How To Use The Bucket Investing Approach

Not sure where to keep your money... whether it's in savings, stocks, or somewhere in between? In this episode, we break down the Bucket Investing Strategy to help you organize your short-term, mid-term, and long-term goals so you can invest with clarity and confidence. Tune in!

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Chapters

• 1:07 Life Updates: Dogs & Skunks
• 3:03 What The Heck is The Bucket Approach?
• 7:08 Bucket 1: Short-Term Needs (1–4 years)
• 12:57 Bucket 2: Mid-Term Needs (4–10 years)
• 17:38 Bucket 3: Long-Term Needs (10+ years)
• 24:09 Bucket Investing at Work & When to Talk With an Advisor

Transcript

You're listening to the Wealth Mindset show, where Hixon Zuercher Capital Management's team of finance professionals, portfolio managers, and a life coach come together to tackle complex topics in finance and retirement planning, so you don't have to. From investment strategies and wealth management to tax planning, retirement income, and aligning your money with your values and purpose, the Wealth Mindset show offers the tools to thrive.

Austin Wilson:

All right. Hey, hey, hey. Welcome back to the Wealth Mindset Show, where the Hixon Zuercher team helps you manage wealth, navigate retirement, and make smart decisions for a secure, meaningful future. I'm Austin Wilson, Director of Investments at Hixon Zuercher Capital Management.

Josh Robb:

And I'm Josh Robb, Director of wealth Management at Hixon Zuercher Capital Management. And Chase Rose is joining us today.

Chase Rose:

Oh, yeah.

Josh Robb:

Talking about one of his favorite topics, which is bucket investing, or how you group or visualize your different goals and targets.

Austin Wilson:

See, this was confusing. When I started learning about this, because I had to learn about this, I said, "Bucket investing? Every bucket I've bought, I've never made a dime on."

Josh Robb:

Yeah.

Chase Rose:

I can see a dad joke coming from a mile away when I-

[1:07] - Life Updates: Dogs & Skunks

Austin Wilson:

It's a good one. But yeah, that's what we're talking about today. But first, what's going on, Chase?

Chase Rose:

I've got-

Austin Wilson:

You're relaxing. The ice cream shop is closed.

Chase Rose:

It is. It was closed last week too.

Austin Wilson:

Kaity's home?

Josh Robb:

Yeah.

Austin Wilson:

Yeah, Kaity's home. Everything's good?

Chase Rose:

Kaity is home. She's happy. She's healthy. That's all I can ask for.

Austin Wilson:

Little doggo time?

Chase Rose:

The doggos are also happy and healthy. They're not locked up in their cage all day. Yeah.

Josh Robb:

Our neighborhood is on high alert. There's a skunk wandering our neighborhood, been caught on Ring cameras. So everybody's like, "Watch your dogs," because the last thing you want is for your dog to get sprayed with a skunk and have to deal with it.

Chase Rose:

Yeah. I have actually experienced that. When I was younger, I was in high school, played football, came home from a Friday night game, and I got home, dog ran outside, went potty, ran back inside, skunked.

Josh Robb:

Smelled terrible.

Chase Rose:

Skunked. Terrible. I smelled like skunk for weeks. And I felt bad for everyone who had to be around me. So that's like almost PTSD at this point.

Josh Robb:

Yeah. And that's everyday.

Austin Wilson:

There are skunks. There are skunks.

Josh Robb:

They're around.

Austin Wilson:

I was on our front porch, I don't know, bringing the flag in one night or something. It was dark. And I saw a skunk across the street right by Jordan's house actually. Jordan lives across the street from me. And it was a mama skunk and like 10 babies. And the skunk ran across the street, but the babies were swarming around her. It was crazy. And then they just scurried off in between our houses, and I never... My dog was inside.

Josh Robb:

If you don't mess with them, they're fine. The problem is the dogs don't know. He's not going to walk up and spray you. People don't get sprayed by skunks unless they're messing with the skunk. The skunk's not looking to do that. But the dogs don't know any better.

Austin Wilson:

They don't know better.

Josh Robb:

They see an animal, they go after and then they get sprayed.

