management, why entrepreneurship can often be the best way to maximizing wealth, and why every family should have a CFO to stay on top of its progress and goals.
A full transcript follows the video.
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This podcast was recorded on Dec. 20, 2016.
Alison Southwick: This is Motley Fool Answers. I'm joined, as always, by Robert Brokamp, personal finance expert here at The Motley Fool. He's also the advisor on Motley Fool's Rule Your Retirement newsletter. When you nod your head -- this is radio! We've been doing this show for two years. You can't ...
Robert Brokamp: What am I supposed to say?
Southwick:... nod!
Brokamp: I agree with everything you just said.
Southwick: You're tired of hearing me say that same intro over and over?
Brokamp: Sure. It makes me self ...
Southwick: I'm kind of tired of saying it.
Brokamp: I'm self-conscious. You're talking about me. I don't know. I'm a shy guy.
Southwick: Aw!
Brokamp: Kind of a little bit.
Southwick: No, but you're a great guy.
Brokamp: Thank you.
Southwick: Oh, all right. We have a special guest this week. Oh, hey! Someone else is also in the room. It's Douglas McCormick. He's here to talk about his book, Family, Inc.: Using Business Principles to Maximize Your Family's Wealth. We're also going to answer your question about before and after-tax retirement contribution limits and share some listener feedback. All that and more on this week's episode of Motley Fool Answers.
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Southwick: It's time for Answers, Answers and today's question comes from Alison (great name!) in Seattle, Washington. Alison writes: "I have been investigating the options for after-tax contributions to my 401(k). Can you please explain the difference between the $18,000 limit for before-tax contributions and the after-tax contributions that can, when combined with pre-tax money, reach $53,000? Fool on!"
Brokamp: Well Alison ...
Southwick: Such a great ... and she spelled it right, too.
Brokamp: She does! So you bring up, first of all, the $18,000 limit. It may seem that the contribution limits between 2016 and 2017 haven't changed, and that's true. You can contribute $18,000 per year to your 401(k) and an additional $6,000 if you will be 50 or older by December 31 of the end of the year.
Now for those contributions, you can contribute to the traditional 401(k). Contributions are essentially tax-deductible. The money grows tax-deferred, which means you don't pay taxes as it grows, but you do when you take it out. Most, but not all plans, also offer the Roth option. You do not get a deduction, but as long as you follow the rules, the money grows tax-free. But there is another limit and she mentions it -- $53,000 -- but that is actually changing. That's in 2016 and it's going up to $54,000 in 2017. What's included in that?
Well first of all, that's the total amount of money that can go into the account, so that includes that $18,000 that you put in. The employer match if you get one. Some companies actually have profit sharing by which they just put money in people's 401(k)s whether they're participating or not.
And then there's this other thing called the after-tax contribution. The thing is not every plan allows these. Only about half of 401(k)s do. And it's not to be confused with the Roth. Roth is also considered after-tax because you're not getting a tax deduction, but this is separate from a Roth.
Southwick: OK. So it's all 401(k). It's your typical 401(k), your Roth 401(k), and then now we're talking ...
Brokamp: This is after-tax.
Southwick:... after-tax contributions.
Brokamp: Yes. Now when you put that money in, you don't get a deduction, but the money does grow tax-deferred, so you don't pay taxes until you take the money out.
There was a ruling in 2014 from the IRS that made these even more attractive, and that is when you leave the company, you can separate the after-tax money and put that, actually, in a Roth IRA and you automatically get a Roth. So from there on it grows tax-free.
Southwick: Oh! OK.
Brokamp: So a lot of people are using this to save a lot of money, because you would only contribute to this once you've already maxed out that $18,000. It's also a way for people to get lots of Roth assets, because you put that money in, and once you take the money out, it becomes a Roth IRA.
Southwick: And no income limits on that.
Brokamp: No income limits on that, which is a great point, because there are income limits on the Roth IRA.
Southwick: I'm learning stuff.
Brokamp: You are learning stuff.
Southwick: I have learned a lot!
Brokamp: So if you are in a situation where you can put that much money into your 401(k) -- it might be because you earn a higher income, or because you have gotten older, or the kids have left the house, or you're behind in your retirement savings, or you just want to put a lot of money in there -- it's a great way to do it.
