How to Deal with Financial Pressure Ep 127

Experts from the show:

A couple weeks Jerome Powell, the head of the Federal Reserve, stated the time has come to lower interest rates. The goal has been to lower the cost of everyday items we use while not plunging the economy into a recession. Talk about trying to walk on a tightrope over the Grand Canyon.

Believe it or not there’s even a fear and greed index that gauges which sentiment is most applicable at the time.

From the Wall Street Journal, “September is a popular time for companies to go public. This month’s stock-market volatility is putting some plans on ice. It isn’t just the market’s recent choppiness, they say, but that turbulence could flare up again, given the uncertainty around November’s presidential election and how much the Federal Reserve will cut interest rates this year.”

 From Fox Business, “About 61% of workers said they fear retirement more than they do death, while 64% said the thought of retiring is scarier than the thought of getting divorced. One reason for the fear is that Americans are worried they will run out of money in retirement.”

Last week I was talking to my friend Jason Benham and we were talking about how fear often leads to anxiety.

The World Health Organization states, “In 2019, 301 million people in the world had an anxiety disorder, making anxiety disorders the most common of all mental disorders.”

If you’ve been reading our newsletter for a while you may recall our mice problem we had a while back in our garage.

Investment advisory services offered through CreativeOne Wealth, LLC. Clients Excel, LLC and CreativeOne Wealth are not affiliated companies. Licensed Insurance Professionals. Investing involves risk, including potential loss of principal. Any references to protection or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. Annuity withdrawals are subject to ordinary income taxes and potentially a 10% IRS penalty before age 59-1/2. Roth distributions are tax free after age 59-1/2 and the account has been open for at least 5 years. This video is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. 

Episode Transcript

SPEAKER_00 (00:00):
Welcome back to the Excel in Retirement podcast,
where we help good people makewise financial decisions so that
they may excel in retirementwith confidence.
Learn more at clientsexcel.com.
Now to your host, David Treese.

UNKNOWN (00:18):
David Treese.

SPEAKER_01 (00:24):
All right, welcome back to episode 127.
We're going to talk interestrates, what's going on.
We're going to talk about how todeal with pressure, and then
we're going to talk about debtand some views on debt and how
we should handle that.
It seems like just a minute ago,we were back in early 2022, and
everyone was wondering why theFederal Reserve hasn't already

(00:45):
raised interest rates to combatthe rapidly rising cost of
goods.
I think it's safe to say thatnobody anticipated rates would
stay as I'll see you next time.

(01:13):
A couple weeks ago, JeromePowell, the head of the Federal
Reserve, stated that the timehas come to lower interest
rates.
The goal has been to lower thecost of everyday items we use
while not plunging the economyinto a recession.
Really talk about trying to walkon a tightrope over the Grand
Canyon.
That's a perilous situation,isn't it?

(01:35):
And it is to be determined howit's going to play out, really.
But seemingly, what has pushedthe decision to eventually lower
rates later this month has beenunemployment rising.
And from an article I linkedhere, and I'll put it in the
show notes, meanwhile, he said,a slowdown in the labor market
is unmistakable and a downsiderisk to employment has

(01:59):
increased.
And so that was what JeromePowell said.
In finance, commentatorssometimes say people may their
decisions about their portfoliobased on fear or greed.
Believe it or not, there's evena fear and greed index and it
gauges the sentiment that's mostapplicable at the time.
And it doesn't take long todiscover things to be fearful

(02:20):
about, does it?
This time of year also isgenerally a hot time for
companies to begin offeringshares of ownership to the
public for investment.
So IPOs will come onto the sceneand whatnot.
The Wall Street Journal recentlyThis month's stock market

(02:41):
volatility is putting some planson ice.
Companies weighing whether tomake their stock market debuts
face critical decision in thecoming weeks.
Pull the trigger soon so theycan launch their deals before
year-end or hold off until 2025.
And the article continues, theoutlook isn't rosy.
The growing consensus amongcompanies considering initial

(03:03):
public offerings is to waituntil the end of the year.
wait until next year.
Many bankers, lawyers, andcorporate executives say it
isn't just the market's recentchoppiness, they say.
But the turbulence could flareup again, given the uncertainty
around November's presidentialelection and how the Federal
Reserve will cut interest ratesthis year.

(03:24):
And so Fox Business had anotherarticle that said about 61% of
workers fear retirement morethan they fear death.
And while 64% said they thoughtof retiring as scarier than the
thought of getting divorced, onereason for the fear the article

(03:45):
is that Americans are worriedthey will run out of money.
That's certainly a considerationand something to think through.
And it's a big fear every timepolling happens around these
questions.
But I've got a confession foryou.
If I had to pick fear or greedas one of the most dominant
feelings I have, I'd have to sayit would be fear.

