Episode Transcript
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Speaker 1 (00:06):
Tonight, we have some new numbers that I can pretty
much guarantee you the Fed will look very closely at.
So what are they going to do with them? We'll
get into that. You're listening to simply Money presented by
all Worth Financial Imemi Wagner along with Bob Spawdseller Man.
I mean, for years and years, you probably didn't even
think much about inflation. I mean, if you look back,
(00:27):
you know, we would talk about how much my parents
paid for the first house they felt, and you'd be like, oh,
sixty five thousand dollars. You know, that's amazing. You can
see inflation trends when you look back decades, but your here,
we weren't feeling much of a difference. That has changed
over for sure. Over the past several years, we've been
dealing with much higher inflation and the Federal Reserve, our
(00:48):
nation central bank, trying to pull down inflation by lowering
interest rates. And it has been this kind of tight
rope walk for them, of as data comes in. How
do we keep this right and keep everything on the rails?
Trying to bring inflation down without totally seizing up the
American economy not an easy task.
Speaker 2 (01:10):
Yeah, and I think the abundance of headlines also has
a lot to do that. We're about to get a
new president in less than a week, yep, and we've
talked about that. You know, there's all kinds of assumptions
on what's going to happen with, for example, tariffs and
other regulation. So that just makes more and more people
write more and more articles, and people get more and
more worried. Let's talk about what actually happened this morning,
(01:31):
which is pretty much a whole lot of nothing. So,
you know, CPI came out at two point nine percent,
you know, the consumer price reading over a year ago,
that's just a tick higher than expected, but pretty much
in line. And then core inflation, which removes food and energy,
came in at three point two percent higher than a
(01:53):
year ago, which is slightly less than expected. Yeah, if
you net all that out, pretty much, which everything came
in as expected, despite all the headlines and everybody saying
this is the biggest inflation reading in decades, a whole
lot of nothing.
Speaker 1 (02:10):
Yeah. Well, and let's just put this in dollars and
cents for you, if you spent one thousand dollars on
if you went to the store and bought certain products,
and you spent one thousand dollars on them last year,
and you went and bought the same exact things this year,
instead of paying one thousand dollars, you might now be
paying one thousand dollars one thousand and twenty nine dollars
(02:30):
right on average, depending on what that was.
Speaker 3 (02:32):
You know.
Speaker 1 (02:33):
I think the bigger takeaway is when you sort of
kind of dig a little deeper into this inflation report,
is you know, what's costing more, what's costing less. The
FED target rate is two percent, and it's been really
sticky and really tricky for them to try to get
these numbers down to two percent. Most of the time. Recently,
the culprit has been housing, you know, rent, I mean,
(02:57):
those costs have not been going down. We're finally seeing
a little bit of easing in that market. That's movement
in the right direction for anyone who is renting a
place or buying a place. You know, we're finally seeing
inflation in that one particular sector coming down. Well, that's
the one that was just not moving for the longest time.
Speaker 2 (03:17):
Yeah, the price of shelter rose four point six percent
year over year in twenty twenty four, making it the
smallest twelve month increase since January of twenty twenty two.
Speaker 4 (03:29):
So that's good news to a.
Speaker 2 (03:31):
Lot of folks, especially those first time home buyers out
there that they're just trying to get into the housing market,
start to build some net worth through actually owning versus renting.
Hopefully that'll spurn some activity in the housing market. Yeah.
Speaker 1 (03:46):
I mean, and other things that you're paying more for
that at least prices rose, you know, and contributed to
this rise in inflation, airfare, used cars and trucks, vehicles,
medical care. For anyone who's been paying car insurance, we've
been I'm telling you this for a while. Now it's
going up shop around. It's time, you know. I think
(04:06):
there's lots of things in our lives that we just
kind of set it and forget it. We're all really,
really busy. And what inflation has forced many of us
to do, and I don't think this is a bad thing,
is when we are stretched tighter and tighter, it has
forced many of us to look at specific things within
our budget, like car insurance that maybe you just automatically
(04:28):
paid every year, and say, is there a way that
I can get a cheaper rate if I'm paying fourteen
percent more than I was last year or whatever it is.
I mean, I've seen some astronomical numbers out there. Do
your research on these things that you're paying for. Shop around,
look at your subscriptions, you know, all of the Netflix
and Hulus and all of those things.
Speaker 2 (04:47):
You know.
Speaker 1 (04:48):
I mean, I think if inflation teaches us anything, it's
how to be really intentional about how we're spending our money.
Speaker 2 (04:54):
Yeah, and speaking of that, the price of gasoline did
rise for point four percent on the month, you know,
and prices have been coming down a little bit over
the last six months of last year. And without getting
into a political discussion, I would not be surprised if
next Monday, one of the one hundred and some odd
(05:16):
executive orders that are our new president signs is something
having to do with oil and gas. So I wouldn't
be surprised to see if that number starts to tick
down here once the new administration comes on board.
Speaker 5 (05:30):
Well.
Speaker 1 (05:30):
I think it's so interesting because you know, just gas
prices are so volatile, but for many of us, it
feels like the number one tie to inflation because as
you are driving to work in the morning, as you
are driving your kids to school, picking up your grandkids
after school, whatever it is. You're driving past gas stations,
(05:50):
and it is right there in front of your face,
headlines right on those on those big big signs out front,
how much you're paying, and as you're paying attention to that,
if it goes up, you're fucking Inflation is out of control.
I mean, I just think that the price of gas
is such a litmus for how we feel about which
way inflation is going.
Speaker 2 (06:09):
Yep, let's not forget to mention some good news that
came out this morning, and you and I talked about
this on Monday, Monday, Amy. You know, at the end
of the day, what really moves markets, and we talk
about it all the time is earnings.
Speaker 4 (06:23):
Earnings, earnings.
Speaker 2 (06:24):
When you're investing in the stock market, you're investing in
good old US capitalism and the ability for companies to
make more money this quarter, more money this year than they.
Speaker 4 (06:35):
Did last year.
Speaker 2 (06:36):
Some good news this morning, and we talked about it
on Monday. A lot of the big bank earnings came
out early this morning. The profits of Goldman Sachs doubled
this last quarter over the prior quarter, JP Morgan and
Wells Fargo both came out with really robust forecast beating
(06:56):
numbers and you know, wouldn't you know it.
Speaker 4 (06:59):
As a result, the stock futures were up.
Speaker 2 (07:02):
Very, very nicely this morning, and again just proving our
point that at the end of the day, profits and
earnings are what moved this market.
Speaker 1 (07:12):
You're listening to simply money presented by all Worth Financial
and Memi Wagner along with Bob Sponseller. New data out
today that the Federal Reserve, our nation and Central Bank
will digest and figuring out, Okay, where are we going
now with interest rates and inflation? You know, not necessarily
moving much depending on which numbers you're looking at, maybe
a tick higher than forecasted in some cases, maybe a
(07:34):
tick lower depending on which specific number that you're looking at.
So nothing that's really moving the needle. Bob, I really
appreciate your point. What we should really be paying attention
to when it comes to our four one K is
how are these big companies that make up the American
economy and by the way, you're four one K, how
are they feeling about the economy and data and based
(07:54):
on again we're just starting into earning season, but based
on these first few big banks and companies that are
reporting we have good news, and you know, I think
we're gonna have some volatility into short term. We've got
the transition into a new administration, so much talk about
our campaign trail promise is actually going to come to
fruition in the first one hundred days of an administration.
(08:17):
Those are a lot of unknowns and you can get
really really caught up in that political noise. But I
always kind of tether myself to how do companies feel
about how things are doing? And I think so far
we can say they're feeling pretty good.
Speaker 4 (08:32):
Yeah.
Speaker 2 (08:33):
To quote one of my favorite all time quarterbacks, Tom Brady,
let's go go profits, go capitalism, right.
Speaker 1 (08:42):
Yeah, and go corporate greed because all of those things
are are are fueling our flour and ks are fueling
our investments. And you know, nobody has the crystal ball,
but Andy Stouder, chief investment officer, is super keeps his
finger on the pulse of where we think things are
moving in the future. In the next six months, I
think it's looking pretty well. So what does all of
this mean from the standpoint of the FED, Well, it
(09:04):
basically means we will likely see no change with what
the FED is going to do when they meet again,
so for the first time in twenty twenty five, when
they're meeting deciding where interest rates will go in the future,
I would expect And anything could change between now and then.
New data could come out, but I would expect at
this point no change.
