Episode Transcript
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Speaker 1 (00:00):
Good morning everyone. My name is Martin Shields. I'm the
chief volprovisor at Bouchet Finance Group, and I'm going to
be your host today for Let's Talk Money. It's great
to be here with you on this gorgeous, sunny summer morning.
Happy Father's Day to all fathers out there. I hope
that you are relaxing and enjoying yourself, as you may
(00:22):
know if you're a listener. I'm the father of three
amazing young adults and I look forward to spending some
time with them and my wife. And you know, Father's
Day is a great day. I mean, I want to appreciate,
you know, being a father and all that entails. But
you know, just there's this an element of it one.
(00:44):
You know, we're really in the summer. We're I think
today's the summer solstice, so the longest day of the year.
We're officially in the summer. You got the US Open on,
which is always a great golf tournament to watch, and
you know, to me, it's about just spending time with
my family, nothing fancy or crazy. I also do every
(01:06):
My standard go to meal, whether it's my birthday or
Father's Day, is a steak and scalps me and they
sailing a little red wine and Boston cream pie or
something of that sort. So you know, those basic things,
and just spending time with my family, and I'm sure
(01:26):
with yourself or your father, that's really the important things.
And actually the funny thing is too is my kids
are you know, eighteen to twenty two. They still make
me handmade cards, and that's I'm telling you, is my
most favorite thing about whatever I would receive on that
day or this day. And I always just ask them
(01:48):
not to get me anything, but if they can make
me a handwritten card, I'm going to be very happy
with it. So again, happy Father's Days everybody. And it's
great to be here with you to answer any questions
you may have for your arding, your financial planning or
investment management concerns. And I encourage you to call in
with those questions. As they always say, there's no dumb
(02:09):
or silly question except for the one you don't ask,
and you may be doing your fellow listener a favor
by asking that question that they have as well. So
give me a call. You can reach me at eight
hundred talk wq I. That's eight hundred eight two five
five nine four nine, or if you're too shy to
get on the phones, you can email me at ask
(02:32):
Bouche at bouchet dot com. That's asked Bouchet at Bouchet
dot com and Bouchet is spelled b O U c
h e y and this dot com. Well, a lot
to discuss this week. Markets are, you know, getting real
close to getting back to all time highs. We got
(02:54):
a last weekend, we got a peace deal or the
start of a peace deal in the Middle East, and
that definitely helped oil prices down to bring him down
to seventy five dollars a barrel and gave some hope
that maybe some of this inflation that we're seeing could
help peter off a little bit. We had Kevin Warsh
(03:15):
have his first press conference and give guidance that as
of right now, interest rates are going to remain where
they are. I think he did a nice job. You know,
he's obviously an Albany Capital native and really nice guy
as well, but I think very smart guy. And I've
(03:37):
heard people say that they're concerned that he's just going
to be under the direction of Donald Trump and potentially
lowering rates too dramatically and causing inflation, and I don't
think that's what you saw in the press conference, and
I don't think that's what you're going to see. You know,
at the end of the day, Kevin Warsh is a
smart guy and he's going to do whatever he thinks
(03:59):
is best for the economy and the markets. And I've
said also all along that if you learn something from
the seventies and eighties that you don't want to be
presiding over a period of time where inflation really takes off.
He'll do whatever he thinks he needs to be doing
to make sure that the economy remains strong, but that
(04:20):
the inflation remains checked. And you know, whether that's lower rates,
keep them the same, reducing quantitative easing where which is
where we go out and buy bonds, whatever that needs
to be done. I have confidence that helped you that,
and I thought his press conference was very good. He
(04:42):
has a good way about him. And then you know,
I will see with the war, it's a challenging environment
to say the least, and even this weekend there's been
some on and off with it again. But I do
think both parties really want to put this behind us,
and oh the straight are hermus and if we can
(05:03):
get that in place and get the ships going. I
think you'll see oil prices go down, which will certainly
be beneficial to inflation. So we'll keep our fingers crossed
and see what happens. I'd like to discuss a number
of things. Certainly, you know, retirement planning comes up a
lot with our clients. It's a big reason why they
(05:25):
engage us. And you know, it's interesting as you move
into retirement, it really requires a whole mindset change as
to how do you approach your finances. And you know,
I always say when you're younger and you're accumulating, depending
on your situation, you can have a lot of complicated
(05:46):
issues that and this is where our firm steps in.
Where you know, maybe you're an executive with a company
and you have stock options or restrich to stock units.
We get involved with that or executive benefits. Or maybe
you're a small business own or and you're looking to
manage that and be able to save with your small business,
(06:06):
or maybe you have family wealthy you're trying to deal
with some of those issues. So there's a lot of
areas we get involved with our clients. But it's only
when it comes to retirement planning. I try to give
guidance that, you know, in general, I really have never
met anybody who hasn't been happy to move in retirement.
Very rarely do they have any regrets. I will say
(06:29):
that one of the most important things is that people
have a plan of how they're going to use their time, right,
Because you know, the idea of just kicking back and
doing nothing that works for about three months, maybe six
months a year at the most, but at some point
you've got to do something that keep yourself engaged. And
whether it's a hobby, whether it's volunteering, whether it's part
(06:51):
time work with taking care of grandkids, whatever the case
may be, it's those are all great options, but you've
got to have something to keep yourself engaged. But it
also requires you to appreciate that there's there's a changes
in you know, your mindset on finances, changes on just
(07:12):
how you approach life, and they could be challenging, right,
I mean, most of it's good, but not you know,
some of it can be a little bit challenging. So
I just want to spend a few minutes and talk
about that and provide some highlights of what I see
when we move into this. You know, one of the
things that we talk about is the transition, so before
you retire, that transition into retirement and some of the
(07:34):
things you can do that people really are not necessarily
thinking about. And you know, a number of meetings I
had this past week, one of the guidance I was
giving to these couples is that, you know, they've done
a great job of saving for retirement and they want
to spend more money. And one you know, by going
through the planning process, they're able to see that they can,
(07:57):
in fact actually spend more money, and that they've because
they've done this such a great job and they've been
able to grow their portfolio and manage their expenses, they're
really a good spot to retire, maybe a little bit
earlier than expected. Right. That's always a great conversation when
we can give guidance that they don't need to maybe
work for another four or five years, but maybe how
(08:18):
about next two or three years they can retire. The
other thing is that even when they're still working, there's
a really good likelihood they don't need to save anymore
for retirement. Right, Because you think about this when you
get these latter stages of your working years, the dollars
that you put in are not going to mean as
(08:40):
much as the growth in the portfolio itself. Right, So
if you're saving, say ten, fifteen, twenty thirty thousand dollars,
that's really valuable, especially over time. But when you're a
year or two out, that additional twenty thousand or thirty
thousand dollars really doesn't mean as much. It's a growth
in the portfolio. In particular of the portfolio is you know,
(09:02):
one million, two million, three million dollars. That growth of
ten percent means a lot more than adding that additional
twenty or thirty thousand dollars. And what I always tell folks,
I'd rather than work another year or two uh, and
then take that extra money that they would be saving
and spend it spending on travel, spending on doing things
(09:23):
around the house. And in many cases they can do that,
and that's that's something they're necessarily expecting to do, uh,
And they always appreciate that guidance that you know, hey, listen,
how about if you continue to work, that that additional
money that you used to be saving for retirement you
can spend And that really can kind of change people's
(09:44):
perception of working a few more years. The other guidance
I always give is, you know the potential working part time. Uh,
you know that as a very powerful thing to be
able to do that from retirement planning perspective, is you know,
to stop working now, but the work part time for
another two or three or four years. If you can
(10:05):
do that, then that's additional money that you have that
maybe you don't need to draw down as much from
your portfolio or maybe even just spend that additional money, right.
And I always think that if you can do that,
and not all people are able to do that with
their job, and then some folks it's either all or nothing,
But if you can do that, it can really add
(10:27):
a lot of value both financially but also from a
personal perspective to your life. You know, I always tell folks,
you know, you don't realize that with your job that
you've been doing for say forty plus years, that there's
a lot of elements that exist in your own personal
perspective of who you are that are tied up with
(10:48):
your job and your career. And one is there's a
social element. Right. You may not be best friends with
people you work with, You may not even be you know,
socially friendly with them outside of the world, but there
is that social connection that you have with most of
the people you work with that adds value to your life. Two,
there's a sense of identity. You've been doing that all
(11:11):
your life. And you know when you go to a
contail party and you start talking to somebody and say, well,
what do you do? You know you talk about that. Well,
if you're retired, that kind of goes away. You talk
about what you did, but it's not who you are now.
So there's a sense of identity that goes away as well.
