Simply Money

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Episode Transcript

(00:06):
Night. We have a great showfor you, an investing history lesson.
We've got retirement factor fiction and thefinancial move that three out of four of
you would benefit from making. You'relistening to Simply Money, presented by all
Worth Financial. I mean you,Wagner along with Steve Sprovac. Happy Halloween
everyone tonight, No tricks, butwe have a major, major treat for

(00:29):
you. Our dear friend, thefounder of Simply Money, who has been
on a microphone for many, manyyears of his life, Ed Fink,
is joining us against tonight and weare so excited. Well that's that's that's
so nice, Amy, But Ithink the real reason is because it's Halloween
and I bought that tosock, soyou bring me on everywhere. You know

(00:55):
what, We don't need think hereto scare people because the headlines are scary
and the stock market right now,we've got the stock market. We've got
you know, calling for the endof the world, major recessions, all
kinds of things. And I lovethat you're here right now because we've been
talking about this a lot lately.In the financial world. There's a lot

(01:17):
of noise out there and it's scarystuff. And for an average investor,
if you're consuming any of this,you might be questioning should I get out?
Should I get You were just saying, Steve, that you've had investors
that you've worked with me a longtime that you never would have thought that
you had heard of that are callingyou saying maybe I should go to cash
exactly. And these are people thatare not rash, not you know,

(01:38):
they're they're generally they're not ready tojump out the window. Why are people
so scared right now? It's notjust Halloween. I mean, the stock
market's been a little bit concerning.And on top of that, Okay,
bonds have always helped us out right, bonds are they're the shock absorber?
Not so much lately. We've hada rough October. Yesterday was kind of

(01:59):
interesting. The market actually went upone and a half percent yesterday. Why.
I don't know. I mean,we're supposed to be the experts,
but this is the stock market.This is the way it happens. You
never know when you're going to havea real big day or a real down
day. And that's why we don'ttry to time the market. I mean,
yesterday, market's up one and ahalf percent. For the month,

(02:19):
it's down or was down about twoand a half percent, So we made
up more than half of the downturnfor the entire month in one day with
no real good news, nothing,nothing crazy that should that should have caused
it. Are you reading Are youreading the headlines as much as well?
I'm reading the headlines, but I'mreading the data too, which I think
is more important because I'm just afirm believer that it's much better to be

(02:44):
informed than affirmed. And so manytimes you made the point there Amy when
you kicked it off about noise andscare. Those are two words that you
use, and that's what's being useda lot of times on some of the
media that we can on a dailybasis. As opposed to us going in
looking at that ourselves, we're kindof depending on somebody else to interpret it

(03:07):
for us. And so many timestheir whole point is to keep you scared,
because what that ends up doing isthat it attracts more eyeballs, that
attracts more clicks in the case ofthe Internet and the rest, and you
know, scare works to get people'sattention, but history is something that makes
much more more sense. Well,when you're an economist, to your core

(03:28):
and so when you look at thedata, right you're saying, yes,
a lot of people are looking atheadlines. When you look at the data,
what do you see. I seethat our economy as it sits here
right now is the envy of theworld. You know, in spite of
the fact that that we repeated surveyshow that people think that the economy is

(03:49):
in horrible shape. You look atwe had we're at the end, not
at the end, hopefully, butwe're in the middle of it of one
of the greatest job expansions in thehistory of our economies, going back to
spring of twenty twenty one, runningafter I mean just last month's numbers blew
out of the water, even themost optimistic predictions that we had, and

(04:12):
then they revise upward the last twomonths before that. So you got inflation
coming down, you got solid jobs. I was driving last weekend. I
saw gas under three dollars a gallon. Yeah, yeah, I mean,
in spite of what's going on inthe Middle East. So I see things
very solid job standpoint by inflation comingdown. Gross domestic product, which is

(04:35):
our measurement of our production of ourgoods and services, up four point nine
percent last quarter. I mean,come on, that's not recession. But
everybody's saying, oh, well,no, no, we must be in
a recession or we been in arecession. This is pretty far from a
recession. But aren't you a littleconcerned? I mean, the whole point
of the Federal Reserve raising interest ratesas much as they did was to bring

(04:57):
inflation down, and yet we havestrong job jobs numbers GDP at four point
nine percent. That's not exactly aresult of contraction of the economy. That's
still a pretty aggressive expansion. Andthat tells me maybe the Fed has some
more work to do. Well,maybe they do, but I think it's
time for them to pump the brakes. I think I think they've done a
lot of work. And you know, it's always easy to Monday morning quarterback.

