Simply Money

Episode Transcript

(00:00):
Three never sounded so good. FreeiHeartRadio app in the app Store, more
online at fifty five KRC dot com. Tonight, the biggest mistakes we see
investors make and how you can avoidthem. You're listening to Simply Money,

(00:20):
presented by all Worth Financial. Imean, you Wagner along with Steve Ruby.
It's our job, right, Imean, we're talking to the investors
that we work with every day.We're talking to listeners here on the show,
and we're trying to make sure thatyou're not making major financial mistakes that
you can't recover from. And sotonight Steve and I are just going to
throw out some of the biggest onesthat we'd say we've seen and probably maybe

(00:41):
the most common ones. Yeah.And the first one is it's a tough
one. It's when you let yourfeelings get the best of you and you
try to time the market. Yeah. So this is something that it's human
nature almost because we feel fearful,we feel greedy. Different emotions take control
and we think that we can makedecisions based on those emotions, and that

(01:03):
can really railroad your retirement if youwait and sell when we're at the bottom.
For example, I've seen this alltoo often. A big part of
our job, you said it ourselves, is coaching people to not make a
decision that can harm them. Peopleall too often get fearful after the market's
drop. But that's part of thegame, so to speak. When we

(01:23):
invest, it comes with volatility.So we need to find that sweet spot
for how much risk you have tokeep you invested during those periods of volatility,
because that's when the best days happen. If we sell at the bottom,
we are missing out on the bestdays during those periods of volatility.
It's something that I've seen happen toooften, and it's the type of thing

(01:46):
that can really throw a curveball inyour long term financial plan. You look
at the daily fluctuations of the market, and usually they're not huge, but
often coming off of a bottom isa huge fluctuation. A day when we've
got a huge kind of rebound,well, you wouldn't ever wake up that
morning and be like, oh,today is going to be a good day
in the markets, right. Mostof the time, the financial headlines on

(02:07):
those days are still terrible, right, and so there's nothing out there that
would point you toward Okay, Itook my money out last week, or
last month or yesterday, but today'sa good day to get back in.
And those are the days that youmiss. And there are all kinds of
charts that show the difference if youmiss just five, ten, fifteen,
twenty of those days. She's huge. Chief Investment Officer Andy sadaball Worth Financial,

(02:30):
he put together one and it showsthat if you had invested in the
SMP five hundred, one hundred thousanddollars over the span of twenty five years,
starting back in ninety seven, ifyou just sat it and forget it,
forgot it, that is, thenthat money would have turned into over
a million dollars. If you missedthe ten best days, four hundred and
seventy thousand dollars, not even halfof what that could have been worth just

(02:53):
by letting it ride. Yeah.One of the other things that drives me
crazy and is a major mistake Isee people making, and this is a
conversation I have all too often,is when we start getting on the topic
of saving for retirement and oh,are you putting enough money into the floor
one ky to get the full companymatch or you know, have you bumped
up how much your savings? Andthere's always a yeah, I get how

(03:14):
important that is. I really do, and I'm one hundred percent on the
same page with you. Here's thething. My son is on this travel
soccer team. It's really expensive.So once we get off this travel soccer
team, then we're going to startsaving. We've got this big vacation coming
up next summer. Once that vacations, there's always going to be something right.

(03:35):
And by waiting until the next something, then there's going to be something
else on the horizon after that.And you're putting off that power of compounding
and all the time that you have, that's what you're missing out on.
So these excuses really are only hurting. It's like your current self is hurting
your future self. And if yourfuture self could go back and talk to
you, they would say, listen, we get the travel soccer team,

(03:57):
we get the big trips. Butretirement, now, look, it's a
lot different because we made those decisionsbecause we didn't get that compounding interest.
Yes, don't do that to yourself. So another one is taking too much
or too little risk with your investments. When we work with folks, we're
building financial plans that map out allof your financial goals and we run scenarios,
and the point there is when youhave a financial plan, it tells

(04:20):
you the level of risk that youneed to take to meet your goals that
you can afford to take based onyour financial situation, and then getting to
know you and going through some questionnairescan can shine light on your risk tolerance.
I see situations where people try takingtoo much risk when they're knocking on
their door to retirement, or eventoo little risk when they are retired.
One of the biggest challenges that weface in retirement, believe it or not,

(04:42):
is inflation. Now we've been talkingabout it a lot over the last
year because it's spiked, but inflationis a silent killer. If you do
not take enough risk in stocks,because that's what keeps up with inflation,
then you risk losing purchasing power onyour money. When that happens, you
can't buy as much goods and serviceswith the dollars that you've managed to save
up. So we need to findthat sweet spot where you are subjecting your

