August 23, 2025 • 44 mins
Smart stratgeies in retirement planning give you the flexibility to jump when you need to. It's One Source Wealth Management's fire-power. This week, hosts John and Giusepppe show us the opportunities to set our sights on. Plus, the Fed's inaction, Managing risk around life events, historical Inflation levels, and Speculating. Join us for our upcoming workshop in Reno! The Wise Money Guys!
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Episode Transcript
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Speaker 1 (00:00):
The Wise Money Guys Radio Show is brought to you
by One Source of Wealth Management SEC Licensed three one
nine zero seven eight. For disclosures and more information, visit
our website One Source WM dot com.
Speaker 2 (00:13):
Welcome to the Wise Money Guys Radio Show. I'm your
co host John Scamraham here with my partner up you Wisconti,
and we are certified portfolio Managers, which means we are
at investment experts at helping people who are retired are
about to retire manage their money. If you like our show,
have any comments or questions, or want to get together
for a no obligation consultation, give us a call at
(00:34):
nine one six ninety six seven thirty five hundred for
more information. You can also visit our website at Wysemoneyguys
dot com. Score the end page for important information, and
you can also email us at question at Wysemoneyguys dot com.
And we got a pretty big thing happening the Fed.
(00:57):
The Fed is but you know, has really kind of
put us on a pause if you will, of you know,
continual record breaking and even created a little bit of
a pullback here which last week you've got your eyes
worked on. And I said Hey, you know, luck in
some profit and and you know, buy on the dips,
(01:19):
and certainly I think that's the opportunity which dip that
we're in. Yeah, which, well, when there is a dip,
you got to look at certain things that you're following
and then you know, buy those things that you think
are now at a good price. But but it just
I don't know how many times I've talked about this
over the years, but the fact that the FED, the
(01:40):
Federal Reserve Board, has this much world financial control, world
financial control of markets, currencies, interest rates, economies, prosperity, it
just seems I think it's so out of date. I
think the feds dual mandate, which I see you have
(02:02):
some notes here on and you know, if you wouldn't
mind talking about some of this stuff that we're expecting
from the FED. But I think it's just antiquated, and
I think they've got to rein in some of the
control that the FED has because they shouldn't be able
to decide, you know, and really king making right. So
(02:25):
they cut rates last year when they shouldn't have, and
the market reacted negatively, and interest rates actually went higher
because everybody the stock market was fine but everybody knew
it was political, and now you know, when you've got
it's still a pretty decent economy, but definitely signs of slowing,
(02:46):
and we're seeing that in the labor market and the
jobs reports and retail sales and things like that. You
certainly have the ammunition to be preemptive. I think being
preemptive to to make a mistake one where or the other.
A preemptive mistake on cutting is better than a mistake
(03:08):
on you know, not cutting, is it? I think? So
what do you think?
Speaker 3 (03:13):
Well, I mean, they made three they made three cuts
last year, right, that was the wrong move, so that
could have been preemptive and then.
Speaker 2 (03:22):
Yields went higher. But are we doing as well as
we're doing? Because they they they were preemptive even though
it didn't do the the it didn't have the effect
that they wanted. And when I say, they were talking
about the Federal Reserve Board, the FOMC on on interest rates.
(03:43):
But we did get a more normalized heel curve and
we have had a pretty robust, you know, economy up
until recently, and you know, decent GDP numbers so on
and so forth. So so you know, now, to me,
if we want to keep that going. You know, you
don't let your foot off the gas. You know, we
(04:05):
can afford a little bit more growth in in in
our overall economy versus the one percent or the one
point four percent that that they're you know, there's various
uh people out there are the same predicting. That's where
we'll you know, come in at uh for for for
(04:26):
what for a full year GDP one point four one
point four that's horrible. Yeah, I mean, so why not,
you know, push the accelerator down more.
Speaker 3 (04:37):
I think the Yeah, it's a tough it's a tough
spot to be in because their mandate is price stability
and full employment. We got full employment. We've had full employment.
The stock market's been resilient, we've hit all time highs.
So you know there and and you know, when you
go back to the amount of power they have is
(04:58):
I think the problem with the fact is a flip
flop and they change your strategy. It's not they don't.
They're not operating today like they used to, like in
the nineteen nineties, right, and so they're.
Speaker 2 (05:09):
Either way long ago in the nineteen nineties.
Speaker 3 (05:12):
Yeah, yeah, Well, and I have some I have some
actually uh, information from nineteen nineties and the Golden Right,
and I'm sure you lived through that.
Speaker 2 (05:26):
When I was growing up, I was like, oh, if
I can make one.
Speaker 3 (05:29):
Hundred thousand dollars a year, yeah, like that would be perfect, right,
you can have enough six six figures, you can have
enough to.
Speaker 2 (05:36):
Buy a house with big billion dollars. That was you
were good, You were good, you were you were rich.
Speaker 3 (05:43):
So we can we'll dive more into some of the
data and one hundred thousand dollars back in nineteen nineties
and what that means today and how things how much
things have changed. But going back to the FED is
you know, the either data dependent or they're forecasting.
Speaker 2 (05:59):
It's one of the other.
Speaker 3 (06:01):
And you can't go one and then go back together
because if you're data dependent, then you're just looking at
the data and you're making decisions on monetary monetary decisions
based off of the data. You can't say, well, the
data is coming in and it looks like inflation is
going down, but we think maybe in.
Speaker 2 (06:18):
The near term it's going to go back up.
Speaker 3 (06:20):
Yeah, and so therefore we're making a decision to do
this or lose credibility.
Speaker 2 (06:25):
Credibility, the fat does well, you make mistakes, and you
make mistakes, you lose credibility, and then there's market question
your motives.
Speaker 3 (06:32):
Well, and there's well, and there's no consistency. So what
is your process? Is your process to forecasts and make
decisions based off of your forecast, and if such, then
how how well and how accurate have you forecast been
in the past, and how well has that worked out
in the past? By forecasting right, and therefore making a
decisions based off of forecasting versus making decisions based off
(06:55):
of just the data that's incoming and then making monetary
decisions based off of that, how successful and how accurate
has that been versus your forecasting? And I think this
should just make decisions based off of what has been
a better outcome one way or the other. And I'll
tell you, you know, if you're guessing, well, we should look
into that. You don't need to, because the forecasts and
all their dot plots that they've gone back all the
(07:17):
way you know, through the big last recession in two thousand.
Speaker 2 (07:20):
And eight have been horrible.
Speaker 3 (07:21):
Yeah, I mean maybe ninety percent of them have been wrong, probably,
And so.
Speaker 2 (07:26):
This is why you know, I repeat myself often on
how important it is to you know, have professional management
of your money, especially retirement, especially if it's part of
your livelihood and income needs, because you know, the reality
is is you shouldn't be going it alone at where
(07:47):
to put your money quite frankly, because you know a
lot of people they come in and they're they're shocked
to see that you know, what types of difference investments
there are out there that and what they pay when
they see that things can pay a five, six, seven, eight,
even to as high as ten percent and it doesn't
(08:09):
have to be a typical stock or a typical mutual fund,
and that when you have money, you're afforded access to
different things then when you don't have money, and yet
people still just you know, don't don't get informed as
much as they should. And so you know, my my,
(08:32):
I guess mantra is again, why would you be retired,
you know, watching all of this information if you do,
or and then deciding when to get in, when to
get out, what to get into, what to get out of,
and do that when you're retired in your sixties, seventies
(08:52):
and eighties, it makes it makes no sense to me,
I mean, because there's always money to do that's such.
Speaker 3 (08:57):
A profession or you have all the resources at hand, Yeah,
and you enjoy doing that and you've educated yourself then sure,
which there's some people like that, but the majority of
people aren't.
Speaker 2 (09:06):
Like no that I would say.
Speaker 3 (09:07):
Or you or you or you are and then you
get caught up because you start emotions starts bleeding into
the right decisions.
Speaker 2 (09:14):
Right. We had a client come in and and literally
because of the records and stuff like that, she took
over basically, uh, the management of an account that they
have and was like, oh, I've got this. I can
just you know, use chat, GBT and GPTE g g
(09:41):
GPP good and and it'll tell me then and that's
asked at GPT how to say chat GPT And that's
just I mean, not reality. In fact, AI is proving
you know, so far are to be I mean, other
(10:02):
than helping you create, you know, a letter or come
up with some ideas. It's it's nowhere near where the
future is going to be once.
Speaker 3 (10:15):
It's a helpful tool for sure, but that's use I
use it, but you have to I think the caution
is you have to know some and have some information
and knowledge of the subject matter that you're dealing with
because if you don't, because I've ran some economic analysis
(10:39):
and things on stock market, and you know, the importance
of AI is how you prompt number one and then
number two knowing enough about the information that you're trying
to extract from it to decipher if that's accurate or
relevant information or not. Because I've ran into situations where
I've done things to help with analysis neither stock market
(11:01):
or economic and there was a situation in the world
was completely wrong, and so I had to double check
in and I went I did some of my own research,
and I'm like, no, this is not I don't know
where it's pulling this information from.
Speaker 2 (11:11):
But I think that point is valid. Your input, the
quality of your input and what you're asking it to
come up with determines the quality of the output exactly.
And so if you don't know enough of the information.
Speaker 3 (11:27):
Or subject matter, then how are you going to best
prompt it exactly? And so when you can get the
information and you say, great, I'm going to run with that.
