Should we embrace the recent economic slowdown?

Chuck Zodda and Mike Armstrong react to Warren Buffett's comments about AI from the annual Berkshire Hathaway meeting. Are we finally experiencing the long awaited economic slowdown? Is the Fed right to bide its time on rate moves? Could the Fed do a better job explaining the moves they make? The 401(k) match change could have 'unintended consequences' at tax time. Equinox launches a $40,000 per year membership to help you live longer.

Episode Transcript

(00:00):
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(01:07):
Exchange with Chuck Zada and Mike Armstrong, Chuck, Mike Kentucker with you here
kicking off another week and over theweekend it was not just the Kentucky Derby,
not just Game seven of Bruins beatingthe maple Leafs again, thank god,

(01:30):
but it was also the Berkshire HathawayAnnual Meeting, which always happens on
the same day of the Kentucky Derby. Yeah, he pointed that out to
me on Friday. I hadn't honestlyput that one together. I only know
this because about ten years ago,I had a buddy of mine who was
working in the investment world and wasactually heading out to Omaha, and shortly

(01:51):
after he was going to go toMexico for some due diligence on a couple
of Mexican companies, and he forgothis passport and so I had to go
to the cargo tar terminal at LoganAirport, I put it on a plane
and Mexican. And I knew thisbecause I was trying to get home for
the Kentucky Derby as well. Inany case, this was the first time

(02:15):
ever that the Berkshire Hathaway annual meetinghas not had both Warren Buffett and Charlie
Mungrad since the two became, youknow, intertwined and took the company over
back what sixty years ago now,And so this one had a little bit
of a different feel to it,and that there was a lot of talk
about Buffett's mortality in this and thatsuccession planning, all of those, you

(02:38):
know, important items that quite honestlyhave been surprisingly evasive for a company who
is headed by two ninety five plusyear olds. Yeah. I mean look,
until last December, like just forthe two of them, you could
be were led by a company withover two, you know, almost two
hundred years experience. It's like,wow, you know, it's it's rare

(02:59):
to see that. Sorry, Warrenis only ninety three years old. I
don't need to exaggerate his age.My apologies. He was born in August
of nineteen thirty. He's seen somestuff, man, Yeah, he's seen
some stuff. So a lot totalk about Buffet's mortality. But where I
want to start today is with thispiece from the Wall Street Journal specifically talking
about Warren Buffett and his thoughts onartificial intelligence. And I'll read just a

(03:23):
couple of quotes from him, Welet a genie out of the bottle when
we develop nuclear weapons. AI issomewhat similar. It's part way out of
the bottle discuss So he's not thefirst person to make a nuclear weapon comparison.
In fact, I think we didso on this exact program. And
you know, he goes on topoint out that he doesn't have the depth

(03:45):
of knowledge of the underlying technology,but sees how it could be so radically
important to frankly world order in thefuture. He's seen compelling videos of himself,
for example, that were created byartificial intelligence, and that potential to
dis seve there do we know thatWarren Buffett even was himself at this kind
of entirely just be was a deepfake? So he is. Look,

(04:11):
he and Charlie Munger always at thesemeetings are asked about big not necessarily investment
related items, but societal related items, and artificial intelligence is clear the top
of the list right now, andhe is injecting an opinion that does not
have much to do with any sortof investment thesis on the subject. He
said, quote, if I wasinterested in investing in scamming, it's going

(04:31):
to be the growth industry of alltime. And here this is the key
difference between AI and the atom bomb. Aside from lots of other ones,
but this is the key one,Mike, You and I cannot go out
and build an atomic bomb. No, It's just not possible for us to
do so. It's it's not likeyou just go out and say, hey,

(04:54):
there's some uranium over there. Ibet if we, you know,
take a chunk out of it andput it in to a It doesn't work
like that. Yep. You know, it's hard to make an atomic weapon.
It's hard, expensive, and youneed lots of really smart people and
everything kind of going perfectly for you. Yep, it doesn't just happen.