It has a lot of the other rules of 401(k)s in that generally you don't want to touch the money until you're 59 1/2 because you'll pay taxes and penalties, though there's some ways around that. And I would only do it if you have a good 401(k). There are a lot of lousy 401(k)s out there, and in that case it's better just to put it in a regular taxable account. Just invest in stocks that don't pay dividends or very tax-efficient ETFs and just let it ride like that.
I will say that even this explanation, as detailed as it was, doesn't tell the whole story, so if you plan to do this, check with your plan to see if it's allowed. There are several kinds of quirky rules about it, so make sure you know what you're doing before you make any moves.
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Southwick: We have a guest in the studio, today. This is always so nice when people come and visit us. He is Doug McCormick. He's the author of Family, Inc.: Using Business Principles to Maximize Your Family's Wealth. And Family,Inc. is, I guess, a step-by-step guide to handling your family's finances with the insight and strategy of a corporate CFO. Doug, thank you for joining us today.
Doug McCormick: Glad to be here. Thank you.
Brokamp: So when I was reading your book I read your bio. You went to West Point and you went to Harvard for grad school, so a smart guy. But you also talked in the book about how when you left the Army to go to Harvard, you went through your savings. Went $50,000 in debt. Had to borrow money to move to New York City. Your first night you're there with your wife, and she either was pregnant or had a kid at that point and you're sleeping on the floor.
I think everyone has struggles. Even someone as accomplished as you -- obviously a bright guy -- finds themselves in a situation where they're thinking, "What have I gotten myself into?"
McCormick: No doubt. Again, I call this the "financial game of life," because I think it's one of those things that there are different stages and different choices you've got to make. And one of the things that's been so humbling for me is being talented, being hardworking, and being financially secure are not the same thing at all. I think it just highlights that financial security is something that you've got to be proactive about and plan. I think many of us focus on what is timely as opposed to what is important. Managing your personal finances will arguably never be timely, but if you're not careful it can be very important.
So those struggles helped me realize (a) the importance and then (b) ultimately that there's a better approach or a better way to think about some of those choices.
Brokamp: On your website, FamilyInc.com, you have "15 Principles to Maximize Your Wealth". We're going to go through six of them. I'll just read it. You tell me a little bit about it and then we can talk about it.
So No. 1:No matter what your profession, you are a business owner. Your business sells labor and manages assets to support the spending needs of your family throughout a lifetime.
McCormick: This is really the whole crux of the book. Family, Inc. basically says we're all entrepreneurs. We're all owners of businesses, and those two businesses are labor (and the name of that game is converting labor into financial capital) and then an asset management business, so that when you've depleted all your labor, you can actually manage those assets to fund your consumption.
Brokamp: In the book, you point out there's actually a difference between asset management and investing.
McCormick: Yes. I think basically we can all be good asset managers. Very few of us have the talents, the information, and the infrastructure to be good investors, so I'm generally an advocate of do not try to be a very good investor. Be a good asset allocator or asset manager.
Brokamp: So give me an example of the assets you're talking about when it comes to managing those.
McCormick: Well, I think one of the great things about the book is it speaks holistically about all the assets available to a family. That's labor, that's Social Security, and that's financial assets (stocks, bonds, and those kinds of things).
When I think about being a good investor versus a good asset allocator, a good asset allocator picks the right portfolio (stocks versus bonds). They pick the right kind of vehicle (like an ETF that's very low-cost, very tax efficient), and they let it run. And they focus on the right time horizon (which is very long with the right investment objectives), which is low-cost, after-tax, after-fee, real appreciation. And then an investor would be the guy trying to pick stocks, and for most of us that's a tough game to succeed at.
Brokamp: Here at The Motley Fool we do talk about picking individual stocks, though we also talk about index funds and ETFs. I often think that we would never invest in a company if we didn't know its expenses. Have a good idea of what it's spending on its facilities. Have an idea of how much money it's actually making. Have a projection of how much it will make down the road. Yet few people actually manage their personal finances that way, and I think that's ultimately the crux of your book; in that you're going to be more successful if you look at your household as that sort of a business.
