January 12, 2026 • 9 mins
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Speaker 1 (00:00):
The talk station.
Speaker 2 (00:04):
It was six if if you five garcied Talk station.
Happy Monday to you. Coming up the next segment, we're
gonna an abbreviated Money Monday with Brian James. Not because
we don't want to talk to Brian, because Vva Ramaswam
is going to join the program at eight twenty talk
about well his new running mate Rob McCauley and op
ed that he wrote the other day that I read
on the air was amazing, plus his fundraising. Zach Haynes
is going to join the program. Bottom the Art, the
(00:25):
Ohio State Senate candidate for District seven, earned the Americans
for Prosperity endorsement, so he'll join the program. Then in
the meantime, Brian James Smallworth Financial give it us some information.
I guess our retirement number change. Welcome back, Brian James.
It's always great talking with you on the morning show.
Speaker 1 (00:40):
Absolutely, we'll do a minuscule Money Monday this morning to
make room for some other voices as well. But yeah,
happy New Year to you and everybody out there in
the listening world. Here, we kind of thought it would
be a good year to or a good time at
the beginning of the year here to just kind of
layout the what does it look like nowadays with inflation
for people who are thinking big picture around retire All right.
Speaker 2 (01:00):
Well, we did see reduced inflation. We're no longer at
eight percent I guess last year, as you point out
in your notes, three percent. Not so bad. A little
bit higher than I guess the two percent, which is
the ideal figure, but not so bad.
Speaker 1 (01:13):
Yeah, it's tolerable. Right, So with the Federal Reserve would
very very much prefer we want to be around two percent.
That's the goal to get the interest rates down, an
inflation down to a level that is sustainable over time.
We've been stuck at three percent for a long time.
But as you point out, we're not at nine percent.
I do not have people anymore talking about, oh my gosh,
(01:35):
we have to change our portfolio drastically because this nine
percent inflation rate is going to hang around forever. That
was transitory. The overall inflation was not, as we learned,
different different from what the Biden administration told us. For
a very long time. Inflation did hang around, but not
at those ridiculous levels.
Speaker 2 (01:51):
Well, as we've had many conversations before, and what you
can expect on average over the life of your long
term investments, isn't it like eight percent is really kind
of where you over time.
Speaker 1 (02:01):
Of course, it all depends on how aggressive you're gonna
be with your investments. I mean, realistically, if you look
at the stock market, it's averaged ten percent over thirty years,
and these are real numbers. They do take into account.
Of course, you know, the last thirty years include some
of the scariest years we've ever had, three of them
in fact, thousand and two, two thousand and eight, and
(02:21):
twenty twenty two, and as well as some of the
best years we've ever had. But if you smush it
all together, the stock market itself has averaged in the
neighborhood of ten percent. That doesn't mean you should throw
all your money in the stock market. That said, you know,
if you have a long term time frame, sure that's
an okay thing to do, as long as you understand
the roller coaster. Now, on the other hand, and what
we're really talking about today, if you are in a
situation where it's time to start drawing on that nest
(02:43):
egg and hopefully you'll all be there someday, then you
don't want to ride that roller coaster as much, because
you'll be sitting in a situation where the market may
have taken taken ten percent from your portfolio, plus you
need to withdraw four maybe five percent to pay the bills,
and that can dig us into a hole that sometimes
we can can't get out of.
Speaker 2 (03:00):
Bran So how does one assess that withdraw raiding? I
note that you mentioned four percent that apparently was the
rule of thumb, So how do you reassess or currently
assess that if you're at this place.
Speaker 1 (03:12):
Right, So let's go. Let's do a little history on
that four percent rule. That came from a study that
went from the that studied thirty year periods, assuming that's
kind of the average retirement length of time before end
of life expectancy, thirty year periods starting from the nineteen thirties,
so nineteen thirty to nineteen sixty, thirty one to sixty one,
thirty two to sixty two, and on and on and
(03:32):
on all through that time period. And the conclusion was,
if you withdrew four percent of your portfolio and the
market did what it did over those thirty year periods,
that's historical information. The four percent would never There are
no thirty year periods where that four percent would have
bankrupted you even in all with all the crazy stuff
that happened in those thirty year time periods. So that's
(03:53):
where that comes from. A lot of people have been
hanging their hats on that. It gets attacked every now
and then because of inflation concern or concerns that the
stock market is running too hot, we're relying too much
on history. But it still seems to be holding true.
