Episode Transcript
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Speaker 1 (00:19):
Well, hello folks. I welcome you to Let's Talk Money.
I can't thank you enough for tuning in every Saturday
at ten, every Sunday morning at eight. For you to
take time out of your day to hear what I
or my colleagues had to say means a lot to me.
I'm Stephen Bouchet. I'm sitting here live with you today
(00:41):
and I would love to talk to you about any
questions you may have, whatever that may be. Give me
a call. Zach Harris, my long term producer, and I
are sitting here, ready, willing and able to talk with you.
Our phone lines are open. The number is one eight
hundred talk w g Y one eight hundred eighty two
(01:02):
five five nine four nine. So, Zach, this is my
first time in twenty twenty five. I was off last weekend,
so some some nice anniversaries to celebrate with you. Zach. Absolutely,
Happy new year, Steve, Happy new year to you. And
on January second, we started our thirty fifth year in business,
(01:24):
which is pretty pretty remarkable. I'm very proud of that
to build this firm into what it is today and
have it be the just premiere talk show that we have.
I'm also celebrating thirty years Zach that I've been doing
this show on radio with you know, the listening audience.
(01:45):
And as I say so often, I never get tired
doing the show. I love doing the show. I love
helping the listening audience out some way, somehow. That's my goal,
is to be able to help people out, get them
pointed in the right direction. So thirty five years in
business and thirty years on radio, that's a long time.
That's a lot of weekends, folks. So once again, thank
(02:08):
you for tuning in. One eight hundred eight, two, five
fifty nine, forty nine. Those are our numbers today. Give
me a call with any questions that you have. So
we had a pretty remarkable twenty twenty four. You know,
sometimes you get tongue tied trying to say twenty twenty five.
It just doesn't seem possible that we're in twenty twenty five.
(02:30):
But investors, last year, you know, it was a it
was kind of a crazy year. You had the political election,
the presidential election, we had inflation, we had geopolitical conflict,
and the indexes they had big gains, the Dow up
thirteen percent, SMP up twenty three percent, NASDA composite up
(02:51):
twenty nine percent. Those are pretty good gains, folks. That's
two years in a row where we had twenty five
percent returns for the SMP five hundred indecks. As you know,
I don't really talk a lot about the Dow because
really there's only thirty stocks in that and how can
the Dow be up only thirteen percent the SMP with
five hundred stocks be up twenty three percent. The SMP
(03:13):
is really the benchmark you want to look at. Unfortunately,
the Dow Jones Industrial Average is the most popular index.
It gets the most airtime, most press, and a lot
of people like to refer to the DOW. But I
just look at it as a you know, basically, it's
celebratory in a way. It's an old index that's been around.
But you really want to look at the SMP if
(03:35):
you're comparing your returns, if you're sitting down with your advisor,
don't let your advisor sit down with you and show
you a fifteen percent return last year and how it
beat the Dow, which was up thirteen percent. Let the
advisor show you that fifteen percent return up against the
SMP being up twenty three percent. That's really what you
(03:56):
want to look at. So the SMP is really the benchmarket.
I always I always talk about NANSDAC because our clients
own as much NANSDAC as they do the SMP, and
I love the NANSDACK. It's a great index. I call
it our growth slash technology part of the portfolio. It's
(04:17):
one of our core holdings. And until the day I
die or they drag me out of working because I'm
mentally incompetent, we will always have as much NANSDAC as
we do the broad Stock Market Index. That's how I
feel about it, at least that's how I feel about
it sitting here today. Artificial intelligence that's what fuel tech stocks.
(04:40):
Last year. You have you know, listen to Magnificent seven, Apple, Navidia,
Microsoft Alphabet which is Google, Amazon, metaw which is Facebook,
and Tesla. These stocks made up about fifty seven percent
of the sm P five hundreds market cap gain this
year according to the Doald Jones Market Day, and as
(05:00):
a group, the stocks grew about sixty five percent and
it was a little below twenty twenty three the mags
seven and twenty twenty three sor at one hundred and
eleven percent making up sixty five percent of the S
and p's market cap game, but it's still pretty remarkable
that seven stocks is really what's driving the market. You know,
(05:23):
you had some winners last year, Planetary Technologies, Vistra, and Navidia.
They were the top, and then the dogs following Intel, Nike, Walgreens, Walgreens,
Boots Alliance, I guess is what they call themselves now.
So if you own those stocks, you had the losers
for the year. And this is why it's hard to
(05:46):
pick individual stocks. I can't begin to tell you how
hard it is to put together a portfolio of individual
stocks and think that you're going to outperform the market.
I had a pretty spirited conversation with a really really
good friend this week, and I, you know, he was
bragging how he owned this stock, how he owned that stock,
(06:09):
how he just looks for dividends and that's the only
stocks that he owns. So I had him mentioned a
couple of stocks that's in his portfolio. So, you know,
the beauty about technology, which is why we owned so
much NASDAC because I believe in technology. You know, I
was able to pull up the stock charts. Verizon was
one of one of the stocks, and you know, he
(06:30):
felt that he really hit, you know, a home run,
because Verizon pays such such a high dividend. You know,
right now the yield is seven percent, and you know,
last year it really took it on the chin. It
was really a loser. But I showed him a ten
year chart and I compared it to the S and
(06:51):
P five hundred indecks and he felt good because he's
getting this seven percent dividend yield, but he actually lost
money over the ten years. And I tried to tell him,
don't be afraid of having, you know, one, I think
everybody should have the broad stock Market Index, whether that
be the S and P five hundred or the Total
Return Index. We use the Schwab Broad Market Index, which
(07:15):
takes into consideration large cap, mid cap, and small camp
because we like exposure to the MidCap and small cap,
whereas the SMP really just takes into consideration the large
cap segment of the market. But they're all highly correlated.
And whether you have the SMP or the broad Stock
Market Index, though, that should really be the core of
(07:37):
your portfolio. And as I showed my buddy, I said, Tommy,
I said, you know, you're getting a six seven percent dividend,
but look at how much money you've lost. And we
talked about a couple other stops, and he's just so
fixated on dividends. So he's going to give me his portfolio,
and I'm gonna have Ed Wilhelm, who really does a
(07:59):
remarkable job for us. So he's a wizard with stats
and spreadsheets, and I'm going to analyze his portfolio. And
I'm pretty sure if he were to just buy the
broad stock market index, he could have done a whole
lot better than what he's doing on his own just
trying to pick individual stocks. It's hard, folks, hard to
pick individual stocks. One eight hundred eight two five five
(08:24):
nine four nine. Zach, let me take a quick fifteen
second break. Please here I am, folks, I'm back. Thank
you for letting me wet my whistle. One eight hundred
eighty two five fifty nine forty nine. Any questions whatsoever.
(08:48):
So this week's parents is the twenty twenty four round
Table report cards. Basically, they have I don't know about
ten money managers and they all give their individual stock
picks at the beginning of the year. And you know, folks,
it's it's it's amazing. These are supposed to be the
best of the best, right barons, you know, chooses these
(09:12):
money managers. Some of them I think really should be
retired from the from the roundtable report cards. You know,
I'm you know, I'm looking at when they all give
you know, four or five six picks, and there's only
one that that that really came out with a clean
report card. So now the say who works for Franklin,
(09:35):
and ironically she didn't have one individual stock. She actually
picked some ETFs and mutual funds, which kind of goes
along with what I tell you all the time. You know,
that's it's hard to pick individual stocks. Now, I'd like
to play with individual stocks. I have a sandbox account
where I have some individual stocks and I have some bitcoin.
(09:58):
And sure, I'm like, I'd like to play. Why not.
Life is short, let's have a little fun. Let's get
out there and you know, roll the dice. But that's
just for my play account. My sandbox account is we
like to call it a good client of ours. I'm
kind of coining the phrase from him. He transferred all
of his client or his accounts to us, and he
(10:20):
had one that he called the sandbox I said, what
do you mean by that? Chuck? He says, Oh, that's
what I play in, like you're a kid playing in
the sands. So now we refer to it as our
sandbox accounts. But as I go through all these money
managers and look at their their picks, you know, you
know Abby Joseph Khane, she she only had one winner
(10:41):
out of two out of six picks, only one winner.
The others lost money. And I can go on and
on and on about it. I guess the point I'm
making is it's hard to pick individual stocks, which is why,
especially if you're doing it on your own, or if
you have a stockbroker you're working with that you know,
one of the big wire houses. Sit down, do an
(11:04):
annual review twenty twenty four, see how your performance was
compared to the SMP for the stock portion. If you
have a sixty forty portfolio, bring in you know, have
have have your advisors show you sixty percent sm P
five hundred forty percent the ice shares, bond indecks and
see how how your returns are for the money that
(11:25):
you paid one eight hundred eight two five five nine
four nine one eight. Well, folks, that was interesting I
(11:46):
apologized I had somebody trying to call me and it
kicked me off doing live radio. So I gave out
the phone number one eight hundred eighty two, five fifty nine,
and I'm really truly sorry about that. One eight hundred
eighty two five five nine four nine. Let's go to
(12:07):
the phone lines. We have Dennis in Clifton Park. Hello, Dennis, Hey,
good morning, Steve.