(05:15):
Artificial intelligence scams do just happen becauseit's really cheap to buy the software needed
to do this kind of stuff.And all you need is a little bit
of know how and a few bucks, and you can get all kinds of
scamminess pretty darn easily. It's notquite as easy as opening an email account.

(05:36):
But what I would say is,if you've ever you know, built
a website, it's not that muchharder than that. At this point,
I'll even go a step further intosay, even the comparison, even if
you're not talking about the scam itself. But let's take the comparison of building
a large language model an artificial intelligencetool compared to building a nuclear weapon significantly

(05:59):
easy. You're to build a toolthere as well, and so I think
that you're right, it is akey difference. And I think the main
comparison between nuclear weapons and AI isjust the potential for long term vital impact
that nobody is probably accurately forecasting rightnow. So when we look at artificial
intelligence, this is all the scarystuff, but it is important to also

(06:23):
remember that the potential upside here issignificant as well, as far as you
know, the ability to do thingsmore powerfully and more quickly than before.
And I don't know if any ofyou saw, but over the weekend there
was a band I've never heard ofhim, I can't even remember who they
are right now, who released thefirst music video produced entirely by artificial intelligence.

(06:47):
And I was, you know,floating around the internet just being like,
Okay, what are people saying aboutthis? And a common thing that
I heard was it's so sad thatall the all the people that would have
worked on that project. Otherwise,you know, never got to use their
talents and never got paid for doingwhat they would do. You know,
the lighting people, the camera people, the direct blah blah blah, all

(07:11):
those people. And on one hand, I go, yes, like that,
that is true. But the counterpointto it is this is also what
is said at any point in technologicalprogress. The stone tablet carvers and what
was probably a very strong union backin the day probably looked. They probably

(07:32):
looked at the printing press and werelike, man, this is gonna put
us out of business. And itdid and and and it did and and
better for it. And that's goodthat we don't have to walk around carrying
a bunch of granite. You know, it's we'd all be kind of jacked,
But ultimately that would not be somethingthat's net positive. So I don't

(07:54):
think you can look at artificial intelligenceand be like, oh, this is
gonna cost so many jobs. Butbecause there's always another problem to solve and
always something new. Yeah, andI haven't seen the video that you're referring
to, but washed out by theway it was the band. I've seen
several songs created by artificial intelligence andother things books and other pieces of writing,
and generally speaking, for instance,the college professors and high school professors

(08:18):
who are dealing with artificial intelligence writtenstuff, the general conclusion has been like,
yeah, I mean, if youwant to use an AI to write
a basically a C grade paper,then you can do so pretty easily.
But that's about as good as itgets. And so I'm with you.
I don't think that those items arethe ones to fear. If you're going
to be scared of artificial intelligence,there's plenty of stuff to be worried about.

(08:41):
Right There is this scam impact.How easy is it going to be
for artificial intelligence to listen to myvoice, which there's plenty of it out
on the internet, and create aversion of me that is saying a bunch
of things that I've never said,or use it to try and convince other
people that I am, that Ineed their help, that I need their

(09:01):
money, that I want to,you know, do something that I wouldn't
normally do. There are plenty ofcircumstances where we should be concerned about artificial
intelligence. You know, authoritarian regimes. Creating news stories that aren't real becomes
a lot easier when you have thecapacity, but you don't need a bunch
of people to write fake stories.The stuff that I'm yeah, a lot

(09:24):
less concerned about are the lighting peoplewho are working on music videos. Is
anybody terribly interested in going to seea movie created entirely by artificial intelligence?
I'm not no, And this isone of the other things that I've pointed
out. AI has really been aroundfor about sixteen months right now, Tucker,

(09:46):
you're you like the Internet? Ido, yeah, multiple reasons.
You're pretty heavy into the Internet.I'll admit like I am too. I
don't do like the whole social mediathing the way that a lot of people
do, but I still pay attentionto stuff. Has there been a single
meme that artificial intelligence has made?There was recently. Yes, there might

