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Episode #511 - Should I Continue to Own Bond Funds?
Roger: "I can't begin to tell you the things that I discovered while I was looking for something else."
-Shelby Foote.
Hey there, welcome to the Retirement Answer Man show.
My name is Roger Whitney, and I am here with Nichole "Rockstar" Mills. This is a show dedicated to helping you not just survive retirement but have the confidence to lean in and rock retirement.
Hey, Nichole, how are you doing?
Nichole: Permission to speak, sir.
Roger: I got my spiel. I got my spiel. Welcome to the show.
Nichole: Happy to be here.
Roger: I like that quote from Shelby about curiosity. You discover so many different things when you're looking for something else.
Have you ever done that where you've gone looking for a screwdriver and you find like a photo of your kids when they were like two and then you go off on this whole tangent? I love that.
Nichole: I live with someone who I'm pretty sure would have been like a mad scientist if he had been born at the right time so I'm constantly finding things I wasn't looking for. The most recent was a fish trap made out of a coke bottle.
Roger: Not in the water though.
Nichole: No, just in the house.
Roger: Okay. Well, today we're going to answer some listener questions.
Before we do that, I want to go to the books that I read in October, since we're at the beginning of November already. So, I finished three books in October.
The first one was Stillness is the Key by Ryan Holiday. Have you ever read any of his books, Nichole?
Nichole: No, I've heard you talk about him a lot. He's The Daily Stoic guy.
Roger: Yes, The Daily Stoic guy. Discipline is Destiny. Stillness is the Key. What was the other one? I have it up here. Ego is the Enemy. They're really good books. I like these on audio. I don't like a lot of books on audio. I like the way he writes. They're very tight with a good story. A good multivitamin of stoicism would be the way I'd describe his writing. So, I read that.
The second one was, I couldn't even remember that I had read this because I finished it early in the month, was The Count of Monte Cristo by Alexander Dumas.
Nichole: How was that? I've never read that one.
Roger: I didn't realize he's the same guy that wrote Three Musketeers. It was long. People talked a lot. They wrote in very long sentences, but it was a good story. It was a good story. I liked it. I want to go watch one of the movies. Now that I've read the book, I liked it. Yeah.
Nichole: Oh yeah. If you haven't seen it, I think Guy Pearce is in it. I remember it came out when I was in high school.
It was a good one. A good version.
Roger: Okay. There were like three or four versions. So, I always like to mix in classics. The last one I read is, let me find it on my iPhone. This was an audio book, and this is another really long book was Ken Follett's, The Armor of Light. This is a continuation of The Pillars of the Earth.
I really enjoyed that. I didn't realize that came out 30 years ago. This one took place in the. 17, early 1800s in England, rural area around this city that has a cathedral. It was a good story. It was a good story. So, two fiction books this month, and I only got three done.
I have other books that I'm started to read right now. Did you read anything of note in October?
Nichole: I started the Oppenheimer book, but I'm very jealous of your reading time because it's going to take me, I would guess at least another month to finish it.
Roger: It's a big book. It's a big book.
Nichole: It's huge, yes. Then you and I have talked a little bit about that generations book I picked up from the library that talked about different generations and some of their defining traits.
I am on the fence about whether I'd recommend it or not.
Roger: I told you to throw it out. I believe.
Nichole: You did. Yeah. Yeah. It was interesting, but not necessarily encouraging.
Roger: Yeah, well, you are not happy with what they said about your generation, right?
Nichole: Right, yes.
Roger: Okay. Well, that's the problem with generalities just like retirement rules though.
You talk about the withdrawal rate or a generation, but you're your own iteration. You're nothing like a lot of the things that you shared about the statistics of your generation.
Nichole: Well, thank you. I appreciate that.
Roger: All right. Love to talk about books and I'll let you know what I finish in November.
But for now, let's get on to your questions.
LISTENER QUESTIONS
All right, we're here to answer your questions. If you have a question for the show, you can go to askroger.me and type in your question or leave an audio question, and our first question, which is our title question, has to do with bond fund losses.
WILL IT BE A LONG WAY TO GET BACK TO EVEN ON BOND FUNDS?
Nichole: So, this question is from Maggie, and she writes in,
"We are sitting on a bond fund that incurred a 10 percent loss in 2022 down 30, 000.
Is this something that has the chance of recovery or is it going to be a long slog to get back to neutral?"
Roger: It's a great question related to bond funds. And when we have an investment, it’s important to understand the purpose of the investment. So, your core question, and this is going to be a optimized question, is it going to be a long slog to get this back to even?
The answer is maybe. It could be.
If you know the reason why you own something, you can put that into context in losses, right? You lost 13 percent; I thought bonds were safe is essentially what a lot of us are asking ourselves. How can I be down 13 percent in a bond fund when that's supposed to be my safe money?
Last year was a little bit of an outlier year because we also had a bear market in stock. So, we did not get much value from diversification. But if you go back to 2021, the bond index was down just shy of two percent and 2020 it was up seven and a half and then 19, eight and a half, et cetera. You can go back through history.
