Simply Money

Episode Transcript

Speaker 1 (00:05):
Tonight, we're talking the future of interest rates, the dangers
of social media when it comes to your money, and
should you be doing Roth conversions. We'll get into it.
You're listening to Simply Money presented by all Worth Financial.
Let me Wagner along with Bob Sponseller. As we told
you yesterday, right, the Federal Reserve, our nation central bank
met did nothing with interest rates as was expected. What

(00:29):
we were leaning into was a couple of things, not
what they were actually going to do, but what fedchair
pal said afterwards. And also the dot plot coming out
from the voting members of the FED about where they
see interest rates going in twenty twenty five.

Speaker 2 (00:50):
Yeah, the dot plot. The Fed's latest forecast still includes
two interest rate cuts in twenty twenty five. That's where
their positioned right now. But Chairman House said he and
his colleagues are reluctant to make any changes until they
get more clarity on how the economy might respond to
these new tariffs that are coming on board supposedly April first,

(01:11):
if nothing changes in the next ten days. So none
of this was a surprise. Yeah, we've been talking about this,
it feels like forever. But there we are. Two rate
cuts expected, but to be determined based on how the economy,
you know, progresses from here with tariffs and inflation and
everything else. And like I said yesterday, Amy, I still

(01:33):
think what's going to move this market more than anything
else in the near term is corporate earnings, and we're
going to get a glimpse on how that starts to
shake out here once the calendar flips over to April.

Speaker 1 (01:44):
I think the important thing to remember about the dot
plot is this is not something etched in stone. It's
more like written in sand that can change. You know,
we think about going into twenty twenty four, you know,
the expectation that we were going to have so many
rate cuts starting right off the bat last year, Uh,
those got pushed right to later in the year because

(02:07):
the Fed just felt like inflation was just really sticky
and they weren't ready to move yet. So while these
dot plots are an interesting way for us to get
in the mind of what the FED might be thinking
right now, I think it's also important to keep in
mind this may or may not happen.

Speaker 2 (02:24):
You know.

Speaker 1 (02:25):
I'll tell you one thing I was a little nervous
about was the FED stepping back from a couple of
interest rate cuts this year. Taking these tariffs really seriously
looking at the potential inflationary measures of that, I think
that would have been a really tough move for the
markets to swallow yesterday. So this, actually, I feel like

(02:47):
is a little bit of maybe best case scenario coming
out of yesterday's meetings.

Speaker 2 (02:52):
Yeah, I think I think the Fed is being responsible here. Yes,
they're they're they're doing their job. They're waiting for actual
data and they're not speculating. And you know, without getting
into a political discussion, I mean, our President Trump provides
more than enough speculation for everybody to try to digest

(03:13):
from day to day, whether you agree with the policies
or not. It's a moving target all the time. So
I do give Chairman Pal and his colleagues credit for
basically saying, Hey, we're just gonna try to hit the
pause button here, wait and see, let the data speak
to us. And I think that's a responsible way to

(03:33):
handle things here at the Federal Reserve. The market liked it.
The stock market was up yesterday, and I think that's
just because the market hates uncertainty, hates and they liked
the smooth sailing, steady handed approach of our Federal Reserve
champion yesterday.

Speaker 1 (03:50):
Just back to what you were saying about President Trump, right, like,
he just moves so fast, and he says one thing
and then something else happens. And again, I think this
is potentially all of his negotiation tactics. And I cannot
obviously get into Jerome Pal's head. But remember when Jerome
Pal first came took over right at the Helm, he
was a little loose lipped about his thoughts and some

(04:11):
things in the economy, and the economy took a nosedive.
Is the result of that. So what Jerome Pal has
learned since then is to be very measured in his words,
to be very clear about what he thinks is going
to happen. So here you have a FED chair who's
learned the hard way. By the way, I mean, you know,
tank the markets for a little while based on what

(04:35):
he said. Now working and I'm not going to stay
with right, I mean, the FED doesn't work with the
Oval Office. But having to take into an account a
president who is not necessarily so measured with his words
or so clear about where we're heading in the future,
and I think it's you know a little bit of
a tough role to be in.

