Let's Talk Money

Septmeber 14th, 2025.

Episode Transcript

Speaker 1 (00:06):
Good morning everyone. My name is Martin Shields. I'm the
chief Wealth Advisor at Bouchet Financial Group and it's great
to be here with you on this absolutely gorgeous sunny
Sunday morning, and it's as always as great to be
able to take any questions you may have regard to
your financial planning or investment management concerns, and I encourage

(00:28):
you to call in with those questions. You can reach
me at eight hundred talk WI. That's eight hundred eight
two five five nine four nine. Once again, it's eight
hundred eight two five five nine four nine. Or you
can email me. If you're just too shy to get
on the radio, you can email me at ask Bouche

(00:50):
at Bouchet dot com. That's ask Bouche at Bouchet dot
com and it's spelled b O U c h e y. So,
however you want to be in touch with me, email me,
give me a call, but give me a call, we
can chat. I give you some insight on your questions,
whether it's regarding the markets or any funds planning, tax

(01:12):
planning questions. Another great week in the markets. The queues
or up almost fifteen percent. That's a Nasdaq one hundred
almost fifteen percent. Year to date, the S and P
five hundred is up just about twelve percent, so hitting
all time highs throughout this year. And you know, just really,

(01:35):
what's driving this Because we get this question what is
driving this strong market, it's earnings. Earnings just continue to
come out to be very strong, and it gives you
some perspective. There are a number of different areas where
there's strength out there from a market perspective, but certainly
by all means, it's technology and it's AI driven. So

(01:58):
you may have heard that Oracle had a huge run
up this week. Larry Ellison, who is the founder and
CEO of Oracle, he's over eighty actually, and he became
the for a period of time, he became the richest
man in the world. He wanted to pass Elon Musk

(02:22):
and Oracle really the company that has evolved quite a
bit over the last number of years. If you recall,
it was a company that did very well during the
nineties tech boom, but has continued to morph itself and
its business model and now really is in the AI space.

(02:43):
But these companies in that space, not only do they
just have tremendous amount of revenue coming in, but they
also have extremely large profit margins, and so you just
have more and more of these companies in that space
doing incredibly well. And then also as the revenue increases,

(03:04):
their profits increased tremendously. And we've talked about this. You know,
as we look forward, we've been overweight technology since well
before I joined the firm, and you know, it's just
definitely a space that not only is it the fastest
growing area from a business perspective, but it has the
largest profit margins by all means. And so you do

(03:27):
see strength in general with the economy, but you really
see strength in that technology space, and that's what's driving
this market higher. Now we've talked about this, you could
have a situation where valuations are a little bit stretched.
So when you talk about valuations, is what do you
pay for that stock for the earnings that company has,

(03:51):
and the measure that you look at it. There's different
ways to evaluate it, but one of the more common
ways is the forward our earnings for the next twelve
months and that that pe ratio for the next twelve
months on average is around eighteen or nineteen, and right
now it's up at twenty two. So it's a little

(04:13):
bit higher than we've seen. But this is also time
where some of the growth that we're seeing in some
of these bigger names in the technology space is also
greater than other times as well. So you know, that's
the way this sets up, which is when you have fast,
large growing companies, they tend to be worth more money, right,

(04:36):
so that pe that you're willing to pay for that,
the price to earnings ratio is going to be higher,
and that's what we're seeing. I think what's amazing is
if you look at the top twenty companies in the
S and P five hundred top twenty companies, they make
almost fifty percent of the S and P five hundred.
And you know, we've talked about this. The S and

(04:58):
P five hundred is the biggest five one hundred companies
in the US, but it's marketcap weighted, so the biggest
companies like Navidia and Microsoft and Apple, they make up
the largest part of that. So Navidia is seven almost
seven and a half percent of the SP five hundred,
Microsoft is almost six and a half percent, Apple almost

(05:21):
six percent, Amazon, four, Meta, which is Facebook, three Broadcom,
which is in the tech space as well at just
under three and then Google there's two different share classes combined,
that's at five percent, and finally Tesla at just over
two percent. So again you think about that, So the

(05:42):
top twenty companies, there's five hundred companies that are in
the SP five hundred, but the top twenty companies make
up almost fifty percent of that weighting, and they make
up even a larger part of the profits. So again
that's the thing you have to appreciate, which is as
we go forward here, you can see some things that

(06:03):
look a little bit distorted as far as you know,
both what is going on in the economy and then
what is going on with the stock market, and that
we've talked about this before. Those are two different things.
You know, if you've recalled during COVID, you know, you
had an economy that was really not doing great, a

