Simply Money

Episode Transcript

(00:05):
Tonight, one company blows away estimates, the Fed had interest rate hikes on
its mind, and nine reasons whytime in the market beats timing the market
every time you're listening to simply whenhe presented by all Worth Financial Imami Wagner
along with Steve Ruby, Steve,We've got a lot to talk about.
Let's start with not the Magnificent seven, right We've talked about this a lot

(00:29):
in recent months, is seven companiesthat sort of moved the market. But
really there's one that is moving themarkets right now. Yeah, would that
be the magnificent one, Navidio atthis point, Yeah, Yeah, you
know, they're the AI chip maker, and sales more than tripled in its
latest quarter and gave the sales forecastthat signaled the AI boom, a two

(00:49):
trillion dollar valuation that is obviously stillgoing strong at this point. The company's
outlook of around twenty eight billion dollarsin sales current for its current fiscal quarter
was also higher than anticipated, sothey blew their their estimated profit numbers out
of the world. Yeah, theyshattered any estimates coming out of this company.
It's interesting because this is where wetalk a lot about fear and greed

(01:12):
pushing investors to make bad decisions.You can look at this company and say,
gosh, I mean they are fundamentallystrong. Not only that, but
you look out into the future andyou think AI is where things are going.
They don't seem to have any realcompetition. There are other companies trying
to make chips the way that theydo, but none that can produce sort

(01:34):
of the high quality chips that they'reproducing. And then I think it's interesting
because you go back to the foundationof this company was like three guys in
a Denny store over breakfast who arelike video gamers, complaining about graphics and
this is that went like in theeighties or the nineties, and they were
like, gosh, you know,we should be able to do better.

(01:55):
So they were really trying to comeup with these graphic processing units to improve
the way video games look. Wellthey accomplish that. I mean I walk
into my son's room sometimes and I'mlike, are you watching TV? And
it's actually a video game. It'sjust amazing how clear it all looks.
But since then, the real win, I guess for a VIDEI is all

(02:15):
the ways that now other companies areable to use these GPUs graphic processing units
to help with AI and all kindsof things. Well, chat GPT open
AIS created chat GPT. Are wegoing to be doing the radio show forever?
And do you think chat GPT isgoing to take over? Eventually?

(02:36):
At some point it's going to bevirtual Amy and virtual Steve. It's kind
of remarkable. I haven't personally playedaround with chat GPT, but those around
me have and seeing what it comesup with is mind blowing. And you're
right. It all started and aDenny's with people saying let's make video game
graphics better. And here we arewith AI thirty years later, answering complay

(03:00):
questions and writing essays. Pretty wild. It's at the point now, obviously
outside of the shattering the earnings estimates. The company also said on Wednesday that
they're going to have a ten toone stock split on June seventh, and
increased its dividends up to ten centsfrom four cents. Now, remember stock

(03:20):
splits, this is enticing new investorsby driving the price lower. So if
you already owned the video, you'regoing to get more shares, but the
value is going to stay the same. But technically it does make those shares
a little bit more marketable for thosethat have a barrier entry. As far
as the price of the share rightnow is concerned, I'm glad that you
explained that because I think often companiesget a huge buzz around the fact that

(03:43):
they're doing a stock split. Essentially, they just want to be able to
attract more investors because the cost oftheir stock has gotten so high and there's
a lot of just normal investors thatcan no longer afford it. So if
you're looking at a pie, it'snot that if you owned if you owned
a quarter of that pie before,for well, now maybe that quarter is
now broken up into three smaller slices. You still get the same piece of

(04:05):
the pie. There's just more smallerpieces of it. So important to understand
a lot of people will get interestedin companies because of a stock split.
It really doesn't mean anything other thanthey're trying to be able to attract new
investors. But to investors, youknow, I think you have to ask
yourself. First of all, youknow, is this company fundamentally sound,

(04:26):
But also we preach and we believevery strongly, you don't want to buy
things that a high Who knows whetherthis is a high or not, but
I do think they're going to geta lot of attention for this, and
also, of course because earnings havejust shattered estimates. And this is where
me I start to think, Okay, what could go wrong here? Right?
What could possibly go wrong? AIis so new, something could come

