Simply Money

Episode Transcript

(00:06):
Today we're making the case for indexfunds, talking about the worst investments of
all time, and we're actually theadvisor you're listening to. Simply Money,
presented by all Worth Financial I MemiWagner along with Steve Ruby. I'm going
to give you a little bit ofhomework. Don't do it now, but
when this show is over, turnon your TV and go to a financial

(00:26):
network, go to a financial website. See how long it takes you to
find someone who's telling you what thenext big stock pick is. What do
you think, Steve, It'll takeyou less than a minute, that's for
sure. There's there's experts all overthe place telling you which stock you need
to pick right now. For thisreason, Yeah, for this reason.
And just to you know, wedid a quick search before recording today and

(00:51):
just a few headlines that stood out. By Nesley stuck despair is turning to
hope. By us steal stock.It won't be stuck in deal limb oh
forever. Ev woes crush this lithiumstock. Now it's time to look for
the rally. Honestly, it exhaustsme. Yeah, I mean, there's
always a reason someone is trying totell you what the next big thing is

(01:14):
around the corner. And I alsothink many times you see the headlines of
the person who got in on Amazonreally early, the person and so there's
this kind of expectation that someone's goingto tell me what the next big thing
is, and if I get itright, I'm going to strike it big.
I mean, it's like standing inline for the powerball lottery, right.
Odds of that working out well foryou aren't so great. Yet,

(01:38):
so much time and energy is devotedinto making investors believe that there's some kind
of formula or someone with a magicball or a way to roll the dice
and tell you what's the next bigthing, and then if you go all
in, then you're on easy show. Do you think some of these people
have an alterior motive? You thinkmaybe. I think that's probably the case.

(02:00):
I think they've got lots of ulteriermotives. Quite a few, making
a lot of money being one ofthem. So we've talked about actively managed
funds versus passively managed funds in thepast. I know Andy Stout, chief
investment officer of all Worth Financial,he is a big fan of passively managed
index funds. That's something that justmirrors the market, doesn't try to beat

(02:22):
the market, and there's research andhistory shows why he would have that viewpoint.
If we look at through the endof twenty twenty two, over three
years, seventy four percent of activelymanaged funds trailed the index. Yeah,
over five years, almost ninety percentunderperformed. Over ten years, again,

(02:43):
ninety percent underperformed. Over twenty years, ninety five percent underperformed. If you
are listening to these numbers right nowand thinking why would anyone then spend the
money on actively managed funds, You'recorrect. You are correct in your way
of thinking, because the numbers inthe research bear this out time and time
again. There's lots of smart peoplewho I'm going to tell you get paid

(03:06):
a lot of money to try tofigure out ways to beat the market,
and just year after year they comeup short. I was reading some headlines.
I was reading an article over theweekend about Kathy Wood who the ARC
Fund, and her fund is uberfocused on finding these sort of niche tech
stocks that they think are going togo big. You dive into what she's

(03:30):
invested in and it's like, Okay, well, yeah, some of these
stocks are interesting, they make sense. There's certainly a buzz around them,
and then you look her returns arelike twenty seven percent below, but the
rest of the other it's like,gosh, she gets a lot of headlines,
she makes a ton of money.There is a huge buzz around her
and the investments she makes. Andif you had just invested in the S

(03:53):
and P five hundred, the fivehundred biggest companies in the American economy,
you would come out far far aheadthen you would if you took our investment
advice. It is truly amazing tome. I mean, it's founded in
fear and greed. Greed here kicksin because if you think that that you
know, the muckety MUCKs that putthese things together are able to get you

(04:13):
more alpha on your investment, thenthat is motivation to invest in them.
So there's people that try because youknow, we're showing you in the past
three years, these actively managed fundsthey have underperformed seventy five percent of the
time, So you could be thattwenty five percent you're in the right one,
and all of a sudden you're comingout on top. Greed is motivating
people's action for investing in these typesof funds and for perspective. There are

(04:40):
statisticians out there that look at,okay, how many years would these active
managers, these people who manage thesefunds need to beat the index for us
to say okay, this is athing, right, Statistically, sixty four
years they would need to beat theindex. They can't even collective beat the

(05:00):
index one year, right, andit would take sixty four years for this
to make sense for statisticians to beconfident in the actively managed fund's ability to
actively beat the indexes. You're listeningto Simply Money, presented by all Worth
Financial. I'm Ami Wagner long withSteve Ruby as we make the case for
index funds tonight. I am bewildered, be fuddled by how much time,