(06:25):
lot of unemployment, but you had the stock market railing
higher throughout you know, most of COVID. And really there's
two elements there, right. So the one is that the
market is always forward looking, right, It's forward looking anywhere
from six to nine months to twelve months out. So
during COVID, even though that the economy was struggling, for

(06:49):
the very early part of COVID that the market is
always saying, Okay, what's going to happen beyond that, and
there were strong expectations of growth. The other thing is
that you could you can have situations where the economy
is struggling, but at the same time, you know, you
actually the profits from corporations are doing quite well, and

(07:12):
that's something that you could you potentially could see. And
the way this sets up is that you know, right
now some of the labor numbers are showing some weakness,
right and I highlight this and on my LinkedIn post,
there's a graph that's out there. If you go on
LinkedIn you can see that I commented on it. It

(07:34):
basically shows that as the unemployment rate hits a low,
which we did back about a year or so ago,
in the three percent range, and it starts moving higher
that quite often after that occurs, you can go into
a recessionary period. It's not a given, so it's you know,
it's like anything in business. It's not a musk that's

(07:55):
going to happen, but that that kind of occurrence, you do,
you see that pattern that exists, So the unemployment rate
goes down very low, hits a low, and as I said,
we did about a year or so ago at three
point seven percent, starts to move higher and as it
moves higher, they're it can quite often move higher very quickly,

(08:16):
and there could be a recessionary period. So we're starting
to see unemployment tick up a little bit. You probably
have heard that some of the monthly numbers as far
as new jobs added is declining. But you know, I
think the thing that appreciate is there's a number of
different factors going on here that could distort what may

(08:37):
actually be happening with the economy and also with corporate profits.
One of those things is that you know, it is
not on the realm of possibility that you can have
weakness in labor numbers. In partnering by AI right, companies
are maybe hiring less, but from a market perspective, as
they're hiring less, they're actually able to grow profit. It's

(09:00):
even more so you could have this situation where you
have some elements of weakness and particularly in the labor markets,
but from a corporate earnings perspective, things are even better
than before because they're not hiring as much. That's keeping
their cost slow. But overall, from a technology perspective and
the revenue associated with that, things continue to increase and

(09:23):
the profit market margins grow. The other thing is, you know,
with immigrant immigration being so much lower, and also the
demographics that we see in our country with more and
more baby boomers retiring, that can also distort things from
a labor market perspective. So it is going to be
interesting to see how this plays out. But as of

(09:45):
right now, you know, we have this happy medium, this
balance between you know, some of the weakness that exists
in the economy and then all just in general corporate profits.
Now we'll have to see what happens next week with
JA with the Federal Reserve, they'll be looking to potentially
lower interest rates, I think right now, given the weakness

(10:08):
in the labor markets. And then also you know, inflation
has increased, but at the same time it is still
at a reasonable level. Right, So the target for inflation
is two percent, but there's nothing magic about that number, right,
That's a number that was established about fifteen twenty years ago,

(10:31):
and you know, there's nothing that says it has to
be two percent versus two and a half or three.
And I think that with some of the weakness in
the labor markets. You know you're going to probably see
the FED. I don't see them reducing rates by more
than twenty five bases points, so that's one quarter of percent.
But they may also reduce rates in future meetings as well.

(10:54):
That's that's the potential. We're going to go to an
email we have from Ray. It says, morning and thank you.
I am seven years old, retired and debt free, including
a paid for new home. Well, congratulations on being retired
and deaf free. That's fantastic. I have two thirds of
my portfolio and equities and one third in cash, namely CDs.

(11:16):
The cash portion currently will allow me eight years of
living conservatively when coupled with my monthly Social Security discoursements.
My question is at what point should the declining interest
rates prompt me to move some of my cash into equities,
as the interest rates would only be parallel inflation. I

(11:37):
enjoy the comfort of the cash balance. However, I should
be complacent and do want to make prudent decisions to
sustain my future earnings. The cash account is in the
taxi account, the equities in a row. So great question.

Speaker 2 (11:52):
Ray.

Speaker 1 (11:54):
Again, this is the challenge that people are going to
see who have monies in CDs or or in a
money market fund that as the Federal Reserve lowers interest rates,
that the yield that you get it's been very good.
I mean it was up above five percent. Now it's
in the mid four percent range. You know, if again,

(12:15):
if they start cutting interest rates more dramatically, that could
go down below four percent. And what raise question is, hey,
as that goes down and it gets maybe closer to
three percent, that's going to be really just ad inflation.
So really, what you're doing is not really you know,
growing your assets above inflation. You're just keeping up with inflation.