There's a sense of need, right you know, when you're working,
(11:32):
you understand that if you're doing a job in general,
you're needed in that job, and that sense of need
is really important. You may not appreciate that all the time,
but as humans, that's a big crux of how we
operate is there is an importance of being needed. The
other thing with that, too, is even your relationship with
(11:54):
your spouse, right you know, I see this especially with
one spouse that travels. That's they've been been doing that
for years. I was just talking with one couple. The
husband has travel for work. There was one point he
was traveling three weeks out of a month, and now
he travels a week or two out of the month. Well,
guess what when he's not traveling anymore. Their relationship is
(12:17):
going to change now hopefully for the better, but in
some respective is going to be definitely some challenges, just
to the extent that that's going to be much different
than what they've always done for all their life. So
I think you'd appreciate that your relationship with your spouse
is changing as well. The other element that's important to
appreciate is that throughout all your working career, you have
(12:41):
been saving dollars. Right, you're putting money away and getting invested.
Now you've got to flip that equation and you've got
to start to draw down on your portfolio. Well, that's
a big change that is not always an easy thing
to be able to kind of comprehend. And again, I
think our firm adds a great deal of value across
(13:05):
many different spectrums with our clients. But that's one of
the biggest elements is that we really help frame that
concept of making your portfolio turn it into a paycheck.
You know, we always say we'll put it in the
fifth or the fifteenth or the twenty fifth of the month,
we'll withhold taxes, make sure it goes right to your
checking account, and really it becomes your new paycheck. And
(13:28):
that idea is difficult for folks, and also just mechanics
of it, like where does that money come from? From income,
from growth in the portfolio, and oh, by the way,
what if there's market volatility, you know, how is that
going to impact your ability to continue to provide that
those distributions. And for our firm, we have an amazing
(13:51):
investment team that handles that across all of our client portfolios.
You know, we talk about this all the time, the
fantastic job they do, and certainly this year has been
no accession. They've had a great job. They've done a
great job of adding some task overlays into the portfolio
of that added a tremendous amount of value. But they
(14:12):
also do a great job of managing those distributions for
our clients. So what we do is we put away
two years with the distributions into a market servative allocation
so that even if there's market volatility, whether it's with
you know, could be with dogs, commun with bonds. Right,
you know, people don't appreciate that sometimes bonds can be
(14:33):
volatile as well, that with this fund it's more conservative.
It's a steady any fund, you know, yielding it around
three to four percent, And it is just a great
way that we're able to provide those distributions in good
times or in times of volatility, and that's an important
(14:54):
part of how we operate. And then our investment team
is constantly replenishing those two you're up to two years
worth of distributions and having it set as the market
goes higher. So that's, uh, that becomes very important. The
other thing I always try to give a perspective to
retirees is that this idea that the grass is not
(15:15):
always greener, right, and I see this that you know,
they retire and they think they need to make a change,
and quite often that change includes moving someplace. Now, sometimes
that's good, I don't know, you see it. They want
to move for lower taxes, they want to move for
lower for warmer weather. You know, there's a lot of
different reasons. But I always caution them to do it
(15:38):
in a kind of well thought out, methodical fashion because
you know, the fact of the matter is if you
just go ahead and sell your house and buy another
house someplace and move. You may get there and go
was this was this the right move? I'm not sure
this was the right move. And you know I have
epic stories less though with clients, but people I know
outside that have done some made some decisions like that
(16:01):
and it has not gone god well for them. And
so I always tell people when you're making these decisions,
you know, you may think the grass is greener that
if you go ahead and you move someplace, that that's
going to be your ideal situation. But I always tell them,
you know, why don't you get rent for a while
there first and confirm that that's the right move for
you before you just go a wholesale tell your home
(16:24):
and buy buy another home someplace else. And you know,
you can always move back or you know, change and
go a different direction, but it is smarter to take
it one step at a time. So again, these are
all different changes that you see. You know, it's funny
I had a meeting with clients this week, and you know,
(16:47):
this is quite oftome the case with clients. I become
their marriage counselor slash, you know, counselor on spending and
you know, we talk about how you know. When it
comes to portfolios, there's numbers, there's the analytical part, but
this is psychology. There's the emotional part, and that even
becomes more so with couples and how to make these
(17:09):
decisions that are important. And I will say that with
our firm and with all of our advisors, they're great listeners.
They have a way of really getting to the point
of what clients are looking to get guidance on, and
then they're great communicators. They have a great way of
providing that guidance that gives people confidence to be able
(17:32):
to make those decisions and say, you know what, I
think this is the right decision, both from a gallar perspective,
but also from an emotional psychological perspective, whether it's an
individual by themselves or with their spouse as well. So
all those things become very important as you move in retirement.
(17:52):
And I think many of these things people aren't expecting, right,
They're just thinking about the positives of retirement, which are great.
I mean there's many positives and as we always tell
our clients are tagline is health, wealth for life. And
if you have your health, you know you cannot take
that For Brandon you have it one day, the next
(18:14):
day things can change very dramatically. And if you have
your health and your reasonably good financial situation, go on
and spend that money. That is just extremely important. Can't
stress that enough that you know, you see it where people,
you know, they try to kind of struggle with that
idea and then something happens to you know, one of them,
and it changes their mind real fast. That you know,
(18:37):
every day that we have is not a given. We're
very fortunate. I always talk about the importance of gratitude,
and you know that means being grateful for uh, you know,
what they have in that relationship, but being willing to
spend some of those dollars to go out there and
do the things they want to do. Uh, And that
becomes so important. Well, I've got a few more topics
(18:59):
want to go before we hit break. But again, if
you have any questions, you can give me a call
at eight hundred eight two five five nine four nine
at eight hundred eight two five five nine four nine,
or you can send me an email at ask Bouchet
at Bouche dot com and Bouchet is spelled b O
(19:20):
U d h E Y. Actually, I want to spend
a few minutes talking about our website, which is Bouche
dot com. And you know, our marketing team does a
great job of putting this together and also updating a
number of things on our website. And you know we've
talked about one of the things that we have there
(19:41):
are client testimonials. We have almost fifty client testimonials. Uh.
This is done through a service and a website called
wealth Tender. Where it's important for us because we're under
the purview of the SEC. We got to make sure
we hit the requirements of that to have these client testimonials.
(20:02):
But to me, as somebody is talking to our firm
about what it means to work with us, I always
point them towards that because they just provide a good
perspective from again almost ficky of our clients of what
it means to work with us. And all those reviews
are five stars. They do a great job of kind
of sharing the insight and the value that our clients
(20:24):
have by working with us. And you know we always
tell it for such a clients, there is no there's
a contract, but there's no term of that contract. You
decide that you know, we're not meeting your needs. You know,
we could delink you from the institutional side of Trois
Schwab and move you to the retail side, and you
know that's it. Now. I will say that our client
(20:45):
retention rate is over ninety nine percent annually, which shows
you the value that we're offering. And the two things
we always ask clients if they decide to go a
different direction. One, let's just have a conversation that maybe
you know, you thought we were going to go more
left and we're going more right, and that can mean
a lot of different things, but let's just have a
conversation that maybe we can do something to meet your
(21:07):
needs that we're just not aware of right that you know,
we're not meeting your expectations, but we can change course
and try to do that. So we always ask to
have that conversation. And then two, we just always ask
that if they decide to leave, let's just have a
conversation about what we could have done differently. And you know,
I always tell folks that you know, at the end
(21:29):
of the day, it's a business decision. They need to
do what's right for them. And this is true if
they're leaving another advisor to come work with us, it's
a business decision, so we support that. But I'm a
big believer in, you know, being open and honest and
being good communicators. We try to do that with our
clients and we ask that they reciprocate with that. So
(21:52):
I always just say, hey, you know, if you made
that business decision, whether it's with us or with another firm,
just communicate what your thoughts are, why you're doing it.
And we always tell our clients or somebody who leaves,
if you decide change direction, we always welcome you back.
You know that relationship can always be restored. Well, really
(22:12):
a break, folks, but come back in as we take
your question. You listen to Let's Talk Money, brought to
you by Bruchet Finance Group. While we help our clients
prioritize their health, well we manage their wealth for life.
Welcome back, folks, those of you just joining us. My
name is Martin Shields and i'm your host today for
Let's Talk Money. As always, it's great to be here
(22:33):
to answer anto your questions you may have, and you
can call in with those questions 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 Bruche at Bruche dot com. At ask
(22:53):
Bouche at bruche dot com. So whatever route you want
to go, send me your question. Calling with your question,
I'll give you some guidance. So a number of things
that I want to continue to discuss today, but I
do want to highlight the World Cup. So I if
you you know, it's everywhere, so it's hard not to
(23:13):
see it, and you know, I don't know, you know,
I think the US is not a huge soccer country.
It is changing, though it is. I think it's evolving.
