Money Monday with Brian James

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Station eight o six on a Monday. I hope you
know what that means. It's that time talking money matters.
It's money Monday with all Worth Financials. Brian James appreciate
all Worth loading out every Monday to talk about financial matters.
I hope you had a wonderful weekend. You're ready for
the holidays, Brian, we are. Yeah, We've got all local.
We're a good West side Cincinnati family.

Speaker 2 (00:21):
So nobody ever left town very far, so we just
got a lot of places they hit over the next
few weeks.

Speaker 1 (00:25):
H Yeah, I'm sure you're looking forward to it. I know,
I am. It's nice to excel a little bit and
try to enjoy something so much gloom and doom in
the news these days. Just I'm glad the holidays are
fast approaching for that reason alone. If there are any
other I gotta ask you. This Federal Reserve cut interest
rates by a quarter point and there was apparently dissension
among the ranks. We had Chicago's Fed president and the

(00:47):
Kansas City Fed saying no, no, you need a whole rate steady.
The Fed Governor, Stephen Moran said they've fifty percent basis
point cut, so point five and it came in at
point twenty five. What's the argument about Brian James. What
seems to be the problem here reaching a consensus?

Speaker 3 (01:03):
Well, you know that people have different opinions is really
all this thing.

Speaker 2 (01:07):
It really turns out we don't just move in lockstep
go figure. So, yeah, there were three descents this time around.
There were two that wanted to keep rates exactly where
they were, with concerns about elevated inflation, which is really,
you know, inflation has just never gone away. I don't
know that it's necessarily new inflation, it just hasn't gotten back.

Speaker 3 (01:22):
To where we want.

Speaker 2 (01:23):
And then another one wanted a steeper cutout about a
half percent. That one was concerned about a slowing labor market,
in other words, we want This person wanted to basically
kind of goose the system to sit, to entice businesses
to invest more and then re energize the hiring market.
So there's more new projections out there, some of them
painting a more optimistic, bigger picture, and so they did

(01:48):
increase their GDP forecast for twenty six to two point
three percent from one point eight.

Speaker 3 (01:53):
So obviously that's good.

Speaker 2 (01:53):
They're seeing better times ahead and reducing the twenty six
inflation projections to two point four percent.

Speaker 3 (02:00):
Two point six so as we're sitting here right now.

Speaker 2 (02:02):
Oh and also they kept unemployment the unemployment projections at
four point four for next year. So as we're sitting
here right now, it seems to be we are leaning
toward the opinion of the general opinion of the Fed
governors is positive. We're seeing better things coming with regard
to both inflation and economic growth. But yes, like you said,
we do still have some descent among the ranks.

Speaker 1 (02:22):
Okay, and I certainly get to this sounds kind of
joke a little bit there, But let me ask you this.
You mentioned the economic forecast, and I was glad you did,
because they project where they think the economy is going,
inflation and and employment and all that is. Are there
any statistics about how accurate they are with these forecasts,
because you know, someone wrote down accurate. Is this science

(02:43):
or alchemy? That will be me?

Speaker 3 (02:45):
Really?

Speaker 1 (02:45):
What's behind this? And has anybody checked their overall accuracy
rate over the years.

Speaker 2 (02:49):
Well, I think they've kind of They run hot and cold,
and we get excited about them when they're super accurate.

Speaker 3 (02:53):
We get excited about.

Speaker 2 (02:54):
Them when they're not accurate at all when they're in
the When they're kind of in the middle, we don't
pay attention a whole lot. So but yeah, these are
generally considered to be directionally useful but numerically wrong. So,
for example, in twenty one and twenty two, the FED
repeatedly projected inflation was going to fall quickly, only to
see it spike to forty year highs. Remember transitory inflation,

(03:15):
Well that wasn't exactly transitory. And over the last fifteen
fifteen years, we've repeatedly predicted slower GDP.

Speaker 3 (03:22):
Growth than what has actually occurred.