Speaker 2 (12:11):
How are you.
Speaker 1 (12:12):
I'm doing great, Good morning to you as well.
Speaker 2 (12:16):
I hope Steve you can help me with a question
I've got. My situation is I'm seventy one. I'm in
the twenty four percent bracket right now, but because I've
got to start taking iron money, I should have started
taking it a while ago, but I start taking it,
it's going to push me into the thirty two percent bracket.
What do you advise clients to try and reduce those taxes?
Speaker 1 (12:38):
Yeah, well, you know, unless you know, there's really not
a whole lot that you can do. So you're you're
gonna have to start taking your rm ds. And when
you do, start taking your rm ds, and right now, basically,
if you turn seventy three in twenty twenty three or
(12:59):
or later, you must take R and d's by April
first of the year following the year you turn seventy three,
so you have a little bit of time before you
have to take it, Dennis. But if it's going to
if you have a big IRA, and it's because that's
taxable income to you, that's going to be reported on
your taxes. Now, remember in New York, you get the
(13:19):
first twenty thousand dollars is tax free New York State
tax free, So up to twenty thousand dollars you're only
paying federal tax. A lot of people in New York
don't realize that. And if you're married and your spouse
is taking money out, really the first forty thousand dollars
you don't pay New York state tax on. So that's
a beautiful thing, and that's something that a lot of
(13:41):
people don't realize. But if it's going to boost your
tax bracket, there's really unless you're working and you're able
to put money into a pension plan, or if you
have a business and you're able to get some write offs,
there's really not much you can do. Unfortunately, Dennis. You
know you have that money, you got a tax break
when you put it in there, A long, long, long
time ago, and it grew tax efferd and now it's
(14:04):
taxable when it comes out, so there's really not much
you can do.
Speaker 2 (14:09):
Okay, Well, hey, thanks very much, even and again i'd
like to thank you for your show. I listened every
week and your advice is tremendous, So thank you very
much for what you do.
Speaker 1 (14:19):
Oh Dennis, thank you. That's like the best commercial that
I can have today, Zach. I truly appreciate those words
of confidence, Dennis, and I'm glad that listening to the
show helps you out. That's really my goal. I try
to have the best, most professional money show on the airwaves.
And as I said, this is our thirtieth year of
(14:40):
doing radio, and I've been doing radio every weekend for
those thirty years. Now I have colleagues that help me,
so I get a little weekend off here and there,
and that's much appreciated. After thirty five years of building
and creating this firm, and you know, investing in technology,
investing in human capital, and investing in the time to
(15:03):
grow the business, it takes a lot, and it's it's
nice every once in a while to get a weekend.
Often my goal is to have the most professional show
thee where the listening audience can get good advice and
on some things. Believe me, I say it often. If
(15:23):
you wind up ten wealth advisors, you can get ten
different opinions. We all have our own style, our own way.
I'm pretty honest and open with my feelings. You know,
I don't like annuities whatsoever. You know that I like
stocks over bonds. In my personal portfolio, I'm one hundred
percent invested in stocks. I don't expect all investors to
(15:46):
do that because there's a lot of volatility that comes
with that. Although there's volatility and bonds and commodities in
real estate as well. Unfortunately, a lot of investors just
are fixated on a stock portion of their portfolio. They
don't look at the rest of their portfolio. But you
blend in those other asset classes to kind of soften
(16:07):
the volatility. But I'm okay with risk. The market goes up,
the market goes down, the market always comes back and
always goes on to make new all time highs. So
if you're looking at you know, here we are in
the first couple of weeks of January, and you know
this week alone, the SMP was down almost two percent.
(16:29):
NASDAC both the Total Composite and QQQ down about two
and a quarter percent. Russell two thousand was down three
and a half percent for the week. For the year
to date, we're down just about one percent in the
NASDAC and the SMP, and the Russell two thousand is
down about two percent. So we're starting off, you know,
(16:50):
taking a baby step backwards and after having the year
that we had last year's that's okay, folks, It's really
truly true. Okay. You you you have to take into consideration.
Then there's going to be good years bad years. If
I go back over the last eleven years in the
(17:12):
S and P five hundred index, you hear me say
this often, there were only two years where you lost money.
Twenty eighteen you were down about four and a half percent.
Twenty twenty two, down about eighteen percent. So it's okay,
you can't you know, twenty twenty three. So if you
got spooked out of the markets in twenty twenty two
(17:32):
because you were off eighteen percent, you missed out on
a twenty six percent return in twenty twenty three and
a twenty five percent return in twenty twenty four. And
you look at all the headlines last year, who would
have ever thought that the stock market did as well
as it did. And when you look at the one
(17:53):
year predictions of the stock market, all I can say
is you can't look at the one year prediction of
the stock market because there's just you know, it just
doesn't make sense when when you look at the at
the market gurus and what they come out with. I'm
(18:16):
telling you, folks, you can't. You can't look at it
and think just because somebody supposedly is a market predictor
and you know, well thought of in the markets, they
get it wrong as much as anybody, Which is why
you need to have patience when you're invested. You need
(18:38):
to be well diversified. You need to just you know,
don't don't think you're you're you're going to pick stocks
and go out there and really beat the market. It's
hard to beat the market. Sixty five to eighty percent
of the time, you can't beat the market, which is
why having the market is part of your portfolio. Is
(19:02):
your core holdings make sense? One eight hundred eight two, five,
five nine four nine one eight hundred eighty two five
fifty nine forty nine Any questions whatsoever, give me a call,
love to talk to you. So you know, the we
was we started out with Wheak China manufacturing data, and
(19:26):
we bring up China because it's the second largest economy
in the world behind US and China. You know, they
would love to be number one. I don't think that
will happen. I'm very optimistic over the next few years
that this economy is going to be a pretty strong economy.
I'm hoping we see a lot of less regulation, let's say,
(19:47):
less government kind of spending money haphazardly. I'm really hopeful
that we got some good things coming. And this is
why I'm so optimistic. On the stock market, you know,
it was it was a shortened week. They closed the
market on Thursday for President Jimmy Carter's funeral. Eight two, five, five,
(20:09):
nine four nine. Let's go back to the phone lines
where we have Rick in Hackpoon. Good morning, rick.
Speaker 3 (20:15):
Yesty, and I'm a little confused of art about the
RMD requirement. I'm having to turn seventy three in a
few months, so that means I got to take withdrawal
of this this given year.
Speaker 1 (20:27):
Well you're supposed to take it this given year, but
irs you can postpone it up until April first of
twenty twenty six. But that means rick that you'll take
two rm ds in twenty twenty six. So basically, you'll
add up the you know, your your iras or simple iras,
(20:48):
your four owen k's, you add up the total and
based on December thirty first, twenty twenty four. So when
you get those year end statements, your r and D
this year will be based on that. There's a factor
that you'll you'll figure out how much you have to take,
So you have to take that sometime before April first
(21:10):
of next year. And then what happens is December thirty
first of this year you'll have to take once again.
You'll you'll you'll have to take the value of this
year's r and D based on all the accounts adding up.
(21:31):
But no, you have up until April first of next year.
You don't have to take it this year. It just
means that you're going to take two next year. Okay, okay,
do that makes sense?
Speaker 3 (21:44):
Clarification? Yes, thank you for that clarification.
Speaker 1 (21:47):
Well, I'm glad you made it to this great age
of almost seventy three. So I'll give you an early
Happy birthday. Let me be the first one Rick to
wish you a happy birthday.
Speaker 3 (21:58):
Thank you very much.
Speaker 1 (22:00):
All right, Rick, You'll be well, stay healthy. That's what
it's all about, folks, being healthy. You know, our tagline
is health, Wealth for Life, and we like to say
we want our clients to be healthy so that we
can really manage their wealth and make sure they have
(22:21):
a good life. Folks, you're listening to Let's Talk Money,
brought to you by Bouchef and Andrew, where we help
our clients prioritize their health while we manage their wealth
for life. I truly appreciate you tuning in today. I
can't thank you enough. I'm going to take a quick
break for the news, but I'll be back on the
other side of the news. The phone lines are open
one eight hundred eight two five five nine four nine
(22:44):
one eight hundred eight two five fifty nine forty nine.
If you have any questions, give me a call. I'll
pick you up on the other side of the news. Hello, folks,
thank you for hanging in through the news. I truly
(23:06):
thank you for tuning in every weekend Saturdays at ten
Sundays at eight am. I can't thank you enough. I
love doing the show. We're in our thirtieth year, thirty
fifth year of being in business, so I've been doing
the show almost as long as I've been in business.
