Simply Money

Episode Transcript

Speaker 1 (00:06):
Tonight, we are digging deep.

Speaker 2 (00:07):
We're getting into the key behaviors that you might have
that could have a big impact on your money. You're
listening to Simply Money, presented by all Worth Financial Immi
Wagner along with Bob Sponseller.

Speaker 1 (00:20):
You know, Bob, my.

Speaker 2 (00:21):
Daughter was home recently for a break and she is
a finance major, and so I said, hey, why don't
you come in and sit in on a meeting.

Speaker 1 (00:31):
With me now?

Speaker 2 (00:32):
To be fully transparent here for anyone who has anyone
in college, I know you've had kids go through college.
She's on the fence constantly about her major right, not
sure what she wants to do with life. And in
high school she loved psychology, like she just loved it
so much. She got an A plus in ap psychology.
And so we were coming to this meeting. She wasn't

(00:56):
sure how she was going to feel about it. She
sat through the meeting and when it was over, she said,
that was amazing, And the reason why she loved it
so much was it wasn't just economic theories, financial calculations, yes,
all of that plays into it, but what she saw
in the course of that meeting with one of my
clients was the psychology of this right, And I think

(01:19):
many times when we're thinking about our money, we underplay
how our brain plays into the decisions we're making with
our money.

Speaker 1 (01:27):
We're not even aware of it, but it happens all
the time.

Speaker 3 (01:30):
Yeah.

Speaker 4 (01:31):
I've said for years and decades that, you know, our
main job as financial advisors, whether people want to admit
it or not, is we're basically professional slash amateur psychologists.
And the psychology of money, you know, we talk about
it all the time, fear and greed and the different

(01:52):
things in our life that bring on those emotions of
fear and greed.

Speaker 3 (01:56):
It's just fascinating and just as an a.

Speaker 4 (02:00):
I had an opportunity to meet your daughter Grace when
she was in the office that day, and for whatever
it's worth, Amy, she had a smile on her face
the whole time she was here. I could tell that
she loved it, loved being able to be in your
client meeting. And what a great educational opportunity for her.
And I told her, I said, hey, you get trained
up and be ready to go. By the time I'm

(02:22):
ready to retire and die, you could come in here
and take over for me.

Speaker 3 (02:26):
It was great. It was great to meet her.

Speaker 2 (02:28):
And I really think it's that behavioral finance component that
is so interesting. You know, I have a credential in this.
I've studied this in depth and it is because you know,
our job is to make sure that when we're working
with a client that they are not making a decision
that they cannot recover from.

Speaker 1 (02:46):
And there's lots of ways that this play that this
plays out. Many times we.

Speaker 2 (02:51):
Are not even aware of why we're making the decisions
that we're making, but there are terms for them. We've
got some great examples where I think you might be
able to say, oh, I've done that before or I've
thought that way before, So I really want to get
into these. And one of these is an overconfidence bias. Right,
this is your investments are doing really, really well, right,

(03:13):
every time you check your four one kup, it's up,
and you are then overly confident about how much knowledge
you have as an investor, and then you start to
get a little bit reckless.

Speaker 1 (03:24):
Right, well this worked out.

Speaker 2 (03:25):
So well, maybe I should get into this investment or
that investment. You start chasing returns, you start getting risky,
and that can take a really bad turn.

Speaker 4 (03:35):
Yeah, I can remember A real life example for me
and I'm sure for others was that dot com bubble
in the late nineties and early two thousands, and Amy
I can remember.

Speaker 3 (03:45):
I got into this I got into this business in
nineteen ninety one.

Speaker 4 (03:49):
And during that period of time, you know, in the
mid nineties, I mean, a trained monkey could have thrown
a dart or pick stocks, you know, at will and
made twenty five percent year.

Speaker 3 (04:01):
And I think perhaps I was starting.

Speaker 4 (04:03):
To get a little cocky, a little arrogant about my
abilities in that area. And I remember a wise, older
gentleman who had been in this business for forty years,
politely and supportively called me into his office and he said, Bob,
just remember you don't know, you won't know blank about

(04:26):
and I won't use the word about managing money until
you navigate a client through a bear market.

Speaker 3 (04:32):
And never I looked at him, like, what is that
you know? And boy did I learn quickly.

Speaker 4 (04:39):
And I'll never forget that talk that that gentleman had
with me.

Speaker 3 (04:43):
One of some of the best career advice I ever got.

