Episode Transcript
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Speaker 1 (00:06):
Tonight, we've got Wall Street whiplash, a sudden opportunity for
those looking to buy a home, and remedies for common
tax mistakes. You're listening to Simply Money, presented by all
Worth Financial. I'm Amy Wagner.
Speaker 2 (00:17):
Okay, if you love roller coasters.
Speaker 1 (00:19):
We live near King's Island. Maybe you don't mind those.
How did you feel about last week on Wall Street?
Because that was one heck of a ride. I gotta
tell you, I feel like I'm a little too old
for roller coasters, but Wall Street doesn't care.
Speaker 2 (00:32):
So joining us tonight to explain this ride that we've.
Speaker 1 (00:35):
Been on and maybe where it's heading in the future,
is all Wors Chief investment Officer Andy Stout, joining us
as he does every Monday on our show. Andy, I'm
going to start by giving you credit because early last week,
as we were looking at a couple of terrible, terrible
days in the market, there were all these headlines projecting
that this could be the start of something really terrible.
Speaker 2 (00:57):
And I asked you, do you think.
Speaker 1 (00:58):
This is short term utility or are we starting to
slide into something much more awful? And you felt like
short term volatility and at least right now what appears
you were right.
Speaker 3 (01:09):
Yeah, so far, so good. I mean, when we look
at what transpired over the past week, with the dal
Jones falling thirteen hundred points pretty much right at the
open to start the week off, and you know, it
was some scary headlines you were seeing all over the media,
not just to the financial media, but you could go
to you know, your news channel of preference, you know,
(01:32):
and they were talking about it. But by the end
of the week that was down like half a percent,
so pretty much erased all of those losses. And when
you think about just that roller coaster that you're on,
it really it felt a little bit like maybe you
felt unhinged a little bit, right, But when you step
back and you look at the bigger picture, I mean,
(01:54):
you'll see this type of volatility is pretty normal, you
in terms of just the point movements and how quickly
the market moved, I mean, that's not too uncommon, and
especially when you think about what's been driving the fears
over the past really couple of weeks and where it
really kind of apexed last Monday.
Speaker 1 (02:16):
So when you talk about this recovery or what maybe
appears to be the start of the recovery. What do
you think the difference is from one week right, It
was like the sky is falling and everything looks terrible,
and then all of a sudden, markets shrug it off.
Speaker 3 (02:30):
Yeah. There was essentially three big worries out there last week,
the first and last couple of weeks, I should say
the first we The first one was that the FED
is essentially behind the curve, so meaning that they already
should have been lowering rates to help the economy grow,
with the unemployment rate going from four point one to
four point three percent for the month of the July
(02:53):
compared to June. And if you look at where the
unplanyment rate was roughly a year year and a half ago,
right around three point four percent, you know that's not
a small move when you think about it, from three
point four to four point three. And a weakening of
the labor market is a concern, and there are some
other i'll call them cracks in the job market. So
we had the fears that the FED was behind on
(03:16):
the curve they needed to be moving quicker. The second
concern was earnings. Specifically, a lot of these big tech
companies like Apple, they've been pouring billions of dollars into
AI but haven't gotten any money out of it. So
there were many comparisons between the Internet hype and bust
of the early two thousands with an AI hype right
(03:39):
now and whether or not there will be an AI bust.
The third issue, and I think this is probably the
biggest one, to be honest, was the yen carry trade,
which is just an easy way for hedge funds to
make money. Basically, you borrow in Japan at almost zero
interest rates and you can invest in other areas like
Mexican bonds and get ten percent yield and just make
lots of money. Now, the problem was the Bank of
(04:03):
Japan surprise investors hiked rates and that resulted in substantial
losses and a lot of selling across the board. And
I think that was the biggest issue, and so the
question why has it calmed down a little bit? Well,
and if you look at that carry trade, JP Morgan
thinks about three quarters of all global currency carry trades
(04:25):
have been closed out, so that that built up essentially
volatility has been already released into the market, so there
isn't much to go from that. Now. You know that
JP Morgan could be wrong, right, but when you look
at that, you know things have improved from that perspective,
and also from an economic perspective. The US economy got
(04:48):
some decent data last week with the ISM Services Survey
weekly jobless claims, which are people filing for unemployment benefits,
and also a survey on whether or not banks are
t tightening lending standards, and they have slowed down on that.
Those are all economic positives and that additionally helped the
market stabilize.
Speaker 1 (05:10):
You're listening to Simply Money, presented by all Worth Financial
Immi Wagner along with Andy Stout, all Worth Investment's chief
investment officer. As we look at where we've been over
the past week on this insane wild ride for the
markets and maybe the period of calm that we're entering
into now. Any One of the things that I really
appreciate you is about you is your honesty.
Speaker 2 (05:30):
When it comes to the Federal Reserve.
Speaker 1 (05:31):
I've asked you several times to kind of grade how
they're handling, which you and I would both admit is
a bit of a tight rope walk as they've tried
to bring inflation down by raising interest rates, and it
looked like for the longest time there. They had done
a good job by kind of holding before they started
to cut rates, and now there's criticism out there that
you just mentioned that maybe they've waited too long, and
(05:53):
now we're looking at maybe not a quarter point cut,
but half a point cut coming up next month September eighteenth,
when they meet. Want to get your take on the
quarter point versus the half points and do you think
they've waited too long?
Speaker 2 (06:07):
Here?
Speaker 3 (06:09):
You know, I think they have a tough job, right
and there's there's no one. If you want me to
give them a grade, I'll give them a BE currently
maybe a B minus. But I completely reserve the right
to change my opinion in six months, depending on how
the economy evolves. Yeah. Right, With all of that said,
(06:31):
when you think about the Fed cutting rates, I think
they I think they probably should do a half point cut.
The reason being, when they have raised rates, it took
a long time for those rate hikes to actually start
to bring down inflation, and we started to slowly see
some labor market cracks, and we're starting to see those
cracks widen. The issue is that when the FED raises
(06:54):
raised and when they cut rates, it takes generally a
long time for that to actually impact the economy. So
if they go too slow, they really raise the risk
of a recession. I don't I think we'll have any
a recession this year, but early next year is a
possibility depending on what the FED does and how the
(07:16):
economy responds to that. Now, what will ultimately determine what
the FED does at its next meeting on September eighteenth
is going to be probably two things more than anything else.
One is the August Jobs Report, which will come out
in the first week of September, and if you see
further deterioration in the unimal ployment right say it goes higher,
(07:38):
I think you could easily see a half point cut.
The other items that are going to influence the FED
are going to be the two inflation reports that we
will get. We're gonna get one of them this week
and one the week before the FED meets. We're getting
the Consumer Inflation or CPI report. If we see if
(07:59):
we get the really bad situation of unemployment rate essentially
increasing but then also inflation increasing, if that's going to
be in a pickle because they're going to want to
cut to help the job market get to full employment,
but they don't want to cut because then the risk
reigniting inflationary flames. If you look at what the market's expecting,
(08:20):
the mild increase in inflation that we'll get for July,
about one point two percent increase. If that comes to
fruition and you get another team reading for the month
of August, which we'll get in mid July, that update,
you could easily see that half point cut. But if
(08:41):
it's anywhere else, you're probably looking at a quarter point cut.
And I think the economy probably needs a half point cut,
just because it takes a while for the economic policy
to have an impact on the economy, and.
Speaker 1 (08:53):
Any one of the points that we make off and
when it comes to your four one K Wall Street
your investments is what really matters is corporate greed, right,
how well these big US companies are doing. Let's talk
about earning season, because I think if you're really going
to anticipate what's going to happen moving forward when it
comes to your form, okay, that's where you got luck.
Speaker 3 (09:14):
Yeah, And earning season has been pretty good. So we
have been getting the results from companies over the past
three to four weeks, and it's we're almost at the
end of it. I mean we have of the S
and P five hundred companies. Of those five hundred companies,
four hundred and fifty five have reported profits so far,
(09:34):
so we're almost done. We're in the home stretch here,
and if you look at how earnings have transpired, what
we've seen is that the S and P five hundred
has had a thirteen point three percent growth in the
second quarter compared to the second quarter last year, which
is a lot better than the eight point three that
Wall Street was expecting. And of those companies, by the way,
amy eighty percent have reported better than expected profits. Now,
(09:58):
one thing I do want to highlight real quickly is
that there's a lot of focus on the Magnificent seven,
those larger companies. When we look at the earnings excluding
the Magnificent Seven, the results have been pretty good so far,
and they really they've been a lot better than what
we've seen in the past. Over the when we look
at that year over year growth, it's been at eight
(10:19):
point seven percent for the Magnificent seven, and if you
think about last quarter, it was basically flat, actually slightly
down a little bit. So we're seeing some broad growth.
