Let's Talk Money

March 29th, 2025

Episode Transcript

Speaker 1 (00:05):
Every night I sit him women. Good morning everyone.

Speaker 2 (00:11):
My name is Martin Shields. I'm the chief Wealth Advisor
of Bruchet Financial.

Speaker 1 (00:15):
Group, and I gonna be your host. Let's talk money.

Speaker 2 (00:18):
It's great to be here with you on this boy
kind of rainy, nasty Saturday. I think, unfortunately we're we're
in for for the next couple of days here, but
that's springing upstate New York, right. This is I always say,
if I had to pick a month or two that
I just don't love as much, it's the next let's say,
thirty days or so. But you know, once you get
through that, we'll be in gorgeous May and the rest

(00:41):
of the summer.

Speaker 1 (00:41):
So it is what it is. So but it's great
to be here with you. Dude.

Speaker 2 (00:46):
Answer any questions you may have regarding your financial planning
or investment management concerns, and I encourage you to call
in with those questions. You can reach me at eight
hundred talk WI. That's eight hundred eight two five I've
nine four nine once again eight hundred eight two five
five nine four nine, or you can email me at

(01:08):
ask Bouchet at Bouchet dot com. Again is ask Bouche
at Bouche dot com and Bouchet spelled b O U
c h e y dot com. Now I'd rather you
call in. It's always great to talk with you.

Speaker 1 (01:24):
But some people are a little shy.

Speaker 2 (01:25):
They don't want to be on the radio, and all
I would say to you, if that's the case, get
out of your comfort zone.

Speaker 1 (01:30):
Give me a call. Let's chat, right.

Speaker 2 (01:33):
You know, you got to got to try something once
at least. But if you just can't do it, just
give me an email.

Speaker 1 (01:39):
We can chat.

Speaker 2 (01:40):
You know, I always say you may be doing your
fellow listener favor by asking that question that everyone else has.
As you know, if you listen to Son who's up
in Saint Lawrence, he's a freshman and he's taken a
finance class, and you know it's interesting because I'm a
big believer in those situation is you got to ask

(02:00):
those questions whatever, you know, that's how I say you're
going to learn. And you know he said that, the
professor kind of shuts that down. I said, Heyden, we're
paying good money for you to be up there. You
make sure you asked the question. I don't care if
the professor, that's his job is to answer those questions,
and he said that afterwards he asked a few questions.
A couple of the kids in the class said, Hey, hey,

(02:21):
not glad you asked that question. I had that same question.
So you know, I'd say the same thing for all
of our listeners. You have a question, give me a
call or shoot me email again. You can reach me
at eight hundred eight two five five nine four nine.
So a lot to discuss, both with the markets, some
of the economic data, and also from a financial planning perspective.

(02:43):
Of course, these days, I mean any given minute day,
everything changes very quickly around here, and certainly this week
some big news with the tariffs on you know, the
car companies up at twenty five five percent. You had
the consumer confidence report that came out and it declined

(03:07):
by twelve percent. And then you had inflation that came
out on Friday that with a print a little bit higher,
it actually moved up from the prior month. So all
that combined didn't make for a great week. In particular,
it did not make for a great Friday, where the
market dropped by two percent. So we're almost we're not

(03:28):
really quite back in correction territory. That's when the marks
down ten percent, but we're close. We're down more than
five percent for the year. And that ten percent correction
I'm talking about from the market high that we saw
in January I'm sorry, in February to where we are now.
So that's that ten percent change. And you know, we
talk about this. You know, in any giving year, the

(03:51):
intra year volatility is fourteen percent. So we're below average
right now, folks, We're not even. It may seem like
we're above average, we're below average. I think the challenge
and we've talked about this. We had our State of
the Economy presentation. This is where we gather all of
our clients. We have an event in Troy at Franklin Plaza,

(04:13):
event and dinner and a lunch here at Saratoga at
the eighteen sixty three Club, and we outline our thoughts
on the market and economy. We go over some financial
planning and tax advice as well. And you know, one
of the things we talked about is when you put
a high level of uncertainty out there for both consumers

(04:34):
but certainly for businesses, it becomes problematic. Right and you know,
if we can go through and you know, if the
administration can use these tariffs to negotiate with our trade
partners to drive more production, more manufacturing back to the US.
If they can use them to lower anyone's called reciprocal
tariffs those countries are charging on our goods and services,

(04:58):
then that's a great thing, and you know, we'd be
better off for it. But if these tariffs are in
place long term, it's a little bit of a problem
because what we have to appreciate is we used to
have tariffs this high. Back around nineteen hundred eighteen ninety,
we had tariffs in the thirty or forty percent range,
and so even higher than where they are now. But

(05:21):
we have to appreciate is international trade at that time
for the US economy was less than five percent, right,
so very little of our economy was dependent upon international trade.
Now it's between thirty five and forty percent. And that
includes both goods and services that we sell overseas and
also that we bring from overseas and sell here. And

(05:45):
you know, we have a lot of we have a
lot of small business owners here in the Kaper region.
They're you know, they're here in the Couper region, but
they have international business model.

Speaker 1 (05:55):
Right.