Speaker 2 (04:45):
Yeah, I mean, during that time, it was so easy
to go all in on the dot COM's right, and
it didn't even matter whether it was the dumbest concept
in the world, if it had dot com. At the
end of it, people were investing in it, and many
people went overly in on dot com. And then when
that bubble bursts, man, they lost everything. And so I
think there's a huge kind of thing that we can

(05:07):
learn from that. Also on the flip side of that
loss version, right, when you have lost money for whatever
reason and then you can't go back in, and I
think back to I've met people Bob from seven eight, right,
and listen.

Speaker 1 (05:23):
This was brutal. It was brutal for all of us.

Speaker 2 (05:25):
I remember my four oh one k was down forty
five percent at one point. But I have met people
who lost money during that time and have not put
a single penny back in the market because they are
so sure that if they did, they would lose it
all over again. But the reality is that's of course
not then the trend that we have seen since then, right,

(05:46):
markets have rebounded to new highs several.

Speaker 1 (05:48):
Times since then.

Speaker 2 (05:49):
We've had pullbacks, But man, not having that market exposure
since seven eight is going to put you way behind
those who just kept their money in the market, you know,
braved the nausea of that couple of years and moved
on forward.

Speaker 4 (06:03):
Yeah, I remember those days like it was yesterday. And
I remember sitting in my office by myself, with the
news on one computer screen and the chart of various
stocks and the S and B on another, And I'll
admit I was just sitting there, wide eyed and in shock.
And you know, the old quote it's different this time

(06:24):
came into my mind. I mean, I can remember Fifth
Third Bank trading at like a dollar a share. Same
with City Bank, General Electric, needing tarp funds to even
stay in business. It was crazy, crazy. We can laugh
about it now, but it wasn't funny back then.

Speaker 1 (06:43):
Not laughable.

Speaker 2 (06:43):
Then you're listening to simply when you're presented by all
Worth Financial, I mem you Wagner, along with Bob Sponseller
taking a little different turn on the show to get
you into the behavioral finance of your money.

Speaker 1 (06:57):
The ways that we see many of.

Speaker 2 (06:58):
The clients that we work with thinking through things that
could be hurtful to them, right, how can you see
this in your own decision making and maybe avoid it.
We've talked about the fact that you can get overly confident, right,
over confidence bias, and then on the flip side, the
loss a version. You can be really afraid because of
past losses, and that could then cloud the judgment that

(07:19):
you have. And then there's a recency bias where the
most recent thing that happened to you you tend to
put more weight on whether there's a likelihood of that
ever occurring again or not.

Speaker 1 (07:30):
It is just there in your mind and you can't
get it out.

Speaker 4 (07:34):
Yeah, and I think the media has so much to
do with this, with recency bias. I mean, we just
get beaten over the head daily with headlines and it
has a psychological effect on all of us, myself included recently.
Recency bias is real. So you know, we've got to

(07:55):
pull back and study history a little bit, which you know,
fewer and fewer people seem to be willing to do.
Otherwise you can get caught up in that recency bias
and make some really poor decisions, again based solely out
of emotion and not logic in a grasp on history.

Speaker 2 (08:14):
Here's one that I see people falling into, maybe more
than anything else, herd mentality. We have this fear of
missing out, and so when you start to hear someone
else talk about something, especially if it's Oh, I made
twenty five percent on this one investment last year. You
just keep hearing about it, you suddenly think, what do

(08:37):
they know that I don't know? I should probably jump
on this. And there's no better example that I can
think of than bitcoin. In cryptocurrency, several years ago, I
could not go anywhere, Bob, anywhere without someone asking me
about it.

Speaker 1 (08:53):
Not that they.

Speaker 2 (08:53):
Understood it themselves, but they heard everyone else talking about it,
and they wanted to jump in.

Speaker 1 (08:59):
They didn't understand it whatsoever.

Speaker 2 (09:01):
You know, I'm a huge war and Buffett fangirl, and
one of the best pieces of advice he has said is, Hey,
if you don't understand the basic financials of an investment
of a company, of how it works.

Speaker 1 (09:13):
Of why it does what it does, do not invest
in that.

Speaker 2 (09:16):
Yet people could not begin to explain cryptocurrency, bitcoin exchanges,
how it all works. Yet they were throwing money at
it left and right. Why Well, because everyone was talking
about it. Heard mentality at its finest.

Speaker 3 (09:32):
Yeah, and we you.

Speaker 4 (09:34):
Know, often we may in fact actually be right about
our predictions about the future direction of anything. The problem
is that that the correctness of the prediction rarely tends
to happen within a time frame within which we can
actually profit from that theory or prediction. In other words,

(09:54):
you know, while a broken even a broken clock is
right twice a day, nobody will to depend on a
broken clock to tell time.

