In this podcast, Motley Fool co-founder David Gardner is joined by Motley Fool Chief Investment Officer Andy Cross and personal finance expert Robert Brokamp to explore strategies for retirement withdrawals, building children's portfolios, and managing dominant holdings, while also celebrating generosity, unity, and candle-lighting stories from across the Fool community. It's a warm, thoughtful Mailbag.
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A full transcript is below.
This podcast was recorded on Nov.26, 2025.
David Gardner: As November winds down, and the last of the pumpkin pie disappears, the mailbag grows, apparently, stronger than ever because this month, my friends, we may have set an all-time Rule Breaker record 11 mailbag items 11. From your gratitude challenge stories, which have been wonderful to read, to a listener's brand-new five-stock sampler, this mailbag is overflowing. Let's turn the page on another month. Let's open the mail together. Let's celebrate the ideas, the reflections, and Rule Breaker spirit that you bring to this podcast every time you write in. Only on this week's Rule Breaker Investing.
Welcome back to Rule Breaker Investing. A delight to have you with me this busy week. In some ways, this is probably my least listened to mailbag, as a lot of people are probably away, enjoying, especially in the United States of America, time with family and friends around Thanksgiving. But in other ways, this is one of my more listened to mailbags because you might be on a drive. You might be jogging off some of that weight you gained on Thursday. There are extra reasons to lean in and listen in, especially because we have a really special mailbag. As I mentioned at the top, this is 11 mailbag items. I think that's an all-time record. Of course, I couldn't use everyone's mailbag item, but there were so many good ones and even good ones I couldn't include that I had to go there this week. Before we get started, let me mention December. Games are always a theme for this podcast, especially in the month of December. Next week's show is my annual games, games, games podcast. It will be Volume 7, the seventh annual buyers' guide for tabletop games, cooperative games, competitive strategy, word games. The list goes on. You know I love games and once a year, at least, but always the first week of December, we talk about games that I might suggest you might really enjoy either with your family or wrapping up under a tree for a friend. Games, games, games, is on us next week. We also have our Besties, of course, coming up, my annual awards for the best podcast, the best appearances, the best Rule Breaker investing moments of 2025. That will occur in the middle of the month, awarding our 10 best episodes Besties. With cameo appearances, Galore, of course, speaking of games, we'll also have the Market Cap Game Show. Our final finalist will be named whoever wins this month's Market Cap Game Show will finish out our final four for March Market Cap Madness in March of 2026. Some delights ahead as we close out 2025. Well, I always start off mailbags with hot takes from Twitter X. I just have one this week to keep us moving, but it is from Andrew Gibson. Andrew, I want to personally thank you during this month of gratitude for all of the wonderful tweeting and social media support you've given me in this podcast over the last year. I would say you're the rookie of the year in the last year or so. Someone relatively new to this podcast, at least to writing in, and you are a faithful correspondent. You also drop wonderful notes on Twitter, where you are at Andrew Gibs. That's just with one B, like Gibson.
But without the ON at Andrew Gibs 53446, I highly recommend any Rule Breaker investing fan following Andrew and Andrew, yours is the one hot take I'm going to share here at the end of November, in part because you quoted back from the poem that I close last week's gratitude podcast with, as I've done most of the last several years. I just want to read it again, and then your lovely thought at the end. Here it is, you quoting from our Why Do We Invest poem. You write, and I quote, ''Why do we invest so that our hard work endures beyond our short years, so that our children start their journeys on a hill and see the mountain. We build battlements that endure, shelter others from the worst of storms. We launch sturdy ships. We will not see the far shore, but have no regrets. We are a small part of all we set in motion, and thus, we invest.'' Thank you again for quoting that, Andrew, and you wrote such a great podcast this week at RBI Podcast. Cheers to unity and gratitude. Grateful for you guys this year and many more to come, Fool On from Andrew. Andrew, Fool on back to you, thank you. On to Rule Breaker mailbag item number 1. I'm going to say this mailbag podcast comes at you in three parts.
The first part is a Motley grouping of notes that I'm just going to mainly read. They're so well written. They don't need me to speak back much. That's Chapter 1. Chapter 2, some Q&A. I'm going to be joined by some Fool super talents, and we're going to answer some of your questions in Chapter 2. Then Chapter 3, for those still listening this holiday week, it's just going to be beauty and gratitude. Just some lovely notes from some of my favorite listeners. That's Part 3. If you're still around for that part of this week's podcast, I guarantee you, you too, will be inspired. With all that said, here's a mailbag item number 1. This one comes from Amit Samani writing in from Bangalore, India. Always good to hear from you, Amit. Thank you. You wrote, hi, David. Thank you for the wonderful podcasts that you publish week after week, year after year. No wonder you're a great entrepreneur and a terrific investor. You compound relentlessly in everything you do. Now, I'm going to stop it right there and simply say that is very Amit. I am humbled. I don't like to spend a lot of time reading out praise of me on this podcast, but I also want to honor, especially during this month of gratitude, especially since we talked all about being grateful last week, I want to make I honor your words and some other kind words that will be said this week. That is very you. But beyond just saying great or terrific, I love that you said you compound relentlessly in everything you do. That is a high compliment, especially coming from you. Amit goes on. I love the five-point checklist for the gratitude episode. As a quick recap, the list was, and yes, these were the five points I challenged listeners to enact in the week ahead. Some of us actually did that, and Amit's about to share what he's done. He's not the only one sharing this week, but it's fun to read this back out of Amit writes as a quick recap, the list was A, send a spontaneous message. Text someone you haven't spoken to in a while. B, turn a transaction into a conversation. Offer a genuine compliment, perhaps at someone's cash register. C, extend an unexpected invite, breakfast or lunch, someone you normally wouldn't. D a small unsolicited gift to someone. E, reconnect in person or at a higher level of personalization than you normally do. Yes, those were five fun ways to magnify your own gratitude to translate it from thought or word into deeds that I shared with everybody on last week's podcast. Amit, you go on and say, I completed four out of five already. I'm hoping to finish the fifth one before this episode airs. I hope to qualify Amit rights for the jester hat. Well, technically, Amit, it's just an imagined golden jester cap. This won't actually take tangible form, but thank you.
I'm going to say you already have qualified for the Golden Jester hat, based on this wonderful note. You go on to say, by the way, I finally got my three preordered copies of your new Rule Breaker book in India. In fact, point number 4, the small unsolicited gift to someone was a gift of your book to a young investor. Regards, Amit Samani. Well, Amit, as I said, that's a lovely note. It doesn't really need me to comment too much on it, other than I want to say, thank you. That was wonderful. On to Rule Breaker mailbag item number 2. This is from a longtime correspondent and friend of mine, Eric Eason. Eric, it is always an honor to receive a note from you. I enjoy everything that you share. This note included. Hello, David. With the holidays approaching, I felt it was time to write to you again and send my greetings to you, your family, and all our fellow Fools. There are three topics I wish to touch on today, each sparked recently by either your book or your podcasts. They are Why We Sell, Winter Soldiers, and Our Inevitable Regrets. But first, about your new book, Rule Breaker Investing, I loved your book. I've been a Fool since 1998, and on several occasions, have been deeply involved in the community of Fools, even though I knew most of the concepts and many of the stories you presented having them all presented together with such well-organized and playful clarity really gelled for me the entire philosophy of Rule Breaker Investing. Eric goes on. To my fellow Fools, let me say that whether you're an old hand like me or an investing novice like my nephews, this book is for you. Keep it nearby and reference it whenever you think about your portfolio, especially whenever your finger hovers near that trade button. Now to my topics. You've mentioned one legitimate reason as to why we sell, and that is when you find a better place for your money. But that is a tactical reason, important, perhaps, but only tactical.
