Ray Lucia charged by SEC - "Buckets of Money" Sep 5, 2012

[dodonnell]

"Buckets of Money" has been mentioned, suggested, and discussed on this forum in the past. Some have even read Lucia's book.
... it appears to be a complete fraud:

SEC Press Release

A few of the Bogleheads threads:

• Bogleheads vs Lucia three Buckets
  Lucia's Bucket #2
  Ray Lucia

Ben Stein promoted Ray Lucia

[staythecourse]

Another reminder of the ageless advice of the late Harry Browne, "Keep as few a people from you and your money as you can".

Good luck.

[clacy]

Of all the sharks out there in the investment world, they choose Ray Lucia to pick on? Jon Corzine walks free, they're going after Lucia.... Unbelievable.

[BYUvol]

Alot of Bogleheads say backtesting has little benefit, so maybe Ray was a true Boglehead after all.

Moral of the story: If you are going to be an advisor, do lots of things you don't truly believe in to cover your own tail.

*Edit* 2nd moral: Honesty and transparency are good business practices in the long run.

[Grt2bOutdoors]

"Buckets of Money" has been mentioned, suggested, and discussed on this forum in the past. Some have even read Lucia's book.
... it appears to be a complete fraud:

SEC Press Release

A few of the Bogleheads threads:

• Bogleheads vs Lucia three Buckets
  Lucia's Bucket #2
  Ray Lucia

Ben Stein promoted Ray Lucia

I can smell the lawsuits coming for all parties involved.

[tyrion]

I hope I never need to hear his radio show promos again. They are truly awful, even worse than listening to the show itself.

[BornInCA]

"Buckets of Money" has been mentioned, suggested, and discussed on this forum in the past. Some have even read Lucia's book.
... it appears to be a complete fraud:

SEC Press Release

A few of the Bogleheads threads:

• Bogleheads vs Lucia three Buckets
  Lucia's Bucket #2
  Ray Lucia

Ben Stein promoted Ray Lucia

I think you forgot these links as well:
http://www.bogleheads.org/wiki/Buckets_of_Money
http://www.bogleheads.org/wiki/Books:_R ... nd_Reviews -- His "Buckets of Money" book is on the recommended read list

[Alex Frakt]

From the SEC release:

The SEC’s Division of Enforcement alleges that investment adviser Ray Lucia, Sr. claimed that the wealth management strategy he promoted at the seminars had been empirically “backtested” over actual bear market periods. Backtesting is the process of evaluating a strategy, theory, or model by applying it to historical data and calculating how it would have performed had it actually been used in a prior time period.

Lucia, who lives in the San Diego area, and his company formerly named Raymond J. Lucia Companies Inc. (RJL) allegedly presented a lengthy slideshow at the seminars indicating that extensive backtesting proved that the Buckets of Money strategy would provide inflation-adjusted income to retirees while protecting and even increasing their retirement savings. However despite the claims they made publicly, Lucia and RJL performed scant, if any, actual backtesting of the Buckets of Money strategy.

“Lucia and RJL left their seminar attendees with a false sense of comfort about the Buckets of Money strategy,” said Michele Wein Layne, Regional Director of the SEC’s Los Angeles Regional Office. “The so-called backtests weren’t really backtests, and the strategy wasn’t proven as they claimed.”

According to the SEC’s order instituting administrative proceedings against Lucia and RJL, they held the seminars highlighting their Buckets of Money strategy in an effort to obtain advisory clients who would be charged fees in return for their advisory services. They promoted the seminars on Lucia’s radio show and on Lucia’s personal and company websites.

According to the SEC’s order, a backtest must utilize actual data from the time period in order to get an accurate result. Lucia and RJL have admitted during the SEC’s investigation that the only testing they actually performed were some calculations that Lucia made in the late 1990s – copies of which no longer exist – and two two-page spreadsheets.

According to the SEC’s order, the two cursory spreadsheets that Lucia claims were backtests used a hypothetical 3 percent inflation rate even though this was lower than actual historical rates. Lucia admittedly knew that using the lower hypothetical inflation rate would make the results look more favorable for the Buckets of Money strategy. These alleged backtests also failed to account for the negative effect that the deduction of advisory fees would have had on the backtesting of their investment strategy, and their “backtesting” did not even allocate in the manner called for by Lucia’s Buckets of Money strategy. The slideshow presentation that Lucia and RJL used during the seminars failed to disclose the flaws in their alleged backtests and was materially misleading.