(10:11):
have been memes about AI, butthere's been nothing where it's like, yeah,
the means we have okay are Hey, you know, you show the
picture of crying Michael Jordan and everyoneimmediately knows what it is. You show
the one of you know, theYankees fan in the outfield going dog,

(10:31):
and everyone knows what it is.Because we recognize that these are actual parts
of society. We see the humanityin ourselves and that's why they become memes.
Memes is because we can see ourselvesin them when it's just hey,
here's you know, a snowman dancingand holding three beers. Okay, that's

(10:54):
that's not really it doesn't matter.I think, look like any other technology,
but this one a bit on steroids. There are some really big concerns
and it goes beyond scamming too.Right, the atrocious stuff that you might
hear about on child pornography and othersorts of pornography when it comes to artificial
intelligence is disgusting and frightening as aparent. Yeah, yeah, that was

(11:20):
the other part that I was readingabout over the weekend. And you know,
disgusting, frightening, terrifying as aparent of a few young girls.
Those are the areas that require ourattention. Those are the areas that require
legislation, that require change to howthese systems work. We don't need legislation
or change when it comes to creatinga music video using AI. Just be

(11:43):
concerned. If you work in anindustry that you know might be immediately impacted.
If you are a ghost writer forsome sort of company, then yeah,
you may face challenges in the future, but I think to Warren Buffett's
point where he kind of hit thenail on the head is if you adapt
it, if you go in andutilize it and learn it as a as

(12:03):
a piece, then you may beable to leverage it in a way that
wouldn't previously have been possible without thetechnology. When the chainsaw was invented,
did all the lumberjacks say, no, we're gonna go and do this the
old fashioned way by holding a sawon two sides of a tree and pulling
it back and forth. O.No, they said, guys, this
is gonna make our lives easier.We can cut more trees and make more

(12:24):
money. Now just goes workout,though. But no, there's a reason.
There's a reason why lumberjacks are notnearly as beefy as they used to
be, and we're worse off forthat, but better off for cheaper lumber.
Let's take a quick break. Whenwe got back, we are going
to cover beefy lumberjacks on the FinancialExchange. Welcome to Monday, baby.

(12:46):
The economic slowdown is finally here.Welcome that too. That is the headline
from the Wall Street Journal. We'llcover that when we come back. Business
and financial news affecting the markets andyour wallet. We've got it all straight
from Wall Street right here on theFinancial Exchange Radio Network. Find daily interviews
and full shows of the Financial Exchangeon our YouTube page. Like us on

(13:09):
YouTube and get caught up on anythingand everything you might have missed. This
is the Financial Exchange Radio Network piecefrom the Journal of Wall Street. The
economic slowdown is finally here. Welcomeit, Mike. That's right. We

(13:30):
got one data point that showed someindications of a slowdown, So there have
been a couple, I'll at leastadmit. But here's here's the question,
Mike. Is this this year's versionof Hey, you really gotta let your
your pet die in order to staveoff in flay sheets, because that's what
Bloomberg said two years ago they did. No, I'm not sure I would.

(13:52):
It's not quite there. But againI okay, So yes, this
is not the job report that wereceived on Friday, which, to recap,
indicated that the labor market grew whataround a half as fast as the
prior month in terms of jobs createdtwo thirds. There we go somewhere in
that general range that wage growth wasslower than anticipated, and then as the

(14:18):
Wall Street Journal calls out, inparticular, there is a notable shift to
just five thousand jobs being added inthe leisure and hospitality sector compared with fifty
three thousand in March, all pointstwo in their view, and indication that
the US economy is finally seeing theslow down needed to regain control on inflation,

(14:41):
I guess would be the argument.I don't think they've taken this so
far as to say that there's definitelyand definitively a recession, but that we
are finally starting to see a slowdown and you can see it from spending
at different discretionary type publicly traded companies, you can see it in ism data,
you can see it in hiring data. And that that we're seeing that