McCormick: Yeah, and the great thing about it is business schools and businesses have been working for centuries to improve the tools and create best practices; and any of those, like managing an income statement, managing a balance sheet, all apply to our family decisions with some minor tweaks, but there's really a good framework, there, to help you think through some of those big choices.
Brokamp: Another one of your principles is: Labor is likely your largest asset and must be actively managed just like your financial capital.
McCormick: I think this is the one that we miss most often. I think most of us think about our jobs and we ask ourselves questions like, "How much am I going to make this year?" Or when I'm selecting a job, "What's the opportunity this year?" And the reality is the goal should be, "How do I maximize my lifetime income?"
And when you think about it that way, you have a very different duration and you also think about things other than simply compensation. You think about branding opportunities for yourself. You think about the skill sets that you'll acquire. I think those are all really important ways to think about that big asset.
Brokamp: And one of the things you explain in your book is basically a way to create a present value for all your future earnings, and actually put a dollar figure on your earning potential.
McCormick: The way I look at the world -- and there are some graphs in the book -- for most Americans, their point of highest wealth comes when they have the least financial assets. That's the newly minted college graduate. That person's, let's say, 25. They're likely to work until they're 65, and so they've got 40 years of labor capacity or potential ahead of them. They have no financial assets, but if you add up all those years of earnings, they have significant wealth.
So yes, I do give specific tools to help think about the value of your labor and ultimately maybe the consequences of big choices. What is my labor worth today without going back to college for a graduate degree? What could it be worth if I went back and how much would that cost me?
The thing I would say about the labor calculator is I promise you it will be wrong in terms of the answer, but the framework, itself, is still very valuable and I think the way it facilitates thinking about your choices is an important tool.
Brokamp: Another one:The principles of investing can be applied to your career choice to increase your expected lifetime consumption.
McCormick: So if you get back to this whole concept of the family has multiple assets, I believe the same way you think about allocating your financial assets to good stocks or good investments can be applied to your labor assets. And so I give a number of ways that people should think about it, but in general, the high-level approach that I often argue is as a financial investor, I'm a value-focused investor and as an employee, or when I think about my labor capital, I'm a growth investor.
And the reason I think that is, is because if I'm a value investor, I have equal risk of gain and loss; but as an employee, or when I'm managing or investing my labor, I have lots of upside in start-ups and interesting opportunities and very little downside, because if it doesn't work out well, I take that experience, I take the battle scars, and I go deploy my labor somewhere else.
So I think taking more risk with your labor is often prudent. There are a number of principles about how to think about investing your labor, but essentially what they say is think about your brand, think about the long-term choices you're making, and align yourself with good business models.
I think it's very hard to predict the growth rate of any business or any industry, but I take a lot of comfort in that good business models survive cycles. They survive economic environments. So if you can align yourself with a good business, you're generally well-served.
Brokamp: In the book, you talk about basically "the way to analyze a potential employer is the way you might analyze an investment."
McCormick: Yes. It's very similar in terms of concept. The big difference is you don't really have how you price the opportunity, but you can evaluate the opportunity on a relative basis and I think that is a helpful framework.
Brokamp: Another one of your principles is: Entrepreneurship is an attractive way to lengthen your career while sheltering your labor and capital from competition.
McCormick: Yes. I think, in general, entrepreneurship is the surest way to financial independence and true wealth creation, and I think there are four reasons [for] that. The first is this concept of sheltering your assets (both labor and capital) from competition, and I just look at metrics in the market today.
Most of us would agree [that] if you can generate 5% real return in the marketplace for a many-year period that would probably be a very reasonable return. The median average income in America is like $45,000 and very few people -- call it less than 20% -- make more than $100,000 a year. Both of those things suggest to me that there's a lot of competition for return on both those assets.
I find when you combine them to create a business -- an entrepreneurship is very simply taking financial capital and combining it with labor capital -- that you can generally get returns on both of those assets that are much higher. So that's the first.
The second is that entrepreneurship generally allows us to extend our career. I find a lot of entrepreneurs I work with in my professional endeavors who can be involved in the business in the important decisions until they're 70 or 75 and they don't have this requirement to be all in or all out.
And then I think lastly the tax code supports entrepreneurship. It's more efficient. And actually there's one more lastly -- the fourth -- which is a really important one. If you build a good business as an entrepreneur, you get to sell that in perpetuity, and that's a big payday at the end of a career.