So thank you for tuning in. The phone lines are
open if you have any questions. On eight hundred eight
(23:28):
two five, five, nine four nine. Let's go back to
the phone lines where we have Jim on hold.
Speaker 4 (23:34):
Hello, Jim, Hi Steve, good morning, good morning. Congratulations on
your longevity, your business and your radio show. I listened
to it quite often on a Saturday morning.
Speaker 1 (23:48):
Oh, thank you very much, thank you.
Speaker 4 (23:52):
I have a question in regard to roth conversion uh
and converting from a regular retirement ira to uh wroth ira.
(24:15):
Is that amount of money converted included in the maximum
that you can put into a roth ira in during
you know, during the year.
Speaker 1 (24:30):
Yeah. No, what happens is you can convert as much
as you want. Now. The problem is when you convert
from a traditional ira into a roth ira. What's what's
going to happen is that's going to be taxable income.
The government likes that because they're getting their tax money
(24:51):
sooner than than later. Your contribution limits are seven thousand
dollars if you're fifty or you know, under the age
of fifty this year in twenty twenty five, eight thousand
dollars if you're fifty year older. So if you qualify
to put money into an IRA or a roth IRA,
(25:12):
the conversion is different than the contribution. The conversion is
you're taking you know, let's make believe you're taking ten
thousand dollars out of your IRA and converting it to
a ROTH because you feel that brings you benefits of
you know, if you're one in a low tax bracket.
Now it's something to look at, especially if you think
you're going to be in a higher tax bracket later
(25:34):
if you're younger with a long time horizon where you
can have that money continue to grow tax deferred, because
then you'll pay tax on that money today, but when
you take it out years down the road or maybe
decades down the road, it's tax free. And sometimes retirees
and early retirement they have minimal taxable income, so it
(25:56):
makes sense because when you convert to a ROTH, you
don't have to take a rm D. So there's some
pros and cons to it. The biggest con jim is
that you're going to pay tax on that amount, and
if that puts you into a higher tax bracket, you
really want to maybe consult with your tax prepared to
make sure that it makes sense for you.
Speaker 4 (26:18):
Okay, all right, And so actually anything that's converted isn't
included in that seven or eight thousand dollars, No, completely different. Okay,
So you can you could convert one hundred thousand dollars
just to name of number. Yeah, and other than of
(26:42):
course you have to pay, as you said, pay the
taxes on that today, but that doesn't count as part
of the seven or the eight thousand dollars correct maximum. Okay,
great and answers my question, Steve, I appreciate for sire
your answer.
Speaker 1 (27:00):
Thank you, Stay well, be healthy by bye. Eight two, five, five,
nine four nine. So you know, if you've been listening
to the show over the thirty years, you know that
I'm more optimistic than not. I always say in my
office there's a reason why I guarantee our clients that
they'll lose money, Because they will. I just can't tell
(27:22):
them like I don't know this week was a down
week in the market. Did I know that last weekend? No,
I didn't know. Nobody knows, but you're going to have
days and weeks and months and sometimes years. As I said,
over the last ten eleven years, there were only two
negative years for the s and P five hundred two
(27:44):
out of ten. That's not bad, folks. I'll take that
off day long. And at the beginning of every year,
the market pundits, you know, they're always there's a survey
that comes out. So think about this. Last January. As
as we entered twenty twenty four, the average return forecast
(28:05):
for the SMP was seven point four percent by stock
analysts and one point three percent by market strategists. The
actual return with dividends was twenty five percent. So if
you listen to them, you know they were wrong. Go
back a year before that, twenty twenty three, seventeen point
(28:29):
five percent for the SMP. The strategist set a six
point two percent rise. The actual return was twenty six
point three percent. You know it's it's it's hard to
figure it out, and that's why sometimes you know, listen
to all the news taken and digest the information, but
(28:53):
don't don't let it. Don't let it change your long
term horizon and the discipline you need to be a
good investor. Stocks go up, stocks go down, so do bonds,
So do commodities, so do's real estate. All those asset
classes go up and down, up and down, up and down.
If you looked at them every day. Over time, stocks
(29:16):
has been the best performing asset class one, eight, five, nine.
Let's go back to the phone lines. We have Jim
in Aubany, Good morning, Jim.
Speaker 5 (29:26):
Good morning Steve. Like everybody else, I want to thank
you for what you do for the community here, and
I know you do more than just a show. So
it's a it's a it's it's a privilege to listen
to you. So the question I have my profile just
very quickly, I kind of been a I'm going to
become I'm going to turn sixty two, uh in a
(29:48):
year and a half or so, and I'm actually going
to turn sixty one next week, but I'm still working.
I'm probably going to stop working in a in a
year or so. I would classify myself as a super saver.
Over the years, I've maxed out my Flora one case.
I haven't done a wroth for a one case. So
I'm assuming all the questions that people are asking about
(30:11):
roth conversions at some point in time, I know I'm
going to have to probably look at that. My overall
question though, is becoming a Florida resident because I we
don't like the cold. I've got children down in Florida,
so longer term, and I know I've heard you say
that the first twenty thousand in income is not taxable
(30:33):
New York state wise here, but long term, if I'm
going to be in those higher tax brackets, your experience
on if becoming a Florida resident really has saved people
a lot of money?
Speaker 1 (30:51):
Sure, so you have to put it, you know, think
about it this way. As I said one of the
earlier callers in New York State, the first twenty thousand
dollars for you and for your spouse is not taxed
in New York State. When you take money out of
a pension plan IRA, whatever it may be, the first
(31:12):
twenty thousand dollars is New York State tax free. So
that really gives you forty thousand dollars. So to make
a move and relocate and change your residency, you have
to look at other factors. So one New York State
hates it when people leave New York State and say hey, goodbye,
We're not paying your taxes anymore. And there's a lot
(31:33):
of audits of people that do change residency. So let's
make believe you come down to Florida. You want to
be a Florida resident. What you have to do is
you have to stay out of New York State for
at least you know, one hundred and eighty four days,
you know, half a year, six months in a day,
at least. I say at least because I've consulted with
(31:55):
some attorneys and they say, if you can show irs
that you're out of New York's date more like seven months,
that's a better argument if you keep it right to
that day. And remember, if you know, let's make believe
you're a Florida resident. Let's make believe you take a
six o'clock flight out of Florida and you get in
at eleven thirty tonight into Aubny airport. That's included as
(32:20):
a day of living in New York State, believe it
or not, even though you were only there for a
half hour, they count that as being a day in
New York State. So there's programs, and there's one great
program that I always recommend to our clients that they
get and It basically tracks on GPS, it tracks exactly
(32:44):
where you are. It's called MANEO m O NAEO. And
let's make believe you're flying to New York today. If
you stop in Atlanta because you're flying Delta, it'll show
that you were in Florida. It'll show that you were
in Atlanta to show that you ended up in New
York State. And it's a pretty good program. The other
(33:05):
thing you have to do is you have to change
your doctors. You have to probably have a better home
in Florida than in New York. That's one of the
things they look at, although I think that's up for
argument and I'm not in an attorney. You have to
make sure you change the registration of your car, and
(33:25):
your driver's license and your voting registration. So those are
all the things to think about if you become a
Florida resident. But more the short and long of it is,
you have to be out of New York State at
least six months. In a day, you could be in Italy,
you could be in you know, Myrtle Beach, you can
(33:45):
be in Palm Beach. As long as you're out of
New York State for at least six months.
Speaker 6 (33:50):
Gim okay, And let's say someone is going to be
in My income is going to be maybe one fifty
to two hundred thousand a year, So we're talking about
one hundred and sixty thousand of that not having to
pay New York State tax. Right, that's with New York
State tax rates. That's a sizable amount of money over years.
Speaker 1 (34:13):
Oh sure it is. It's you know, well, you know,
let's just say these after your deductions and everything, let's
say you bring it down to one hundred and twenty thousand,
you're looking at seven eight thousand a year in New
York State taxes. Once again, you have to weigh out
the pros and cons of relocating having a home. Will
you enjoy being in Florida? I heard you say that
(34:35):
your children are in Florida, so maybe, you know, maybe
that's the incentive for you to go down. But really
from a tax perspective, make sure that you do your homework.
Make sure that it makes sense for you to relocate.
Now a lot of times, you know, one, do you
have a job that you can show irs that you
(34:55):
weren't in New York State working? Like if you have
a business, it's harder to show that you were in
Florida for half the year. So once again, this is
another factor to consider, a lot of things to think about, Jim,
But it's a it's a good question, thank you, okay.
One eight hundred eighty two five five nine four nine
(35:17):
one eight hundred eighty two five fifty nine forty nine. Yeah,
it's a real crapshoot to do you do you move
out of New York State. And believe me, people are
leaving New York State left and right. I guess in
some ways, can you can you blame them? Between the taxes,
the politics, the regulations, there's so many things that people
(35:39):
are just throwing their hands in the air about and
they've just you know, they've they've they've had enough. You know.