Speaker 4 (09:22):
I think that's a good assumption.
Speaker 2 (09:23):
Everybody's just going to lay low and see what happens
for a few months.
Speaker 1 (09:27):
Yeah, I want to move quickly onto something pivots to
something completely different. But this is a headline that really
caught my eye and I just want to point it
out to you because it is so insane preposterous that
anyone's looking at the markets this way. But you know,
you and I are talking about you know, should you
be looking at it from the perspective of inflation and
(09:48):
in you know, these numbers that are coming out, Should
you be looking at it from the standpoint of how
corporate earnings are looking at Well, there is someone who
wrote an article a market watches is maybe what you
should be paying attention is what you were in And
if it's a year like with a ending in a five,
maybe you should treat your entire financial portfolio differently. Because
(10:12):
we're in the year twenty twenty five.
Speaker 2 (10:13):
Yeah, this guy actually crunched the numbers going back to
eighteen ninety five, oh my gosh, and concluded that in
every year that the calendar year ends in a five,
the stock market goes up ninety two percent of the time. So, Amy,
I know you told me walking into the office today
that you've already completely liquidated your finely tuned, diversified portfolio.
Speaker 1 (10:37):
And yeah, just because of this.
Speaker 2 (10:39):
Call options on Amazon stock? Are you sure that was
a good idea?
Speaker 1 (10:43):
Oh my gosh.
Speaker 3 (10:44):
You know.
Speaker 1 (10:45):
The perspective I think that needs to come with this
is you can look at this article and hopefully most
of us like can see this for what it is
and be like, I'm not going to do anything with
my money based on this guy. By the way, there
have been thirteen times, right that we've had a year
ending five since eighteen ninety five, ninety two percent of time.
That means nothing. That's like statistically irrelevant, And I would
(11:07):
hate to hear of an investor who did anything different
with what they are doing with their money with their
long term plan based on this kind of nonsense. So
this article is just one example of a gazillion others
that are out there designed fully to just get you
to click on them, and I think, you know, I
feel sorry for this guy who even just spent time
(11:28):
researching this, because it's just absolute insanity. Here's the all
Worth advice you had. Another example of where this headline
could compel you to just read the article, only to
then wonder why why were it even published in the
first place. Who even thought this was worth talking about,
much less making a financial decision based on Coming up next,
(11:48):
are you making the right investment decisions? Maybe you need
an investment thesis. We'll tell you what that is. Next,
you're listening to Simply Money presented by all Worth Financial.
Here in fifty five KRC thexation. You're listening to Simply
Money presented by all Worth Financial I Memi Wagner along
with Bob spond Seller. If you can't listen to our
(12:10):
show every night, you don't have to miss the thing
we talk about. We've got a daily podcast for you.
Just search Simply Money. It's on the iHeart app or
wherever you get your podcasts. Coming up at six forty three,
we've got questions to answer that you've given us income
taxes long term care, and a lot more and are
ask the advisor segment. I think some of the questions
were answering might help you as well. Okay, for anyone
(12:33):
who has gone through the process of a graduate degree,
you know you may have had to write a thesis,
go really in depth on one particular topic and listen,
it's exhausting for me to even think about it. Sounds
like a whole lot of work. But for those of
you who feel like you're maybe a little all over
(12:56):
the place when it comes to your money, like one
day you've got it figured out, you've got a plan
in a direction, and a few days later you're spending
money on something that you know you don't need, and
you're you're just all over the place, maybe you might
want to think about something along these lines. Call it
a thesis, call it your financial plan, call it your goals.
You know, Bob, I think about Steve Sprovac, your predecessor
(13:18):
in that seat, and you know, he was very, very
open and transparent about the fact that, you know, even
though he had been in this business for years and
years and years, they paid for a private school for
their boys to go to college. It was really really
expensive and they were behind when it came to saving
for retirement, and so he was in his early fifties
and realized, Okay, we really have to get serious about this.
(13:40):
He sat down, legal pad and pen and figured out, Okay,
what do we need to have a really good retirement
whatever that looked like for them, right, being able to travel,
spend time with their kids and their grandkids. And then
he put in the work on figuring out what it
took to get there. That thesis, that plan was in
the forefront of every financial decision they made for the
(14:03):
next decade and a half.
Speaker 2 (14:06):
Yeah, and I was going to ask the question, and
you just answered it. I bet Steve sat down with
his wife and his pen and his pad a paper yep,
way before, six months before he was going to retire.
Right Knowing Steve, he planned and planned and did this.
Speaker 4 (14:20):
The right way.
Speaker 2 (14:21):
So it goes back to what you know, you and
I talk about all the time, and we don't need
to get into complex terminology here. It all comes down
to what does your money need to do for you
and when and how much? And that might that might
sound simple, but it really doesn't need to get much
more complicated than that. And you know, the starting place
(14:45):
is to sit down and talk about how much money
do you really need to spend once the paychecks stop
and your portfolio and income sources have to replace that paycheck.
Speaker 1 (14:57):
That's a really scary transition for a lot of people.
Right You're going from that cumulation phase of there's a
paycheck coming in and you're put money into that flour
one K and hopefully iras and health savings account. However
you're saving the money's going in, but you see it
going in every month and all of a sudden, no
more money coming in, and you have what you have
to work with at that point. And this is a
(15:19):
time when I think a thesis or some kind of
guiding principle is really really important because it can get scary.
And you know, we can talk about finances in mathematical
terms all the time, but it's way more complex. And
that because what we're taking out of the equation is
the way you feel your emotions and behavioral finance. If
(15:40):
you're not paying attention to how you feel about money
and how that influences your decisions, you're probably missing out,
you know. And I see a lot of people get
to this point of retiring and they want to curl
up in a feto position around that money, right. They
don't want to take zero risk because.
Speaker 6 (15:57):
It was it was a lot of hard work to
get to where they are, and then that creates a
whole different problem of then inflation during the time that
they're retired being the silent killer of everything that they
have accumulated through the years.
Speaker 2 (16:13):
Well along with setting all those goals, another huge part
of if you want to use the word thesis or
financial plan, isn't an investment risk assessment meaning sitting down
with an advisor and a couple of tools and your
spouse and say how much investment risk or investment volatility
(16:34):
can our financial plan handle economically? But to your point, Amy,
how much can we handle emotionally? And the economic and
the emotional quotion of an investment risk plan are both
very important and need to be talked about in advance,
because I'll quote my favorite investment advisor, Mike Tyson, heavyweight
(16:57):
boxer YEP says, everybody as a plan until they get
punched in the mouth, and all joking aside, When you're
living off your paycheck every month, you're not so worried
about investment risk because you know you got a paycheck
coming in, you know, fifteen days from now. When those
paychecks stop in, your portfolio has to become your paycheck.
(17:20):
And we see this all the time, you know, Amy,
when we meet with clients, Investment volatility starts to mean
a whole lot more to somebody that just retired in
the last six to eight to ten months because they've
never thought about it in those terms before, so can't.
Speaker 4 (17:36):
Emphasize it enough.
Speaker 2 (17:38):
A good discussion with your advisor about investment risk tolerance
and an investment plan that fits that risk tolerance is
going to keep you from making behavioral decisions that can
upend and demolish the viability of your plan.
Speaker 1 (17:54):
I mean, I think back to when I was in college, right,
and it had a big project or a big paper.
It started with sitting down and kind of distilling all
the thoughts into one sentence. Right, what's the major thing
I'm trying to communicate here? I think the same principle
is it's with your money, and I don't care if
you're thirty three years old.
Speaker 3 (18:11):
Right.
Speaker 1 (18:11):
I had a thirty three year old couple in my
office this week, and you know, while yes, they've got
so much time and they're making great salaries, and they've
got all these paychecks ahead, they still have so many
financial decisions they're going to be bombarded with through the years.
If they have this thesis now, right, this kind of
guiding principle, it's going to help them sift through all
of those things and say, wait, what's the most important
(18:32):
thing to us? Does this next financial decision either bring
me closer to it or farther away from it? And
then there's tools that kind of support it. Just like
when you're writing a paper or doing a project, you
do that risk tolerance, right, you make sure that your
investments are aligned with that, and you just keep yourself
on that same page so that you know, none of
(18:52):
the crazy headlines that you read, none of the emotions
that you feel, none of the political stuff that you're hearing,
is ever to take you away from that singular focus
when it comes to your money.
Speaker 4 (19:04):
Yeah.
