Simply Money

Episode Transcript

(00:06):
Tonight, the strong labor market strikesagain. Is gold the answer and yet
another reason why your future plan forhealthcare is absolutely crucial. You're listening to
simply Money presented by all Worth FinancialI Meani Wagner along with Brian James and
for Steve Ruby tonight. Okay,the Federal Reserve has now spent two years
trying to get inflation and check right, we were almost at ten percent.

(00:29):
They're trying to get it down totwo percent. In the process, they've
hiked interest rates eleven times. Thereare certain things, Brian, that you
would expect to happen as the resultof that. The problem is those things
aren't falling in line exactly maybe theway that the Federal Reserve would have initially
intended them to. So two yearsago we hit the COVID pandemic and that

(00:51):
was a big curveball for everybody,and obviously a lot of dominoes fell three
years ago. That's true, you'reright, that's how much time has flown.
That's right. But any case,Yeah, so we may some moves
there to deal with the fallout fromthat, which was the we had to
raise interest rates, of course,to slow down the economy because things changed.
That was an outside impact, andit changed a whole lot of things.

(01:11):
It shifted to shifted us all towork from home. It caused people
to say, hey, you knowwhat, I don't really like this place
that I'm surrounded by. I wantto go buy another house, and all
that kind of stuff. And ithas just caused the economy to move in
a very very strong manner, whichyou wouldn't really expect. Everybody kind of
anticipated was going to go the otherway. But so we just got a
curveball last week in terms of theoverall job report. So the analysts were

(01:34):
thinking that we were going to gettwo hundred thousand new jobs this time,
but it was we were only offby fifty percent. So right, good
enough, close enough? Right,So three hundred and three thousand jobs in
job how much do they get paidto be wrong? That wrong? You
don't need to pinpoint. I guessright. So maybe they should just give
us a thumbs up or thumbs downand not put numbers into it. But
in any case, yeah, that'sso three hundred thousand new jobs that that's

(01:57):
a sign of a very strong economy. That's a good thing, right,
we want a strong economy. Butat the same time, we can't really
control inflation as much as we wouldlike if things are cooking that hot.
So unemployment went back to three pointeight percent, down to three point from
three point nine. Average hourly earningslowed down to about four point one from
four point three percent February. Sothere are signs that maybe it's slowing down,

(02:19):
But all these new jobs amy arereally an indicator that things haven't slowed
as much as they want. Sowe might be stuck with these interest rates
a little longer. Since the FederalReserve has started down this path of trying
to get inflation in control by raisinginterest rates, we've kind of been operating
in this upside down world when itcomes to the economy, meaning good news.

(02:39):
What would be typically good news,which would be like more jobs,
more options for people, then weirdlybecomes bad news because as you raise interest
rates, you expect that the economywould contract. You expect that, you
know, corporations would be worried aboutthe borrowing costs of paying that extra interest,
and as the results of that,they might slow some of the business

(03:00):
decisions down. As the result ofthat, there might be layoffs, and
as the result of that people wouldstop spending as much money because they would
be worried about job security. Noneof those things right, have kind of
fallen in line the way that wewould expect them to. You know what,
I think the interesting thing is inthe past, when we've gotten numbers
like this, the next thing youdo is check the stock market, because

(03:21):
you're like, Okay, this stockmarket's also going to head south on this
news because it's the opposite of whatthe Federal Reserve wants to see. I
also, though, think we arenow in this new place where we almost
think, okay, it's reasonable toassume that the Federal Reserve is going to
keep interest rates higher at the sametime that the economy would continue to expand

(03:44):
and consumers and all of us wouldcontinue to spend money. Because it's kind
of the space that we've been operatingand it's almost like this new normal we've
created in this situation. Yeah,it's interesting. So sitting across the table
from people doing financial plans, peopleare starting to think a little differently because
we are in a higher rate environment, of course, and so people are
thinking, you know, what doI do in this case? Are there

(04:06):
different decisions I would make? Sobefore it used to be I'm going to
mortgage the daylights out of my housebecause I can get two and a half
two point seven percent, and I'mgoing to keep a bunch of money sitting
in cash because I'm just getting sucha good deal my mortgage. But now
we're having conversations that Amy I haven'thad in thirty years, reminding people that
they're allowed to get interest on theirsavings and on their deposits through money market

(04:27):
accounts and CDC, and people areasking permission, is it a good idea
if I buy a one or twoyear cd These are things that are not
particularly scary, right, It's justI think they're just just confused by how
positive they can be on the thingsthat we've been kind of poop pooing for
the last several decades because rates havebeen so low. So the whole point
of this is that businesses are makingdifferent decisions as well, differently than they
would have done in the past.Because it's simply a different environment. Doesn't