(05:27):
energy, money, resources are spentin our industry trying to make it seem
so convoluted when the answer is reallyso much easier. Our show is called
Simply Money for a reason, andI truly believe that if people listen to
the show over the long term andfollow the advice, you're going to be
far better off. But yet there'sso much noise out there telling you the

(05:51):
opposite of what I feel like.We're on this like little boat. You
know, very little boat surrounded byall these choppy waters, and I think
it's really hard to get to thetruth of things. And that's why we're
so passionate about making sure that youcan cut through all of this noise or
these choppy waters, because man,there's a lot of sharks in the waters.
We do what we can to makethese topics entertaining. But when it

(06:13):
comes to investing, boring is good. There's nothing wrong with taking the boring
approach. If we make a comparisonto dieting, for example, a healthy
diet is a great example, becausecutting out dessert and eating more broccoli not
really fun, I guess unless youenjoy sitting around munch non broccoli. But
I would rather have graders exactly.But it's going to help you control your

(06:34):
way, reduce chances of diabetes,cancer, heart disease, all kinds of
ills that are attached to having anunhealthy diet. That is more fun eating
a banana split for dinner, butit's risky compared to these actively managed funds
that aren't beating the indices that they'regoing up against. That's why we go

(06:54):
back to investing in these passively managedfunds that do give you an opportunity for
diversification, casting a large net andnot taking on the same level of risk
of underperforming. I also think there'ssomething else at play here, and it
is the fact that we are veryshort term in our thinking. Right,

(07:14):
It's really difficult for us to thinkabout Amy Wagner twenty thirty years from now,
Steve Ruby twenty thirty years from now, Right, So it's more fun,
more interesting to think about could Ifigure out what the next big stock
is, or you know, evenjust thinking about budgeting versus not budgeting,
or going out this weekend versus savingthe money, or it's a really busy

(07:39):
time and things are really expensive withthe kids, and we really want to
go on this vacation. So I'mgoing to start putting money in the four
to one K next year. Ifyou could begin to picture yourself in twenty
thirty years, what you would wantyour current self to be doing, it
would be eat the broccoli, investin the index funds, keep your hands

(07:59):
off that money, don't take outfour to one K loans when you're tempted
to keep investing. Right, theseare the things that your future self would
tell you. The problem is,you can't begin to picture it. Yeah,
that's that's why building a financial planis so important because it can be
eye opening if there are gaps betweenwhere you are and where you need to
be in order to maintain a standardof living that you've grown used to.

(08:20):
In order to start, you know, checking bucket list items off when you
transition to retirement. That takes properplanning. Yeah, that takes ideally not
sacrifice, because if you are workingwith a fiduciary financial planner, they find
a way to help you balance yourcurrent lifestyle, your current desires with your
future use goals and desires. Butthat means making sure that you're making the

(08:43):
most out of the resources that youhave. You mentioned saving in your four
to one K that's a fantastic wayto plug money away. There used to
be a three legged stool with pensions, social security, four to one k's
that's just not the reality for mostpeople. So it falls on you as
an individual investor to make sure thatyou're doing what you need to do to
support your lifestyle when you know,for twenty or thirty years down the road

(09:03):
from now. What we advocate for, though what we think is the smartest
thing is very vanilla. It isthe opposite of what the headlines are.
When you are at a graduation partyor a barbecue or whatever it is on
the weekend, people aren't standing aroundtalking about I'm invested in a low cost
index fund, right, I do, well, you and I do,

(09:26):
and more clearly the life of theparty. But often the people getting the
attention are I'm invested in crypto andhere's what it did for me last week.
Or this individual stock and here's whatit did. Those are tend to
be the ones that get the attentionthat you listen to. And you mentioned
fear earlier. I think a lotof investing in bad decisions. In investing.
The fear that's really at play isfear of missing out. Yeah,

(09:50):
oh, other people are going tojump on this and they're gonna make it
big, and it would take mea lot longer to get there, and
so I should probably jump in onthis. Think FOMO is probably the best
way that I could describe what's happenedwith crypto. Yeah, I mean comparing
yourself to those around you and whatthey're doing and how they're saving. It's
not good for you as an individual. That's why you need to build that

(10:13):
financial plan to hone in on yourown needs and goals. That will help
you understand the level of risk youneed to take to meet your financial objectives
and how much you can afford totake, rather than just throwing it all
in on some kind of an investmentthat could be gone tomorrow. Yeah,
back to the homework, right.It takes three seconds to find someone making
advocating for buy this, and thisis the next thing, and this is

