Simply Money

Episode Transcript

(00:04):
Tonight it is July first. We'vegot a look back on the first half
of the year and a look forward. What should you be doing? What
does your mid year financial checkup looklike? You're listening to simply when you're
presented by all Worth Financially Meani Wagneralong with Steve Ruby. Gosh, it's
hard to believe it is already Julyfirst. This year has flown by One

(00:25):
of the things I think that isso interesting too is you know, when
you get to the end of ayear, there's all these predictions of what's
going to happen. So we hadall these predictions, you know, last
December and in January of where wewould be maybe by now, and now
we've got kind of the reality ofit. Yeah, so you know,
today we're going to give a lookback and what's happened in the first half
of the year. And you know, so far, the sm P five

(00:47):
hundred index climb fourteen and a halfpercent. That's huge. Yeah, this
is obviously this is on the backof some big stocks and we've had entire
segments talking about the Magnificent seven,the you know, the Big three,
the Top one NA video. Sothat's you know, it's riding pretty high
because of a handful of stocks,but the S and P five hundred up
fourteen and a half percent. Forsome reason, it almost doesn't feel like

(01:07):
I know. I think it's justbecause there's been kind of a mixed bag
so far this year. I mean, we're still working on bringing inflation down,
we're still paying so much more thanwe did a year ago. And
I think in the midst of allof that, I don't know, if
you're not paying close attention, there'sbeen a lot of market volatility. I
haven't looked at this research recently,but I would say a month, a
month and a half ago, welooked at the fact that the market was

(01:30):
up because of eight or nine daysthis year, you know, So it's
not like every day we're riding allthese highs. We've seen some volatility this
year over although up close to fifteenpercent, not a bad first half of
a year to kind of have inthe history books at point, especially when
we use the S and P fivehundreds as a gauge so often. You
know, three straight quarters up thirtytwo point six percent from it's fifty two

(01:52):
week low back in a sober that'sthat's big the tech having Nasdaq, you
know, led the way in thefirst half. It climbed eighteen point one
percent. Obviously, Ai Craze kindof capturing the attention of a lot of
investors that are happening on to thecues, as he would call them.
That's that's the investment for the Nasdaq. H blue chick blue chip Dow lagged

(02:15):
up about three point one percent.Yeah. You know, what I think
is really interesting about the Dow isso much of the financial articles and headlines
revolve around the Dow. I mean, you know, it's only thirty stocks.
It's a very very small index,yet it's talked about so often the
Dow. This the Dow plunge,the Dow way up, the Dow if

(02:36):
that is something that you invest solelyin, because that's what everyone's that's what
everyone's talking about. Well, wejust said the S and P five hundred,
the five hundred biggest companies that makeup the American economy up north of
you know, almost fifteen percent.Then you've got the Dow three to four
percent up this year, you know, And I think that's that speaks really
clearly to why you have to beso diversified where you can't just be following

(02:58):
one index. And okay, I'mdiversified because you look at the doll this
year and it's way behind everyone else. Yeah, you want to have a
mix of large cap, small cap, MidCap, international, domestic. There's
different types of stocks that you needto have exposures to, just the same
way that you need to have exposureto a lot of different indexes now when
we look at all of them overall. We recently have had a segment on

(03:19):
the VIX, which is the volatilityindex or Wall Street's fear index, and
it has stayed under twenty for quitesome time now. Under twenty signifies calm
waters and that I don't know,thing's pretty good right now as far as
the markets are concerned. Yeah.In fact, speaking of calm, we
haven't seen any swings above or belowtwo point one five percent in a day

(03:42):
for over a year on the VIX. Yes, on the VIX, and
I think it's important to understand thatbecause it just means that investors are feeling
pretty good. I mean, no, it's not just the VIX. I
think it's just like in the index, right, no more days above or
below you know, that kind ofa swing. So we talk about volatility,
but really we haven't had any majordown days. We haven't had major
up days. The problem with thatthat I see too often is investors start

(04:06):
to feel like, oh, Ican do no valuable Yes, yeah,
there is a weird sense of invincibility, and I think it goes into the
sort of recency bias. You know, you forget gosh. We have seen
periods of terrible, terrible volatility whereyou feel like you need to take a
drama meine, you're so nauseous fromthe you know, the losses in your
four oh one K. But thenyou enter into a period like we have

(04:29):
been now over a year of nota ton of volatility, and it feels
like, you know, oh I'meighty five years old, put me more
in on the stock market. Nope, not the best idea. You got
to stick with your plan. ButI also think it's a great plan during
times like this, when there isnot a huge storm raging in your four
o one K or in the economy, to look around and to do a