Speaker 2 (19:05):
And one of the tools that we use with all
of our clients, and I'm sure you use this with
this client you just spoke about, Amy, is something called
stress testing your portfolio. So you can actually take a
client that's coming in as a new client, take a
look at what their current holdings are and put load
all that information into some very nice software that says, hey,
(19:26):
based on historical volatility, this is what could happen to
your current portfolio if we have another ten percent correction
or fifty percent housing crash or what have you. And
you need to find out in advance what the client's
likely to do. And sometimes people are surprised when they
see that analysis done.
Speaker 1 (19:48):
Here's the all Worth advice. Creating an investment thesis is
really a good skill for you as an investor. It
can provide you with a framework for figuring out all
of your future financial decisions. Coming up next, what are
you worth? Is your employer aligned? Do they feel like
you're worth that? We're gonna help you negotiate this. Next,
you're listening to Simply Money presented by all Worth Financial
here on fifty five KRC the talk station. You're listening
(20:15):
to Simply Money presented by all Worth Financial. I mean
you Wagner along with Bob's bond seller New Year, and
maybe you're hoping to get some new dollars out of
your boss in the form of a raise in this
kind of post pandemic world. And it sounds crazy to
be saying that because we're several years removed from it,
but I don't feel like the job market has really
quite normalized yet, and so you might just kind of
(20:38):
feel like you don't even know what kind of ground
you're standing on. Can you ask for one? How much
should you ask for? What should you say? I don't
have the answers, but Julie Baukie does. Julie on the job.
She's our expert in all things having to do with
your career. You know, Julie think there's a lot of people,
and we've been talking on the show for several years
now about inflation. It's harder and harder to make ends meet.
(20:59):
And maybe you've just been working really hard and haven't
been getting the raises that you think maybe you deserve.
So if you're thinking twenty twenty five is the year
for that, how do you go about it?
Speaker 3 (21:10):
First thing I think it's really really important to remember
is that asking for a raise, it is a business conversation.
It is a business decision on the part of your
organization whether to give you more money or give you
what you ask for, whether that's more time off, whatever
it is. So it's a business decision, and so therefore
(21:33):
it will and should be run through the lens of
what you've contributed as one lens. Okay, so back up,
what do I mean by a business decision? What I
mean is you will not get traction by saying things
like my rent went up, I need a raise, or gosh,
(21:53):
you know, inflation is so high, I need a raise,
or I'm not making men's ends meet. I need a raise.
You've then made it personal, and I get that it's
personal to you, but that's not a compelling argument. Let's
let's break it down. When you're hired, it's to provide
a service of value, and organizations decide to pay you
(22:14):
based on the value your value plus other things obviously,
but so you've got this all goes down to what
value are you bringing? Now, If you're a strong performer,
if you are consistently being praised and what would we
do without you and blah blah blah, then you have
a little bit of leverage. But if you are someone
(22:35):
who's been like barely phoning it in, you've been talked
to about look, you need to step it up. Asking
for a raise. It's just a really bad idea.
Speaker 1 (22:45):
A little tell you that, right, it does.
Speaker 3 (22:47):
And so you have to start with understanding your value.
What is it you bring to the workplace. How have
your accomplishments, your actions, the things that you've done, the
things you've taken on, how have those contributed to the
success of the organization. That's really what it is. Because
if someone comes to me and says my rent went up,
(23:08):
I need a raise, well, everybody's rents going up, and
you can't make a business case for that. So you
have to start with what is your value? And so
this is something where we really struggle, you know. I
think humans really struggle with this, and I think women
especially struggle with this, Which is what is my value?
I show up every day and work hard. Is lovely, really,
(23:30):
but what is it? You know, what have you taken on?
What have you done, what have your accomplishments been? What
is it? What can you point to that says I
need to be making more money than I'm making now.
And part of that can also be what is the
market paying? You know, so if the market is paying
twenty thousand dollars more for the exact same job, that's
also a part of your case because your employer may
(23:52):
not even know that. And so I think that's a
part of the case. Market is part of the case,
because then there starts to be a risk of losing people.
But you have to deliver all of this in a
very businesslike, non emotional way and lay out the facts
or you won't get anywhere.
Speaker 2 (24:10):
So, Julie, if I'm hearing and understanding you correctly, what
this involves is you got to do a little homework.
You got to do a little research and meaning start
with what were the goals of the organization you work
for for the last year, did we meet those goals?
And then what part of that, what role in that
did you play where you can demonstrate your value in
(24:31):
helping the organization win?
Speaker 4 (24:33):
Is that someone on track?
Speaker 3 (24:35):
Absolutely, yes, very much. So it could be something like,
you know, when Fred left back in March, I took
on Fred's role for six straight months with no additional
compensation or help. I was happy to do that to
help the organization. But you know, I'm still doing a
lot of Fred's work, and you know, and here we are,
(24:55):
and of course the organization is saving money by not
having Fred there anymore, and so you know you can
talk about but again too, you have to know it's
a value to you for some people it is money,
But what if it's really not for you about the money.
What if it's more about flexibility. What if it's you know,
(25:17):
I'm happy to help out the organization, what I'd really
like to do, what I'd really like to talk about
for the year moving forward, is the ability to work
remotely on Friday. So if that's a value to you,
we always ask for more money, because who doesn't want
more money, But you have to figure out the source
of your discontent and that could be it could be
(25:38):
it could be something that will not be alleviated by
an increase in your salary. It could be more about
the quality of your life. And so getting really clear
on what would make you happier than than right that,
happier where you are than than you are right now?
What is that? And just you have to and it's
if you really do like you said, you really have
(26:00):
to dig deep and understand what it is for you.
And we always call back on salary, which is fine,
but again you've got to show that value and sometimes
by saying, look, I just got contacted by a recruiter
who's looking for someone for the ABC company and the
job sounds exactly like mine, and the starting salary for
(26:23):
the low end of the range, it's about fifteen thousand
dollars more than I make. Can we talk about how
we might address that in the upcoming year. See that's
a very emotionless business conversation versus I just got a
call them or career. I could go over to the
xID company tomorrow and make fifteen thousand dollars more than you,
cheap cheap guys or paying me that that's not going
to get you anywhere. And so you have to think,
(26:44):
as I say, you have to think from both sides
of the desk when you're asking for an increase.
Speaker 1 (26:48):
I love that you make that point, Julie, because I
think for many of us two things. First, of our
money is very emotional, and second, of all our jobs
we feel very emotional. We spend a lot of time
at them. And so understanding this is business, you cannot
go throw up all over your boss's desk all of
your emotions. And I have been overwhelmed, and I think
you're over It's not going to go well. And so
(27:11):
I love that you're saying you have to look at
this from a business standpoint. But I really want to
touch on what you were saying about salary, because you
mentioned this kind of a couple of years ago that
maybe millennials and some of the younger generations do not
value salary as much as maybe my generation. It used
to be the only thing you ever negotiated on.
Speaker 4 (27:33):
It.
Speaker 1 (27:34):
Give examples of other things that you have heard. I
love the example of maybe Friday is working from home.
What are some other stuff that we can negotiate that
maybe we've never even thought about negotiating before.
Speaker 3 (27:47):
Yes, so certain things are non negotiable, like your healthcare benefits.
It's also generally not negotiable to say I want four
weekstification instead of three, because once the organization gives that
to you, forbody else to get, the organization is going
to get is going to get themselves in trouble if
they start to be if they start to be more,
(28:09):
if they start to be what's going to be considered
unfair or discriminatory. You can't do that. So, first of all,
can you negotiate? And if there might be or there
might be times when you work for an organization where
they have a strict eight to five in the office
and your your hands may be tied, your leader's hands
may be tied in terms of what they can give you,
(28:30):
but it never hurts to ask, So is it I'd
like to what I'd really like to do now that
I've now that I'm pretty much doing a job and
a half, I really like to spend some time on
a project over here. I'd like to learn more about this.
I'd like to maybe head up a company volunteer team,
(28:51):
so figure out what would make your I'd like to
make your work life better or maybe you know, as
I look around, I think I'd really like to point
my career over here. Can we talk about what that
might look like? And can you help connect me with
some of the people over there so I can start
to broaden my career view so that you know, you know,
(29:13):
so that I can continue to grow.
Speaker 1 (29:15):
That might great thing. The key, yeah, I think the
key here is understanding if this is the year to
negotiate what's important to you and then go at it
from that business perspective. Great perspective, as always from Julie Balki.