(04:48):
out of the blue, and inany way of just saying when you start
to get greedy and think I needa piece of this, that's fine if
it really makes sense your portfolio.But if it's just because gosh, I
want to get rich, right,then I think this is where you have
to pull back from that and say, anything could happen with any individual company,

(05:10):
whether it's Nvidia, Tesla, Meta, Amazon, Procter and Gamble,
Kroger, it doesn't matter. We'veseen disruptions time and time again, en
Ron exactly, the Kodak, Radioshack right companies it seems like they could
do no wrong, suddenly seem likethey can do no right. It happens
all the time. And I thinkit's interesting, Steve, because you can

(05:30):
forget about all those companies and thinkwhat could possibly go wrong? And I'm
not saying that something is going togo wrong, but I'm saying it definitely
can, and so as an investor, you have to keep that touched away
in the back of your mind atall times. That's one of the reasons
why we preach don't have more thanfive or ten percent of your overall net
worth tied to one company, becausewe don't know what could happen to that
company overnight. Chances are you alreadyown the video if you have it broadly

(05:55):
diversified portfolio of exchange traded funds becausethat's in an index, so you don't
need to take all your money andputting an NVIDIA to let greed take over.
Because you need to think. Whenwe're driven by emotion and fear of
missing out, you need to thinkabout what would happen if I lost my
shirt, if I put too muchmoney in this and something were to happen
to that company, or something happenedto AI that affected that company, how

(06:15):
would that affect your financial goals,your ability to retire for example. There's
a balance, right you have thatfear of missing out, it needs to
be balanced with the fear of missingor of losing your shirt. At the
same time, you're listening to simplymoney presented by all Worth Financial i Memi
Wagner along with Steve Ruby, aswe digest several things happening in the stock
market. First of all, inNvidia reporting earnings yesterday blew out estimates.

(06:40):
The stock market loved it. Stockmarket doesn't love though, that the Federal
Reserve released the minutes of April's meeting. Now, this is kind of looking
in the rear view mirror. It'ssomething that already happened. We know what
happened, but these minutes also giveus some insight into what individual Fed members
were thinking, not like this.Yeah, we need to dig into this

(07:01):
one a little bit deeper because investors, you mentioned, some of them freaked
out when they read those minutes.It showed that some Fed officials were willing
to make additional rate hikes if theydeemed it necessary. Now, hike,
that's a nasty four letter word.At this point, interest rate hikes are
supposed to be done. We're supposedto be talking about decreasing interest rates when

(07:25):
that's going to happen. It wasgoing to be six times this year.
Maybe now it's one or two.But what happened is is remember, up
until the April thirtieth meeting, inflationhad been running hotter than inspected in January,
February, and March, so itwould make sense at that point for
FED members to say, maybe maybewe would consider an interest rate hike.

(07:49):
But that was before information came outthat inflation was actually trending downwards. You
know what's so interesting about this.We have a meeting every day where we
get together with our crew and wetalk about what we need to talk about
here. Right. We do alot of research and planning. We don't
just kind of jump on the showand talk for an hour. And one
of our producers was saying, thisis so frustrating. It's so confusing to

(08:11):
me because it doesn't make any sense. And you and I were like,
Haha, it's funny that you thinkthe markets are rational. I mean,
there's nothing rational about the markets.The markets are trying to figure out what's
going to happen six months down theroad. But also can just as likely
or just as much respond to somethingthat happened a week ago that is no
or a month ago that is nolonger relevant. Right, It's like,

(08:35):
oh, shiny ball. And Ithink when you try to make sense of
how these work on a daily basis, you can go crazy and that's why
we're huge proponents of let's look athistorical patterns over months, over years,
over decades, because trying to makesense of any individual day or few hours
span in the markets, you're justgoing to go crazy yourself. Yeah.