But you know, as you watch these games. And I
went down to Philadelphia with my daughter and my brother
and his daughter and we went to see Ecuador versus
Ivory Coasts in Philadelphia, and I will tell you, like
(23:36):
it is such a great environment that lincoln Field Financial
Field was just packed and just this really positive environment,
great soccer game. Ivory Coast won one nothing, but just
in general, as you see these games going on, it
is great to see all these folks coming in from
all over the world and you know, supporting their teams
(23:59):
and parody that exists with soccer these days, so you
have usually it was thirty two teams that are in
the World Cup. Now there's forty eight teams. They've expanded
it just like everything else. Of course, it's I mean,
it is a money grab, but that is what it is.
But you know, it's amazing to see, you know, how
much parody there is, and then it's also amazing to
(24:21):
see how good the US is playing right now, and
you know, you take it one game at a time,
but from there there right now guaranteed to be into
the next roune, which is called the knockout stages, and
they're gonna be one of the top seeded teams in that.
We'll see how they do against Turkey this Thursday. But
it's great to see them playing at that level and
(24:43):
certainly a lot of fun as well to watch all that. So,
you know, it's one of those things where you know,
I enjoy watching soccer. I've played soccer in college and
I play now, but there are some things where you
kind of still scratch your head. I've you know that
there's always the flop, which I don't really appreciate when
(25:03):
that goes on because you see it certainly on the
replay and it's very evident what's going on and then
you know, there's also this concept that the tie zero zero. Uh.
You know, I'm more of the mindset that, uh that
you know, they just keep playing until you get a winner,
and even if like you do it in hockey where
you start taking players off the field and you know,
(25:27):
at some point it's you know, five on five or
whatever it is, but there's just an element where you know,
leaving it a tie, or when you get to the
knockout stages, you'll go to what called penalty shootouts if
there's no score or if it's a tie game, and
you know, it's almost like a different sport. So you know,
I just think that in general, you've got to have
(25:47):
a winner when it comes comes down to these games.
But it's been great to watch. Let's move on to
a couple other financial planning topics. Uh. You know, it's
interesting because there's always a financial expert there where it's
Susie Orman or whoever the case may be. And you know,
so I will certainly either read an article or listen
(26:08):
to what they're espousing, and you know, in many times
you know their guidance. It kind of makes you roll
your eyes. And it's interesting because they're put a financial experts,
but yet they're really you know, they're not dealing with
people on a day to day basis. So you know,
in a number of ways, you can as you listen
to them, you can tell that they're out of touch
(26:30):
with what the reality is for many folks. But there
was one individual that it was talking about just how
people spend money, and you know that one of the
problems that people have is that they don't prioritize what
is really important to them versus other things where they
spend a lot of money, and that that actually did
(26:51):
resonate with me to the extent that you know, I
think that you know, in many ways, we're such a
consumerism economy. It drives capitalism. You know, consumer spending is
seventy five to eighty percent of the US economy and
that's not going to change. You know. I always say,
don't bet against the US consumer. They will work four
(27:14):
or five jobs in order to spend the type of
money they want to spend. But I do think it's
safe to say that for many of them, in particular,
if you see that they don't have a sufficient funds
to cover an emergency, right, We've seen this in different
situations where you know they lose a job, you know,
(27:36):
the government shut down, and they don't have enough funds
in their emergency reserve fund to cover that emergency. And
you know, we always give our client's guidance that you
want to have at least three to six months of
cash set aside. I don't even care if it's in
CDs or whatever it's but just set aside that you
never touched. That it's your piece of eye money that
(27:58):
if you need something and it's a big expense, you
have it there. You have it ready to go. Whether
you lose your job or you have a big medical
expense or something with the house, you're able to access
that money. And you know it could be a larger
amount too. Right, if you and your wife both work
very solid jobs that are very stable, you have your
(28:21):
mortgage paid off, you don't have kids, or you have
kids that were college has always paid off, you know
three to six months is going to be more than enough.
But now if you are trying to do a startup,
or you and your spouse work in companies that are
a little bit more uncertain and your job is more uncertain,
(28:42):
you know you might want to have nine to twelve
months of cash set aside, that might be the best
approach is to have additional fund set aside in that situation.
But you know, again, I think if people start looking
and say, hey, what's really important to me, either personally
myself and or family or with my spouse, what are
(29:02):
the most important things, and let's prioritize how we spend
money on those, and let's look at our other spendings
and say, hey, do we really need to have this.
We spend money across a lot of different things, in
particular these days where a number of these expenditures are
membership type of fees, right, whether it's with TV subscriptions
(29:24):
or other subscriptions that you have. It's a great model
for our business, right because once you get into that,
it's automatic renewal, and it's hard to remember all the
things that you're actually spending money on. But if you
start to look at your budget and how do you
spend your money, what's the most important thing? I do
think most folks would be so much better off if
(29:45):
they start to say, hey, we're going to prioritize these one,
two or three things. These are important for us for
our family. And I always say this you know, obviously
having three kits of our own, but I think in general,
having these type of budget discussions with your kids is
important because that way you can show them that, hey,
(30:07):
let's talk about things that are important for us. We're
gonna spend money there. These other things less important, We're
either going to stop spending money on those, or we're
gonna spend less money and get them involved with it.
I think it's very important that kids understand that concept
that you can't get everything you want. There's gonna be
some things that you want that you can't get, and
(30:27):
there's gonna be other things that you want that you
may have to save for. And getting them involved with
that at a young age is very important. You know,
with our kids when they're working, I always give them
guidance you can spend some of the money. Now, some
of the money we're gonna be putting into a raw
fire raise that's going to grow, and you know, if
you need access it for certain things you can't, but
otherwise it's for your retirement. And then some of that money,
(30:49):
because these are the summer jobs they have, you're gonna
spend during your college year. But having them understand that
and get into that thinking as soon as you can
is very important. And you know, I do think that's
great guidance for folks and from families is you know,
I always say, want to have a budget. Actually, one
(31:10):
of these financial experts that was kind of put wooing
the idea of a budget, and you know, I had
to laugh, because of course they do, because when you
make enough money, you maybe don't need a budget. And
you know, I'm sure they're very successful as being financial experts,
but for most people, having some element of budget is
extremely important for financials success. And even if it's just
(31:35):
to start big buckets, right, you have to have a
granular budget, and I always say that they have that
budget in place. The value is that you're going to
understand the times where you deviate from that and you
can course correct if you don't have a budget. The
problem also becomes when you're married and you're trying that
you have you got these different priorities, right, and there's
(31:58):
always a battle for those priorities, and we have the budget,
you can agree that, hey, this is the budget we
agree to. We've got to try to stick to that.
So maybe it's eating out less, maybe it's buying less,
new clothes or whatever the case may be. You know,
there are ways to go about it to make sure
you fit within that budget. And certainly you know, I
(32:19):
always tell folks, you know, the two first things you
got to pay. You got to pay your taxes, and
you've got to put money away for retirement. After that,
everything else is somewhat discretionary. Now you're going to have
fixed expenses that you can't you know, it's going to
be fixed every month, whether it's rent and utilities, and
you're going to have variable expenses as well, and you're
(32:41):
going to have more control over those variable expenses. And
the other thing you want to do from a budget
perspective is put money's away for one time expenses, right,
so that you know, every year you own a house,
even if you don't do any major top or improvements
to it, maybe you're putting money away to fund those
capital improvements when something happens, right, so that when you
(33:01):
need that air conditioning unit, you have the money set aside,
it's ready to go. And that's the value of having
that budget, in particular as a household. So I would
highly if you don't have a budget, I would highly
encourage you to get one in place, and in particular,
what we see is there are you know, individuals and
families that they make enough money they don't really need
(33:23):
to have a budget. They kind of spend what they
want and still be successful. And that's possible. But what
you have to you appreciate is when you move a
retirement it could be a little bit different. Right, Things
are going to be probably a little bit tighter for
most folks, especially if they're coming from high income earners.
It's going to be a little bit different. So I
would encourage you to even if you're a high income earner,
(33:45):
to have a budget in place as you move into
a retirement. It's going to be very valuable for you
to be successful. We're going to go to the phone lines.
We have Frank from Burnt Hill.
Speaker 2 (33:56):
Frank you there, Yes, TI, Hi, Frank.
Speaker 1 (34:02):
How you doing.
Speaker 2 (34:04):
Good? I want to give you a testimonial and then
I want to ask a question. So I am a
client and you guys have been the best move I've
ever made. Follows my guy, and he's been great, and
the whole team is great. I always get an answer
(34:27):
when I call, and it was the best move I
ever made, Maddie. But anyway, my question, and it is
safe withdrawal rates. When you factor in a safe withdrawal rate,
do you add in the fees that you guys charge. Well, first,
(34:51):
I want to say thank you for your testimonio.