According to the SEC’s order, Lucia and RJL also failed to maintain adequate records of the backtesting as they were required to do under an SEC rule. The pair of two-page spreadsheets was the only documentation of their backtesting calculations, and those spreadsheets failed to duplicate their advertised investment strategy.

Edit: So this is about failure to follow SEC rules when soliciting clients for advisory services. It doesn't actually address the underlying strategy (continued on next post).

[Alex Frakt]

I don't know anything about this particular person. But I don't believe this invalidates a buckets approach in general. I first heard about it from Frank Armstrong in one of his late '90s columns on Morningstar (reproduced on Frank's website) and I've always like his simple formulation. Here's how he describes it in a 2011 Morningstar interview

Benz: So, Frank, you have been one of the pioneers of the bucketing approach to retirement income. Let's talk about what that is exactly, and why you think having separate buckets in retirement can help retirees manage volatility a little bit better?

Armstrong: Well, first, if you have an income bucket of fixed-income today, at least, it's going to produce next to nothing, but its purpose is to serve as a store of value and to moderate the risk in the portfolio as a whole. You're not going to be able to accomplish your objectives using that unless you're so incredibly wealthy that you don't need to bother about planning.

However, the other half of the portfolio needs to grow to counter inflation and meet your growth objectives. So, your total return is enough to support a reasonably liberal withdrawal program.

So, on one hand you've got a bucket of safe, safe assets that you can use to withdraw your fixed income for some period of time in the future. We recommend eight to 10 years. That allows you to sleep well at night, have the intestinal fortitude to ride out the ups and downs, and also have the financial ability to ride the ups and downs with the market, because you know that all your bills are going to be paid for some very long time out into the future, and the overwhelming probability is that the market is going to self-correct whatever disaster we have today, and go on to all-time highs during that 10-year period.

So, we use two buckets, one for safe, safe assets to meet your needs off into the future and moderate the risk of the total portfolio, and the other bucket to grow to meet your long-term needs to hedge inflation and have real growth of the portfolio.

Benz: So, eight to 10 years, Frank, you're not saying sink eight to 10 years' worth of living expenses in cash though, right?

Armstrong: ... In a short-term, high-quality portfolio that doesn't vary a lot, and it's a near-cash, one- to two-year durations. It doesn't vary a lot in capital values as interest rates go up and down.

Should you go longer or lower quality, at some point, interest rates have to go up, which means capital value is going to fall like the rock, and you don't want to be there.

So, short-term portfolio protects your downside in a rising interest rate environment. Very few of us would like to bet the farm today that interest rates can't go up.

Also see http://www.napfa.org/tips_tools/article ... 2&TT_ID=76 for a more detailed explanation by Frank.

[NAVigator]

I've read the book and was not really convinced of the strategy. I didn't know Lucia had a radio program, but that makes sense. I am also not surprised he conducts seminars and gives presentations.

From the report from the SEC that Alex provided here as well, the offense is not so much the backtesting, but rather the claim to have backtested the strategy and to lure in paying customers based on falsified information.

I applaud the SEC for actually investigating such matters involving fabricated public investing approaches.

Jerry

[Call_Me_Op]

Another reminder of the ageless advice of the late Harry Browne, "Keep as few a people from you and your money as you can".

Good luck.

Nice. Don't recall him saying that, but certainly sounds like something he would have said.

[Taylor Larimore]

Born in CA wrote:

His "Buckets of Money" book is on the recommended read list

Mr. Lucia's Buckets of Money was never in my Investment Gems.

Best wishes.
Taylor

[fcirullo]

From the SEC release: “Lucia and RJL left their seminar attendees with a false sense of comfort about the Buckets of Money strategy,” said Michele Wein Layne, Regional Director of the SEC’s Los Angeles Regional Office. “The so-called backtests weren’t really backtests, and the strategy wasn’t proven as they claimed.”

Coming up with the marketing phrase "Buckets of money" was cleaver, but making those claims was dumb!

Back in the day when people were Stock Brokers (There were no Financial planners), everyone was trained to say something like this: Mr./Mrs. prospect, you can put all of your eggs in one basket and watch that basket very carefully, or you can take my advice and diversify by putting your money into three baskets.

----------------------- // -----------------------

These days, regardless of which investment strategy you use it makes sense to keep costs low and make the necessary adjustments to how much you save and spend. If you begin to spend too much instead of saving more, sooner or later you will be snapped back into reality like a rubber band!

Edited on 09/07/2012 to clarify that the last sentence is not a continuation of the previous sentence.