Last year was the culmination of the long-awaited correction in the bond market, literally since the early 90s. Interest rates have slowly gone down, and we've seen that in mortgage rates and what we pay on car payments, etc. I can remember in the early 2000s wondering when interest rates would go up, and here we are 20 years later, and this finally happened.
Interest rates went up after going down and down and down, almost to negative interest rates. Maggie, you felt the brunt of that. People had been anticipating this for 20 years, and it has never happened, and then suddenly, like things typically happen. Like, we got rained on. We walked Sherlock the other day, and halfway through the walk, we thought we'd beat the rain, and it finally came, and we were in the middle of nowhere.
Nichole: Nice.
Roger: Yeah. Last year was a very difficult year for bond investors because interest rates went up significantly. And when interest rates go up, the value of bonds go down and this happens very quickly, and you got caught in that storm. So now you're sitting here down 10 12 percent in your bond fund saying, Well, what's the point?
If it's part of a longer allocation, Ideally, what you would be doing is rebalancing every single year. So, assuming you were supposed to have say a 40 percent allocation to your bond portfolio, in theory, when you have bad markets, other things do well. Now, last year was an exception. Let's say the value of your bond portfolio went from 40 percent of your portfolio to 35 percent of your portfolio because it went down and did so poorly.
Ideally, over time, you would bring it back up to the same percentage, which is a back way discipline of buying low. As it's going down, you just keep buying more of it and then, as you go through cycles, since it's a long-term portfolio, You've been able to dollar cost average down and you've had interest payments that are buying more shares, so it all comes back up.
This is part of asset allocation, but when you look at it from just a point in time, like last year, it's like, am I ever going to get that money back? And it could take a long time. We don't know what interest rates are going to do.
The key thing here, Maggie, is the bond fund, right? Because you own a portfolio of bonds, not individual bonds.
If you had individual bonds, they have a maturity date. So even if they went down in value because interest rates went up, you wouldn't care as much because you knew they would mature on a certain date. And you just get the money back that was par value regardless of what interest rates are doing.
So, my rule of thumb is when you need the return of your money, say in your income floor in the near term, you want to use individual bonds because you care about getting your money back. If you're building a portfolio for 5, 10, 20 years, bond funds can be much more efficient because you have the reinvestment of interest rates, and you have enough time for cycles to happen, right?
When interest rates go down, the value of bond funds will go back up, and what will happen also, Maggie, is now that interest rates are higher, as the bonds mature in that portfolio, they'll be replaced with bonds that are going to yield a higher rate of interest, which means you're going to get paid more to own that fund.
So, I don't think you necessarily need to do anything as long as it's a long term portfolio, and assuming you're rebalancing.
Where you can get caught is if it's money that you know you're going to need on a certain date. That can be very problematic. That's where you need the return of your money, and that's where individual bonds might be more important.
But you just got caught in a really bad storm. People had been expecting the storm for the last 20 years, and we just happened to get it last year.
Now, Nichole, you'll be the independent arbiter. Did I answer the question, or did I just pontificate?
Nichole: I think you answered the question. Okay. He needs to know what role the money is playing in her portfolio.
Roger: Yeah. So as long as it's long term, if you're rebalancing, stay the course.
ABOUT A RECOMMENDED WITHDRAWAL RATE IN RETIREMENT
Nichole: All right. Our next question is a question about withdrawal rates. Anonymous. I don't know.
Roger: Yeah, actually they emailed this to me, and I forgot to copy the name, so I apologize.
Nichole: I know I'm like, there's no name.
So, it says,
"I've heard different discussion about the recommended withdrawal rate in retirement with 3 percent being the new number.
My question is when you're calculating withdrawal rate, is the yield or return on investments calculated into it? Say for instance, you had 2 million in retirement savings invested in dividends. Is the dividend income calculated in the withdrawal rate, or is the withdrawal rate calculated without those dividends?"
Roger: The simple answer is, in the studies that developed withdrawal rates, quote unquote safe withdrawal rates, they were just academic exercises to see what a withdrawal rate is. That is sustainable over a certain period of time, given some assumptions, and in that, the assumption is that we're including capital appreciation and dividend in the return characteristics of the portfolio.
So yes, it's assumed that you're getting market appreciation or depreciation, and also, you're getting the dividend reinvestment. The dividends aren't actually paying payout in that study, I believe they were assumed reinvested, and then you just sold your percentage each year.
That said, Withdrawal rates are not a way to base a retirement strategy, full stop.
They're a mathematical model to try to do some estimates and forecasting, but they are not a retirement plan or strategy and there is no right withdrawal rate. I won't go on from there, but yeah, they are included in those calculations on sustainable withdrawal rates.
Nichole: Yeah, I was expecting the question to be about it being 3 percent instead of 4%.
They kind of threw me a little bit on that.
Roger: That 3%, yeah, the original study, you're right, Nichole, done back in, I believe in the 80s, back testing said 4 percent was sustainable. That's actually a 4 percent adjusted for inflation, by the way, sustainable over a typical retirement period.
Now people have grabbed onto that framework like it's a plan and now it's all this big debate on well given today's situations what's the new withdrawal rate? I think that's just a horrible way to plan for retirement.