Speaker 1 (34:54):
I know who you are, frank and I appreciate you,
and I know Paula appreciate you, and so thank you
that that means a lot to us. So, yes, what's
all rates? We do everything we talk about, whether it's
it's all rates or rate of returns. So you know
you have a client portal, you can look at your
rate return. That's net of our fee, right that our
(35:16):
fee is removed in that. And certainly when we talk
about which all rates is net of our fee. So
if you're taking you know, four and a half percent, uh,
and we're assuming a five and a half percent rate
of return, that five and a half percent rate of
return is net of our fees. So yeah, that's that
that is taken into consideration.
Speaker 3 (35:38):
Okay, So so I'm taken say if I'm taking four percent, Marty,
do I factor in that fee and say I'm really
taking four point seven percent?
Speaker 1 (35:55):
Well, so what I would do, Frankie, I would flip
it a little bit and look at that our fee
as an impact on your rate of return. Right, So,
and again this is how we view it is you know,
because if again your portfolio is returning eight percent, it's
returning eight percent after our fee. Again, that's the way
(36:19):
we kind of view it. Even as we talk about
it in your plan. We're not adding on our fee
into your distribution rate, but we are subtracting it from
your rate of return. And you know, as we talk
about our ability to outperform benchmarks and all those things,
it's always net of our fees and net of any
(36:40):
fees with the funds we use. So again, you can
either add it on if you wanted to, but I
think it's easier because when you when you look at
your portfolio and the performance on our Bouchet portal, it's
going to be net of our fees already. If that
makes sense, it does.
Speaker 2 (36:59):
Bodies.
Speaker 3 (37:00):
You guys are great, have a great weekend, all.
Speaker 1 (37:03):
Right, Thanks Frank, you too, take care. Right. So, as
I talked about are we are, we've got great clients
and Frank is one of them. And uh, you know,
I always talk about how fortunate I am to work
at this amazing firm with all of our amazing colleagues,
who I appreciate so much, but also with our amazing clients.
(37:24):
They're just they're successful people who have just done a
great job of saving and living and within their means.
And uh, now they're they're either you know, still working
and saving or they're moving in retirement and you know,
or into what we call financial independence and just living
great lives. And so I feel fortunate every day to
(37:45):
be able to deal with them. Uh, And they're just
phenomenal people. But Frank's comment, our question is is a
good one, which is you know, how what are you know,
distribution rates and how do you consider that? And you know,
I've always tell clients or prestructor clients when they're looking
at rate of returns or anything like that, that's always
(38:06):
net of our fees, right, And that's important, you know.
And you know we always talk about that that value
proposition of paying a fee, and I always say, I
don't want to pay ten dollars for something that I
don't get value from. In fact, I was joking with
one of my colleagues, I go to the bookstore in
Northshire here in town. I love going to the north Shire,
but what I found sometimes is I buy a book
(38:28):
and then I start reading, I'm like, this book's no good.
So you know, in general, I only go to the
bookstore and get something what I know, it's a book
that I'm going to like, right somebody's recommended it. Otherwise
I'll go to the library because I can get books
from the library for free, and I don't want to
spend twenty dollars on a book that I don't like.
There's no value in that. And so you know, I'm
a big believer in this concept of value. And you know,
(38:51):
our clients appreciate the value that we provide for them,
both from an investment perspective, financial planning perspective, and our
client service team. And that's where I talked about, which
is we don't have a term to our contract. You
can leave at any point, but that they stay day
to day, week to week, month to month, year to
year because of that value. And you know, we have
(39:12):
clients now our firms. You know, in our thirty fifth year,
we have clients that have been on with us the
whole time. And we have clients where started with grandparents
now and then it went to the the kids, and
then now and then it's the grandkids and now literally
now there's great grandkids. They're just little babies or kids
(39:34):
in elementary school, so they're not necessarily clients. But there
are really four generations that we're helping right now with
a number set of clients. And these are very successful families,
you know, I always say so these days, for most
people who are clients of ours, it's family wealth. It's
going to get passed on to the next generation. That
next generation needs to be make sure that they're prepared
(39:56):
to receive those assets. And you know that's where you know,
parents play a big role on that, our grandparents, but
also our firm does. And you know, we always tell
our clients that, you know, as we start working with them,
we will always give their kids or grandkids clients I'm
sorry advice. Now, they may not be able to come
on as clients just they don't have enough assets, but
(40:18):
that doesn't mean we won't help them. We'll make sure
they're doing everything right to make sure that they're on
the right path. And that's very important, right you know,
I always tell clients right which is you're saving those
dollars one you should spend them because somebody else will right,
whether it's a charity, whether it's your kids, whether it's
(40:38):
you know, nieces and nephews, people will spend those dollars,
so you might as well, first of all, spend them.
But two, you really need to make sure that whoever's
receiving those funds. Again, whether it's a charity, whether it's nieces, nephews,
whether it's kids or grandkids, you need to make sure
that they're prepared to receive them and that they're doing
all the right things themselves. Because we do see that,
(41:01):
right is, if that next generation is doing all the
right things, if they're preparing for retirement themselves, if they're saving,
if they're managing their spending and really doing all those
right things themselves, they're going to take a much different
approach to receiving your dollars, right, They're gonna think much
(41:22):
differently about them. Well, we're gonna go on. We have
a few more topics to discuss, but you know, I
do want to highlight we did have the ad for
the women event, and you know, I just really want
to stress that that's also on our website. You can
go and register for that. It's going to be a
phenomenal event. It's coming up in August, and you know,
(41:44):
I just think that we're so glad we're the premier
sponsor for this event. Steve has always been very supportive
of women of wealth, and it really has been the case.
I mean, our industry for the longest time is you know,
a bunch of old men, usually white and with a
lot of white hair, and it's evolving, right And you know,
(42:06):
certainly we have so many successful women clients we deal with,
and we have so many our firm has a lot
of successful women, and we've got a lot of great
women advisors and I appreciate them tremendously. They are I mean,
I'm telling you they are top notch. And for us
to be able to support this educational day and it's Tuesday,
(42:27):
August twenty fifth at uph and they haven't been to
Universal Preservation Hall. It's amazing event space, so highly recommend
it and you know, you go on and get your
tickets right through our website. There's a link to do that.
And again, it can't be happy or more proud to
(42:47):
be the premier sponsor for this great event. And also
this Shero Fund, which is you know, really this group
of women that they help support others as they start
a business or they get going in their career, which
I think is very powerful. But a few last topics
to discuss before we're done here. One of the things
(43:10):
I want to highlight our HSA accounts House saves accounts,
and you know, they're a great way to save money.
It's really the best way from a tax perspective, to
save dollars. So you know, basic just is you have
to be in a high deductible deductible health insurance plan
and if you do, you can put away pre tax dollars.
(43:31):
This year it's eight seven hundred and fifty dollars for
a family, and if it's just for yourself, it's four
thousand and four hundred dollars for an individual. Those dollars
go away put in pre tax, they grow tax free,
and come out tax free for qualified healthcare expenses. So
again it is the only account that's pre tax. You
(43:53):
don't pay taxes going in, and if it's for healthcare expenses,
you don't pay taxes on the growth or the money
going out. There's no other counselor in that same category,
so these are great accounts. The other thing, too, is
that you can get these dollars invested in the market.
We do this for our clients as well. And the
(44:14):
other caveat to this is if you take dollars out
of the HSA and use it for non healthcare expenses,
there is a twenty percent penalty on that, so that's
very important to know. But that twenty percent penalty goes
away after the age sixty when you're sixty five or older,
So that's also very important to know because you know,
(44:34):
you can you have to worry about having too many
dollars there if you put moneys in there and you
don't use it for healthcare expenses. You could just use
it like you would a traditional array, right that you
put in pre tax dollars, it comes out and you
pay taxes on the distribution on that HSA if you're
using it for non qualified healthcare expenses after the HHAFT five,
(44:56):
but there's no penalty on that if you're sixty five
and older. So again, you know, are just a great fund,
and you know for many people, you know, having a
high deductible plan, it's a great it could be a
great way if you don't have major health care expenses.
You know that that's a great way to save money
and you know within HSA in the most tax efficient
(45:18):
way possible. So I would encourage you to do that.
And the thing is those accounts can't get transferred to
the next generation now they need to distribute them. But
you know it can move to the next generation and
just get distributed like a traditional IRA. Well, folks, it's
been a great hour. I hope that you learned a
little bit. It's I always love being here with you.
(45:40):
And again, if your father out there, have a great day.
And if you don't forget to say a happy Father's
Day to your father, you'll listen to Let's talk money.