The real reasons we sell, the strategic ones, are those related to why we invest in the first place. Thank you, Captain Haiku. We miss you, ladies, Eric adds. Reasons such as retiring comfortably, paying for a college education for someone in our life, buying a home, traveling the world, and many others, which add up to living a better life. For my part, Eric goes on, in 2018, I sold a portion of my three largest Rule Breaker holdings of Amazon, Apple, and Netflix to buy my first house. I was happy to do so as I had bought those shares years ago in part for this very purpose. Before we go on to his second topic, Winter Soldiers, I just want to say, I really appreciate you making the point that you are Eric. I think I was speaking to selling with the idea of reinvesting. When do we sell? Well, if you find a better place for your money, for example, if there's some new great stock that you'd love to be in your portfolio, and it isn't right now, that's a great reason to sell, sell something you don't feel is great about, and buy into that new thing. But, Eric, you're reminding me and all of us that the reason we invest in the first place is for outcomes and goals, like, as you said, buying a house, or putting someone else through college, or traveling the world. I think I may have actually missed speaking to that last week, even though that is the cardinal reason of why we invest, speaking of why we invest. Thank you for that reminder for us all. Onto topic number 2 in your note you wrote, which brings me to your concept of Winter Soldiers investors, those who face a severe bear market storm and invest despite the cacaphony impelling them to sell and run for the shelters. The reason I was able to buy my house was because I first bought those shares of Amazon, Apple, and Netflix at the bottom of the great financial crisis of 2008 and '09 and added to them again and again, with every paycheck relentlessly for years. For the first four years of market recovery, during which the media swore it was too fragile to invest in, I added fully 60% of my take-home pay, wow, into my portfolio. Because of this, even when I did sell shares of these three stocks to buy my house, they remain to this day among my top holdings. I encourage all of you to take David's advice to be a Winter Soldier. When the inevitable market storms arise, your future self will be grateful for your fortitude.
That Winter Soldier reference, of course, comes directly from my book. It's not a phrase I've used very often on this podcast over the years, but I really appreciate that reference. I remember how I end that chapter in the book, and I hope all of us will take that to heart. The line was simply, remember this in your every winter, Winter Soldiers. I'm surrounded by many of them in the Motley Fool community. Finally, on to your third topic, Eric, you wrote, and yet, despite our best intentions, we do things and make choices we later regret. I wasn't a Winter Soldier yet when the dotcom bubble burst. Eric goes on, I passed up the opportunity in 2001, about which I thought long and hard to invest the $10,000 in my Roth IRA into Amazon. That's something like a $3 million tax-free opportunity cost that still stings when I let myself wallow in the memory. Echoing Dan Pink's excellent book, The Power of Regret, we can use those regrets to become not just a better investor, Eric writes, but a better person. As we forgive others their trespasses when they are trying to become a better person and encourage them to do so when they are not, so must we forgive ourselves while we endeavor to become a better person, for as David reminds us, the present is all we have, and the future is all that we can aspire to. In that spirit, let us thank our past selves for all the hard work we put in to make ourselves the better persons we are today. Enjoy the present that work has given us, and be a for person, ever believing in that better future self we can become. Happy Thanksgiving. David, thank you for all the gifts and friendship you have given us, we Band of Fools, signed Foolish Eric. Eric Eason, Oregon City, Oregon.
As I did with our first note from Amit, Eric, I know there's more I could say. I did interpose a few comments throughout, but I just want to say, thank you. On to Mailbag item Number 3. This one from Christian Belcom here comes a five stock sampler of his own making. Thanks for this fun no, Christian. Hi, David. I just finished your new book. I was extremely happy and pleased with your content. I thoroughly enjoyed your stories, insights, and guidance, learning more about becoming a rule breaker. After reading your book, I was inspired to put together my own five stock sampler. Since I already have a portfolio, these new holdings will include the genesis for some of the ideas from your book. I'm calling these five stocks that make being online a little more human. Christian says that's with an assist from ChatGPT on the name. They include and Christian now lists out five ticker symbols now in keeping with all of my five stock samplers in the past, I'm going to introduce these alphabetically, and I'm just going to introduce the ticker symbol and the company name. I will leave it to my August listeners if they want to do their own due diligence here on Christian's ideas. Christian has these five companies.
Again, five stocks that make being online a little more human. Number 1, Chewy, ticker symbol, CHWY. Number 2, the Walt Disney Company, ticker symbol DIS. Number 3, Duolingo, Ticker symbol DUOL. Number 4, Reddit, ticker symbol RDDT. Number 5, Snowflake, ticker symbol SNOW. Christian concludes I look forward to doing my check ins every year for the next three years to see how I did. But look forward to growing these holdings using the habits, traits, and principles from your book. Thanks for the great read and guidance. Fool on. Signed Christian Belcom. Well, Christian, fool on back to you, sir. Thank you so much for sharing some of your favorite stock ideas. I, of course, love that you use the five stock sample framework. You had a catchy name. I like the theme.
A number of those companies I know quite well, I own at least one of them, and a few of them I need to get to know better, although they are very popular holdings, I think, among many fellow fools. Thank you so much for sharing, and I love, of course, that you're going to be scoring and holding yourself accountable. That is so capital F, Foolish. Mailbag item number four, this one from Sean M. Good morning, David. I just wanted to thank you for your new book. I can tell that you are pulling back the curtain a bit. I am 42-years-old, living in Cincinnati, Ohio. Sean writes, I have worked at Fifth Third Bank since 2010. I was first introduced to Motley Fool when I was about 18. My dad said that if I read The Motley Fool Teen Investing Book, that he would give me 500 bucks to invest. Well, I did just that. I read the book quickly, and I've been hooked on investing ever since. I was primarily in index funds for years until 2020 when I joined Motley Fool Stock Advisor. I soaked in all the Motley Fool Live videos, listen to Motley Fool Money and your Rule Breakers podcast. Your newest book was so inspiring. I've thought about writing a note for a few years now and just decided to pull the trigger today, inspired by your Jeff Bezos story. If you all ever need a salesman at The Fool, I am your guy. I will tell the world about the methodology. I am a customer myself, and I love the people who work at the Fool. No worries, if not, though, have a great day.
Thank you so much, sir, Sean M. But let me just say, Shawn, it's not every mailbag item that has one of our listeners offering to come work for us. Sean, if you would work for us for free, I will accept right now your application. But I suspect you'd probably like to be paid and given your incredible faithfulness and loyalty to Fifth Third Bank, a very fine company where you've been for the last 15 years, I assume you'd be a pretty tough hire for us to acquire. With all that said, I want you to know that careers.fool.com is the site on the Internet where anyone can look and see what Motley Fool jobs are available, careers.fool.com. On that site, you will see a blue button near the top that says see open positions. If you click that, you'll discover we have some open positions, both full time and for contractors, and I wouldn't say there are a lot of positions there right now. We've certainly had more in the past. But I do see one there that says Senior Manager revenue optimization. Now, as I'm not in operations at our company, I'm not exactly sure what that is, but that feels at least a little bit like sales to me.