(10:35):
the next place it's going to go. It can be confusing, it can
be noisy, you know, itcan make your head spin. And I
think the thing here is to keepyour head down. You've got a financial
plan. We hope you have afinancial plan where big advocates of that.
You stick to your financial plan,not to whatever everyone else is telling you.
That's what's going to get you whereyou need to go, so that
twenty thirty years from now, yourfuture self is saying, yes, I

(10:58):
did exactly the right way. Iwouldn't change a thing when it comes to
my money. Here's the all worthadvice to quote Warren Buffett, and you
know I love him. Don't savewhat is left after spending, spend what
is left after saving your future self. Well, thank you. Coming up
next, we're discussing the worst investmentsof all time. This might make you

(11:18):
smile. You're listening to Simply Money, presented by all Worth Financial here on
fifty five KRC, the talk station. You're listening to Simply Money presented by
all Worth Financial. I mean youWagner along with Steve Ruby. If you
can't listen to our show every night, you do not have to miss a
thing. We've got a daily podcastfor you, search Simply Money. It's

(11:39):
right there on the iHeart op orwherever you get your podcasts. Coming up
to six forty three, we're answeringyour questions. You're asking us about student
loan debt, inherited I raise,and much more. You know, it's
interesting. One thing we don't talkabout really ever here on the show is
mental health, and I'm grateful thatwe are living in a world where things
like there are being talked about moreand more often. And the reason why

(12:03):
we don't talk about therapy on ourshow often is because it doesn't necessarily tie
very directly with money. But nowwe're starting to see that more people are
seeking therapy, which is a goodthing, and there is a financial component.
Demand has gone up surprices have goneup. Yes, about shocking.
Yeah, it all has to dowith COVID. Everybody being locked in,
more people decided to better themselves mentallyand sought out mental health. Mid tamb

(12:28):
pandemic industry survey by the American PsychologicalAssociation showed that sixty eight percent of psychologists
said that they had longer waitless thanbefore COVID nineteen arrived, and two and
three actually said they weren't able toaccept new patients. So as more people
are getting help, of course,spending on mental health services is also up,
climbing by more than half fifty threepercent from March of twenty twenty so

(12:52):
the beginning of the pandemic to Augustof twenty twenty two. I would assume
now it was probably even higher thanthat. In they're getting more of it,
they're spending more of it. Useoverall use of mental health services up
by forty percent. Here's the deal. While it is so good, I
think if you need this kind ofhelp to seek it out. Patients are
spending more on mental health care thanthey can afford. I want to also

(13:16):
bring it back around to what Ialways bring things back around, health savings
accounts Health Savings accounts actually can beused for these kinds of appointment, So
that another reason why having this moneyset aside means you don't have to put
these appointments on a credit card orrack up debt during a time when this
is beneficial to you. Do youas a couple, right couples, therapy,

(13:37):
your children, whatever it is,an HSA can go a long way
toward helping you fund these things.Yeah, therapy expenses average about two hundred
dollars a month for those that areactually seeking therapy, So you can funnel
that through your HSA, get adeductible contribution, and then use the money
tax for you to pay for yourmental health. When we talk about investing,
we often go back to and Ithink it's the topic of behavior your

(14:00):
old finances is so interesting because it'slike it's so clear what you should do,
yet you're so tempted by other things, and many times people just make
bad decisions. So tonight we're givingyou some perspective on what we would say
are some of the worst investments ofall time. Maybe that when you first
heard about them, it's like,well, this sounds good, this sounds
interesting. Given a few years perspectiveon some of these, you're like,

(14:24):
that is terrible. One of theearliest examples of a bubble was the tulip
mania all the way back in thesixteen thirties. This was a Dutch craze
about tulips and the speculation as toyou know, what color they were going
to be. It led the peopleactually selling their homes to buy tulip bulbs

(14:46):
so that they could turn it intoeven more money, and then the bottom
fell out and a lot of peoplelost everything. Yeah. I think a
lot of people were like, thisis dumb. We can't eat right now,
but we have all these tulip bulbslying around. We're not going to
do this anymore. The market wentaway, demand went away, the bottom
fell out, people lost their shirtsagain. It sounds crazy, it's on
tulip bulbs, tulips, yet timeand time again. It's like the tulip

(15:09):
bulb just keeps like sprouting again indifferent ways in modern day. Here's one.
Sears. Okay, I remember whenI was a little girl going to
my grandparents' house and there would bethose ginormous like Sears catalogs there, and
then you could go into the Seer'sstore and you could, I don't know,
get closed and your tire changed andnew tools and all the things.