HOW TO FIGURE OUT THE NET WORTH OF A PENSION
Nichole: Our next question is from Gene about net worth.
He says,
"I've been listening for two years now and recently retired."
Congratulations Gene.
"You talked about net worth How do you figure out net worth of a pension? Why is it not figured like an annuity or an IRA? Part of my salary was taken out for the pension during my working year, so there's got to be a value for that, right?"
Roger: Great question. A net worth statement captures the value of assets you actually have.
Let's use your example there of an annuity, and this is going to be a feasible question when we think of the pillars that we're talking about. An annuity has a value, right? You put in a hundred thousand dollars into an annuity. It has a value that you can take payments from, you could take a withdraw from, you could surrender the entire annuity and put it into something else. That has a place on a net worth statement because there's some financial capital there.
But if you took an annuity, Gene, and annuitized it, meaning you got periodic payments and now you don't have any access to the 100, 000 in this instance that you put into it. It actually would not be on your net worth statement because you don't have a financial asset.
You have what we call social capital, just like a pension would be social capital, that you just have a guaranteed payment for the rest of your life, and that would be reflected on your income statement, not your net worth statement. And so that's why we don't include it there.
Now, if you have a pension where you haven't retired or turned it on and you have a choice of taking a lump sum or taking the pension payment, then you could put that lump sum in theory on your net worth statement.
So that's the distinction there, Gene.
There is another type of statement, which we call the household balance sheet, where we would put the net present value, say, of all of your pension payments to reflect it more like some financial capital that you have.
So, rule of thumb is that you're going to capture that in the cash flow statement. That's why it's not on the net worth statement. With your example of an annuity, if there's still money that you can control, then yeah, it's on your net worth statement, but annuitized annuity would now just be the same as social security in that instance. So hopefully that answers your question.
Were you laughing at me? Cause I'm doing hand gestures, and the zoom keeps trying to make thumbs up.
Nichole: It's just, I'm smiling because it all seems to come back to lump sum or the pension.
Roger: Oh, that is the most often asked question that we get about that.
A QUESTION ABOUT TRANSFERRING IRA FUNDS TO AN HSA
Nichole: So, our next question is actually not about that though.
Russell wants to fund his HSA and he says,
"I'm 62 years old and I have been told that I can complete a one-time transfer from an IRA to an HSA. Is this so and what are the specifics and mechanics of accomplishing this?"
Roger: Yeah, I had to look at this one, Russell, because I haven't done it. Real quick, I want to go back to that lump sum pension thing that you mentioned.
It is a very oft asked question.
It sort of makes sense, because that's the kind of question you got to be really careful about, because it's irrevocable. That's a question that you really want to slow down with when you're making it, because as soon as you make it, you can't unmake it. Whereas there's a lot of other questions that you can do very quickly, because you still have optionality.
It's like, so probably a bad analogy. You can make decisions on, yeah, I'll go on a date with that person really quickly. If you get married, you want to slow down on that decision.
Okay. Sorry, Russell. I digress. So, I had actually had to look this one up, Russell, because I have never done it.
You can make a one time, in your lifetime, transfer of IRA money, pretax money to a health savings account. When you do this transfer from an IRA to an HSA, you have to be eligible to make an HSA contribution, which means you have to be participating in what's defined as an HSA compliant plan or high deductible plan, at the time of the contribution, and you have to let the money stay that way for the next 12 months.
Getting this part wrong not only means you pay taxes, but you may also actually pay a penalty if you do that. The amount that you're able to transfer to the HSA is only to the level of the contribution limits within the HSA, but it's definitely possible if you think that's something that you want to explore, then you just want to do some research to make sure you do it correctly.
FEEDBACK ON WISDOM FOR OUT CHILDREN
Nichole: Our next question is really feedback. Ronald wanted to write in. We did our theme last month with wisdom for our children, and he wanted to share his.
He said,
"There's a tendency for children in their 20s to think, I know I need to save, but since I'm just starting out, I'll wait until I make more to start that 401k.
We know the superpower of time when it comes to investing. The longer, the better. But if your child starts investing 5, 000 a year at 8 percent return from the age of 22 until 30 and stops, versus if their twin starts investing 5, 000 a year at 8 percent return at 31 and invests until they're 65, the first child will have more money to retire."
Roger: Good advice. I think we have a few that I wanted to get in. Here's a audio one, Nichole.
Nichole: Oh yes. Play that.
Roger: Let me play this one.
Brad: Hi Roger.
This is Brad, a long-time podcast listener and one of the early members of the Rock Retirement Club. For your October Retirement Answer Man theme, Wisdom for Our Children, I'd like to share the following.
When I was in my early 20s and during a family gathering, my wealthy uncle pulled me aside to share some words of financial wisdom. He simply said, by the time you're 45, you should be earning as much from your investment portfolio as from your salary. This simple message stuck in my brain and motivated me to begin living beneath my means and investing the result in saving.
It was the impetus that launched me on my journey to personal finance learning and to financial independence.
Roger: Love that Brad love these simple heuristics that stick with you. Easy to remember and it set you on a whole different course and that could have been a throwaway comment on his part Which is beautiful.