Speaker 1 (10:03):
Yeah, that's a fantastic example.

Speaker 2 (10:06):
And yeah, I mean there's just so many ways that
the way that our brain works and the traps that
we fall into can oftentimes kind of force us down
a path where we're making a decision about money that
is just not the best one for us. A huge
example of another one of these is a confirmation by us.
Think back to the subprime mortgage crisis of two thousand

(10:27):
and eight. Many people were buying homes, were getting mortgages
for half a million dollars house system. You hit a
fog of mirror. If that's all you had to do.
It didn't matter what kind of financial background you had,
how you were filling out this paperwork, it didn't matter.
You were getting mortgages, oftentimes for homes you couldn't afford.
And the reason why you were often buying them is

(10:49):
because you had seen the amount that house was worth
right go up and up and up and up. So
you just keep thinking it's going to continue to go
this way. So I'm going to buy this home for
five hundred thousand dollars even though it's really worth three
hundred thousand, and I'm going to turn around and sell
it for seven hundred thousand until that bottom fell out, right.

Speaker 4 (11:08):
Well, and add to that the fact that you know,
we sit here in Cincinnati enduring these harsh winters, and
you know, you see all the news and the headlines
about beachfront property and condos just going to the moon. Yeah,
it looks awfully attractive to go buy something in Florida
on the water. And oh, by the way, I'm going

(11:29):
to double my money in two to three years.

Speaker 3 (11:31):
Count me in, Yeah.

Speaker 1 (11:33):
Well, count me in, right? What could possibly go wrong?

Speaker 2 (11:35):
Then you have a year like we have the past
couple of years, just many parts of Florida getting slammed
by hurricanes, and then all of a sudden, well, you
can't get insurance for your home, and then people are
moving out of Florida because they don't want to.

Speaker 1 (11:48):
Deal with this anymore.

Speaker 2 (11:49):
And then all of a sudden, you couldn't go wrong
on that house that was going to double, and now
you're trying to sell it and you're probably going to
take a loss right, And so many times it's our
brain tells us we can't go wrong with this, but
the facts kind of tell us otherwise. You know, you
can select certain information that's going to tell you yeah,

(12:10):
but there's lots of other information out there to the contrary.

Speaker 1 (12:13):
You just choose to ignore it because it doesn't tell
you what you want to tell it.

Speaker 2 (12:16):
And I think, man, when it comes to your money,
you got to look at everything. You got to educate
yourself fully before you're making a major decision. There's just
so many ways that your brain can lead you astray.
So understanding how these work can man really save you
from some headaches and some heartaches when it comes to.

Speaker 1 (12:34):
Your money down the road. Here's the all Worth advice.

Speaker 2 (12:36):
Remember in investing, it's not about avoiding losses, it's about
managing them, staying the course and understanding maybe when your
brain is leading you down the wrong path can be
up next, So you want to retire, maybe your spouse
isn't ready, So how do you navigate things like your money,
your emotions and much more. We'll get into that next.
You're listening to Simply Money, presented by all Worth financial.

(12:57):
Here in fifty five krs.

Speaker 1 (12:59):
The talks.

Speaker 2 (13:05):
You're listening to simply money you're presented by all were
with financial I mean me Wagner along with Bob's bondseller
straight ahead at six forty three. We're taking your questions
and we've got some good ones about long term care, insurance,
bond laddering, how can that help you out?

Speaker 1 (13:19):
And a lot more.

Speaker 2 (13:20):
Tonight we are diving into something I actually see pretty often.

Speaker 1 (13:25):
A couple comes into my office.

Speaker 2 (13:27):
We're getting to the point where retirement is starting to
look real, and one of them is going to retire
before the.

Speaker 1 (13:33):
Other one, and sometimes there's several years right.

Speaker 2 (13:36):
In between in between those retirement kind of goal dates.
There's a lot to think through in this situation, Bob.
Obviously part of it being money, part of it is
also an emotional standpoint. I had some neighbors several years ago.
He had been retired for a long time. She retired,
I don't know, probably four or five years later. It was,

(13:58):
I'm not joking, two or three into her retirement. She
texted me and said, it is all worth hiring. And
I said, what do you mean, who needs a job?
And she said me, I cannot stand it here all
day with him.

Speaker 1 (14:10):
It is too much.

Speaker 2 (14:12):
He was used to retirement, she wasn't a little bit
of a rocky transition. They figured it out eventually, but man,
it doesn't matter whether you're retiring at the same time
or different times.