You know, some people want to come back and say, well,
maybe I need to back off to three percent just
to be on the safe side. There's, of course nothing
wrong with that, bearing in mind that lifestyle is lifestyle
(04:16):
and that really does mean true sacrifices that you will see,
touch and feel in how you live your lives. But
at the same time, the whole point is, let's sit down.
Most people haven't even figured out what the lifestyle is let.
Speaker 2 (04:26):
Alone, but rate does to it well. And how long
is any given person going to live too? Because the idea,
of course, you want this money to last you through
your retirement, and retirement quite often is the time when
people get hit with, you know, the biggest medical bills,
the biggest complications, the problems. You don't have any money
coming in the door, and how many years am I
going to be around on this planet to need to
(04:47):
be able to tap into my my savings. So it's
the levels of difficulty and coming up with the accurate
numbers seem to be almost insurmountable.
Speaker 1 (04:56):
Brode. Yeah, it really does. And that's why I have
a job, frankly, because we have to simulate an awful
lot of different you know, I always walk people through that,
here's the honky dory outcome, here's everything you ever wanted
to do, and nothing bad ever happens. Again, that's our baseline,
and then next to that we can put in Okay, well,
let's pretend we have instead of three percent inflation, let's
pretend it's four percent or five percent something like that.
(05:17):
What happens there, and all we're doing is we're playing
with spending and time. Any financial plan is only looking
at those two things. When you truly boil it down,
there's a million different buttons to push and levers to
pull to illustrate that. But again, it's only spending and time.
That's all we're dealing with. So then right next to it,
we'll do a stress test which could be maybe we
have four or five percent inflation, or it could be
let's pretend the market punches us in the face right now,
(05:39):
that happened to anybody who retired in twenty twenty one.
They thought things were hunky dory, but then twenty twenty
two came along and took away possibly up to a
twenty percent of their portfolio for a brief period of time. Now,
for those who panic and sell out when that happens, yeah,
that's a permanent hit. You're not getting it back. On
the other hand, if you keep your head and you
understand market history and you can ride those things out
(06:01):
and still stay retired, you might not like it. That's
a different scenario, but it doesn't mean you can't afford
to take that hit. But the important thing is to
know what kind of hit you can take in the
first place, and most people don't well.
Speaker 2 (06:11):
And one of the other choices people have to consider is,
you know, delaying retirement rather than when taking socials security
on the earlier side, you do end up with a
lot more by way of monthly pay. And if you
can kick it off to say seventy oh.
Speaker 1 (06:24):
Absolutely you do. And yeah, so financial planning is easy
if your only goal is to poke the government in
the eye. Right, Some people come in and say, by God,
my plan revolves around me not taking Social Security until
seventy because I want as much money as that government
is ever going to give me. That's great. I will
say that in my thirty years of doing this, I
have a lot more fifty five year olds who say
that versus sixty five year olds. Our thoughts tend to
(06:45):
change over time, and I just I want my life back.
It's less about punching the government in my face, and
I just want my life.
Speaker 2 (06:52):
I was laughing about that so hard because it seems
to me a moment in time ago, I wouldn't even
entertain the idea of discussing retirement, Like, what the hell
am I going to do? No, I'm probably gonna die
behind whatever job I'm going to do, is always my
philosophy at this particular point, die behind the microphone. But no,
I think about retirement all the time now, Bryan, a
little different.
Speaker 1 (07:09):
You know, the more we age, the more we think
about it. It looks kind of cool, really is.
Speaker 2 (07:12):
And then real estate and liquidity, I understand, and that
makes perfect sense. A lot of your clients have a
significant amount of money tied up in real estate, but
can you actually access it? And is it something that
you should factor in terms of your overall investments, Like
you've got a million dollars invested in the markets are
distributed to mutual funds and bonds and all that, And
if you've got a million dollars in house, you really
(07:34):
don't have two million to play with, do you No?
Speaker 1 (07:37):
Exactly? Because that's hard to get to. You got to
keep the rain off your stuff, so you have to
have a roof over your head. There are ways to
do it, I mean you can. There are ways to
access that. The home equity lines of credit, by the way,
I think those are a good idea, even if it's
a just in case, because debt against your home is
probably going to be the best debt you can ever get.
(07:57):
Most people aren't comfortable with this, but when it comes
down to you, I'll give an example. So let's say
you figure out you need to buy a car, you know,
sooner than you thought you would, or something like that,
and you don't have the cash or what more happens.