(15:03):
slow down and don't necessarily think it'sa bad thing, is what the Wall
Street Journal is. Here's the convincinghere's the piece that is interesting to me.
And I'm just pulling up to makesure that I quote this correctly here.
So you've got all this chatter aboutslow down in the economy, but
I want to talk about earnings fora second. And I know that earnings
are not the economy, but theytend to track it kind of in a

(15:28):
uh, in a bit of aleveraged fashion. You know, when the
economy is going well, they growfaster than the economy. When the economy
is doing badly, they shrink fasterthan the economy. The typical thing that
we see in the run up toan earning season is that as you get
closer to that earning season, analystestimates for earnings come down. And this

(15:50):
is kind of the game that's played, is estimates come down, and then
companies beat reduced estimates and hey,everyone's happy. Q one is a great
example of this heading into Q one. So at the end of December,
earnings estimates for Q one were fivepoint seven percent. By the time April
thirty first rolled around, I'm sorry, April thirtieth rolled around, which is

(16:12):
right, I'm sorry, not aMarch thirty first. Sure, yes,
earnings estimates were down to three pointtwo percent for the quarter, and then
look, companies beat them. They'vecome in now with eighty percent of the
S and P five hundred reporting accordingto fact set, they've come in at
five percent earnings growth, so prettyclose to where the initial estimate wash,

(16:33):
which means that the initial estimate wasactually pretty darn good. If Earning's committed
five percent, the estimate was fiveseven, it's like, oh, you
guys, you guys are kind ofgood at this, actually, But the
trend is normally that earnings estimates decreaseover the course of the quarter. Q
two earnings estimates have now risen bypoint seven percent since the start of Q

(16:56):
two, which would not indicate aslowing economy, which is not what you
typically see if the economy is meaningfullyslow in because profits don't usually grow,
they don't usually just you know,accelerate faster, you know, quarter over
quarter in a slowing economy. Now, this is a bit of a US
centric phenomenon to some extent, becausewe are a very consumer based U economy

(17:18):
and stock market, both of thosethings are heavily reliant on consumer spending.
But yeah, I think here's myoverall message. We may be in the
midst of a slowing economy right now, but I don't think that that should
allow it should completely convince you thatwe're there, should completely convince you that
rates are definitively coming down this year. Just be careful what you are utilizing

(17:45):
to make your assessment of where theoverall economy is going because I have to
say that, yes, a slow, generally slowing economy is probably my base
case assumption. But I can't sayI would be amazingly surprised if we saw
consumers bending flip back up in thesecond half of this year, or that
if we saw inflation on the backsof a really robust housing market this spring

(18:07):
turn higher again. I don't thinkany of those things would be hugely surprising
to me or frankly anyone that looksat the economy on a regular basis.
And the other thing that I alwaystell people is, look, the economy
is never stationary. What you areseeing in data today, it's not going
to be what it looks like inthe future. So it's the the evolution
of data, I think is justas important to pay attention to, because

(18:27):
that's how if you're not paying attentionto that, that's how you miss turning
points. That's how you miss youknow, the idea that, hey,
the US was not going into recessionlast year because growth was going to be
too strong. A lot of peoplemiss that because they said, oh,
here's you know, the snapshot ofdata heading into twenty twenty three, and
that's what you know, it's goingto continue and it's going to get worse.