(08:58):
So, just to be clear aboutthis particular article that came out and saying
various Fed official rates were willing tohike interest rates if needed, that that
happened. These words happened before theinflation report in April came out that showed
that the economy is indeed slowing alittle bit. Inflation has slowed a little

(09:18):
bit. It should not have readvarious officials are willing to hike interest rates
if needed. It should have saidthey were willing to hike interest rates they
needed, because new information has comeout since then. This is why one
of our producers got so worked up. He couldn't wrap his head around the
fact that the markets reacted so stronglyto old news. This is news of

(09:41):
the past. It was a monthago, but things have changed for the
better since then, so that thisis an alarmist headline. Yeah, it's
it's smart for them to have itand for the Fed to have it in
the back pocket that yes, technicallyinterest rate hikes are possible if if and
if and since then, and thingsjust haven't gone in that direction because the

(10:03):
economy and inflation where it is currently. And we say this all the time,
the Fed is not looking backwards onwhat's happening. It's looking forwards.
It's taking in a ton of economicinformation and then trying to make the best
decision moving forward. So they releasethese minutes, but they are not looking
back. They are looking forward,as we will continue to do. We

(10:24):
don't have a crystal ball. Wedon't know what they're going to do next,
but yeah, interesting, definitely severaldays in the market coming up next.
Nine reasons why time in the marketbeats timing the market. You're listening
to Simply Money, presented by allWorth Financial here in fifty five KRC,
the talk station. You're listening toSimply Money. You're presented by all Worth

(10:46):
Financial. I mean you Wagner alongwith Steve Ruby. If you can't listen
to our show every night, youdon't have to miss a thing. We've
got a daily podcast for you,search Simply Money. It's right there on
the iHeart app or wherever you getyour podcasts. Coming up at six forty
three. We've got specific zific detailsthree of them to keep in mind when
you are planning for a successful retirement. One of the things I think that

(11:07):
is the most important thing, Steveabout what we do is providing perspective.
Any given day, trying to makesense of markets, the economy, consumer
spending, consumer thinking, it canbe overwhelming. So we like to give
historical perspective to say, hey,here's why we believe what we believe.
And we have a great example ofthat again on tonight's show. Yeah,

(11:30):
So this is a fun one forme to talk about here because with the
two hundred and fifty trading days ina given year, nearly all of those
days have stock gains and losses thataren't really that large whatsoever when you look
at it over a longer period oftime. Really it's oftentimes just a couple
of days a year that can contributeto much of your gain and losses throughout
the year, and that is thecase this year as well. There's an

(11:54):
organization called Data Trek Research and theylooked at the about one hundred trading days
that we've had in twenty twenty fourso far, and they honed in on
the SMP five hundred, which isup about eleven percent at this point.
The gains those eleven percent came fromjust nine trading days. Nine of the

(12:15):
one hundred is where all of thegains came from. Let me ask you
this, when you think about anyof those individual days, would there have
been any kind of alarm going offin your head the day before, the
night before, that morning when youwoke up to say, this is the
day, right if I had moneyto put in the market, I was

(12:35):
going out, this is the dayto do it. Absolutely not, I
mean. And the interesting thing aboutthese good days in the market, often
they come on the heels of reallybad days in the market. So the
day before you could have thought Igot to get out, I got to
get out, I'm losing money,and then the next day is one of
the best days that contributes to themost gains in the market over that year.

(12:58):
And I think this is just agreat example to drive home why you
can't jump in and jump out.You're just not going to get it right
and you're going to lose out.You have to guess so many times to
get it right. Because in thissituation, out of one hundred days again,
there was just a handful of themthat really contributed to the gains that
we've seen in the year, andthose specific days we're going to talk about

(13:18):
them and why this happened, andask yourself if, like you said,
if you had cash on the sideline, would this have been something that you
would have known about in order todeploy it. January eighth, that was
when Navidia unveiled new AI chips forpersonal computers, sending that stock to an
all time high. The sm Pfive hundred, which actually is pulled quite

(13:41):
a bit by Navidia, was upone and a half percent that day.
Now, if you have insider information, maybe you should have seen that coming.
That that's also illegal. Yeah,I mean, no one would have
known. And the interesting thing ismarkets really respond strongly to Nvidia earnings calls,
and they usually do these calls afterhours, so sometimes you'll see a
little bit of a dip before andthen it'll come up. But markets are

(14:05):
all over the place. It's alittle scary, right that one company has
that much short of a sway inthe market, but that's sort of the
way that things are right now.So one day, one earnings call,
one announcement from one company moved themarket one and a half percent. Let's
fast forward about a week and ahalf January nineteenth, the S and P
five hundred, five hundred biggest companiesup over one percent after the chief financial

(14:28):
officer of a company called Taiwan SemiconductorManufacturing. Were you looking at them?
Were you paying attention? Never?I want semiconductor Manufacturing, never ever paid
attention to them, never heard aboutthem? Why do we care? Well
on this particular day in January onthe nineteenth, they offered an upbeat revenue