(05:05):
money to gain potential, but nottoo much, especially if you're knocking on
the door to retirement. Think ofthis as Goldilocks and the Three bears,
right it's finding for you the perfectplace not too hot, not too cold,
but exactly right or exactly the rightsize for you. It's going to
be different for everyone, but yeah, I think the goal for your financial

(05:25):
plan should be to take on theleast amount of risk as possible and still
reach those goals. It's going tolook different for everyone, and for a
lot of you, it's going tobe Okay, how much stock exposure can
you have while still being able tosleep at night exactly? You know,
but you want to eat well andyou also want to sleep well, and

(05:45):
so you have to figure out whatthat middle ground is that's right for you
in order for you to be ableto do both things and get their well
exactly. So. Another one isplanning on working and definitely rather than planning
your finances. This is one thatdrives me crazy. Study after study right
shows the average person retires at theage of sixty two. Yet many times

(06:06):
I'll talk to someone and I'll say, I don't know, I really like
my job. My husband really likeshis job. We're not really going to
save for retirement. We're just goingto keep working. Anything could happen between
now and then. I don't careif you're sixty two or forty two or
thirty two, And then we talkabout four different kinds of sick. You
can get sick of your job,right, I mean, you can have

(06:26):
the best boss in the world,and then all of a sudden, you
come in next Monday and there's acompletely different person in that in that office
that could change things. And youknow a lot, yes exactly, your
boss could honestly get sick of you. You may be in a great situation
wouldn't happen to us, I meannot you and I, but some people,
right, that could happen too.And then there's the unfortunate situations where

(06:46):
maybe you get sick, or yourspouse or someone that you love get sick
and you need to take care ofthem. And so I say, listen,
if this is your plan, youlove your job, great, you
still plan on retiring at sixty two? Who were sixty five? You run
those numbers. If it comes tothat, then you're going to be okay.
If you can still work until you'reseventy or seventy five. You know,

(07:08):
my dad's roommate from college was justin town from Houston. He's an
economics professor. He worked until hewas seventy five because he just loves it.
Now he's retired and he still goesinto the office every day for a
few hours and he doesn't even getpaid for it. Great, that worked
out well for him, but hewas ready to retire financially at sixty five
and then everything else is just kindof gravy on top. Listening to Simply

(07:30):
Money presented by all Worth Financial,I'm Amy Wagner along with Steve Ruby,
as we talk about some of themajor mistakes that we have seen far too
often people making when it comes toplanning for their money and their retirement.
We just want to say, here'sour warning to you tonight to make sure
that this is not something you're notfalling for and to go back to what

(07:50):
you were just saying. I dowant to highlight that when somebody feels like
they're going to keep on working,when they tell me that, I kind
of pay it and talk about we'renot necessarily planning for a retirement timeframe.
Then we're planning for financial freedom,the freedom to not have to work in
case life throws your curveballs and you'renot able to Ideally, you want to

(08:11):
find yourself in a situation where ifyou have a really bad day at work,
you just don't have to go overagain. Yeah, and if you
don't plan accordingly, then that mightnot be your situation. So we've talked
about Social Security a lot. It'sa big part of many people's retirements.
Collecting too young is an issue thatI've seen all too often. People just
want to get that paycheck. Theywant to get back some of what they

(08:33):
put in key point. There issome because if you collect early, you
are missing out unguaranteed bigger benefits forthe rest of your life. It's about
eight percent more per year until fullretirement age, and then another we'll call
it about eight percent until you reachseventy, which is a thirty percent difference
between sixty two and seventy. That'sa big deal, guaranteed rate of return

(08:54):
that you're leaving on the table.Second, secondarily to that, if you
are working and you decide to collectSocial Security before full retirement age, you
get reduce the benefit. Yeah,and I don't know that. When you
look at statistics, it shows thatthe lie and share of Americans take Social
Security that the earliest day. It'slike, turn sixty two, give me

(09:15):
my social Security, not thinking through, where else can you get a guaranteed
eight percent? I think of afamily friend of ours who worked really hard
for yours, I mean crazy hours. He was always at work, and
he'd done a good job of savingfor retirement. He turned sixty two and
he started claiming Social Security. Isaid, well, why why did you
do that. I'm assuming that youprobably have enough saved. Yeah, I've

(09:35):
got plenty saved. He said.But you know, my parents both died
early, died young. Okay,well what happened with them? Well,
they were really overweight and you know, heard issues. And I'm looking at
this man. He works out everyday, he eats really well, And
it was like, okay, lookat yourself. Right, there's a very

