Kersten Wealth Management Group - Money Sense 1-11-25

Episode Transcript

Speaker 1 (00:00):
Hello, and welcome to Money Centra're listening to the advisors
of Kirstin Wealth Manage for Group, Kevin Kirsten and Brad Kirsten.
Happy to be with you today, Brad. As we get
into the new year, the market's kind of bounced around
a little bit up and down, not really finding much direction.
We talked about in the previous show how the Santa
Claus rally did not pan out. You have sort of
the trifecta of indicators you look for the first five days,

(00:24):
is still positive, and then we look for January to
see what happens to give us a pretty good indication
of where the year might go. But certainly some ups
and downs with some news stories. I mean, we had
in Nvidia, not a recommendation to buy or sell in Vidia,
but as I mentioned that, they did have their CEO
out talking about their chips and AI and where it's going.

(00:48):
Everything new, but it is things that are pretty far
off into the future, and I think that that's probably
why Nvidia had a little bit of downside. Thing. Well,
it went nowhere for about three months. I mean big
kind of big volatility, right, you know, up fifteen percent down,
fifteen percent back and forth, back and forth for three
months then leading into this this speech on I guess

(01:09):
it would have been Monday night, the stocks up about
ten percent in a two day period, opens up Tuesday
morning up three or four more percent, and then midday
everybody's had enough and they sell it right back off
to the low end of this range. But I think
it's pretty telling what the market is showing you on
these up days and even sideways movement, is that what

(01:32):
has led us here off the bottom, Tech and tech
related is still the leaders. If you're looking at what's
up and what's down since the election, or what's up
and what's down year to date, albeit I know only
a week, it is everything that's been working has continued
to work, and everything that has not worked is not
working is still negative, so negative since the election, all

(01:53):
those value sectors except for utilities. Everything positive since the election,
not just technology, communication services, and consumer discretionary, all the
tech related, but also financials, a little bit of healthcare,
and I think healthcare is going to continue to be
in financials a little bit more of the AI story.
Where there is AI the in the conference calls of earnings,

(02:17):
and where there's AI spend it is not just technology companies.
It is financials and healthcare kind of leading the way,
especially medicine and medical devices. The AI and quantum computing
spend for the healthcare companies is astronomically more than even
some tech companies. We had a jobs report this morning

(02:39):
that was I think kind of interesting. You don't often
talk about the weekly job reports, but job openings rose
to eight point one million in November, the most since February,
up from seven point eight million in October. That's job
opening down from eight point nine million a year earlier.
The peak was twelve point two million job openings in
March of twenty two. Was the economy was roaring back

(03:01):
from the COVID lockdowns, and that was actually a record
number ever that we ever saw in terms of job openings.
But there's still a lot of jobs available out there.
Economists that expected job openings to fall slightly in November,
and they were, they were up. Layoffs rose slightly in November,
so sort of a you know, two sided coin there
with layoffs rise, layoffs rising slightly in November, and the

(03:22):
number of people quitting their jobs fell. So people are
locking into their jobs feeling a little less certain that
they could leave their current job and find something better
and not yeah, and find something better, not just find something.
And I think that's so that job quitter number is
a little bit telling on the wage inflation slowing down.
If I can, if I, if I, if I can

(03:42):
quit to go to a job where I'm gonna get
paid more, great, I'm gonna quit. But that's slowing down.
And that's what that's that that's gonna foretell in the
future here is we're gonna see those wage numbers come down.
The jobs numbers are about one hundred and eighty thousand
a month for twenty twenty four for the full year,
two hundred and fifty one thousand a month in twenty
twenty three, and three hundred and thirty seven thou a

(04:03):
month in twenty twenty two, and then there was a
record six hundred and four thousand a month average in
twenty twenty one. So that is definitely cooled off and
come down a little bit. When you look at where
the jobs are located I had this year, I mean
it's actually mostly higher end positions. Manager positions in technology,

(04:25):
finance and insurance were the two biggest increasers on the
job front, So it's interesting to see. You know, when
you look at the cycle of an economy, and sometimes
it happens quickly, so you have to be careful of
making those predictions. But you certainly start by losing the
job openings first before you start getting massive layoffs across

(04:47):
the board. That would indicate a receipts And we had
a year of that. We actually had eighteen months of
that and now starting to tick back up. Let's see
if that's a trend. But even if we had a
year of the job openings following, you mean, yeah, but
not outright layoffs. Oh no. But when people saw the
unemployment rate tick higher, it was as a result of
people who weren't working coming back back to the workforce. Yeah,

(05:09):
so the participation rate going up by a half a
percent meant that you saw the unemployment rate go down
by zero point four And so yeah, that can only
the participation rate, how many people are looking, can only
go so far. But everything except for that job openings
number is somewhat of a indication of a slowdown, indication

(05:32):
that the Fed maybe could keep going. And I think
there's a lot of people just saying, with inflation where
it is, why would the Fed keep going. If they're
seeing slow down, they're going to keep going. One other
interesting thing about where the jobs are not just sectors
and industries, but how about the states last two years?
Where are people moving? Where are they moving out of
It's all tax related. The states that are getting the

(05:56):
last two years, they got more than a one percent
increase Florida, Georgia, South Carolina, North Carolina, Tennessee, Texas, Utah, Idaho,
and South Dakota. Ones with a half to a one percent.
There's a bunch of them, Nevada, Arizona, Montana, North Dakota, Nebraska, Oklahoma,

