Episode Transcript
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Speaker 1 (00:06):
Night.
Speaker 2 (00:07):
The key people you want in your life to help
you achieve financial independence. You're listening to some point money
presented by all Worth Financial. I mean you Wagner along
with Steve Ruby. I don't think a lot of people
think about it this way, but if you surround yourself
with the right kinds of people, especially those in certain positions,
(00:27):
you can end up so much further ahead when it comes.
Speaker 3 (00:31):
To your money. So let's stick into that a little
bit tonight, because it's funny.
Speaker 2 (00:35):
I remember when I had my first kid, A dear
friend of mine came over to visit, right like see
the baby, hold the baby or whatever, and she said
to me, at this point in your life, you're going
to want a lot less people in your life, Like
this kid is going to take up so much time
that you will have, you will.
Speaker 3 (00:51):
End up choosing less friends.
Speaker 2 (00:53):
And so I think it's a matter of getting the
right kind of people in your life.
Speaker 4 (00:59):
Yeah, yeah, you say. Oftentimes people don't think about this.
I do because I'm one of those people. So there's
a little bit of bias here. A fiduciary, sure, that's
the first. A fiduciary financial advisor that kind of runs
quarterback on your entire financial situation. When I say runs quarterback,
they're working with your attorney, they're working with your accountants,
(01:20):
some of these other people we're going to talk about
as we go down the list today and in no
particular order, but a fiduciary financial planner has your best
interests front and center at all times when it comes
to helping you navigate changes in your life like having
a child, for example, and how that might impact your finances.
Speaker 2 (01:39):
The reason why we say fiduciary financial advisor, well a
few things. First of all, they're putting your best interests
ahead of theirs. But second of all, this becomes for
most of us, a long term relationship.
Speaker 1 (01:50):
Yeah.
Speaker 3 (01:51):
I mean when things change in your life, like a
child is born.
Speaker 2 (01:55):
You know, child gets closer to college age, and you're
thinking about how to help pay for tuition. As life changes,
you keep going back to this person. You know, they
know what's going on with you. They help you as
you get closer to retirement with that transition, and so
it becomes a relationship. And the reason also why fiduciary
is so important is because someone came into my office
(02:17):
recently and it just bought an annuity and it wasn't
a great fit for them.
Speaker 3 (02:22):
I mean, it definitely was not in their best interest.
Speaker 2 (02:25):
And so as we kind of talked about it, she said, well,
they said they were a fiduciary, and I'm like, well,
you have to then ask the question are you a
fiduciary one hundred percent of the time when you are
making recommendations for me?
Speaker 3 (02:39):
So as you.
Speaker 2 (02:40):
Figure out who this person is going to be in
your life, be very careful.
Speaker 3 (02:45):
Ask lots of questions. Expect transparency.
Speaker 4 (02:48):
How are you paid? Yes, exactly, that's that's the one
that's front and center. How are you fake? How are
you paid? Because that will typically reflect a lot of
details on whether or not somebody is actually a fiduciary,
because whoever sold that annuity to your friend got probably
a nice little commission check, and in some situations annuities
do make sense. You know, we've talked about that, but
that commission was.
Speaker 3 (03:09):
Never disclosed to the person. They have no idea, no idea,
y yeah.
Speaker 4 (03:13):
Jeez, And this person called themselves fiduciary.
Speaker 3 (03:15):
That's that's great.
Speaker 4 (03:16):
Okay, So you know you need to vet, you know,
the person that you're working with. Maybe ask around, find
somebody that can you know, stick with you at your
side through whatever changes in life you're going through, because again,
that fiduciary financial planner is going to run quarterback over
the entire relationship for all things financial. So another person
would be the CPA. Because a CFP, for example, yes
(03:39):
they have knowledge surrounding tax planning and different strategies, but
they're not typically filing your taxes for you unless they're
a CPA or an accountant as well. So a CPA
is the person that's going to keep the irs off
your back with any changes to the tax code or
tax laws.
Speaker 2 (03:57):
You know, I think some people can feel like do
I really need this? When I file my taxes, it's
very straightforward. I use an online program. You know, Do
I actually need to be working with a person? I
mean there is, you know, a charge that goes along
with it, and I would say for those especially getting
closer to retirement, this is where I think there can
be a lot of value in this relationship. You're looking
(04:20):
at things like wroth conversions.
Speaker 3 (04:23):
How can you.
Speaker 2 (04:23):
Legally keep as much money in your pocket and give
the least amount possible to Uncle Sam? So if you've
never worked with the CPA before, I think as you
get closer to that age or to that stage in life,
it can make a lot of sense because you're no
longer talking about just tax preparation, right, filing your taxes
in April, but it's year round tax strategies, especially as
(04:46):
you get closer to maybe that age of required minimum
distributions of Okay, how can I take these distributions also
in a way that's as tax efficient as possible? Or
is they're pulling money out of accounts in retirement? Right,
which is the way where do you take as distributions from?
And at what point in all of these decisions your
certified financial planner, right, your fiduciary financial advisor can be
(05:08):
working with your CPA to help you.
Speaker 3 (05:10):
Make those decisions.
Speaker 4 (05:11):
Yeah. I highly encourage folks I work with if they're
not having taxes filed through all Worth, that we are
connecting with their CPA. They fill out paperwork that allows
me to talk directly with their CPA about the accounts
that they have.
Speaker 1 (05:25):
Here.