(18:48):
And a lot of people miss thefact that there was this reacceleration that
was happening. So I think youhave to, you know, stay very
in tune to this because look,if you had one hundred and seventy five
thousand jobs created, an average hourlyearnings up point two percent month over month
for twelve months, and the economy, the economy is pretty much perfect,
then but unless not just that orthe other happens to throw that out again,

(19:12):
it's it's not going to do thatbecause it's never stationary. Now,
you know. Now you've got companieswho say, oh, gee, is
the economy slowing? Am I goingto pull back on hiring? And so
you see that, and then thattakes interest rates down. The companies say,
well, now it's cheaper to borrow, so I'll borrow more and expand,
and that drives the next wave.It's all give and take. It's

(19:33):
it's not it's not stationary. Quickbreak here. Wall Street Watch is next.
Like us on Facebook and follow uson Twitter at TFE show. Breaking
business news is always first right hereon the Financial Exchange Radio Network. Time
Now for Wall Street. Watch acomplete look at what's moving markets so far

(19:57):
today right here on the Finitel ExchangeRadio network. Well coming off of busy
week, markets today aren't positive Territories. Investors continue to assess first quarter earning
season, last week's FED meeting andremarks from FED Chairman Jerome Powell in April
jobs report on Friday that fell shortof estimates. Right now, the Dow

(20:18):
is up by about a quarter percent, are one hundred and nine points,
S and P five hundred is upover half a percent, or twenty nine
points, and the NAZAC is upby nearly two thirds of a percent or
one hundred points. Russell two thousandis up over one in a third percent.
Ten year treasury yield flat at fourpoint five zero percent, and crude

(20:41):
oil up nearly three quarters of apercent, trating at seventy eight dollars and
sixty six cents a barrel. TysonFoods reported quarterly results ahead of the opening
bell this morning, where the meatprocessing giant posted mixed results, beating on
adjusted earnings expectations but falling just shortof revenue forecasts that stocked down by seven

(21:03):
percent. Meanwhile, Paramount global sharesare up by three percent following a report
from The New York Times that themedia firm has decided to formally open negotiation
negotiations with a bidding group led bySony Pictures Entertainment and the private equity giant
Apollo. This comes after talks betweensky Dance and Paramount lapsed on Friday night.

(21:25):
Separately, Warren Buffett disclosed during hisannual shareholder meeting over the weekend that
Berkshire Hathaways sold the entire stake inParamount at a loss. Elsewhere, Spirit
Airlines down by eight and a halfpercent after the Discount. Airline posted a
wider than expected loss in the firstquarter, while revenue met expectations. However,

(21:47):
Spirit's second quarter revenue fell short ofstreet forecast. If Former Starbucks CEO
Howard Schultz took to LinkedIn over theweekend, posting that the coffee giant needs
to fix its US operations and howto go about doing so. That stock
up by about a quarter percent.I'm Tucker Silvan, that's Wall Street Watch.
Do you want to talk fed?Yeah, let's talk about the Federal

(22:08):
Reserve. They had their meeting lastWednesday where Jerome Powell address the nation or
a very small subset of the nationthat chooses to listen to him at two
PM and excuse me, and thegeneral message from him was duvish, generally
perceived as duvish after he spoke andspoke to a number of conditions under which

(22:33):
they would consider cutting interest rates,but did maintain the overall idea that the
data does not support doing so.Today, I think that when we look
at the FED, the thing thatI always not always no, the thing
I always focus on is that sincethe end of twenty eighteen, whenever pushes

(22:56):
come to shove and granted, theinflation issue has really only been present since
twenty twenty two. Yep. Theyhave consistently acted more douvishly at every opportunity
they've had to be hawkish. Theymay have spoken hawkishly, but the keyword
that I was there is acted,because in every single case where they could
have said, you know what weneed to do more than the markets expecting,

(23:21):
they did less yep. And lessis a choice. It may be
the right choice sometimes, it mightbe the wrong choice sometimes, but that
is the choice that they are making. And so and it seems to me
by the way that it was thecorrect choice up until twenty twenty one,
and was the wrong choice starting intwenty twenty two to do less when it
came to inflation. The big thingis that the economy has evolved considerably since

(23:47):
twenty twenty, and I think thatwhen we look at where it sits today,
the inflationary risks at this point intime are no longer asymmetrically skewed to
the downside like they were for thelast thirty forty years. I remember back
in twenty eleven, twenty twelve,every single person out there screaming, all