Speaker 2 (03:24):
Twenty thirteen to twenty nineteen growth was consistently ahead of
FED estimates. So now the FED hasn't been any more
accurate really than many other resources in terms of projecting
all this. And part of me wants to believe that
this might be because it's gonna hurt a lot more
if we tell everybody everything is wonderful, because people will
tend to take that and multiply it by ten, and
so it is reasonable to me that they might be

(03:47):
hesitant to really kind of light that light things on
fire too quickly, and therefore they kind of lean toward
urging caution a little more often.

Speaker 1 (03:54):
Well, with hindsight, it should. Do you think they're lamenting
the fact they didn't put the brakes on a little
bit sooner considering the trillions of dollars that were infused
into the economy through all these massive government spending programs
during the COVID time.

Speaker 3 (04:07):
Oh, for sure.

Speaker 2 (04:08):
I mean, because we had unbridled spending and we didn't
have a whole lot of oversight over the whole thing.
But yeah, I think at the time there was just
out and out panic among you know, the decision makers
from a standpoint of we don't know what this is,
we don't know how long this is going to last.

Speaker 3 (04:21):
We just know we have to do something big and
something quick.

Speaker 2 (04:24):
And I think and then a lot a lot of
cases that got us back to things we've seen in
the past where we've done a lot of spending like
that with really out any any handcuffs on it, and
that gets us the inflation that we've gotten. We saw
that in the late seventies early eighties when we were
when we basically cut interest rates too low during the
Nixon administration, and that begat a bunch of inflation over

(04:45):
the next several several years, leading to really really high
interest rates in the late eighties, well the early eighties.

Speaker 1 (04:51):
It is one of the big question marks the scenes
to be swirling about all this. And one of the
reasons I think they lowered the interest rate by our
quarter point is because of the concern over the labor market. See,
we used to be a rather moving target these days,
and I've read a number of articles where there's like
question marks over waitment. What is the true state of
the labor market. It seems that there's a lot of
people that are supposed to be in the know that

(05:12):
aren't quite in the know on that. But all the
arras seem to point to a deteriorating labor market. If
for no other reason, We're going to talk about artificial
intelligence in the next segment. This may be a bubble coming,
but AI is in fact replacing a lot of jobs,
and does it seems like that that trajectory is not
going to go anywhere anytime soon.

Speaker 2 (05:31):
Yeah, And we do have some jobs data coming out here,
and we have to look with a little bit of
a cross eye at the at the data we're getting
because who knows what we're seeing anymore? Because we're kind
of swapping this in for that and that kind of thing.
But in any case, where we are right now, the
November payroll payroll comes out this week, but we still
got some good information this week anyway. So August was

(05:54):
the last time the Jolts survey was updated, and that
showed opening job openings near multi year lows. And after
the government reopened, there was a jump in September to
seven point six million from seven point two and October
data is inching higher to seven point six So most
of these increases are coming from lower skill service jobs
and those are still dealing with seasonal quirks. So we

(06:17):
obviously we're in the holiday so you're gonna see a
little bit of fuzziness there. But all this data tells
us that workers are feeling a little bit less confident
about leaving that current job to find a new one
without already having secured something. You know, when these indexes
look a little bit different, that's when people feel like, Okay,
the job market is healthy, so I'm going to go
ahead and leave this job that's making me miserable and
I'll find something else later. Well, we're not seeing this

(06:38):
is the quis rate I'm referring to. So people are
hanging on to older jobs without you know, having found
a new one yet, So a little bit of insecurity there.

Speaker 1 (06:48):
So I hear what you're saying, no reason to doubt that.
But I keep again reading a bunch of articles about
how concerned people are that are looking to hire people
they can't find qualified people for the job, or the
people that they find are not well, not very good workers.
So there seems to be a demand out there for workers.
But I guess not in all sectors you mentioned the
lower level sectors, or are there other areas that have

(07:11):
been impacted one way or the other.