Brokamp: Now, let me play devil's advocate. Various stats show that a good part, if not most, small businesses fail, which would indicate either (a) it's not very easy or (b) most of the people trying it are doing it wrong.
McCormick: I'm not familiar with those stats, so let's take them at face value. I think we're probably doing them wrong. I'm a big believer that entrepreneurship is a game of incrementalism. And what I mean by that is it's generally an extension of what you've done as an employee. Over time as an employee, with the benefit of other people's money, you've created the right relationships, you've created the right skill sets, and you've created enough financial savings that you can make the leap to entrepreneurship without a lot of risk.
And I think people underestimate the capital required to get started. That's one of the biggest challenges to entrepreneurship. It's not that you had a bad idea you executed poorly. You ran out of money before you could see it through. I think that gets back to one of the concepts of you've got to plan over a very long time horizon. If you want to be an entrepreneur, you probably need to start today to give yourself the financial wherewithal to have the flexibility to succeed.
Brokamp: One of the interesting stories from your book -- throughout the book you talk about your dad. Now, your dad didn't start off as an entrepreneur, and I don't know if you'd even consider it, but he started off as an educator and then basically moved up to where at one point he was the head of the Minnesota Higher Education Department or something along those lines ...
McCormick: That's correct.
Brokamp:... and he took that role relatively late in life. I think by now he's 79 or 80 ...
McCormick: Mm-hmm ...
Brokamp:... and he's still working part-time as a recruiter. Did I understand that correctly?
McCormick: Yup.
Brokamp: So I think it's a great story about how someone who's taken a pretty standard job (and I have sympathy with it because I used to be a teacher) leaves the workforce three times to get a better education, comes back into the workforce, and just builds his career to a point where now he's happy to be working in the same general career well into his 70s.
McCormick: First of all, my dad has been a great inspiration and also a great mentor. And not that we always agree, but a great mentor in the context of the ability to have this open conversation and me be able to learn from his good choices as well as his mistakes. But I think the thing that he's done so well is make the most of his labor potential.
And just as an aside (this is more of a value comment than it is necessarily a financial comment), I'm a big believer that the concept of retirement, as it's been viewed traditionally, is yesterday's gain, and that most of us won't pursue a traditional retirement. And I think life expectancies are increasing in a way that to just retire at 65 and be [inactive] for many years is challenging for many people financially.
But I also think this new concept of part-time jobs or a gig economy, where you can work as much as you want, is a great way to stay stimulated, and engaged, and feel value in what you're doing every day. And he's been a great example on that front.
Brokamp: You sort of imply in the book that as a broader family you don't talk about finances too much and that actually should be a familywide discussion. I don't know if I got that right.
McCormick: Yeah. I think most of us don't talk about financial choices as a broad family. It's very personal. Most of us are embarrassed about bad choices we've made, or we feel like we should have accomplished more than we have, so it can be a sensitive topic. And I think there's also the concern of entitlement. If you have accumulated wealth, you don't want your kids to feel like they're entitled to that wealth, so it's a delicate conversation.
Having said that, I think this is a life skill. It's one that takes many years to get really good at. The conversation has to start at the dinner table and the breakfast table, and I think there are lessons every day all around us. So when you're going to purchase something for the home, or a car for the family, what a great opportunity to teach your kids (a) how to purchase well (b) to think about financing and (c) to think about the difference between an appreciating asset and a depreciating asset. I try to use everyday life examples all the time with my family. They are sick of it, but I think they'll benefit from it.
Brokamp: Got you. And then the last one:Every family needs a CFO. That sort of implies that there's one person who's in charge of it and I don't know if that's what you mean. So address that, but also what does the CFO do on a regular basis to have that role in the family?
McCormick: I generally believe it should be one person that is the family CFO. Now, let me differentiate. The person who has the aptitude and the interest and is responsible for illuminating the big important decisions and helping get to an answer -- how that decision is made is probably very different in every family. I know in mine while I'm the designated family CFO, I'm certainly not the designated decision maker, and that's a messy thing that my wife, my kids, and I go through. So that I'll leave to individuals to figure out how they make the decisions, but I think one person to be responsible for understanding the financial implications of the choices is the right way to approach it.