Speaker 4 (05:25):
This is what fiduciary financial advisors should be doing, not
just me, but any financial planner out there that's a fiduciary. Again,
when I say running point over the financial relationship. I
work with the CPA to make sure that we're not
surprising them with strategies that we're deploying, for example, roth conversions,
because as you're making that transition into retirement, for example,
with twenty twenty six looming and tax code changes on
(05:48):
the horizon, there's a lot of folks right now that
are scrambling to figure out if ROTH conversions makes sense.
And trying to do that yourself with software online that's
nearly free is a big risk when when we're button
up against things like IERMA Medicare. If we get too
high with our roth conversions now we have to pay
higher Medicare Part B premiums if we have stock out
(06:09):
there floating around. This happens a lot in Cincinnati. Procter
and Gamble. A lot of people have Procter and Gamble
shares are highly appreciated. Maybe we use that to fund
a donor advice fund, and then we bunch our tax
filing and take the itemized deductions for a year rather
than standard deduction. So things can get very complicated. And
this is why you need to have these people in
your corner, because you don't want to make a mistake.
Speaker 2 (06:30):
You're listening to Simply Money presented by all Worth Financial
Amami Wagner long with Steve Ruby tonight, who do you
want on your team? We're essentially taking you back to
elementary school on the playground when you are picking the
right people for your team.
Speaker 4 (06:43):
When Amy used to talk about taxes on the playground.
Speaker 3 (06:47):
Such a fun friend to have arounds.
Speaker 2 (06:50):
So yeah, I mean, I think part of that is
the fiduciary financial advisor.
Speaker 3 (06:53):
Another part of that. Another person on that team is
a CPA.
Speaker 2 (06:56):
Also, though, I would say someone who's helping you make
smart decision and about your health. Be it your doctor
and you're going in once a year to have those
proactive conversations about your health. If it's a trainer or
a nutritionist, it's trying to, you know, keep you on track,
help you make healthier decision. Why are we talking about
this on a money show. Here's the stat you need
(07:18):
to know. The average retired couple is going to spend
three point fifty three hundred and sixty thousand dollars somewhere
around there over the course of your retirement on healthcare expenses.
If you go into that period of time healthy, right,
you're proactively.
Speaker 3 (07:33):
Taking care of maybe anything that could pop up.
Speaker 2 (07:36):
You're not going five six years in between doctor's visits,
you're having the test done, you're getting regular exercise, you're
eating well. All of those things can play a huge
role in keeping those medical expenses down.
Speaker 4 (07:49):
Yeah, you don't need to have like a fitness trainer necessarily.
Speaker 1 (07:52):
You know.
Speaker 4 (07:52):
I have a good buddy of mine that's ultra competitive
like I am, and we just play racquetball with each
other and we'll push each other's boundaries and push as
hard as we can to win. And that that's a
good way to get that workout. And it's just competitive sports, pickleball, tennis,
you know, something to get out there and stay active
to some capacity. Because again this does tie back to money.
Just like you said, if we're healthy, then we're spending
(08:13):
less on healthcare.
Speaker 2 (08:15):
Also part of this team is good friends, close friends.
Why are we talking about this again on the Money Show?
There is research out there that shows one of the
major things that can lead to health issues, especially later
in life, is the sense of loneliness. You feel isolated
from other people. You don't have anyone to talk to, to
spend time with, you know, So for those of you
(08:37):
especially and This is kind of a know yourself situation.
If a lot of your fulfillment in life now in
your working years comes from the actual work.
Speaker 1 (08:45):
Right.
Speaker 2 (08:46):
Your colleagues are your friends. They are the people that
you talk to. You may not have a lot of
people outside of that work circle. It becomes really important
then to start developing friendships away from work, so that
when you're no longer going there every day, you're not
trying to figure out what am I going to do
with my day? I don't have anyone to talk to anymore,
(09:06):
So it becomes really important to have a solid, strong
social network.
Speaker 4 (09:12):
And how about a handyman. Do you have a handyman?
Is it your husband?
Speaker 2 (09:15):
He is actually very handy, thank goodness. But I do
have a good friend who's always got a guy.
Speaker 3 (09:21):
Yeah, And so when you need painting, dyne, when you
need landscaping, when you whatever, they have a guy.
Speaker 2 (09:27):
And generally when you get multiple bids from people, their.
Speaker 3 (09:30):
Guy is always going to be the cheapest.
Speaker 4 (09:32):
Yeah, you know so, and.
Speaker 3 (09:33):
That will save you money.
Speaker 2 (09:35):
Right, Having a trusted person that you can go to
to help you make decisions and do these repairs and
things around your home can save you a lot of money.
Speaker 4 (09:43):
Find a guy, I have a guy, Get a guy. Yes,
it's very helpful to have somebody like that in your
corner exactly for those reasons. You're making updates, you're you know,
you're selling your home, you're buying a home. You have
somebody you can go to that can help you navigate,
you know, changes that you want to make in a
cost efficient manner.
Speaker 3 (09:58):
Also, I think having a person and it person.
Speaker 2 (10:02):
Now this does not have to be someone you hire,
but like I think about my parents, my nephew is
always helping them with devices, right, helping them program I
don't know, their TV, their phones, anytime they get a
new device, he's the person who goes over and helps
them get it figured out. I remember a time this
is really going to date myself, but like my mom
could never figure out how to use the VCR, and
(10:24):
I would just remember thinking like, I'm never going to
be that person. I will always know how to use technology.
Fast forward to now you know I'm forty seven and
I'm handing my phone to my fifteen year old, like,
help help me with this. I don't know how to
do this app or set this thing up. And so
you can see how it's really easy for technology just
(10:44):
to get past you. Having someone that can help you
understand how different things work so that you can communicate
with others, you can text people whatever that is, can
make a huge difference, especially later in life.
