Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
Today we're pulling back the curtain.
Speaker 2 (00:08):
The most common issues that we see were the first
time client and maybe what you can learn from that experience.
You're listening to simply money presented by all Worth Financial.
I mean me Wagner, along with Steve Ruby. Steve, you
can correct me if I'm wrong or you've experienced this
a different way. But what I find is most people,
at some point and their sort of adult lives, when
(00:29):
they're earning money, come to a point where there's an
issue and they're just not sure about it.
Speaker 1 (00:36):
They kind of know maybe they need some additional help, but.
Speaker 2 (00:38):
It takes that thing to get them over the hump
and make the call to say, okay, fine, I'm coming in.
And I think the reason why so many are so
reluctant about it is because it feels really uncomfortable to
get financially naked in front of someone.
Speaker 1 (00:56):
And that's what we're.
Speaker 2 (00:57):
Asking people to do, right, We're saying, okay, let us
see your wards and all the mistakes you've ever made
in front of you. And I think for a lot
of people, there's some shame, there's some guilt, there's.
Speaker 1 (01:08):
A feeling of like I should have never done this.
And someone's going to judge me for it.
Speaker 2 (01:12):
So if you've ever felt any of those things, like,
let's levels that you are not alone.
Speaker 3 (01:17):
Yeah, this is very natural if it's your first time
sitting down with a financial advisor. So just just some
ideas about what to expect. Now, First of all, there
are different types of advisors that exist in this world.
There's those that work for discount brokerage firms, there's those
that work for banks, there's those that work for registered
investment advisors. You know, keep in mind we've talked about
this before. If you're sitting down with a commissioned salesperson,
(01:40):
then the feeling of that meeting might be a little
bit different then if you're sitting down with a fiduciary
financial planner for a registered investment advisory firm. But at
the end of the day, you should expect to be
asked questions. As advisors, we need to know more about
a person's financial situation, their needs, their goals to really
understand if there's ways that we might be able to help.
(02:02):
So first things first, expect that you do need to
be vulnerable, you do need to answer some of these questions,
and that's really the first.
Speaker 2 (02:11):
Step One of the things that I like that you
do is to actually start by saying, do you mind
if I ask questions right, kind of just to get permission,
and Okay, let's get in the mindset that he's going
to start asking me some questions about money. I think
that most of us would like to think that our
emotions are not as tied up into our money and
(02:31):
our financial situation as they really are.
Speaker 1 (02:34):
I mean, there's been research done by this.
Speaker 2 (02:35):
There's more than twenty seven different emotions right that we
can categorize. And I think it's really tricky is you
can feel several emotions about the same thing at the
same time.
Speaker 1 (02:47):
Some of them can be positive, some of them can
be negative. Just a couple of weeks ago, when we
came into.
Speaker 2 (02:52):
The office, her husband had always handled their money. He
had passed away several years ago. She was managing things
on her own, and she knew she was kind.
Speaker 1 (03:02):
Of losing control.
Speaker 2 (03:03):
She knew there was a couple of major decisions that
need to be made with her money and she wanted
help on it. When she came in, she seemed super confident.
Speaker 4 (03:12):
You know.
Speaker 1 (03:13):
We talked through some things.
Speaker 2 (03:14):
But the interesting thing is when we left she said
that wasn't so bad.
Speaker 1 (03:18):
I was nervous wreck about this.
Speaker 2 (03:21):
She hit it well, but she was really nervous coming
in to have that initial conversation, and I think many are.
Speaker 1 (03:29):
And then once you kind.
Speaker 2 (03:30):
Of leave, it's like, oh, I actually feel much better.
I'm starting on a path to have a plan for.
Speaker 1 (03:36):
You know, what I'm going to do with my money.
Speaker 2 (03:38):
And maybe the questions weren't as probing or I wasn't
as embarrassed as I thought.
Speaker 1 (03:43):
So I would say, if you have any of these.
Speaker 2 (03:45):
Kind of emotions built up in your brain or you know,
holding you back from actually getting the kind of help
that could truly help you understand, it's likely not going
to be as bad as your thinking.
Speaker 3 (03:55):
Yeah, that's a great point, and to echo you, I
would say the two biggest emotions that I see when
people come in and sit down for the first time.
One is nervous, and some will admit to it, some
will hide it. The other is ashamed of mistakes that
they've made in the past and having somebody highlight those mistakes. Now,
there's ways around that. I mean, what's in the past
is what's in the past. Financial planning is about maximizing
(04:17):
the resources that you have today, maintaining the lifestyle that
you want to live while making sure that your money
lasts through retirement. So whatever you did in the past,
that is what it is. If we need to identify
ways to close gaps with different strategies or different advice,
that's fine. That's part of how you work with an advisor.
So I would say, you know, outside of emotions, which
(04:39):
is obviously tied to a lot of this, that there's
also more common financial issues that many folks that sit
down with an advisor for the first time are sharing.
And I would say some of those the highlight would
be not having a uniform investment strategy. And this is
caused by having accounts spread out all over the from
(05:00):
old four to one k's old iras, stock that you
have in this account, mutual funds that you have in
that account. That can create complications when it comes to
building that uniform investment strategy that gives you the level
of risk that you need to take to meet your
goals and that you can afford to take based on
your financial situation.
Speaker 2 (05:16):
You're listening to Simply Money presented by all Worth Financial.
I Meani Wagner along with Steve Ruby as we're kind
of pulling back the curtain for you today and say, hey,
if any part of you has thought recently that maybe
you need to go in talk to a fiduci ory
financial advisor, right, that's what we would recommend someone who's
putting your best interests ahead of theirs, and you have
concerns about that, let's just talk through what that could
(05:38):
look like. You don't even have to walk in the office,
and we can at least tell you what you can expect.
I think if we're going to talk about kind of
what we see as issues, there's two different perspectives. There's
one from the investor that's coming in, and what I've
found through the years too is there's usually some triggering event,
some kind of debt that they didn't expect, some kind
of an inheritance that's come through, some kind of question
(06:00):
about cleaning Social Security, and then yeah, oh oh, that's
a fantastic one, right, major life changes, losing someone, losing
a job, right, and it's like, wait, what do I
do now? So there's a reason why you end up
coming in to talk to someone. But then from our perspective,
once we start to dig into things.
Speaker 1 (06:21):
Uh, there's usually other issues.
Speaker 2 (06:23):
That we uncover that, by the way, many times can
be corrected, some more easily than others. You know, Steve,
you mentioned not having a uniform plan. You know, you
and I were talking to someone last week who thought
she was really conservative in her investments and then found
out one of those investments was ninety six percent in stock.
Speaker 1 (06:41):
She didn't know, you know.
Speaker 2 (06:43):
It's exactly right that moment, and she was like, wait,
what you know I was led to believe otherwise, you know,
and that that same investor had been had been pushed
by a commission someone selling a commission product to her
that that was the way to go. And she knew
that was isn't the way to go, but she wasn't
sure what the path forward was, right, And so we find.
Speaker 1 (07:05):
That there's often a trigger situation.
Speaker 2 (07:08):
That brings someone in, but it gives a fiduciary then
the ability to look through and say, okay, how can
we get you to where you need to be?
Speaker 3 (07:16):
Yeah, A good financial planner is going to help you navigate,
you know, buyers remorse, for example, if you've purchased products
or solutions, loaded funds, annuities, different healthcare, or different life
insurance products that is that you quite frankly maybe didn't need,
and some kind of an advisor in quotations that was
(07:37):
actually a commissioned salesperson got a commission to sell you
something that didn't necessarily fit in with your plan. And
that's that's where some of that shame comes in. Sometimes
people know that they have something they don't need, but
sitting down with a fiduciary financial planner can can make
you understand the path forwards.
Speaker 1 (07:54):
I want to make something else clear.
Speaker 2 (07:56):
When you're sitting down with this person, it's kind of
a mutual interview process, right.
Speaker 1 (08:01):
Both sides are saying, are we a good fit for
each other?
Speaker 2 (08:04):
And if any part of you just feels like, I
don't know, like I'm not clicking with this person, I
don't feel like they're really hearing me or getting me,
it is okay to leave and not to go back there.
Speaker 1 (08:15):
And I also think part of that.
Speaker 2 (08:17):
Initial conversation has to be a very direct question about
how that financial advisor gets paid. And if you feel
like they're not being clear, if they're tap dancing around
this one, I would also say you need to tap
dance your way out that door, right because this is
something they.
Speaker 1 (08:32):
Should be old truck clear on and again back to
the shame. There's so many people who.
Speaker 2 (08:36):
Feel like I'm not comfortable asking someone how I'm paying them.
Speaker 1 (08:40):
It's your money.
Speaker 3 (08:42):
You owe it to yourself. You know, I find joy
in asking that question. But maybe I'm a minority here,
but you do owe it to yourself. So, especially if
you're interviewing multiple advisors, what you should be You know,
you should do research. You should maybe ask around friends
and family who do they use, coworkers who do they use?