Brought to you by Bruchet Finance Group. While we help
our clients prioritize their health, while we manage their wealth
for life, take care of yourself and take care of
each other, folks,
Good morning everyone. My name is Martin Shields. I'm the
chief volprovisor at Bouchet Finance Group, and I'm going to
be your host today for Let's Talk Money. It's great
to be here with you on this gorgeous, sunny summer morning.
Happy Father's Day to all fathers out there. I hope
that you are relaxing and enjoying yourself, as you may
(00:22):
know if you're a listener. I'm the father of three
amazing young adults and I look forward to spending some
time with them and my wife. And you know, Father's
Day is a great day. I mean, I want to appreciate,
you know, being a father and all that entails. But
you know, just there's this an element of it one.
(00:44):
You know, we're really in the summer. We're I think
today's the summer solstice, so the longest day of the year.
We're officially in the summer. You got the US Open on,
which is always a great golf tournament to watch, and
you know, to me, it's about just spending time with
my family, nothing fancy or crazy. I also do every
(01:06):
My standard go to meal, whether it's my birthday or
Father's Day, is a steak and scalps me and they
sailing a little red wine and Boston cream pie or
something of that sort. So you know, those basic things,
and just spending time with my family, and I'm sure
(01:26):
with yourself or your father, that's really the important things.
And actually the funny thing is too is my kids
are you know, eighteen to twenty two. They still make
me handmade cards, and that's I'm telling you, is my
most favorite thing about whatever I would receive on that
day or this day. And I always just ask them
(01:48):
not to get me anything, but if they can make
me a handwritten card, I'm going to be very happy
with it. So again, happy Father's Days everybody. And it's
great to be here with you to answer any questions
you may have for your arding, your financial planning or
investment management concerns. And I encourage you to call in
with those questions. As they always say, there's no dumb
(02:09):
or silly question except for the one you don't ask,
and you may be doing your fellow listener a favor
by asking that question that they have as well. So
give me a call. You can reach me at eight
hundred talk wq I. That's eight hundred eight two five
five nine four nine, or if you're too shy to
get on the phones, you can email me at ask
(02:32):
Bouche at bouchet dot com. That's asked Bouchet at Bouchet
dot com and Bouchet is spelled b O U c
h e y and this dot com. Well, a lot
to discuss this week. Markets are, you know, getting real
close to getting back to all time highs. We got
(02:54):
a last weekend, we got a peace deal or the
start of a peace deal in the Middle East, and
that definitely helped oil prices down to bring him down
to seventy five dollars a barrel and gave some hope
that maybe some of this inflation that we're seeing could
help peter off a little bit. We had Kevin Warsh
(03:15):
have his first press conference and give guidance that as
of right now, interest rates are going to remain where
they are. I think he did a nice job. You know,
he's obviously an Albany Capital native and really nice guy
as well, but I think very smart guy. And I've
(03:37):
heard people say that they're concerned that he's just going
to be under the direction of Donald Trump and potentially
lowering rates too dramatically and causing inflation, and I don't
think that's what you saw in the press conference, and
I don't think that's what you're going to see. You know,
at the end of the day, Kevin Warsh is a
smart guy and he's going to do whatever he thinks
(03:59):
is best for the economy and the markets. And I've
said also all along that if you learn something from
the seventies and eighties that you don't want to be
presiding over a period of time where inflation really takes off.
He'll do whatever he thinks he needs to be doing
to make sure that the economy remains strong, but that
(04:20):
the inflation remains checked. And you know, whether that's lower rates,
keep them the same, reducing quantitative easing where which is
where we go out and buy bonds, whatever that needs
to be done. I have confidence that helped you that,
and I thought his press conference was very good. He
(04:42):
has a good way about him. And then you know,
I will see with the war, it's a challenging environment
to say the least, and even this weekend there's been
some on and off with it again. But I do
think both parties really want to put this behind us,
and oh the straight are hermus and if we can
(05:03):
get that in place and get the ships going. I
think you'll see oil prices go down, which will certainly
be beneficial to inflation. So we'll keep our fingers crossed
and see what happens. I'd like to discuss a number
of things. Certainly, you know, retirement planning comes up a
lot with our clients. It's a big reason why they
(05:25):
engage us. And you know, it's interesting as you move
into retirement, it really requires a whole mindset change as
to how do you approach your finances. And you know,
I always say when you're younger and you're accumulating, depending
on your situation, you can have a lot of complicated
(05:46):
issues that and this is where our firm steps in.
Where you know, maybe you're an executive with a company
and you have stock options or restrich to stock units.
We get involved with that or executive benefits. Or maybe
you're a small business own or and you're looking to
manage that and be able to save with your small business,
(06:06):
or maybe you have family wealthy you're trying to deal
with some of those issues. So there's a lot of
areas we get involved with our clients. But it's only
when it comes to retirement planning. I try to give
guidance that, you know, in general, I really have never
met anybody who hasn't been happy to move in retirement.
Very rarely do they have any regrets. I will say
(06:29):
that one of the most important things is that people
have a plan of how they're going to use their time, right,
Because you know, the idea of just kicking back and
doing nothing that works for about three months, maybe six
months a year at the most, but at some point
you've got to do something that keep yourself engaged. And
whether it's a hobby, whether it's volunteering, whether it's part
(06:51):
time work with taking care of grandkids, whatever the case
may be, it's those are all great options, but you've
got to have something to keep yourself engaged. But it
also requires you to appreciate that there's there's a changes
in you know, your mindset on finances, changes on just
(07:12):
how you approach life, and they could be challenging, right,
I mean, most of it's good, but not you know,
some of it can be a little bit challenging. So
I just want to spend a few minutes and talk
about that and provide some highlights of what I see
when we move into this. You know, one of the
things that we talk about is the transition, so before
you retire, that transition into retirement and some of the
(07:34):
things you can do that people really are not necessarily
thinking about. And you know, a number of meetings I
had this past week, one of the guidance I was
giving to these couples is that, you know, they've done
a great job of saving for retirement and they want
to spend more money. And one you know, by going
through the planning process, they're able to see that they can,
(07:57):
in fact actually spend more money, and that they've because
they've done this such a great job and they've been
able to grow their portfolio and manage their expenses, they're
really a good spot to retire, maybe a little bit
earlier than expected. Right. That's always a great conversation when
we can give guidance that they don't need to maybe
work for another four or five years, but maybe how
(08:18):
about next two or three years they can retire. The
other thing is that even when they're still working, there's
a really good likelihood they don't need to save anymore
for retirement. Right, Because you think about this when you
get these latter stages of your working years, the dollars
that you put in are not going to mean as
(08:40):
much as the growth in the portfolio itself. Right, So
if you're saving, say ten, fifteen, twenty thirty thousand dollars,
that's really valuable, especially over time. But when you're a
year or two out, that additional twenty thousand or thirty
thousand dollars really doesn't mean as much. It's a growth
in the portfolio. In particular of the portfolio is you know,
(09:02):
one million, two million, three million dollars. That growth of
ten percent means a lot more than adding that additional
twenty or thirty thousand dollars. And what I always tell folks,
I'd rather than work another year or two uh, and
then take that extra money that they would be saving
and spend it spending on travel, spending on doing things
(09:23):
around the house. And in many cases they can do that,
and that's that's something they're necessarily expecting to do, uh,
And they always appreciate that guidance that you know, hey, listen,
how about if you continue to work, that that additional
money that you used to be saving for retirement you
can spend And that really can kind of change people's
(09:44):
perception of working a few more years. The other guidance
I always give is, you know the potential working part time. Uh,
you know that as a very powerful thing to be
able to do that from retirement planning perspective, is you know,
to stop working now, but the work part time for
another two or three or four years. If you can
(10:05):
do that, then that's additional money that you have that
maybe you don't need to draw down as much from
your portfolio or maybe even just spend that additional money, right.
And I always think that if you can do that,
and not all people are able to do that with
their job, and then some folks it's either all or nothing,
But if you can do that, it can really add
(10:27):
a lot of value both financially but also from a
personal perspective to your life. You know, I always tell folks,
you know, you don't realize that with your job that
you've been doing for say forty plus years, that there's
a lot of elements that exist in your own personal
perspective of who you are that are tied up with
(10:48):
your job and your career. And one is there's a
social element. Right. You may not be best friends with
people you work with, You may not even be you know,
socially friendly with them outside of the world, but there
is that social connection that you have with most of
the people you work with that adds value to your life. Two,
there's a sense of identity. You've been doing that all
(11:11):
your life. And you know when you go to a
contail party and you start talking to somebody and say, well,
what do you do? You know you talk about that. Well,
if you're retired, that kind of goes away. You talk
about what you did, but it's not who you are now.
So there's a sense of identity that goes away as well.