(05:23):
Yes, you know, people who'vegot a lot more data than any
of us will ever have, andI think they've done a pretty pretty good
job of, you know, kindof bringing things under control. Now,
interest rates you know that they controlat twenty to two year high, of
course, so we should be seeingsome result of that, and I think
we are starting to see that inthe inflation numbers coming down. But you

(05:44):
know, the fact that the jobssituation continues strong. I mean that is
a consideration of things. Do startoverheating, but I'll take overheating every day
of the week. Yeah, youknow, compared with the recession, because
that means people are spending money,which they're doing, and factories are putting
stuff out the doors, and youknow, jobs numbers are solid. I
continue to be an optimist. Yeah. Well, I mean, this economy

(06:06):
has been so robust in the spiteof in the face of, right what
the Federal Reserve has been doing,which you would expect rite that contraction to
happen. Naturally. You're listening tosimply Money presented by all Worth Financial.
I mean you Wagner, along withSteve Sprovac, and we are joined by
our special guests and dear fred EdFink, as we make sense on this
Halloween of what could seem like avery scary time for your four one K

(06:30):
for your investments in our economy.But we're saying, if you actually look
at the data, it's not.And I also want to say it's not
just the data, it's history thatshows us some patterns with investments. And
I think if you can look backto the future or to the past.
It's going to help you a lotwhen you're looking toward the future. Well,

(06:51):
I think you know Ed brought upa good point about a lot of
these headlines. They're they're scare tactics. They're trying to draw people to the
attention of whatever the media outt happensto be. They want clicks on the
website, and words like disaster,crash, correction, they attract people.
And right now we're saying, hey, by the way, did you know

(07:13):
we're in a stock correction the Nasdaq, which are in smaller tech companies for
the most part, it's down overten percent. Should that concern you?
It doesn't concern me when it wasup thirty percent. Now it's back ten
percent. I'll take that correction everyyear, and it shouldn't just concern you.
I mean, certainly if you're lookingat the your account value on a
day to day basis, to seeit down over ten percent over a six

(07:34):
month period of time or whatever it'sbeen, yeah, that's going to get
your attention, and unfortunately it maycause you to make exactly the wrong decision.
But when you look back at history, like you said, Amy,
looking back at the historic numbers asopposed to the scary headlines. Come on.
Ten percent correction, that's what wecall Tuesday, you know. I

(07:55):
mean, in the long history ofinvesting, a ten percent correction is nothing
if it never correct it, ifit went straight up all the time,
there wouldn't be a penny anywhere elsebut in the stocks. But the fact
that a lot of money is inmuch quote safer unquote vehicles says that those
people who do have the ability tolook back to history are the ones who

(08:18):
are going to come out ahead.I want listeners to understand right now that
we have decades of history and knowledgeright on this show, very close to
my centuary between the two I reallythink. And here's why I'm bringing up
this point. When you have younginvestors right that are maybe just getting out
of college, just putting money intotheir four oh one k who might be

(08:39):
listening tonight, most of their informationis coming from the very place that you're
talking about, social media, theInternet, where there is just so much
noise and it is so scary.So what is your message to those people
right that are saying, I don'tknow right you mentioned we've got you know,
interest rates to twenty plus yar highs, and the stock market has been
all over the place in the lastyear year and a half. It's it's

(09:01):
funny that you asked that question,because I just I had that discussion about
six or seven months ago with ayoung first time investor starting out, how
do I get started in investing?And I said, what do you want
to do is build your investments aroundthe biggest companies in the United States first,
And that's the standard of course fivehundred. Don't try to get cute
and pick individual companies. Just buythe index, you know, buy it

(09:24):
in the form of an exchange tradeand fun and and and just let it
go. And here's here's one thingI will guarantee you though, as a
new investor, what you will seehappen is interestingly enough, what we've seen
happen so far this year. It'sgoing to go down the first year.
I don't care. When you startinvestments. Doesn't feel good. It doesn't

(09:46):
feel good for any of us whenit goes down. But I like your
point. It's a Tuesday. That'swhat you have to get used to.
The price of admission, right asan investor, is it some days you're
going to win and some days you'regoing to lose. But the key is
you're going to in at least historicallya heck of a lot more days than
you are going to lose. Andthat's why you invest. Here's the other

