Episode Transcript
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Speaker 1 (00:08):
Tonight, we've got the big piece of news that could
determine how aggressive the Federal Reserve will get with interst
rate cuts. You're listening to simply money percent of my
all with financially Memi Wagner along Wisty Ruby. That doesn't
even roll off my tongue interest right cuts because we've
been talking about hikes for so long. It's like my
brain doesn't do cuts. It doesn't even can't even wrap
(00:28):
itself around that.
Speaker 2 (00:30):
One of my favorite openings that we've ever had on
the show, because it's been years. It's been years, it
has and we're actually talking about interest rate cuts now.
Unless something absolutely dramatic happens in the next two weeks,
the Federal Reserve it's going to do something that hasn't
done in four years, and that's lower interest rates. Now,
(00:50):
we don't know that this will be on September eighteenth,
and we don't know at this point whether it's going
to go down a quarter of a point or a
half point. It's about a seventy percent chance that that
there's going to be a quarter point cut at this point.
Speaker 1 (01:02):
And there's a lot of data that the Federal Reserve
will continue to take in. I mean, and I've said
this during this entire process, reams and reams of data
the likes I would never ever want to see, I
think would fry my brain. And that's what they're trying
to process to figure out, Okay, what makes the most
sense moving forward, you know. And I think at the
top of that list, of course, will be the next
jobs reports, as well as the next round of inflation
(01:26):
data that's coming in. Both of those things coming in
over the next sort of week or so, you know.
And I think it's interesting because when it comes to
the jobs report, there are all kinds of, of course,
expectations out there. What economists are predicting. I don't give
them a lick of a second thought at this point
because they have been so off, so off lately that
I'm kind of holding my breath. And that job's report,
(01:48):
of course, will be this Friday. Be interesting to see
what comes out of that.
Speaker 2 (01:52):
Yeah, you bring up a good point, because this Friday economists, obviously,
they always have their thoughts about what will.
Speaker 1 (01:58):
Sure that's what they get gave, even if they're wrong.
Speaker 2 (02:01):
Yeah, I mean, they expect augusts unemployment rate to drop
from from four point three to four point two percent.
You know, they see that employers added about one hundred
and sixty five thousand jobs last month. Obviously this will
be an important piece of data. And a couple of
weeks ago we saw what happened with the job numbers too.
Speaker 1 (02:18):
Yeah, in fact, they went the other direction. It wasn't
what they were expecting. They were hundreds of thousands of
jobs off. It was just a huge miss. And as
the result of that, of course, the markets, you know,
freaked out. We saw a three percent drop, which isn't huge,
but keep in mind we haven't had volatility before that
point over the course of the last year. In several months, yeah,
(02:40):
of two percent or more, so we got kind of
got jolted awake, like, wait a second, we need to
be paying attention to that. Listen, we're coming up on
election season. I guess we're in election season now. Experience
more volatility. I think that's just going to be kind
of the price of admission. And just remind yourself, right,
if you're a long term and investor, this job's report,
(03:02):
the next piece of inflation data, what the Fed does,
who was elected in November, none of those things should matter.
If you've got a long term plan that is tailored
to your specific needs.
Speaker 2 (03:13):
Yeah. I think if you're a long term listener of
the show, you realize that we are not advocates of
timing the market, especially based on emotional decisions or short
term decisions. So you bring up some good points there,
And it's funny how economists, you know, their job is
to make these predictions, but what will happen? You know,
what they thought was it could have been Hurricane Barrel,
It could have been retooling at automobile factories. You know,
(03:35):
some thought it was job losses that focus on states
unaffected by the hurricane. What we will know is that
this week's unemployment rate would clarify whether or not that
increase was merely a blip or something. More So, more
data has become available so that they're going to get
some clarification on it. But nonetheless, whatever comes out. Again,
to tie back to what you said, you don't need
to make short term decisions, because had you of a
(03:56):
few weeks ago when the markets went down three percent
very quickly, they bounced back in a couple of days
and other all time highs again.
Speaker 1 (04:03):
Yeah, and if you have gotten out right on that
Monday August fifth, based on the fact that markets were
down and we saw eight times the normal amount of
activity in people's four O one K on that day.
I mean, people were just flocking to safety. Well, you know,
a couple of days later markets had rebounded and they
lost out on those best days gains, and it just gosh,
(04:26):
it just frustrates me so much. And you know, there
is a lot more data coming out yesterday. Markets you know,
responded to kind of some rough manufacturing data. You know,
manufacturing sector not doing so great. It kind of remains
in a recession. We're all over the place. This economy
is all over the place. But I think in most cases,
(04:47):
most data is showing we're still pretty strong. There are
some cracks in the foundation, yes, but is it a
house of cards that's getting ready to fall apart? I
don't think so.
Speaker 2 (04:57):
Yeah. I mean, one of the reasons to to decrease
rates at this point it would be to speed up manufacturing,
for example, in consumer spending, making it cheaper to borrow.
You know, ultimately we do need to prepare for rate cuts.
Speaker 1 (05:10):
Now.
Speaker 2 (05:11):
If you get extra cash laying around, you don't need
it as part of an emergency fund, you know, We're
going to talk about that a little bit later, maybe
maybe exploring some options there.
Speaker 1 (05:18):
CDs, you just need to simply money presented by all
Worth Financial Memi Wagner along with Steve Ruby as we
talk about what the FED might do in their next meeting.
This is later in September on the eighteenth. Pretty pretty
apparent that they are going to cut rates. Sound. I mean,
it's just still so weird to even say that. I'm
glad we're here, you know, I feel like, gosh, we've
(05:38):
maybe made it to the other side of this mountain.
Are they going to cut a quarter point half? A point?
That remains to be seen. I'll tell you, on a
personal level, on a main street perspective, what really kind
of worries me. It's the personal savings rate that most
Americans have. I was looking at some of this data
earlier today. So during the pandemic, the personal savings rate
(05:59):
reach north of thirty percent. I think it was thirty
two percent, and that just means of the money that
you're bringing home, how much of that are you actually saving? Right,
thirty two percent? Now, we knew that was not going
to be normal, you know, we knew that was not normal.
You couldn't spend money at that time. You had stimulus
money flooding your account. You couldn't spend money. But you know,
the average is somewhere north of eight percent. Right now,
(06:24):
we're seeing the personal savings rate at two point nine percent.
That does not give us a whole lot of breathing
room as consumers. And keep in mind, you know, seventy
percent of the US economy is what you and I
are spending. You know, if we get to the point
where we have no savings left, right, we're taking on
a ton of debt. You're not leaving yourselves a whole
lot of options at that point.
Speaker 2 (06:45):
Well, I mean, that's another argument for why there's a
seventy percent chance that the Fed's going to reduce interest
rates by two point two five percent, you know, the
other thirty percent being half a percent, you know, getting
the economy moving forward for those of us on Main
Street to make sure that we are increasing that that
savings rate and making sure that well the correction that
(07:05):
we are spending, because as you said, that makes up
seventy percent of GDP.
Speaker 1 (07:10):
Yeah, so just a lot for us to even digest here,
and certainly a lot for the Federal Reserve. And also,
you know, we just kind of ended earning season, and
this of all the data, to me, is really the
most important thing when it comes to your four when Kate,
what you care about is how strong are these US
companies that you are invested in, right, what are they
(07:31):
predicting about where they're going to go in the future.
And it was a great earning season. Your profit growth
came in at fourteen percent. Again, economists way off on
this one. They were predicting about eight point three percent.
And I think you could say, yeah, well, you've got Nvidia,
You've got all these other big companies. Even if you
stripped out the Magnificent seven, all other companies' profits still
(07:55):
nine percent higher over the past year. So that to me, right,
if you want to figure out what your flour O
one K is based on, it's based on corporate greed.
Are these companies going to continue to figure out a
way to make a profit? And one hundred percent they are.
And if you look at this earning season, I think
it paints a pretty good picture of where we could
(08:15):
be moving in the future. You didn't have a lot
of companies saying we think the sky is falling in
the fourth quarter of twenty twenty four. We are really
worried about this. We're holding back on research, we're holding
back on development. That's not what we're hearing. I would
say maybe one of the not so bright spots if
you're looking at one of those sort of big companies
(08:35):
that have been moving markets, in Vidia and their next
generation chip. You know, they had said, you know, this
is going to be the next great thing, and obviously
lots of eyes on Nvidia because of AI in how
much that chip contributes to that. Now they're saying, oh sweet,
just want to tell you that there are a little
a couple of issues and the production of these chips.
(08:55):
We're not going to go into details here, but we
don't have the best story to tell about these STIPs.
Speaker 2 (09:00):
Right, it's the next best thing. You're going to love it.
It's so fantastic.
Speaker 1 (09:04):
We don't ask any more questions.
Speaker 2 (09:06):
Yeah, it's going to perform five times better than our
current market leading chips. But we've run into some issues
with the son It's kind of funny the way the
cards fall with that. But you bring up some good points.
You know, corporate greed is really what drives our investments forwards. Yeah,
and and companies are are doing well, even if the
savings rate is down quite a bit to a very.
