Episode Transcript
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Speaker 1 (00:06):
Tonight, the hidden risks of how do you get yourself
to be maybe that middle class millionaire you're listening to
simply Money presented by all Worth Financially Memi Wagner along
with Bob sponseller Bob, I think at some point we've all.
Speaker 2 (00:20):
Come across that person who maybe you don't know much
about their job.
Speaker 1 (00:26):
You know, you know, they've been working really hard for years,
they drive an older model car, maybe they're still living
in the first home that they bought two three decades
ago when they first got married, and all of a
sudden they kind of drop something into the conversation about
I don't know how much is in their four oh
one k or how much and you're like, what you have?
Speaker 2 (00:49):
How much money?
Speaker 1 (00:51):
And I think we're probably all living in the midst
of people like that, right, And we've.
Speaker 2 (00:55):
Got a lot of clients who are exactly like this.
Speaker 1 (00:59):
They are saving, they've made a lot of smart decisions.
They've also avoided a number of risks along the way,
potential potholes that could have really derailed that. And so
if you're someone who would like to be on this
path yourself, I think we can get into tonight some
of the things we would say, hey, this is a risk,
(01:19):
you need to be aware of it.
Speaker 3 (01:21):
Yeah, And what we're what we're going to talk about,
are not the folks that you just mentioned. We're talking
about the folks that maybe have very high incomes, maybe
in a lot of cases to to income earner high
you know high earners where they're busy. You know, they're
running businesses, they're they're high end corporate executives. They're busy,
(01:42):
they're working, they're achieving, they're making a lot of money,
and they're spending a lot of money along the way
with vacations, eating out, maybe expensive cars, vacation homes, and
sometimes and I and I've mentioned this before, Amy, I'm
often surprised at how many of these types of folks
don't even think about how much money they're actually going
(02:03):
to spend or plan to spend after they stop working.
So this hidden risk, Number one I guess that we'll
talk about is just lifestyle creep and overconfidence just assuming that, hey,
the money's always going to be there. Because we've always
had a high income, we've saved in our four to
one K, we've always had enough left over to do
(02:24):
whatever we want, and we just assume that that's all
going to, you know, continue to happen for the rest
of our life.
Speaker 1 (02:31):
For those that fall into this lifestyle creep trap, I
think it's because you are so focused on the here
and now, the next vacation, the car that you want,
the house you know, the next big house that.
Speaker 2 (02:44):
You want to buy or build or whatever.
Speaker 1 (02:46):
What you don't think about is your future self and retirement.
When that paycheck is no longer coming in. Have you
saved enough to continue the lifestyle that you're living now
in retirement. I've got clients, I know people, and these
are tough conversations that we're having, and I can say, look,
I'm looking at your W two's. I know you make
(03:06):
a lot of money. Great, You're also spending so much
money that it's not sustainable.
Speaker 2 (03:13):
So if you are.
Speaker 1 (03:14):
Hoping that at some point you can tell your boss
to take this job and shove it, that you can
make the transition into retirement and not worry about if
you're going to have enough, you need to avoid lifestyle creep.
And now now listen, I don't live the same way
that I did when I was twenty two years old
and I started working. But I also pay myself first,
(03:37):
I save first, and then what's left over I can
do the nicer things with, right, But I think you
have to prioritize the saving and the investing for your future.
Speaker 3 (03:49):
Yeah, and we'll just get to the punchline right away
here as we go through some of these other risks,
it all comes down to being proactive and doing a
comprehensive financial plan with spending assumptions built in that change
and evolve as you approach and move into retirement. Another
risk is I think the silent wealth killer, and that's taxes,
(04:13):
particularly for folks that have accumulated large amounts in their
retirement plans and iras and all those type of wonderful
tax deferred savings vehicles. You got to factor in the
point that it's some you know, at some point when
you convert this into spendable money, you do have to
pay taxes on that, and sometimes people underestimate the impact
(04:36):
that's going to have on their nest egg.
Speaker 1 (04:38):
I kind of say that my generation, right, are the
ones who do not have pensions, right, are kind of
the guinea pigs when it comes to floural one kes.
Speaker 2 (04:49):
We're figuring this out, and it's the number one way
that we're going to retire.
Speaker 1 (04:54):
And I had a lot of people come through my
office who are like, if I had only known years
ago that I could be putting money into a wroth
within my four oh one K pay tax at the
time and then take advantage of that tax regrowth, I
would have now though I have significant dollars that are
tax deferred, and listen, there are things we can do.
Speaker 2 (05:14):
We can do wroth conversions, we can do some qualified
charitable donations as we're pulling things.
Speaker 1 (05:20):
Out of those iras getting ready to take required minimum distributions.
Speaker 2 (05:24):
But in a perfect world, from the get.
Speaker 1 (05:28):
Go, their I was not only on saving and investing
that money, but also how can they be as tax
efficient as possible? If you have a million dollars in
your four to oh one k, fantastic, how much of
that do you owe to Uncle Sam?
Speaker 2 (05:42):
And are you really thinking through that?
Speaker 3 (05:44):
Yeah, and this is a reason to meet. Start to
meet with a fiduciary financial advisor when you're in your thirties,
not when you're in your mid fifties. And I'm thinking
about the client you've talked about a couple of times
Amy that did do that, and they wanted to retire
in their late fifties, and you were able to help
them create a strategy to get there. And you know,
(06:06):
when you wait until two three years before retirement, oftentimes
it's too late to do a lot of these strategies.
They can make a big difference down the road.
Speaker 2 (06:16):
You're listening to Simply Money presented by all Worth Financial.
Speaker 1 (06:19):
I Memi Wagner along with Bob Sponseller. Do you know
someone right the middle class millionaire next door?
Speaker 2 (06:25):
I think we all do.
Speaker 1 (06:26):
And you look at them and you're like, Ah, if
I had been paying closer attention.
Speaker 2 (06:29):
I wouldn't realized they drive a later model car.
Speaker 1 (06:32):
They're probably not as susceptible to lifestyle creep. Is maybe
me trying to keep up with the people I went
to college with on Facebook. You know, they keep an
eye on the future and they're making smart decisions about
their money. I think one thing that you got to
go in to retirement eyes wide open and be planning
for it even when you're in your thirties is longevity
(06:55):
and healthcare costs and retirement.
Speaker 2 (06:58):
I come across a lot of people who want to
that against themselves.
Speaker 1 (07:01):
Oh I'm not I'm not going to make it much
past seventy, so I'm not really going to worry.
Speaker 2 (07:05):
But what if you do right?
Speaker 1 (07:08):
What if you do live to ninety five, are your
dollars going to be there?
Speaker 2 (07:12):
Are your dollars going to outlast you?
Speaker 3 (07:14):
Yeah? And I'm seeing this amy. You know, a lot
of the clients I've worked with for over thirty years,
they're now in their mid to late eighties. And if
I had asked them twenty five, thirty years ago, did
you think you'd ever see age eighty six? Most of
them would say no. And you know, I'll just say anecdotally.
I'm not a doctor, I'm not you know, a scientist,
(07:37):
but it's normal unless you've got some type of chronic
disease or some you know, significant health issue. If you
take care of yourself, living to your mid to late
eighties should be considered the norm now. And that's why
we run all of our plans to look at what
what do things look like if you get into your
(07:57):
early to mid nineties, because that that is probably reality
for the majority of the people that are in their
late fifties, you know, to sixty right now, you have
to plan to live to be ninety ninety two, ninety four.
That's is going to become the new normal.
Speaker 2 (08:16):
But when you talk about right living, the new norm
being living until you're mid late eighties or early nineties, there
health care costs associated with that.
Speaker 1 (08:25):
Right Typically, there's several specialists, there's prescriptions, things like that.
I love to bring up health savings accounts, but man
to my clients to your point, who are in their thirties,
this is how we're preparing for health care costs in
the future. We're saying, does a high deductible health care
plan make sense if that box is checked?
Speaker 2 (08:45):
Yes, Okay, can.
Speaker 1 (08:46):
We build up enough cash reserves that we're paying for
medical expenses out of pocket.
Speaker 2 (08:50):
Let's get that money and the HSA invested.
Speaker 1 (08:53):
And let's let it grow for retirement triple tax advantage.
Speaker 2 (08:57):
Nothing like it. It makes so much sense. Pop.
Speaker 1 (09:00):
It is like music to my ears when someone will
come in my office and I'll say, yes, I have
an HSA.
Speaker 2 (09:05):
I know I've been listening to you talk about it,
and it's like, it's just such.
Speaker 1 (09:09):
A great tool for saving for retirement when it comes
to these healthcare expenses.
Speaker 3 (09:16):
Yeah, and also modeling out the risk of a potential
long term care event. And that's another thing that a
lot of people don't even want to talk about because
it's not a pleasant topic to discuss. But for most couples,
the vast majority of couples are going to see at
least one spouse needs some type of long term care help,
either in the home or in a healthcare you know,
(09:38):
nursing home facility, and you have to factor in that
cost and model that. And again that's a reason to
have that bucket of money set aside and have that
modeled out in your long term retirement plan to make
sure it's accounted for.