Speaker 1 (14:23):
There's just a lot to think through here.

Speaker 4 (14:26):
Yeah, and this topic kind of hit you know, full disclosure,
just keeping it real here. This this topic's hitting pretty
close to home for me right now.

Speaker 3 (14:36):
I'm not retired. I'm still working. I have no immediate plans.

Speaker 4 (14:39):
In goodness, well thank you, But it's just more of
a stage life thing. My wife and I have three
sons that are now all through college as of a
couple of years ago. And I know, like yourself, and
we spent all of those formative years chasing them around
with their with their athletic and evers, and they all

(15:01):
three played college sports. And so my wife and I
just tag team this thing running around for years and years.
I was coaching, I was working full time. My wife,
after the kids got in school, went back and was
a teacher. She retired a few years ago, and so
we've had we've got more free time on our hands
now that we're not chasing kids around. And you know,

(15:24):
my wife and I have had to sit down here
in recent days and months it's.

Speaker 3 (15:28):
Like, what are we gonna do?

Speaker 4 (15:29):
How do we want to spend all this time? So
A we're having some meaningful days and years, and B
so we're not driving each other crazy. It's a fascinating
stage of life to go through.

Speaker 3 (15:44):
You know.

Speaker 2 (15:44):
What I also see off a is people who plan
to retire one maybe long before the other one, and
then the one spouse retires, the one who's still working
is like, wait a second, this is ridiculous. I don't
want to work four more years. I'm jealous of the
lifestyle you're living now. And that becomes not only an
emotional decision, but also a financial one, because maybe we've

(16:05):
built the plan where that person's going to work four
or five years. Maybe they're not medicare age yet, not
to sixty five, and so they're carrying the insurance, and
they end up back in my office saying, Okay, I
actually do not want to work until I'm sixty five.

Speaker 1 (16:18):
I'm seeing how great my husband or my wife's life
is right now.

Speaker 2 (16:23):
How do we make these numbers work and see whether
we can in fact, maybe retire a little bit early,
and again there's an emotional and a financial component to that.

Speaker 4 (16:33):
Yeah, you bring up a couple of great points. Where
do the healthcare dollars come from? Because we have to
have healthcare. Sometimes the spouse that is still working, the
retired spouse can go on you know, the other spouses
his or her health care plan. Sometimes they can't and
they have to go out and buy private insurance. It

(16:54):
gets into you know, medicare planning all those type of things,
and then dovetail that with a social security claiming strategy,
you know, from the standpoint of where's the cash flow
going to come from? So a lot of reasons to
sit down and do some planning so that we don't
just make emotional decisions based on how we're feeling in
the day or the week, that there's there's actually some

(17:15):
thought and discussion behind it.

Speaker 2 (17:17):
I'm going to throw another kind of legger of decision
making into this, and what if the person who gets
to retirement first is the one that has the far
larger social security benefit right the other one's probably going
to claim off.

Speaker 1 (17:31):
Of their history.

Speaker 2 (17:33):
It can make a lot more sense financially, right math wise,
for that person to wait and claim later and draw
a much larger benefit, especially if there's ten years age
difference between the two of them, something along those lines.

Speaker 1 (17:47):
So then you know, figuring out the.

Speaker 2 (17:49):
Social security claiming strategy you know, during this time can
be really critical. And you know, often when we do
financial plans we run them in several different scenarios for
social security, which just I had someone in my office
the other day who they're sixty two right now, so
they're looking at claiming at sixty three or waiting until

(18:09):
full retirement age, and so we ran the numbers. You know,
the difference was a couple hundred thousand dollars, and then
we said, which, what's your preference here? Right, But they
had the information in front of them to make the
best decision for themselves. And I think you know, when
you're looking at retiring at different times and you're looking
at different sources of you know, maybe there's a little

(18:30):
bit of a paycheck still coming in and then not
on the other side taking distributions. When to claim social security.

Speaker 1 (18:35):
These can be really tricky decisions.

Speaker 2 (18:38):
Getting them right can mean the difference between thousands tens
of thousands of dollars. This is where I point to
a financial plan as the foundation for those decisions.

Speaker 4 (18:48):
Absolutely and stepping away from the money part of this
for a moment. It's also important to just communicate with
your spouse about, Hey, if we make decision A or B, here,
what is an average day in the life of you know,
us as a new reality?

Speaker 1 (19:06):
Yeah?