Of course, if you've listened to Dan Pink, who earlier got referenced by Eric Eason's note, you'll know with Dan that we're all in sales all the time throughout life. I really appreciate your love of the Motley Fool and our purpose, and I'm really grateful that you took the time to write and share your enthusiasm Fool on, my friend. On to Rule Breaker Mailbag item Number 5. Those who were listening earlier, we're now in Chapter two of this podcast where some Qs come in. We're going to offer up some As. I'm going to be joined by two of my favorite fools. Let's go with Mailbag item Number 5 from Tim Minor. Thank you, Tim. What a wonderful note. Hi, David. I've been a fan of the Motley Fool for many years. You actually answered a question of mine on the podcast in about 2018, and was really looking forward to buying your new book. As fate would have it, I was about to fly to Singapore for the first time in late September. I specifically brought your book along so I could read it on that long 16 hour flight from Seattle. Thank you. You made the 16 hours on the plane much more enjoyable. Well, thank you back, Tim, let me just say, I think the audio book took me eight hours and six minutes to read, so I assume you still had some time to sleep and catch up on that flight from Seattle to Singapore, Epic. Tim's note goes on, the book is wonderful. I do, however, have a question for you. I started investing in individual stocks in 2016 and have made so many horrible mistakes. I'm actually amazed. I'm up this much nine years later. To me, that is one of the greatest things about investing in the stock market. Tim writes. You can make countless egregious errors and still do very well. As I read your excellent book, I realized how many habits and principles I had violated. My biggest mistake over the years has been not following Habit 1. Let your winners run. I still wince when I recall selling my shares of Apple stock in 2019, Shopify in 2018 or Palanter in 2022. Habit 3, invest for at least three years is also something I have repeatedly violated to my detriment.
As a result, I find myself nine years later with a portfolio that is dominated by one position. NVIDIA that makes up nearly 50% of my portfolio. Unfortunately, I did not arrive at this imbalance in the recommended fool way. I did not begin with a fair starting line, Chapter 15, nor with a 5% max initial position, Chapter 5e. By the way, I really appreciate you calling out all of the key lines in the book, the chapter titles, and even numbering the chapters, Tim. Clearly, you didn't fall asleep on at least a portion of that trip from Seattle to Singapore. Tim goes on, I let my emotions drive my portfolio decisions, frequently jumping on what was going up and panic selling what was going down. I confess I've even pulled up my trading history in my brokerage account to torture myself by looking at the stocks I've sold and calculating what they'd be worth now if I had held them. Now, I'm giggling a little bit there, Tim, because I feel like, first of all, you're being very humble. I think you're doing pretty well overall, and we've all had moments like yours. Don't kick yourself too hard, friend.
But then, again, I think you are having some fun because I assume you weren't actually torturing yourself. I think you're just having fun with your language. With all that said, you go on. You helped me deal with these negative emotions, when I read the section of your book titled The Robot Syndrome, I realized I was wasting too much time looking back instead of moving forward, thank you for that. To my question, given that I violated the fair starting line in 5% max initial position principles, I'm wondering if I should trim some of my massive NVIDIA position and a few other monster positions and diversify into index funds or other stocks. I am 56 and hoping to retire in four years. I love NVIDIA. It passes Henrick's T-shirt test for me. I'd be proud to wear an NVIDIA T-shirt in public. But I would hate for something to happen like China invading Taiwan right before I retire and seeing the stock price drop in half.
Although I suppose the entire market would probably drop in that case, my sleep number, Chapter 16, seems high, I guess, around 50 since I sleep fine, holding such a lopsided portfolio. I know there is no easy answer to this, but I'm just wondering what you'd recommend when the habits and principles seemingly oppose each other like this. Does the sleep number principle trump the other principles? Do the principles of fair starting line and 5% Mac's initial position become irrelevant when I neglected to follow them? I realized there may be no definitive answer, but I'm interested in hearing how you would approach this if you were in my shoes. Thank you again for the great book and for making my 16 hour flight to Singapore, so much more enjoyable. Your fellow English major, University of Oregon, 1992, Tim Minor. Well, Tim, that was a delight. It hurt at different points to read your note out loud and share these details with the world at large, because to admit one's mistakes and to do so in public, with this many people paying attention, probably isn't easy to do, and yet, you did it. You did a great job with it. I really appreciate that. When I thought about your key line, there's a key line in there, you said, I know there's no easy answer to this. I thought, you're right. Why don't I have Robert Brokamp and Andy Cross, frequent commentators on this podcast, both 20 plus year, maybe even 30 in Andy's case, employees at the Motley Fool two of our most senior thinkers who do think about, like, allocation and how to redistribute. We're going to have them answer maybe another mailbag item or two here for Chapter of this podcast. I thought, let me have these guys on 'cause it's not an easy answer. Let me start with Robert Brokamp. Robert, happy Thanksgiving.
Robert Brokamp: Well, thank you, David, and I know you thought, well, I need another English major on this call, so I'll bring in Bro.
David Gardner: Will your Thanksgiving be bro tastic?
Robert Brokamp: Absolutely. We're beginning the day with doing a turkey trot and then going to visit some relatives in the middle of Virginia.
David Gardner: That sounds fantastic. Well, Robert, you too heard Tim Minor's story, and I'm curious just first thoughts overall about Tim as an investor and where he is, and then we'll dial in. We'll welcome Andy as well to NVIDIA and some other stock market thinking.
Robert Brokamp: I'll start with something you said, and that is we have all made those mistakes. Don't beat yourself up too much. Every single investor here at The Motley Fool has a long list of things we wish we would have done differently, so love the idea that you are going to be looking forward and not backward, Number 1. Number 2, I'll give sort of classic financial planning, retirement planning principles. You say that you are four years from retirement, so you should be building up something that we call the income cushion, which is five years worth of portfolio provided income out of the stock market. Now, if you're more aggressive, maybe three years, but at least a few years out of the stock market, so you start thinking about that. Then there's the classic advice that you really have to think about having more than 10% of your portfolio in a single stock. Unlike most financial planners, I will not say that you should definitely sell at that point, but it bears more scrutiny. There are all kinds of factors that would come into that. If you work for that same company, that would mean maybe you should cut it back. What's the rest of your portfolio look like? You said that you have some other monster winners in there, which tells me that maybe you don't have that many stocks. We hear at the Motley Fool as a very broad piece of advice is saying that you should have at least 25 stocks, and that will probably different recommendation when you talk to individuals among us, but I think that's a good starting point. The closer you are to retirement, the more you are relying on your portfolio for that retirement, and the less diversified the rest of your portfolio is, the more I would suggest that you cut back on the NVIDIA and any of the other big holdings that you have.
David Gardner: Thank you retirement expert Robert Brokamp, and I don't just mean in a Motley Fool context. I mean that in a global context. Robert is world class. Thank you. Speaking of world class, Chief Investment Officer at The Motley Fool, Andy Cross, welcome back.
Andy Cross: Thank you, David. Great to be here.