(12:36):
So what I would tell you Ray is a couple
of things. You know, if you have two thirds in equities,
that's a good ratio. Most of our retirees are in
what's called our growth and income model, which is sixty
percent equities, forty percent bonds, cash and alternative. So you're

(12:59):
at a good level there. What I think you probably
need to be doing is moving from cash into a
diversified bond portfolio. And the reason I say that is,
you know, we've talked about this before. Back when interest
rates rose so dramatically, we went all out of bonds
we didn't have any money into bonds because they were

(13:19):
impacted in such a negative fashion. Bonds for twenty twenty
three were down eighteen percent. But after rates were raised,
we went into bonds pretty strongly, and the reason was
we wanted to capture those higher interest rates. So there
was about a year or so ago the US ten

(13:39):
year treasury rate was over was basically five percent, right,
so you're basically if you bought a ten year's treasury,
you would be locking in at that point to a
five percent interest rate for ten years. So very powerful
to have that in place. You think about it, almost
no risk and you get five percent annual interest that

(14:01):
is not taxed at the state levels, only tax at
the federal level. So we moved a lot of our
clients' money into diversified bond funds and or we bought
individual treasuries, trying to go as far as we could. Now,
what I would tell you is Ray, is that I
would recommend moving more not into maybe equities, but moving

(14:22):
more into a diversified bond fund. Right, so that bond fund,
you know, depends on which one year in could be
earning anywhere from four and a half to five percent
and now you're buying those bonds that have that longer maturity.
They could you know, could be five years, could be
seven years, could be ten years. Now, what happens when

(14:43):
rates go down on the short end, which is what
will happen when the Federal Reserve reduces the federal funds rate,
the value of those bond funds actually goes up. Right,
So there's the inverse relationship between interest rates and bond prices.
So this would actually bene that you both by locking
in that higher yield if you buy those bond funds

(15:05):
with that cash, and then also the value of those
bond funds would appreciate if you want to sell them.
So I think that is a better route than adding
more to your equities. Now, the other thing we do
have in place for our clients really primarily in our
bond cash and alternatives bucket is hedged equity. Right, So

(15:28):
all that is there's a number of different financial fund
providers that have it's an ETF and that it tracks
in general, it could track different indices, but there's one
that tracks the SDP five one hundred and they use
options stock options to put a hedge on the downside

(15:51):
for that ETF so the way to view this is
that you can get it heads at different levels, so
down ten percent, down fifteen, down, twenty, and so they
if the market starts going down, you're really not going
to feel much downdraft in that position until the market
gets down by more than that amount. So if you

(16:13):
buy the ETF that is heads down ten percent, you're
going to see a little bit of a downdraft aft
the market as the market goes down, but in general
it's not until the market goes down by more than
ten percent that you really start to feel that downdraft.
So if you're going to go and add more of
equities to your portfolio, but you want some element of protection,

(16:34):
this is a great way to do that. And now
the only thing is the way that that's paid for
that heads on the downside is that there's there's a
camp on the top side as well. So they use
options basically selling options on the top side basically a
covered losses, and so you've got to appreciate that with

(16:56):
that hedge that you're getting, you're going to get capped
out anywhere it depends anywhere from eight to fifteen percent.
So again for individuals that want to maybe take dollars
from a more conservative part of the portfolio, put them
into the equity market, but not take on all the
risk of stocks, especially given some of the economic concerns

(17:18):
and also maybe some of the valuation concerns. It's a
great way to do that. You know, we have those
in our portfolio in are really in our alternative sleeve,
and they're doing really well. I mean they're up from
anywhere from seven to eight to nine percent a year today,
which is a great return on a more conservative part
of your portfolio. So that's another option to consider, is

(17:42):
you know, if you want to move out of cash,
you want to put some money into bond, but you
maybe also want to put some in additional equities, but
you're a little bit concerned about some of the economic
environment but also concerned about valuations. It's a great way
to go as well. Move on to a different topic,
but before we do, if you have any questions, again,

(18:04):
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 at
ask Bouche at bouche dot com. That's asked Bouche at
Bouche dot com and Bouchet is spelled b O U

(18:25):
d h e y dot com. So, you know, one
of the things I wanted to mention. If you read
the Albady Business Review, you will see our firm was
written up in the past month. Actually now it's been
two months end of July. Myself, my colleague Ryan Bouche,

(18:47):
my colleague John Malay, and our other colleague, Lauren Bouchet
have all become shareholders or partners of the firm. And
that article does a nice job just kind of talking
about that transition. And you know, it's been a great
to become a shareholder of the firm, if you've been
listened to the program at all. I've been with the