(10:07):
point that I made to her,because when that day, I told her
that that day's going to come,and it's going to come real soon,
or that money that you put thatput in might be worth ten percent lesson
and it is right now, andyou'll be saying, this is the stupidest
thing I ever did in my life. Here's what I want you to do.
I want you to google the Standardand Poores five hundred. Look at
that list of five hundred companies.You won't get through the a's before you

(10:30):
say, okay, I get it. These are big, real companies,
right, They're going to be around. They've gone through this in the past.
And the reason that they're big realcompanies is because they've they've managed themselves
in such a way as to surviveand come out the other side and provide
goods and services that everybody in theworld wants and needs. Well, you
used a phrase years ago, andI'm sure you forgot this, but we

(10:52):
were talking about cars imagine that andyou said it's a good ten footer.
What do you mean ten foot?Well, from ten feet it looks perfect.
You get up real close. Yeah, there's some flaws in it.
That's a market chart. When youlook at a stock market chart from ten
feet away, it looks like astraight line. Why wouldn't you put me
on the right. But the realworld is no, your eyeballs right at

(11:13):
the ink, and you're looking atthat downturn that may keep going on forever
and ever and ever. That's notthat way. You've got to take a
step back. And I think youradvice that is perfect. You just just
let it go. When you getscared, let it go. In my
baseball terms, we're about in athousand on recoveries. Well, Steve,
there's kind of two ways of lookingat that, at that long term chart.

(11:37):
You know. One is people lookat it and say, I can't
invest today because the stock market's atan all time high. I wait for
it to sell off. And myanswer to them is, the market's been
at an all time high virtually yourentire life. It occasionally pulls back,
but then because then it comes back. Yeah, and then the other side
of it is well, I can'tinvest now because the market's going down.

(11:58):
It must be continue. It willcontinue to go down for some point and
then I'll pick the bottom. Noyou won't, No, you won't.
You know if you're not in becauseit's going down, today's the day to
get in, because it's lower thanit was yesterday or a month or six
months ago. Mister voice on theshow, here's the all Worth advice.
If you can understand the basic principlesinvesting and take history to heart, the

(12:22):
road of financial independence turns out.Whether it's Halloween or not, it's not
so scary after all. Coming upnext, we've got the Financial Move.
Three out of four of you wouldbenefit from making. You're listening to Simply
Money present by all Worth Financial herein fifty five KRC, the talk station.
You're listening to you Simply Money presentedby all Worth Financial. I mean

(12:45):
you Wagner, along with Steve Scrovacand of course our special guest. I'd
think joining us today. If youcan't catch our show every night, we've
got a daily podcast for you.Just search Simply Money. You'll find it
on the iHeart app or wherever youget your podcasts. Coming up at six
forty three, so much, somany misconceptions out there about retirement. We're
going to separate the fact from fiction. Okay, So right now we're talking

(13:07):
about inflation. You've got deflation,there's shrinkflation going on out there, stagnation
and now spoof spoof lation. Yeah, this hits home. I don't like
talking about this. The price ofcandy for Halloween is up double digits.
Yeah, the price of chocolate,which will upset my wife I know,
is me very much. Yeah,and you know it's crazy. We've got

(13:31):
to watch what the weather is inMexico because that's where a lot of the
sugar comes from candy and as littlerain as they're getting in Mexico driving up
candy prices while they're getting extra rainin Western Africa and that's driving up cocoa
prices. So yeah, double whammy. You know, wait, we've got
to pay more for candy and chocolatewell, up almost twenty two percent since
twenty twenty one. In the pasttwo years. I mean, we've been

(13:52):
talking about the fact that with inflatation, this means cut back on chocolate.
Right, No, No, it''snot. I know, you're a lot
of things you can cut back chocolateexactly. I can even cut back on
wine chocolate. I'm not cutting backon crazy. I walk in, you
know, into Kroger, and I'mlooking at the price as a kidding,
I'm like, oh my gosh,that's a lot. So this year I

(14:13):
hid the Halloween candy from the kits. I put it in a place where
they would never look where like,and they found it. And so now
I'm afraid I'm gonna go home,you know today, like with the trigger
treaters, you know, probably notnot enough left for all of them.
Because you're a chocohol I'm blaming iton the kids. I understand. That's
what's happening, all right. Ilove chocolate, and I also love hssa's