Austin Wilson:

I've heard they make great pets and you can remove their stink glands.

Josh Robb:

You can remove the-

Austin Wilson:

That sounds too much for me.

Josh Robb:

Yes.

Austin Wilson:

So anyway-

Chase Rose:

I wouldn't risk trying to get those things out in the first place. You're probably going to suffer.

Austin Wilson:

Yeah. I know. I know. So I think you may need a bucket if your dog gets sprayed on by a skunk. And we're going to bring that back full circle.

Josh Robb:

There it is. Back to where we were.

[3:03] - What The Heck is The Bucket Approach?

Austin Wilson:

To talk about bucket investing. And it's an interesting way to think about life when you're talking about your money, goals for money. But different money has different goals. You can't just look at all your money in one picture and say, "Oh, this one pile of money."

Josh Robb:

It has to do everything. And you do. So when we've talked about in the past is creating a net worth statement.

Austin Wilson:

Well yeah.

Josh Robb:

You really summarize it up into assets minus liabilities, net worth. So there are some ways where you do look at it as one big bucket and you use it some targeting, how's it growing and on track? But you're right in that within, once you get nuanced, not everything has the same goal.

Austin Wilson:

So maybe you've got a roof coming up, that might be in a couple of years. That obviously should be handled very differently than retirement savings or something in the middle. Maybe you need a new car, or kids' college, or these different, time often dictates the needs for money, short term, medium term and long term. And there's a couple ways to look at this that you could do really wrong. You could say, "Well if it's all looked at the same thing, if I sit it in cash, well I'm missing out on growth. But if I put it all in equity markets, I could really have a lot of volatility and have potential for losses. And if I need it, I have to sell at a loss and no one wants to do that." And the blend of all of this is really where it comes to fruition, when we're talking about the Bucket Investing approach. So briefly Chase, just talk a little bit about the Bucket Investing, the bucket approach.

Chase Rose:

So I see this in, there's really two different ways that you can use the bucket investing approach. One is if you're retired, and you have this nest egg of savings and investments that you've built up over your life that you're now tapping into to cover your lifestyle expenses, the bucket approach, we split your short-term, your midterm and your long-term goals into different buckets. And the reason we do that is because the expenses that you're going to need to cover over the next couple of years, you'll need to tap into that. And if you have everything in one bucket, maybe you're selling everything incrementally and we go into a bear market, then you're selling stocks at a loss. Or if we're in a bull market and you're living off of cash, you're missing an opportunity to sell stocks while they're at peaks.

So we like to split different buckets into different accounts. We do it by account. Oftentimes you can even go as basic as just saying, "Here's this allocation in your portfolio that we're earmarking for this, this is for this and this is for that." However, while you're working, if you're not a retiree, you can say, "Hey, I have a roof repair that I know I'm going to need to pay for in four years." And we can split off a different account, and this is how we do it typically. We'll split off a different account that we know is earmarked for that specific goal. It can be anything. I'm just using a roof expense as an example. And we're going to invest that account based on the timeframe and the amount that you need to cover that expense.

Josh Robb:

And along with that, and we'll talk about this as each bucket, but the type of accounts dictate too which ones we're going to highlight or earmark for those short-term, midterm or long-term growth.

Chase Rose:

Absolutely.

Austin Wilson:

And I tend to think about this as, so if you're looking at a sinking fund is the idea, especially for those shorter term needs. So let's start with short-term. Maybe 1, 2, 3, 4 years out. Pretty reasonably close to where we are right now. I use the sinking fund philosophy, and this is the way I view the bucketing thing where I say, "I know in a year I'm going to be needing to buy A, I don't know. Usually it's like freezer meat. So I know how much freezer meets roughly going to be in a year. So I know that one 12th of that every paycheck goes right into that account."

Chase Rose:

Absolutely.

Austin Wilson:

And then it just comes out, and it's in a money market fund, so it's very conservative. It's pretty much like cash, but it earns some interest, safety, liquidity, very high there. Another thing, if you want to do a roof in four years, you know that roof's going to be $40,000, divide that over 12, every month, a 12th of that goes into that account. That's a great way to do that. Things you don't want any volatility to touch, right? That's the key there. Safety, liquidity, you could access it very quickly if you had to. Where could you put this? What are some account types?