(19:09):
firm now for thirteen years. I moved up with my
family from Virginia, originally from upstate New York, but I
met my wife down in Washington, d C. She's also
from upstate. She's from way upstate, the North Country, Canton.
And when we had three little kids at the time,
you know, we loved Virginia, we love d C. But

(19:31):
we knew that we probably wanted to move back to upstate.
And I'm from Binghamton originally so this was a good
compromise as far as location, and you know, it was
just an amazing move for us. We tell Steve all
the time that you know, it's just it could be better.
We love this area and to have been fortunate enough
to find Steve and Bouchet Financial Group and to be

(19:54):
able to work here as a partner, it's just a
fantastic thing. So if you have chance to read that article,
you know, I encourage you to do that. And you know,
I just want to say on the radio, thank you
to Steve to have me as a partner. It means
a great deal to me and feel very fortunate to
be in this role. We're going to go to the

(20:17):
phone lines. We have John from Saratoga. Johnny there, Yes,
I am what can I do for you?

Speaker 2 (20:27):
So I'll try to keep this as quick as I can.
So I am sixty two, looking to retire next year.
My wife is already retired. She was a school teacher.
She got out a little early, but they were changing
her health care benefits, so we locked in her healthcare benefits,

(20:49):
which are my healthcare benefits. So so that standpoint, we're
all set. My total assets if I include the lump
sum pension that I'm gonna get in lumpsub pension is
seems to be the value of it. If interest rates
go down, the lump sum goes up.

Speaker 1 (21:11):
That's right.

Speaker 2 (21:11):
And yeah, so and I I I'm just a lump
sum person more than I am an annuity person. So
but in the end, I'm going to have about seven
to eight million of assets. And so I've been meeting
I've been meeting with Fidelity, and you know, because I
don't I'm not going to be drawing a pension and

(21:32):
I don't want to get my Social Security until I'm seventy.
She would start drawing social Security at sixty two. Her
pension is not that much. It's maybe fifteen hundred dollars
a month. He's been talking to me about taking a
chunk of the assets that I have and putting it

(21:55):
in an annuity. Now I know, you know, every time
I Steve talked about annuities, he's like, look out, somebody's
getting fees off of this. And so I asked him
that question. I'm like, I don't like this. I don't
I just don't like the term. And he's like, no,
I'm getting a very very very small fee A point

(22:17):
one or something like that. But it's a way to
basically start an income stream for me because I really
otherwise without that, I'm gonna I'm gonna have to start
to take money out myself basically, you know, live off
my cap I'm out of the seven or eight million,

(22:39):
I would say forty five percent of it is in
a brokerage account which has got high capital gains that
I'm gonna have to pay. The rest of it is
obviously my four oh one K, which is fairly hefty.
And I know R and ds are going to kick
in when I'm seventy five. And when I look at
those numbers, those are like crazy. It's like, you know,

(23:00):
taking out more in an R and D than I've
lived off of my entire life. So I'm just sure, Yeah,
I'm just and I know there's a I know there's
probably a possibility at some point in time if I
just lived off of capital gains that I could I
could do some R and D conversions when my when
my income isn't doesn't appear on paper to be high,

(23:24):
right because I'm looking off of capital gains. So I'm
just curious about this annuity piece of it, and that
you know he said it's a it's annuity offered by Fidelity.
It was paying like five or six percent just as
a way to give me a constant, steady, uh income stream,

(23:46):
you know for a while. Yeah, anything you can comment on.

Speaker 1 (23:53):
Yeah, I'll start the question. Gonna have said we're gonna
be going to commercial break here pretty soon, but let
me sure want to start your answer. You know, one
just off the top of the bat. You know, you
went and you got the you went and you got
the lump sum payout versus the annuity piece, and how

(24:13):
you're potentially talking about taking that lump sump or some
element of it and getting annuity right, so you can
appreciate you're like, oh, wait a second, you maybe should
have stuck with a pension if that's what you're thinking.
But all I would tell you is this is and
again i'll go in to more detail we come back
from the break. But you know you made that decision.
It sounds like you're very comfortable with that element of

(24:37):
having stocks. I would right away say that's probably not
the right course just because you're comfortable with that. But
we're gonna go to a commercial break and I'll finish
when I come back, you'll listen to Let's Talk Money,
brought to you by Bouchet on Instagram. Welcome back, folks.
For those of you who are just joining us, my
name is Martin Shields on your host today Let's Talk Money.