There's a sense of need, right you know, when you're working,
(11:32):
you understand that if you're doing a job in general,
you're needed in that job, and that sense of need
is really important. You may not appreciate that all the time,
but as humans, that's a big crux of how we
operate is there is an importance of being needed. The
other thing with that, too, is even your relationship with
(11:54):
your spouse, right you know, I see this especially with
one spouse that travels. That's they've been been doing that
for years. I was just talking with one couple. The
husband has travel for work. There was one point he
was traveling three weeks out of a month, and now
he travels a week or two out of the month. Well,
guess what when he's not traveling anymore. Their relationship is
(12:17):
going to change now hopefully for the better, but in
some respective is going to be definitely some challenges, just
to the extent that that's going to be much different
than what they've always done for all their life. So
I think you'd appreciate that your relationship with your spouse
is changing as well. The other element that's important to
appreciate is that throughout all your working career, you have
(12:41):
been saving dollars. Right, you're putting money away and getting invested.
Now you've got to flip that equation and you've got
to start to draw down on your portfolio. Well, that's
a big change that is not always an easy thing
to be able to kind of comprehend. And again, I
think our firm adds a great deal of value across
(13:05):
many different spectrums with our clients. But that's one of
the biggest elements is that we really help frame that
concept of making your portfolio turn it into a paycheck.
You know, we always say we'll put it in the
fifth or the fifteenth or the twenty fifth of the month,
we'll withhold taxes, make sure it goes right to your
checking account, and really it becomes your new paycheck. And
(13:28):
that idea is difficult for folks, and also just mechanics
of it, like where does that money come from? From income,
from growth in the portfolio, and oh, by the way,
what if there's market volatility, you know, how is that
going to impact your ability to continue to provide that
those distributions. And for our firm, we have an amazing
(13:51):
investment team that handles that across all of our client portfolios.
You know, we talk about this all the time, the
fantastic job they do, and certainly this year has been
no accession. They've had a great job. They've done a
great job of adding some task overlays into the portfolio
of that added a tremendous amount of value. But they
(14:12):
also do a great job of managing those distributions for
our clients. So what we do is we put away
two years with the distributions into a market servative allocation
so that even if there's market volatility, whether it's with
you know, could be with dogs, commun with bonds. Right,
you know, people don't appreciate that sometimes bonds can be
(14:33):
volatile as well, that with this fund it's more conservative.
It's a steady any fund, you know, yielding it around
three to four percent, And it is just a great
way that we're able to provide those distributions in good
times or in times of volatility, and that's an important
(14:54):
part of how we operate. And then our investment team
is constantly replenishing those two you're up to two years
worth of distributions and having it set as the market
goes higher. So that's, uh, that becomes very important. The
other thing I always try to give a perspective to
retirees is that this idea that the grass is not
(15:15):
always greener, right, and I see this that you know,
they retire and they think they need to make a change,
and quite often that change includes moving someplace. Now, sometimes
that's good, I don't know, you see it. They want
to move for lower taxes, they want to move for
lower for warmer weather. You know, there's a lot of
different reasons. But I always caution them to do it
(15:38):
in a kind of well thought out, methodical fashion because
you know, the fact of the matter is if you
just go ahead and sell your house and buy another
house someplace and move. You may get there and go
was this was this the right move? I'm not sure
this was the right move. And you know I have
epic stories less though with clients, but people I know
outside that have done some made some decisions like that
(16:01):
and it has not gone god well for them. And
so I always tell people when you're making these decisions,
you know, you may think the grass is greener that
if you go ahead and you move someplace, that that's
going to be your ideal situation. But I always tell them,
you know, why don't you get rent for a while
there first and confirm that that's the right move for
you before you just go a wholesale tell your home
(16:24):
and buy buy another home someplace else. And you know,
you can always move back or you know, change and
go a different direction, but it is smarter to take
it one step at a time. So again, these are
all different changes that you see. You know, it's funny
I had a meeting with clients this week, and you know,
(16:47):
this is quite oftome the case with clients. I become
their marriage counselor slash, you know, counselor on spending and
you know, we talk about how you know. When it
comes to portfolios, there's numbers, there's the analytical part, but
this is psychology. There's the emotional part, and that even
becomes more so with couples and how to make these
(17:09):
decisions that are important. And I will say that with
our firm and with all of our advisors, they're great listeners.
They have a way of really getting to the point
of what clients are looking to get guidance on, and
then they're great communicators. They have a great way of
providing that guidance that gives people confidence to be able
(17:32):
to make those decisions and say, you know what, I
think this is the right decision, both from a gallar perspective,
but also from an emotional psychological perspective, whether it's an
individual by themselves or with their spouse as well. So
all those things become very important as you move in retirement.
(17:52):
And I think many of these things people aren't expecting, right,
They're just thinking about the positives of retirement, which are great.
I mean there's many positives and as we always tell
our clients are tagline is health, wealth for life. And
if you have your health, you know you cannot take
that For Brandon you have it one day, the next
(18:14):
day things can change very dramatically. And if you have
your health and your reasonably good financial situation, go on
and spend that money. That is just extremely important. Can't
stress that enough that you know, you see it where people,
you know, they try to kind of struggle with that
idea and then something happens to you know, one of them,
and it changes their mind real fast. That you know,
(18:37):
every day that we have is not a given. We're
very fortunate. I always talk about the importance of gratitude,
and you know that means being grateful for uh, you know,
what they have in that relationship, but being willing to
spend some of those dollars to go out there and
do the things they want to do. Uh, And that
becomes so important. Well, I've got a few more topics
(18:59):
want to go before we hit break. But again, if
you have any questions, you can give me a call
at eight hundred eight two five five nine four nine
at eight hundred eight two five five nine four nine,
or you can send me an email at ask Bouchet
at Bouche dot com and Bouchet is spelled b O
(19:20):
U d h E Y. Actually, I want to spend
a few minutes talking about our website, which is Bouche
dot com. And you know, our marketing team does a
great job of putting this together and also updating a
number of things on our website. And you know we've
talked about one of the things that we have there
(19:41):
are client testimonials. We have almost fifty client testimonials. Uh.
This is done through a service and a website called
wealth Tender. Where it's important for us because we're under
the purview of the SEC. We got to make sure
we hit the requirements of that to have these client testimonials.
(20:02):
But to me, as somebody is talking to our firm
about what it means to work with us, I always
point them towards that because they just provide a good
perspective from again almost ficky of our clients of what
it means to work with us. And all those reviews
are five stars. They do a great job of kind
of sharing the insight and the value that our clients
(20:24):
have by working with us. And you know we always
tell it for such a clients, there is no there's
a contract, but there's no term of that contract. You
decide that you know, we're not meeting your needs. You know,
we could delink you from the institutional side of Trois
Schwab and move you to the retail side, and you
know that's it. Now. I will say that our client
(20:45):
retention rate is over ninety nine percent annually, which shows
you the value that we're offering. And the two things
we always ask clients if they decide to go a
different direction. One, let's just have a conversation that maybe
you know, you thought we were going to go more
left and we're going more right, and that can mean
a lot of different things, but let's just have a
conversation that maybe we can do something to meet your
(21:07):
needs that we're just not aware of right that you know,
we're not meeting your expectations, but we can change course
and try to do that. So we always ask to
have that conversation. And then two, we just always ask
that if they decide to leave, let's just have a
conversation about what we could have done differently. And you know,
I always tell folks that you know, at the end
(21:29):
of the day, it's a business decision. They need to
do what's right for them. And this is true if
they're leaving another advisor to come work with us, it's
a business decision, so we support that. But I'm a
big believer in, you know, being open and honest and
being good communicators. We try to do that with our
clients and we ask that they reciprocate with that. So
(21:52):
I always just say, hey, you know, if you made
that business decision, whether it's with us or with another firm,
just communicate what your thoughts are, why you're doing it.
And we always tell our clients or somebody who leaves,
if you decide change direction, we always welcome you back.
You know that relationship can always be restored. Well, really
(22:12):
a break, folks, but come back in as we take
your question. You listen to Let's Talk Money, brought to
you by Bruchet Finance Group. While we help our clients
prioritize their health, well we manage their wealth for life.
Welcome back, folks, those of you just joining us. My
name is Martin Shields and i'm your host today for
Let's Talk Money. As always, it's great to be here
(22:33):
to answer anto your questions you may have, and you
can call in with those questions 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 Bruche at Bruche dot com. At ask
(22:53):
Bouche at bruche dot com. So whatever route you want
to go, send me your question. Calling with your question,
I'll give you some guidance. So a number of things
that I want to continue to discuss today, but I
do want to highlight the World Cup. So I if
you you know, it's everywhere, so it's hard not to
(23:13):
see it, and you know, I don't know, you know,
I think the US is not a huge soccer country.
It is changing, though it is. I think it's evolving.