Speaker 2 (05:55):
They both buy services, they buy goods overseas, they bring
it back here, some of them manufacture here, some of
the manufacturer in other locations, and they distribute around the world.
So you can imagine that's with a small local company.
You can imagine with these big international companies that you know,
this is very problematic when they're going to try to
make decisions about where to put capital and there's all

(06:19):
these unknowns. And I'll give you an example myself, which is,
at probably this fall, I'm at a point where I
might buy a new car, and you know, you think
about it, if these terrafts are in place, I want
to buy a car that's coming from overseas, it's getting
slapped with a twenty five percent tariff, I'm probably not
going to buy it. And here's one of the reasons why,
which is if I were to buy it and I

(06:41):
thought these terrafts were in place forever, you know, let's
say long term, well, I might be more inclined to
buy it because that's just part of the cost of
the car, right. But what I don't want to do
is buy it and then the next day find out
that terrafts were removed, and I could have bought the
car for a discount of seventy five or twenty five percent.

Speaker 1 (07:01):
So you know, when there's that level of.

Speaker 2 (07:04):
Uncertainty you know of what's going to be in place
and for how long and at what level. That uncertainty
is not great for business and it's certainly obviously not
great for consumers. So as we move forward, you know,
one of the big elements is what is the duration
of these tariffs at at what level?

Speaker 1 (07:25):
So we'll have to look at that.

Speaker 2 (07:27):
So let's let's talk about this what this means to
you as investors, because we get these questions all the time.
Right one is a good time to invest cash, and
as we always say, it depends on your time horizon.
You know, as long as you got a long time horizon,
which most people do, I mean time horizon, you know,
five to ten years plus, you got that long time horizon,

(07:48):
Yes it is if you've got cash long time horizon.
With that, it is a good time to invest in
a diversified portfolio. Make sure your asset allocation fits your
risk tolerance that you can sleep night. But if it's
short term in the next one or two years, you know,
certainly keep it more liquid. And this is the advice
we would just normally give. Then the next question is

(08:11):
is this a good time to free up cash. Let's
say I need to I'm you know, building a house
or buying a car, and all I would tell you
is this, which is when you look at where the
markets are, they're down about five percent for the year,
and it's the equivalent to where we were probably in September.
So if you were to be, you know, buying that
car in September or building that house and you need

(08:32):
the money, you'd be at a market all time high
and you'd be thinking, Wow, this is works out great.

Speaker 1 (08:38):
So what I would tell.

Speaker 2 (08:39):
You is, you know, it is not a bad time
after you think about hol on this bull market's been
going on for is not a bad time to freep
cash if you need it for something an expenditure you're
coming up. If you want to roll the dice and
see if we can, you know, kind of get through
this volatility and the markets move higher, certainly do that.
But now you have to ask yourself the question, what

(09:00):
if the volatility hasn't moved. Matter of fact, what if
let's say it's gotten worse. Are where will you go
for that cash? Will you be okay selling at that point.
If the answer is no, then again, what I always
tell clients is make sure that you maximize achieving your goals. Right,
that's the most important thing. Maximize achieving your goals. Don't

(09:21):
worry so much about maximizing your financial situation. And all
I mean by that is so often people get fret
They're like, oh, you know I wanted to I'm to
buy a car, I was going to buy a house
or do something. I should have sold in February. It's
the market highs and I'm like, stop that. Right, you

(09:42):
are still selling with a market at a very good
spot from a historical perspective. I mean, the last fifteen
sixteen years, the market's been averaging fourteen percent, so you're
selling at a very good time all things considered. Don't
worry if you're not getting it right at the top.
And what's more important is that you maximize your personal

(10:03):
goal and that if that personal goal is to buy
a house or buy a car, then do that and
don't get concerned that you didn't sell at the top. Right.

Speaker 1 (10:12):
Very important.

Speaker 2 (10:13):
The other thing is is it a good time to
change your risk tolerance? Well, certainly if you want to
become more aggressive at this point the market down ten percent,
it's not a bad time, right If you've got again
the right long time, long term time horizon for your investments,
it's not a bad time to change that right now.
But if you want to become more conservative, well even there,

(10:36):
especially if you've got a life change, let's say you're
coming up until retirement. You know, again, I always say,
it's no different than if you need cash. If if
you were in the growth allocation and all equity allocation
for years. You know, if your retire has been years
and you've done very well, your portfolio has grown tremendously,

(10:56):
and now you want to change the growth and income, well,
it's it's not outrageous that with the markets just down
five percent for the year, if you look at it again,
you go back to September time horizon where we were
to go ahead and make that change and give you
a peace of mind.

Speaker 1 (11:10):
Absolutely feel free to do that now again. If you
want to.

Speaker 2 (11:13):
Roll the dice and see if we can move up
a little bit, you can try that, but you just
got to be aware that you know, we don't know
exactly where the market is going to go over the
next short short term one to two weeks one or
two months. So don't be afraid again to achieve your
personal goals of retirement. Make that the priority. Don't make

(11:33):
trying to maximize your financial situation the priority. That's very
important to remember. Want to just kind of switch gears
a little bit. We're going to go and talk about
things I want individuals who are I'm going to say
four to one case savers, and this is many of
you who are in the accumulation stages of your lifetime.

(11:54):
I want to go through in some things that you
have to be aware of. We as we talk about this,
we work with an of our forming K plans where
fiduciary on those plans like we are with our individual clients,
and we quite often meet with both the trustees of
those plans to give them guidance, but also with the participants,
and we really communicate that this is a that's a
great opportunity for us to be able to sit down

(12:17):
with these individuals and give them fiduciary advice. For many
of these individuals, they could be lower income earners. They
probably won't have access to a fiduciary. Otherwise quite often
they would be you know, if you're going to a
financial advisor if somebody's going to be selling them an
annuity or a life insurance product, so it's a great
opportunity for us to give them guidance of things they

(12:38):
need to do.

