Simply Money

Episode Transcript

(00:06):
And I have you gotten on thescale lately? What about the impact weight
can have on your financial future?You're listening to simply when you presented by
all Worth Financial Immi Wagner along withSteve Ruby, are you over weight?
I don't know. I got onthis scale recently and was like, oh,
that's why my pants are so tight. As we know, being overweight

(00:27):
can have a dramatic impact on ourphysical health. But of course you know
this is not a show about yourphysical health, though we know it's incredibly
important. This is a show aboutfinancial health. So when we talk about
weight, we're talking about a differentkind of weight, and this has to
do with your portfolio. Yeah,this is something that can happen in indexes.
So specifically we're talking about the Sand P five hundred today being overweighted

(00:51):
in just a handful of stocks.So we've talked about the Magnificence seven before
that carried the rally through twenty twentythree and bumped up the S and P
five hundred twenty four percent. Butthings have changed and right now it's really
just the top three and this isprobably not that good of a thing.
Yeah, No, we're talking aboutspecifically Microsoft in, Nvidia, and Apple.

(01:12):
Those three companies single handily have accountedfor one fifth of the index for
six days in the past two weeks. It is like if you were to
open and we are not huge proponentsof checking your four oh and k maybe
even more than monthly or quarterly,but for those who check it really often

(01:34):
and you're seeing some major swings,it could be as as simple as in
Vidia's earnings call. Right, Imean, one small on a small thing,
but one thing to do with oneof these companies can literally move the
entire market. And that's what we'vebeen seeing. Yeah, and why this
is some mind boggling. Remember theSMP five hundred is five hundred stocks.

(01:56):
It's five hundred of the largest USlarge cap stocks, but we have three
of them moving the entire index.I've talked about this before in the show.
It has to do with how theindexes are weighted. It's market cap
weighted, which means the biggest playershave the most pool on the underlying performance
of those indexes, as opposed toif it were equal weighted. It gives

(02:17):
an equal opportunity for some of thesmaller of the largest five hundred to have
a poll on the index. Butthat's not how it is. It's not
it's not equal weighted, it's it'smarket cap weighted. So this is where
we can run into issues when whenyou have three stocks essentially controlling the EBB
and flow of that index. Well, and if you want to dig even

(02:39):
deeper, you know it's it's Nvidia. It's one company. I mean,
if you look at Nvidia year todate, it's up over one hundred and
fifty percent so far this year.The others are are doing five but twelve
point three percent, doing twel pointthree percent, one point six percent for
Microsoft, Apple respectively. You know, Nvidia recently overtook Apple for the number

(03:05):
two spot. This was last thursday, closing in fast on Microsoft as the
largest company. So these three companiesjust in really one are having such an
impact on really everything, including yourfour one. Okay, yeah, So
we also just talked about the inVidia ten to one stock split, which

(03:28):
is designed to make that stock moreinviting to investors that didn't have the type
of capital that they needed to investin a single share. So the number
of shares that are available is goingup, the price of the shares is
going down, so it's more likelythat even more people are going to be
able to buy into it as anindividual stock separate from the index. With

(03:49):
that split, an individual share ofNvideo went from twelve hundred, say around
there a share to one hundred andtwenty, Right, much easier. Here's
the problem. You mentioned that that'sgoing to attract more investors, and I
agree that it will, and especiallybecause Nvidio dominates the headlines. You know,
they make these chips that are usedin AI artificial intelligence powered chat GPT

(04:15):
so and it seems like there areno other companies coming to market with a
chip that can begin to compete withtheirs. Right, So I know there's
a lot of interest in this company, but I also want you to understand
the perspective, but that by thetime that a company becomes a stock market
darling, its mediork rise often isalready behind it. Well, we had

(04:40):
an entire segment about that last week, in fact, and this is data
from Dimensional Fund Advisors. So alot of the fastest growing stocks, what
ends up happening is out they stopoutperforming, that is, after a certain
period of times. So if welook from from nineteen twenty seven to twenty
three, the average return of acompany ten years before it hit the top

(05:00):
ten list was eleven point six.The top ten list of the biggest fastest
growing stocks. Yeah, eleven pointsix. The average return five years before
hitting the top ten twenty percent.Three years before hitting the top ten twenty
seven point two percent. So gainingmomentum, getting bigger, getting more headlines,
getting more attention, right exactly,And that can lead to a situation