Speaker 2 (04:57):
Yeah, I mean we've had days in in weeks where
the President and Chairman Palell go tit for tat here
in the media and that that does not that does
not shake out well for anybody, and it creates uncertainty.
So yep, kudos to our Federal Reserve chairman and how
they're handling things. I think it's great. The other interesting
data point from yesterday's meeting, the Central Bank cut its

(05:21):
forecast for gross domestic product this year. You know, a
growth rate of one point seven from their prior estimate
of two point one percent for the year. That would
mark a pretty big drop off from almost three percent
growth that we experienced in both twenty twenty three and
twenty twenty two. So when you combined possible tariffs with

(05:43):
lessening government spending, that can be a short term drag
on GDP growth. But on the flip side, Chairman pal said, hey,
we also expect any teriff related bump and inflation could
be short lived or just even a one time event.
So you know, he predicted that we'd be back to
two point two percent growth again by twenty twenty six,

(06:06):
so who knows. Yeah, and that does not also take
into account whether the tax cuts are permanent. You know
this one point seven trillion dollars of new investment coming
into the United States that it's going to take some
time to hit the economy. So there's a lot of
things going on. And again, yesterday was a non event
from the Fed. The market liked it, and we lift

(06:28):
to fight another day.

Speaker 1 (06:29):
Amy we do, and we've now set our sites on
the next big day being, of course, at April second.
That's when the White House plans to announce what tariffs
might actually go into effect at that point, who knows, right,
we'll keep an eye on that for you. You're listening
to simply Money presented by all Worth Financial, I mean
you Wagner along with Bob Spahseller. As we're looking at

(06:51):
a couple of major events today. One is the Federal
Reserve meeting yesterday releasing their dot plot, making comment saying, hey,
maybe slowing down the economy is what we see in
twenty twenty five, but it's still fundamentally sound, so let's
not go running for the hills. The sky is not
falling here. I also, though, want to talk about something

(07:13):
that came out, and this is some research a scary
report about social media. You know, if you've listened to
the show for any amount of time, I am a
huge proponent for having open and honest conversations with your
family about money. If you are not doing that and
you have children or grandchildren who are teenagers, twenty somethings, millennials,

(07:35):
all the younger generations, they may be getting their messages
about money from social media. And that's downright scary.

Speaker 3 (07:44):
Yeah.

Speaker 2 (07:45):
A new survey that came out from Bank Rates said,
you know, nearly one third of American adults. We're not
talking about kids, we're talking about one third of American
adults now trust social media for financial advice. Now, amy,
social media is a broadly used term. I mean that
could be TikTok, Instagram X, what have you. So social

(08:08):
media and the media in general is starting to pivot
more and more toward podcasts and social media and away
from quote unquote legacy media. But I think the point
raised here is we got to be careful about what
we're digesting here on these different apps and make sure

(08:29):
you don't take action based on advice that may or
may not be in your best interest, or even qualified
advice people that even know what they're doing.

Speaker 1 (08:38):
Yeah, So, as the parent of four teenagers, I have
some experience with social media and how this works. You
can become influencer status on any social media platform by
just getting a certain number of people to follow you.
Several years ago, Trey was into editing videos, pull still

(09:01):
pictures and he would pull actual video from NBA games.
He would edit it old together. For whatever reason, people
were loving it, and Instagram came back to training. They
were like, you can be an influencer on it.

Speaker 2 (09:12):
I still need this kid.

Speaker 1 (09:14):
The more and more you yes, the more and more.

Speaker 2 (09:17):
You talk about his life in general and what he does,
I'm really intrigued. I like the kid a lot, and
I've never even met him.