Speaker 2 (09:52):
What if you have saved and saved and saved for years.
Speaker 1 (09:55):
For retirement and all of a sudden you get there
and markets headslf right to the tune of twenty percent pullback.
I have known people that this has happened to and
it can be incredibly stressful if if you are not
well prepared for this.
Speaker 3 (10:12):
Yeah, and a good, A good way to approach that,
Amy and I know you do this with your clients
is if you set aside the you know, one to
three years worth of living expenses in a non risky account,
you know, short term bonds, cash, something that is non volatile.
You can usually with withstand any kind of severe market
(10:35):
volatility that's going to come down the pike and allow
your longer term growth assets to stay in place and
recover and grow for the longer term. But again, it
comes down to telling your money what it's going to
do in advance, and having buckets of money set aside
for each purpose that you have in your retirement plan.
Speaker 1 (10:54):
A couple of other things I think are worth throwing
out because I've seen these majorly derailed people's plan for
their money. One is having too much wealth and one asset,
and I want to get into this a little bit
more leader in the show, but you got to be
properly diversified.
Speaker 2 (11:10):
And then the other one, and this is a biggie.
Speaker 1 (11:12):
I have this conversation up front with everyone that comes
to my client and into my office, and I say,
this is the bank of mom and dad still open.
Speaker 2 (11:20):
If you have adult children, you would be shocked, some
of you.
Speaker 1 (11:25):
By how much money is coming in to the parents'
coffers and going right back out in the parent atm
of I need help with my insurance. I mean, just
parents that are covering so much. The problem is it's
to their own detriment, and they are not having the
conversations with their kids, the hard ones of we cannot
sustain this long term? How are we going to get
(11:47):
you on your own two feet? Which I think is
also Bob. It's a gift to the kids, right, They
need to figure out how they can support their own lifestyle.
Speaker 2 (11:56):
Here's the all Worth advice.
Speaker 1 (11:57):
Having a good amount of money isn't the same having
a solid financial strategy. Sometimes you need to partner with
a fiduciary advisor that can help you kind of proactively
plan for these risks so that you're not falling into
these possible pitfalls. Coming up next, the most ridiculous financial headlines,
just playing wrong. We've got some great historical perspective for you.
(12:19):
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 Meani
Wagner along with Bob Sponsell. Or if you can't listen
to our show every night, you don't have to miss
a thing we talk about.
Speaker 2 (12:37):
We have ideently.
Speaker 1 (12:37):
Podcast where you just search simply Money. It's on the
iHeart app or wherever you.
Speaker 2 (12:42):
Get your podcasts. Coming up at six forty three.
Speaker 1 (12:44):
You've got a lot of great questions about estate planning strategies,
and a lot more in our Ask the Advisor segment.
Speaker 2 (12:52):
We'll get to all that in just a few minutes.
Speaker 1 (12:55):
One of the things, Bob, that we do on the show,
I think that it's different from where you get elsewa
is we rip apart some headlines that you might come across.
Speaker 2 (13:04):
That might give you pause, freak you out.
Speaker 1 (13:07):
Give you major anxiety if you don't have kind of
some historical perspective.
Speaker 2 (13:12):
But I think what.
Speaker 1 (13:13):
We're going to do now is even more of a
treat because it's not just hey, here's some recent headlines.
It is going back decades in talking about some of
the headlines that people actually came across they could have
totally derailed their money. And I think this perspective might
help you kind of the next time you come across one.
Speaker 2 (13:33):
Of these things and it gives you a little heartburn.
Speaker 3 (13:36):
It's a great reminder, Amy that so much of the
media is built to instill fear and greed in people,
so that we click on the articles and we get
emotionally charged up by them. Here here's a good one
back from nineteen twenty nine in the New York Times
quote stocks have reached a permanently high plateau. Pretty bold
(13:57):
statement about how the stock mark it would continue to
rise forever. And we all know what happened shortly thereafter
in nineteen twenty nine.
Speaker 2 (14:06):
What could possibly go wrong?
Speaker 3 (14:08):
It could possibly go wrong.
Speaker 1 (14:10):
Meanwhile, what we know now is there was so many
factors behind the scenes, people being over leveraged, all kinds
of things that were slowly silently behind the headlines, leading
everything to what set our country back financially for over
a decade. Right when I come across people who lived
(14:32):
through the Great Depression, their approach to money is entirely
different from everyone else's because these are formative years and
it shook them to their core, standing in line to
wait for bread in food like this was a devastating
time financially. And again nineteen twenty nine, right just on
(14:53):
the cusp of this, everyone thought it was smooth sailing well.
Speaker 3 (14:57):
And that's why you have a lot of people in
their eighties who are living in small Cape Cod paid
off houses that are worth six seven million dollars driving
a fifteen year old sedan. They remember the Great Depression,
and you know they adjusted their life accordingly. Here's another
headline back from nineteen sixty six. The Dow hits one thousand.
(15:21):
This is the end of the line.
Speaker 1 (15:26):
So many times people will refer to the Dow and
they'll talk about how many points up or down it is, right,
and it can sound scary.
Speaker 2 (15:33):
In the reminder we always give you is, hey, what's
the percentage. What's the percentage that it's up or down
at any given point. That's what you need to focus on.
Speaker 1 (15:43):
The Dow hitting one thousand back in nineteen sixty six,
this is the end of the line.
Speaker 2 (15:47):
It can't possibly go further. We all know how that.
Speaker 1 (15:50):
Has played out and continues to play out, right, And
so I think you know. The reminder here is you've
got to focus on what's really important. It's not points,
it's the percentage that it's up or down.
Speaker 2 (16:01):
And listen, and any given day it could be up,
it's going to be down. One never knows.
Speaker 1 (16:06):
But over time, what you have to count on is
more up days in the market than down days, and
that's how you slowly build wealth. Right time in the market,
not timing the market.
Speaker 3 (16:18):
Yeah, I mean, the market should be hitting all time
highs on a fairly regular basis. That means we have
a growing economy. That's how it's supposed to work. Yep,
they're going to be ebbs and flows in between. But
calling a all time market high is ridiculous. Yeah, how about
this one Amy In two thousand, the Wall Street Journal
(16:40):
declares the tech boom is over. You know, all tech
stocks are nothing but a fad. The whole thing's going
to blow up. Obviously, the market did blow up. This
was the first big bear market I experienced as an advisor,
and it was severe, and it certainly had people nervous,
not making light of that at all. But to declare
(17:00):
technology a fad was, you know, obviously overstated.
Speaker 2 (17:05):
Somewhat short sighted.
Speaker 1 (17:06):
I think you've got to remember kind of the thought
process during that time. You could do Amyanbob dot com
and we could have zero financial plan whatsoever, and people
were going to invest because there was dot Com at
the end of that company name.
Speaker 2 (17:24):
In many of these companies were just not fundamentally sound.
It was a bit of a.
Speaker 1 (17:28):
House of cards and that house of cards fell down.
Does that mean that there was no future for technology? Well,
we all know how this played out. Fast forward to Apple,
to Amazon to Meta. I mean, these are these large
companies that have moved the markets over the past couple
of years. You know, I think maybe technology got a
little bit ahead of itself when it came to during
(17:49):
that time. Do I still think that these big, large
companies will continue to innovate?
Speaker 2 (17:54):
Yes, yeah, I do. I do. Am I going to
go all in on the tech sector? Absolutely not right,
We've learned this lesson.
Speaker 3 (18:02):
Well on The same thing could be said about AI
stocks today. I mean, it's an emerging new technology. It's
going to impact the economy, we hope in a very
positive way. But there's going to be winners and losers
in this space. And you can't just say, hey, I'm
going to buy anything with AI next week's name, Because
to your last point, some of these companies have earnings
(18:23):
and growing earnings, and some of them have no earnings
and no prospect of ever having any earnings and a
depleting balance sheet at the same time. So with new
innovation and new companies comes opportunity, but also comes a
lot of potential short term volatility.
Speaker 1 (18:41):
Yeah, here's another great headline from nineteen ninety five, the
end of the Internet.
Speaker 2 (18:46):
It's just a fad. It was recently telling my daughter.
Speaker 1 (18:49):
In nineteen ninety five, I was a freshman at the
University of Kentucky.
Speaker 2 (18:54):
We had to leave our dorm and go.
Speaker 1 (18:57):
To the Chemphis building on UK's camp us to check
our email. Do you realize how crazy that sounds to
our children now, who are picking out their phones out
of their pockets and they've got email and text messages.
You know we will, these companies will continue to evolve
and to innovate. I think calling anything justifad does it
(19:17):
make sense. I think the key here is to proper
diversify yourself.
Speaker 3 (19:22):
Amy, I'm going to date myself a bit here. You
might get a chuckle out of this, but I got
in this business in nineteen ninety one, and it was
literally that year where they started to put personal computers
on people's desks hooked up to the Internet. I used
to just stare at that screen at all the scrolling advertisements,
and I'm like, this is awesome, you know, just to
(19:44):
have that on my desktop. I'm one of those old
people that got introduced to the Internet.