Julie on the job, you're listening to Simply Money, presented
by all Worth Financial here in fifty five krs. The
talk station you're listening to Simply Money presented by all
(29:40):
Worth Financial. I mean you Wagner, along with Bob Spon's
already have a financial question you need a little help with.
There's a red button you can click them while you're
listening to the show. It's right there on the iHeart app.
Record your question. It's coming straight to us. And speaking
of questions, we've got some really good ones. The first
one from Chris and Clermont County.
Speaker 5 (29:59):
I am serious, say, thinking about moving to Florida since
there's no income tax?
Speaker 4 (30:03):
Am I crazy?
Speaker 2 (30:04):
Well, Chris, you're not crazy, but you know what tends
to happen with moving to Florida. Everybody's attracted to moving
to Florida because they know about no state income tax,
so that are involved in moving to Florida. For example,
I know for a fact that the cost of renewing
your license plates and driver's license and other things like that.
(30:25):
You know, permits are higher in Florida than they are
in Ohio. So you got to look at what you're
actually going to spend while you're living in Florida and
do a little comparison shopping on what normal expenses are.
I know, groceries at publics in Florida are more expensive.
Speaker 4 (30:42):
Than groceries at Kroger.
Speaker 2 (30:44):
Most people don't think about that, but when you get
down there and fill out that grocery cart, you might
have a little sticker shock.
Speaker 1 (30:50):
Yeah.
Speaker 3 (30:51):
You know.
Speaker 1 (30:51):
The way that I like to explain this to people
when they come to me with this kind of idea,
and you're right, a lot of people feel this way,
is it costs the same amount eats amount of money
in Florida to build roads and bridges as it does
in Ohio or anywhere else. So it is not that
it's cheaper. Even if you're not paying income taxes. They're
going to need to get the money from you in
(31:12):
a different way. And maybe it's you're paying tolls right
when you're driving from one place to another. Maybe it's
you're paying higher when you're yes for different kinds of
insurance or taxes or whatever. They're going to get it
for you from you in some way or another. I
would really like to move to Florida, not because of
no income tax because January here is really really cold
and gray, right. But I'm also going to look at
(31:35):
with eyes wide open, the entire financial picture and figure
out how it will really impact me before I make
that decision. So I don't think you're crazy Christopher for
thinking about it this way, but I say, hey, also
do some research on other kinds of taxes in that
state and figure out how they're really filling the coffers
in Florida, because they're doing it some way, and maybe
(31:58):
it would a way that would impact you a little
less than income tax, and so maybe that would make sense.
But go into this with fully eyes wide open. Next
question from Philip and Marymont.
Speaker 5 (32:07):
You guys are always saying how you prefer wroth savings
versus a regular for one K that's tax deferred. But
I can't see how paying twenty two percent tax now
is better than paying twelve percent once I retire and
have a lower income.
Speaker 1 (32:20):
So I think there's a couple of ways that you
can look at this. And the first is the kind
of mathematically where I am now, what tax backet I'm
in now versus where I'm going to be in retirement.
And a lot of people will say, well, don't pay
taxes now, you know, put money into a wrath now
because you know you're in a higher tax bracket now.
(32:41):
One thing though, that I like to consider is and listen,
I might be in my higher earning years now and
I'm putting a lot of my money into a wroth.
Why because I would rather pay these taxes now. And again,
this is just me. This is how I look at it.
And let that money grow tax free all of these
years then and every dollar of it that's tax deferred
(33:03):
having to pay taxes on it later, even if those
taxes that are a lower weight, because I'm counting on
the growth, right, the growth being the difference maker here.
I don't know, Bob, how do you look at this?
Speaker 4 (33:13):
I look at it the same way.
Speaker 2 (33:14):
And again this comes back to having a proactive, open
discussion with your fiduciary advisor who you know. Pretty much
every fiduciary advisor that's truly doing their job nowadays can
model some of these scenarios out, and it's a great
discussion to have. Talk about when do you plan to retire,
what do you expect your income to be? To your point, Amy,
will your income be higher at retirement than it is
(33:37):
now or lower? And you can run different scenarios and
you know, we can't perfectly predict the future, but we
can model some of these things out to allow folks
to make educated decisions that they feel good about.
Speaker 4 (33:51):
So it's a great question, Philip.
Speaker 1 (33:53):
Next question from Chris and Loveland.
Speaker 5 (33:55):
I've adjusted my budget this year so I can max
out my four to oh one K, and I are
if I still have money to save, where should it go?
Speaker 2 (34:03):
Well, Chris, I always hate to answer questions with the
answer it depends, but in this situation it does depend.
Speaker 4 (34:13):
So you know, we always default too.
Speaker 2 (34:15):
Can you make IRA contributions after you max out your
four to one K? That depends on your taxable income
for both you and your spouse. We look at you know,
does it make sense to do a WROTH or a
regular IRA or does it just make sense to start
to build a taxable account that's invested in a tax
efficient portfolio. So kind of like the discussion about tax
(34:39):
deferred versus ROTH four oh one K, it does depend,
and that discussion is worthy of a sit down with
your advisor to go over what's the best situation for you.
Speaker 1 (34:50):
I am going to throw out one other option here,
a health savings account. If a high deductible health care
plan makes sense for you, triple tax advantage, there's nothing
like it is a great way to save for future,
right cost future healthcare costs and retirement, if you can
pay for those expenses out of pocket. Now, have the
money in that HSA invested, let it grow, and then
(35:12):
when you get to retirement, take it out to cover
those expenses. It's a great, great tool, and again the
only thing that the government gives you where you're never
going to have to pay taxes on that money. Only
though obviously an option if a high deductible health care
plan makes sense for you. All right, coming up next,
you could be getting a check in the mail for
over one thousand dollars. Not a scam. We'll explain what
(35:34):
we're talking about. 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 Bob Sponseller. Did you
know the IRS is currently sending out about two point
(35:54):
four billion dollars worth of stimulus checks. No, you are
not listening to a show from twenty twenty. This is
not an old show that's coming up. What we're talking
about stimulus checks. The reason why is some of you
might have missed out on getting this check during the
pandemic when the rest of us got one.
Speaker 2 (36:13):
Show me the money, Amy, show me the money. Tell
me more. When do I get my check? And how
much am I getting?
Speaker 1 (36:20):
You're only going to get it if you did not
claim the recovery rebate credit on your twenty twenty one
tax return. It was just a complex process. The IRS
recently realized a lot of people missed out on this,
and they said, listen, it would be too much of
a headache for each of you individually to go back
and figure out did you claim this did you not
(36:40):
claim it? So they're going to go back and check
for you. And if you didn't claim, there's nothing you
need to do. You're just going to get a check
in the mail up to fourteen hundred bucks.
Speaker 4 (36:49):
Yeah.
Speaker 2 (36:49):
Amy, When I actually read this article, I almost laughed
out loud, because, you know, our IRS commissioner basically said,
you know, looking back at their internal data, now we're
we're four years after the fact. Now, yeah, yeah, about
one million taxpayers overlooked claiming this complex credit that they
(37:09):
were actually eligible for. And then in the next sentence
he said, don't worry, we know who you are, we
know how to get them, which that scares the but
Jesus out of me. Anyway, we know who we know
who you are, we know your bank account information. If
you're eligible for the check, you'll get the check. And
they also said if you're supposed to be getting a check,
(37:31):
you should have gotten a letter already, I think in
late December, so I know I didn't get a letter.
So I'm, you know, all joking aside. I'm not holding
my breath on receiving any money. But obviously some people
are going to receive money, because two point.
Speaker 4 (37:48):
Four billion dollars is not is not pocket change?
Speaker 1 (37:51):
Yeah, no, a million or more people. You mentioned the check.
They could also do direct deposit. You should have gotten
a letter, you know. I wonder if it's something you
know you just kind of toss like, well, irs, like
what would this be in December? They're not they shouldn't
be reaching out to me. Now. Hopefully you opened it
because they would then be notifying you that you would
have this incoming stimulus payment. So nothing you have to do,
(38:15):
but hey, like a head's up. You could have a
little extra money coming your way this month. Not a
bad thing. The payments, of course, will vary. The maximum
amount an eligible person can receive fourteen hundred dollars. You
don't have to do anything. You don't have to call
your accountant. Man, I guess you know. If you didn't
get it before, you're getting it now. Thanks for listening.
We hope you're going to tune in tomorrow. We are
(38:35):
answering the biggest worries that people who are getting close
to retirement have. I think there's a lot we can
all learn from this. You've been listening to Simply Money,
presented by all Worth Financial here on fifty five KRC,
the talk station
Tonight, we have some new numbers that I can pretty
much guarantee you the Fed will look very closely at.