Speaker 1 (12:39):
And I want to go through those.

Speaker 2 (12:40):
But again, if you have any questions, you can give
me a call at eight hundred eight two five five
nine four nine. Again that's eight hundred eight two five
five nine four nine, or you can email me at
ask Bouchet at Bouchet dot com and Bouchet is spelled
b o u c ey dot com. So things to remember. One,

(13:06):
you really need to be saving about ten to fifteen
percent of your gross compensation right and now, if you're younger,
if your early twenties, you can be more on the
ten percent side. If you're older, let's say pushing in
the forties, you need to be in the fifteen percent range.
If you're in your fifties, you need to be higher

(13:27):
than that. You need to be twenty plus percent. And
that level of savings it does a couple things. One is,
once you start doing that, and I think anybody who
does it can attest to this, which is, once you
start doing that, you don't even know that that money
is going out the door. Right, It's like paying taxes.
It's just what you do. And so you make it

(13:48):
one of your first things to do, which is you
pay your taxes and you make your contributions into your
retirement accounts. And so once you start that, you don't
even know it gets you use suspending less money, right,
So you think about that, if you're putting ten to
fifteen percent away in a form and K plan or
four three B or even an IRA, you're not spending

(14:10):
those dollars and so that when you prepare for retirement,
you can remove those dollars from your income and having
to try to offset for those because basically the way
to view this is when you go into retirement, you
just need to have you just need a substitute your
income you're getting from your paycheck. You're going to need

(14:30):
a substitutent with security or distributions from your portfolio. So again,
if you can reduce what you're actually spending while you're working,
well those are fewer dollars that you need in retirement.

Speaker 1 (14:41):
We're gonna go to the phone lines. We have alent
from Glenville. Alien there, Yeah.

Speaker 3 (14:46):
Good morning, can you hear me Okay, I.

Speaker 1 (14:49):
Can how you doing? What can I help you with?

Speaker 2 (14:51):
Good?

Speaker 3 (14:52):
Great show? A quick question regarding tariffs. We're trying to
bring back a trade into the US manufacturing making products here.
Isn't that in and of itself going to be very
inflation every long term for no other reasons. Think about

(15:14):
why all our business went overseas over the last fifty years,
it was to reduce production costs. If a way, journer
with benefits is going to make eighty bucks an hour,
and overseas they can do it for fifteen. Either way,
whether we're getting taxed on tariffs, or we're going to

(15:35):
get a bump in paying for things because of increased payroll.
Either way, inflation is going to go up. I'd just
like to hear your.

Speaker 2 (15:45):
Thoughts on that great question, Alan, really is a great question.
I really can't argue against you. I really can't argue
against you. That is exactly what has happened. Right again,
in our State of the Econry presentation, we talked about this.
We used to start putting in these trade agreements NAFTA
and the WTO trade agreements with I mean each different

(16:06):
area of South America, Southeast Asia. And when China ended
that in two thousand. That's what we saw manufacturing leave
the US. And when it left, it went over to
those other areas. Guess what we got. We got cheap,
cheap goods. I always make this analogy. I'm not a
big Walmart fan. Pretty Walmart fans out there, I'm sorry,

(16:27):
but I'm not a big Walmart fan.

Speaker 1 (16:28):
And this is why.

Speaker 2 (16:29):
You know, Walmart basically sells to me just a lot.
It's much about consumerism, right, and I'd like to buy things,
but I think we're sometimes we're too much of the
consumerism as a country. And they love to sell stuff,
and they love to sell cheap stuff. So what they
did is they continuously, and I know people that worked
at these companies that sold into Walmart, they continuously hammered

(16:50):
their suppliers for lower costs, lower cost, lower cost. Well,
to Allen's point, what did those suppliers do. They went
and they outsourced their production to other countries and they
got lower costs.

Speaker 1 (17:05):
That's what happened.

Speaker 2 (17:06):
Well, in doing that, those manufacturing jobs that were higher
paying left the US, and so those individuals who were
making pretty good money in those jobs, they lost their jobs. Well,
the other thing that Walmart did is that it went
into pretty much everywhere in the US. I know with
my son who's up in Saint Lawrence and Kenton and Potsdam,

(17:28):
they have a Walmart up there.

Speaker 1 (17:30):
And it kills small towns. Right. So if you're a small.

Speaker 2 (17:34):
Mom Paul business and you're in the downtown area, you
can't compete against Walmart. They've got everything you have for
a lot cheaper prices. So not only did it take
higher paying manufacturing jobs and put them overseas, it took
the local businesses and drove them out of business because
they didn't have they can't compete on cost. So now

(17:56):
to Allen's boyt, if you bring manufacturing back, yes, you're
gonna probably raise some of the costs. I think, Alan,
how I respond to that is, I don't. I think
we're going to be moderately effective in bringing manufacturing back.
I just think it is what it is. Let me
tell you what's gonna happen, and this is what's happened.

(18:16):
You know that happened back in twenty eighteen when the
terriffs went against China. You know, yes, some of those
goods and services the terrorifts applied. There was negotiating on
terms of trade going forward. But what happened to a
lot of the manufacturing.

Speaker 1 (18:33):
Guess what?