Speaker 2 (19:49):
Here's the old Worth advice.
Speaker 1 (19:50):
Next time you see a headline just screaming at you
about what it thinks is going to happen in the
future of the market.
Speaker 2 (19:55):
Take it with a grain of salt.
Speaker 1 (19:57):
Coming up next, how's your career going? Is it time
to pivot, exit or double down? We're going to get
into that nextural listening to Simply Money presented by all
Worth Financial here in fifty five KRC the talk station.
Speaker 2 (20:14):
You're listening to Simply Money.
Speaker 1 (20:16):
You're presented by all Worth Financial, I Memi Wagner along
with Bob spawn Seller. Do you feel like maybe you're
at a career crossroads right now? Like?
Speaker 2 (20:25):
Do you keep on the path that you've always been?
Can can you pivot?
Speaker 1 (20:29):
What are your options? Joining us tonight is our expert
in everything to do with your job, Julie on the job,
Julie Bouki. You know, I think the options when you
get to a career crossroads or you know, do pivot,
do exit?
Speaker 2 (20:42):
To double down? And how do you even know?
Speaker 4 (20:47):
So the first thing let's do, let's normalize that you
will have multiple career crossroads in your career and versus
you pick one job when you're twenty two and hang
on for dear life forty plus years. You know, it's
it is healthy and normal to come to those moments
where you say, am I doing what I want to do?
(21:08):
Do I want to do something completely different? Do I
just want to make a slight pivot? And I call
that different chapters of your career. So we're very comfortable
using them more of the different chapters of life. But
I'm just such a fan of your career should be
lived in chapters as well, and so anytime you start
to have those feelings, it's really really don't stuff them down.
(21:32):
It's really worth examining why am I feeling this way,
what's working, what isn't blah blah blah, and then what
do I do about it? And the trick here is
you've got to be willing to do something about it.
Speaker 3 (21:43):
Amy as you talk about that, I think of some
of the articles I read that predict, you know, the
average person's going to have nine to twelve career or
job changes throughout their career. You know, people that are
young right now, And then I compare that to people
in their seventies and eighties. The people that work at
one company for thirty five forty years, got the gold watch,
(22:03):
got the pension. Is somewhere in the middle what reality
should be, you know, meaning if you're if you if
you're changing jobs and careers nine to twelve times, are
you maybe a little impatient or is that just the
way things have evolved, you know, in the economy these days.
Speaker 4 (22:21):
So let's say the numbers nine. It's reasonable to think
that at least half of that number will be involuntary changes,
companies having layoffs, companies maybe outsourcing what your department does.
And so when you look at how many times people
will get laid off in their career if they start
(22:41):
in the workforce today, if I had to, let's just say,
laid off or let go for some reason, for some
for any reason, if I just had to pick a
number out of the sky, it'd probably be I'd say,
in a you know, probably four to five times you're
going to be presented with the opportunity to find your
life's work elsewhere. And then there are going to be
(23:01):
those times when it becomes evident to you that it's
time for you to initiate that. And so it's going
to be that combination. But so instead of just hoping
it doesn't happen to you, and we need to learn
the skills of self reflection, of discernment, of getting into
(23:24):
getting into action and changing jobs because, believe me, it's
a lot more pleasant when you make that choice actively
instead of having it done to you.
Speaker 2 (23:35):
So we need to we.
Speaker 3 (23:36):
Need to doge proof our career and resume.
Speaker 4 (23:39):
Is that what you're saying, Well, you know, I you know,
I don't. I don't know if there that's even possible.
You know, you can, as I think a lot of
our friends in the Washington area would tell us, you
can be doing a great job and you can be
at risk for a variety of reasons. And it could
it could feel very arbitrary, or it could be very
(24:01):
Look what you got, what this team does, we are
outsourcing it to a team in India. So now you
need to go find something else. And so the ability
to be resilient in your career and to reskill or
upskill or decide to do something else, you have to
learn to invest in and take a chance on yourself
instead of waiting for an employer to really be the
(24:22):
one that con controls your career.
Speaker 2 (24:25):
So pivot, exit or double down right.
Speaker 1 (24:28):
Julie Balki, Julian the job joining us tonight to help
us figure this out. You know, Julie, you make an
excellent point. Of course, sometimes we don't have a choice
in this and we're shoved into this change. But if
you are someone who've maybe just started to feel an itch,
or you used to love what you did and it's
just not as enjoyable anymore, how do you think through
(24:48):
does it make sense to change?
Speaker 2 (24:50):
And where would you even start looking?
Speaker 1 (24:52):
I think it can be overwhelming for a lot of
people to think about making a change proactively mid career.
Speaker 2 (25:00):
Because that can be really scary.
Speaker 4 (25:03):
Yeah, and so the first thing you have to do
is look inward and assess why am I feeling this way?
Am I feeling this way because I'm bored? Maybe I've
been doing it for a long time and it's fine,
but you know, I believe I could you know, I
could do something else or use my talents and skills differently.
Or is it because something has changed at work? Maybe
you have a new leader that you don't quite get
(25:24):
along with, or maybe it's it's something you're dealing with
at home that really is rippling into work. So you've
got to be really good at pinning those things down.
What is it? Is it the job itself? Is it?
Speaker 3 (25:38):
You know?
Speaker 4 (25:38):
Do you not like it anymore? Or you burn out,
or have you been put in a role that you
don't feel confident and qualified for, Or is it it's
a return to the office thing and that has really
up ended your life and you can't do that, or
is it a leadership for cultures? So you've got to
look at what's the primary reason why I'm feeling this way,
And then the next question is is this something that's
(25:59):
under my can And if it's a leadership change and
your report and you work in a really small company
and that's you don't have the opportunity to move into
a different department, then you've got to figure out it
may be time to leave. If it's that you really
like the company you work for and you really like
the leadership and you believe in the mission, but you're
getting bored in your job, that might be something you
(26:21):
could have a conversation about. So you've got to diagnose
the problem before you can figure out if it's in
your control, and if it isn't, if you try everything
and say, you know what, it's just time for me
to move on for whatever reason, then the next step
is figuring out like getting in your car and opening
up Google Maps and putting the destination in you have
(26:43):
to start figuring out, given what's unsatisfactory about where you are, now,
what does satisfactory look like?
Speaker 1 (26:50):
What?
Speaker 4 (26:50):
In other words, what do I want to move toward?
More of this, less of this, et cetera. And it's really,
really and this is why we exist. It's hard to
do it for yourself because we don't, I find it normally,
we don't give ourselves enough credit for all the things
we're good at. Where most of us are instead of
(27:12):
being having a self having a overinflated sense of what
we're capable of, it's generally underinflated. And that's I mean,
that's what we do. We help people figure that out
and then put a plan together to go get it.
But if you're stuck in the if you're stuck in
the who else would hire me? This is all I know.
(27:35):
I'm over fifty, I'm too old. If you start any
of that thinking, then you're really relegating yourself to just
several more years of being miserable. And frankly, when you're
miserable at work, it's very, very hard to be pleasant
in other areas of your life because the line between work.
Speaker 1 (27:54):
And home is gone at this point Julie quickly, we
have about a minute left. You know, for someone who
is in this place, you kind of refer to this.
But you and I have done this together in the past,
making lists.
Speaker 2 (28:09):
What do I want to do more of? What do
I want to do less of?
Speaker 1 (28:12):
And I think putting it on paper can be incredibly
I opening of Oh, maybe here's the solution, and maybe
it's already within the company that I'm working.
Speaker 2 (28:21):
It's just a slight pivot.
Speaker 4 (28:23):
Right exactly, that's right once you figure out. So the
process we walk people through is we'll say, Okay, what's
not working and what do you want? So we help
people figure out. You pull yourself away from your employer
and say, okay, what do I really want? The next
question then is can I get it where I am?
And if the answer is yes, then you start to
(28:46):
have conversations where you're very clear about what you want
more of, less of, et cetera. But sometimes the answer
is no. And so at that point you are at
a crossroads where you say, well, I either need to
I I believe everybody deserves to be happy at work.
Speaker 1 (29:02):
Yeah, so maybe it's making a jump, right that could
be the best thing, which you gotta ask yourself.
Speaker 2 (29:08):
Could but you've got to ask yourself the questions first.
Speaker 1 (29:11):
Yeah, Julie Bauki, Julie on the job, Thank you so much,
great insights. You're listening to Simply Money presented by all
Worth Financial here in fifty five krs the talk station.
Speaker 2 (29:24):
You're listening to Simply Money presented by all Worth Financial.
Speaker 1 (29:27):
I mean me Wagner alone with Bob spondsell or. Do
you have a financial question you need a little help with.
There's a red button you can click on while you're
listening to the show right there on the iHeart app
record your question. It's coming straight to us, and it
is time to ask the advisor some of your questions.