So that's good for investors.
Speaker 1 (10:31):
And of course we haven't heard Nvidia reporting yet, right
they report a couple of weeks from now.
Speaker 2 (10:36):
We'll see what happens there.
Speaker 1 (10:37):
But yeah, I think great perspective because Andy, Wow, what
a difference a week makes.
Speaker 2 (10:41):
Here's the all Worth advice. Panic is really the worst
thing that you can do.
Speaker 1 (10:44):
When markets are volatile, they often bounce back just as
quickly as they fall.
Speaker 2 (10:48):
Case in point, just the past week. Coming up next,
in the midst of all of this interest rate.
Speaker 1 (10:53):
Talk suddenly and opening in the housing market, is it
time for you to pull the trigger?
Speaker 2 (10:58):
We're going to talk with our real estate experts. Next.
Speaker 1 (11:00):
You're listening to Simply Money, presented by all Worth Financial
here on fifty five KRC, the talk station. You're listening
to Simply Money presented by all Worth Financial.
Speaker 2 (11:11):
I'm Amy Wagner. Okay, So we've got the Federal Reserve
talking about lowering interest rates.
Speaker 1 (11:17):
What does that mean for mortgage rates and the housing market?
Joining us night, of course, is a real estate expert,
Michelle Sloan. You can catch her on fifty five KRC
right here every Sunday on her show Sloan Sells Home.
She's also the owner of remax time, Michelle. We have
been talking about this crazy real estate market for the
past few years, coming out of this pandemic.
Speaker 2 (11:39):
Where are we now as we see the FED talking
about lowering interest rates.
Speaker 4 (11:45):
Well, it's good news because the mortgage interest rates have
been going down and they're at their lowest point in
quite a long time now. With mortgage rates falling, it's
definitely a bit of good news news for buyers who
feel like they've been priced out of the market. They
may consider getting back in, getting a new pre approval,
(12:08):
seeing what they can afford, but realizing that there still
is quite a bit of volatility in the market itself.
Now the FED has decided, I think it was a
week or so ago that they weren't going to raise
or lower the rates, so it stayed the same. And
with that news, rates have gone down over the last
(12:30):
week or so, actually over the last couple of weeks
anywhere for the thirty year fixed straight And I hesitate
a little bit to say numbers, because it's always going
to be dependent on your credit score, your situations exactly,
but on average, the thirty year fixed rates anywhere between
(12:51):
six point one and six point five.
Speaker 5 (12:53):
Which is really good because we.
Speaker 4 (12:55):
Were at seven point one and seven point five at
one point, and so we're down almost to full point,
which is very, very exciting. And then if you can
afford a fifteen year fixed st rate, it's even lower
five and a half to six points six percent actually
for a mortgage interest rate. So again it's a great idea.
(13:15):
It is spurring some people to think about refinancing because
if they do have a seven or a seven and
a half, usually if that rate goes at least one
full point lower, it's a time to at least take
a look at it and see if you can save
money on your mortgage.
Speaker 1 (13:33):
Okay, so let's talk about those people that have been
sitting on the sidelines wanting to buy but not.
Speaker 2 (13:38):
Comfortable with that seven percent interest rate. Do you feel like, Okay,
now's the time to jump in.
Speaker 1 (13:44):
Or there's a lot of talk about the Federal Reserve
lowering rates starting next month, or there are a lot
of people who are saying we're gonna wait a little
bit longer and see, and what do you think about that?
Speaker 4 (13:55):
I don't think you should wait because, as always, the
market is going to fluctuate daily. The interest rate isn't
just a set number that stays the same every single day.
It can fluctuate every single day, so and it may
take you more than a month to actually find a home.
So finding the home really is the most difficult part
(14:19):
of the home search. Today. The good news is there
are more homes on the market in a lot of
locations in the Cincinnati Northern Kentucky area. Some situations, the
homes are staying on the market a little bit longer.
So you have opportunities, and you, as a buyer always
need to be ready, willing, and able whenever the opportunity
(14:42):
arises for you to find a home that fits your
needs number one and that you can afford number two.
Speaker 1 (14:50):
Michaell, we came out of this crazy time where if
you were looking to buy a house, the second you
heard about something going on the market, you sprinted to
that location, you had your realtor meet you there, you
ran through the house as fast as you can, and
then you've said deal if you thought you might want it.
I mean, people were just swarming over these houses. Give
(15:11):
us the reality of the landscape today. Do we have
a second to process things? Are people still in bidding wars?
Speaker 2 (15:18):
What does this look like?
Speaker 3 (15:19):
Now?
Speaker 4 (15:20):
You know that's such a hard question because the answer
is yes and no. In some areas there are still
there's still a frenzy a lot of times in a
certain price point. If you're between two hundred and four
hundred thousand dollars, there are going to be more buyers
that are interested in your home. I'm seeing a lot
(15:41):
of properties that are over five hundred thousand dollars in
some areas that are sitting for up to thirty days
or more. So with that situation, listen if something's been
on the market that long and they haven't done a
price adjustment or price reduction, and those are the homes
that you want to look at, because the seller may
(16:03):
be getting a little bit anxious and they may be willing.
I have, personally, I have two sellers right now that
are ready willing and able to negotiate. They just need
somebodies to come in the door and make an offer.
So don't be afraid if you're a buyer to make
an offer. Tell your agent, Talk to your agent, tell
(16:25):
them talk to your agent about making sure that a
if you can afford it, go in there and do
a little negotiating. We weren't two or three years ago
in twenty twenty, we weren't negotiating anything, but up now
today we are starting to negotiate in some instances lower
(16:45):
than the list price, which is wow. You know, it's
a good thing for buyers. Sellers aren't real thrilled about it,
but that's okay.
Speaker 3 (16:52):
Wait.
Speaker 1 (16:52):
I just remember talking to you during the pandemic and saying,
this is like upside down world. I've never in my
life negotiated up from the asking price out of how
here we are. So I feel like maybe we're starting
to head into what many of us feel like as
a period of more normalcy in the real estate market,
or at least what we've kind of been used to
over the course of our lifetimes. You know, as we
(17:14):
talk about interest rates, Michelle, so much of this, of
course is out of our control.
Speaker 2 (17:20):
You can try to figure.
Speaker 1 (17:21):
Out the timing and the best time to jump in
or jump out, But there are some things that we
can control in order to get the best mortgage rate possible.
Speaker 2 (17:31):
Lay that out for us.
Speaker 1 (17:32):
What can potential buyers be doing now in order to
make themselves the best possible candidate to buy?
Speaker 4 (17:39):
There are three things that you can do right this minute.
Number one, increase and make sure you have the best
credit score available. You work on improving credit score so
that you can get that lowest rate possible. It really
is tied together, and if you don't know how to
boost your credit, you can talk to a lender. The
(18:02):
lender that's going to help you get your mortgage can
also help you boost your credit about which types of
credit you need to pay off. You know how much
your debt to income ratio is. You can get all
of that information and it's really interesting because over the
course of just a couple of months, you can improve
your score and you can get a better mortgage rate.
(18:24):
The second thing is save your money. If you have
more of a down payment, certainly is the best thing
that you can possibly do is have, you know, try
to reduce your private mortgage insurance, try to have twenty
percent down Those are that's very very important. And then
the second or the third thing would be, in my opinion,
(18:46):
if you can look for a home that's a little
bit lower priced. We all want to push the envelope
just a little bit, but if you can find a
home that costs less, then you're going to be borrowing
less and you're going to be in a better position
all around.
Speaker 1 (19:00):
So I think it's like as buyers kind of going
into this first of all doing your homework, doing everything
you can, but also eyes wide open about what you
really really can.
Speaker 4 (19:09):
Afford and what you really really need. I mean, that's
the thing that's the key, and it's I will say
buying a home is always better than renting because it's
like you're it's not like but you are paying yourself.
You are building your own equity when you purchase a property.
Speaker 1 (19:27):
So maybe you go into it with your list of
things you need, things you want, and the ones are great,
they're bonus, but the needs are the things that you've
got to have are just great insights as always into
what you can expect right buyers and sellers. Right now,
this market is changing rapidly. What you need to know
from our real estate expert Michelle Sloan. You're listening to
Simply Money presented by all Worth Financial here on fifty
(19:48):
five krs the talk station. You're listening to Simply Money
presented by all Worth Financial. I'm Amy Wagner along with Ruby.
Here's a question for you when it comes to money
and your house, Who's making the major decisions? I can
(20:08):
tell you in my home this might surprise you, it's
often me.
Speaker 5 (20:12):
Yeah, I mean it doesn't surprise me. I've been in
the industry long enough to see this unfold all the time. Personally,
it's a little bit prevalent in my household as well.