(09:56):
different situation. So you're making alot of assumptions about yourself, and in
doing so, you're losing out onhundreds thousands of dollars probably over the course
of your retirement. Assuming that thisman has made all these healthy decisions and
will likely have a very long life. We want to plan for longevity.
Want we want to plan like you'regoing to be around for a long time,
because worst case scenario, your moneyhas to last longer. That's the

(10:16):
way I look at it, andeventually you had a break even point on
social Security where if you just itearly eighties, the late seventies, early
eighties is certainly possible, and ifyou live past that time frame, then
you win. You get more moneyback than you would have if you collected
at an earlier age, like beatingthe system. So this is it's a

(10:37):
mistake that I see all too often, and it's something that's worth sitting out
down and talking to a fiduciary financialplanner about before you pull the trigger on
collecting here social security benefit. Anotherone I want to hit is not taking
full advantage of a health savings account. If one makes sense for you.
You knew it was going to gothere because I like them too, Amy,

(10:58):
I love them. It's triple taxadvantage, just a gift from the
government. We all know this.The government doesn't give out many gifts in
this kind of form. So ifa high deductible health care plan makes sense
for you and your family, andlisten, I get it. For a
lot of families it doesn't make sense. But if it does make sense for
you, often your employer will evenseed that account because it's way cheaper for

(11:20):
them to pay for a high deductiblehealth insurance plan than a regular plan.
So there's a financial incentive there.And then I say, okay, if
you can at all, if youhave an emergency fund where you can pay
those medical expenses as they come outof pocket, then you make sure that
the money in that HSA is investedand you just keep sending it forward for
retirement. When you get to retirement, you have a nice little pot of

(11:45):
money set up for the medical expenses. And I think on average medical expenses
for a couple that retires today atthe age of sixty five, it's like
two hundred and fifty thousand dollars plus. Could yeah, could be even higher
than that. That's the reality thesituation. So take advantage of the HSA
triple tax advantage. Deductible contribution growstax free, tax free when you use
the money for non reimburse qualified medicalexpenses. Nothing else like it. Here's

(12:07):
the all Worth advice. If youcan overcome maybe just some of these investing
challenges, you're going to immediately getyourself closer to being able to retire and
retire well. Coming up next,the results of a massive survey about what
you expect when you get financial advice. You're listening to Simply Money, presented
by all Worth Financial here on fiftyfive KRC the talk station. Yes,

(12:31):
he's a fifty five KRC traffic update. AM radio has always been there and
where it's still enders. I doget the news on the radio, online,
on your smart device and always onAM. I listen to the radio
more often than not. Fifty fivekrs the talk station. All Worth Financial

(12:52):
a registered investment advisory firm. Anyideas presented during this program are not intended
to provide specific financial advice. Youshould consult your own financial advisor, tax
consultant, or a state planning attorneyto conduct your own due diligence. You're
listening to Simply Money presented by allWorth Financial. I mean you Wagner along
with Steve Ruby. If you can'tlisten to Simply Money every night, you

(13:15):
do not have to miss a thing. We've got a daily podcast where you
just search Simply Money. It's rightthere on the iHeart app or wherever you
get your podcasts. Coming up atsix forty three, does it make sense
to gift stock to your kids whoare adults or should you wait for them
to inherit it, We're going toask the advisor that and many more questions
coming up. Speaking of advisors,the one that maybe you're working with,

(13:37):
sitting down across the table with isalways putting your best interests first? Right,
Well, your research shows that maybe what you're expecting, but what
are you really getting. So there'san ARP survey is conducted nationally and with
adults age just fifty and plus todetermine how many adults expect professional financial advice

(13:58):
to actually be in their best interestand how many think it should be required.
When we talk about this, Ifeel like maybe some listeners are like,
this is absurd. What do youmean. I'm working with a financial
advisor. Why should they Why wouldn'tthey be putting my best interest before theirs?
You think about working with an attorneyor working with a doctor, so

(14:18):
many other financial professionals that you turnto to help you make important decisions about
your life. Of course, they'regiving you the best advice that they possibly
can for you. Unfortunately, inour industry there are some shady people.
Not only but there are also someparts of the industry that are set up

(14:39):
in a way not to take advantageof you, but to be able to
charge to sell you commission products thatsomeone's going to say, well, it
may not be in your best interest, but it's suitable. I mean,
it's not a bad thing for youto have. That sounds insane. Suitability
is the key there. That's theword you use in Historically, that's what's
been used because if you can finda reason to justify a situation where maybe

(15:03):
a certain product or solution, commissionedproducts or solution might be suitable for somebody,
then you can sell it to them. That is the teenagers. It's
like the teenagers in my house beingable to justify something that they did.
Right. Of course, they're goingto find a way to justify it.
Does it make sense? Was itthe best decision that they could have made?
Probably not right, and it soundsinsane, but you know, there's

