Can You Hold My Attention? Dr. William F. Sharpe

It’s not every day you get to interview a Nobel Laureate. I am honored that Dr. William F. Sharpe sat down to talk with me about the Sharpe Ratio, retirement planning , and why his focus has evolved from accumulation of wealth for retirement and how firms can better manage those assets, to helping individuals plan to use those assets to finance their retirement. We also discussed his free eBook, Retirement Income Planning with Scenario Matrices, at length. You can access the eBook & software he references with the link below

  • Why the Sharpe Ratio continues to be important in planning today
  • The evolution of Dr. Sharpe’s career, and how his focus evolved
  • How scenario matrices can help people understand what it means to have enough to retire
  • Dr. Sharpe’s perspective on annuities
  • Why Dr. Sharpe is nervous about the U.S. economic outlook over the next five years

Download Retirement Income Analysis with Scenario Matrices (eBook and Software) 

Resources: Kingswood U.S.  | Can You Hold My Attention Archive on LinkedIn |William F. SharpeRetirement Income Analysis with Scenario Matrices (eBook and Software Download)

Related: Can You Hold My Attention? Jeffrey Kleintop

Transcript:

SPEAKERS

William Sharpe, Derek Bruton

Derek Bruton  00:00

Welcome to can you hold my attention. I'm your host, Derek Bruton. And thank you for tuning into my podcast. This is my eighth episode, I'm having an absolute blast with the shows. I've heard from many of you. And the feedback has been voluminous and very helpful. So please keep it coming. And please follow the show on Apple, Spotify, Google and Stitcher. . .

You know, throughout my 30 plus years in the wealth management industry, I've had the good fortune to meet many smart and impressive people. But I actually met today's guests before I even got a start in this industry. In fact, I met him during my sophomore year in college 35 years ago, I vividly remember bill sharp as a rabid college basketball fan at Stanford. Bill also served as an academic advisor to players on the team in the mid to late 80s. And I can still remember exactly where his seats were at maples arena, our home basketball court on the farm. At the time, I didn't know a Sharpe ratio from any other ratio. I only knew bill as a Stanford professor who just loved to watch college basketball, and as a friend to a bunch of wet behind the air college basketball players who occasionally needed a reminder about the importance of a college education. So fast forward 35 years, and I have the great pleasure of having bill sharp, a Nobel laureate and one of the most famous economists in history on my podcast. Welcome to the show, Bill.

William Sharpe  01:56

Thanks. It's a great pleasure to be here.

Derek Bruton  01:59

So I understand you're still brandishing the cardinal red and attending a lot of basketball games. Is that right?

William Sharpe  02:05

Yes, but I attend them as one does many things these days remotely. We live in Carmel, rather than the Bay Area. So it's basically TV time.

Derek Bruton  02:18

Yeah, that's that's true. I don't know what I was thinking, well, maybe I just maybe I'm just anxious to get back to to the norm again, so that we can all go back to basketball games. But as it turns out, the cardinal women's basketball team is doing very well and is entering the tournament. Unfortunately, the men are I don't even know if they're nit bound. I think they're not going to make it this year. But we'll see. We will see. So let's let's jump right in. You develop the Sharpe ratio in 1966 to help investors understand the return of an investment compared to his risk. And at its most basic level, if I'm understanding correctly, the ratios, the average return earned in excess of the risk free rate per unit of volatility or total risk. So Bill 55 years later, can you explain why it's still Sharpe ratio still erasure relative measurement?