Speaker 2 (29:40):
First one is from Chris and Mason.
Speaker 3 (29:43):
Should I invest one hundred percent in stocks?
Speaker 2 (29:45):
If I plan on handing my portfolio over to my children,
I don't need the money.
Speaker 3 (29:49):
Well, Chris, you know, just going off the question. And
I'm a literal kind of guy, so I'm just reading
the question. If this is truly money that you never
intend to spend, and it's a long term time horizon
and you're going to live another fifteen, twenty thirty years
and then hand these stop the portfolio over to your
children by all means, take advantage of capital gains, growth
(30:11):
in the market, stepped up cost bases at death. It's
a wonderful way to leave assets you know to your
children and grow them while you're still alive. I say,
go for it, but be diversified. Be diversified, don't put
it all in deep seek.
Speaker 1 (30:26):
One of the number one conversations or first conversations I
have when I'm working with someone is what's your goal
for your money? Do you want your last check to
bounce or do you want your kids to get this money.
If the goal is, hey, we've got enough that we're
not going to need a lot of this and the
kids are going to get it, I think it does
make sense to be more aggressive. I think the one
(30:47):
caveat I would throw in here is, hey, if you're
one hundred percent in the stock market, hopefully you realize
the price of admission is.
Speaker 2 (30:53):
Going to be some volatility.
Speaker 1 (30:54):
Are you going to wake up one day and see
that that portfolio could potentially be down twenty percent? And
are you still going to be able to sleep at
night knowing that it's likely going to rebound to a
new high, hopefully before your.
Speaker 2 (31:05):
Kids inherent that money.
Speaker 1 (31:06):
So a lot of this is just understanding your own
risk tolerance. Here, let's get to Mark now in Madeira.
Speaker 5 (31:12):
My wife and I are both fifty one years old
and have no children. We are in great shape financially.
Should we be investing in private equity, hedge funds or
alternative investments?
Speaker 3 (31:23):
Well, Mark, I think investing in these different asset classes
has very little to do with how old you are
and how many children you have and what shape you're
in financially. It just has to do with how much
growth do you want or potential growth do you want
in your portfolio, and how much risk mitigation do you
want a lot of times, the reason people use alternative
(31:43):
investments is to have a non correlated asset class in
their portfolio, meaning something that will go down when the
broad stock market goes up, and vice versa. With private equity,
you know you're getting privately held companies that have oftentimes
a lot more growth potential, but you need to be
aware that there's higher fees usually involved with these type
of investments and your money can be locked up for
(32:05):
a period of time. And then hedge funds is kind
of a to me, very similar to alternative investments just
another non correlated asset class. So I think the key
here is just to understand how each of these different
types of investments work and then decide is this a
good fit for me and my personal financial plan?
Speaker 1 (32:26):
Yeah, and I think you got to look at Okay,
what are we really going to need in retirement?
Speaker 4 (32:29):
Right?
Speaker 2 (32:29):
What are our expenses going to be?
Speaker 1 (32:31):
I would say dollars that you know you're going to
need to live off of retirement. Maybe don't belong and
some of these asset classes because there's just going to
be more volatility potentially associated with these. If you have
checked the box and you know you're good for retirement
and you want to diversify beyond there, this could be
a great thing to look at. But I think Bob,
I love your point about, hey, do your research first.
(32:53):
Just because other people are talking about it doesn't mean
you go on in on any of these potential investments.
Things like this can sound incredible, sexy, but I think
you have to figure out does this truly make sense
for us? All right, let's get to Robert now in
Amberley Village.
Speaker 5 (33:07):
How can I structure my portfolio to minimize exposure to
a potential recession while maintaining upside potential.
Speaker 3 (33:14):
I think this comes down to how your portfolio is
allocated risk wise between different asset classes, broadly speaking, stocks, bonds,
and cash. And then you know, Robert, there there is
going to be a recession at some point. It's not
a matter of if, it's a matter of when. So again,
it comes down to planning your cash flow and having
(33:34):
some short term money, money that you're gonna need within
one to three years, set aside in something that's safe,
high yield savings accounts, short term bonds, things like that
that will dramatically minimize your exposure to a potential recession.
Speaker 2 (33:51):
Yeah.
Speaker 1 (33:51):
I think you've got to build up cash reserves right
that you could potentially draw from when markets are down,
so that you're not locking in losses by pulling distributions
out of your investments.
Speaker 2 (34:02):
I'm going to throw out another option here. It's called
a buffer.
Speaker 1 (34:05):
ETF, and this could be something that might make sense
for your assets, a portion of your assets, and essentially
it can protect you from give you some downside protection
while also taking advantage of potential upside too. You know,
and I think you just have to think through does
this something that makes sense for you. Our buffer ETF
(34:25):
here at all Worth, we say to fully participate in
the advantages of this, you need your probably money locked
up in it for about a year, and it's not
ever locked up.
Speaker 2 (34:33):
It's not like an annuity or anything else.
Speaker 1 (34:35):
But to truly participate in it, you know, that's something
that you need to think through.
Speaker 2 (34:39):
Right, Is this money I'm going to need in the
next year.
Speaker 1 (34:41):
So so I think there are options here, and I
also think it's really smart to be thinking through the
closer you get to retirement, not only growth, but also protection.
Speaker 2 (34:51):
I ran coming up next, a little dose of Wagner
wisdom for you.
Speaker 1 (34:55):
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 MEI
Wagner along with Bob Sponsller that music can only mean
one thing.
Speaker 2 (35:13):
It is time for some Wagner wisdom for you. Bob.
Speaker 1 (35:17):
I'm going to ask you to stick with me on
this one. I was listening to a podcast this week and.
Speaker 2 (35:21):
They were sharing this story.
Speaker 1 (35:23):
I don't know how many years it goes back, but
back to the day where like people would go to
local festivals all the time, things like that, And and
there was a competition at a festival where you could
go and you could guess how much the prize steer weighs.
Speaker 2 (35:41):
Right, it's the it's the competition.
Speaker 1 (35:43):
So all these people were going and they were all
putting in guesses in one lucky person.
Speaker 3 (35:49):
Is the prize steer an animal or a human being?
Speaker 2 (35:52):
I think it's an animal.
Speaker 1 (35:54):
As I was following along, Christ is the animal, and
everyone is, you know, making their bets on what's the
winning thing here. One person comes within ten pounds. Interestingly,
someone who was there that day said to the people
who were doing this festival, can I get all the guesses?
And they're like, sure, sure you can get all the guesses.
(36:14):
We don't need them. So this person went home and
average together everybody's guesses. Interestingly, they were within two pounds.
When you put the collective together, they were within two
pounds of what the actual weight was. And that got
me thinking as I was listening to this about being
broadly diversified. Right, one person won that day, one person
(36:39):
like that, one thing came out ahead, but the collective, right,
everyone's collective energy in smarts actually got much closer to
the reality. And so I think there's so many people
who want to go in all in on whatever it is.
Speaker 2 (36:54):
Pick your company, pick.
Speaker 1 (36:55):
Your asset class, pick what an old investment, and think
this is it. And I fully, fully believe a broadly diversified,
you know, portfolio built on indexes, where we're relying on
the brain power of a lot of really smart people
running these companies is truly what's going to get you
out ahead.
Speaker 3 (37:16):
Well, and you're you know a lot of people are wrong,
just like you're gonna have a lot of big winners
and big losers in a broad index. But the broad market,
highly diversified is always right, I think, is the point
that you're making. And I guess I was going to
ask too, is this person that you're referring to named
Andy Stout? Is this how Andy grew up our chief
(37:37):
investment officer at all? This sounds like something Andy would
have done.
Speaker 1 (37:40):
It is probably how his brain works, which is why
I'm so glad he is in the position that he's in.
Speaker 2 (37:46):
But it just it was so interesting because I was
listening to.
Speaker 1 (37:48):
This story, I was thinking I would have never thought,
first of all, hey, what did everyone collectively come up with,
but how much closer it was to any person's individual Guess.
You know there's people that I come into contact with
all the time. What about crypto?
Speaker 2 (38:04):
What about this? What about that?
Speaker 1 (38:06):
And I'm like, what about the S and P five hundred?
What about these big companies?
Speaker 3 (38:11):
Yeah, and to your point, Amy and all joking, stupid
jokes aside, that's an excellent illustration. It really is, and
it's a good lesson to learn for all of us.
Speaker 1 (38:20):
Yeah.
Speaker 2 (38:21):
So the next time you're at a party, someone's.
Speaker 1 (38:23):
Talking about how much they made some crazy return on
some individual asset, and you're starting to think, either I
need to get into that or I need to figure
out what my own lottery ticket is. Right, No, I
mean it's the chortose versus the hair here, being broadly diversified.
It's not one sexy stock that's going to change everything
for you. It's being smart and well diversified through the years.
Speaker 2 (38:45):
Thanks for listening.