[mlebuf]

I have listened to Ray Lucia for years and attended a couple of his seminars. I have not purchased his services nor do I plan to. However, compared to many/most of the sharks who sell financial products via radio, Ray Lucia is a saint. Much of the investment information he passes along on his radio show is based on very solid, academic research. He doesn't believe in market timing or pretend that he can foretell what markets will do in the future. His buckets of money strategy is simply an asset allocation plan. Like Bob Brinker or Dave Ramsey who also provide solid information, Ray isn't perfect and everybody on radio is selling something. Nevertheless, it seems to me that if the SEC wants to go after somebody on radio, there are much more appropriate targets they could have chosen.

[dodonnell]

Lets be clear about the SEC claims (IMO):

• Ray Lucia clearly lied and cheated.
  His "Buckets of Money" is a failing strategy.
  Investors following this strategy may have been, or may be seriously damaged.

The SEC backtested his claimed "Buckets of Money" strategy and found out it FAILED.

... an investor using the BOM strategy would have exhausted his or her assets by 1986 (if retiring in 1966) or by 1989 (if retiring in 1973),

Read the full SEC complaint referenced in the Press Release for more details:
http://www.sec.gov/litigation/admin/2012/34-67781.pdf

[Buddtholomew]

I hope I never need to hear his radio show promos again. They are truly awful, even worse than listening to the show itself.

I couldn't agree more. Unfrotunately, I have been listening to his sales pitch for almost a decade on 1220AM in the San Francisco area. He did have some thought provoking interviews over the years, but his daily, hour-long broadcast always used scare tactics to solicit clients for his services. He was by no means a BH (referred to "buy and hold" as "hold and hope") and used charts extensively to time the market. He also spent over 20 years trading commodities.

I once called-in to receive a free book and was hung-up on when I declined an asset allocation review. This guy was a salesman, first and foremost. Look him up online for a picture and let me know what you think. Pleased that he will face these SEC charges.

Budd

[letsgobobby]

Was it fraud or was it incompetence or some of both? I agree with previous poster, his sin is so small compared to many of the psychopaths in our corporate world and even in the investment world.

[nisiprius]

I think of myself as skeptical but I keep encountering evidence that I'm still pretty credulous. It never in a million years occurred to me that Lucia hadn't really done an honest and workmanlike job of the actual backtesting; I assumed the flaw with the strategy was just the generic issue of assuming how much assurance backtesting gives you about "tail risk."

[dodonnell]

Was it fraud or was it incompetence or some of both? I agree with previous poster, his sin is so small compared to many of the psychopaths in our corporate world and even in the investment world.

Lies imply Fraud.

[caseynshan]

I always thought his seminars were a way to lure clients. (much like Dave Ramsey), but that his radio show provided excellent advice.
I learned a ton about rentals, taxes and protecting assets from him and his show.

casey

[caseynshan]

listening to his response on his site (http://www.raylucia.com/)

he claims it is all about the claim of 3% inflation...

[LadyGeek]

It's out of the wiki: Buckets of Money

Rather than delete the article, I replaced the content with a link to the SEC charges and to this thread.

We can always put back content if anyone feels this was too extreme.

Update: It's also removed from Books: Recommendations and Reviews and Category:Books and Authors

[woof755]

Moral to the story:

There is not mad crazy money to be made in selling a "buy-hold-keep costs low strategy" unless you are personally providing financial services and have a ton of clients...or if you are Vanguard.

His philosophy is commendable, his execution apparently suspect.

[Mel Lindauer]

listening to his response on his site (http://www.raylucia.com/)

he claims it is all about the claim of 3% inflation...

That's his claim. However, it appears the SEC says the figures he used in his seminars didn't work even when using his own supposedly "back-testing" two-page spreadsheets AND that the return figures shown attendees also didn't take into account his advisory fees.

[Dinero]

Another reminder of the ageless advice of the late Harry Browne, "Keep as few a people from you and your money as you can".

Nice. Don't recall him saying that, but certainly sounds like something he would have said.

Actually, I think Harry advocated keeping as few people as possible between you and your money...

[SP-diceman]

I can smell the lawsuits coming for all parties involved.

He’ll need “buckets of lawyers.”

[Dinero]

We can always put back content if anyone feels this was too extreme.

Guilty until proven innocent?

Why not just provide the SEC links?

[LadyGeek]

The purpose of the wiki is to educate new investors. If there are any questions on the credibility of the source, we shouldn't use it. We don't want to recommend a book while simultaneously saying "don't trust the content."