William Sharpe  03:15

Well, I would say yes, it is used and I would also add misused quite frequently. My initial reaction is good grief, we have computers now, we can do more than this. Right? That said, the idea is very simple. As you say, the numerator is, on average, how have you done over and above some risk plus alternative, such as treasuries. And the denominator on the bottom is how much risk was entailed in getting that, hopefully, positive excess return. So it's excess return per unit of risk. And there's an argument that you should arrange your affairs. So that measure for your total portfolio is as high as possible, because you can always adjust your leverage up and down. But and if you have only one number to compute, the Sharpe ratio was certainly not a not a bad one. That said, it really doesn't apply in the same way four pieces of a portfolio, your equity portion, your fixed portion, this manager, that manager because then you get into correlations and other things. So I would say it's in some way misused. When you see as one does a report. Here's the Sharpe ratio for this part of your portfolio. Here it is for that part. That said, if you're going to use one number to evaluate a manager, the excess return per unit of risk is not a bad measure at least takes into account. Both aspects.

Derek Bruton  05:13

Hmm. Interesting. So when you develop this in 1966, do you have any idea, it would become a standard measurement and the industry like it has been?

William Sharpe  05:25

No, I, I entered this field as an economist who took finance, in the business school as one field of five for my PhD, and then sort of drifted into the field turns of my research and then ultimately in teaching. So now, I certainly have no idea. And I'm serve on, you know, investment committees of a number of nonprofits, as one does at this stage of life. And our advisors or our consultants dutifully bring in reports for every meeting where the Sharpe ratio for every little piece of our overall portfolio just managers Sharpe ratio that managers and impresses the other members of the committee until they realize, I don't know any more than they do.

Derek Bruton  06:23

Well, I you know, back in, back in the day when I first met you, I recall, my basketball coach having something called the Bruton ratio was that which was the ratio of Miss free throws to basketball games that I participated in. So I'm not nearly as proud of that ratios. I'm sure you are of yours. But let's fast forward a little bit to 1996 when you co founded Financial Engines with Stanford, Professor Joseph Grunfeld, grown Grundfest and lawyer in Silicon Valley named Craig Johnson, and Financial Engines use the technology, your technology to implement many of the financial theories in portfolio management and basically brought quality investment advice to people looking for help with their nest eggs. went public in 2010, when the firm managed, I think it was around 37 billion in assets. And then now today, many people know Financial Engines is Edelman financial that merged with Financial Engines. Now, it's called Edelman Financial Engines, and I think the firm's up to 200 billion in assets. And if I'm not mistaken, the largest ra in the country. What was you know, let's go back to 96. You know, what was the most rewarding aspect of the work you did with Financial Engines and with your partners there?

William Sharpe  07:45

Well, what our goal was to help individuals in 401 K and 403 b plans, make sensible decisions as to how they saved, how they invested in order to finance help finance their retirement at least. So that was the goal. And what we tried to do was to provide every employee in the firm that was our client, with information, here's how you invested, here's the risk, here's the return, here's the range of possible outcomes when you retire, etc, and to let them experiment with different portfolios, and see how that would affect the ultimate goal of retirement saving. And we use a lot of technology, we used returns based style analysis, to try to, you know, analyze the individual mutual funds, etc, that were available. And we used, obviously, MonteCarlo projections to the range of possible retirement incomes, they might have, etc. So we used a lot of technology and developed some additional technology, and began, we tried to make everyone in the firm in the plan. aware of the alternatives, what happens if I say more, what's the range of possible retirements that I might expect, given what I'm doing now? And what if I changed? And I think that was both exciting, and it was a way to apply a lot of theory to practice. And I think we help the people since, you know, I dropped out of the firm after shortly after it went public. So I can't tell you much about what's going on now. But that was certainly our intent.

Derek Bruton  09:58

Right? Well, it certainly seems like Like your intent was reached. And I know the firm has done a lot of good work and helping people in the accumulation phase of their life. And then after that, in 2017, just a few years ago, you wrote an E book called retirement income analysis with scenario matrices. And I read a bill and honestly, it was a little bit like a dog looking at a ceiling fan, just staring at a ceiling fan. I, I, it was a algorithm overload as I'd say, but, but I could tell it was quite interesting. And one of those things where, you know, hey, people smarter than me, I figured this out. And, and I skip to the the end that conclusion. But tell us a little bit about the work of, you know, what drove you to take on the topic of retirement income at this point in your career,