It's amazing how certain things stick to different people. Thanks for sharing that.
This next one is from Kevin. Nichole, I’m playing this because I thought it was funny for you.
Kevin: Hey Roger. This is dad for five, long time listener You can imagine with five kids what the orthodontics bills are like, so I always tell my kids that when you smile, my 401k sobs.
Have a great day.
Roger: I just thought that was funny.
Nichole: That is funny.
HOW FAR BACK SHOULD A NEW LISTENER GO IN THE PODCASTS?
Roger: Our next one, Nichole, and this is a question for you, probably more than me.
"My cousin turned me on to your podcast and I am almost finished with your book. How far back should I go to listen to your podcast? Maybe there is a list of what to listen to, what is out of date, maybe you've rewritten some of the old stuff.
Eight years later, thanks
-Dwayne.”
So, a newer listener, how far back should they go? What do you think would be essential for them, Nichole? You have the privilege of listening to every single word I ramble on about.
Nichole: I actually had somebody ask me a very similar question to this at the roundup. I think it was a year or so ago that we did a series on planning for non-planners that I think was great for people that are not as into geeking out on spreadsheets and retirement planning.
We've done a couple of different agile retirements, you know, we did the eight pillars earlier this year, and then I think we did a series. Gosh, was that this year or last winter? We did the agile retirement planning process. We kind of walked people through it. All of the retirement plan lives are great.
Most of our content I think is evergreen except that obviously interest rates have done some weird things in the last couple of years that they weren't doing five, six years ago. So, I guess that's my major caveat. If you go back and listen to old episodes and we start talking about low interest rates and that just sounds wrong.
Forgive us.
Roger: Yeah, I definitely think this year for sure. The retirement plan lives are examples of conversations and might prompt some thinking because it's more of an interview style with a listener. Then the pillars, the four pillars, which we've now eight pillars, non-financial and for financial, we did a whole series on those.
As far as the old episodes, and I don't know the actual date or the episode number, but there was one where I did a little song on IRAs that is sort of special to me. So, you might check that one out.
Nichole: I'll have to see if I can dig that one up.
Roger: Oh, how I love my IRA! Anyway.
Speaking of something special, we had a little bit of feedback from Lynn who found us on YouTube, which we're actually starting this month with some YouTube Q& A videos.
So, you can go to youtube.com/retirementanswerman, and it might not be one here on the November 1st, but you'll start to see some video content. That way we can share some resources when we're answering questions.
A COMMENT ON MY YOUTUBE VIDEO WITH JOE SAUL-SEHY
Nichole: Now I see why you want this one.
Okay. Lynn wrote,
"I've been a long-time listener and I've really learned so much from your informational podcasts. I wish I'd started paying more attention back in my thirties, but your podcast gives me hope moving forward.
As I said, I've listened to it for a long time, but just last week I watched a YouTube video from Stacking Benjamins, and you were on with Joe Saul-Sehy at Camp FI. I couldn't believe how young you look. I almost didn't believe it was you until you spoke, and I realized, yep, that's Roger.
Anyway, I just wanted to let you know that your health mindedness is paying off in more ways than you think.
Thank you for all you do for us out here. You have a great influence more than you realize."
Roger: I read that one every day now, Nichole.
Nichole: Did you like print it out and hang it on your mirror?
Roger: Because when I look at photos of me, I do not feel that young.
All right.
Well, now let's move on to our bring it on segment and talk with Dr. Bobby DuBois on energy.
BRING IT ON WITH DR. BOBBY DUBOIS
So, it's the start of the month. We're going to bring it on and talk about the energy pillar of creating a great life with our guide, Dr. Bobby DuBois. Hey, Bobby, how are you?
Dr. Bobby DuBois: I'm good. I got my cup of joe right here and I've been sipping away. So, I'm good and ready.
Roger: This is like talking about the things you're not supposed to talk about, just like they do in politics or those rails that you're never supposed to talk about. We've already talked about alcohol and now we're talking about caffeine that just Googled right before we got on and I think Gallup says that about 63 percent of Americans drink alcohol, which actually seemed low to me. Then when I looked at how many people drink caffeinated beverages, we're at now at 85%.
This is an even more touchy subject for a lot of us, so we're going to talk about caffeine today.
Dr. Bobby DuBois: Yes, we are. Now it would be particularly touchy if I ended things by saying, man, I think everybody should stop drinking their caffeine. But the good news is to sort of give the punchline, it's a pretty darn good drug.
It is a drug, but it's pretty darn safe and people should continue to enjoy it.
Roger: I'm so glad that you led with That to just put us at ease related to caffeine, because depending on what time somebody is listening to this, they could react very differently. So, 83 percent of Americans drink a caffeinated drink?
Let's talk about how we consume our caffeine. Let's start there, I guess.
Dr. Bobby DuBois: Sure. So, a whole lot of people, as you say, have caffeine every day. 60 to 70 percent of adults drink coffee a day, and the average is about three cups a day. Then there are the tea drinkers and the Coca Cola drinkers, the Mountain Dew drinkers, the Dr. Pepper drinkers, as we'll get into a little bit later, chocolate eaters get a fair bit of caffeine into them. Of course, all the energy drinks that have become unbelievably popular in the last Sort of 30 years or so, so it's kind of everywhere and for a good reason.
