Let's Talk Money

May 24th, 2025.

Episode Transcript

Speaker 1 (00:00):
Good morning, and welcome to Let's Talk Money on ten WGY.
I want to start off by thanking you for tuning
in this morning and making us a part of your
holiday weekend. I'm John Malay and I'm going to be
your host for this morning's edition of Let's Talk Money.
I'm a certified public accountant. I'm a wealth advisor at

(00:23):
Bouchet Financial Group. I'm also the firm's chief financial officer
and chief operating officer. Joining me this morning is my
co host, Scott Strohecker. Scott is a wealth advisor at
the firm. Scott is a certified financial planner, an enrolled agent,
and a key member of our tax team. I want

(00:44):
to thank you for joining me this morning.

Speaker 2 (00:45):
Scott, Thank you John, and Happy Memorial Day to everybody
out there. It is hard to believe with the weather
even happen ways tolay that way at the arnofficial of summer.
But you know, hopefully we'll see the weather turnaround. I
definitely know that you doing some growing this weekend. You

(01:09):
know many people will be and just as a fun
little fact, I think they say that about eighty million
hot dogs and hamburgers will be consuing the early again John,
how do you kind of spending your weekend?

Speaker 1 (01:27):
Well, I will say Scott, it is a little cooler
that I expected, so, but I think I will be
contributing to those those the large quantity of hot dogs
and hamburgers you mentioned, so you know, a variety. We'll
be visiting some friends up at Lake George. I will say,
with the cool weather, we might be enjoying it from inside,

(01:49):
but still a great place to be, and then some
family activities later on the weekend. But you know, I
will say, it's a it's it is a great weekend
looking forward to, you know, getting together with friends and family.
How about yourself, what are your big plans? Scott?

Speaker 2 (02:08):
Spending the weekend up in our RV with my wife
and our two boys. We've been up very past two days,
so I haven't spent much time outside, but hopefully it
looks like maybe Monday may turn it around.

Speaker 1 (02:21):
Whether we'll say great, great, excellent. And you know, one
of the things that Scott and I participated in with
actually several other of our colleagues at the firm is
a little over a week ago we ran in a
CDPHP workforce challenge. So it's a it is a three

(02:43):
and a half mile run rate in downtown Albany. A
great event that raises money for some great causes. This year,
the recipients of the money raised where Unity House of Troy,
an organization I know, well it does great, great work
to serve really the underserved population of Rensseler County. So

(03:07):
it's great organization. And also Girls on the Run that's
an organization I'm not as familiar with, but read up
on it. A little bitch needs to be a great organization.
So it's a it was a fun evening, you know.
I think they had a close to eight thousand runners. Uh,
and you have a lot of companies, you know, in
the Capital region that put together a team. We put
together a team had I will say, we did not

(03:27):
break any running records, but we we had a great
time together and uh certainly helped raise some money for
some great causes.

Speaker 3 (03:38):
You know.

Speaker 1 (03:38):
And as Scott mentioned, you know, before we get into
you know, the markets and financial planning topics, you know,
I want to really you know, just to momentary remember
what what this weekend really is about. And you know
Scott mentioned, you know, Memorral Day is kind of the
unofficial start of summer but more importantly, it's a time
to honor the men and women who gave their lives,

(04:01):
you know, in service of our country. And you know,
it seems especially meaningful right now. It's a time where
sometimes we feel like we're pulling in different directions, but
this day should remind us of something. We all share
a deep respect for those who sacrifice for our freedoms,
and they sacrifice to make this country as great as

(04:22):
as is. And it is, you know, and we're not
without our flaws, but not you know, no countries without
as flaws. But we are a great country, and we
owe a debt of gratitude, you know, to the men
and women who gave their lives in service. So you know,
whether you're planning to celebrate, you know, with a backyard
barbecue or a road trip, or flying across country, or

(04:43):
just enjoying a quiet weekend at home, you know, Scott
and I are glad that you've made us a part
of your weekend. We hope you enjoy the rest of
the weekend. Hopefully, as Scott said, the weather will get
better as we move on. I want to encourage you know, listeners,
Scott and I here to answer any questions you have.
You know, we'll be covering the markets, some financial planning,

(05:05):
and tax topics. You know, Scott, as an enrolled agent,
is going to be covering a little segment about the
big beautiful bill, you know that's that's making its way
through Congress. So we'll talk about that a little bit.
But encourage if you have questions, we're here, you can
reach out to us at eight hundred talk WGY that's

(05:26):
eight hundred eight two five five nine four nine. You
just also want to take just a moment to promote,
you know, an event that we're having, you know, a
seminar that we're calling Planning with a Purpose and it's
you know, an event that we're having in early June,
really designed really to help people take control of their

(05:47):
wealth and uncertain times. The event is designed for those
looking to navigate the complexities of a state in financial planning.
During this seminar, you'll learn how to maximize after tax wealth,
preserve your legacy, and ensure your financial future secure so
you can If you go to our website Bouchet dot com.
Up in the upper left hand corner, you'll see a