My action was to protect new investors as a first priority. (Shoot first, ask questions later.)

If others feel differently, I'm certainly open to suggestions. There should be a consensus on what to do. I'll go with the majority.

[ndchamp]

The purpose of the wiki is to educate new investors. If there are any questions on the credibility of the source, we shouldn't use it. We don't want to recommend a book while simultaneously saying "don't trust the content."

I agree.

[Dinero]

The purpose of the wiki is to educate new investors. If there are any questions on the credibility of the source, we shouldn't use it. We don't want to recommend a book while simultaneously saying "don't trust the content."

I think is premature to pull the content. The SEC is not omnipotent.

If you are going to pull the content OK, but I think it unfair to then leave the SEC link absent the content.

[Mel Lindauer]

The purpose of the wiki is to educate new investors. If there are any questions on the credibility of the source, we shouldn't use it. We don't want to recommend a book while simultaneously saying "don't trust the content."

My action was to protect new investors as a first priority. (Shoot first, ask questions later.)

If others feel differently, I'm certainly open to suggestions. There should be a consensus on what to do. I'll go with the majority.

I agree with the action taken. Our first priorty is educating and protecting new investors.

[second-guesser]

Evidently Ray has a history with the SEC. His brokerage firm had to pay a $2 million fine in 2010 to settle charges.
The brokerage firm was First Allied Securities and Ray received up to a two percent referral fee in advance. I have
listened to Ray during my lunch break when I eat my sandwich in my car. He is very charming and some of his advice is helpful.
It makes you wonder how much these guys have to make ? He is just another example of how vunerable unsuspecting investors are
to these glib pitchmen. It's weird how you tend to want to believe Ray is honest - in reality he is just another
charlatan.

S-G

[robocop]

I agree with the actions taken. It is true that someone is innocent until proven guilty, but it doesn't mean that we should have the same standard here. This whole site is about providing reliable, trustworthy sources, and accordingly I think it is better to err on the side of caution.

Thanks for all your hard work LadyGeek!

[nisiprius]

LadyGeek, I agree with pulling the article temporarily, but I believe we should have a Wiki article on the "buckets of money" strategy. It should be introduced with a section on the SEC action, and a statement that this is not a strategy we recommend, and we should quote the disclosures about the method not working in backtesting. Criticism of the strategy should be presented (Stock allocation increases rather than decreasing, for example). Afraid I've never read the old article so don't remember its gist, tone, or prsentation.

But I believe there should at least be a description of what the "Buckets of Money" strategy is (was?). We are not Wikipedia and shouldn't be, but the way this would be handled on Wikipedia--hmmm.... maybe I should go look and see what they have done--would be to present all points of view. There would likely be a section on "criticism of the strategy." I think there would definitely be a section on the SEC action.

(Hmmm... just looked up the Wikipedia Ray Lucia. Sounds as if it was written by him or an associate. And it hasn't been updated to reflect recent events.)

[LadyGeek]

I think is premature to pull the content. The SEC is not omnipotent.

If you are going to pull the content OK, but I think it unfair to then leave the SEC link absent the content.

Good idea, I added the content: Buckets of Money. It has a good explanation of backtesting.

I also added the SEC order, which goes into the details: SEC order Against Raymond J. Lucia Companies, Inc. and Raymond J. Lucia, Sr.

nisiprius - I missed your post. That sounds like a good idea, as we should fairly present things from a neutral perspective.

I shot first, the smoke is clearing. Now we can ask questions and see what to do. As always, any wiki editor is welcome to update the page, or create a new one.

[dickenjb]

I have always thought the buckets strategy is BS. For starters, it makes you take on additional risk after stocks have fallen. Furthermore I saw an academic study that said the drag on returns caused by the cash hoard outweighs any benefit from being able to hold onto stocks during a down market.

[Dinero]

LadyGeek,

Good result.

Thanks for all of your (and all the other mods) hard work.

[gkaplan]

I have always thought the buckets strategy is BS

Me too. I always thought it was more complicated than needed.

[joe8d]

Frank Armstrong's "Bucket Approach" ( referred to in Alex's post ) is the method I'd recommend considering,at least in it's basic structure.It is very similar to what I have done.

[SGM]

I have never bought the bucket approach. His show is interesting and as others have said he has a lot of good info on owning real estate. I do not like his recommendation for putting non traded REITs in your portfolio. I do like the idea of having an income stream that covers needs and then invest the balance. And it is important to not have to sell stocks during a downturn such as 2008. He presents academic research, most of which I have already read, but I believe most have not been exposed to.