And if you don't know and the only reason why
you do that is because you don't know enough about
the subject matter that you're just going to run with
that and maybe that you know, provides to be successful,
but maybe not, and it gives you something completely different.
Speaker 2 (11:48):
I'm kind of glad that these things are coming out
because certainly there's some benefit, like you said, as a tool,
but it also demonstrates to me how much we are
needed and will be needed still in the in the
near and medium term future, just because you know, things
(12:10):
are changing drastically, and the more we're in this new
industrial revolution, the more opportunity that needs to be researched
and deciphered to decide what should make up your portfolio.
You're listening to the Wise Mondy Guys radio show and
your co host John Scammeran here with my partner Extraordinary
to Seppia Visconti, and you know, we were talking a
(12:34):
little bit about AI. We were talking, of course, about
the FED and and just their resistance to cutting rates
or at least changing their mentality about you know, where
they're at from a tightening or an easy perspective to
your kind of comments. I mean, really, you could argue
(12:56):
it either way. I mean, there's ammunition out there to say, oh,
let's be preemptive and cut and there's an ammunition out there
that says, nope, it's too soon to you know, not
be in a restrictive economy is doing fairly well, you know,
monetary and employments slow.
Speaker 3 (13:12):
Stock market hit all time highs. You know, it's kind
of hard. There's not all the it's not a there's
no big red flag waving. That's that's the tough part, right.
Speaker 2 (13:22):
So, which got us to our point that we were
trying to make that it becomes more challenging to know
what to be in, and that AI isn't the solution
to where you could just go, oh chat g P
T huh, tell me what to put my money in.
(13:42):
It's too unreliable and unless it really knows you your
financial situation, your tolerance for investment risk, your time horizon. Well, no,
you're giving them all the ammunition. Well, that's still list
of prompt right, I mean, because when it comes down
(14:02):
to it, there's five different categories of investments. There's stocks,
there's bonds, those are alternatives, there's real estate, there's cash
cash equivalents. And just because you know, you might think
you know what's best, doesn't mean that it is. Because
you can get stock like returns from investments that we've
(14:25):
talked about on this show that are a combination of
a stock intoicy and a bond and an option all
wrapped into one thing with some heck of you know,
some pretty amazing features from from a cash flow perspective,
that it's that a computer is not going to know
(14:45):
about and then even if it does, it's not going
to know what percentage of your money you should put
in and what parameters.
Speaker 3 (14:55):
I mean it could, it could, but it would be sophisticated.
You have to build it out again.
Speaker 2 (14:59):
You have have all thems. You'd have to have the
information to do too, you know, the prompts that you
put in, and so you're going to make a mistake,
is my point. And if you're retired and you've got
you know, a fair amount of money, why would you
risk it and then stress about it? Right? Because then you.
Speaker 3 (15:17):
Got I think that I think the bigger part is
just why would you take unnecessary risk? I think what
we see more of is, you know, when when things
are going great in the stock market or certain stocks
that people are holding, you know, then they're willing that
euphoria kicks in and they're willing to take and to
continue to take risks or maybe or maybe take more risk, right,
(15:38):
and say, hey, I did well on this stock or
this basket of stocks.
Speaker 2 (15:41):
Greed, the greed, the green eyed monster kicks in, right.
Speaker 3 (15:45):
And so why would you why would you take the
unnecessary risk? And sometimes, you know, in our job, a
lot of times what we find when we're having conversations
with clients when there's high flyers out there stock markets
hitting all time highs is raining them in and saying,
based off of your timeline, your goals and so on
and so forth, in us doing all the calculations within
the financial plan and factoring inflation, and not only that,
(16:08):
but then factoring in what if scenarios?
Speaker 2 (16:10):
Right, what if you have a.
Speaker 3 (16:11):
Long term care event retirement that's going to cost you
sixty seventy eighty thousand dollars a year extra, right, that
you hadn't planned for for three years? How does that
impact your overall portfolio, your other plans, your goals, so
on and so forth. Those are things that we take
into consideration because it's very likely that it can happen.
Speaker 2 (16:29):
There's a high probability.
Speaker 3 (16:30):
And so then you look at okay, well, then how
much risk are you taking on your assets? And how
hard do your assets really need to work for you
to be able to hit all your financial goals. And
then also what if some of those curveballs get thrown in?
You know, then what do you still survive? And sometimes
people say, well, if I'm taking more risk and I'm
going to get a higher return, then that should be better. Right,
(16:53):
So then if I have a long term care event,
or if I have something where my expenses go way up,
then it should put me in a better situation because
I took more and I had more games and so
on and so forth. Not all the time because you
have a higher standard deviation or a higher risk. There
could be years like two thousand and eight or twenty
twenty two or what have you, and then maybe that
curveball event happens that same year or the next year,
(17:15):
and now your assets are at a lower level, and
because you've taken more, you don't have the time to
what are you looking at?
Speaker 2 (17:24):
Well, I'm hearing aside, you know, guys wondering if they're
coming from my head.
Speaker 3 (17:30):
Or I'm talking in the mic, but I'm looking at
you and you're looking around like like it's like you're
in a haunted mansion or something.
Speaker 2 (17:38):
By the way, you can you can watch us doing
our show if you prefer and can't catch us Saturdays
at eleven on KSTE six point fifty, you can catch
us on our YouTube channel, which is the Wise Money
at wismoney guys dot com. Is it at the or at.
Speaker 3 (17:59):
No, it's just wise But you can go on YouTube
and you can search just you can type in a
scambray and visconte calm of the Wise Money Guys and
it should it should pop us. But to finish my thought,
which I think my thought lost me at this point,
But the reality is we don't only just take and
look at just pure investments and say what's going to
(18:20):
grow or what's going to grow the best, or how
can we beat the s and P five hundred.
Speaker 2 (18:23):
There's a lot more that goes into that. And what we.
Speaker 3 (18:25):
Find is when we have conversation with the clients, it's
you know, especially the ones that have a little bit
more vigor that they're going to want to go after gains.
Is reining them in and saying, look, your assets don't
need to take this much risk. If you want to
maybe take a smaller portion of your assets, and then
we can play more aggressively with that because then if
it blows up on this smaller portion, it's not going
(18:46):
to blow up your overall plan, especially if there's some
unforeseeing things that happen, you know, within your retirement ten
years down the line.
Speaker 2 (18:53):
Yeah, and then really do you have the knowledge you
know when to rebalance, when to dollar cost average, when
to take fit you know, so on and so forth,
and you know what area you know does well when
other areas are doing poorly. You know, right now, are
you shifting from megacap or or large company stocks and
(19:14):
stock funds to the undervalued small company stock funds or
medium sized company stock funds or stocks? You know, if
you did, if you missed out on VideA, Is there
a way that there's companies out there that Nvidia needs
in order to continue to make its profits. And yes,
(19:34):
there are companies that you can invest in that are
an an indirect way to play the Nvidia plan.
Speaker 3 (19:43):
So I'm kind of tired of talking about like in
Nvidia and video like whoo who there's there's thousands of stocks,
and what we're seeing right now is that there's a
pullback in a lot of these tech names because they've
been overvalued. Yep, they're at high pe multiples and now
it's rotating into some dividend paying stocks.
Speaker 2 (19:57):
And that happens when we started saying, you know, months
and months ago, well, and we don't ignore divid in
pain stocks. And you don't want to go one way
or the other.
Speaker 3 (20:07):
You know, our core portfolio that has thirty stocks has
some of all right, it has some uh names in there,
like Palunteer for example, that that could be high flyers,
but then it has a lot of dividend pain stocks
as well. The point is you want to have diversified
and you don't want to focus on like what's gonna well,
and that is going to be the focus next week,
(20:27):
by the way, because in video earnings is going to
come out. So it's not only just the FED. Yeah,
that has all the power in the in the person.
Speaker 2 (20:35):
When you're a four trillion dollar market cap, I mean literally,
you can the entire market. You can move the S
and P five hundred and the Nasdaq and the doubt
global global markets really and quite frankly around the world.
You can move the hang saying you can move it everything, yeah,
foot see everything. Yeah goodness.
Speaker 3 (20:54):
So I mean this week the focus has been around
Jerome Powell and the economics and and Jackson Hole.
Speaker 2 (21:01):
Next week it's.
Speaker 3 (21:02):
Going to be in video, and then the big one
is going to be coming in September of the FMC,
meaning because then we're going to see if there's going
to be action or no action.
Speaker 2 (21:11):
I'm predicting right now there'll be no action. That's that's
not that big of a prediction. Well, no, it is.
I mean, well, I think I'm right.
Speaker 3 (21:20):
I think the better prediction would be, what is your
prediction of the commentary? We know, we know that there's
going to probably be no action.
Speaker 2 (21:27):
He's already given that away.
Speaker 3 (21:29):
What is he going to have a dubvish tone now
during the September meeting and lean towards maybe we look
towards some cutting and the end of the year, or
is he going to stay stayed.
Speaker 2 (21:42):
I think Jerome Powell secretly wants the economy to go
into a recession. I really do. I do. It's just
why is that? How does that make because of his speech?
Well it doesn't. He's a king. He's got the Messiah complex.
Think so without at I don't know when you see
him up takes he takes no direction from Congress, who
(22:05):
actually does control the power of the purse. You know,
fiscal policy. He takes no direction from the president and
that and there's dependent I get that. But at the
same time, you know, it can't just be your way
or the highway. And that's the problem.