(05:24):
of fomo greed. People say,oh, okay, Well they start talking
about it at the dinner table,at a family picnic, at church,
wherever, wherever they're they're they're gettingtogether and they're saying, hey, I
saw this stock, and I thinkit's a great buy. I think we
should all get in, and andyou have that fear of missing out,
so you buy the stock that hasperhaps already gone past its prime as far

(05:46):
as growth potential is concerned, becausewhat then happens again, this is still
according to dimensional fund Advisors, onceit ends up. Once a stock ends
up on the top ten, threeyears after hitting that top ten, the
average return was about half a percent. Five years later it was down about
a percent, and ten years laterthe top ten was down one and a
half. You're listening to Simply Money, presented by all Worth Financial Ammi Wagner

(06:08):
along with Steve Ruby. As wetalk about weight, and when we mean
weight, we're talking about specifically thefact that the S and P five hundred
could be overweighted right now by certainstocks, really three stocks, and the
largest of those being in Vidia.When you're talking about this, this DFA
research showing sort of the rise andthen the fall of these stocks. I'm

(06:31):
born and raised in this area.I grew up with a King's Island season
pass. I think of the rollercoasters, the twin Racers were always my
favorite, right, and there's thislike anticipation when it's like slowly going up
the hill, right, and themomentum is building. The momentum is building.
The thing about roller coasters is youcan see in front of you when

(06:53):
the top hits right. Yeah.The difference here is how hot, how
hi are the tracks going, youknow, and at what point does it
start to go down the other side. And also it takes a while to
get up and then and then thedrop happens incredible, yes, yes,
yes, And you don't know whenthat's coming when you're investing in individual stocks.

(07:15):
That's a great point. I mean, we don't know if the data
that we just shared is going topan out the exact same way that it
has historically. Obviously past performance isn'tan indication of future returns, but that's
what history tells us. On average, the momentum builds, builds builds,
the stock gains gains gains, andthen it hits a point where once it's
on the top, typically it's notgoing to perform as well as it has

(07:38):
in the past. So it's somethingto be mindful of if you're thinking about
maybe using some of your retirement fundsto buy into an individual stock that has
been doing quite well lately, tothe point where we're having an entire segment
about it, pulling the entire weightof the SMP five hundred in Navidia here.
It's it's it's extremely risky to makedecisions based on the fact that it's

(08:01):
been going up as quickly as ithas. I'm glad you went there,
because if you're listening and you're like, well, what am I supposed to
do about this? Think about itthis way. If your four ah one
k right in your retirement fund,so your major vehicle to get you from
where you are right now into retirementsomeday is already, as we're pointing out,

(08:22):
overweighted in these individual stocks. Andthen you start looking around and that
fomo hits and you think, I'mgoing to invest right, I'm going to
buy these individual stocks. These arethe companies that are moving the market.
What happens then if next week orthe week after, some crazy news comes
out about AI and all of asudden and video just drops your portfolio.

(08:46):
Your four to one K is waydown, and now you made an investment
in this individual stock and it's alsodown. You got greedy, you took
a risk, and then the riskdoesn't pay and you lost your shirt.
Yes, and it can happen.Yeah, that's another. The other reason
I brought it up is just broaddiversification. Because if you have your four
to one K, which is themain vehicle for most of us saving for

(09:07):
requirement in this day and age,and you look, let's say you enrolled
in your new four one K andyou're looking at the investments and you see,
you know, the best returns havebeen this one in that one.
So that's the one you put yourmoney in. That's not diversified. You
need to have a mix that haslarge cap, small cap, mid cap,
domestic international, maybe some bonds,maybe some short term positions. Broad
diversification so that if something were tohappen to AI, like you said that

(09:31):
that moves not only Navidia, butapparently the markets via the S and P
five hundred fund, You don't justhave too much of your eggs in one
basket, because you know, I'llhave folks ask that, why why shouldn't
I just put all my money inthe S and P five hundred? Well,
now, in this day and age, it's because you pretty much own
three stocks. It's not as diversifiedas a lot of people think it is.