(24:11):
like, this recovery from the financialcrisis is going to create so much inflation
and rates are gonna have to goup, and and no matter what the
FED did, no matter how duvishlythey acted, they literally couldn't generate inflation
because the economic the economy was justso malayserific. Yeah, yes, you

(24:33):
know, it was just like itwas just it was like walking through cement
with bricks already on your feet,that like, you just couldn't generate inflation.
Today, that's not the case.And it's not that everything that the
Fed does is inherently going to generateinflation. But it is a case where
I don't know that the FED isnecessarily appreciated how the picture has changed since

(24:55):
a lot of these people started workingat the FED, which was during you
know, that twenty thirty year periodwhere inflation was not a problem. Basically,
no matter what the Fed or theTreasury did, inflation didn't become a
problem. It's just it's a differentenvironment. And so there's plenty of evidence.
By the way right, I knowthat we are been quite critical of

(25:15):
the Federal Reserve and their policy,especially at the beginning of twenty twenty two.
I think where the big mistakes weremade. You had massive bond buying
programs still occurring and no hight tointerest rates at the same time that inflation
was clearly there. There's evidence thatagain we are seeing the slowdown that's going
to control inflation. The labor marketis starting to show signs. Credit markets,

(25:36):
you know, you take a lookat consumer debt, revolving credit card
debt, whether you take a lookat card debt and default rates in some
of these areas, they're starting totick up in a way that would indicate
a slowdown. My overall concern isn'tMy overall concern has been what the Federal
Reserve is saying not so much theiractions since they got to peak rates.

(25:59):
My overall concern is will the FederalReserve end up cutting rates prior to seeing
the actual evidence of inflation coming undercontrol, because I think if there's one
area to see how the Federal Reservecutting rates could cause more inflation and lead
to a period similar to the nineteenseventies. Again, to me, it's
housing. I just go back toyou. With the auto market, I'm

(26:23):
not sure, but with the housingmarket, if you saw interest rates over
the next twelve months get down oreven just today down below let's call it
seven percent or six and a halfpercent, I personally believe that the housing
market activity would just go through theroof and probably cause more inflation on the
tail end of it. This bringsus to our next piece on the FED,

(26:45):
which is interesting in some respects andkind of scary another. So Austin
Goulsby, who is the president ofthe Federal Reserve Bank of Chicago, was
talking about, Hey, how canwe improve how we communicate with the public,
And my answers will stop communicating somuch, like, don't have a

(27:07):
symposium about how you're going to communicatewith the public more like, we don't
need to communicate about the communicating that'swhat I'm communicating. What he is talking
about, that's kind of interesting tome, and I need to think through
like the second and third order impactsof it. Every two FED meetings we
get what's called their Summary of EconomicProjections, where it says, hey,

(27:30):
here is the projections that we haveas you know, the Federal Reserve,
Open Market Committee, for inflation,growth, unemployment, the FED funds rate,
all these different pieces, these bigvariables in the economy. Here's what
we're projecting the next three years andthen for the long run. And what

(27:52):
Goolsby is talking about doing here is, hey, don't like publish you know,
who has what view on which ofthese variables. But instead of just
having a bunch of they do thesedots for all of these different things on
it's a chart that they show andinstead of just having the dots, you
know, kind of posted randomly,instead say, hey, this dot here

(28:17):
that shows that the FED funds rateis going to be you know, five
point five percent. The person whoprojected that is also projecting that economic growth
is going to be stronger and inflationhigher. And that's why they think the
Fed funds rate needs to be higher, So it's kind of tying together those
projections, which on one level Ilook at and I go, Okay,
that maybe provides a little bit ofcontext. The counter to it is that

(28:41):
then you start to try to figureout, Okay, who's dots are these
and whose dots are those? Andnow you're playing a stupid game, and
what do we know about stupid games, Mike, stupid prizes? Uh huh.
I have to say that I reallyam having a tough time getting on
board with any Federal Reserve plan thatinvolves them publishing more data about their outlook