(06:10):
link to Planning with Purpose, which gives more information about
the seminar and how to register. So just highly encourage
you check out our website Bouche dot com and uh
and look at that. So without uh any other time,
I'm gonna jump right into the markets. You know, this week, uh,

(06:32):
you know, the US markets face some turbulence, uh, you know,
really driven by escalated trade tensions again, some growing fiscal concerns,
you know, and really some renewed anxieties about the government's
credit worthiness. So we'll we'll talk a lot about that.
You know, So all of our major indexes, uh, you

(06:53):
know posted losses this week, which uh, you know, the
S and P fell about two point six percent, about
two point five the tech heavy NASDAC also about two
point five you know, in the Russell two thousand, largely
small cap you know, experienced a further decline of about
three point five percent. And you know, these declines marked

(07:13):
the worst performance for the S and P. And in
the last seven weeks, you know, we had a you know,
since early April, we've had a nice recovery. But this
week we certainly you know, saw you know a step
back and kind of an increase in some volatility again.
And you know, we know that the tariff conversation is
not over. And you know we've certainly you know, saw

(07:36):
you know, some evidence of that this week. And you
know some of the key drivers of the market is,
you know, on Friday, President Trump, you know, announced intentions
to you know, pose heavy tariffs on the EU fifty
percent tariffs and also talked about a tariff on on

(07:57):
smartphones that manufactured outs.

Speaker 2 (08:00):
If we may have lost John, well we try to
get him reconnected also into John talking about one big
beautiful bill, you know, aka Tax Cuts and Job Zac
two point zero, which was passed by the House Ways
and Means Committee about two weeks ago on May thirteenth.

(08:23):
This bill, at a sort of higher level, would permanently
extend a number of the provisions from the tax cutsom
job sacks. Would also extend and modify some other parts
and add some new provisions that weren't part of the
original tax cuts and job zacs. So one of the
provisions that would be made permanent is the current income

(08:46):
tax brackets, which are the ten, twelve, twenty two, twenty four,
thirty two, thirty five, and thirty seven percent tax brackets.
Is this one then maybe permanent or were even extended,
then we would see rates revert back to prior to
the text cutting job to act again essentially for most

(09:10):
of the income brackets, raising it to a higher percentage.
But again in this current bill, we are seeing these
current rate made permanent. Some of the other highlights that
we see with one big beautiful bill is the new

(09:31):
provisions which are really making a lot of the headlines
we see. No tax on tips and no tax on
over time. These are obviously subjects to certain limitations. This
would be an above the line deduction and available for
taxpayers that don't itemize, and it's actually you know in

(09:52):
the current bill, would the retro access to the beginning
of this year, so at the beginning of twenty twenty five,
and then run through twenty eight, so a few years
where you would see this as part of your taxes.
Another new provision would be the auto loan interest deduction.

(10:13):
This would be an above the line deduction, so it
would you know, come off before you have calculated your
adjustice growth income. This would be up to a ten
thousand dollars interest deduction on qualified passenger vehicle loans. Again,
this would also be retroactive to the beginning of this year.

(10:37):
If it was to pass again. A lot of these
things they are subject to different stays out, so it
may or may not apply to you. Another new provision
as part of one big beautiful built is new qualifications
for five point nine expensive you know, it's been ended

(11:00):
to be more inclusive of K through twelve expenses, not
just tuition, and also college tuition, which is traditionally was
applicable to You can also use home expensive if you
do homeschooling as well, that would qualify for distribution from

(11:21):
a five twenty nine plan. Another big part of the
reform the new bill is HSA reform, So we would
see an increase, almost a double doubling of the contribution
limit for HSA plan. So an individual, you know, is

(11:42):
go from forty four hundred each year to about eighty
eight hundred, and then for our families go from this
guy of nine thousand dollars a year to almost eighteen
thousand dollars. And I think we may have actually gotten
John best Alla turn it back over to him and
we'll touch back on taxes a little bit later.

Speaker 1 (12:04):
All right, thank you, Scott. I appreciate that, and uh,
you apologize for some technical difficulty there. Not quite sure
what happened. But hey, you know today's day in technology,
we love it when it works, and uh, every once
in a while it doesn't, so uh sorry for that.
So so Scott, I know, uh, you know, going through
some key elements of the tax bill, and we'll bounce

(12:27):
right back to that in just a moment, but you
just want to wrap up kind of the market uh
recap segment. And you know, as I mentioned after, you know,
markets have been you know coming back, roaring back since
early April. You know, things seem to be settling down
on the tarraf front, and and this week they kind

(12:47):
of you know, raised their head again. So uh, you know,
as I started to mention, as we've had declines really
in all of the you know major indexes, uh this
week with uh you know really the Russell two thousand
leading the decline at a three point five percent, And
so you know, a lot of this was driven by
a couple of factors. You know, one resurgence of tariff