Speaker 4 (19:07):
Yeah, yeah? How are we having fun? How are we
spending meaningful time? You know, if I do this, is
it going to be irritating to you? Or are you
going to feel avoided? You know, there's all those things
that go into it, and you know the saying holds
communication is key. You got to sit down and talk

(19:28):
about it and be honest with one another before you
pull the trigger.

Speaker 3 (19:31):
On any of these major changes in your life.

Speaker 1 (19:34):
Here's the all Worth advice.

Speaker 2 (19:35):
Whether one Spells is enjoying retirement earlier or the other
is still working understanding having a clear vision that's going
to help you maintain a strong sense of partnership, mutual support,
and also making sure the.

Speaker 1 (19:46):
Financial plan works this way.

Speaker 2 (19:48):
Coming up next, a topic that can bring so much
pain on a family, It can be debilitating. We're going
to get to that coming up in how you can
make sure you're helping your elderly loved one. You're listening
to Simply Money presented by all Worth Financial. Here in
fifty five KRC the talk station. You're listening to Simply

(20:11):
Money presented by all Worth Financial. Amami Wagner along with
Bob Sponsorer. I think we've all heard the horror stories
in the news and other places, and it just kind
of makes you sick a little nauseous in your stomach
when you hear about an elderly person who has been
taking advantage of and abused in any way. And oftentimes

(20:31):
the way that those headlines play out is it can
even be someone close to them. And so if you've
kind of seen or heard any of those stories and
you worry about someone your parents, your aunt, your uncle,
whoever that is, stick.

Speaker 1 (20:48):
With us here.

Speaker 2 (20:49):
We are joined tonight by Mark Reckman. He is our
estate planning expert from the law firm of Wood and Lamping,
an expert on all things in elder care. In Mark,
I really want to die into this financial abuse of
the elderly. What do we need to be looking for here?
What do we need to know to protect our loved ones?

Speaker 5 (21:09):
Well, probably the classic scenario is that is people who
developed dementia. But that's not the only time that you
see financial abuse. But dementia symptoms is an example of that.
And when I say dementia symptoms, I mean gullibility, I
mean forgetfulness, I mean people who were disorganized, who are

(21:30):
unable to follow through, they can't keep commitments. And these
are symptoms. These are all symptoms. Collectively, they're referred to
as dementia. Some people have some of them, some people
have more of them. Dementia is a collection of symptoms.
It's not a disease. The disease is either Alzheimer's or
Parkinson's or Huntington's or some other neurological condition. And they

(21:54):
manifest themselves by dementia symptoms. And that's a big one.
People who are easily influenced by others, people who are isolated,
living alone, people who are lonely, people who have a
recent loss of family member. This is the sort of
group of people that are prime potential targets for elder abuse.

Speaker 4 (22:16):
Mark, what are the most common forms of elder abuse
that you're seeing in your practice these days.

Speaker 5 (22:24):
Well, they come in a variety of flavors. Forging checks
or forcing a victim to sign checks, is something that
we see. So basically that's a type of embezzlement, for
lack of a better term, forcing a victim to sign
a deed to transfer real estate, or to sign a
will to change their beneficiary, or to sign a beneficiary

(22:45):
form on life insurance or accounts at organizations like yours,
at investment companies, people who are tricked into signing trusts
or a power of attorney. Another one is that someone
who has taking advantage of an elderly person will have
them sign a power of attorney which gives the abuser

(23:05):
the right to transact business on behalf of the victim,
stealing property, promising lifelong care in exchange for money, or
in exchange for immediate payment. I will take care of
you for the rest of your life, but give me
fifty thousand dollars now using property of another person without

(23:26):
payment or permission. As a classical one, by the way,
these things manifest themselves in phone scams, nail scams, internet scams. Now,
classically this group of people are not big Internet users,
but as time marches on, that has gotten to be
a bigger and bigger deal. Another thing we worry about,

(23:47):
which is a very difficult one, to pin down and
that self neglect because often there's no abuser involved people
who are neglecting themselves, there's not an active third party.

Speaker 4 (23:58):
All right, Mark, that brings up question I've been dying
to ask ever since I knew we were going to
do this segment, because I've got several clients.

Speaker 3 (24:06):
Now in their mid to late eighties.

Speaker 4 (24:08):
We've done all the planning, we referred them to a
great estate planning attorney like yourself. They've done the power
of attorney, They've done everything, and now the mental state
of the client is starting to change where we're having
to trigger actually implementing that power of attorney authority. I

(24:30):
know we have compliance guidelines in place in our industry,
but I'm curious, from the standpoint of the attorney in
the legal profession, what would you say are the main
triggering events where we can say definitively, we are now
moving to that financial power of attorney to make all
decisions in place of the client.