But you know, and somebody that you're comfortable with. But
(09:02):
make yourself comfortable, even if it takes a try or
to to ask how do I pay you? And how
are you paid? Because those are different questions. How do
I pay you might be percentage of assets under management
on assets being managed, It could be a flat fee.
How are they paid? It could be a salary, it
could be commissioned. And there's big differences in how an
(09:25):
advisor is paid will drive the behavior as far as
the solutions that they offer you.
Speaker 2 (09:30):
Yeah, it's like question one A in question one B, right,
what are you getting from me? And then how is
where you work paying you? And I think you have
to have that complete picture in order to make a
good decision whether this person fits for you.
Speaker 1 (09:41):
Okay, so what if you get through the whole, like
getting financially.
Speaker 2 (09:45):
Naked, you do feel some relief, there's a plan in place,
and you're going to kind of move forward. We want
to also let you know, Okay, what does that relationship
look like after that. One thing I would say is
you should hear from that person.
Speaker 1 (10:00):
In fact, at the beginning of the relationship, I would
say even more than you will down the road.
Speaker 2 (10:05):
Close family friend worked with what they thought was a
financial advisor. Never ever hear from that person, never unless
they're reaching out to take a distribution or something. And
it makes me want to pull my hair out because
it's just not the way this relationship would go. If
this is a fiduciary, you should expect to hear from them.
And Hey, there's going to be times when you get nervous,
(10:25):
whether it's the presidential election this year and what if
this person gets into the office, or.
Speaker 1 (10:29):
You know, volatility in the markets and all of a
sudden you're thinking, oh, should I change something.
Speaker 2 (10:34):
We saw that, you know, when COVID first started in
February and March of twenty twenty, every advisor in our
office was attached. It was like we had to surgically
remove the headsets from heads because there were so many
people calling in so concerned. And you know, the number
one goal should be that we don't let you make
financial decisions that you can't recover from.
Speaker 3 (10:56):
Yeah, protecting you from yourself, especially when it's an emotional decision.
And I do want to go back to, especially in
the first couple of years of a relationship, when you're
working with a fiduciary financial planner, it's not just your investments,
but it's your insurance, it is your tax filing and
tax planning. It is your state planning, it is your
retirement planning, it's distribution planning. So that's why you have
(11:18):
multiple meetings throughout the first couple of years to make
sure that you have that solid financial plan moving forwards
that will enable you to have insight into understanding what
you need to do for your plan to be successful,
and usually that's writing it out no matter what the
markets are doing. So finding that sweet spot with your
investments is very important.
Speaker 2 (11:37):
Yeah, I think this first couple years is like how
you build, how and when you build that financial foundation.
It can always be changed, but at least it gives
you a starting point in a building point. Here's the
all Worth advice. If you do get skittish right when
you see market volatility, when you have questions about what
to do with your money, well, the best thing you
can do, I think, is find someone that you can
(11:57):
trust to work with whose job is to help you
a lot the way by not letting you act on emotion.
Coming up next, we've got an overlooked retirement tool that
could also lower your tax bill. At the same time,
you're listening to Simply Money, presented by all Worth Financial.
Here in fifty five KRC the talk station, you're listening
(12:19):
to Simply Money, percented by all Worth Financial I Memi
Wagner along with Steve Ruby. If you can't listen to
our show every night, you do not have to miss
a thing. We've got a daily podcast where you just
search Simply Money. It's right there on the iHeart app
or wherever you turn to to get your podcasts. And
coming up at six forty three, we're taking questions about iras,
four one k's and social Security. These are some of
(12:40):
our most asked questions and we will ask the advisor.
You know, we all know, the earlier you start saving
for retirement, the faster you're going to get there. One
way to do that is, of course, to have that
paycheck that helps you save. And you know, the reality,
the stark reality of it is some jobs are going
to be better than others that help and you get there.
(13:01):
I am raising my hand right now because I was
a journalism major and I made sixteen thousand.
Speaker 1 (13:07):
Dollars my first year out of college.
Speaker 2 (13:09):
Now, I don't know, adjusted for inflation, maybe today that
would be twenty two thousand. It wasn't a lot of money.
Investing in a floor to one K really wasn't an
option for me.
Speaker 1 (13:18):
In fact, paying all of my bills.
Speaker 2 (13:20):
Was a really an option either barely an option for me.
So there's some new research out that shows, hey, there's
certain majors that you can look at in college that
are going to be better for these things than others.
Speaker 3 (13:33):
Yeah, New York Federal Reserve analysis revealed the worst paying
college majors five years after graduation. So this is kind
of setting the expectations moving forwards. And this is an
important conversation to have with children, grandchildren, those that are
younger than you and your life that are thinking about
majoring in liberal arts, performing arts, theology. Those three make
(13:54):
an annual income of around thirty eight thousand dollars per year.
A few others leisure, hospitality, history, fine art, psychology. They
hit that forty thousand dollar mark or last per year
after five years in that field.
Speaker 2 (14:08):
So one of my nephews actually was in leisure and
hospitality worked at a hotel downtown for several years.
Speaker 1 (14:14):
First of all, did not get paid much.
Speaker 2 (14:16):
Second of all, the hours were insane and he worked
so hard. I mean he did every, hope, like every
job on that hotel, from valleting to helping set up catering,
you know, to cleaning rooms, every single thing. And after
a few years of that, he took a higher paying
job at a completely different industry, and even though he
really liked the concept of you know, hospitality and helping
(14:39):
other people, it just didn't work for him long term. Right,
So I think there's one way to just understand if
you're looking at these majors the reality of what you're
going to have when you get.
Speaker 1 (14:48):
Out five years later, but.
Speaker 2 (14:50):
Also could these things be passions.
Speaker 1 (14:51):
That you can pursue on the side while you're.
Speaker 2 (14:54):
Actually getting a decent paycheck at the time, which, by
the way, if you're looking for that decent paycheck, well
then you need to look at something maybe in science, technology, engineering, math,
those stem fields, which unfortunately isn't where my brain goes.
Speaker 1 (15:10):
Those aren't my favorite things.
Speaker 2 (15:12):
But you know, the highest median income right after college
computer engineers eighty grand a year.
Speaker 3 (15:18):
That's right, and pey grows up up to one hundred
and thirty three thousand dollars by the time they reach
somewhere between the ages of thirty five and forty five
years old.
Speaker 2 (15:27):
Now we're not saying that every decision that you make
in life needs to be made through the lens of
the financial impact of it. But I don't think you
can underestimate how important it is, and maybe not necessarily
your major, because I think you can pivot away from
those things. I think some jobs are just looking for
a college education.
Speaker 1 (15:47):
But I would say, you know, and I've changed.
Speaker 2 (15:50):
You know, I went from journalism to then finance and
and have built a fantastic career and I love it.
I got into journalism because I liked helping people and
giving it information that makes a difference now I get
to do that when it comes to their money, right,
So I don't think you have to be laser focused
on maybe the normal career path for that major.
Speaker 1 (16:11):
This is going to make a big difference though.
Speaker 3 (16:12):
The challenge in this day and age, though, is the
rising cost of education. Yes, of continuing education. It is
through the roof more than it's ever been before, so
it is something to take into consideration. I'm all about
making sure you live a happy life doing the things
that you want to do, but you need to be
realistic about whether or not you can pay for that education,
especially if you're only making thirty five thousand dollars a year.
Speaker 1 (16:32):
Fantastic point.
Speaker 2 (16:33):
One of the things that we do on the show
every day, right, our goal is to make sure that
you are educated on every aspect of smart financial planning
making smart decisions with your money.
Speaker 1 (16:43):
And I think one that is.
Speaker 2 (16:44):
Probably the most overlooked there is taxes. This is not
tax preparation that you do you know around April. This
is like tax planning and it can be incredibly strategic
and these are ways that you can keep more money
in your pocket while also taking better steps to plan
for your future.
Speaker 3 (17:03):
Tax planning sounds terribly boring, but if you look at
it through the lens of finding ways to poke Uncle
Sam right in the eye with a stick, that sounds
a little bit more fun. And that's what we're doing
when it comes to tax planning. So one overlook strategy
is a spousal IRA. This could be wroth or traditional,
and this is for a non working spouse that has
no access to any other retirement vehicle. You are still
(17:26):
able to contribute on behalf of that spouse with your
earned income into that spousal IRA.
Speaker 1 (17:34):
This one catches people off guard.
Speaker 2 (17:35):
I mean my son yesterday, My fourteen year old was
just saying, hey, Mom, soon, can you help me with investing?
Which I thought was super cute, But I said, hey,
what you I'm happy to help you with investing. You
have to have a job to start to put money
into an IRA first, and that is true unless you're
married and you are filing taxes jointly with your spouse,
(17:59):
you don't both needed income. You can actually pull from
that working spouse's income to set up a separate IRA
for yourself, which means more money is going to saving
and investing and compounding for the future for both of you,
and that can make a lot of sense.
Speaker 3 (18:17):
And from the tax planning perspective as well. If it's
a traditional IRA, that contribution can be deductible, which means
that you're deferring paying taxes on those dollars until you
start taking distributions out from the account. Later. On the
flip side, you could do a roth spousal IRA, which
is not deductible, but those those earnings will be tax
(18:38):
free as long as the account owner is fifty nine
and a half at the time of distribution and it's
been open for five years.