Roger: Those energy drinks. I remember when they came out, I said, I'm just not going to go there.
I'm just not even to try one. because I might like it. I just felt that it was a slippery slope for me. From a dosage standpoint, when we say we drink a cup of coffee, what actually is a cup of coffee? This serving size issue came up with alcohol. So, I imagine that it comes up here too.
Dr. Bobby DuBois: Well, it does. It's also a kind of a historical perspective in terms of Americans and coffee drinking. I mean, I grew up as a kid in the sixties and my parents had coffee every morning. In those days, it was you open up the Folger's can of coffee, and then you count out scoops, and those scoops were one teaspoon for every sort of six-ounce glass of coffee that you're thinking of.
Now, since Starbucks and then Pete's Coffee and everything else, people's tastes have radically changed. So back then, a cup of coffee might have had 40, maybe 50 milligrams of caffeine. A cup of Starbucks today. If you get a grande, which is 16 ounces, it's probably 250 to 300 milligrams of caffeine. So, we've become, I don't know about addicted, whether that's the word, but certainly there's been a huge evolution from fairly thin coffee with not that much caffeine to today where it's a very different beast with a heck of a lot more kind of jolt then the original days.
Roger: When I think of the original days versus now and you reference Starbucks, which is where my daughter works, rarely does somebody order a cup of joe, right? Just a cup of coffee Generally, it's going to be a frappuccino or a name of a beverage that contains caffeine that has like four or five words. A lot of it being sugar oriented, so that's probably one of the big changes relative to just a teaspoon of sugar. Now it's like you get a Frappuccino, you're talking a thousand calories in addition to your caffeine.
Dr. Bobby DuBois: Right. That's a topic for another day.
Roger: Okay. Okay. So, given how we're consuming, is it okay? What's a good amount? Where do we go from here?
Dr. Bobby DuBois: Well, let's put some numbers by the amounts of caffeine, then maybe take a step back and talk a little bit about where all this come from, and then kind of figure out kind of where to go from there. So, a shot of espresso is probably about 60 milligrams of caffeine, which is not much different than a Coke. Coke is probably 45 or 50.
Black tea is a bit more, maybe 60 to 80 milligrams per cup of tea, and as I mentioned, Starbucks is about 300 milligrams. That's about the same as an energy drink, Red Bull, a monster, whatever it is, two to 300 kinds of milligrams. People used to take NoDoz in the old days. I don't know if anybody does that anymore, but that's about 200 milligrams.
Now I am extraordinarily sensitive to caffeine, and we'll talk a little bit later about genetics that are associated with this. When you do the math, I mean, it used to be, well, decaffeinated coffee back in the day sank, I guess it was 97 percent caffeine free, which sounded great but if you do the math and you multiply the 3 percent caffeine times a huge amount of caffeine in a Starbucks, a decaf Starbucks has the same amount of caffeine as a half of a Coke, 25 milligrams. I learned this one more recently, a dark chocolate bar has 25 milligrams of caffeine. So, if anybody has said, I had a hard time sleeping and I didn't have my coffee late in the day.
Oh, by the way, I did have a candy bar too before bed. There's real caffeine in candy, not in candy, but in chocolate, dark chocolate, more than milk chocolate. So just something to keep in mind as you kind of work your way through the day, three to 400 milligrams a day is probably fine. We'll get into a little bit later, what are some of the side effects and things that people might want to pay attention to, but those numbers are probably okay.
Roger: That's what actually, as you were talking, I was thinking about that of, okay, I'm hearing these milligrams, but what is the context? I think, man, if someone drinks three energy drinks a day, they're getting six to 900 milligrams per day. Okay. Okay.
Dr. Bobby DuBois: That's a lot, and you might have some downside effects from that in the short term.
It's fun to kind of go back into history. So, I was looking into, okay, so where did tea come from? I'm a meditator and I do remember my meditation coach saying, well, back in China and such, the monks used to drink tea because it would keep them awake all night while they meditated and get increased their attention and such.
Tea goes back to probably 1000 B.C. And China. Obviously came from the leaves of a bush. Coffee, now again, nobody knows any of this, but the legend of coffee's origin goes back to about 850 A. D. in Ethiopia, where you had a guy named Kaldi, who was a goat herder, and so he would be taking his goats here, there, and wherever it is, you take goats. I guess new places for them to munch on. All of a sudden in this location, they'd start hopping around like they were crazy, and he came to realize they were eating the berries of some plant, obviously something that had coffee beans on it and so that was probably the origin of coffee.
Roger: It's amazing how they can chronicle that.
Dr. Bobby DuBois: Yes. Well, they call these things legends for a reason. We don't know for sure.
Roger: What does caffeine actually do?
Dr. Bobby DuBois: Well, I don't want to get lost in biochemistry, so I'll keep this fairly superficial. So, the brain has all sorts of chemicals. People hear about dopamine and other kinds of things, but one of the things that floats around in the brain is something called adenosine.