(15:28):
an insurance industry that is set upout there that doesn't always work in your
best interests. It's not the standardthat they're held to. All they have
to say is this was a suitableproduct to sell someone. And then forur
too often what happens is they comethrough the doors it all worth and they
have an annuity or a permanent insuranceproduct that makes zero sense, or ten

(15:50):
permanent insurance products that make zero sensefor them. It's frustrating, it's sad.
It's an unfortunate situation because this studyshowed that nine to ten people expect
that the advice that they're receiving fromany financial professional that they're talking to to
actually be in their best interest.But four and ten have financial professional that
they don't know whether or not they'veactually acted in their best interest. This

(16:12):
is a problem. I mean,we look at a brokerage firm, for
example, and the individuals that workfor these places. Maybe they're credential financial
advisors, maybe they have a CFP. Maybe they're good people and they want
to help you the best that theycan, but they're hamstrung by their employer
to sell only what that employer offers. Same thing with a bank. An

(16:33):
advisor at a bank could be acredential advisor, but they're limited to the
products and solutions that that bank andthe advisory company under that bank offer insurance
products, same thing we talked aboutit. You might walk in the door
here and sit down for a financialreview, and you have ten insurance policies
that you didn't need to buy.But the person that sold them to you
got commissions each and every time theydid. That's the frustrating part in that

(16:57):
situation because some of these organizations,you walk in the door and I equated
to them saying, you know,we have a six size six shoe.
What size do you wear? Eight? Okay, cool, we'll make it
work. Yeah, six is goodenough. Yeah good enough. Still a
shoe. Yeah it's suitable. Itcovers your foot, it might hurt a
little bit, but it works.You can never walk in it. But

(17:17):
yeah, it's very frustrating to meas a financial professional because that there are
bad actors in the industry that haveover sold products and solutions that they didn't
need to. We are huge proponentsof the word fiduciary, and I have
to say, you know here itall worth going back twenty plus years.
We were fiduciaries before the word waseven cool, before anyone else was ever

(17:38):
talking about it. And it justmeans we don't have conflicts. When we
are talking to you about what wethink is best for your future. We
are absolutely putting your best interest forward. We're not saying, oh my buddy
actually has this great investment and I'minvested in it. You should probably invest
in it. Right, there's conflictsof interest like that along the way.

(18:00):
If fiduciary could never ever do that. And so if you're wondering, Okay,
well i've been working with this personfor a long time. I don't
even know. There's one question youneed to ask them. Are you a
fiduciary one hundred percent of the timewhen you are working with me and you
are making those recommendations. Ask thatquestion, Then shut up and listen.
Right. If they start to backpedal, if everything they say afterwards does it

(18:23):
make sense, If they're throwing outa lot of big words and financial lingo,
please run for the doors. There'sdiscomfort. If they start squirming around
in their chair, you'll know.Yeah, they get to beat a sweat
on their forehead. They get nervous. A secondary question of that is how
are you paid? Yeah, howare you compensated? What do you receive
when I accept your financial advice?There are registered investment advisory firms out there

(18:47):
where you pay a rap fee,you pay a percentage of assets under management,
and that's all the other financial planningservices go along with that. Because
these companies like all Worth and otherregistered investment advisors they're not tied to one
particular solution when we're talking about otheraspects of financial planning like insurance, like
a state planning, like retirement planning. So you're not forced to sell a

(19:10):
particular product, and you can trulygive fiduciary advice when you're in that type
of situation. So ask those questions. I think it's hard to find someone
who you can trust anything. Formost of us, we come across someone
that we're working with because someone elserecommended them. And I think about,
you know, someone in my family, going back years and years and years,
they were in their thirties, cameacross someone, started working with them,

(19:33):
put together a financial plan, feltgood about it, and didn't realize
until years later that this was someonewho would sold them some annuities, some
insurance products that really weren't necessary.Also, the person wasn't checking in with
them on at least an annual basis. The only time they heard from them
was when they were reaching out tothe advisor, not when the advisor was
reaching out to them. Hey,let's check in. What are your goals?

