In a recent conversation, Ric Edelman and Anderson Wozny drew an unexpected yet powerful comparison between the infamous 17th hole at the TPC Sawgrass golf course and the decisions investors face every day. Whether you’re standing on the tee box or planning your portfolio, it’s all about how much risk you’re willing to take—and whether the reward is really worth it.

1. Golf and Investing: Know When to Go for It

The 17th hole at TPC Sawgrass is iconic, not just because of its island green, but because it embodies a fundamental principle of risk management. Golfers are faced with a decision: aim for the pin and risk landing in the water, or play it safe and go for the middle of the green.

Investors face the same dilemma—especially as they approach retirement. As Bill Hughes put it, sometimes it’s better to aim for consistency than to chase aggressive returns that could wipe out years of gains. Just like in golf, there’s no do-over when you’re close to the finish.

2. Paying IRA Fees the Smart Way

Frank from Pasadena raised an excellent question about IRA management fees. Should you pay them from your IRA or from a separate account?

According to IRS rules, it’s actually more tax-efficient to pay the fees directly from your IRA. Ric Edelman explained that these fees are not considered taxable withdrawals. So by letting the account handle the cost, you preserve cash in your other accounts and reduce unnecessary tax consequences.

It’s a simple decision that could help your money go further.

3. Teaching Kids About Money—Starting at Age Three

Yes, you read that right: age three.

Ric Edelman believes kids can start learning about money as soon as they can start helping make small purchases. He recommends parents teach four core money lessons:

• Spend a little now to understand value
• Save for something bigger to learn patience
• Donate to charity to foster empathy
• Withhold a bit as “taxes”—and then secretly invest it for a future lesson in compounding growth

Financial literacy isn’t just for adults. The earlier you start, the more prepared your kids will be for real-world challenges.

4. Money Market vs. Mutual Funds: Know the Difference

One viewer asked a common question: what’s the difference between a money market fund and a mutual fund?

Edelman explained it clearly. Money market funds are essentially very short-term, stable cash investments—like a savings account, but slightly more productive. Mutual funds, on the other hand, are diversified pools of stocks or bonds designed for long-term growth or income. Knowing which is right for your goals—and understanding the risk involved—is key to avoiding expensive mistakes.

5. The Racial Wealth Gap: A Call for Financial Empowerment

Ric Edelman and Bob Johnson took a moment to reflect on a troubling economic reality. According to Census data, the median white household has 10 times the wealth of the median Black household. Worse, 60% of African-American families are unlikely to reach the wealth levels of their parents.

Johnson emphasized that solving this issue isn’t just about policy—it’s about personal finance. Less consumption, more saving, more investing, and a stronger focus on financial education could go a long way. This is a generational challenge that needs both personal and collective commitment to overcome.

6. Don’t Get Caught in the Latest Investment Fads

From gold and commodities to options trading and annuities, fads in investing come and go. The problem? Many people jump into these strategies out of fear—especially during volatile markets—and then don’t know when or how to get back into long-term growth investments.

As advisors at a recent conference noted, moving to cash may feel safe, but without a strategy to re-enter the market, you could miss out on serious gains. Always ask: “What’s my long-term plan?”

7. The Truth About Money: It’s Never Too Late to Learn

Ric Edelman wrapped up the discussion with an important reminder: no matter where you’re starting from, financial literacy can change your life.

From kids learning about taxes through allowance “withholdings,” to Bob Johnson’s rise from poverty, to a curious pedicab driver asking smart questions about investing—education is the great equalizer. You don’t need to be wealthy to start learning. You just need the willingness to ask questions and the discipline to act.

All information provided is for educational purposes only and does not constitute investment, legal or tax advice; an offer to buy or sell any security or insurance product; or an endorsement of any third party or such third party’s views. The information contained herein has been obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness. Whenever there are hyperlinks to third-party content, this information is intended to provide additional perspective and should not be construed as an endorsement of any services, products, guidance, individuals or points of view outside Edelman Financial Engines. All examples are hypothetical and for illustrative purposes only. Please contact us for more complete information based on your personal circumstances and to obtain personal individual investment advice.

Neither Edelman Financial Engines nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to seek advice from qualified tax and/or legal experts regarding the best options for your particular circumstances.

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