(04:49):
bit of a checklist. We're goingto get to that in a few minutes,
but for now, yeah, Ithink investors are feeling pretty good.
And as we said, there's probablya reason for them to be feeling pretty
good. Build your ship when thewaters are calm. Yes, you know,
that's something else we had an entiresegment about, and now is the
time to revisit making sure that youhave the proper asset allocation based on your
financial situation, needs and goals.It's not the time to say, well,

(05:12):
the markets are doing great, Ithink I need to put everything into
stock. That's you need to askyourself if you're thinking about that, what's
that based off of it? It'sgreed. Greed is what's driving that decision.
So build your ship when the watersare calm. Now we're going to
pivot and talk about inflation for alittle bit. At the start of the
year, the amount of money we'repaying for everything was about three point one
percent more than in the prior yearJanuary of twenty twenty three. Today,

(05:34):
headline inflation stands at three point threepercent. FED is trying to get that
down to two percent. We knewit was going to be difficult. The
FED actually said that, they projectedthat. They said the closer we get
to two percent, the harder it'sgoing to be. But there's different measures
of inflation in what the FED reallycares about. Right, The FED cannot

(05:54):
control the price that you're paying foreggs, the price that you're paying at
the gas pump. There are somany other external factors, the weather,
what's happening, you know, inthe Middle East, all different kinds of
things that are so the FED canonly control the Federal funds rate and so
they kind of pull those really volatilepieces out of gas and food and say,
Okay, how are we doing,and that data shows we're moving in

(06:17):
the right direction. Now. Interestingly, we talked about some of the predictions
right in January. You had alot of uh, sort of Wall Street
experts saying, oh, I thinkwe're going to see you know, maybe
six seven rate decreases this year fromthe Federal Reserve. We haven't seen yet
a one yet because this inflation hasremained stickier than we thought, you know.

(06:40):
So I think one thing to thinkabout there is, you know,
you can't make any changes to yourportfolio or the way that you're invested based
on what anyone is predicting, becausewe just know those predictions. Some of
them absolutely land, many of themfall fall far off, and you just
never know how that's going to go. Housing market remain stubborn. You know,
people just start moving right now whenyou're paying double and interest rates what

(07:03):
you were just a few years ago, you know, about seven percent.
House price is incredibly high. Rightnow, things are like, it's like
really weird time because you're your fourto one case probably doing okay, Yet
the rest of your life you're payingmore for things. The opportunity to move
isn't so great. It's kind ofa mixed sense. That's why it doesn't
feel like the economy is doing aswell. It is why the stock market

(07:25):
is doing as well. It isbecause you're four to one k if you're
invested, is going up. Yes, you're I rate, it's going up
as long as you have some stockexposure in those accounts. This is really
great for all of us. Butyes, when you're filling up your gas
tank, when you're buying groceries,you know, if you're shopping around for
a home, yes, yeah,home prices have doubled since the end of
twenty mortgage mortgage rates that is,have doubled since the end of twenty twenty

(07:48):
one. So it is extremely expensiveto mortgage taking a mortgage on a house
right now. So there are challengesthat we're all experiencing and certainly noticing.
But yes, the markets are up. You're listening to Simply Money presented by
all Worth Financial. I Meani wagneraa long with Steve Ruby. It is
July first. We are looking backon the past six months, where we've

(08:09):
landed with inflation, where your fouroh one k has likely landed, where
the economy is right now. Theinteresting thing though, is those are all
things that you cannot control. Goodto know where they are, really good
to be informed. But now Iwant to get into the nitty gritty of
the financial check up here. Whatcould you be doing? What should you
be doing? Good to know wherethings stand, But here's what you can

(08:31):
do. Yeah, So if youaren't retired, if you're in the accumulation
phase of retirement planning, you're stillsaving, you're actively employed, you have
your four O one K, fouroh three B whatever you might be saving
in. Have you up your contributions. That's something that we should be looking
at just about annually to make surethat we don't have too much lifestyle creep,
meaning as we get even if it'sa small race two three percent,

(08:52):
put one percent into your four toone k find a way to make that
happen, so that our money hasthe chance to turn into more money,
and that money has the chance toturn into more money. It's compounding interest.
It's one of our best friends whenwe have time on our side.
Fidelle recommends that you're putting away aboutfifteen percent of your take home pay for
as long as I have been hereat all, worth it simply money.
We've always sid twenty percent. Thatfeels like a huge stretch for a lot