(19:53):
What's changed uns the last time wemet. These are all important things
that if they're not happening in youyour relationship with advisor. As the survey
says, most of us agree someoneshould be putting our best interests first.
If you're concerned about that or notsure that the relationship you're in is actually
doing that, ask questions, andif you are not getting clear answers,

(20:15):
run for the door. Here's theall Worth advice when looking for financial advice,
you do you want advisor who's legallybound to work in your best interests.
Coming up next, we've got financialadvice for a certain portion of the
population that as often maybe not considered. You're listening to Simply Money, presented
by all Worth Financial here in fiftyfive KRC, the talk station. We

(20:36):
got a big problem. Arc AniHeartRadio station. You're listening to Simply Money
percent of by all Worth Financial,I mean Wagner along with Steve Ruby.
Some of us envy them. Sometimesthey're misunderstood. We are talking about couples,

(20:56):
couples known as Dink's dual income nokids. It's funny that we're talking
about this because sometimes my husband andI will you know, be talking about
a couple and these amazing trips thatthey're going on or something, and we'll
just look at each other and belike thanks. You know, dual income
no kids us derogatory and it's notright. It's two people who are both

(21:18):
working who've never had kids. They'vegot two incomes coming in and not the
I will say this financial drain ofchildren. I love I love mine very
much, but I mean, let'sface it. I think the research says
that the average cost of raising kidsto the age of eighteen is north two
hundred and thirty seven thousand dollars forone kid. That's a lot of vacations

(21:40):
that Dinks can take that we can't. You know, you like chi ching,
chi ching, chi ching in yourmind, You've got one kid,
we've got four, So you multiplythat times four and practically Dink compared to
you, huh exactly. Yeah,you don't even know what I'm talking about
here. But no, I meanthere's a lot of people who make this
decision. You know, they getmarried or they want to get married,

(22:00):
but they decide for whatever reason thatthey're not going to have kids, and
their financial planning is different, theirfinancial situation is different. Yeah. I
mean a couple of our best friends, actually they're in this category, and
they lived in Northern Kentucky. Theywere both They worked in a school district
and they took a job in NorthAfrica and Morocco. They moved to Marrakech,
where the cost of living is almostnon existent, but they're getting American

(22:23):
wages. Wow, these two arejust rich, super rich. Yeah,
they're making bank they're living in luxury, they're traveling all over Europe, Africa,
Asia. They don't have any children, exactly. There's a little bit
of jealousy there, even though,like you said, I absolutely adore my
daughter. I have an eight yearold daughter at home and she's amazing.
I wouldn't trade her for anything,of course, but my god, the

(22:45):
opportunity when you're in a situation whereyou don't have to pay for children is
unmatched. Yeah. And for manyof the people who fall into this dink
category, they're number one thing thatthey spend on is travel, like kind
of like you're mentioning the friends ofyours. And I think that's where it
comes down, right when you whenyou've got families with kids, you're traveling
to soccer tournaments. You know,maybe you get a few days at the

(23:06):
beach or whatever. These people arein Marrakesh, they're in Europe, they're
doing all the things or whatever.Their top spending category is often, yeah,
discretionary income. Uh, and it'sit's it's the travel. Hobbies.
Hobbies are second. I like thisone. Pets came into a close third.
So it almost seems to me likethey're trying to fill a missing niche.
You know, they don't have children, So here's our fur babies,

(23:30):
here's our cats. And I knowsome like this, right, it's like
the member of their family. Allthe conversations around. Listen, if wherever
you fall in the spectrum, we'renot saying there's anything wrong with any of
the decisions that you're making. Youknow, if you've got kids and you're
spending the money on them, andif you don't have kids and you're not
spending the money on them, uh, you know, that's the part that

(23:52):
doesn't matter. It's it's how youunderstand that your financial planning is looking maybe
a little bit different. Yeah,so they don't want to move it again.
It just feels so weird saying it, doesn't it It's like it's derogatory,
but it's not you said it yourselfat all. It's it's a person.
Yeah, exactly. It's a personaldecision. And obviously planning is a
little bit different, how you spendyour money is a little bit different.

(24:15):
There's the reality that if you dohave children and and you're a dank,
oftentimes you would have to move toa new city. And these people they
just want to if they do.And I think it's like if you're if
you're worried about the school district thatyou're living in, right, you're in
an urban area, you're living downtown, schools aren't the best. Now you're
looking at moving to the suburbs orfiguring out what the best school district is
and moving there, not necessarily whereyou want to live. That's exactly what

(24:37):
happened to us, is it really? Oh yeah, we were in Cincinnati
having a good time, Like,okay, we need we need to move
to the burbs now, yeah,right, for the school district and then
your whole lifestyle, right, itchanges a lot, you know, And
that's just kind of part of thatdecision making. I think a few things.
First of all, we would say, and this is, I don't
know, if you're a dink,and if you're not a dink, if

(24:57):
you've got kids as well, thatfully funded emergency account, right, that's
going to make such a difference.And if the two of you are putting
money into that, stacking savings inthere, it's going to give you so
much more flexibility to focus on whateveris important to you. Yeah, I
mean, you still have to plan. And that's the thing because part of