Speaker 2 (18:33):
It moved to other Southeastern Asian countries where we didn't
have those tariffs cheps. One of the best examples is Vietnam.
You know, it's a perfect graft that I had in
our state of the kind of presentation where you had
all this manufacturing that was tariffed in China and then
you saw the drop in those goods and services coming

(18:55):
from China. Well, guess what, it all went over to Vietnam. So, oh,
you know it's gonna move. It's going to move from
these countries. The likelihood of it moving back to the
US is not so high. Now, again that's not a
completely accurate statement. I do think in those areas where
it makes sense economically to bring it back to the US, uh,

(19:18):
that will happen, and that mainly is in more complex,
more high tech items. I mean, you do see this.
I mean Honda and Toyota and Mercedes, Benz and BMW.
They all have manufacturing plants here in the US, right,
So it can be done. But I don't think anything

(19:40):
that doesn't make sense economically where you can you just
you can't compete with it price wise. When it's produced overseas,
that's not coming back to the US, folks. The other
problem too, is, you know, there's a lot of areas,
including Upstate York and parts of Ohio and Michigan and
Indiana that just really devastated financially. Well, guess us, what

(20:00):
chances are that manufacturing is probably not coming back to
some of these areas.

Speaker 1 (20:04):
Right.

Speaker 2 (20:05):
That's the other thing to appreciate, which is, you know,
it's not as though those manufacturing plants absolutely come back
to these areas. I think, you know, the best thing
you could do in any area from an economics perspective
is the continue to move on. Like in many areas,
certainly in the Capital disc region is you know, with
Regeneron and with Global Founderies, you've got to move on

(20:27):
to that next kind of technology and you know, the
micro technology and everything. You've got to be thinking ahead
along those lines versus worrying about the past. So to
Allen's point, yeah, I don't some of that manufacturer's going
to move back to.

Speaker 1 (20:43):
The US, but a lot of it won't.

Speaker 2 (20:46):
And there is the concern, I mean, all this stuff,
both tariffs in general and moving it back can be inflationary.

Speaker 1 (20:56):
It certainly can.

Speaker 2 (20:57):
And that's one of the problems, right, which is, you know,
if you have higher inflation and yet you have slower growth,
that's stagflation.

Speaker 1 (21:06):
It's not great.

Speaker 2 (21:07):
But again, my hope is that with this administration that
they get this in place. There's a lot of you know,
terse words back and forth between you know, the countries here,
and then they get to the table and the area
able to negotiate something that the very minimum allows us
to sell more into their countries a little bit easier.

(21:30):
But we'll see how this flows. It's a little bit unknown.
But let's say before we go back to breaks and becoming.
Soon before we get there, let's go back to the
four one K and just a reminder, so big elements
talk about how much you need to contribute one of
the other big elements, and I'm telling you this is
so important is you need to be very aggressive in

(21:50):
how you're allocated. And all I mean by that is
be as much into stocks in a diversified fashion as possible.

Speaker 1 (21:58):
Right, So for most people all the way up until.

Speaker 2 (22:01):
Your five years or certainly at the longest advance is
ten years, you really should be one hundred percent equities, right,
because you don't care if the market goes up or down.
All you care about is what's the long term return
on your dollars. The other thing to remember is whether
your full and K or four to three B, you're
constantly investing those dollars into the market.

Speaker 1 (22:22):
So think about this.

Speaker 2 (22:23):
If you're one hundred percent equity, that's how your allocation is.
That means if the market's down ten percent or fifteen
percent or twenty percent, that means all your dollars you're
putting in are all going into stocks and you're buying
at a discount. Along those lines, I always make this comment,
which is, you know, when markets at all time highs,
people feel good.

Speaker 1 (22:43):
But the downside to that is.

Speaker 2 (22:45):
In your fall and K you're buying, you're buying stocks
at high prices. And what you really want to be
doing is buying stocks at a very low discounted price.
And so if you can do that, that that's ideal.
And that's what happens with volatility. So again, try to
max get your savings to ten to fifteen percent. Try

(23:07):
to make sure that you're as aggressive as you can.
Now I mean by that is close to one hundred
percent stocks and a diversified portfolio. And then the other
thing that's very important is that you want to make
sure that you have an emergency reserve fund and that
is separate from our foe and K. But I just
see it so often where people have an expense and
they can't cover it, they start freaking out. They're looking

(23:29):
to borrow from their fellwing K. They're looking to take
a distribution from their fall and K, and you don't
want that to happen, right, that's not a good thing
to be either borrowing from your fallwing K or take
it a distribution. If you put usually three to six
months maybe nine months worth of cash in a bank account,

(23:49):
don't worry about how much you're earning on it, right.
I mean, you could put it to CDs or whatever,
but just make sure it's there for safety purposes, to
give it peace of mind that you have that money there.
If you need a new roof, you need a new furnace,
you're okay, you can cover it, right, folks, Just remember
to do that, and then you're gonna be in a
good spot. Well, we're gonna go to commercial break, but

(24:11):
come back and join us as we continue to take
your questions. You'll listen to Let's Talk Money, brought to
you by Bruchet Financial Group, where we help our clients
prioritize their health while we manage their wealth for life.
Come back and join us, folks.

Speaker 1 (24:31):
You welcome back, folks.

Speaker 2 (24:35):
For those of you who are just joining us, my
name is Martin Shields. I'm your host today for Let's
Talk Money. It's great to be here with you on
this Saturday morning. And as always, if you have any questions,
you can reach me at eight hundred eight two five
five nine four nine. That's eight hundred eight two five
five nine four nine, or you can email me and

(24:56):
ask Bouchet at Bouchet dot com b O U C
H E Y. And we'll go to the phone lines.
We have Frank from Boston's SPA.