But you know, as you watch these games. And I
went down to Philadelphia with my daughter and my brother
and his daughter and we went to see Ecuador versus
Ivory Coasts in Philadelphia, and I will tell you, like
(23:36):
it is such a great environment that lincoln Field Financial
Field was just packed and just this really positive environment,
great soccer game. Ivory Coast won one nothing, but just
in general, as you see these games going on, it
is great to see all these folks coming in from
all over the world and you know, supporting their teams
(23:59):
and parody that exists with soccer these days, so you
have usually it was thirty two teams that are in
the World Cup. Now there's forty eight teams. They've expanded
it just like everything else. Of course, it's I mean,
it is a money grab, but that is what it is.
But you know, it's amazing to see, you know, how
much parody there is, and then it's also amazing to
(24:21):
see how good the US is playing right now, and
you know, you take it one game at a time,
but from there there right now guaranteed to be into
the next roune, which is called the knockout stages, and
they're gonna be one of the top seeded teams in that.
We'll see how they do against Turkey this Thursday. But
it's great to see them playing at that level and
(24:43):
certainly a lot of fun as well to watch all that. So,
you know, it's one of those things where you know,
I enjoy watching soccer. I've played soccer in college and
I play now, but there are some things where you
kind of still scratch your head. I've you know that
there's always the flop, which I don't really appreciate when
(25:03):
that goes on because you see it certainly on the
replay and it's very evident what's going on and then
you know, there's also this concept that the tie zero zero. Uh.
You know, I'm more of the mindset that, uh that
you know, they just keep playing until you get a winner,
and even if like you do it in hockey where
you start taking players off the field and you know,
(25:27):
at some point it's you know, five on five or
whatever it is, but there's just an element where you know,
leaving it a tie, or when you get to the
knockout stages, you'll go to what called penalty shootouts if
there's no score or if it's a tie game, and
you know, it's almost like a different sport. So you know,
I just think that in general, you've got to have
(25:47):
a winner when it comes comes down to these games.
But it's been great to watch. Let's move on to
a couple other financial planning topics. Uh. You know, it's
interesting because there's always a financial expert there where it's
Susie Orman or whoever the case may be. And you know,
so I will certainly either read an article or listen
(26:08):
to what they're espousing, and you know, in many times
you know their guidance. It kind of makes you roll
your eyes. And it's interesting because they're put a financial experts,
but yet they're really you know, they're not dealing with
people on a day to day basis. So you know,
in a number of ways, you can as you listen
to them, you can tell that they're out of touch
(26:30):
with what the reality is for many folks. But there
was one individual that it was talking about just how
people spend money, and you know that one of the
problems that people have is that they don't prioritize what
is really important to them versus other things where they
spend a lot of money, and that that actually did
(26:51):
resonate with me to the extent that you know, I
think that you know, in many ways, we're such a
consumerism economy. It drives capitalism. You know, consumer spending is
seventy five to eighty percent of the US economy and
that's not going to change. You know. I always say,
don't bet against the US consumer. They will work four
(27:14):
or five jobs in order to spend the type of
money they want to spend. But I do think it's
safe to say that for many of them, in particular,
if you see that they don't have a sufficient funds
to cover an emergency, right, We've seen this in different
situations where you know they lose a job, you know,
(27:36):
the government shut down, and they don't have enough funds
in their emergency reserve fund to cover that emergency. And
you know, we always give our client's guidance that you
want to have at least three to six months of
cash set aside. I don't even care if it's in
CDs or whatever it's but just set aside that you
never touched. That it's your piece of eye money that
(27:58):
if you need something and it's a big expense, you
have it there. You have it ready to go. Whether
you lose your job or you have a big medical
expense or something with the house, you're able to access
that money. And you know it could be a larger
amount too. Right, if you and your wife both work
very solid jobs that are very stable, you have your
(28:21):
mortgage paid off, you don't have kids, or you have
kids that were college has always paid off, you know
three to six months is going to be more than enough.
But now if you are trying to do a startup,
or you and your spouse work in companies that are
a little bit more uncertain and your job is more uncertain,
(28:42):
you know you might want to have nine to twelve
months of cash set aside, that might be the best
approach is to have additional fund set aside in that situation.
But you know, again, I think if people start looking
and say, hey, what's really important to me, either personally
myself and or family or with my spouse, what are
(29:02):
the most important things, and let's prioritize how we spend
money on those, and let's look at our other spendings
and say, hey, do we really need to have this.
We spend money across a lot of different things, in
particular these days where a number of these expenditures are
membership type of fees, right, whether it's with TV subscriptions
(29:24):
or other subscriptions that you have. It's a great model
for our business, right because once you get into that,
it's automatic renewal, and it's hard to remember all the
things that you're actually spending money on. But if you
start to look at your budget and how do you
spend your money, what's the most important thing? I do
think most folks would be so much better off if
(29:45):
they start to say, hey, we're going to prioritize these one,
two or three things. These are important for us for
our family. And I always say this you know, obviously
having three kits of our own, but I think in general,
having these type of budget discussions with your kids is
important because that way you can show them that, hey,
(30:07):
let's talk about things that are important for us. We're
gonna spend money there. These other things less important, We're
either going to stop spending money on those, or we're
gonna spend less money and get them involved with it.
I think it's very important that kids understand that concept
that you can't get everything you want. There's gonna be
some things that you want that you can't get, and
(30:27):
there's gonna be other things that you want that you
may have to save for. And getting them involved with
that at a young age is very important. You know,
with our kids when they're working, I always give them
guidance you can spend some of the money. Now, some
of the money we're gonna be putting into a raw
fire raise that's going to grow, and you know, if
you need access it for certain things you can't, but
otherwise it's for your retirement. And then some of that money,
(30:49):
because these are the summer jobs they have, you're gonna
spend during your college year. But having them understand that
and get into that thinking as soon as you can
is very important. And you know, I do think that's
great guidance for folks and from families is you know,
I always say, want to have a budget. Actually, one
(31:10):
of these financial experts that was kind of put wooing
the idea of a budget, and you know, I had
to laugh, because of course they do, because when you
make enough money, you maybe don't need a budget. And
you know, I'm sure they're very successful as being financial experts,
but for most people, having some element of budget is
extremely important for financials success. And even if it's just
(31:35):
to start big buckets, right, you have to have a
granular budget, and I always say that they have that
budget in place. The value is that you're going to
understand the times where you deviate from that and you
can course correct if you don't have a budget. The
problem also becomes when you're married and you're trying that
you have you got these different priorities, right, and there's
(31:58):
always a battle for those priorities, and we have the budget,
you can agree that, hey, this is the budget we
agree to. We've got to try to stick to that.
So maybe it's eating out less, maybe it's buying less,
new clothes or whatever the case may be. You know,
there are ways to go about it to make sure
you fit within that budget. And certainly you know, I
(32:19):
always tell folks, you know, the two first things you
got to pay. You got to pay your taxes, and
you've got to put money away for retirement. After that,
everything else is somewhat discretionary. Now you're going to have
fixed expenses that you can't you know, it's going to
be fixed every month, whether it's rent and utilities, and
you're going to have variable expenses as well, and you're
(32:41):
going to have more control over those variable expenses. And
the other thing you want to do from a budget
perspective is put money's away for one time expenses, right,
so that you know, every year you own a house,
even if you don't do any major top or improvements
to it, maybe you're putting money away to fund those
capital improvements when something happens, right, so that when you
(33:01):
need that air conditioning unit, you have the money set aside,
it's ready to go. And that's the value of having
that budget, in particular as a household. So I would
highly if you don't have a budget, I would highly
encourage you to get one in place, and in particular,
what we see is there are you know, individuals and
families that they make enough money they don't really need
(33:23):
to have a budget. They kind of spend what they
want and still be successful. And that's possible. But what
you have to you appreciate is when you move a
retirement it could be a little bit different. Right, Things
are going to be probably a little bit tighter for
most folks, especially if they're coming from high income earners.
It's going to be a little bit different. So I
would encourage you to even if you're a high income earner,
(33:45):
to have a budget in place as you move into
a retirement. It's going to be very valuable for you
to be successful. We're going to go to the phone lines.
We have Frank from Burnt Hill.
Speaker 2 (33:56):
Frank you there, Yes, TI, Hi, Frank.
Speaker 1 (34:02):
How you doing.
Speaker 2 (34:04):
Good? I want to give you a testimonial and then
I want to ask a question. So I am a
client and you guys have been the best move I've
ever made. Follows my guy, and he's been great, and
the whole team is great. I always get an answer
(34:27):
when I call, and it was the best move I
ever made, Maddie. But anyway, my question, and it is
safe withdrawal rates. When you factor in a safe withdrawal rate,
do you add in the fees that you guys charge. Well, first,
(34:51):
I want to say thank you for your testimonio.