I'm not ashamed to admit it. That's totally fine. I
work a lot. My wife were fortunate enough that she
stays home, and she spends a significantly larger amount of
time purchasing goods and services for the family than I do.
(20:35):
That's the reality of the situation.
Speaker 1 (20:37):
Well, and you gotta understand, coming from a media background, right,
the golden demo that everyone really wants to hit is
women between the ages of twenty five and fifty four
in our country, because just most people that produce goods
right make stuff feel like those are the number one people.
Speaker 2 (20:55):
Who buy it.
Speaker 1 (20:56):
So there's a lot of purchasing power there, and I
think the statistics.
Speaker 2 (21:01):
Kind of back that up.
Speaker 1 (21:02):
Women use their buying power and influence to drive seventy
to eighty percent of all of consumer purchasing. Yet you know,
women are making so many money decisions, and yet there's
some miss around how women do that or what exactly
they do, and I want to talk about those. One
of them is that women are more likely to spend money.
(21:23):
You were just saying, Steve, Probably in your house that's
the case because she's buying everything for the household. But
if you want to break this down, this is according
to lending Tree, single men actually outspent single women close
but forty one thousand dollars a year to about thirty
eight thirty nine thousand. So it's not like women are
out there spending left and right and men are being
(21:43):
super frugal.
Speaker 5 (21:44):
Well yeah, I mean these findings and this is tied
to the Beer of Labor statistics from twenty twenty one
Consumer Expenditure Survey. It shows that men spend more on food, alcohol,
and entertainment those experiences versus women's spending more money on clothes.
And you know, again, personally in my household, this is
one hundred percent accurate. I have my nice suits for work,
(22:07):
and then if you see me outside of the office,
I'm dressed just like every other dad. And my wardrobe
is not particularly robust as compared to my wife's, which
is much more. But you bring up a good point,
because this study broke down spending if it were a
single man versus a single woman, and the man is
spending more.
Speaker 2 (22:26):
Yeah, And I think that's an important thing to understand.
Speaker 1 (22:28):
Here's another myth about women, that women are specifically bad
at salary negotiation. Now here's what I think everyone needs
to take away from this. Women and men are both
bad at salary negotiation.
Speaker 2 (22:44):
I think it's a difficult conversation.
Speaker 1 (22:46):
To have, whether you are starting a new job and
trying to prove your worth, or whether you've been at
a company for a long time and you're going asking
for a raise. It's never a comfortable conversation. And I
think everyone across the board could get a lot better.
And it's like, hey, when you are looking at your
friends and I Ustar Wars jokes that I had a
friend and I was going to renegotiate her contract for
(23:07):
her because she was just never able to put into
words everything that she brings to the table. Yet I could,
I could easily talk about those things. And so I
think sometimes you have to kind of go outside yourself
and say, if someone else were describing me, how will
they describe me? And then and then use those words
when talking to your boss or a potential employer and
(23:27):
understand this. Study after study shows that the best way
to increase your salary is usually not by staying in
the same company. It's kind of jumping ship and going
across the street to somewhere else. That's where you are
usually best able to better yourself.
Speaker 5 (23:42):
Yeah, I think everybody should go up to beat for
themselves and ask for more money and advocate for yourself.
So I'd like that you've done that for a friend.
I've literally literally helped a friend with that as well. Yeah,
because I find joy in this type of conversation. My
boss doesn't because I'll I'll be a pest about it,
but it's it's a fun conversation to me anyways, and
it's something that we should all be looking at, and
it's something that we're not. This is another myth, and
(24:05):
I've seen this in my time as a financial planner
as well. The myth is that women are not as
good as investors as men, and at its foundation, investing
is all about risk. It's true that women do tend
to be more risk averse than men, but it can
work out in their favor because men will try to
(24:27):
time the market more. Women don't make as many changes,
and it's amazing how that works when you're not trying
to time the market. We're just letting our money work
for us. That has better results over.
Speaker 1 (24:37):
The long term.
Speaker 4 (24:38):
You know.
Speaker 1 (24:39):
I think it's interesting because it's like the same kind
of traits that you think of, like, you know, moms
with small kids.
Speaker 2 (24:46):
You need a really large dose of patience. You need to.
Speaker 1 (24:49):
Understand that this is a long term undertaking and there's
going to be some rough days, right, I mean, you think,
like gosh, it's.
Speaker 2 (24:56):
Really the same as investing in the markets. You have
to be patient. Maybe ups, there's going to be downs.
You're going to be right at the long term plan.
Speaker 1 (25:04):
Retirement isn't next year, just like the kids aren't going
to be fully grown and functioning on their own and
making smart decisions all the time.
Speaker 2 (25:12):
In a year. But you're in it for the long haul.
Speaker 1 (25:14):
And I think maybe women are just uniquely suited to
invest and a lot of studies bear that out.
Speaker 2 (25:22):
Women versus men tend to.
Speaker 1 (25:24):
Come out ahead and their investments not by a huge margin,
but again time and time again they show that. And
another thing that's a myth about women is that we
are more spooked about this stock market than men.
Speaker 5 (25:37):
Yeah. So this was a Fidelity study that was conducted
and it showed that more than half of women who
invest in stocks they typically stayed the course when markets dipped,
compared to forty three percent of men who will try
to time things, as I was just talking about, and
that's a problem because you need to have a crystal
ball in order to time the market, and whether you're
(25:58):
man or a woman, you don't have a crystal ball. Yes,
you have to get it right twice. You have to
guess before things go back down or go down. You
have to guess before they go back up. If you're
simply not trying to guess, and you're letting your investments
do what they're supposed to do, which is grow over
the long term, then you're better off for it. And
this is a place where women take the lead, absolutely,
according to this Fidelity study.
Speaker 4 (26:18):
Yeah.
Speaker 1 (26:19):
Well, and here's some more interesting data because another myth
out there is that women are just too emotional to
be good money managers. Same Fidelity study found that listen,
the number one emotion that women say they feel about
money is stress. But still about ninety percent of women
are taking some kind of steps to control their finances
to control their money.
Speaker 2 (26:38):
I remember when I first started.
Speaker 1 (26:39):
In this business, we would look at photos that people
had on their websites and there would be a man
and a woman, you know, sitting across from a financial advisor.
The financial advisor was never looking at the woman, always
looking at the man. And I think over time we
are starting to change that conversation. And as you mentioned, Steve,
in your own house, your wife is kind of the
seat EO of things there, right, so it makes sense
(27:02):
that maybe we're also the CFOs, you know, making smart decisions.
And I will go a step further and say that
the best way to run your home as a business
is that partnership between men and women, right, because I
think we both bring unique traits in ways of thinking
to the table that can that can benefit And so
if you can align on what those money goals are
(27:23):
and then go after it together, I think that's where
you hit the sweet spot.
Speaker 5 (27:27):
Yeah. Better as a team than planning separate. I agree
with that. And you know, while I do say she's
the primary decision maker with money, we certainly have these
conversations and I bring her up to speed with where
we are in the investments because I'm the one typically
making those decisions. It's it's interesting too, because women tend
to live longer than men. So you bring up these
these past pictures that you used to see where the
(27:49):
advisor is only talking to the man. That is the
wrong way to do business, because at the end of
the day, if you know a woman is going to
live longer than a man, then we need to make
sure that both people in that family, in that household
unit have an understanding of what's happening with the investments,
so that we great plans that show that money is
going to last longer than both people in the relationship.
Speaker 1 (28:12):
Here's the all Worth advice, just don't underestimate the power
and wisdom that women can bring to the table and
should have in a relationship, especially when it comes to money.
Coming out next, we've got the most common mistakes one
group of people could make on their taxes. If this
is you, it can cost you thousands of dollars. You're
listening to Simply Money presented by all Worth Financial. Here
in fifty five KRC the talk station. You're listening to
(28:40):
Simply Money presented by all Worth Financial. I mean me
Wagner along with Steve Ruby, if you have a financial
question you'd like a little help in figuring out, there's
a red button you can click them while you're listening
to the show. It's right there on the iHeart app.
Record your question. It's coming straight to us. We'll help
you figure it out.
Speaker 2 (28:56):
And straight ahead. If you are just.
Speaker 1 (28:58):
Done with how much you are paying on all the
streaming services that your family has, We've got a lesson
on something called binging and bailing. We're going to tell
you how to binge and bail on your favorite streaming services.
Speaker 2 (29:12):
You want to stick around for that one.
Speaker 1 (29:14):
You know, when we talk about financial planning, so many
people's brains just go to returns, right, you know, how
much are my investments making.
Speaker 2 (29:21):
There's so much more to it than that. In one
of the most strategic.
Speaker 1 (29:26):
Areas that you can focus on is tax planning. You
get this right, you can save yourself a lot of money.
You get this wrong, You're handing over money to Uncle
Sam at no point.