William Sharpe  10:53

I sort of think of myself as having three research and application phases. Originally, I was focused on individuals accumulating, and then, as part of that phase, then I guess you would call it maybe a second phase, helping defined benefit pension plans, better manage their assets. And then I turn to helping people saving for retirement, to manage their assets. And then I guess I'm getting to for now, and then I turn to helping people who are just retiring, plan, how to use their assets to finance their retirement, right after they stopped accumulating in their in the D cumulation. phase. So the book you mentioned, or ebook, I call it because that's the format it takes. And it's available for free. I wanted to write a software suite, to be able to generate 100,000 scenarios, say, of what might happen to you, and your partner, given your investments, etc. And so I took the easy way out, and I just wrote one ebook that had all the software in it, including here's how to write programs in MATLAB, as well as here's some investment theory, thereby guaranteeing almost nobody would do more than you have tried, and many would do less than that. But But basically, what I was trying to do was address the issues, you're retired, you've got Social Security, you've got your savings from your 401 K plan, you've probably got some other savings. What do you do? And what are some of the alternatives that people are offering, and provide the software so you could, you know, put that information for you into it, and get all kinds of analyses, hopefully, with the help of an advisor that will guide you through all this, in order to understand well, if I do this, here's the range of things that could happen if I do that. Here's the range that could happen. And in the process, I developed I think, some some new analytic techniques. And I'm a great believer, I call it scenario analysis, rather than MonteCarlo simulation, because I don't like the the idea to gamble. But it's basically, there are a lot of things that could happen to you, if you do this with your investments. And a lot of things that could happen to you if you do that with your investments. And the relatively easy part is generating the range of things that could happen to you. The hard part is figuring out a way to make that comprehensible to an ordinary intelligent human being. Who doesn't want to look at 1000s of probability distributions, one for each year, et cetera, et cetera. I have not solved that ladder problem, nor do I suspect, Will anybody really solve it. But it's a very, very difficult problem. And I wanted to sort of, take a whack at it, develop maybe some new techniques, try some things, experiment, and lay out at least the issues involved. And that's, that's what I set out to do.

Derek Bruton  14:46

So I want to dive deeper into this scenario matrices as you call them in your book, but I want to take a brief moment to take a break here and we'll be right back with Bill sharp. Okay. I'm just taking a break. Hear bill? Sure. Well, welcome back a bill, you go into depth about scenario matrices in your ebook. And by the way, for everyone listening, the E book is called retirement income analysis with scenario matrices. And as Bill just told us, it's free, look it up and take a read. But you go into the scenario matrices were used, the algorithms you've created to help determine whether a retiree will have enough income to live out the rest of their lives. And you mentioned the different scenarios, investment scenarios, but there's also life scenarios that play into these matrices. Is that right?

William Sharpe  15:52

Absolutely, yes. Yeah, one of the one of the, you know, a matrix is basically 100,000 different, multi year stories, you know, so there was a matrix of who's alive. And so in each in each scenario there as well, first three years, you're both alive, and then for another 10 years, the partner one is alive. And then after that, for three years, partner two is alive. And there are 100,000 of these alternatives, because there are lots of combinations if you think about it, right? And there's another one for, what's the market gonna do you know, what about riskless securities, and then from that you can generate income, well, here's the income, from Social Security, in all these different scenarios in different years, here's the income if I invest some of this money in this particular kind of annuity from a particular company, etc, etc. And then you add all those incomes together to find out in each scenario, in each year, what the income will be. And then you try to sit, sit back and say, well, with this strategy, I've got all these things that could happen. And then with that strategy, I've got all those things that could happen. And somehow other gets your mind around which of those two monstrous sets of data you would prefer to have. And then as you can imagine, lies the really hard problem.

Derek Bruton  17:29

So let's say you arrived at that, and you I picked Scenario number one, for example, that's, that's what I determined is the most resembling of my life. What's the conclusion that what's the to do after that, if you will?