Speaker 2 (07:12):
Well, I think there's just a heel. Like you said,
there's a huge disconnect. It would be wonderful to get
all these people in the same room. The people who
are saying there aren't enough jobs available. This is the
people whore saying there aren't enough workers available. I would
like to get them into one big, giant hotel conference
room and maybe just kind of have a big job
fare and see how that goes. But I have a
feeling this is more of a discrepancy of employers not

(07:34):
wanting to give the perks that people still feel should
be involved in a job such as a flexible work schedule, hybrid.

Speaker 3 (07:40):
And remote work, those kinds of things.

Speaker 2 (07:41):
And then of course there we'll never see the eye
to eye on what the compensation should be in general.
So to me, all of that speaks more to a
lack of willingness to compromise on both sides than it
does complete blindness to the other side.

Speaker 1 (07:55):
All right, and the all important question the quarter point drop,
is that going to translate into lower mortgage rates.

Speaker 2 (08:03):
Well it should, But at the same time, there's a
lot of people out there, Brian who bought houses and
wound up with a eight eight and a half percent
mortgage something like that, And so we're gonna see those
folks who are obviously seeing.

Speaker 3 (08:14):
An opportunity to refinance.

Speaker 2 (08:16):
Sure, but that also was putting, that was pushing, you know,
those higher registrates were keeping people from moving at all, deciding,
you know, we'll push it out another couple three years. Well,
now that interest rates are falling a bit, I think
we might see the demand for housing pop back up
just a little bit, because people who would would have
moved otherwise over the last couple three years held off,
and now things are more a little more favorable for

(08:37):
them to do so.

Speaker 1 (08:38):
And under those circumstances, don't we still have an inventory
problem because I got the impression that we're kind of
short on housing supply.

Speaker 3 (08:46):
Yeah, and I think there's there's a lot to be
said too. We're also moving into a slower time of
year where people just don't want to move. So if
I have the.

Speaker 2 (08:52):
Cold out, it's exactly, I don't want to go get
the paper, let alone move everything. I know.

Speaker 3 (08:57):
So, yeah, we're entering in that time of year.

Speaker 2 (08:59):
And yeah, so there are fewer houses hitting the market.
I don't see cracks in the foundation or anything like that,
just kind of a downswing in the overall activity.

Speaker 1 (09:08):
All right, fair enough, We'll continue with Brian James speaking
of artificial intelligence Wall Street seeing an AI bubble coming.
What's that mean for us generally speaking? We'll learn about
that with Brian James. Stick around me right back fast
and pro roofing a reputable company that pre.

Speaker 3 (09:23):
The talk station.

Speaker 1 (09:29):
It's eight nineteen at fifty five KRC, the Talk Station,
Happy Monday, Brian James.

Speaker 3 (09:35):
All were financials.

Speaker 1 (09:36):
Brian James going through the Money Monday segment, and we're
going to talk about owner We're going to see another
tech bubble in the form of an AI bubble. Brian James,
Billions of dollars being thrown a fit at artificial intelligence
and a real game changer in terms of our energy needs.
And maybe we'll have a reform in terms of where
we get our energy from, notably small nuclear reactors. Please,
Dear God, let us have those. But is this a

(09:59):
bubble getting ready to pop? The whole world's competing on
this stage.

Speaker 2 (10:02):
Well, yeah, there's and this is AI has been a catalyst,
just like lots of other technological headlines over the last
thirty years. I remember remember when the Internet was very
first a brand new thing in the late nineties and
early two thousands. Well, obviously that was not a flash
in the pan, and it'd be got more bubbles. But
what we're concerned about here right now is you're seeing
a lot of sell offs on Nvidia, some of the
big names. An Oracle stock that has plunged after they

(10:25):
were they hit about three hundred and twenty bucks a share,
Now they're down to about one hundred and eighty eight.
A big step back for Oracle that was from October
to now, and just over a lot of AI spending
a weakening sentiment for firms tied to these platforms like
like open ai, and that's open Ai is the one
behind chat GPT.