(09:52):
Now. I know that's a bitof a stretch because you still do
have exposure to five hundred stocks,but some of them are so minimal that
there's not really an opportunity for thosesmaller of the large companies to do much
as far as moving the S andP five hundred is concerned. Well,
and to your point, why notjust go all in on the S and
P five hundred? If you lookat research going back to nineteen twenty six,

(10:16):
it shows that actually, if youwere going to invest in one basket
of stocks and look for the highestreturn. I think it's actually small cap
value funds that have had the mostgrowth, Right, why wouldn't you invest
then in just small cap value funds. Well, a lot of years they're
up, a lot of years,they can be there, you know.
So it's just that's why you haveto be diversified. And there's no really

(10:41):
kind of easy solution to this.It's not buying one of these individual stocks
and watching some meteorc rise and that'show you retire. It's not going all
in on the s and P fivehundred. It's truly figuring out how to
be as diversified as you can possiblybe. Yeah, And sitting down and
working with a fiduciary financial planner willhelp you map out your goal and to
help you understand the risk that youneed to take, that you can afford

(11:01):
to take, that you're comfortable taking, and that can help you get to
where you want to be with aninvestment strategy that keeps you invested because you
don't make emotional, knee jerk reactiondecisions when the markets get kicked in the
teeth and you had too much inthe video and things went out. Here's
the all Worth advice. A trulydiversified approach allows you to track the hot

(11:22):
companies now. But get this,you will also then be invested in the
companies that are going to get hotin the future, and you don't have
to know what they are because youalready own part of them. It is
truly the best of both worlds.Coming up, Roaring Kitty. Yep,
we're back memestock insanity. Here's thequestion today, is it legal? We're
going to get to that next.You're listening to Simply Money, presented by

(11:43):
all Worth Financial. Here in fiftyfive KRC, the talk station. You're
listening to Simply Money presented by allWorth Financial. I'm Amy Wagner along with
Steve Ruby. If you can't listento our show every night, you don't
have to miss any of our moneyadvice because we've got a daily podcast for

(12:05):
you. Search Simply Money. It'son the iheartapp or wherever you get your
podcasts. And straight ahead at sixforty three, the big tax break many
married couples may not know about,may not be taking advantage of. We'll
tell you. Coming up in justa few minutes. Okay, Roaring Kitty.
It sounds it's so crazy, andsometimes it's so funny, Steve,

(12:26):
what I think like, if youwould have told me five years ago that
I would be saying the words roaringKitty on the show, I would have
laughed at you. And the factthat we now say these words so often.
We're talking about the person who reallywas the grandfather of memestocks, the
father of memestocks, if you will. But today the question is is this

(12:46):
even legal? Yeah, I meancertainly interesting topics. So roaring Kid,
roaring Kitty, his name is actuallyKeith Gill. It's more comfortable for me
to say, so I might justrefer to him as Keith. I like
roaring Kiddy. It's just crazy kiekyboy, gilly boy. I don't know
this guy. He again, we'vetalked about this recently where he was the

(13:09):
grandfather of meme stocks. By noticingthat there were during the COVID pandemic,
a lot of hedge funds rightfully shortingcompanies that were probably on the downswing.
We're so fundamentally sounds exactly. Yeah, we're talking AMC. Nobody can go
to the movie theater, we're talkinggame stop. We can't go to the

(13:30):
store. You don't need to anymorebecause you can get video games and download
them online. My son has notbought an actual game. I don't even
know cartridge or whatever they are inyears. Yeah, because you can just
download them online what you need.So yeah, to your point, game
Stop doesn't look great long term.Everyone's playing games that they're just they don't

(13:50):
have to leave the house to geton their computers. Yeah, I mean
it makes sense. So these hedgefunds were shorting it, meaning they sell
stock they don't own because they knowthe price is going to go down so
they can buy it later and gaina profit. So what this Keith gilguy
did is he rallied the troops onReddit, Wall Street bets and he got
people to buy into the stock andbuy into options, creating a short squeeze
which shot the as they call it, shot the value to the moon.

(14:13):
And this was actually investigating investigated byCongress where this guy his argument was,
I just like the stock. Yeahthat's what It just looked good to me.
It made a lot of sense.That's literally what he said in front
of Congress. His argument was,I just like the stock. I don't
know if this is the truth aboutthis Roaring Kiddy guy, but I in

(14:35):
my mind, he's like in hisgrandma's basement, like some dark basement,
just like trolling online. And theinteresting thing about it is it was like
kind of if he hit the lotteryonce, right, Like his theory behind
memestocks actually worked. He was ableto do what he did, you know,
drive the prices of these companies thatreally make no sense long term.