(09:15):
of people. Why do we sayit? Well, I like stretch goals
and I like to have something tobe working toward. But also those who
can pull that off right, andit's not an easy thing to do.
I'm not talking about people who havemajor six figure incomes. I'm talking about
people who average salaries, but theywork, they find a way, they
live beneath their means. The reasonwhy we say twenty percent is as people

(09:35):
are always fine when they get toretirement. You know they have just they
have done well, they have savedwell. There is no difference in what
their lifestyle needs to be in retirement. In fact, they can often spend
more. Yeah, what you're doingis you're paying yourself, your future self
for financial freedom. Yeah, isreally what that is. Because plenty of
folks that we work with, theydon't come from extreme incomes. They come

(09:56):
from making good financial decisions with theincome that they have and saving what they
can to make sure that they havea plan that creates a situation where their
money lasts longer than they do.And you can do that by putting aside
twenty percent of your income, justlike you said, oftentimes finding ways to
spend more when you transition into retirement. But in order to do this,
it also goes back to the emergencyfund. Yeah, you got to have

(10:16):
that solid financial cushion, that foundationthat in case life throws us a curveball,
we're able to weather that storm andnot take on additional debt, not
tap into our four to one ksor other investments. So have that three
to six month emergency fund if you'rein the accumulation phase of retirement, planning
three months for a double income household, six months for a single if you

(10:37):
are retired, it's not the worstthing to have more. I'm talking maybe
one or two years because in thatsituation, you're buying time against volatility for
when the markets do go down,you don't have to sell it a loss.
You can tap into your liquid cashvia the emergency fund. And also,
were you someone who at the beginningof the year, when you were
making your financial New Year's resolution,said, I'm going to pay down that

(10:58):
this year, A little bit ofcredit card debt that has creeped up,
maybe student loan debt that I that'sout of control. I'm going to pay
down debt. Okay, have youin what we have seen over the years.
Is it the more specific you are, I'm going to pay down this
debt by this amount by this day, and here's what I'm going to do

(11:20):
in order to make that happen.You have to be very specific to reach
financial goals like this. If youhave made progress on debt, today is
a day to celebrate. If youhaven't, today's a day to double down
on the fact that while interest ratesare so high, that credit card debt,
gosh, it is squeezing the lifeout of you because you're probably paying
twenty twenty five percent you know,interest on that money. Yeah, maybe

(11:41):
that downe maybe even higher. Yes, pay it down. And it's never
a bad time to review the taxsituation. If you're of age and you
need to do required minimum distributions.Have you done them? Have you explored
maybe a qualified charitable distribution where yougive your RMD directly to a charity.
If you have an accountant, sitdown and ask him, I do thing
that I can be doing to minimizethe taxes that I'm losing each year that

(12:05):
I could be saving for myself.Here's the all Worth advice. This is
the midway point of the year andit is a great time to review your
overall financial situation and then tweak thingswherever you see you might be a little
off. Coming up next, areyou rich? Do you consider yourself rich?
We're gonna look at that definition anddoesn't have any impact on your long
term financial success. You're listening toSimply Money presented by all Worth Financial.

(12:26):
Here in fifty five KRC the talkstation. You're listening to Simply Money presented
by all Worth Financial and Memiwagon're alongwith Steve Rueby. If you can't listen
to our show every night, youdo not have to miss a thing.
We have a daily podcast for you. Search Simply Money. You'll find it
right there on the iHeart app orwherever you get your podcasts. And straight

(12:48):
ahead at six forty three. Theroadmap you need to follow if you're looking
to retire early, will tell youhow you can be much more likely to
get there. I think there isthis thought that, you know, the
more money you have, the betteroff you are, the happier you are,
the easier your life is. There'sso much research to the contrary of
that. But there is a newsurvey from the Federal Reserve Bank of Philadelphia

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that shows that people who are makingreally good salaries, right six figure salaries
between one hundred and one hundred andfifty thousand dollars, are still concerned about
their ability to make ends meet inthe next six months. Man, that
is not a good figure. Ohgeez. And interestingly, the more affluent

(13:31):
Americans are actually as worried about theirfinances than many individuals who are earning less
money. About three and ten individualsmaking between forty and seventy thousand dollars set
their concerns so even less. So. I guess that would stand by the
old saying MO money, more MOproblems. Maybe it is maybe I've actually
been reading this book talking about Also, you know, what is the point

(13:54):
where there's more happiness and you knowit is you get to a certain amount
of income, you're no happier.And I think that there are I mean,
you've got the same problems regardless.One of the problems that all of
us are seeing right now and experiencingis inflation. The typical US household right
now, it's talking about two hundredand thirty dollars a month more to buy
the same things goods and services thatwe were buying one year ago. And