(13:10):
conversations and you know, President Trump you know, announced intentions
to increase tariffs on the EU. Negotiations are not going
as planned and and so there's been uh you know,
some threats there and also you know, kind of a
new front now, you know, you know, saying individual tariffs

(13:32):
on companies like Apple and particularly looking at you know,
cell phones manufactured outside of the US. So certainly the
markets did not like the uptick in tariff conversation. And
you know, we saw Apple and several other tech stocks, uh,
you know, feel the pain of that on Friday. But
the other thing, you know happened was, you know, we

(13:54):
saw the bond markets, you know, have some turmoil this week.
And you know, we'll talk a little bit more detail
later in a segment, but you know, you've got a
couple of things happened. Yet you had Moody's Investor Services
downgrade the US credit UH, and that certainly, you know'd say,
spooked bond markets a little bit. And then you know,

(14:15):
we also have the you know, the ballooning deficit and
you know what what that's meaning in terms of uh,
you know, you know, our our total uh lending by
the federal government, and so combination of what's happening with
the sweeping tax and spending package, which there's several estimates

(14:36):
that will add you know, upwards a three trillion to
you know, to our national debt. So concerns, concerns about
the rising national debt, and and we understand that we've
been talking about this, uh for a while, and you know,
at some point there's got to be you know, concerned
about that, and you know, interest payments on those debts
that have now become this second biggest part of our budget.

(15:00):
So it's certainly big concerns. And so what we saw,
we saw the bond markets react to that. So we
had a thirty year treasury you know, finished the week
a little over five percent and the ten year ended
at about four point five. So certainly saw spikes above
even five percent on the thirty year. We'll talk about that.
So the end of the day, you know, we saw

(15:22):
you know, the volatility, the vics increase. It's kind of
considered Wall Street's fear gauge, you know, after you know,
really coming down since early April, it upticked. And so
certainly concern is about you know, the health of you know,
our economy and what is going to happen with interest rates.

(15:45):
So certainly, you know, FED back firmly into conversation. FED
will meet again in June. Certainly you've got President Trump,
who is very vocal indicating where what direction he thinks
Poul should be taking rate, which is clearly downwards. So
so at this point, you know, that's a wrap of

(16:06):
the market before we jump back into the tax discussion.
You know, we've got a caller Paul in Connecticut. Paul,
we appreciate you tuning in this morning, and what can
we help you with?

Speaker 3 (16:19):
Well, I have a good background being in practice in CPS.

Speaker 4 (16:23):
It's a different listener to various shows, and.

Speaker 3 (16:26):
Quite frankly, I allow these apail across the board from investments,
tax policy. So I'm going to make an observation and
then your response. It's not a trap, by the way.
So my first observation is isn't it particularly unappealing awkward

(16:46):
to just target one company like Apple?

Speaker 4 (16:49):
Even though I'm a Trump.

Speaker 3 (16:50):
Supporter and I like his tariff strategy that kind of
equalized things, it seems to me that is contrary versus
in discreet strategy. Right, Do you have a thought on it?
Because it just when when I saw this, right, it
seems that would be like, I know, Apple is a.

Speaker 4 (17:11):
Big number, I know you guys own it.

Speaker 3 (17:13):
Actually it just doesn't seem right. You can you can.

Speaker 4 (17:16):
Comment on that, right if you want.

Speaker 3 (17:18):
Or a point.

Speaker 1 (17:20):
No, Paul, I certainly would comment, and I agree, And
and this is where you know today's information age, right,
is is that really policy direction or is that you know,
President Trump going out and just putting a statement out right?
So so I agree it would uh you know, I don't.

(17:45):
It seems like it would hard for that policy to
really be implemented targeting a specific company, particularly.

Speaker 3 (17:52):
What I was getting at.

Speaker 4 (17:53):
It's not going to happen.

Speaker 1 (17:54):
Not that's if you know, I can't in this administration.
I never say never right in politics, but I will
say I have a hard time seeing that going because
you're right, it is it is you know, a company
that is, you know, putting a lot of wealth in
uh individual's hands and through through its stock performance plus

(18:15):
such an important you know, Uh could I don't.

Speaker 3 (18:19):
Even mean that. I mean if you specifically started going
down the line and saying, well, I don't know how
the law is written. I've looked at some of this stuff,
but it has to be specific to the industry or
a particular S I C or whatever. But the next
one is kind of a wild card. I've worked at
the racetrack nine summers and at Belmont okay, and I

(18:42):
understand I've just looked at I like horse racing. I
do it for fun, but I understand the mechanics of
the business inside out and backwards, because I've consulted to
at least two racing entities or written for it. And
it seems to me that I looked at the occupations
that qualified for the service industry let's call it, that

(19:06):
it didn't include. And I know that people are a
member of the I think ninety nine electrical workersiis, they
get tips, so in theory they may not qualify, which
has absurd to me, if you follow me. The reason
I bring this up is because prior to this legislation,
a discussion with a CPA who is practicing, and I said, well,

(19:30):
why don't we just reclassify how we want to get compensated.
I think this is another example where it's almost very
subjective because there's a lot of people who may get
extra compensation. It's you can't give it.