(14:58):
Up. He made a ton ofmoney. A couple of people holding onto
his coattails made money to lots ofpeople lost their shirts as well. And
then he kind of went dark fora while. He testified before Congress,
and then he kind of went away, and then he resurfaced lately, and
I was thinking about it this morning. You know, we talk about Jerome
Powell. He is chair of theFederal Reserve, our nation's central bank,

(15:20):
and when he speaks, the marketsmove. Okay, that makes sense to
me. He has a really bigimportant job. What makes me nervous is
that when roaring pity warring Kitty speaks, when he roars, yes, when
he roars, markets also move.And that's downright scary to me. Yeah,
three years of silence. On Maythirteenth, he tweeted a man leaning

(15:41):
forward in a red office chair holdingwhat looked like a video game controller,
and game stock stock went from seventeeneighteen bucks up to thirty dollars. Yeah,
just because he tweeted in guy Cityholding a controller over the next time.
No words, right, no wordsin the tweet, just a picture.
Well, there was a bunch ofcryptic tweets that came out over the
next four days, about one hundreddifferent tweets and a million different followers trying

(16:06):
to decipher what they meant. Andthen on June's second he posted a green
Uno reverse card and then shortly after, probably from from Gil himself, a
Reddit post unconfirmed showing that he hadone hundred and eighty million dollars in game
stock, stock and options. Yeah, this guy is making it big.
But here's the question. Is thiseven legal? Yeah? Manating about yes,

(16:32):
as I'm talking about the fact thathe has so much power over the
markets. The question is shouldn't belegal for someone to have this much power
over markets? In you know,what does it take right to decide?
Well, courts require three things toprove a violation, to prove that something
that's happening with in the markets isnot legal, A deliberate attempt to manipulate

(16:56):
a stock I'm not a lawyer,but sure, probably I'm going to check
that box. A financial interest inthat stock. He proved it with bragging
about the positions he has. Checkthat box to the creation of an artificial
price. This is the one that'shard to argue. Yes it is,
check check check. Yeah, it'sa remarkable situation. I mean. Another

(17:18):
rule targets actions that deceive investors byartificially inflating and debating stock price deflating stock
prices. Can I stop you there, though, because this is deceiving.
I don't actually think he deceived anyone. I mean, I think if you're
going to hold this up as isit illegal, if you hadn't, he
didn't deceive. I think he justgot the masses to jump on this crazy

(17:41):
boat that he's on and follow him. I wouldn't say deception played rules.
There's a movie about this, bythe way, and it slips my mind
what it's called right now, youknow what I'm talking about. It's an
actual movie about Keith Gill. Yeah, it's yes, recent on Netflix.
I think, is that right?You know? I should have looked at
I don't recall, but maybe I'llgive it a watch and see what they
have to say about it, butI think it's pretty clear that there is

(18:03):
certainly standing here, that there isan interest in the stock price and an
attempt at manipulation. Right now,he holds his accounts at e Trade,
and e Trade is reviewing whether ornot they're going to kick him off the
platform itself. Which where's he goingfrom there? Yeah? Well, and
again back to my at least whatI see in my mind, right this

(18:25):
guy in his dark grandma's basement.Where is he getting the money to invest
this much in, you know,in meme stocks? Well you know,
who knows. But one plausible scenariois that he made a fortune on short
dated out of the money options tradein May and then rolled it back into

(18:45):
game Stop or also maybe all ofthose initial winnings went into Nvidia. It's
like, I don't know, howmany times can you can lightning strike for
one person in their grandma's basement.I don't know. Yeah, I mean,
there's there's hedge funds out there thatshort stock all the time, so
there is a chance that he's identifyingthe stocks that are being short at the
most and trying to manipulate the marketsvia Reddit. I mean, they certainly

(19:11):
did find a way to stick itto hedge funds because of the short squeeze.
It's a real thing, which iswhat shot the stock price up in
the first place. So it's badfor hedge funds, you know, No,
I mean that's what the movie isabout. I imagine it's it's a
hedge funds versus retail investors. Sothere is kind of I don't know a
Robin Hood Robin Hood's story here.But when you're manipulating the market in a

(19:33):
way that people lose their shirts becausethey have fomo and they go in and
they say, all right, well, you know, I have my heart
earned money. I have no ideawhat options are, but I'm going to
open an account on robin Hood itselfand put money into the markets, and
then they lose a bunch of it. That's where a problem starts. Here's
the all Worth advice. Do notfollow the crowd or make investment decisions based
on what you see on social media. Please understand this is a recipe for