Speaker 1 (09:29):
Very low I'm going to say alarming alarming levels.
Speaker 2 (09:33):
Yes, yes, But again that's why the FED looks at
all this data and they analyze, and they look at
all the moving parts, and they make determinations about what
to do with interest rates. And we finally reached the
other side of the mountain where where interest rates are
going to begin to fall, you know, the economy. All
the numbers point towards positive figures, but that that's because
(09:54):
these companies are continuing to grow, which is good news
for those of us that are investing in our four
to one ks and and more importantly, not making emotional,
knee jerk reaction decisions based on some volatility that might
happen during let's say an election year for.
Speaker 1 (10:07):
Yeah, and I think you've got to think from a
personal standpoint, Okay, what does this mean to me? If
you haven't locked in you know, money and a high
yield savings account, right that emergency fund that's sitting on
the sidelines, please look at that, you probably have less
and less options. Definitely shop around there on the flip side, though,
maybe the real estate market we're gonna talk about this
later in the show, might be opening up for us
(10:28):
a little bit, right if you wouldn't assume that mortgage
rates might be coming down in the near future, so
there could be opportunities there as well as for anyone
who carries credit card debt, right you have been paying
far more on that debt. It's interesting though, because it's like,
these rates go up really quickly, but some of these
things that aren't in favor of the consumer tend to
fall a lot more slowly. You know, it might be
(10:49):
a while before your credit card company is like, oh,
we're going to go from twenty three percent to eighteen
percent or wherever they end up landing on these things.
You know, don't hold your breath on that one. It's
definitely not gonna be tomorrow. Come me up next. We're
gonna help you figure out what to do right if
you do have a CD coming do right now, just
as the Fed is likely going to lower interest rates.
(11:10):
Plus a milestone for the generation on deck for retirement.
By the way, this is my generation. 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. I mean you Wagner along
with Steve Ruby. If you can't listen to our show
(11:31):
every night, you don't have to miss any of the
money advice we give out. We've got a daily podcast
for you. Just search Simply Money. It's right there on
the iHeart app or wherever you get your podcasts. Coming
up at six forty three, we're gonna educate you using
our favorite game, retirement fact or Fiction. A lot of
good stuff in there today for anyone who's coming up
on retiring anytime soon, or even is hoping to retire
(11:53):
in the next few decades, right, you're gonna want to
tune in for that. Speaking of retirement, my generation Gen
X is up next on deck. I think the oldest
and Gen X our early sixties at this point and
were the first generation that really didn't have pensions in
large numbers, where the Sandwich generation. We've taken care of
(12:15):
our parents and our the lot going on for Gen X,
and we've spent a lot of time on this show
talking about all the bad things, but now we've got
actually some good news to report.
Speaker 2 (12:24):
Yeah, so Fidelity Investment's latest quarterly report, they saw gen
X jump thirty percent in their IRA contributions over the
last year. They're also contributing more than they ever have
in the last five years. Average balance was about a
half million dollars in the second quarter, compared to just
slightly less the quarter before.
Speaker 1 (12:43):
Not only that, we've also talked about many times four
to one K millionaires, and we see those numbers kind
of shoot up two. In fact, the number of savers
with at least a million in or four oh one
k grow by about two and a half percent just
between the first and second quarters of the year. Irase
up as well for three b's, you know, those retirement accounts.
(13:05):
It's almost like we're finally getting it. We understand that
our company is probably not on the hook. They're not
going to make sure that we are good when it
comes to retirement, right, They're going to put some money
into that company match, and hopefully you're putting in at
least enough money to get that full company match right
that you have to do that. But it seems like
more and more of us, especially those who are again
(13:26):
on deck for retirement next are realizing, man, we've got
to prioritize these vehicles. Nothing makes me more concerned about
our future when people are spending a lot more time
planning their summer vacation than you are understanding how you're
invested in that four h n K, how much money
is in there, how the features of it, what your
(13:47):
company match is like. Please, if you don't know anything
about your four O one K, that's your homework to
figure out what you need to know in order to
maximize that retirement savings vehicle.
Speaker 2 (13:57):
I think this is a testament to people beginning to
pay to pay more attention to how they are expected
to save, which is the four to one K. You
talk about gen xers not having access to pensions, Very
very few do, so it's important to lean on your
four oh one K. And Fidelity shares this data because
they have forty eight million four to one k's and
around these and iris yees, so they have they have
(14:20):
some pretty good insight into some of these trends, and
Fidelity is attributing the milestone to consistently contributing and strong
market conditions. So you look back a few weeks ago
when the markets went down three percent, we've been spoiled
volatility happened. If you're one of those individuals that reacts
emotionally to something short term like that, then this could
throw a curveball in you being part of these good numbers.
Speaker 1 (14:43):
For gen xers, you know, they see timing is everything,
and we have also been huge proponents recently for Hey,
during this time when interest rates are higher, how can
you take advantage of it? Well, you know we've talked
about money markets, market accounts and how yield savings accounts
and locking in CD rates. Well, for those of you
who are paying attention and you locked in these higher
(15:04):
rates about a year ago, speaking of timing, your timing
may not be so great, right, These these CDs are
reaching maturity at a time when you're not going to
be able to lock in these same rates that you've
had over the past year.
Speaker 3 (15:17):
Yeah.
Speaker 2 (15:17):
There's a banking trade publication called Financial Brand and they
analyzed a bunch of FDIC data and they see that
about nine hundred and fifty billion dollars worth of term
deposits are going to be coming due by October. That
is a huge wave of money coming to term here.
And furthermore, another publication looked and they saw that over
(15:39):
the next twelve months, another two point five trillion dollars
worth of CDs coming to term.
Speaker 1 (15:45):
They're using the term and you know, you know, I
love so many of these terms. They're using the term maturity. Tsunami.
CDs have never sounded so exciting before, right as tsunami.
But essentially, they're saying, listen, there's so much money, so
many of us have flocked to the safety of these
kinds of investments. We hadn't been able to see rates
(16:06):
like what we have seen over the past year in
a really long time. You know, so smart to lock
them in for the past year. The problem is then
they're maturing, right, and we're talking about the fact that
the FED is just a couple of weeks away from
making their next decision about where rates are going to go.
As rates are going to go down, you're going to
be able to get less and less on these investments.
(16:26):
I will say, Steve, my one concern in all of
this with you being able to lock in these higher
rates is that maybe too many people flocked to safety.
Too many people pulled investments out of the stock market.
You know, if you're twenty thirty years away from retirement,
even fifteen, you still need that growth that's coming from
from the markets. And so you know, my concern is
(16:48):
a lot of people then went to the safety of
things like you know, these certificates of deposit, and now
as they're looking around, I'll be interested to see where
a lot of consumers go next.
Speaker 2 (16:59):
Yeah, I mean, when it matures, you got some choices,
you rolled into a new CD at the prevailing rate,
you move it to a CD maybe at another institution.
You shop around a little bit, find a better rate,
or you do something with the cash proceeds. The best
way to keep up with inflation over the long term
is stock. That's why we invest. It's not just to
get rich quick. It's to make sure that our money
doesn't lose purchasing power over the years. So you bring
(17:19):
up a good point because your cds' that's for shorter,
intermediate term cash positions, which we don't need to have
a ton of unless there's some kind of a goal
intermediate goal, you know, a year or two out, a
down payment on a home, paying for college for our
children or grandchildren, whatever that might be. That's what you
can use your CDs for. Maybe getting your emergency fund
to work a little bit. This isn't something that we
(17:41):
need to go overboard with because it's not going to
keep up with inflation over the long term.
Speaker 1 (17:47):
You also though mentioned shopping around, and I think that's
key here. It's like when you go back to the
beginning of the Federal Reserve, right on nation Central Bank
raising interest rates, it took a while for banks to
kind of catch up to that. What we found is
a lot of the bricks and mortar banks never did.
You had to shop around find an online bank that
was offering higher rates. You're probably not ever going to
(18:08):
be able, I shouldn't say never, but in the short
term going to be able to lock in CD rates
like what you're probably coming out of as that current
CD matures. But it is worth shopping around again. If
this is money that you need in the near term,
if this is money for retirement and you're not retiring
in the next year, I don't think that many belongs
(18:30):
in a CD.
Speaker 2 (18:31):
Yeah, the easy solution is to take some of that
cash and invest in long term in the stock market.
But what we're talking about today actually has a name.
It's called reinvestment risk. Because what that means is if
you have a bond or a fixed duration investment of
some kind like a CD, you can't get as high
as a rate when interest rates fall. And if you
have a twelve month CD that you bought into eleven
(18:55):
months ago, then then you may be in a situation
here where when this CD comes to term, interest rates
are going to fall and you're not gonna be able
to lock in that same kind of rate.