Speaker 4 (10:57):
Yeah, and I think that this kind of goes hand
in hand. But you know, word about family is keeping
those family bonds strong. Yeah, as you know, you are
there to support each other through changes in life.
Speaker 1 (11:08):
You know.
Speaker 2 (11:09):
I also, though, want to say friends can be family
that you choose for yourself. For some people, family can
almost be toxic. It can be draining, and sometimes the
healthiest thing you can do would be to maybe cut
yourself off. It can create so much stress that ultimately
the boundary of not being around them or whatever that
(11:31):
looks like. But having people who feel like family, whether
they are actually family or whether they are friends, where
you can spend holidays together, where you can cheer each
other on, where you can support each other during times
that are not great.
Speaker 1 (11:46):
You know.
Speaker 2 (11:46):
I know, again this feels weird to talk about on
a money show, but when you have all of these
kinds of people on your team, you are mentally healthier,
You are physically healthier, you are financially a healthier person.
And I don't think we can say it enough. We
can talk about all different kinds of strategies in different
things that you can employ in your financial life. But
(12:09):
having the right people surrounding you, Yeah, am your corner,
and I think you can actually put dollars and cents
to it over the course of your lifetime. Can actually
save you money by having the right people there. Here's
the all Worth advice, develop and cultivate your team that
can help you achieve your goals. Coming up next, why
some CD owners have to redeem their interests.
Speaker 3 (12:31):
Before the full maturity date. Have you heard about this?
We'll get into it next.
Speaker 2 (12:36):
You're listening to Simply Money, presented by all Worth Financial
here in fifty five KRC the talk station Money presented
by all Worth Financial. I mean mean, whag you're along
with Steve Ruby. If you can't listen to our show
every day, you don't happiness the thing.
Speaker 3 (12:53):
We have a daily podcast for you.
Speaker 2 (12:55):
Just search Simply Money on the iHeart app or wherever
you get your podcasts. Coming up in six three. The
group of people who need to step up their retirement game.
We're not talking about.
Speaker 3 (13:06):
Generationally here, we'll get into that in just a few minutes.
Speaker 2 (13:08):
All right, first it was gold, now it's platinum. When
you are making your Costco shopping list the next time
you've got gold bars, do you have platinum bars on there?
Speaker 3 (13:19):
Well, I guess you could have them.
Speaker 4 (13:21):
Are you on the platinum bandwagon? Are you gonna buy
a platinum bar for eleven hundred dollars?
Speaker 3 (13:25):
I'm not.
Speaker 2 (13:26):
I'm not gonna buy gold bars from Costco either, but
apparently lots of people are. This started back in August
of twenty twenty three. They started offering these gold bars,
and they were as soon as they restocked them, they
were selling back out. You know, it's like you can
get a dollar hot dog and an eleven hundred dollar
(13:47):
bar of gold, Like.
Speaker 4 (13:49):
I remember when this launched. Yeah yeah, and since then
they've paid. They sold two hundred million dollars worth of
gold bars in just a month.
Speaker 2 (13:58):
Yeah.
Speaker 4 (13:59):
It's really remarkable how what they've turned this into and
now they're jumping onto the platinum bandwagon.
Speaker 1 (14:05):
Yeah.
Speaker 4 (14:06):
Now remember that. You know, if you have some extra
money sitting around and you want to dip a toe
in the commodities market and it's not a big part
of your financial plant that's fine. Yeah, but as far
as you know how this stuff is taxed when you
go to sell it, if there's even liquidity in the
market at the time when you try to sell it,
it's taxed higher rates as a collectible, not an investment. Plus,
these are a little bit more volatile than I think
(14:27):
people realize.
Speaker 2 (14:28):
Yeah, So if you want to buy an ounce of
platinum from Costco, it is on sale right now from
about one thousand and ninety dollars. You can buy it
on their website. There's also, you know, silver coins available.
I think the attraction for a lot of people here
is it's something that you can touch. Right when you
own a stock or a bond, you're either owning part
(14:50):
of a company or you're loaning money to a company,
it's harder to see it, touch it, feel it. So
I think that's kind of the attraction, especially with these commodities,
these precious metals.
Speaker 3 (15:00):
I don't know.
Speaker 2 (15:00):
I don't know that I would want to have to
deal with storing them, keeping up with them selling them.
I think it's interesting that Costco is jumping into this market.
Speaker 4 (15:10):
But there's money to be made. That's it. Yeah, that's
all there is to it.
Speaker 2 (15:13):
People are interested by the way the value of platinum
up more than fifteen percent over the past twelve months,
though it has dropped more than eight percent since topping
eleven hundred dollars an ounce earlier in twenty twenty four.
Speaker 3 (15:27):
I like your point.
Speaker 2 (15:28):
If you've got money on the sidelines that you just
think you would like to buy this, that's one thing.
If it is money that you are planning on using
and needing later in life for retirement, I would caution
you there, Okay, those of you who have locked in
CD rates right you're probably patting yourself on the back
right now, like, oh, you know, we've got interest rates falling,
You've got the Federal Reserve, our nation Central Bank lowering
(15:50):
interest rates, and you maybe've got a CD that's locked
in six more months when we're year and you've got
five percent or something on that and you're thinking, like, gosh,
I'm I'm really winning at this investment game. Right now,
I would ask you, are you one hundred percent certain
that that CD is not callable?
Speaker 1 (16:09):
Yeah?
Speaker 4 (16:09):
So callible. This is something that a lot of people
don't realize is attached to the CDs that they buy,
and that essentially gives the institution that sold you the
CD the right to redeem it before it's maturity date.