Speaker 2 (18:46):
Yeah, well, and you can lower your taxable income right
by putting it into that traditional IRA.
Speaker 1 (18:51):
So there's lots of strategies to think through these things.
Speaker 2 (18:54):
So this is why I think it's just important to
know what your options are because it would easy be
easy to think, well, this is working and one of
us isn't. So only that person who's working has the
option to put money into these accounts.
Speaker 1 (19:05):
This is one of those kind of rare gifts from
the government.
Speaker 2 (19:08):
It's also rare that it's just common sense, right, how
can we we have a retirement crisis in this country?
So how can we help working families get there? And
get there well, so huge proponents of these. If you
have someone in your household who stays home, look into this.
This can make a lot of sense for you. Here's
the all Worth advice. Espousal Ira can be a great
(19:30):
retirement tool for some. Make sure you work with a
qualified financial pro who can provide you with the pros
and cons for your particular situation. Next, we're looking at
one of the most economical ways you can make a
major overhaul on your home. 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
(19:55):
all Worth Financial Ammi Wagner along with Steve Ruby. Okay,
so maybe in the next d or two you're thinking,
I'm gonna make that jump. I'm gonna put my house
on the market. So what can I be doing now?
What kind of updates would give me the most return
on my investment. I'm not going to tell you what
to do, but our real estate expert Michelle Sloan certainly
will because she knows all these things backwards and forwards.
(20:18):
Of course, you can catch a show right here on
fifty five KRC. Every Sunday. Sloan sells homes. She is
owner of Remax Time. She is a veteran in the
real estate market. So where do you start when you're
thinking about putting your home on the market.
Speaker 1 (20:30):
You know, it's funny.
Speaker 2 (20:31):
Because I love to look at Zillo and I love
to look at just all the different listings on MLS,
and I see certain pictures and I'm like, oh, that
house is so pretty, and it's because they're staged well
and they just look.
Speaker 1 (20:42):
So great and so clean.
Speaker 2 (20:44):
So how do you get to those kinds of staging decisions.
Speaker 4 (20:48):
Well, it doesn't come overnight for most people. Most people
the way that we live is not the way that
we want to present ourselves when we are selling our home.
So honestly, I tell people, let's start thinking about it.
If you're thinking about moving anytime in twenty twenty four,
maybe you should think about doing some neutralization inside of
(21:11):
your home, making sure that you're getting rid of as
much clutter as possible. But the most economical thing that
you can do is paint, because if you have not
painted inside of your home in the last twenty years,
I'm sure it's time. Because we live in our homes.
(21:31):
If you have kids or pets or anything like that.
We're all bouncing into the walls and kids are just
messy anyway, so the hallways get beat up really bad,
and the staircases and everything. So updating your home paint
is the most economical, but you want to be really
careful because some colors are a huge turnoff and we're
(21:53):
going to go through those. You ready.
Speaker 2 (21:56):
It's so funny that you say this. You know, I
just built a home. We've been in it a little
over two years, and I was like just coming out
of one of my kids rooms the other day and
I was like, oh my gosh, what did you like
run over this with a lawnmower? Like what did you
do to the like the you know, the wood at
the bottom.
Speaker 1 (22:11):
And I'm like, okay, and you know that.
Speaker 2 (22:13):
Our dog has scratched at every door. So even though
I think we have good neutral colors, it still looks
like we've lived there for a million years and we
chose gray. Is gray still the answer?
Speaker 4 (22:28):
No? You know, not really, gray is still fine. I mean,
I think you're gonna find that gray is going to
last a while. It's one of those colors that if
you chose a gray that's really stark and really clinical
and really harsh, like a you know, really hard gray
(22:51):
that's going to go out a lot sooner than something
in the gray's family that has a little bit of
browns undertones to it. So you know, that's that's funny
because it's it's definitely the question everyone is asking, is
gray in or out? And it's it's definitely on the
way out. If you're choosing flooring, don't choose a gray
(23:13):
floor I recommend again it's always something traditional, so a
lighter color would. I probably wouldn't go with an oak
because that tends to get really yellow. You know, you
want to do something, and there are so many flooring options.
If you get into flooring, forget about it. I mean,
there are so many options in luxury vinyl tile and
(23:33):
it's there's so many flooring options that are so they're
easy to take care of and they will last for many,
many years, and I think that's what people are looking for.
So if you're planning to do any updates when it
comes to the flooring or the pink colors, neutral is
best and neutral means your whites you're very light. If
(23:56):
you're going to go grayish, a little grayish warm neutrals, beiges.
So those are the kinds of colors that really are
going to stand the test of time. And so those
are the things now, the colors to avoid completely. Now, Amy,
your new house certainly doesn't have any red walls, right.
Speaker 2 (24:18):
No, But it's funny that you say that because the
accent walls. We don't have any accent walls in our house.
But I've heard of more people starting to do those again.
And usually people choose those kind of bold rights, like
a navy or a bright blue or a red, and
I've heard of people doing that a little more often.
So I'm kind of wondering what your take is on that.
Speaker 4 (24:40):
Yeah, interestingly, So the trends for twenty twenty four, the
most off putting colors the ones that people don't like
red fifty three percent. A lot of us in the
last twenty years maybe had a red dining room that
was all the rage for a while, or a red kitchen. Yeah,
(25:00):
that's because that's so out And when I walk into
some homes again, if they haven't painted in the last
twenty years and you have a red dining room or
a red kitchen, my eyes pop out of my head
and I say, okay, we really need to tone that down.
Some other colors that are out lime green. My daughter
(25:22):
had lime green in her bedroom and we said, okay,
that's We knew that that would only be a phase
and it would have to go at some point any yellows.
Yellows are just off putting if they're not done in
a very mild manner, in a way so bright bright yellow.
(25:43):
Forty percent of people say that that's a turnoff. You
don't want to paint your home a color that will
be a turnoff to the general public. Now, if you
love it and you want color in every single room,
you just have to understand that there's a really good
chance that your real estate agent is going to say, okay,
in your best interest to get the most for your home,
(26:04):
the most money when it comes to selling, you may
need to neutralize those colors. So something a little trendy
with a little bit of blue in it, or maybe
a little bit of blue green, triquoise. Just it's got
to be so subtle. And the accent walls are coming
back again. You're right, but those are easy if it's
(26:24):
just one wall.
Speaker 2 (26:25):
Right, Okay, Well, let me ask you about this I've
seen more and more people painting like cabinet or painting
islands in like a like a green or a blue.
What are the trends that you're seeing for kitchens? Is
that a thing or is that going out?
Speaker 4 (26:45):
Well, cabinet tree has been painted for the last ten
years or so. Most people that have had this typical
wood cabinets have painted them either white or gray. The
color to is black cabinets. Again, I'm a little bit
leery of going in the black category because again it's
(27:07):
so bold and it's not going to be everybody's taste.
But if you love it, you love it and you're
going to stay there for a while.
Speaker 3 (27:14):
Totally cool.
Speaker 4 (27:15):
But yeah, so as far as cabinetry goes, there are
so it's so much easier now because there's products available
so that you could do it yourself. But it's you know, again,
stay in the neutral family if because if you paint
your cabinets, you can't go back. You can't go back
to the wood. So think about if you're not real
(27:35):
handy or artistic, maybe you should put the paint stick away,
put it away.
Speaker 1 (27:42):
Rates, or hire someone.
Speaker 2 (27:44):
We have friends who just bought a house and they
said we're going to paint the cabinets ourselves. And I
said I have the number for someone and they said, no,
we've got this. A week later they texted and said,
give us the number. I thought, well, that's probably a
good call. One more question really quickly, Michelle, because we've
been talking about paint, and that's a that's a more
expensive thing that you can do in your home. But
what about appliances. What is the trend there? If someone's
(28:05):
thinking about putting their home on the market in the
next few years and updating appliances, where do you go.
Speaker 1 (28:10):
Is it still stainless Yeah.
Speaker 4 (28:12):
Stainless steel? Well, I think always dominate the kitchen appliance space.
But some of the old school colors are coming back.
It's so fun. The avocado cream color that you may
remember from the nineteen seventies is coming back. I think
that you know what it's. It's manufacturers, appliance manufacturers like, Okay,
(28:34):
what can we do to make people excited about appliances. Well,
let's do a whole line of different colors. We're seeing
scorched orange, avocado cream, a yellow pepper, a misty blue.
All of these are kitchen aid colors. It cracks me up.
That is not going to last. But if you love
it again, great, if it fits into your motif in
(28:56):
your space, fine, But if you're selling, if you buy
the avocado cream today five years from now, that is
going to look like puke. Well.
Speaker 2 (29:10):
And I think you've been very consistent with this, Michelle
and saying listen, if this is something that speaks to you,
do it, make the investment. If you're going to be
there for a long time. But if you are thinking
along the term lightlines of you know, I'm going to
sell this home in the next few years, then you
don't go with a super trendy thing, or you don't
go with the thing that speaks to you. You go
to something that's more traditional, something that's more long lasting.