And in terms of why I believe that, again, the premise of the book is we should view ourselves as a business. If I told you I was a small business owner, you would certainly not assume that that business runs itself, and the family is really the same. And I think it's much broader than a conversation around what should my stock and bond allocation be. This is a holistic responsibility, so I'll give you some examples.
One of the biggest examples is how the family is allocating its labor to the highest endeavors in terms of what kind of jobs they are pursuing. If we're going to make investments in education or entrepreneurship -- those are important decisions for the family CFO to weigh in on, in terms of whether that is a good investment. How are we going to finance it?
Traditional things that people would normally associate with the family CFO would be budgeting. Managing a balance sheet so I can track where I am today and how the budget's going to get me to where I want to be in the future. But also things like risk mitigation, which I look at as insurances of various types (life insurance, vehicle insurance, home insurance).
And then I think an important aspect of the family CFO role is perpetuating this expertise and knowledge through generations, and that's the educational approach to it. That's thinking about things like trusts, etc. So it's really a very broad, holistic way to think about the family's assets over multiple generations.
Brokamp: On your website you provide balance sheet and income statement samples for the people who want to see that, and you don't actually seem to be that into traditional budgeting. I don't know if I got that right.
McCormick: Yes, that's accurate. The real quick take, there, is I find that people that have very detailed budgets spend a lot of time establishing the budget and monitoring the budget, and it doesn't necessarily lead to improved behavior in terms of what I am saving and what I am dropping to the bottom line.
So I think an income statement is more than adequate, and on an income statement I'm just laying out, very high level, what I am bringing in, what the major expense items are, and then what's left over, which is my savings, or in a business context my net income. And that's really what I care about. So I don't personally care where I spent the money. I care how much I was able to accumulate for future investment.
Southwick: What has been the biggest change in your thinking since you started applying Family, Inc. principles to your family?
McCormick: I think it's this concept of appreciating multiple assets. I think everybody myopically focuses on the financial assets and it occurred to me, as I'm really the first couple of years out of business school, that it's harder to create assets than grow assets. You create them with your labor, and so it quickly became apparent to me if I was going to generate wealth, it had to start with making good decisions with my labor. And so I think that was a monumental insight for me. It's pretty simple, but I think to think about it that way is not normal.
But there are also all kinds of implications to that throughout your broader financial plan. For example, if you really believe that your labor is a big asset, then I think most people are probably way under allocated to equities as they think about managing their portfolio of risk, because I think labor looks like an annuity or a bond more so than it does a stock or an equity.
Brokamp: You studied economics at West Point. Went to business school at Harvard. Did you ever take a class in traditional financial planning?
McCormick: No. I read voraciously. I'm very interested in the topic, and so I feel like I've been relatively well self-educated. But I think one of the benefits of the book is I'm not encumbered by a lot of the traditional thinking. I came at it, or arrived at some of these answers from a different perspective, and I think that hopefully will challenge people's thinking as they develop their own plan.
Brokamp: I definitely think that is true. Why I think it's a great book is that you do come at it from a different perspective; in particular addressing the whole management of your labor as an asset which is, in my opinion, severely underappreciated in traditional financial planning.
But to a certain degree, one of the biggest determinants of your future wealth and your ability to retire is what kind of job you have. Have you diversified your labor? Will you be able to withstand the next time there's any sort of significant recession? Will your job still be there? Those types of things. It's just not really discussed in traditional financial planning books.
McCormick: I think that's so foundational, because it really impacts your risk profile everywhere else. You can afford to make a lot of mistakes when you get your labor right, and so I just think it really is fundamental. And I think one of the challenges is our market is generally set up in a way (when I say our market, I mean the financial products market) that people are compensated to sell products. And I'm not critical of the industry.
I'm just highlighting that a lot of this kind of advice has no sale associated with it, and so it's hard to engage the people that can benefit most from the book [who are] probably 18, 19, or 20. Who are getting ready to make big investments in college and need to be thinking about their career choices in the context of Family Inc.
Brokamp: One of the phrases that you used in the book was "excess education" or the penalty of excess education. In other words, spending time getting a degree that probably will not be helping you very much.
McCormick: Yes. So as you can imagine my father, the educator, questioned my logic, there.