Speaker 1 (09:26):
But go ahead, But Trey would tell you that Trey
is a is an expert on basketball. He was a
twelve thirteen year old kid at the time. Right knows
what he knows. But I'm making the point that people
who are influencers or finfluencers is what we call them
in the financial realm, may or may not have any

(09:47):
solid advice. They might have the flashiest videos, the most
interesting graphics, and as a result of that, more people
are following them. The lens through which many people look
at social media is if you have a lot of followers,
you must know what you are looking or what you're
talking about. You must be giving out sound advice you

(10:07):
and I know that's obviously not the case. If you're
not having this conversation with your kids and grandkids, please
please do.

Speaker 2 (10:17):
Yeah, and I'm going to say something that might surprise
you a little bit. Amy. We talk about people that
get on the air and differ different media channels and
talk their book or try to you know, I will
say the same thing happens almost every day on CNBC
Fox Business. You know, just because you're wearing a three
piece suit and have a couple of letters behind your

(10:39):
name doesn't mean that you're getting on there talking about
things that are going to be in the best interest
of your listeners. So without getting you know, at the
risk of being inappropriate. I've heard of a lot of
this stuff being referred to as financial pornography before, and
it comes in all shapes and sizes, not just on

(11:00):
social media.

Speaker 1 (11:01):
So well, and my husband's come to me with some
things that he's seen before, and it looks like, you know,
this person's again to your point, super buttoned up. They've got,
you know, graphics that explain why you should pull all
of your money from something and put it into something else.
And again, it can be easy to buy into that.
I think what you have to have to remember is

(11:22):
step back right. They're making general recommendations. For instance, a
few years ago, every influencer was telling you need to
get into bitcoin. Well, the insane volatility right in that space.
We're not saying, hey, maybe some portion of what you
have can't be in bitcoin, but certainly not all of it.
You know, so make sure you are doing your research
on who you are taking advice from. That they are smart,

(11:46):
that they have a background, that they are credential, that
they have been working with people for a long time,
that they are in this day in and day out.

Speaker 2 (11:53):
The key word here is fiduciary, Yeah, Amy, Yeah. And
by fiduciary we mean somebody that knows enough about your
individual situation so that then when they give you advice,
it's based on your individual situation and is one hundred
percent only advice given in your best interest. That's what

(12:15):
we're talking about here, that if you're going to take
financial advice, it should be coming from a qualified fiduciary.

Speaker 1 (12:22):
Here's the financial here's the all Worth advice. Social media
it can be a great place, certainly for entertainment, it's
not necessarily where you should be getting your financial advice,
neither your kids nor your grandkids as well. Coming up next,
a massive money scam going around. You may have been targeted.
I know I have. We're going to get into that next.
Plus think you can beat the market. We've got the numbers.

(12:44):
You're listening to Simply Money presented by all Worth Financial.
Here in fifty five KRC the talk station. You're listening
to Simply Money presented by all Worth Financial. I mean
you Wagner alone with Bob sponseller. If you missed our
show one night, you don't have to miss the thing
we're talking about. We've got a daily podcast where you
just search Simply Money. It's on the iHeart app or

(13:06):
wherever you find your podcast. We were just talking about
social media and how that influences your money. Maybe you
would need to share that podcast with your kids or
your grandkids, so do that straight ahead. At six forty three,
now might actually be a really good time to look
into roth conversions. We'll tell you why that is.

Speaker 4 (13:24):
But First, I want to talk about a text that
I've gotten and a lot of other people I know,
and it is that I owe money on tolls, which
is interesting because I have not been.

Speaker 1 (13:35):
On a toll road probably anytime in twenty twenty five.
Yet people's phones are blowing up with these texts, and
of course, Bob, this is a scam.

Speaker 2 (13:45):
I've gotten this text I think at least four times
in the last two months. Amy and my wife and
I have three adult sons. Every one of us, all
five of us, have received multiple texts involving toll road
payments being due in the last few months. And somebody
must know something because you know, our youngest son lives

(14:07):
in Colorado. One of our other sons lived in Florida
for a period of time, so they have figured out
there's toll roads in both of those states, and we've
traveled back and forth. So yeah, we've all gotten hit
with that text. So it's it's a big watch out.
And of course every one of those texts comes with
a link, you know, link on this find how much
you owe, find how much.