(15:31):
I didn't even know actually that Searsexisted anymore. But actually Sears was purchased
by a hedge fund trader for elevenbillion dollars. Company has been declining ever
since, was even bankrupt for fouryears. It seemed like a good investment
to this guy. I don't knowwhat he was looking at. I mean
there was a legal battle between withthat and he settled for one hundred and

(15:54):
seventy five million dollars after buying itfor eleven billion. Yeah. I actually
didn't even know that Sears is stillin the stock market. Apparently it is,
and it's just like a few pennies, Yeah, a few pennies.
Pets dot com that was a bigone back in the late nineties. They
had their sock puppet dog that wasthe company icon. I remember that this

(16:15):
little guy was on Super Bowl commercialsand he'd got people talking. And ultimately
the company failed before it really gotstarted because of the beginning of the dot
com bubble bursting, and this wasa company I would say that was a
little bit too far ahead of itself. Yeah, I mean when you think
about the fact that this was inthe nineteen nineties for many people. Online
shopping really took off during the pandemicso twenty twenty. So then maybe they

(16:38):
were about thirty years ahead of theirtime. Great concept, there just wasn't
the online marketplace then that there isnow. I mean a version of it
now would be like Chewy and Iwalk in my neighborhood every day and there's
bags of Chewy, you know,stuff all over people, boxes and bags
on everybody that has a pets porchcoming from Chewy. So it's like great

(17:00):
idea. Unfortunately, Yeah, theywere just ahead of their time. How
about Blockbuster? Blockbuster that was aton of fun. I used to love
going to Blockbuster and new releases onTuesdays. Did you remember that though,
Well I didn't know that. Idon't remember that. They came out on
new releases are on Tuesdays. Anda group of friends that we used to
have movie night every Tuesday, andthat involved obviously a trip to Blockbuster.

(17:22):
Yeah, it seemed like nothing couldgo wrong, right and at the time
the Blockbuster was going big. Theyraised over eighteen million dollars and investor funding.
This was back in the late eighties, and then of course streaming services
came along just blew them out ofthe water. Can I even tell my
teenagers about Blockbuster? They look atme with the most bizarre looks on their
faces, like you went to astore to buy a movie in a box

(17:45):
a box, don't you understand?Right? And it sounds crazy now.
In my basement, my man cave, I actually have one of the old
movie shelves, yeah, from Blockbuster. That's cool, full of DVDs that
I used to buy. They werelike, get four of them for ten
dollars or four of them for twentydollars. And maybe you kept Blockbuster going

(18:06):
for another year. I probably did. But but yeah, think of those
that got invested in it and whereit is now. Enron is another example,
right. It seemed like they couldgo no they could do no wrong,
successful energy companies. It was adarling on Wall Street, sixty three
point four billion dollars in assets andthen combusted. Yeah. Unlike Blockbuster and

(18:26):
Sears, which simply became obsolete,Enron went down due to insider fraud.
And you never know what could takean investment down exactly. That's that's one
of the scary things because a big, seemingly solid company worth tons of money,
doing well for investors, and allof a sudden it all crumbles because
of illegal activity. It's mind boggling. How you know, advice that we

(18:47):
give over and over again is don'thave more than five or ten percent of
your net worth in one company stock. And this is an easy story to
point back to because a lot ofpeople remember that. Yeah, well and
NFTs right, it was like,what is this thing that we're even talking
about? Non fungible tokens again?I think back to what we did during
the pandemic and were people really thisboard. It's like a digital image that

(19:10):
that people liken to like Picasso,and would pay thousands, tens of thousands,
hundreds of thousands of dollars for theseNFTs. Well trading is down ninety
seven percent on NFTs from just twoyears ago. It's so stupid to me
because you own the original image,but anybody else can also own that image,
but it's not the original. Yes, yeah, that's one hundred percent

(19:33):
percent speculation. Yes, our mostrecent example of just terrible, terrible investments.
Here's the all Worth advice. Thenames may change from Tool of Bulbs
to NFTs but fad investments. They'renot going away. Stick to tried and
true investing principles. Boring is good. Coming up next, howth scammers are
using AI to take advantage of youas an investor. You're listening to simply