Speaker 5 (29:38):
Yeah, and remember there's a difference between tax filing and
tax planning. Tax filing is literally just filling out the paperwork.
Tax planning is different maneuvers that you can take advantage
of in an attempt to poke Uncle Sam in the
eye with a stick, which most people find joy in doing,
especially if it means more money in your pockets year
(29:58):
after year and through out the year. So you know,
first of all, just staying organized a big mistake that
many taxpayers make, not just retirees, as being unorganized or
irresponsible about your tax return. If you miss, for example,
your time frame for filing taxes, then there can be
late penalties and interest fees, and that's something that we
(30:19):
want to avoid. We don't want to give Uncle Slam
more money than we need to.
Speaker 1 (30:23):
Here's another big thing, and particularly when you retire, this
starts to come in understanding retirement account taxation.
Speaker 2 (30:32):
So you have.
Speaker 1 (30:32):
Money in a roth ira and in a traditional tax
deferred for one K, and then you have money in
a taxable brokerage account. Understanding the different tax treatments and
actually the flexibility that comes from having those accounts can
be a great thing. But when to pull money out
of which account can make a huge difference in what
you're going to end up paying in taxes.
Speaker 5 (30:54):
This is an example of tax planning intertwined with financial planning,
and that's making a strategy it is, it's making sure
that you're making the right decisions while you're still saving
in the types of buckets you put your money into,
as you mentioned, pre tax WROTH, health savings accounts, after
tax brokerage accounts, so that you can diversify that future
income tax stream. If we have too munchy and believe
(31:17):
it or not, there is such a problem as too
much money in certain vehicles, for example, your four oh
one K being all pre tax or an IRA being
all pre tax, if we are forced to take distributions
you required minimum distributions. Once you hit seventy three at
this point or seventy five few years down the road,
and you have too much money in these vehicles, then
(31:37):
you can kick yourself into a higher tax bracket. On
top of that, if you're married filing jointly, for example,
and your income falls above I think it's about two
hundred and ten thousand for twenty twenty four, then you
will find yourself with an increased Medicare Part B premium.
So planning accordingly to pull from different buckets, your WROTH,
(31:57):
your your after tax non roth. These are ways to
diversify the future or current income tax stream.
Speaker 1 (32:04):
To plan according you want to get this right, right,
I mean the difference is potentially thousands of dollars. And
then back to tax preparation, there's just a level of
understanding that you need to have in order to best
take advantage of that situation. One is you know, understanding
the difference between a standard deduction and an itemized deduction.
I think with the change in tax law that we
(32:25):
had several years ago, most I think it's ninety plus
percent of Americans take the standard.
Speaker 2 (32:30):
Deduction very hot.
Speaker 1 (32:32):
Yeah, but if you have a high amount of medical expenses,
it can make sense to itemize.
Speaker 5 (32:39):
Yeah. So if you're above the standard deduction and you itemize,
then you essentially find yourself paying lower taxes. And keep
in mind that the standard deduction is fluid. This at
this point is changing in twenty twenty six unless Congress
an x to extend what that standardized deduction is. So
don't be complained in identifying potential ways to itemize. As
(33:05):
you said, if you have substantial medical expenses, somebody paying
for geriatric care, AIDS in home or something, you may
find it extremely advantageous to itemize rather than taking your
standard deduction.
Speaker 1 (33:19):
Here's another thing that I see people losing money on
over time, and this is taking social Security either too
soon or too late. This is a big deal, and
I think it's so interesting because you're paying into the
system for so many years and I think Steve, when
you flip it to the way that you talk about it,
which is, okay, how do you take the most advantage
of this and kind of poke Uncle Sam in the eye.
(33:41):
For a lot of people, it's not on the first
day that you can possibly claim social Security. You're not
getting the most out of the system often by taking
it that way. So understanding how it works and being
a little strategic about when you claim.
Speaker 5 (33:55):
Can make a huge difference, especially if you're earning income
and you decide to collect Social Security. Depending on your age,
you may get a reduced benefit. You also may have
to pay higher You may have to pay taxes on
more of your Social Security benefit. So that's something that
you need to be careful about. And that goes back
to tax diversification of future cash flows as well. So
(34:19):
another thing about finding a way to poke Uncle Sam
and the eye with stickiers is making sure that you
have the proper cost basis on shares of old mutual
funds or stocks. I've seen this for people that have
paper certificates and you know it's Hey, I inherited this.
It was my grandfather's I found it in my grandmother's house,
(34:40):
whatever that might be. You need to make sure that
you have the proper cost basis, including stock splits and
dividend reinvestments, because that's going to increase the cost basis,
which is what's used to calculate how much taxes you
actually owe when you sell those stocks.
Speaker 1 (34:55):
Yeah, understanding all of these things can go a long
way and keeping more money in your pocket and out
of Uncle Sam's here's the all Worth advice. Probably the
biggest mistake you can make it make is not hiring
a qualified tax professional who can help you make sure
that you are not making any of these mistakes.
Speaker 2 (35:12):
Coming up next, the art.
Speaker 1 (35:13):
Of binging and then bailing. We're talking about streaming services.
Speaker 2 (35:19):
Maybe how to take the most advantage of them.
Speaker 1 (35:21):
You're listening to Simply Money, presented by all Worth Financial
here in fifty five KRC the talk station. You're listening
to Simply Money and presented by all Worth Financial. I
mean me Wagner along with Steve Ruby. I've been doing
this show for long enough to remember we used to
talk a lot about cutting the cord, and that was
just people who were done with cable bills that were
(35:43):
just through the roof and said, you know what, I'm
going to make the system work for me.
Speaker 2 (35:47):
I'm getting rid of cable.
Speaker 1 (35:49):
And I'm going to get Netflix and we're just going
to watch Netflix instead, and I'm going to save all
kinds of money. Well, how that worked for you, Steve Ruby.
How many streaming services do you have now?
Speaker 3 (35:59):
Oh?
Speaker 5 (35:59):
Too, man, I have an eight year old daughter at home,
and you know, my wife, again being one of the
primary financial decision makers in the household. As we've discussed,
when there's a show on that my daughter wants to watch,
oftentimes my wife will just fold and say, whatever, let's
get it. And it's on a new streaming service, something
that we didn't already have. Let's pick that up, and
then rather than canceling it, now we have an extra
(36:21):
streaming service. And by the way, we did the math,
if you had all the streaming services out there, you'd
be spending about five hundred dollars a month right now,
can you imagine.
Speaker 2 (36:31):
And there are lots of people who have lots.
Speaker 1 (36:34):
Of streaming services, and so there is kind of a
new thing that you can do. And I would say
this with a one caveat being you can take full
advantage of some of these streaming services and kind of
work the system.
Speaker 2 (36:46):
If you are an organized person.
Speaker 1 (36:49):
This is called binge and bail and it means, Okay,
the new season of Handmaid's Tale is coming out on Hulu,
so I'm going to jump into Hulu.
Speaker 2 (36:58):
I'm going to binge water all of those.
Speaker 1 (37:01):
Shows within a month, and then I'm going to cancel
my subscription and wait for the next season to come out.
It's a lot to track, but if you can track it,
then you are not using or you're not paying for
every streaming service at the same time. Meanwhile, three of
those streaming services you haven't even watched in seven months.
Speaker 5 (37:18):
Yeah, so you have to be organized and disciplined if
I'm being honest here, Because in a perfect world, we
sit down, we make a list of all the services
we subscribe to, We look at the release dates of
the services or the shows that we like and that
we're going to watch, and we plan accordingly to binge
watch them, get it off, and then get it off
(37:39):
the payroll, you know, remove that expense from your life
by canceling it until that show comes back out realistically,
do you see yourself doing this?
Speaker 4 (37:52):
No?
Speaker 1 (37:52):
I don't, But I will also tell you that I
keep a lock on how many of these streaming services
we have, right Like my kids will still ask for
Disney sometimes and I'm like, no, like we did Disney,
then you guys wanted something else, and now we're onto
something else and we're not going to have all of them,
so I do put some parameters on this.
Speaker 2 (38:10):
There's also those some free streaming.
Speaker 1 (38:12):
Services that come with dare we say it, commercials. It's
funny how it's just like, oh, come in full circle here,
free v Pluto TV, which I've heard is good to be,
which I've watched before. And then also if you've got
a library card, you might get some free streaming services
out of that.
Speaker 5 (38:29):
And I think.
Speaker 1 (38:31):
Yeah, And I think the key here is taking a
really critical look at how much you're spending on streaming services.
It's probably more than you want to be paying. Thanks
for listening tonight. We hope we're going to tune in tomorrow.