(14:50):
outlook at the S and P fivehundred. Loved it. I mean,
did you see that coming? Nobodysaw that coming. Nobody would have said,
this is going to be a goodday for the markets. Let's put
our money in. Taiwan's Semiconductor Manufacturingis gonna happen. You the one They're
gonna move it. They're gonna movethe whole S and P five hundred one
point two percent. February first,a couple of the Magnificent seven, Meta
and Amazon beat expectations SMP five hundredrows one point two percent. So again

(15:16):
a trend here, a couple ofcompanies have some news boom the markets go
up. Maybe this one. Ifyou're paying close attention, you could have
seen it coming. But whatever Imean, the moral of the story here
is still you don't want to siton the sidelines waiting to deploy cash to
try to time the markets, becauseit's very, very difficult to get it
right, and if you're on thesidelines and you miss it, your money's
just not going to grow as much. Best day of twenty twenty four so

(15:37):
far was February twenty second again NAvideo Crush Journings Expectations SMP five hundred rows
two point one percent. You're listeningto Simply Money, presented by all Worth
Financial Immi Wagner along with Dave Ruby, as we make perhaps the most important
point that we can make to you. We talk a lot about how fear
and greed drive investors to make baddecisions, and we're hoping that this shows

(16:00):
you the reason why that's bad,Because there were just nine days so far
in twenty twenty four that, ifyou were invested, probably hash your four
oh one K looking much better thanit would otherwise. Nothing about those days
when they started, or the nightbefore or the week before would have made
you think that there was going tobe any difference in the markets that day.
But if you miss them, youreally missed out on some earnings in

(16:22):
your investments. A lot of thesesteve as you look at them, have
to do with American companies doing well, growing finding ways to continue to grow.
And I want to remind you thisbecause I woke up this morning to
a text message from a friend whosaid, my husband and I think we
should get out of the markets thisyear because we think, regardless of who

(16:42):
is in office after the November election, that there's going to be a recession.
Okay, I woke up to thistext and I thought, oh my
gosh, I could respond a thousanddifferent ways. But as we talk about
this, there's nothing in here abouta good day or a bad day on
the result of a decision made outof the Oval Office, something coming down

(17:03):
from the Capital Congress making a decision. No, these are these are mostly
all having to do with either verygood days or very very bad days for
US companies. When you're betting againstthe markets, you're betting against capitalism,
corporate greed. These these are thingsthat are going to continue to drive the
markets forward no matter who's in theOval Office. You know, We've talked

(17:26):
about it before. Andy Stout hasput together a chart of data that I
show. He's a chief investment officerof all Worth Financial, and I'll pull
this up in meetings with folks fromtime to time when they're emotional tied to
one side of the aisle or anotherwhen it comes to politics. And it
can be a little surprising when weshine light on the fact that most of
the time, no matter what,no matter who wins in a given year,

(17:47):
the markets are still up. Samething with the following four years.
So again you bring up an electionyear politics, money is green, it's
not red or blue. These companiesare United States companies that have done good
and they're creating value for shareholders andmoving the markets by doing so. So
sitting on the sidelines is essentially bettingagainst the United States and capitalism. You
mentioned, right, If you hadinvested, say a million dollars in the

(18:11):
S and P five hundred twenty yearsago, right, and just in nothing,
you let it ride, you letit stay in the market, that
million dollars in twenty years would besix point three million. That's it.
Hey, Yeah, But if youpull that money out and you missed just
ten days, right, the tenbest days in the market over that time
six point three million. Now cutit in more than half. You have
two point nine million. You missedthe best twenty days. You have one

(18:34):
point seven million miss the best thirtydays. Your million dollars is one point
one million versus six point three million. I don't know any other way that
we can possibly say. There's justno way to time the markets. You've
got to write it out. Somedays you might feel nauseous, but you
got to keep it in. Yeah, I mean, there's nothing wrong with

(18:55):
a boring, slow and steady approach. Because you'll notice that the percentages each
of these best days that we shineda little bit of light on today markets
went up maybe one or two percent. That's it, just one or two
percent at a time, but itadds up very very quickly. And if
you miss those days, you canabsolutely massacre your investments. Best way to
keep up with inflation over the longterm is stock So if you're sitting on