And this is oftentimes going to be in the fine print.
These are the CDs that typically pay your higher yields.
They're more attractive because that higher yield. But in order
(16:33):
to have that higher yield a lot of times the
institutions make them callable.
Speaker 2 (16:37):
Yes, so our TFP people read the fine print. It's
okay if you buy one of these. You just want
to know that you've bought it. I mean, especially right
now right as a FED as lowering interest rates, you're
going to have a lot of banks, a lot of institutions,
financial institutions looking at these saying, or are we going
to lose money by continuing to pay this interest rate?
So what happens if they call it? Well, you get
(16:59):
them money back, right that you paid for that CD.
You get the interest that you've occurred like that you've
gotten over that time that you've owned that CD.
Speaker 3 (17:07):
But you don't you lose out on the future.
Speaker 2 (17:10):
Interest that you would have gotten if that CD wasn't
called back.
Speaker 4 (17:14):
You lose out on the suitet deal that you thought
you had. Yes, that's what it is.
Speaker 3 (17:18):
That's the tough pill this.
Speaker 4 (17:19):
Well, yeah, hey, I got five and a half percent
on the CD. What you're taking it away from me?
Because that's exactly what it is. They give you the
money back. There's no penalty or anything like that. It's
you're not penalized, but you're it's the opportunity cost. You
thought you had that that income stream, or that that
that money coming to term an X period of time,
and all of a sudden you don't. So if this
(17:40):
were to happen to you, what do you do? You know,
you don't need to panic. This is this is the
cost of investing in CDs, the potential for them being callable,
especially in an environment where interest rates are going down
and you have these longer term CDs, these institutions might
look and say, all right, we need to get these
off of our books. Let's look at these callable CDs. Boom,
(18:03):
there you are. You get your money back. But now
it's your responsibility to make good decisions with that money
that all of a sudden you have now that you
didn't expect.
Speaker 2 (18:09):
And a good decision doesn't have to be an immediate decision.
I mean shop around a little bit. You know, you
can probably still find a money market account out there
where you can get three and a half four and
a half percent, And then I think you also have
to ask yourself, Okay, what is this money actually earmarked for.
If it's money that you're not going to need for
you know, five years, ten years, maybe it might make
sense to invest it. Or if it's part of your
(18:30):
emergency fund and you are going to need that money soon,
then really how much interest you're making on it may.
Speaker 3 (18:35):
Not matter as much, you know.
Speaker 2 (18:37):
I think it's kind of that intermediate I'm going to
need this money in three years or five years.
Speaker 3 (18:41):
And by the way, these callible CDs.
Speaker 2 (18:43):
One of the reasons why I would say it's important
to read the fine print is there's usually a period
of time like the first year where they can't do
anything with it, and then there's also kind of windows
of time like maybe six months after that, then there's
kind of an open window where they can look at
calling that CD back understanding when those periods of time are.
(19:04):
Are you coming up on those if you currently own one?
And this is just a matter of educating yourself so
that you know exactly what you have so that nothing
is kind of surprising you. If you get that call
of hey, we're calling back this CD.
Speaker 4 (19:17):
Yeah, and emphasis is concerning for you that something like
this could happen. You can always look at treasuries, for example,
some are still paying between four and five percent depending
on the term. They are not callable, but they are
tradable on the open market, so that that is an
opportunity to buy or sell outside of the term that
you're buying that treasury for Here's the.
Speaker 3 (19:35):
All Worth advice.
Speaker 2 (19:36):
Just make sure you are reading the fine print when
you're making any moves, any investments with your money. Coming
up next, we're tackling the pros and cons of taking
out a home equity line of credit. You're listening to
simply Money presented by all Worth Financial here in fifty
five KRC the talk station. You're listening to simply money
(19:59):
presented by all Worth trying angel, I mean you Wagner,
along with Stee Ruby statistics to show us that many
of us are staying in our homes for longer. Right,
We're not moving every five years the way that we
once did, which means that often we build up more
equity in that home. Does it make sense to take
out a line of credit on the equity of that home.
Joining us tonight is our credit expert, Britt Scarce. Britt,
(20:21):
let's talk through this the pros and cons of making
a decision like this one.
Speaker 1 (20:25):
Well, right now, if you're sitting on a mortgage that
you were able to put in place back when rates
were two or three percent, you're probably not looking to
get rid of that first mortgage. But we have seen
a tremendous amount of appreciation on homes over the last
(20:47):
three or four years. So, as you said, we're sitting
on a lot of equity, and unfortunately, we've also seen
a lot of people struggling with all the inflation and
all the other more expensive you know, the life being
more expensive. So a lot of people have been racking
up credit card debt and other types of debt. And
with all that home equity sitting there, it could be
(21:10):
a good idea to be able to tap into some
of that equity and perhaps pay off or consolidate some
of that high interest rate credit card debt and save
yourself some money and potentially have some deductibility on the
interest where credit card interest is not, and it could
certainly give some relief. So the pros are definitely there.
(21:32):
As far as that's concerned. Now, the cons to getting
a home equity loan would be that you're using the
equity in your home and you're now taking unsecured debt
and putting it into a secured position where if you
don't make the payments, you could potentially lose your home.
Speaker 4 (21:50):
What are some of the fees associated with this, because
obviously there's plenty of us out there that could unlock
some of the equity in our homes to free up
cash for whatever need that might be. You brought up
credit card debt for example, you know, the lower interest
rate on a helock versus a higher interest rate on
a credit card. What kind of fees or costs are
associated with a helock?