Speaker 1 (14:28):
You are right here?

Speaker 2 (14:29):
Yeah, yeah, so huge watch out here. I mean, if
my entire family has received these things, I can only
imagine that many of our listeners have been, you know,
receiving the same kind of text.

Speaker 1 (14:39):
Yeah, here's the message you need to know. Consumers should
know easy pass tolld by mail. None of these companies
will ever send you a text or email requesting personal
sensitive information you know about to your point, we don't
have a lot of tolls around here, so maybe weird,
but in places right where there are this could be
a huge issues. So something to keep an eye on.

(15:02):
Spread the word right to other people that this is
a huge scam it's going around, not to fall for it.
This is a conversation we have not even just once
a year, I would say several times a year. And
that is how should your money be invested? You know,
should you be invested in a fund that's tracking the
markets or do you want to have a fund that

(15:25):
is actively managed? Bob, I think it's important for people
to know the differences between the two and maybe a
little historical perspective here.

Speaker 2 (15:33):
Yes, some data just came out the twenty twenty four
SMP Global Report on the Comparative performance of actively managed
funds versus passively managed mutual funds or ets or index funds.
And you know, not surprisingly, this data really never changes.
Two thirds of all managed large cap stock funds failed

(15:56):
to beat the SMP five hundred for yet another year,
and that amy, I've been doing this for a long time.
That answer never changes. It's after fees and expenses, two
thirds of them underperform just being in the broadly diversified index.
And there's several reasons for that that we can get into,

(16:17):
but yeah, it's just when you net all this thing
out for fees and expenses and everything. In the large
cap space, it's usually always better to just get your
diversification through a low cost index versus quote unquote paying
somebody to beat the market, because most of them can't.

Speaker 1 (16:36):
You know, I love behavioral finance, right like why we
make certain decisions with our money, and I think this
is a major reason where a major place where you
can see this playing out to think about, Okay, I'm
investing right my four oh one K, my whole retirement
into something that no one is necessarily checking. It's just

(16:57):
tracking a particular index versus I'm paying maybe a little more.
And you usually do write the internal expenses on these
kinds of actively managed funds usually a bit higher to
have someone with a lot of letters after their name.
In some cases they went to Harvard, you know, you
name your muckety muck school, and they have you know,

(17:19):
a gazillion dollars coming in a team of people doing
research for them, trying to figure out what is next
coming next for the economy, what's the next sector that's
going to be up? And you would like to think
that someone making those decisions right for you would then
outperform the index, but it doesn't. But time and time again,
I'll talk to investors who are like, you know, what's

(17:42):
being done right now to change things in this particular situation,
And I'm like, we can talk about active management, but
I also want to provide you with a historical perspective
which shows people having their fingers and your investments constantly
don't necessarily give you the best outcome.

Speaker 2 (17:59):
This is one of many reasons why I just adore
our chief investment officer, Andy Stout.

Speaker 1 (18:05):
Yeah, and.

Speaker 2 (18:07):
He does a great job of checking his ego at
the door and taking a good honest look on hey,
as we quote unquote manage these portfolios. And he's running,
you know, over twenty five billion dollars of our client assets. Now,
where can we really truly add value through some active
management and where is it better to take the low

(18:29):
cost index approach? And he does a wonderful job of that.
And to your point, Amy, there are certain sectors where
you can add some value in active management, and I've
seen him do it recently, like in bond portfolios, lessening
the duration on minds. A lot of times in the
small cap value space you can add value. We've talked

(18:50):
about private equity recently. That's an area where you know,
stock picking, company picking matters. So this is why it's
great again to have a a good team of fiduciary
folks who check their ego at the door and look
at hey, where can we really add value for our
clients after fees and expenses and allocate portfolios appropriate.

Speaker 1 (19:13):
Yeah, he is incredibly intentional about making these changes. They're
not happening day in and day out in people's portfolios
or anything like that. They'll try to sense maybe what's
coming down the pike, make some changes, but not wholesale
changes to what you're doing. And I agree, I love
his approach.