Brokamp: Well Doug, thank you for coming in. It's an outstanding book. It was great to meet you.
McCormick: I appreciate it. Thank you for having me on and sharing some of the context.
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Southwick: All right. It's time for some listener feedback. You guys may remember the credit ... no.
Brokamp: Credit Score Mailbag, I believe.
Southwick: Yes, Credit Score Mailbag. And Berlinda wrote because she had an issue where when she was in college, she had internet with Verizon, and then she thought she cancelled the service, but she didn't, and so the tenants that lived in the apartment kept using it, but they didn't pay the bill. She found out that Verizon had updated the debt. It looked like it was reported just this February and her credit score took a huge hit.
So I believe Dayana was on the show that episode, and the advice from you and Dayana was to call the credit reporting bureaus, state your case, and then good luck. Go with God. Like it wasn't necessarily a whole lot.
Brokamp: Yes, be very persistent, probably.
Southwick: There wasn't necessarily a whole lot you could do. Anyway, Berlinda wrote us to give us an update. Basically what happened is she said, "I called up Verizon and they would gladly take a payment, but they wouldn't amend anything on the credit report. I asked for the credit agency and Verizon refused to give me the name of who I could pay off, so that's fun." So she instead contacted the reporting bureaus of the mistake and as of last week, that ding is no longer on her credit report.
Brokamp: Oh, that's excellent.
Southwick: Yes.
Brokamp: I'm really very happy to hear that.
Southwick: So her credit score jumped to 780 and she's in the process of buying a new home.
Brokamp: Wow! Nice!
Southwick: Isn't that great?
Brokamp: Yeah.
Southwick: Yay! We also got a fun email from Christian who works at Artless Design. They sell fashion, illustrations, and gifts. And she shared our Science of Better Gift Giving episode to her newsletter subscribers.
Brokamp: Oh, that's good.
Southwick: Isn't that fun?
Brokamp: Thank you.
Southwick: I also want to thank None of the Above, Cody D., Irv Wash, and others who left reviews of the show on iTunes. We get emails from people who say they've been listening to our show since the beginning, which is kind of crazy. And it just so happens that this is our two-year anniversary episode.
Brokamp: Wow! And two-year anniversary is ... what's the substance or whatever is associated with it?
Southwick: Did I say it was cotton?
Brokamp: Cotton. I think you said it was cotton. Is it cotton?
Southwick: Well just because I said it before doesn't make it any more right.
Brokamp: Keep that in mind, podcast listeners.
Southwick: Just because I said it more than once doesn't mean I'm right. First year. OK. Second year is cotton or china, but I have no room for a country of that size.
Brokamp: Ha ha ha ha.
Southwick: That's not funny at all. All right, yes. So it's cotton or china. In the spirit of that, I decided to ignore all of the gift-giving advice from the episode we just did and I bought you two a couple of anniversary presents.
Brokamp: Yay! That is very thoughtful of you.
Rick Engdahl: Aw!
Southwick: Here, come on. Open yours. Here, open yours.
Brokamp: Okay. I know this makes for great podcast radio. Oh, a shirt! I bet it has cotton with it. Oh! Ah ha ha ha! Well, listeners. It is like an ugly sweater, but it's a t-shirt, and it's got a T-rex with Santa Claus because if you've ever seen the video version of this, you know that I talk with my hands, but I kind of keep them close in.
Southwick: You keep them tight.
Brokamp: A little bit like a T-rex.
Southwick: And so he'll talk, and he'll kind of shoot his little hands out like he's a little T-rex, and so that's why I got you a shirt with a little T-rex on it. Rick? Do you want your present?
Engdahl: Sure. All right. Well. At least you can hear the wrapping paper, here.
Southwick: Yes. I got it on Etsy.
Engdahl: It is from Etsy.
Southwick: Of course.
Brokamp: Of course.
Engdahl: It's first class. Oh, no. It's a Trump-scented candle.
Southwick: When we had Kimberly Palmer on the show, we did the game Etsy ... or not Etsy. Whatever we called it. And there was a Putin-scented candle that came up and I said, "Well, you can get a Putin-scented candle, but it's not on Etsy." I don't know. Anyway.
Engdahl: I don't know if I can get my little hands around the lid here. Ugh!