(14:20):
that's seven hundred and eighty dollars morethan we the same time two years ago.
I mean, that is a toughpill to swallow. I was just
with a teacher from Indiana over theweekend. And this is not like a
brand new teacher. She's been teachingfor eight years in a sort of high
poverty school system there. She justmade a huge difference. In the summer,

(14:41):
she lives with her parents, Sheairbnb's her house. This is a
teacher, This is an eight timein her thirties, right, This is
what she is doing to make endsmeet. And she's also a server in
a restaurant during the summer. Andshe said the reason why, with inflation
being the way that it is,there are many weeks when over the past
year or two she would have tochoose between the gas to get to work

(15:03):
she works a pretty good distance fromwhere she lives, or buying groceries that
week. That I take major issuewith that. And these are the people
that educate our children and our grandchildren. They you know, they should not
be strung. Yeah, they needto make more money, because to take
it a step further, three yearsago, we're spending about one thousand dollars

(15:24):
more per month. Yes, sothat that is reflected in the fact that
you personally know of a teacher inIndiana who has to work part time and
find little hustles just to keep thelights on and keep gas in her car.
That's awful. Yes, And Ithink there might be others listening tonight
maybe don't feel it to that extent, but you certainly feel it, and
you can understand how someone could seea difference to that extent. And so

(15:48):
you know, yeah, I thinkthis research is interesting and it's you know,
if only I can make more money, maybe I would feel a little
better about things we see that thatreally isn't the case. And I think
along these lines, it's not justhow much you make, right, but
it is how much you have,and there's a calculation. And whenever I'm
sitting down and working with a clientwith an investor for the very first time,

(16:10):
one of the first things we dois to calculate their net worth.
And this is simply what is everythingthat you have, the money that you
have, and you're checking in savingsaccounts and your four one ks and any
accounts like that, how much equityyou have in your home. Add all
of that together versus how much debt? How much more do you owe on
cars in your home? And theirstudent loan debt, is their credit card
dead? Hopefully that number is apositive. But what I try to say

(16:33):
is hopefully whatever number we come upwith the very first time you meet with
me is the lowest number you're evergoing to see. Yeah, that's a
big part of financial planning is protectingthe net worth and growing it year over
year and talking about strategy to achievethat. Absolutely So. Schwab did a
recent Modern Wealth Health Wealth survey,that is and found that Americans think that
you need about two point two milliondollars to qualify as being rich. That's

(16:57):
the threshold currently that many people think. If you want to compare yourself to
what a one percent or is inthis day and age, that that's the
top one percent net worth twelve milliondollars. I mean, yes, I'm
me up for that. I guesssounds kind of nice, right. I
know. Top two percent have anet worth of about three million, top

(17:17):
five percent just north of one million. If you're in the top ten percent,
you've got just under a million dollars. In the top fifty percent,
you've got just under six hundred thousanddollars. I don't know. I guess
it's good to know where you fallwithin these things. This is this is
Schwab's research. I think we recentlyearlier this summer, had some research that
shows many Americans definition of rich isone and a half million dollars. So

(17:41):
I think that the research varies.You can look at these numbers again.
You can figure out where you fall, where you stack up. I don't
know if that's helpful or not.I would say, first of all,
calculate your net worth just to seewhere you are right now. But secondly,
your number should be an individual number, and you should figure out what
your goal is, not just forhow much equity you have in your home,

(18:02):
because that's not liquid. I don'tknow that that's any indicator of how
well you're doing when you get toretirement. I think you've got to figure
out how much you've saved, howmuch you've invested, and what the gap
is between where you are now andwhere you need to be to continue with
the same lifestyle that you have whenyou're working in retirements. Yeah, I
think comparison here is the thief ofjoy. There's no need to compare ourselves

(18:25):
to others because financial planning is aboutyou, your situation, your needs,
your goals, that of your famili'sneeds and goals, and making sure that
you have the means that you needto support the lifestyle that you've grown used
to and the lifestyle that you wantthe future. So making these comparisons is
kind of a moot point because thereis such thing as living below your means.