(19:55):
disaster. Next, we are breakingdown the safeguards you need to be taking
with your phone to keep thieves outof it. You're listening to simply Money
presented by all Worth Financial. Herein fifty five KRC, the talk station
you're listening to Simply Money, presentedby all Worth Financial Immy Wagner along with

(20:17):
Steve Ruby. Here's a question foryou. When is the last time you
turned off your phone and turned itback on? Why am I asking?
Well, there are some security issuesinvolved in this, and joining us tonight
to explain what we need to knowin order to keep our phone safe from
people who shouldn't have any access toit is, of course, our tech
expert Dave Hatter from Interest It So, Dave, there's kind of some new

(20:40):
guidelines out there on what we canbe doing to protect ourselves, and one
of the biggies has to do withhow often we turn our phone off and
back on. Yeah, Amy,the NSA, interestingly enough, of all
organizations, put out this new guidance. It's called the Mobile Device Best Practices
Report. You can just look itup and they've done a nice job with

(21:02):
an infographic and a PDF that kindof shows you a laundry list of different
things to look out for and whatyou should do to protect your device security.
And I guess before we delve intothe specific issue you raised, or
really what that says in the report, I just like to remind folks more
and more of us are spending moretime online in our phones. We're doing

(21:22):
work from our phones, when entertainingourselves from our phones. We're shopping,
banking online, etc. From ourphones. And think, if you think
about it, you know, youraverage mobile phone from a security and privacy
perspective doesn't have the same level ofmaturity as a PC. Right, these
things are much newer. Most peopledon't have any virus, or if they
do, it's not nearly as robustas what you might get in an enterprise

(21:42):
setting on a PC. The badguys know this, right, So it's
probably never been more important for peopleto think about how can I secure my
mobile device, especially because I'm doingmore on it probably than ever before in
almost every case. So I thinkthis is a timely report from the NSA.
It's got some great advice in it. One of the key standouts was

(22:03):
you should restart your phone every sooften. And it's not just the security
and privacy applications to this. Youknow, it will help you clear out
the phone's memory, it might helpyou save your battery life, you'll probably
get slightly better performance, and youknow My advice would be whether it's a
desktop PC, a notebook, atablet, or a phone or whatever,
it's a good idea to restart it, at least on a weekly basis.

(22:26):
Just do a hard boot, restartit completely from scratch. I can almost
gantee you're going to get better performanceand better battery life out of it.
And the NSA's point is this canhelp break connections as like command and control
servers and that sort of thing,and from a security perspective, it's a
win as well as well as someof the other things they suggest that is
really easy to implement. Advice.This is not a particularly complicated process.

(22:48):
You turn your phone off and thenyou turn it back on. And we
have Dave Hadder telling us here basedon research from the NSA that this can
help protect the security of your devicethat you probably use for things like online
banking, maybe checking your investment accounts. What are what are people doing that

(23:10):
that we'll say, the bad guys? What are the bad guys doing that
they can actually get access to thistype of information, because that's that's scary
stuff. Yeah, well, you'reright, Steve, I mean it's pretty
low friction. Advice is to restartyour phone now. Again, they've got
a lounderlist of things, and we'lltouch on some of the others in a
minute, but you know, it'sa lot of the same sort of things
that we've seen with traditional PCs.Right, you get a phishing email,

(23:30):
you click a link and it eithertries to take you to a doppel Gang
or Slash lookalike website where they stealyour credentials or maybe attempts to download some
kind of malware. And you know, going back to earlier in this segment
when we talked about all the differentways people are using their phones. Now,
if you could download some sort ofmalware like a like a keystroke clogger
for example. Keystroke Clogger a softwarethat kind of runs serreptitiously in the background

(23:52):
and literally captures all your keystrokes overthe course of time. I'm literally going
to see every site you visit,and I'm going to have the credentials for
every single one of them because thiskey stroke blogger is capturing that. One
of the reasons why you would wantto restart the phone is it's going to
make that application restart. It's goingto break the connection to their server.
Maybe it won't work right after that. I mean, it's hard to say.
They say in there very clearly,the NSA does you know, this

(24:15):
is not a fool proof recommendation,and simply restarting your phone is only one
of many things they're suggesting, butit's one of the ways to help fight
against that kind of attack. WhatI like, though, Dave, about
what we're talking about tonight is there'sso much there's so many scary things out
there that the scammers and these youknow, thieves, these creeps are doing
to people that we can scare peopleall day long, but this is practically,