I was in New York City on Tuesday to go
down for an appointment, and my driver picked me up
at Laguardi Airport and told me all about the congestion
pricing and how it's going to affect everybody. And believe me, folks,
(36:05):
that congestion tax is going to be passed on to
the consumer. My driver, you know, every time he goes
below sixtieth Street, there's a nine dollars fee that he
has to pay a tax. Now, let's make believe he
brings me to my appointment and then brings me back
(36:26):
to the airport and then goes back into the city.
He's got to pay that nine dollars tax again. So
you think about you know, that's just one independent driver
trying to make a living. You think of all the
delivery trucks. You think of you know, all the people
that need to go into work, and you know that
(36:49):
parked their cars. So the taxes that we pay in
New Yorker just just crazy, just crazy. On eight hundred
eighty five five nine four nine. Let's go back to
the phone lines. We have Brick. Hello, Rick, Hi, Steve Looten.
Speaker 3 (37:10):
I have a question about what is the barometer for
MOTT for checking your bond portfolio. It's all You've mentioned
it a little while ago.
Speaker 1 (37:18):
Yeah, I mentioned it often because I like bonds. Right now,
I'm gonna let you go because there's a lot of interference,
but I'll answer your question. So, folks, when you're looking
at the ten year Treasury note right now being four
point seven six percent, we're we're almost at five percent.
The thirty year hit five percent on the twenty year
(37:41):
is at five percent, but the ten year that's you know,
I don't like to go out further than ten years.
I always say, ladder a bond portfolio. If you have bonds,
wonder new York state tax free. Once again, if if
you're paying New York state taxes, buying a treasury, you're
not going to pay New York State tax on that interest.
(38:03):
So you can buy a tenure right now four point
seven six percent. That's pretty good, folks. In one year's
paying four point to two percent. So finally, the yield
curve is such that the shorter term bonds are paying
less than the longer term bonds. And I'm not sure
where interest rates are going. After yesterday's jobs report. You know,
(38:23):
there's there's a feeling on Wall Street that the Fed
may be done with their interest rate cuts, which would
be really remarkable to think that they just started cutting
in September. They cut a few times, and they may
be done. Maybe there's one more cut based on yesterday's
jobs report. Now, remember one, it's an important jobs report,
(38:45):
and you know, the US economy added two hundred and
fifty six thousand jobs. Unemployment fell just just a little
bit to four point one percent, and the wage growth
was up less than than than expect it. But it
shows that the jobs market is really a resilient, strong
(39:06):
job market. And the reason why the Fed cuts rates
is to stimuli stimulate the economy as a catalyst to
get the economy going, make borrow money cheaper so that
people will start, you know, buying things and moving the economy.
So that's why the Fed cuts interest rates. In reverse,
(39:31):
they raise interest rates to slow down in the economy
that is grown you know by by you know, just
too fast, where the price of goods and services is
just going up. You know, just a couple of years ago,
inflation was nine point one percent. Now we're somewhere between
two and three percent. We'll find out later this week.
(39:51):
We have a report coming out on inflation and we'll
see what it is, but somewhere between two and three percent.
The target for the Fed is two percent. So yesterday's
the Friday job report showed that the jobs are healthy,
people are going back to work. So you actually have
interest rates that are up, and I like ladder in
(40:14):
your bond portfolio. This way you're not gambling, but I'm
not I'm not against somebody loading up on this US
ten year Treasury note at four point seven six percent.
I mean, we're creeping up to five percent. I don't
know if it'll be higher or lower, but I know
it's a pretty good yield. Just it wasn't that long ago, folks,
(40:35):
it was three point five percent. So I'll take four
point seven six percent all day long. So hopefully that
helps you. Rick just ladder a portfolio. And as I said,
you're paying tax on interest with CDs, you're not paying
New York State tax on the interest of the treasury
one eight hundred eighty two five five nine four nine.
(40:55):
Let's go back to the phone lines. We have Mike
in my hometown of Troy, a fellow trojan. Hello, Mike, Hey,
how you doing. I'm doing wonderful.
Speaker 3 (41:08):
I just had a question on something you said earlier.
Speaker 1 (41:12):
So I have a five percent guaranteed annuity for five years.
Speaker 3 (41:15):
Why would that be a negative when the bottom market
has had such a horrible return over the last four years.
Speaker 1 (41:21):
Yeah, Well, one, you're locked into an annuity, and I
don't know how old you are, but basically what you're
doing is you're getting a decent yield. Mike. You know,
five percent if you're locked in for five percent for
five years and they can't change that. That's pretty good.
I just gave out the US Treasury of four point
seven six percent. I just don't like annuities. One you're
(41:45):
locked in, you can't get out of it if you
wanted to get out of it, And having a well
diversified portfolio is so much better than having all of
your money locked into a fixed annuity. I'm just not
a fan of a new Now, I'm not folks, There's
there's reasons why people buy a nodies. Some people are
(42:05):
nervous nellies. They want it annyse, they want that guaranteed
in come. And remember it's guaranteed from the insurance company.
Whereas if you letter a bond portfolio, you're going to
get decent yields and it's guaranteed if you buy treasuries
by the US government, which I think is a little
bit safer than an insurance company. But Mike, not knowing
(42:26):
the rest of your portfolio, or if you have a
diversified portfolio. You know, if you're a young guy and
you got all your money and it fixed the neudy,
getting five percent, well that sounds great, but boy, you
lost out by not having a diversified portfolio, by having
some stocks for the growth portion of your portfolio, hopefully
that helps you out. Mike E eighty five five nine
(42:48):
four nine. So I'm optimistic on the stock market, and
believe me, there will be a correction where the market
goes down ten percent. There will be another bear market
where the market goes down twenty percent, there will be
another recession. I don't see. I don't see a recession
on the horizon. But you know, believe me, go back
(43:09):
four years, five years now. You know we had a recession,
the quickest recession and on the books during COVID, and
it came and gone. So I can't sit here just
because I don't see a horizon on the or a
recession on the horizon, doesn't mean that we may not
get a recession. But think about this, folks, this is
(43:29):
why you can't be afraid of stocks. If you look
at any one year, any given year, the best return
and I'm going back to nineteen fifty, so seventy four years,
pretty good, pretty good statistics. Your best year in the
stock market was fifty two percent. Your worst year was
(43:50):
thirty seven percent, and that was recently two thousand and eight.
So you know, sixteen years ago, bonds, your best year
was thirty three percent, your worst year was thirteen percent.
And if you had a sixty forty portfolio, which a
lot of people have, what we call a growth and
income strategy, your best year was thirty four percent, your
(44:14):
worst year was twenty percent. That's any given year going
back to nineteen fifty, any given year. So having that diversification,
being invested, not being scared, not listening to your brother
in law this afternoon at you know, or this weekend
at the dinner table, and your coworker at the water
(44:36):
cooler on Monday morning. You know, have a well diversified
portfolio and have that discipline. Now I want you to
think about I'm going to give you five year, ten year,
twenty year rolling averages. That means nineteen fifty starts a
new five year rolling average, a new ten year or
new twenty year. Nineteen fifty two a new so you
know there's a lot of rolling averages. Stocks your best
(45:01):
five year period was up twenty nine percent, annualized return
up twenty nine percent, worse two percent, Bonds up eighteen percent,
worse five year rolling period two percent, and in the
growth and income portfolio, the best was twenty percent, the
worst was one percent. Now, most people are invested for
(45:24):
ten years or longer. So with stocks over a twenty
year rolling period, your best twenty year rolling period was
eighteen percent, your worst was six percent. Year in, year out,
your best bond per you know, twenty year rolling period
was eleven percent. Your worst was negative one percent. And
(45:46):
in the growth and income portfolio, your best twenty year
rolling average was fifteen percent. Your worst was five percent.
So there you have it, folks, this is why you
can't be You really can't. Don't feel like you can
have stocks in your portfolio. It's okay to have stocks
in your portfolio. Nothing wrong with having stocks in your portfolio.
(46:11):
And as I said, I'm hoping with the change of
guard in Washington, I'm optimistic we have some good things
to look forward to. Before I let you go any further, though,
I just need to take time out because I'm thinking
of all the devastation, all the people that have lost lives,
(46:35):
their favorite pets, loved ones in California with these with
these wildfires. My heart just aches for them. It truly
breaks breaks for all these people that are just you
know one hundred and eighty thousand I think are relocated
to evacuate their homes. Then you have the thugs coming
(46:58):
in and looting. You know, the homes that are still standing, folks.
My heart goes out to them and I say a
prayer for them every morning. I just can't believe what's
going on. It's just a terrible thing. You're listening to.
Let's Talk Money, brought to you by Bouche Finance Group,
where we help our clients prioritize their health while we
(47:18):
manage their wealth for life. Go to our website Bouchet
dot com, That's biz and boy O U C h
e Y dot com. Thank you for tuning in. I
thank you for every Saturday at ten, every Sunday at
eight for listening. Have a great day, stay healthy, be well.