David Gardner: Andy, I want you to imagine what your Thanksgiving highlight is going to be even though Thanksgiving Day hasn't happened yet as of this recording. What has been the big highlight this week for you?
Andy Cross: Well, David, the Thanksgiving holiday, I love, but the household event that we pay attention to every year is actually the Saturday after Thanksgiving, which is the Michigan Ohio State football match. I am a proud graduate of the University of Michigan, and my wife is a big Ohio State fan, so we have a house divided for a day or maybe a couple hours, and this year, boy, Ohio State football team looks very impressive, so I'm a little worried going into the weekend.
David Gardner: Well, it's a game that is of interest to the whole college football fandom to college football nation, just because of how great those schools both are, and so I wish you both luck, Andy.
Andy Cross: Thank you, David.
David Gardner: I'm a big fan of your full family. I can't just be with my Wolverine guy here on the podcast. I have to fear the love.
Andy Cross: I appreciate that and expect nothing else.
David Gardner: Excellent. What we have here, as you've just heard you heard Robert's response, as well, is we have somebody who has about half his portfolio in NVIDIA. Now, that has been an incredible benefit, a boon, because there have been few better stocks over the last 10 years, and I think in part, it got to be half of Tim's portfolio because it appreciated so much. What are your initial thoughts as you hear his situation?
Andy Cross: A lot of talk about Tim what he did in the past, and frankly, right now, that's all water under the bridge. Congratulations for having just such a monster performance in anyone. I have a very large position in NVIDIA myself, not as large as he does. He talks about his slate number, and Robert talked about some of the classical guidance around allocation of personal finance. The thing to know about any one stock position, but especially a company like NVIDIA, if you go through the history of NVIDIA, there were multiple times when that stock has fallen 30%, 50%, even 90% over various time periods over the last since it was IPO-ed in 1999.
David Gardner: Andy, I believe the stock was down two thirds of its value in just the year 2022, which was only three years ago.
Andy Cross: That's right. Just earlier in 2025, David, the stock fell almost 20% over the course of a day or two.
David Gardner: Now, Tim has experienced all of that. He's taking it on the chin, and he's still going. He's a winter soldier.
Andy Cross: If it's a 50% position, the stock falls 20%. That means the portfolio is going to fall 10%, depending on the time period. So understanding that volatility, really thinking about that, when I think about slate number Dave, that you've talked about so much and written about, that's really how I think about and being comfortable with that amount of volatility and loss. It's not so much about the starting line or max position sizes. The portfolio and stocks only care about what you are today and going forward, and so that's the way that he has to think about it.
David Gardner: I totally appreciate that point. There is some self flagellation in Tim's note, and he shouldn't be doing that to himself, because first of all, if you do like some of my habits and principles, Tim, I hadn't even written them down until they came out just a couple of months ago in this book. It's not like you violated anything you didn't know about 10 years ago, as both Robert and Andy have already said, Let's let the past be the past. All that matters is present into the future. Andy, let's stick with NVIDIA a little bit more. Obviously, this is a significant holding for you. This is a company that you believe in going forward, and you also have experienced probably getting cut in half more than once with either this stock or of course, along with me, many others. Thoughts about mindset, especially for somebody approaching count it down. Robert mentioned inside five years toward retirement.
Andy Cross: Yeah, I think, David, and yes, I have experienced multiple drawdowns in many of my stocks, very large positions and small positions. In fact, I think almost every stock I bought in the last four or five months is down, not inconsequentially. Now, they're relatively smaller positions because I just started it. But we all, as Robert said, and you said, as well, too, we're always all of us, if you're investing in this game, you are going to have some ones that do not work out in your portfolio. The way that I've thought about this is really my time horizon, and we talked about that, and Tim mentioned about this. But if you are investing in any company, I truly believe this and we talk about money in the market versus money on the sidelines and that time horizon. Any stock that you're investing in, I truly believe you have to have at least a three year, if not a five year and longer time horizon, especially as the allocations get bigger and bigger and the volatility starts to increase, because as those positions grow in the portfolio, obviously, the portfolio becomes more risky, meaning more potential for volatility because it's tied to just one position. It's really important that anyone investing in any position of size or any company of size, I think it's understanding that I have to be investing this for five years.
David Gardner: Thank you for that, Andy. Back to you, Robert, for some final thoughts on Tim's note. I'm thinking in particular, just he's put it out there that he wants to retire in four years. Now, obviously, if the stock market doesn't do well or if NVIDIA doesn't do well, it seems as if that time horizon might have to change. Now, if at the age of 60, he's OK working another 3-5 years, then it's OK to take more risks in advance of a presumed retirement. But, Robert, if he's heck bent on retiring in four years, then probably he should be transitioning some of that position away in order not to endanger a special date in his mind.
Robert Brokamp: I think it's important to consider the consequences of what would happen if a stock like that or your whole portfolio dropped 30, 40, 50%. If that would derail your financial plan, then it does make sense to cut back a little bit on it. People will often put up the counter arguments to having a concentrated portfolio, they'll point out, Warren Buffett and Elon Musk became some of the wealthiest people in the world by investing in one stock. But they're in situations where their portfolio could drop 75%, and they're still going to do very well. If your situation is that if your portfolio dropped, you would not do so well, then cut back. On the other hand, you might be fine. You might have a pension. You might have a business. You might have an inheritance coming, or you might be so wealthy that it's fine. You'll live through it. I think that's one of the most important questions you can ask.
Andy Cross: David, I'll also say and Bro chime in here on this, too, if a company is paying dividends and you're relying on those dividends, that is an important factor I talked to my dad and my family a lot about this and the dividends that they rely on in retirement. That is something to consider as well when you're figuring out the allocation percentage and trimming back or not is if you rely on the dividends or not, cash dividends for some living, that's a factor to also bake into your equation.
Robert Brokamp: Just pointed out that the yield on NVIDIA is 0.02%, so if you're able to live on that, congratulations.
David Gardner: Yeah, not a big dividend payer. Well, guys, thank you very much for this. We are not, well, actually, one of us is a professional financial planner, but we're not offering personalized advice. That's not what I do through this podcast. That's not the focus of Motley Fool publishing. Obviously, Tim, in the same way that you got yourself into this mess, and I mean that in the best sense, congratulations. I think you're doing really well. You need to make sure you continue to work through this mess on your own. We're here to help. I think The Motley Fool operates best as a copilot for people who want to be pilots of their own plane here. Of course, speaking to self directed people, that's a privilege for us. Some of my favorite people in the whole wide world are people who take ownership and responsibility for things around them, their money included. I want to congratulate you on what you've done. We need to keep moving with this mailbag. But one final thought might just be about, Jeff Bezos was the one who first used this phrase when we were interviewing him years ago. He said, I live my life by what I call the regret minimization framework. Bezos said, I'm a geek. I have a watch that updates itself 45 times per minute via satellite. This is before, smartphones. But anyway, that's what he said. He said, I'm a geek, and I live my life by a geeky phrase, the regret minimization framework. Jeff went on to say, What that means is when I'm 80 or 90, looking back to today, whatever decision I'm thinking about today, how do I minimize the regret that I will feel at the age of 80 something? Do I minimize that regret? Now, sometimes that means I shouldn't do what I'm thinking about doing. Other times, it means I should do what I'm thinking of doing. I think that's a wonderful way to go through life, Tim and Noor and everybody listening is with that regret minimization framework, I've thought a lot about that ever since myself. I think that can help guide you a little bit with oversized positions. As we move on now to Mailbag Item Number 6, it's worth pointing out, guys, that to a lot of traditional financial planners, what we just did probably sounds like crazy talk, because as Robert started with his answer, most people say, you should never have a slate number greater than 10. You should instantly start paring down any concentrated position. Here we are advising somebody who has a 50% weight position in a single stock. But I also want to honor the rule breakeriness of that situation, and we tried to speak to that in our motley way.