Speaker 1 (19:04):
You know, I think we cover so much of the
data and what the Federal Reserve is, you know, trying
to sort of absorb all this information, and I think
it all comes back to you got to control what
you can control, and this is one of the things
that you can control. Making sure that your short term money,
your mid term money, your long term money is invested
(19:25):
in the best way for you right understanding your financial plan,
shopping around, doing the research, trying to get the best
rate of return that you possibly can. That's where you
can make a difference. That's where you can have some control,
not over who's elected in November, or you know what
the housing market's going to look like, or what the
jobs report is going to be. Here's the all worth advice.
Shop around to ensure you're getting the most bang for
(19:48):
your buck. Do your research. Come here next, We're going
to get a beat on the housing market. Is it
time for buyers and sellers to pull the trigger? You're
listening to Simply Money, presented by all Worth Financial here
on fifty five KRC, the talk station you listened to
Simply Money and percent of me all Worth Financial. I
Meani Wagner along with Steve Ruby. We are just a
(20:11):
couple of weeks away right from the Federal Reserve, our
nation central Bank, likely lowering interest rates. What does that
mean if you have any interest in buying or selling
your home this year? Joining us of course as our
real estate expert Michelle Sloane. You can catch her right
here on fifty five KRC every Sunday her show, Sloan
sells homes as well as the owner of Remax Time Michelle,
(20:33):
any changes any, I know there's probably a lot of
anticipation in the real estate market.
Speaker 3 (20:38):
There really is.
Speaker 4 (20:40):
And so for the fifth week in a row, mortgage
rates have gone down. But you'd like to think five
weeks in a row, you know, we would be in
that five percent territory, but we're not. We're just under
six and a half percent, so six point four something
like that depending on your credit score, the amount of
(21:02):
money you're putting down on a loan, it is.
Speaker 3 (21:05):
It's it's just hovering.
Speaker 4 (21:08):
And we can say that mortgage rates have fallen five
weeks in a row, but boy, they haven't fallen a
lot each and every week.
Speaker 3 (21:17):
It's just like little bits.
Speaker 2 (21:19):
There's a caveat there really is.
Speaker 4 (21:23):
And home buyers, I think, are also very slow to
react as these rates just are being really slow and
they're creeping along. It feels like Halloween, right, It's just
everybody's creeping along. There aren't as many buyers that are
ready to just jump right in and get involved because
(21:44):
so many people have been burned. There are still pretty
much little inventory in the Cincinnati market. I will say though,
that in the higher price ranges over five hundred thousand dollars,
the homes are very slow to sell, and we are
seeing homes on the market for thirty sixty ninety days.
Speaker 3 (22:09):
And this is something we have not seen for quite
a long time.
Speaker 1 (22:14):
You know.
Speaker 3 (22:14):
We in the past couple of months or the past couple.
Speaker 4 (22:17):
Of years, even the high end, the low end, everything
was selling lightning fast, and now things are really slowing down.
And I think there's a lot of reasons for it,
but like you said, there's a lot of skepticism in
the minds of most Americans with the election and just
(22:37):
their financial situation in general.
Speaker 1 (22:40):
Right which, when we think about it, the normal sort
of pattern of the real estate market is things generally
do slow down in the fall, you know, as we
head into the winter. But if rates are starting to
fall at this time, do you expect an uptick or
do you think a lot of people will stay on
the sidelines and maybe jump back in next spring.
Speaker 3 (22:57):
I think yes, I agree with you.
Speaker 4 (23:00):
I think that most buyers are still going to be
very cautious even if the rates go down to maybe
a five percent, and a lot of us in the
industry feel like that's going to be a marker where
we're going to see some significant increase in people actually
jumping in, but a lot of sellers right now. It's
(23:23):
interesting because I'm getting a lot of phone calls from
sellers and they're like, if I list my house now,
is it going to sell really fast? And am I
going to get that highest price that we saw earlier
this year? And quite honestly, my answer has to be
a little bit like, well, you know, we don't know
(23:44):
what's going to happen, because we are seeing home stay
on the market a little bit longer, and maybe it
is wise to wait until spring. But then again, we
have no idea what spring looks like. So I always
tell people, if you are ready to sell today, you
have a place to move to put the house on
the market. If you don't have to sell, and the
(24:07):
prices start to come down to a point where you
don't want to sell for that price.
Speaker 3 (24:12):
You don't have to sell, or maybe you do again.
Speaker 4 (24:16):
It's all personal, and it all really depends on what
your situation is, and so you know whether or not
you do it now, whether or not you wait.
Speaker 3 (24:26):
It's very personal. And buyers are doing the same thing.
Speaker 1 (24:29):
You know.
Speaker 4 (24:29):
Maybe they're thinking, well, if the rates go down to
five and I've saved enough money, then I'm going to
start looking again. But I don't want to waste my time.
So everybody is just a little hesitant.
Speaker 2 (24:42):
I think, is this causing people to stay in their
homes for longer at this point? Would you say a.
Speaker 3 (24:47):
Thousand percent yes.
Speaker 4 (24:48):
When I got into the industry twenty years ago, when
I became a real estate agent twenty years ago, people
were moving every three to five years. Now we're every
eight to ten years, and it is not uncommon for
me to see people who've been in their homes for
twenty years or more. And that is definitely and that's
(25:11):
really one of the main reasons why we have so
little inventory because people just aren't moving, and you know,
the price of everything has gone up, so it's it's
a hesitant market as everybody's being very very cautious.
Speaker 1 (25:25):
Okay, so we're talking about that caution, Michelle, for people
who are thinking, Okay, I'm going to wait and see
what happens with the fat I'm going to wait till
these mortgage rates come down. I'm thinking about putting my
house in the market in the spring. Are their upgrades
or things that they could be looking at and doing
over the course of this winter to get themselves ready.
Speaker 4 (25:45):
Yes, yes, yes, And I say that really emphatically because
over the last few years, a lot of sellers haven't
had to do any of that prep the house prep
selling quickly, weather.
Speaker 1 (25:56):
On the market, and you're going to get ten offers
in the next three.
Speaker 4 (25:59):
Hours, right it, And they're going to be good offers,
They're going to be high offers. Today buyers are being
very particular and they're like, well, you know this needs paint,
this needs new carpet, We need to do this, this,
and this. Buyers want move in ready, so sellers, you
(26:19):
have to And I beg sometimes I feel like I
am begging constantly to please listen to the real estate
agent who has the experience and the knowledge. It's like, yes,
when I tell you you have to take all of
those personal pictures off the walls, and when you have
four hundred nail holes, yes you have a patch and
paint that wall, if not the entire home. And so
(26:43):
most people are like, but that's going to cost me
thousands of dollars.
Speaker 3 (26:45):
I don't want to do that.
Speaker 4 (26:47):
I totally understand, but in order to get the highest price,
you really do need to go back to prepping your home.
Speaker 2 (26:55):
Anything else that you would recommend at this point for
those that are waiting for rates to fall and you
know that they know they want to move maybe in
the spring, outside of painting and carpet, anything that you
would recommend that people do well.
Speaker 4 (27:08):
I do think it's really smart to go ahead and
choose your real estate agent sooner rather than later, start
a relationship.
Speaker 3 (27:16):
With someone and once you do that.
Speaker 4 (27:19):
So it's not uncommon for me to meet with potential
clients who aren't planning to sell their home today or
within the next month or so, but they're going to
be looking at selling next year. Now is an absolutely
perfect time to talk to a real estate agent and
ask them, Okay, what things should I be doing in
order to get the highest price possible when I do
(27:40):
put it on the market. So it's having that relationship
and knowing what you need to do and spending the
time doing it between now and next year.
Speaker 3 (27:50):
Decluttering is the biggest thing you can do.
Speaker 4 (27:53):
Cleaning, you know, getting those cobwebs out from a vaulted ceiling,
something you look at every day or you just look.
Speaker 3 (28:01):
Past every day.
Speaker 4 (28:03):
But having some help, getting some help doing those mundane
tasks that nobody really wants to do.
Speaker 3 (28:10):
But when you put your house on the market, you
really should.
Speaker 2 (28:12):
So move your spring cleaning up a few.
Speaker 4 (28:14):
Months, absolutely, because it takes time. If you've lived in
a house for twenty years, you have accumulated so much
stuff it's crazy. So yes, you can't get rid of
all of it in the course of a week or two.
It's going to take months. You know one one closet
at a time, one room at a time. It really
you have to really pace yourself. And if you need
(28:36):
some accountability, that's what I can do for you. That's
what your real estate agent is going to do for you.
They're going to give you the accountability to get done
what needs to be done before.
Speaker 1 (28:46):
Michelle will keep you on task without a doubt. Michelle
Great Insights is always into the current state of the
real estate market. Here in Cincinnati, you're listening to Simply
Money presentably all Worth Financial here on fifty five krs
the talk station. You're listening to Simply Money presented by
(29:06):
all Worth Financial. I mean you Wagner Long with Steve Ruby,
have a financial question you need a little help with. Well,
there's a red button you can click them while you're
listening to the show. It's right there on the iHeart
opp record your question. It's coming straight to us and
straight ahead. We talk about investing all the time, but
what are some ways to invest in yourself and your
future that may not have much to do with money.