Bye bye, folks,
Well, hello folks. I welcome you to Let's Talk Money.
I can't thank you enough for tuning in every Saturday
at ten, every Sunday morning at eight. For you to
take time out of your day to hear what I
or my colleagues had to say means a lot to me.
I'm Stephen Bouchet. I'm sitting here live with you today
(00:41):
and I would love to talk to you about any
questions you may have, whatever that may be. Give me
a call. Zach Harris, my long term producer, and I
are sitting here, ready, willing and able to talk with you.
Our phone lines are open. The number is one eight
hundred talk w g Y one eight hundred eighty two
(01:02):
five five nine four nine. So, Zach, this is my
first time in twenty twenty five. I was off last weekend,
so some some nice anniversaries to celebrate with you. Zach. Absolutely,
Happy new year, Steve, Happy new year to you. And
on January second, we started our thirty fifth year in business,
(01:24):
which is pretty pretty remarkable. I'm very proud of that
to build this firm into what it is today and
have it be the just premiere talk show that we have.
I'm also celebrating thirty years Zach that I've been doing
this show on radio with you know, the listening audience.
(01:45):
And as I say so often, I never get tired
doing the show. I love doing the show. I love
helping the listening audience out some way, somehow. That's my goal,
is to be able to help people out, get them
pointed in the right direction. So thirty five years in
business and thirty years on radio, that's a long time.
That's a lot of weekends, folks. So once again, thank
(02:08):
you for tuning in. One eight hundred eight, two, five
fifty nine, forty nine. Those are our numbers today. Give
me a call with any questions that you have. So
we had a pretty remarkable twenty twenty four. You know,
sometimes you get tongue tied trying to say twenty twenty five.
It just doesn't seem possible that we're in twenty twenty five.
(02:30):
But investors, last year, you know, it was a it
was kind of a crazy year. You had the political election,
the presidential election, we had inflation, we had geopolitical conflict,
and the indexes they had big gains, the Dow up
thirteen percent, SMP up twenty three percent, NASDA composite up
(02:51):
twenty nine percent. Those are pretty good gains, folks. That's
two years in a row where we had twenty five
percent returns for the SMP five hundred indecks. As you know,
I don't really talk a lot about the Dow because
really there's only thirty stocks in that and how can
the Dow be up only thirteen percent the SMP with
five hundred stocks be up twenty three percent. The SMP
(03:13):
is really the benchmark you want to look at. Unfortunately,
the Dow Jones Industrial Average is the most popular index.
It gets the most airtime, most press, and a lot
of people like to refer to the DOW. But I
just look at it as a you know, basically, it's
celebratory in a way. It's an old index that's been around.
But you really want to look at the SMP if
(03:35):
you're comparing your returns, if you're sitting down with your advisor,
don't let your advisor sit down with you and show
you a fifteen percent return last year and how it
beat the Dow, which was up thirteen percent. Let the
advisor show you that fifteen percent return up against the
SMP being up twenty three percent. That's really what you
(03:56):
want to look at. So the SMP is really the benchmarket.
I always I always talk about NANSDAC because our clients
own as much NANSDAC as they do the SMP, and
I love the NANSDACK. It's a great index. I call
it our growth slash technology part of the portfolio. It's
(04:17):
one of our core holdings. And until the day I
die or they drag me out of working because I'm
mentally incompetent, we will always have as much NANSDAC as
we do the broad Stock Market Index. That's how I
feel about it, at least that's how I feel about
it sitting here today. Artificial intelligence that's what fuel tech stocks.
(04:40):
Last year. You have you know, listen to Magnificent seven, Apple, Navidia,
Microsoft Alphabet which is Google, Amazon, metaw which is Facebook,
and Tesla. These stocks made up about fifty seven percent
of the sm P five hundreds market cap gain this
year according to the Doald Jones Market Day, and as
(05:00):
a group, the stocks grew about sixty five percent and
it was a little below twenty twenty three the mags
seven and twenty twenty three sor at one hundred and
eleven percent making up sixty five percent of the S
and p's market cap game, but it's still pretty remarkable
that seven stocks is really what's driving the market. You know,
(05:23):
you had some winners last year, Planetary Technologies, Vistra, and Navidia.
They were the top, and then the dogs following Intel, Nike, Walgreens, Walgreens,
Boots Alliance, I guess is what they call themselves now.
So if you own those stocks, you had the losers
for the year. And this is why it's hard to
(05:46):
pick individual stocks. I can't begin to tell you how
hard it is to put together a portfolio of individual
stocks and think that you're going to outperform the market.
I had a pretty spirited conversation with a really really
good friend this week, and I, you know, he was
bragging how he owned this stock, how he owned that stock,
(06:09):
how he just looks for dividends and that's the only
stocks that he owns. So I had him mentioned a
couple of stocks that's in his portfolio. So, you know,
the beauty about technology, which is why we owned so
much NASDAC because I believe in technology. You know, I
was able to pull up the stock charts. Verizon was
one of one of the stocks, and you know, he
(06:30):
felt that he really hit, you know, a home run,
because Verizon pays such such a high dividend. You know,
right now the yield is seven percent, and you know,
last year it really took it on the chin. It
was really a loser. But I showed him a ten
year chart and I compared it to the S and
(06:51):
P five hundred indecks and he felt good because he's
getting this seven percent dividend yield, but he actually lost
money over the ten years. And I tried to tell him,
don't be afraid of having, you know, one, I think
everybody should have the broad stock Market Index, whether that
be the S and P five hundred or the Total
Return Index. We use the Schwab Broad Market Index, which
(07:15):
takes into consideration large cap, mid cap, and small camp
because we like exposure to the MidCap and small cap,
whereas the SMP really just takes into consideration the large
cap segment of the market. But they're all highly correlated.
And whether you have the SMP or the broad Stock
Market Index, though, that should really be the core of
(07:37):
your portfolio. And as I showed my buddy, I said, Tommy,
I said, you know, you're getting a six seven percent dividend,
but look at how much money you've lost. And we
talked about a couple other stops, and he's just so
fixated on dividends. So he's going to give me his portfolio,
and I'm gonna have Ed Wilhelm, who really does a
(07:59):
remarkable job for us. So he's a wizard with stats
and spreadsheets, and I'm going to analyze his portfolio. And
I'm pretty sure if he were to just buy the
broad stock market index, he could have done a whole
lot better than what he's doing on his own just
trying to pick individual stocks. It's hard, folks, hard to
pick individual stocks. One eight hundred eight two five five
(08:24):
nine four nine. Zach, let me take a quick fifteen
second break. Please here I am, folks, I'm back. Thank
you for letting me wet my whistle. One eight hundred
eighty two five fifty nine forty nine. Any questions whatsoever.
(08:48):
So this week's parents is the twenty twenty four round
Table report cards. Basically, they have I don't know about
ten money managers and they all give their individual stock
picks at the beginning of the year. And you know, folks,
it's it's it's amazing. These are supposed to be the
best of the best, right barons, you know, chooses these
(09:12):
money managers. Some of them I think really should be
retired from the from the roundtable report cards. You know,
I'm you know, I'm looking at when they all give
you know, four or five six picks, and there's only
one that that that really came out with a clean
report card. So now the say who works for Franklin,
(09:35):
and ironically she didn't have one individual stock. She actually
picked some ETFs and mutual funds, which kind of goes
along with what I tell you all the time. You know,
that's it's hard to pick individual stocks. Now, I'd like
to play with individual stocks. I have a sandbox account
where I have some individual stocks and I have some bitcoin.
(09:58):
And sure, I'm like, I'd like to play. Why not.
Life is short, let's have a little fun. Let's get
out there and you know, roll the dice. But that's
just for my play account. My sandbox account is we
like to call it a good client of ours. I'm
kind of coining the phrase from him. He transferred all
of his client or his accounts to us, and he
(10:20):
had one that he called the sandbox I said, what
do you mean by that? Chuck? He says, Oh, that's
what I play in, like you're a kid playing in
the sands. So now we refer to it as our
sandbox accounts. But as I go through all these money
managers and look at their their picks, you know, you
know Abby Joseph Khane, she she only had one winner
(10:41):
out of two out of six picks, only one winner.
The others lost money. And I can go on and
on and on about it. I guess the point I'm
making is it's hard to pick individual stocks, which is why,
especially if you're doing it on your own, or if
you have a stockbroker you're working with that you know,
one of the big wire houses. Sit down, do an
(11:04):
annual review twenty twenty four, see how your performance was
compared to the SMP for the stock portion. If you
have a sixty forty portfolio, bring in you know, have
have have your advisors show you sixty percent sm P
five hundred forty percent the ice shares, bond indecks and
see how how your returns are for the money that
(11:25):
you paid one eight hundred eight two five five nine
four nine one eight. Well, folks, that was interesting I
(11:46):
apologized I had somebody trying to call me and it
kicked me off doing live radio. So I gave out
the phone number one eight hundred eighty two, five fifty nine,
and I'm really truly sorry about that. One eight hundred
eighty two five five nine four nine. Let's go to
(12:07):
the phone lines. We have Dennis in Clifton Park. Hello, Dennis, Hey,
good morning, Steve.