Speaker 1 (25:06):
Frank you there, Yes, I'm here. What can I help
you with?

Speaker 3 (25:11):
Hi?

Speaker 1 (25:12):
What do you think of?

Speaker 2 (25:13):
Hi? How are you?

Speaker 1 (25:14):
God? I listen to your show all the time. I
was curious, what do you think of investing in b
r K b r K b Oh for sure?

Speaker 2 (25:26):
Yes, uh, let's see here.

Speaker 1 (25:33):
Yeah, I mean it's the stock just keeps on giving.

Speaker 2 (25:37):
I mean, it's certainly it's at all time highs. You know,
maybe in part because it has so much in cash.
I think, listen, putting it as part of your portfolio,
it's I think it's it's fine.

Speaker 1 (25:51):
I think it's a great addition. Uh.

Speaker 2 (25:54):
You know, I do feel even though that Warren Buffett,
what is he years old, I think that company now operates.
You know, he basically built the values that by which
that company operates, and I think they'll continue to do well.
So you know, just appreciate your buying it at all.

Speaker 1 (26:13):
Time highs and see here pe P's pretty low.

Speaker 2 (26:19):
But you know, I absolutely you know you want to
put that in, you know, part of a diversity portfolio.
I just have a lot of confidence in the way
that that company is operated. They've got it's great. Those
are the type of companies that it slow and steady
wins the race. That's what they're all about. They may
we got to be willing that they may under perform

(26:39):
the market for a while, but if you're okay with that,
it's a great addition to the portfolio. And it certainly
it's the type of company that in many cases, you know,
it doesn't swing crazy one way or the other, but
sometimes it does better when you know there's a challenging
times economically, and I think again that's a little bit
of the reason what's going not now they're some of

(27:00):
their their assets are you know, good quality companies, high growth,
good profitability, good cash. So yep, not not a bad
idea to put a few dollars there, Frank, if you.

Speaker 1 (27:12):
Want, okay, thank you, you got it. Yes's great question.

Speaker 2 (27:18):
I mean, I just if I had to pick somebody
from just even as a person, but even from a
financial perspective, Warren Buffett and certainly Charlie Munger is the
same way.

Speaker 1 (27:30):
He's passed away. But those two individuals, it just there.
You know.

Speaker 2 (27:35):
It's not that they don't make mistakes or screw up
here or there, but just as a whole, they really
have just an amazing approach.

Speaker 1 (27:42):
I quite often quote Warren Buffett.

Speaker 2 (27:43):
When I start to see, you know, a scially with
an initial client, he talks really concerned about the markets
or about just stocks in general. You know, Warren Buffett
has this statement that says, don't bet against the US economy,
and you know it's a great statement, which is, you know,
you may have issues with our political system and the

(28:04):
whole list of other things. But at the end of
the day, when you look at our economy versus any
other economy, you pick it, and our country to start
a company in versus any other country, you pick it.
It's the best area to do it, and so don't
bet against it. Don't bet against the US consumer as well, right.
I always remember this, which is somebody telling me that listen,

(28:27):
the US consumer wants to consume, will always consume, and
they will be willing to work four or five jobs
to be able to consume at the level they want.
And that's just what we're about. We attract that type
of person globally to economy. I'm not saying it's good
or bad, but it is what it is.

Speaker 1 (28:43):
And you know, the.

Speaker 2 (28:43):
Consumer makes up seventy percent of our GDP. So for
that reason, don't bet against US economy is a good one.
The other thing too, I always give the analogy with
Warren Buffett. You know, when people talk about should we
sell or know, what should we do? As far as
I'm concerned about the markets, I said, listen, do you

(29:04):
think Warren Buffett is there, you know, fretting about if
there's market volatility? Of course, not all he cares about
is trying to find good companies to invest in. Now
he may not be He may be selling when he
finds good opportunities and when valuations are elevated, and he
may not be buying if they're too elevated. But at
the end of the day, Warren Buffet's a long term investor.

(29:25):
He doesn't even think twice about what's going on with
the value of his company day to day. And that's
the important thing of being a good long term investor.
And I always tell our clients, I mean, if you
own a diversified portfolio of hundreds of not probably thousands
of companies, you got market risk. You don't have capital risk.
It's not going to go to zero. You're going to
have volatility in that portfolio. But as long as you

(29:47):
believe that the US economy over time will grow, that
companies will find a way to increase profits, then you're
going to be fine. We're going to go to an
email have Robert from Clifton Park. His question is, I'm retired.
I'm retired from New York State with a pension and
a substantial amount and a four to fifty seven New
York State deferred complan. Is it smart to do a

(30:10):
partial WROTH conversion within the plan in order to take
advantage of the New York State tax assumption up to
twenty thousand dollars a year and limit the amount of
taxes I pay when I start with the rm DS.
I'll pay the lower tax now and let the wroth
grow tax free. Well, that sounds like a great idea.
Now there's a lot of nuances to this, Robert, so

(30:31):
I'll answer your question. But you know, it depends a
little bit on what other income you have and what's
your tax bracket. You know, you got to be aware
that you're not going to put yourself increase your IRMA,
which is your Medicare premiums, assuming that you're sixty five.
You've got to be aware that we do this, that
you're not going to have that happen. It's not the

(30:52):
end of the world, but it just got to be
aware of it. I like the idea of doing up
to twenty thousand dollars. So just for all of our listeners,
know that York State you can get either twenty thousand
dollars of private pension. This in New York State, you
don't pay taxes on a state pension or a local pension,
but our federal pension, but private pensions you do pay

(31:15):
New York State tax not but you have an exemption
up to twenty thousand dollars per person. That exemption also
applies to IRA distributions, So in this case, Robert could
take those that twenty thousand dollars out of his fourfty
seventh plan. Now, what I always recommend to anybody is
that unless there was a particular reason.