Speaker 3 (10:42):
Of course, the Microsoft is doing a lot of money
them as well.

Speaker 2 (10:45):
And so I think investors are looking at the kind
of debating, okay, for twenty twenty six, how do I
want to be positioned?

Speaker 3 (10:51):
Do want to do?

Speaker 2 (10:52):
I want to stay as exposed given the run up
that all these stocks have had, and given the fact
that we really haven't had much of a shakeout. Remember
back two thousand and one, two thousand and two, that
was the shakeout of the original Internet bubble, and that's
when the winners and losers were first chosen. That has
not happened yet in the AI space, and I think
investors might be starting to look to that saying, okay,

(11:12):
it's really time for time for things to kind of
move to a little bit of a ranked order in
terms of who's going to survive and who's not.

Speaker 1 (11:18):
Well, it's like crypto in a way, isn't it. There's
like eight gajillion different cryptos out there, and you know,
I guess one of them, maybe or more, are going
to emerge as the top contenders and the other one's
going to fall by the wayside? Am I close on that?

Speaker 3 (11:31):
Well?

Speaker 2 (11:31):
I mean I think I think the difference there is
Crypto is more speculatively based. I mean it's it's these
companies that are pursuing AI have different patented technologies, different
approaches to things, versus crypto, which is ninety percent what
does the herd want.

Speaker 3 (11:44):
To buy to me? I got you so?

Speaker 2 (11:46):
But yeah, so I think it's going to be a
little different than that. This will be more traditional. Let's
look at the business plans and the opportunity strengths and
weaknesses and all that of each individual company again versus
just speculative types of assets.

Speaker 1 (11:56):
All right, Well, I guess in terms of exposure, I presumed,
since I have, you know, these managed funds and they're
filled with all kinds of different stocks, that anybody who's
got that kind of financial portfolio is exposed on some level.
I presume that some of my investments are in these
AI companies.

Speaker 3 (12:13):
Right. Oh, it's hard, It's impossible to avoid. There's no way.

Speaker 2 (12:16):
Yeah, even if you don't have anything that strictly is
itself involved in AI, it's a virtual guarantee that a
lot of the companies you've invested in via those mutual
funds and exchange traded funds are somehow themselves benefiting from AI.
There are a lot of savings and a lot of
efficiencies to be gained by allowing to allowing computers to
do more thinking pros and cons for sure, but we

(12:36):
can't pretend that these aren't these.

Speaker 3 (12:38):
Aren't powerful tools.

Speaker 2 (12:39):
So AI is going to filter its way into every
part of every industry just simply because of those efficiencies
that can be gained. If you own the S and
P five hundred, then a huge chunk of that the
largest holdings in there. And I feel like we've beaten
this to death on the radio waves here this last
several months. But a very very large chunk of the
S and P five hundred is focused in the technology

(12:59):
sect and just a handful of country companies. Because of
the way it's built, the S and P five hundred
is capitalization weighted. That means the bigger the company, the
more it makes up of the index. So as we
all know, technology is ruling the day at the moment,
so those tech companies are absolutely huge. If you have
the S and P five hundred index fund that's a
good fund, but.

Speaker 3 (13:20):
Don't assume that you're completely diversified.

Speaker 2 (13:22):
It's largely going to be driven by what technology does,
which that's just driving the market these past couple decades.

Speaker 1 (13:27):
I guess it is now I'm guessing this is I
hate using the phrase piece of God, but it often
is like the passes all human understanding, and for Brian Thomas,
it passes my understanding. Now, there are different types of
artificial intelligence, the mechanism, the how it works, components behind
the scenes of computer number crunching, whatever it's doing. And

(13:48):
somebody is going to emerge as the predominant force at
some point, right other one is going to be better
than the other. So there's the tech component of it.
But then there's also the hardware part. Isn't Navidia don't
they manufacture the chips?