(06:19):
and Alabama. The ones with a decrease. You guessed it.
The biggest decrease percentage wise was New York high tax states.
All the other East coast and West coast high tax
states have more than a half a percent decline in
population California and Oregon, Illinois. Anything with a high tax decrease,

(06:39):
anything with a low tax or no tax increase. I
don't think that's just a one off. I don't think
that's just by accident. There is a reason that companies
go there and then jobs follow. That's right, So you know,
looking at how to gauge the economy. The economy's on
pretty solid footing. I mean, you can look at those
jobs numbers certainly not seeing anything bad or any major

(07:02):
red flags. You look at the earnings reports that are
coming out earning some companies are still hanging in there
in a very solid way. But you do have to
always couple that with what's the value of the market.
And so it's not just the economy is good, so
own stocks, and I think you do have to be
a little bit careful. But you know, it's really difficult

(07:26):
to gauge market tops. I think, in fact, we always
have sat down with people. I know you've sat down
with people to say, why you sell the top? Where's
the top? What top? And we've had all these different
examples of these peaks that people thought were peaks, and
the market went higher, and then that's the peak. And
there's no better example. I just read an article, Brad

(07:47):
one of the FED governors talking about expensive stock prices,
and you know that they're smart people. They follow markets,
and that's certainly given where the markets are right now,
that's a good observation because the market is on the
higher side of price to earnings ratios. But I go
back to December of nineteen ninety six, when the Fed

(08:08):
Chairman Alan Greenspan at the time had this statement clearly
sustained low inflation, which is interesting because we'd like to
have it sustained low inflation. So it's a little bit
different time period right now. Clearly sustained low inflation implies
more certainty about the future, lower risk premiums, and imply
higher prices of stocks and other earning assets. We can
see that that in the inverse relationship exhibited by price

(08:32):
to earnings ratios and inflation. But how do we know
when irrational exuberance has unduly escalated asset values, which then
become the subject to unexpected and prolonged contractions as they
have in Japan over the last decade. Japan at that
point had had a decade worth and ended up being

(08:52):
twenty years sideways of downturn. But talking about the irrational exubers,
the problem is, and same thing with valuations is it's
not a good predictor of returns. And I looked it
up the day of the speech. The S and P.
Five hundred was at seven hundred and sixty. It didn't
peak out till double that value over fifteen over fifteen hundred.

(09:16):
So and by the way, you got another opportunity to
buy seven hundred and sixty after the market peaked out.
It actually dropped strangely enough, right back to seven hundred
and sixty. So, but that was seven years, six years
later when you got that opportunity to buy again. So
it's the valuation argument is not perfect. People make it

(09:39):
all the time. I'll make it on occasion on this show.
But you can't use that as a reason of when
to sell. Well, it can't be a reason certainly for
all and all out. It can be a reason if
you want a reason to take a little risk off
the table, but there's there's a lot of people giving
a reason like valuations, giving a reason like my supply

(10:00):
as a reason to sell. You do have to look
and say has that been a perfect predictor? And if not,
then you do have to use it with a little
bit of skepticism. Well, so, who would have had a
good reason to sell in nineteen ninety six or nineteen
ninety nine. And this goes to I think investors often
asked the wrong question, and the first question you should
ask is when you need the money. If in nineteen

(10:22):
ninety six, you were thirty years old and you didn't
need the money till you were sixty five, then the
irrational exuberance didn't matter. But if in nineteen ninety six
you had a chunk of money set aside that you
were going to use to buy a house in a year,
then you should sell. But they were like, well, why
wouldn't both people sell? Because if one person doesn't need

(10:44):
the money for thirty years, the S and P. Five
hundred is now at six thousand, when back then it
was at seven hundred and sixty. And even though it
went to fifteen hundred and got cut in half, the
person who didn't need the money for thirty years was
still better off holding. And so I think oftentimes investors
ask the wrong question. And even right now as we've
had a two year rally, to me, the question never

(11:06):
changes when do you need the money? When do you
need the money? I mean, even when the market's down,
when do you need the money? Right? And so people
need to stop asking the question is when when should
I sell because the market's too expensive and get back
to the fundamentals, which is when you need those dollars.
There are a lot of your dollars that you never need,

(11:28):
and those should be fully invested at all times. And
so you need to get away from the noise. And
there's always going to be somebody giving you a reason
not to own. Very few people just give you a
reason to own for all the time. And there could
be an argument for half three quarters of your dollars
should never come out of the market, should be fully
invested at all times, because especially if your account is growing,

(11:52):
a good chunk of it you will never need. And
all we really have to worry about is if you're
starting to take withdrawals or if you need what in
the future to start taking withdrawals? How many years worth
how many years worth of withdrawals are we going to
set aside? And those are the dollars that maybe need
to be reallocated on run ups in the market and
continue to fill up that those short term need buckets.