(19:56):
Money presented by all Worth Financial herein fifty five krs the tox station.
You're listening to simply money presented byall Worth Financial. Immy Wagner along with
Steve Ruby. I don't know aboutyou. You can mess with a lot
of things, don't you mess withmy four oh one k turns out though,
scammers are targeting exactly that, right, your investments, and they're using

(20:19):
now artificial intelligence to do that.So tonight joining us with the warning what
you need to know is, ofcourse, our tech expert Dave Hatter from
Interest I T I mean seriously,Dave, nothing nothing is ever sacred these
days. Scammers are coming after everything, and the problem I think with artificial
intelligence is scammers are out ahead ofeveryone else. Well, Amy, as

(20:41):
always, thanks for having me onand in your honor, I am wearing
my make or Well Fiction Again shirttoday. Sure you can't see it,
but yeah, you're right. Theyare out ahead and I think to a
large extent, it's because they understandthat the general public is not as familiar
with all this technology, and youknow, they're able to leverage this stuff

(21:03):
to very rapidly scam people. Youknow, my biggest concern about artificial intelligence,
and I keep saying this everywhere Italk about it in the short run,
is not it's going to take everyone'sjobs or the terminators are going to
be running down the streets wiping thisall out. It's the ability to use
these tools to spoof folks, createextremely realistic content, including things like deep

(21:26):
fake voice cloning, deep fake videos, you know, aka synthetic media,
and use it to fool people intothinking things are real that aren't. And
you know, we just it justkeeps happening over and over and over again.
Whenever you're on I get nervous.These these topics are too they really
are. And you know, Ialways gott to ask you, what can

(21:47):
we do to protect ourselves? Whatshould we be looking out for? Well,
they are scary, Steve, becauseagain a lot of the hyperbole that's
out there, We're not going tobe wiped out by this stuff anytime soon.
I mean, just go try chatchept and I mean it'll tell you
that it makes stuff up. Imean, there's a lot of these tools
have an amazing amount of potential,and I do think they will have,
you know, a major impact onsociety over time. But this scam thing

(22:11):
is it's an immediate threat in frontof us all right now. And whether
it's you know, deep fake attackson an election or more specifically in this
case, using these technologies to stealpeople's money, it's happening every day.
I mean, you don't have togo very far to find examples right now
where people are getting phone calls wherethe voices have been cloned. You know,
the grandparents scam. Hey it's yourgranddaughter, I'm in jail, send

(22:34):
me money. This you know,it's been reported by law enforcement. This
is a real thing that's happening rightnow, and the best way to protect
yourself, Steve, at the momentis to understand this is a real thing.
This is not something out of sciencefiction. This is not something that
might happen five years from now.It is entirely possible as we speak,
with no previous experience and at noexpense, to go online and find tools

(22:56):
that will allow you to clone someone'svoice, And the usual question I get
is, well, how I wouldthey get my voice? I'm not a
celebrity. Do you have voicemail?This is a question for your listeners.
Do you have voicemail with your voiceon it? Why? I can call
your phone number and I am nowyou. Once I record your voice and
I uploaded to one of these toolsand train a model, I can type

(23:17):
in anything I want to say andit will sound either exactly like you or
so much like you that especially ina scenario where you're already caught off guard
and something is you know, stressful, urgent quote unquote, people are going
to be highly likely to believe it'syou. I'm telling you this is a
real thing, right now. Youknow, I think with artificial intelligence,

(23:37):
there's so many people that are tryingto figure out, you know, how
do I use this to my advantage? Right? That's artificial intelligence, and
there's people that are you know,asking it which stocks to invest in,
and also just thinking from the standpointof you look at companies like Navidia,
right, and their stock has beenthrough the roof lately largely in part to
what they do, you know,how they contribute to artificial intelligence. So
I think the concern here is thatfor those that kind of go out there

(24:00):
and how do I capitalize on artificialintelligence and make money off of it.
Scammers know you're going to be lookingfor those ways, and they're also creating
false things that aren't even true,and I think there's a lot of people
that can easily stumble into those traps. Yeah, I think you're exactly right.
Aman. Going back to Steve's point, so awareness or question awareness is
key, and then maintaining a healthydose of skepticism, which is so important

(24:25):
for any cybersecurity related topic. Youknow, it's it's unbelievably easy and requires
almost zero technical skill to spoof aphone number, to spoof a text,
to spoof an email, to spoofan entire website. Now you couple that
with these AI technologies that can,you know, make it much much easier
to spoof things, make them muchmore realistic in less time and less cost