Speaker 3 (22:24):
And that's what I was talking to before, is what
is their process and are you going to stick to
that process?
Speaker 2 (22:29):
They don't, or do you just.
Speaker 3 (22:30):
Go, Okay, this is what we're gonna do. We're gonna
or this is what we're gonna do to day dependency
or whatever.
Speaker 2 (22:35):
That's the problem. I think.
Speaker 3 (22:37):
I think if if Jerome Powell came in and said,
here's our process and this is what we're going to
act upon, no matter what's going on right like they
did it with a supply chain, we're forecasting supply chain
is going to free up and then we're gonna it's
gonna solve a lot of this inflation that we're seeing wrong,
which did in the form of energy, thinking about we're
producing they were wrong, but no where we're not where.
(22:58):
That wasn't wrong.
Speaker 2 (22:59):
I mean that. But what I'm saying, well, I'm saying
they were wrong, and because they were holding off on
raising rates, because they were forecasting the supply chains, we're
going to free up. And therefore you're talking about back
when they were saying, oh is transitory right, Yes, so they're.
Speaker 3 (23:16):
Now doing it all over again, but now it's instead
of supply chains, it's terrace and it's yes, we see
inflation is starting to come down and head in the
right direction. But but what happens in the next few months.
Speaker 2 (23:30):
But the reality is where you can lead prices down,
and what's been crucial is the creation of more output
of energy in its various forms here in the US,
which has driven crude down, which is driven heating you know, uh,
energy down, utilities down, unless it's PGEN in California, course,
(23:53):
but anywhere else in the nation, utility prices have come down.
Gas prices have come way down. You know, your home
has come way down. Energy prices to you know, factories
and businesses have all come down. And then it offsets
the increase in maybe some of the product costs to
(24:15):
create whatever your product or service.
Speaker 3 (24:17):
Which should be helpful, Yeah, what should be helpful because
and we'll talk more in a course segment.
Speaker 2 (24:22):
Fedbacks that out of their data dependent of course, because
they refuse to acknowledge because it's not part of climate
change and the goal to say that the climate changes
because of fossil fuels and energy. So you therefore have
to back out that, Hey, energy can make the world better,
(24:48):
it can make you produce things less expensively, it could
create more jobs, it creates more prosperity, and it just
makes leftists like Jerome Power want to puke. And so
the reality oil. Yeah, So the reality is is that
(25:08):
I personally think the FED should be completely overhauled, especially
the whole process and the dual mandates, and and really
get back to more of a free market economy and
and let capitalism do what it's done for one hundred years.
Speaker 3 (25:25):
Well, laws the government steps in way too too much
for actual free market to actually exist.
Speaker 2 (25:31):
That's not just it'll take Congress to you know, pass
new laws to you know change these things, which of
course there we're not going to see that happen either.
But nevertheless, you're listening to the Wise Many Guys radio show.
I'm your co host John Scameron here with my partner
de Seppi Viskani, and we've touched upon this real briefly,
(25:53):
but we need to touch upon You had mentioned g
when you made one hundred thousand and I said, yeah,
and when you had a million dollars, you know, you're
retired wealthy. But nowadays and yeah, nineteen eighties, nineteen nineties,
that has completely changed. And now you look at and
what's interesting is is and I don't know who wrote
(26:15):
this article, but maybe you can talk about that, you
know what it what the inflation adjusted levels are, and
what it would mean to feel rich, say in San
Francisco or Santa z or in different parts of California.
That would be how you would felt in the eighties
(26:36):
if you had a million backs and you were making
one hundred grand a year. I mean, that's some pretty
unbelievable stuff, which really then goes to you just can't
make three or four percent on your money anymore and
think that you're going to unless you got a whole
lot of it. Yeah, unless you have tens of millions
or either you or you live meagerly. It's one or
(26:58):
the other, a both, right, So our job is to
help you live, you know, the coming years and the
coming decades at the same level where you feel good
about what you have and what you can do you
know now, but on into the future and for the
rest of your lives. That's really what planning and money
(27:20):
managers is about. Right, So go into some of that.
This is yeah, just so in my mind, there's a
lot of data here.
Speaker 3 (27:27):
But I read this article and it was basically it's
you know, the golden one hundred thousand dollars in the
nineteen nineties, right, it was you just start your job
or you get out of college, and your whole goal was,
man if I can make six figures like I haven't made, right,
I feel accomplished.
Speaker 2 (27:45):
Right.
Speaker 3 (27:46):
And doesn't mean that you were super rich, but you
were making enough money at that time where you could,
you know, really be goal oriented to buy your own house,
to take vacations, to have a family, right, to be
able to say for maybe kids college, so on and
so forth.
Speaker 2 (28:03):
So at that point in time, one.
Speaker 3 (28:08):
Hundred thousand dollars in nineteen ninety, basically the was three
times a median income. So the median income was about
thirty thousand dollars, okay, so it was three x the
median income. Housing that basically boiled down to two and
a half times income. So buying a house around two
(28:31):
hundred thousand dollars or two hundred and fifty thousand dollars. Tuition
at that year at that time was eight thousand dollars
a year, so it was relatively low. Healthcare, right, and
these are all the things, right, housing tuition if you're
saving up for a kid or maybe helping out a
grandchild for school or college. And then healthcare was two
and a half to three thousand dollars a year, so
(28:54):
very doable on one hundred thousand dollars a year income.
Now when you adjusted for inflation and fast forward to
twenty twenty five, one hundred thousand dollars back then, what
equal two hundred and twenty three thousand dollars a year now?
But even two hundred and twenty three thousand, even though
that's more than double, Okay, it still feels like you're
treading water, is basically what the article is saying. Because
(29:17):
when you look at median income and you compare that
to the met and this is just for the US,
not California.
Speaker 2 (29:24):
California is way out of whack.
Speaker 3 (29:26):
But when you look at the median income versus a
median house or cost of a home, you now need
five times the income for a house. Right, Tuition now
is forty two thousand dollars a year. Healthcare is twenty
four thousand dollars a year. So healthcare has gone up
almost ten x. Tuition has gone up, what is that
(29:47):
eight to forty.
Speaker 2 (29:48):
Two five x plus, right, that's quite a bit.
Speaker 3 (29:54):
So the rising cost of everything and just to live
for housing, tuition, healthcare, all those things.
Speaker 2 (30:02):
Income has not caught up with that.
Speaker 3 (30:03):
And the sad thing is you now see dual income
as a bigger percentage of households versus just singling almost.
Speaker 2 (30:12):
You know, you can't be a single income household, at
least most people in the country can't, right, Yeah, and
especially depending on where you live. Right.
Speaker 3 (30:21):
So the whole article was saying that the middle class, right,
because if you're making one hundred thousand dollars back then
in nineteen ninety, per se, you're a middle class and
you're living comfortable, you can take vacations, you can you know,
live in.
Speaker 2 (30:35):
A decent area of a neighborhood, buy a house.
Speaker 3 (30:38):
And that was actually my dad, My dad in in
the late eighties, and I remember I was asking him.
I started becoming curious and asking him because he had
his own business doing tyle of marble with my uncle,
and you know, I asked him. I was like, you know,
what do you guys do, Like how much you make?
How much you're making?
Speaker 2 (30:55):
This nice is you know about one hundred thousand dollars
a year in the late eighties. Was great. Lived in
San Jose at the time.
Speaker 3 (30:59):
Yeah, okay, and then you're going to you're going to
bring up some stuff on Saturaay, No way, lived lived.
Speaker 2 (31:05):
In San Jose. That's where I grew up. You know,
lived in a decent neighborhood in San Jose. They had
their own house, you know.
Speaker 3 (31:10):
My dad had had they had three vehicles they had
at that time.
Speaker 2 (31:16):
A thing that between late eighties and early nineties.
Speaker 3 (31:18):
My dad had a weekend car Camaro, also had motor home.
Speaker 2 (31:22):
We went on vacations.
Speaker 3 (31:23):
We go back east, you know, every other year, went
to Hawaii, things like that. So my dad didn't have
and my mom stayed home all right, and that provided
one hundred thousand at that time. Provided we weren't rich,
but we were comfortable, right right, one hundred thousand dollars
today or even two hundred thousand dollars today in San Jose.
Speaker 2 (31:41):
Good luck.
Speaker 3 (31:41):
So there's another article and John's going to read some
numbers off. Yeah, So I love this, but go on
for for what is it? What does it take to
feel rich? Okay, to feel like, man, I've made it
and I'm living real comfortable in some of these more
expensive cities like San Jose and San Francis. Go when
you put in a relation to the cost of living
(32:04):
in those cities.