Speaker 2 (12:11):
How are you.
Speaker 1 (12:12):
I'm doing great, Good morning to you as well.
Speaker 2 (12:16):
I hope Steve you can help me with a question
I've got. My situation is I'm seventy one. I'm in
the twenty four percent bracket right now, but because I've
got to start taking iron money, I should have started
taking it a while ago, but I start taking it,
it's going to push me into the thirty two percent bracket.
What do you advise clients to try and reduce those taxes?
Speaker 1 (12:38):
Yeah, well, you know, unless you know, there's really not
a whole lot that you can do. So you're you're
gonna have to start taking your rm ds. And when
you do, start taking your rm ds, and right now, basically,
if you turn seventy three in twenty twenty three or
(12:59):
or later, you must take R and d's by April
first of the year following the year you turn seventy three,
so you have a little bit of time before you
have to take it, Dennis. But if it's going to
if you have a big IRA, and it's because that's
taxable income to you, that's going to be reported on
your taxes. Now, remember in New York, you get the
(13:19):
first twenty thousand dollars is tax free New York State
tax free, So up to twenty thousand dollars you're only
paying federal tax. A lot of people in New York
don't realize that. And if you're married and your spouse
is taking money out, really the first forty thousand dollars
you don't pay New York state tax on. So that's
a beautiful thing, and that's something that a lot of
(13:41):
people don't realize. But if it's going to boost your
tax bracket, there's really unless you're working and you're able
to put money into a pension plan, or if you
have a business and you're able to get some write offs,
there's really not much you can do. Unfortunately, Dennis. You
know you have that money, you got a tax break
when you put it in there, A long, long, long
time ago, and it grew tax efferd and now it's
(14:04):
taxable when it comes out, so there's really not much
you can do.
Speaker 2 (14:09):
Okay, Well, hey, thanks very much, even and again i'd
like to thank you for your show. I listened every
week and your advice is tremendous, So thank you very
much for what you do.
Speaker 1 (14:19):
Oh Dennis, thank you. That's like the best commercial that
I can have today, Zach. I truly appreciate those words
of confidence, Dennis, and I'm glad that listening to the
show helps you out. That's really my goal. I try
to have the best, most professional money show on the airwaves.
And as I said, this is our thirtieth year of
(14:40):
doing radio, and I've been doing radio every weekend for
those thirty years. Now I have colleagues that help me,
so I get a little weekend off here and there,
and that's much appreciated. After thirty five years of building
and creating this firm, and you know, investing in technology,
investing in human capital, and investing in the time to
(15:03):
grow the business, it takes a lot, and it's it's
nice every once in a while to get a weekend.
Often my goal is to have the most professional show
thee where the listening audience can get good advice and
on some things. Believe me, I say it often. If
(15:23):
you wind up ten wealth advisors, you can get ten
different opinions. We all have our own style, our own way.
I'm pretty honest and open with my feelings. You know,
I don't like annuities whatsoever. You know that I like
stocks over bonds. In my personal portfolio, I'm one hundred
percent invested in stocks. I don't expect all investors to
(15:46):
do that because there's a lot of volatility that comes
with that. Although there's volatility and bonds and commodities in
real estate as well. Unfortunately, a lot of investors just
are fixated on a stock portion of their portfolio. They
don't look at the rest of their portfolio. But you
blend in those other asset classes to kind of soften
(16:07):
the volatility. But I'm okay with risk. The market goes up,
the market goes down, the market always comes back and
always goes on to make new all time highs. So
if you're looking at you know, here we are in
the first couple of weeks of January, and you know
this week alone, the SMP was down almost two percent.
(16:29):
NASDAC both the Total Composite and QQQ down about two
and a quarter percent. Russell two thousand was down three
and a half percent for the week. For the year
to date, we're down just about one percent in the
NASDAC and the SMP, and the Russell two thousand is
down about two percent. So we're starting off, you know,
(16:50):
taking a baby step backwards and after having the year
that we had last year's that's okay, folks, It's really
truly true. Okay. You you you have to take into consideration.
Then there's going to be good years bad years. If
I go back over the last eleven years in the
(17:12):
S and P five hundred index, you hear me say
this often, there were only two years where you lost money.
Twenty eighteen you were down about four and a half percent.
Twenty twenty two, down about eighteen percent. So it's okay,
you can't you know, twenty twenty three. So if you
got spooked out of the markets in twenty twenty two
(17:32):
because you were off eighteen percent, you missed out on
a twenty six percent return in twenty twenty three and
a twenty five percent return in twenty twenty four. And
you look at all the headlines last year, who would
have ever thought that the stock market did as well
as it did. And when you look at the one
(17:53):
year predictions of the stock market, all I can say
is you can't look at the one year prediction of
the stock market because there's just you know, it just
doesn't make sense when when you look at the at
the market gurus and what they come out with. I'm
(18:16):
telling you, folks, you can't. You can't look at it
and think just because somebody supposedly is a market predictor
and you know, well thought of in the markets, they
get it wrong as much as anybody, Which is why
you need to have patience when you're invested. You need
(18:38):
to be well diversified. You need to just you know,
don't don't think you're you're you're going to pick stocks
and go out there and really beat the market. It's
hard to beat the market. Sixty five to eighty percent
of the time, you can't beat the market, which is
why having the market is part of your portfolio. Is
(19:02):
your core holdings make sense? One eight hundred eight two, five,
five nine four nine one eight hundred eighty two five
fifty nine forty nine Any questions whatsoever, give me a call,
love to talk to you. So you know, the we
was we started out with Wheak China manufacturing data, and
(19:26):
we bring up China because it's the second largest economy
in the world behind US and China. You know, they
would love to be number one. I don't think that
will happen. I'm very optimistic over the next few years
that this economy is going to be a pretty strong economy.
I'm hoping we see a lot of less regulation, let's say,
(19:47):
less government kind of spending money haphazardly. I'm really hopeful
that we got some good things coming. And this is
why I'm so optimistic. On the stock market, you know,
it was it was a shortened week. They closed the
market on Thursday for President Jimmy Carter's funeral. Eight two, five, five,
(20:09):
nine four nine. Let's go back to the phone lines
where we have Rick in Hackpoon. Good morning, rick.
Speaker 3 (20:15):
Yesty, and I'm a little confused of art about the
RMD requirement. I'm having to turn seventy three in a
few months, so that means I got to take withdrawal
of this this given year.
Speaker 1 (20:27):
Well you're supposed to take it this given year, but
irs you can postpone it up until April first of
twenty twenty six. But that means rick that you'll take
two rm ds in twenty twenty six. So basically, you'll
add up the you know, your your iras or simple iras,
(20:48):
your four owen k's, you add up the total and
based on December thirty first, twenty twenty four. So when
you get those year end statements, your r and D
this year will be based on that. There's a factor
that you'll you'll figure out how much you have to take,
So you have to take that sometime before April first
(21:10):
of next year. And then what happens is December thirty
first of this year you'll have to take once again.
You'll you'll you'll have to take the value of this
year's r and D based on all the accounts adding up.
(21:31):
But no, you have up until April first of next year.
You don't have to take it this year. It just
means that you're going to take two next year. Okay, okay,
do that makes sense?
Speaker 3 (21:44):
Clarification? Yes, thank you for that clarification.
Speaker 1 (21:47):
Well, I'm glad you made it to this great age
of almost seventy three. So I'll give you an early
Happy birthday. Let me be the first one Rick to
wish you a happy birthday.
Speaker 3 (21:58):
Thank you very much.
Speaker 1 (22:00):
All right, Rick, You'll be well, stay healthy. That's what
it's all about, folks, being healthy. You know, our tagline
is health, Wealth for Life, and we like to say
we want our clients to be healthy so that we
can really manage their wealth and make sure they have
(22:21):
a good life. Folks, you're listening to Let's Talk Money,
brought to you by Bouchef and Andrew, where we help
our clients prioritize their health while we manage their wealth
for life. I truly appreciate you tuning in today. I
can't thank you enough. I'm going to take a quick
break for the news, but I'll be back on the
other side of the news. The phone lines are open
one eight hundred eight two five five nine four nine
(22:44):
one eight hundred eight two five fifty nine forty nine.
If you have any questions, give me a call. I'll
pick you up on the other side of the news. Hello, folks,
thank you for hanging in through the news. I truly
(23:06):
thank you for tuning in every weekend Saturdays at ten
Sundays at eight am. I can't thank you enough. I
love doing the show. We're in our thirtieth year, thirty
fifth year of being in business, so I've been doing
the show almost as long as I've been in business.
So thank you for tuning in. The phone lines are
open if you have any questions. On eight hundred eight
(23:28):
two five, five, nine four nine. Let's go back to
the phone lines where we have Jim on hold.