Speaker 3 (14:01):
Correct? Yeah, there's a lot of components to this.

Speaker 2 (14:03):
There there are, you know, and I think back always
us example, I think back to the gold Rush. The
gold Rush was not at all about people digging gold
out of the ground. In terms of who made the money.
It was the companies that realized that there was a
movement happening among society. A lot of people were moving
out west to go dig in the dirt. So the
companies that made a lot of money were Levi's because
they they invented clothing that was durable and would hold

(14:26):
up for that kind of thing. They were the Studebaker
company that ultimately became the automotive company that we know of.

Speaker 3 (14:32):
They sold shovels. Go figure, that's a good idea.

Speaker 2 (14:34):
Wells Fargo, that's where the stage coach came from. For
for all these businesses doing doing business out there on
the frontier, out on the fringes, somehow that money had
to get back to the to the financial centers. That's
where the stage coach came from. So it's same thing
is happening here. And Vidia makes the chips that will
support the demand that's out there. In Vidia is not
out there putting AI into companies and consulting with them

(14:57):
on how to use it. They're just creating the hardware
because they know that demand is going.

Speaker 3 (15:00):
To be there for it. Are are they unique?

Speaker 1 (15:03):
Because that's all the only company I hear about in
terms of chips, and I know there's got to be
more of them out there, But does Navidia have any
competitors along there? At their level. Yeah.

Speaker 3 (15:12):
Yeah, so in Vidia, it is not a new company.

Speaker 2 (15:14):
It's a new name to people who don't who haven't
necessarily paid much attention to the technology industry. But in
Vidia has been a graphics company for decades, right, right,
So this.

Speaker 3 (15:22):
Is not They're not a you know, new on the scene.

Speaker 2 (15:25):
But they have the right technology and the right patents
to make this, to make the chips that are that
that happen to be appropriate for graphical processing units. They
also happen to be the best brains for artificial intelligence.
So some of it is knowledge and some of it
is right place, right time. But but they quickly got there,
and they had the ability to scale it up in

(15:47):
order to basically provide enough supply for all the demand
that's out.

Speaker 1 (15:51):
There, all right, And of course we have that you know,
critical question of whether they're going to be allowed to
sell chips that China and China's benefiting from official intelligence too.
The question is do we need to fund or help
our our foes if we may, in a geopolitical sense
refer to them along with their technology. So there's all
that that goes along with it.

Speaker 2 (16:10):
Yeah, that's true, and there is competition out there right.
This doesn't mean that AMD and Intel have just kind
of gone away and vanished. They are still out there,
but in Vidia is the one again just has the
best technology to produce these things at scale. And there
is you know, there wasn't remember it wasn't that long
ago that China came out with a competitor that turned
out to be a little bit, a little bit fake,

(16:30):
a little bit plastic. But there are certainly other organizations
other countries out there looking for more you looking for
more efficiencies there that will compete with in Nvidia, and
Vidia just has that they have much more of the
vertical of producing all these types of things.

Speaker 3 (16:44):
So that's why they're the leader right now.

Speaker 1 (16:46):
All right, we'll continue with Brian James. What is the
required minimum distribution? When is the deadline and what you
need to know about that. That's coming up next. More
with Brian James and Money Monday. After these brief words
fifty five KRC.

Speaker 3 (16:57):
This is a station.

Speaker 1 (17:00):
A twenty nine to fifty five fir CED talks station,
Happy Monday, Money Money with Brian James. We're gonna talk
about required minimum distributions.

Speaker 3 (17:07):
Question.

Speaker 1 (17:07):
This is for folks with retirement accounts like four to
one k's, and as I understand it, at seventy three
you have to start taking this required minimum distribution. In
other words, you might not need the money for your
day to day living expenses or whatever. You might be
well off independent of your retirement account, but you have
to start taking a distribution. What is the reason or

(17:28):
policy behind the mandate that at age seventy three you
have to start doing this before we get into the
dates and all that, Brian James.