Speaker 4 (19:48):
An unlimited, you know, pool of people up occupations.

Speaker 3 (19:56):
But I just looked it up, and it's kind of
sketchy to me that it may exclude certain occupations like
you have a client concierge, right, they may not qualify
under the occupation code, but you're calling them a concierge
station if I come in there.

Speaker 4 (20:15):
And give them a tip.

Speaker 3 (20:16):
I'm not getting into whether they reported or not.

Speaker 4 (20:19):
It just seems it seems sketchy to me.

Speaker 3 (20:23):
So you can comment after I get off, or you
don't have to comment. It's just more vening you. The
last one relates to the overall theory of social security
not being text. Well, I looked at the Wharton pen
some model. You know, I've looked at their numbers. This
is not going to happen in my opinion ever, because

(20:47):
it's I'm not saying they may not change and inflation
adjust those brackets twenty five thirty five. I just wanted
your thoughts on that. That's mostly because you guys are pros.
You know what I'm talking about. That's about it, Okay,
thank perfect.

Speaker 1 (21:01):
Yeah, No, Paul, appreciate calling with and and you know,
I will say a lot of these policies right now,
there's a lot of gray area, and you know, I'll
comment on the tips and I'll let Scott talk about
SoC security. I mean, you know tips, you know, you know,
probably a month ago I was having a conversation with
another CPA particularly you know, this kind of opens the door,

(21:24):
right is Like like Paul said, there's there's many forms
of compensation. You know what if I say, well, now,
part of my compensation is let's say I'm a professional,
I'm a CPA doing tax returns, and somehow I figure
out a way to characterry some of my income as
tips to uh to avoid taxes. So you know, I
know they have to put some guardrails on that. And

(21:45):
and you know, no question when you start to take
something like that and put guardrails on, there's there's gonna
be some inequities, There's no question. And uh So I
think as this gets worked through, you know, hopefully some
of those inequities will be will be you know, ironed out.
But when you think about it, it also there's got

(22:07):
to be guardrails otherwise there could be some you know,
significant uh I think fraud and abuse and really figure
out a way to put more income towards tips as
a way to avoid, uh, you know, avoid taxes. Scott,
the SOID security front, anything you know you want to comment.

Speaker 4 (22:26):
On there.

Speaker 2 (22:30):
Not too much about as far as the taxation of it.
I mean, there has been a lot of taughts just
recently about the system as a whole. You know, people
worrying about, you know, our benefits going to be cut.
We know, you know, just given where it stands right now,
the program, you know, it'll be underfunded, you know, by
twenty thirty three. So basically, no major changes are made,

(22:53):
what is being paid into the system will be less
than what is being paid out. So overall, there definitely
needs to be some changes that are made. But as
far as the tax station, We'll see how that one
shakes out, and I will actually circle back to the
conversation on the tax no tax station on tips. So

(23:15):
there are already some guidelines that have been talked about.
Some of the requirements I've seen is the occupation must
be you know, traditionally and customarily receiving tips as of
December thirty first of last year. So again it's sort
of building in some of those far brails that you
can't just reclassify or try to change, you know, who

(23:38):
now is receiving tips when they haven't in the past. Also,
the tips must not be earned through that's the five
service trade or business, which is you know, one type
of UH are certain industries that you know had some
restrictions as far as the one ninety nine game deduction,

(23:59):
the twenty percent cd I a dust and so also
can't be earned through those types of works and jobs.
Also there is limitations on the earners. Can't be a
highly compensated employee, so as of last year's you know
income and can't be anything over one hundred and fifty thousands.

(24:20):
So sure, they'll just be continuing to iron out what
the guard rails are, but there are some that you
know have been supposed so far.

Speaker 1 (24:31):
Great, great, and Paul, you appreciate that call from Paul
and and and clearly you know there's you know, with
with any major legislation in this big beautiful bill is
some major legislation. You know there will be you know,
some things that need to be defined and ironed out
for sure.

Speaker 2 (24:49):
So you know, we.

Speaker 1 (24:51):
Encourage listeners to call in with questions. You know, you
can reach Scott and I at eight hundred talk WGY.
That's eight hundred at eight two, five five nine four nine.
You know, with Paul's questioning on the race, I wasn't racetrack.
I wasn't sure if he was going to go into
some handicapping questions, and I was gonna say, you know what, Unfortunately,

(25:11):
I do like to go to the racetrack. I am
not a good handicapper, so I do. I do have
some friends and colleagues who I do reach out to
from time to time, you know, when I'm at the racetrack.
And certainly, you know, Scott and I are both you know,
in our downtown Saratoga office right now, and you know,

(25:31):
certainly Belmont is you know, is on top of mind
in Saratoga. Saratoga will again be hosting the Belmont Stakes,
and so certainly we'll see downtown Saratoga get very busy
and get a lot of attention while that is going on.