(24:48):
for the bad guys to do,and frankly improve the quality drastically. You
know, whether it's a here's avideo of a CEO who claims to have
some sort of great investment tactic.I mean that video could be created with
an AI tool. It might noteven be a real person, or it
might be a real person who hasbeen spoofed using these tools in order to
leverage someone's supposed credibility. I meanthere have been, you know, all

(25:10):
the spoofs of Putin or deep fakesrather of Putin, of Zelensky, of
Elon Musk, and these things justkeep getting better and better. So it's
it's awareness that this is the thing. It's skepticism. And then you know,
as always, if it seems toogood to be true, if they
claim to double triple whatever your investmentwith some sort of AI something or other,
I would be highly dubious and highlyskeptical. And remember if you say,

(25:33):
well I want to see these returns, anything they produce could be completely
completely spoofed. So yeah, againgoing back to what Steve said, this
stuff is scary, and you haveto do your homework, You have to
do your due diligence, and youjust have to be unbelievably skeptical and move
carefully if you want to try toleverage this. Because there are ways right
now to make money off AI,and you touched on some amy. You

(25:56):
invest in companies that are building thisstuff, invest in companies that are making
the hard way where the power thisstuff. But if you're going to try
to do some get rich quick schemefrom something you found on Amazon or YouTube
or Rumble or something, because they'reusing AI, I would say you have
a better than ninety percent chance oflosing your money. So a former four
oh one K custodian where I hada four toh one K from a previous

(26:19):
role in my career, they hada voice technology where we could record our
voice so that when we called in, we automatically came in as a verified
and you know, the people onthe other end just started talking to us.
What are companies able to do tostay ahead of scammers utilizing AI for
something like that. Well, I'mglad you brought that up, Steve,

(26:41):
because I wouldn't have thought of itotherwise. But I read an article recently.
I think it was' wired,but I don't have it in front
of me, so it might notbe wired, where the writer basically said,
Hey, I use a bank thathas a voice verification system and I
want to see if I can spoofit using voice cleaning technology, and he
did so. I think this isa major problem for banks right now or

(27:03):
any sort of organization that is,using any sort of voice technology to verify
your identity. I think you canjust throw that away because you know,
if you don't know what you're doingand use some free tool, are you're
going to be able to clim myvoice perfectly? Maybe not. But if
you know what you're doing and youhave access to the right tools that are
willing to take the time to training, can you get to a place And
again, this is an actual articlein a well known magazine where the guy

(27:26):
said, here's how I did it. Yes, you can easily fool those
kind of systems, and trust me, as you guys already know, this
technology is only going to get better. Maybe you can't spoof my voice perfectly
today, but I guarantee you fiveyears from now, you'll have no problem
having access to technology that will soundexactly like me or you. So yeah,
that's a major problem. So thetakeaway there is if you're utilizing voice

(27:49):
print technology at any other financial institution, maybe don't. If I think you're
making an important point, Steve,if it were me, I would ask
my bank or whatever four one Kthird party ministry river I would I would
ask them to disable that capability onmy account and not make that a way

(28:10):
to verify my identity, because Idon't believe at this point there's any common
access to the general public to toolsthat would be able to spoof your voice
real time. In other words,like you know you are really talking to
me right now, two three yearsfrom now, I'm not sure you'll know
if you're really sor Ry Dave.This is actually chat GPT with your Yeah,

(28:30):
it's Dave GPDA. But to yourpoint, you know, I think
any kind of technology that relies onyour voice or even possibly video to verify
you, it's going to go outthe window. Because when we hit the
place where the technology, both thehardware and software is good enough to have
a real time conversation with someone,and I'm not telling you that doesn't exist,

(28:52):
but I'm not aware that it's generallyaccessible to the public. Well,
then all bets are off, becauseyou know, I could call you as
a criminal and I've spoofed, youknow, spoofed Amy's voice, and you
think you're taught. You're asking questionsand I'm answering is Amy real time that's
coming? It's coming, if it'snot already out there. I think this
is once again as always, animportant warning to all of us as investors

(29:15):
of how artificial intelligence is changing thelandscape and what you need to be aware
of in order to protect yourself.Thanks as always, today've Hatter our tech
expert from Interest I T you're listeningto Simply Money here on fifty five cars
the talk station. You're listening toSimply Money. Present of my are worth