(24:59):
It's great to be with you again on this gorgeous
Sunday morning. I tell you can get used to this
weather right Sunday every day. Uh, you know, cool evenings,
great sleeping weather. And uh, I think September I'm gonna
make I'm gonna make it official. It's it's our best
month of the year. It seems like that has been

(25:19):
the case the last number of years. That not too
much rain. Maybe we even need a little bit of rain,
but that's not too much rain, but plenty of sun
and just perfect weather. So I hope that you're get
out to enjoy this great day. And as always, if
you have any questions, you can either call in with
those questions at eight hundred eight two five five nine

(25:43):
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. That's ask Bouchet at bouchettes
dot com and at bouchet is spelled b o U
d eight ey dot com. Well, let me go back

(26:03):
to John's question. It was a great question, John, And
you know, I could tell you really kind of uh,
you know, thinking through things correctly to try to get
you to a great spot. And you know, just from
the way you talked, uh, it seems as though you've
you know, done a great job of you know, you know,
overspend and that you've done a great job saving and

(26:24):
that's how you've got you've a masked such wealth. But
let me give you let me just take a step
back and say, in general, when we talk about annuities,
we're in I think Steve would agree with this as well.
We're not really against the idea of annuities, right, an
annuity in and of itself. We have clients that we've
helped get annuities because it worked for them. Right, There's

(26:45):
different situation situations where having that annuity was the right thing. Now,
what we would say is in most cases it's not,
But in different situations when we talk to the client, uh,
and based on what their needs and desires were, an
annuity was the right thing, and we helped facilitate them
getting an annuity. So again, it's not as though we

(27:07):
think an annuity in and of itself is a bad thing.
The problem is is the way it's sold, right, and
that's it is sold to people. And more often than not,
the problem I see is they come in and they
have these annuities. They have no idea why they have them.
If you have an annuity, you better know exactly why
you have them. So let me give you this scenario
where it would make the most sense for somebody to

(27:29):
have an annuity. So let's say that you are close
to retirement, or like John is going into retirement, you
are definitely afraid of the stock market, right, you know,
anytime the market goes up or down, you are really
just you can't stomach it and you end up putting
a lot of your wealth into cash. Now that doesn't
sound like John. You know, he said he had a

(27:52):
sizeable amount into a broken account, and so it doesn't
really sound like he's overly concerned about the market. You
know'll probably stay andered uh frustration or concern when there
is market volatility. But that's that's pretty normal. And then
the other reason, and I don't know about the answer
to this, but if you don't have any children. You're

(28:12):
not concerned about legacy right where you just you know,
you're a single person, definitely afraid of the market and
you don't have that. You're not thinking about, Hey, I
want to pass these assets on. From your perspective, you
can spend everything down to zero when you die, and
and you're good with that. Now, in that situation, maybe

(28:34):
putting some assets into an annuity could work because now
that person has that element of that fixed income that's
out there.

Speaker 2 (28:44):
Now.

Speaker 1 (28:45):
The problem I will tell you is, you know, for
our firm, if we're going to recommend an annuity, our
fee doesn't change. Everything stays the same. So I we
don't care if you're in stocks or bonds or an annuity.
It doesn't matter to us. We're completely different. So if
I'm going to give you a guidance or advice on that,
it's purely because I think it's your best interest. Now,

(29:07):
I don't know this for certain, I don't know exactly
what the fidelity advisors are paid out. I can almost
guarantee you that they get paid out more for an annuity.
They just do. Because you think about this with an annuity,
what's happening is let's say you took a million dollars
and you put it with that and also it's a

(29:27):
Fidelity annuity, right that's the other thing too. So everything,
if you know, you go to a Schwap person or
you go to Fidelity, all their products are all for
their firm right there. They're not picking the best out there.
They're basically going with whatever company they work with, which
is also a conflict of interest right there. But they

(29:49):
they each one of the decisions, they get paid differently,
and it's interesting. I think I brought this up on
the show about the month or so ago. We're in
the process of hiring advisor, and I went on and
looked at a number of different posts for companies hiring
advisors just to see what, you know, they were saying

(30:09):
as far as trying to find that advisor and what
their compensation is. And I went on. It was a
Schwab post for hiring an advisor and then they have
a link to the compensation. The compensation page was three
two to three pages long. It was all this complexity
that says if you sell this, you get that, if

(30:31):
you sell this, you get that, And so I was
just like amazed that, you know, this is the type
of decisions that an advisor would need to make that
is going to both impact the client but also their compensation.
And it is absolutely human nature that when you get
paid more for recommending a client to a particular area,