(29:26):
We'll get into those. Okay, now it is time to
play everybody's favorite game, Retirement Factor Fiction. We have fun
with this but there's nothing fun about someone getting close
to retirement with bad information, and so that's why I
think this is really really an important thing to talk about.
Here's the first one Steve factor fiction. If you don't
use all of the money and a five to twenty
(29:48):
nine plan, you can move it to a wroth account. Now,
keep in mind five to twenty nine account is set
up for college and for education.
Speaker 2 (29:56):
Uh fact kind of. So just to clarify here that
this is a change with Secure at two point zero,
making five twenty nine leftover money more flexible than ever.
Historically you were simply changing the beneficiary. But as long
as some certain stipulations are met, such as the account
being opening open for X amount of years and the
beneficiary having earned income, then you can use money from
(30:21):
the five to twenty nine plan to fund that beneficiary's
ira roth IRA each year up to that limit.
Speaker 1 (30:27):
Yeah, so it has been there for like fifteen years.
There's a certain amount that can be moved into that
roth IRA. But I think the takeaway from this should
be a lot of people shined away from five to
twenty nine's for a while because it was like, what
if my kid, who is so brilliant gets straight a's.
You know, I know when they're two that they're going
to get a full ride scholarship, or they're going to
(30:47):
play this sport, and there wasn't the flexibility of okay,
then if they do get a full ride or don't
go to college, what can you do? A lot more
flexibility with these five to twenty nine plans?
Speaker 2 (30:57):
Now, yeah, they're wonderful. Fact or fiction behind on the
road to retirement, you need to be more aggressive with
your portfolio allocation.
Speaker 1 (31:07):
I'm gonna say fiction with a caveat here. If you
are behind, one of the best ways I think to
catch up is to look at that budget and figure
out ways, especially if you're fifty and older, you can
prioritize catch up contributions. However, I also know people who
have to be a little more aggressive in their investments
than maybe they would be other side otherwise. And I
(31:29):
also offset that as they get closer to retirement with
having more of an emergency fund. That way, if their
investments do happen to go down, and of course inevitably
that's going to happen right around the time someone retires,
you know, totally stressing them out, and that way we
turn off. You know, any distributions from those accounts live
off of that emergency fund. So this is not you know,
(31:50):
it's like if you're behind. And another thing I want
to say too is if someone is chasing returns the
closer they get to retirement, my concern is also they're
going to go after some really bad investments. And that's
where things like Ponzi schemes in in crazy stuff that
can really get you into trouble, can really come into
someone's picture. As like this makes sense to me, it
(32:11):
really never will. Here's the next one, fact or fiction.
You're gonna want a more robust emergency fund in retirement
compared to before retirement.
Speaker 2 (32:18):
I just gave you the Answerry, Yeah, didn't you kind
of answer that one. This one, this is an easy one.
Speaker 3 (32:23):
Yeah.
Speaker 2 (32:23):
Fact. Typically, most most financial planners, when you're in the
accumulation phase of retirement planning, they say three to six
months talked away three months if you're a double income household,
six months if you're a single income household. But when
you transition into retirement, you are using that emergency fund
to buy time, just like you said, against market fluctuations.
So I am an advocate if you want to have
(32:45):
one to two years of liquid cash on the sidelines
or maybe invested in you know, CDs or treasuries or
money markets, and then that's totally fine and I would
support that fact or fiction. It's okay to have more
than twenty percent of your portfolio invested in your company.
Speaker 3 (32:59):
Stock fiction fiction.
Speaker 1 (33:01):
This makes me really nervous. Yeah, so think about this.
Your current self is very reliant on your company because
it's called the paycheck, right, and that's what you're living
on now. And then when you put all your future
chips and how that company is doing, and we see
we have such great hometown teams, right, Procter and Gamble,
General Electric, Kroger, great great companies. Nothing against those companies
(33:22):
at all, but we have seen time and time again
like the Amazon factor, right, or something else coming from
out of left field and no one saw coming for
that particular company. I mean, think about General Electric right
rebounding now, but after several several tough years. And I
remember years ago meeting with people who had just retired
from GE and they just love that General Electric stock
(33:45):
and then it came back to bite them. So we say,
no more than ten percent of your entire portfolio should
be an individual company stocks. That's really kind of the
best way to protect yourself. It's just too risky, Yeah,
way too risky. Coming up next smart investing, and it
doesn't have anything to do with your portfolio. We'll talk
about that. You're listening to Simply Money, presented by all
(34:06):
Worth Financial here on fifty five KRC, the talk station.
You're listening to Simply Money presented by all Worth Financial.
I Meemi Wagner along with Steve Ruby. We spent a
lot of time on the show talking about money and investments,
but sometimes the investments really have nothing to do with
(34:26):
your four to oh one k We're talking about investing
specifically in yourself.
Speaker 2 (34:32):
Yeah. So finding balance, I think is important while we're
still working, while we're saving for retirement. Part of financial
planning is ensuring that you can live the lifestyle that
you want to today while maintaining that lifestyle in retirement.
So when it comes to work life balance, there's a
lot of studies out there that show that working long
hours doesn't always amount to more productivity. In fact, at
(34:54):
a certain point it becomes counterproductive. A study currently from
Stanford University discovered that after about fifty five hours of
work in a week that the benefits of working additional
hours are essentially null.
Speaker 1 (35:07):
At that point, I was feeling people who work like
eighty hours a week, they just wear it like a
badge of honor. You know. But I like this research
because it's showing, gosh, like, you could work your tail
off and never spend time with your family and never
go on vacations and never develop hobbies or anything like that,
and it's really not even helping you in the long term.
You're not really accomplishing anymore. Steve Sprovac, you know who
(35:29):
retired in December. One of the things that he always
said about his goal for work was to work the
least amount that he could while making the most amount
of money.
Speaker 2 (35:39):
He did a pretty good job of that, and he
did it brilliantly.
Speaker 1 (35:42):
He wasn't someone who took work home with him. He
was a warrior. He cared so much about his clients,
but he his nights and his weekends were for his
family and his eighty seven thousand hobbies. And he did
a great job throughout his career of having that work
life balance, investing in himself and also investing in his future.
(36:03):
You know, where he is now transitioning into retirement and
nothing's keeping that guy up at night.
Speaker 2 (36:07):
No, no, it's not, and he's happy. I mean, the
transition of retirement for him wasn't particularly difficult, and it
can be for many many people. You know, he did
a good job setting boundaries too, for example, so creating
some kind of a balance between fulfilling what you want
to do in life, between your own needs and priorities
and communicating them to others so that you're not spreading
(36:28):
yourself too thin. For example, I.
Speaker 1 (36:30):
Am terrible about this, always have that. I'm getting a
little bit better. But you know, my early career was
in media, and you weren't even allowed to have boundaries.
If there was breaking news you were going you could
be there for four nights with you know, not knowing
when you were going to get to come home. There
was no really setting boundaries at that point. And gosh,
for those of you who do have careers where you
(36:52):
can set some healthy boundaries, you know, not constantly checking
your email at ten o'clock and responding to people things
like that. I think also along with healthy boundaries healthy habits. Right,
can you you know, get up from your desk a
few times a day and just walk around, get some
steps in. I mean, we have a gym on our
complex at work. I got to tell you what we do.
(37:14):
You didn't even know it was there. I've never stepped.
Speaker 2 (37:17):
Foot in it, you know it without the paperwork that
would let me use it.
Speaker 1 (37:20):
Did you really?
Speaker 2 (37:21):
I did?
Speaker 4 (37:22):
Have you?
Speaker 1 (37:23):
Have you ever stepped foot in that gym?
Speaker 2 (37:25):
No comment? I did the paperwork? Amy, Great, you made.
Speaker 1 (37:32):
That investment in yourself. Maybe you should make the investment
into like bringing some clothes and maybe a little walking
on the treadmill or something.
Speaker 2 (37:40):
It's like, I can't work out in my suit, they
won't let me do that.
Speaker 1 (37:42):
I'd like to see you try it. I'll get some
video and post it all over all over social media.
Speaker 2 (37:47):
You know.
Speaker 1 (37:48):
I think a lot of this is, you know, just
looking at your life and your career with that healthy balance, right,
what are the habits that are going to keep you
healthy for work and for home? Know what your goals are,
and these are you know, personal life too. I actually
was meeting with someone recently who it's probably about five
years away from retirement, single, no kids. She is incredibly
(38:10):
worried about what she's going to do with herself. After
work because she doesn't know, she doesn't have any hobbies
or goals, and I'm really trying to challenge her. Her
challenge is not saving more money, it's figuring out what
life and retirement will actually look like.
Speaker 2 (38:24):
Yeah, we see that often where people tie a lot
of their identity and what their daily life looks like
simply to their work. So making sure that you're developing
some of these healthy habits outside of work will make
the transition to retirement much more effective when the time comes.