Speaker 1 (38:46):
You've been listening to Simply Money presented by all Worth
Financial here in fifty five krs, the talk station
Tonight, the hidden risks of how do you get yourself
to be maybe that middle class millionaire you're listening to
simply Money presented by all Worth Financially Memi Wagner along
with Bob sponseller Bob, I think at some point we've all.
Speaker 2 (00:20):
Come across that person who maybe you don't know much
about their job.
Speaker 1 (00:26):
You know, you know, they've been working really hard for years,
they drive an older model car, maybe they're still living
in the first home that they bought two three decades
ago when they first got married, and all of a
sudden they kind of drop something into the conversation about
I don't know how much is in their four oh
one k or how much and you're like, what you have?
Speaker 2 (00:49):
How much money?
Speaker 1 (00:51):
And I think we're probably all living in the midst
of people like that, right, And we've.
Speaker 2 (00:55):
Got a lot of clients who are exactly like this.
Speaker 1 (00:59):
They are saving, they've made a lot of smart decisions.
They've also avoided a number of risks along the way,
potential potholes that could have really derailed that. And so
if you're someone who would like to be on this
path yourself, I think we can get into tonight some
of the things we would say, hey, this is a risk,
(01:19):
you need to be aware of it.
Speaker 3 (01:21):
Yeah, And what we're what we're going to talk about,
are not the folks that you just mentioned. We're talking
about the folks that maybe have very high incomes, maybe
in a lot of cases to to income earner high
you know high earners where they're busy. You know, they're
running businesses, they're they're high end corporate executives. They're busy,
(01:42):
they're working, they're achieving, they're making a lot of money,
and they're spending a lot of money along the way
with vacations, eating out, maybe expensive cars, vacation homes, and
sometimes and I and I've mentioned this before, Amy, I'm
often surprised at how many of these types of folks
don't even think about how much money they're actually going
(02:03):
to spend or plan to spend after they stop working.
So this hidden risk, Number one I guess that we'll
talk about is just lifestyle creep and overconfidence just assuming that, hey,
the money's always going to be there. Because we've always
had a high income, we've saved in our four to
one K, we've always had enough left over to do
(02:24):
whatever we want, and we just assume that that's all
going to, you know, continue to happen for the rest
of our life.
Speaker 1 (02:31):
For those that fall into this lifestyle creep trap, I
think it's because you are so focused on the here
and now, the next vacation, the car that you want,
the house you know, the next big house that.
Speaker 2 (02:44):
You want to buy or build or whatever.
Speaker 1 (02:46):
What you don't think about is your future self and retirement.
When that paycheck is no longer coming in. Have you
saved enough to continue the lifestyle that you're living now
in retirement. I've got clients, I know people, and these
are tough conversations that we're having, and I can say, look,
I'm looking at your W two's. I know you make
(03:06):
a lot of money. Great, You're also spending so much
money that it's not sustainable.
Speaker 2 (03:13):
So if you are.
Speaker 1 (03:14):
Hoping that at some point you can tell your boss
to take this job and shove it, that you can
make the transition into retirement and not worry about if
you're going to have enough, you need to avoid lifestyle creep.
And now now listen, I don't live the same way
that I did when I was twenty two years old
and I started working. But I also pay myself first,
(03:37):
I save first, and then what's left over I can
do the nicer things with, right, But I think you
have to prioritize the saving and the investing for your future.
Speaker 3 (03:49):
Yeah, and we'll just get to the punchline right away
here as we go through some of these other risks,
it all comes down to being proactive and doing a
comprehensive financial plan with spending assumptions built in that change
and evolve as you approach and move into retirement. Another
risk is I think the silent wealth killer, and that's taxes,
(04:13):
particularly for folks that have accumulated large amounts in their
retirement plans and iras and all those type of wonderful
tax deferred savings vehicles. You got to factor in the
point that it's some you know, at some point when
you convert this into spendable money, you do have to
pay taxes on that, and sometimes people underestimate the impact
(04:36):
that's going to have on their nest egg.
Speaker 1 (04:38):
I kind of say that my generation, right, are the
ones who do not have pensions, right, are kind of
the guinea pigs when it comes to floural one kes.
Speaker 2 (04:49):
We're figuring this out, and it's the number one way
that we're going to retire.
Speaker 1 (04:54):
And I had a lot of people come through my
office who are like, if I had only known years
ago that I could be putting money into a wroth
within my four oh one K pay tax at the
time and then take advantage of that tax regrowth, I
would have now though I have significant dollars that are
tax deferred, and listen, there are things we can do.
Speaker 2 (05:14):
We can do wroth conversions, we can do some qualified
charitable donations as we're pulling things.
Speaker 1 (05:20):
Out of those iras getting ready to take required minimum distributions.
Speaker 2 (05:24):
But in a perfect world, from the get.
Speaker 1 (05:28):
Go, their I was not only on saving and investing
that money, but also how can they be as tax
efficient as possible? If you have a million dollars in
your four to oh one k, fantastic, how much of
that do you owe to Uncle Sam?
Speaker 2 (05:42):
And are you really thinking through that?
Speaker 3 (05:44):
Yeah, and this is a reason to meet. Start to
meet with a fiduciary financial advisor when you're in your thirties,
not when you're in your mid fifties. And I'm thinking
about the client you've talked about a couple of times
Amy that did do that, and they wanted to retire
in their late fifties, and you were able to help
them create a strategy to get there. And you know,
(06:06):
when you wait until two three years before retirement, oftentimes
it's too late to do a lot of these strategies.
They can make a big difference down the road.
Speaker 2 (06:16):
You're listening to Simply Money presented by all Worth Financial.
Speaker 1 (06:19):
I Memi Wagner along with Bob Sponseller. Do you know
someone right the middle class millionaire next door?
Speaker 2 (06:25):
I think we all do.
Speaker 1 (06:26):
And you look at them and you're like, Ah, if
I had been paying closer attention.
Speaker 2 (06:29):
I wouldn't realized they drive a later model car.
Speaker 1 (06:32):
They're probably not as susceptible to lifestyle creep. Is maybe
me trying to keep up with the people I went
to college with on Facebook. You know, they keep an
eye on the future and they're making smart decisions about
their money. I think one thing that you got to
go in to retirement eyes wide open and be planning
for it even when you're in your thirties is longevity
(06:55):
and healthcare costs and retirement.
Speaker 2 (06:58):
I come across a lot of people who want to
that against themselves.
Speaker 1 (07:01):
Oh I'm not I'm not going to make it much
past seventy, so I'm not really going to worry.
Speaker 2 (07:05):
But what if you do right?
Speaker 1 (07:08):
What if you do live to ninety five, are your
dollars going to be there?
Speaker 2 (07:12):
Are your dollars going to outlast you?
Speaker 3 (07:14):
Yeah? And I'm seeing this amy. You know, a lot
of the clients I've worked with for over thirty years,
they're now in their mid to late eighties. And if
I had asked them twenty five, thirty years ago, did
you think you'd ever see age eighty six? Most of
them would say no. And you know, I'll just say anecdotally.
I'm not a doctor, I'm not you know, a scientist,
(07:37):
but it's normal unless you've got some type of chronic
disease or some you know, significant health issue. If you
take care of yourself, living to your mid to late
eighties should be considered the norm now. And that's why
we run all of our plans to look at what
what do things look like if you get into your
(07:57):
early to mid nineties, because that that is probably reality
for the majority of the people that are in their
late fifties, you know, to sixty right now, you have
to plan to live to be ninety ninety two, ninety four.
That's is going to become the new normal.
Speaker 2 (08:16):
But when you talk about right living, the new norm
being living until you're mid late eighties or early nineties, there
health care costs associated with that.
Speaker 1 (08:25):
Right Typically, there's several specialists, there's prescriptions, things like that.
I love to bring up health savings accounts, but man
to my clients to your point, who are in their thirties,
this is how we're preparing for health care costs in
the future. We're saying, does a high deductible health care
plan make sense if that box is checked?
Speaker 2 (08:45):
Yes, Okay, can.
Speaker 1 (08:46):
We build up enough cash reserves that we're paying for
medical expenses out of pocket.
Speaker 2 (08:50):
Let's get that money and the HSA invested.
Speaker 1 (08:53):
And let's let it grow for retirement triple tax advantage.
Speaker 2 (08:57):
Nothing like it. It makes so much sense. Pop.
Speaker 1 (09:00):
It is like music to my ears when someone will
come in my office and I'll say, yes, I have
an HSA.
Speaker 2 (09:05):
I know I've been listening to you talk about it,
and it's like, it's just such.
Speaker 1 (09:09):
A great tool for saving for retirement when it comes
to these healthcare expenses.
Speaker 3 (09:16):
Yeah, and also modeling out the risk of a potential
long term care event. And that's another thing that a
lot of people don't even want to talk about because
it's not a pleasant topic to discuss. But for most couples,
the vast majority of couples are going to see at
least one spouse needs some type of long term care help,
either in the home or in a healthcare you know,
(09:38):
nursing home facility, and you have to factor in that
cost and model that. And again that's a reason to
have that bucket of money set aside and have that
modeled out in your long term retirement plan to make
sure it's accounted for.