(29:36):
financial? I mean you wagner longwith ste Ruby straight ahead when you should
splurge, when you should settle,or when you should skip that purchase altogether.
We'll get into that, but first, do you have a financial question?
It's keeping you up at night.You and your spouse not on the
same page about There's a red buttonwhen you can click them while you're listening
to the show. It's right thereon the iheartopp record your question. It's

(29:57):
coming straight to us, and we'vegot some questions tonight. Our first one
comes from Jerry in Boone County,Amy and Steve. My daughter has ten
thousand dollars left in student loan debtand ten thousand dollars in credit card debt.
Which should she work harder to payoff? I mean, all things
equal as far as those balances areconcerned, I would certainly attack the one
that has a higher interest rate.In the situation, I'm going to guess

(30:17):
that's the credit card. That's probablythe credit card and the high interest rate
environment that we're in. There's alsoopportunities for paying back student loans based on
how much she earns, for example, and who knows what's eventually going to
happen with student loan repayments. That'smoot, though I wouldn't count on anything
like that. I would say thatthe credit card debt, because these are
equal dollar amounts. Just attack theone with the higher interest rate debt,

(30:40):
which is going to be the creditcard. And the conversation I would have
if this were my daughter Jerry wouldbe, once you paid down this credit
card debt, once you paid off, stay out of it. Your goal
needs to be with that credit cardthat you pay that balance in full every
month. If you're struggling to dothat, it probably means you're buying things
that you can afford. Right,Because I feel so bad for young adults

(31:03):
today coming out of college with studentloan debt hanging over their head that they
feel like idiot. You compound thatwith credit card debt, and it can
feel like you're never going to getahead, so focusing and that might mean
she has to make some sacrifices.That credit card debt first, yes,
but also that student loan debt.The feeling that she will have right of
financial freedom once she gets out fromunder that debt and is able to start

(31:25):
saving for a future, it's goingto open up a lot of opportunities for
her. Next question is from Siennaand Montgomery. Thanks for taking my question.
I just inherited an IRA from myfather who recently passed at age eighty
two. How do I deal withtaxes? Wish we could take this question
straight to the IRS because they don'thave a clear answer on this, and

(31:47):
inherited IRA if it's not from yourspouse, has rules that are changing.
They have changed over the past fewyears. Here's the problem with the IRS.
It's clear as mud how they're handlingthis. I think what you need
to plan, though, is tostart taking distributions on this money. You
used to have ten years where youcould look at that and then start to

(32:07):
do it, and that window isnow gone. It used to be a
stretch, IRA where you would beable to do it over the course of
your life based on life expectancies andIRS tax tables. What has changed now
is you have ten years, butthat the IRS guidance is what's clear as
mud as to whether or not youneed to do that every year, or

(32:27):
you can wait until the eleventh hourand take it out in that tenth year.
So a lot of advisors at thispoint would probably recommend just doing distributions
each year to spread out the taxliability because the taxes, You've inherited this
money and I'm sorry for your loss, and that the taxes is something that
you've also inherited, So spreading itout over the course of ten years is

(32:51):
probably a good start. But talkto a tax advisor. Yeah, what
the IRS came out with this yearis said, we've had too many questions,
we really don't have answers yet,so we're going to kick the cake
until next year. I think youmake a great point, though, just
to go ahead and start taking thosedistributions, because that's what we would anticipate,
might be the best thing long term. Next question is from Kyle in
Cincinnati. I want to retire inabout ten years. Is there a recommended

(33:15):
amount of stocks versus bonds? Ishould have. Yeah, sure, I
mean based on your own financial situation, needs and goals. There is no
cookie cutter answer unless you're putting allyour money into a target date retirement fund.
That fund will give you that answerbased on just your time frame up
to retirement, but I'm not abig fan of that. When you're ten
years out from retirement, I thinkat this point you should sit down with

(33:37):
a fiduciary financial planner to help understandthe risk you need to take to meet
your goals and that you can affordto take based on your financial situation.
No cookie cutter answer for this one. Yeah, this question doesn't surprise me.
We've seen a million versions of thisthrough the years. Everyone would love
one size fits all formula or answer, but you don't want a one size
fits all retirement and that's why wecan't give you that. So I would

(33:58):
say figuring out what looks like foryou is a really good way to spend
some time. Coming up next isLena from Loveland. I've adjusted my budget
this year, so I'm going tomax out my four oh one k and
IRA, assuming I still have moneyto save. Where should it go?
Okay? I love first of allthat you're looking at your budget that you're