Speaker 1 (38:39):
Yeah, well we talk about investing, We're not just talking
about your money. Thanks for listening. Tune in tomorrow. We're
going to show you how you can make hundreds of
thousands of dollars by doing one thing with your 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 the big piece of news that could
determine how aggressive the Federal Reserve will get with interst
rate cuts. You're listening to simply money percent of my
all with financially Memi Wagner along Wisty Ruby. That doesn't
even roll off my tongue interest right cuts because we've
been talking about hikes for so long. It's like my
brain doesn't do cuts. It doesn't even can't even wrap
(00:28):
itself around that.
Speaker 2 (00:30):
One of my favorite openings that we've ever had on
the show, because it's been years. It's been years, it
has and we're actually talking about interest rate cuts now.
Unless something absolutely dramatic happens in the next two weeks,
the Federal Reserve it's going to do something that hasn't
done in four years, and that's lower interest rates. Now,
(00:50):
we don't know that this will be on September eighteenth,
and we don't know at this point whether it's going
to go down a quarter of a point or a
half point. It's about a seventy percent chance that that
there's going to be a quarter point cut at this point.
Speaker 1 (01:02):
And there's a lot of data that the Federal Reserve
will continue to take in. I mean, and I've said
this during this entire process, reams and reams of data
the likes I would never ever want to see, I
think would fry my brain. And that's what they're trying
to process to figure out, Okay, what makes the most
sense moving forward, you know. And I think at the
top of that list, of course, will be the next
jobs reports, as well as the next round of inflation
(01:26):
data that's coming in. Both of those things coming in
over the next sort of week or so, you know.
And I think it's interesting because when it comes to
the jobs report, there are all kinds of, of course,
expectations out there. What economists are predicting. I don't give
them a lick of a second thought at this point
because they have been so off, so off lately that
I'm kind of holding my breath. And that job's report,
(01:48):
of course, will be this Friday. Be interesting to see
what comes out of that.
Speaker 2 (01:52):
Yeah, you bring up a good point, because this Friday economists, obviously,
they always have their thoughts about what will.
Speaker 1 (01:58):
Sure that's what they get gave, even if they're wrong.
Speaker 2 (02:01):
Yeah, I mean, they expect augusts unemployment rate to drop
from from four point three to four point two percent.
You know, they see that employers added about one hundred
and sixty five thousand jobs last month. Obviously this will
be an important piece of data. And a couple of
weeks ago we saw what happened with the job numbers too.
Speaker 1 (02:18):
Yeah, in fact, they went the other direction. It wasn't
what they were expecting. They were hundreds of thousands of
jobs off. It was just a huge miss. And as
the result of that, of course, the markets, you know,
freaked out. We saw a three percent drop, which isn't huge,
but keep in mind we haven't had volatility before that
point over the course of the last year. In several months, yeah,
(02:40):
of two percent or more, so we got kind of
got jolted awake, like, wait a second, we need to
be paying attention to that. Listen, we're coming up on
election season. I guess we're in election season now. Experience
more volatility. I think that's just going to be kind
of the price of admission. And just remind yourself, right,
if you're a long term and investor, this job's report,
(03:02):
the next piece of inflation data, what the Fed does,
who was elected in November, none of those things should matter.
If you've got a long term plan that is tailored
to your specific needs.
Speaker 2 (03:13):
Yeah. I think if you're a long term listener of
the show, you realize that we are not advocates of
timing the market, especially based on emotional decisions or short
term decisions. So you bring up some good points there,
And it's funny how economists, you know, their job is
to make these predictions, but what will happen? You know,
what they thought was it could have been Hurricane Barrel,
It could have been retooling at automobile factories. You know,
(03:35):
some thought it was job losses that focus on states
unaffected by the hurricane. What we will know is that
this week's unemployment rate would clarify whether or not that
increase was merely a blip or something. More So, more
data has become available so that they're going to get
some clarification on it. But nonetheless, whatever comes out. Again,
to tie back to what you said, you don't need
to make short term decisions, because had you of a
(03:56):
few weeks ago when the markets went down three percent
very quickly, they bounced back in a couple of days
and other all time highs again.
Speaker 1 (04:03):
Yeah, and if you have gotten out right on that
Monday August fifth, based on the fact that markets were
down and we saw eight times the normal amount of
activity in people's four O one K on that day.
I mean, people were just flocking to safety. Well, you know,
a couple of days later markets had rebounded and they
lost out on those best days gains, and it just gosh,
(04:26):
it just frustrates me so much. And you know, there
is a lot more data coming out yesterday. Markets you know,
responded to kind of some rough manufacturing data. You know,
manufacturing sector not doing so great. It kind of remains
in a recession. We're all over the place. This economy
is all over the place. But I think in most cases,
(04:47):
most data is showing we're still pretty strong. There are
some cracks in the foundation, yes, but is it a
house of cards that's getting ready to fall apart? I
don't think so.
Speaker 2 (04:57):
Yeah. I mean, one of the reasons to to decrease
rates at this point it would be to speed up manufacturing,
for example, in consumer spending, making it cheaper to borrow.
You know, ultimately we do need to prepare for rate cuts.
Speaker 1 (05:10):
Now.
Speaker 2 (05:11):
If you get extra cash laying around, you don't need
it as part of an emergency fund, you know, We're
going to talk about that a little bit later, maybe
maybe exploring some options there.
Speaker 1 (05:18):
CDs, you just need to simply money presented by all
Worth Financial Memi Wagner along with Steve Ruby as we
talk about what the FED might do in their next meeting.
This is later in September on the eighteenth. Pretty pretty
apparent that they are going to cut rates. Sound. I mean,
it's just still so weird to even say that. I'm
glad we're here, you know, I feel like, gosh, we've
(05:38):
maybe made it to the other side of this mountain.
Are they going to cut a quarter point half? A point?
That remains to be seen. I'll tell you, on a
personal level, on a main street perspective, what really kind
of worries me. It's the personal savings rate that most
Americans have. I was looking at some of this data
earlier today. So during the pandemic, the personal savings rate
(05:59):
reach north of thirty percent. I think it was thirty
two percent, and that just means of the money that
you're bringing home, how much of that are you actually saving? Right,
thirty two percent? Now, we knew that was not going
to be normal, you know, we knew that was not normal.
You couldn't spend money at that time. You had stimulus
money flooding your account. You couldn't spend money. But you know,
the average is somewhere north of eight percent. Right now,
(06:24):
we're seeing the personal savings rate at two point nine percent.
That does not give us a whole lot of breathing
room as consumers. And keep in mind, you know, seventy
percent of the US economy is what you and I
are spending. You know, if we get to the point
where we have no savings left, right, we're taking on
a ton of debt. You're not leaving yourselves a whole
lot of options at that point.
Speaker 2 (06:45):
Well, I mean, that's another argument for why there's a
seventy percent chance that the Fed's going to reduce interest
rates by two point two five percent, you know, the
other thirty percent being half a percent, you know, getting
the economy moving forward for those of us on Main
Street to make sure that we are increasing that that
savings rate and making sure that well the correction that
(07:05):
we are spending, because as you said, that makes up
seventy percent of GDP.
Speaker 1 (07:10):
Yeah, so just a lot for us to even digest here,
and certainly a lot for the Federal Reserve. And also,
you know, we just kind of ended earning season, and
this of all the data, to me, is really the
most important thing when it comes to your four when Kate,
what you care about is how strong are these US
companies that you are invested in, right, what are they
(07:31):
predicting about where they're going to go in the future.
And it was a great earning season. Your profit growth
came in at fourteen percent. Again, economists way off on
this one. They were predicting about eight point three percent.
And I think you could say, yeah, well, you've got Nvidia,
You've got all these other big companies. Even if you
stripped out the Magnificent seven, all other companies' profits still
(07:55):
nine percent higher over the past year. So that to me, right,
if you want to figure out what your flour O
one K is based on, it's based on corporate greed.
Are these companies going to continue to figure out a
way to make a profit? And one hundred percent they are.
And if you look at this earning season, I think
it paints a pretty good picture of where we could
(08:15):
be moving in the future. You didn't have a lot
of companies saying we think the sky is falling in
the fourth quarter of twenty twenty four. We are really
worried about this. We're holding back on research, we're holding
back on development. That's not what we're hearing. I would
say maybe one of the not so bright spots if
you're looking at one of those sort of big companies
(08:35):
that have been moving markets, in Vidia and their next
generation chip. You know, they had said, you know, this
is going to be the next great thing, and obviously
lots of eyes on Nvidia because of AI in how
much that chip contributes to that. Now they're saying, oh sweet,
just want to tell you that there are a little
a couple of issues and the production of these chips.
(08:55):
We're not going to go into details here, but we
don't have the best story to tell about these STIPs.
Speaker 2 (09:00):
Right, it's the next best thing. You're going to love it.
It's so fantastic.
Speaker 1 (09:04):
We don't ask any more questions.
Speaker 2 (09:06):
Yeah, it's going to perform five times better than our
current market leading chips. But we've run into some issues
with the son It's kind of funny the way the
cards fall with that. But you bring up some good points.
You know, corporate greed is really what drives our investments forwards. Yeah,
and and companies are are doing well, even if the
savings rate is down quite a bit to a very.