Speaker 2 (09:52):
What if you have saved and saved and saved for years.
Speaker 1 (09:55):
For retirement and all of a sudden you get there
and markets headslf right to the tune of twenty percent pullback.
I have known people that this has happened to and
it can be incredibly stressful if if you are not
well prepared for this.
Speaker 3 (10:12):
Yeah, and a good, A good way to approach that,
Amy and I know you do this with your clients
is if you set aside the you know, one to
three years worth of living expenses in a non risky account,
you know, short term bonds, cash, something that is non volatile.
You can usually with withstand any kind of severe market
(10:35):
volatility that's going to come down the pike and allow
your longer term growth assets to stay in place and
recover and grow for the longer term. But again, it
comes down to telling your money what it's going to
do in advance, and having buckets of money set aside
for each purpose that you have in your retirement plan.
Speaker 1 (10:54):
A couple of other things I think are worth throwing
out because I've seen these majorly derailed people's plan for
their money. One is having too much wealth and one asset,
and I want to get into this a little bit
more leader in the show, but you got to be
properly diversified.
Speaker 2 (11:10):
And then the other one, and this is a biggie.
Speaker 1 (11:12):
I have this conversation up front with everyone that comes
to my client and into my office, and I say,
this is the bank of mom and dad still open.
Speaker 2 (11:20):
If you have adult children, you would be shocked, some
of you.
Speaker 1 (11:25):
By how much money is coming in to the parents'
coffers and going right back out in the parent atm
of I need help with my insurance. I mean, just
parents that are covering so much. The problem is it's
to their own detriment, and they are not having the
conversations with their kids, the hard ones of we cannot
sustain this long term? How are we going to get
(11:47):
you on your own two feet? Which I think is
also Bob. It's a gift to the kids, right, They
need to figure out how they can support their own lifestyle.
Speaker 2 (11:56):
Here's the all Worth advice.
Speaker 1 (11:57):
Having a good amount of money isn't the same having
a solid financial strategy. Sometimes you need to partner with
a fiduciary advisor that can help you kind of proactively
plan for these risks so that you're not falling into
these possible pitfalls. Coming up next, the most ridiculous financial headlines,
just playing wrong. We've got some great historical perspective for you.
(12:19):
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 Meani
Wagner along with Bob Sponsell. Or if you can't listen
to our show every night, you don't have to miss
a thing we talk about.
Speaker 2 (12:37):
We have ideently.
Speaker 1 (12:37):
Podcast where you just search simply Money. It's on the
iHeart app or wherever you.
Speaker 2 (12:42):
Get your podcasts. Coming up at six forty three.
Speaker 1 (12:44):
You've got a lot of great questions about estate planning strategies,
and a lot more in our Ask the Advisor segment.
Speaker 2 (12:52):
We'll get to all that in just a few minutes.
Speaker 1 (12:55):
One of the things, Bob, that we do on the show,
I think that it's different from where you get elsewa
is we rip apart some headlines that you might come across.
Speaker 2 (13:04):
That might give you pause, freak you out.
Speaker 1 (13:07):
Give you major anxiety if you don't have kind of
some historical perspective.
Speaker 2 (13:12):
But I think what.
Speaker 1 (13:13):
We're going to do now is even more of a
treat because it's not just hey, here's some recent headlines.
It is going back decades in talking about some of
the headlines that people actually came across they could have
totally derailed their money. And I think this perspective might
help you kind of the next time you come across one.
Speaker 2 (13:33):
Of these things and it gives you a little heartburn.
Speaker 3 (13:36):
It's a great reminder, Amy that so much of the
media is built to instill fear and greed in people,
so that we click on the articles and we get
emotionally charged up by them. Here here's a good one
back from nineteen twenty nine in the New York Times
quote stocks have reached a permanently high plateau. Pretty bold
(13:57):
statement about how the stock mark it would continue to
rise forever. And we all know what happened shortly thereafter
in nineteen twenty nine.
Speaker 2 (14:06):
What could possibly go wrong?
Speaker 3 (14:08):
It could possibly go wrong.
Speaker 1 (14:10):
Meanwhile, what we know now is there was so many
factors behind the scenes, people being over leveraged, all kinds
of things that were slowly silently behind the headlines, leading
everything to what set our country back financially for over
a decade. Right when I come across people who lived
(14:32):
through the Great Depression, their approach to money is entirely
different from everyone else's because these are formative years and
it shook them to their core, standing in line to
wait for bread in food like this was a devastating
time financially. And again nineteen twenty nine, right just on
(14:53):
the cusp of this, everyone thought it was smooth sailing well.
Speaker 3 (14:57):
And that's why you have a lot of people in
their eighties who are living in small Cape Cod paid
off houses that are worth six seven million dollars driving
a fifteen year old sedan. They remember the Great Depression,
and you know they adjusted their life accordingly. Here's another
headline back from nineteen sixty six. The Dow hits one thousand.
(15:21):
This is the end of the line.
Speaker 1 (15:26):
So many times people will refer to the Dow and
they'll talk about how many points up or down it is, right,
and it can sound scary.
Speaker 2 (15:33):
In the reminder we always give you is, hey, what's
the percentage. What's the percentage that it's up or down
at any given point. That's what you need to focus on.
Speaker 1 (15:43):
The Dow hitting one thousand back in nineteen sixty six,
this is the end of the line.
Speaker 2 (15:47):
It can't possibly go further. We all know how that.
Speaker 1 (15:50):
Has played out and continues to play out, right, And
so I think you know. The reminder here is you've
got to focus on what's really important. It's not points,
it's the percentage that it's up or down.
Speaker 2 (16:01):
And listen, and any given day it could be up,
it's going to be down. One never knows.
Speaker 1 (16:06):
But over time, what you have to count on is
more up days in the market than down days, and
that's how you slowly build wealth. Right time in the market,
not timing the market.
Speaker 3 (16:18):
Yeah, I mean, the market should be hitting all time
highs on a fairly regular basis. That means we have
a growing economy. That's how it's supposed to work. Yep,
they're going to be ebbs and flows in between. But
calling a all time market high is ridiculous. Yeah, how about
this one Amy In two thousand, the Wall Street Journal
(16:40):
declares the tech boom is over. You know, all tech
stocks are nothing but a fad. The whole thing's going
to blow up. Obviously, the market did blow up. This
was the first big bear market I experienced as an advisor,
and it was severe, and it certainly had people nervous,
not making light of that at all. But to declare
(17:00):
technology a fad was, you know, obviously overstated.
Speaker 2 (17:05):
Somewhat short sighted.
Speaker 1 (17:06):
I think you've got to remember kind of the thought
process during that time. You could do Amyanbob dot com
and we could have zero financial plan whatsoever, and people
were going to invest because there was dot Com at
the end of that company name.
Speaker 2 (17:24):
In many of these companies were just not fundamentally sound.
It was a bit of a.
Speaker 1 (17:28):
House of cards and that house of cards fell down.
Does that mean that there was no future for technology? Well,
we all know how this played out. Fast forward to Apple,
to Amazon to Meta. I mean, these are these large
companies that have moved the markets over the past couple
of years. You know, I think maybe technology got a
little bit ahead of itself when it came to during
(17:49):
that time. Do I still think that these big, large
companies will continue to innovate?
Speaker 2 (17:54):
Yes, yeah, I do. I do. Am I going to
go all in on the tech sector? Absolutely not right,
We've learned this lesson.
Speaker 3 (18:02):
Well on The same thing could be said about AI
stocks today. I mean, it's an emerging new technology. It's
going to impact the economy, we hope in a very
positive way. But there's going to be winners and losers
in this space. And you can't just say, hey, I'm
going to buy anything with AI next week's name, Because
to your last point, some of these companies have earnings
(18:23):
and growing earnings, and some of them have no earnings
and no prospect of ever having any earnings and a
depleting balance sheet at the same time. So with new
innovation and new companies comes opportunity, but also comes a
lot of potential short term volatility.
Speaker 1 (18:41):
Yeah, here's another great headline from nineteen ninety five, the
end of the Internet.
Speaker 2 (18:46):
It's just a fad. It was recently telling my daughter.
Speaker 1 (18:49):
In nineteen ninety five, I was a freshman at the
University of Kentucky.
Speaker 2 (18:54):
We had to leave our dorm and go.
Speaker 1 (18:57):
To the Chemphis building on UK's camp us to check
our email. Do you realize how crazy that sounds to
our children now, who are picking out their phones out
of their pockets and they've got email and text messages.
You know we will, these companies will continue to evolve
and to innovate. I think calling anything justifad does it
(19:17):
make sense. I think the key here is to proper
diversify yourself.
Speaker 3 (19:22):
Amy, I'm going to date myself a bit here. You
might get a chuckle out of this, but I got
in this business in nineteen ninety one, and it was
literally that year where they started to put personal computers
on people's desks hooked up to the Internet. I used
to just stare at that screen at all the scrolling advertisements,
and I'm like, this is awesome, you know, just to
(19:44):
have that on my desktop. I'm one of those old
people that got introduced to the Internet.