(25:52):
So again, appreciate everybody listening. And so just wrapping up,
you know, final in the market update, we're gonna be
heading into a break here. So you know markets, uh again,
the Moodies down grade and concern about the you know,

(26:14):
the ballooning deficit, you know, certainly had some impact on
the markets. But you know, this is a year where
you know, especially with you know, its tariffs and we've
seen them kick down the road a little bit. You know,
we just we're telling our clients you know, this is
gonna be a year where there's gonna be some ups
and downs. It's certainly you know, we we know we're

(26:36):
not out of the woods, but we also know, you know,
as we saw in April, markets came back the you know,
we're gonna get some more inflation news next week with
the PCE. Inflation has been showing that it's going in
the right direction. Jobs reports are showing that the labor
market is continuing to hold up strong. So you know, yes,

(26:58):
there is uh you know, as the big beautiful bill
is working its way through and our legislature is working
on you know, budget deficis and how that is going
to impact our national debt. You know, it does create
some concerns, but in terms of are there real concerns
about the US and holding treasuries, absolutely not. US is

(27:20):
still is still strong as ever. So we are heading
into our commercial break. We're halfway through the show and
we're gonna be taking a break. We want to thank
you for tuning in with this today and hope you
enjoy the show so far. We encourage listeners to call
in with questions. You have been listening to Let's Talk
Money brought to you by Bouchet Financial Group, where we

(27:43):
help our clients prioritize their wealth while we manage their
wealth for life. Certified public accountant, a wealth advisor at
Bouchet Financial Group in the firm's chief financial officer and
chief operating officer. And I'm joined by my colleague Scott Strohecker.
Scott and I are here actually both working out of

(28:05):
our Saratoga office this morning, preparing to enjoy the rest
of our Memorial Day weekend. Before we went into the break,
we had Paul, I'm sorry, we had Robert from Hadley. Robert,
I hope you were able to stay through the break. Robert,
are you there?

Speaker 2 (28:24):
Yeah, I'm here, great, Robert.

Speaker 1 (28:27):
We appreciate Yeah, we appreciate you listening this morning. Appreciate
your calling and what can we do for you.

Speaker 5 (28:34):
Just a comment on what the last caller had our
questioned about on the care of from India from Apple.
I listened to that same question asked by a reporter
to President Trump and he clarified that your caller was

(28:55):
absolutely right that would you can isolate run company? That
that will be for anybody making cell phones or electronics
outside the country in India. The reason why he mentioned India.

(29:16):
Is Apple just announced there what is it, four hundred
million square foot or over the four hundred billion dollars.
It was some some saggering amount a huge factory that's
being announced to be built with an India. And he says,
his comments was, if they want to build it, they

(29:37):
can pay the fort. But if you don't want to
build it, we want it within the USA.

Speaker 1 (29:46):
Right right, Yeah, absolutely, And I appreciate your calling and
adding some more color. And certainly, you know, I will
say President Trump has had a you know, a on
and on again all again a relationship with Tim Cook,
the CEO of Apple, and I think you're right, you know,
he's he doesn't love everything that our tech CEOs do.

(30:08):
And uh, you know, I think this was clearly he
was sending a shot across Tim Cook's bow by saying, uh,
you can go ahead and do that, but you're gonna
you're gonna feel some pain. You're gonna pay the price
for doing that. And you know, certainly we've seen, you know,
President Trump has not been shy about uh, you know,
putting things out on social media, making comments, uh as

(30:32):
a way to you know, I I think get uh
get companies to get in line with what he's he's
looking to do.

Speaker 2 (30:41):
Uh.

Speaker 1 (30:42):
Now, ultimately, again, will that be carried out, will that
come into play? I think, you know, there's a there's
a lot that needs to happen between those statements and
actually something like that being implemented. But uh, you know, appreciate, uh,
appreciate the calling. And you know, there's no question, you know,
the Trump administration, you know, at this point is you know,
showing that they're serious with tariffs.

Speaker 2 (31:03):
Right.

Speaker 1 (31:03):
They believe strongly in you know, moving manufacturing to the
US and and that's a good thing for our economy,
and you know, certainly they want to look like they're
coming from a position of strength in these tariff negotiations.
So certainly, you know, we saw some of that, and
and again we saw markets react to particularly you know,

(31:27):
isolating certain segment of the tech industry. Uh, particularly so
appreciate uh Robert calling in with that, and you know, uh,
you know, Scott started off first segment, you know, talking
about some of the aspects of the big beautiful tax bill,
and Scott, you want to continue through with that discussion

(31:51):
and provide a little bit more detail.