Speaker 1 (09:29):
Very low I'm going to say alarming alarming levels.
Speaker 2 (09:33):
Yes, yes, But again that's why the FED looks at
all this data and they analyze, and they look at
all the moving parts, and they make determinations about what
to do with interest rates. And we finally reached the
other side of the mountain where where interest rates are
going to begin to fall, you know, the economy. All
the numbers point towards positive figures, but that that's because
(09:54):
these companies are continuing to grow, which is good news
for those of us that are investing in our four
to one ks and and more importantly, not making emotional,
knee jerk reaction decisions based on some volatility that might
happen during let's say an election year for.
Speaker 1 (10:07):
Yeah, and I think you've got to think from a
personal standpoint, Okay, what does this mean to me? If
you haven't locked in you know, money and a high
yield savings account, right that emergency fund that's sitting on
the sidelines, please look at that, you probably have less
and less options. Definitely shop around there on the flip side, though,
maybe the real estate market we're gonna talk about this
later in the show, might be opening up for us
(10:28):
a little bit, right if you wouldn't assume that mortgage
rates might be coming down in the near future, so
there could be opportunities there as well as for anyone
who carries credit card debt, right you have been paying
far more on that debt. It's interesting though, because it's like,
these rates go up really quickly, but some of these
things that aren't in favor of the consumer tend to
fall a lot more slowly. You know, it might be
(10:49):
a while before your credit card company is like, oh,
we're going to go from twenty three percent to eighteen
percent or wherever they end up landing on these things.
You know, don't hold your breath on that one. It's
definitely not gonna be tomorrow. Come me up next. We're
gonna help you figure out what to do right if
you do have a CD coming do right now, just
as the Fed is likely going to lower interest rates.
(11:10):
Plus a milestone for the generation on deck for retirement.
By the way, this is my generation. 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. I mean you Wagner along
with Steve Ruby. If you can't listen to our show
(11:31):
every night, you don't have to miss any of the
money advice we give out. We've got a daily podcast
for you. Just search Simply Money. It's right there on
the iHeart app or wherever you get your podcasts. Coming
up at six forty three, we're gonna educate you using
our favorite game, retirement fact or Fiction. A lot of
good stuff in there today for anyone who's coming up
on retiring anytime soon, or even is hoping to retire
(11:53):
in the next few decades, right, you're gonna want to
tune in for that. Speaking of retirement, my generation Gen
X is up next on deck. I think the oldest
and Gen X our early sixties at this point and
were the first generation that really didn't have pensions in
large numbers, where the Sandwich generation. We've taken care of
(12:15):
our parents and our the lot going on for Gen X,
and we've spent a lot of time on this show
talking about all the bad things, but now we've got
actually some good news to report.
Speaker 2 (12:24):
Yeah, so Fidelity Investment's latest quarterly report, they saw gen
X jump thirty percent in their IRA contributions over the
last year. They're also contributing more than they ever have
in the last five years. Average balance was about a
half million dollars in the second quarter, compared to just
slightly less the quarter before.
Speaker 1 (12:43):
Not only that, we've also talked about many times four
to one K millionaires, and we see those numbers kind
of shoot up two. In fact, the number of savers
with at least a million in or four oh one
k grow by about two and a half percent just
between the first and second quarters of the year. Irase
up as well for three b's, you know, those retirement accounts.
(13:05):
It's almost like we're finally getting it. We understand that
our company is probably not on the hook. They're not
going to make sure that we are good when it
comes to retirement, right, They're going to put some money
into that company match, and hopefully you're putting in at
least enough money to get that full company match right
that you have to do that. But it seems like
more and more of us, especially those who are again
(13:26):
on deck for retirement next are realizing, man, we've got
to prioritize these vehicles. Nothing makes me more concerned about
our future when people are spending a lot more time
planning their summer vacation than you are understanding how you're
invested in that four h n K, how much money
is in there, how the features of it, what your
(13:47):
company match is like. Please, if you don't know anything
about your four O one K, that's your homework to
figure out what you need to know in order to
maximize that retirement savings vehicle.
Speaker 2 (13:57):
I think this is a testament to people beginning to
pay to pay more attention to how they are expected
to save, which is the four to one K. You
talk about gen xers not having access to pensions, Very
very few do, so it's important to lean on your
four oh one K. And Fidelity shares this data because
they have forty eight million four to one k's and
around these and iris yees, so they have they have
(14:20):
some pretty good insight into some of these trends, and
Fidelity is attributing the milestone to consistently contributing and strong
market conditions. So you look back a few weeks ago
when the markets went down three percent, we've been spoiled
volatility happened. If you're one of those individuals that reacts
emotionally to something short term like that, then this could
throw a curveball in you being part of these good numbers.
Speaker 1 (14:43):
For gen xers, you know, they see timing is everything,
and we have also been huge proponents recently for Hey,
during this time when interest rates are higher, how can
you take advantage of it? Well, you know we've talked
about money markets, market accounts and how yield savings accounts
and locking in CD rates. Well, for those of you
who are paying attention and you locked in these higher
(15:04):
rates about a year ago, speaking of timing, your timing
may not be so great, right, These these CDs are
reaching maturity at a time when you're not going to
be able to lock in these same rates that you've
had over the past year.
Speaker 3 (15:17):
Yeah.
Speaker 2 (15:17):
There's a banking trade publication called Financial Brand and they
analyzed a bunch of FDIC data and they see that
about nine hundred and fifty billion dollars worth of term
deposits are going to be coming due by October. That
is a huge wave of money coming to term here.
And furthermore, another publication looked and they saw that over
(15:39):
the next twelve months, another two point five trillion dollars
worth of CDs coming to term.
Speaker 1 (15:45):
They're using the term and you know, you know, I
love so many of these terms. They're using the term maturity. Tsunami.
CDs have never sounded so exciting before, right as tsunami.
But essentially, they're saying, listen, there's so much money, so
many of us have flocked to the safety of these
kinds of investments. We hadn't been able to see rates
(16:06):
like what we have seen over the past year in
a really long time. You know, so smart to lock
them in for the past year. The problem is then
they're maturing, right, and we're talking about the fact that
the FED is just a couple of weeks away from
making their next decision about where rates are going to go.
As rates are going to go down, you're going to
be able to get less and less on these investments.
(16:26):
I will say, Steve, my one concern in all of
this with you being able to lock in these higher
rates is that maybe too many people flocked to safety.
Too many people pulled investments out of the stock market.
You know, if you're twenty thirty years away from retirement,
even fifteen, you still need that growth that's coming from
from the markets. And so you know, my concern is
(16:48):
a lot of people then went to the safety of
things like you know, these certificates of deposit, and now
as they're looking around, I'll be interested to see where
a lot of consumers go next.
Speaker 2 (16:59):
Yeah, I mean, when it matures, you got some choices,
you rolled into a new CD at the prevailing rate,
you move it to a CD maybe at another institution.
You shop around a little bit, find a better rate,
or you do something with the cash proceeds. The best
way to keep up with inflation over the long term
is stock. That's why we invest. It's not just to
get rich quick. It's to make sure that our money
doesn't lose purchasing power over the years. So you bring
(17:19):
up a good point because your cds' that's for shorter,
intermediate term cash positions, which we don't need to have
a ton of unless there's some kind of a goal
intermediate goal, you know, a year or two out, a
down payment on a home, paying for college for our
children or grandchildren, whatever that might be. That's what you
can use your CDs for. Maybe getting your emergency fund
to work a little bit. This isn't something that we
(17:41):
need to go overboard with because it's not going to
keep up with inflation over the long term.
Speaker 1 (17:47):
You also though mentioned shopping around, and I think that's
key here. It's like when you go back to the
beginning of the Federal Reserve, right on nation Central Bank
raising interest rates, it took a while for banks to
kind of catch up to that. What we found is
a lot of the bricks and mortar banks never did.
You had to shop around find an online bank that
was offering higher rates. You're probably not ever going to
(18:08):
be able, I shouldn't say never, but in the short
term going to be able to lock in CD rates
like what you're probably coming out of as that current
CD matures. But it is worth shopping around again. If
this is money that you need in the near term,
if this is money for retirement and you're not retiring
in the next year, I don't think that many belongs
(18:30):
in a CD.
Speaker 2 (18:31):
Yeah, the easy solution is to take some of that
cash and invest in long term in the stock market.
But what we're talking about today actually has a name.
It's called reinvestment risk. Because what that means is if
you have a bond or a fixed duration investment of
some kind like a CD, you can't get as high
as a rate when interest rates fall. And if you
have a twelve month CD that you bought into eleven
(18:55):
months ago, then then you may be in a situation
here where when this CD comes to term, interest rates
are going to fall and you're not gonna be able
to lock in that same kind of rate.