We're talking about how to save a million dollars in
a four to one K You've been listening to simply
money presented by all Worth Financial here in fifty five KRC,
the talk station
Tonight, we've got Wall Street whiplash, a sudden opportunity for
those looking to buy a home, and remedies for common
tax mistakes. You're listening to Simply Money, presented by all
Worth Financial. I'm Amy Wagner.
Speaker 2 (00:17):
Okay, if you love roller coasters.
Speaker 1 (00:19):
We live near King's Island. Maybe you don't mind those.
How did you feel about last week on Wall Street?
Because that was one heck of a ride. I gotta
tell you, I feel like I'm a little too old
for roller coasters, but Wall Street doesn't care.
Speaker 2 (00:32):
So joining us tonight to explain this ride that we've.
Speaker 1 (00:35):
Been on and maybe where it's heading in the future,
is all Wors Chief investment Officer Andy Stout, joining us
as he does every Monday on our show. Andy, I'm
going to start by giving you credit because early last week,
as we were looking at a couple of terrible, terrible
days in the market, there were all these headlines projecting
that this could be the start of something really terrible.
Speaker 2 (00:57):
And I asked you, do you think.
Speaker 1 (00:58):
This is short term utility or are we starting to
slide into something much more awful? And you felt like
short term volatility and at least right now what appears
you were right.
Speaker 3 (01:09):
Yeah, so far, so good. I mean, when we look
at what transpired over the past week, with the dal
Jones falling thirteen hundred points pretty much right at the
open to start the week off, and you know, it
was some scary headlines you were seeing all over the media,
not just to the financial media, but you could go
to you know, your news channel of preference, you know,
(01:32):
and they were talking about it. But by the end
of the week that was down like half a percent,
so pretty much erased all of those losses. And when
you think about just that roller coaster that you're on,
it really it felt a little bit like maybe you
felt unhinged a little bit, right, But when you step
back and you look at the bigger picture, I mean,
(01:54):
you'll see this type of volatility is pretty normal, you
in terms of just the point movements and how quickly
the market moved, I mean, that's not too uncommon, and
especially when you think about what's been driving the fears
over the past really couple of weeks and where it
really kind of apexed last Monday.
Speaker 1 (02:16):
So when you talk about this recovery or what maybe
appears to be the start of the recovery. What do
you think the difference is from one week right, It
was like the sky is falling and everything looks terrible,
and then all of a sudden, markets shrug it off.
Speaker 3 (02:30):
Yeah. There was essentially three big worries out there last week,
the first and last couple of weeks, I should say
the first we The first one was that the FED
is essentially behind the curve, so meaning that they already
should have been lowering rates to help the economy grow,
with the unemployment rate going from four point one to
four point three percent for the month of the July
(02:53):
compared to June. And if you look at where the
unplanyment rate was roughly a year year and a half ago,
right around three point four percent, you know that's not
a small move when you think about it, from three
point four to four point three. And a weakening of
the labor market is a concern, and there are some
other i'll call them cracks in the job market. So
we had the fears that the FED was behind on
(03:16):
the curve they needed to be moving quicker. The second
concern was earnings. Specifically, a lot of these big tech
companies like Apple, they've been pouring billions of dollars into
AI but haven't gotten any money out of it. So
there were many comparisons between the Internet hype and bust
of the early two thousands with an AI hype right
(03:39):
now and whether or not there will be an AI bust.
The third issue, and I think this is probably the
biggest one, to be honest, was the yen carry trade,
which is just an easy way for hedge funds to
make money. Basically, you borrow in Japan at almost zero
interest rates and you can invest in other areas like
Mexican bonds and get ten percent yield and just make
lots of money. Now, the problem was the Bank of
(04:03):
Japan surprise investors hiked rates and that resulted in substantial
losses and a lot of selling across the board. And
I think that was the biggest issue, and so the
question why has it calmed down a little bit? Well,
and if you look at that carry trade, JP Morgan
thinks about three quarters of all global currency carry trades
(04:25):
have been closed out, so that that built up essentially
volatility has been already released into the market, so there
isn't much to go from that. Now. You know that
JP Morgan could be wrong, right, but when you look
at that, you know things have improved from that perspective,
and also from an economic perspective. The US economy got
(04:48):
some decent data last week with the ISM Services Survey
weekly jobless claims, which are people filing for unemployment benefits,
and also a survey on whether or not banks are
t tightening lending standards, and they have slowed down on that.
Those are all economic positives and that additionally helped the
market stabilize.
Speaker 1 (05:10):
You're listening to Simply Money, presented by all Worth Financial
Immi Wagner along with Andy Stout, all Worth Investment's chief
investment officer. As we look at where we've been over
the past week on this insane wild ride for the
markets and maybe the period of calm that we're entering
into now. Any One of the things that I really
appreciate you is about you is your honesty.
Speaker 2 (05:30):
When it comes to the Federal Reserve.
Speaker 1 (05:31):
I've asked you several times to kind of grade how
they're handling, which you and I would both admit is
a bit of a tight rope walk as they've tried
to bring inflation down by raising interest rates, and it
looked like for the longest time there. They had done
a good job by kind of holding before they started
to cut rates, and now there's criticism out there that
you just mentioned that maybe they've waited too long, and
(05:53):
now we're looking at maybe not a quarter point cut,
but half a point cut coming up next month September eighteenth,
when they meet. Want to get your take on the
quarter point versus the half points and do you think
they've waited too long?
Speaker 2 (06:07):
Here?
Speaker 3 (06:09):
You know, I think they have a tough job, right
and there's there's no one. If you want me to
give them a grade, I'll give them a BE currently
maybe a B minus. But I completely reserve the right
to change my opinion in six months, depending on how
the economy evolves. Yeah. Right, With all of that said,
(06:31):
when you think about the Fed cutting rates, I think
they I think they probably should do a half point cut.
The reason being, when they have raised rates, it took
a long time for those rate hikes to actually start
to bring down inflation, and we started to slowly see
some labor market cracks, and we're starting to see those
cracks widen. The issue is that when the FED raises
(06:54):
raised and when they cut rates, it takes generally a
long time for that to actually impact the economy. So
if they go too slow, they really raise the risk
of a recession. I don't I think we'll have any
a recession this year, but early next year is a
possibility depending on what the FED does and how the
(07:16):
economy responds to that. Now, what will ultimately determine what
the FED does at its next meeting on September eighteenth
is going to be probably two things more than anything else.
One is the August Jobs Report, which will come out
in the first week of September, and if you see
further deterioration in the unimal ployment right say it goes higher,
(07:38):
I think you could easily see a half point cut.
The other items that are going to influence the FED
are going to be the two inflation reports that we
will get. We're gonna get one of them this week
and one the week before the FED meets. We're getting
the Consumer Inflation or CPI report. If we see if
(07:59):
we get the really bad situation of unemployment rate essentially
increasing but then also inflation increasing, if that's going to
be in a pickle because they're going to want to
cut to help the job market get to full employment,
but they don't want to cut because then the risk
reigniting inflationary flames. If you look at what the market's expecting,
(08:20):
the mild increase in inflation that we'll get for July,
about one point two percent increase. If that comes to
fruition and you get another team reading for the month
of August, which we'll get in mid July, that update,
you could easily see that half point cut. But if
(08:41):
it's anywhere else, you're probably looking at a quarter point cut.
And I think the economy probably needs a half point cut,
just because it takes a while for the economic policy
to have an impact on the economy, and.
Speaker 1 (08:53):
Any one of the points that we make off and
when it comes to your four one K Wall Street
your investments is what really matters is corporate greed, right,
how well these big US companies are doing. Let's talk
about earning season, because I think if you're really going
to anticipate what's going to happen moving forward when it
comes to your form, okay, that's where you got luck.
Speaker 3 (09:14):
Yeah, And earning season has been pretty good. So we
have been getting the results from companies over the past
three to four weeks, and it's we're almost at the
end of it. I mean we have of the S
and P five hundred companies. Of those five hundred companies,
four hundred and fifty five have reported profits so far,
(09:34):
so we're almost done. We're in the home stretch here,
and if you look at how earnings have transpired, what
we've seen is that the S and P five hundred
has had a thirteen point three percent growth in the
second quarter compared to the second quarter last year, which
is a lot better than the eight point three that
Wall Street was expecting. And of those companies, by the way,
amy eighty percent have reported better than expected profits. Now,
(09:58):
one thing I do want to highlight real quickly is
that there's a lot of focus on the Magnificent seven,
those larger companies. When we look at the earnings excluding
the Magnificent Seven, the results have been pretty good so far,
and they really they've been a lot better than what
we've seen in the past. Over the when we look
at that year over year growth, it's been at eight
(10:19):
point seven percent for the Magnificent seven, and if you
think about last quarter, it was basically flat, actually slightly
down a little bit. So we're seeing some broad growth.
So that's good for investors.