(04:50):
mean we can't function. It justmeans the playbook is a little different.
And as we're sitting here, thestock market is up ten percent again this
year. It's been on an absolutetear October, and we know that we're
sooner or later things are going topull back a little bit. But with
these are all things that it justkind of goes to show we want to
stick with the plan, don't tryto guess what's coming. Because if you

(05:10):
looked at the headlines without any anyregard for what the stock market was doing
at the time, you would havelooked at the headlines of rising interest rates
and you would have said, thisis going to be a scary time for
the market. I should batten downthe hatches and get really conservative. Well,
this would definitely have put you inone of the camps of trying to
time in the market, because thisthese last three or four months have been
one of those periods where if youweren't in it, that's going to have
repercussions for years to come, becauseyou know if you tried to take the

(05:34):
kind of the safer path. You'relistening to simply money presented by all Worth
Financial, imm You Wagner along withBrian James, who's in a pir Steve
Ruby tonight, as we digest rightthe latest jobs report, not what economists
were predicting, not necessarily what thefederal Reserve was hoping to see, you
know, but I think you haveto look at this and say, Okay,

(05:55):
what's the Fed's next move, right, what are they going to do
next? And you know, overthe past week or so, oh,
we've heard the Federal Reserve, manyof the voting members kind of speaking out
Cleveland, San Francisco, Minneapolis,Atlanta, all of those voting FED members,
and they're saying different things, butthey're kind of all the same message,
which is, Okay, there wasa time in January maybe when we

(06:16):
were thinking we were going to startlowering interest rates, maybe even in May.
I mean there was time even theythought maybe in March. And now
it's like, okay, when youhave these numbers coming in so robust,
showing that the economy seems to becompletely impervious to everything that we're doing.
And they have said, too,hey, the closer we get to two
percent, the harder it's going tobe to get there. But what the

(06:40):
Federal Reserve doesn't want to do isstart lowering interest rates right now, and
then you have the economy completely heatup and all of a sudden, inflation
gets out of control all over again. Right, there's precedence for this.
We saw this in the early eightiesdouble dippercession. It was not It was
incredibly ugly at the time. Sowe think most of the FED members are
now saying, hey, let's sitwhere we are right now and wait and

(07:02):
see what happens. Yeah. Sothe FED, of course is led by
Jerome Powell, but there are alsoregional federal reserves and as Amy mentioned,
in several different cities, and ofcourse all of their opinions count, and
they all get together every so oftenand make decisions in a manner of making
moving us the right direction. Soright now we're trying to gather opinions.

(07:24):
This is what we always do atthis in this phase of the game of
what do they all think? Andevery one of them made comments along the
lines of, yeah, we thinkinterest rates are going to come down,
but probably not tomorrow. They're definitelyleaving the door open for the idea that
we may not get the rate cutsthat we've been talking about. Phrases such
as, there's no urgency for theFED to cut us interest rates and maybe
we'll see something in the fourth quarter, maybe we'll see two rate cuts,

(07:46):
but there also might be no ratecuts. So definitely leaving the door open
for what we're all really kind ofhoping will not happen, which is no
rate cuts at all. But it'sseeming more and more likely that as long
as things move the way they are, we're not really going to see that
this. We're going to get somemore reports, of course, So on
Wednesday we're going to hear the Marchinflation report. Expected to rise point three

(08:07):
percent for March. That doesn't soundlike much, but remember we have to
annualize this, so if it goesup point three percent, multiply that by
twelve. Now we're at three pointsix percent inflation. That's not bad.
It's certainly not nine percent, butthe FED wants to get it down closer
to two to two and a halfrange. So it's been stubbornly stuck at
that at that three and a halfplateau for a little while now. And

(08:28):
I think one of the things thatthe FED is looking at is the cost
of housing, the cost of rent, right, And it's like, you
can't control everything, and so evenas interest rates have risen, you know
you have And it's what we seeright here in Cincinnati. We have Michelle
slan on all the time, ourreal estate expert is She's like, there's
just no inventory, and when youdon't have options, that's going to drive

(08:48):
up the prices of home and thenyou know, you've got a housing and
then you've got you know, rentsstill high. You know, all that
kind of peaked during the pandemic andthen the years after. And for most
people, when you rent a place, you rent it for a year,
and so those contracts aren't necessarily allup yet, and so as some of
those fall off, what you haveto look at is, Okay, those

(09:11):
are those pieces of property renting atlower rates. All of this is going
to take a while to cycle out, and they feel like the interesting thing
is that the stock market, PallStreet is kind of impatient, and the
Federal Reserve has to be patient.They have to wait and figure out get
as much data as they can togetherto kind of figure out, okay,
what's the next smart move. Iwould not want this job. I do

(09:31):
not know how much do they getpaid, but it is not enough because
right now, you know, Imean, it's like everyone's the great Monday
morning quarterback. If I should havedone this, They should have started hiking
interest rates earlier. They should havedone this. They should have done that,
and I think at this point whatthey're doing makes a lot of sense.
Wait and see, we need moredata to come in, We need