(12:14):
But I see people oftentimes far too conservative in those scenarios, Brad.
Take take a fifty five year old, for example, which
would be somebody that said, oh, I need to start
loading up on fixed income if you're fifty five and
you're gonna retire at sixty five. Okay, There's never been
a fifteen year period in the stock market where you've
lost money. Never I can actually say that because it's

(12:35):
never been a fifteen year period where the stock markets
lost money. So if you're fifty five today, in order
to get yourself past the historical probability that you won't
lose any money, all you would need is your first
five years of retirement income set aside. Okay, let's say
that's seventy five thousand dollars a year or eighty grand
a year. That's four hundred thousand dollars if you have

(12:56):
two million invested. That's even if you wanted to be cautious,
which by the way, it probably wouldn't take four hundred
thousand dollars to have four hundred thousand hours hiring in
ten years. If you're putting it in something fixed, it'd
probably take three hundred thousand dollars. That's all you would need.
I think too many people get wrapped up in the
forty sixty allocation sixty forty allocation and don't ask that question,

(13:19):
what do I need and when do I need it?
And that's the most important thing to ask, regardless of
where the S and P. Five hundred is currently trading.
You know, One more thing that we've been hearing for
two years and it hasn't mattered, is that the US
market's top heavy, that the top ten make up too
much of the the s and P five hundred make
up too much of the of the overall market. I

(13:42):
just saw this come across. I think this is Ryan
Dietrich and it and he had the top twenty one
countries in the world, and the percentage of their top
ten in the US is actually number number two Lowes.
The only other lower is Japan, probably not a stock

(14:05):
market that we want to look like. The rest of
them are north of the thirty eight percent that we're at,
and the highest ones are three quarters of the market
are their top ten. So here we are at thirty
eight point eight. They don't give an average here, but
it's twenty eight for Japan, thirty eight for US. Everything
else is forty two, forty eight, fifty to fifty nine,

(14:26):
sixty all the way up to seventy five percent of
the markets. And it's every major market in the world
except for US. So is it a sign of a
normal economy that that happens. Yeah, it's just a function
of a normal economy that your biggest companies are the
most successful, make up the biggest part of the market.
It's not a symptom of a top it's just a
symptom of a normal market, and hopefully we're talking less

(14:50):
and less about that in twenty twenty five. Let's take
our first break. Brad, you're listening to advisors of Kirsten
Wealth Manage Group, Kevin Kirsten and Brad Kirsten. We'll be
right back and welcome back. You're listening to the advisors
of Kristen Wealth Manager Recruit Brat and Kevin here with
you this morning. If you're listening on iheartened an didn't
hear any of our ads We are professional financial advisors

(15:11):
in Perrysburg, Ohio. You can get on our website Kristonwealth
dot com and find a lot of the things we're
talking about on our website. Kevin, we were talking about
news of the week. I thought it was a pretty
big news story that kind of they talked about for
five minutes on Monday, and that is that United Airlines
finished up a deal that they've been talking about for
about six months with Starlink with SpaceX's Starlink to put

(15:35):
Starlink Internet on all of their planes. Not a whole
lot of retrofitting that has to happen. You're really just
putting one of their units on every plane, and then
everybody is getting free Wi Fi on United flights. I
think there's a little bit of a snowball there. Starlink
works way better than a lot of the other systems
that these companies have on these planes. I've never understod

(15:58):
Wi Fi on the planes, and I never have it
work well. Well, you can send an email. That's about
the only thing you can do. You could be Internet
on your own phone. If you had Internet on your
own phone, you could watch whenever you watch Netflix on
your phone when you're flying. You can't know if you
had WiFi. No, I don't know why you wouldn't be
able to stream events. And the Wi Fi is so
specific when you get on the Wi Fi on the plane,

(16:22):
you have to do everything through the app of the airline. Yeah,
well you probably would still have to do that with
United maybe, I don't know. If there's Starlink on the plane,
I would think you could just get that as your
WiFi and do whatever you want. You're not doing it,
do it. It's gotta work to me. Airlines have always
used the wrong term when talking about Wi Fi on

(16:42):
planes because when people think Wi Fi, they think I
can do everything. Yeah, I can watch a live football game.
Well we'll see how this works. Because if starlink is
just going to be one of your options when you
go to your Wi Fi on the plane because it's
on the plane and you're in the sky, well what's
a way or alternative? And everybody will have to go
to that, right. I just I've often heard it when

(17:05):
I'm on the plane. Then I see what it is
and I'm like, well, this isn't Wi Fi, and it's
like it's like nineteen ninety nine, two thousand Internet, Right,
You're on this one specific thing and you can do
very little. You can, yeah, exactly. So if starlink makes
that better, I mean, what do people want to do,
especially this time of year, if you're flying and watch
sports and o hi. If you're flying at seven thirty

(17:28):
or eight o'clock on Friday night, you want to watch
Ohio State Texas and get on the internet and you
can stream it on YouTube TV or whatever stream offer
it anyway. But that's that's what people think when they
say Wi Fi, Like I want to send a couple
of emails like what I don't I don't get that. Yeah,
So that was big news this week. The other, the
other one that came on Tuesday was Facebook is doing

(17:49):
a one eighty on They had fact checkers. I didn't
even realize they had fact checkers on staff, all of
them housed in the office in California. I can't believe
that they finally determined that those guys were biased. So
they are literally throwing away all of the biased and
they it was their words, they said they're getting rid

(18:09):
of the fact checkers because they determined them to be
politically biased. Well, and they're using at least they figured
it out. Essentially, they're using now the new system, which
is similar to what Twitter X is using exactly, which
is the wisdom of the crowds. Yeah. So they call
community notes. X calls it, well, it's using excess community notes,

(18:30):
exs community. Okay. So in the new story, I don't
think Facebook has a name for it. Okay, Okay, So
because he said in the news story, it would be
similar to community, not I got you, I got you. Yeah.
So and that's that works great. It's kind of a
self fact checking and we don't need individuals saying oh,
I think this is wrong, or I think this is is,