Speaker 1 (10:31):
And of course we haven't heard Nvidia reporting yet, right
they report a couple of weeks from now.
Speaker 2 (10:36):
We'll see what happens there.
Speaker 1 (10:37):
But yeah, I think great perspective because Andy, Wow, what
a difference a week makes.
Speaker 2 (10:41):
Here's the all Worth advice. Panic is really the worst
thing that you can do.
Speaker 1 (10:44):
When markets are volatile, they often bounce back just as
quickly as they fall.
Speaker 2 (10:48):
Case in point, just the past week. Coming up next,
in the midst of all of this interest rate.
Speaker 1 (10:53):
Talk suddenly and opening in the housing market, is it
time for you to pull the trigger?
Speaker 2 (10:58):
We're going to talk with our real estate experts. Next.
Speaker 1 (11:00):
You're listening to Simply Money, presented by all Worth Financial
here on fifty five KRC, the talk station. You're listening
to Simply Money presented by all Worth Financial.
Speaker 2 (11:11):
I'm Amy Wagner. Okay, So we've got the Federal Reserve
talking about lowering interest rates.
Speaker 1 (11:17):
What does that mean for mortgage rates and the housing market?
Joining us night, of course, is a real estate expert,
Michelle Sloan. You can catch her on fifty five KRC
right here every Sunday on her show Sloan Sells Home.
She's also the owner of remax time, Michelle. We have
been talking about this crazy real estate market for the
past few years, coming out of this pandemic.
Speaker 2 (11:39):
Where are we now as we see the FED talking
about lowering interest rates.
Speaker 4 (11:45):
Well, it's good news because the mortgage interest rates have
been going down and they're at their lowest point in
quite a long time now. With mortgage rates falling, it's
definitely a bit of good news news for buyers who
feel like they've been priced out of the market. They
may consider getting back in, getting a new pre approval,
(12:08):
seeing what they can afford, but realizing that there still
is quite a bit of volatility in the market itself.
Now the FED has decided, I think it was a
week or so ago that they weren't going to raise
or lower the rates, so it stayed the same. And
with that news, rates have gone down over the last
(12:30):
week or so, actually over the last couple of weeks
anywhere for the thirty year fixed straight And I hesitate
a little bit to say numbers, because it's always going
to be dependent on your credit score, your situations exactly,
but on average, the thirty year fixed rates anywhere between
(12:51):
six point one and six point five.
Speaker 5 (12:53):
Which is really good because we.
Speaker 4 (12:55):
Were at seven point one and seven point five at
one point, and so we're down almost to full point,
which is very, very exciting. And then if you can
afford a fifteen year fixed st rate, it's even lower
five and a half to six points six percent actually
for a mortgage interest rate. So again it's a great idea.
(13:15):
It is spurring some people to think about refinancing because
if they do have a seven or a seven and
a half, usually if that rate goes at least one
full point lower, it's a time to at least take
a look at it and see if you can save
money on your mortgage.
Speaker 1 (13:33):
Okay, so let's talk about those people that have been
sitting on the sidelines wanting to buy but not.
Speaker 2 (13:38):
Comfortable with that seven percent interest rate. Do you feel like, Okay,
now's the time to jump in.
Speaker 1 (13:44):
Or there's a lot of talk about the Federal Reserve
lowering rates starting next month, or there are a lot
of people who are saying we're gonna wait a little
bit longer and see, and what do you think about that?
Speaker 4 (13:55):
I don't think you should wait because, as always, the
market is going to fluctuate daily. The interest rate isn't
just a set number that stays the same every single day.
It can fluctuate every single day, so and it may
take you more than a month to actually find a home.
So finding the home really is the most difficult part
(14:19):
of the home search. Today. The good news is there
are more homes on the market in a lot of
locations in the Cincinnati Northern Kentucky area. Some situations, the
homes are staying on the market a little bit longer.
So you have opportunities, and you, as a buyer always
need to be ready, willing, and able whenever the opportunity
(14:42):
arises for you to find a home that fits your
needs number one and that you can afford number two.
Speaker 1 (14:50):
Michaell, we came out of this crazy time where if
you were looking to buy a house, the second you
heard about something going on the market, you sprinted to
that location, you had your realtor meet you there, you
ran through the house as fast as you can, and
then you've said deal if you thought you might want it.
I mean, people were just swarming over these houses. Give
(15:11):
us the reality of the landscape today. Do we have
a second to process things? Are people still in bidding wars?
Speaker 2 (15:18):
What does this look like?
Speaker 3 (15:19):
Now?
Speaker 4 (15:20):
You know that's such a hard question because the answer
is yes and no. In some areas there are still
there's still a frenzy a lot of times in a
certain price point. If you're between two hundred and four
hundred thousand dollars, there are going to be more buyers
that are interested in your home. I'm seeing a lot
(15:41):
of properties that are over five hundred thousand dollars in
some areas that are sitting for up to thirty days
or more. So with that situation, listen if something's been
on the market that long and they haven't done a
price adjustment or price reduction, and those are the homes
that you want to look at, because the seller may
(16:03):
be getting a little bit anxious and they may be willing.
I have, personally, I have two sellers right now that
are ready willing and able to negotiate. They just need
somebodies to come in the door and make an offer.
So don't be afraid if you're a buyer to make
an offer. Tell your agent, Talk to your agent, tell
(16:25):
them talk to your agent about making sure that a
if you can afford it, go in there and do
a little negotiating. We weren't two or three years ago
in twenty twenty, we weren't negotiating anything, but up now
today we are starting to negotiate in some instances lower
(16:45):
than the list price, which is wow. You know, it's
a good thing for buyers. Sellers aren't real thrilled about it,
but that's okay.
Speaker 3 (16:52):
Wait.
Speaker 1 (16:52):
I just remember talking to you during the pandemic and saying,
this is like upside down world. I've never in my
life negotiated up from the asking price out of how
here we are. So I feel like maybe we're starting
to head into what many of us feel like as
a period of more normalcy in the real estate market,
or at least what we've kind of been used to
over the course of our lifetimes. You know, as we
(17:14):
talk about interest rates, Michelle, so much of this, of
course is out of our control.
Speaker 2 (17:20):
You can try to figure.
Speaker 1 (17:21):
Out the timing and the best time to jump in
or jump out, But there are some things that we
can control in order to get the best mortgage rate possible.
Speaker 2 (17:31):
Lay that out for us.
Speaker 1 (17:32):
What can potential buyers be doing now in order to
make themselves the best possible candidate to buy?
Speaker 4 (17:39):
There are three things that you can do right this minute.
Number one, increase and make sure you have the best
credit score available. You work on improving credit score so
that you can get that lowest rate possible. It really
is tied together, and if you don't know how to
boost your credit, you can talk to a lender. The
(18:02):
lender that's going to help you get your mortgage can
also help you boost your credit about which types of
credit you need to pay off. You know how much
your debt to income ratio is. You can get all
of that information and it's really interesting because over the
course of just a couple of months, you can improve
your score and you can get a better mortgage rate.
(18:24):
The second thing is save your money. If you have
more of a down payment, certainly is the best thing
that you can possibly do is have, you know, try
to reduce your private mortgage insurance, try to have twenty
percent down Those are that's very very important. And then
the second or the third thing would be, in my opinion,
(18:46):
if you can look for a home that's a little
bit lower priced. We all want to push the envelope
just a little bit, but if you can find a
home that costs less, then you're going to be borrowing
less and you're going to be in a better position
all around.
Speaker 1 (19:00):
So I think it's like as buyers kind of going
into this first of all doing your homework, doing everything
you can, but also eyes wide open about what you
really really can.
Speaker 4 (19:09):
Afford and what you really really need. I mean, that's
the thing that's the key, and it's I will say
buying a home is always better than renting because it's
like you're it's not like but you are paying yourself.
You are building your own equity when you purchase a property.
Speaker 1 (19:27):
So maybe you go into it with your list of
things you need, things you want, and the ones are great,
they're bonus, but the needs are the things that you've
got to have are just great insights as always into
what you can expect right buyers and sellers. Right now,
this market is changing rapidly. What you need to know
from our real estate expert Michelle Sloan. You're listening to
Simply Money presented by all Worth Financial here on fifty
(19:48):
five krs the talk station. You're listening to Simply Money
presented by all Worth Financial. I'm Amy Wagner along with Ruby.
Here's a question for you when it comes to money
and your house, Who's making the major decisions? I can
(20:08):
tell you in my home this might surprise you, it's
often me.
Speaker 5 (20:12):
Yeah, I mean it doesn't surprise me. I've been in
the industry long enough to see this unfold all the time. Personally,
it's a little bit prevalent in my household as well.