Speaker 2 (32:06):
Well, now you know why, because I'm going to tell
you why people leave the Bay area and come out
to the sacrament areas. They have the opportunity to work
remote from home for suight because according to this, in Santase,
to feel like you felt back in the late eighties
or nineties where you were, you were comfortable for affording
(32:27):
the house, the healthcare, the cars, you know, so on
and so forth. Tuition Now in Santase it's eight hundred
and forty two thousand dollars a year. In San Francisco
it's slightly less seven hundred and sixty eight thousand, NAPA
seven hundred and eight, Santa Cruz six seventy two, Santa
(32:48):
Rosa five point thirty four. Valeo, Yeah, Leo, I mean, yeah,
there's okay. I mean, I guess if you're looking at
some of the bay there, it might be nice, but
valeo' is a pit, it's a dump. And four I mean,
don't get me wrong, areas we've got six flags. But
that's pretty exciting. Yeah, four hundred and nine thousand. To
(33:11):
live comfortable or to live like you feel rich in
Valec did three seventy five, modesto three forty one. Now
that doesn't mean the average household income is those. It
just means to feel like it was the eighties or
nineties all over here and you were making it where
you were comfortable based on you know, the house payment,
(33:32):
the insurance payments, you know, the property taxes, the cars, utilities.
Speaker 3 (33:38):
Being to being able to say what for tuition for
kids for college and all that, and the.
Speaker 2 (33:43):
Reality is it's not going to get better, so you
know the benefit, I guess to most we always say this,
the first thing you need to accomplish before even considering
retiring is you have no debt. You can't have a
mortgage payment. I mean again unless you have some incredible
(34:05):
you know, assets and a great pension plus soul security,
or you can have a very low interest rate and
it's very manageable.
Speaker 3 (34:13):
You know, for the most part, our most you probably
don't want a boat payment.
Speaker 2 (34:17):
Right I don't know anybody who has a boat payment,
but you probably don't want to have. I mean, our
recommendation would be, you don't have a mortgage payment, you
don't use credit cards, you don't have an automobile payment,
and be in.
Speaker 3 (34:31):
The position where you don't have to because if you're
in a position and you're nearing retirement and you have
to use credit cards, you have to have these payments
ready to retire exactly.
Speaker 2 (34:41):
And so and then it boils down to, Okay, now
I'm at least in a good position to where you
know my debt is not going to be a burden
in retirement. I guess that's the real way to I
got to work another five years because I got all
this debt, and now I believe I've amassed the money
that I need to supplement and continue our lifestyle for
(35:03):
the rest of my the rest of our lives. Then
that is where we come in, and that is why
you should call nine one six nine six seven thirty
five hundred to come in for a new obligation consultation.
We'll show you exactly what we're helping people accomplish. Or
if you're in or going to be in and or
(35:23):
around the Reno area on September tenth, about three weeks
from now, call to register for our September tenth Retirement workshop,
which will be at the Twisted Fork from six to
seven thirty pm on Wednesday, September tenth. And let's talk
a little bit about Okay, we talked a lot about
the FED. We talked about, you know, some of the
(35:46):
things that we don't like about the FED, or at
least I did. We talked about obvious obviously that it
takes a lot more money now to live the same
comfort that you live lived, you know, years ago, than
than what it will take now. And the reality is
(36:07):
is what I said is people like us are needed
more now than they've ever been needed because in order
to not run out of money to continue that comfortable lifestyle,
it takes active management of your investments, of your finances,
and it takes you know, kind of weeding out the
(36:31):
probability of making a mistake. And most people who's risk mitigation,
risk mitigation is the is the fancy way of saying that.
And the reality is is we think you should be
moving you know, some of some of your money out
of stocks into alternatives and into bonds, if you have
(36:53):
a moderate risk tolerance, one that you know, hey, well
if if you're heavy in stocks, you know, if you're
heavy in stocks and those stocks have a lot of
profits still in them, to avoid potentially giving up some
of that profit and to increase your dividends and interest,
there's other things that you should be taking a look at.
(37:16):
Or your advisor or your agent whoever is helping you
manage your money, or your accountant, your attorney. People use
all kinds of people these days themselves, which is about
the same as the times.
Speaker 3 (37:30):
Sometimes you get there like oh, hey, we get it.
I mean, we get it when we go walking in
the bank. He did you hear that about this stock
or that stah?
Speaker 2 (37:35):
Yeah, yeah, what do you think of? Everybody's got a
hot stock pick and I love that, and almost all
of those end up, you know, completely worthless. I can't
tell you how many times over the years people have
pulled money out because I had a business opportunity or
a friend told them, you know, and this is a
sure thing. It's the see this is from the CEO's
(37:58):
friend of a friend's brothers sister's cousin's mother, and then
they pull out fifty grand one hundred grand, you know,
two hundred and then they I should have back a
couple of years.
Speaker 3 (38:09):
I should have personally done that. I should have personally
done that with one back in twenty twelve. That worked out.
Speaker 2 (38:17):
Yep, okay, twenty twelve, I should have done it. Apple
it was. It was twelve dollars at the time. Apple, Nope, Google.
We talked about it before in the previous Microsoft. Way
bigger than that, way bigger than that. Nvidio.
Speaker 3 (38:31):
It was twelve dollars at the time in twenty twelve.
End of twenty twelve. Yeah, okay, it's now six figures.
Oh Berkshire Bitcoin, Oh what come on? Of course, well,
I had somebody had told me you should look into it,
a cryptocurrency bitcoin, blah blah blah blah blah. And my
(38:53):
wife said, and we had talked about this. I don't
know what show was, but then she says, what if
we just take a thousand dollars and by it I would
have been ninety bitcoin about.
Speaker 2 (39:00):
Yeah, make a millionaire.
Speaker 4 (39:03):
Not mega but almost mega. What would you consider mega megaladon? Well,
I have one, not quite that good. But in nineteen
ninety six there, of course, you know, Internet and the
speed of information, which we talk about in our workshop
wasn't what it is uh today. And I read and
(39:25):
subscribed to Smart money magazine, which I don't even think
is around anymore, and it said buy these three companies.
One of them was Abbot Labs, one of them was Apple,
and then the other one was GE. By these three
companies now, and here's why. Well, I looked at GE.
GE was very expensive and I couldn't buy a lot
(39:49):
of shares based on the price Abbot Labs. The stock
had run up quite a bit and from the research
I read, was pretty close to its target price. So
on and so forth. And then or was Apple. Apple
was about sixteen bucks a share. So I bought a
thousand shares and then Apple about one month later, went
(40:09):
to twenty one dollars a share. And you know what
I did, sold it. I sold it. But you know,
hindsight is twenty twenty. I mean that thousand shares is
probably worth at least a million dollars today now after today,
with the splits and everything. But that's reality. I mean,
you know, sometimes it works that way, but a lot
(40:31):
of times it doesn't.
Speaker 2 (40:32):
But so that doesn't and you know that you make
a good point.
Speaker 3 (40:35):
And I think you know with with and we've dealt
with this with certain clients, is when it's hey, i'd
like to take some risk on, you know, and buy
the stock or look at that stock, or what do
you think about this other stock, or it's going to
be big, or it's a future so on and so forth.
Take a small enough portion of your portfolio. You know,
we've done it with some clients, and you can make
(40:57):
those bets hold long term. If you have conviction on
a certain company or sector and if it doesn't work out,
it's not going to put you behind. It's not going
to change your plans or have it where all of
a sudden you're going to say, oh, I was going
to retire next year, but now I got to push
it out three, four or five more years.
Speaker 2 (41:15):
Yeah. And so again, the reason why you would want
to come in for a no obligation consultation is because
we're going to show you how we diversify people, truly
diversify people. We focus on things that have lower correlation
to each other, that have lower standard deviations than the
typical stock or stock fund or even bond or bond
(41:38):
fund to you know, create a diversity inside of your
portfolio to create a more consistent potential track record and
a better you know, overall long term return on investment.
So that again you you you keep up or outpace inflation.
Speaker 3 (41:56):
Well, you're taking the burden of growth out of the portfolio,
because if you have bonds or alternatives and they're paying
five six seven percent and distribution rate a year, right,
and you know you're going to get at least that
growth out of them, right, and then maybe a little
bit of market market growth fiation. Yeah, and you're shooting
(42:17):
for maybe a seven or eight percent or whatever or
ten percent, then the burden of the portfolio trying to
go after stocks that are going to just provide growth. Right,
if you're going for eight or ten percent or even
fifteen percent, you're you're leaving some of that burden.
Speaker 2 (42:32):
Yeah. So I would say that the biggest thing to
focus on right now. The best advice we could give
if you refuse to come in for a no obligation
consultation by calling nine one six ninety six seven thirty
five hundred is focus on total return. Total return. There's
two components of it. What does something pay you while
(42:53):
you own it? And then what price did you pay
and what potential does that price potentially increased to? And
so I think and and and our money. Our money
management style for our retired clients is we focus more,
not that we don't focus on, you know, prices that
(43:13):
we pay for investments, but because most of our clients
are retired, we focus on what something pays while you
own it as a big portion of your total return,
just like Joseppi said, to reduce the burden on getting
to a goal. And that's the other strategy and tip
is you know, have a minimum return to objective number.
(43:37):
Let that be quantified for you or quantify it yourself.
And we include planning for our for all of our clients.
It's not an extra cost to help you identify what
real what real numbers you need to achieve each year
to not run out of money and have a very
(43:57):
high probability of success, which we shoot for an eighty
percent or better probability of success that you won't rent
out of money and you'll achieve whatever your minimum return
to objective is. And if it's six percent, then your
portfolio should net six percent or be designed to net
six percent. If it's seven or eight, so on. And
(44:18):
so forth. Then your portfolio should be designed to have
a high probability of achieving those numbers. And if you
don't know these things, then you know you're you're gonna
wish you did, and you're gonna wish you called nine one,
six ninety six, seven thirty five hundred. Well, I hope
you enjoyed listening to the wise money guys, John scammering
(44:40):
to Steppe Vescani. We always enjoy talking to you each Saturday,
so come back and give us a listen next week.