(18:50):
this is hate speech. It fixes itself and that's what
that's the good use of AI. And uh, well sometimes
I've seen it on X with his community notes. This
is you know, cherry picking a clip or taking a
clip out of context, or taking a clip that's old
that I'll see community notes say this has been proven wrong,

(19:13):
this has been proven wrong, or you know, the one
that was so ridiculous recently was there was some senator,
it was just the last couple of days that was
doing something or getting sworn in or something, and he
was going up to Kamala Harris because she was doing
the swearing in. Did you see this? And community notes
fixed it because the senator is disabled and he walks

(19:38):
with a cane. But in the picture that somebody showed,
there was someone standing in front of his arm, his
right arm where he has the cane, and the clip
was and it was from a liberal site, but Republicans
do it as well. It was from a liberal commentator
that said, can't believe he wouldn't shake her hand. Oh,

(19:59):
and the community notes said, well, he has a disability.
He's holding a cane, and so just to remind people
what that is, so community notes says he has a disability.
Community notes is not a person. Community Notes is not
It is actually a computer program or AI going in
there and looking at all the comments and whatever the

(20:21):
preponderance of the comments say. Then they put that into
the Community Note to correct the record, and in some
cases with references to the correction so you can see
where it's So in this case, the liberal commentator was
trying to say that the Republican nominee wouldn't shake Kamala's hand.
Community Notes came in after looking at all the comments

(20:43):
and corrected that record. So that would be an example.
And I've heard Elon talking about it. He points out
that even some of his his own and he will write,
this is proof that community Notes is. I'm not biased
for it or against it. It's correcting me. And this
is a this is correct I was slightly wrong on

(21:03):
what I wrote, and this is the proof that it's
it's unbiased. Uh corrections and it's just using the AI
to do it. But it is the reason everybody thinks.
You know, Elon bought Twitter. Twitter is done. No now,
well they have less advertisers. For a while. Yeah, but
as it grows, the advertisers are going to come back
because it's a better way to get news because it's

(21:26):
not biased. And it's the reason that the you see
these clips of people saying there's one of Don Lemon
asking about some story and the guy he's talking to
is like, I've never heard of that. He's like, well,
pull it up on your phone. He's like, well, this
one's from ABC, this one's from CBS, this one's from CNNA.
He's like, I don't trust any of those sources. And
he's talking to Don Lemon and Don Lean. What do

(21:46):
you mean those are the biggest news news agencies in
the world. He's like, yeah, they're all the most untrustworthy.
I've never heard of what you're talking about because it's
all coming from this one sided thing, and it was
about the particular question is about Elon being the president
and Trump really being the vice president. What do you
think of that? That's that's that's really what people are saying.
It's like nobody's saying that, right, and and A and

(22:08):
A community notes if enough people were commenting about that
would would correct the record. And sometimes it's it's more
blatant things like I mentioned, which is you have somebody
who was disabled and physically couldn't shake Common's hand right
in that case, So I think it's it's a positive development. Uh,
it's way too long. I mean, we went through COVID

(22:29):
and Trump's election and basically finally Suckerberg. Szuckerberg from Facebook
has admitted that he cave to the pressure of the
government ye trying to suppress certain He's been pretty outspoken,
not just this week, he's been pretty outspoken for the
last three months about how they had real problems and
he was a little bit slow to fix them and

(22:51):
and now and I think he was uncomfortable with what
he was being asked. So they're they're they're moving everything
to Texas. I don't know, I don't know if it's Austin.
I'm not sure where they're moving it to, but somewhere
in Texas Facebook office. They're moving all of this off
site so that there is no biased West Coast fact
checkers that are involved with basically monitoring or creating the

(23:12):
AI to do all of the fixes or corrections that
might come from Facebook. In a couple of weeks, Kevin,
we have the inauguration, and there's gonna be a lot
of talk of the first one hundred days. I thought
a good review of how really bad the first hundred
days were for Trump the first time around. You know,
we talk about the first hundred days because first off,
are you okay with what? Well? It was Insurrection Day?

(23:36):
I just want to make sure you're on Is this
January sixth? It was? Yeah? It was, yeah, it was
January the other day, Yeah, a couple of days ago,
Insurrection Week. I just want to make sure you're okay. Oh,
because all I heard from a lot of the liberal
media sources is Insurrection Day saddest day in American history?
Are we joking? You know? What's interesting is on I'm

(23:59):
on I'm I'm on Twitter every day x just to
see what is trending? What are people talking about? And
on January sixth, because it came and went, I never
saw any of it trending. So you can look at
what's trending for me based on what I follow, but
also what's trending I look at both. I didn't in
the in the what's trending in the world, there's about
twenty I didn't see it in the top twenty, So

(24:20):
nobody really cares. But the old style media would say
that's important, but they really care. They're saying it's gonna
it's gonna be right alongside of nine to eleven and
Pearl Harbor, the Insurrection Day. Nobody, nobody cares. Nobody cares.
But back to the first hundred days. This one's going
to be different because we always talk about the first

(24:43):
hundred days because of FDR passing seventy six laws in
the first hundred days and nine of them being deemed major.
I didn't know that we talked about major laws and
not major laws. But there is a distinction as how
they determine if it's just an executive order, something simple,
or a major law. In Trump's first one hundred days,

(25:06):
there were twenty four executive orders, twenty eight bill sign
and that kind of ranks up there with the lowest
amount getting done in the first hundred days. And if
you look a little, the reason why is all we
were talking about was the Ukraine phone call and the impeachment,
and they were gumming up all the nominees. Well, the