(34:19):
maxing out these things, Lena,I would say one thing to think about
is beyond that four oh one Kwhere you're getting your company match, I
might even leapfrog over that IRA andsay max out a health savings account if
a high deductible health care plan makessense for you, because there's more tax
advantages to this than an IRA tripletax advantage. You're going to need that

(34:39):
money at some point in your lifefor qualified healthcare expenses. So I actually
think that might be the best useof your money. But the fact that
you're even looking at maxing out anyof these, you know at this point
is a great thing. Good foryou. Gold Star. Yeah, there's
kind of a hierarchy here as faras the next most tax efficient bucket to
put your money in when it comesto investing. The HSA is actually number

(35:01):
one because it's triple tax advantage.But you got to get that company match
because exactly so, you need thefree money from your four om K,
but charity max in it. Sofour oh one k HSA IRA, you
need to make sure you have anemergency fund, of course, I'm assuming
you do. From there, justa taxable brokerage account where there's no limits
on how much you can invest,and that's certainly a way to start building

(35:22):
some some wealth outside of retirement accounts. Coming up a next when paying top
dollar makes sense and when it doesn't. You're listening to Simply Money presented by
all Worth Financial here on fifty fiveKRC, the talk station. You're listening
to Simply Money presented by all WorthFinancial. I mean, you Wagner,
along with Steve Ruby, have youever looked at something and wondered, Okay,

(35:45):
should I suck it up and paytop dollar for this? Do I
need the nicest thing possible? CanI get something maybe cheaper? Or should
I skip it all together? Imean, it happens all the time,
and we want to talk about itemsto splurge on and maybe where you can
save a little bit of money.First of all, splurging on appliances.

(36:05):
If you're going to shell out hundredsor even thousands of dollars in appliances,
then spending a little extra to getthat quality product probably makes sense. That
doesn't mean that you don't want toshop around and find the best deal based
on what's available. Yeah, there'ssales like Memorial Day for example, a
little timely labor day. This issomething where you definitely want to go the

(36:27):
extra mile, I would say,because that product can then last so much
longer than a cheaper version of it. If there are certain clothes with a
quality guarantee. I think of NathanBackgrack, who used to co host the
show with me. Would always talkabout these shoes that he spent more than
you would spend on normal shoes,but they would I mean expensive shoes,
I think like a few hundred dollars, which is insane, but then they

(36:50):
would just resole them over and overand over again. So he would make
this investment one time, but theshoes always look brand new because they I
don't even know if that brand exists. I don't know what brand it is.
But point being, sometimes paying forquality, if it's quality that's going
to last, can make a difference. I make this if you're wearing it
for ten years, then sure,yes, well, and I make this

(37:12):
point to my kids all the time. Listen, like, if there's certain
things that you're gonna wear all thetime, you can spend more. But
if it's something that is going tobe trendy, get it as cheap as
you possibly can if you're not goingto want to wear the same thing next
summer that you're wearing this summer.And I think you really have to look
at Okay, am I going tokeep this thing long term? Is it
going to serve me five years orten years? Okay, then maybe I
spend a little more on it.If it's something that isn't going to be

(37:37):
around as long, well maybe thenyou settle on that one. Anything with
a shorter lifespan, you know youstill need it, maybe, but you
don't need it to last as long. Yeah, I mean, I mean
we're talking about things like paper,tiles, napkin, soap, shampoo,
everyday items that you're going to cyclethrough very quickly. That it's not an
investment that you're making because you're goingto use shampoo, you're going to use

(37:58):
it every day, and as opposedto an appliance that you can splurge on
and you're going to use it overthe course of twenty years, it's a
big difference on how much money youcan save by not splurging on Some of
those items are going to go awayvery quickly. I also think there's an
intersection here that you should focus onbetween what's the nicest thing I can get
at the best price I can possiblyget. Thinking about flights, right,

(38:22):
there's certain airlines that you know areoften running late, they have a ton
of cancelations. You may or maynot be able to actually sit down on
that airplane. You know, what'sthe best flight that you can get at
the cheapest cost. So you're notnecessarily going to be paying first class,
but at the same time, you'regoing to make it there. I think
thinking through, am I going tokeep this long term? Is it shorter
term? Or do I even needit at all? Full price to Parel,

(38:45):
maybe not extended warranties that should becovered by your credit card. Thanks
for listening tonight. You've been listeningto Simply Money, presented by all Worth
Financial here on fifty five KRC,the talk station