Speaker 1 (19:04):
You know, I think we cover so much of the
data and what the Federal Reserve is, you know, trying
to sort of absorb all this information, and I think
it all comes back to you got to control what
you can control, and this is one of the things
that you can control. Making sure that your short term money,
your mid term money, your long term money is invested
(19:25):
in the best way for you right understanding your financial plan,
shopping around, doing the research, trying to get the best
rate of return that you possibly can. That's where you
can make a difference. That's where you can have some control,
not over who's elected in November, or you know what
the housing market's going to look like, or what the
jobs report is going to be. Here's the all worth advice.
Shop around to ensure you're getting the most bang for
(19:48):
your buck. Do your research. Come here next, We're going
to get a beat on the housing market. Is it
time for buyers and sellers to pull the trigger? You're
listening to Simply Money, presented by all Worth Financial here
on fifty five KRC, the talk station you listened to
Simply Money and percent of me all Worth Financial. I
Meani Wagner along with Steve Ruby. We are just a
(20:11):
couple of weeks away right from the Federal Reserve, our
nation central Bank, likely lowering interest rates. What does that
mean if you have any interest in buying or selling
your home this year? Joining us of course as our
real estate expert Michelle Sloane. You can catch her right
here on fifty five KRC every Sunday her show, Sloan
sells homes as well as the owner of Remax Time Michelle,
(20:33):
any changes any, I know there's probably a lot of
anticipation in the real estate market.
Speaker 3 (20:38):
There really is.
Speaker 4 (20:40):
And so for the fifth week in a row, mortgage
rates have gone down. But you'd like to think five
weeks in a row, you know, we would be in
that five percent territory, but we're not. We're just under
six and a half percent, so six point four something
like that depending on your credit score, the amount of
(21:02):
money you're putting down on a loan, it is.
Speaker 3 (21:05):
It's it's just hovering.
Speaker 4 (21:08):
And we can say that mortgage rates have fallen five
weeks in a row, but boy, they haven't fallen a
lot each and every week.
Speaker 3 (21:17):
It's just like little bits.
Speaker 2 (21:19):
There's a caveat there really is.
Speaker 4 (21:23):
And home buyers, I think, are also very slow to
react as these rates just are being really slow and
they're creeping along. It feels like Halloween, right, It's just
everybody's creeping along. There aren't as many buyers that are
ready to just jump right in and get involved because
(21:44):
so many people have been burned. There are still pretty
much little inventory in the Cincinnati market. I will say though,
that in the higher price ranges over five hundred thousand dollars,
the homes are very slow to sell, and we are
seeing homes on the market for thirty sixty ninety days.
Speaker 3 (22:09):
And this is something we have not seen for quite
a long time.
Speaker 1 (22:14):
You know.
Speaker 3 (22:14):
We in the past couple of months or the past couple.
Speaker 4 (22:17):
Of years, even the high end, the low end, everything
was selling lightning fast, and now things are really slowing down.
And I think there's a lot of reasons for it,
but like you said, there's a lot of skepticism in
the minds of most Americans with the election and just
(22:37):
their financial situation in general.
Speaker 1 (22:40):
Right which, when we think about it, the normal sort
of pattern of the real estate market is things generally
do slow down in the fall, you know, as we
head into the winter. But if rates are starting to
fall at this time, do you expect an uptick or
do you think a lot of people will stay on
the sidelines and maybe jump back in next spring.
Speaker 3 (22:57):
I think yes, I agree with you.
Speaker 4 (23:00):
I think that most buyers are still going to be
very cautious even if the rates go down to maybe
a five percent, and a lot of us in the
industry feel like that's going to be a marker where
we're going to see some significant increase in people actually
jumping in, but a lot of sellers right now. It's
(23:23):
interesting because I'm getting a lot of phone calls from
sellers and they're like, if I list my house now,
is it going to sell really fast? And am I
going to get that highest price that we saw earlier
this year? And quite honestly, my answer has to be
a little bit like, well, you know, we don't know
(23:44):
what's going to happen, because we are seeing home stay
on the market a little bit longer, and maybe it
is wise to wait until spring. But then again, we
have no idea what spring looks like. So I always
tell people, if you are ready to sell today, you
have a place to move to put the house on
the market. If you don't have to sell, and the
(24:07):
prices start to come down to a point where you
don't want to sell for that price.
Speaker 3 (24:12):
You don't have to sell, or maybe you do again.
Speaker 4 (24:16):
It's all personal, and it all really depends on what
your situation is, and so you know whether or not
you do it now, whether or not you wait.
Speaker 3 (24:26):
It's very personal. And buyers are doing the same thing.
Speaker 1 (24:29):
You know.
Speaker 4 (24:29):
Maybe they're thinking, well, if the rates go down to
five and I've saved enough money, then I'm going to
start looking again. But I don't want to waste my time.
So everybody is just a little hesitant.
Speaker 2 (24:42):
I think, is this causing people to stay in their
homes for longer at this point? Would you say a.
Speaker 3 (24:47):
Thousand percent yes.
Speaker 4 (24:48):
When I got into the industry twenty years ago, when
I became a real estate agent twenty years ago, people
were moving every three to five years. Now we're every
eight to ten years, and it is not uncommon for
me to see people who've been in their homes for
twenty years or more. And that is definitely and that's
(25:11):
really one of the main reasons why we have so
little inventory because people just aren't moving, and you know,
the price of everything has gone up, so it's it's
a hesitant market as everybody's being very very cautious.
Speaker 1 (25:25):
Okay, so we're talking about that caution, Michelle, for people
who are thinking, Okay, I'm going to wait and see
what happens with the fat I'm going to wait till
these mortgage rates come down. I'm thinking about putting my
house in the market in the spring. Are their upgrades
or things that they could be looking at and doing
over the course of this winter to get themselves ready.
Speaker 4 (25:45):
Yes, yes, yes, And I say that really emphatically because
over the last few years, a lot of sellers haven't
had to do any of that prep the house prep
selling quickly, weather.
Speaker 1 (25:56):
On the market, and you're going to get ten offers
in the next three.
Speaker 4 (25:59):
Hours, right it, And they're going to be good offers,
They're going to be high offers. Today buyers are being
very particular and they're like, well, you know this needs paint,
this needs new carpet, We need to do this, this,
and this. Buyers want move in ready, so sellers, you
(26:19):
have to And I beg sometimes I feel like I
am begging constantly to please listen to the real estate
agent who has the experience and the knowledge. It's like, yes,
when I tell you you have to take all of
those personal pictures off the walls, and when you have
four hundred nail holes, yes you have a patch and
paint that wall, if not the entire home. And so
(26:43):
most people are like, but that's going to cost me
thousands of dollars.
Speaker 3 (26:45):
I don't want to do that.
Speaker 4 (26:47):
I totally understand, but in order to get the highest price,
you really do need to go back to prepping your home.
Speaker 2 (26:55):
Anything else that you would recommend at this point for
those that are waiting for rates to fall and you
know that they know they want to move maybe in
the spring, outside of painting and carpet, anything that you
would recommend that people do well.
Speaker 4 (27:08):
I do think it's really smart to go ahead and
choose your real estate agent sooner rather than later, start
a relationship.
Speaker 3 (27:16):
With someone and once you do that.
Speaker 4 (27:19):
So it's not uncommon for me to meet with potential
clients who aren't planning to sell their home today or
within the next month or so, but they're going to
be looking at selling next year. Now is an absolutely
perfect time to talk to a real estate agent and
ask them, Okay, what things should I be doing in
order to get the highest price possible when I do
(27:40):
put it on the market. So it's having that relationship
and knowing what you need to do and spending the
time doing it between now and next year.
Speaker 3 (27:50):
Decluttering is the biggest thing you can do.
Speaker 4 (27:53):
Cleaning, you know, getting those cobwebs out from a vaulted ceiling,
something you look at every day or you just look.
Speaker 3 (28:01):
Past every day.
Speaker 4 (28:03):
But having some help, getting some help doing those mundane
tasks that nobody really wants to do.
Speaker 3 (28:10):
But when you put your house on the market, you
really should.
Speaker 2 (28:12):
So move your spring cleaning up a few.
Speaker 4 (28:14):
Months, absolutely, because it takes time. If you've lived in
a house for twenty years, you have accumulated so much
stuff it's crazy. So yes, you can't get rid of
all of it in the course of a week or two.
It's going to take months. You know one one closet
at a time, one room at a time. It really
you have to really pace yourself. And if you need
(28:36):
some accountability, that's what I can do for you. That's
what your real estate agent is going to do for you.
They're going to give you the accountability to get done
what needs to be done before.
Speaker 1 (28:46):
Michelle will keep you on task without a doubt. Michelle
Great Insights is always into the current state of the
real estate market. Here in Cincinnati, you're listening to Simply
Money presentably all Worth Financial here on fifty five krs
the talk station. You're listening to Simply Money presented by
(29:06):
all Worth Financial. I mean you Wagner Long with Steve Ruby,
have a financial question you need a little help with. Well,
there's a red button you can click them while you're
listening to the show. It's right there on the iHeart
opp record your question. It's coming straight to us and
straight ahead. We talk about investing all the time, but
what are some ways to invest in yourself and your
future that may not have much to do with money.