Speaker 2 (31:55):
Yeah, thanks, John, I mean I could definitely go on,
you know, e to the end of the show and
probably do a whole other hour on you know, some
of the provisions that are part of this bill, but
I just want to focus in on to other ones.
So there's been a lot of talk about the salt caps,

(32:16):
you know, the state and local tacks. So currently you're
limited to ten thousand dollars for that deduction as you're itemizing.

Speaker 5 (32:27):
Under the.

Speaker 2 (32:29):
Proposal of the One Big Beautiful Bill, the limitation would
increase to thirty thousand dollars starting next year. So definitely
an increase on the limitation, So definitely that's been in
the spotlights. And then another provision and actually a new
provision which has recently changed names. It went from MAGA

(32:53):
accounts to now you know, being proposed they're called Trump accounts.
So these would be accounts basically saving vehicles for children.
You could open one for children. A child before their
least birthday, you can contribute you know, the five thousand
dollars each year until their age team's birthday. It would

(33:17):
be a have tax deferred growth. There wouldn't be any
sort of deduction on contributions, but again you get that
tax deferred growth and really the big piece that people
are talking about is that you know, very federal government
would open and contribute one thousand dollars to these new
accounts for every US citizen born, you know, this year

(33:40):
through twenty twenty eight. So those are just two again
of the many provisions that are part of the new,
one big, beautiful bill. And while it is important to
you talked about and understand what is going on with
this bill, it's a far you know, still far way
to go until it is fully passed and becomes lass.

(34:02):
So definitely want to continue to wait and see what
is going to be pushed over the finish lines. But
all in all, there is you know, talks on how
much this full costs and the overall national debt, and
it's in the range of about six trillion dollars. So
it definitely has an impact on you know, everybody's life,

(34:25):
business to a degree, and even the treasury market, which
we've seen recently. Though it definitely isn't the only contributing factor.
And I'll let John uh dive into that de bit deeper.

Speaker 1 (34:37):
Now, appreciate that information on the tax bill Scott and
Scott mentioned, you know, it is made its way through
the House now through the Senate, we'll see what happens
and what modifications have to happen to it. But you know,
as you know, we mentioned, we did see you know,
turmoil in the bond markets this past week, and we

(34:58):
saw yields serve you know, thirty year over five percent,
you know, ten year approaching four point six percent, and
you know, certainly we're seeing investor apprehension over our nation's
you know, fiscal trajectory, which no question is getting concerned
and and you know, we had intensified with Moody's decision

(35:21):
to downgrade the US credit from a triple A, you know,
and doing so, they cited, you know, concerns over the
large deficits and the rising interest costs, which certainly have
an impact. And you know that this downgrade, you know,
really aligned with what the SP S and P and

(35:43):
Fitch had already done. And you know, it's interesting when
you look back, you know at prior downgrades. You know,
the S and P downgraded our debt you know credit
down back in August twenty twenty one, and you know,
at that point we saw significant reaction. You know, markets
felt by close to seven percent. Took a little while

(36:04):
to recover. But all, you know, all downgrades in our
credit are not equal. You know. In twenty twenty three,
that's when Fitch downgraded US from you know, the US
credit from triple A to double A plus, and you know,
we had a small impact in the markets. You know,
the SMP declined by you know, less than two percent

(36:24):
and then and then recovered, you know, So certainly we
saw some reaction this week. Now what will come of
this again, There's some investors who say, you know, the downgrade,
what does it really mean? But certainly I think when
you couple that with a couple other events, right, we
had you know, this week, we had an auction of

(36:46):
twenty year treasuries and saw some lighter lighter demand, you know,
and I think the lackluster performance, you know, really underscore
the market sensitivity to the increase of the supply of
treasuries at a time where seeing an expansion of fiscal policy.
So just certainly some concerns. So Wednesday, you know, we
had the treasury auction was again weaker than expected, and

(37:10):
the weak auction you know, definitely reflects I think investor
concerns over you know, where our national debt is going,
and some of the impacts that will happen out of
this potential tax package. And you know, the treasury the
thirty the thirty year treasury surge to five point one
which it's highest level in you know, since twenty twenty three,

(37:33):
and the ten year climbed to four point six percent,
and you know, the stock market reacted negatively. So you know,
when bond yields surge, right, they don't just affect the
fixed income portion right of our portfolios. They shake the
whole foundation of financial markets because you know, you think
about it, rising rates are like gravity. They pulled down
stock valuations. They shrink some earnings potential, you know, and

(37:54):
really you know, make make investors question, you know, where
where how much risk they wanted to take and where
should they put that? So you know, when you think
about you know, rising yields and what are some of
the costs of that, you know of that you know
certainly increases cost of capital for companies. You know, many
companies borrow and this increases their their borrowing costs, and

(38:17):
you know, higher borrowing costs will decrease corporate profit profitability.
So that's some concerns there. You know, certainly in the
tech sector, right, especially with growth tech. You know, value
you see pressure on valuations when you have rising yields,
right because you know, tech companies are largely valued on
future earnings, and when interest rates rise, you know, the