(29:34):
And I think these are all great tips on how
to update your home, not only for yourself, but maybe
for the next person who's going to live there. That's
Michelle Sloan, a real estate expert from Mariemax. Time 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 perscented by all Worth Financial.
Speaker 1 (29:55):
I mean ne Wagner along.
Speaker 2 (29:56):
With Steve Ruby straight ahead reasons why your credit card
is not a good option when you should not pull
that credit card out. We'll get into that, and if
you've got a financial question you want us to answer,
there's a red button you can click on while you're
listening to the show.
Speaker 1 (30:10):
It's there on the iHeart app.
Speaker 2 (30:11):
Record your question. It's coming straight to us sin tonight.
Our first question Casey in Springdale. Hey, guys, my wife
and I want to buy a home, but since we're
a little short on the.
Speaker 1 (30:20):
Down payment, we'd have to pay PMI should we still
go through with the purchase?
Speaker 3 (30:25):
It's a good question. I mean, sure, as long as
you can afford payments and it doesn't hinder your ability
to save more in the future. I would say, especially
in this day and age where if you are going
to land in the home that you're going to be
in for a long time, and it's a difficult time
for some of us because there's not a lot of
sellers with interest rates where they are, I think that
(30:47):
it's worth exploring buying the home that makes you happy.
But again, as long as you can afford the payments
and it doesn't hinder your ability to save.
Speaker 1 (30:54):
I'm going to disagree with you.
Speaker 2 (30:56):
There are certain dirty words to me, and one of
those is PMI, and I feel like if you have
to pay PMI, it is a symptom that you probably
cannot afford that home. Because we would say the best
way to put yourself in the best financial shape to
buy a home is to have twenty percent to put down,
right absolutely, When you don't have twenty percent to put down,
that's when you're looking at PMI, which to me is
(31:17):
kind of a tax on stupidity.
Speaker 1 (31:18):
Okay, maybe not stupidity, but it's a.
Speaker 2 (31:22):
Tax on either being too impatient to have the money
or you know, not saving well. So I would say,
unless this is the dream home, you're going to stay
in it forever. There's no other options, right you Just
you can't wrap your head around passing up on this
house financially, I would say, you probably can't afford this
(31:45):
house and you should probably wait.
Speaker 3 (31:47):
Right my two cents, Yeah, I mean it's long as
it doesn't hinder your ability to save and you can
afford to payments. And that's a big if. So you know,
I'm I believe what I say, But you do bring
up good points you really do well.
Speaker 1 (32:01):
Thank you. Next, we've got Rob from.
Speaker 2 (32:03):
Edgewood, Thanks for taking my question. We've heard of a
social Security strategy called filing a restricted application to boost
our benefit. Is this something you recommend using?
Speaker 3 (32:15):
Uh, sure, if we could. I mean, unfortunately, this is
something that's ended in the end of twenty twenty three.
I mean the people born before nineteen fifty four. It
could be grandfathered into it, but the whole goal this
was to allow the qualifying spouse to collect spousal benefits,
only deferring their own benefit until they reach the age
of seventy to collect that later.
Speaker 2 (32:36):
We do a segment all the time that we call
retirement factor fiction. I could probably we could probably spend
the rest of our lives doing factor fiction on Social
Security questions. Because it's such a convoluted program. There's so
much misinformation out there. So I'm not surprised that you've
probably heard someone talking about filing a restricted application. It
was an option a few years ago, and it did
(32:58):
make sense for a lot of people. It's just not
an option now, so, you know, not something worth looking into,
but definitely it is worth looking into. Which filing, Which
way to file makes the most sense, and also when
the timing is best for you right. Getting social Security
decisions wrong can mean tens of thousands of dollars lost
(33:18):
over the course of the rest of your life, so
this is when you definitely have to get right. Next,
I've got a question from CS who lives in Claremont County.
Speaker 1 (33:27):
Hi.
Speaker 2 (33:27):
I'm sixty three currently claiming Social Security. I do also
have legal custody of my granddaughter who's five years old.
So if something were to happen to me, can she
get any of my Social Security?
Speaker 3 (33:38):
Yes? So as long as your granddaughter, as long as
you have custodian, and you have custody and you are
the legal guardian, then if something were to happen to you,
meaning if you pass away, then up to seventy five
percent of that benefit can continue for your grandchild until
they hit the age of eighteen, unless they are still
in high school or disabled in some situations, and those
(34:01):
payments can extend a little longer.
Speaker 2 (34:03):
All right. Next, we've got Nicholas Springfield Township. We've reworked
our budget, so we're going to max out our flour
owing ks and iras this year. Is there anything else
we can do to save for retirement. I love this question.
First of all, good for you, guys, Nicholas. You are
like official super Safer status and that's really impressive. I
would say a health savings account, and I would say
(34:25):
maybe that health savings account might even make more sense
than the IRA, and it's because it's triple tax advantage.
So you just have more flexibility with this account than
you do with others. And of course that all hinges
on whether or not a high deductible health care plan
actually makes sense for you.
Speaker 1 (34:41):
But if it does, I would.
Speaker 2 (34:42):
Say, next step on this, like super saving journey, do
the research, figure out if an HSA works for you,
and then make sure that money is invested and if
at all possible, pay for your healthcare expenses now out
of your emergency fund. Then you're just pushing that money
forward to retirement. You're going to have high health care
expenses in retirement, and if you don't, you take it
(35:04):
out and you pay standard tax rate on that and
it becomes like a de facto for one.
Speaker 1 (35:08):
Okay, so lots of reasons.
Speaker 3 (35:10):
This is only if you actually have a high deductible
health plan to be to be eligible for one. If not,
then we look at an after tax brokerage acount, a
tod account as you call it, or a joint account
between you and your spouse where there are no limits
on earnings and no limits on contributions. It's just not
tax deferred like your iras.
Speaker 2 (35:27):
Or for one case coming up next, why whipping out
that plastic for emergency payments isn't your best move. 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 present by all Worth Financial. I mean you
wag you're along with Steve Ruby. You know, we talk
often on the show about credit cards, right, there are
(35:50):
a tool if you use them well on certain purchases
and you pay off that balance every month, you can maximize.
Speaker 1 (35:56):
The points or rewards.
Speaker 2 (35:58):
So lots of reasons why we would say absolutely pull
out that plastic.
Speaker 1 (36:02):
Also, there are times when we would say keep that
plastic in your pocket.
Speaker 3 (36:06):
Yeah, I mean, at the end of the day, the
emergency fund is the most It's one of the most
important things about having a solid financial foundation, because if
we have to rely on a credit card to pay
for an emergency, you know, you can run into issues
you might not be able to cover every unexpected expense
with that credit card. A contract or may not even
take a credit card. Maybe more importantly, you know right
(36:28):
now and in the past, we've of course seen some
very high interest on credit cards, and if we're not
able to pay that off, then that can create an
issue where that debt just snowballs.
Speaker 2 (36:40):
I think so many times when we are faced with
a difficult decision, financial or not, it's like, what is
the lowest hanging fruit, what's the easiest thing I can do?
Then you go, you know, fast forward a week, a month,
a year down the road, and you're like, I wish
I had done X right. It's so clear to me
now that that was not the best option. And I
think that's often how this plays out. When it comes
to your credit card. It's right there, you know, you've
(37:02):
got twenty thousand or thirty thousand or whatever it is
available to you, You swipe it, you put it on there,
and then all of a sudden, a couple months down
the road, when you can't pay that balance, you're looking
at how much more you're paying and you're thinking, wait
a second, this is terrible. And this is where things
can really start to sort of snowball out of control,
you know, and get out of control. So this is
(37:23):
why we would say, hey, that emergency fund. It is
the cornerstone of your financial plan. It can feel kind
of lucky sometimes when that money is liquid, when it's
on the sidelines, you know, in times when the markets
are doing really well, and these are the times when
then you put it up against your credit card rate
that you would have to pay if you didn't have
that emergency fund, and you say, okay, I'm winning every
(37:44):
day of the week by having.
Speaker 3 (37:45):
This, absolutely, Yeah. An emergency fund buys you time against
not having to take on debt. It buys you the
opportunity to not have to tap into retirement accounts. Because
if we need to tap into a retirement account to
pay for a expenses because maybe we don't have the
credit to actually do that, then that can derail our
financial futures, especially with the opportunity cost of not having
(38:07):
that money growing towards your retirement.
Speaker 2 (38:11):
And you think about major emergencies like losing your job.
I mean, how high is your credit limit?
Speaker 1 (38:16):
You know, do you have enough credit available to.
Speaker 2 (38:18):
You that you can pay all of your bills for
months that can be an incredibly overwhelming situation. That's why
we say three to six months of those critical expenses
set aside makes so much sense.
Speaker 1 (38:28):
Thanks for listening tonight.
Speaker 2 (38:29):
You've been listening to Simply Money and percented by all
Worth Financial here on fifty five KRC, the talk station
Today we're pulling back the curtain.