(19:17):
the sidelines not investing, not onlyis your money not growing, but it's
being eaten alive by by what's calledpurchasing power risk. So it's the name
of the game. If you wantyour money to grow if you wanted to
keep up with inflation. Putting inthe market, keeping it there, letting
your money turn into more money thatmakes more money for you is the way
to go. Here's the all WorthAdvice. Time in the market. Yes,
it does beat timing the market.Coming up next, we're helping you

(19:38):
navigate end of life issues with ourestate planning expert. Incredibly important stuff.
You're listening to Simply Money, presentedby all Worth Financial here on fifty five
KRC, the talk station you're listeningtoo, Simply Money, presented by all
Worth Financial. I Meani Wagner alongwith Steve Ruby many times when I'm meeting

(19:59):
with some about their financial plan.Their goal is to spend that money over
the course of their retirement to thepoint or that last check bounces. How
do you do that? And howdo you also plan for what's a very
expensive expense at the very end.We're talking about funerals tonight and joining us
to do that as Mark Rerekman,our state planning expert from the law firm

(20:22):
of Wood and Lamping. All Right, for those out there, Mark who
had that goal right, that lastcheck is going to be it's how do
you plan. Well, the funeralindustry has gone through a consolidation in the
last fifteen years, and so payingfor a funeral, which is of course
unavoidable, has really changed during WhenI see these estates and we report the

(20:45):
final expenses to the probate court,these numbers have been growing steadily for the
last fifteen twenty years, and Imean quite a bit. And this is
because of something called consolidation. Wheneconomists look at various sectors of the economy,
they often look to see if thereare trends. In the case of
funeral homes, it was a cottageindustry, which is a term they used

(21:07):
to describe a collection of a bunchof small businesses. All of these funeral
homes were individually owned and operated,most of them by family. Some of
them might have two or three locations, but they're all small companies and there
are dozens of them in a citylike Cincinnati. That changed, and what
happened is that investors started coming inbuying out these places. You and I

(21:30):
don't know it because the name didn'tchange. The place looks the same,
but they've been consolidated by investors.And along with that trend, guess what
funeral costs started to go up,and in the last fifteen years they have
almost tripled in the last fifteen years. Now, what that means, Amy,
is that like any other industry,when prices go up like that,

(21:55):
there are discount products and discount servicesthat enter the market. And so now
you can actually buy discount funeral equipment, funeral products, and funeral services.
Not a lot of it, butif you do a little shopping you can
find it. And it's kind ofodd, It's not something people really expect.
I've heard about caskets that can bepurchased at Costco and Walmart. In

(22:22):
preparation for this, I decided tolook to see and I looked online and
sure enough, there's a whole line. You can actually buy a plane pine
box that is that's designed to disintegratein the ground and they are nine hundred
and ninety nine dollars delivered to yourdoor. And so yes, you can

(22:44):
buy these things. And what youfind out is the products at Costco,
product at Walmart is the same productthat you and I would buy from a
funeral home. They're made right upthe I seventy four many of them are
the product comes down of Indiana,rant up there, and it's an exact
same product that you pay full pricefor at the funeral home, but you

(23:07):
can buy it on Costco for maybesixty sixty five cents on the dollar.
You got, what do you dolike stored in your basement until you need
it? Well more? They havenext day delivery. I hate it's true.
You either planned way ahead or it'sthe last minute. What's the average
cost you're talking about it, youknow, going up tripling over the last
decade or so. What's the pricetag that we're looking at here? Well,

(23:30):
last year, in twenty twenty three, the average cost in Ohio and
specifically elected that I looked at theCincinnati market just crossed over seven thousand.
Now that's the average. There's alsowhat they call the mean, which is
closer to eight thousand dollars. Now, when I started my practice many years
ago, the funeral bills I wouldsee would be in the twenty five hundred

(23:52):
dollars range, may maybe three grandif it was fancy. And now it's
the mean price is almost eight thousanddollars. And I have not seen new
figures. You know, there's beensort of a jump in inflation in the
last six months, which is levelingout, and I have not seen what
that's done to this industry. You'relistening to simply money presented by all Worth