(25:17):
think it is dual income. Yeah, so there's oftentimes situations where it can
be easy to live a little bitmore extravagantly, to spend money on these
vacations because you don't have to spendmoney on children, But you do need
that emergency fund, You need thatfinancial foundation. You both should be saving
in four o one case. Youboth need to take advantage of the savings

(25:41):
opportunities that are available to you,you know. And I think one of
the things you have to keep inmind here too, is if everyone's on
the same page, right, dualincome, and you are aligned on your
goals, it's just that much easierto get there. Much of the show
we talk about Okay, you're helpingkids save for college pay for college at

(26:02):
the same time you're saving for yourown retirement. When that's out of the
picture, it's what are your goals. Let's work on them together, and
I think you can get there,you know, a lot faster. And
then I think it's then you canlook at, Okay, we're fully funding
retirement accounts, we're doing great withthat. We also want to go to
Europe. Maybe that becomes that mucheasier. So I think it's just aligning
on those goals, getting on thesame page. But then I think,

(26:26):
is state planning looks very different becauseyou don't have children or inheritance necessarily that
you're thinking through. And so Ithink is state planning becomes more important because
think about it, if you don'thave a will in place, and this
goes through probate, they're going tofind your closest living relative if you're close
to them. Maybe you're not.Maybe you want your money to go to

(26:48):
the college that you went to,or a philanthropy or a nephew or something
like that. You need to makesure that that's very clear in all of
your estate planning, so that yourwish they're carried out when you're no longer
here. State planning is always animportant part of the financial planning conversation,
but you're right, it is alittle bit different. If anything, it
becomes a little bit more important becauseyou need to have an idea of where

(27:11):
you want your money to go inthe event that's something were to happen to
you and your spouse prematurely. Sositting down having that conversation drafting up the
proper documents to get your assets inorder is a major planning maneuver that anybody
needs to do. But with thingsin particular, who's that money going to?
Is it going to a niece,a nephew, a brother, a

(27:33):
friend, a child of a friend. These are real conversations that you need
to have. And you know,I have plenty of folks that I work
with that don't have children. Thereality of the situation is obviously there's less
money that you need to spend onchildren if you don't have them, obviously,
and you have incredible savings potential whenyou have double incomes without that added

(27:55):
expense. I have people that haveretired early. They've lived the lifestyle that
they wanted to live, they've traveled, they've had their hobbies, and then
they retired early because they save veryaggressively. It is an opportunity when you
find yourself in a position where youare a ding, it just gives you,
I think more flexibility, you know. I mean that's a lot of
money when you look at about twohundred and forty thousand dollars per kid to

(28:17):
raise them to the age of eighteen. So yeah, I think you've got
that flexibility. I think on theflip side, though, long term care
insurance and things like that become thatmuch more important. I mean, for
most of us, when we havekids, we would say the goal is
not that our kids are taking careof us someday, but if it were
necessary, I think our kids probablywould could step to the point fully step

(28:37):
up. When you don't have thatoption, that conversation about what happens to
one of us or both of usif we can no longer take care of
each other. You know, wedon't have that next generation coming behind us
that we can lean on, Soa long term care insurance policy becomes more
important, or figuring out at leastif you can self fund those situations,

(28:57):
if you need to go and likea skilled care facility. So there's just
different nuances I think that come alongwith this situation, lots of opportunities as
well. The key is to understandthem all fully. Here's the all Worth
advice While those without kids may havesome financial advantages, you still need proper
planning to make sure you can maximizewhat you have. Coming up next,

(29:21):
we're answering your questions. We areasking the advisor you're listening to Simply Money
because I'm by all Worth Financial hereon fifty five KRC, the talk station
wor As life changes, you're gonnahave to decide what are my priorities?
So do financial priorities? Is itgetting married or is it being the life
of the party and showing up toevery single thing whether we like it or

(29:42):
not enough time for it. I'mexhausted, I'm sick all those things.
The Ramsey Show. You're going tohave to make that decision. If you
learn that now before you get married. I'm telling you right now, the
rest of your life is going tobe so much more peace week days.
But it is hard. There's notan easy way to do it. On
fifty five KRC, the talks toyou're listening to Simply Money presentbody all Worth

(30:06):
Financial III Wagoner along with Steve Rubystraight Ahead, we're looking at whether this
might be something you want to trypaying your credit card every two weeks rather
than once a month. We'll getinto that. Do you have a financial
questions keeping you up at night?You and your spouse. Maybe you aren't
on the same page. There's ared button you can click on while you're
listening to our show. It's rightthere on the iHeart app. It's really

(30:29):
easy. Record your question. It'scoming straight to us. We'd love to
help you figure it out. Infact, we're answering some of your questions
right now. The first one comesfrom Dale and Colorane Township, who says,
I'm torn between paying for my kidsschooling and saving for retirement. What
should I do? Figure out ifyou can afford to say for both.
Yeah, that's the kind of Yeah, sit down, work with a fiduciary

(30:51):
financial planner, build out a financialplan, map out your financial future,
find a balance between your competing financialgoals. Obviously, we want to have
a situation for our children where theywere better off than we were. That's
a big motivation for me. Youknow, I would love to be able
to help pay for my daughter's schoolingwhen the time comes. But you they
can borrow for school if they needto. You cannot borrow for retirement.

