Ep 104How to Invest Wisely in 2026
The biggest misconception about investing success
A big part of being successful in investing is minimizing your missteps. It's not getting the big grand slams.
Jonathan Shenkman
How to Invest Wisely in 2026
with Jonathan Shenkman
Money is a tool, it's not a scorecard. You're not going to get a prize if you're the richest person in the graveyard.
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Quotes
“You can't just save the money. It has to be invested the right way because inflation will eat away at your buying power.”
“There's no need to invest in individual stocks. It is basically gambling.”
“Take 5% or less of your investable assets, open up what I call a cowboy account and do whatever you want with it.”
“Diversification always means apologizing for something.”
“A good rule of life in terms of investing is to avoid what people say in the kiddush club, on the golf course, or in the coffee room.”
“A big part of being successful in investing is minimizing your missteps. It's not getting the big grand slams.”
Takeaways
- 1 Pay yourself first. Money you never see in checking, you don't spend - and what's left can be spent guilt-free. His 2026 figures: $24,500 into a 401(k), plus $8,000 catch-up at 50+, or about $11,500 at ages 60-63.
- 2 Which retirement account you get depends on how you're employed (403(b), 401(k), SEP, SIMPLE, 457). Use your employer's plan and match first. A couple each maxing out for 30-40 years will likely be in very good shape; if you can only do a little, start anyway.
- 3 Time beats amount: starting at 25 with $4-5K a year beats starting at 45 with $24K. Save hard before kids and a mortgage, while costs are low.
- 4 Match the account to the time horizon: money for a simcha in 3 months goes in high-yield savings or a money market; money for 8 years out can be invested. His buckets are a Roth 401(k), a taxable account, UTMA accounts for the kids, and a 529.
- 5 For bar mitzvah or wedding savings, open brokerage accounts in your own name nicknamed per child. A UTMA becomes the child's money at 21 in New York, and they can spend it however they like.
- 6 Consolidate and review: a client with 25 accounts at 18 institutions found $500K of forgotten IBM stock certificates in his basement. Update beneficiaries, or an ex-spouse could inherit everything.
- 7 Diversify across US large, small and mid cap, international, real estate and bonds. Use funds, not single stocks - Boeing cut its dividend to zero and the stock halved. Keep speculation in a "cowboy account" of 5% or less.
- 8 The S&P 500 is heavy in tech. Near retirement, watch sequence-of-returns risk (2022: stocks down 20% and bonds down 18%) - keep 2-3 years of expenses in cash. The 2000-2009 "lost decade" was roughly flat.
- 9 Avoid alternatives (opaque, high-fee, tax-inefficient), anything you don't understand (Munger's "too hard pile"), and promises of steady returns with no losses - Madoff showed about 10% every year.
- 10 Spend on what enhances your life once the basics are covered. Give by framework: family first, then local (shul, mikvah, school, food bank), then Israel, then friends' causes.