(25:27):
Ukraine phone call didn't happen at that point, it was
the nominees. He finally got around to nominating all of
his people by February eighth, so we had already wasted
two weeks before he actually nominated everyone, and April twenty
ninth was when almost all of them either got approved
or not approved. But they wasted the first hundred days

(25:49):
bickering and slowing down the process, so that the first
hundred days nothing really could get done. And so what
was he able to do when he went right to healthcare,
which was another waste of time. Yeah, so in the
first hundred day they tried to do the border, but
he had to cave a little bit on the border
because there was a government shutdown that they had pushed
off with a couple of band aids. And so the

(26:10):
skeptic in me would say, did they push it off
with a few band aids? So Trump would have to
deal with this the government shutdown. Of course they would,
because then what ended up happening was the border wall
deal that he was promising everyone on the campaign trail.
He had to cave on because the government shutdown was
going to happen, And so in early April, all of
that just went by the wayside so that the government

(26:32):
wouldn't have its shutdown, and so the first hundred days
was wasted with government shutdown and nominations, and then when
they finally got down to real business, the first thing
that Trump did was a travel band with what he
said were terrorist countries. It was mainly Iraq, Iran, Libya, Somalia, Sudan, Syria,
and Yemen, and there was a few other countries that

(26:55):
they were limiting the amount of that you could of
people that could come into the country. And everyone was
in an uproar over this. You know, limiting the the
our enemies people from coming in doesn't seem like too
much of a stretch, but he did. He did do
that in January, and then the Affordable Care Act and
trying to get that repealed, and it didn't happen. So

(27:16):
we spent we start in a good six to nine
months accomplishing about nothing, getting cabinet nominated, not really getting
a lot done on the border, doing a travel band
that eventually got lifted, and having a what's frustrating is
because he's not serving consecutive terms. It's almost like you're

(27:38):
starting all over. Yeah, you're not just seamlessly, you know,
keeping keeping the same people in place. You are literally
starting all over. So at least he's learned from it
that I think everything everyone who's going to have been
nominated is at least picked at this point. So we're
not waiting until three weeks after inauguration to actually nominate people.

(28:00):
We're getting that well. And also he supported and push
helped push through Mike Johnson as Speaker of the House,
because that could have also delayed the same thing. You know,
some of these Republicans were gonna let perfect be the
enemy of the good, and Trump realized although Mike Johnson
might not be his absolute perfect choice, he didn't want
to spend time arguing about who the speaker was the

(28:23):
House was right after his inauguration. So there's there's a
few things he's already talked about. Is gonna they're gonna
do on day one, which would make him already the
first hundred days a lot more productive than the first one.
And and one of those in the first hundred days
they're already talking about is the is the uh not
making sure that that the bill has passed, but pushing

(28:44):
Congress to get a tax bill to him in the
first hundred day. So while he's basically saying, while I'm
working on all these other things. Congress, House, you work
on the tax bill, Okay, right, I'm gonna work on
the border. I'm gonna work on rolling back a lot
of the executive orders that Biden put in the last
six months. You have to get me a tax bill.

(29:05):
Get to work, and so yeah, maybe in the first
six months we will get a lot of these big
things done. It'll be it'll be border first. It'll you'll
hear a lot of deportation talk and shut down of
the border and maybe travel bands for certain countries. And
then we're gonna hear a lot about the proposed cuts
from Doge and all, and then probably by Midsummer we're

(29:29):
gonna be hearing about the tax plan. A lot of
that is really good momentum. The only one that will
be a little bit of a drag maybe on future
spending in the economy will be the proposed cuts from
the Doche Committee. But I know you're pretty skeptical if
they can even get anything done them making suggestions on
what to cut is one thing. Get in Congress, and

(29:50):
even Trump to agree to cut something that might slow
things down is a whole nother ballgame. So it is
yet to be seen if we can actually get Republicans
to agree to any cut, because that might mean a
little slow down for the economy, a little slow down
for the stock market. But if they actually do, you know,
you do have to take note, where are we making
these cuts? Where might it slow things down? And let's

(30:13):
make some adjustments to portfolio is because of it. But
that's at least six months down the road. Looking at
the administration's brad on inauguration day to the first to
the first one hundred days excuse me, no, inauguration day
through the first four years, Trump's obviously trying to deregulate

(30:33):
and cut things back. Now he's obviously still putting rules
in place. But look at the cost. The overall cost
to the budget line items for all these rules and
regulations for Trump in his four years, it was thirty billion.
So some of that's getting rid of stuff. Okay, sixty
seven point five million dollars in paperwork excuse me, sixty

(30:55):
point seven point five million paperwork hours. That cost thirty billion.
Biden's cost for his executive orders in regulation was one
point four trillion, two hundred and sixty seven million hours
to get the paperwork ready. Obama for his first four
years was two hundred and thirty six million man hours

(31:17):
to get the paperwork ready for his executive orders in
regulation costing three hundred and three billion, So Trump thirty billion,
Obama ten times more, three hundred and three billion, and
Biden four times more than that at one point four
trillion in terms of so it costs a little less
to get rid of a regulation than to add it, right,

(31:37):
and sometimes you need a regulation to get rid of
a regulation, and that's where Trump still had some paperwork hours,
but thirty billion versus one point four trillion for Biden.
So yeah, he's going to try to reduce the stack.
I remember the famous press conference he did where he
stood next to the total stack of regulations that he