His show is entertaining,sometimes informative and I listen to it if I am driving. I believe he says there have been no 15 year periods when people have lost money in the market. I guess this is where the back testing is lacking.

I do not trust any of these seminars, they are always sales promotions.

[SteveB3005]

I didn't think it was a terrible strategy, overly complicated yes, but it was a discipline and that helped some people I'm sure. Mainly, I just wonder who was hurt and filed complaints or if it's the SEC policing things on their own. The message is clear either way though, they're looking beyond just Wall St. fat cats and are taking the fight down to the personal investment level of seminars and books.

[DonDraper]

I listen to Ray Lucia's podcasts frequently. The guy is not a scam artist. I'd be shocked if he truly doesn't believe in the strategy. It sounds to me like he's only guilty of exaggerating how much he actually back tested a strategy he believes in. It's hard to believe with all the sharks on wall street the SEC is going after Ray Lucia. I will continue to listen to his show.

[bobcat2]

It has always seemed to to me that Lucia's bucket strategy was unadulterated BS. It appears predicated on the naive notion that the equity sequence of returns problem never occurs during early retirement years. That foolishness remains whether he cheated on his backtesting or not.

The bigger question is how Lucia's nonsense theory and book wormed their way into the Bogleheads Wiki on theory and recommended books in the first place. The hurdle for getting into the Wiki ought to be somewhat higher than this. At this rate what is up next for the Wiki will be a discussion of the pros and cons of the Ponzi investment strategy.

BobK

[LadyGeek]

It got there because a wiki editor thought it would make a good addition and no one else said otherwise. (You can say otherwise by posting in Suggestions for the Wiki or starting a thread on the topic.) Look at the View history tab and you'll see it was there since 2008.

If anyone thinks it should be permanently removed, that's certainly an option. I see a few opinions in this direction, that decision is also on the table.

However, nisiprius is after a balanced perspective. There should be an explanation of why this book is a bad idea.

[Barry Barnitz]

It has always seemed to to me that Lucia's bucket strategy was unadulterated BS. It appears predicated on the idea that the equity sequence of returns problem never occurs during early retirement years. That remains true whether he cheated on his backtesting or not.

The bigger question is how Lucia's nonsense theory and book wormed their way into the Bogleheads Wiki on theory and recommended books in the first place. The hurdle for getting into the Wiki ought to be somewhat higher than this. At this rate what is up next for the Wiki will be a discussion of the pros and cons of the Ponzi strategy.

BobK

The page dates from the earliest days of the wiki, and is simply a book review. Each of these reviews has a section specifically designed for forum members to provide comments, an opportunity that forum members have ignored en masse.

Here are the original pages, (you can view the page history to see the edit history):

All About Asset Allocation - Bogleheads
Bogleheads' Guide To Investing - Bogleheads
Only Investment Guide - Bogleheads
Intelligent Asset Allocator - Bogleheads
Buckets of Money - Bogleheads (the review now removed)

Additional pages in this series have been occasionally created by subsequent editors:

Smartest Investment Book You'll Ever Read - Bogleheads
Asset Dedication - Bogleheads
Common Sense Investing - Bogleheads
Live It Up Without Outliving Your Money - Bogleheads
Retirement Income Redesigned - Bogleheads
Your Complete Retirement Planning Road Map - Bogleheads

regards,

[bobcat2]

It got there because a wiki editor thought it would make a good addition and no one else said otherwise. (You can say otherwise by posting in Suggestions for the Wiki or starting a thread on the topic.) Look at the View history tab and you'll see it was there since 2008.

If anyone thinks it should be permanently removed, that's certainly an option. I see a few opinions in this direction, that decision is also on the table.

However, nisiprius is after a balanced perspective. There should be an explanation of why this book is a bad idea.

Because it all so obviously ignores the sequence of returns problem. If the sequence of returns problem isn't in the Wiki, I suggest that that would be an excellent replacement for the buckets of (@!#*) money "strategy".

Here is Moshe Milevsky discussing the far from hidden flaw in this strategy.

Some commentators have expressed the view that by placing a few years worth of
retirement income needs into safe investments and not touching the remaining funds in
the event of a bear market, they can somehow avoid the ruinous impact of a poor
sequence of investments returns. A fringe element of this sect believes that if markets
decline a retiree should simply be counseled to only take income from their bond
allocation and then “wait for the stock allocation to recover” and thus avoid selling at a
loss.