By Ally, I have a great weekend.
The Wise Money Guys Radio Show is brought to you
by One Source of Wealth Management SEC Licensed three one
nine zero seven eight. For disclosures and more information, visit
our website One Source WM dot com.
Speaker 2 (00:13):
Welcome to the Wise Money Guys Radio Show. I'm your
co host John Scamraham here with my partner up you Wisconti,
and we are certified portfolio Managers, which means we are
at investment experts at helping people who are retired are
about to retire manage their money. If you like our show,
have any comments or questions, or want to get together
for a no obligation consultation, give us a call at
(00:34):
nine one six ninety six seven thirty five hundred for
more information. You can also visit our website at Wysemoneyguys
dot com. Score the end page for important information, and
you can also email us at question at Wysemoneyguys dot com.
And we got a pretty big thing happening the Fed.
(00:57):
The Fed is but you know, has really kind of
put us on a pause if you will, of you know,
continual record breaking and even created a little bit of
a pullback here which last week you've got your eyes
worked on. And I said Hey, you know, luck in
some profit and and you know, buy on the dips,
(01:19):
and certainly I think that's the opportunity which dip that
we're in. Yeah, which, well, when there is a dip,
you got to look at certain things that you're following
and then you know, buy those things that you think
are now at a good price. But but it just
I don't know how many times I've talked about this
over the years, but the fact that the FED, the
(01:40):
Federal Reserve Board, has this much world financial control, world
financial control of markets, currencies, interest rates, economies, prosperity, it
just seems I think it's so out of date. I
think the feds dual mandate, which I see you have
(02:02):
some notes here on and you know, if you wouldn't
mind talking about some of this stuff that we're expecting
from the FED. But I think it's just antiquated, and
I think they've got to rein in some of the
control that the FED has because they shouldn't be able
to decide, you know, and really king making right. So
(02:25):
they cut rates last year when they shouldn't have, and
the market reacted negatively, and interest rates actually went higher
because everybody the stock market was fine but everybody knew
it was political, and now you know, when you've got
it's still a pretty decent economy, but definitely signs of slowing,
(02:46):
and we're seeing that in the labor market and the
jobs reports and retail sales and things like that. You
certainly have the ammunition to be preemptive. I think being
preemptive to to make a mistake one where or the other.
A preemptive mistake on cutting is better than a mistake
(03:08):
on you know, not cutting, is it? I think? So
what do you think?
Speaker 3 (03:13):
Well, I mean, they made three they made three cuts
last year, right, that was the wrong move, so that
could have been preemptive and then.
Speaker 2 (03:22):
Yields went higher. But are we doing as well as
we're doing? Because they they they were preemptive even though
it didn't do the the it didn't have the effect
that they wanted. And when I say, they were talking
about the Federal Reserve Board, the FOMC on on interest rates.
(03:43):
But we did get a more normalized heel curve and
we have had a pretty robust, you know, economy up
until recently, and you know, decent GDP numbers so on
and so forth. So so you know, now, to me,
if we want to keep that going. You know, you
don't let your foot off the gas. You know, we
(04:05):
can afford a little bit more growth in in in
our overall economy versus the one percent or the one
point four percent that that they're you know, there's various
uh people out there are the same predicting. That's where
we'll you know, come in at uh for for for
(04:26):
what for a full year GDP one point four one
point four that's horrible. Yeah, I mean, so why not,
you know, push the accelerator down more.
Speaker 3 (04:37):
I think the Yeah, it's a tough it's a tough
spot to be in because their mandate is price stability
and full employment. We got full employment. We've had full employment.
The stock market's been resilient, we've hit all time highs.
So you know there and and you know, when you
go back to the amount of power they have is
(04:58):
I think the problem with the fact is a flip
flop and they change your strategy. It's not they don't.
They're not operating today like they used to, like in
the nineteen nineties, right, and so they're.
Speaker 2 (05:09):
Either way long ago in the nineteen nineties.
Speaker 3 (05:12):
Yeah, yeah, Well, and I have some I have some
actually uh, information from nineteen nineties and the Golden Right,
and I'm sure you lived through that.
Speaker 2 (05:26):
When I was growing up, I was like, oh, if
I can make one.
Speaker 3 (05:29):
Hundred thousand dollars a year, yeah, like that would be perfect, right,
you can have enough six six figures, you can have
enough to.
Speaker 2 (05:36):
Buy a house with big billion dollars. That was you
were good, You were good, you were you were rich.
Speaker 3 (05:43):
So we can we'll dive more into some of the
data and one hundred thousand dollars back in nineteen nineties
and what that means today and how things how much
things have changed. But going back to the FED is
you know, the either data dependent or they're forecasting.
Speaker 2 (05:59):
It's one of the other.
Speaker 3 (06:01):
And you can't go one and then go back together
because if you're data dependent, then you're just looking at
the data and you're making decisions on monetary monetary decisions
based off of the data. You can't say, well, the
data is coming in and it looks like inflation is
going down, but we think maybe in.
Speaker 2 (06:18):
The near term it's going to go back up.
Speaker 3 (06:20):
Yeah, and so therefore we're making a decision to do
this or lose credibility.
Speaker 2 (06:25):
Credibility, the fat does well, you make mistakes, and you
make mistakes, you lose credibility, and then there's market question
your motives.
Speaker 3 (06:32):
Well, and there's well, and there's no consistency. So what
is your process? Is your process to forecasts and make
decisions based off of your forecast, and if such, then
how how well and how accurate have you forecast been
in the past, and how well has that worked out
in the past? By forecasting right, and therefore making a
decisions based off of forecasting versus making decisions based off
(06:55):
of just the data that's incoming and then making monetary
decisions based off of that, how successful and how accurate
has that been versus your forecasting? And I think this
should just make decisions based off of what has been
a better outcome one way or the other. And I'll
tell you, you know, if you're guessing, well, we should look
into that. You don't need to, because the forecasts and
all their dot plots that they've gone back all the
(07:17):
way you know, through the big last recession in two thousand.
Speaker 2 (07:20):
And eight have been horrible.
Speaker 3 (07:21):
Yeah, I mean maybe ninety percent of them have been wrong, probably,
And so.
Speaker 2 (07:26):
This is why you know, I repeat myself often on
how important it is to you know, have professional management
of your money, especially retirement, especially if it's part of
your livelihood and income needs, because you know, the reality
is is you shouldn't be going it alone at where
(07:47):
to put your money quite frankly, because you know a
lot of people they come in and they're they're shocked
to see that you know, what types of difference investments
there are out there that and what they pay when
they see that things can pay a five, six, seven, eight,
even to as high as ten percent and it doesn't
(08:09):
have to be a typical stock or a typical mutual fund,
and that when you have money, you're afforded access to
different things then when you don't have money, and yet
people still just you know, don't don't get informed as
much as they should. And so you know, my my,
(08:32):
I guess mantra is again, why would you be retired,
you know, watching all of this information if you do,
or and then deciding when to get in, when to
get out, what to get into, what to get out of,
and do that when you're retired in your sixties, seventies
(08:52):
and eighties, it makes it makes no sense to me,
I mean, because there's always money to do that's such.
Speaker 3 (08:57):
A profession or you have all the resources at hand, Yeah,
and you enjoy doing that and you've educated yourself then sure,
which there's some people like that, but the majority of
people aren't.
Speaker 2 (09:06):
Like no that I would say.
Speaker 3 (09:07):
Or you or you or you are and then you
get caught up because you start emotions starts bleeding into
the right decisions.
Speaker 2 (09:14):
Right. We had a client come in and and literally
because of the records and stuff like that, she took
over basically, uh, the management of an account that they
have and was like, oh, I've got this. I can
just you know, use chat, GBT and GPTE g g
(09:41):
GPP good and and it'll tell me then and that's
asked at GPT how to say chat GPT And that's
just I mean, not reality. In fact, AI is proving
you know, so far are to be I mean, other
(10:02):
than helping you create, you know, a letter or come
up with some ideas. It's it's nowhere near where the
future is going to be once.
Speaker 3 (10:15):
It's a helpful tool for sure, but that's use I
use it, but you have to I think the caution
is you have to know some and have some information
and knowledge of the subject matter that you're dealing with
because if you don't, because I've ran some economic analysis
(10:39):
and things on stock market, and you know, the importance
of AI is how you prompt number one and then
number two knowing enough about the information that you're trying
to extract from it to decipher if that's accurate or
relevant information or not. Because I've ran into situations where
I've done things to help with analysis neither stock market
(11:01):
or economic and there was a situation in the world
was completely wrong, and so I had to double check
in and I went I did some of my own research,
and I'm like, no, this is not I don't know
where it's pulling this information from.
Speaker 2 (11:11):
But I think that point is valid. Your input, the
quality of your input and what you're asking it to
come up with determines the quality of the output exactly.
And so if you don't know enough of the information.
Speaker 3 (11:27):
Or subject matter, then how are you going to best
prompt it exactly? And so when you can get the
information and you say, great, I'm going to run with that.
And if you don't know and the only reason why
you do that is because you don't know enough about
the subject matter that you're just going to run with
that and maybe that you know, provides to be successful,
but maybe not, and it gives you something completely different.