Speaker 2 (17:34):
Jure, Well, yeah, this refers to not only four to
one k's as you mentioned, but also iras four h
three b's really any kind of tax sheltered account that
would have originated from your employment by some other company
out there. And the thought is the reason for this
is the IRS is basically saying, Okay, the gravy train
has come to a halt. You've never paid taxes on
these pre tax dollars. This only affects pre tax accounts.

(17:56):
We're not talking about roth, we're not talking about after tax.
So what they're basically saying is that you've contributed this
to maybe thirty forty years, you deducted it on the
way in it has grown completely tax free to something
when you turn age seventy three, it's also or seventy five,
depending on how old you are right now. If you
haven't reached that age as of yet as of by
twenty thirty, then it'll be seventy five.

Speaker 3 (18:17):
But for most people now seventy.

Speaker 2 (18:18):
Three, then the IRS says you do have to start
taking taxable distributions. Doesn't matter what you do with the money.
What it really means is that you just have to
start paying taxes on little bits of it. There's a
calculation you have to go through, and there's a table
in the IRS records that you'll use to do the calculation,
or just have your IRA custodian or four to one
K custodian do it for you. But essentially a good

(18:41):
ballpark is about four to five percent of the of
the accounts. So maybe if you've got one hundred thousand
and one of these accounts, you might have to take
out something like four to five thousand. That's not the taxes,
that is the distribution. That is what will be taxed.
So if you're in a twenty percent bracket, you might
owe eight hundred thousand bucks on that. So but the
whole point to answer your question, is basically that this
can't be a permanently tax sheltered pile of money. Does

(19:05):
have to get taxed at some point, and that's where
that's where they decided to start it decades ago.

Speaker 1 (19:09):
Okay, well, there is a thing called an inherited IRA,
for example, and is that a taxable event when it's
passed along to airs or is this are they subject
to a separate requirementium distribution.

Speaker 2 (19:21):
Yeah, as with anything, there are lots of moving parts
of this. So what you're referring to is somebody that
that you know, some benefactor of mine, passed away. They
themselves had one of these four oh one k ira
tax deferred accounts. And so generally speaking, here's what's commonly
known nowadays, as of the Secure Act of twenty twenty.
If I inherit an IRA from someone who passed after

(19:45):
twenty twenty, then I have ten years to drain that account.
I can drain it all day one, nothing stops me.
I can drain it all on day three, six hundred
and fifty at the end of the ten years. But
the point of that is that I now will have
to pay income taxes on every nickel of it, all
at once. Usually the best way to do that is
to find a way combine it with your other sources
of income to figure out what brackets you're going to hit,

(20:05):
and then figure out the right years to take it,
because most people within a decade will have some high
tax years and some low tax years. Now there's moving
parts to that too, though, Brian. If the person who
passed away, this is a new rule as of this year,
if the person who passed away was themselves of required
minimum distribution age, which which could have been any that
might have been seventy and a half several years ago,

(20:27):
then you will even though there's still the ten year rule,
you do still have to take a minimal amount out.
So make sure if you're in that situation that you're
that you're on top of that.

Speaker 1 (20:36):
Okay, Now, the downside risk if you fail to do
the require minimum distribution by the all important deadline. What
kind of penalty you are going to the face with the
on this one.

Speaker 3 (20:47):
A fat one, although not as fat as in the past.

Speaker 2 (20:50):
If you fail to take this full RMD by December
thirty first, the penalty is generally twenty five percent of
the amount that wasn't withdrawn. That's a huge chunk used
to be fifty percent and there was no forgiveness for it,
but now if you correct it within two years with
an IRS form, the penalty can be reduced to ten percent.
Penalties are penalties, though, let's just avoid them. Just make

(21:10):
sure you know understand what your obligations are and try
to get it done by December thirty. First, you do
have a get out of jail free card in your
very first year. You have until tax time the following year.
Because a lot of people don't find out, they don't
understand until they've done their taxes that they should have
taken a distribution.