Speaker 1 (31:36):
There can be some reasons.

Speaker 2 (31:37):
But in general, in New York State, you should always
roll your four to three throw or three B, your
four one K, your four fifty seventh plan, roll into
an IRA, roll at to Vanguard, at Schwab at Fidelity.
It just makes your life easier, you know. It's you
know that the New York State defer compas not a

(31:57):
bad plan. Fees are very low, but at the same time,
it is not as easy to deal with as you know,
dealing with an IRA at Chwob or Vanguard. So that's
that's the one thing I would recommend, And then you
could do that conversion right at Schwab or Vanguard or Fidelity.
It's a lot easier to handle that, but it's not
a bad idea. Now, the thing to do remember when.

Speaker 1 (32:19):
You're doing the wroth conversion, just a couple of things.

Speaker 2 (32:21):
One, you want to make sure that you pay when
you pay the taxes on that, because it's going to
be a taxable event that you pay those taxes with
outside dollars, right, you don't want to pay it with
the IRA dollars that you're converting. That's then it start
to the strategy is not as effective. The other thing
is the longer term you have for those dollars to grow,

(32:43):
the more valuable that conversion is. And in particular where
it can be very valuable is if you have kids.
What you're really doing is you're taking a little bit
of the burden yourself and you're allowing those dollars to grow.
And then when your kids get those wroth out arrays,
they will have to take them out within ten years

(33:04):
of receiving them, but they won't pay any taxes on them.
So you know, really there's a little bit of an
element of you know that you take the burden yourself
a little bit now, but it certainly helps your kids
out and your airs out when they receive them.

Speaker 1 (33:19):
So yeah, I think it could be a good thing.
To do.

Speaker 2 (33:21):
It could also, as Robert mentioned, lower your rm ds.
So you think about this, If you can do this
enough times in a certain level, then it draws down
your traditional IRA value and then.

Speaker 1 (33:35):
Then when you have to take R and D s.

Speaker 2 (33:36):
Right now it's age seventy three, it's going to be
age seventy five in a few years, then those R
and ds are lower. And that's the thing you have
to appreciate. I see this a lot with clients have
just been they saved so much into four and K plans.
They have the bulk of their wealth millions of dollars
in traditional irays, pre tax dollars, so that when their

(33:59):
R and ds come, it's going to be pretty sizable.
So you know, they have to be aware of that.
So if you can take it down a little bit
while you're before, then it could be very beneficial. The
other thing I always just remind folks is you know, really,
if you're saving into a four and K four three B,
you really should be almost everybody should be putting part

(34:20):
of that as a wroth. Now, certainly if you are
just starting in year twenties, I would say all your
dollars that you're saving should be in a wroth. Right,
you're in a lower tax bracket that we will be
later in your life. Get those dollars into a wroth,
let them grow tax free. That's very powerful. And you
know I always you know, I talk about this with

(34:41):
my our kids. They're working at jobs. My daughter to
make a lot of money as a server in Cantina
here at Saratoga. Put those dollars into a wroth and
let them grow tax free for the rest of the life.
The thing with that, too is you can always access
the principle of a wroth, not a form and K,

(35:01):
but a wroth I array. You can always access the
principle if you need. And for a first time home buyer,
this is a great thing. You can take out to
ten thousand dollars tax free, ten thousand dollars of growth
in a wroth tax free for a first time home buyer.
So you know, really beneficial to save in the wroth
straight up into the wroth I array or to a

(35:23):
wroth form and K. And then what you do, You
should do that for your twenties, just sock it away
all your dollars, put it into a wroth. As I
mentioned earlier, be as aggressive as you can in your allocation.
And then as you start moving up to higher income levels,
you start to transition into the pre tax dollars.

Speaker 1 (35:42):
Right.

Speaker 2 (35:43):
So that way, when you're in your thirties, forties, and fifties,
you start moving into the higher income brackets, you start
to move into pre tax savings. And that makes sense.
Now you're going to have a diversified basket. All the
dollars you put into a WROTH when you're younger, and
those dollars are going to grow a really substantial way
thanks to the power of compounding. And then the pre

(36:04):
tax dollars that you're putting in in your forties and fifties,
you're saving all those taxes. As a higher income earner,
that's a really powerful equation.

Speaker 1 (36:13):
There to be successful.

Speaker 2 (36:15):
And that way, when you're retired again, you come, you
talk to us, and you got these nice baskets. You
got a nice basket of WROTH dollars that can be
accessed at any point, pay no taxes on it. Nice
basket of pre tax dollars they can utilize as well.
And even I always say it's not a bad idea
to have some dollars in a broken account if you
need to right, that could be managed in a very

(36:36):
tax efficient way. Uh. And you know that's people always
think they have to get this tax savings. Well not necessarily.
You know, the broken account can be also a great
vehicle to get invested, as well as the wrath and
the pre tax.

Speaker 1 (36:52):
Let's move on from this.