(14:37):
right health savings accounts. If you'velistened to the show at all, you
know I am a huge proponent ofthese, and we always say, listen,
you have to keep in mind thefact that for an HSA to make
sense for you, a high deductiblehealth care plan also has to make sense.
But now there's new data out showingthat for most of us it probably
does make sense. In fact,if your company is putting money into that

(14:58):
age to help seat it you actuallyare probably coming out ahead by having that
high detis Well, let's let's talkabout this a little bit. Hsas and
I kid, but I mean you'rea proponent of them, as you should
be if you're trying to maximize yoursaving. It's one of the only ways
you can get triple tax savings onany investment. And a health savings account

(15:20):
lets you put in pre tax money. Okay, that's like my four oh
one K or my deductible IRA.It grows tax deferred. Well yeah,
that's the same as my four ohone K and IRA, and you can
take the money out tax free ifit's used for health accounts. What's the
difference. Well, you can putmoney away in addition to those two other
areas, in addition to your fouroh one K, in addition to your

(15:43):
IRA. It's a pretty neat investment. The only catch is, yeah,
you've got to have a high deductiblehealth plan, and that means you're paying
more out of pocket. But ifyou can cover those out of pocket costs,
it's just a great tool. Andif you use it for your entire
working life, Yeah, you canuse those districtributions even for Medicare. I
don't know anything that has a tripletax advantage. Yeah, it doesn't exist.

(16:07):
It doesn't exist, So yeah,you have to take advantage of it.
Yes, absolutely, And this newresearch out is showing that three out
of four of us would actually havespent less if we had a high deductible
plan because the premiums are less.Right, so you're paying less in premiums.
If your boss is seating that accountas well, you know you might
be coming out ahead. So ofcourse you have to run the numbers right,

(16:29):
figure out if someone in your familyhas, you know, ongoing sort
of chronic illnesses. But I thinkeven if you look at you know how
much you're going to pay for thatdeductible, a lot of times you're still
going to come out. I thinkit sounds complex to a lot of people,
and for that reason they don't participatein it, but it really isn't.
If you take a look at itcloser, or you talk to somebody
who knows what they're talking about,you really need to take advantage of it.

(16:51):
Something else I want to take advantageof since you are in the studio
today, is the fact that wehave an event to talk about. I
think you know, our old friendis back, and one of the things,
ed and there are a million thingsthat I love about you, but
one of the things is that youserved our country so faithfully, so loyally.
I think of you every year onVeterans Day Memorial Day. You've been

(17:15):
so kind to share stories through theyears, and you're always front and center
kind of raising awareness and reminding usof the fact that this is so important.
Well, thanks, Amy, Iappreciate that. And as a proud
US Army veteran, you know,I'll take your words to the herd.
I do appreciate that. But whenI'm here to kind of make an announcement
on and encourage all veterans to attendis my alma Modern Malor High School is

(17:41):
having a special Veterans Day celebration onThursday, November the ninth. Thursday,
November the ninth, Veterans Day willbe officially celebrated on Friday the tenth.
Maler's going to have a celebration onThursday, November the ninth for all veterans,
not just people of affiliated with Muller, but all veterans. And it's

(18:02):
really I'm part of the Veterans DayCommittee, and I think we put together
a very very nice program. Itstarts at eight thirty am with a Continental
breakfast in the student commons, followedby the program itself of nine thirty.
We just encourage anybody to come outwho's a veteran in the community, wherever
you are, come out. Ithink you'll get a lot out of the

(18:27):
out of the ceremony, and it'llbe a day recognition to you as a
veteran that I think is something that'svery well deserved. So that's Thursday,
November the ninth, eight thirty am, Continental Breakfast, nine thirty am.
Ceremony it self get started Muller HighSchool in Kenwell on Montgomery Road. And
you have an interesting connection to Muller. Weren't you part of the first class

(18:49):
that went through. I was thefirst class in the first class. So
we started as freshmen in nineteen sixtyas freshmen, and there were only freshmen
in the school, which was kindof a strange joy of going through.
So each year they are was theoldest. Yeah, they added a class
behind us each year until we wereseniors and there were four full classes.
I almost thought it would be agreat and long term psychological study. See

(19:12):
how many serious personality disorders came fromour class, from never having had upper
class in school. But my heartis with Morrow High School. My heart
is with veterans, and this isa great combination. Quickly, do they
need to sign up? Do theyto call or can they just show it?