[7:08] - Bucket 1: Short-Term Needs (1–4 years) 

Chase Rose:

So ideally it should be an after tax. I wouldn't even say you should have this, your Roth IRA should be aggressive. So a Roth is a version of an after-tax, but it's a tax-free account. We're talking a normal after-tax brokerage investment account.

Austin Wilson:

You can do anything with it at any time.

Chase Rose:

A bank account, a savings account, you need a place where you can hold cash, and tap into that cash at a moment's notice. And what you should be investing into ideally, especially if rates are low, you should be investing in money market funds or have money in a high yield savings account. That would almost always be my recommendation. If rates are high and you want to optimize more, you could theoretically do some type of CD ladder or a Treasury Bill ladder, but then you're losing out on the liquidity aspect of it. If you surrender a CD before it matures and you lose X amount of interest.

Josh Robb:

That comes to what is that short-term goal? Is it something that will happen within this time frame or at? So for instance, if you have a kid going to college in three years, that's not something that's going to surprise you along the way. You could use a CD ladder, or something that has a maturity date because there's a set time to it. But if it's a, "I'm going to need a new car in the next three years."

Chase Rose:

And then a year from now your car breaks down.

Josh Robb:

Think about it that way is when we're talking short-term goals, there's different goal types.

Chase Rose:

Correct.

Josh Robb:

So you may say, "Hey, CD ladder works for this goal but not this goal, because one has a set time, I know I'm it's to be activated, where another one could happen at some point, down payment on a house. Well I don't know when I'm going to find the house I want, so I want that liquid."

Austin Wilson:

And another thought, of the reason that volatility is something you don't want in this bucket at all. Keep it cashish, or cash plus yield. So money market fund would be what I would call that, is you don't want to have to sell that investment when it's down. So that's why you are pretty much taking zero risk here, and just buying things that are going to generate a little interest but no price movement essentially and be good to go.

Chase Rose:

The questions to ask is what's my timeframe? That's that short-term goal. But then how flexible am I with that timeframe? So if you have some flexibility, you could get a little more aggressive. If you say, for instance, "I'm going to want to get a car, but it's not essential, is I could stretch this out." So maybe it's that fun thing you're going to be doing. That short-term need could be a little more aggressive on the scale of things, because you said it's not an imperative thing. I could stretch that. I'm saving up for this big trip. Do I have to take it in three years? No, I could be a little aggressive to try to get more money if I'm willing to extend the timeline. So those are the questions you have to ask yourself when you think of what should I hold and where should it be held, because how often will I have to need it and will or can I be flexible?

Austin Wilson:

So let's take a step further in our duration of money needs.

Chase Rose:

Actually before we do that, I did have a couple facts that I wanted to share.

Austin Wilson:

Factoids.

Chase Rose:

This is also primarily dealing with retirees, but also can apply to if you're saving for certain goals as a non-retiree. Another reason we have a timeframe, we're looking at one to four years. And the reason that we do that is if you look at the last 50 to 60 years in the stock market, the average duration of a bear market from, and how we look at this, is from the peak all-time highs, to the bottom, and then recover back to where you were before. The average duration is 32 months. So if you have stock investments that you need within the next four years, and we go into a bear market right now, there's a chance that on average 32 months from now you will not have grown your assets at all, or it could even be lower than where it's at.

And I also, I prefer a two-year timeframe. Anything within the next two years, you should not be investing at all, just do some type of cash, or money market fund because the median bear market is 24 months from peak, to trough to peak. So that's why we're looking at a one to four year timeframe. And that itself is also based on the investor's risk tolerance. So if you're a conservative person by nature, maybe four years is more appropriate. If you're aggressive, maybe one to two years would be a little more acceptable.

Austin Wilson:

And that's why in our world when we're meeting with clients, a lot of things that we're recommending is getting that cash built up on the sidelines out of the market.

Chase Rose:

Absolutely.

Austin Wilson:

And that's in something, we call it a bear market fund is what you're alluding to here?