Speaker 4 (23:34):
Hello, Jim, Hi Steve, good morning, good morning. Congratulations on
your longevity, your business and your radio show. I listened
to it quite often on a Saturday morning.
Speaker 1 (23:48):
Oh, thank you very much, thank you.
Speaker 4 (23:52):
I have a question in regard to roth conversion uh
and converting from a regular retirement ira to uh wroth ira.
(24:15):
Is that amount of money converted included in the maximum
that you can put into a roth ira in during
you know, during the year.
Speaker 1 (24:30):
Yeah. No, what happens is you can convert as much
as you want. Now. The problem is when you convert
from a traditional ira into a roth ira. What's what's
going to happen is that's going to be taxable income.
The government likes that because they're getting their tax money
(24:51):
sooner than than later. Your contribution limits are seven thousand
dollars if you're fifty or you know, under the age
of fifty this year in twenty twenty five, eight thousand
dollars if you're fifty year older. So if you qualify
to put money into an IRA or a roth IRA,
(25:12):
the conversion is different than the contribution. The conversion is
you're taking you know, let's make believe you're taking ten
thousand dollars out of your IRA and converting it to
a ROTH because you feel that brings you benefits of
you know, if you're one in a low tax bracket.
Now it's something to look at, especially if you think
you're going to be in a higher tax bracket later
(25:34):
if you're younger with a long time horizon where you
can have that money continue to grow tax deferred, because
then you'll pay tax on that money today, but when
you take it out years down the road or maybe
decades down the road, it's tax free. And sometimes retirees
and early retirement they have minimal taxable income, so it
(25:56):
makes sense because when you convert to a ROTH, you
don't have to take a rm D. So there's some
pros and cons to it. The biggest con jim is
that you're going to pay tax on that amount, and
if that puts you into a higher tax bracket, you
really want to maybe consult with your tax prepared to
make sure that it makes sense for you.
Speaker 4 (26:18):
Okay, all right, And so actually anything that's converted isn't
included in that seven or eight thousand dollars, No, completely different. Okay,
So you can you could convert one hundred thousand dollars
just to name of number. Yeah, and other than of
(26:42):
course you have to pay, as you said, pay the
taxes on that today, but that doesn't count as part
of the seven or the eight thousand dollars correct maximum. Okay,
great and answers my question, Steve, I appreciate for sire
your answer.
Speaker 1 (27:00):
Thank you, Stay well, be healthy by bye. Eight two, five, five,
nine four nine. So you know, if you've been listening
to the show over the thirty years, you know that
I'm more optimistic than not. I always say in my
office there's a reason why I guarantee our clients that
they'll lose money, Because they will. I just can't tell
(27:22):
them like I don't know this week was a down
week in the market. Did I know that last weekend? No,
I didn't know. Nobody knows, but you're going to have
days and weeks and months and sometimes years. As I said,
over the last ten eleven years, there were only two
negative years for the s and P five hundred two
(27:44):
out of ten. That's not bad, folks. I'll take that
off day long. And at the beginning of every year,
the market pundits, you know, they're always there's a survey
that comes out. So think about this. Last January. As
as we entered twenty twenty four, the average return forecast
(28:05):
for the SMP was seven point four percent by stock
analysts and one point three percent by market strategists. The
actual return with dividends was twenty five percent. So if
you listen to them, you know they were wrong. Go
back a year before that, twenty twenty three, seventeen point
(28:29):
five percent for the SMP. The strategist set a six
point two percent rise. The actual return was twenty six
point three percent. You know it's it's it's hard to
figure it out, and that's why sometimes you know, listen
to all the news taken and digest the information, but
(28:53):
don't don't let it. Don't let it change your long
term horizon and the discipline you need to be a
good investor. Stocks go up, stocks go down, so do bonds,
So do commodities, so do's real estate. All those asset
classes go up and down, up and down, up and down.
If you looked at them every day. Over time, stocks
(29:16):
has been the best performing asset class one, eight, five, nine.
Let's go back to the phone lines. We have Jim
in Aubany, Good morning, Jim.
Speaker 5 (29:26):
Good morning Steve. Like everybody else, I want to thank
you for what you do for the community here, and
I know you do more than just a show. So
it's a it's a it's it's a privilege to listen
to you. So the question I have my profile just
very quickly, I kind of been a I'm going to
become I'm going to turn sixty two, uh in a
(29:48):
year and a half or so, and I'm actually going
to turn sixty one next week, but I'm still working.
I'm probably going to stop working in a in a
year or so. I would classify myself as a super saver.
Over the years, I've maxed out my Flora one case.
I haven't done a wroth for a one case. So
I'm assuming all the questions that people are asking about
(30:11):
roth conversions at some point in time, I know I'm
going to have to probably look at that. My overall
question though, is becoming a Florida resident because I we
don't like the cold. I've got children down in Florida,
so longer term, and I know I've heard you say
that the first twenty thousand in income is not taxable
(30:33):
New York state wise here, but long term, if I'm
going to be in those higher tax brackets, your experience
on if becoming a Florida resident really has saved people
a lot of money?
Speaker 1 (30:51):
Sure, so you have to put it, you know, think
about it this way. As I said one of the
earlier callers in New York State, the first twenty thousand
dollars for you and for your spouse is not taxed
in New York State. When you take money out of
a pension plan IRA, whatever it may be, the first
(31:12):
twenty thousand dollars is New York State tax free. So
that really gives you forty thousand dollars. So to make
a move and relocate and change your residency, you have
to look at other factors. So one New York State
hates it when people leave New York State and say hey, goodbye,
We're not paying your taxes anymore. And there's a lot
(31:33):
of audits of people that do change residency. So let's
make believe you come down to Florida. You want to
be a Florida resident. What you have to do is
you have to stay out of New York State for
at least you know, one hundred and eighty four days,
you know, half a year, six months in a day,
at least. I say at least because I've consulted with
(31:55):
some attorneys and they say, if you can show irs
that you're out of New York's date more like seven months,
that's a better argument if you keep it right to
that day. And remember, if you know, let's make believe
you're a Florida resident. Let's make believe you take a
six o'clock flight out of Florida and you get in
at eleven thirty tonight into Aubny airport. That's included as
(32:20):
a day of living in New York State, believe it
or not, even though you were only there for a
half hour, they count that as being a day in
New York State. So there's programs, and there's one great
program that I always recommend to our clients that they
get and It basically tracks on GPS, it tracks exactly
(32:44):
where you are. It's called MANEO m O NAEO. And
let's make believe you're flying to New York today. If
you stop in Atlanta because you're flying Delta, it'll show
that you were in Florida. It'll show that you were
in Atlanta to show that you ended up in New
York State. And it's a pretty good program. The other
(33:05):
thing you have to do is you have to change
your doctors. You have to probably have a better home
in Florida than in New York. That's one of the
things they look at, although I think that's up for
argument and I'm not in an attorney. You have to
make sure you change the registration of your car, and
(33:25):
your driver's license and your voting registration. So those are
all the things to think about if you become a
Florida resident. But more the short and long of it is,
you have to be out of New York State at
least six months. In a day, you could be in Italy,
you could be in you know, Myrtle Beach, you can
(33:45):
be in Palm Beach. As long as you're out of
New York State for at least six months.
Speaker 6 (33:50):
Gim okay, And let's say someone is going to be
in My income is going to be maybe one fifty
to two hundred thousand a year, So we're talking about
one hundred and sixty thousand of that not having to
pay New York State tax. Right, that's with New York
State tax rates. That's a sizable amount of money over years.
Speaker 1 (34:13):
Oh sure it is. It's you know, well, you know,
let's just say these after your deductions and everything, let's
say you bring it down to one hundred and twenty thousand,
you're looking at seven eight thousand a year in New
York State taxes. Once again, you have to weigh out
the pros and cons of relocating having a home. Will
you enjoy being in Florida? I heard you say that
(34:35):
your children are in Florida, so maybe, you know, maybe
that's the incentive for you to go down. But really
from a tax perspective, make sure that you do your homework.
Make sure that it makes sense for you to relocate.
Now a lot of times, you know, one, do you
have a job that you can show irs that you
(34:55):
weren't in New York State working? Like if you have
a business, it's harder to show that you were in
Florida for half the year. So once again, this is
another factor to consider, a lot of things to think about, Jim,
But it's a it's a good question, thank you, okay.
One eight hundred eighty two five five nine four nine
(35:17):
one eight hundred eighty two five fifty nine forty nine. Yeah,
it's a real crapshoot to do you do you move
out of New York State. And believe me, people are
leaving New York State left and right. I guess in
some ways, can you can you blame them? Between the taxes,
the politics, the regulations, there's so many things that people
(35:39):
are just throwing their hands in the air about and
they've just you know, they've they've they've had enough. You know.
