Should I Have Private Equity in My Portfolio?

02/26/25 • 44 min

1 Listener

In this episode, we tackle the complexities surrounding private equity in retirement portfolios. Join Roger as he navigates a listener's inquiry about the necessity and implications of investing in private equity, especially in light of recent discussions and literature on the topic. With insights from investment expert Peter Lazaroff, we explore the pros and cons, the importance of having a solid retirement plan, and whether private equity is truly a beneficial addition to your portfolio. Tune in to gain clarity and confidence in your retirement investment strategy!

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

(00:00) Complexity is your enemy. Any fool can make something complicated. It is hard to keep things simple.-Richard Branson
(00:38) Today’s episode is about private equity.
(01:33) Roger reads an email from listener Dave with a question about investing in private equity.
(02:28) Roger says that this episode features his opinion and judgment on private equity.
(06:45) Don't think about private equity until you have a vision for what you want your retirement to look like.
(10:20) Consider the second order consequence of making an investment.
(12:00) Unless you are significantly overfunded and have an interest in private equity- Roger thinks private equity is unnecessary for creating a great life.

INTERVIEW WITH PETER LAZAROFF

(14:10) Introduction of Peter Lazaroff, author of Making Money Simple
(16:39) What is private equity?
(17:38) Who is traditionally invested in private equity?
(26:12) When markets are under stress, private equity correlations go a lot higher.
(27:49) What is the normal fee structure for investing in private equity?
(31:15) What you're seeing more often these days are semi-liquid funds that offer liquidity windows.
(34:30) There is no evidence to suggest that fewer companies going public is causing an issue.
(40:15) We can’t predict when a bad decade of returns is going to come.
(41:35) Peter: I am more concerned about implementing a bad idea than missing out on a good one.

SMART SPRINT

(42:39) In the next seven days, take a moment and remind yourself of the purpose of retirement planning which is to create a great life.

BONUS

(43:20) Roger reads an excerpt from his grandfather's WWII journal.

REFERENCES

Show notes created by https://headliner.app

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

(00:00) Complexity is your enemy. Any fool can make something complicated. It is hard to keep things simple.-Richard Branson
(00:38) Today’s episode is about private equity.
(01:33) Roger reads an email from listener Dave with a question about investing in private equity.
(02:28) Roger says that this episode features his opinion and judgment on private equity.
(06:45) Don't think about private equity until you have a vision for what you want your retirement to look like.
(10:20) Consider the second order consequence of making an investment.
(12:00) Unless you are significantly overfunded and have an interest in private equity- Roger thinks private equity is unnecessary for creating a great life.

INTERVIEW WITH PETER LAZAROFF

(14:10) Introduction of Peter Lazaroff, author of Making Money Simple
(16:39) What is private equity?
(17:38) Who is traditionally invested in private equity?
(26:12) When markets are under stress, private equity correlations go a lot higher.
(27:49) What is the normal fee structure for investing in private equity?
(31:15) What you're seeing more often these days are semi-liquid funds that offer liquidity windows.
(34:30) There is no evidence to suggest that fewer companies going public is causing an issue.
(40:15) We can’t predict when a bad decade of returns is going to come.
(41:35) Peter: I am more concerned about implementing a bad idea than missing out on a good one.

SMART SPRINT

(42:39) In the next seven days, take a moment and remind yourself of the purpose of retirement planning which is to create a great life.

BONUS

(43:20) Roger reads an excerpt from his grandfather's WWII journal.

REFERENCES

Show notes created by https://headliner.app

Previous Episode

Retirement Plan Live Debrief with Tanya Nichols

💬 Show Notes

In this episode, we explore the essential questions of retirement planning with financial expert Roger Whitney and guest Tanya Nichols from Align Financial. They dissect the case studies of Laura and Nick, highlighting their unique approaches to retirement and how their lifestyles influence their financial decisions. Tune in for insights on spending, confidence in planning, and the importance of resilience in your retirement strategy!

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

(00:00) Stage one of retirement planning involves answering the central questions
(00:54) Today, Roger chats with Tanya Nichols about the Retirement Plan Live case studies.

DEBRIEF WITH TANYA NICHOLS

(02:40) Roger introduces Tanya Nichols with Align Financial.
(03:28) Roger and Tanya discuss Laura’s RPL plan.
(05:25) What risks are associated with having a lean spending plan?
(08:35) Once people realize they can achieve something, they pause and evaluate reality.
(09:58) Roger asks Tanya how she determines how hard to push clients when they're afraid of the next step.
(12:10) Tanya and Roger discuss Nick’s RPL plan.
(14:50) If you have a plan that is feasible and resilient, you will likely have an inheritance even if it isn't planned for.
(17:00) Roger talks about the importance of a resilient plan.
(21:18) Roger and Tanya compare/contrast Nick and Laura’s plans
(23:10) Roger asks Tanya how she incorporates current world events into retirement and life choices.

LISTENER QUESTIONS

(25:06) John asks a question about best utilizing extra income.
(29:38) Edward asks a question about diversification versus safety.

SMART SPRINT

(38:21) In the next seven days, I encourage you to start organizing your tax documents and get them to your CPA as early as possible.

BONUS

(39:34) Next installment of Roger’s grandfather’s WWII journal.

REFERENCES

Show notes created by https://headliner.app

Next Episode

What Life Expectancy Should I Use in My Retirement Plan?

💬 Show Notes

In this episode, Roger Whitney tackles the critical question of life expectancy in retirement planning. With statistics from the CDC, he guides listeners through the complexities of determining how long they should plan for their retirement. Roger addresses the cognitive bias known as the "curse of knowledge," providing clarity on how to approach life expectancy assumptions. He also shares insights on the importance of using personalized data rather than general averages, and discusses practical tools for assessing longevity. Tune in for valuable advice that can help you plan confidently for your future!

OUTLINE OF THIS EPISODE OF RETIREMENT ANSWER MAN

(00:00) What life expectancy should you use in your retirement plan?
(00:39) We have a change happening to our Six Shot Saturday email.
(02:18) Roger discusses the concept of ‘The Curse of Knowledge.’
(03:38) Listener, D.S., sends in a question about life expectancy in retirement.
(05:58) Roger discusses how to interpret the data from the Social Security Administration life expectancy calculator.
(9:30) Roger uses age 92 for a male and 94 for a female for a base assumption in retirement planning.

LISTENER QUESTIONS

(11:26) Thrift savings plans will allow Roth conversion starting in 2026.
(12:13) Karen asks about the pie-cake and the purpose of a 6 month emergency fund.
(15:35) Karen asks a second question about suggestions for saving vehicles that are not US treasury bonds.
(17:27) Evan asks “How does a pension figure into a net worth statement?”
(22:00) Gene asks how to look at the total allocation of your retirement portfolio.
(25:00) Roger reads feedback from listener Scott about last week’s episode.

ROCKING RETIREMENT IN THE WILD