Chase Rose:

Exactly.

Austin Wilson:

2, 3, 4, whatever you're comfortable with risk tolerance wise, living expenses covered in something that's very not risky. Now we've invested it usually in such a way that it can generate a really good amount of income and yield, but it's not super risky. It's fixed income. It's usually shorter term fixed income. So that is the bear market fund concept. So you don't have to sell your equities like we already talked about, when they're down, right?

Chase Rose:

Correct.

Austin Wilson:

We're going to take a quick pause in this episode before we get back to today's topic. I want to take a quick moment to share something that could really help you on your retirement journey. At Hixon Zuercher Capital Management, we are all about making sure your financial life aligns with what truly matters to you. That's why we created the assessment, Are You Retirement Ready, over at hzcapital.com/quiz. It's a quick and easy quiz that helps you figure out how prepared you are for retirement. It only takes a few minutes and you might discover some great insights into what you need to do before you retire, both in the financial and non-financial aspects. So if you're curious about how ready you are to embrace this new phase, head on over to the website and check it out. Again, that's hzcapital.com/quiz. Now let's jump back into our conversation.

So now we'll take that step out. You did one to four, you got your short-term needs covered. I'm saving for those. I understand what's coming, or I'm flexible and can make that work. Middle term, talking midterm needs, bucket 2, 4, 10 years, somewhere in there. How would you guys invest that?

[12:57] - Bucket 2: Mid-Term Needs (4–10 years) 

Chase Rose:

Yeah, so Josh, you made a comment earlier, when someone has a goal in mind but not a specific preference on, I guess I don't have to reach it by this date. I can be flexible and reach it sooner if the markets do well, or later if the markets don't cooperate as well. And so that's what I would throw into this midterm bucket. If you have, for example, someone who is happy in the house that they're in now, but ideally someday they want to upgrade. So you start saving for a down payment on that house. If the market does well and your stocks pull their weight, you can buy a house in four years, or if they don't cooperate, maybe it's more like six to seven years. So this is the things that fill that bucket is more so if you're flexible on when this goal can be reached, then let's look more to a little higher stock exposure.

Josh Robb:

If the goal doesn't have a hard deadline.

Chase Rose:

Correct.

Josh Robb:

You can be more flexible.

Chase Rose:

Correct.

Josh Robb:

I do know a client, one of the things that comes to mind for me is they had this dream family vacation. There was no year that they necessarily needed to take it on, but they just said, "Here's something we've always talked about doing, I want to do." And they didn't want to wait until everybody was in their 60s, but they said, "Hey, it's pretty open, I just know I need X amount of dollars." That's a great goal for this midterm. It's like it's out there, but its market helps. We could go sooner. Market drags along, it could be a little longer. As long as there are tolerance and they're open to it, you could try to get there quicker by investing a little more moderate in your investments.

The other thing is just farther down the road. So let's say you have a ten-year-old kid, and you know want to save for their college. Well that college we know is eight years away. It's not coming any sooner probably, unless they're super smart or whatever. But you probably figure that out. But eight years, I know the timeframe, I could be a little more aggressive, at least the first half of this goal. And then it moves into that short-term bucket list. So it also may move from one bucket to another as that timeframe changes.

Austin Wilson:

And I would say when you're looking at investments for this way of thinking, again, this is a very wide timeframe we're talking about here, but this is where you move out of the cash and money market side of things, to you start if it's still on the shorter end of that, you maybe look at short-term bonds. You can increase your bond duration the longer that gets. But you also might start thinking about adding in some equity exposure. And by the time you're looking out 10 years or so, you might be looking at something like a balanced portfolio, which is what we're thinking of as like 60/40, or a 40, 50% equity, 40, 50, 60%, somewhere in there. But still a little bit less risky. We would be advocating for something like, "Hey, maybe some dividend stocks, maybe something that's producing a little income with less volatility, less downside."

Chase Rose:

Now you should always be diversified just for the sake of risk-return metrics. But even more so when you're talking about the shorter timeframe. Because if we have, let's say for example if the US stock market goes into a bear market, international stocks might still be doing well.