William Sharpe  17:42

Well, I, I wouldn't let you look at one scenario, because because that's not the real world, you don't know how long you're going to live, you don't know how long your partner is going to live? You don't know how the markets are going to do? You've got to somehow rather say, Well, if I make this set of decisions, Visa V, my investments in annuities, then here's the whole range of things that could happen. If I make that decision, here's this different range of things. And therein lies the problem. How do you mean the only thing that you can pretty well say, well, Social Security, you can get your mind around, you know, if we're both alive, we get x, if I'm alive, I get y if your partner is alive, you get z. And that's pretty much yet. But But anything else? markets go up and down people die. You know, it's it's very hard.

Derek Bruton  18:40

So that's, that's why you bring in math, and that's why you bring in the algorithms is to, is to simplify all these different variables.

William Sharpe  18:48

I'm not sure it simplifies it. The question is, how do you when you're done, you have you know, 100,000 scenarios, and then each scenario, somebody lives somebody dies, you get a certain amount of income in the first year, and the second and the third? And the question is, how do you get your mind around that and, and I've tried to provide all kinds of different graphical outputs from which you can choose. And I'm also working with some friends who have behavioral psychologists, academics, see if I can get them interested in trying to figure out efficient ways to communicate this set of alternatives versus that set of alternatives. Because it's certainly beyond me.

Derek Bruton  19:40

So one of the one of the things I often hear from people is just the life expectancies from say 25 years ago versus now change dramatically, right with technology and with a focus on health and just all these factors going on the time the D cumulation phase of one's Life is grown. So that's that must play some part in the scenarios that you're talking about, right?

William Sharpe  20:07

Oh, absolutely. Um, you know, there's, you have to input mortality tables, the ones that I have in the version that's available are now sort of outdated. But you have to put in mortality tables, which indicate the probability of a 73 year old, a man who is 73, in 2031, will die in that year, assuming he's alive. And then another one for women, and you have all kinds of mortality projections. I might say, however, that the increase in longevity and which you alluded to, which has been huge, has shown some signs even before the pandemic of coming, if not to a screeching halt, at least slowing down. And now, it's everybody's guess, of course, exactly what will happen. But we've seen you've been seeing numbers saying, life expectancy for certain groups is now one year less than it was before the pandemic, which is a misleading number, because that assumes that there'll be another pandemic, when people make that kind of calculation. But social security and many I use actuarial data from the Society of actuaries. There are estimates as to how much better longevity will get for man for women, etc, year by year, those are what I used. But again, you know, those are all somewhat speculative, right?

Derek Bruton  21:51

Well, I know that mortality rate in the Bruton household is very predictable. If I don't clean the garage this next weekend, I'll know exactly how long I'll be living. But so bill, are you are you worried about baby boomers having enough income for their retirement? You know, taking the account, we just talked about what life expectancy but other factors as well?

William Sharpe  22:12

Absolutely. And, you know, we're saying two phenomena, which I read it well, three, in any event, we're seeing people enter this serious workforce later in life. And we're seeing people wanting to retire. And we're seeing people, as we've mentioned, living longer. And we're seeing people want to retire at the same age, people retired before them. And that kind of doesn't compute. If you're not entering the workforce until later, and you're leaving at the same time as before, then you've got fewer working years, right. And if you're living longer, you've got more retirement years. So all of that is a serious problem.

Derek Bruton  23:05

And what is, uh, do you think corporate America? And I say corporate? I don't mean just big companies, but any company for that matter that offers a 401k plan, and, and has has employees that are in this phase where they're saving for retirement? Is corporate america doing enough to help people manage their retirement income?