Speaker 1 (22:09):
Well, ' let's talk about the two different ways you
can tap into that equity. And you know, on a second,
a home equity loan or a home equity line of
credit is typically going to be a second lean position
behind your first mortgage, unless you don't have a first mortgage,
and which case it would be in a first lean position.
But a home equity loan is typically a fixed rate
loan that is typically for maybe a ten or fifteen
(22:32):
or twenty or in some cases even a thirty year term,
which obviously affects the monthly payments depending on the term
and so forth. And typically a home equity loan would
carry a fixed rate, and as you said, they typically
are much better and more attractive than a credit card
at you know, eighteen to twenty five percent. You usually
can get home equity loans anywhere between you know, seven, eight, nine,
(22:53):
ten percent, depending on credit scores and what loan to
value or how much equity you have in your home
and so forth. So there's one way to do it
with a home equity loan, which is typically fixed like
that for some specified term, and it's usually amortized to
pay the entire balance off by the end of the
term of the loan. The home equity line of credit
that you're referencing there, Steve, A line of credit is
(23:14):
kind of like attaching a big credit card to your
home if basically you can you have a certain amount
of credit line using your homeless collateral, and you can
use it, pay it off, use it, pay it off
just like you do a credit card. Now, the cost
to obtain these are very similar, but a lot of
banks and lenders, a lot of credit unions especially have
(23:36):
some really good deals on home equity lines of credit.
They really don't charge a whole lot to put these
in place. In some cases, you may have to pay
for a pool appraisal, which could be four or five
hundred dollars, but a lot of the home equity lending
programs use what's called an automated valuation system like an AVM,
(23:56):
and they basically don't make you go through the whole
expense of a whole you know, full appraisal. They'll do
kind of a digital type analysis typeos are appraisal.
Speaker 4 (24:08):
Remember these companies they want you they want you to
borrow against it because then they're making money off you.
Speaker 1 (24:14):
That that's correct, So they'll eat a lot of the fees.
There may be a few title fees and so forth,
maybe a few hundred bucks or so. But you know,
home equity lines of credit you can you could put
in place very affordably. Some home equity loans, some of
them may require you know, full appraisal and full title
insurance and that sort of thing, so you know, it
(24:34):
could be a thousand or two thousand bucks. But most
of the time you can do these very affordably with
very few closing costs.
Speaker 2 (24:43):
Hey, Rett, let's talk through good reasons maybe to take
out a home equity loan or line of credit, and
also bad reasons.
Speaker 1 (24:51):
Well, a good reason would be is if you, you know,
do an analysis on your budget and find that you
have a lot of unsecured debt at high end rest
rates and you're struggling on a monthly basis, you know,
by consolidating and using some of that home equity there
allowing you to borrow money much more affordably, you know,
with much lower interest rates and have potential deductibility where
(25:14):
credit card interest is not. It could really be a
real lifeline to really give you some relief. Now here's
the danger. If you utilize your home equity to pay
off all those other debts and then you go and
run up those other debts again. Now you have the mortgage,
you know, the second mortgage payment, and all that new
debt again. So you know your home is yes, yes,
(25:38):
and you know and obviously you're using your home as
collateral for this. So you know, if you get yourself
in deeper into debt and not use it responsibly, you know,
it could actually put you in a worse situation.
Speaker 4 (25:49):
Yeah, this isn't necessarily a magic solution that's going to
just create cash out of thin air, because you're putting
your home up as collateral. If you don't pay that debt,
you can lose your home. So it is very important
to realize that this is, you know, it is an
option for tapping into the equity, but it comes with risks,
obviously it does.
Speaker 1 (26:11):
And I'm not a big fan of using like a
home equity line of credit necessarily for deck consolidation, because
the payment on a on a home equity line of credit,
they'll they'll allow you to make interest only payments for
the first you know, five to ten years on that
on that loan, and you know, if you're only making
the interest payments, you're not getting anywhere on the principle.
(26:31):
If you're getting a home equity loan, in many cases,
that is going to be you know, a set term,
like you know it's it's a loan for ten years
or fifteen years, and you know every payment that you
make is one less that you have to make, and
so that you know that that sometimes can be a
little bit better. But I do see a lot of
(26:52):
people utilize home equity lines of credit to kind of
fall back on for making a quick home repair or
something of that nature, where they're going to they're going
to are going to pay it back within five or
six months, and it's just there as a tool to use, uh,
you know, to kind of help them with their finances
when big things come up.
Speaker 2 (27:09):
Right for those who've never done this before, either taking
a homoquity loan or line of credit.
Speaker 3 (27:15):
What what are your steps? What are the first steps
and how to get get started here?
Speaker 1 (27:19):
Well, I would I would first talk to who you
do your checking and savings with, you know, your local
credit union hopefully you know, would have a lot of
great programs, a lot of your you know, large you
know banking institutions and savings and loans. They all have
these types of programs, and some will are more aggressive
(27:39):
than others. I mean, I know some credit unions that
will literally lend all the way up to one hundred
percent of the value of your home on a second one,
and there's others that limit it to only ninety percent
of the value of your home or eighty percent of
the value of your home. So it's just a matter
of starting a conversation with your I would start where
you currently do your banking and checking, and then from
(28:01):
there maybe get some references from some other friends that
might have gotten a home equity loan, and you know,
talk to two or three different lenders and see who
has the best rates and who has the best simplest process.
Speaker 2 (28:13):
Do your research, right, I mean this is a this
is a thing that starting where you usually bank can.
Speaker 3 (28:18):
Make a lot of sense.