(38:38):
present value of those future earnings fall, so that that
can lead to corresponding you know, dropping stock prices. And
many times it's a flight to safety. You know, investors
in times like they say where, you know, where can
I go for the safest haven? So, uh, certainly, when
you see bond yields as high as they are, you
can have individuals to say, hey, maybe it's time to

(39:00):
pull a little bit out of the stock market. If
I can get a yield of five you know, five
percent and lock that in or close to five percent,
you know, that sounds that could be attractive. Certainly. Uh,
you know, still with the phenomenal credit worthiness of the
US government. So certainly when you see the treasury yields spike,
look they had like we saw this week, they're not

(39:23):
isolated just to the fixed income. They're going to bleed
through and affect our equity markets. And that's what we saw.
And again you know it's our national debt is continuing
to rise and and you know this, this has been
happening for years, and when you look at the charts
of how quickly it's gone up, you know, it's really

(39:45):
in the last you know, five to seven years where
it's significantly increased, and it's one where is it? You know,
I know President Trump, you know it's you know, one
of the things he's touting is getting fiscal control right,
getting our you know, you got to art. If you
want to get our debt down, you just start with
you know, getting our budget deficit down. So certainly that's

(40:07):
been a focus. And also generating additional revenue. So you know,
the bond market is definitely you know, on edge a
little bit right now. And you know this also puts
the pressure on the Fed. What's the Fed going to do?
And we know, you know, next Fed meeting is you know,
middle June. Certainly, you know President Trump has been you know,
very vocal on what he thinks they should be doing

(40:29):
with rates, and that's clearly declining. It'll be interesting to see,
you know, their reaction to this. You know, many think
that in light of what's happening with the bond market,
you know, they'll see it'll be hard for the Fed
to do anything at this point. So you just again,
so a lot of the volatility we saw in the
markets last week, you know, really driven by tariffs you know,

(40:52):
rearing their head again and then some of the concerns
that we're seeing in the bond market for sure. So one,
I just want to encourage listeners to call in with questions.
You can reach Scott and I at eight hundred talk WGY.
That's eight hundred eight two five five nine four nine.

(41:13):
So here we are, you know, end of May, and
this is graduation time, whether graduating from colleges, graduating from
high school. So Scott has a you know, some informations,
a little segment prepared about you know, graduating season and
what that can mean to investors, what it can mean
to you, whether it's you're a graduate who's listening, or

(41:37):
you're a parent or a grandparent. So Scott, why don't
you take over this segment?

Speaker 2 (41:44):
Yeah? Thanks? John. John's saying it is the top graduation season,
whether that's college or high school. It's time and really
a transition of going from you know, being a student,
whether that's full time college to maybe starting your first
full time job. So it's a great time to start

(42:06):
some mark financial habits, and I saw it with sort
of list of ten practical high impact hips that you
can use either as a recent grad yourself or really
a lot of them are applicable to anybody out there
that's working as well. So start with Number one is

(42:27):
understand your total compensation, and that would be not just
your salary obviously, think it's a lot of the focus,
but your total compensation would include things like your four
one K mats you receive from your employer, your health
insurance that's offered HSA and FSA accounts as well, and

(42:48):
then possibly any sort of stock options and bonuses that
are part of your total compensation. Number two very important
that you create a budget. When you set your budget,
you want to make sure that you're using your net
take home pay to really help build that framework, because

(43:09):
if you don't have a budget, you really just aren't
setting yourself up for a financial success, because you know,
if you can't peak to a budget, you're just going
to end up you know, overspending potentially, So really make
sure that you create a budget. Start off number three,
make sure you sign up for your employer retirement plan.

(43:32):
If your employer offers a match, try to contribute at
least enough to get the full match. If you aren't
able to do that initially, you know, maybe you build
that up over time to get that full employer match.
Number four. Automate your finances just to help save time
and really just say make it so as a recurring

(43:53):
things you want to try to automate, you know, fill pay,
saving transfers and also loan pay. Just again, it just
helps creating a great framework and making sure you're not
missing it or having to be subject to late sees.
Number five. Starting an emergency fund. You can start small,

(44:14):
maybe do a couple hundred dollars to start off, and
then work towards building up to you know, three to
six months worth of expenses in that emergency fund. And
it's also important to try to put this emergency fund
into a high yield savings account rather than a checking account,
so again just to get a little bit more of

(44:37):
a yield and you know, rather than sitting there and
you know, most checking accounts these days, okay, in very
small you know interest rates. Number six. Build credit responsibly.
You know, you don't want to go out and just
open a bunch of credit cards that you don't need
to make sure that you're just overall monitoring your credit

(45:00):
as you you know, possibly apply for loans or do
open credit cards. Number seven, avoid the lifestyle trap. Just
because you're now making some money, you don't want to
go out and spend it all and make a bike
of purchases they don't really need. So again that goes
back to you know, number two, creating a budget and

(45:22):
then staying within that budget. Number eight, Learn to read
your PA stuff. Know how much you know is going
towards tax, is your four to one K and other
deductions as well, just so you can see if there's
any error there. You know, possibly you're under recording or
not maxing out your constribution as maybe you're intending to

(45:46):
Number nine that you know some one year financial goals.
These one year financial goals could be really anything, you know,
as a couple of examples, you could say, I would
like to save X amount into my emergency fund by
the end of the year, or possibly pay off a
credit card or student loan that you have as well.