(09:52):
more time to pass in order tofigure out, Okay, should we now
begin to lower these interest rates orare we good? And I think you
made an excellent point earlier, Brian, which is okay, the stock market
wants these rates to go down.But while they're not, what's the smart
thing to do as an investor?Look for the silver lining if you still
have the cash on the silings.We talk all the time about the importance

(10:13):
of an emergency fund. Make surethat money is getting interest right, you're
earning interest on those dollars. Thereare relatively safer places to have your money
right now than ever before. Howlong that lasts, we don't know.
But while it's an option, definitelytake advantage of it. Yeah, you
should be getting at least four fourand a half percent, and that's actually
kind of on the low side.But for a money market savings account or

(10:35):
a CD or whatever, it's actuallynot very hard to get five percent.
But you need to a lot oftimes let go of the idea that I
have to use this brick and mortarbank because Unics the teller has been there
for a brazilion years. Right,nothing wrong with Unis. But at the
same time, those big banks aren'tgoing to give you the highest rates you
can possibly get. Open your mindand look at look at some other things
too. Here's the all Worth AdviceWednesday's inflation report. Well, you could

(10:56):
expect maybe more market volatility depending onwhat comes out. Listen, don't worry
about that. Hopefully you've got afinancial plan that focuses on the long term.
Just expects some market volatility in theshort term. And as we speak
about volatility, skittish investors are turningwhat's always to considered be a safe investment
in the value of that is risingand it's our concern. We're going to

(11:18):
talk about that next. You're listeningto Simply Money, presented by all Worth
Financial. Here in fifty five krsthe talk station. You're listening to Simply
Money percented by all Worth Financial.I mean Me Wagner along with Brian James.
If you can't listen to our showevery night, you don't have to
miss a thing that we talk aboutbecause we've got a daily podcast for you.

(11:39):
Just search Simply Money it's right thereon the Iheard app or wherever you
turn to to get your podcasts.Coming up at six forty three, we're
looking at a specific type of realestate investment. Does it make sense for
you? We'll take a look.All right, well, big day here
in Cincinnati. Kind of we havea brand new publicly traded company. Before

(12:01):
you start to check the papers andlike, wait, what is this?
What's going on here? Well,maybe it's kind of like something old is
new again, or something new asold as something like that. Yeah,
So a while back we reported onthe news that General Electric was going to
split up into a few different publiccompanies. So this is kind of the
oppostion. We spent years amy talkingabout how General Electric was kind of its
own mutual fund because they got intoeverything. They made light bulbs, they

(12:24):
made dishwashers, they did long termcare insurance, and of course a whole
lot of stuff in the energy phase. But kind of probably maybe a little
too big, too fast, andbecame very sluggish over the decade. So
the resolution to that is for themto become smaller and more nimble. So
ge Aerospace is going to split.It is going to be one of the
companies alongside GE Vernova, which isthe energy space in GE Healthcare, which

(12:48):
is of course healthcare. So it'sstill based in even Dale, that part's
not changing, but it's its ownindependent company now and it'll still the GE
Aerospace will still trade under the tickersymbol GE, so they get to keep
the legacy there, but it willnot be impacted anymore by the by the
financial outcomes of the energy side andthe healthcare side. They're just going to
worry about aircraft engines. You andI through the years have spent a lot

(13:11):
of time, you know, talkingto groups of people and we have always
had this you know, huge GEpresence obviously here in Cincinnati, and I
think you know, all Worth Financialsimply winning before that has always had close
ties to GE. So we spenta lot of time in rooms with the
people who you know, kind ofraised this company up and and feel really
strongly and are very loyal to it. And so it's been really tough to

(13:33):
kind of watch the sort of fall. You know, it was it was
in the Dow, and then itwas out of the Dow, and then
you know, it was paying dividendsand then it went down to a penny
and it's been really tough, andI think, you know, many times
this is what happens, you know, companies almost it's like they get too
big for their bridges, you know, and they quit focusing on what they
really know. And you know,they were on appliances, and they were

(13:54):
on insurance, and they were doingall of these other things. And what
they've decided to do is get backto their roots. And I think this
could be a really really good thing. And you know, interestingly, just
for some historical perspective, Ge kindof came together from three different companies that
made one and now we're going backto three different companies, and so this
is kind of the first move andthat direction, you know, and certainly

(14:16):
as a hometown team, we hopeit's a it's a really successful one for
them. You know, we werejust talking about the last segment that expect
market volatility in the near term,right as the Federal Reserve, our nation
central bank does everything it can totry to bring inflation down, it's not
going to be easy. It's goingto take a while. Markets are going

(14:37):
to be all over the place,maybe in the near term, and whenever
there's any kind of uncertainty, onething that you could count on is that
when you turn on your TV,there's going to be commercials telling you that
gold is the answer, right wheneverthere's uncertainty, because gold, I think,
is this very emotional kind of aninvestment. You know, you can't
necessarily see that sheriff procer and game, you can't necessarily see that share of