Speaker 2 (28:19):
But also doing some research and even online right some
some I've seen credit unions putting some heelock rates online,
so even online searches can help you. There great insights
on the pros and cons of using home equity loans
from our credit expert brit Scares. You're listening to Simply
Money presented by all Worth Financial here on fifty five
KRC the talk station.
Speaker 4 (28:43):
Two whity far.
Speaker 2 (28:48):
You're listening to Simply Money presented by all Worth Financial.
Speaker 3 (28:51):
I mean Me Wagner along with Steve Ruby.
Speaker 2 (28:53):
You have a financial question you need a little help with, Well,
there's red button you can click on while you're listening
to the show. It's right there on the heart record
your question and it's coming straight to us. Sorry for
you and your partner to really be on the same
page when it comes to your money.
Speaker 3 (29:09):
Here's thin gee, you both.
Speaker 2 (29:11):
Have to be involved in the decision making process. What
I find pretty often is that the female in the
relationship is often making budgeting decisions, day to day spending decisions,
but for whatever reason, when it comes to long term
financial planning, investment decisions, planning for retirement, women, for whatever reason,
(29:33):
often leave those decisions to the men. And then what
happens is they're not necessarily involved, they're not educated, and
a lot can go wrong in those situations.
Speaker 4 (29:45):
I think a trend that we've seen, and there's data
to back it up, shows that women oftentimes are the
chief financial officers in their households. They're responsible about ninety
percent of the time, is data that I've seen recently
for households spending decisions, but less than half of women
exercise soul responsibility for the investment decisions, the long term
(30:05):
investment decisions within the household. Only a quarter of women
share that responsibility overall with their spouses.
Speaker 2 (30:13):
Yeah, you're paying the bills, you're juggling maybe childcare, you're
making decisions about that next vacation. But when it comes
to meeting with a financial planner, I have even seen
many times where a man will just want to come
into the office himself. Now, let's talk about what can
go wrong here. I recently had a couple of people
become clients of mine who are widows, and in both
(30:35):
of those situations, the husband had taken care of all
of the investments, and so after they lost their husband
and their mourning right, it's such an emotional time. Both
of these women separately said, I think I kind of
put my head in the stand for about five years
when it came to our investments. I just felt overwhelmed.
(30:56):
I had never been part of the conversation. I didn't
really understand what he was trying to do, so I
don't fully comprehend it when we look back on those
five years, that was lost time that some decisions could
have been made that would have put them in much
better shape than they are now. And the interesting thing is, too,
they're incredibly smart people. They actually are very capable of
(31:17):
making these decisions. But at some point they just decided,
I'm not going to do it. I'm not going to
be involved in this. I'm going to let my husband
handle this. If this sounds like the dynamic of your relationship,
whether you are the husband or the wife, the man
or the woman in this I'm going to say, please
change that dynamic now. Will both of you will be
better for having two voices at the table and part
(31:39):
of this conversation.
Speaker 4 (31:40):
And if you're the man and you're listening and you're
the one that runs the finances, I think it's important
to remember that women tend to live longer than we yes,
So if you want to be there and you want
to make sure that that your spouse has cared for
when she survives you, if indeed that happens, then folding
her into the conversation now is beneficial.
Speaker 3 (32:02):
Yeah.
Speaker 2 (32:03):
I recently had a couple in my office and the
woman said, do you know why I'm here?
Speaker 3 (32:08):
And I said, what brought you in?
Speaker 2 (32:09):
And she said, I heard the stat that you guys
talked about on your show at one point where this
great wealth transfer, so women ending up, you know, taking
on the money. And I also heard the stat about
women firing the financial advisor that the husband had the
relationship with within a year or eighteen months. And she said,
I don't want that. I want to be part of
(32:30):
the conversation now, and I was so grateful for that.
And together we're making some great decisions, you know about
tax planning strategies and investment strategies, and if something were
to happen to her husband, she would be fully educated
on what the plan is and we can move forward
without missing a beat when it comes to the money.
Speaker 4 (32:52):
So this is often happening because there's a few reasons.
So if you ask why is this happening? You know,
for example, I've recently learned how much my wife really
does in the household because she had knee surgery. Yeah,
we're in a situation here where where she stays at
home and I'm the working parent, and I got to
(33:12):
experience full time work, full time caretaker, and stay at
home parent all the time. Time, lots of money on
door dash, dirty dishes, piles of laundry, bills stacking up,
so that there's just an incredible amount that you know,
the stay at home partner does in the household. So,
especially in this day and age, current generation you can
see them as the sandwich generation because not only are
(33:34):
they caring for children, but oftentimes aging parents as well.
So when that responsibility falls on the woman in the household,
that can create a lot of time that needs to
go towards those activities and less towards investment discussions. For example, if.
Speaker 2 (33:50):
You're not part of the conversation right now as a woman,
and it feels overwhelming to just jump in, I would
say start having quarterly meetings right, set those up you
and your husband, you know, and just start talking through
the decisions that have been.
Speaker 3 (34:03):
Made so far and why, so that you're aware.
Speaker 2 (34:06):
And the next time there's an appointment that pops up
with the financial advisor, go make it a priority to
go be part of it. Ask questions, understand things, you know,
don't just sit there. I remember when I first started
in this business looking at we were looking at photographs
to be used in some kind of collateral material that
we were sending out there every and this made me crazy.
Speaker 3 (34:28):
Every picture that was out there of.
Speaker 2 (34:30):
Someone meeting with the financial advisor had the financial advisor
shaking the husband's hand, not even looking at the woman.