(24:15):
Financial. I mean me Wagner alongwith Steve Ruby, as we talked to
our state planning expert Mark Reckman tonightabout the cost of funerals. No one
likes to think about this, butplanning ahead is actually a gift for your
loved ones. Mark. You know, I think about the fact that,
gosh, it'd spend you know,ten plus years since I lost my mom.
But when you're in that place ofgrieving and then you're led into the

(24:37):
funeral home and you're making all thedecisions about the casket and the flowers,
in that emotional place, it tendsto feel like you need to spend more
in order to show your love tothat person. It's like there's nothing else
you can do so they deserve thebest things. I actually know my mom
wouldn't have cared about that, wouldn'thave wanted us to necessarily spend a lot

(24:59):
of money on this. So Ido think that it's sort of a beautiful
act of love to pre plan thatfuneral and take the stress out of that
emotional time for the people that youlove absolutely and pre planning as well as
pre paying. You can do eitheror both. In other words, you
can pre plan without paying, oryou can pre plan and pay. It's

(25:23):
a real gift to the children.And I say that because there's a number
of advantages to that. One isthat it makes your wishes. Me being
the person who's dying, it makesmy wishes clear to my family. Number
two, it minimizes any opportunity forfamily members to disagree. And the dynamic

(25:44):
you just described as very real,and that is I don't want a chintz,
I don't want to be cheap.I love my mother. I want
the best for her. Well isthat what she would want? And is
it really the best use for money? You know, we're Midwesterners. Spinning
tens of thousands of dollars on acasket is sort of not really what I
would call a typical Midwestern perspective.And also amy it also allows if I've

(26:08):
pre planned my funeral so that mykids walk in and know exactly that I've
picked everything out, then it givesmy family the opportunity to focus on grieving
and spending time together and not makingawkward decisions. Another thing I've noticed,
and I don't know if this isa trend, and maybe it's based on

(26:29):
cost or something else, but Ithink back to the funerals that I've been
to over the past few years,more and more people are choosing cremation.
M it's a big switch, andit's a swing that's been going on now
for probably two decades. And inCincinnati all cremation was done at the Hillside
Chapel over there behind Good sam Hospital, and it was that way for one

(26:51):
hundred years. That's the oldest theoldest public crematory in the country. By
the way. They're closed now becausepart of what I was talking about a
minute ago, this whole consolidation,is that the investors who've been buying up
these funeral homes have been injecting alot of capital and many many of them
have put it I brought in theirown crebactory. And so now cremation is

(27:15):
growing very fast, as you know, and the cremation services are available at
dozens of locations around the Tri statearea. Mark for someone who's listening and
saying, Okay, I think Iwant to go ahead in pre plan,
maybe pre pay, get this takencare of. Where do you even get
started. What you do is youcall your funeral home, and there are

(27:38):
places all over town. Everybody,I guess has connections. If you're from
Cincinnati, you've probably been to afew funeral homes. You call one of
them. If you're interested in discounting, you're going to have to go online
and do a little research and findthe discounters in town, and then you
go in with your paper and penciland you look over their products. You

(28:00):
decide what you want. They willfill out a form and you sign that
form, and then they'll put thaton file. They give you a copy
and you give it to your family, so when you're gone, the family
has that piece of paper. Theycontact the funeral home and the arrangements are
already there. If they're being paid, and there are numbers. There are
three or four different ways you canprepay. If those services are prepaid in

(28:23):
some circumstances, that's it. Thefuneral home cannot charge more than that.
You know now, they're not goingto allow somebody to prepay a funeral for
a thirty year old and have noprice adjustments when they die fifty years later.
But within certain age limits, Ican prepay my funeral and the funeral
home will lock in those prices.Now, prepaying can be done in a

(28:48):
variety of ways, but probably themost common that I see is done with
the funeral is done with the lifeinsurance policy. And in fact, one
of the big life insurance carriers whosells these policies is hill Rebrand right up
here in India, the same peoplewho make the caskets. It's called Forethought
Great Company. You go to yourfuneral home, you pick seven thousand dollars

(29:10):
worth of funeral products and services.You then buy a life insurance policy from
Forethought for seven thousand dollars payable tothe funeral home, and you go on
your way. When you die,then the insurance company pays the funeral home
and services are covered. You knowthis is nothing I think that you know
it's not enjoyable necessarily to do this, but I very much feel that this