(15:01):
Facebook, Navidio, Meta, whateverit is, but you can't see that
gold bar. And so I thinkit feels safe. And so a lot
of headlines out there around gold rightnow, we want to talk about some
of those and give you our take. So why is gold in the headlines?
Amy, Well, that's kind ofbeen the dark horse. And you
know, whenever we go through tryingeconomic times and craziness, some people will

(15:24):
run to gold and that pushes theprice of gold up. So gold is
up about eleven percent for twenty twentyfour, and there are those out there
who who see gold headed even higher, not just driven by the federal reserves
decisions, just for the overall opinionsof the market, but just speaking to
people sitting across the table having donefinancial plans form, what I hear is

(15:46):
is something that it's what a commodityis when people are interested in gold,
they're simply saying, well, abunch of other people are buying it,
maybe I should too, rather thanwell, no, this XYZ company has
invented this product, and I thinkit's going to be a good thing.
It's going to be successful, orthis company has made some bad decisions.
I think I want to get ridof it. You can't do that with
gold. Gold is worth nothing morethan the opinion of the overall market.

(16:07):
And it's predictable in a sense ofwhenever we hit times of turmoil, gold
will run up and then you'll startto see you'll start to see commercials,
and they tend to be with peoplewith British accents because we know British accent
accented people smarter than we are,right, that's how that works. Anyone
with a British accent. I'm alwayslistening, like I am tuned in,
so I do to your new exactly. I do get that you must know

(16:29):
what you're saying, because I loveyour accent. And here you've got just
one headline that we've seen recently.Veteran strategist says, grab your hammer and
pick because he thinks gold is headedto three thousand. This guy David Rosenberg
from Rosenberg Research making this big prediction. But it's like I don't have a
crystal ball. I can't tell youour markets are going to go, but

(16:52):
I can tell you this. Ifthere's any volatility, people are going to
be talking about gold. I donot need a crystal ball to know or
people we're going to go. It'san emotional decision, you know. And
when you look at just historical perspectivehere, please google it. Google the
S and P five hundred over thepast one hundred years. Look at where
that graph takes you, and thenlook at gold and where that takes you.

(17:15):
And if you're still thinking about gold, call me because I think maybe
you're reading the graph's wrong. Itshould be a no brainer, you know.
And so when they're talking about,okay, gold up eleven percent this
year because people are flocking to gold, they're making this emotional decision. Well,
the SNP five hundred is up ninepercent so far this year. Let's
go back an entire year. TheS and P five hundred is up north
of twenty five percent, gold ofsixteen percent. It's like that the farther

(17:40):
you go out, the farther youlook back on how are that the stock
market does versus gold. The stockmarket is the clear winner every time.
Yeah, so gold hits the newswhen it makes a big move, and
that's what's happening right now. Therehave really been two big spikes in gold
over the last couple of years,and we're sitting on one right now.
Had you owned it maybe over thelast six weeks, yes, you would
have seen a spike in your inyour in your returns there. But at

(18:02):
the same time, the stock market'sdone pretty well too. Stock market has
actually held up a lot better andhas had steadier returns over the last two
years. So don't don't get suckedin by what's going on In terms of
any anything that moves quickly. It'sreally no different than than you know,
the beanie baby craze or cryptocurrency whenit was at its peak. These things
are going to move up and downbased on demand alone, and you'll never
be able to predict it. VersusI know how to calculate how profitable a

(18:26):
company is and what to expect outof a stock. My former co host
on the show, right, NathanBackgrack and Ed think Youstallisa, there are
two reasons why you need to investin gold. And the first time they
said it, I like leaned forward, like what is this And they said
to say I'm sorry or I loveyou. Right, buy the gold jewelry
for the people that you love orsomeone that you need to apologize to.

(18:48):
That makes sense, right, That'san investment in those relationships. But as
an investment in your future, tryingto reach financial goals, trying to retire,
there are clear other investments that aregoing to outshine, actually outshine gold
every day of the week. Sowhen you look at periods of time like
this when gold is doing well,it is because other people are making these

(19:10):
emotional decisions. If gold for somereason makes sense for your financial plan,
which most of the time it doesn't. You know, great if that's your
long term financial plan, but don'tjust go to it and times when there's
headlines about it, because that doesnot turn out well. Here's the all
Worth advice. Want to buy goldagain only if you need to tell someone
I love you or I'm sorry.Coming up next, aging in your home.