William Sharpe  23:26

I can't honestly say I know the answer, because I haven't been that close to it for the last decade or so. But I I suspect the answer is no, although you certainly hearing about lots of innovative products coming products that come combined saving with annuitization in the 401k plan while you're in the accumulation phase, and there's a whole raft of new products, partly because it's now allowed under federal regulations that allow you to start buying either pieces of an annuity while you're still saving, or pieces of an option to buy an annuity when you retire, right. So you can start locking in, you know, guaranteed income, or the option to have a guaranteed income on given terms earlier in life, which is a good thing. Assuming that people understand what they're doing.

Derek Bruton  24:34

Well, there's a lot of firms out there too. I know personally, some of my former colleagues that work with firms that are focused on wellness in the workplace and in helping helping investors understand their options, as they're as they're in the accumulation phase and, but it's oftentimes up to the plan sponsors the employers to be smart enough to recognize those needs out there and Know that there's a raft of options for them to, to go out use. But you got to be able to use them, right?

William Sharpe  25:08

No. Yeah, and absolutely no, I mean, that is a real burden on the employers. And we all, I would say obligation on the part of the employer to help their employees understand as much as they need to about this whole process.

Derek Bruton  25:26

Right. So what do you think is the best way for a near retiree? A lot of us, I think, thought we were near retirees until COVID hit and some other things went on. But But what's the best way for a near retiree to get a full understanding of their retirement situation? And then somehow get to some level of peace of mind?

William Sharpe  25:50

Well, the latter is an easier question to answer, to get to some level of peace of mind, they're probably going to have to save more, or work longer than they were hoping to. But again, it goes back to helping them understand at least the rudiments of what it means to have enough to in all likelihood, be able to retire comfortably. And, you know, the easiest way to be as sure as possible is to annuitize. Because otherwise, your your, your savings are gonna probably fund you and your kids or your universities, which is a good thing. Right, right. But just just that basic understanding. And so, I really think it's not something employers, probably really in the best of all worlds would want to do. But they're at the point where this can be done as well as it can be. So I think employers really need to help their employees understand as much as they need to, to make sensible decisions, including working longer.

Derek Bruton  27:10

Right? Well, and saving more, as you as you say, and saving more for sure.

William Sharpe  27:17

Yeah. So you save more tomorrow, Dick Thaler and other have pushed this idea with good cause. And which you sort of default your employees unless they tell you otherwise, you increase their contribution rate, you know, year after year, and as they are employed in the firm, till they get up to a greater savings rate. They don't have to, but if they don't do anything, that will happen. That's very helpful. Yeah. And it's been very, very successful, I would say,

Derek Bruton  27:51

Well, one of the one of the interesting things going on, one of the trends in our industry right now is holistic planning. And many advisors are very much coming around to under realizing that they don't just money, manage money in a vacuum for their clients that they need to look at a state and insurance and saving rates and the retirement plans and all that. So I think there are advisors in America bringing education to these clients who are in that accumulation phase. And for some advisors, it's tough, because these aren't the biggest clients. These are people that, you know, that might not have bought their first house, or they may not have children that they started saving for education, so, so really getting a grasp of that, of how much to save and how long to work, that sometimes maybe maybe the best thing to do is to talk to an advisor about that.

William Sharpe  28:44

Oh, absolutely. I know, no question about that. And, you know, one of the problems in the industry is that you typically when you read, let's say, you've just retired and you've got your 401k and some savings, and you need help. Typically, you would go to an investment advisor, or an insurance salesperson. And if you went to the farmer, you've got portfolios, if you went up the ladder, you got an annuity. And, you know, most people probably ought to have both. And so I think, false, given the present reality on the employer to try to help people understand those are two alternatives. And they're not exclusive. And they have rather different properties because the annuity allows you to pull longevity risk, the investment, generally, you have to fund the longevity risk, right. And so, so I think, at the very least people need a rudimentary understanding of that. And for many people that the right answer is both not But one or the other?