Speaker 2 (00:08):
The most common issues that we see were the first
time client and maybe what you can learn from that experience.
You're listening to simply money presented by all Worth Financial.
I mean me Wagner, along with Steve Ruby. Steve, you
can correct me if I'm wrong or you've experienced this
a different way. But what I find is most people,
at some point and their sort of adult lives, when
(00:29):
they're earning money, come to a point where there's an
issue and they're just not sure about it.
Speaker 1 (00:36):
They kind of know maybe they need some additional help, but.
Speaker 2 (00:38):
It takes that thing to get them over the hump
and make the call to say, okay, fine, I'm coming in.
And I think the reason why so many are so
reluctant about it is because it feels really uncomfortable to
get financially naked in front of someone.
Speaker 1 (00:56):
And that's what we're.
Speaker 2 (00:57):
Asking people to do, right, We're saying, okay, let us
see your wards and all the mistakes you've ever made
in front of you. And I think for a lot
of people, there's some shame, there's some guilt, there's.
Speaker 1 (01:08):
A feeling of like I should have never done this.
And someone's going to judge me for it.
Speaker 2 (01:12):
So if you've ever felt any of those things, like,
let's levels that you are not alone.
Speaker 3 (01:17):
Yeah, this is very natural if it's your first time
sitting down with a financial advisor. So just just some
ideas about what to expect. Now, First of all, there
are different types of advisors that exist in this world.
There's those that work for discount brokerage firms, there's those
that work for banks, there's those that work for registered
investment advisors. You know, keep in mind we've talked about
this before. If you're sitting down with a commissioned salesperson,
(01:40):
then the feeling of that meeting might be a little
bit different then if you're sitting down with a fiduciary
financial planner for a registered investment advisory firm. But at
the end of the day, you should expect to be
asked questions. As advisors, we need to know more about
a person's financial situation, their needs, their goals to really
understand if there's ways that we might be able to help.
(02:02):
So first things first, expect that you do need to
be vulnerable, you do need to answer some of these questions,
and that's really the first.
Speaker 2 (02:11):
Step One of the things that I like that you
do is to actually start by saying, do you mind
if I ask questions right, kind of just to get permission,
and Okay, let's get in the mindset that he's going
to start asking me some questions about money. I think
that most of us would like to think that our
emotions are not as tied up into our money and
(02:31):
our financial situation as they really are.
Speaker 1 (02:34):
I mean, there's been research done by this.
Speaker 2 (02:35):
There's more than twenty seven different emotions right that we
can categorize. And I think it's really tricky is you
can feel several emotions about the same thing at the
same time.
Speaker 1 (02:47):
Some of them can be positive, some of them can
be negative. Just a couple of weeks ago, when we
came into.
Speaker 2 (02:52):
The office, her husband had always handled their money. He
had passed away several years ago. She was managing things
on her own, and she knew she was kind.
Speaker 1 (03:02):
Of losing control.
Speaker 2 (03:03):
She knew there was a couple of major decisions that
need to be made with her money and she wanted
help on it. When she came in, she seemed super confident.
Speaker 4 (03:12):
You know.
Speaker 1 (03:13):
We talked through some things.
Speaker 2 (03:14):
But the interesting thing is when we left she said
that wasn't so bad.
Speaker 1 (03:18):
I was nervous wreck about this.
Speaker 2 (03:21):
She hit it well, but she was really nervous coming
in to have that initial conversation, and I think many are.
Speaker 1 (03:29):
And then once you kind.
Speaker 2 (03:30):
Of leave, it's like, oh, I actually feel much better.
I'm starting on a path to have a plan for.
Speaker 1 (03:36):
You know, what I'm going to do with my money.
Speaker 2 (03:38):
And maybe the questions weren't as probing or I wasn't
as embarrassed as I thought.
Speaker 1 (03:43):
So I would say, if you have any of these.
Speaker 2 (03:45):
Kind of emotions built up in your brain or you know,
holding you back from actually getting the kind of help
that could truly help you understand, it's likely not going
to be as bad as your thinking.
Speaker 3 (03:55):
Yeah, that's a great point, and to echo you, I
would say the two biggest emotions that I see when
people come in and sit down for the first time.
One is nervous, and some will admit to it, some
will hide it. The other is ashamed of mistakes that
they've made in the past and having somebody highlight those mistakes. Now,
there's ways around that. I mean, what's in the past
is what's in the past. Financial planning is about maximizing
(04:17):
the resources that you have today, maintaining the lifestyle that
you want to live while making sure that your money
lasts through retirement. So whatever you did in the past,
that is what it is. If we need to identify
ways to close gaps with different strategies or different advice,
that's fine. That's part of how you work with an advisor.
So I would say, you know, outside of emotions, which
(04:39):
is obviously tied to a lot of this, that there's
also more common financial issues that many folks that sit
down with an advisor for the first time are sharing.
And I would say some of those the highlight would
be not having a uniform investment strategy. And this is
caused by having accounts spread out all over the from
(05:00):
old four to one k's old iras, stock that you
have in this account, mutual funds that you have in
that account. That can create complications when it comes to
building that uniform investment strategy that gives you the level
of risk that you need to take to meet your
goals and that you can afford to take based on
your financial situation.
Speaker 2 (05:16):
You're listening to Simply Money presented by all Worth Financial.
I Meani Wagner along with Steve Ruby as we're kind
of pulling back the curtain for you today and say, hey,
if any part of you has thought recently that maybe
you need to go in talk to a fiduci ory
financial advisor, right, that's what we would recommend someone who's
putting your best interests ahead of theirs, and you have
concerns about that, let's just talk through what that could
(05:38):
look like. You don't even have to walk in the office,
and we can at least tell you what you can expect.
I think if we're going to talk about kind of
what we see as issues, there's two different perspectives. There's
one from the investor that's coming in, and what I've
found through the years too is there's usually some triggering event,
some kind of debt that they didn't expect, some kind
of an inheritance that's come through, some kind of question
(06:00):
about cleaning Social Security, and then yeah, oh oh, that's
a fantastic one, right, major life changes, losing someone, losing
a job, right, and it's like, wait, what do I
do now? So there's a reason why you end up
coming in to talk to someone. But then from our perspective,
once we start to dig into things.
Speaker 1 (06:21):
Uh, there's usually other issues.
Speaker 2 (06:23):
That we uncover that, by the way, many times can
be corrected, some more easily than others. You know, Steve,
you mentioned not having a uniform plan. You know, you
and I were talking to someone last week who thought
she was really conservative in her investments and then found
out one of those investments was ninety six percent in stock.
Speaker 1 (06:41):
She didn't know, you know.
Speaker 2 (06:43):
It's exactly right that moment, and she was like, wait,
what you know I was led to believe otherwise, you know,
and that that same investor had been had been pushed
by a commission someone selling a commission product to her
that that was the way to go. And she knew
that was isn't the way to go, but she wasn't
sure what the path forward was, right, And so we find.
Speaker 1 (07:05):
That there's often a trigger situation.
Speaker 2 (07:08):
That brings someone in, but it gives a fiduciary then
the ability to look through and say, okay, how can
we get you to where you need to be?
Speaker 3 (07:16):
Yeah, A good financial planner is going to help you navigate,
you know, buyers remorse, for example, if you've purchased products
or solutions, loaded funds, annuities, different healthcare, or different life
insurance products that is that you quite frankly maybe didn't need,
and some kind of an advisor in quotations that was
(07:37):
actually a commissioned salesperson got a commission to sell you
something that didn't necessarily fit in with your plan. And
that's that's where some of that shame comes in. Sometimes
people know that they have something they don't need, but
sitting down with a fiduciary financial planner can can make
you understand the path forwards.
Speaker 1 (07:54):
I want to make something else clear.
Speaker 2 (07:56):
When you're sitting down with this person, it's kind of
a mutual interview process, right.
Speaker 1 (08:01):
Both sides are saying, are we a good fit for
each other?
Speaker 2 (08:04):
And if any part of you just feels like, I
don't know, like I'm not clicking with this person, I
don't feel like they're really hearing me or getting me,
it is okay to leave and not to go back there.
Speaker 1 (08:15):
And I also think part of that.
Speaker 2 (08:17):
Initial conversation has to be a very direct question about
how that financial advisor gets paid. And if you feel
like they're not being clear, if they're tap dancing around
this one, I would also say you need to tap
dance your way out that door, right because this is
something they.
Speaker 1 (08:32):
Should be old truck clear on and again back to
the shame. There's so many people who.
Speaker 2 (08:36):
Feel like I'm not comfortable asking someone how I'm paying them.
Speaker 1 (08:40):
It's your money.
Speaker 3 (08:42):
You owe it to yourself. You know, I find joy
in asking that question. But maybe I'm a minority here,
but you do owe it to yourself. So, especially if
you're interviewing multiple advisors, what you should be You know,
you should do research. You should maybe ask around friends
and family who do they use, coworkers who do they use?