(19:33):
If that's your plan, there's somechallenges you might need to think through.
We'll talk about those. You're listeningto. Simply money presented by all
Worth Financial. You're in fifty fiveKRC the talk station you're listening to Simply
Money, presented by all Worth Financial. Immi Wagner along with Brian James.
Brian, how many times through theyears is someone come into your office talking

(19:56):
about retirement and they say, whatI really want to do is retire to
a nursing home. Sign me upfor that, right, I want to
get out of my house and Iwant to, you know, live in
a nursing home. That happen prettyoften. I'm let me count on my
let's see one, two, threefor never that's actually never happen. Yeah,
people don't really think that that's thatthat's in the plans, but at
the same time, you know itdoes happen. So what are some stats?

(20:19):
Eight and ten adults fifty and olderwant to age in place in their
homes. I'm kind of worrying aboutand wondering about those other two. Maybe
they just don't like their house.They're not thinking about their future exactly.
Maybe they're thinking about well, theymean, they must mean I want to
move to the beachers. I think, of course I want to do that.
But in order that for that tohappen, seven out of ten are
going to need some support. Sowhat we're talking about today is home health
care someone coming to your house insteadof you moving to a nursing home.

(20:42):
Someone coming to your house to takecare of some things for you. So
and that has gotten expensive. Gofigure, we're in inflationary times. Average
cost of a home health aid amythey help out with things like bathing and
dressing and eating those kinds of things, it was seventy five thousand, a
little over seventy five th twenty too. This is according to jen Worth,
assuming somebody who'd need about forty fiftyhours a week, it's about thirty three

(21:04):
bucks an hour. So it's alittle pricey but at the same time,
but that's what you're planning on doing. Then of course we got to talk
about that in terms of over anoverall financial plan. Yeah, I don't
want to ride on anyone's parade.In one of the good things. I
think they came out of the pandemicwhen there were such terrible headlines about what
was happening in these nursing homes.No fault to the nursing homes. It
was just if one person came upwith COVID. It spread like wildfire.

(21:26):
People couldn't see their loved ones,and I think a lot of people started
saying, wait a second, Ididn't even think about this before, and
now I'm thinking about it. AndI don't want to necessarily pick up everything
and be in a you unfamiliar environmentwhen I'm older, I want to stay
at home. And so I thinkthe conversation is good, but you need
the stats to understand, Okay,how do you prepare for that. The

(21:48):
cost of aging at home aren't cheap, the cost of going to a nursing
home aren't cheap. So I thinkwhat you have to do is have the
facts. I always say knowledge ispower, and I think this segment is
kind of looking at that right whatyou need to know in order to be
able to plan that, Because whatyou're talking about is you know some of
the stuff that you need just toget by right and survive. But then

(22:11):
beyond that, you know you mightneed help with cooking, with cleaning,
with running errands. My grandpa gotParkinson's when he was eighty six, so
my dad found and he had togo into a nursing home. He was
the person who drove my grandma EvelynWagner, she never drove, so my
dad hired someone to come in thehouse and kind of help her. You
know, she was getting close toninety two. What we found Evelyn was

(22:33):
doing with this person that we werepaying, is she was paying them to
sort of uber her to the mall. And she really wanted to go shopping.
She just wanted companionship, she wantedto get out. But hey,
that's part of it too, Likeshe was trying to keep kind of some
normalcy in her life. And asyou age, it becomes harder to do,
and some of the things that werecompletely free before you now have to

(22:55):
pay people to help them do itfor you. In all of those cops
add up, in fact, theprice tag can be close to astronomical.
Yeah, and then what you're describingthere too, that's that's sort of a
lower level. So there's a homehealth aid that's somebody who actually will,
you know, basically make physical contactwith you to help you in and out
of the bathtub, help you getdressed, help you eat, and so

(23:15):
forth. Versus homemaker services that's morecooking, cleaning, running errands for you.
I think that's what sounds like.That's more like what Evelyn head,
so just kind of helping her,helping her keep things normal, but sometimes
you need both right right at thesame time, and you talk about how
those costs would absolutely pile up.I was just with a friend recently,
her mom also with Parkinson's but hasrecently gotten worse. So they have someone

(23:37):
there during the day that kind ofprovides those you know, medical essentials and
and you know, transferring her fromchair to wherever she needs to go.
But here's the thing she was alsosaying, now we're starting to wonder whether
at night at night she's always beenby herself, if she can now handle
that she would have wake up inthe middle of the night and it needed
something, she may not be ableto do that anymore. So you're constantly

(23:59):
have to reassess the situation when someoneis still living at home to say,
okay, is the level of carethat we have in this home is it
enough? Or have things changed overthe past few years and now we need
more? And every time those changesare made, they come with a pretty
large price tag. You've got people, obviously, you want somebody you trust,
and somebody who is skilled at theirjob and patient and all those kinds

(24:22):
of things, and that's not aminimum wage role. So either way,
if you're looking for only the homemakerservices or if you actually need a full
fledged home health aid, it's goingto be sixty to seventy thousand dollars per
year. According to these studies we'vebeen reading, that's about thirty bucks an
hour, thirty to thirty three dollarsan hour for one of these folks to
come in your home. And here'sthe rub. Remember, Medicare does not
cover most of this stuff. Thatis not something you should rely on Medicare