(29:02):
on things. Less is more.We've talked about this. I know you're
not going to the problem is thatthe cats out of the bag, and
I don't think you're ever going toget there, because once you've started to
publish all of these opinions, it'sreally tough to go back and say,
you know, we think we've publishedtoo much information, so we're just going
to stop. The only way youcan kind of get around that is just
having a FED president who's intentionally moreopaque with his commentary. But I don't

(29:29):
think you can pull back the datapoints that get published and Likewise, you
should think long and hard before yougo and publish one of these things,
because once you do again really difficultto say, oh, yeah, this
was a mistake publishing this. Let'sstop. Let's stop doing so. But
to me, I fall in thesame boat, Jock Witch would be the
Federal Reserve and its board members seemto talk too much, answer too many

(29:52):
questions off the cuff, with seeminglyunintended answers to those questions, and generally
leave the public more confused then clearon what they are thinking about the economy.
To take a quick break here.When we come back, we'll talk
about the potential move by the Departmentof Justice to reclassify marijuana and what it
means for well the marijuana economy.Miss any of the show. The Financial

(30:18):
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USBI dot com. Mike. There'sa piece in CMBC talking about four one
ks and company matches associated with them, and specifically company plans that have WROTH

(31:25):
for one k's attached to them.Yeah, what's going on here? So
this has been a pretty quick changeover the last decade. Back in twenty
thirteen, about fifty eight percent ofemployers who had a retirement plan available offered
a WROTH option. By twenty twentytwo, eighty nine percent of those employers
were offering. Real wild that's apretty rapid chance to say, and I

(31:47):
recognize that some of you might notreally fundamentally know the difference between traditional and
WROTH, which is an important distinctionhere, but basics are traditional four one
K pre tax money. You geta deduction for them contributions. The money
is taxable when it comes out WROTHno deduction, tax free growth, and
tax free permanently. Also not subjectto required minimum distributions if set up properly.

(32:13):
The changes that are coming are intriguing. So one employers frequently match contributions
to four one ks, and previously, whether you are contributing to traditional or
WROTH, the matching contributions always wentto the traditional bucket. Now you have
the ability in some plans this isan ability, not a requirement, to
direct those contributions to your WROTH fora one K as well. But watch

(32:37):
out because if you do, thenthey are compensation and you're going to be
taxed on them, and they don'tknow how to withhold for you. So
there are some employers that say theywant to roll out this possibility of doing
it, but only about twelve percentof them have said they're definitely adding the
feature. There's another thirty seven percentthat are still considering. It can come
with some tax surprises within a fewyears. Though pretty much everybody's going to

(33:00):
have a ROTH for a one Koption because in twenty twenty six. If
you make more than one hundred andforty five thousand dollars per year, and
I'm sure that that number gets inflationadjusted, but if you end up making
too much, then they're going tosay that, hey, all of your
catchup contributions are required to go intothe wroth. Here's the key takeaway.

(33:21):
This is one of those issues thatI hear from people frequently. They understand
that a wroth can be desirable,but most people have no real idea whether
or not they should be utilizing it. There's some pretty clear circumstances in most
cases where you can look at somebodyand say, hey, based on where
you are today, based on howmuch you've saved, based on when you
want to retire, and how youplan on using this money, yeah,

(33:43):
roth does or does not make sensein your circumstances. And here's why.
More often than not, what Ihear from people is, hey, this
thing got ruled out, and Idecided to just slug some of my money
into it without really thinking about it. And not that that's going to devastate
you, but you should really understandwhat the implication are whether or not you're
withholding enough money from your paycheck andwhat that's going to mean for your financial