Austin Wilson:

Got to have it.

Chase Rose:

Right? So you're spreading your exposure not only across dividend versus non-dividend, but also just in the US compared to other parts of the world.

Austin Wilson:

Absolutely.

Chase Rose:

And another thing I would want to discuss here. I talked about bear market fund, bear market statistics. I keep saying bear market fund, it's a term that we use.

Austin Wilson:

I know you use it all the time.

Chase Rose:

I use it all the time.

Austin Wilson:

Yeah.

Chase Rose:

When we looked at the last 50 to 60 years, the longest bear market that we're looking at lasted seven and a half years. So personally, this is how I see it. When we're looking at a timeframe between four to seven years, I prefer to lean away from stocks, too much stocks at least. But if we get longer than seven, seven and a half, eight years, more towards that 10 year timeframe, that's when you can have equities. Because equities are the asset class that have proven over time to get the return that you want.

And then to allude on a topic from earlier talking about retiree spending. So you are certainly going to spend money every year, everyone does, and we're filling up years one through four, this is what you need over the next four years. We'll keep it in cash, conservative. The next four to 10 years, that's what we consider to be this bucket. And again, you mentioned earlier we look at more of a balanced fund, so a 60/40 stock to bond ratio. And that's how we would look to do this portion of a retiree's portfolio, depending on the risk tolerance obviously.

[17:37] - Bucket 3: Long-Term Needs (10+ years) 

Josh Robb:

Of course. And so you mentioned stocks being the best growth engine, historically speaking. That's what brings us to that long-term bucket,

Austin Wilson:

Long-term bucket, bucket three.

Josh Robb:

So we're thinking over 10 years. That's where equities show up more.

Chase Rose:

Absolutely.

Josh Robb:

And that's because they are the best growth piece, but they also have the most volatility.

Austin Wilson:

Absolutely.

Josh Robb:

And so you got to allow them that volatility to capture the long-term growth. And so when you have 10 plus years, that gives you the opportunity to stomach those ups and downs. At whatever risk tolerance you have, that's where you're going to put most of your equity.

Austin Wilson:

It's worth the volatility because it is proven to be the only asset class to outpace consistently inflation. So those one to four especially, but even getting closer to 10 years, you're not as concerned with inflation. Inflation over that relatively short of a timeframe, yeah, it'll be there, but it's not going to ruin your life. And hopefully the interest you're getting is offsetting some of that, but you're not worried about grow, grow, grow, grow.

Chase Rose:

Exactly.

Austin Wilson:

But if you're looking out 10 years, inflation compounds out more than 10 years, and it is where you need to have equities. They've just proven to be the only asset class that can really outpace over the long term. So that's where you're looking at long-term growth here. This is where we would say, "Yeah, equities are your friend." That could be individual stocks. We have individual stock portfolios here that we manage. Equity ETFs or mutual funds. Hopefully, like Chase said, globally diversified is a key metric for your overall portfolio because yeah, it can be international, emerging market, large cap, small cap, mid-cap, there's so many buckets. But you really need exposure to all of them to be diversified.

Chase Rose:

And understanding that with that bucket, we're talking long term, 10 plus years out. When you're a retiree and you have to get over the psychological hurdles that a bear market can bring, it's very refreshing, it's very calming to know that the majority of your stock exposure is earmarked for those spending years, 10 plus years out. So if we go into a bear market and the market's down from 20 to 30% from all-time high.

Austin Wilson:

I'm not touching it,

Chase Rose:

It's not fun, it's not.

Austin Wilson:

But it's not going to wreck your plan.

Chase Rose:

Correct. Because you know psychologically I don't need these dollars for another 10 years. And that can be really freeing for someone in that situation.

Josh Robb:

And then along with that bucket, the last thought of that, that long-term piece, you may have retired, you say, "Well, I'm retired now, I'm done." Well how long are you expecting to be in retirement?

Chase Rose:

Right. Exactly.

Josh Robb:

And then the second, remember we're talking about goals. Do you have a legacy goal? Because that timeframe for those assets may actually be beyond your life.

Chase Rose:

Correct.