Speaker 3 (24:53):
How does that work in your world?

Speaker 5 (24:56):
Well, now, some of these signals are subtle and some
of them are blatant. The subtle ones are people who
change their mailing address for no apparent reason, or they
change the place where their financial statements are being sent.
In other words, your financial planning firms send out reports
and statements every month, and somebody customer comes along and

(25:18):
changes their mailing address even though they haven't moved, so
those reports are going to a third party. We look
for large withdrawals. A big one is missing the payment
of bills. Bills that you're regularly paying monthly, you've not
had a problem with in the past, and now there's
a series of missing bills. Now I'm not talking about
an occasional lapse. I was out of the country last

(25:39):
month and I was a day late making a payment
on my credit card, and so that's not what I'm
talking about. I'm talking about people who are missing two
or three or four payments, and maybe not in a row,
but over the course of several months. Substandard personal care,
which comes to dressing, wearing clean clothes, keeping yourself clean,

(26:02):
and your appearance in decent shape a thing to watch
out for. Another one is the perpetrator or the abuser
as we call it, tends to spend too much time
with a victim. That's that's a clue, or the perpetrator
shows too much interest in the money affairs of the
person that they are allegedly helping. Another key thing is

(26:24):
missing belongings. Now I'm not talking about things that are
missing around the house, but I'm talking about you know,
where's your car?

Speaker 3 (26:31):
Oh?

Speaker 5 (26:31):
Well, you know, I took my car. I took it
to the shop and it's being repaired well, but it's
been gone for a month. That kind of thing. We
also look for anybody who tries to limit access to
an utterly person by their family or friends or neighbors.
One of the oldest themes that we see is that

(26:52):
abusers tend to isolate their victims and cut them off
from contacts with family and friends.

Speaker 2 (26:58):
You know, Mark, I think about some of these situations
that I have been aware of through the years, and
it's tough because, you know, when you were talking about,
you know, maybe the people who are more susceptible to
these kinds of things are lonely. You know, they feel
isolated in themselves. So if someone comes along starts to
show them attention, it's been a while, right since someone

(27:21):
new has been in their lives and is really really
interested in them asking them questions. But as the loved one,
if you start to hear someone's name that you've never
heard before. Maybe it's you know, they're in an assisted
living facility and it's so someone that just keeps coming
around or whatever. Make sure you're asking questions because I
think it's oftentimes there's a little kind of bell that

(27:42):
we're hearing in the back of our heads, yet we're
not necessarily acting on it.

Speaker 1 (27:46):
I think when we don't act on it, that's when
things can go really wrong.

Speaker 5 (27:49):
Well most certainly that's the case. And so one of
the things to look out for is you've got to
keep communication open with this person. It's a memory of
your family. That should be easy, and that's if it's
a client that you're working with, that's going to be
a little harder. And of course it's hard for a professional,
for example, to maintain enough contact with the client. That's

(28:10):
not really your role or my role to do. On
the other hand, we're the people. We're the professionals, the doctors,
the financial planners, the lawyers are the people who will
notice these sort of things and it gets a little awkward.
And the best thing, of course, you can do is
to be sure you have contact information for somebody in
the family in your file. And I suspect that your office,

(28:31):
like mine, has a system where you record contact phone
numbers and addresses for key people when you open an account,
so you've got someplace that you can go with your concerns.

Speaker 2 (28:42):
Mark, great insights and things for those of us who
maybe have aging parents loved ones to look out for.
To make sure that we're paying attention to you. And
I think, man, if you have any thought in your
mind that maybe this could be happening to your loved one,
go down the path right, ask the question and do
the research follow up. You'll never regret spending that extra

(29:04):
time on it because on the flip side, right if
something does happen, it's just the worst feeling in the world.
So great insights from Mark Reckman are a state planning
expert from the law firm of Wood and Lamping. You're
listening to Simply Money presented by all Worth Financial here
on fifty five KRC the talk station. You're listening to
Simply Money presented by all Worth Financial. I mean you

(29:25):
Wagner along with Bob Sponsellar. Do you have a financial
question you just need a little help figuring out Well,
there's a red button you can click on while you're listening.

Speaker 1 (29:33):
To the show.

Speaker 2 (29:34):
It's right there on the iHeart app. Record your question,
it's coming straight to us. First question tonight is from
Corey in Edgewood.

Speaker 1 (29:42):
My mom and dad are in their mid sixties.

Speaker 2 (29:44):
Is it too late for them to buy a long
term care policy?