(32:00):
got rid of federal Yeah, and it was you know,
he said, this was the entire federal regulatory agency print
out in nineteen sixty and it was this tiny little
stack of paper and he had like four stacks ten
feet tall next to him in terms of what he
had to get rid of to get it back down
to that type of size. So certainly that's going to

(32:22):
be one of the goals with along with DOGE, to
reduce cost and to reduce you know, the government deficits.
So we'll see what happened. We'll take our next pause.
You're listening in a money sense, Kevin and Brad Kirsten.
We'll be right back. Welcome back to the show. You're
listening to the advisors of Kirsten Wealth Manageer Group, Kevin
Kirsten and Brad Kirsten. Brad, a little bit of a

(32:43):
change to Solid Security. We talked about it, I think
two or three shows ago that it was possibly going
to be approved, sent to Biden's desk to sign. It's official.
It's official. Biden did sign it, but it's going to
take sold Security some time to work through the logistics
of making these changes. You talked to it, you know,
overall being a net positive. I see some people, I'm sorry,

(33:05):
how can it be a negative? Well, I see some
people skewing it online. Okay. And this is in regards
to the what's the acronym they use for there's two
different ones, so it's it's the windfall elimination for wpp
YE and then the government pension offset which typically is
the government pension off sets is is UH. If you're

(33:25):
getting survivor benefits as a widow. I keep saying, I
keep seeing this online because I've heard people talk about
it and they say, you know, I've been a teacher
my whole life, and I'm going to get the SCRs,
but I'm not going to get Social Security. If you
went to college, graduated, get your education degree, immediately started
working as a teacher, worked as a teacher your whole life,

(33:47):
never did any other job, you're not going to get
anything extra. Yeah, okay, what if when I was in college,
I worked for a few years, and I was in
high school I worked for a few years. You're probably
still not going to because you didn't have enough for
a full years in maybe qualify for Social Security. Now
you can look. It doesn't take much. You could within
two minutes. You can get on social Security dot gov

(34:10):
and go to pull up your Social Security benefit estimate.
And even if you've never logged in, it's all information
you have in your head. With your phone in front
of you, you can get you can get look at
it and see if you have any benefits coming to you.
So the people this will benefit are people who worked
in the public sector for a period of time. You

(34:33):
worked for I don't know what's the minimum you would
need probably five or ten years at least. Yeah, Okay,
and then you decided to go work for the government,
or you decided to become a police officer, you decided
to become a firefighter, you decided to go into teaching,
whatever it might be. When you get to Social Security age,
there was this calculation that was done that pretty much

(34:53):
eliminated most, if not all, of your Social Security benefit
even though you had signif working years. And so for
those people who were eliminated it, or for people who
are eliminated part of it, there's gonna be a little
bit of a different process for you to make sure
you're gonna get it now. This is retroactive to the
start of last year, and so there's gonna be when

(35:17):
they finally figure it out, there's gonna be a lump
sum payment that goes out to people who are owed
money for the amount that was missed for last year
and up to the point where they finally get it
figured out for this year, and then you're gonna start
either getting more Social Security than you're getting, or you're
gonna start getting Social Security now. I asked, so security,
this question only applies once again, if you worked out

(35:40):
if you were a post office worker or a firefighter,
or a school teacher your whole life. Yeah, sorry, you're
not gonna get anything, you never paid it. But if
you contributed to Social Security and you didn't get it
because of the the elimination provision, because of your your state,
your government pension reduced SoC Security down to zero or
reduced it at all. Now are those offsets are going

(36:03):
away and you're gonna get the Social Security that you're deserved.
And so how about this one too, Brad Chuck Schumer,
this is his quote. I hate it when they refer
to government stuff like this. The bill is a great
gift to our retired five fighters, police officers, and teachers.
It is not a gift. No, you contributed to Social
Security and you're currently either getting none or a reduced

(36:25):
amount for no fault of your own. Someone steals money
from you and then gives it back. Is that a gift? Yeah?
Right right. If anything, you're probably not gonna get your
own money back because for years, say you're eighty and
you're retired at sixty two, you've got a lot of years.
They're not making it retroactive to when you're sixty two.
Total back benefits you're getting is twenty twenty four. That's right,

(36:46):
the year twenty two four. Most people are not still
not going to get their Social Security that they're deserved.
But I asked this question. Let's just be clear here
for people if this is going to affect you. I
asked this question to Social Security and got this response.
I said, my main question is social Security going to
adjust future payments or pay out the lump sum for
miss twenty twenty four on their own or does someone

(37:09):
have to apply or fill out paperwork to get it.
That's the main question. Do I have to do anything?
And so our contact a Social Security let me know
that when they finally get it figured out, if you're
currently getting social Security benefits, she was pretty sure that
they're going to just adjust because they know who you are,
and they know that you have a reduction, and they
know what your WEP. Yeah. Yeah, So say your social

(37:30):
Security was going to be a thousand and they reduced
it down to five hundred, but you're getting social Security.
They know who you are, they know what your reduction is,
they know how to calculate your lump sum and pay
it out to you, and they also know what to
take off of that elimination provision to pay you out
your first full Social Security. But if your social Security
was either fully eliminated or you didn't even apply in