(24:44):
for Medicare is for your doctor visits, your prescription, so on and so
forth. It's not going to coversomebody to come in your home and help
take care of you. One ofthe hardest things, I think, one
of the hardest conversations to have withsomeone who's planning for their future and retirement
is we can be sitting across thetable from someone is I don't know,
forty five, fifty five, evensixty five, and you're healthy. So

(25:04):
it's really hard for someone to betelling you, Okay, as a couple,
you need to plan for three hundredthousand or three hundred and fifty thousand
dollars worth of health care expenses becauseit's like, what, I'm not gonna
need that I'm healthy, I haveno prescriptions, I have no things can
change, and so it's really hardto plan for this future version of yourself
that you don't see when you lookin the mirror right now. But if

(25:26):
you can wrap your head around that, or at least begin to, there
are things you can do to planfor it. And of course, the
number one thing I'm going to tellyou is a health savings account. Oh
my gosh, that's shocking. They'reshocking. I know, I literally I
don't know why they don't even havemy picture up when you google hessays.
I'm such a huge proponent of these. If a high deductible health care plan

(25:47):
makes sense for your family, thisis a triple tax advantage to count.
It is the gift from the government. There's nothing else like it. It
is money that you may never haveto pay taxes for if you save it
and invest it and use it well. And I would say you've really been
listening to the show. What youknow is we're huge proponents also of having
a strong emergency fund. If youcan pay your healthcare expenses out of that

(26:08):
emergency fund now, and you investthe money and that HSA and you keep
sending it forward to retirement and thatgrows. Conversations like the one we're having
now become much more doable because you'veplanned a head so an HSA. HSA
stands for health savings Amy. I'msorry health savings account. Sorry for you
to slip there, but as youmentioned, they are they're fantastic tools for

(26:33):
financial planning. The thing that comesalong with it, though, this is
of course something you're doing while you'reworking. You have to have a high
deductible health care insurance plan, soit's also important to make sure that plan
gives you what you need. Currently. There's always there's always cases we hear
about every year where somebody had toswitch off of the high high deductible plan
because it did not have therict doctorsor descriptions or whatever. But most of
the time it is it is avery good It covers what you need and

(26:56):
it gives you some awesome tax benefitsthat you will not get anywhere. Health
savings amys are very good ideas hugefans. The key here is to plan
right, to know your options whenyou're I don't know around the age of
fifty five sixty, you have tostart thinking about long term care. Used
to be, there were all theseoptions in the marketplace, all of these
providers that had different insurance policies.Less and less of an option, and

(27:19):
long term care insurance is becoming moreand more expensive. These premiums are not
cheap, but the younger you lookinto them and the healthy you are at
the time, the more that theycan be affordable. And I think they're
not necessarily the only option for you. But the key is to start thinking
about what can I do? Isone of these policies make sense? Do
I have enough money in an HSA? Can I self ensure? But to

(27:41):
just think I'm healthy now, I'mnot going to have to worry about it.
That's the worst situation you can puthere. That's how you paint yourself
into a corner, and it couldbe pretty scary. So we want to
make sure that that we've budgeted somethingout there for that dollar amount. But
don't let it terrify you either.Some of the expenses that you'll incur,
Heaven forbid you have to move intoa nursing home. Some of those expenses
you incur are already occurring now.You're not paying for food and on top

(28:04):
of an electric on top of allthese things, so don't treat it like
as a brand new expense. Greatpoint. Here's the all Worth advice as
sooner you plan for those future healthcarecosts, the better your future self will
thank you. You know. Andas we talk about inflation, the cost
of healthcare inflates at a much higherrate than the cost of everything else,
So you've got to have a plancoming up. It's a simple way to

(28:25):
invest in real estate, but doesit make good financial sense for you?
We'll talk about that next. You'relistening to Simply Money presented by all Worth
Financial. Here in fifty five KRCthe talk station. You're listening to Simply
Money presented by all Worth Financial.I meani Wagon. You're along with Brian
James. If you've got a financialquestion it's bothering you. There's a red

(28:48):
button you can click on while you'relistening to the show. It's right there
on the iHeart app. Really easyto use. Record your question and it's
coming straight to us. We'll helpyou figure it out and straight ahead.
If you have looked at your homeinsurance costs right your bill recently might be
stressed out about that. We've gotsome ways that you can deal with those
higher costs. Some eye opening informationthere, all right. You know,

(29:10):
I think a lot of times,Brian, when it comes to investing,
an investment that feels really safe forpeople is real estate. You can't touch
that stock that you own. Youknow it's a piece of a company,
but you can't see it, youcan't touch it. Real estate is something
most of us can wrap our headsaround. And so we're going to talk
about a real estate investment trust orreads, which is something we haven't talked
about on the show in a while. So, as you mentioned, when

(29:32):
we think of real estate, wenormally think of the place we live in
the box that keeps all our stuffout of the rain. Or maybe if
you think, if you're thinking investments, you might have investment property, build
it in or something like that.But a lot of people are not comfortable
with that kind of approach of directlyowning real estate because we don't want to
plumb toilets during the holidays, right, send me up for that exactly.