But you know, and somebody that you're comfortable with. But
(09:02):
make yourself comfortable, even if it takes a try or
to to ask how do I pay you? And how
are you paid? Because those are different questions. How do
I pay you might be percentage of assets under management
on assets being managed, It could be a flat fee.
How are they paid? It could be a salary, it
could be commissioned. And there's big differences in how an
(09:25):
advisor is paid will drive the behavior as far as
the solutions that they offer you.
Speaker 2 (09:30):
Yeah, it's like question one A in question one B, right,
what are you getting from me? And then how is
where you work paying you? And I think you have
to have that complete picture in order to make a
good decision whether this person fits for you.
Speaker 1 (09:41):
Okay, so what if you get through the whole, like
getting financially.
Speaker 2 (09:45):
Naked, you do feel some relief, there's a plan in place,
and you're going to kind of move forward. We want
to also let you know, Okay, what does that relationship
look like after that. One thing I would say is
you should hear from that person.
Speaker 1 (10:00):
In fact, at the beginning of the relationship, I would
say even more than you will down the road.
Speaker 2 (10:05):
Close family friend worked with what they thought was a
financial advisor. Never ever hear from that person, never unless
they're reaching out to take a distribution or something. And
it makes me want to pull my hair out because
it's just not the way this relationship would go. If
this is a fiduciary, you should expect to hear from them.
And Hey, there's going to be times when you get nervous,
(10:25):
whether it's the presidential election this year and what if
this person gets into the office, or.
Speaker 1 (10:29):
You know, volatility in the markets and all of a
sudden you're thinking, oh, should I change something.
Speaker 2 (10:34):
We saw that, you know, when COVID first started in
February and March of twenty twenty, every advisor in our
office was attached. It was like we had to surgically
remove the headsets from heads because there were so many
people calling in so concerned. And you know, the number
one goal should be that we don't let you make
financial decisions that you can't recover from.
Speaker 3 (10:56):
Yeah, protecting you from yourself, especially when it's an emotional decision.
And I do want to go back to, especially in
the first couple of years of a relationship, when you're
working with a fiduciary financial planner, it's not just your investments,
but it's your insurance, it is your tax filing and
tax planning. It is your state planning, it is your
retirement planning, it's distribution planning. So that's why you have
(11:18):
multiple meetings throughout the first couple of years to make
sure that you have that solid financial plan moving forwards
that will enable you to have insight into understanding what
you need to do for your plan to be successful,
and usually that's writing it out no matter what the
markets are doing. So finding that sweet spot with your
investments is very important.
Speaker 2 (11:37):
Yeah, I think this first couple years is like how
you build, how and when you build that financial foundation.
It can always be changed, but at least it gives
you a starting point in a building point. Here's the
all Worth advice. If you do get skittish right when
you see market volatility, when you have questions about what
to do with your money, well, the best thing you
can do, I think, is find someone that you can
(11:57):
trust to work with whose job is to help you
a lot the way by not letting you act on emotion.
Coming up next, we've got an overlooked retirement tool that
could also lower your tax bill. At the same time,
you're listening to Simply Money, presented by all Worth Financial.
Here in fifty five KRC the talk station, you're listening
(12:19):
to Simply Money, percented by all Worth Financial I Memi
Wagner along with Steve Ruby. If you can't listen to
our show every night, you do not have to miss
a thing. We've got a daily podcast where you just
search Simply Money. It's right there on the iHeart app
or wherever you turn to to get your podcasts. And
coming up at six forty three, we're taking questions about iras,
four one k's and social Security. These are some of
(12:40):
our most asked questions and we will ask the advisor.
You know, we all know, the earlier you start saving
for retirement, the faster you're going to get there. One
way to do that is, of course, to have that
paycheck that helps you save. And you know, the reality,
the stark reality of it is some jobs are going
to be better than others that help and you get there.
(13:01):
I am raising my hand right now because I was
a journalism major and I made sixteen thousand.
Speaker 1 (13:07):
Dollars my first year out of college.
Speaker 2 (13:09):
Now, I don't know, adjusted for inflation, maybe today that
would be twenty two thousand. It wasn't a lot of money.
Investing in a floor to one K really wasn't an
option for me.
Speaker 1 (13:18):
In fact, paying all of my bills.
Speaker 2 (13:20):
Was a really an option either barely an option for me.
So there's some new research out that shows, hey, there's
certain majors that you can look at in college that
are going to be better for these things than others.
Speaker 3 (13:33):
Yeah, New York Federal Reserve analysis revealed the worst paying
college majors five years after graduation. So this is kind
of setting the expectations moving forwards. And this is an
important conversation to have with children, grandchildren, those that are
younger than you and your life that are thinking about
majoring in liberal arts, performing arts, theology. Those three make
(13:54):
an annual income of around thirty eight thousand dollars per year.
A few others leisure, hospitality, history, fine art, psychology. They
hit that forty thousand dollar mark or last per year
after five years in that field.
Speaker 2 (14:08):
So one of my nephews actually was in leisure and
hospitality worked at a hotel downtown for several years.
Speaker 1 (14:14):
First of all, did not get paid much.
Speaker 2 (14:16):
Second of all, the hours were insane and he worked
so hard. I mean he did every, hope, like every
job on that hotel, from valleting to helping set up catering,
you know, to cleaning rooms, every single thing. And after
a few years of that, he took a higher paying
job at a completely different industry, and even though he
really liked the concept of you know, hospitality and helping
(14:39):
other people, it just didn't work for him long term. Right,
So I think there's one way to just understand if
you're looking at these majors the reality of what you're
going to have when you get.
Speaker 1 (14:48):
Out five years later, but.
Speaker 2 (14:50):
Also could these things be passions.
Speaker 1 (14:51):
That you can pursue on the side while you're.
Speaker 2 (14:54):
Actually getting a decent paycheck at the time, which, by
the way, if you're looking for that decent paycheck, well
then you need to look at something maybe in science, technology, engineering, math,
those stem fields, which unfortunately isn't where my brain goes.
Speaker 1 (15:10):
Those aren't my favorite things.
Speaker 2 (15:12):
But you know, the highest median income right after college
computer engineers eighty grand a year.
Speaker 3 (15:18):
That's right, and pey grows up up to one hundred
and thirty three thousand dollars by the time they reach
somewhere between the ages of thirty five and forty five
years old.
Speaker 2 (15:27):
Now we're not saying that every decision that you make
in life needs to be made through the lens of
the financial impact of it. But I don't think you
can underestimate how important it is, and maybe not necessarily
your major, because I think you can pivot away from
those things. I think some jobs are just looking for
a college education.
Speaker 1 (15:47):
But I would say, you know, and I've changed.
Speaker 2 (15:50):
You know, I went from journalism to then finance and
and have built a fantastic career and I love it.
I got into journalism because I liked helping people and
giving it information that makes a difference now I get
to do that when it comes to their money, right,
So I don't think you have to be laser focused
on maybe the normal career path for that major.
Speaker 1 (16:11):
This is going to make a big difference though.
Speaker 3 (16:12):
The challenge in this day and age, though, is the
rising cost of education. Yes, of continuing education. It is
through the roof more than it's ever been before, so
it is something to take into consideration. I'm all about
making sure you live a happy life doing the things
that you want to do, but you need to be
realistic about whether or not you can pay for that education,
especially if you're only making thirty five thousand dollars a year.
Speaker 1 (16:32):
Fantastic point.
Speaker 2 (16:33):
One of the things that we do on the show
every day, right, our goal is to make sure that
you are educated on every aspect of smart financial planning
making smart decisions with your money.
Speaker 1 (16:43):
And I think one that is.
Speaker 2 (16:44):
Probably the most overlooked there is taxes. This is not
tax preparation that you do you know around April. This
is like tax planning and it can be incredibly strategic
and these are ways that you can keep more money
in your pocket while also taking better steps to plan
for your future.
Speaker 3 (17:03):
Tax planning sounds terribly boring, but if you look at
it through the lens of finding ways to poke Uncle
Sam right in the eye with a stick, that sounds
a little bit more fun. And that's what we're doing
when it comes to tax planning. So one overlook strategy
is a spousal IRA. This could be wroth or traditional,
and this is for a non working spouse that has
no access to any other retirement vehicle. You are still
(17:26):
able to contribute on behalf of that spouse with your
earned income into that spousal IRA.
Speaker 1 (17:34):
This one catches people off guard.
Speaker 2 (17:35):
I mean my son yesterday, My fourteen year old was
just saying, hey, Mom, soon, can you help me with investing?
Which I thought was super cute, But I said, hey,
what you I'm happy to help you with investing. You
have to have a job to start to put money
into an IRA first, and that is true unless you're
married and you are filing taxes jointly with your spouse,
(17:59):
you don't both needed income. You can actually pull from
that working spouse's income to set up a separate IRA
for yourself, which means more money is going to saving
and investing and compounding for the future for both of you,
and that can make a lot of sense.
Speaker 3 (18:17):
And from the tax planning perspective as well. If it's
a traditional IRA, that contribution can be deductible, which means
that you're deferring paying taxes on those dollars until you
start taking distributions out from the account. Later. On the
flip side, you could do a roth spousal IRA, which
is not deductible, but those those earnings will be tax
(18:38):
free as long as the account owner is fifty nine
and a half at the time of distribution and it's
been open for five years.