(18:45):
I almost can get whiplash sometimes inone day and the difference between the
people who come into my office.There are some who come in and they
live so frugally that they have moneyleft over from their Social Security yeah,
you know, which is only supposeto replace forty percent of your income.
So anything that they've saved in thecourse of retirement, they're hardly ever going
to touch that money. Then Isee those right who are spending money left

(19:08):
and right. They're not saving nearlyenough, and they're telling me when I
retire, I want to go toEurope. I want to do this.
I want to do that. Youlook at their income and you think they
should be doing great. Actually there'sa huge gap and it worries me about
how they can get there. SoI think people can get really hung up
on one number in the research.You really have to figure out know yourself

(19:30):
and how much you're going to need, and that's where you start. Here's
the all Worth advice, the definitionof rich. It's really much more than
a dollar amount. It's a veryindividual number coming up BAX. So we're
going to take a deep dive intothose travel credit cards. Which ones might
make the most sense for you.You're listening to Simply Money, presented by
all Worth Financial. Here in fiftyfive krs the talk station. You're listening

(19:57):
to Simply Money percent of my allWorth Financial I mean wager long with Steve
Ruby. It is that time ofthe year, peak summer travel season.
But as we know, everything ismore expensive. It's not cheap to fly,
to stay in hotels, to doanything along those lines. So how
do you use your credit cards tomaximize those travel rewards to get yourself maybe

(20:18):
a pretty nice vacation without the prettynice price tagle joining us tonight as our
credit expert Britt Scarce. But itseems like there are offers everywhere. How
do we even begin to make senseof it all? Well, certainly they
are. They're hitting you hot andheavy right now. I know, I
personally was on a on a flightin the last couple of weeks. And

(20:38):
or they spend a good amount oftime going over their credit card application and
the bonus points that they would offer. If you signed up today, you
earn up to sixty thousand travel miles, applies to again go anywhere eighty nine
dollars annual fee. It's like captiveaudience, We're going to shove this credit
card down their throats. And Ithink there's a lot of people who are

(20:59):
sitting there like, I don't knownothing else to think about or do.
Does this make sense? Does itmake sense? Yeah? I mean if
you travel enough and providing keep inmind these cards that are being offered amy
the atrs on these cards are anywherebetween twenty one point nine percent and twenty
nine point nine nine percent. Soit is worth their time to push these

(21:22):
on you because if you utilize themand take time revolving balances, they make
a ton of money. They domake a ton of money. That's huge
twenty nine percent, almost thirty percent. If you are revolving that debt and
you are not paying it off everymonth, then you're not actually coming out
on top at all. Speaking ofwhich, you know, there's different types

(21:44):
of credit of travel credit cards.Can you break that down a little bit
for us? Yeah, I meanyou have credit cards that will you know
that you can redeem points for hotels, you know, for airlines you know,
you can do you can use someof these, you know, to
to basically you know, for foryou know, your rental cars, you

(22:06):
know, and most of the timeyou're not getting enough points to completely pay.
It depends on where you're going,of course, but in many cases
it's enough to maybe help you upgradea flight to maybe a little bit,
maybe to business class or maybe thefirst class. It depends on how much
you actually utilize this. The averageperson that's not say a business traveler that

(22:26):
literally try out travels, you know, thousands and thousands of miles a year
for the average you know, personthat goes on vacation once or twice every
other year or something. I don'tknow that these benefit people all that much.
I think it's more of a gimmickin a way to get you into
a balance that you can revolve andpay them a lot of interest. I
think that last thing you said isextremely important gimmick. You're sitting on a

(22:48):
flight, you're stuck listening to it. You don't realize the added costs that
you could add into your life fora minor benefit that you may or made
I not even use of which whenit comes time to redeem your points or
miles, how do we go aboutthat? Is there any flexibility in this
day and age. Well, differentcards have, you know, different procedures,

(23:10):
and a lot of times it's nottoo terribly difficult. I mean,
you're getting about when you get pointsto get it's about a penny a point,
you know, so it takes quitea few miles or points to add
up to miles and actual money thatyou can that you can utilize. And
in many cases it's something that's justa little nice, little perk and like
I said, a little upgrade towhere you're sitting, or maybe it does

(23:32):
help you with a part of yourhotel and that sort of thing. And
if you're the kind of person thattravels for business and you use your business,
you know, one of these cardsfor everything. I mean, you
could potentially rack up, you know, some points and get a you know,
maybe a mostly paid for airfare ormaybe a free hotel room or something
of that nature. But it takesquite a few for them to add up

(23:55):
to much. I think, Britt. The only way that these make a
lot of sense is in this iskind of what we have done. Is
you put everything that you need topay for, like all of your bills,
attached to that credit card, andthen you have to pay it off
in full every month and then thatyou know that all is earning points.
But you know, my husband andI actually were having this conversation with some