Speaker 2 (11:48):
I'm kind of glad that these things are coming out
because certainly there's some benefit, like you said, as a tool,
but it also demonstrates to me how much we are
needed and will be needed still in the in the
near and medium term future, just because you know, things
(12:10):
are changing drastically, and the more we're in this new
industrial revolution, the more opportunity that needs to be researched
and deciphered to decide what should make up your portfolio.
You're listening to the Wise Mondy Guys radio show and
your co host John Scammeran here with my partner Extraordinary
to Seppia Visconti, and you know, we were talking a
(12:34):
little bit about AI. We were talking, of course, about
the FED and and just their resistance to cutting rates
or at least changing their mentality about you know, where
they're at from a tightening or an easy perspective to
your kind of comments. I mean, really, you could argue
(12:56):
it either way. I mean, there's ammunition out there to say, oh,
let's be preemptive and cut and there's an ammunition out there
that says, nope, it's too soon to you know, not
be in a restrictive economy is doing fairly well, you know,
monetary and employments slow.
Speaker 3 (13:12):
Stock market hit all time highs. You know, it's kind
of hard. There's not all the it's not a there's
no big red flag waving. That's that's the tough part, right.
Speaker 2 (13:22):
So, which got us to our point that we were
trying to make that it becomes more challenging to know
what to be in, and that AI isn't the solution
to where you could just go, oh chat g P
T huh, tell me what to put my money in.
(13:42):
It's too unreliable and unless it really knows you your
financial situation, your tolerance for investment risk, your time horizon. Well, no,
you're giving them all the ammunition. Well, that's still list
of prompt right, I mean, because when it comes down
(14:02):
to it, there's five different categories of investments. There's stocks,
there's bonds, those are alternatives, there's real estate, there's cash
cash equivalents. And just because you know, you might think
you know what's best, doesn't mean that it is. Because
you can get stock like returns from investments that we've
(14:25):
talked about on this show that are a combination of
a stock intoicy and a bond and an option all
wrapped into one thing with some heck of you know,
some pretty amazing features from from a cash flow perspective,
that it's that a computer is not going to know
(14:45):
about and then even if it does, it's not going
to know what percentage of your money you should put
in and what parameters.
Speaker 3 (14:55):
I mean it could, it could, but it would be sophisticated.
You have to build it out again.
Speaker 2 (14:59):
You have have all thems. You'd have to have the
information to do too, you know, the prompts that you
put in, and so you're going to make a mistake,
is my point. And if you're retired and you've got
you know, a fair amount of money, why would you
risk it and then stress about it? Right? Because then you.
Speaker 3 (15:17):
Got I think that I think the bigger part is
just why would you take unnecessary risk? I think what
we see more of is, you know, when when things
are going great in the stock market or certain stocks
that people are holding, you know, then they're willing that
euphoria kicks in and they're willing to take and to
continue to take risks or maybe or maybe take more risk, right,
(15:38):
and say, hey, I did well on this stock or
this basket of stocks.
Speaker 2 (15:41):
Greed, the greed, the green eyed monster kicks in, right.
Speaker 3 (15:45):
And so why would you why would you take the
unnecessary risk? And sometimes, you know, in our job, a
lot of times what we find when we're having conversations
with clients when there's high flyers out there stock markets
hitting all time highs is raining them in and saying,
based off of your timeline, your goals and so on
and so forth, in us doing all the calculations within
the financial plan and factoring inflation, and not only that,
(16:08):
but then factoring in what if scenarios?
Speaker 2 (16:10):
Right, what if you have a.
Speaker 3 (16:11):
Long term care event retirement that's going to cost you
sixty seventy eighty thousand dollars a year extra, right, that
you hadn't planned for for three years? How does that
impact your overall portfolio, your other plans, your goals, so
on and so forth. Those are things that we take
into consideration because it's very likely that it can happen.
Speaker 2 (16:29):
There's a high probability.
Speaker 3 (16:30):
And so then you look at okay, well, then how
much risk are you taking on your assets? And how
hard do your assets really need to work for you
to be able to hit all your financial goals. And
then also what if some of those curveballs get thrown in?
You know, then what do you still survive? And sometimes
people say, well, if I'm taking more risk and I'm
going to get a higher return, then that should be better. Right,
(16:53):
So then if I have a long term care event,
or if I have something where my expenses go way up,
then it should put me in a better situation because
I took more and I had more games and so
on and so forth. Not all the time because you
have a higher standard deviation or a higher risk. There
could be years like two thousand and eight or twenty
twenty two or what have you, and then maybe that
curveball event happens that same year or the next year,
(17:15):
and now your assets are at a lower level, and
because you've taken more, you don't have the time to
what are you looking at?
Speaker 2 (17:24):
Well, I'm hearing aside, you know, guys wondering if they're
coming from my head.
Speaker 3 (17:30):
Or I'm talking in the mic, but I'm looking at
you and you're looking around like like it's like you're
in a haunted mansion or something.
Speaker 2 (17:38):
By the way, you can you can watch us doing
our show if you prefer and can't catch us Saturdays
at eleven on KSTE six point fifty, you can catch
us on our YouTube channel, which is the Wise Money
at wismoney guys dot com. Is it at the or at.
Speaker 3 (17:59):
No, it's just wise But you can go on YouTube
and you can search just you can type in a
scambray and visconte calm of the Wise Money Guys and
it should it should pop us. But to finish my thought,
which I think my thought lost me at this point,
But the reality is we don't only just take and
look at just pure investments and say what's going to
(18:20):
grow or what's going to grow the best, or how
can we beat the s and P five hundred.
Speaker 2 (18:23):
There's a lot more that goes into that. And what we.
Speaker 3 (18:25):
Find is when we have conversation with the clients, it's
you know, especially the ones that have a little bit
more vigor that they're going to want to go after gains.
Is reining them in and saying, look, your assets don't
need to take this much risk. If you want to
maybe take a smaller portion of your assets, and then
we can play more aggressively with that because then if
it blows up on this smaller portion, it's not going
(18:46):
to blow up your overall plan, especially if there's some
unforeseeing things that happen, you know, within your retirement ten
years down the line.
Speaker 2 (18:53):
Yeah, and then really do you have the knowledge you
know when to rebalance, when to dollar cost average, when
to take fit you know, so on and so forth,
and you know what area you know does well when
other areas are doing poorly. You know, right now, are
you shifting from megacap or or large company stocks and
(19:14):
stock funds to the undervalued small company stock funds or
medium sized company stock funds or stocks? You know, if
you did, if you missed out on VideA, Is there
a way that there's companies out there that Nvidia needs
in order to continue to make its profits. And yes,
(19:34):
there are companies that you can invest in that are
an an indirect way to play the Nvidia plan.
Speaker 3 (19:43):
So I'm kind of tired of talking about like in
Nvidia and video like whoo who there's there's thousands of stocks,
and what we're seeing right now is that there's a
pullback in a lot of these tech names because they've
been overvalued. Yep, they're at high pe multiples and now
it's rotating into some dividend paying stocks.
Speaker 2 (19:57):
And that happens when we started saying, you know, months
and months ago, well, and we don't ignore divid in
pain stocks. And you don't want to go one way
or the other.
Speaker 3 (20:07):
You know, our core portfolio that has thirty stocks has
some of all right, it has some uh names in there,
like Palunteer for example, that that could be high flyers,
but then it has a lot of dividend pain stocks
as well. The point is you want to have diversified
and you don't want to focus on like what's gonna well,
and that is going to be the focus next week,
(20:27):
by the way, because in video earnings is going to
come out. So it's not only just the FED. Yeah,
that has all the power in the in the person.
Speaker 2 (20:35):
When you're a four trillion dollar market cap, I mean literally,
you can the entire market. You can move the S
and P five hundred and the Nasdaq and the doubt
global global markets really and quite frankly around the world.
You can move the hang saying you can move it everything, yeah,
foot see everything. Yeah goodness.
Speaker 3 (20:54):
So I mean this week the focus has been around
Jerome Powell and the economics and and Jackson Hole.
Speaker 2 (21:01):
Next week it's.
Speaker 3 (21:02):
Going to be in video, and then the big one
is going to be coming in September of the FMC,
meaning because then we're going to see if there's going
to be action or no action.
Speaker 2 (21:11):
I'm predicting right now there'll be no action. That's that's
not that big of a prediction. Well, no, it is.
I mean, well, I think I'm right.
Speaker 3 (21:20):
I think the better prediction would be, what is your
prediction of the commentary? We know, we know that there's
going to probably be no action.
Speaker 2 (21:27):
He's already given that away.
Speaker 3 (21:29):
What is he going to have a dubvish tone now
during the September meeting and lean towards maybe we look
towards some cutting and the end of the year, or
is he going to stay stayed.
Speaker 2 (21:42):
I think Jerome Powell secretly wants the economy to go
into a recession. I really do. I do. It's just
why is that? How does that make because of his speech?
Well it doesn't. He's a king. He's got the Messiah complex.
Think so without at I don't know when you see
him up takes he takes no direction from Congress, who
(22:05):
actually does control the power of the purse. You know,
fiscal policy. He takes no direction from the president and
that and there's dependent I get that. But at the
same time, you know, it can't just be your way
or the highway. And that's the problem.
Speaker 3 (22:24):
And that's what I was talking to before, is what
is their process and are you going to stick to
that process?