More commonly happens is you know what, I don't want
to take anymore. Let's say you're at the end of
the year. I don't want to take any more tax hets,
I don't want to cause any more taxation. I really
want to push this into the next year. Right, you
(08:19):
could borrow fifty thousand dollars against your home. Let's pretend
that you're getting charged maybe six or seven percent on that.
Borrow fifty thousand dollars against the home in you know,
the November December timeframe to get the situation fixed, and
then in January February, when we're in a new tax year,
that's when you take the distribution and cause the taxation.
You know, we don't want that. But at the same time,
(08:40):
all you will have done in that case is borrowed
fifty thousand dollars and you pay again currently six to
seven percent interest on that, but only for a few months.
So you're really talking less than one or two percent
true hard dollars worth of interest. And that beats the
heck out of needing to finance things, you know, with
a credit card or you know, or borrowing from the
from the dealership for fixed amount of time. Well, there
(09:01):
are ways to tap into that. I think it's a
good idea to have a home equity line of credit
in your back pocket even if you never draw on it.
Speaker 2 (09:06):
Well, isn't that how the uber rich manage their money
and avoid paying income taxes?
Speaker 1 (09:11):
Yeah, don't sell your assets, borrow against them. Right, If
you want to play that game, then don't sell anything.
Figure out how you can borrow against them. If you
have a portfolio of securities outside of an IRA, you
can do margin loans, you can do portfolio loans. You
can borrow against those. Yes, there have to be payments made.
You are jumping through financial hoops to do this, of course,
But there's a reason that rich people get rich.
Speaker 2 (09:31):
Brian James, very interesting and informative discussion we've had here.
As we end of the new year, consider that. And
of course, as I always point out, it's great to
think half a financial planner sitting on your side of
the table, one that knows you for douce youry obligation.
That way, you don't have to fret and worry about
these issues day to day. Let somebody like Brian do it.
Brian James, appreciate all worth loading you out every Monday.
We'll do this again next Monday. I hope you have
(09:52):
a fantastic week. My friend, you bet have a good week.
We'll talk to you Monday, age fifteen. Right now, if
if, if I have cares the talk station of the Quick
Word for my friends and Zimmer
The talk station.
Speaker 2 (00:04):
It was six if if you five garcied Talk station.
Happy Monday to you. Coming up the next segment, we're
gonna an abbreviated Money Monday with Brian James. Not because
we don't want to talk to Brian, because Vva Ramaswam
is going to join the program at eight twenty talk
about well his new running mate Rob McCauley and op
ed that he wrote the other day that I read
on the air was amazing, plus his fundraising. Zach Haynes
is going to join the program. Bottom the Art, the
(00:25):
Ohio State Senate candidate for District seven, earned the Americans
for Prosperity endorsement, so he'll join the program. Then in
the meantime, Brian James Smallworth Financial give it us some information.
I guess our retirement number change. Welcome back, Brian James.
It's always great talking with you on the morning show.
Speaker 1 (00:40):
Absolutely, we'll do a minuscule Money Monday this morning to
make room for some other voices as well. But yeah,
happy New Year to you and everybody out there in
the listening world. Here, we kind of thought it would
be a good year to or a good time at
the beginning of the year here to just kind of
layout the what does it look like nowadays with inflation
for people who are thinking big picture around retire All right.
Speaker 2 (01:00):
Well, we did see reduced inflation. We're no longer at
eight percent I guess last year, as you point out
in your notes, three percent. Not so bad. A little
bit higher than I guess the two percent, which is
the ideal figure, but not so bad.
Speaker 1 (01:13):
Yeah, it's tolerable. Right, So with the Federal Reserve would
very very much prefer we want to be around two percent.
That's the goal to get the interest rates down, an
inflation down to a level that is sustainable over time.
We've been stuck at three percent for a long time.
But as you point out, we're not at nine percent.
I do not have people anymore talking about, oh my gosh,
(01:35):
we have to change our portfolio drastically because this nine
percent inflation rate is going to hang around forever. That
was transitory. The overall inflation was not, as we learned,
different different from what the Biden administration told us. For
a very long time. Inflation did hang around, but not
at those ridiculous levels.
Speaker 2 (01:51):
Well, as we've had many conversations before, and what you
can expect on average over the life of your long
term investments, isn't it like eight percent is really kind
of where you over time.
