NGPF Podcast: Tim Talks to Investor and Educator Paul Merriman
Paul’s passion for educating others about investing stems from his encounters with people who believed they couldn’t do it themselves. As a successful financial advisor, Paul had an unorthodox strategy to grow his business. He wanted to educate his clients so well that they would no longer need his services (and put him out of business). Needless to say, word of mouth spread about this incredible educator/financial advisor which ultimately led to a successful sale of his advisory business. This allowed him to focus on his passion to serve others. In addition to being a popular lecturer at Western Washington University, Paul is establishing a financial education center there with a goal of developing financial skills in all students. Still going strong at 75, you will be inspired by Paul's commitment to help the next generation through financial education (and also learn about target-date funds too!).
- 0:00–1:09 Introduction
- 1:10–2:19 Paul, the very active retiree
- 2:20–6:18 Helping people help themselves has always been the goal
- 6:19–15:36 The thing about index funds…
- 15:37–19:00 Dispelling common myths that young people have about money
- 19:01–23:24 How to build your portfolio for life
- 23:25–27:06 From the ashes of pensions, target date funds rise
- 27:07–27:33 A word from NGPF
- 27:34–33:28 Educating the naysayers & refuting their arguments
- 33:29–38:57 What he wants young people to invest in
- 38:58–42:33 Diversification is the key to financial success
- 42:34–45:36 Paul’s parting words for teachers
- 45:37–46:49 Conclusion
- Paul's website (over 20,000 subscribers)
- Charles Schwab
- Chris Pederson
- Paul’s study
- Most recent SPIVA report comparing active performance vs. passive index funds
His foundation funds a course informally called "Personal Investing for non-personal finance majors" at Western Washington University where Paul occasionally guest lectures.
Top 3 things to teach students about index funds:
- Low expense ratios
- A guaranteed market return
- “If you start investing in your 20s and not have waited until your 40s, you’re going to have more than enough. Yes, it would be nice to win the lottery, of course. But the fact is is that you don’t need to win the lottery, you don’t need to outperform the market if you could just capture the market return efficiently, safely as you can.”
- “What you find when you’re in the trenches with other people is that it’s fine to be aggressive when you’re young, but when you get to be 50 and 60 and 70, having all your money in the S&P 500 is not the right answer.”
- “50% of all the people investing in Vanguard… in a 401(k) plan… have all their money in a target date fund!”
About the Authors
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
Danielle is a native of Southern California and a recent graduate from the University of Maine, where she braved the frigid winters—a feat in and of itself—and earned her Bachelor's degree in International Affairs. She has a passion for working with non-profit organizations and serving populations in underprivileged communities. When Danielle isn't writing NGPF blog posts, spearheading various outreach projects, or managing contests and flash surveys, you can find her doing some sort of outdoor activity, learning a new hobby, or cracking what she thinks are witty puns!
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