I was in New York City on Tuesday to go
down for an appointment, and my driver picked me up
at Laguardi Airport and told me all about the congestion
pricing and how it's going to affect everybody. And believe me, folks,
(36:05):
that congestion tax is going to be passed on to
the consumer. My driver, you know, every time he goes
below sixtieth Street, there's a nine dollars fee that he
has to pay a tax. Now, let's make believe he
brings me to my appointment and then brings me back
(36:26):
to the airport and then goes back into the city.
He's got to pay that nine dollars tax again. So
you think about you know, that's just one independent driver
trying to make a living. You think of all the
delivery trucks. You think of you know, all the people
that need to go into work, and you know that
(36:49):
parked their cars. So the taxes that we pay in
New Yorker just just crazy, just crazy. On eight hundred
eighty five five nine four nine. Let's go back to
the phone lines. We have Brick. Hello, Rick, Hi, Steve Looten.
Speaker 3 (37:10):
I have a question about what is the barometer for
MOTT for checking your bond portfolio. It's all You've mentioned
it a little while ago.
Speaker 1 (37:18):
Yeah, I mentioned it often because I like bonds. Right now,
I'm gonna let you go because there's a lot of interference,
but I'll answer your question. So, folks, when you're looking
at the ten year Treasury note right now being four
point seven six percent, we're we're almost at five percent.
The thirty year hit five percent on the twenty year
(37:41):
is at five percent, but the ten year that's you know,
I don't like to go out further than ten years.
I always say, ladder a bond portfolio. If you have bonds,
wonder new York state tax free. Once again, if if
you're paying New York state taxes, buying a treasury, you're
not going to pay New York State tax on that interest.
(38:03):
So you can buy a tenure right now four point
seven six percent. That's pretty good, folks. In one year's
paying four point to two percent. So finally, the yield
curve is such that the shorter term bonds are paying
less than the longer term bonds. And I'm not sure
where interest rates are going. After yesterday's jobs report. You know,
(38:23):
there's there's a feeling on Wall Street that the Fed
may be done with their interest rate cuts, which would
be really remarkable to think that they just started cutting
in September. They cut a few times, and they may
be done. Maybe there's one more cut based on yesterday's
jobs report. Now, remember one, it's an important jobs report,
(38:45):
and you know, the US economy added two hundred and
fifty six thousand jobs. Unemployment fell just just a little
bit to four point one percent, and the wage growth
was up less than than than expect it. But it
shows that the jobs market is really a resilient, strong
(39:06):
job market. And the reason why the Fed cuts rates
is to stimuli stimulate the economy as a catalyst to
get the economy going, make borrow money cheaper so that
people will start, you know, buying things and moving the economy.
So that's why the Fed cuts interest rates. In reverse,
(39:31):
they raise interest rates to slow down in the economy
that is grown you know by by you know, just
too fast, where the price of goods and services is
just going up. You know, just a couple of years ago,
inflation was nine point one percent. Now we're somewhere between
two and three percent. We'll find out later this week.
(39:51):
We have a report coming out on inflation and we'll
see what it is, but somewhere between two and three percent.
The target for the Fed is two percent. So yesterday's
the Friday job report showed that the jobs are healthy,
people are going back to work. So you actually have
interest rates that are up, and I like ladder in
(40:14):
your bond portfolio. This way you're not gambling, but I'm
not I'm not against somebody loading up on this US
ten year Treasury note at four point seven six percent.
I mean, we're creeping up to five percent. I don't
know if it'll be higher or lower, but I know
it's a pretty good yield. Just it wasn't that long ago, folks,
(40:35):
it was three point five percent. So I'll take four
point seven six percent all day long. So hopefully that
helps you. Rick just ladder a portfolio. And as I said,
you're paying tax on interest with CDs, you're not paying
New York State tax on the interest of the treasury
one eight hundred eighty two five five nine four nine.
(40:55):
Let's go back to the phone lines. We have Mike
in my hometown of Troy, a fellow trojan. Hello, Mike, Hey,
how you doing. I'm doing wonderful.
Speaker 3 (41:08):
I just had a question on something you said earlier.
Speaker 1 (41:12):
So I have a five percent guaranteed annuity for five years.
Speaker 3 (41:15):
Why would that be a negative when the bottom market
has had such a horrible return over the last four years.
Speaker 1 (41:21):
Yeah, Well, one, you're locked into an annuity, and I
don't know how old you are, but basically what you're
doing is you're getting a decent yield. Mike. You know,
five percent if you're locked in for five percent for
five years and they can't change that. That's pretty good.
I just gave out the US Treasury of four point
seven six percent. I just don't like annuities. One you're
(41:45):
locked in, you can't get out of it if you
wanted to get out of it, And having a well
diversified portfolio is so much better than having all of
your money locked into a fixed annuity. I'm just not
a fan of a new Now, I'm not folks, There's
there's reasons why people buy a nodies. Some people are
(42:05):
nervous nellies. They want it annyse, they want that guaranteed
in come. And remember it's guaranteed from the insurance company.
Whereas if you letter a bond portfolio, you're going to
get decent yields and it's guaranteed if you buy treasuries
by the US government, which I think is a little
bit safer than an insurance company. But Mike, not knowing
(42:26):
the rest of your portfolio, or if you have a
diversified portfolio. You know, if you're a young guy and
you got all your money and it fixed the neudy,
getting five percent, well that sounds great, but boy, you
lost out by not having a diversified portfolio, by having
some stocks for the growth portion of your portfolio, hopefully
that helps you out. Mike E eighty five five nine
(42:48):
four nine. So I'm optimistic on the stock market, and
believe me, there will be a correction where the market
goes down ten percent. There will be another bear market
where the market goes down twenty percent, there will be
another recession. I don't see. I don't see a recession
on the horizon. But you know, believe me, go back
(43:09):
four years, five years now. You know we had a recession,
the quickest recession and on the books during COVID, and
it came and gone. So I can't sit here just
because I don't see a horizon on the or a
recession on the horizon, doesn't mean that we may not
get a recession. But think about this, folks, this is
(43:29):
why you can't be afraid of stocks. If you look
at any one year, any given year, the best return
and I'm going back to nineteen fifty, so seventy four years,
pretty good, pretty good statistics. Your best year in the
stock market was fifty two percent. Your worst year was
(43:50):
thirty seven percent, and that was recently two thousand and eight.
So you know, sixteen years ago, bonds, your best year
was thirty three percent, your worst year was thirteen percent.
And if you had a sixty forty portfolio, which a
lot of people have, what we call a growth and
income strategy, your best year was thirty four percent, your
(44:14):
worst year was twenty percent. That's any given year going
back to nineteen fifty, any given year. So having that diversification,
being invested, not being scared, not listening to your brother
in law this afternoon at you know, or this weekend
at the dinner table, and your coworker at the water
(44:36):
cooler on Monday morning. You know, have a well diversified
portfolio and have that discipline. Now I want you to
think about I'm going to give you five year, ten year,
twenty year rolling averages. That means nineteen fifty starts a
new five year rolling average, a new ten year or
new twenty year. Nineteen fifty two a new so you
know there's a lot of rolling averages. Stocks your best
(45:01):
five year period was up twenty nine percent, annualized return
up twenty nine percent, worse two percent, Bonds up eighteen percent,
worse five year rolling period two percent, and in the
growth and income portfolio, the best was twenty percent, the
worst was one percent. Now, most people are invested for
(45:24):
ten years or longer. So with stocks over a twenty
year rolling period, your best twenty year rolling period was
eighteen percent, your worst was six percent. Year in, year out,
your best bond per you know, twenty year rolling period
was eleven percent. Your worst was negative one percent. And
(45:46):
in the growth and income portfolio, your best twenty year
rolling average was fifteen percent. Your worst was five percent.
So there you have it, folks, this is why you
can't be You really can't. Don't feel like you can
have stocks in your portfolio. It's okay to have stocks
in your portfolio. Nothing wrong with having stocks in your portfolio.
(46:11):
And as I said, I'm hoping with the change of
guard in Washington, I'm optimistic we have some good things
to look forward to. Before I let you go any further, though,
I just need to take time out because I'm thinking
of all the devastation, all the people that have lost lives,
(46:35):
their favorite pets, loved ones in California with these with
these wildfires. My heart just aches for them. It truly
breaks breaks for all these people that are just you
know one hundred and eighty thousand I think are relocated
to evacuate their homes. Then you have the thugs coming
(46:58):
in and looting. You know, the homes that are still standing, folks.
My heart goes out to them and I say a
prayer for them every morning. I just can't believe what's
going on. It's just a terrible thing. You're listening to.
Let's Talk Money, brought to you by Bouche Finance Group,
where we help our clients prioritize their health while we
(47:18):
manage their wealth for life. Go to our website Bouchet
dot com, That's biz and boy O U C h
e Y dot com. Thank you for tuning in. I
thank you for every Saturday at ten, every Sunday at
eight for listening. Have a great day, stay healthy, be well.
Bye bye, folks,
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