Adenosine basically, when it's around, it causes you to feel relaxed and sleepy. So, what caffeine does is block the action of adenosine, so more caffeine, more blockage, and so you get the opposite of sleepiness. You get awakeness, and so it's a stimulant. It keeps you awake; it improves your focus. It improves your alertness, and that's how it works.
Now, what makes this wrinkle added to the story is it's not a pure play on caffeine. People say, ah, I react a little differently to tea, black tea, then I do to a cup of coffee and that's a real deal, because coffee has all sorts of other things floating around. that might give it antioxidant, anti-inflammatory properties. Similarly, tea has a whole bunch of other stuff.
The literature looks a lot at caffeine and coffee. There aren’t a lot of studies that compare decaf to regular or decaf tea to regular to say, well, is it the caffeine or is it all the other stuff floating around?
Now from a wakefulness standpoint, there's no question, it's the caffeine. But in terms of some of the other benefits that some people talk about, the anti-inflammatory and such. It could well be all the other stuff and likely is all the other stuff.
Roger: Yeah. I think of this as tea or coffee is food, whereas energy drink is food product, and so you lose a lot of the, I mean, this is complex stuff, right?
Dr. Bobby DuBois: The brain very much is and food is very much so.
Roger: I never realized that. Caffeine is called a stimulant, but it actually is a suppressant. It suppresses the substance that keeps us relaxed, but which in turn makes us, I didn't realize that. Interesting.
Dr. Bobby DuBois: Yeah. It's called an antagonist is kind of how you refer to it biochemically. It's antagonizing something else.
Roger: I guess we could talk about the positive benefits of caffeine. We probably feel like we're pretty. In tune with those us 85 percenters that consume caffeine, but what are some of the positive benefits?
Dr. Bobby DuBois: Yeah, I think people are obviously aware of the fact that for many, many, many people it makes them more alert now my sister, coffee does nothing to her. She loves drinking and she drinks it all the time and not to excess but it doesn't do anything for her. It doesn't really wake her up in the morning. So, for some people, the alertness isn't so apparent.
In your genes, there are characteristics that determine how quickly you break down caffeine. Some people break it down a lot and quicker and may have less impact of the caffeine and others are slower at it. So that's something you're 23 and me, if you got it, you could take a look and see what your CYP genes are.
But beyond the obvious stuff, "it makes me stay awake". There have been real scientific studies looking at athletic performance, things like if you're doing bench pressing, can you do it longer and with more weight? Can you sprint on your bicycle longer and harder? And there's a five to 8 percent power output increase.
That actually is really important. There is obviously discussion at the Olympics level and others to say, at some point, do we need to regulate caffeine intake before competitions or not. At the moment, I think you're pretty much able to do what you want.
The other thing that caffeine does, and again, people may not realize it, a lot of analgesics, over the counter analgesics that might have aspirin or whatever, also have caffeine in them.
And caffeine, at least for some people, dulls pain, dulls pain perception. For anybody who has done endurance runs or whatever. When you have that jolt of your gel with caffeine, for me anyways, not only does it give me some energy of the sugar and the caffeine, but any fatigue or achiness in my body feels better for a period of time.
So, it actually does seem to do something with pain perception. Asthmatics can help your lung function; it's been shown to do that. For some people, and I happen to be one of those people, If I have a jolt of coffee, it affects my appetite. I don't feel hungry for a number of hours. Again, this affects some people, and some it doesn't.
Now, these are all kinds of short-term effects, but coffee or caffeine has some long-term effects. There's some data to suggest it protects against Alzheimer's disease and even stronger data that it reduces the risk of certain cancers, liver cancer, and cirrhosis. If people want to look at kind of where the data is behind some of this. I've referred to this website before examining. com and they tend to focus a lot on sort of nutraceuticals and things like caffeine and others. So, you may take a look at that if you're interested.
Roger: I get the shorter-term impacts and I think a lot of us experienced those. When we start to think about these longer-term potentials of helping battle against Alzheimer's or certain kinds of cancers. How much should we take with a grain of salt?
Dr. Bobby DuBois: Well, I mean, there are studies, the NIH has something and maybe we can put the link in the 6-Shot Saturday. People can read it and see how convinced they are. Again, I have to go back to what I said earlier, which is we don't know if it's caffeine or all the other stuff.
I would guess the caffeine in and of itself may not be the protective agent for your liver and may well be all the other stuff that's in there and in teas. The neuroprotective against Alzheimer's, it could just be pure caffeine. I don't know. Or it could be the other stuff. And again, that's where science kind of leaves us a little bit wanting.
Roger: Now, I know there are some downsides to caffeine, and I think the first one That I see you mentioned is jitteriness and anxiety. I was halfway through my second cup of coffee yesterday on an empty stomach, and I could tell like, okay, I need to stop because I could tell that I was getting jittery. So that's definitely a potential downside, right?
I guess everybody's going to handle it differently.
Dr. Bobby DuBois: Exactly, and that also relates to your genetics and how fast you metabolize it. So yes, everybody who's drunk coffee, who gets an effect from coffee will know if they've had a little extra that they should not have had. They can feel anxious. They can feel jittery. Their heart can beat more rapidly. For some people, they're going to pee a lot more, which may be okay during the day, maybe not so okay at night.