Speaker 2 (36:53):
If you have any questions, you can reach me at
eight hundred eight two five five nine four nine. Again
it's eight hundred eight two five five nine four nine,
or you can email me at ask Bruche at bruche
dot com. Let's ask Bouche at Bouche dot com. That's
b O U C h E Y dot com. The

(37:17):
next thing I want to talk about is just what
we see in the industry and I'll telling you it
gets me fired up here. So we're in the process
of hiring a junior advisor. Uh. You know, we we've
been growing and we always say this, we say this
in our state of economy. We grow in the in
the right fashion right where we want to make sure
that as we grow we continue that keep the same culture,

(37:40):
we continue to keep the same idea that the client
comes first. That's the most important thing. If we can
make sure that we're always doing what's in the best
interest in the client, even if in the short run
it's not in our firm's best interest. And all I
mean by that is, you know, there are times with
clients where they need a lot of handholding. They've got
something going on on, uh life change, Uh, just something

(38:04):
big that lose a spouse, you name it, and we
just spend an inorder amount of time with them.

Speaker 1 (38:09):
We don't think twice about that.

Speaker 2 (38:10):
We're not like, well, you know, we're gonna end up
spending more money on the hours than we you know,
are bringing in.

Speaker 1 (38:17):
That's never comes into the equation.

Speaker 2 (38:19):
The only thing that comes into the equation is what
does the client need and let's make sure we do
it for them. So that mindset of always putting the
client first. Uh, you know, it has allowed us to
grow because people refer us to their colleagues, to their
friends and family, and it's just a great way to
run a business.

Speaker 1 (38:38):
And you know, it's as.

Speaker 2 (38:40):
We've grown, we're hiring some junior planners and it's what's
interesting in this process is just.

Speaker 1 (38:46):
Seeing what is out there. And you know, I'm already
aware of this, but you know, a couple of these
young folks.

Speaker 2 (38:52):
One uh worked at I'm not going to name the name,
but it's one of the large insurance companies.

Speaker 1 (38:57):
These are national companies. Uh, you know they you know
who they are, and.

Speaker 2 (39:02):
There's a whole bunch of them, and you know they're
in the wealth management space. But you know, at the
end of the day, what they do a lot is
they sell annuities and insurance products. And what they were
having these young people do, and this I've heard this,
but just mind boggling, is they hire literally thirty of them,
hire thirty of them out of college and then basically
they have them it's like a boiler room and they

(39:25):
basically have them write down two hundred of the individuals
they know, friends and family, and they basically have them
go out and calling on them to sell them annuities
and life insurance products.

Speaker 1 (39:37):
And you know, it's just a.

Speaker 2 (39:40):
It's mind boggling that that is still effective, but it
must be because they continue to do it. But you
basically everything this is a situation where everything that your
person you come across, you're selling them an annuity, You're
selling them a life insurance product.

Speaker 1 (39:55):
Do they need it? Well, I don't know, but that's
what you're selling them.

Speaker 2 (39:58):
And you know, I think with one of them, they
interviewed for the position and they're like, I don't want this.
This sounds terrible, which I would agree. And then the
other one, it said that he did it for six months,
he was pretty successful with it, but he said, I
just can't continue to do this. It just doesn't resonate
with me from an ethical perspective. And you know, it

(40:19):
is amazing to me when we have our firm that
access of fiduciary, well, we hire young folks. We're not
having them out selling. We're having them do analytical work
on tax planning and financial planning and you know, working
in an analysis for small business owners and for executives.
You know, that's what they do, and they work hard
and they're really smart, and you know, it's it's it

(40:41):
could be a stressful environment. I always tell folks, but
you know, it's something that if you're passionate about it,
it's you know, you really enjoy doing it. Whereas it's
the idea of bringing these young folks and having them
go out to their friends and family and sell you know,
these products and services. Again, I'm just amazing that it
still goes on The other thing I just wanted to
kind of remind folks, and I see this too, is

(41:03):
you know, one of the values that we have as
a firm is that we're.

Speaker 1 (41:06):
An independent firm.

Speaker 2 (41:07):
We're independently owned, you know, and we don't have any shareholders,
you know, corporate shareholders. And you know these big companies
that are have shareholders, they're in the wealth manage space,
you know.

Speaker 1 (41:22):
I don't want to dispairse them too much. To the
extent that I know. Advisors are there, they do a
good job, it's it's all good.

Speaker 2 (41:27):
But the thing that's really important to remember is at
the end of the day, the CEOs that drive those companies,
they don't have a fiduciary responsible to their customers. They
have a fiduciary responsible. They're legally obligated to act in
the best interest of the corporation. Now you think the
two go hand in hand, but they don't. And I

(41:47):
had worked in corporations before before I started doing wealth
management twenty years ago, I worked in corporate finance in
the telecom space, and I will tell you the corporations
consistently do things that are not in their customer's best
interest that they think that's in the long term best
interest of the shareholders. And even those actions as there's

(42:08):
thirty years, one hundreds of years, but certainly thirty years
of history, that shows they still make decisions. When you
look at them, you're like, wow, that is really not
either in the customer's best interest or even in the
shareholders best interest. Certainly, you know, all the debacle that
happened with all the financial companies in you know nine,
they made decisions that were they were not in anybody's

(42:31):
best interest long term.

Speaker 1 (42:33):
But I think that's just a really.

Speaker 2 (42:34):
Important differentiator to me at least, which is, you know,
when we make decisions is only through the lens. How
does this take care of our team members because we
want to make sure that they they have that mentality
and they feel it that that's how we operate with them.
And then how does this take care of our of
our customers in that fiduciary capacity, And you know, it

(42:55):
really is evident as I see, you know, some of
these decisions made by the large corporations where you know,
it is mostly about maximizing shareholder value quarter to quarter.
And that's the other thing too, right, and that is
a problem obviously with any public company is that so
often they're measured quarter to quarter versus hey, long term,

(43:16):
what's the best decision even if the next quarter or
you know, a few quarters.