(24:17):
friends recently about the fact that itused to be able to fund you know,
a couple of trips a year andyou could you know, at least
free hotel and maybe free airfare.And now I don't know if it's because
of inflation or because they're sort ofminimizing you know, how many points you
get, but it's it's harder andharder to save these points for a trip

(24:37):
that makes any kind of a difference. It's true, I mean, and
they do give you a sign upyou know, bonuses and things of that
nature. And I have seen afew people say, hey, with the
sign up on this, it paidfor my you know, trip that was
only a few hundred bucks or somethingto you know, somewhere here in the
States or something. But the otherissue that you have with these cards too
is most of them come with somesort of an annual fee as well,

(25:00):
and you've got to make sure thatyou're utilizing it enough to where the annual
fees and with all the little uhyou know, the higher interest rate,
all the all the all the detrimentalthings, you've got to make sure that
you know it's actually going to comeout to your advantage and not just end
up costing you more money. AndI know that, you know, legislation
wise, uh, you know,Congress is trying to find ways to cut

(25:22):
the interchange fees that credit cards areable to charge. Whenever uh uh a
purchase is made. You know,they they they have to pay a merchant
has to pay a fee to theto the credit card companies for people to
use credit cards as a form ofpayment. And if they get their way
and they are able to cut alot of those types of fees, you're
going to see a lot of thesetypes of reward things go away, because

(25:45):
obviously, if they can't charge asmuch on that kind of thing, they
can't afford to do these types ofprograms. Another warning, and I've seen
this, I don't know if youhave read a lot of these credit cards
will say sign up, you getthirty thousand points or miles or whatever if
you spend x amount of dollars inthe first few months, right, And

(26:07):
so it's like you're either spending morethan you need to or you're not spending
enough and you're not getting the pointsanyway, and now you've got another credit
card exactly to your point. Theone airline that I was on here recently
said earn up to sixty thousand travelmiles eighty nine dollars annualcy if you apply

(26:29):
now, earn forty thousand miles ifyou spend at least five hundred dollars in
the first ninety days. And thenthe other one said, an additional twenty
thousand travel miles if you spend atleast two thousand dollars in the first six
months. So let's see if wecan get you revolving right away at that
twenty nine percent interest so that wecan give you a two hundred dollars plane

(26:52):
ticket. So remember that these thesecredit card perks exist because someone is paying
for them. Yeah, if ifyou want to be the person that actually
capitalizes on is on these benefits,then you cannot carry revolving debt. When
you do that and you're paying almostthirty percent interest rates, you're the one
that's buying somebody else's airline ticket orupgrading them to business class, or upgrading

(27:15):
their their their vehicle when when they'rerenting. You know, these these costs
can be extravagant. So you know, I'm curious to hear from from your
perspective, Britain. You know,how do we choose the right travel card
if we are going to use one? Yeah, understand your own behavior,
you know, you know what,depending on your situation. If you're someone

(27:36):
who does travel a lot for work, I mean I've seen people that use
you know that swear By, youknow, certain cards because it gets them
into certain lounges, you know,when they're traveling all around the country,
you know, every month, andyou know maybe around the world, you
know, every every other month orwhatever. And you know, some of
these cards, you know, offercertain perks to get you in some of

(27:56):
the some of the airline lounges.Some of them will you know, if
if it's hotels, you want moreof a discount on you just have to
research them and see which ones offerbased on your behaviors. You know which
one's going to give you the biggestthing for your buck. But the bottom
line is, you know, mostof these come with very large annual fees.

(28:17):
The eighty nine dollars one was oneof the small ones. I've seen
some that are as much as likesix hundred and fifty dollars a year as
an annual fee. And yeah,they have a lot of nice little perks
and they hope you get the TSA, you know, clear and all the
other other types of things. Butagain, if you're you know, if
you're gonna if you're gonna have toput a bunch of money on the card

(28:38):
and you're not able to pay itoff every month, Uh, these don't
really benefit you much at all.I mean ire beware right, it's you
know you can get big eyes aboutall of these benefits and then get yourself
into some trouble. Fritz Scars,our credit expert, thank you for the
real story behind all of the travelperks. Just keep this in mind.
You're listening to Simply Money, presentedby all Worth by Financial here on fifty

(29:00):
five KRC, the talk station.You're listening to you Simply Money because somebody
all Worth Financial ANEMI wagon. You'realong with Steve Ruby. You have a
financial question you and your spouse fightingabout, or it's keeping you up at
night. It can't figure it out. We can help you figure it out.
There's a red button you can clickon while you're listening to our show.