(37:52):
the first place because you knew it was going to
be eliminated, then you will need to fill out some
paperwork and apply for your benefits to get the lump
sum for the back dated stuff for twenty four and
to start getting your Social Security. There's a lot of
people that looked at it and said, oh, my social
Security is going to get reduced by two thirds of
my pension. My pension's four thousand a month, My social
Security is going to be eight hundred. Why bother? I agree,

(38:15):
there's a lot of the why bother people because the
handwriting was on the wall. Those people need to notify
social Security that they exist and that they're still alive
and that they're entitled to these benefits. So you will
have to when they get to it, fill out something
with Social Security. Yeah. It even says here in this
USA to Day article. For those who have previously filed
for Social Security benefits and they are partially or completely offset,

(38:38):
the soci Security Administration says you do not need to
take any action except to verify that we have your
current mailing address and direct deposit information. But for those
who have not previously filed for SOCI Security benefits and
are interesting to doing so, SOCI Security Administration says they
can and should file online right away. So if you
didn't bother because you didn't think you were going to

(38:58):
get anything before, you need to make sure you do it. Yeah,
so it sounds like from that that you could just
apply as if you're getting normal benefits now and they
they'll they'll pick it up when they're ready for it.
Right if you had benefits, yes, yeah, you're not going
to get benefits if you didn't have benefits. So then
the next question is, like I mentioned before, how do
you know if you're going to get it? Get on

(39:18):
solid security dot gov, just get your get your accounts
set up, get your accountselt of your statement because they
don't mail out statements anymore. You can look at your statement.
You can see if you had years that were in there.
You can call Social Security, but it's pretty easy to
see if you had If you have a benefit, you
can look at your benefit statement and you can see
the years that you have in there, and then on
that benefit statement will say here's what you will get

(39:40):
it sixty two or would have gotten at sixty five.
It's right on there. So you know, if you had
a benefit, it's going to be on that benefit statement.
Just go ahead and look at it. Pretty easy to
find and now there's no more calculation. You'll just get
that benefit. That's right. Yeah, there's not gonna be any reduction.
They said, the average is about four hundred a month
in terms of the offset. Okay, some will be higher,
some will be lower, but obviously, you know a lot

(40:02):
of people get solid security between fifteen hundred and three
thousand dollars a month. Those are only the people who
have thirty five working years. Yeah, okay, you're not going
to get that, right, but you could have had ten
working years and that's why the average is, you know,
three to four hundred dollars a month. So here's the
other aspect to it. There's a lot of people that

(40:23):
also don't bother to go and collect the spousal benefit
because they're a teacher with a with a huge teacher's
pension and that would offset they're potential to get a
spouse benefit. Well, now you're not penalized for that, So
you might have some widows out there that could get
the widow benefit. It doesn't hurt. I mean, even if
you're not going to get anything. If you're a if

(40:45):
you're a public worker of any kind, if you work
for the state, if you work for odd or the county,
or you work for you're a police officer, a firefighter
or whatever, and you don't even remember because it was
so long ago. Just just file, yeah, just file. It
won't hurt. Yeah, file and see if you'll get anything.
In a place. For over four decades, they've been they've
been lobbying to get this done for forty years and

(41:07):
finally got it done. And it's just it. It did
seem like a penalty that didn't make sense. You contribute
to Social Security and then you get it with your money, yeah,
and then you get nothing. Yeah, And there is still
a lobby out there. And I know I'm hammering this.
There's there's still a lobby out there for people to
get it even if they didn't pay in Well, now,
that's ridiculous, that's ridiculous. That's like people walking across the

(41:30):
border to file for Social Security. Well that, well, there's
a lobby for that too. I'm sure, so we're take
our next pause. You're listening to your Money since Kevin
and Brad Kurston will be right back, Welcome back to
the show. You're listening to the advisors of Kristen Wealth
Manager Group, Kevin Kirsten and Brad Kirsten. On the last
segment here, Brad, I kind of notice there's something I
always do at the beginning of the year. And you know,

(41:53):
anytime I'm doing something, I'm a financial advisor's probably talk
to people about you know, what to look for and
you start planning out, especially the first quarter. The first
quarter for your financial life is, in my opinion, the
busiest one. You're making changes to your contributions. You're making
your contributions to your various retirement accounts, you're paying attentions
into taxes, you're getting tax forms, you're getting ten ninety nine,

(42:14):
you're getting W two's that all come in, and I
always kind of do a little bit of a refresh
look to make some contributions to some various accounts after
the first of the year, so you know, looking at
what people should be paying attention to and should be
looking out for. And even I would even add to
this because I have quite a few people who have
inherited money in the last year, and I'll be looking

(42:36):
to sit down with them to kind of go over
new tax forms that they haven't expected in previous years
as well. So create a little bit of a checklist
for hears. Since you had new accounts in twenty twenty four,
what ten ninety nine might you begetting right so right
away in January. First off, see how you did last year.
Go take a look, see what your performance was. Look
at all your various accounts. See how you're doing. See

(42:58):
if you're on the financial calculator. See if you're still
on track for retirement in terms of when you wanted
to retire and how much income you could reasonably receive.
Look at how much you're contributing. If you've got a raise,
if you had a bonus, or whatever it might be.
You're probably making more money this year. Are you still
contributing the proper amount? You know, there's some really great

(43:22):
tools on four oh one K plans right now. I've
seen it when I've helped people sign up, where they say, Okay,
what do you want to They'll literally ask you right
when you sign up, what do you want to do?
When you get a raise or how how do you
want to increase your contribution? Now, if you're doing the max,
which we always encourage people to do if they can,
that won't change other than when the maximum contribution amount