Speaker 2 (19:31):
Well. In one of the great things about Andy, it's
not all it's very rarely what you do, it's what
you choose not to do. Yes, that adds value. And
then again that's why I really have a high regard
for Andy and his team.

Speaker 1 (19:43):
Here's the all Worth advice when it comes to investing
data is clear. Most active managers, they really fail to
consistently beat their benchmarks. So keep cost low, stay diversified,
and focus on a long term strategy that aligns with
your financial goals. Coming up next, what's celebrities can teach
us about estate planning? You're listening Disimply Money, presented by

(20:04):
all Worth Financial here on fifty five KRC, the talk station.
You're listening to Simply Money and presented by all Worth Financial.
I Memi Wagner along with Bob Sponseller, one of my
favorite shows when I was growing up. And I'm not
going to do the impression of Robin Leech, but oh please,

(20:25):
I cannot even begin. You can do it if you
want to. Lifestyles of the Rich and Famous. I mean,
it was just amazing, the yachts and the ways that
they live. Well, we're going to pivot that on its
head tonight and we're going to talk about death. Styles
of the Rich and Famous doesn't sound exciting. But I
do think that when we lose someone in the headlines

(20:46):
that everyone knows and has maybe followed their career for years,
you can learn a lot about state planning, what to do,
what not to do. So joining us tonight with this
perspective on the death styles of the rich and famous
is of course, our state planning expert, Mark Rekman from
the law firm of Wood and Lampang. All right, Mark,
we're just going to let you take hold here.

Speaker 3 (21:06):
Well, you know, in my line of work, I sort
of track these things, and it's always interesting to see
someone famous that has died or has handled their estate
in an interesting way. Often what amuses me about this
is that these people have accumulated often a lot of money,
just as often they've done little or nothing to plan ahead.

(21:29):
And one of the things that and some of them
plan ahead, but they don't plan ahead very well. These
people often have very complicated lives and very complicated relationships,
and of course it's reflected in their estate plan. The
one that I want to talk about first is Anthony Boudaine.
He's the guy who travels around and eats unusual items
on television. Yeah, and he's been a factor on TV

(21:53):
for Oh, I don't know what thirty years he died.
This has been probably about ten years ago now. He
died and he left a will, and in his will
he had directed his executor to set up a trust
for his minor daughter. His daughter is no longer a minor,
but she was at the time, and the trust was

(22:14):
to last until she was twenty five or thirty. Now
that's a good move, especially considering the size of his estate.
According to the probate records, he was worth about sixteen
million dollars, but interestingly enough, only about one point two
million dollars of his estate actually went through probate. That's
good because what it means is that he worked with

(22:36):
his lawyer to find a more streamlined way to set
this trust up with a little less probate court involvement.
That saved a fair amount of time and money. Here's
the rub. He picked his estranged wife and put her
in charge of the trust, and I presume he did
that with full knowledge. The problem was, of course, that

(22:57):
he was a strangeman his wife for good reasons, and
she was not the right person for doing that job,
and it created a great deal of stress and conflict
between his daughter and her mother actually, and of course
what that meant was that there was a lot of conflict. Now,
one of the interesting things about that estate is that

(23:17):
one of his largest assets, or one of his larger
surprise assets, was frequent flyer miles.

Speaker 1 (23:24):
I guess that makes sense, and he's traveling everywhere.

Speaker 3 (23:26):
For work, that's right, And they do have value, as
all of us know who've used them. In his case,
he had millions of these miles, and under the laws,
under the rules of these frequent flier programs, sometimes you
can leave those in a will or a trust and
leave them to someone else. They're transferable. So one of
the things I have told my clients over the years

(23:48):
is that if you're the kind of person who accumulates
lots of these miles, it's a good idea to familiarize
yourself with the rules of each one of those programs
and figure out a way that you're miles don't die
with you, because they can be worth tens of thousands
of dollars.

Speaker 1 (24:04):
You know, Mark, you're talking about this trust that Anthony
Bodain had. There are different kinds of trust, and wondering
in this situation, what's what's the good kind of have,
what's the not so great kind of have.