These strategies are an optical illusion at best and create a potential for grave
disappointment at worst. If you are unlucky enough to earn a poor sequence of initial
returns, “bucketing” your retirement income is not a guaranteed bailout.

Link to Milevsky article - Can Buckets Bail Out a Poor Sequence of Investment Returns?
http://www.ifid.ca/pdf_newsletters/PFA_ ... uckets.pdf

The answer is straightforward. - NO.

BobK

[Jerilynn]

I listen to Ray Lucia's podcasts frequently. The guy is not a scam artist. I'd be shocked if he truly doesn't believe in the strategy. It sounds to me like he's only guilty of exaggerating how much he actually back tested a strategy he believes in. It's hard to believe with all the sharks on wall street the SEC is going after Ray Lucia. I will continue to listen to his show.

That's why they are called 'Con' men. They gain your confidence.

[nisiprius]

In the past, the usual Bogleheads viewpoint on "buckets of money" is that it is just another withdrawal strategy, neither terribly bad nor terribly good, that Lucia overhypes. I haven't read Lucia's book, and certainly have not immersed myself in the actual world of the culture surrounding the strategy or how his advisory business promotes and implements it. I wish Bob90245 were still participating; he had some articles about "bonds-first" withdrawal strategies, which don't create separated buckets. IIRC he thought the difference between those and "buckets" was just mental accounting, and that bonds-first did have some merits.

One must distinguish between several questions.

a) Does/did Lucia and his associates imply that they had a methodology that was vastly superior to withdrawing from a balanced portfolio while keeping balanced? Did they suggest that "buckets" could make portfolio-withdrawals much safer than other methods?

b) Did they lie about the actual backtested results of their method?

c) Even if a "buckets" strategy isn't magically superior to withdrawal from a unified portfolio, is it really that much different or that much worse?

I've only glanced at Milevsky's article, but I remember circa 2006-2007, preparing for semiretirement, being flabbergasted by the range of advice on "emergency funds" for retirees. Milevsky says

Some commentators have expressed the view that by placing a few years worth of retirement income needs into safe investments and not touching the remaining funds in the event of a bear market, they can somehow avoid the ruinous impact of a poor sequence of investments returns. A fringe element of this sect believes that if markets decline a retiree should simply be counseled to only take income from their bond allocation and then “wait for the stock allocation to recover” and thus avoid selling at a loss.

I do not think that is a "fringe view." I'd been holding maybe six month's spending in cash. I read enough authoritative-sounding books and articles saying that retirees should be keeping 2-3 years in cash that I got a little panicky. But I eventually decided that the "2-3 years in cash" people were not talking about an emergency fund as I understand it, but about a "ride-through-a-bear-market" fund. It seemed so obvious to me that "spend down your cash while the stock market recovers" is a martingale-like, gambling-system-like strategy--it reduces your dispersion of results as long as the bear market(s) you encounter are shorter than your emergency reserve period, while increasing the severity of the damage if the bear market outlasts your reserve. So I just decided to ignore those suggestions.

[Dinero]

The "Buckets" approach is not too terribly different from the Liability Matching Portfolio advocated by Bernstein et al.

I think the latter approach IS superior, since, assuming you have correctly identified how much your portfolio needs to provide each year, and if you can fund it with TIPS, ST Bonds, etc., it is nearly bulletproof. But to match liabilities with such conservative investments over a 30-year retirement usually takes a pile of money. Buckets is a way to "match" some your portfolio with your near-term liabilities while maintaining some assets at relatively high risk.

[DonDraper]

I listen to Ray Lucia's podcasts frequently. The guy is not a scam artist. I'd be shocked if he truly doesn't believe in the strategy. It sounds to me like he's only guilty of exaggerating how much he actually back tested a strategy he believes in. It's hard to believe with all the sharks on wall street the SEC is going after Ray Lucia. I will continue to listen to his show.

That's why they are called 'Con' men. They gain your confidence.

People love to tear other people down. I witnessed the same "jump to conclusions" attack on Joe Paterno until public perception spiralled out of control based on little facts or evidence. I see the same thing happening to Ray Lucia in this thread. Guilty until proven innocent. Anyway I do not want to turn this into a Joe Paterno thread.

This seems more similar to case where a bunch of Bogleheads would pitch that philosophy at a seminar but exaggerate its chances at success and downplay its risks. Certainly there are issues with that but this seems far from a Con Man type situation.