I'm not ashamed to admit it. That's totally fine. I
work a lot. My wife were fortunate enough that she
stays home, and she spends a significantly larger amount of
time purchasing goods and services for the family than I do.
(20:35):
That's the reality of the situation.
Speaker 1 (20:37):
Well, and you gotta understand, coming from a media background, right,
the golden demo that everyone really wants to hit is
women between the ages of twenty five and fifty four
in our country, because just most people that produce goods
right make stuff feel like those are the number one people.
Speaker 2 (20:55):
Who buy it.
Speaker 1 (20:56):
So there's a lot of purchasing power there, and I
think the statistics.
Speaker 2 (21:01):
Kind of back that up.
Speaker 1 (21:02):
Women use their buying power and influence to drive seventy
to eighty percent of all of consumer purchasing. Yet you know,
women are making so many money decisions, and yet there's
some miss around how women do that or what exactly
they do, and I want to talk about those. One
of them is that women are more likely to spend money.
(21:23):
You were just saying, Steve, Probably in your house that's
the case because she's buying everything for the household. But
if you want to break this down, this is according
to lending Tree, single men actually outspent single women close
but forty one thousand dollars a year to about thirty
eight thirty nine thousand. So it's not like women are
out there spending left and right and men are being
(21:43):
super frugal.
Speaker 5 (21:44):
Well yeah, I mean these findings and this is tied
to the Beer of Labor statistics from twenty twenty one
Consumer Expenditure Survey. It shows that men spend more on food, alcohol,
and entertainment those experiences versus women's spending more money on clothes.
And you know, again, personally in my household, this is
one hundred percent accurate. I have my nice suits for work,
(22:07):
and then if you see me outside of the office,
I'm dressed just like every other dad. And my wardrobe
is not particularly robust as compared to my wife's, which
is much more. But you bring up a good point,
because this study broke down spending if it were a
single man versus a single woman, and the man is
spending more.
Speaker 2 (22:26):
Yeah, And I think that's an important thing to understand.
Speaker 1 (22:28):
Here's another myth about women, that women are specifically bad
at salary negotiation. Now here's what I think everyone needs
to take away from this. Women and men are both
bad at salary negotiation.
Speaker 2 (22:44):
I think it's a difficult conversation.
Speaker 1 (22:46):
To have, whether you are starting a new job and
trying to prove your worth, or whether you've been at
a company for a long time and you're going asking
for a raise. It's never a comfortable conversation. And I
think everyone across the board could get a lot better.
And it's like, hey, when you are looking at your
friends and I Ustar Wars jokes that I had a
friend and I was going to renegotiate her contract for
(23:07):
her because she was just never able to put into
words everything that she brings to the table. Yet I could,
I could easily talk about those things. And so I
think sometimes you have to kind of go outside yourself
and say, if someone else were describing me, how will
they describe me? And then and then use those words
when talking to your boss or a potential employer and
(23:27):
understand this. Study after study shows that the best way
to increase your salary is usually not by staying in
the same company. It's kind of jumping ship and going
across the street to somewhere else. That's where you are
usually best able to better yourself.
Speaker 5 (23:42):
Yeah, I think everybody should go up to beat for
themselves and ask for more money and advocate for yourself.
So I'd like that you've done that for a friend.
I've literally literally helped a friend with that as well. Yeah,
because I find joy in this type of conversation. My
boss doesn't because I'll I'll be a pest about it,
but it's it's a fun conversation to me anyways, and
it's something that we should all be looking at, and
it's something that we're not. This is another myth, and
(24:05):
I've seen this in my time as a financial planner
as well. The myth is that women are not as
good as investors as men, and at its foundation, investing
is all about risk. It's true that women do tend
to be more risk averse than men, but it can
work out in their favor because men will try to
(24:27):
time the market more. Women don't make as many changes,
and it's amazing how that works when you're not trying
to time the market. We're just letting our money work
for us. That has better results over.
Speaker 1 (24:37):
The long term.
Speaker 4 (24:38):
You know.
Speaker 1 (24:39):
I think it's interesting because it's like the same kind
of traits that you think of, like, you know, moms
with small kids.
Speaker 2 (24:46):
You need a really large dose of patience. You need to.
Speaker 1 (24:49):
Understand that this is a long term undertaking and there's
going to be some rough days, right, I mean, you think,
like gosh, it's.
Speaker 2 (24:56):
Really the same as investing in the markets. You have
to be patient. Maybe ups, there's going to be downs.
You're going to be right at the long term plan.
Speaker 1 (25:04):
Retirement isn't next year, just like the kids aren't going
to be fully grown and functioning on their own and
making smart decisions all the time.
Speaker 2 (25:12):
In a year. But you're in it for the long haul.
Speaker 1 (25:14):
And I think maybe women are just uniquely suited to
invest and a lot of studies bear that out.
Speaker 2 (25:22):
Women versus men tend to.
Speaker 1 (25:24):
Come out ahead and their investments not by a huge margin,
but again time and time again they show that. And
another thing that's a myth about women is that we
are more spooked about this stock market than men.
Speaker 5 (25:37):
Yeah. So this was a Fidelity study that was conducted
and it showed that more than half of women who
invest in stocks they typically stayed the course when markets dipped,
compared to forty three percent of men who will try
to time things, as I was just talking about, and
that's a problem because you need to have a crystal
ball in order to time the market, and whether you're
(25:58):
man or a woman, you don't have a crystal ball. Yes,
you have to get it right twice. You have to
guess before things go back down or go down. You
have to guess before they go back up. If you're
simply not trying to guess, and you're letting your investments
do what they're supposed to do, which is grow over
the long term, then you're better off for it. And
this is a place where women take the lead, absolutely,
according to this Fidelity study.
Speaker 4 (26:18):
Yeah.
Speaker 1 (26:19):
Well, and here's some more interesting data because another myth
out there is that women are just too emotional to
be good money managers. Same Fidelity study found that listen,
the number one emotion that women say they feel about
money is stress. But still about ninety percent of women
are taking some kind of steps to control their finances
to control their money.
Speaker 2 (26:38):
I remember when I first started.
Speaker 1 (26:39):
In this business, we would look at photos that people
had on their websites and there would be a man
and a woman, you know, sitting across from a financial advisor.
The financial advisor was never looking at the woman, always
looking at the man. And I think over time we
are starting to change that conversation. And as you mentioned, Steve,
in your own house, your wife is kind of the
seat EO of things there, right, so it makes sense
(27:02):
that maybe we're also the CFOs, you know, making smart decisions.
And I will go a step further and say that
the best way to run your home as a business
is that partnership between men and women, right, because I
think we both bring unique traits in ways of thinking
to the table that can that can benefit And so
if you can align on what those money goals are
(27:23):
and then go after it together, I think that's where
you hit the sweet spot.
Speaker 5 (27:27):
Yeah. Better as a team than planning separate. I agree
with that. And you know, while I do say she's
the primary decision maker with money, we certainly have these
conversations and I bring her up to speed with where
we are in the investments because I'm the one typically
making those decisions. It's it's interesting too, because women tend
to live longer than men. So you bring up these
these past pictures that you used to see where the
(27:49):
advisor is only talking to the man. That is the
wrong way to do business, because at the end of
the day, if you know a woman is going to
live longer than a man, then we need to make
sure that both people in that family, in that household
unit have an understanding of what's happening with the investments,
so that we great plans that show that money is
going to last longer than both people in the relationship.
Speaker 1 (28:12):
Here's the all Worth advice, just don't underestimate the power
and wisdom that women can bring to the table and
should have in a relationship, especially when it comes to money.
Coming out next, we've got the most common mistakes one
group of people could make on their taxes. If this
is you, it can cost you thousands of dollars. You're
listening to Simply Money presented by all Worth Financial. Here
in fifty five KRC the talk station. You're listening to
(28:40):
Simply Money presented by all Worth Financial. I mean me
Wagner along with Steve Ruby, if you have a financial
question you'd like a little help in figuring out, there's
a red button you can click them while you're listening
to the show. It's right there on the iHeart app.
Record your question. It's coming straight to us. We'll help
you figure it out.
Speaker 2 (28:56):
And straight ahead. If you are just.
Speaker 1 (28:58):
Done with how much you are paying on all the
streaming services that your family has, We've got a lesson
on something called binging and bailing. We're going to tell
you how to binge and bail on your favorite streaming services.
Speaker 2 (29:12):
You want to stick around for that one.
Speaker 1 (29:14):
You know, when we talk about financial planning, so many
people's brains just go to returns, right, you know, how
much are my investments making.
Speaker 2 (29:21):
There's so much more to it than that. In one
of the most strategic.
Speaker 1 (29:26):
Areas that you can focus on is tax planning. You
get this right, you can save yourself a lot of money.
You get this wrong, You're handing over money to Uncle
Sam at no point.