(04:06):
And some of us probably learnedat a young age that you tend to
attract to your life the peopleyou're like.
So I'm commonly havingconversations Let me preface
that a healthy view of both isprobably most helpful, right?
We want to be cautious, but wealso want to be positioned to

(04:26):
capture opportunities when theyarise.
Last week, I was talking to myfriend Jason Benham.
And I'll put a show note link tohis information if you want to
check that out.
But we were talking about howfear often leads to anxiety.
The World Health Organizationstates that in 2019, 301 million

(04:48):
people in the world had ananxiety disorder, making anxiety
disorders the most common of allmental disorders.
My takeaway from that is ifyou're not dealing with anxiety
about something, your probablyinteract today with someone who
is.
So how can we deal with thischallenge?

(05:08):
Jason has a framework he worksoff of to deal with anxiety.
He starts by defining the typesof pressure we often experience.
And so he says, number one iseveryday pressure.
And so we're supposed to havethis type of pressure, pressure
to get out the door so we're notlate to work or pressure to make
sure a bill is paid on time orthe kids are at school on time

(05:30):
or we get to a doctor'sappointment on time, things like
that.
Number two would be events.
We have a big project at workdue and we have to get it done
or we have to give apresentation at a club we're
part of or at work or somethinglike that.
So everyday pressure, events,and then number three is
emergency.
So let's say we're in anaccident and something bad has

(05:52):
happened outside of our control.
And so those are the three typesof pressure, everyday, events,
and emergency.
And fear may cause level one andtwo things to accelerate to
level three if we leaveourselves unchecked.
Jason defines anxiety asprojecting fear into the future,

(06:14):
which may turn pressure intopanic.
And then what happens whenpressure becomes panic and we're
projecting that fear into thefuture is we get stuck.
So now.
We know what pressure is.
Let's figure out a solution andthree keys to deal with this.
Number one, what we want to dois recognize what's truly going

(06:36):
on.
And so as a Christian, werealize that the enemy doesn't
want peace.
But we have hope as a Christianthat all things will eventually
be made whole.
Even if you're not a Christian,I think most people out there
would agree that there areforces in our world that are
obstinately pursuing chaos.

(06:59):
My faith, though, helps meunderstand why.
Understand it for what it is.
There's forces out there thatare not for peaceful solutions
to our issues.
So we've recognized number one.
Number two, we want to renouncethe lie that we're tempted to
believe.
Have you ever thought somethingin your head?
I do this all the time.
And then you say it out loud toa friend or maybe your spouse,

(07:22):
and you realize that wasn'tright at all.
Sometimes our internal dialogueleads us to believe things that
just aren't true or they're notfully true.
We should be aware of thetemptation to despair.
We can find tons of reasons toworry, but that's a temptation
to despair and we need torenounce that in an ideal

(07:43):
situation.
Number three is to replace itwith truth.
And so we've got number one,recognize.
Number two, renounce.
Number three is to replace itwith truth.
What do you know to be trueabout the situation?
Figure out what's importantabout the situation.
So let's tell a story.
When Jesus was on the boat withhis disciples, a storm arose on

(08:05):
the lake.
But Jesus was below peacefullysleeping, the Bible says.
The disciples believed Jesus tobe the literal Messiah of the
world, and yet they panicked,thinking they were going to
drown that day.
They believed Jesus was a divinebeing, so they should have
really known that the boat wasnot going down with Jesus on

(08:28):
board, the literal Messiah ofthe world.
As a Christian, we know Jesus isin our proverbial boat, and the
book says the boat isn't goingdown.
Jesus ultimately rebuked thedisciples for their lack of
faith.
And so from a practicalstandpoint, sometimes we lack
faith in our own work oraccomplishments, right?

(08:50):
We strive and work to save forretirement, and some of us are
prone to fear that doom isimpending.
But hopefully with this templatethat I've outlined that Jason
has created, you can have a toolto combat some of those
feelings.
I feel like it's been helpful tome and I feel like it's a good
exercise.
I believe with all theinnovation with technology, And

(09:14):
with things getting so much morerobust with us being able to get
information quickly, itgenerates issues with us having
more to be anxious about.
Okay, let's transition toanother story.
I don't know about you, but Ireally like having comfortable
furniture.

(09:34):
I love sitting down in anoversized recliner and kicking
up my legs after a long day,right?
Mallory, my wife, though, she'sthe type that prefers aesthetic
furniture over comfortablefurniture.
Comfort is secondary to her.
She might disagree with methere.
Remember, she's the art teacherand the interior decorator.
When we started dating, she hadthis small couch in her living

(09:57):
room that fit the bill perfectlyfor her.
If you were looking at herliving room and not actually
living in it, it was a greatcouch.
And so it looked like somethingout of a magazine.
Another challenge we have isMallory's about seven inches
shorter than I am.
So in a big chair, her feetsometimes don't reach the
ground, right?