(34:06):
future a decade or two from here. Because remember that the RMD age used
to be seventy and a half,it's now seventy five. All of these
things that Congress has changed have allowedfor a lot more planning and you can
really be taken advantage of. Italso allows, like anything else that Congress
does, a lot of opportunities toshoot yourself in the foot. And so
if you're considering all these changes,if you're considering what to do and what

(34:29):
your employers offering to you within yourown retirement plan, the folks at Armstrong
Advisory Group would love to sit downwith you and help you guide yourself through
that, especially if you're heading towardsthat retirement stage. If you're blindly going
in there and selecting the investment optionsand not giving it much thought or deciding
whether it goes to traditional or wrothand could use a bit more in the

(34:50):
way of guidance on these subjects,call the Armstrong Advisory Group and let us
have a free consultation. The phonenumber is eight hundred three nine three four
zero zero one again once once moreto book an appointment with one of our
advisors located throughout New England. Thenumber is eight hundred three nine three four
zero zero one. The proceeding waspaid for by Armstrong Advisory Group, a

(35:13):
registered investment advisor. Nothing in thead or in any Armstrong guide a specific
financial, legal, or tax advice. Consult your own financial tax into state
planning advisors before making any investment decisions. Armstrong may contact you to offer investment
advisory services, like how often youget to the gym? Don't lie?
Last time was Planet Fitness and someof us, So sometime in the twenty

(35:36):
fourteen range, it's good. Itwould be my guest talker bit like a
public gym we're talking about here.Maybe I went to it one at a
hotel once in the last decade.Yeah, pre pandemic from there. Yeah,
did you guys see Actually, Tucker, I know that you did see
this because you send it to me. But Equinox forty thousand dollars a year
gym seems like a bargain. Imean, there's no other words on the

(35:58):
moon. What do I sign upforty thousand dollars a year? I ask
again, here's what you get forforty thousand dollars a year, Michael,
Okay, maybe Mars, you getthree sixty minute training sessions per week,
per week week. Okay, saya year for the year done, like
total three sixty minute sessions a week. Okay. We go with a top

(36:20):
level trainer. I guess that meansthat they have some bottom level trainers.
Yeah, the question is why dothey have them? The better be it
includes two half hour sessions a monthwith nutrition coach, two half hour sessions
a month with a sleep coach.And I love the term sleep coach.
I know that they provide a valuableservice, but all I'm seeing is some
guy on a couch. We coulddo it, man, do less,
sleep harder, Let me sleep.We came here to sleep tonight, and

(36:45):
that's what we're gonna do. Gentlemen. We do wonder if there's a big
crossover between the jacked up trainer andthe sleep coach, Like I can you
have both designations because I have atough time with somebody who just took their
muscle milk, screaming in my earto sleep better. The sheep are who
we thought they were, and welet them off the hook. So oh

(37:05):
in one massage therapy session a monthtoo. So you live a month forty
grand a year. I mean itshould be a weekly fan. It's the
same as a as Formula one oran athlete, where you're given a team
of top experts and all these differentverticals to design a program based on all
the data we've collected. Let mebe clear about something. I'm not an
athlete. And the idea behind thisis it's to let you live longer.
Like that's how they're marketing it.We are so obsessed with living longer that

(37:30):
we're gonna end up with a bunchof robots who do nothing but other than
like, take a bunch of testsand go to the gym and don't actually
live any life. We're gonna bea bunch of automatons just oh, input
output, input output, input output. Like it's we're going too far.
Forty a year. On top ofit, forty thousand a year. There

(37:52):
better be a guarantee in here.If I pay forty grand a year and
I die before my average life expectancy, I'm gonna be pest equinox. Right,
what's the policy? Doesn't matter?You're dead, What are you gonna
do? Still cheaper than a nursinghome, I guess it's kind of remarkable.
Oh yeah, yeah, it's kindof remarkable that this is where we

(38:15):
are now. But I wonder howmany of these they actually end up selling.
I don't know, they just gota bunch of free advertising. So
we'll see. We're gonna take aquick break out or two coming up in
just a little bit.