(19:32):
On the show on thirty for theContinental Breakfast nine thirty for the ceremony
Moor High School, Thursday November theninth, Be there, love to see
you, tell you know, stopand say hi and tell me that that
you you heard us here on SimplyMoney. So grateful that you are a
veteran, So grateful that you cameback to remind us about this important event

(19:53):
that is going nowhere. We've gotgood news there. So he's going to
get personal and this next segment we'regoing to talk about retirement. You're listening
to Simply Money presented by all WorthFinancial here in fifty five k r C
the talk station. You're listening toSimply Money presented by all Worth Financial,

(20:14):
I mean Wagner along with Steve Sprovacand tonight on Halloween we are actually have
a huge street on the show atFink. Our old friend who has been
behind the mic with us for decadesbefore this and entered into retirement. How
many years have you been retired now? Oh? I don't know, Amy.
This is the thanks you forget anddon't keep track of. What day
is it today? Five five years? Oh my gosh, she's it been

(20:37):
five years already. That's that's crazybefore. I don't know to suit you,
let's put it that way. Iam very comfortable. Thank you,
good good, Okay, So youmade the you made the switch into retirement.
I have to say, uh,from the outside, at least,
it was a beautiful transition. Ifollow you on Facebook. You are a

(20:59):
very talented photographer, so your picturesare on there. You spend a lot
of time with your granddaughter Nova nextup though, and I'm not happy about
this. I'm actually very sad.Steve Sprovac fun following very soon on your
heels, and so I think,what a great thing that we have today
that you can be here and sharesome advice. Yeah, I'm heading into

(21:22):
that realm of my life. Andyou know, it's interesting when you do
financial planning for a living. Forforty years, I've been telling people,
you're fine, I'm gone through yournumbers. It all works. Go with
a happy face and sign those retirementpapers, and when it's you, you
get why. Okay, this explainswhy these people are anxious, because you
wonder, all right, fine,I think I put everything into the plan.

(21:45):
I think I've set my life upfor preparation for retirement. But when
the rubber hits the road, whenyou're only a couple of months away from
retirement, the anxieties, at leastfor me, start to build up.
I would love to hear what yourtransition was like and whatever advice you might
have for somebody approaching retirement. Well, Steven Amy, I'll tell you that.

(22:06):
You know, there's been volumes writtenabout the financial side of planning for
retirement. Sure, and I'm noteven going to touch on that because I'm
assuming people have done the correct thingat this point. If they're approaching retirement
they haven't, then it's probably alittle bit too late to be worrying about
that. But I think the socialside of it is critically important, and
this does not get a lot oftalk. And I've kiddingly said in the

(22:32):
past that twenty thirty years ago,can you imagine, twenty thirty years ago,
I was doing a retirement workshop atone of the big what had been
one of the big companies in townhere in Milligron, And I would kick
these things off by asking people,what does retirement mean to you? What's
your definition retirement? You know,guy, I would say, Oh,
I'm going to play golf, youknow, five days a week, and

(22:56):
some people that's great, and somebodyelse said some other plan. I'm going
to try the world. And thislady in the front row, who was
already retired, puts up her hand. She said, I'll tell you what
retirement is. It's a time oftoo little money and too much husband.
And that's social side of it.If you have a spouse who's involved in

(23:18):
your retirement decision with you, regardlesswhether that spouse has been working in the
workplace or working at home, they'vegot their own lifestyles set up there.
You know, it's not all aboutyou. They've got they have got their
own routines and all the rest,and they don't necessarily want too much husband,

(23:38):
you know, if it's if it'sa case of a wife and a
husband. So did you learn thatwhen you were tired? Were you at
home? And I did learn that. I did learn that, And you
don't tend to think of that.But everybody's got their own routine, and
sometimes you know, their spouse doesn'twant you going to Kroger with them because
that's kind of their fortress of solitude, getting in the car and going off

(23:59):
somewhere. But you know that's partof it. You know, a second
part of the social side is andwe were just having this discussion here here
at all work is for me,the hardest part of our retirement, as
I look back on it, isthe lack of the camaraderie that we had
every day with our coworkers. Youknow, to some degree may be losing
a little bit of that with thework from home stress now. But you

(24:23):
know, the people that you workwith on a day to day basis,
who are you. You're not onlyyour company associates, but also become friends
or in any case, not inall cases, not many cases, become
friends and you share your life withthem. You know, you raise your
kids, you watch their kids growup, You go through sickness and health
and all the rest for each other, and now all of a sudden,

(24:44):
bam, you know, as ofDecember thirty first, you're gone. Their
lives go on with everybody else aroundthem and continue to have that social aspect
in their life. But suddenly you'recut off on that, and that's something
you need to think about. Youneed to replace that in some way,
shape or form. For me,one thing that I did was I had
had a lifetime love of photography,but never spend much time on it.