(31:15):
If you put your savings off anddidn't save enough. Help comes in many
different forms, and I think forso many of us parents we think of
it as just financial help. Ijust want to help them pay for college.
But sometimes if we're doing that tothe detriment of our own future and
our own retirement, it can looklike conversations about Okay, what can you
truly afford? You know? Ithink about my daughter who's going to be

(31:37):
a freshman in college next year.Starting in middle school, she literally saw
a school on Instagram that had palmtrees and was like, that's where I
want to go going there. It'sout of state, not not necessarily it
had the major that she wanted,or she knew anything about it. She
just saw the palm trees. Andwe had to have these tough conversations about
the fact that, Okay, anout of state school, right, you're

(31:59):
going to pay out of state tuition. In Kentucky, we've got keys money
that goes toward in state schools,like, so out of state isn't an
option for you. There's no moneyfor that. If you go farther,
farther enough south in Kentucky, canit support a palm tree in some of
these areas? Maybe I don't know, maybe for a couple of months in
the summer and then you bring itinside. I should just do that.
Just take a palm tree to oneof these campuses, take a picture,

(32:21):
sent it to her. She's good. But no, as she's gotten older,
she's realized that's not something that wecan afford. And so I think
some of the conversations are some ofthe help that we can give are just
really truthful conversations about what can beafforded, and then talking to them about
what they're planning on doing after school. The simply money rule for all of
this is always, hey, don'ttake out more in total student loans than

(32:42):
you can expect to make in anincome and that first year. So if
you're taking out eighty thousand dollars instudent loans and you're going to be making
forty thousand dollars that first year outof college, likely probably not the best
thing that you can do. It'sa big challenge to overcome. Yeah,
maybe you don't live on campus,maybe you stay at home. These are
tough decisions, but again I thinkparents can be involved in helping their kids

(33:05):
make smart financial decisions without necessarily payingfor everything. Next question comes from Carl
and Cindy and cleaves. From atax standpoint, should we gift shares of
stocks to our adult kids now orjust let them eventually inherit those shares.
From a tax standpoint, and nodoubt about it, letting them inherit the
shares is a bigger benefit because thoseshares will receive a step up in basis,

(33:30):
which is that baseline to calculate thetax liability once those shares are sold.
So if you sell the shares onthe day to death, then ultimately
there's no tax liability because there's beenno gains. So it's a big opportunity.
Now, if you're charitably inclined andyou're looking to maybe get involved with
a charity, then then you cangive your appreciated shares away in life and

(33:52):
you don't have to pay the capitalgains taxes once you make that donation to
your children. Not the same story. They would have to pay the capital
gains taxes when they sold those sharesif they were received in life. I
like that Carl and Sindy are askingthis question because we are really fortunate here
in the Cincinnati area and the factthat we've got huge companies. Procter and

(34:13):
gamble Kroger a ge sentas where peopleare you know, feel really strongly about
maybe working for those companies or theybuy that stock because we know and we
love these companies and how much theydo for our area, and you know,
so I think there's a lot ofpeople in this situation where they do
have a lot of company stock.So I think that the probably most if

(34:34):
you want to give something to youradult children while you're still alive, is
cash is probably your best option atthat point. Knowing that that stepped up
basis of when they inherit that stock, that it's much more tax friendly to
them, makes a lot of sense. Next question comes from Tony and Westwood.
I just discovered my husband has avastly different sense of what retirement looks

(34:54):
like, and hey, we're aboutfive years away. Any suggestions for how
we can find some ground. Ilove this question because years ago, the
first time my now ex husband andI sat down to have this conversation,
we were not only on different pages, we were on different planets. How

(35:14):
bad was it? It was reallybad. You know, I wanted to
retire you around sixty five. Iwanted to travel and spend time with the
grandkids, and you know, heyou know, was like, I never
want to retire. You know thatdidn't necessarily feel like, you know,
need to plan for it, becauseyou know, the thought for him was
it just keep working. And itwas like and I just felt like,