Josh Robb:

And so even if you're 80, 90 years old, you may say, "I may not have 10 plus years. Why would I be invested?" Well, what are you hoping to have this money do beyond you?

Chase Rose:

Correct.

Josh Robb:

Should it be growing for that next goal, that legacy piece you're doing? So even when we're talking about this, remember we're talking goals, the length of those goals, not life expectancy or things like that. We're talking about what are those dollars really designed for in your ideal scenario? What's that timeframe? And that's what we're targeting.

Chase Rose:

I was talking with a client not too long ago, and they came into their meeting with us and they made the comment, they said, "Based on my age, Google or whatever article they found online, I should be X amount of stocks, X percentage of bonds in my portfolio because I am 75." Let's just use that for an example. And that is the thing that annoys me most with this whole discussion around stocks to bonds, how aggressive should you be? How conservative should you be? First off, you got to understand the client's risk tolerance. This person specifically has a very high risk tolerance. We know that just through a very long relationship with them, but also their annual withdrawal rate is 1% of their portfolio. And so think about 10 years of withdrawals, 10% of your portfolio, if you had 10% of your portfolio outside of the stock market, you had 10 years of living expenses covered.

Austin Wilson:

Correct.

Chase Rose:

That would be a 90/10 stock to bond ratio. I would say that that is a prudent investment for this client, but they think that they should be 60/40 because of all of these based on your age, all this stuff.

Josh Robb:

The rule of thumb is probably what they're talking about is you take 100 minus your age, and that's how much equity exposure you have. So if they're 75-

Austin Wilson:

I think that's ridiculous.

Josh Robb:

They're looking at that and saying, "I need 25% equity exposure."

Austin Wilson:

Or for a 30-year-old, 70%, no, you need to be 100% equity.

Chase Rose:

If you're saving for retirement...

Austin Wilson:

It's a hundred percent. I know.

Josh Robb:

And so that's the one thing that we talk through with our clients is, there's these rule of thumbs out there. They're there for a reason because for somebody who doesn't know or is dong it on their own.

Chase Rose:

They don't know what to do.

Josh Robb:

The worst case too is you're too aggressive and it scares you out of staying invested long term.

Chase Rose:

Correct.

Josh Robb:

But when you're mindful and taking a practical approach of looking through goals and reasons, more often than not, those things are way too conservative for what you're actually trying to do.

Austin Wilson:

Yeah, absolutely. And what actually ends up happening is the older you get and the further you get into your seventies, eighties and nineties, you probably actually have more risk tolerance than you think you do.

Chase Rose:

That's years of experience.

Josh Robb:

So that and you also say, I'm not running out of money.

Austin Wilson:

I'm not running out of money. I know what the markets are going to do. So yeah, exactly. So let's just put some practical takeaways at this whole bucket investing process. So let's just recap, short, mid, and long term. Those are the three buckets we talked about. One to four years, really conservative, just pretty much trying to get some interest. Four to 10 years, that middle-term thing. We can start edging out on duration, maybe on some bonds, but also maybe a little bit of equity exposure. Keep it conservative, keep it conservative. And then boom, long term, 10 plus we're willing to take on some risk. We are willing to absorb some volatility as well because we know, this is a Nick Murrayism by the way. Time kills volatility. And that's a lot of time.

It is unlikely to have a bear market the last 10 years. Not impossible, but unlikely. So therefore that's your growth engine. Keep that growing for your overall long-term plan there. But the questions you have to ask yourself is, "Hey, do I have too much cash? Am I too conservative with I'm giving up growth? Or am I too risky that I don't have enough cash to meet my short and mid-term needs?" And that is a question that only you can answer.

Chase Rose:

Yeah, correct.

[24:09] - Bucket Investing at Work & When to Talk With an Advisor

Austin Wilson:

It goes to each person's individual plan, individual goals, individual risk tolerances. And that's where I think it really comes down to having a professional. So talk a little bit about just why this is a great time to talk to an advisor?

Josh Robb:

Yeah, go ahead.