So what are they going to do with them? We'll
get into that. You're listening to simply Money presented by
all Worth Financial Imemi Wagner along with Bob Spawdseller Man.
I mean, for years and years, you probably didn't even
think much about inflation. I mean, if you look back,
(00:27):
you know, we would talk about how much my parents
paid for the first house they felt, and you'd be like, oh,
sixty five thousand dollars. You know, that's amazing. You can
see inflation trends when you look back decades, but your here,
we weren't feeling much of a difference. That has changed
over for sure. Over the past several years, we've been
dealing with much higher inflation and the Federal Reserve, our
(00:48):
nation central bank, trying to pull down inflation by lowering
interest rates. And it has been this kind of tight
rope walk for them, of as data comes in. How
do we keep this right and keep everything on the rails?
Trying to bring inflation down without totally seizing up the
American economy not an easy task.
Speaker 2 (01:10):
Yeah, and I think the abundance of headlines also has
a lot to do that. We're about to get a
new president in less than a week, yep, and we've
talked about that. You know, there's all kinds of assumptions
on what's going to happen with, for example, tariffs and
other regulation. So that just makes more and more people
write more and more articles, and people get more and
more worried. Let's talk about what actually happened this morning,
(01:31):
which is pretty much a whole lot of nothing. So,
you know, CPI came out at two point nine percent,
you know, the consumer price reading over a year ago,
that's just a tick higher than expected, but pretty much
in line. And then core inflation, which removes food and energy,
came in at three point two percent higher than a
(01:53):
year ago, which is slightly less than expected. Yeah, if
you net all that out, pretty much, which everything came
in as expected, despite all the headlines and everybody saying
this is the biggest inflation reading in decades, a whole
lot of nothing.
Speaker 1 (02:10):
Yeah. Well, and let's just put this in dollars and
cents for you, if you spent one thousand dollars on
if you went to the store and bought certain products,
and you spent one thousand dollars on them last year,
and you went and bought the same exact things this year,
instead of paying one thousand dollars, you might now be
paying one thousand dollars one thousand and twenty nine dollars
(02:30):
right on average, depending on what that was.
Speaker 3 (02:32):
You know.
Speaker 1 (02:33):
I think the bigger takeaway is when you sort of
kind of dig a little deeper into this inflation report,
is you know, what's costing more, what's costing less. The
FED target rate is two percent, and it's been really
sticky and really tricky for them to try to get
these numbers down to two percent. Most of the time. Recently,
the culprit has been housing, you know, rent, I mean,
(02:57):
those costs have not been going down. We're finally seeing
a little bit of easing in that market. That's movement
in the right direction for anyone who is renting a
place or buying a place. You know, we're finally seeing
inflation in that one particular sector coming down. Well, that's
the one that was just not moving for the longest time.
Speaker 2 (03:17):
Yeah, the price of shelter rose four point six percent
year over year in twenty twenty four, making it the
smallest twelve month increase since January of twenty twenty two.
Speaker 4 (03:29):
So that's good news to a.
Speaker 2 (03:31):
Lot of folks, especially those first time home buyers out
there that they're just trying to get into the housing market,
start to build some net worth through actually owning versus renting.
Hopefully that'll spurn some activity in the housing market. Yeah.
Speaker 1 (03:46):
I mean, and other things that you're paying more for
that at least prices rose, you know, and contributed to
this rise in inflation, airfare, used cars and trucks, vehicles,
medical care. For anyone who's been paying car insurance, we've
been I'm telling you this for a while. Now it's
going up shop around. It's time, you know. I think
(04:06):
there's lots of things in our lives that we just
kind of set it and forget it. We're all really,
really busy. And what inflation has forced many of us
to do, and I don't think this is a bad thing,
is when we are stretched tighter and tighter, it has
forced many of us to look at specific things within
our budget, like car insurance that maybe you just automatically
(04:28):
paid every year, and say, is there a way that
I can get a cheaper rate if I'm paying fourteen
percent more than I was last year or whatever it is.
I mean, I've seen some astronomical numbers out there. Do
your research on these things that you're paying for. Shop around,
look at your subscriptions, you know, all of the Netflix
and Hulus and all of those things.
Speaker 2 (04:47):
You know.
Speaker 1 (04:48):
I mean, I think if inflation teaches us anything, it's
how to be really intentional about how we're spending our money.
Speaker 2 (04:54):
Yeah, and speaking of that, the price of gasoline did
rise for point four percent on the month, you know,
and prices have been coming down a little bit over
the last six months of last year. And without getting
into a political discussion, I would not be surprised if
next Monday, one of the one hundred and some odd
(05:16):
executive orders that are our new president signs is something
having to do with oil and gas. So I wouldn't
be surprised to see if that number starts to tick
down here once the new administration comes on board.
Speaker 5 (05:30):
Well.
Speaker 1 (05:30):
I think it's so interesting because you know, just gas
prices are so volatile, but for many of us, it
feels like the number one tie to inflation because as
you are driving to work in the morning, as you
are driving your kids to school, picking up your grandkids
after school, whatever it is. You're driving past gas stations,
(05:50):
and it is right there in front of your face,
headlines right on those on those big big signs out front,
how much you're paying, and as you're paying attention to that,
if it goes up, you're fucking Inflation is out of control.
I mean, I just think that the price of gas
is such a litmus for how we feel about which
way inflation is going.
Speaker 2 (06:09):
Yep, let's not forget to mention some good news that
came out this morning, and you and I talked about
this on Monday, Monday, Amy. You know, at the end
of the day, what really moves markets, and we talk
about it all the time is earnings.
Speaker 4 (06:23):
Earnings, earnings.
Speaker 2 (06:24):
When you're investing in the stock market, you're investing in
good old US capitalism and the ability for companies to
make more money this quarter, more money this year than they.
Speaker 4 (06:35):
Did last year.
Speaker 2 (06:36):
Some good news this morning, and we talked about it
on Monday. A lot of the big bank earnings came
out early this morning. The profits of Goldman Sachs doubled
this last quarter over the prior quarter, JP Morgan and
Wells Fargo both came out with really robust forecast beating
(06:56):
numbers and you know, wouldn't you know it.
Speaker 4 (06:59):
As a result, the stock futures were up.
Speaker 2 (07:02):
Very, very nicely this morning, and again just proving our
point that at the end of the day, profits and
earnings are what moved this market.
Speaker 1 (07:12):
You're listening to simply money presented by all Worth Financial
and Memi Wagner along with Bob Sponseller. New data out
today that the Federal Reserve, our nation and Central Bank
will digest and figuring out, Okay, where are we going
now with interest rates and inflation? You know, not necessarily
moving much depending on which numbers you're looking at, maybe
a tick higher than forecasted in some cases, maybe a
(07:34):
tick lower depending on which specific number that you're looking at.
So nothing that's really moving the needle. Bob, I really
appreciate your point. What we should really be paying attention
to when it comes to our four one K is
how are these big companies that make up the American
economy and by the way, you're four one K, how
are they feeling about the economy and data and based
(07:54):
on again we're just starting into earning season, but based
on these first few big banks and companies that are
reporting we have good news, and you know, I think
we're gonna have some volatility into short term. We've got
the transition into a new administration, so much talk about
our campaign trail promise is actually going to come to
fruition in the first one hundred days of an administration.
(08:17):
Those are a lot of unknowns and you can get
really really caught up in that political noise. But I
always kind of tether myself to how do companies feel
about how things are doing? And I think so far
we can say they're feeling pretty good.
Speaker 4 (08:32):
Yeah.
Speaker 2 (08:33):
To quote one of my favorite all time quarterbacks, Tom Brady,
let's go go profits, go capitalism, right.
Speaker 1 (08:42):
Yeah, and go corporate greed because all of those things
are are are fueling our flour and ks are fueling
our investments. And you know, nobody has the crystal ball,
but Andy Stouder, chief investment officer, is super keeps his
finger on the pulse of where we think things are
moving in the future. In the next six months, I
think it's looking pretty well. So what does all of
this mean from the standpoint of the FED, Well, it
(09:04):
basically means we will likely see no change with what
the FED is going to do when they meet again,
so for the first time in twenty twenty five, when
they're meeting deciding where interest rates will go in the future,
I would expect And anything could change between now and then.
New data could come out, but I would expect at
this point no change.
Speaker 4 (09:22):
I think that's a good assumption.