Speaker 4 (29:48):
Well, Corey, I would say it's not too late, but
just understand that long term care insurance does need to
go through medical underwriting. And I will tell you from experience,
as you get into your mid late fifties and early sixties,
the annual premium starts to go up, you know what
feels like exponentially.

Speaker 3 (30:07):
So it's not too late.

Speaker 4 (30:09):
But if this is something that your mom and dad
need to do, I'd recommend that they look at it
sooner rather than later.

Speaker 1 (30:16):
Immediately, I mean immediately.

Speaker 2 (30:19):
You know, it used to be that there was a
huge marketplace for these long term care policies.

Speaker 1 (30:24):
There was you know, competitive nature to it.

Speaker 2 (30:27):
You know, premiums weren't going to kill you, and so
many of these insurance companies.

Speaker 1 (30:31):
Just lost on these policies.

Speaker 2 (30:33):
People were spending so much more time in these facilities,
they were so much more expensive, and they just lost
their shirts. And a number of insurance companies got out
of this business. They aren't selling long term care policies anymore,
which means, right, the less competition, the more you're likely
going to have to pay. So if a long term
care policy might make sense for your parents, they need

(30:54):
to look into it now, because the younger you start
to look into it, the better off you're going to
be with the premiums that are not going to continue
to go up.

Speaker 1 (31:02):
But you know, I just have seen a huge change
in this space, and.

Speaker 2 (31:06):
A lot of people now are choosing to self ensure,
either because they have enough assets to do it or
because they don't have enough assets for a long term
care policy. So looking into it sooner than later, I
think makes a lot of sense. Let's get to John's
question now he's in Mason.

Speaker 1 (31:22):
Can you please explain what bond lading is?

Speaker 4 (31:25):
Yeah, John, let's first explain what a bond is, because
I think it's important for people to just understand the
fundamental concept. When you buy a bond, what you're basically
doing is you're loaning your money either to a government,
you know, the federal government, a municipality, or a company,
and that bond comes with an interest rate and a

(31:46):
term of years. So really all laddering is is not
putting all your eggs in one basket and staggering the
maturity term of each of those loans that you're making.
That tends to do is mitigate some of the interest
rate risk. And I probably don't have to remind you
about how much interest rates have moved in the last

(32:07):
three or four years. So bond laddering is a great
way to just diversify the time horizon over which you're
loaning your money to a various institution and when you
get your principal.

Speaker 3 (32:20):
Back as well.

Speaker 2 (32:21):
Yeah, it can also help with liquidity, right if there's
a reason why you might need money, or you're maybe
not sure. Maybe you're potentially going to buy house if
the right thing comes up, but you're not sure.

Speaker 1 (32:32):
You know, having bonds that are coming.

Speaker 2 (32:34):
To maturity once a year kind of gives you the
option of if something then comes available, Okay, now I've
got that money, it still has kind of exposure to
that growth, and then all of a sudden it becomes
available to me. I can decide whether I need to
use that now or whether I want to reinvest it
right and continue to kind of create the next rung
and that bond ladder.

Speaker 1 (32:53):
Let's get to Peter next, he's in morrow.

Speaker 3 (32:55):
What do I need to know about mutual fun expense ratios?

Speaker 2 (32:59):
You know, it's interesting because mutual funds used to be
what everyone started investing in, right and now.

Speaker 1 (33:07):
I was just having a conversation with someone the other
day and I.

Speaker 2 (33:09):
Said, I feel like ETFs exchange traded funds are like
mutual funds two point zero.

Speaker 1 (33:15):
And the reason why.

Speaker 2 (33:17):
Is because mutual funds tend to have higher expense ratios
and them. I think the problem with this, Bob is
many people don't understand that the investment vehicle that you
are using will have an internal expense in it. You
and I have to fill out for compliance reasons, something
called a rollover analyzer right when people are moving their

(33:38):
money into all Worth, and many times someone will call
me and say, I don't understand what I'm reading here.
I wasn't paying any fees before. Absolutely, absolutely you were,
and it's important to know how much they are because
sometimes you're paying way too much for an expense ratio
for an investment that you could maybe have an ETF

(33:58):
and be paying far fees and get the same kind
of diversification.

Speaker 1 (34:02):
Same kind of investment product.

Speaker 4 (34:04):
Yeah, So in answer to the question, what do you
need to know about mutual fund expense ratios?

Speaker 3 (34:09):
Know what they are? Absolutely a couple simple ways to
do that.