Austin Wilson:

I was just going to say, you can get so focused in on things or have a bias that having someone else talk through it with you helps bring that to light. You may be sitting there saying, "No, I need this much cash." And you have a professional walk through, well, what would you do with it? Why is it there? And walk through and see, what am I actually protecting against? And you may realize that my thought of what I need is different than what I actually really do need. And then the advisor's job too is to make sure along the way that as time goes on, those things all stay in the right balance. Because if you got to a retiree who's living consistently with withdrawals, that's going to deplete it. When do I refill it? Where do I refill it from? Having somebody help think through that and being strategic really helps to optimize it.

Chase Rose:

And ideally, what you should do, first and foremost, we've said this a million times, you have to create a plan. And when you're creating a plan, you should take the recency bias out of consideration. What's the market done over the last month? Who cares? It doesn't matter. What we're focusing on over 30, 50 plus years. What has the market reliantly gotten you in these certain investments? And then you should build your plan based off of that. At least annually. I would say annually is a good frequency. You should rebalance the portfolio to refill the cash from whatever has performed the best over the last year. If we're in a down market, you're probably going to sell some bonds to fund your living expenses for the next year. If we're in a bull market, the stocks are doing well, great opportunity to sell at a gain, at peak market levels, fill your cash up and then you're in balance for the next year. However, do not make a change to the plan based on recency bias. You should only make a change if your goals are changing. Correct. If you have a desire to spend-

Josh Robb:

Your goal or life situation change.

Chase Rose:

Correct. If you have a desire to spend more or less, that should be discussed. If you have a desire to do something for the next generation, that should be discussed. But if you're scared about markets, you should not make a change based on that.

Austin Wilson:

Probably the worst time you can do it.

Chase Rose:

Correct. Absolutely.

Austin Wilson:

Because you're only going to be scared when something's going on. And that's probably already past the time where you should have made a change.

Chase Rose:

Yes, exactly.

Austin Wilson:

So that's bucket investing. Chase's favorite topic in the entire world. So thanks Chase.

Chase Rose:

Let me cook. I was ready to go today.

Josh Robb:

The bucket investing, it pales to other things.

Austin Wilson:

Pales to other things. Absolutely. The dad joke made it in. So your homework, we don't often give homework to our listeners, but this week you got some homework. So take a few minutes, look at your situation, think about your short, your mid, your long-term goals, your needs. Is your money really where it should be? Just evaluate that. And this is a great chance to talk to your advisor and make sure that you're on track to have all those goals funded.

Josh Robb:

And when you have those buckets separated, this is another thing that we prefer at our firm Hixon Zuercher, is when you have the bucket separated, you know how each portion is playing its role in your portfolio. You know how your cash is doing, you know how your bonds are doing, you know how your stocks are doing and all of those different areas. So pay attention. If you have everything lumped into one account, it might be hard to decipher what's doing what, and how are these different accounts doing. But yeah, that's just our perspective on it.

Austin Wilson:

So that's bucket investing. If you found value in what we are saying, first of all, check out our website at TheWealthMindsetShow.com. We have our show notes and all the links and everything you can talk about and think about there. So check that out. Also, don't forget to hit the subscribe button on your player wherever you're listening to us, so you get new episodes when they drop. Follow us on social media because we're pretty active on there and we'd love to stay in touch. And always feel free to check out HZCapital.com, which is where Hixon Zuercher Capital Management is hosted. And we would love for you to check us out on the web. And thanks for listening and we'll see you next week.

Chase Rose:

Talk you later.

Thank you for joining us at the Wealth Mindset Show, where we tackle the complexities of finance and life planning to help you align your wealth with your values. We hope today's conversation provided value and clarity as you navigate your financial journey. Your hosts work for Hixon Zuercher Capital Management, and all opinions expressed by them or any podcast guest are solely their own, and do not reflect the opinions of Hixon Zuercher Capital Management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Hixon Zuercher Capital Management may maintain positions in the securities discussed in this podcast. There is no guarantee that statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment, and any investor attempting to mimic index performance would incur fees and expenses that could reduce returns. Securities investing involves risks, including the potential loss of principle, and there is no assurance that any investment plan or strategy will be successful.