Speaker 2 (09:23):
Everybody's just going to lay low and see what happens
for a few months.
Speaker 1 (09:27):
Yeah, I want to move quickly onto something pivots to
something completely different. But this is a headline that really
caught my eye and I just want to point it
out to you because it is so insane preposterous that
anyone's looking at the markets this way. But you know,
you and I are talking about you know, should you
be looking at it from the perspective of inflation and
(09:48):
in you know, these numbers that are coming out, Should
you be looking at it from the standpoint of how
corporate earnings are looking at Well, there is someone who
wrote an article a market watches is maybe what you
should be paying attention is what you were in And
if it's a year like with a ending in a five,
maybe you should treat your entire financial portfolio differently. Because
(10:12):
we're in the year twenty twenty five.
Speaker 2 (10:13):
Yeah, this guy actually crunched the numbers going back to
eighteen ninety five, oh my gosh, and concluded that in
every year that the calendar year ends in a five,
the stock market goes up ninety two percent of the time. So, Amy,
I know you told me walking into the office today
that you've already completely liquidated your finely tuned, diversified portfolio.
Speaker 1 (10:37):
And yeah, just because of this.
Speaker 2 (10:39):
Call options on Amazon stock? Are you sure that was
a good idea?
Speaker 1 (10:43):
Oh my gosh.
Speaker 3 (10:44):
You know.
Speaker 1 (10:45):
The perspective I think that needs to come with this
is you can look at this article and hopefully most
of us like can see this for what it is
and be like, I'm not going to do anything with
my money based on this guy. By the way, there
have been thirteen times, right that we've had a year
ending five since eighteen ninety five, ninety two percent of time.
That means nothing. That's like statistically irrelevant, And I would
(11:07):
hate to hear of an investor who did anything different
with what they are doing with their money with their
long term plan based on this kind of nonsense. So
this article is just one example of a gazillion others
that are out there designed fully to just get you
to click on them, and I think, you know, I
feel sorry for this guy who even just spent time
(11:28):
researching this, because it's just absolute insanity. Here's the all
Worth advice you had. Another example of where this headline
could compel you to just read the article, only to
then wonder why why were it even published in the
first place. Who even thought this was worth talking about,
much less making a financial decision based on Coming up next,
(11:48):
are you making the right investment decisions? Maybe you need
an investment thesis. We'll tell you what that is. Next,
you're listening to Simply Money presented by all Worth Financial.
Here in fifty five KRC thexation. You're listening to Simply
Money presented by all Worth Financial I Memi Wagner along
with Bob spond Seller. If you can't listen to our
(12:10):
show every night, you don't have to miss the thing
we talk about. We've got a daily podcast for you.
Just search Simply Money. It's on the iHeart app or
wherever you get your podcasts. Coming up at six forty three,
we've got questions to answer that you've given us income
taxes long term care, and a lot more and are
ask the advisor segment. I think some of the questions
were answering might help you as well. Okay, for anyone
(12:33):
who has gone through the process of a graduate degree,
you know you may have had to write a thesis,
go really in depth on one particular topic and listen,
it's exhausting for me to even think about it. Sounds
like a whole lot of work. But for those of
you who feel like you're maybe a little all over
(12:56):
the place when it comes to your money, like one
day you've got it figured out, you've got a plan
in a direction, and a few days later you're spending
money on something that you know you don't need, and
you're you're just all over the place, maybe you might
want to think about something along these lines. Call it
a thesis, call it your financial plan, call it your goals.
You know, Bob, I think about Steve Sprovac, your predecessor
(13:18):
in that seat, and you know, he was very, very
open and transparent about the fact that, you know, even
though he had been in this business for years and
years and years, they paid for a private school for
their boys to go to college. It was really really
expensive and they were behind when it came to saving
for retirement, and so he was in his early fifties
and realized, Okay, we really have to get serious about this.
(13:40):
He sat down, legal pad and pen and figured out, Okay,
what do we need to have a really good retirement
whatever that looked like for them, right, being able to travel,
spend time with their kids and their grandkids. And then
he put in the work on figuring out what it
took to get there. That thesis, that plan was in
the forefront of every financial decision they made for the
(14:03):
next decade and a half.
Speaker 2 (14:06):
Yeah, and I was going to ask the question, and
you just answered it. I bet Steve sat down with
his wife and his pen and his pad a paper yep,
way before, six months before he was going to retire.
Right Knowing Steve, he planned and planned and did this.
Speaker 4 (14:20):
The right way.
Speaker 2 (14:21):
So it goes back to what you know, you and
I talk about all the time, and we don't need
to get into complex terminology here. It all comes down
to what does your money need to do for you
and when and how much? And that might that might
sound simple, but it really doesn't need to get much
more complicated than that. And you know, the starting place
(14:45):
is to sit down and talk about how much money
do you really need to spend once the paychecks stop
and your portfolio and income sources have to replace that paycheck.
Speaker 1 (14:57):
That's a really scary transition for a lot of people.
Right You're going from that cumulation phase of there's a
paycheck coming in and you're put money into that flour
one K and hopefully iras and health savings account. However
you're saving the money's going in, but you see it
going in every month and all of a sudden, no
more money coming in, and you have what you have
to work with at that point. And this is a
(15:19):
time when I think a thesis or some kind of
guiding principle is really really important because it can get scary.
And you know, we can talk about finances in mathematical
terms all the time, but it's way more complex. And
that because what we're taking out of the equation is
the way you feel your emotions and behavioral finance. If
(15:40):
you're not paying attention to how you feel about money
and how that influences your decisions, you're probably missing out,
you know. And I see a lot of people get
to this point of retiring and they want to curl
up in a feto position around that money, right. They
don't want to take zero risk because.
Speaker 6 (15:57):
It was it was a lot of hard work to
get to where they are, and then that creates a
whole different problem of then inflation during the time that
they're retired being the silent killer of everything that they
have accumulated through the years.
Speaker 2 (16:13):
Well along with setting all those goals, another huge part
of if you want to use the word thesis or
financial plan, isn't an investment risk assessment meaning sitting down
with an advisor and a couple of tools and your
spouse and say how much investment risk or investment volatility
(16:34):
can our financial plan handle economically? But to your point, Amy,
how much can we handle emotionally? And the economic and
the emotional quotion of an investment risk plan are both
very important and need to be talked about in advance,
because I'll quote my favorite investment advisor, Mike Tyson, heavyweight
(16:57):
boxer YEP says, everybody as a plan until they get
punched in the mouth, and all joking aside, When you're
living off your paycheck every month, you're not so worried
about investment risk because you know you got a paycheck
coming in, you know, fifteen days from now. When those
paychecks stop in, your portfolio has to become your paycheck.
(17:20):
And we see this all the time, you know, Amy,
when we meet with clients, Investment volatility starts to mean
a whole lot more to somebody that just retired in
the last six to eight to ten months because they've
never thought about it in those terms before, so can't.
Speaker 4 (17:36):
Emphasize it enough.
Speaker 2 (17:38):
A good discussion with your advisor about investment risk tolerance
and an investment plan that fits that risk tolerance is
going to keep you from making behavioral decisions that can
upend and demolish the viability of your plan.
Speaker 1 (17:54):
I mean, I think back to when I was in college, right,
and it had a big project or a big paper.
It started with sitting down and kind of distilling all
the thoughts into one sentence. Right, what's the major thing
I'm trying to communicate here? I think the same principle
is it's with your money, and I don't care if
you're thirty three years old.
Speaker 3 (18:11):
Right.
Speaker 1 (18:11):
I had a thirty three year old couple in my
office this week, and you know, while yes, they've got
so much time and they're making great salaries, and they've
got all these paychecks ahead, they still have so many
financial decisions they're going to be bombarded with through the years.
If they have this thesis now, right, this kind of
guiding principle, it's going to help them sift through all
of those things and say, wait, what's the most important
(18:32):
thing to us? Does this next financial decision either bring
me closer to it or farther away from it? And
then there's tools that kind of support it. Just like
when you're writing a paper or doing a project, you
do that risk tolerance, right, you make sure that your
investments are aligned with that, and you just keep yourself
on that same page so that you know, none of
(18:52):
the crazy headlines that you read, none of the emotions
that you feel, none of the political stuff that you're hearing,
is ever to take you away from that singular focus
when it comes to your money.
Speaker 4 (19:04):
Yeah.