(29:21):
It's right there on the iHeart apprecorder. Question it's coming straight to
us. We will weigh in andstraight ahead. Are you planning a family
trip to Disney? How much areyou actually need needing to plan on shelling
out? And we've got some goodnews maybe that can make that trip a
little less stressful. Okay, it'sMonday, and are you thinking how many

(29:41):
more Mondays do I have to dragmyself out of bed and go into this
terrible place. I hate my boss, I hate my commute, I hate
my coworkers. I hope that's notyou. But I think that there's probably
a lot of people out there whoare thinking, yep, yep, yep,
like I want to be done,and maybe you're nowhere close to sixty
five and question that you're trying tofigure out right now is could I possibly

(30:03):
retire early? We could clip that. You know, a lot of trouble
Amy. I know I'm not sayingI think that. I'm just saying there
might be people out there who feelthat way. I certainly have not in
this job, but in the past. Yeah, yeah, I for sure.
But yeah, this is where rarenow and we're happy. But Pew
research just came out about half ofworkers are actually highly satisfied with their job.

(30:26):
That means that half are not highlysatisfied with their jobs, and that's
unfortunate because a job is a bigpart of our lives. Yeah, it
shapes our days oftentimes, it shapesour evenings, our weekends, depending on
how much we're working, how muchtime we have, and how much stress
we take with you how much stressyou take home, so that's an unfortunate
reality. I think that a lotof Americans are experiencing right now. And

(30:48):
when you dig deeper into why arewe not happy with our jobs? You
know, there's a lot of peoplewho say, I don't feel like there's
opportunities for training for me to growin my job. I'm not happy with
how much i'm or my opportunities forpromotion. Eight and ten. Workers say
it's extremely, very important to themthat a job offers a four oh one
K or a four to three Bsome way for them to save. And

(31:11):
I think ultimately everyone is across theboard says like, can I just get
to the point where I've got financialfreedom and then work becomes an option not
an obligation. And if you're notthere, but you want to get there,
what do you do well? Setof higher savings, right, that's
a big one. Not only areyou accumulating more money, but you're also
learning to live off of a littlebit less. Yes, so when you

(31:33):
need to calculate the number that youwill need to support yourself in retirement,
that number will be a little bitlower inherently because you have saved. So
in a situation where you want toclose gaps. That's the easiest way to
do it, because getting more moneymeans more compounding interest, and that can
really help you retire earlier. Youknow. I think there's a behavioral finance
component to this, of like mycurrent self versus my future self? Right,

(31:57):
and I want all of these thingsnow, But if I get them
now, will I be able toretire? One of our really good friends
was saying, his very first dayof his very first job out of college,
he realized, I hate this.I hate working. There's not a
job that you can give me thatI'm going to love. And so what
did he do with that? Hestarted maxing out his four oh and K,

(32:22):
his health savings account, his irasand said, Okay, what is
it going to take for me tohave to do this for the shortest amount
of time that I possibly can?He will likely retire before the age of
fifty good, and he'll probably beokay into his nineties. Is he grumpy
every day? Though? He's notgrumpy every day because you know what,
he knows that he's doing what heneeds to get what he needs to do.

(32:45):
He's still and there's a balance there. He's still enjoying life, you
know, But maybe they do manyvacations rather than huge trips to Europe or
whatever. Doesn't bother him because hiseyes are on the future with that goal
to retire early and he he's ontrack to do it. Yeah, that's
a great point. So if youhave a financial plan, then that can
give you that sigh of relief,that breath is fresh air. Yeah,

(33:07):
to know that the time and effortthat you're putting in to aggressively save is
means that you can leave your jobthat you are not satisfied with earlier.
So on that note, how aboutmaximizing your income if you want to close
gaps. You know, we kindof are in a day and age here
where you know, you used tobe able to work at one place for
your entire career and they would takegreat care of you, and then you

(33:30):
would have your three legged stool withyour pension, your Social Security, maybe
some other investment assets, and thatwould float you for the rest of your
lives and give you that lifestyle thatyou know, you had two, three,
four kids and you took a vacationevery year. Yeah, that's not
really the reality anymore unfortunately, whichhas cost a lot of people to job

(33:50):
search, to jump from job tojob, which is a great way to
bring up your income more quickly.Yes, but it's also at the same
time you can't rely on that bossto fund your retirement, so you've got
to be serious about it yourself ownsafet. Yes, yes, which is
why you know, living beneath yourmeans for many people is what it's required
to be able to max out alot of these accounts and also to invest