(29:33):
is a beautiful gift that you canleave behind for your loved ones. So
to your point, Mark, theycan grieve and you've made those decisions for
them. Great perspective as always fromMark Rekman are a state planning expert from
the law firm of Wood and Lamping. You're listening to Simply Money percent by
all Worth Financial. Here in fiftyfive krs the talk station you're listening to

(29:56):
Simply Money presented by all Worth Financial. I mean you Wagner along with If
you've got a financial question you wantus to answer, there's a red button
you can click them while you're listeningto the show. It's right there on
the iHeart app. Record your question. It's coming straight to us and coming
up. If you're thinking about buyinga car, does it make more sense
to buy one or to lease one? We're going to tackle that straight ahead.

(30:18):
I think we've all heard the phrasethe devil is in the details,
and we know right. Sometimes youskip some steps, things don't turn out
quite well. So when it comesto retirement planning, there are certain details
where we would say when you getit right, it makes a big difference.
You get it wrong and it canmake a big negative difference. Let's
get into these, Steve, andI think one of these is figuring out

(30:41):
the right amount of risk for you. Yeah, higher risk means higher reward
over the long term as long asyou can stomach it, but not everybody
can. So finding the right amountof risk with your investments, how much
you need to take to meet yourgoals. How much you can afford to
take, base on your situation,how much risk you currently have versus the
changes you need to make to bewhere you need to be. Taking the

(31:04):
right amount of risk is extremely extremelyimportant. You go too strong and can
it can create emotionally difficult situations thatmay lead you to make really bad decisions.
The way that I like to putit is, I want you to
be able to eat as well aspossible in retirement. At the same time,

(31:26):
I want you to be able tosleep as well as possible in retirement.
Right, you want to be ableto make as much money as you
can, but you also want tobe able to have the peace of mind
when markets are down that you canstill digest it, that you can still
sleep at night, that you're notgoing to be worried and anxious all the
time. And this is going tobe really different for everyone. So figuring

(31:47):
out what that is for you,and it can go both ways. You
can get fearful or you can getgreedy. But figuring out what that is
outside of the markets, outside ofthat real situation, then he gives you
a place to go to on aday when oh, markets can do no
wrong, right, go all inon stock market, or I'm scared to

(32:07):
death, I'm going out. No, no, no, You've already figured
out what your right amount of riskis for you, and then you just
stick with it. And when youcan't, and when you're struggling with that,
that's where then you lean on afinancial advisor that's going to remind you,
Okay, we decided what this isfor you. You made this decision.
It's best to stick with it.And it's important to remember too that

(32:28):
if let's say you get started inyour four ok and you pick a handful
of investments and then you're complacent,you don't make any changes over time.
Something that will happen over time iscalled portfolio drift. So let's say that
you think that you have a sixtypercent stock forty percent bond portfolio because that's
what you're comfortable with. You don'twant to take a ton of risk,
but you're still in the stock market, and over time, as the markets

(32:50):
perform well, the stocks will beyou will have more stock than bond and
you may end up with a seventythirty portfolio or even a very long period
of time, maybe you're eighty twenty, and then the markets have a correction
and you lost a lot more thanyou were expecting to be possible because you
were complacent with your investments, youdidn't have an advisor helping you, and
now you have found a situation whereyou were taking more risk than you thought

(33:13):
that you were because you didn't rebalance. Here's another detail that I find people
miss all of the time. Right, you think I've done everything I possibly
can for retirement. No estate planning, no will, no thought of whether
you need a state, no powerof attorneys so that if something weren't happened
to you and you were incapacitated,your family could make either decisions about your

(33:34):
healthcare or financial decisions for you.It happens all the time in the headlines
too. How are you, PabloPicasso? Prince Right, All of these
people that had so much money youwould think would be surrounded by people helping
them make smart money decisions pass away, and then there's no estate plan and
it's just a mess. This isI get it, something no one likes
to think about. Just truthfully,it was on my list of things to

(33:58):
do for months and months, andI just kept saying, I'll get to
it next week. I'll get toit next week. But then I started
thinking, what is something really weirdto happen to me? It's sort of
an act of love for your lovedones that this is taking care of that.
It's you know, figured it outfor them so that they aren't grieving
you and at the same time tryingto figure out these terrible details about your