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David Gardner: Let me move on to Mailbag Item Number 6. This is from Rich Kaplan, Rich. Hello, David. I just finished listening to your October Mailbag podcast. I followed you and Tom and The Motley Fool for more than 20 years and subscribed to some of your services. Let me just pause and say, thank you. Thanks, Rich Kaplan. I faithfully listen to all Rule Breaker Investing podcasts and a great majority of Motley Fool Money podcasts. I just finished reading your most recent book, which is a wonderful compilation of the lessons I've learned from you over the years. Now, a little bit about myself. To put into context my question, which I believe will also pertain to many of your listeners. I'm 66-years-old and planning to retire from the practice of pediatric medicine this upcoming June. The bulk of our retirement savings are in an employer sponsored 403(b). I have had the good fortune of turning a small side account of what Rich calls "play money". I think it started to get more serious than play over the course of time. He goes on, I was first invested in mutual funds in 1987, he adds just before the October crash, and eventually turning to individual stocks in the mid '90s, now a sizable portfolio amounting to around 20% of our net worth. I understand tax implications of selling and various principles of withdrawal strategies to employ across various retirement accounts and non retirement accounts. My question for you, and I'm going to say for Bro. My question for Bro is simply as I begin to deploy my stock portfolio in retirement planning to hold onto some stocks to pass on to my children, how to decide which stocks to sell? What rule breaking principles to follow. Thank you, Rich Kaplan. Well, Andy is here, too, and Dave's here along for the ride as well. But I want to turn first back to Robert Brokamp. Robert, this is a classic example of a question. Well, similar to so many questions that you've received for so many years initial thoughts for Rich Kaplan and his Ilk.
Robert Brokamp: I would start with something we talked about in the previous answer to the question, which is use dividends. If you are reinvesting dividends, turn that off, so you don't buy more shares and you can live off that cash. A very rough retirement principle when you have multiple types of accounts is to drain the taxable brokerage account first and leave the tax deferred or Roth account alone to second or third. Now, that can be sort of complicated because if you have a really big 403(b) in this case, it's probably traditional tax deferred, which means once you get to the required minimum distribution age, you might have really big RMDs, so you might want to take some of that soon. I'm just laying out the ground rules, like the basic rule of thumb, but investigate that further. But the general pathway for most people is drain the taxable brokerage account first. Then you question, Okay, which ones am I going to sell? I think one thing about being in retirement is you sell what you are overweight. It's a way to rebalance your portfolio. If you have a certain stock or a certain sector or a certain industry that you feel, You know what? I have a little too much in that, I would sell a little bit of that. There's a twist here, because he's also asking, which stocks do I want to leave my kids? That's very powerful because when you leave stocks to heirs that are not in an IRA or 401(k) or 403(b), they get a step up in cost basis, but he could live another 20 or 30 years. He might think about, these are the companies that I think will still be around in 20, 30 years and will be what I want my kids to inherit. You segregate those out, maybe even in a separate account or just mental like these are the ones that I'm going to leave alone. But I'm sure if you look at your portfolio, you're going to be there are some companies are like, You know what? I'm not sure where they're going to be 5, 10 years from now, but this one, I think is still going to be a solid performer 30 years from now. That's another consideration.
David Gardner: Andy additional thoughts from our chief investment officer here for the rich captains of the world?
Andy Cross: Well, I think Bro spoke as he often does eloquently about this. I was attuned to the part about the children because I think many of us are in this spot, whether we've received equity shares from our family. I know I have, and that was a great start to my investing journey. Thinking about that and that framework of thinking about, hey, as I look at the portfolio and those ones that I want to set aside to my kids, thinking about those individual stocks as long term performers, getting back to our previous question with Tim about those long term performers. But this is a case of a different style, and I think some people don't often think about this when they're thinking about their portfolio allocations. What do I want to maybe pass on to future generations, and those ones that I look at forward and think, wow, in the next 10 years or so could really be the ones that are dominating industries, and I want to keep those to be able to pass on to future generations.
David Gardner: Thank you, guys. Andy, with your response, you briefly complimented Robert. You said he spoke to it eloquently, as he so often does. I did listen very carefully, though. You didn't say as he always does. You just said as he so often does. Do you have examples in the past in your mind when Robert did not speak eloquently?
Andy Cross: It's usually around the Tampa Bay Buccaneers football team.
Robert Brokamp: You mean all the times that the Bucks have beaten the Eagles in the playoffs? [LAUGHTER]
David Gardner: I knew this was going to spill out. There's a lot of football going on here. I, as a Washington Commanders fan, don't have any leg to stand on this conversation, but I do admire the Eagles and the Buccaneers, especially because I'm looking up at win totals that double my own team of choice. Anyway, let's move on now, will you guys stay with me one more?
Andy Cross: Absolutely.
David Gardner: Thank you. Let's go to Mailbag Item Number 7. This is from Italian Fool. This one comes in two parts. Let's get into it. Dear David, thank you for Rule Breaker Investing and your recent podcasts. I've read the book cover to cover and listened to every interview I could find. Wow, thanks, Italian Fool. Your philosophy truly resonates with me. I have two questions. One about portfolio allocation, and one about investing for future children. Question 1 from Italian Fool. I recently inherited a substantial sum. Spent some time trying to decide how to invest it. I settled on Charlie Munger's concentrated approach, Italian Fool writes, 85% split equally across six, he uses quotes, "high quality stocks". He would say strong MOTs, 10% plus earnings growth, and that potential existing for decades. He says, with 15%, that other 15% in some of his favorite companies like Tesla and Robin Hood. After making these investments, I discovered your rule breaker approach, which resonates even more deeply. My dilemma. Should I reduce these six concentrated holdings and reallocate across 20 plus rule Breaker stocks?
David Gardner: Or keep the current portfolio and only apply the Rule Breaker strategy to new capital. Given the inheritance size, he adds, I can only save about 2% annually, roughly one new stock per year. More broadly, what would you advise someone already invested with a different philosophy who now wants to embrace Rule Breaker investing, sell and start fresh or partially rebalance, or leave existing holdings intact and only apply the new approach to future capital. I'm going to pause right there. There is a question too about kids, but guys, let's sink our teeth into this one. Andy, I'm going to go to you first your thoughts here. Well, I think this is fair. You're in the middle of a horse race and you're thinking of jumping horses. How do you do it?
Andy Cross: Well, David, I'm guessing, since September 16th of this year, when your book published, there are more than a fair amount of people who are looking at pivoting their portfolio, maybe making some changes that the way they've invested capital very much like this loyal listener does.