Speaker 2 (19:05):
And one of the tools that we use with all
of our clients, and I'm sure you use this with
this client you just spoke about, Amy, is something called
stress testing your portfolio. So you can actually take a
client that's coming in as a new client, take a
look at what their current holdings are and put load
all that information into some very nice software that says, hey,
(19:26):
based on historical volatility, this is what could happen to
your current portfolio if we have another ten percent correction
or fifty percent housing crash or what have you. And
you need to find out in advance what the client's
likely to do. And sometimes people are surprised when they
see that analysis done.
Speaker 1 (19:48):
Here's the all Worth advice. Creating an investment thesis is
really a good skill for you as an investor. It
can provide you with a framework for figuring out all
of your future financial decisions. Coming up next, what are
you worth? Is your employer aligned? Do they feel like
you're worth that? We're gonna help you negotiate this. Next,
you're listening to Simply Money presented by all Worth Financial
here on fifty five KRC the talk station. You're listening
(20:15):
to Simply Money presented by all Worth Financial. I mean
you Wagner along with Bob's bond seller New Year, and
maybe you're hoping to get some new dollars out of
your boss in the form of a raise in this
kind of post pandemic world. And it sounds crazy to
be saying that because we're several years removed from it,
but I don't feel like the job market has really
quite normalized yet, and so you might just kind of
(20:38):
feel like you don't even know what kind of ground
you're standing on. Can you ask for one? How much
should you ask for? What should you say? I don't
have the answers, but Julie Baukie does. Julie on the job.
She's our expert in all things having to do with
your career. You know, Julie think there's a lot of people,
and we've been talking on the show for several years
now about inflation. It's harder and harder to make ends meet.
(20:59):
And maybe you've just been working really hard and haven't
been getting the raises that you think maybe you deserve.
So if you're thinking twenty twenty five is the year
for that, how do you go about it?
Speaker 3 (21:10):
First thing I think it's really really important to remember
is that asking for a raise, it is a business conversation.
It is a business decision on the part of your
organization whether to give you more money or give you
what you ask for, whether that's more time off, whatever
it is. So it's a business decision, and so therefore
(21:33):
it will and should be run through the lens of
what you've contributed as one lens. Okay, so back up,
what do I mean by a business decision? What I
mean is you will not get traction by saying things
like my rent went up, I need a raise, or gosh,
(21:53):
you know, inflation is so high, I need a raise,
or I'm not making men's ends meet. I need a raise.
You've then made it personal, and I get that it's
personal to you, but that's not a compelling argument. Let's
let's break it down. When you're hired, it's to provide
a service of value, and organizations decide to pay you
(22:14):
based on the value your value plus other things obviously,
but so you've got this all goes down to what
value are you bringing? Now, If you're a strong performer,
if you are consistently being praised and what would we
do without you and blah blah blah, then you have
a little bit of leverage. But if you are someone
(22:35):
who's been like barely phoning it in, you've been talked
to about look, you need to step it up. Asking
for a raise. It's just a really bad idea.
Speaker 1 (22:45):
A little tell you that, right, it does.
Speaker 3 (22:47):
And so you have to start with understanding your value.
What is it you bring to the workplace. How have
your accomplishments, your actions, the things that you've done, the
things you've taken on, how have those contributed to the
success of the organization. That's really what it is. Because
if someone comes to me and says my rent went up,
(23:08):
I need a raise, well, everybody's rents going up, and
you can't make a business case for that. So you
have to start with what is your value? And so
this is something where we really struggle, you know. I
think humans really struggle with this, and I think women
especially struggle with this, Which is what is my value?
I show up every day and work hard. Is lovely, really,
(23:30):
but what is it? You know, what have you taken on?
What have you done, what have your accomplishments been? What
is it? What can you point to that says I
need to be making more money than I'm making now.
And part of that can also be what is the
market paying? You know, so if the market is paying
twenty thousand dollars more for the exact same job, that's
also a part of your case because your employer may
(23:52):
not even know that. And so I think that's a
part of the case. Market is part of the case,
because then there starts to be a risk of losing people.
But you have to deliver all of this in a
very businesslike, non emotional way and lay out the facts
or you won't get anywhere.
Speaker 2 (24:10):
So, Julie, if I'm hearing and understanding you correctly, what
this involves is you got to do a little homework.
You got to do a little research and meaning start
with what were the goals of the organization you work
for for the last year, did we meet those goals?
And then what part of that, what role in that
did you play where you can demonstrate your value in
(24:31):
helping the organization win?
Speaker 4 (24:33):
Is that someone on track?
Speaker 3 (24:35):
Absolutely, yes, very much. So it could be something like,
you know, when Fred left back in March, I took
on Fred's role for six straight months with no additional
compensation or help. I was happy to do that to
help the organization. But you know, I'm still doing a
lot of Fred's work, and you know, and here we are,
(24:55):
and of course the organization is saving money by not
having Fred there anymore, and so you know you can
talk about but again too, you have to know it's
a value to you for some people it is money,
But what if it's really not for you about the money.
What if it's more about flexibility. What if it's you know,
(25:17):
I'm happy to help out the organization, what I'd really
like to do, what I'd really like to talk about
for the year moving forward, is the ability to work
remotely on Friday. So if that's a value to you,
we always ask for more money, because who doesn't want
more money, But you have to figure out the source
of your discontent and that could be it could be
(25:38):
it could be something that will not be alleviated by
an increase in your salary. It could be more about
the quality of your life. And so getting really clear
on what would make you happier than than right that,
happier where you are than than you are right now?
What is that? And just you have to and it's
if you really do like you said, you really have
(26:00):
to dig deep and understand what it is for you.
And we always call back on salary, which is fine,
but again you've got to show that value and sometimes
by saying, look, I just got contacted by a recruiter
who's looking for someone for the ABC company and the
job sounds exactly like mine, and the starting salary for
(26:23):
the low end of the range, it's about fifteen thousand
dollars more than I make. Can we talk about how
we might address that in the upcoming year. See that's
a very emotionless business conversation versus I just got a
call them or career. I could go over to the
xID company tomorrow and make fifteen thousand dollars more than you,
cheap cheap guys or paying me that that's not going
to get you anywhere. And so you have to think,
(26:44):
as I say, you have to think from both sides
of the desk when you're asking for an increase.
Speaker 1 (26:48):
I love that you make that point, Julie, because I
think for many of us two things. First, of our
money is very emotional, and second, of all our jobs
we feel very emotional. We spend a lot of time
at them. And so understanding this is business, you cannot
go throw up all over your boss's desk all of
your emotions. And I have been overwhelmed, and I think
you're over It's not going to go well. And so
(27:11):
I love that you're saying you have to look at
this from a business standpoint. But I really want to
touch on what you were saying about salary, because you
mentioned this kind of a couple of years ago that
maybe millennials and some of the younger generations do not
value salary as much as maybe my generation. It used
to be the only thing you ever negotiated on.
Speaker 4 (27:33):
It.
Speaker 1 (27:34):
Give examples of other things that you have heard. I
love the example of maybe Friday is working from home.
What are some other stuff that we can negotiate that
maybe we've never even thought about negotiating before.
Speaker 3 (27:47):
Yes, so certain things are non negotiable, like your healthcare benefits.
It's also generally not negotiable to say I want four
weekstification instead of three, because once the organization gives that
to you, forbody else to get, the organization is going
to get is going to get themselves in trouble if
they start to be if they start to be more,
(28:09):
if they start to be what's going to be considered
unfair or discriminatory. You can't do that. So, first of all,
can you negotiate? And if there might be or there
might be times when you work for an organization where
they have a strict eight to five in the office
and your your hands may be tied, your leader's hands
may be tied in terms of what they can give you,
(28:30):
but it never hurts to ask, So is it I'd
like to what I'd really like to do now that
I've now that I'm pretty much doing a job and
a half, I really like to spend some time on
a project over here. I'd like to learn more about this.
I'd like to maybe head up a company volunteer team,
(28:51):
so figure out what would make your I'd like to
make your work life better or maybe you know, as
I look around, I think I'd really like to point
my career over here. Can we talk about what that
might look like? And can you help connect me with
some of the people over there so I can start
to broaden my career view so that you know, you know,
(29:13):
so that I can continue to grow.
Speaker 1 (29:15):
That might great thing. The key, yeah, I think the
key here is understanding if this is the year to
negotiate what's important to you and then go at it
from that business perspective. Great perspective, as always from Julie Balki.
Julie on the job, you're listening to Simply Money, presented
by all Worth Financial here in fifty five krs. The
talk station you're listening to Simply Money presented by all
(29:40):
Worth Financial. I mean you Wagner, along with Bob Spon's
already have a financial question you need a little help with.