(29:52):
So there's a way you can investin it without actually owning and deal with
it. It's called a real estateinvestment trust ore E or pronounce. It's
basically sort of like a mutual fundor an exchange traded fund often that buys
real estate on your behalf. It'sa passive way to have real estate exposure,
but you don't have to actually worryabout owning that. You know,
whether there's leaks in the roof,those kinds of things. So, just

(30:14):
like any other investment, any othercollective investment, like a mutual fund or
exchange traded fund, they raise apool of money from a lot of people
and then they go buy a portfolioof income generating real estate properties. Sometimes
it's income generating. Sometimes they alsowant to buy it because there are growth
opportunities. There's lots of ways toview real estate, just like any other
investment, could be apartment building,shopping malls, hospitals. But the point

(30:36):
is you can take a relatively smallamount of money and buy a portion of
a larger portfolio of real estate.Sounds great, right, I mean real
estate sounds like a great investment.And and there are sometimes when it is
a couple of things to understand here. There are non traded rates and publicly
traded reads, right, And thenon traded reads are very different in something.

(30:56):
I'm not necessarily a huge fan ofthe publicly traded reads. You mentioned
victual funds. You buy them andsell them whenever you want to. You
know, the non traded kind aremore long term investments. They're not as
easy to sell. You have tofind someone who wants to buy this from
you, which isn't so easy.And then also you mentioned the different kinds
of things, right that reads wouldnormally invest in shopping malls. How's that

(31:22):
working, right? If it's severalseveral years ago you invested in a read
that invested in shopping malls. Idon't know if you've been in one lately,
But other than Kenwood Town Center,they're all like turning themselves into pickleball
courts. I mean, there's justnot a lot of options. Okay,
let's look at commercial real estate,right, going gangbusters in twenty nineteen,
twenty twenty pandemic hit. Most ofus aren't necessarily back in the office full

(31:45):
time. Many companies scaling back onthe you know, how many they've got
in the office, how much theblueprint of or the footprint of their commercial
needs are, and so what seemslike a no brainer when it comes to
realitate suddenly can't be So I wouldjust caution that while this often sounds like
a great investment, you really gotto know what you're getting yourself into here.

(32:07):
Yeah, So underneath the hood youmight find that the real estate properties
are heavily leveraged because a lot oftimes these reachs just like you. Right,
if you want to invest in anown in your own property, your
own apartment building, whatever, youmight go get a loan to do it.
Well, real estate investment trust cando that too. They might use
a combination of debt and equity tomake a purchase like that. So what
that means is that they are thensubject to interest rate changes, and hey,

(32:30):
guess what, we've had a coupleinterest rate changes. We're kind of
through the looking glass and interest ratesand we're being reminded of what it was
like thirty years ago. But ifthose investments had as amy as you mentioned
back in twenty nineteen when everything wasfabulous, if they had variable rate debt
tied to those well that is apart of what you invested in, and
going you will have taken a loss. You will have seen a lot of
volatility because all of a sudden,where the ret itself may have had expenses

(32:52):
based off of maybe a three percentmortgage or something like that. It may
have spiked a five, six,seven, even eight percent. That's going
to lower the overall value of thereach share itself. So don't feel like
just because there's real estate underneath itand they ain't making any more. Real
estate is the common quote we alwayshear. But that doesn't mean that things
don't go up and down. That'sbecause it's publicly traded. That's literally what

(33:13):
that means. That means you canlook at the ticker symbol and you can
see what the overall opinion of themarket is on such an investment. Non
publicly traded reads will not be asvolatile as far as what you can see
in your statement. But amy,like you said, you're pretty much stuck
with them until you can find abuyer for them, or they'll have maybe
like a quarterly or sometimes an annualwindow where you can liquidate. Another thing

(33:34):
to think about here is because thisis real estate, it's a little bit
different when it comes to the irs. Right. You look at Meta,
Facebook, you look at Apple.Much of their growth comes from when any
money comes in, when they haverevenue, that money goes into research and
development, Right, what's the nextiPhone, what's the next AirPod, what's
the next metaverse or whatever it isthat we can invest in, that we

(33:58):
can research, that we can growthis company. Real estate isn't that same
way. IRS rules require reads todistribute ninety percent of their annual earnings to
investors, so reads are actually onlyleft with a really small percentage, right,
ten percent to reinvest in sort ofgrowing that portfolio. Speaking of portfolios,

(34:19):
portfolios are managed, you know,and so you're paying that manager.
They do not work for free afee. So as you're looking into,
you know, does a reate makesense for you? And sometimes they can
be something that is a great investment, you know, but you have to
do your research. You have toknow exactly what first of all those reads
are investing in, what are thefees, you know, what is the