Speaker 2 (22:29):
They don't, or do you just.
Speaker 3 (22:30):
Go, Okay, this is what we're gonna do. We're gonna
or this is what we're gonna do to day dependency
or whatever.
Speaker 2 (22:35):
That's the problem. I think.
Speaker 3 (22:37):
I think if if Jerome Powell came in and said,
here's our process and this is what we're going to
act upon, no matter what's going on right like they
did it with a supply chain, we're forecasting supply chain
is going to free up and then we're gonna it's
gonna solve a lot of this inflation that we're seeing wrong,
which did in the form of energy, thinking about we're
producing they were wrong, but no where we're not where.
(22:58):
That wasn't wrong.
Speaker 2 (22:59):
I mean that. But what I'm saying, well, I'm saying
they were wrong, and because they were holding off on
raising rates, because they were forecasting the supply chains, we're
going to free up. And therefore you're talking about back
when they were saying, oh is transitory right, Yes, so they're.
Speaker 3 (23:16):
Now doing it all over again, but now it's instead
of supply chains, it's terrace and it's yes, we see
inflation is starting to come down and head in the
right direction. But but what happens in the next few months.
Speaker 2 (23:30):
But the reality is where you can lead prices down,
and what's been crucial is the creation of more output
of energy in its various forms here in the US,
which has driven crude down, which is driven heating you know, uh,
energy down, utilities down, unless it's PGEN in California, course,
(23:53):
but anywhere else in the nation, utility prices have come down.
Gas prices have come way down. You know, your home
has come way down. Energy prices to you know, factories
and businesses have all come down. And then it offsets
the increase in maybe some of the product costs to
(24:15):
create whatever your product or service.
Speaker 3 (24:17):
Which should be helpful, Yeah, what should be helpful because
and we'll talk more in a course segment.
Speaker 2 (24:22):
Fedbacks that out of their data dependent of course, because
they refuse to acknowledge because it's not part of climate
change and the goal to say that the climate changes
because of fossil fuels and energy. So you therefore have
to back out that, Hey, energy can make the world better,
(24:48):
it can make you produce things less expensively, it could
create more jobs, it creates more prosperity, and it just
makes leftists like Jerome Power want to puke. And so
the reality oil. Yeah, So the reality is is that
(25:08):
I personally think the FED should be completely overhauled, especially
the whole process and the dual mandates, and and really
get back to more of a free market economy and
and let capitalism do what it's done for one hundred years.
Speaker 3 (25:25):
Well, laws the government steps in way too too much
for actual free market to actually exist.
Speaker 2 (25:31):
That's not just it'll take Congress to you know, pass
new laws to you know change these things, which of
course there we're not going to see that happen either.
But nevertheless, you're listening to the Wise Many Guys radio show.
I'm your co host John Scameron here with my partner
de Seppi Viskani, and we've touched upon this real briefly,
(25:53):
but we need to touch upon You had mentioned g
when you made one hundred thousand and I said, yeah,
and when you had a million dollars, you know, you're
retired wealthy. But nowadays and yeah, nineteen eighties, nineteen nineties,
that has completely changed. And now you look at and
what's interesting is is and I don't know who wrote
(26:15):
this article, but maybe you can talk about that, you
know what it what the inflation adjusted levels are, and
what it would mean to feel rich, say in San
Francisco or Santa z or in different parts of California.
That would be how you would felt in the eighties
(26:36):
if you had a million backs and you were making
one hundred grand a year. I mean, that's some pretty
unbelievable stuff, which really then goes to you just can't
make three or four percent on your money anymore and
think that you're going to unless you got a whole
lot of it. Yeah, unless you have tens of millions
or either you or you live meagerly. It's one or
(26:58):
the other, a both, right, So our job is to
help you live, you know, the coming years and the
coming decades at the same level where you feel good
about what you have and what you can do you
know now, but on into the future and for the
rest of your lives. That's really what planning and money
(27:20):
managers is about. Right, So go into some of that.
This is yeah, just so in my mind, there's a
lot of data here.
Speaker 3 (27:27):
But I read this article and it was basically it's
you know, the golden one hundred thousand dollars in the
nineteen nineties, right, it was you just start your job
or you get out of college, and your whole goal was,
man if I can make six figures like I haven't made, right,
I feel accomplished.
Speaker 2 (27:45):
Right.
Speaker 3 (27:46):
And doesn't mean that you were super rich, but you
were making enough money at that time where you could,
you know, really be goal oriented to buy your own house,
to take vacations, to have a family, right, to be
able to say for maybe kids college, so on and
so forth.
Speaker 2 (28:03):
So at that point in time, one.
Speaker 3 (28:08):
Hundred thousand dollars in nineteen ninety, basically the was three
times a median income. So the median income was about
thirty thousand dollars, okay, so it was three x the
median income. Housing that basically boiled down to two and
a half times income. So buying a house around two
(28:31):
hundred thousand dollars or two hundred and fifty thousand dollars. Tuition
at that year at that time was eight thousand dollars
a year, so it was relatively low. Healthcare, right, and
these are all the things, right, housing tuition if you're
saving up for a kid or maybe helping out a
grandchild for school or college. And then healthcare was two
and a half to three thousand dollars a year, so
(28:54):
very doable on one hundred thousand dollars a year income.
Now when you adjusted for inflation and fast forward to
twenty twenty five, one hundred thousand dollars back then, what
equal two hundred and twenty three thousand dollars a year now?
But even two hundred and twenty three thousand, even though
that's more than double, Okay, it still feels like you're
treading water, is basically what the article is saying. Because
(29:17):
when you look at median income and you compare that
to the met and this is just for the US,
not California.
Speaker 2 (29:24):
California is way out of whack.
Speaker 3 (29:26):
But when you look at the median income versus a
median house or cost of a home, you now need
five times the income for a house. Right, Tuition now
is forty two thousand dollars a year. Healthcare is twenty
four thousand dollars a year. So healthcare has gone up
almost ten x. Tuition has gone up, what is that
(29:47):
eight to forty.
Speaker 2 (29:48):
Two five x plus, right, that's quite a bit.
Speaker 3 (29:54):
So the rising cost of everything and just to live
for housing, tuition, healthcare, all those things.
Speaker 2 (30:02):
Income has not caught up with that.
Speaker 3 (30:03):
And the sad thing is you now see dual income
as a bigger percentage of households versus just singling almost.
Speaker 2 (30:12):
You know, you can't be a single income household, at
least most people in the country can't, right, Yeah, and
especially depending on where you live. Right.
Speaker 3 (30:21):
So the whole article was saying that the middle class, right,
because if you're making one hundred thousand dollars back then
in nineteen ninety, per se, you're a middle class and
you're living comfortable, you can take vacations, you can you know,
live in.
Speaker 2 (30:35):
A decent area of a neighborhood, buy a house.
Speaker 3 (30:38):
And that was actually my dad, My dad in in
the late eighties, and I remember I was asking him.
I started becoming curious and asking him because he had
his own business doing tyle of marble with my uncle,
and you know, I asked him. I was like, you know,
what do you guys do, Like how much you make?
How much you're making?
Speaker 2 (30:55):
This nice is you know about one hundred thousand dollars
a year in the late eighties. Was great. Lived in
San Jose at the time.
Speaker 3 (30:59):
Yeah, okay, and then you're going to you're going to
bring up some stuff on Saturaay, No way, lived lived.
Speaker 2 (31:05):
In San Jose. That's where I grew up. You know,
lived in a decent neighborhood in San Jose. They had
their own house, you know.
Speaker 3 (31:10):
My dad had had they had three vehicles they had
at that time.
Speaker 2 (31:16):
A thing that between late eighties and early nineties.
Speaker 3 (31:18):
My dad had a weekend car Camaro, also had motor home.
Speaker 2 (31:22):
We went on vacations.
Speaker 3 (31:23):
We go back east, you know, every other year, went
to Hawaii, things like that. So my dad didn't have
and my mom stayed home all right, and that provided
one hundred thousand at that time. Provided we weren't rich,
but we were comfortable, right right, one hundred thousand dollars
today or even two hundred thousand dollars today in San Jose.
Speaker 2 (31:41):
Good luck.
Speaker 3 (31:41):
So there's another article and John's going to read some
numbers off. Yeah, So I love this, but go on
for for what is it? What does it take to
feel rich? Okay, to feel like, man, I've made it
and I'm living real comfortable in some of these more
expensive cities like San Jose and San Francis. Go when
you put in a relation to the cost of living
(32:04):
in those cities.
Speaker 2 (32:06):
Well, now you know why, because I'm going to tell
you why people leave the Bay area and come out
to the sacrament areas. They have the opportunity to work
remote from home for suight because according to this, in Santase,
to feel like you felt back in the late eighties
or nineties where you were, you were comfortable for affording
(32:27):
the house, the healthcare, the cars, you know, so on
and so forth. Tuition Now in Santase it's eight hundred
and forty two thousand dollars a year. In San Francisco
it's slightly less seven hundred and sixty eight thousand, NAPA
seven hundred and eight, Santa Cruz six seventy two, Santa
(32:48):
Rosa five point thirty four. Valeo, Yeah, Leo, I mean, yeah,
there's okay. I mean, I guess if you're looking at
some of the bay there, it might be nice, but
valeo' is a pit, it's a dump. And four I mean,
don't get me wrong, areas we've got six flags. But
that's pretty exciting. Yeah, four hundred and nine thousand. To
(33:11):
live comfortable or to live like you feel rich in
Valec did three seventy five, modesto three forty one. Now
that doesn't mean the average household income is those. It
just means to feel like it was the eighties or
nineties all over here and you were making it where
you were comfortable based on you know, the house payment,
(33:32):
the insurance payments, you know, the property taxes, the cars, utilities.