Southwick: [00:30:10] mistake.
Engdahl: Oh, it's horrible.
Southwick: Is it? It looked so funny.
Engdahl: That is really horrible. Thank you, Alison.
Southwick: Well, thank you guys for doing this show with me for two years.
Brokamp: Well, I've got a present for you.
Southwick: So the wrapping paper is you putting your face on the copy machine at The Motley Fool.
Brokamp: I have photocopied some but not all of my favorite body parts as the wrapping for this paper.
Southwick: Ooh! It's Star Wars-y.
Engdahl: Very nice. Very Star Wars-y. It's a Van Gogh Star Wars.
Southwick: Ohhh...
Brokamp: There's a little something in there for each of you, as well.
Southwick: I love it!
Engdahl: The whoopee cushion?
Brokamp: The whoopee cushion, yes. Each of you got a whoopee cushion and I love that it's multicultural. It has the Spanish term for whoopee cushion.
Southwick: A whoopee cushion and a Star Wars t-shirt. You know me so well. Aw!
Engdahl: Well, I have a gift for you guys, as well.
Southwick: You do?
Engdahl: However, I took your advice.
Brokamp: Is it a new experience?
Engdahl: It is an experience.
Southwick: Oh, no way.
Engdahl: I got an experience for each of you.
Southwick: OK.
Engdahl: We're going to experience it all here together.
Southwick: Right now?
Engdahl: Yeah, right now.
Southwick: OK.
Engdahl: I was going to get you like a ruler and a pen and draft everything.
Southwick: How much you care about us.
Engdahl: But I didn't have time. I mean, I didn't make time. I mean, uh... So instead, I wrote you each a poem.
Southwick: Oh!
Brokamp: Wow!
Engdahl: I know that's kind of mushy. I went out on a limb. My own personal limb, which would make it a lim-e-rick.
Brokamp: Aha!
Southwick: All right.
Engdahl: So I'll start with Bro. Here we go. There once was a Fool named Bro/Who managed his cash like a pro/He tried to lose weight/But whatever he ate/His assets continued to grow!
Brokamp: Beautiful. Beautiful.
Engdahl: All right. Are you ready for yours, Alison?
Southwick: Yes.
Engdahl: With Alison's hand on the wheel/The show's answers are sure to appeal/Though your heartstrings she'll tug/They'll be no special hugs/But a postcard will make the girl squeal.
Southwick: [Laughs]
Brokamp: [Laughs] Bill Curtis has nothing on you. That's all I can say.
Southwick: Oh, that's so good. I'm going to put that on a pillow. Embroider that. Oh, that's wonderful. Thank you, Rick.
Brokamp: That was very nice.
Southwick: Thank you. All right. So, yes, happy anniversary.
Brokamp: Happy anniversary.
Southwick: Here's to two more.
Brokamp: At least.
Engdahl: Yes!
Southwick: Why not. What are you doing for the next two years?
Engdahl: This, I guess.
Southwick: I guess. I guess. All right, so I want to thank all of you guys, as well, for supporting the show and listening for the last two years. In just this last year alone we've answered probably about 100 questions, I doomed the whole state of New Hampshire to alcohol poisoning, and we learned the joys of listening to the show at half speed.
Brokamp: Mm-hmm.
Southwick: I did my best to convince you that Bro is the weird one. I don't know if I succeeded or not, but it's true. We received so many postcards and other amazing gifts (like mugs from South Dakota and Stay Foolish art, and amazing chocolate). You guys really are the best. So I don't have a gift for our listeners unless you consider us doing the show some more a gift then you're welcome. But we enjoy doing it, too, so I guess as long as everyone's having a good time we'll keep going, huh?
Brokamp: Absolutely.
Southwick: All right. So there's no show next week, so this is it for the year.
Brokamp: Happy holidays, everybody. Happy New Year.
Southwick: Happy holidays. Happy New Year.
Brokamp: I'm looking forward to an outstanding 2017.
Southwick: All right. Well, our email is Answers@Fool.com. For Rick Engdahl and Robert Brokamp, I'm Alison Southwick. Stay Foolish everybody!
Alison Southwick has no position in any stocks mentioned. Richard Engdahl owns shares of Etsy. Robert Brokamp, CFP has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Etsy. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.