Speaker 1 (02:01):
Of course, it all depends on how aggressive you're gonna
be with your investments. I mean, realistically, if you look
at the stock market, it's averaged ten percent over thirty years,
and these are real numbers. They do take into account.
Of course, you know, the last thirty years include some
of the scariest years we've ever had, three of them
in fact, thousand and two, two thousand and eight, and
(02:21):
twenty twenty two, and as well as some of the
best years we've ever had. But if you smush it
all together, the stock market itself has averaged in the
neighborhood of ten percent. That doesn't mean you should throw
all your money in the stock market. That said, you know,
if you have a long term time frame, sure that's
an okay thing to do, as long as you understand
the roller coaster. Now, on the other hand, and what
we're really talking about today, if you are in a
situation where it's time to start drawing on that nest
(02:43):
egg and hopefully you'll all be there someday, then you
don't want to ride that roller coaster as much, because
you'll be sitting in a situation where the market may
have taken taken ten percent from your portfolio, plus you
need to withdraw four maybe five percent to pay the bills,
and that can dig us into a hole that sometimes
we can can't get out of.
Speaker 2 (03:00):
Bran So how does one assess that withdraw raiding? I
note that you mentioned four percent that apparently was the
rule of thumb, So how do you reassess or currently
assess that if you're at this place.
Speaker 1 (03:12):
Right, So let's go. Let's do a little history on
that four percent rule. That came from a study that
went from the that studied thirty year periods, assuming that's
kind of the average retirement length of time before end
of life expectancy, thirty year periods starting from the nineteen thirties,
so nineteen thirty to nineteen sixty, thirty one to sixty one,
thirty two to sixty two, and on and on and
(03:32):
on all through that time period. And the conclusion was,
if you withdrew four percent of your portfolio and the
market did what it did over those thirty year periods,
that's historical information. The four percent would never There are
no thirty year periods where that four percent would have
bankrupted you even in all with all the crazy stuff
that happened in those thirty year time periods. So that's
(03:53):
where that comes from. A lot of people have been
hanging their hats on that. It gets attacked every now
and then because of inflation concern or concerns that the
stock market is running too hot, we're relying too much
on history. But it still seems to be holding true.
You know, some people want to come back and say, well,
maybe I need to back off to three percent just
to be on the safe side. There's, of course nothing
wrong with that, bearing in mind that lifestyle is lifestyle
(04:16):
and that really does mean true sacrifices that you will see,
touch and feel in how you live your lives. But
at the same time, the whole point is, let's sit down.
Most people haven't even figured out what the lifestyle is let.
Speaker 2 (04:26):
Alone, but rate does to it well. And how long
is any given person going to live too? Because the idea,
of course, you want this money to last you through
your retirement, and retirement quite often is the time when
people get hit with, you know, the biggest medical bills,
the biggest complications, the problems. You don't have any money
coming in the door, and how many years am I
going to be around on this planet to need to
(04:47):
be able to tap into my my savings. So it's
the levels of difficulty and coming up with the accurate
numbers seem to be almost insurmountable.
Speaker 1 (04:56):
Brode. Yeah, it really does. And that's why I have
a job, frankly, because we have to simulate an awful
lot of different you know, I always walk people through that,
here's the honky dory outcome, here's everything you ever wanted
to do, and nothing bad ever happens. Again, that's our baseline,
and then next to that we can put in Okay, well,
let's pretend we have instead of three percent inflation, let's
pretend it's four percent or five percent something like that.
(05:17):
What happens there, and all we're doing is we're playing
with spending and time. Any financial plan is only looking
at those two things. When you truly boil it down,
there's a million different buttons to push and levers to
pull to illustrate that. But again, it's only spending and time.
That's all we're dealing with. So then right next to it,
we'll do a stress test which could be maybe we
have four or five percent inflation, or it could be
let's pretend the market punches us in the face right now,
(05:39):
that happened to anybody who retired in twenty twenty one.
They thought things were hunky dory, but then twenty twenty
two came along and took away possibly up to a
twenty percent of their portfolio for a brief period of time. Now,
for those who panic and sell out when that happens, yeah,
that's a permanent hit. You're not getting it back. On
the other hand, if you keep your head and you
understand market history and you can ride those things out
(06:01):
and still stay retired, you might not like it. That's
a different scenario, but it doesn't mean you can't afford
to take that hit. But the important thing is to
know what kind of hit you can take in the
first place, and most people don't well.