(46:07):
So really just setting yourself some you know, one year
goals to really help create a framework for yourself going forward.
And then just number ten, ask questions early and often
you know, in today's day, a really you know it's
going to be afraid to ask questions of whether it's
your boss, HR or other colleagues or even have financial advisor,

(46:32):
to really make sure that you better understand what's going on.
So definitely speak up, ask those questions, and you know,
look to get the answered that you need.

Speaker 1 (46:45):
That's some great information there, Scott and I will say,
this is one where parents and grandparents you can have
a huge impact if you have that conversation with your
child or grandchild, I will say, and you know, and
Scott can comment on this too. You know, when we're
doing financial planning for our clients. You know, the clients

(47:08):
that we've seen who've had controlled spending that that have
allowed them to invest and invest consistently over a long
period of time end up with the most successful financial plans.
And it's not necessarily the individuals who make the most

(47:29):
amount of money or who have during their working life.
It's those who have discipline spending and disciplined savings. And
you know, when you're transitioning, whether you're going from you know,
high school into a trade, or whether you're going from
college into your first job, you know that is the
time where if you get it right, and it doesn't

(47:49):
have to be in a huge way getting it right,
but if you just get it right, that can be
so impactful for your financial future. And I would just say,
you know, one, if there's any graduates listening, to listen
and do this. But if you, if you're a parent
or grandparent, have that conversation. You know, I know some
kids I act like they don't want to They know
everything and they don't want to hear leave me. I've

(48:11):
got three children, and uh so I understand that, but
they do listen. They they are an off in the
moment acknowledge that, but they pick up on those nuggets.
And I would just say it can be the most impactful.
And even if you haven't done this yourself right, it's
it's not that you have to be sitting on a
pile of casher investments to be able to give that advice, right,

(48:33):
it's you know, let's face it. You know, you know
we're not all perfect, and things happen and we make
decisions in life. Sometimes they're the right decisions, sometimes they're not.
But I would just say, you know, if you have
someone graduating again high school going into a trade. This
isn't just for college graduates. You know, they're they're going
to start making money. And you know, when you start

(48:54):
getting your first job, you you have some tendencies. You know,
you may have friends who are buying wear cars. I mean,
I'm actually shocked by the the amount of new cars
I see out there, and high end cars and who's
driving them. It's it's kind of crazy. But also apartments.
I meant, you know, moving out of the house, going

(49:15):
into apartment, you know, maybe over buying an apartment. And
I will say once you know, it's just it's sad
but true. Once you start spending that it is so
hard to dial that back and say, well a year later,
well I now understand how important it is, and now
I want to get you know, fifteen percent into savings,
either through a four or one K or the other.

(49:36):
If you've already committed and you're in that, it is
so hard to pull back. It is so hard. And
so I would just say have those conversations and you know,
because it really can be impactful and whether they can
even if they can only start saving, you know, if
they do work for an employer has an employer based

(49:57):
plan like a four H one K or four three
B only if they can even if they can only
start small. It's about you know, being involved, being consistent
and then letting that that time, you know, work on
the behalf. And and I would just say again, share
that knowledge because it can be uh, you know, very
impactful uh to an individual that they listen and uh

(50:21):
and start putting some money aside.

Speaker 2 (50:23):
You know.

Speaker 1 (50:23):
So we're we're you know, nearing the end of this
morning show. We appreciate uh you tuning in again. Apologize
for some of the technical issues we had during this show,
but uh, you know, life throws us some curveballs every
once in a while. And Scott and I certainly you
know reacted Scott, appreciate you being on the show this morning.
And you know, Scott, who is just a great a

(50:45):
great colleague, great tax knowledge, appreciate him having on you know,
and again remember to you know, check out our website,
you know, bouchet dot com. You know, for the upcoming
seminar we're gonna be having. You'll see a planning with
a purpose tagline. If you click on that, it'll bring
you on how to register. Again, we want to thank
you for tuning in the show. Hope you enjoyed it.

(51:07):
I know that Scott and I did. Be sure to
tune in next week for another great show you have
been listening to 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. On again,
I want to thank you for tuning in this morning.
Hope you enjoy the rest of your holiday weekend and

(51:28):
hopefully the weather will get a little bit nicer you
can go out there enjoy some of the festivities.