What's important is that people who have heart rhythm issues, it does not appear to cause problems. I know that was, for a while, that was a big issue. Obviously, talk to your doctor if you, in fact, do have cardiac rhythm disorder problems, but it doesn't look like it's a real issue. It will increase your blood pressure in the short term. So, if you're going to the doctor and you'd like your blood pressure to look good, maybe have coffee on the way out, not on the way in.
The other is, and again, if you watch anything on TV and any sitcom, people who need their cup of coffee in the morning can be grumpy, they can have headaches, they can feel like, oh, I can't concentrate. So, there's the withdrawal aspect that's important. The other one, which again, if you're not paying close attention, it really impacts your sleep, and there are real studies. In fact, there was a meta-analysis, which is really a composite of 24 randomized trials, and they looked at people that drank coffee and compared to those that weren't, and looked at total sleep time, and the total sleep time went down by 45 minutes, and that's a lot. Deep sleep went down by 11 minutes. Didn't appear to have much impact on REM.
Each study was done differently, so I don't know when the coffee was during the day, when they went to sleep. I suspect it was probably fairly close to bedtime as opposed to looking at a morning cup of coffee and then the nighttime sleep.
For most people, you've got your 12 hours in between the two or 10 hours. You're probably fine. So, you can take a look at some of these studies and look for yourself. But if you have problems with sleep and you're sensitive to caffeine, do pay attention to how much caffeine you're having and how late in the day you're doing it.
Roger: I think that's the key to all this stuff that we talk about is. Obviously, consult your doctor and then experiment on if it's related to sleep when you consume your caffeine and tracking your sleep in some way and then control for that and see if it improves it or not.
Dr. Bobby DuBois: Exactly. I mean, the one thing I do want to mention is in my scouring of the literature, there does not appear to be any long-term ill effects from the caffeine. So yes, there's some short-term problems, but it'll work its way out of your system. You may have a bad night's sleep, but there does not appear to be any long-term problems.
So, we're probably not going to look back and say, Ooh, that was pretty dumb to be smoking two packs a day analogously with coffee. I don't think we're going to wake up in a decade and say, oh, that was awful.
Roger: When it comes to withdrawals and headaches and difficulty concentrating. Does that indicate a dependency of some sort? Or is it just your body is used to a certain rhythm and when it gets disrupted, it doesn't like it?
Dr. Bobby DuBois: Well, it's a drug. I'm not a mental health specialist or an addiction specialist. So, there are strict definitions of what becomes an addiction. It means that there's physical aspects to your body where withdrawal comes into play, and everybody knows alcohol and opiates.
Roger: I'm just curious.
Dr. Bobby DuBois: Yeah. If you want to be colloquial. Well, I guess there is certainly a dependence for some people, but it's something that goes away in a day or two, and it's not a big deal for most.
Roger: Okay. So, what do we do with all this information? The good news is, as you led with, you always lead with the headline, which is coffee is a drug, but it is not that harmful and has a lot of benefits.
What do we do with this information in terms of how we navigate managing consumption as it relates to our energy?
Dr. Bobby DuBois: Yeah, I think enjoy your coffee. Enjoy your morning coffee or morning tea. I underline the word morning. If you think you're having any problems with sleep that might be related to coffee, just tally up how many milligrams of coffee you're having, really easy to find on the web what the quantity of milligrams of coffee for different kinds of things and then adjust the timing and see how that goes.
See if it helps you at a workout. I mean, it can't hurt. Give it a go, and you might say, oh, gosh, this is my new routine. If you're having any problems, then dial it down and reassess.
I mean, this is a pretty easy one. People have pretty much dialed things up and down. already without this podcast, but I think I can sort of reassure folks that your morning Joe is probably just fine.
Roger: Would you agree with this? I would also think that there are compound effects. I remember when we talked about alcohol, one of the potential downsides of alcohol is that it decreases inhibitions related to eating and munching and things like that. I could see the same thing with coffee of one is, there's a downstream effect. If you take coffee as a frappuccino, you could consume a lot more calories than you intended because we don't think of it as a sugar drink. We think of it as coffee.
Also, the sleep aspect and you know, the compounding of how important sleep is, and I know we've had that conversation before.
Dr. Bobby DuBois: That is a very cogent observation.
Back in the day, sort of 20 years ago or so, when I started thinking about caffeine and coffee, there was a whole flurry of epidemiologic evidence suggesting coffee was really bad for you, and they looked at people over 20 or 30 years and how much coffee they had. This was part of courses on epidemiology, how to read studies and why epidemiologic studies can have problems.
It had nothing to do with the coffee. It had to do with the fact that back in the day, back in the 60s or 70s, when people had a cup of coffee, they invariably had a cigarette. So, what you were really measuring wasn't the ill effects of the coffee, but the ill effects of the cigarettes that were associated with the coffee drinker, and somebody who has a cigarette with their coffee has cigarettes without their coffee, so on and so forth.
