[Music] um Taco Bell tumtum says, Is there such a thing as being too spread out? 529, Ira, HSA, 41k, state, and said, Advised tax accounts, etc. So, it sounds like he has a lot of account types that he just listed. Would it not be better to try and consolidate as much as possible? What do you guys have to say about that? You to kind of answer the technical side, but I think this is Taco Bell tum tum. You are hitting on the dilemma of all financial mutants, is that you, when you start this journey out, um, you're maximizing, and that's why we did the financial order of operations to tell you what to do with your next dollar. But it's naturally going to happen that just by being good with money, you're going to have a bunch of different account structures. CU, you're letting the tax decisions kind of help influence and maximize all those decisions, but you're, as you start building complexity, 'cause success naturally is going to create

complexity. You're going to start having this echo that whispers, and you're going, I wish my life was simpler. I wish my life was simpler. And that's exactly what Taco Bell Tum Tum is alluding to. Yeah, I think a lot of people crave and desire simplicity, but we also crave and desire optimization. And the list of accounts you said, I don't think I wrote them all down, but 529, IRA, HSA, 401(k), and then state incentivized tax accounts. It's really unique. All of those have very different purposes. All of those are very different things. You know, your HSA, that's for healthcare expenses, and there are unique tax opportunities related to an HSA. 529, that's for a specific type of expense that you might have. There may also be tax incentives for funding that. IRAs, that can be traditional, Roth, or maybe that's a rollover from a previous employer. Those have unique places in your portfolio and

then the state incentivized tax account. There are some states that will allow you to open special types of accounts that are helpful to have should you consolidate them. Well, you have to look at the opportunity cost. Is the opportunity cost of consolidating them going to cause you to miss out on some opportunity? Now, I see this happen in the negative way where someone says, Hey, you know what I'm going to do? I'm going to go open 16 different high-yield checking accounts. I'm just going to move my money to get the highest yield at any point in time. I would argue in that scenario that the juice is not worth the squeeze. If you're just trying to get an extra 10 basis points, 15 basis points, and having all these accounts, there's a bigger chance you're going to forget to report one on your tax form, or you're going to forget where an account is, you're going to lose track of it, or whatever else. So, you want to make your financial life as simple as

possible, but as optimized as you can be. Unfortunately for financial mutants, the account structure you described is pretty common: employer-sponsored retirement plans, IRAs, you know, maybe back doors or Roth IRAs, HSAs if you have access, 529s. I just don't think there's going to be a huge way to get around that, and so long as you can manage it, that's great. Now, here's where I will say it's a little bit different. If you have six different 401ks from six different employers, used employers you used to work at, there's not a ton of benefit in leaving all six of those separate. You probably could consolidate those. But with the accounts that you listed, I don't think that consolidation is absolutely necessary because I think all those accounts have a very specific and unique purpose of why you have them opened and funded. Taco Bell put run it through these two filters: is the why and purpose being, you know, reflected and respected? Those things are going to keep you safe on a lot of that, and then realize

effective simplicity is always the goal. That's going so we want your system to be as simple as possible. But unfortunately, to be effective, sometimes you're going to have to have some complex or different account structures. But it's exactly back to the point of what Bo just said. If you've worked at three different employers and they're all at Fidelity or Vanguard, maybe you don't need all three of them. Effective simplicity would have you consolidate that down so that you have one less variable to take off the table. But that doesn't mean that you can necessarily go cash out all your 401ks so that you have less accounts and pay all the income taxes and all the other things. So that's why effective simplicity is always the goal, but understand the why and purpose for every account and every account structure in your plan. Okay, I go to say one more thing, sorry, because a lot of people say, Okay, but no, no, I want to diversify the reason

I have all these different accounts. I want to diversify. Just because you have a bunch of accounts does not mean you are diversified. You can hold the exact same investment in six different accounts, and you have zero diversification. On the counter side, you can have one single account but hold a bunch of different investments inside of it, and you are well diversified. So, don't miss out and misunderstand. I think just by spreading my money out, I'm accomplishing some goal that I'm not actually accomplishing. Someone said a comment that made me think of that. Well, we've had, we've heard people say, I don't want all my money at Vanguard. I don't want all my money at Fidelity. They're like, Ah, you know, I... And then we always have to have that discussion on the protections, the excess insurance, and then what actually are the real risks out there. Yep.

Can You Be Too Spread Out With Investment Accounts?

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