Speaker 1 (43:21):
This is a real negative.

Speaker 2 (43:23):
So sometimes those decisions are made in that fashion, but
many times it's not.

Speaker 1 (43:27):
And just want to share that with you. I just
I see it and it.

Speaker 2 (43:30):
Really bothers me as someone who's in this industry to see,
you know, we see a new client coming in who
came from that and I see, you know, what's in
their portfolio or you know, the annuities they have and
they have no idea why they have the annuities. You're
just really really important to remember that if you can,
to really try to work with the fiduciary as you

(43:52):
go to get seek your investment advice.

Speaker 1 (43:54):
It's so important.

Speaker 2 (43:56):
Let's move on, But if you have any questions, you
can reach me at eight hundred eight two five five
nine four nine. Again that's eight hundred eight two five
five nine four nine, or ask Bouchet at Bouchet dot com.
So you know, one of the things I want to
talk about is single stock risk and we talk about

(44:17):
this quite a bit, right, which is if you have
a large position in one particular company.

Speaker 1 (44:23):
That is usually a great way to accumulate wealth. Right,
whether it's you know, your small business.

Speaker 2 (44:28):
Owner and you own your small business, or whether you're
an executive at a company and you're able to grow
that company, or even if you're an investor and you
own that company. It is it is potentially a great
way to increase personal wealth very quickly. Now it's also
a great way to lose personal wealth very quickly.

Speaker 1 (44:48):
You have to be aware of that.

Speaker 2 (44:49):
But the guidance I want to give is just to
anybody out there, in particular if you're you know, an executive,
or if you're in a company and you have a
lot of that company stock, but it can even be
people that have outside shares of a company, is you
really need to have a plan to look to diversify.
And this is something that we do with so many
of our clients, is to put that plan in place.

(45:12):
And you know, boy, there's enough examples always to show that.
But certainly with Regeneron more recently where it's lost half
its value in the last year, and with plug Power
where it's lost so much value of the last four years.

Speaker 1 (45:25):
And it doesn't mean.

Speaker 2 (45:26):
Those companies they're still great companies and you know they'll
do very well. But what it does mean is that
if you have those shares, you just lost a lot
of money, and if you have a plan in place
to try to diversify out of those positions, it could
be really valuable. In particular, you know, you don't know

(45:46):
what life holds you. You know, you maybe working at a
company like this and you think you're going to be
there long term. But you know, if you saw in
the headlines, you know Plug is laying people off, and
you know with Regeneron maybe you move on to another company,
So you don't know how long you're going to be there. Plus,
not only do you have all those dollars tied up
in that company, but that's where you work as well, right,
so you have so much concentrated in your financial life

(46:09):
with those companies. So all I would tell you is
it's just so important that you have a plan in place.
And with our executives, we go through and we do,
you know, quite a bit of analysis on hey, how
do we diversify on this in a smart fashion to
try to maximize the profits in those holdings while also
minimizing gains. And there's different ways to do that. Whether

(46:31):
it's restricted stock or stock options, whether it's employee stock
purchase plan. All those areas are ways that you have
a well thought out plan that's executed in a consistent fashion.
It really is more about risk management than it is
about investment management, and you really want to manage that
risk that you can still have those those shares right,

(46:54):
you're not selling out completely, but you want to make
sure you know, the range that's most ideal is between
ten about ten percent five to ten percent. Really five
percent is the ideal range in general to have ten
percent on the top side for a single stock. If
you're starting to have more than that, you really need

(47:14):
to be thinking about how do I put a plan
in place. And here's the thing is, there's a lot
of different ways to do this. As I mentioned just
having a consistent fashion to be able to diversify out
with also watching what your taxes are. But there's things
like exchange funds that we work with our clients where
you can put a concentrated position into a fund and

(47:35):
now in that fund you're going to get S and
P five hundred performance, not the performance of that stock.
And you know base there's a number of other elements
that also basically help you from a tax perspective, a
cash flow perspective, and a diversification of turning a performance perspective.
So that's a great alternative putting in stock callers, which

(47:57):
is using option strategy. You put in floor on the
price of the stock and you put a ceiling on
the top side, so you know a range that you're
going to be able to operate within with that price,
and you know you don't have to do this for
all your shares.

Speaker 1 (48:12):
You can just do for part of your share.

Speaker 2 (48:14):
So if you have a thousand shares of a company,
you know you want to do some of these strategies
for five hundred or some later level of your shares,
then that's a great way to do it. The other
thing is charitable giving. If you have a charitable you
know inclination, then you know that's a great way to

(48:36):
use a donor advise fund to put those shares in
there and then get the tax deduction for that contribution
and then also move out those appreciated shares. So these
are different strategies that we work with on this well, folks,
As always, it's been great to be here with you
on this hour. Hopefully you'll learned a lot. I enjoyed

(48:58):
being here and answering your questions.

Speaker 1 (49:00):
You're listening.

Speaker 2 (49:01):
Let's talk money, brought to you by Bouchet Financial Group,
where we help our clients prioritize their health while we
manage their wealth for life. Folks, enjoy this good rainy day,
get some good reading and spring cleaning done, and as
I always say, take care of yourself and take care
of each other