Speaker 5 (29:38):
Yeah, and remember there's a difference between tax filing and
tax planning. Tax filing is literally just filling out the paperwork.
Tax planning is different maneuvers that you can take advantage
of in an attempt to poke Uncle Sam in the
eye with a stick, which most people find joy in doing,
especially if it means more money in your pockets year
(29:58):
after year and through out the year. So you know,
first of all, just staying organized a big mistake that
many taxpayers make, not just retirees, as being unorganized or
irresponsible about your tax return. If you miss, for example,
your time frame for filing taxes, then there can be
late penalties and interest fees, and that's something that we
(30:19):
want to avoid. We don't want to give Uncle Slam
more money than we need to.
Speaker 1 (30:23):
Here's another big thing, and particularly when you retire, this
starts to come in understanding retirement account taxation.
Speaker 2 (30:32):
So you have.
Speaker 1 (30:32):
Money in a roth ira and in a traditional tax
deferred for one K, and then you have money in
a taxable brokerage account. Understanding the different tax treatments and
actually the flexibility that comes from having those accounts can
be a great thing. But when to pull money out
of which account can make a huge difference in what
you're going to end up paying in taxes.
Speaker 5 (30:54):
This is an example of tax planning intertwined with financial planning,
and that's making a strategy it is, it's making sure
that you're making the right decisions while you're still saving
in the types of buckets you put your money into,
as you mentioned, pre tax WROTH, health savings accounts, after
tax brokerage accounts, so that you can diversify that future
income tax stream. If we have too munchy and believe
(31:17):
it or not, there is such a problem as too
much money in certain vehicles, for example, your four oh
one K being all pre tax or an IRA being
all pre tax, if we are forced to take distributions
you required minimum distributions. Once you hit seventy three at
this point or seventy five few years down the road,
and you have too much money in these vehicles, then
(31:37):
you can kick yourself into a higher tax bracket. On
top of that, if you're married filing jointly, for example,
and your income falls above I think it's about two
hundred and ten thousand for twenty twenty four, then you
will find yourself with an increased Medicare Part B premium.
So planning accordingly to pull from different buckets, your WROTH,
(31:57):
your your after tax non roth. These are ways to
diversify the future or current income tax stream.
Speaker 1 (32:04):
To plan according you want to get this right, right,
I mean the difference is potentially thousands of dollars. And
then back to tax preparation, there's just a level of
understanding that you need to have in order to best
take advantage of that situation. One is you know, understanding
the difference between a standard deduction and an itemized deduction.
I think with the change in tax law that we
(32:25):
had several years ago, most I think it's ninety plus
percent of Americans take the standard.
Speaker 2 (32:30):
Deduction very hot.
Speaker 1 (32:32):
Yeah, but if you have a high amount of medical expenses,
it can make sense to itemize.
Speaker 5 (32:39):
Yeah. So if you're above the standard deduction and you itemize,
then you essentially find yourself paying lower taxes. And keep
in mind that the standard deduction is fluid. This at
this point is changing in twenty twenty six unless Congress
an x to extend what that standardized deduction is. So
don't be complained in identifying potential ways to itemize. As
(33:05):
you said, if you have substantial medical expenses, somebody paying
for geriatric care, AIDS in home or something, you may
find it extremely advantageous to itemize rather than taking your
standard deduction.
Speaker 1 (33:19):
Here's another thing that I see people losing money on
over time, and this is taking social Security either too
soon or too late. This is a big deal, and
I think it's so interesting because you're paying into the
system for so many years and I think Steve, when
you flip it to the way that you talk about it,
which is, okay, how do you take the most advantage
of this and kind of poke Uncle Sam in the eye.
(33:41):
For a lot of people, it's not on the first
day that you can possibly claim social Security. You're not
getting the most out of the system often by taking
it that way. So understanding how it works and being
a little strategic about when you claim.
Speaker 5 (33:55):
Can make a huge difference, especially if you're earning income
and you decide to collect Social Security. Depending on your age,
you may get a reduced benefit. You also may have
to pay higher You may have to pay taxes on
more of your Social Security benefit. So that's something that
you need to be careful about. And that goes back
to tax diversification of future cash flows as well. So
(34:19):
another thing about finding a way to poke Uncle Sam
and the eye with stickiers is making sure that you
have the proper cost basis on shares of old mutual
funds or stocks. I've seen this for people that have
paper certificates and you know it's Hey, I inherited this.
It was my grandfather's I found it in my grandmother's house,
(34:40):
whatever that might be. You need to make sure that
you have the proper cost basis, including stock splits and
dividend reinvestments, because that's going to increase the cost basis,
which is what's used to calculate how much taxes you
actually owe when you sell those stocks.
Speaker 1 (34:55):
Yeah, understanding all of these things can go a long
way and keeping more money in your pocket and out
of Uncle Sam's here's the all Worth advice. Probably the
biggest mistake you can make it make is not hiring
a qualified tax professional who can help you make sure
that you are not making any of these mistakes.
Speaker 2 (35:12):
Coming up next, the art.
Speaker 1 (35:13):
Of binging and then bailing. We're talking about streaming services.
Speaker 2 (35:19):
Maybe how to take the most advantage of them.
Speaker 1 (35:21):
You're listening to Simply Money, presented by all Worth Financial
here in fifty five KRC the talk station. You're listening
to Simply Money and presented by all Worth Financial. I
mean me Wagner along with Steve Ruby. I've been doing
this show for long enough to remember we used to
talk a lot about cutting the cord, and that was
just people who were done with cable bills that were
(35:43):
just through the roof and said, you know what, I'm
going to make the system work for me.
Speaker 2 (35:47):
I'm getting rid of cable.
Speaker 1 (35:49):
And I'm going to get Netflix and we're just going
to watch Netflix instead, and I'm going to save all
kinds of money. Well, how that worked for you, Steve Ruby.
How many streaming services do you have now?
Speaker 3 (35:59):
Oh?
Speaker 5 (35:59):
Too, man, I have an eight year old daughter at home,
and you know, my wife, again being one of the
primary financial decision makers in the household. As we've discussed,
when there's a show on that my daughter wants to watch,
oftentimes my wife will just fold and say, whatever, let's
get it. And it's on a new streaming service, something
that we didn't already have. Let's pick that up, and
then rather than canceling it, now we have an extra
(36:21):
streaming service. And by the way, we did the math,
if you had all the streaming services out there, you'd
be spending about five hundred dollars a month right now,
can you imagine.
Speaker 2 (36:31):
And there are lots of people who have lots.
Speaker 1 (36:34):
Of streaming services, and so there is kind of a
new thing that you can do. And I would say
this with a one caveat being you can take full
advantage of some of these streaming services and kind of
work the system.
Speaker 2 (36:46):
If you are an organized person.
Speaker 1 (36:49):
This is called binge and bail and it means, Okay,
the new season of Handmaid's Tale is coming out on Hulu,
so I'm going to jump into Hulu.
Speaker 2 (36:58):
I'm going to binge water all of those.
Speaker 1 (37:01):
Shows within a month, and then I'm going to cancel
my subscription and wait for the next season to come out.
It's a lot to track, but if you can track it,
then you are not using or you're not paying for
every streaming service at the same time. Meanwhile, three of
those streaming services you haven't even watched in seven months.
Speaker 5 (37:18):
Yeah, so you have to be organized and disciplined if
I'm being honest here, Because in a perfect world, we
sit down, we make a list of all the services
we subscribe to, We look at the release dates of
the services or the shows that we like and that
we're going to watch, and we plan accordingly to binge
watch them, get it off, and then get it off
(37:39):
the payroll, you know, remove that expense from your life
by canceling it until that show comes back out realistically,
do you see yourself doing this?
Speaker 4 (37:52):
No?
Speaker 1 (37:52):
I don't, But I will also tell you that I
keep a lock on how many of these streaming services
we have, right Like my kids will still ask for
Disney sometimes and I'm like, no, like we did Disney,
then you guys wanted something else, and now we're onto
something else and we're not going to have all of them,
so I do put some parameters on this.
Speaker 2 (38:10):
There's also those some free streaming.
Speaker 1 (38:12):
Services that come with dare we say it, commercials. It's
funny how it's just like, oh, come in full circle here,
free v Pluto TV, which I've heard is good to be,
which I've watched before. And then also if you've got
a library card, you might get some free streaming services
out of that.
Speaker 5 (38:29):
And I think.
Speaker 1 (38:31):
Yeah, And I think the key here is taking a
really critical look at how much you're spending on streaming services.
It's probably more than you want to be paying. Thanks
for listening tonight. We hope we're going to tune in tomorrow.
We're talking about how to save a million dollars in
a four to one K You've been listening to simply
money presented by all Worth Financial here in fifty five KRC,
the talk station
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