(34:19):
finances and about what you would havewanted. So this is a detail.
If you have not tackled it,please please do it soon. Yeah.
Part of financial planning is a stateplanning. So when you're working with a
fiduciary financial planner, they should betalking to you about your estate plan and
making sure that if there's not anattorney on staff, or you don't already
have an attorney, they're putting youin touch with somebody that can make sure

(34:40):
your final wishes are met via properestate planning, which can not only make
sure your wishes are met, buthelp save taxes as part of your estate,
for example, remove family infighting thatmaybe you don't think is going to
happen, but certainly can. WhatI tell folks i'm working with is oftentimes
it becomes a homework assignment because nobodywants to do this stuff, and I

(35:02):
tell them I'm going to bug thecrap out of them until they either do
it or they tell me to shutup about it. Yeah, because the
state planning is so important that weneed to make sure that you get hit
done. Another thing that many peopleoverlook is just the big impact of small
adjustments. You wrongly think that themillionaire next door to you got that way
because they hit it big on oneindividual stock. Nope, most of the

(35:23):
time, it's just really slow andsteady, and that's what makes the difference
over the long haul. Here's theall Worth advice. As with most things,
little details make the biggest impact.Coming up next an age old question,
should you buy or lease that nextcar? We'll get into that.
You're listening to Simply Money, presentedby all Worth Financial here in fifty five
KRC the talk station. You're listeningto Simply Money and presented by all Worth

(35:52):
Financial. I mean Me Wagner alongwith Steve Ruby. This is the question
I think a lot of people havethought about through the years. When you're
getting ready to get a new car, what makes the most sense right?
Should you buy or lease a vehicle? I can tell you, Steve,
I leased a vehicle years ago myfirst job. I was living several hours
away from home. Financially, atfirst it seemed to make sense, and

(36:14):
then I realized I actually drive alot more than the ten thousand miles a
year that they're going to go onit on the lease. And then it
became a very stressful financial decision becauseit was like it was just like,
should I park the car and takethe bus everywhere or you know, swallow
it and pay for the extra miles. And I made the wrong decision in

(36:34):
that time. But it can bea different situation for other people. Yeah,
Personally, I've never at leased avehicle. You know, I'm an
individual that wants to buy a carand drive it as long as I possibly
can. I think that's the financialplanner in me. That doesn't come from
much, you know, I wantto stretch out a vehicle as long as
I possibly can. But obviously thereare pros and cons of leasing a vehicle.

(36:55):
When you're leasing a vehicle, you'redriving it during its most trouble for
years. Very rare that a vehicle, yeah, is going to have any
kind of an issues. It's alate model covered by the manufacturer's warranty,
probably getting free oil changes and otherscheduled maintenance. It can enable people to
drive higher priced, better equipped vehiclesthan they may otherwise be able to afford

(37:17):
if they are just going out andpurchasing that vehicle. So there are obviously
some pros of leasing vehicles. Ithink maybe one of the smartest things that
you can do when leasing a vehicleis to look at them purchasing it at
the end of that lease period,because often dealers give you great opportunities to
just go ahead and keep this car, and here's how much your payment's going

(37:39):
to be. I think the problemfor people who lease is then it's like,
well, I don't want this caranymore. I already had it for
three years. I want a newcar with now the latest spells and whistles.
And the cons of leasing are leasingusually cost you more than an equivalent
loan. You're paying for that carduring the time when it's most rapidly depreciating.
Right They talk about the fact youdrive it off the lot, it's

(38:00):
no longer worth it anymore. Youhave nothing to show for it. A
lot of the least deals that you'llsee offered also include you putting something down,
which you might not have anything toput down because you just leased a
car, right you weren't able tosave up the money for that down payment.
And if you're always leasing vehicles,you're always going to have a payment
that's not going away because you're notactually creating ownership in that vehicle unless you

(38:22):
buy it when the lease is up. But if you buy a vehicle,
then over time, like I said, that's why I buy them personally because
eventually I'm not going to have apayment, and I really like that because
then I can use that money tosave towards other goals. I think a
lot to think about. The keyis to do the math both ways,
right way, the pros and cons, and look at yourself in the mirror,
know yourself and what's best for you. Thanks for listening tonight. You've

(38:42):
been listening to Simply Money present ofall Worth Financial here on fifty five KRC,
the talk station