Derek Bruton  30:01

Yeah. Well, so let's talk about a vehicle out there with the aspects of both. When I grew up in this business it was it was a lot like, you know, when I went to Stanford, you're you're taught to hate cow, you're not sure why, but they're blue and gold, and they're across the bay, and you're taught to hate them

William Sharpe  30:16

I should say, I spent my freshman year at Cal and my rest at UCLA. So when football season, I was highly conflicted.

Derek Bruton  30:26

Well, I didn't know that part about you with cowbell, but I'm gonna continue this podcast nonetheless. So, you know, growing up on the RA side, what you're taught to hate is annuities. And there's plenty of firms out there we see all the times it's a very polarizing topic in financial services, this, the annuities and so do you think, you know, what are your thoughts just basically on annuities? And do you think some of the criticisms are deserved? Well,

William Sharpe  30:54

the first thing you have to worry about is, you know, what's the financial, you know, solidity of the provider? And yes, there are state insurance plans that will will help in the case of a default. But but that's, that's certainly something to be concerned with. And then I, I've looked at more of these annuities, especially the new fancier ones, than then I wish I had, and they are so terminally complicated. I mean, Social Security, which is, of course, the annuity, most of us have, is hard enough to deal with, you know, but but by and large, it's pretty simple in terms of what you get. And but then you have the choice of when you claim and all that, but some of these annuities, and I think some of them are possibly intentionally complicated. It's hard to understand. And some of them play to, you know, investors, hopes and dreams in ways that, you know, they could hardly never, they could possibly never understand, you know, with ratchets, etc. and exactly what does it do, and what's the chance that the market will go up more than 10% are far more than 20. They're very complicated. But somehow or other, we need to have advice from whomever that really doesn't care whether you buy an annuity, or invest your money, that somehow either either they're concerned with the client is sufficient, or their remuneration is not sufficiently affected by one choice or the other. It's and and one solution to that is to let the employer do it.

Derek Bruton  32:50

Right. But it certainly the the regulators have played a bigger part in and across the industry with every product in terms of enhancing transparency, or forcing the product sponsors to have enhanced transparency, particularly as it relates to the one dig, you always hear on annuities, which is the fees. And so and transparency is helping the industry bring down some of those fees. And I think that's going to be good because it does bring those two aspects, like you talked about earlier, the insurance plus the investment together,

William Sharpe  33:25

there's just a quick plug for my software, my graph where you can put an annuity these terms into it. And, and it will tell you, at least given all the many assumptions that go into it. Well, this is worth the benefits you're getting from this are x, and the cost is y. And the difference is presumably what the annuity providers getting. So you can get a sense at least. And this, this even works for some of these very complex products. So one of the things you can do, and again, I'm not offering the software as the be all and end all, but as an indicator of what good software might be able to do.

Derek Bruton  34:15

And you could find the software within your ebook.

William Sharpe  34:18

That's all available. It's you can download the software in one fell swoop.

Derek Bruton  34:24

Well, one thing I did see in their bill and I thought it was interesting was this concept of lockbox annuities. Can you briefly explain what you meant by lockbox annuities?