(30:55):
the likelihood of you doing that is substantially higher. So again,
and I don't know what the fidelity person gets paid
for an annuity versus not, but from all my twenty
plus years of experience, I'm almost one hundred cent certain
they get paid more to put a client into an
annuity because, as I said, if they put that million

(31:16):
dollars in with that annuity, that really becomes the asset
of fidelity. Right now, there's usually a death benefit that
happens that if you were to pass away in the
first five years or ten years, that there's moneys they
go back to your heirs, your beneficiaries. But beyond that,
if you live past that ten years and you pass away,

(31:37):
that money is gone. That million dollars is gone. So
it's very lucrative for these insurance companies with these annuities,
right it just it is. It's just a very good
business for them, So they incentivize their advisors to sell
those it's just the reality of the facts. And in

(31:59):
john situation, I mean, he saved a lot of money
to save up seven or eight million dollars in general,
that's that's a decent amount of wealth. And you know,
to get some perspective, John could easily be able to
take out you know, somewhere in the neighborhood of three
hundred and fifty thousand dollars three hundred to three hundred

(32:21):
fifty thousand dollars every year and still be able to
grow that for to cover inflation. So you know, he
really is not in a situation where he needs an annuity, right,
He's got substantial assets, He's going to have Social Security.
My guess is he has his mortgage paid off. From
the sounds of it, you know, he's a very frugal,

(32:43):
smart spending individual. You know, there is this absolutely no
need for him to have an annuity, and especially as kids,
you know that he wants to leave any of those
assets too. So I'm telling you, you know, if you
are having a conversation with somebody about an annuity, you
need to talk to a fiduciary, somebody that is not

(33:07):
going to get compensated for selling of that annuity. It
is I don't know how to say this. Let's say
let's say I'm a doctor, right and you know you're
doing something that is in jeopardy for your health. You
need to get second opinion on that you think about
it from a health perspective before you make that decision.
You one percent need to because here's the other issue

(33:27):
with annuities is that once you make that decision, you're
locked into that annuity. You have a contract, legally binding
contract that you're locked in for ten to twelve years,
where if you want to get out before that, you're
going to be paying upwards of ten percent of the
value of the annuity to get out. Now, it declines
as time goes on, so that by the year eleven

(33:49):
or twelve it's down to two or three or one percent. Right,
So it's the highest after that first year. But anything
in business, if you have lack of liquidity and lack transparency,
which is really what an annuity is, you don't have liquidity,
can't sell it right away, and it's hard to tell
exactly you know what the moving pieces are. With most

(34:09):
annuities that you you should get benefited a lot more.
Right that that's extremely important anything in business, but certainly in investments,
is that if when you don't have liquidity, meaning you
can't sell today and get your cash tomorrow, and you
don't have complete transparency to know exactly what's in that investment,
you get it, you have to get compensated more for that.

(34:33):
So again, I just I can't stress that enough to John,
but to any listener out there, that if you're looking
at somebody's talking to you about annuity, uh, that you
need to get a second opinion before you make that decision.
There's just too much at risk that.

Speaker 2 (34:49):
Uh.

Speaker 1 (34:49):
You know, you're getting guidance from somebody who gets compensated
for that guidance. Uh, and they probably get compensated by
more to put you in an annuity than not. So just
really really important things. And then you know the last
item I'm saying this is, you know John made that decision.
I mean, a pension is an annuity. That's all. That's
all a pension is. It's an annuity. So John made

(35:12):
that decision, which again it's reasonable. I could tell the
way he approached it. He wants ownership over that asset, right,
He wants to own that asset. That's why he said,
you know what, I'm not going to do the pension.
I'm going to do the lump sum. And you know,
for him now to go buy an annuity, it's kind
of like going counter to what he could have had

(35:33):
with the pension, and you know would have been more
likely not just as well off keeping the pension, sometimes
even better because you know, quite often a pension will
have some benefits that an annuity won't have. So I
went on for a while with that. But how strongly
I feel on this, and also just to the extended

(35:54):
I said before, we have put clients in annuities, and
you know, not that often, but in the right situation
where it made the right sense, we will be willing
to do that. So just something to be aware of. Well,
let's go on to a different topic. But if you
have any questions, you can reach me at eight hundred

(36:14):
eight two five five nine four nine again that is
eight hundred eight two five five nine four nine, or
you can email me at ask Bouchet at Bouchet dot com.
That's asked Bouchet at Bouchet dot com. You know, one
thing I want to highlight is I think it's mentioned