There's a red button you can click them while you're
listening to the show. It's right there on the iHeart app.
Record your question. It's coming straight to us. And speaking
of questions, we've got some really good ones. The first
one from Chris and Clermont County.
Speaker 5 (29:59):
I am serious, say, thinking about moving to Florida since
there's no income tax?
Speaker 4 (30:03):
Am I crazy?
Speaker 2 (30:04):
Well, Chris, you're not crazy, but you know what tends
to happen with moving to Florida. Everybody's attracted to moving
to Florida because they know about no state income tax,
so that are involved in moving to Florida. For example,
I know for a fact that the cost of renewing
your license plates and driver's license and other things like that.
(30:25):
You know, permits are higher in Florida than they are
in Ohio. So you got to look at what you're
actually going to spend while you're living in Florida and
do a little comparison shopping on what normal expenses are.
I know, groceries at publics in Florida are more expensive.
Speaker 4 (30:42):
Than groceries at Kroger.
Speaker 2 (30:44):
Most people don't think about that, but when you get
down there and fill out that grocery cart, you might
have a little sticker shock.
Speaker 1 (30:50):
Yeah.
Speaker 3 (30:51):
You know.
Speaker 1 (30:51):
The way that I like to explain this to people
when they come to me with this kind of idea,
and you're right, a lot of people feel this way,
is it costs the same amount eats amount of money
in Florida to build roads and bridges as it does
in Ohio or anywhere else. So it is not that
it's cheaper. Even if you're not paying income taxes. They're
going to need to get the money from you in
(31:12):
a different way. And maybe it's you're paying tolls right
when you're driving from one place to another. Maybe it's
you're paying higher when you're yes for different kinds of
insurance or taxes or whatever. They're going to get it
for you from you in some way or another. I
would really like to move to Florida, not because of
no income tax because January here is really really cold
and gray, right. But I'm also going to look at
(31:35):
with eyes wide open, the entire financial picture and figure
out how it will really impact me before I make
that decision. So I don't think you're crazy Christopher for
thinking about it this way, but I say, hey, also
do some research on other kinds of taxes in that
state and figure out how they're really filling the coffers
in Florida, because they're doing it some way, and maybe
(31:58):
it would a way that would impact you a little
less than income tax, and so maybe that would make sense.
But go into this with fully eyes wide open. Next
question from Philip and Marymont.
Speaker 5 (32:07):
You guys are always saying how you prefer wroth savings
versus a regular for one K that's tax deferred. But
I can't see how paying twenty two percent tax now
is better than paying twelve percent once I retire and
have a lower income.
Speaker 1 (32:20):
So I think there's a couple of ways that you
can look at this. And the first is the kind
of mathematically where I am now, what tax backet I'm
in now versus where I'm going to be in retirement.
And a lot of people will say, well, don't pay
taxes now, you know, put money into a wrath now
because you know you're in a higher tax bracket now.
(32:41):
One thing though, that I like to consider is and listen,
I might be in my higher earning years now and
I'm putting a lot of my money into a wroth.
Why because I would rather pay these taxes now. And again,
this is just me. This is how I look at it.
And let that money grow tax free all of these
years then and every dollar of it that's tax deferred
(33:03):
having to pay taxes on it later, even if those
taxes that are a lower weight, because I'm counting on
the growth, right, the growth being the difference maker here.
I don't know, Bob, how do you look at this?
Speaker 4 (33:13):
I look at it the same way.
Speaker 2 (33:14):
And again this comes back to having a proactive, open
discussion with your fiduciary advisor who you know. Pretty much
every fiduciary advisor that's truly doing their job nowadays can
model some of these scenarios out, and it's a great
discussion to have. Talk about when do you plan to retire,
what do you expect your income to be? To your point, Amy,
will your income be higher at retirement than it is
(33:37):
now or lower? And you can run different scenarios and
you know, we can't perfectly predict the future, but we
can model some of these things out to allow folks
to make educated decisions that they feel good about.
Speaker 4 (33:51):
So it's a great question, Philip.
Speaker 1 (33:53):
Next question from Chris and Loveland.
Speaker 5 (33:55):
I've adjusted my budget this year so I can max
out my four to oh one K, and I are
if I still have money to save, where should it go?
Speaker 2 (34:03):
Well, Chris, I always hate to answer questions with the
answer it depends, but in this situation it does depend.
Speaker 4 (34:13):
So you know, we always default too.
Speaker 2 (34:15):
Can you make IRA contributions after you max out your
four to one K? That depends on your taxable income
for both you and your spouse. We look at you know,
does it make sense to do a WROTH or a
regular IRA or does it just make sense to start
to build a taxable account that's invested in a tax
efficient portfolio. So kind of like the discussion about tax
(34:39):
deferred versus ROTH four oh one K, it does depend,
and that discussion is worthy of a sit down with
your advisor to go over what's the best situation for you.
Speaker 1 (34:50):
I am going to throw out one other option here,
a health savings account. If a high deductible health care
plan makes sense for you, triple tax advantage, there's nothing
like it is a great way to save for future,
right cost future healthcare costs and retirement, if you can
pay for those expenses out of pocket. Now, have the
money in that HSA invested, let it grow, and then
(35:12):
when you get to retirement, take it out to cover
those expenses. It's a great, great tool, and again the
only thing that the government gives you where you're never
going to have to pay taxes on that money. Only
though obviously an option if a high deductible health care
plan makes sense for you. All right, coming up next,
you could be getting a check in the mail for
over one thousand dollars. Not a scam. We'll explain what
(35:34):
we're talking about. 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 Bob Sponseller. Did you
know the IRS is currently sending out about two point
(35:54):
four billion dollars worth of stimulus checks. No, you are
not listening to a show from twenty twenty. This is
not an old show that's coming up. What we're talking
about stimulus checks. The reason why is some of you
might have missed out on getting this check during the
pandemic when the rest of us got one.
Speaker 2 (36:13):
Show me the money, Amy, show me the money. Tell
me more. When do I get my check? And how
much am I getting?
Speaker 1 (36:20):
You're only going to get it if you did not
claim the recovery rebate credit on your twenty twenty one
tax return. It was just a complex process. The IRS
recently realized a lot of people missed out on this,
and they said, listen, it would be too much of
a headache for each of you individually to go back
and figure out did you claim this did you not
(36:40):
claim it? So they're going to go back and check
for you. And if you didn't claim, there's nothing you
need to do. You're just going to get a check
in the mail up to fourteen hundred bucks.
Speaker 4 (36:49):
Yeah.
Speaker 2 (36:49):
Amy, When I actually read this article, I almost laughed
out loud, because, you know, our IRS commissioner basically said,
you know, looking back at their internal data, now we're
we're four years after the fact. Now, yeah, yeah, about
one million taxpayers overlooked claiming this complex credit that they
(37:09):
were actually eligible for. And then in the next sentence
he said, don't worry, we know who you are, we
know how to get them, which that scares the but
Jesus out of me. Anyway, we know who we know
who you are, we know your bank account information. If
you're eligible for the check, you'll get the check. And
they also said if you're supposed to be getting a check,
(37:31):
you should have gotten a letter already, I think in
late December, so I know I didn't get a letter.
So I'm, you know, all joking aside. I'm not holding
my breath on receiving any money. But obviously some people
are going to receive money, because two point.
Speaker 4 (37:48):
Four billion dollars is not is not pocket change?
Speaker 1 (37:51):
Yeah, no, a million or more people. You mentioned the check.
They could also do direct deposit. You should have gotten
a letter, you know. I wonder if it's something you
know you just kind of toss like, well, irs, like
what would this be in December? They're not they shouldn't
be reaching out to me. Now. Hopefully you opened it
because they would then be notifying you that you would
have this incoming stimulus payment. So nothing you have to do,
(38:15):
but hey, like a head's up. You could have a
little extra money coming your way this month. Not a
bad thing. The payments, of course, will vary. The maximum
amount an eligible person can receive fourteen hundred dollars. You
don't have to do anything. You don't have to call
your accountant. Man, I guess you know. If you didn't
get it before, you're getting it now. Thanks for listening.
We hope you're going to tune in tomorrow. We are
(38:35):
answering the biggest worries that people who are getting close
to retirement have. I think there's a lot we can
all learn from this. You've been listening to Simply Money,
presented by all Worth Financial here on fifty five KRC,
the talk station
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