(35:35):
gosh, do we really even knoweach other? And that didn't end up
working out, not in this situation. It didn't work out for our situation.
Not necessarily. Yes, I'm notsaying that that is the path that
you're going down, but I'm sayingthat many people have found themselves in the
same page. Right, You're justdoing life, and life doesn't always involved
talking about what's going to happen twentyyears in the future or even five years

(35:58):
in the future. But now youhave this information, I think what needs
to happen next is a lot ofconversations about figuring out what a middle ground
looks like. Well, maybe you'reboth giving up something, but you're also
getting something and just kind of tryingto get in some kind of alignment.
Build a plan. I mean,I sound like a broken record for some
of this, but you need tosit down with a financial plan or build

(36:19):
a plan and understand when, notnecessarily when retirement is but when financial freedom
is because once you have that financialfreedom, it opens the door up to
have slightly different perspectives on how you'regoing to spend your time in retirement.
But yeah, this is not justa retirement planning conversation. This is almost
a counseling one that you need tohave some serious conversation. And I'm glad

(36:39):
you said that because I actually thinkthat as financial advisors, that's often what
we do. Right. A lotof that has to do with just helping
to figure out the way forward andknowing that we've helped many other couples get
there too. Coming up next,are there benefits to making two credit card
payments each month instead of one?We're looking at that. You're listening to
simply money percent by all our financialhere on fifty five krcal station. That's

(37:00):
another press for my kids or gasfor my car. Talk about it here
fifty five KRC the talk station.Yeah, you're listening to you simply Money
puts that by all with financial.I'm Emmy Wagner long with Steve Ruby.
Does your budget include a credit cardpayment once a month? What would happen

(37:22):
then if you stepped it up andyou made a credit card payment twice a
month. Now, some of youmight think that sounds crazy, but it
actually can make sense for a lotof us. Yeah, I mean interest
is constantly accruing. This isn't aevery day Yeah, it doesn't build on
end a month. Okay, here'sall your interest. It is calculated on
a daily basis based on your currentbalance, so that interest is building throughout

(37:45):
the month, each and every day. If you wait to make that payment,
then what it does is it canaffect your credit utilization ratio. This
is something my husband makes sun ofme all the time for whatever reason.
I owe him for many reasons,but one of them being I'm obsessed about
my credit score. Okay, andone of the major components of our credit

(38:06):
scores is credit utilization. And thatmeans how much available credit is out there
for you in the form of loans, and how much is the entire amounts
that you can put on that creditcard right that credit card limit? And
then how much are you actually takingadvantage? And the lower that ratio is
the better. In fact, thepeople who've got the highest credit scores often
take advantage of less than ten percentof what's available to them. If you're

(38:29):
having a month that you had anextra large expense on that credit card,
right, I often, well,and I look at our credit card bill,
probably at least once a week.But if it's a little higher than
it normally is, paying it offnow so that that credit ratio looks better
on that credit report can actually makea lot of sense. It does because

(38:49):
it lowers the credit utilization ratio,especially in a high expense month. I
do want to highlight something here thatI did, and this is based on
feedback that we had a show maybelast year. You can call your credit
card company and say can I havea higher credit limit? Yes? And
if you're a good customer, it'slike a large percentage of the time they'll
say okay, yeah. I ActuallyI did it online through the app,

(39:12):
and it took a couple of minutes. I put a stupid high number,
yeah I did, And they cameback and said, well, here's a
slightly less stupid high number. Yeah, And I said okay, And my
credit utilization ratio went down, mycredit score ran up, just by clicking
a button on the phone app.That's a great point. And I think,
yes, some of it's just someof the time it's just kind of
taking some steps and making sure thatyou're educated on how best right to manage

(39:34):
your credit score. And then Ialso think that just checking that balance on
a weekly or a bi weekly basisgets you much more in touch with your
spending and your budget. So ifthings feel out of control and you're carrying
a balance, looking at that,maybe then that next purchase, when you
whip out that credit card, you'relike, do I really need this?
Right? I looked at my balancethis month and it's already really high.
Do I really need? So?I think for a lot of reasons,

(39:57):
being more in touch and maybe makingtwo credit card payments a month and make
a lot of sense. Thanks forlistening tonight. You've been listening to simply
money, because some of it allworth financial Here in fifty five KRC the
talk station, and I thank youmyself. Is America secure with the world
on fire? What are cyber attacks? Russia, in the Middle China,
these hotspots are flattering this border crisis. Thank you. If you are thinking

(40:22):
what we are thinking, real worldconsequences to the American people, then check
in two, three, four timestoday. Well your world, the world
more dangerous place happens here on fiftyfive KRC, the talk station. I
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