David Gardner: That's you to say, Andy, I hope there are a lot more Motley Fool fans of all stripes. That's the real goal. But thank you. I appreciate that.
Andy Cross: That's true, but as we've talked about Rule Breaker sometimes comes late to people investing because it's not naturally taught, I think, and you've talked about this. But moving on more to the question, so I think this is not an uncommon situation where people want to pivot in how they are thinking about investing. I'll just say this and Brooke and maybe jump in if he wants to share more specifics. But my thinking is making sure he doesn't have to be right away. You can evolve into the practice if you want to think about trying to take some of the existing positions and maybe starting to pivot because those Tesla and Robin Hood that he mentioned, David, are already in the Rule Breaker style. He already has a toe into that pond. Can slowly start to evolve and change the portfolio, not thinking about it once or done overnight. I think sometimes many investors feel like they got to change things right away, and that's just not the case. In fact, I think oftentimes, it can be a little bit dangerous.
David Gardner: Robert, Italian Fool has a problem here, a problem we'd all, I think, love to have. This is something obviously that does happen, and that is inheritance. He got a big lumpsum. Do you have any dos and don'ts when you think about transitioning someone else's money that all of a sudden is yours?
Robert Brokamp: I'll highlight something I mentioned previously in that when you inherit stock and it's again, not in an IRA, but it is in a tax brokerage account, you got that step up and cost basis. If there's something you don't like, then is the time to sell it because there won't be any tax consequences. Number 1, it sounds like this person rearranged the portfolio and invested in six high quality stocks, also Robin Hood and Tesla. My first reaction to hearing that is that's pretty concentrated and you have to be an experienced investor, I think, with a pretty high risk tolerance for that level of concentration. My thought would be it does make sense to gradually move more of that portfolio into Rule Breaker stocks or even any other type of stocks. My guess is that some of these, by the way he described them, they pay a dividend. That's another way. Don't reinvest the dividend, take that cash and invest it in another stock or another group of stocks. If the stocks you own don't pay a dividend or it's not a significant dividend, you can create your own by just selling a portion of the stock on a quarterly basis. As Andy said, gradually moving in to other stocks, especially if you're new to Rule Breaker investing, it'll probably take you some time to get the lay of the land, figure out which stocks you want to buy. You don't want to jump into anything without knowing what you're buying. Gradually, I think is a good way to do it, but I do think it's probably better to have a more diversified portfolio.
David Gardner: I agree, and I love that idea of gradual certainly that accords with the actions that we've taken so often as advisors at The Motley Fool. We're big fans of dollar-cost averaging in, dollar-cost averaging out, incrementalism. Certainly, sometimes Italian Fool, it can be an all or nothing, get out, get in, full position, out, full position in. But more often than not, I want many of us to imagine going maybe a third in or a third out. That incrementalism, that gradual approach it also forestalls regrets because a lot of regrets arise when we make sometimes an emotional decision, but we do something all at once, and then we regret it later. If instead you're just leading the investing life, you've got the vibe. You've got the capital F Fool vibe of, let's gradually move in or out. I think that's just going to be more pleasing for you. I also agree, good point, Robert, that he has a very concentrated portfolio with this inheritance. Taking portions of some of those six high quality stocks and thinking about if he's a big Rule Breaker fan and not everybody needs to be, but if he start thinking about what Rule Breakers would you want to move portions of that into. We hope diversifying the number of companies that he is invested in. Thank you guys for those good thoughts. There are a lot of similar threads running through these three mailbag items we've confronted together. But I think that's because a lot of listeners have a lot of these allocation decisions, especially as we start to think about retirement, or we get an inheritance, and all of a sudden, we've like, Oh, my gosh, I have to do something we hope good with all this.
Robert Brokamp: I'll just add something that possibly pertains to all three questions, maybe more of the second one. I don't know where I got this. It's possible, David, I actually got it from you or maybe you Andy, but it's basically at least once a year, take a look at your portfolio, look at everything you own, but pretend you don't own it and ask yourself, if I didn't own this investment, would I buy it today? Every time you say no, that's a candidate for something to either sell if you're retired, you need to raise cash or maybe to pare back on that investment and put that money elsewhere.
Andy Cross: This transfer of wealth is a significant amount for the baby boomers as they are just handing over more and more wealth. I do feel this question is coming up more and more where people are saying, I'm inheriting a certain number of stocks or types of stocks, or a certain sum of a portfolio. How do I think about that matching with my own investing style, and do I want to change what I'm inheriting? What are the tax implications and things of this nature? I think you're right, David. I think this thread running through these questions is very common to how many listeners to the podcast and many Fools in general may be thinking about inheritance.
Robert Brokamp: I don't know the figure off the top of my head, but it's in the trillions of dollars. Sarah will just say, if you are the person who will be leaving that money, think about whether your heirs are prepared to inherit it and manage it well, and if not, now's a good time to educate them.
David Gardner: Thank you, guys. I feel like you're giving eight answers to what I was only categorizing as three mailbag items, but I mean eight answers in a good way. You've got lots of good thoughts. We got one more question. The last part of Italian Fool's question is about inheritance for children. Let's go there. He writes, I want to create investment portfolios for my future kids. Similar to what your father did for you, and he knows my story. Thank you, Italian Fool. But how do you handle the inequality that naturally arises? If I invest $5,000 at each child's birth, even in an index fund, market timing will create vastly different outcomes by the time they're adults. I think he just means the market itself, not timing in or timing out. It simply means different starting points, you're going to end up with different end points. He goes, on my solution wait until they're five and let them pick their own stocks. They lose five years of compounding, but the outcomes reflect their choices, not mine. To compensate, I'd offer a two for one employer match on money they earn and choose to invest from odd jobs or if you like, allowance or tasks. How did you approach this with your kids? He asked me, but I'm opening this up to our quorum here, my three headed Fool. We've all had kids, guys, I'm curious whether you've done something like this for your kids, and knowing that it would have to be in equitable in some sense because somebody is getting up with a slightly different time frame than somebody else, Robert or Andy, what have you guys done?
Robert Brokamp: Well, with my kids, we just opened a brokerage account, and we started off with a flat amount in index funds when they were younger, and we didn't get too much of their input other than just to say, you're investing in the stock market. We talked about stock market was. Whenever we went to Starbucks, for example, stock we owned, we said, hey, we own part of this company. Then once they got older, we didn't ask when they were five. We asked probably later when they were maybe 10, 12, 11. We looked at stock advisor and said, which of these companies are most interested to you and they were allowed to pick their individual stocks. At that point, that took care of any inequality because it was up to them.
David Gardner: You made your bed, you lie in it.
Robert Brokamp: My wife and I have talked about this broadly speaking. One kid did a sport that cost a lot of money, another kid didn't. One kid went to a college that cost more money, and another didn't. We have just decided to say, it's a great life lesson that not everything's fair, but we've did the best we could for you.
Andy Cross: David, I think the obvious answer is just to pick the child you love the best and give them more capital into the, [LAUGHTER] jokes aside. The reality is, and David, you've talked about this for many, many years is the market tends to march higher over time. Having money into the market when you have, especially for somebody or some portfolio that has years and years to invest that five-year compounding can be substantial when you look out, say, 10, 15, 20, 30 years. What I did was tried to get my portfolios set up for my kids, either their trust or their college fund as soon as possible and start $1 cost averaging in that. Yes, it might lead and probably does just lead to some slight inequalities there, but because the market tends to go higher over long periods of time. You want that money rolling into those funds as soon as possible.