(10:18):
When I sat on her couch, though,my knees were in my chest.
And so the couch became a pointof contention.
I've always figured, though,that if our biggest disagreement
was over furniture, we weredoing pretty well.
The other issue with the tinycouch is, we were sitting on it
when I proposed to her.
So now the uncomfortable tinycouch has sentimental value too.

(10:40):
At this point, when I figuredthis out, I started really
despairing, thinking I would bedealing with this couch until I
go to my grave.
After a lot of griping though,we finally got a bigger couch
and somehow the tiny couch endedup transitioning to our garage
for storage.
And if you've read ournewsletter, you may recall back

(11:01):
in May, I wrote about...
our mice problem.
And I'll put a show note linkhere to that.
And we had mice in our garagefrom when we were storing
chicken feed in there for fiveyears or so.
That was a bad, bad idea.
And after the extent of therodent problem was revealed back
earlier in the spring, Mallorywas finally okay with getting

(11:23):
rid of this couch, but notbefore she had imagined those
beady-eyed devils lounging on itat night.
So we left the couch on thetrailer.
We loaded it up a few weeks Andso we waited for an opportune
time to drop it off at the dumpon the other side of the county.
And the time finally came thispast weekend.

(11:46):
And as soon as that went overthe ledge into the great trash
abyss, I sighed a sigh of reliefand Mallory immediately started
reminiscing about all thememories the couch invoked for
her.
Sometimes people come into ouroffice and they have old debt
hanging out there.
Maybe it's an old student loanor an old credit card from when
they hit a rough patch, and thetopic will come up about what to

(12:09):
do about it.
Sometimes people have the fundsto retire the debt, but they
keep it around like our old tinycouch.
They reminisce about the funthey had financing that boat or
that car or whatever it was.
Maybe they initially didn't havethe money to pay it off, but now
they do, and they're stilloperating under the terms of not

(12:30):
having the funds to be done withthe problem.
The other challenge is sometimeswe don't want to give up our
cash to pay debts down.
That can be a challenge.
And you'll be able to find tonsof people on the internet
advocating for things like neverpaying your home off because of
the tax deduction and making theargument you can earn more on

(12:50):
your money if you have a lowinterest rate on your mortgage.
And those ideas are fine forsome people and they certainly
have merit, but we What we needto think about is that peace of
mind is freeing, and we cannotput a price tag on peace of
mind.
Not to speak of the interestwe're paying on that debt that
we're servicing.
At times, if our debts arecausing our clients distress,

(13:13):
I'll consider with them whetherit makes sense to take funds
from their retirement accountsto pay off the debts and be done
with it.
What it comes down for me is Ispent a lot of time with my
grandparents as a kid, and I'mboth sides of my family, I had
some great-grandparents and thenmy mom's parents, they lived
through the Great Depression.

(13:34):
And one of their number oneobjectives early in their
careers was paying their houseoff as quickly as possible.
And what it came down to is theywere looking to generate as much
financial security as possible,given that their childhood was
the Great Depression and theiryoung years.
And so they wanted to pay thatoff.

(13:54):
And call me simple-minded, butwhen it And when we have less
debt, I think it frees us up forthe potential of other
opportunities, opportunities togrow our savings without
interest payments, or maybe itfrees us up to support nonprofit
causes that are important to us.
And I really think it relievesour mind of stress.

(14:14):
So my rule of thumb is when indoubt, pay it off.
And so we want to get rid ofthat stuff as quickly as we can
in an ideal situation.
If you have any questions orcomments, feel free to email.
You can reach us at864-641-7955, or you can email
us at hello at clientsexcel.com.

(14:35):
Hope you have a great day.

SPEAKER_00 (14:38):
Take care.
Investment advisory servicesoffered through Creative One
Wealth, LLC.
Clients Excel, LLC and CreativeOne Wealth are not affiliated
companies.
Licensed insuranceprofessionals.
Investing involves risk,including potential loss of
principal.
Any references to protection orlifetime income generally refer
to fixed insurance products,never securities or investments.

(15:02):
Insurance guarantees are backedby the financial strength and
claims-paying abilities of theinsuring carrier.
Annuity withdrawals are subjectto ordinary income taxes and
potentially a 10% IRS penaltybefore age 59 and a half.
Roth distributions are tax-freeafter age 59 and a half, and the
account has been open for atleast five years.

(15:23):
This podcast Transcription byCastingWords The information and

(15:51):
opinions contained hereinprovided by third parties have
been obtained from sourcesbelieved to be reliable, but
accuracy and completeness cannotbe guaranteed by clients Excel.
The use of logos and ortrademarks of hosting sites are
the property of their respectiveowners and are not an
endorsement by those owners ofour firm or our program.