(24:40):
these are practical things that you canbe doing to protect yourself. So
we started with turn off the phoneand turn it back on. What are
some other recommendations? Yeah, Amy, I think you make a really super
important point there that I understand.You know, people like me with a
ten fol hat it's always out therewith the doom and gloom and it gets
overwhelming, right. I totally getthat, you know, and everyone is
a non a technology person that doesn'twant to be. And again, one

(25:02):
of the things that's really great aboutthis report the NSA put out is it's
a lot of pretty simplistic stuff.It's stuff we've talked about before, things
like make sure that you update theapps on your device, right. This
is true for any computerized digital typeof device. You want to put the
latest version of software from credible vendorson there. Use the official app stores
when you do that. Don't sideloadstuff. Don't download stuff from a place

(25:25):
you're not familiar with. If youhave an Apple phone, use the Apple
Store. If you have a Googlephone, use the Google Store. You
know, just by merely updating thesoftware both you know, the operating system
iOS or Android if it's Google,and then the apps you have on it,
that will help block some of thesekinds of attacks simply because the software
will be fixed to stop them,you know, harden the device, turn

(25:45):
off services you're not using. Thisis common cybersecurity advice for any kind of
environment. The less services you're running, the less attack service that is for
the bad guys. So I knowthis is kind of inconvenient, but like,
for example, I don't use turnoff Bluetooth on my phone when I'm
not using it. If I needto use Bluetooth for something, I'll turn
it on. There's a type ofattack known as blue jacking, it's you

(26:07):
know, you've got to be inclose proximity to someone, but blacket Jacklin,
Yes, it's it's essensially a wayto attack bluetooth and try to,
you know, get unauthorized access toa device. You know, lock your
phone, don't leave it unlocked,you know, set it up so it
has a pass code of pen ideallybiometrics or something like that, because if
you leave it unlocked and someone justwalks off with it, well, now

(26:30):
they potentially have access to everything youhave, right, So you know,
again, some of these things arevery low friction. I get the turning
services off and on. I turnoff the location services on my phone when
I'm not using Apple does that's abig one, Henry, touch on that
one for a second, Dave.Because every app that you get on wants
to track where you are. Doyou need to allow them to do that?

(26:52):
Well? In some cases, Amy, you know, you're going to
lose some of the potential benefits ofan app that can, for example,
serve up content based on your location. So you're going to have to decide
for yourself, Like, you know, I was recently in Florida and is
it nice for the weather, appto know that I'm in Florida and give
me the Florida Weather versus the CincinnatiWeather. Yeah, that's nice. I
want do I want the weather app? And Apple and everyone else. Now,

(27:15):
keep in mind, even if youturn off the location services, the
cell phone company, you know,Verizon, t Mobile, whoever, they
still know where you are because ithas to work that way for the phone
to work. But I don't necessarilyneed every Apple on my phone, which
you know me, guys, Ionly have a very small number of apps
to begin with, or Apple toknow where I am all the time.
You know, so you know,you might have some you might lose some

(27:36):
functionality by disabling the location services.But for example, I use Apple mapps
all the time. I turn onthe location services, I put in the
address where I want to go,It gets me there. I turn it
back off. Yeah if I youknow, and well again I know there's
some friction involved there. You knowthis. It impacts your privacy and your
security. When you can turn downthe amount of services you know, use

(27:59):
less apps, get rid of appsyou don't need. These are all just
potential places for the bad guys toinsert themselves. The less you have,
the better in general, and youknow the NSA agrees. I want to
point out that since we've been talking, I did restart my phone and I
turned off my Bluetooth Good Services.I'm working on that one. I couldn't
find it yet. I'll show youwhere it is. It takes like ten

(28:22):
seconds. Yeah, so you knowit's as easy as that, because this
is a low hanging fruit. Lowhanging fruit, and I think that is
the point of this conversation, isthe fact that there are some really low
hanging fruit for you that you cantake in order to protect yourself. Please
please look up these NSA recommendations anddo these on your devices to protect yourself

(28:45):
and your family. Great advice asalways from our tech expert Dave Hatter.
You're listening to Simply Money for someof my all Worth Financial here on fifty
five KRC, the talk station.You're listening to Simply Money because any am
I all Worth Financial, I meanyou Wagner along with Steve Ruby. If
you've got a financial question, maybeit's in the back of your mind,

(29:07):
or maybe now it's keeping you upall night. There's a red button you
can click on while you're listening tothe show. It's right there on the
iHeart opp record your question and it'scoming straight to us and coming up.
We're taking a kind of a wideopen look at how social media is really
influencing your money. You're going tohave to look in the mirror for this
one a little bit. We'll getto that in just a few minutes.