Speaker 2 (06:11):
And one of the other choices people have to consider is,
you know, delaying retirement rather than when taking socials security
on the earlier side, you do end up with a
lot more by way of monthly pay. And if you
can kick it off to say seventy oh.
Speaker 1 (06:24):
Absolutely you do. And yeah, so financial planning is easy
if your only goal is to poke the government in
the eye. Right, Some people come in and say, by God,
my plan revolves around me not taking Social Security until
seventy because I want as much money as that government
is ever going to give me. That's great. I will
say that in my thirty years of doing this, I
have a lot more fifty five year olds who say
that versus sixty five year olds. Our thoughts tend to
(06:45):
change over time, and I just I want my life back.
It's less about punching the government in my face, and
I just want my life.
Speaker 2 (06:52):
I was laughing about that so hard because it seems
to me a moment in time ago, I wouldn't even
entertain the idea of discussing retirement, Like, what the hell
am I going to do? No, I'm probably gonna die
behind whatever job I'm going to do, is always my
philosophy at this particular point, die behind the microphone. But no,
I think about retirement all the time now, Bryan, a
little different.
Speaker 1 (07:09):
You know, the more we age, the more we think
about it. It looks kind of cool, really is.
Speaker 2 (07:12):
And then real estate and liquidity, I understand, and that
makes perfect sense. A lot of your clients have a
significant amount of money tied up in real estate, but
can you actually access it? And is it something that
you should factor in terms of your overall investments, Like
you've got a million dollars invested in the markets are
distributed to mutual funds and bonds and all that, And
if you've got a million dollars in house, you really
(07:34):
don't have two million to play with, do you No?
Speaker 1 (07:37):
Exactly? Because that's hard to get to. You got to
keep the rain off your stuff, so you have to
have a roof over your head. There are ways to
do it, I mean you can. There are ways to
access that. The home equity lines of credit, by the way,
I think those are a good idea, even if it's
a just in case, because debt against your home is
probably going to be the best debt you can ever get.
(07:57):
Most people aren't comfortable with this, but when it comes
down to you, I'll give an example. So let's say
you figure out you need to buy a car, you know,
sooner than you thought you would, or something like that,
and you don't have the cash or what more happens.
More commonly happens is you know what, I don't want
to take anymore. Let's say you're at the end of
the year. I don't want to take any more tax hets,
I don't want to cause any more taxation. I really
want to push this into the next year. Right, you
(08:19):
could borrow fifty thousand dollars against your home. Let's pretend
that you're getting charged maybe six or seven percent on that.
Borrow fifty thousand dollars against the home in you know,
the November December timeframe to get the situation fixed, and
then in January February, when we're in a new tax year,
that's when you take the distribution and cause the taxation.
You know, we don't want that. But at the same time,
(08:40):
all you will have done in that case is borrowed
fifty thousand dollars and you pay again currently six to
seven percent interest on that, but only for a few months.
So you're really talking less than one or two percent
true hard dollars worth of interest. And that beats the
heck out of needing to finance things, you know, with
a credit card or you know, or borrowing from the
from the dealership for fixed amount of time. Well, there
(09:01):
are ways to tap into that. I think it's a
good idea to have a home equity line of credit
in your back pocket even if you never draw on it.
Speaker 2 (09:06):
Well, isn't that how the uber rich manage their money
and avoid paying income taxes?
Speaker 1 (09:11):
Yeah, don't sell your assets, borrow against them. Right, If
you want to play that game, then don't sell anything.
Figure out how you can borrow against them. If you
have a portfolio of securities outside of an IRA, you
can do margin loans, you can do portfolio loans. You
can borrow against those. Yes, there have to be payments made.
You are jumping through financial hoops to do this, of course,
But there's a reason that rich people get rich.
Speaker 2 (09:31):
Brian James, very interesting and informative discussion we've had here.
As we end of the new year, consider that. And
of course, as I always point out, it's great to
think half a financial planner sitting on your side of
the table, one that knows you for douce youry obligation.
That way, you don't have to fret and worry about
these issues day to day. Let somebody like Brian do it.
Brian James, appreciate all worth loading you out every Monday.
We'll do this again next Monday. I hope you have
(09:52):
a fantastic week. My friend, you bet have a good week.
We'll talk to you Monday, age fifteen. Right now, if
if, if I have cares the talk station of the Quick
Word for my friends and Zimmer
Brian Thomas News
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