(25:07):
One thing retirement has given me hasa lot of time, Yeah, photography,
and I have taken that love andjust explored a lot of different different
types of photography and different techniques anddifferent things. And it's something that I
can just walk out the door with. Nancy doesn't have to be involved.
I don't have to say, hey, at three o'clock, statnon we're going
to walk out, or we're goingto go to the Cincinnati Nature Center and

(25:30):
walk around and take pictures. No, I just walk out the door with
my camera and I do what Iwant to do, and we do our
stuff together when we want. Youknow, I have something that is a
mutual interest to us, but Ialso have something that I can just go
off and do, yeah, withouthaving to have our involvement. You're listening
in Simply Money on fifty five KRC. I'm Steve Sprovak along with Amy Wagner

(25:51):
and we've got a special guest,Ed Fink, former co host of Simply
Money for years and years, andwe're talking about retirement and his experiences,
and you brought up a second point. I mean, obviously it's the social
contact, especially with co workers andnow former co workers, but it's also
you have a hobby, and thereare too many people where their hobby is

(26:12):
work. My dad was one ofthose people, and he struggled for a
couple of years after retirement with nocontact to speak of, very very little
social support network and no hobbies.And photography is one, Okay, this
is something I can do. Maybefor somebody else it's golf. But you've
got something to keep you busy that'snot necessarily pastoring your wife. Well,

(26:36):
and for everybody this is going tobe different. You use a term there
that is so common, keeping youbusy. I can't tell you a number
of times people have asked me,now you're retired, what do you do
to keep busy? And my answerback to them is why the heck do
I want to keep busy? Idid that. You know, busy has
a connotation of work, busy work? Is he on the term? Yeah?

(26:57):
You know, I like to thinkI like to think, but more
not as keeping busy, but it'skeeping interested, you know, doing things
that interests me. I'm a lifelongreader, so just sitting down and reading
a book that's something I never hadtime for that could be a good way.
Reading Eastly can be a good day. You know, the photography part
of it, whatever it is foryou, figure out what it is and

(27:17):
understand that that is going to haveto replace some of this that you're walking
away from. One thing I willsay about you, I'm not worried about
Steve Sprovac in retirement. He hasseven eight hundred and forty seven hobbies.
Guys, I mean every day I'mI'm like, I've been working really closely
with you for years now. Ididn't know you do that. I know
you do that, but I think, though, well most of us hang

(27:41):
up the spikes and the bad willbe playing baseball when he's ninety, you
are still playing fast pitch, fastpitch baseball for those of you who may
not know it. But yeah,I got a lot of grown up to
do it. You've got a lotof hobbies. But I also think you
know and you settled into what workedfor you. But I imagine and initially
there had to be a lot ofconversations between you and Nancy as you figured

(28:04):
out what that new norm look like. Well, certainly there is that.
And when I said that everybody isdifferent, and Steve said, you know,
his dad had a tough time transitioninginto retirement. You may have to
get that part time job just tofeel what's missing in your life. Not
because you need the money, right, not because of the money, but

(28:25):
from the social side of it.Being out being around people, doing something
that kind of is a continuation ofwhat you did in your whole life.
Doesn't have to be the same field, but you're interacting with people. If
that's important to you, think longand hard about that. The best thing
I can hear from a retiree is, I don't know how I ever found
time for work. That tells methey're busy and they're having a fulfilling retirement.

(28:48):
I have a final question for you, Ed, and you said we're
not going to talk about money,and I understand that a lot of it
really isn't about money. But goingback to the years that you and I
work together a lot of times,because you do have this amazing background with
the economy and you are looking atdata and there is so much noise out
there. I would often ask youthis question, what's keeping you up at

(29:11):
night? And I'm wondering from thestandpoint of someone who might be getting close
to retiring or someone who's in retirement. Right there's a lot out there.
Is there anything that is currently keepingyou up at night? Well, there
certainly is amy And it's not theeconomy as it exists today, because as
we were saying, things are incrediblystrong right now by just about any measure.
What's keeping me up tonight, upat night, and it literally is