Speaker 4 (34:13):
If you just go to Yahoo finance. I mean, this
is a free website. You type in the symbol for
any mutual fund that you own or are considering, it's
going to tell you what the mutual fund expense expense
ratio is. And to Amy's point, this is the expense
to operate that fund that's coming out of your money
before you earn any type of return in the market. So,

(34:37):
in other words, it's the cost of doing business, and
you should know what that is. Same thing with your
four oh one K plan. You know, your plan will
disclose those items every year in a formal disclosure that
everybody hates to read a lot of times they're thirty
forty pages long. But look for the section on expense
ratios and look at what you're paying, you know, for

(34:57):
the funds that you own. And a lot of time
times nowadays in four to one K plans, the plans.

Speaker 3 (35:02):
Will opt will offer lower.

Speaker 4 (35:05):
Cost index funds ETFs that come with dramatically lower expense costs.

Speaker 3 (35:11):
Than an actively managed fund.

Speaker 2 (35:13):
Yeah, if you don't know what expenses you're paying on
your investments right now, do the research.

Speaker 1 (35:17):
It's easy to figure.

Speaker 2 (35:18):
Out, and it could be eye opening and you might
make some different choices. Coming up next, we're taking you inside.

Speaker 1 (35:23):
Bob's World of Wealth.

Speaker 2 (35:26):
You're listening to Simply Money, presented by all Worth Financial
here on fifty five krz.

Speaker 1 (35:30):
The txation. You're listening to Simply Money. You're presented by
all Worries Financial. I mean you Wagner, along with Bob's sponseller.

Speaker 2 (35:44):
I'm glad you stuck around because this is what you
have been waiting.

Speaker 1 (35:47):
For, Bob's World of Wealth. We have so much to
learn from you. Bob, lay it on us. What do
we need to know? What do we need to think about?

Speaker 4 (35:56):
I'm still trying to stop laughing after listening to that
intro music. But no, here's just a little nugget, and
I'm going to preface this with some major disclosures here.
This is not a recommendation from Bob. It is not
a recommendation from all Worth. It is a recommendation to

(36:18):
acquire some knowledge and wisdom.

Speaker 3 (36:20):
How about that?

Speaker 4 (36:21):
And it's about an asset class that is becoming rather
ubiquitous in our society, and that is bitcoin or cryptocurrency.

Speaker 3 (36:31):
So I've been looking.

Speaker 4 (36:33):
For a resource for a while now to just get
a primer, a self education, you know, background on how
did this, how did bitcoin come about, how's it being used?

Speaker 3 (36:44):
What?

Speaker 4 (36:45):
You know, what's going on with this. And a really
good friend of mine who's a retired senior executive, very
high level executive at Procter and gamb But we were
having dinner a couple months ago and he said, Bob,
you got to read the book. This book is awesome,
you know, all about bitcoin and all that. So I say, hey,
what is it? And and I'll share the title. It's

(37:07):
called the Bitcoin Standard, and I will butcher this man's
first name, so I won't even say it, but his
last name is a moose a m m o us Uh.
Look that book up on Amazon.

Speaker 3 (37:21):
You know, it's a very popular book, and.

Speaker 4 (37:25):
It just gives you a bunch of great background information,
not just about bitcoin and cryptocurrency, but about money, the
use of money historically over time, not only as a
medium of exchange, but as a storehouse of value. And
it's a great book and I highly recommend it. To

(37:46):
anyone who's just trying to learn and become up to
date on something we're going to be hearing more and
more about as time goes on.

Speaker 2 (37:56):
I'm so glad that you brought up educating yourself because
you know so many people ask about bitcoin, about cryptocurrency,
and I think you know, before you invest in anything,
you need to fully understand what you're investing in. Many
times on the show when we're talking about investments and
not making recommendations about what you should invest in, but
giving you perspective, it's because we've.

Speaker 1 (38:16):
Got historical perspective.

Speaker 2 (38:18):
The problem is with bitcoin and cryptocurrency, there's not enough
backgrounds or history there to be able to say make
any predictions about where we're going from the future. At
least when you're educating yourself, you've got that knowledge of
how did we get where we.

Speaker 3 (38:31):
Are today exactly. And we talked about this earlier in
the show. Recency bias.

Speaker 4 (38:37):
Yeah, people jump on things based on recency bias with
no education and background, and that's how disaster can happen.

Speaker 2 (38:45):
So if you're interested in investing in something like bitcoin, cryptocurrency,
whatever it is, educate yourself. I think starting with that
book is a fantastic way to do it. Thanks for
listening tonight. You've been listening to Simply Money, presented by
all Worth Financial here in fifty five KRC.

Speaker 1 (38:59):
The extation