David Gardner: Love it. I agree. I'm also a fan of starting, if you can on Day 1 not five years in just because doing the math, compounding is going to make quite a difference. Thank you for that. Both of you guys, I really appreciate that Robert. Even though Robert, you're not our number one pick all individual stocks person at the Motley Fool, I love that you opened up Stock Advisor and said, Hey, son or daughter, what do you like here? I think that's great. Some sense of agency for the kids. I would also say, having done this for my three kids, I had them inherit what I'd invested for them at the age of 21. They were adults, pretty much. I hope. I think I'm an adult at 59, they probably were adults around the age of 21 when they got it. It's always going to be the case probably that whoever is oldest has the most because they're always going to be ahead of the game, but they also are the oldest, which means they don't have as many years as some of the younger people. I think I wouldn't worry about the inequity if it emerges. You could always compensate in other ways with it down the line. I think the biggest thing we've already said it is to get started early and have them participate in the process. At different ages, there are different ways that you can involve them. I would always say have stocks in their portfolios. I do this for my kids that make a lot of sense for that child based on what he or she really loves in the world. I think that is a much better lesson than the simple math of how much money was made in the account over time, although that matters, too.
Andy Cross: I do love the employee match idea.
Robert Brokamp: You bet you.
Andy Cross: Robert, I think maybe you've spoken about this, as well, too. Again, from that agency, David, you mentioned, you do get them involved. If they're going to invest a little capital, gets matched by the capital that or even more so by the parent. I have not done that yet, really, because my kids are still a little bit too young. I mean, odd jobs and birthday money here and there, but I do like that idea.
Robert Brokamp: Yeah, we've done it once our kids had jobs as teenagers, so that they could then open up a Roth IRA to which my wife and I did a matching contribution. Each of our kids began saving for retirement as teenagers.
Andy Cross: David, that was one of the times when Bro always spoke eloquently about saving and investing right there. [LAUGHTER]. There you go again, Bro.
David Gardner: Well, guys, I want to thank you very much for joining this Chapter 2 of this epic Mailbag here at the end of the month of gratitude. I'm really grateful for all that you have done for me personally, the enrichment and enjoyment that we've had together. I hope it continues many years. I hope you guys have a wonderful Thanksgiving with your families. These questions pertaining, most of all to pre-retirement allocation and what to do with those kids, these are questions that recur, and I know I'll have you back on again, and maybe we'll learn more in the meantime. We'll all see how Nvidia did a year from now. It'll be very interesting to see. But these are real questions from real Fools, and we're always really doing our best to help you as much as we can. I know one thing. I'm a much better Fool when I've got a couple of Fools in my back pocket like these gentlemen and what they do for so many. Andy, Bro, thank you.
Andy Cross: Thank you, David.
Robert Brokamp: Thank you. Happy Thanksgiving.
Andy Cross: Happy Thanksgiving, everyone.
David Gardner: Again, thank you to Robert Brokamp and Andy Cross. Let's move on to Mailbag item Number 8. This one from Thomas who signs with Aloha. Thomas, I'll assume you're somewhere in or around Hawaii. Dear David and the Motley Fool team, thank you for your awesome private service. I feel happier and smarter, and I'm objectively richer. Thanks to all the work you do. Well, thank you, Thomas. I love hearing that. He goes on, I first heard you explain just how silly the old adage bilo sell high is in the year 2020. It was truly a light bulb moment for me, and I joined the Fool. It gave me the courage to board all the boats I thought I had long missed like Google, Amazon, Costco, etc. It has served me well. I enjoyed your book. As a regular podcast listener, many concepts were familiar, but the fair starting line and Gardner Kretzmann Continuum were new and valuable for me. I've always intuitively given each of my so called horses $1,000 to start. Bonus there, no hard mental math for bag counting. Thomas points out. If you start every position with $1,000, it becomes pretty easy to see how many times up in value it is from that big round number. It goes on regarding the GKC at the age of 47, I own 43 stocks. Time to work on my watch list with a winky emoji. I would just say you're doing pretty well, according to me, Thomas, let's keep going. I wanted to share another light bulb moment, courtesy of my most Rule Breakery friend, Ole Peters.
David Gardner: Now, I just want to insert here, Thomas, that I was not previously familiar with Ole's, but I looked into it some, as a consequence of what you're about to share. You go on to say, Ole, a physicist, found that the math behind expected value, which is a widely used term in economics, expected value, the math behind it is roughly two centuries out of date. His research shows that expected value only works under specific circumstances. In the real world, it can mislead or be dead wrong. Since it's often used as a benchmark for rationality, Thomas asserts, this matters. Ole's key insight is that what counts for decision-making is how your wealth grows over time. Not across parallel universes that are inaccessible to you. He explains this neatly using a game in his lecture entitled Time for a Change: Introducing Irreversible Time in Economics. Now, that's something anybody can Google. If you just Google Ole Peters O-L-E, Time for a Change, you'll find it. Thomas goes on to say, many economists fiercely oppose this idea, echoing Schopenhauer's stages of truth. "All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed.
Third, it is accepted as being self-evident." That's Schopenhauer's great quote, which, by the way, I include in Rule Breaker Investing because I absolutely love that quote from Schopenhauer, as well as a few others. Ole comes to several conclusions that align with Rule Breaker Investing philosophy. For one, he modeled cooperation mathematically and shows that win-win scenarios do really exist. He has a whole paper on that, which ends with this sentence. "Such analysis suggests that our natural tendency to cooperate, expressed in our gut feeling and moral sentiment, is in harmony with a careful, formal analysis." Thank you again for the work you do, and happy Jardinage Aloha, Thomas. In a nutshell, Thomas, let me just say back, traditional economics, as you point out, uses expected value, and that assumes that many possible outcomes, even ones we could never personally experience, should be just averaged together to guide rational decision making. Having looked into it now a little bit myself, Peters argues that this approach only works in special cases because in the real world, what matters is actually how your wealth evolves over time. That would be sequential time, like the actual time that you're living through, not how it would behave across so-called parallel universes. Without getting any more heady than that because I don't think I can, I believe this leads to a mathematical defense of things that we really love on this podcast, like long-term compounding and cooperation over zero-sum thinking, and positive-sum dynamics. In other words, Peters' math ends up reinforcing many of our rule breaker ideas, things like time matters more than timing, and compounding beats cleverness, and human cooperation is not naive but optimal. In fact, I think human cooperation explains so much about how humanity has gotten to be where it is in the best sense of where it is today. A physicist, therefore, Thomas has mathematically validated the heart of Rule Breaker Investing. I especially want to point out in closing that, as you say, positive sum systems so things like cooperation, patience, ownership. These things are not only moral, they're actually mathematically superior. It's always fun when a physicist wanders into economics and ends up proving what we happy investors have been experiencing all along. Thomas, thank you for this reflection on your friend Ole Peters.