(29:34):
from time to time, is thestupidity around playing games with the full faith
and credit of the United States Governmentas a cheap political proy. These are
not economists talking as a lifetime economists, I can tell you this is not
something you want to mess around with. It's not something you can say,
oh, I won't be a bigdeal. We can default for a couple
of weeks and then we'll pay everyNo. This would be like you and

(29:56):
your spouse sitting down and deciding you'regoing take this fancy vacation or buy this
expensive car whatever it is, andyou go, hey, you take the
vacation, you buy the car,and then when the bill comes in,
you say, oh, we shouldn'thave spent that money, We're not going
to pay it. What would happento you? Your credit score would go
down, the interest rate you paywould go up. And that's exactly what

(30:17):
happens with the US government, exceptwith this major, major caveat. The
US government bond issues is the underpinningof the global economy. So if interest
rates are pushed up because we default, a lot of US government bonds are
going to have to be sold.Because hundreds of billions of dollars around the
globe are invested in high quality bondfunds that can only invest by charter in

(30:45):
trip A or better rated securities.If the US bond rating is downgraded,
those bonds will have to be sold, which will cause a crush of bonds
on the market, which will causeinterest rates to shoot up and will cause
us to have to pay for therest of our lives for that little fun
and games of playing games with thefull faith and credit of the United States

(31:07):
government. Excuse me for getting alittle bit heated on that, but it's
something that really bothers me. That'swhat's going to cause the chips the phone
in this economy, that's what's goingto cause a major recession, not only
in the US, but probably aroundthe world if we play games with the
US with the full faith and creditof the US government. I think when
it comes to the economy and money, I really think there's no one wiser
around so grateful for your insights.You're listening to Simply Money presented my all

(31:30):
Worth Financial here in fifty five KRCthe talk station. You're listening to you
Simply Money present of my all WorthFinancial. I mean you Wagner along with
Steve Scrovac and our special guest,the former co host of Simply Money at
Fink joining us, and we talkabout this a lot. There's just so

(31:51):
many misconceptions out there when it comesto retirement and your money, and so
we are we like to play retirementfactor fiction just to get to the bottom
of things. So we're going tostart with you ed out fictiontion. There
you go. You just call itout. Having all your money in the
S and P. Five hundred isthe best way to diversify because you're spreading

(32:12):
your money across five hundred companies.Well, it's a great way to diverse.
Fine, it's a great way toget started. So I've always said
the SMP five hundred should be thecorner stone of your investments. So you
put maybe sixty percent the SMP fivehundred. Once you've got a comfortable amount
there, then you start building outthe smaller companies US companies, and you
start building out the foreign both bothlarge and small companies around there. And

(32:35):
depending upon your comfort level and whatyou need, then you put a counterbalance
of some bonds in there too.Yeah. I like that you said it's
the cornerstone because it's a great placeto start, and then you to continue
to diversify from there. All right, I'm going to turn to you,
Steve on this one. I havea feeling this is probably a conversation you
have had in your office many times. Factor fiction, if an interest rate
on an investment is higher than yourmortgage rate, you should put any additional

(32:58):
money toward that investment instead of themortgage. Can I can I say opinion?
Baby? Because no, seriously,this is something we couldn't even talk
about this a couple of years ago, when you know, interest rates were
nothing, okay, and well waita second, now we can get you
know, three percent, four percenton money markets. We can get five

(33:19):
percent on CDs. And I'm startingto hear from people, Wait a second,
my mortgage is only two point sixpercent. It's stupid for me to
pay that off if I'm averaging fivepercent. Yeah, that's what you average,
and maybe the math says, Okay, let's go ahead and keep that
money invested and pay off your mortgagewith your investments. I don't like that.
I really I don't like debt.You know, there's I know there's

(33:39):
good debt and bad debt, butno debt is the best kind of debt.
Yeah, in the long run,and you know you're gonna that the
math works. But the first timeyou have a down market twenty twenty two
is a great example. Okay,my investments are going down, but I'm
still shelling out fourteen hundred dollars amonth for a mortgage that's getting old because
I'm seeing my investment account that usingto pay for that mortgage go down because

(34:01):
of the market, and go downeven faster because I'm making payments. So
I kind of prefer not having debtethan backgrack right, as old partner used
to say this phrase all the time. There's a perfection of theory versus the
message. Reacting. I was justsaying, I was just thinking that when
Steve was saying that. Yeah,so you can think I'm going to take