(29:30):
In the meantime, how do yousave enough for retirement when only one of
you is working and contributing to aretirement account? Right? There's an option
there, Steve, and I don'tknow that a lot of investors understand this.
Yeah, it's called the spousal IRA. This is when you have a
spouse that does not work outside ofthe household and they are able to contribute

(29:52):
to to an IRA their own individualretirement account based on their spouse's earnings.
Now, you have to be marryaid filing jointly. This can be a
traditional or a ROTH, but itdoes have some of the same income limitations
and earning limitations in order to beable to make those contributions. I have
a good friend who's like in hertwenties and thirties. Both of them were

(30:15):
working, they had several children,and they kind of realized that she was
working mostly to put money into thefour oh one K and get the company
match right, and it was reallyreally hard for them to wrap around their
brains around the fact that she wasgoing to walk away from that money for
their retirement later on. But itjust became to the point where it was
really too difficult to balance all thekids and all the things in her working

(30:38):
too, so they decided for herto step away. Now by this time
the husband was making a little moremoney, and so the compromise there was
some of the money he was makingwent into espousal ira in her name.
You can't put as much into thatas you could a four oh one K,
but still it was something so thatthere are at least some retirement accounts

(31:02):
a in her name, but bemore importantly just another way for them to
save a little extra money considering thefact she doesn't have a four to one
K available to her. Yeah,it's another bucket to save in is how
that works. And that's the samesituation in my household when when my wife
had had our child, she wasshe was not making a ton of money,
and it was at the point wherewe sat down and crunched the numbers
and it was well, you couldkeep working and pay for a daycare care

(31:25):
and then you're gonna net about threehundred dollars a month. So this doesn't
make sense anymore. We literally didnot make sense anymore. So she stopped
working out, you know, outsideof the home, and now I contribute
to a spousal IRA. This isnot something that everybody knows about, which
is why we're talking about it today. You know, it's it's the same

(31:45):
situation where you have until the taxfiling deadline of the following year to make
those contributions, just like your ownIRA. So if you're you know,
you're teetering on a next higher taxbracket, then you can look at that
and say, all right, well, now we're gonna put x amount of
out my IRA, your IRA oheringyour taxable income and poke Uncle Sam and
the eye with a stick while savingmore money for our combined retirement. I

(32:08):
think these make sense on a numberof levels. First of all, to
your point, they can make alot of sense from a tax standpoint,
right how to keep more money inyour accounts. Second, it's another vehicle
for you to be able to savefor retirement. And we say this all
the time, on the show.There is a retirement crisis here in the
United States, and this is anothertool that's available for you to fight that

(32:30):
crisis and to be in better shapewhen you get to retirement. But I
think there's also also an emotional componentto this. I have lots of friends
who and I'm not going to sayare stay at home moms. I'm going
to say they work at home.It is a lot of work, and
you know, they are as exhaustedas the end of the day, maybe
more so than anyone else that Iknow. But it's hey, this is

(32:53):
money in my name. We aresomehow contributing to me being a part of
this retire hronment process. And youknow, again back to my friend,
it was tough for her to walkaway from putting her own money that she
was making into a four to onek. This made it easier for her
to wrap her head around, Okay, I'm going to work from home,

(33:14):
right, take care of the kids, and we're still going to be saving
some retirement money in my name.And logistically, remember that if you have
to be married filing jointly in orderto qualify for this, there are still
income limitations. If you're under theage of fifty and contribution limitations. If
you're under the age of fifty,it's seven thousand dollars annually to the IRA.