Speaker 3 (21:28):
But that's only for the first year, and I.

Speaker 2 (21:30):
Would not recommend taking advantage of that because that is
still going to cause you to have to take two distributions,
the one to make up for missing the first year,
which in that case is penalty free, but you also
have to take the one for the second year, so
that could push you into a higher bracket.

Speaker 1 (21:44):
Fair enough, I guess for the folks that don't need
to tap into the retirement accounts, I guess they're in
decent enough financial situation. I guess you know, it might
be a good idea to pass it along to your children.
I mean, let that money work for them while they're alive,
and while you're still alive, and you can see the
fruits of the your labor in your to their benefit.

Speaker 2 (22:01):
Oh for sure, there's lots of things that you can
be thinking about there. The irs, like I said, doesn't
care what you do with these dollars. A lot of
people Brian will simply say, Okay, well I got to
pull that money out. It simply can't be sheltered anymore,
that small proportion of it, and so therefore I'm going
to take it out and I'm gonna immediately stick it
over in my account.

Speaker 3 (22:18):
Well, no, you can't do that. You can't put it
into a raw Oh well, okay, let this gets a
little complicated.

Speaker 2 (22:23):
You can do roth conversions, but they have to happen
after your rm D comes out. Therefore, if my RMD
comes out, and my RMD my required minimum is five thousand,
and I want to convert ten thousand, well then I
take five out. It cannot go anywhere else, pay taxes
on that, and then after that has happened, I can
convert my ten thousand, hundred thousand or whatever. But remember
your RMD is already going to push up your income bracket,

(22:46):
so therefore conversions are going to make that even worse.
If you're wanting to do roth conversions, the best time
to do it is before you have these require minimum
distributions kicking in.

Speaker 1 (22:54):
Do you as a financial planner? Is it person contingent
about whether or not you do a conversion? Because if
I converted my four oh one K, I'd have to
pay at my tax bracket the taxes that are due.
I understand that, but is it a good thing to
do that for somebody and the terrible thing for somebody
else to do I mean, it is.

Speaker 2 (23:13):
Very much not a black and white everybody should figure this. Yeah,
you are very much making a sacrifice right now. I
have a lot of people that'll come in and say,
here's my four to one K. I got a half
million dollars. I want to convert that into a rock.
As if I sign a form and it suddenly poof
tax free doesn't work that way. You need to take
in that case a half million dollars worth of taxable income,
which is going to be a fat voluntary check written

(23:33):
to the IRSA in exchange for the rest of your
life of tax free growth. I can show you mathematically
how that's a good idea, but I'm not the one
who has to write the fat check to the irs.
It's very much a philosophical thing. My role is to
make sure people understand the pros and cons of it.
It will be a very valuable strategy, though.

Speaker 1 (23:48):
I am one that am always worried about when I
start taking out my four oh one k distributions, that
they're going to come up with some just outrageous tax
scheme because we run this country into the toilet with
our debt, and they're going to say, well, there's trillions
of dollars walcked away in four to one case, let's
tax them at a much higher rate because we got
a crisis on our hands.

Speaker 3 (24:06):
Right exactly, and that that's that could happen.

Speaker 2 (24:09):
I don't worry too much about double taxation in these
accounts because the people who will have made that choice
will have to run for reelection having been, you know,
having just double taxed everybody and broken a promise that
had been in place for decades by that point.

Speaker 1 (24:21):
Fair enough on that. I'll try to hang my hat
and get some comfort from those comments. Brian James appreciate
what you do. Thanks to all Worth again for learning out.
We'll do this again next week. Have a wonderful week,
my friend, you too, Stay warm, you too coming up
Doctor Ridikahraman not in from the v