Speaker 3 (34:37):
You're like, what is happening?
Speaker 4 (34:39):
Absolutely not. That was our marketing material for hours.
Speaker 2 (34:43):
It was in like if you were looking for stock
photos of the industry.
Speaker 1 (34:48):
No.
Speaker 3 (34:48):
And I was quick to point out, this is not
where we're going here.
Speaker 2 (34:53):
But understand there's a reason why this dynamic exists, and
it's because it's the way that things meet. You were
in the past, but understand that it will likely not
serve you well in the future and you have to
be part of changing that cycle, that dynamic in your family,
in your marriage, in your relationship. Here's the all Worth advice.
Next time you meet with a financial advisor, just make
(35:15):
sure you and your spouse or partner are there together
and you're asking questions together. Coming up next, how to
act the next time someone comes to you asking for
a little money.
Speaker 3 (35:25):
You're listening to.
Speaker 2 (35:26):
Simply Money presented by all Worth Financial here on fifty
five KRC, the talk station.
Speaker 3 (35:35):
You're listening to Simply Money presented by all Worth Financial.
I Meani Wagner along with Speed Ruby.
Speaker 2 (35:40):
We never had someone come to you asking for money,
asking for a loan. Oftentimes did's someone that you're close to,
someone in your family. It's a difficult conversation, it's a
difficult decision, and I would warn you be careful with
this one.
Speaker 1 (35:58):
Yeah.
Speaker 4 (35:58):
A new survey from bank It points out that more
than half who have lent money or paid for a
group expenses of some kind have had a negative result happen. Yeah,
It's very unfortunate because sometimes you're just thinking, hey, I
can help here, but you could be hurting.
Speaker 2 (36:15):
Well, and by a negative result, it can be all
kinds of things, losing money, harming that relationship with the
person you initially lent the money to, damaged credit scores.
I know people who I mean, think about it. You're
loaning that money and then you're going to be at
Thanksgiving or Christmas or Easter or whatever with that family
member and all of a sudden you're looking at them
and maybe they've gone silent.
Speaker 3 (36:36):
You know, oh, this is just a loan, I'm going
to pay you back.
Speaker 2 (36:39):
And they never have, and it can completely change the
dynamic of that relationship. So I think one thing you
have to ask yourself if someone asks you for a loan,
is do I need this money paid back? Because most
of the time you have to look at it like
if you never see that money again, are you going
to be okay? Are you going to feel okay? Are
you going to be able to look that person in
the eye if.
Speaker 4 (36:59):
It's a family member. I think that it's important to
sit down and look at this more as a gift,
yes than alone, because if it is alone, then things
can go sideways pretty quickly or even over the long term,
over whatever the term of that loan is. If it's
a gift, then you just don't have to worry about
that part of it, because there can be plenty of
issues that follow by having that hanging over the relationship's head.
(37:21):
Here's this loan where I owe you money and I
need to get money from you. It's just a sticky
situation that you want to try to avoid if you can.
Speaker 2 (37:28):
Speaking of loans, you might also have someone coming to you,
not asking for money outright, but for you to co
sign a loan with them. Please also understand how this works.
If that person were to default on that loan, you
would be on the hook not for half of it,
but for one hundred percent of that loan. This could
impact your credit right, your ability to borrow money.
Speaker 3 (37:47):
It can have huge long term ramifications.
Speaker 2 (37:50):
I think many times the better thing to do is
to sit down and have that conversation and say, can
I help you in some other way?
Speaker 3 (37:57):
Can I help you set up a budget?
Speaker 2 (37:59):
Can I help you explore or other ways to find
this money where it won't potentially be damaging to our relationship.
Speaker 4 (38:05):
Yeah, I've had to do some of this in my
own family actually, which is uncomfortable, but that's the reality
of the situation because I was helping out a family
member financially that was then funneling money to another family
member boy and at their own detriment, so I was
essentially paying for this other family members, we'll say, bad habits,
and it's just an unfortunate situation where it's like, oh,
(38:26):
come on, yeah, And since then we've had the conversation
about how can we cut back? And you can use
your own money to help them if you want to,
but I'm not anymore.
Speaker 3 (38:34):
Thanks for listening.
Speaker 2 (38:35):
You've been listening to Simply Money, presented by all Worth
Financial here on fifty five KRC, the talk station
Night.
Speaker 2 (00:07):
The key people you want in your life to help
you achieve financial independence. You're listening to some point money
presented by all Worth Financial. I mean you Wagner along
with Steve Ruby. I don't think a lot of people
think about it this way, but if you surround yourself
with the right kinds of people, especially those in certain positions,
(00:27):
you can end up so much further ahead when it comes.
Speaker 3 (00:31):
To your money. So let's stick into that a little
bit tonight, because it's funny.
Speaker 2 (00:35):
I remember when I had my first kid, A dear
friend of mine came over to visit, right like see
the baby, hold the baby or whatever, and she said
to me, at this point in your life, you're going
to want a lot less people in your life, Like
this kid is going to take up so much time
that you will have, you will.
Speaker 3 (00:51):
End up choosing less friends.
Speaker 2 (00:53):
And so I think it's a matter of getting the
right kind of people in your life.
Speaker 4 (00:59):
Yeah, yeah, you say. Oftentimes people don't think about this.
I do because I'm one of those people. So there's
a little bit of bias here. A fiduciary, sure, that's
the first. A fiduciary financial advisor that kind of runs
quarterback on your entire financial situation. When I say runs quarterback,
they're working with your attorney, they're working with your accountants,
(01:20):
some of these other people we're going to talk about
as we go down the list today and in no
particular order, but a fiduciary financial planner has your best
interests front and center at all times when it comes
to helping you navigate changes in your life like having
a child, for example, and how that might impact your finances.