Fool on and happy Jardinage to you, too. We must cultivate our garden. Let's move on. Now, the final chapter here, and these are just three final notes, all of which are beautiful expressions. As we near the end of one of our more epic mailbags in Rule Breaker Investing podcast history, I just pretty much want to read these flat out, thank each of the correspondents for taking the time to write, and let this serve as inspiration for you, dear listener, still listening to this part of the podcast and your friends and family around you, because each of these is a remarkably expressed sentiment that will inspire. Let's go to mailbag item Number 9, this from Gum, my biggest fan. Hi, David, Rule Breaker Investing in the Motley Fool community. As Thanksgiving gets closer, I found myself thinking a lot about gratitude, about the people whose words, ideas, and kindness have genuinely changed the direction of my life. You, the RBI community, and the Motley Fools are the top of my list, and I couldn't let this season pass without reaching out. I'm in New Zealand, right now traveling for a bit and every now and then, I'm hit with this quiet wave of appreciation. I just do want to insert this is obviously an audio-only podcast, but Gum dropped with her note here. She included a photo of her paragliding around New Zealand. A lot of us would not have the courage, I don't think, to go up there, even with a professional instructor, and do what Gum is doing in this remarkable picture. She doesn't mention that here, but that was one of her pictures from New Zealand. I'm in New Zealand right now traveling for a bit every now and then, I'm hit with this quiet wave of appreciation, the freedom I'm feeling here, the peace, the space to breathe. It exists because of the guidance, optimism, and steady voice you've shared over the years, and I don't take that lightly. A few days ago, I visited a small church, and the preacher said something that stuck with me. "Live your life to reflect what you love, not what you hate." Then he lit a single candle in a dark room. It was incredible how bright that one tiny flame felt. He said, That's how we fight darkness by choosing to be the light and instantly, I thought of you, and I thought of the RBI community, people I've never met in person, but whose stories, wins, mistakes, and reflections I've carried with me throughout the year. They've lit candles, too often, without realizing it, I'm truly grateful for them. It feels like being part of something bigger, something hopeful. Of course, I thought of your message. Don't just be the candle, but help light other candles.
That's exactly what you've done. You've lit mine, and through your work in the community you've fostered, you've helped me build a life centered on optimism, generosity, and long-term hope rather than fear. From the bottom of my heart, thank you. Your influence reaches far beyond your financial guidance. It has shaped the way I see the world and the kind of person I want to be, wishing all of you a warm, joyful, and deeply meaningful Thanksgiving. Stay bright. Gum. PS, New Zealand is an amazing country to visit. You should go if you hadn't already. As I mentioned earlier, I'm tempted to want to give a response to a number of things in there, but let's just keep moving, and I will simply say back. Thank you. Mailbag item Number 10. This one from Vince Granieri. Hi, David. Here I am coming in just under the wire, a habit proving harder to break for me than I'd like to admit. I could write to you every month, believe me, because your content is universally inspirational, but mine isn't. I'll open by congratulating you on your latest book, which hopefully will find its way under many Christmas trees this year. Let me just mention Vince dropped this note the morning of our recording. That's why he's saying, coming in just under the wire. By the way, you can always write us anytime, any month [email protected] is our email address. That's what Vince availed himself Monday morning, November 24th. It's this afternoon of Monday that we're recording this week's Thanksgiving mailbag podcast. Let me continue with Vince's note. My excuse for tardiness is to ensure I completed your gratitude challenge from last week's podcast. I'll not detail every action, but one stood out to me. My bride and I were enjoying dinner at a local restaurant, and we both noticed our server was a senior. Now, I'm sure that some seniors enjoy working, but we've noticed there are a lot more seniors working these days and surmise for economic reasons. I suggested a big tip, 40%, but my bride vetoed that. She said, let's do 50%, and we did, along with a note to have a nice Thanksgiving.
A couple more things. I pooh-poohed your idea to name your portfolio. But the more I thought about it, the more I liked it. I have two portfolios, Vince writes, a dividend portfolio and a growth portfolio. As an aside, nearing retirement, my goal was to increase my dividend portfolio to 40% this year. I'm happy to report that the final number will be closer to 50% because ultimately, I want my dividend portfolio to predominate. I decided to call my dividend portfolio the Guardian Portfolio. Not only is that appropriate for its purpose of preserving wealth, but it pays homage to my favorite Cleveland baseball team and my acceptance, although kicking and screaming, of its name change. For my growth portfolio, I borrow from your parlance, I call it Excelsior. With an exclamation point, I think that's self-explanatory. Finally, I am challenged by your adoption of the motto, be a for person, not an against person. Although optimistic by nature, I do have a tendency, Vince concludes, to speak louder against things than for things. My resolution for 2026 is to turn that around. With gratitude, I wish you a blessed holiday season and a Happy New Year, Vince Granieri. Vince Granieri, thank you. Rule Breaker mailbag item Number 11. This one from Walter Sharon. Hi, David. Your podcast last week on gratitude was timely and transcendent. Thank you. My gratitude this season is for you in the positive transformation in my life that you have been an integral part of. I have been an active individual investor in the stock market since reading The Motley Fool Investment Guide in the late 90s. I've continued investing and learning joyfully since, including your new book, Rule Breaker Investing, which my kids are now reading at my behest. I want to relate what I hope will be a useful case study for those looking to measure as discussed in a recent Rule Breaker podcast, the performance of their investing choices.
At the beginning of the year 2020, I told my brother that he should roll over his 401(k) from a previous employer into a self-directed rollover IRA. I explained that I believed I could put together a portfolio that would outperform the S&P 500, as well as anything else he could put it into. This being a portfolio he would neither add to nor take from it would be easy to calculate the performance using the starting balance and the ending balance each year. He agreed. Remembering a podcast of yours, I have heard them all. I had an idea. A fool wrote into your podcast that he'd noticed, whenever he set up a portfolio for a friend or family member, it would outperform his own. I had noticed this, too, and was very sure this would be the case with my brother's portfolio, as the balance was large enough that I would not be limited in diversification or the stock selection process, it struck me that if I knew this was going to happen, why would I not simply mirror his portfolio with all of mine? I did just that. This made the performance of my entire invested net worth measurable by the performance of his IRA, the measurement of his being very precise as the ending balance would include all dividends, interest, fees, etc. I humbly relate, Walter Sharon writes, that we beat the market over the five-year period from the beginning of the year 2020 to the beginning of 2025, my brother's IRA and by extension, my entire invested net worth grew 188% over that five-year period, compared to the markets, 81%.
That's an annualized 24% compared to the markets annualized 13% over that same period. All thanks to fishing in a stocked pond and to you and all I've learned from you, and to my interest in learning and my temperament, Walter writes, I'm now tracking a new five-year period from the beginning of 2025 to the beginning of 2030. While many pundits, whose intelligence I otherwise acknowledge and highly respect, join the chorus of the Wall Street wise, saying beating the market isn't done. It can't be done. We fools have, and we fools will. Here's to the next five years and happy holidays to you and all fools everywhere. Walter D. Sharon PT. To you, dear listener, I thank you for suffering this fool gladly right to the end. In fact, give yourself another virtual gold jester cap for hearing me right now. From a five-stock sampler early in this episode to being joined in the middle by two fantastic fools to us all being thanked and connected as members of the fool community by such wonderful thoughts at end. I love that you did it for your brother, Walter, with and for. To my USA fools, especially, have a wonderful, full holiday week and weekend, thank you. Fool on.