(34:22):
this money that I would have andI'm going to invest it instead of paying
down the mortgage. But then allof a sudden, someone's going on a
trip and you want to go tothat really fancy car, and all of
a sudden that money has gone toneither the mortgage nor investments. And I
think that happens far too often.Yeah, but a trip is a want,
a car is a need. EspeciallyI'm out numbered in this room right

(34:45):
now, so I'm just going tomove along quickly going to this one,
and I'll just toss it out there. Whoever wants to answer can answer.
Factor fiction. Having too much ofyour portfolio and cash is a way to
go broke safely. Well, youknow, we call it going broke safely
because the thing that you forget abouthaving can is short term interest rates tend
to follow one thing and one thingonly that's inflation, and inflation over the

(35:06):
long term tends to be higher thanshort term interest rates. So once you
once you you consider that those thatinterest rate that that cash is generating.
It's also taxable. Yeah, youtake the tax hit plus the inflation hit
out and you're actually going broke safely. That way. It's doesn't say you
never have any cash, but don'toverdo it. Well, you feel good

(35:29):
getting three or four percent interest,But when the cost of goods increases quietly,
it's like watching your kids grow.You don't see it while it's happening,
but you know a year from nowyou say, wow, where'd that
come from? That's great, that'sa good announce It's the same way with
prices. Coming up next, we'vegot the items you should consider buying at
a dollar store, especially if you'relooking to save money. You're listening to

(35:50):
simply Money presented by all Worth Financialhere in fifty five krs the talk station.
You're listening to you some money presentedby all Worth Financial. I mean
me Wagner, along with Steve Sprovacand our good friend Ed Think who's joining
us? All right? Some peoplelove them, others would never set foot
in the door. But there aresome things if you've never been into a

(36:13):
dollar store, that maybe you shouldconsider going in and buying. I got
to tell you for years I neverwent into the Dollar Store just because it
was just another place to go.And then I went in one day and
I was like, oh my gosh, some deals. Well, all of
my birthday cards that I buy,gift wrap, all of those kinds of
things are I would say, athird a fourth of the price of what

(36:35):
you would pay if you walked intoa Hallmark store or Target or Bottom somewhere
else. So there is some significantsavings if you go in. I've got
a buddy, and you got tounderstand the people I hang around with.
Oh I've got it all. Yeah. He used to like going in the
Dollar store and just pestering the clerks. How much is this that's dollar?
How about this one that's a dollar? How about the absolutely crazy question?
But I digress. Now there aresome deals there. I wonder with inflation,

(36:59):
if they're gonna have to change aname to the dollar fifty stores,
it's actually a dollar twenty five.Now a lot of this stuff is but
you know, picture frames, youknow, if you've got them in your
office or at home, that's agreat thing. We talked about, gift
and party supplies, cleaning products also, right, you go in and you
pay for the name brand. You'regoing to pay five six seventy dollars for
some of those cleaning supplies dollar twentyfive reading glasses. This is up my

(37:21):
alley because I go through at leasta pair couple of days. Every couple
of days I forget where I putthem, which is a whole different issue
I'm dealing with. But yeah,bucking a quarter for reading glasses not a
bad deal. So point here,if you've never been in and you know
with inflation you're looking for ways tosave, you might want to have wonder
into a dollar store and see ifthere's things that you would buy anyway that

(37:42):
you can save a lot on anded. While you're here, I just
want to remind people about the specialevent that you want to talk about that's
going on in Moeller. Yeah,Muller High School on Thursday, November the
ninth, il A Veterans Say Celebrationall veterans in the community, not just
associated with Moler. I'm in theVeterans Say committee there, so I'm kind
of putting the word out here.Eight thirty am Continental Breakfast nine thirty am.

(38:05):
Program starts in the gym. Justkind of a day of thanking you
for your service and celebrating you asa veteran. Come on out Mala High
School and Ken What Thursday, Novemberthe ninth, eight thirty Continental Breakfast nine
thirty programs starts. I have tosay too, if you have children.
My son, I remember he heardEd speak at a veterans event several years

(38:28):
ago. It was eye opening,right, they have never necessarily been face
to face with people who have foughtfor our country. And I remember him.
He had so many questions about itand it was just so I opening
to him. So thank you foralways being involved in these Thank you for
opening all of our eyes to theduty that comes with that and just how
beautifully you have served. Thanks forlistening tonight. We're going to hope you're

(38:52):
going to tune in tomorrow. We'retalking about the Fed's big interest rate decision
and what that could mean to you. You've been listening to Simply Money,
presented by all Worth Financial here infifty five RC the talk station