Speaker 3 (24:17):
They're basically two kinds of trusts. They are testamentary trusts
and what we call living trust A testamentary trust is
one that's set up after your died. It's set up
by your executor under the supervision of the probate court,
and they're commonly used for people with minor children because
they're commonly used in cases where you're not really expecting

(24:37):
to die while your child is still young, so younger
people are frequently using testamentary trusts. A living trust is
a trust that you set up while you're alive, and
as a result, it's already in place. When you die,
you transfer your funds into that trust. During your lifetime,
you control the trust yourself. You live off of the

(24:58):
assets that are in the trust, but at the time
of your death everything's already in place. As a result,
the trust is not supervised by the probate court. That
gives you a great deal of more flexibility. It's a
lot easier to operate, but it also means that there's
it's extra important when you set up a living trust

(25:19):
that you pick a trustee that you can rely on
that might be a bank. That might be a trust company,
It might be a spouse, it might be a child.
But take someone who's well suited. Just because you love
them doesn't mean that they're going to be a good
trust trust manager what we call a trustee. A trustee
has to know how to invest money, or at least

(25:39):
how to hire someone who knows how to trust how
to invest money. They need basic accounting skills. They've got
to see to it the tax returns are filed. They
have to be good with paperwork, which is actually a skill.
I know we all laugh about that and how easy
and what a nuisance paperwork is, but actually it is
an individual skill, and those who have it can get

(26:01):
along a lot better and get a lot more out
of their assets.

Speaker 2 (26:04):
Hey, Mark, I know you came equipped with several real
life stories, you know, from rich and famous folks. What's
another one, another story, another estate planning story that has
really caught your eye.

Speaker 3 (26:17):
The one that I find interesting to me is Paul Newman.
You know. Paul Newman, of course, was the movie star
and race car driver, and he created a brand of
salad dressings Newman's Salad Dressings and salsas, and they actually
did pretty well, and interestingly enough, when he set this
thing up, he set up a charity. And all of

(26:38):
this was a non profit, so there was no stock.
He didn't own it, but he did set up this charity.
He was the member of it, and he elected the board,
and he elected the person to run it, and it
really did a great job. He died in two thousand
and eight and at that point Newman's Own, that's what
they called the company. All of that was left to

(27:00):
a private foundation that he created, and that foundation still operates.
Now here was the rub The IRS rules do not
permit a private charity to own one hundred percent of
a commercial enterprise, and making solid dressings and salsa is
clearly a commercial enterprise, and so the rationale is to

(27:21):
prevent people from putting profitable businesses into a foundation to
avoid taxes. Now that's not what Newman was trying to do.
He was trying to do a good thing. And so
as a result, nobody wanted to enforce the law against
Newman's Own because the gesture was such a good gesture.
So the Congress got involved and they amended their tax rules,

(27:46):
and they amended the rule to create what they now
call the Newman rule, and this is in the Internal
Revenue Code, section forty nine three G. And what that
rule says is that you can, in fact put a
profitable business into a foundation one but they've created six
special rules, special conditions, and of course the Newman's own

(28:10):
meets all of these conditions. They have to own all
of the stock. The stock has to be acquired by gift,
all the income from the foundation must be distributed to
a charity each year, and it cannot be controlled by
the contributor. But I found that whole story to be
interesting and just.

Speaker 1 (28:26):
It is interesting, and I also think, Mark, we have
to take into account if I don't get a state
planning right, there's not going to be the Wagoner rule.
It works for Paul Newman, it may not work for
the rest of us. So make sure that your estate
planning is in good shape. It is an act of love.
I always say this for your loved ones. Great insights
as always from our estate planning expert, Mark Krakman from

(28:46):
the law firm of Wood and Lamping. 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 or financial I mean you Wagner along
with Bob spondsell or do you have a financial question,
maybe you and your spouse not on the same page
about or it's keeping you up at night. We can

(29:08):
help you figure it out. There's a red button you
can click on while you're listening to the show. It's
right there on the iHeart oppa coorder question. It's coming
straight to us. Now you've heard us say this before.
For many investors when markets go down, it is run
for the hill's hair on fire, pull my money out
and stick it under a mattress. But we would remind
you that in times where there's market volatility, there is

(29:31):
also opportunities, and one of them might be something you've
never considered before.