(34:39):
future growth for those and all ofthese things I think really need to be
considered strongly before you pull the triggeron these. Here's the all Worth advice.
We recommend contacting what we would saya fiduciary financial advisor, so someone
who's putting your best interests ahead ofTHEIRS for advice on whether investing in rates
makes sense or not. Coming upnext, we've got ways to lower your

(35:00):
home insurance premiums. I don't knowif you've been paying attention, but you're
probably paying more. You're listening toSimply Money presented by all Worth Financial here
in fifty five KRC the talk station. You're listening to simply Money, percented
by all Worth Financial. I Meaniwag. You're along with Brian James. We've
talked so much over the past coupleof years about inflation. Right, you're

(35:22):
paying more at the grocery store.You're paying more for so many of your
bills. But right, I wonderhow many people have been paying really close
attention to their home insurance, becausethat has also made a pretty significant jump.
Yeah, I guess what just happenedin the James household. I opened
that envelope and looked at the premium. Ah, that's fun. Yeah,
now I should know better, right, yeah, exactly. But the difference
between financial advisors and normal people isthat we make the same mistakes, but

(35:45):
we just generally know exactly what theimpact of our stupidity is. So exactly,
I hadn't been paying much attention,but sure enough, my premiums have
risen and we haven't had any claimsor anything. Is the way it is.
Cost of home insurance up twenty percentacross the country since twenty twenty one,
and this is because it's a lotof it has to do with weather,
natural disasters, reinsurance costs, andjust more expensive to get houses fixed

(36:07):
when there is an incident. Thatall trickles back down to the insurance company
and they're wanting to collect more tobe less at risks, So they're bringing
in more money on the front endso that they can cover all of those
risks out there. Here in Ohio, the average yearly premium for twenty four
is expected to be about fourteen hundreddollars. That's up about five percent from
last year. A lot of ushave in our heads that home insurance is

(36:28):
nine hundred one thousand bucks. That'sa bit of a dated number. We
need to be budgeting about fourteen fifteenhundred Kentucky, it's about twenty seven hundred
dollars, an eight percent increase.Amy You people are expensive, you know.
It's funny. You know when Itravel when people ask where I live,
I say, like, oh,northern Kentucky. I'm essentially live in
Ohio. And then I look atthese numbers and I'm like, but darn
it, I'm still paying Kentucky.You're stay if your premiums across the river.

(36:49):
Yeah. Yeah, Well, Imean not only home insurance, but
we talked about on the show recently, car insurance. Auto insurance is significantly
higher in the state of Kentucky.I do not know what's going on in
Kentucky, but I do know what'sgoing on in other states that are obviously
prone to severe weather. And weknow that. Okay, in Florida,
Yes, you're going to pay morefor hurricane insurance, but also many of
those costs are redistributed across these companies. So even though we're not necessarily directly

(37:15):
impacted by hurricanes, our costs aredirectly impacted by hurricanes. Right. And
so you look at you know,states like Florida, Louisiana, Texas,
Arkansas, Mississippi. You've got hurricanes, You've got tornadoes. California. I
feel like the state's either on fireor it's shaking, or it's always something.
Those are costs that we all absorbin the form of our home insurance.

(37:37):
We do remember, even if youdon't live in one of those areas,
right, so Ohio is not particularlysubject to hurricanes, for example,
But even if you don't live inthose areas, you still are paying for
those increases because the insurance companies haveto diversify their risk. Think back to
a Hurricane Andrew for those of youwho might have been around thirty years ago,

(37:57):
Hurricane Andrew wiped out a lot ofinsurance companies down in Florida because were
they didn't have enough exposure elsewhere.So now and then there's of course a
lot of rules in place to protectthose companies so that people can still maintain
their coverage. So now, ifyou're an insurance company, you have to
spread your portfolio out across lots ofdifferent areas so that if you do have
a hurricane in that and in thehurricane prone area, then there's somewhere else

(38:17):
in the perhaps in the mountains,where people are buying health insurance to protect
from different risks. But that's why, that's why rates are going up,
because you are being impacted by thingsthat don't necessarily directly impact you, but
it could have impacted the insurance company, which ultimately does impact your coverage.
Well, can you do well maybeyou could increase your deductible, which will
lower your premium discounts for making yourhomewre secure, Bundling home and auto can

(38:43):
often help shopping around. Do yourresearch. An umbrella insurance policy can also
make sense here. Here's the allWorth advice. You can't control the factors
driving the cost of your home insurance, but you can control how much you
pay. The key here is todo your research. Thanks for listening.
We hope you're going to tune intomorrow. We're talking about the new magic
amount of money people think you needto retire. You've been listening to Simply
Money, presented by all Worth Financialhere in fifty five krs the talk station