(43:42):
does increase. But take a look. I've seen it where Okay,
when I get a raise, I want to I want
fifty percent of that raise to go towards my contributions.
And there's a lot of good tools that allow you
to set that up. But to me, this particular article
for a morning Star talks about trying to make sure
you're at least doing fifteen percent. I know a lot
of people default to ten, but I would agree more

(44:03):
is better. You need to save more. Okay, ninety nine
point nine percent of people we look at Maybe that's
too high, But I always caution because people always want
to look at it and say, how do I do less?
How do the least amount of what's the least? No,
it shouldn't be the question. Let me give you the
least the least. The minimum you can do on a

(44:24):
four to one K is the maximum the amount to
get the maximum match. So most companies are going to
do three anyway, and in order to get more to
get five or six out of the company, you have
to do something more five or six yourself, maybe ten yourself.
Maybe it's five additional, and you have to do ten
to get the five additional. That's the minimum, that is

(44:45):
the bare minimum to do so that you're going to
just get everything out of the company that they're that's
just giving up free money if you're if you're not
doing it, but if you look at the numbers and
you can afford to do it, going all the way
up to the max is not a bad idea. Okay,
So the max for people under fifty this year twenty
three thousand, five hundred over fifty is thirty one thousand.

(45:07):
There is a new ketchup provision brad sixty to sixty
three can make an additional catchup contribution in twenty twenty five,
so the annual limit for that group, So twenty three thousand,
five hundred from for fifty and under fifty to sixty
is thirty one thousand. Sixty to sixty three, fifty to
fifty nine is thirty one thousand. Sixty to sixty three

(45:28):
is actually up to thirty four thousand, seven fifty for
making IRA contributions seven thousand for people under fifty, eight
thousand for people over fifty, same for roth iras. So
the other thing you should look to do early in
the year is start thinking about your taxes. Maybe you'll
get an organizer from your tax professional. Start looking at

(45:48):
what what items you need to gather. Did anything change?
Will you get a new ten ninety nine this year?
Did you inherit some money? Will you get ten ninety
nine from the inherited accounts? Did you have beneficiary iras
that you didn't have last year that you're going to
have to account for? Did you have a quality are
you over seventy and did you have a qualified charitable distribution?
You need to make sure, So get that tax file

(46:09):
out and make a checklist to make sure you have
all those items. I notice you said over seventy and
I want some people out there might say, oh no, no,
the required beginning date now is seventy three. Want to
point out that you were correct you said over seventy
seventy and a half is still the first age where
you can do a qualified charitable contribution, even though you
don't have a requirement due until age seventy three. They

(46:30):
did not change that in the tax code. So if
you want to start taking money out of an IRA
and have it and you're you're a standard deductor and
you want you want to be able to still get
the deduction for that contribution starting at seventy and a half,
you can do the qualified Charitable distribution right and then
take a look at your ten ninety nine's when you
get them, and look at the portfolios that you own.
Are these tax efficient portfolios? If it's in a non

(46:50):
retirement account? Did they spin off big dividends that you're
paying taxes on now or big capital gains that you're
paying taxes on? Is there anything you can do in
twenty twenty five to make your portfolio more tax efficient?
Do you have an advisor that's in there making enough
trades or making a sizable amount of trades in your
non retirement account to tax lost harvest throughout the year

(47:12):
not just one time per year, which is something we
always do as well. When you get to March in April,
you should have all of that organized. You could certainly
look if you're making last minute IRA contributions to save money,
you know you certainly need to get those in by
April fifteenth, or the health savings account, which you can
also contribute up until April fifteenth for the previous year
as well. Brad. So as you get into January, February,

(47:34):
March and you start getting these tax documents in the
first thing to look at is look at your retirement
and make sure you're on track. Look at your investments,
see how you're allocated. We talked to the beginning of
the show, how much do you have in fixed income?
Is it too much, is it too little? You know,
make sure that number is right, make sure you're contributing enough.
And then as you get into tax season, make sure
you don't miss anything. You mentioned the qualified charitable to

(47:56):
say it again, I can't tell you how many people
I have heard about or see that have made the
charitable contribution and forgot to note it to their tax professional.
So that's a big one as well, Brad. You have
to let them know there's no different tax code on
I wish they would by now. They should have changed it,
as you mentioned, but it is self reporting for right now.
It's self reported on that qualified charitable. Now I'll close

(48:18):
with one more thing that we ran into this week.
If you're in the Ohio deferred compensation plan and you're
over seventy three, you do have a require minimum distribution.
They do not allow charitable qualified charitable distributions if you're
in that Ohio deferred comp plan. So if you have
a large balance in there and you want to make
sure some of that gets earmarked for charity, you're going

(48:39):
to have to roll that plan into an IRA in
order to take advantage of that qualified charitable distribution. Thanks
for listening everyone, We'll talk to you next week. You've
been listening to Money since brought to you each week
by Kirsten Wealth Management Group. To contact Dennis Brad or
Kevin professionally called four one nine eight seven two zero

(49:01):
zero six seven or eight hundred eight seven five seventeen
eighty six. Their email address is Kirstenwealth at LPL dot
com and their website is Kirstenwealth dot com. Opinions voiced
in this show are for general information only and are
not intended to provide specific advice or recommendations for any individual.
To determine which investments may be appropriate for you, consult

(49:22):
with your financial advisor prior to investing. Securities are offered
through LPL Financial member FINRA SIPC