Speaker 2 (29:39):
We're talking about wroth conversions here, and just you know,
and we talk about this all the time, but just
as a reminder, a wroth conversion where we usually do
these is where a client is in a relatively low
tax bracket now compared to where they expect to be
down the road, particularly when required minimum distribution start for

(29:59):
folks that have high balances and iras four oh one
k's and retirements where as a reminder, at age seventy three,
you have to start taking these require minimum distributions and
that can unintentionally put somebody in a much higher tax bracket. So,
you know, in the spirit of selling high and buying low,
which I think everybody can understand, the wisdom in that,

(30:21):
when we do have market volatility like what we've been
experiencing here in the last few weeks, if it makes
sense from a tax standpoint to do a Wroth conversion
in twenty twenty five, well, you want to take a
look at where the market is, and when the market's
down a little bit, that's a great time to do
your Wroth conversion because you pop that money into the

(30:44):
wrath and when the market recovers and that money is
in that wroth IRA versus your regular IRA, that quote
unquote recovery is happening on a completely tax free basis.

Speaker 1 (30:57):
You're essentially doing a conversion at a discounted rate, right,
And that's what happens. When markets go down, there is
a sale and there are multiple opportunities right in the
financial world to take advantage of this. You know, Bob,
to your point, we're not saying, hey, if a Roth
conversion doesn't make sense to you from a tax standpoint

(31:19):
in twenty twenty five, you should be doing this. But
if it already makes sense for you, right, you've run
this analysis with a fiduciary financial advisor. We do this
all the time with our clients. Right, we're looking at
what with the scenario, you know, keeping you in the
same tax bracket, that kind of thing. But this is
an added bonus, a silver lining to the fact that

(31:40):
it could make even more sense or be even more
beneficial to you.

Speaker 3 (31:44):
Yeah.

Speaker 2 (31:45):
So again it's and we can't predict if we do
the Wroth conversion today because the market's We're not saying
that the market's bottomed or it's going to go up
thirty percent between now and the end of the year.
It's just, hey, you know, common sense would say buy low,
you know, think about converting low and over time that
money recovers in the wrath and you don't pay taxes

(32:07):
on the recovery.

Speaker 1 (32:08):
Yeah, you know, I have this conversation with clients in
a few respects, but a lot of times when we
run their plan and we do some forecasting about what
could be left at the end of plan. Right, so
when they get to their nineties and they might be
passing on and a lot of times there's a significant
amount of money left in that plan and a lot

(32:29):
of it is tax deferred. So we can often have
the conversation of would it make sense for you to
go ahead and do some wroth conversions now in order
to then let that inheritance to your kids have no
tax burden on it. And I think one of the
things you have to think through is likely your kids
are going to be and their peak earning years when

(32:50):
they inherit this money, if they're going to have to
then spend down right IRA assets an attack defferd account
over ten years in some cases, that could be a
huge tax burden for them.

Speaker 2 (33:00):
You bring up an excellent point, Amy, And this is
a conversation that I've been having with my longtime clients
that are in their mid eighties more and more in
recent days, and they are bringing this up to me.
They're like, Hey, are my kids going to have to
pay taxes on this money? And obviously the answer is yes.
Sometimes I've got client they're willing to do a roth

(33:23):
conversion or and just pay taxes, even at the not
the most advantageous tax rate, simply because they're willing to
pay the taxes for money that their kids and grandkids
are going to inherit so they don't have to pay
a bunch of taxes down the road. So it's certainly
something to discuss as part of your overall comprehensive financial plan.