Speaker 2 (18:46):
Yeah, well, and you can lower your taxable income right
by putting it into that traditional IRA.
Speaker 1 (18:51):
So there's lots of strategies to think through these things.
Speaker 2 (18:54):
So this is why I think it's just important to
know what your options are because it would easy be
easy to think, well, this is working and one of
us isn't. So only that person who's working has the
option to put money into these accounts.
Speaker 1 (19:05):
This is one of those kind of rare gifts from
the government.
Speaker 2 (19:08):
It's also rare that it's just common sense, right, how
can we we have a retirement crisis in this country?
So how can we help working families get there? And
get there well, so huge proponents of these. If you
have someone in your household who stays home, look into this.
This can make a lot of sense for you. Here's
the all Worth advice. Espousal Ira can be a great
(19:30):
retirement tool for some. Make sure you work with a
qualified financial pro who can provide you with the pros
and cons for your particular situation. Next, we're looking at
one of the most economical ways you can make a
major overhaul on your home. 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
(19:55):
all Worth Financial Ammi Wagner along with Steve Ruby. Okay,
so maybe in the next d or two you're thinking,
I'm gonna make that jump. I'm gonna put my house
on the market. So what can I be doing now?
What kind of updates would give me the most return
on my investment. I'm not going to tell you what
to do, but our real estate expert Michelle Sloan certainly
will because she knows all these things backwards and forwards.
(20:18):
Of course, you can catch a show right here on
fifty five KRC. Every Sunday. Sloan sells homes. She is
owner of Remax Time. She is a veteran in the
real estate market. So where do you start when you're
thinking about putting your home on the market.
Speaker 1 (20:30):
You know, it's funny.
Speaker 2 (20:31):
Because I love to look at Zillo and I love
to look at just all the different listings on MLS,
and I see certain pictures and I'm like, oh, that
house is so pretty, and it's because they're staged well
and they just look.
Speaker 1 (20:42):
So great and so clean.
Speaker 2 (20:44):
So how do you get to those kinds of staging decisions.
Speaker 4 (20:48):
Well, it doesn't come overnight for most people. Most people
the way that we live is not the way that
we want to present ourselves when we are selling our home.
So honestly, I tell people, let's start thinking about it.
If you're thinking about moving anytime in twenty twenty four,
maybe you should think about doing some neutralization inside of
(21:11):
your home, making sure that you're getting rid of as
much clutter as possible. But the most economical thing that
you can do is paint, because if you have not
painted inside of your home in the last twenty years,
I'm sure it's time. Because we live in our homes.
(21:31):
If you have kids or pets or anything like that.
We're all bouncing into the walls and kids are just
messy anyway, so the hallways get beat up really bad,
and the staircases and everything. So updating your home paint
is the most economical, but you want to be really
careful because some colors are a huge turnoff and we're
(21:53):
going to go through those. You ready.
Speaker 2 (21:56):
It's so funny that you say this. You know, I
just built a home. We've been in it a little
over two years, and I was like just coming out
of one of my kids rooms the other day and
I was like, oh my gosh, what did you like
run over this with a lawnmower? Like what did you
do to the like the you know, the wood at
the bottom.
Speaker 1 (22:11):
And I'm like, okay, and you know that.
Speaker 2 (22:13):
Our dog has scratched at every door. So even though
I think we have good neutral colors, it still looks
like we've lived there for a million years and we
chose gray. Is gray still the answer?
Speaker 4 (22:28):
No? You know, not really, gray is still fine. I mean,
I think you're gonna find that gray is going to
last a while. It's one of those colors that if
you chose a gray that's really stark and really clinical
and really harsh, like a you know, really hard gray
(22:51):
that's going to go out a lot sooner than something
in the gray's family that has a little bit of
browns undertones to it. So you know, that's that's funny
because it's it's definitely the question everyone is asking, is
gray in or out? And it's it's definitely on the
way out. If you're choosing flooring, don't choose a gray
(23:13):
floor I recommend again it's always something traditional, so a
lighter color would. I probably wouldn't go with an oak
because that tends to get really yellow. You know, you
want to do something, and there are so many flooring options.
If you get into flooring, forget about it. I mean,
there are so many options in luxury vinyl tile and
(23:33):
it's there's so many flooring options that are so they're
easy to take care of and they will last for many,
many years, and I think that's what people are looking for.
So if you're planning to do any updates when it
comes to the flooring or the pink colors, neutral is
best and neutral means your whites you're very light. If
(23:56):
you're going to go grayish, a little grayish warm neutrals, beiges.
So those are the kinds of colors that really are
going to stand the test of time. And so those
are the things now, the colors to avoid completely. Now, Amy,
your new house certainly doesn't have any red walls, right.
Speaker 2 (24:18):
No, But it's funny that you say that because the
accent walls. We don't have any accent walls in our house.
But I've heard of more people starting to do those again.
And usually people choose those kind of bold rights, like
a navy or a bright blue or a red, and
I've heard of people doing that a little more often.
So I'm kind of wondering what your take is on that.
Speaker 4 (24:40):
Yeah, interestingly, So the trends for twenty twenty four, the
most off putting colors the ones that people don't like
red fifty three percent. A lot of us in the
last twenty years maybe had a red dining room that
was all the rage for a while, or a red kitchen. Yeah,
(25:00):
that's because that's so out And when I walk into
some homes again, if they haven't painted in the last
twenty years and you have a red dining room or
a red kitchen, my eyes pop out of my head
and I say, okay, we really need to tone that down.
Some other colors that are out lime green. My daughter
(25:22):
had lime green in her bedroom and we said, okay,
that's We knew that that would only be a phase
and it would have to go at some point any yellows.
Yellows are just off putting if they're not done in
a very mild manner, in a way so bright bright yellow.
(25:43):
Forty percent of people say that that's a turnoff. You
don't want to paint your home a color that will
be a turnoff to the general public. Now, if you
love it and you want color in every single room,
you just have to understand that there's a really good
chance that your real estate agent is going to say, okay,
in your best interest to get the most for your home,
(26:04):
the most money when it comes to selling, you may
need to neutralize those colors. So something a little trendy
with a little bit of blue in it, or maybe
a little bit of blue green, triquoise. Just it's got
to be so subtle. And the accent walls are coming
back again. You're right, but those are easy if it's
(26:24):
just one wall.
Speaker 2 (26:25):
Right, Okay, Well, let me ask you about this I've
seen more and more people painting like cabinet or painting
islands in like a like a green or a blue.
What are the trends that you're seeing for kitchens? Is
that a thing or is that going out?
Speaker 4 (26:45):
Well, cabinet tree has been painted for the last ten
years or so. Most people that have had this typical
wood cabinets have painted them either white or gray. The
color to is black cabinets. Again, I'm a little bit
leery of going in the black category because again it's
(27:07):
so bold and it's not going to be everybody's taste.
But if you love it, you love it and you're
going to stay there for a while.
Speaker 3 (27:14):
Totally cool.
Speaker 4 (27:15):
But yeah, so as far as cabinetry goes, there are
so it's so much easier now because there's products available
so that you could do it yourself. But it's you know, again,
stay in the neutral family if because if you paint
your cabinets, you can't go back. You can't go back
to the wood. So think about if you're not real
(27:35):
handy or artistic, maybe you should put the paint stick away,
put it away.
Speaker 1 (27:42):
Rates, or hire someone.
Speaker 2 (27:44):
We have friends who just bought a house and they
said we're going to paint the cabinets ourselves. And I
said I have the number for someone and they said, no,
we've got this. A week later they texted and said,
give us the number. I thought, well, that's probably a
good call. One more question really quickly, Michelle, because we've
been talking about paint, and that's a that's a more
expensive thing that you can do in your home. But
what about appliances. What is the trend there? If someone's
(28:05):
thinking about putting their home on the market in the
next few years and updating appliances, where do you go.
Speaker 1 (28:10):
Is it still stainless Yeah.
Speaker 4 (28:12):
Stainless steel? Well, I think always dominate the kitchen appliance space.
But some of the old school colors are coming back.
It's so fun. The avocado cream color that you may
remember from the nineteen seventies is coming back. I think
that you know what it's. It's manufacturers, appliance manufacturers like, Okay,
(28:34):
what can we do to make people excited about appliances. Well,
let's do a whole line of different colors. We're seeing
scorched orange, avocado cream, a yellow pepper, a misty blue.
All of these are kitchen aid colors. It cracks me up.
That is not going to last. But if you love
it again, great, if it fits into your motif in
(28:56):
your space, fine, But if you're selling, if you buy
the avocado cream today five years from now, that is
going to look like puke. Well.
Speaker 2 (29:10):
And I think you've been very consistent with this, Michelle
and saying listen, if this is something that speaks to you,
do it, make the investment. If you're going to be
there for a long time. But if you are thinking
along the term lightlines of you know, I'm going to
sell this home in the next few years, then you
don't go with a super trendy thing, or you don't
go with the thing that speaks to you. You go
to something that's more traditional, something that's more long lasting.