(36:35):
in the all any business review article that I mentioned
that I talked to you about where our firm is
written up, uh with us becoming shareholders. But one of
the things we're going to be celebrating this week is
a firm, is that our firm now manages more than
one point five billion dollars for our clients. And uh,
you know, it's something that when we grow as a firm,

(36:58):
we always do what we really think is in the
best interests of our clients. And I will tell you,
you know, to give you some perspective. When I joined
the firm, we were managing one hundred and fifty million
dollars and that was back thirteen years ago. So we've
been able to grow in a thoughtful manner now thirteen
years later to manage one point five billion dollars for
our clients. We have clients, I think in thirty six states,

(37:21):
we have clients overseas, and so much of that growth
has been from other clients referring their colleagues, referring their
family members to us. You know, we have many clients
where we started with one generation and then we started
working with the second generation, and now we're working with
a third generation and we have one family we're almost

(37:43):
working with the fourth generation. And you know it is
to me working here now. You don't refer somebody, especially
when you're talking about your wealth to a firm where
don't have just complete confidence in that. And for us
to reach one point five billion, we're really you know,
at this point, the Albany Business Review put out their

(38:05):
list of biggest UH wealth management firms in the Capro region,
and when you exclude the likes of Goldman and Merrill,
we're really probably close to being one of the biggest
UH independently owned ri I a fee only arias in
the Capro region. And UH, you know, I know that's

(38:25):
something that we all take a great deal of pride
in UH that our team was able to do that. UH.
And you know, Steve, we said before, Steve was really
UH he was an individual that knew that this idea
of being a fiduciary UH is very important and he
was one of the earliest fiduciaries in the Capital region.

(38:46):
UH he's been you know, we've been working with Schwave
for twenty plus years, and so I give him a
complete credit for uh, you know, laying the foundation that
we're able to build this firmont But it's exciting. This
week we're going to sell rate that as a team
and to do that with just such an amazing colleagues
and to celebrate that milestone. It's fantastic. And one of

(39:09):
the things that we're doing now is for many years
we're regulated by the SEC. You couldn't have a client testimonial.
That was not allowed by the SEC to have any
clients give you a testimonial. But in the last few
years that has changed. There's a number of requirements that
the SEC has put in place to get a client testimonial,

(39:32):
but it is allowed now and so we're in the
process of doing that. If any clients are listening out there,
you want to give us a testimony, to reach out
to us and we'll coordinate that for you. But to me,
that's a really powerful thing because as we're having clients
write testimonials for us to hear what they have to say,
and what it does is gives prospective clients a great

(39:55):
insight is to what it means to work with our firm.
And you know, we can tell you what that's going
to look like, but to hear from an existing client
who has years of experience working with our firm it
changes everything. And you know, I'll tell you that the
testimonies that we've received have been fantastic, and uh, you know,
I talk about how much I appreciate one working in

(40:17):
this industry, how how meaningful it is, but two, you know,
working for a firm that really just helps our clients.
And you know, just this past week, Uh, you know,
we had a situation where we're working with a client
who lost the spouse. And you know, when you when
you go through something like that, whether it be a
divorce or losing a spouse where you know it's or

(40:40):
losing a job where there's just so much emotion to
that and it's it's hard. It is so hard. And
you know, to be able to work with clients that
when they lose a spouse, to be there for them
as they go through that, Uh, they're in the process
of breathing, and you know, they really need to make
sure that their finance are handled properly. And I would

(41:03):
just always encourage you know, as a couple gets older,
if you're managing your own money, which is fantastic, but
as you get older, the concept of working with an
investment fiduciary, that it is something that happened to you
that your spouse, who maybe is not involved with the
best in the investments, has somebody to lean on is

(41:24):
incredibly important. And making sure that everything is organized and
in place. And I'll tell you with you know, this individual,
we've done a great job. She's going to be in
a great spot. But it's just so to me personally
gratifying to work with such great clients, but also to
help people in that way. And again, I will tell

(41:46):
you when we have a situation where a perspective client
comes in where they just lost the spouse and the
other spouse was managing all the investments. You know, if
it's not well organized. You know, we've seen some really
tough situations where you know, there are accounts everywhere and
they're trying to figure out what's going on. And so

(42:07):
not only are they taking on this responsibility that they
didn't have before along with everything else, but they're you know,
they're also obviously grieving from the laws of the spouse.
It can be overwhelming. So just something to consider. Uh,
you know, when you're if you're again managing your own assets,
that if that were to happen, Uh, you know, it's
it's tough for that remaining spouse and in this situation, Uh,

(42:31):
it was pretty quick. Uh, it was not expected. And
you know, you just never will always say you never
know what life is going to throw you. So you
know it's you may think you're going to be doing
one thing and then life, you know, takes you a
different direction. Uh, and you have to be aware of that.
We're going to go on to a different topic. H

(42:51):
But again, if you have any questions, feel free to
reach out to me. 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
email me at ask Bouchet at bouchet dot com. You
know one thing I want to bring up. I just
read this idea. It's called a point zero one percent rule.