Speaker 1 (33:45):
Yeah. I run this analysis a lot of times that
clients who are for clients who are either getting ready
to retire rate so salaries are going down, they'll likely
be in a lower tax bracket or even to your point,
beyond that, right, they could already be taking require minimum distributions.
And I've got client and who are still choosing this.
You know, in some cases I'll say here's what you're
gonna pay, and they'll say, actually, my kids can take

(34:06):
care of that today.

Speaker 2 (34:07):
I get a lot of that.

Speaker 1 (34:08):
Too, but hey, at least you have the information and
then you can make the best choice for you and
your family. You're obviously not going to be around to
deal with the tax burden, but oftentimes it is kind
of an act of love to just take care of that,
get that off the table for your kids. It's definitely
worth thinking through. You know, we're going to discuss tactics,
just like these next week we're doing in person workshops

(34:29):
and these are really focused on kind of advanced wealth strategies.
We talk about some of these on the show for
high net worth investors. First one is next Wednesday at
six I'm actually doing this one right here next to
our office on Carver Road and Blue Ash. The other
one Saturday, the twenty ninth, right up the road Cooper
Creek Event Center. That's at eleven am. To sign up,
go to Allworthfinancial dot com Slash Workshops. I think there's

(34:52):
going to be a lot of value in these. Coming
up next, we're taking you inside Bob's World of Wealth.
You're listening to Simply Money by all Worth Financial. Here
in fifty five KRC the talk station, we're listening to
Simply Money presented by all Worth Financial. I mean, when

(35:13):
you're along with Bob Sponsller time for everyone's favorites, Bob's
World of Wealth. What do you have on tap for us? Today?

Speaker 2 (35:21):
We're going to spend a few minutes on donor advice funds,
Amy and we talk about these, you know, kind of
as a laundry list of things you could do as
part of your charitable giving strategy. I thought we'd dive
into this in a little more detail this morning. So
because I think sometimes folks hear donor advise funds and
they think, well, that's only for ultra wealthy people. That

(35:42):
doesn't apply to me. And I just want to say
I have found this with all of my clients that
I talk about this with Amy, I've never had one
client say to me, I hate that idea. That's stupid.
I don't want to even talk about it. And So
a donor advice fund is just a separate account that

(36:03):
you can put cash, appreciated stocks, anything that you want
to give to charity away into and you get an
immediate tax deduction for making that gift, even if you're
not sure which charity you want to give the money too.
So you get the tax deduction now and you avoid
the accumulated capital gains taxes on any appreciated stock that

(36:24):
you've given away. It's a beautiful way to wearhouse some
future charitable giving and get all the tax benefits now
and then, depending on which account you use. I'm partial
to fidelities, you know, charitable giving account. My wife and
I have one ourselves. It is so easy and actually
fun to use because they've got every publicly recognized five

(36:49):
oh one C three charity right on that website, and
you literally click a button and you can distribute funds
to charities of your choosing right off that same website.
To write checks, you don't have to fill out a
bunch of extra paperwork. It's a beautiful way to handle
your charitable giving in an efficient, tidy manner. And to

(37:09):
my prior point, if it makes sense to do charitable
giving with appreciated stocks or cash now to get a
tax deduction, you get all the tax benefits now, and
then you've got the rest of your life to decide
where to give the money.

Speaker 1 (37:22):
Yeah, I mean ninety percent of us right take the
standard deduction. Any year where you're maybe getting close to itemizing,
this is a great strategy to say, oh, I don't
have to decide where this money is going right now.
It's kind of a charitable waiting room. I can put
it there, take advantage of the tax benefits right now,
and then decide down the road where that money's actually

(37:44):
going to go.

Speaker 2 (37:45):
Well, and you've actually talked about on the show in
recent days about some of your clients that have concentrated
stock positions. It's a wonderful way to diversify out of
some of those too and benefit your chosen charities at
the same time.

Speaker 1 (37:58):
Thanks for listening. We hope we're going to and tomorrow.
We're talking about questions you might want to be asking
if maybe you are becoming a higher net worth investor.
Lots of great strategies here for you you've been listening
Disimply Money presented by all Worth Financial here on fifty
five KRC, the talk station