Speaker 2 (19:49):
Here's the old Worth advice.
Speaker 1 (19:50):
Next time you see a headline just screaming at you
about what it thinks is going to happen in the
future of the market.
Speaker 2 (19:55):
Take it with a grain of salt.
Speaker 1 (19:57):
Coming up next, how's your career going? Is it time
to pivot, exit or double down? We're going to get
into that nextural listening to Simply Money presented by all
Worth Financial here in fifty five KRC the talk station.
Speaker 2 (20:14):
You're listening to Simply Money.
Speaker 1 (20:16):
You're presented by all Worth Financial, I Memi Wagner along
with Bob spawn Seller. Do you feel like maybe you're
at a career crossroads right now? Like?
Speaker 2 (20:25):
Do you keep on the path that you've always been?
Can can you pivot?
Speaker 1 (20:29):
What are your options? Joining us tonight is our expert
in everything to do with your job, Julie on the job,
Julie Bouki. You know, I think the options when you
get to a career crossroads or you know, do pivot,
do exit?
Speaker 2 (20:42):
To double down? And how do you even know?
Speaker 4 (20:47):
So the first thing let's do, let's normalize that you
will have multiple career crossroads in your career and versus
you pick one job when you're twenty two and hang
on for dear life forty plus years. You know, it's
it is healthy and normal to come to those moments
where you say, am I doing what I want to do?
(21:08):
Do I want to do something completely different? Do I
just want to make a slight pivot? And I call
that different chapters of your career. So we're very comfortable
using them more of the different chapters of life. But
I'm just such a fan of your career should be
lived in chapters as well, and so anytime you start
to have those feelings, it's really really don't stuff them down.
(21:32):
It's really worth examining why am I feeling this way,
what's working, what isn't blah blah blah, and then what
do I do about it? And the trick here is
you've got to be willing to do something about it.
Speaker 3 (21:43):
Amy as you talk about that, I think of some
of the articles I read that predict, you know, the
average person's going to have nine to twelve career or
job changes throughout their career. You know, people that are
young right now, And then I compare that to people
in their seventies and eighties. The people that work at
one company for thirty five forty years, got the gold watch,
(22:03):
got the pension. Is somewhere in the middle what reality
should be, you know, meaning if you're if you if
you're changing jobs and careers nine to twelve times, are
you maybe a little impatient or is that just the
way things have evolved, you know, in the economy these days.
Speaker 4 (22:21):
So let's say the numbers nine. It's reasonable to think
that at least half of that number will be involuntary changes,
companies having layoffs, companies maybe outsourcing what your department does.
And so when you look at how many times people
will get laid off in their career if they start
(22:41):
in the workforce today, if I had to, let's just say,
laid off or let go for some reason, for some
for any reason, if I just had to pick a
number out of the sky, it'd probably be I'd say,
in a you know, probably four to five times you're
going to be presented with the opportunity to find your
life's work elsewhere. And then there are going to be
(23:01):
those times when it becomes evident to you that it's
time for you to initiate that. And so it's going
to be that combination. But so instead of just hoping
it doesn't happen to you, and we need to learn
the skills of self reflection, of discernment, of getting into
(23:24):
getting into action and changing jobs because, believe me, it's
a lot more pleasant when you make that choice actively
instead of having it done to you.
Speaker 2 (23:35):
So we need to we.
Speaker 3 (23:36):
Need to doge proof our career and resume.
Speaker 4 (23:39):
Is that what you're saying, Well, you know, I you know,
I don't. I don't know if there that's even possible.
You know, you can, as I think a lot of
our friends in the Washington area would tell us, you
can be doing a great job and you can be
at risk for a variety of reasons. And it could
it could feel very arbitrary, or it could be very
(24:01):
Look what you got, what this team does, we are
outsourcing it to a team in India. So now you
need to go find something else. And so the ability
to be resilient in your career and to reskill or
upskill or decide to do something else, you have to
learn to invest in and take a chance on yourself
instead of waiting for an employer to really be the
(24:22):
one that con controls your career.
Speaker 2 (24:25):
So pivot, exit or double down right.
Speaker 1 (24:28):
Julie Balki, Julian the job joining us tonight to help
us figure this out. You know, Julie, you make an
excellent point. Of course, sometimes we don't have a choice
in this and we're shoved into this change. But if
you are someone who've maybe just started to feel an itch,
or you used to love what you did and it's
just not as enjoyable anymore, how do you think through
(24:48):
does it make sense to change?
Speaker 2 (24:50):
And where would you even start looking?
Speaker 1 (24:52):
I think it can be overwhelming for a lot of
people to think about making a change proactively mid career.
Speaker 2 (25:00):
Because that can be really scary.
Speaker 4 (25:03):
Yeah, and so the first thing you have to do
is look inward and assess why am I feeling this way?
Am I feeling this way because I'm bored? Maybe I've
been doing it for a long time and it's fine,
but you know, I believe I could you know, I
could do something else or use my talents and skills differently.
Or is it because something has changed at work? Maybe
you have a new leader that you don't quite get
(25:24):
along with, or maybe it's it's something you're dealing with
at home that really is rippling into work. So you've
got to be really good at pinning those things down.
What is it? Is it the job itself? Is it?
Speaker 3 (25:38):
You know?
Speaker 4 (25:38):
Do you not like it anymore? Or you burn out,
or have you been put in a role that you
don't feel confident and qualified for, Or is it it's
a return to the office thing and that has really
up ended your life and you can't do that, or
is it a leadership for cultures? So you've got to
look at what's the primary reason why I'm feeling this way,
And then the next question is is this something that's
(25:59):
under my can And if it's a leadership change and
your report and you work in a really small company
and that's you don't have the opportunity to move into
a different department, then you've got to figure out it
may be time to leave. If it's that you really
like the company you work for and you really like
the leadership and you believe in the mission, but you're
getting bored in your job, that might be something you
(26:21):
could have a conversation about. So you've got to diagnose
the problem before you can figure out if it's in
your control, and if it isn't, if you try everything
and say, you know what, it's just time for me
to move on for whatever reason, then the next step
is figuring out like getting in your car and opening
up Google Maps and putting the destination in you have
(26:43):
to start figuring out, given what's unsatisfactory about where you are, now,
what does satisfactory look like?
Speaker 1 (26:50):
What?
Speaker 4 (26:50):
In other words, what do I want to move toward?
More of this, less of this, et cetera. And it's really,
really and this is why we exist. It's hard to
do it for yourself because we don't, I find it normally,
we don't give ourselves enough credit for all the things
we're good at. Where most of us are instead of
(27:12):
being having a self having a overinflated sense of what
we're capable of, it's generally underinflated. And that's I mean,
that's what we do. We help people figure that out
and then put a plan together to go get it.
But if you're stuck in the if you're stuck in
the who else would hire me? This is all I know.
(27:35):
I'm over fifty, I'm too old. If you start any
of that thinking, then you're really relegating yourself to just
several more years of being miserable. And frankly, when you're
miserable at work, it's very, very hard to be pleasant
in other areas of your life because the line between work.
Speaker 1 (27:54):
And home is gone at this point Julie quickly, we
have about a minute left. You know, for someone who
is in this place, you kind of refer to this.
But you and I have done this together in the past,
making lists.
Speaker 2 (28:09):
What do I want to do more of? What do
I want to do less of?
Speaker 1 (28:12):
And I think putting it on paper can be incredibly
I opening of Oh, maybe here's the solution, and maybe
it's already within the company that I'm working.
Speaker 2 (28:21):
It's just a slight pivot.
Speaker 4 (28:23):
Right exactly, that's right once you figure out. So the
process we walk people through is we'll say, Okay, what's
not working and what do you want? So we help
people figure out. You pull yourself away from your employer
and say, okay, what do I really want? The next
question then is can I get it where I am?
And if the answer is yes, then you start to
(28:46):
have conversations where you're very clear about what you want
more of, less of, et cetera. But sometimes the answer
is no. And so at that point you are at
a crossroads where you say, well, I either need to
I I believe everybody deserves to be happy at work.
Speaker 1 (29:02):
Yeah, so maybe it's making a jump, right that could
be the best thing, which you gotta ask yourself.
Speaker 2 (29:08):
Could but you've got to ask yourself the questions first.
Speaker 1 (29:11):
Yeah, Julie Bauki, Julie on the job, Thank you so much,
great insights. You're listening to Simply Money presented by all
Worth Financial here in fifty five krs the talk station.
Speaker 2 (29:24):
You're listening to Simply Money presented by all Worth Financial.
Speaker 1 (29:27):
I mean me Wagner alone with Bob spondsell or. Do
you have a financial question you need a little help with.
There's a red button you can click on while you're
listening to the show right there on the iHeart app
record your question. It's coming straight to us, and it
is time to ask the advisor some of your questions.