(43:17):
Point zero one percent rule. There's all these rules out there, right,
and this one basically says that when you're looking at
whether or not you can afford to spend some money
on maybe a little bit of a luxury or an
upgrade or something, that if it's less than point zero
one percent of your net worth, So if your overall

(43:38):
assets minus your liabilities, then don't overthink it. So just
for example, if your net worth was five hundred thousand dollars,
point zero one percent would be fifty dollars. So if
you're in a situation where you've got some decisions to make,
I'm just I don't know, whatever it is, upgrading on
a seat or something in an airline, or whatever the

(44:00):
case might be, and it's less than that, don't overthink it,
just go ahead and do it. You know, it's interesting
because I read that. I think that sometimes there's too
many rules, but I like the concept. I do see
this where individuals, let's just say, we'll talk about John.
They called it again. My guess is that John and

(44:21):
his wife were very frugal. They really managed their spending.
And you know, one of the things I always tell
clients is like, don't be afraid to spend that money.
And you know, there's I noticed that myself as I've
gotten older. It was raised very frugally, always aware of
spending money and sometimes to the point of being foolish,
you know. And as I've gotten a little bit older,

(44:43):
I've said, you know what, if there's a situation that
makes my life easier, makes my wife life easier, you know,
and it's and it's a reasonable level of expense to
not be afraid to do that. And I think what's
more important than that actual heart and fast rules zero
one percent, which is kind of arbitrary. I think what's
more important is just as you get older, if you've

(45:08):
been successful and you've been doing a good job of
you know, creating wealth and watching your spending, don't be
afraid to, you know, to allow yourself some eases in
life and upgrades in life or whatever that case may be.
You know, within reason, don't go crazy with it. But
my experience is most people just really struggle, as they've

(45:30):
always been super aware, hyper aware of saving their dollars,
that they struggle at spending those dollars. And you know,
I always say, listen, if you don't spend them, somebody
else will. I don't care if it's a nonprofit that
you're leaving those dollars to, or Uncle Sam, or you know,
your heirs, whether it's children or nieces or nephews. You

(45:53):
know they will spend those dollars quicker than you would think,
and so you might as well go ahead and enjoy it,
you know, splurge on yourself, do something, or splurge on
your your spouse, whatever the case may be. Don't be
afraid to spend those dollars because, as I mentioned, you know,
you don't know what tomorrow holds. If you have your

(46:15):
your health, you have everything. And you know, again that's
one of the things we're usually giving guidance to our
clients is from a planning perspective, it's usually pushing them
to spend more. And you know, we've talked about this.
You know that there was a rule of thumb and
the other rule here that you know you're spending goes
down as you retire. It's you know, maybe seventy or

(46:38):
eighty percent of what you're spending is when you're working.
And I strongly disagree with that. I always tell clients
it's the other way. Uh yeah, you're not going to
be you know, saving for retirement. That's true. You're going
to take that off the table, and you're not going
to be paying FIKA, so that's true as well, So
you take that off the table. But otherwise you will

(46:59):
end up spending more. And the reason for that is
you're not working forty or fifty hours a week. You're
going to home depot or you're going to wherever you're
traveling more, you're going out to eat more, You're going
to be spending more money. And you know, also from
a budgeting perspective, it's just a lot easier to go
ahead and a budget and say, hey, I'm probably going

(47:20):
to spend more money, and then if you don't, you've
got a little extra cushion versus you know, going the
other way and budgeting that when you retire you're not
going to be spending as much and then find the
finding it out that's not the case, right, You know,
that's just so important that when you do a retirement plan,
whether it's with yourself or with a professional, we always

(47:41):
say we always are error on the side of being
more conservative, you know, less in return to the market,
higher inflation and greater spending. That way, the plan is
always successful and people are in a good spot. And
just remind yourself of that when you're doing that. Well, Folks,
you spend an hour together as always, it's been great.
I hope you'll learn a little bit. Go out there

(48:03):
and enjoy this day you will listening to Let's Talk Money,
brought to you by the Bouchet Financial Group. While we
help our clients prioritize their health while we manage their
wealth to life. Take care of yourself and take care
of each other, folks,