(29:26):
We'll get into those. Okay, now it is time to
play everybody's favorite game, Retirement Factor Fiction. We have fun
with this but there's nothing fun about someone getting close
to retirement with bad information, and so that's why I
think this is really really an important thing to talk about.
Here's the first one Steve factor fiction. If you don't
use all of the money and a five to twenty
(29:48):
nine plan, you can move it to a wroth account. Now,
keep in mind five to twenty nine account is set
up for college and for education.
Speaker 2 (29:56):
Uh fact kind of. So just to clarify here that
this is a change with Secure at two point zero,
making five twenty nine leftover money more flexible than ever.
Historically you were simply changing the beneficiary. But as long
as some certain stipulations are met, such as the account
being opening open for X amount of years and the
beneficiary having earned income, then you can use money from
(30:21):
the five to twenty nine plan to fund that beneficiary's
ira roth IRA each year up to that limit.
Speaker 1 (30:27):
Yeah, so it has been there for like fifteen years.
There's a certain amount that can be moved into that
roth IRA. But I think the takeaway from this should
be a lot of people shined away from five to
twenty nine's for a while because it was like, what
if my kid, who is so brilliant gets straight a's.
You know, I know when they're two that they're going
to get a full ride scholarship, or they're going to
(30:47):
play this sport, and there wasn't the flexibility of okay,
then if they do get a full ride or don't
go to college, what can you do? A lot more
flexibility with these five to twenty nine plans?
Speaker 2 (30:57):
Now, yeah, they're wonderful. Fact or fiction behind on the
road to retirement, you need to be more aggressive with
your portfolio allocation.
Speaker 1 (31:07):
I'm gonna say fiction with a caveat here. If you
are behind, one of the best ways I think to
catch up is to look at that budget and figure
out ways, especially if you're fifty and older, you can
prioritize catch up contributions. However, I also know people who
have to be a little more aggressive in their investments
than maybe they would be other side otherwise. And I
(31:29):
also offset that as they get closer to retirement with
having more of an emergency fund. That way, if their
investments do happen to go down, and of course inevitably
that's going to happen right around the time someone retires,
you know, totally stressing them out, and that way we
turn off. You know, any distributions from those accounts live
off of that emergency fund. So this is not you know,
(31:50):
it's like if you're behind. And another thing I want
to say too is if someone is chasing returns the
closer they get to retirement, my concern is also they're
going to go after some really bad investments. And that's
where things like Ponzi schemes in in crazy stuff that
can really get you into trouble, can really come into
someone's picture. As like this makes sense to me, it
(32:11):
really never will. Here's the next one, fact or fiction.
You're gonna want a more robust emergency fund in retirement
compared to before retirement.
Speaker 2 (32:18):
I just gave you the Answerry, Yeah, didn't you kind
of answer that one. This one, this is an easy one.
Speaker 3 (32:23):
Yeah.
Speaker 2 (32:23):
Fact. Typically, most most financial planners, when you're in the
accumulation phase of retirement planning, they say three to six
months talked away three months if you're a double income household,
six months if you're a single income household. But when
you transition into retirement, you are using that emergency fund
to buy time, just like you said, against market fluctuations.
So I am an advocate if you want to have
(32:45):
one to two years of liquid cash on the sidelines
or maybe invested in you know, CDs or treasuries or
money markets, and then that's totally fine and I would
support that fact or fiction. It's okay to have more
than twenty percent of your portfolio invested in your company.
Speaker 3 (32:59):
Stock fiction fiction.
Speaker 1 (33:01):
This makes me really nervous. Yeah, so think about this.
Your current self is very reliant on your company because
it's called the paycheck, right, and that's what you're living
on now. And then when you put all your future
chips and how that company is doing, and we see
we have such great hometown teams, right, Procter and Gamble,
General Electric, Kroger, great great companies. Nothing against those companies
(33:22):
at all, but we have seen time and time again
like the Amazon factor, right, or something else coming from
out of left field and no one saw coming for
that particular company. I mean, think about General Electric right
rebounding now, but after several several tough years. And I
remember years ago meeting with people who had just retired
from GE and they just love that General Electric stock
(33:45):
and then it came back to bite them. So we say,
no more than ten percent of your entire portfolio should
be an individual company stocks. That's really kind of the
best way to protect yourself. It's just too risky, Yeah,
way too risky. Coming up next smart investing, and it
doesn't have anything to do with your portfolio. We'll talk
about that. You're listening to Simply Money, presented by all
(34:06):
Worth Financial here on fifty five KRC, the talk station.
You're listening to Simply Money presented by all Worth Financial.
I Meemi Wagner along with Steve Ruby. We spent a
lot of time on the show talking about money and investments,
but sometimes the investments really have nothing to do with
(34:26):
your four to oh one k We're talking about investing
specifically in yourself.
Speaker 2 (34:32):
Yeah. So finding balance, I think is important while we're
still working, while we're saving for retirement. Part of financial
planning is ensuring that you can live the lifestyle that
you want to today while maintaining that lifestyle in retirement.
So when it comes to work life balance, there's a
lot of studies out there that show that working long
hours doesn't always amount to more productivity. In fact, at
(34:54):
a certain point it becomes counterproductive. A study currently from
Stanford University discovered that after about fifty five hours of
work in a week that the benefits of working additional
hours are essentially null.
Speaker 1 (35:07):
At that point, I was feeling people who work like
eighty hours a week, they just wear it like a
badge of honor. You know. But I like this research
because it's showing, gosh, like, you could work your tail
off and never spend time with your family and never
go on vacations and never develop hobbies or anything like that,
and it's really not even helping you in the long term.
You're not really accomplishing anymore. Steve Sprovac, you know who
(35:29):
retired in December. One of the things that he always
said about his goal for work was to work the
least amount that he could while making the most amount
of money.
Speaker 2 (35:39):
He did a pretty good job of that, and he
did it brilliantly.
Speaker 1 (35:42):
He wasn't someone who took work home with him. He
was a warrior. He cared so much about his clients,
but he his nights and his weekends were for his
family and his eighty seven thousand hobbies. And he did
a great job throughout his career of having that work
life balance, investing in himself and also investing in his future.
(36:03):
You know, where he is now transitioning into retirement and
nothing's keeping that guy up at night.
Speaker 2 (36:07):
No, no, it's not, and he's happy. I mean, the
transition of retirement for him wasn't particularly difficult, and it
can be for many many people. You know, he did
a good job setting boundaries too, for example, so creating
some kind of a balance between fulfilling what you want
to do in life, between your own needs and priorities
and communicating them to others so that you're not spreading
(36:28):
yourself too thin. For example, I.
Speaker 1 (36:30):
Am terrible about this, always have that. I'm getting a
little bit better. But you know, my early career was
in media, and you weren't even allowed to have boundaries.
If there was breaking news you were going you could
be there for four nights with you know, not knowing
when you were going to get to come home. There
was no really setting boundaries at that point. And gosh,
for those of you who do have careers where you
(36:52):
can set some healthy boundaries, you know, not constantly checking
your email at ten o'clock and responding to people things
like that. I think also along with healthy boundaries healthy habits. Right,
can you you know, get up from your desk a
few times a day and just walk around, get some
steps in. I mean, we have a gym on our
complex at work. I got to tell you what we do.
(37:14):
You didn't even know it was there. I've never stepped.
Speaker 2 (37:17):
Foot in it, you know it without the paperwork that
would let me use it.
Speaker 1 (37:20):
Did you really?
Speaker 2 (37:21):
I did?
Speaker 4 (37:22):
Have you?
Speaker 1 (37:23):
Have you ever stepped foot in that gym?
Speaker 2 (37:25):
No comment? I did the paperwork? Amy, Great, you made.
Speaker 1 (37:32):
That investment in yourself. Maybe you should make the investment
into like bringing some clothes and maybe a little walking
on the treadmill or something.
Speaker 2 (37:40):
It's like, I can't work out in my suit, they
won't let me do that.
Speaker 1 (37:42):
I'd like to see you try it. I'll get some
video and post it all over all over social media.
Speaker 2 (37:47):
You know.
Speaker 1 (37:48):
I think a lot of this is, you know, just
looking at your life and your career with that healthy balance, right,
what are the habits that are going to keep you
healthy for work and for home? Know what your goals are,
and these are you know, personal life too. I actually
was meeting with someone recently who it's probably about five
years away from retirement, single, no kids. She is incredibly
(38:10):
worried about what she's going to do with herself. After
work because she doesn't know, she doesn't have any hobbies
or goals, and I'm really trying to challenge her. Her
challenge is not saving more money, it's figuring out what
life and retirement will actually look like.
Speaker 2 (38:24):
Yeah, we see that often where people tie a lot
of their identity and what their daily life looks like
simply to their work. So making sure that you're developing
some of these healthy habits outside of work will make
the transition to retirement much more effective when the time comes.
Speaker 1 (38:39):
Yeah, well we talk about investing, We're not just talking
about your money. Thanks for listening. Tune in tomorrow. We're
going to show you how you can make hundreds of
thousands of dollars by doing one thing with your 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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