(33:37):
If you're fifty this year or older, then you get the catchup contribution,
which kicks it up to eight thousanddollars. There's the ability to do
pre tax and or WROTH, soyou're able to diversify the future tax liability
a little bit by making those WROTHcontributions if you don't need the deduction,
because remember your WROTH IRA assets willgrow tax free as long as you don't

(33:58):
take them out until you're fifty nineand a half been in the account for
at least five years. So agreat example here that that t rowe price
looked at. There is a hypotheticalanalysis that over twenty years of contributions and
the earnings on those contributions into anIRA could more than double the account balance
assuming an annual contribution of seven thousanddollars in about a row maxing it out,

(34:20):
yeah, and rate of return ofabout seven percent. So investing kind
of aggressively over that period, theone hundred and forty thousand dollars contributions would
would the earnings would have told itabout one hundred and sixty seven thousand,
so the balance would be over threehundred thousand dollars you're earning. You've more
than doubled the amount that you putin there in the first place, which
goes a long way right from gettinga couple into the working years into that

(34:44):
transition for retirement. Here's the allWorth advice. Espousal ira can be an
awesome strategy that helps you grow money, money that you get to keep in
your pocket in the first place,and not pay to Uncle Sam. Coming
up next. All right, we'retaking a close look at social media,
how how much we spend how's itreally affecting you. You're listening to Simply
Money presented by all Worth Financial.Here in fifty five KRC the talk station.

(35:10):
You're listening to Simply Money presented byall Worth Financial. I Meani Wagner
along with Steve Ruby. Social mediaa lot of you love it, a
lot of you love to hate it, and I think many more don't take
a good close look at how muchit's really impacting you on a day to
day basis when it comes to howyou think about money and how you spend

(35:32):
it. Yeah, to understand howsocial media influences are buying habits wallet hubbed
in a nationally representative online survey.First of all, they found out,
regarding impulse buys, nearly three andfour people have made an unnecessary purchase through
social media. I have a confessionto make. Oh, I am waiting
for this. Well it's not goingto be as exciting as you think.

(35:53):
Okay, I almost, oh gosh, made a financial mistake. Background here,
Steve Ruby claims he has never madea money mistake in his life.
I'm just waiting this out. Atsome point we will uncover something right here
on the show, which is whyeveryone needs to tune in that every day
because you don't know when it's gonnahappen. Okay, so you almost made

(36:13):
a financial mistake. Blah blah blah. What was it? Well, that's
the whole story, that's all.I'm just good. So there was so
obviously there's all kinds of targeted marketingand the misstay and age. And for
whatever reason, they got me onsomething, probably probably because my wife bought
these. It's like these little circlethings that you roll on and it stretches
your back and your neck, andyou know, I have back problems even

(36:35):
though I'm young, slipped disc issueand there was this thing, this matt
that you lay on and it hasall these spikes on it and it's supposed
to like increase blood flow and ithas this video and it's and I woke
up and it's like a weekend morningand I got to sleep in. I'm
all relaxed. I look at myphone. I'm like, oh, that
looks kind of nice. I needthat. And I watched a video and
I put it in my cart.Oh and then you waited because you know.

(36:58):
And then I waited because I know, and I didn't buy the thing,
so I almost made an impulse bybecause I woke up that morning in
my back hurt, and I gotto target it at all. Right,
Well, you were the one infour that has not an unnecessary purchase through
social Sorry if you got excited there, the other three and four have most
of us can identify with that.Social media also encourages overspending. Two and

(37:19):
three Americans believe the social social mediapromotes overspending. I think a lot of
people would say does this really impactme? And you would like to say,
nah, Like I see it andI scroll by. There's something that
just lodges itself somewhere deep in yourbrain, and it says, wait a
second, that guy that I wentto college with he could afford to take
his family to Europe this year,or he joined that country club, or

(37:45):
they have that car. It's keepingup with the Joneses, is what it
is. Steve sprovac And an interestingstory because growing up there was a guy
in the neighborhood. Every time theybought a new car, they kept the
stick around it for how much theypaid for it. Yes, so that
was that was the same type ofthing before social media existed. If you're
not meaning to brag when you're postingyour pictures of your vacations or whatever,
it is the thing that you bought. People notice that and they think,

(38:07):
well, you know, maybe Ishould get that for myself. So it
is a symptom of social media encouragingoverspending also projects a false financial image.
Two in five Americans say they arepresenting an image on social media when it
comes to their money and what theycan afford that isn't truly reality. I
always say I wish that people wouldhave to post like a disclaimer when they

(38:29):
buy a new car or a newhouse or whatever like, here's my credit
score, Here's how much credit carddead I'm really in. Here's the truth
of the matter. Now you decidewhether this makes sense for you, right,
Please understand people are posting not realityup there, so for you to
take it as reality and change howyou spend accordingly isn't the best way to
do this. Here's the all Worthadvice. Please run your own race and

(38:52):
thanks for listening. You're listening toSimply Money, presented by all Worth Financial
here in fifty five KRC, thetalk station