Speaker 3 (33:38):
Being to being able to say what for tuition for
kids for college and all that, and the.
Speaker 2 (33:43):
Reality is it's not going to get better, so you
know the benefit, I guess to most we always say this,
the first thing you need to accomplish before even considering
retiring is you have no debt. You can't have a
mortgage payment. I mean again unless you have some incredible
(34:05):
you know, assets and a great pension plus soul security,
or you can have a very low interest rate and
it's very manageable.
Speaker 3 (34:13):
You know, for the most part, our most you probably
don't want a boat payment.
Speaker 2 (34:17):
Right I don't know anybody who has a boat payment,
but you probably don't want to have. I mean, our
recommendation would be, you don't have a mortgage payment, you
don't use credit cards, you don't have an automobile payment,
and be in.
Speaker 3 (34:31):
The position where you don't have to because if you're
in a position and you're nearing retirement and you have
to use credit cards, you have to have these payments
ready to retire exactly.
Speaker 2 (34:41):
And so and then it boils down to, Okay, now
I'm at least in a good position to where you
know my debt is not going to be a burden
in retirement. I guess that's the real way to I
got to work another five years because I got all
this debt, and now I believe I've amassed the money
that I need to supplement and continue our lifestyle for
(35:03):
the rest of my the rest of our lives. Then
that is where we come in, and that is why
you should call nine one six nine six seven thirty
five hundred to come in for a new obligation consultation.
We'll show you exactly what we're helping people accomplish. Or
if you're in or going to be in and or
(35:23):
around the Reno area on September tenth, about three weeks
from now, call to register for our September tenth Retirement workshop,
which will be at the Twisted Fork from six to
seven thirty pm on Wednesday, September tenth. And let's talk
a little bit about Okay, we talked a lot about
the FED. We talked about, you know, some of the
(35:46):
things that we don't like about the FED, or at
least I did. We talked about obvious obviously that it
takes a lot more money now to live the same
comfort that you live lived, you know, years ago, than
than what it will take now. And the reality is
(36:07):
is what I said is people like us are needed
more now than they've ever been needed because in order
to not run out of money to continue that comfortable lifestyle,
it takes active management of your investments, of your finances,
and it takes you know, kind of weeding out the
(36:31):
probability of making a mistake. And most people who's risk mitigation,
risk mitigation is the is the fancy way of saying that.
And the reality is is we think you should be
moving you know, some of some of your money out
of stocks into alternatives and into bonds, if you have
(36:53):
a moderate risk tolerance, one that you know, hey, well
if if you're heavy in stocks, you know, if you're
heavy in stocks and those stocks have a lot of
profits still in them, to avoid potentially giving up some
of that profit and to increase your dividends and interest,
there's other things that you should be taking a look at.
(37:16):
Or your advisor or your agent whoever is helping you
manage your money, or your accountant, your attorney. People use
all kinds of people these days themselves, which is about
the same as the times.
Speaker 3 (37:30):
Sometimes you get there like oh, hey, we get it.
I mean, we get it when we go walking in
the bank. He did you hear that about this stock
or that stah?
Speaker 2 (37:35):
Yeah, yeah, what do you think of? Everybody's got a
hot stock pick and I love that, and almost all
of those end up, you know, completely worthless. I can't
tell you how many times over the years people have
pulled money out because I had a business opportunity or
a friend told them, you know, and this is a
sure thing. It's the see this is from the CEO's
(37:58):
friend of a friend's brothers sister's cousin's mother, and then
they pull out fifty grand one hundred grand, you know,
two hundred and then they I should have back a
couple of years.
Speaker 3 (38:09):
I should have personally done that. I should have personally
done that with one back in twenty twelve. That worked out.
Speaker 2 (38:17):
Yep, okay, twenty twelve, I should have done it. Apple
it was. It was twelve dollars at the time. Apple, Nope, Google.
We talked about it before in the previous Microsoft. Way
bigger than that, way bigger than that. Nvidio.
Speaker 3 (38:31):
It was twelve dollars at the time in twenty twelve.
End of twenty twelve. Yeah, okay, it's now six figures.
Oh Berkshire Bitcoin, Oh what come on? Of course, well,
I had somebody had told me you should look into it,
a cryptocurrency bitcoin, blah blah blah blah blah. And my
(38:53):
wife said, and we had talked about this. I don't
know what show was, but then she says, what if
we just take a thousand dollars and by it I would
have been ninety bitcoin about.
Speaker 2 (39:00):
Yeah, make a millionaire.
Speaker 4 (39:03):
Not mega but almost mega. What would you consider mega megaladon? Well,
I have one, not quite that good. But in nineteen
ninety six there, of course, you know, Internet and the
speed of information, which we talk about in our workshop
wasn't what it is uh today. And I read and
(39:25):
subscribed to Smart money magazine, which I don't even think
is around anymore, and it said buy these three companies.
One of them was Abbot Labs, one of them was Apple,
and then the other one was GE. By these three
companies now, and here's why. Well, I looked at GE.
GE was very expensive and I couldn't buy a lot
(39:49):
of shares based on the price Abbot Labs. The stock
had run up quite a bit and from the research
I read, was pretty close to its target price. So
on and so forth. And then or was Apple. Apple
was about sixteen bucks a share. So I bought a
thousand shares and then Apple about one month later, went
(40:09):
to twenty one dollars a share. And you know what
I did, sold it. I sold it. But you know,
hindsight is twenty twenty. I mean that thousand shares is
probably worth at least a million dollars today now after today,
with the splits and everything. But that's reality. I mean,
you know, sometimes it works that way, but a lot
(40:31):
of times it doesn't.
Speaker 2 (40:32):
But so that doesn't and you know that you make
a good point.
Speaker 3 (40:35):
And I think you know with with and we've dealt
with this with certain clients, is when it's hey, i'd
like to take some risk on, you know, and buy
the stock or look at that stock, or what do
you think about this other stock, or it's going to
be big, or it's a future so on and so forth.
Take a small enough portion of your portfolio. You know,
we've done it with some clients, and you can make
(40:57):
those bets hold long term. If you have conviction on
a certain company or sector and if it doesn't work out,
it's not going to put you behind. It's not going
to change your plans or have it where all of
a sudden you're going to say, oh, I was going
to retire next year, but now I got to push
it out three, four or five more years.
Speaker 2 (41:15):
Yeah. And so again, the reason why you would want
to come in for a no obligation consultation is because
we're going to show you how we diversify people, truly
diversify people. We focus on things that have lower correlation
to each other, that have lower standard deviations than the
typical stock or stock fund or even bond or bond
(41:38):
fund to you know, create a diversity inside of your
portfolio to create a more consistent potential track record and
a better you know, overall long term return on investment.
So that again you you you keep up or outpace inflation.
Speaker 3 (41:56):
Well, you're taking the burden of growth out of the portfolio,
because if you have bonds or alternatives and they're paying
five six seven percent and distribution rate a year, right,
and you know you're going to get at least that
growth out of them, right, and then maybe a little
bit of market market growth fiation. Yeah, and you're shooting
(42:17):
for maybe a seven or eight percent or whatever or
ten percent, then the burden of the portfolio trying to
go after stocks that are going to just provide growth. Right,
if you're going for eight or ten percent or even
fifteen percent, you're you're leaving some of that burden.
Speaker 2 (42:32):
Yeah. So I would say that the biggest thing to
focus on right now. The best advice we could give
if you refuse to come in for a no obligation
consultation by calling nine one six ninety six seven thirty
five hundred is focus on total return. Total return. There's
two components of it. What does something pay you while
(42:53):
you own it? And then what price did you pay
and what potential does that price potentially increased to? And
so I think and and and our money. Our money
management style for our retired clients is we focus more,
not that we don't focus on, you know, prices that
(43:13):
we pay for investments, but because most of our clients
are retired, we focus on what something pays while you
own it as a big portion of your total return,
just like Joseppi said, to reduce the burden on getting
to a goal. And that's the other strategy and tip
is you know, have a minimum return to objective number.
(43:37):
Let that be quantified for you or quantify it yourself.
And we include planning for our for all of our clients.
It's not an extra cost to help you identify what
real what real numbers you need to achieve each year
to not run out of money and have a very
(43:57):
high probability of success, which we shoot for an eighty
percent or better probability of success that you won't rent
out of money and you'll achieve whatever your minimum return
to objective is. And if it's six percent, then your
portfolio should net six percent or be designed to net
six percent. If it's seven or eight, so on. And
(44:18):
so forth. Then your portfolio should be designed to have
a high probability of achieving those numbers. And if you
don't know these things, then you know you're you're gonna
wish you did, and you're gonna wish you called nine one,
six ninety six, seven thirty five hundred. Well, I hope
you enjoyed listening to the wise money guys, John scammering
(44:40):
to Steppe Vescani. We always enjoy talking to you each Saturday,
so come back and give us a listen next week.
By Ally, I have a great weekend.
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