(29:34):
And I think these are all great tips on how
to update your home, not only for yourself, but maybe
for the next person who's going to live there. That's
Michelle Sloan, a real estate expert from Mariemax. Time 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 perscented by all Worth Financial.
Speaker 1 (29:55):
I mean ne Wagner along.
Speaker 2 (29:56):
With Steve Ruby straight ahead reasons why your credit card
is not a good option when you should not pull
that credit card out. We'll get into that, and if
you've got a financial question you want us to answer,
there's a red button you can click on while you're
listening to the show.
Speaker 1 (30:10):
It's there on the iHeart app.
Speaker 2 (30:11):
Record your question. It's coming straight to us sin tonight.
Our first question Casey in Springdale. Hey, guys, my wife
and I want to buy a home, but since we're
a little short on the.
Speaker 1 (30:20):
Down payment, we'd have to pay PMI should we still
go through with the purchase?
Speaker 3 (30:25):
It's a good question. I mean, sure, as long as
you can afford payments and it doesn't hinder your ability
to save more in the future. I would say, especially
in this day and age where if you are going
to land in the home that you're going to be
in for a long time, and it's a difficult time
for some of us because there's not a lot of
sellers with interest rates where they are, I think that
(30:47):
it's worth exploring buying the home that makes you happy.
But again, as long as you can afford the payments
and it doesn't hinder your ability to save.
Speaker 1 (30:54):
I'm going to disagree with you.
Speaker 2 (30:56):
There are certain dirty words to me, and one of
those is PMI, and I feel like if you have
to pay PMI, it is a symptom that you probably
cannot afford that home. Because we would say the best
way to put yourself in the best financial shape to
buy a home is to have twenty percent to put down,
right absolutely, When you don't have twenty percent to put down,
that's when you're looking at PMI, which to me is
(31:17):
kind of a tax on stupidity.
Speaker 1 (31:18):
Okay, maybe not stupidity, but it's a.
Speaker 2 (31:22):
Tax on either being too impatient to have the money
or you know, not saving well. So I would say,
unless this is the dream home, you're going to stay
in it forever. There's no other options, right you Just
you can't wrap your head around passing up on this
house financially, I would say, you probably can't afford this
(31:45):
house and you should probably wait.
Speaker 3 (31:47):
Right my two cents, Yeah, I mean it's long as
it doesn't hinder your ability to save and you can
afford to payments. And that's a big if. So you know,
I'm I believe what I say, But you do bring
up good points you really do well.
Speaker 1 (32:01):
Thank you. Next, we've got Rob from.
Speaker 2 (32:03):
Edgewood, Thanks for taking my question. We've heard of a
social Security strategy called filing a restricted application to boost
our benefit. Is this something you recommend using?
Speaker 3 (32:15):
Uh, sure, if we could. I mean, unfortunately, this is
something that's ended in the end of twenty twenty three.
I mean the people born before nineteen fifty four. It
could be grandfathered into it, but the whole goal this
was to allow the qualifying spouse to collect spousal benefits,
only deferring their own benefit until they reach the age
of seventy to collect that later.
Speaker 2 (32:36):
We do a segment all the time that we call
retirement factor fiction. I could probably we could probably spend
the rest of our lives doing factor fiction on Social
Security questions. Because it's such a convoluted program. There's so
much misinformation out there. So I'm not surprised that you've
probably heard someone talking about filing a restricted application. It
was an option a few years ago, and it did
(32:58):
make sense for a lot of people. It's just not
an option now, so, you know, not something worth looking into,
but definitely it is worth looking into. Which filing, Which
way to file makes the most sense, and also when
the timing is best for you right. Getting social Security
decisions wrong can mean tens of thousands of dollars lost
(33:18):
over the course of the rest of your life, so
this is when you definitely have to get right. Next,
I've got a question from CS who lives in Claremont County.
Speaker 1 (33:27):
Hi.
Speaker 2 (33:27):
I'm sixty three currently claiming Social Security. I do also
have legal custody of my granddaughter who's five years old.
So if something were to happen to me, can she
get any of my Social Security?
Speaker 3 (33:38):
Yes? So as long as your granddaughter, as long as
you have custodian, and you have custody and you are
the legal guardian, then if something were to happen to you,
meaning if you pass away, then up to seventy five
percent of that benefit can continue for your grandchild until
they hit the age of eighteen, unless they are still
in high school or disabled in some situations, and those
(34:01):
payments can extend a little longer.
Speaker 2 (34:03):
All right. Next, we've got Nicholas Springfield Township. We've reworked
our budget, so we're going to max out our flour
owing ks and iras this year. Is there anything else
we can do to save for retirement. I love this question.
First of all, good for you, guys, Nicholas. You are
like official super Safer status and that's really impressive. I
would say a health savings account, and I would say
(34:25):
maybe that health savings account might even make more sense
than the IRA, and it's because it's triple tax advantage.
So you just have more flexibility with this account than
you do with others. And of course that all hinges
on whether or not a high deductible health care plan
actually makes sense for you.
Speaker 1 (34:41):
But if it does, I would.
Speaker 2 (34:42):
Say, next step on this, like super saving journey, do
the research, figure out if an HSA works for you,
and then make sure that money is invested and if
at all possible, pay for your healthcare expenses now out
of your emergency fund. Then you're just pushing that money
forward to retirement. You're going to have high health care
expenses in retirement, and if you don't, you take it
(35:04):
out and you pay standard tax rate on that and
it becomes like a de facto for one.
Speaker 1 (35:08):
Okay, so lots of reasons.
Speaker 3 (35:10):
This is only if you actually have a high deductible
health plan to be to be eligible for one. If not,
then we look at an after tax brokerage acount, a
tod account as you call it, or a joint account
between you and your spouse where there are no limits
on earnings and no limits on contributions. It's just not
tax deferred like your iras.
Speaker 2 (35:27):
Or for one case coming up next, why whipping out
that plastic for emergency payments isn't your best move. 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 present by all Worth Financial. I mean you
wag you're along with Steve Ruby. You know, we talk
often on the show about credit cards, right, there are
(35:50):
a tool if you use them well on certain purchases
and you pay off that balance every month, you can maximize.
Speaker 1 (35:56):
The points or rewards.
Speaker 2 (35:58):
So lots of reasons why we would say absolutely pull
out that plastic.
Speaker 1 (36:02):
Also, there are times when we would say keep that
plastic in your pocket.
Speaker 3 (36:06):
Yeah, I mean, at the end of the day, the
emergency fund is the most It's one of the most
important things about having a solid financial foundation, because if
we have to rely on a credit card to pay
for an emergency, you know, you can run into issues
you might not be able to cover every unexpected expense
with that credit card. A contract or may not even
take a credit card. Maybe more importantly, you know right
(36:28):
now and in the past, we've of course seen some
very high interest on credit cards, and if we're not
able to pay that off, then that can create an
issue where that debt just snowballs.
Speaker 2 (36:40):
I think so many times when we are faced with
a difficult decision, financial or not, it's like, what is
the lowest hanging fruit, what's the easiest thing I can do?
Then you go, you know, fast forward a week, a month,
a year down the road, and you're like, I wish
I had done X right. It's so clear to me
now that that was not the best option. And I
think that's often how this plays out. When it comes
to your credit card. It's right there, you know, you've
(37:02):
got twenty thousand or thirty thousand or whatever it is
available to you, You swipe it, you put it on there,
and then all of a sudden, a couple months down
the road, when you can't pay that balance, you're looking
at how much more you're paying and you're thinking, wait
a second, this is terrible. And this is where things
can really start to sort of snowball out of control,
you know, and get out of control. So this is
(37:23):
why we would say, hey, that emergency fund. It is
the cornerstone of your financial plan. It can feel kind
of lucky sometimes when that money is liquid, when it's
on the sidelines, you know, in times when the markets
are doing really well, and these are the times when
then you put it up against your credit card rate
that you would have to pay if you didn't have
that emergency fund, and you say, okay, I'm winning every
(37:44):
day of the week by having.
Speaker 3 (37:45):
This, absolutely, Yeah. An emergency fund buys you time against
not having to take on debt. It buys you the
opportunity to not have to tap into retirement accounts. Because
if we need to tap into a retirement account to
pay for a expenses because maybe we don't have the
credit to actually do that, then that can derail our
financial futures, especially with the opportunity cost of not having
(38:07):
that money growing towards your retirement.
Speaker 2 (38:11):
And you think about major emergencies like losing your job.
I mean, how high is your credit limit?
Speaker 1 (38:16):
You know, do you have enough credit available to.
Speaker 2 (38:18):
You that you can pay all of your bills for
months that can be an incredibly overwhelming situation. That's why
we say three to six months of those critical expenses
set aside makes so much sense.
Speaker 1 (38:28):
Thanks for listening tonight.
Speaker 2 (38:29):
You've been listening to Simply Money and percented by all
Worth Financial here on fifty five KRC, the talk station
Simply Money News
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.