Now, fast forward, what people haven't yet fully analyzed is what you're getting at, which is nowadays, a cup of coffee isn't just this zero-calorie entity not only is a frappuccino a heck of a lot more calories, but often when people sit down with a cup of coffee, they're having a danish with it or my sort of passion, I love donuts.
Roger: Really, you love donuts?
Dr. Bobby DuBois: Oh, I love donuts. I love all sorts of bad stuff.
Roger: What's your favorite donut?
Dr. Bobby DuBois: I'm a cake dough person and buttermilk glazed is what I go crazy over. I do love apple fritters as well. The fluffy crispy creams can be good, but I tend to go for the dense stuff.
So that's where the potential downside could be with all the associated calories, either within the drink or alongside it. So, keep that in mind.
Roger: I wanted to peg you on the donut because many of you have not seen Bobby. Yeah, he's a lean guy. He's getting ready to do an Ironman, a half Ironman in November, works on his ranch, and he talks about all these health things for energy, but Bobby still enjoys doughnuts.
I think that's important because it can always feel like, well, I can't live that kind of monk life in doing all of this thing to have energy. You can still enjoy doughnuts or pizza or whatever your jam is. I think it's good to remember. Good to remember.
Dr. Bobby DuBois: That could be a topic for another day.
Roger: All right and then in October, we're going to have a meetup in the club around caffeine and we have some good questions on the amount that we consume, et cetera. And that's actually interesting data for me to get an idea of what a thousand people cohort, how they consume. I think it's interesting data for me anyway.
All right, Bobby. Thanks for hanging out and helping us build our energy in a thoughtful way.
Dr. Bobby DuBois: Well, thank you and until the next time.
TODAY’S SMART SPRINT SEGMENT
Roger: On your marks, get set
and we're off to set a little baby step you can take in the next seven days to not just rock retirement, but rock life.
All right in the next seven days since we talk about books, and I love recommendations on books. If you are on Goodreads, which I just started using again, we created a Retirement Answer Man group where I will share books that I'm reading, and you can share books that maybe have inspired you to rock retirement.
Nichole, you are our first member to the Retirement Answer Man Goodreads group. How do you feel about that?
Nichole: I'm excited. I'm glad you're on it again. Because I love at the end of the year, that little like digest they put together of like how many pages you read in the year and what was longest book, shortest book, how many books total.
That brings me joy every year.
Roger: I have no clue what you're talking about, but I'm excited about that. I think it's also going to help me, Nichole, because I have a problem.
Nichole: What is your problem?
Roger: Shauna will concur or agree with this. I got too many books. If I want to read a book, if I hear about a book, I’m like oh, I have to read that, my default is just to buy it. I have so many books I haven't read that I've bought. I need a place to keep books I want to read without me actually buying them.
Nichole: Like the library?
Roger: Well, not buying them before I'm ready to read them, right? I'm a hoarder of books. I'm a reading prepper.
Nichole: What if you borrowed them from the library, and then if you loved them, you bought them?
Roger: I don't think they would appreciate me tagging and highlighting.
Nichole: Duh! You can in electronic copies. It's not okay in the library's real-world version.
Roger: I do read on Kindle, but if I end up liking the book, I end up buying the book.
Nichole: So, do you read on an actual Kindle or just like on the Kindle app on your phone?
Roger: Actual Kindle.
Nichole: You like that?
Roger: Much better than on the iPhone or iPad for sure.
Nichole: Okay. Yeah. I've been reading the Kindle app on my iPhone and I find I just don't like it.
Roger: Don't do that. You need a Kindle. Now I know your Christmas gift. So thank you.
Nichole: Yay. Thanks.
Roger: Yes. Kindles are not the blue light and yeah, I like one purpose items for stuff like that.
So, your action item, sorry, we digress is if you're on Goodreads, join the Retirement Answer Man Goodreads group, and we'll have a link to it in our 6-Shot Saturday email.
CONCLUSION
Thanks for hanging out with me today, Nichole.
Nichole: Thanks for having me, Roger.
Roger: How do you feel about November? It's already November.
Nichole: October just really flew by really fast.
Roger: Remind me, what were you for Halloween?
Nichole: We were Princess Bride.
Roger: Who were you?
Nichole: Oh, I was Buttercup.
Roger: Which is, remind me.
Nichole: She is the Princess Bride. There's not a lot of female characters in the movie. Which works when you have three sons, but...
Roger: No, there isn't! There's like, two.
Nichole: I think there's Billy Crystal, uh, what's... Carole Kane? Is that her name?
Roger: She's funny. She was in Taxi.
Nichole: Yes.
Roger: Yes. Okay. So, you were Buttercup.
All right, everybody. Thanks for hanging out with us. As always, we are focused on you rocking retirement and actually doing this stuff free from advertisements and sales as much as we can and always curious and always authentic. Appreciate you being with us.
Nichole: Happy November!
The opinions voiced in this podcast are for general information only and not intended to provide specific advice or recommendations for any individual. All performance references are historical and do not guarantee future results. All indices are unmanaged and cannot be invested in directly. Make sure you consult your legal, tax, or financial advisor before making any decisions.