William Sharpe  34:35

I'm not sure I can do it briefly. Let me try. If you think about, think about sort of a plan where you spend each year in retirement your required minimum distribution. The IRS makes you pay taxes if you've got a tax advantage savings a 401k you have to pay taxed, at least on a certain percentage of that every year. So the first year might be 10%. And the next year, you're going to take out 12%, etc. And then the percentage grows. And that's a scheme that some people just use, they say, well, I'll spend 10% of what I have at the end of the first year, and then I'll spend 15%, of what I have at the end of the second year, etc. And that's, that's a retirement spending rule, you can use the percentages in the RMD. Or you can make your own percentages. Any event. It turns out, that's equivalent to having a lockbox, let's see, we're in 2021. So you've got a lockbox for 2022. And you've got some investments in it, then you have a lockbox for 2023. So in 2022, comes, you open that lockbox, and cash in the investments, and that's what you spend that year, right, etc, etc. So, the idea is you have a lockbox and the reason I call it a lockbox is you put in typically a nice index fund, and maybe the world market, bond portfolio, Bond stock portfolio, and some treasury bills Treasury stripped something like that safe asset risky acid diversified, you put that in and you leave it alone. And then in a year, you open it and spend it and the box black box for 2040 you put in and then leave it alone till 2040 and then spend it. And it turns out, if in each lock, but the most of these people who use this proportional spending rule, have a single investment fund, and they have it become more conservative, it starts off with more stocks. And then the next year you move more to bonds, etc, etc, right. So it's a decreasing risk portfolio. Well, you can do that in each of the lockboxes, too. But it turns out, if you do that, you are subject to what's called sequence of returns risk you bear when you take the money out not only the risk of how the markets done over this span of time, but also, you know how it moved around during the span of time. And that's a risk, which at least in theory is not rewarded with higher expected return. Taking market risk for the period of time is on average rewarded sequence of returns risk isn't the lockbox approach allows you to skip the sequence of returns risk. If you just put the different portions in. And then you know, you can do that yourself. Or you can let an insurance company do it and spread the mortality risk or longevity risk among a bunch of people. So you don't need as much money to get a given set of outcomes. Or you get better outcomes out of a given set of money. Now, of course, you may get better outcomes, but your kids in universities get nothing. So it's not a free lunch.

Derek Bruton  38:14

So that's fascinating as anybody kind of turned this into a product yet or have you spoken to anybody about this.

William Sharpe  38:22

I've spoken to people about it, but to my knowledge, nobody's turned it into a product. But you know, someone may have

Derek Bruton  38:29

or somebody might listen to this call. And if it if they end up turning into a product, maybe I don't know, maybe I can get a share of the royalties?

William Sharpe  38:39

Maybe you may, but I can't. It's all free. This is public domain.

Derek Bruton  38:45

Well, a just coming back to a broad economic question. That'll be the last one. From your perspective, Are you hopeful for the country in the in the economy over the next five years? Are we putting ourselves so far behind the eight ball that you're nervous about? You know, a lot of what's going on the future of America?

William Sharpe  39:05

Well, I'm nervous that I'm the latter. I'm nervous. Whether we're behind the eight ball and whether we put ourselves there or not, I you know, I leave to people who are more intelligent than I am. But no, I mean, as I say, the prospect and the demographics are not good. You know, we used to not have that many old people for the working people to support. And now the working people, as I said earlier, are working or trying to work fewer years. And they've got more old people to support per capita. There's some advantage they don't have as many kids to support, because you're having fewer children. But that then is that that's in many ways. The reason we've got so many, you know, old people and we've got a smaller base of working people to support them, we've got many, a lot more old people because people are living longer, which is a great thing. But I just don't think we've really adjusted to the current demographics, let alone the future demographics, which are going to be more challenging. And, you know, one way or the other people are almost certainly going to have to work longer.

Derek Bruton  40:26

Yeah, I agree. I agree. Well, well, Bill, it's it's certainly been a pleasure having you on the show today. Your impressive career has no end even as you sit there and enjoy beautiful Carmel, California and everything that area has to offer. I know your your mind still racing and looking to do what you can to help us who are struggling with what to do as we head into retirement, and then certainly what to do after retirement. But thank you again, I look forward to seeing you when we get back to to some Stanford basketball games again.

William Sharpe  41:04

All right. Well, I I really appreciate your you're doing this. It's been great reconnecting with you after all these many years. And hopefully, we'll be back. The team will be back with people in the stands. I may still be watching on television. But it's it's it's a great, great program. And we were all very lucky to have been at Stanford as as we were. Very much Derek this has been great fun.

Derek Bruton  41:36

Well, thank you again, Bill. And thank you all for listening today. You can again subscribe to can you hold my attention podcast on Apple, Google, Spotify and Stitcher as well as through our LinkedIn page with the same name. Can you hold my attention? Have a great day and stay safe everyone. Bye bye.

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