(34:12):
widely. I've seen people look atthis gap between where they are and where
they want to be and think there'sgot to be some magic solution to this,
and that's where things can go terriblyawry. A couple who I know
was very much on tractor retire earlydoubled down on dot com. You know,
all these great tech companies in thelate nineties. What could possibly go

(34:34):
wrong? They were making thirty fortypercent, you know, year over year,
and then two thousand hits right thebubble burst and they ended up having
to work in extra ten years.That's awful. That is so terrible.
I mean, the tried and true, tested way at this in this day
and age of just passively investing ina lot of index funds and building that
acid allocation of stock to bond ratiois a tried and true, tested way

(34:55):
to get you there. Don't letgreed take over and put too much of
your someone basket to the point whereyou can lose your shirt and have to
work longer. And I think theplan is the foundation of all of this,
The financial plan, Right, whatis it going to take for me
to get there? I love torun plans with several different scenarios. Okay,
does it work this way? Whatif we tweak this, What if
we spend less? What if weput a little more away? What does

(35:16):
that look like? Right? Andthen it's like, okay, is it
worth it to you to make thoseadjustments? Maybe it is, maybe it's
not. And then I also thinkyou've got to look at this from the
standpoint of does it make sense toretire emotionally? Right? How much of
your life and your sense of identityis wrapped up on that job. If
you're ready to say let's go,okay, then get your plan and work

(35:36):
the plan. Here's the all Worthadvice many of you can achieve in early
retirement. It does, though,require discipline, consistency, and a great
deal of planning. It may notbe for everyone, but there's many of
you who likely can do it.Coming up next, some news for parents
and grandparents out there who are readyto take the family to the happiest place
on Earth. You're listening to SimplyMoney presented by all Worth Financial here in

(35:57):
fifty five KRC the talk station.You're listening to Simply Money becausent my all
Worth Financial. I Meani Wag.You're along with Steve Ruby. Okay,
So for those of you who legitimatelyfind Disney as the happiest place on Earth,
I know you, I see you. Some of you are my very
dear friends. I am not aDisney person. I just think the cost

(36:23):
is exorbitant, and one thing thatDisney is trying to do is to sort
of change things about the experience thatyou have there. I guess if you're
going to pay so much, Idon't know. I don't like. I
lean in. I lean in whenDisney says we're going to make things better

(36:43):
because I'm like, Okay, thisis interesting, and how are you going
to make it better? And thenI hear how, and I'm like,
nah, I don't know that's goingto make it much. July twenty fourth,
guests will no longer have to waitfor their park day to preserve experiences.
So this is for those saying atDisney World's resort hotels specifically to seven
days in advance, all at once, uh for up to fourteen days of

(37:04):
their stay. They can make differentreservations within the park for attraction so they
don't have to wait like everybody else. Okay, wait for it, wait
for it. Disney is saying,hey, we have this great thing that
you can do now and maybe you'renot gonna have to wait in line.
It's called Genie Plus and it comeswith a price tag. Yeah, it's
like, we're making this easier foryou, and we're going to pay.

(37:27):
People are going to blow up mysocial media and I'm so sorry. If
you love Disney, I love thatyou love Disney. But as someone who
feels deeply in my bones that youknow and truly investing in experiences is what
I strongly believe in. Up toa point. But the average family of
four can plan, and this isNERD wallet research, can easily top six

(37:50):
thousand dollars for a seven night trip. I think that is on the low,
low low, Well, they specifiedthat that's for a frugal yeah traveler.
For a week long family trip.It can certainly exceed fifteen thousand dollars.
That's for families that are you know, doing character meals, and the
hotels closer to the park that will, I guess enable you to reserve specific

(38:13):
ride times. You know, lastyear I had planned for years. I'd
never been to Europe or Africa forthat matter, and we went to France,
Italy and Morocco, my daughter,my wife and I. Trip of
a lifetime. Yeah, trip ofa lifetime for less than six thousand dollars
and we're gon for two and ahalf weeks. Great, that's not Florida,
where you're spending more than that foran amusement park. If you are

(38:34):
looking to save money, there areDisney good neighbor hotels. There are family
friendly resorts near Disney World that aregenerally more budget friendly. Look at points,
look at miles. One thing thatwe've said many times in the show
too, is you can buy Disneygift cards from Koger when they are doing
like four times the fuel rewards andthen you're going to save on your gas.

(38:55):
So there are some ways that youcan save a little money. But
understand, this is a very expensivetrip. Thanks for listening. We hope
you're going to tune in tomorrow whenwe're talking about the financial mistakes that could
keep you from retiring in the nextfive years. You're listening to Simply Money,
presented by all Worth Financial. Herein fifty five KRC, the talk station