Speaker 2 (29:40):
First one is from Chris and Mason.
Speaker 3 (29:43):
Should I invest one hundred percent in stocks?
Speaker 2 (29:45):
If I plan on handing my portfolio over to my children,
I don't need the money.
Speaker 3 (29:49):
Well, Chris, you know, just going off the question. And
I'm a literal kind of guy, so I'm just reading
the question. If this is truly money that you never
intend to spend, and it's a long term time horizon
and you're going to live another fifteen, twenty thirty years
and then hand these stop the portfolio over to your
children by all means, take advantage of capital gains, growth
(30:11):
in the market, stepped up cost bases at death. It's
a wonderful way to leave assets you know to your
children and grow them while you're still alive. I say,
go for it, but be diversified. Be diversified, don't put
it all in deep seek.
Speaker 1 (30:26):
One of the number one conversations or first conversations I
have when I'm working with someone is what's your goal
for your money? Do you want your last check to
bounce or do you want your kids to get this money.
If the goal is, hey, we've got enough that we're
not going to need a lot of this and the
kids are going to get it, I think it does
make sense to be more aggressive. I think the one
(30:47):
caveat I would throw in here is, hey, if you're
one hundred percent in the stock market, hopefully you realize
the price of admission is.
Speaker 2 (30:53):
Going to be some volatility.
Speaker 1 (30:54):
Are you going to wake up one day and see
that that portfolio could potentially be down twenty percent? And
are you still going to be able to sleep at
night knowing that it's likely going to rebound to a
new high, hopefully before your.
Speaker 2 (31:05):
Kids inherent that money.
Speaker 1 (31:06):
So a lot of this is just understanding your own
risk tolerance. Here, let's get to Mark now in Madeira.
Speaker 5 (31:12):
My wife and I are both fifty one years old
and have no children. We are in great shape financially.
Should we be investing in private equity, hedge funds or
alternative investments?
Speaker 3 (31:23):
Well, Mark, I think investing in these different asset classes
has very little to do with how old you are
and how many children you have and what shape you're
in financially. It just has to do with how much
growth do you want or potential growth do you want
in your portfolio, and how much risk mitigation do you
want a lot of times, the reason people use alternative
(31:43):
investments is to have a non correlated asset class in
their portfolio, meaning something that will go down when the
broad stock market goes up, and vice versa. With private equity,
you know you're getting privately held companies that have oftentimes
a lot more growth potential, but you need to be
aware that there's higher fees usually involved with these type
of investments and your money can be locked up for
(32:05):
a period of time. And then hedge funds is kind
of a to me, very similar to alternative investments just
another non correlated asset class. So I think the key
here is just to understand how each of these different
types of investments work and then decide is this a
good fit for me and my personal financial plan?
Speaker 1 (32:26):
Yeah, and I think you got to look at Okay,
what are we really going to need in retirement?
Speaker 4 (32:29):
Right?
Speaker 2 (32:29):
What are our expenses going to be?
Speaker 1 (32:31):
I would say dollars that you know you're going to
need to live off of retirement. Maybe don't belong and
some of these asset classes because there's just going to
be more volatility potentially associated with these. If you have
checked the box and you know you're good for retirement
and you want to diversify beyond there, this could be
a great thing to look at. But I think Bob,
I love your point about, hey, do your research first.
(32:53):
Just because other people are talking about it doesn't mean
you go on in on any of these potential investments.
Things like this can sound incredible, sexy, but I think
you have to figure out does this truly make sense
for us? All right, let's get to Robert now in
Amberley Village.
Speaker 5 (33:07):
How can I structure my portfolio to minimize exposure to
a potential recession while maintaining upside potential.
Speaker 3 (33:14):
I think this comes down to how your portfolio is
allocated risk wise between different asset classes, broadly speaking, stocks, bonds,
and cash. And then you know, Robert, there there is
going to be a recession at some point. It's not
a matter of if, it's a matter of when. So again,
it comes down to planning your cash flow and having
(33:34):
some short term money, money that you're gonna need within
one to three years, set aside in something that's safe,
high yield savings accounts, short term bonds, things like that
that will dramatically minimize your exposure to a potential recession.
Speaker 2 (33:51):
Yeah.
Speaker 1 (33:51):
I think you've got to build up cash reserves right
that you could potentially draw from when markets are down,
so that you're not locking in losses by pulling distributions
out of your investments.
Speaker 2 (34:02):
I'm going to throw out another option here. It's called
a buffer.
Speaker 1 (34:05):
ETF, and this could be something that might make sense
for your assets, a portion of your assets, and essentially
it can protect you from give you some downside protection
while also taking advantage of potential upside too. You know,
and I think you just have to think through does
this something that makes sense for you. Our buffer ETF
(34:25):
here at all Worth, we say to fully participate in
the advantages of this, you need your probably money locked
up in it for about a year, and it's not
ever locked up.
Speaker 2 (34:33):
It's not like an annuity or anything else.
Speaker 1 (34:35):
But to truly participate in it, you know, that's something
that you need to think through.
Speaker 2 (34:39):
Right, Is this money I'm going to need in the
next year.
Speaker 1 (34:41):
So so I think there are options here, and I
also think it's really smart to be thinking through the
closer you get to retirement, not only growth, but also protection.
Speaker 2 (34:51):
I ran coming up next, a little dose of Wagner
wisdom for you.
Speaker 1 (34:55):
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 MEI
Wagner along with Bob Sponsller that music can only mean
one thing.
Speaker 2 (35:13):
It is time for some Wagner wisdom for you. Bob.
Speaker 1 (35:17):
I'm going to ask you to stick with me on
this one. I was listening to a podcast this week and.
Speaker 2 (35:21):
They were sharing this story.
Speaker 1 (35:23):
I don't know how many years it goes back, but
back to the day where like people would go to
local festivals all the time, things like that, And and
there was a competition at a festival where you could
go and you could guess how much the prize steer weighs.
Speaker 2 (35:41):
Right, it's the it's the competition.
Speaker 1 (35:43):
So all these people were going and they were all
putting in guesses in one lucky person.
Speaker 3 (35:49):
Is the prize steer an animal or a human being?
Speaker 2 (35:52):
I think it's an animal.
Speaker 1 (35:54):
As I was following along, Christ is the animal, and
everyone is, you know, making their bets on what's the
winning thing here. One person comes within ten pounds. Interestingly,
someone who was there that day said to the people
who were doing this festival, can I get all the guesses?
And they're like, sure, sure you can get all the guesses.
(36:14):
We don't need them. So this person went home and
average together everybody's guesses. Interestingly, they were within two pounds.
When you put the collective together, they were within two
pounds of what the actual weight was. And that got
me thinking as I was listening to this about being
broadly diversified. Right, one person won that day, one person
(36:39):
like that, one thing came out ahead, but the collective, right,
everyone's collective energy in smarts actually got much closer to
the reality. And so I think there's so many people
who want to go in all in on whatever it is.
Speaker 2 (36:54):
Pick your company, pick.
Speaker 1 (36:55):
Your asset class, pick what an old investment, and think
this is it. And I fully, fully believe a broadly diversified,
you know, portfolio built on indexes, where we're relying on
the brain power of a lot of really smart people
running these companies is truly what's going to get you
out ahead.
Speaker 3 (37:16):
Well, and you're you know a lot of people are wrong,
just like you're gonna have a lot of big winners
and big losers in a broad index. But the broad market,
highly diversified is always right, I think, is the point
that you're making. And I guess I was going to
ask too, is this person that you're referring to named
Andy Stout? Is this how Andy grew up our chief
(37:37):
investment officer at all? This sounds like something Andy would
have done.
Speaker 1 (37:40):
It is probably how his brain works, which is why
I'm so glad he is in the position that he's in.
Speaker 2 (37:46):
But it just it was so interesting because I was
listening to.
Speaker 1 (37:48):
This story, I was thinking I would have never thought,
first of all, hey, what did everyone collectively come up with,
but how much closer it was to any person's individual Guess.
You know there's people that I come into contact with
all the time. What about crypto?
Speaker 2 (38:04):
What about this? What about that?
Speaker 1 (38:06):
And I'm like, what about the S and P five hundred?
What about these big companies?
Speaker 3 (38:11):
Yeah, and to your point, Amy and all joking, stupid
jokes aside, that's an excellent illustration. It really is, and
it's a good lesson to learn for all of us.
Speaker 1 (38:20):
Yeah.
Speaker 2 (38:21):
So the next time you're at a party, someone's.
Speaker 1 (38:23):
Talking about how much they made some crazy return on
some individual asset, and you're starting to think, either I
need to get into that or I need to figure
out what my own lottery ticket is. Right, No, I
mean it's the chortose versus the hair here, being broadly diversified.
It's not one sexy stock that's going to change everything
for you. It's being smart and well diversified through the years.
Speaker 2 (38:45):
Thanks for listening.
Speaker 1 (38:46):
You've been listening to Simply Money presented by all Worth
Financial here in fifty five krs, the talk station
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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.
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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.