Speaker 1 (34:54):
I know who you are, frank and I appreciate you,
and I know Paula appreciate you, and so thank you
that that means a lot to us. So, yes, what's
all rates? We do everything we talk about, whether it's
it's all rates or rate of returns. So you know
you have a client portal, you can look at your
rate return. That's net of our fee, right that our
(35:16):
fee is removed in that. And certainly when we talk
about which all rates is net of our fee. So
if you're taking you know, four and a half percent, uh,
and we're assuming a five and a half percent rate
of return, that five and a half percent rate of
return is net of our fees. So yeah, that's that
that is taken into consideration.
Speaker 3 (35:38):
Okay, So so I'm taken say if I'm taking four percent, Marty,
do I factor in that fee and say I'm really
taking four point seven percent?
Speaker 1 (35:55):
Well, so what I would do, Frankie, I would flip
it a little bit and look at that our fee
as an impact on your rate of return. Right, So,
and again this is how we view it is you know,
because if again your portfolio is returning eight percent, it's
returning eight percent after our fee. Again, that's the way
(36:19):
we kind of view it. Even as we talk about
it in your plan. We're not adding on our fee
into your distribution rate, but we are subtracting it from
your rate of return. And you know, as we talk
about our ability to outperform benchmarks and all those things,
it's always net of our fees and net of any
(36:40):
fees with the funds we use. So again, you can
either add it on if you wanted to, but I
think it's easier because when you when you look at
your portfolio and the performance on our Bouchet portal, it's
going to be net of our fees already. If that
makes sense, it does.
Speaker 2 (36:59):
Bodies.
Speaker 3 (37:00):
You guys are great, have a great weekend, all.
Speaker 1 (37:03):
Right, Thanks Frank, you too, take care. Right. So, as
I talked about are we are, we've got great clients
and Frank is one of them. And uh, you know,
I always talk about how fortunate I am to work
at this amazing firm with all of our amazing colleagues,
who I appreciate so much, but also with our amazing clients.
(37:24):
They're just they're successful people who have just done a
great job of saving and living and within their means.
And uh, now they're they're either you know, still working
and saving or they're moving in retirement and you know,
or into what we call financial independence and just living
great lives. And so I feel fortunate every day to
(37:45):
be able to deal with them. Uh, And they're just
phenomenal people. But Frank's comment, our question is is a
good one, which is you know, how what are you know,
distribution rates and how do you consider that? And you know,
I've always tell clients or prestructor clients when they're looking
at rate of returns or anything like that, that's always
(38:06):
net of our fees, right, And that's important, you know.
And you know we always talk about that that value
proposition of paying a fee, and I always say, I
don't want to pay ten dollars for something that I
don't get value from. In fact, I was joking with
one of my colleagues, I go to the bookstore in
Northshire here in town. I love going to the north Shire,
but what I found sometimes is I buy a book
(38:28):
and then I start reading, I'm like, this book's no good.
So you know, in general, I only go to the
bookstore and get something what I know, it's a book
that I'm going to like, right somebody's recommended it. Otherwise
I'll go to the library because I can get books
from the library for free, and I don't want to
spend twenty dollars on a book that I don't like.
There's no value in that. And so you know, I'm
a big believer in this concept of value. And you know,
(38:51):
our clients appreciate the value that we provide for them,
both from an investment perspective, financial planning perspective, and our
client service team. And that's where I talked about, which
is we don't have a term to our contract. You
can leave at any point, but that they stay day
to day, week to week, month to month, year to
year because of that value. And you know, we have
(39:12):
clients now our firms. You know, in our thirty fifth year,
we have clients that have been on with us the
whole time. And we have clients where started with grandparents
now and then it went to the the kids, and
then now and then it's the grandkids and now literally
now there's great grandkids. They're just little babies or kids
(39:34):
in elementary school, so they're not necessarily clients. But there
are really four generations that we're helping right now with
a number set of clients. And these are very successful families,
you know, I always say so these days, for most
people who are clients of ours, it's family wealth. It's
going to get passed on to the next generation. That
next generation needs to be make sure that they're prepared
(39:56):
to receive those assets. And you know that's where you know,
parents play a big role on that, our grandparents, but
also our firm does. And you know, we always tell
our clients that, you know, as we start working with them,
we will always give their kids or grandkids clients I'm
sorry advice. Now, they may not be able to come
on as clients just they don't have enough assets, but
(40:18):
that doesn't mean we won't help them. We'll make sure
they're doing everything right to make sure that they're on
the right path. And that's very important, right you know,
I always tell clients right which is you're saving those
dollars one you should spend them because somebody else will right,
whether it's a charity, whether it's your kids, whether it's
(40:38):
you know, nieces and nephews, people will spend those dollars,
so you might as well, first of all, spend them.
But two, you really need to make sure that whoever's
receiving those funds. Again, whether it's a charity, whether it's nieces, nephews,
whether it's kids or grandkids, you need to make sure
that they're prepared to receive them and that they're doing
all the right things themselves. Because we do see that,
(41:01):
right is, if that next generation is doing all the
right things, if they're preparing for retirement themselves, if they're saving,
if they're managing their spending and really doing all those
right things themselves, they're going to take a much different
approach to receiving your dollars, right, They're gonna think much
(41:22):
differently about them. Well, we're gonna go on. We have
a few more topics to discuss, but you know, I
do want to highlight we did have the ad for
the women event, and you know, I just really want
to stress that that's also on our website. You can
go and register for that. It's going to be a
phenomenal event. It's coming up in August, and you know,
(41:44):
I just think that we're so glad we're the premier
sponsor for this event. Steve has always been very supportive
of women of wealth, and it really has been the case.
I mean, our industry for the longest time is you know,
a bunch of old men, usually white and with a
lot of white hair, and it's evolving, right And you know,
(42:06):
certainly we have so many successful women clients we deal with,
and we have so many our firm has a lot
of successful women, and we've got a lot of great
women advisors and I appreciate them tremendously. They are I mean,
I'm telling you they are top notch. And for us
to be able to support this educational day and it's Tuesday,
(42:27):
August twenty fifth at uph and they haven't been to
Universal Preservation Hall. It's amazing event space, so highly recommend
it and you know, you go on and get your
tickets right through our website. There's a link to do that.
And again, it can't be happy or more proud to
(42:47):
be the premier sponsor for this great event. And also
this Shero Fund, which is you know, really this group
of women that they help support others as they start
a business or they get going in their career, which
I think is very powerful. But a few last topics
to discuss before we're done here. One of the things
(43:10):
I want to highlight our HSA accounts House saves accounts,
and you know, they're a great way to save money.
It's really the best way from a tax perspective, to
save dollars. So you know, basic just is you have
to be in a high deductible deductible health insurance plan
and if you do, you can put away pre tax dollars.
(43:31):
This year it's eight seven hundred and fifty dollars for
a family, and if it's just for yourself, it's four
thousand and four hundred dollars for an individual. Those dollars
go away put in pre tax, they grow tax free,
and come out tax free for qualified healthcare expenses. So
again it is the only account that's pre tax. You
(43:53):
don't pay taxes going in, and if it's for healthcare expenses,
you don't pay taxes on the growth or the money
going out. There's no other counselor in that same category,
so these are great accounts. The other thing, too, is
that you can get these dollars invested in the market.
We do this for our clients as well. And the
(44:14):
other caveat to this is if you take dollars out
of the HSA and use it for non healthcare expenses,
there is a twenty percent penalty on that, so that's
very important to know. But that twenty percent penalty goes
away after the age sixty when you're sixty five or older,
So that's also very important to know because you know,
(44:34):
you can you have to worry about having too many
dollars there if you put moneys in there and you
don't use it for healthcare expenses. You could just use
it like you would a traditional array, right that you
put in pre tax dollars, it comes out and you
pay taxes on the distribution on that HSA if you're
using it for non qualified healthcare expenses after the HHAFT five,
(44:56):
but there's no penalty on that if you're sixty five
and older. So again, you know, are just a great fund,
and you know for many people, you know, having a
high deductible plan, it's a great it could be a
great way if you don't have major health care expenses.
You know that that's a great way to save money
and you know within HSA in the most tax efficient
(45:18):
way possible. So I would encourage you to do that.
And the thing is those accounts can't get transferred to
the next generation now they need to distribute them. But
you know it can move to the next generation and
just get distributed like a traditional IRA. Well, folks, it's
been a great hour. I hope that you learned a
little bit. It's I always love being here with you.
(45:40):
And again, if your father out there, have a great day.
And if you don't forget to say a happy Father's
Day to your father, you'll listen to Let's talk money.
Brought to you by Bruchet Finance Group. While we help
our clients prioritize their health, while we manage their wealth
for life, take care of yourself and take care of
each other, folks,
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