Speaker 2 (01:39):
The reason why we say fiduciary financial advisor, well a
few things. First of all, they're putting your best interests
ahead of theirs. But second of all, this becomes for
most of us, a long term relationship.
Speaker 1 (01:50):
Yeah.
Speaker 3 (01:51):
I mean when things change in your life, like a
child is born.
Speaker 2 (01:55):
You know, child gets closer to college age, and you're
thinking about how to help pay for tuition. As life changes,
you keep going back to this person. You know, they
know what's going on with you. They help you as
you get closer to retirement with that transition, and so
it becomes a relationship. And the reason also why fiduciary
is so important is because someone came into my office
(02:17):
recently and it just bought an annuity and it wasn't
a great fit for them.
Speaker 3 (02:22):
I mean, it definitely was not in their best interest.
Speaker 2 (02:25):
And so as we kind of talked about it, she said, well,
they said they were a fiduciary, and I'm like, well,
you have to then ask the question are you a
fiduciary one hundred percent of the time when you are
making recommendations for me?
Speaker 3 (02:39):
So as you.
Speaker 2 (02:40):
Figure out who this person is going to be in
your life, be very careful.
Speaker 3 (02:45):
Ask lots of questions. Expect transparency.
Speaker 4 (02:48):
How are you paid? Yes, exactly, that's that's the one
that's front and center. How are you fake? How are
you paid? Because that will typically reflect a lot of
details on whether or not somebody is actually a fiduciary,
because whoever sold that annuity to your friend got probably
a nice little commission check, and in some situations annuities
do make sense. You know, we've talked about that, but
that commission was.
Speaker 3 (03:09):
Never disclosed to the person. They have no idea, no idea,
y yeah.
Speaker 4 (03:13):
Jeez, And this person called themselves fiduciary.
Speaker 3 (03:15):
That's that's great.
Speaker 4 (03:16):
Okay, So you know you need to vet, you know,
the person that you're working with. Maybe ask around, find
somebody that can you know, stick with you at your
side through whatever changes in life you're going through, because again,
that fiduciary financial planner is going to run quarterback over
the entire relationship for all things financial. So another person
would be the CPA. Because a CFP, for example, yes
(03:39):
they have knowledge surrounding tax planning and different strategies, but
they're not typically filing your taxes for you unless they're
a CPA or an accountant as well. So a CPA
is the person that's going to keep the irs off
your back with any changes to the tax code or
tax laws.
Speaker 2 (03:57):
You know, I think some people can feel like do
I really need this? When I file my taxes, it's
very straightforward. I use an online program. You know, Do
I actually need to be working with a person? I
mean there is, you know, a charge that goes along
with it, and I would say for those especially getting
closer to retirement, this is where I think there can
be a lot of value in this relationship. You're looking
(04:20):
at things like wroth conversions.
Speaker 3 (04:23):
How can you.
Speaker 2 (04:23):
Legally keep as much money in your pocket and give
the least amount possible to Uncle Sam? So if you've
never worked with the CPA before, I think as you
get closer to that age or to that stage in life,
it can make a lot of sense because you're no
longer talking about just tax preparation, right, filing your taxes
in April, but it's year round tax strategies, especially as
(04:46):
you get closer to maybe that age of required minimum
distributions of Okay, how can I take these distributions also
in a way that's as tax efficient as possible? Or
is they're pulling money out of accounts in retirement? Right,
which is the way where do you take as distributions from?
And at what point in all of these decisions your
certified financial planner, right, your fiduciary financial advisor can be
(05:08):
working with your CPA to help you.
Speaker 3 (05:10):
Make those decisions.
Speaker 4 (05:11):
Yeah. I highly encourage folks I work with if they're
not having taxes filed through all Worth, that we are
connecting with their CPA. They fill out paperwork that allows
me to talk directly with their CPA about the accounts
that they have.
Speaker 1 (05:25):
Here.
Speaker 4 (05:25):
This is what fiduciary financial advisors should be doing, not
just me, but any financial planner out there that's a fiduciary. Again,
when I say running point over the financial relationship. I
work with the CPA to make sure that we're not
surprising them with strategies that we're deploying, for example, roth conversions,
because as you're making that transition into retirement, for example,
with twenty twenty six looming and tax code changes on
(05:48):
the horizon, there's a lot of folks right now that
are scrambling to figure out if ROTH conversions makes sense.
And trying to do that yourself with software online that's
nearly free is a big risk when when we're button
up against things like IERMA Medicare. If we get too
high with our roth conversions now we have to pay
higher Medicare Part B premiums if we have stock out
(06:09):
there floating around. This happens a lot in Cincinnati. Procter
and Gamble. A lot of people have Procter and Gamble
shares are highly appreciated. Maybe we use that to fund
a donor advice fund, and then we bunch our tax
filing and take the itemized deductions for a year rather
than standard deduction. So things can get very complicated. And
this is why you need to have these people in
your corner, because you don't want to make a mistake.
Speaker 2 (06:30):
You're listening to Simply Money presented by all Worth Financial
Amami Wagner long with Steve Ruby tonight, who do you
want on your team? We're essentially taking you back to
elementary school on the playground when you are picking the
right people for your team.
Speaker 4 (06:43):
When Amy used to talk about taxes on the playground.
Speaker 3 (06:47):
Such a fun friend to have arounds.
Speaker 2 (06:50):
So yeah, I mean, I think part of that is
the fiduciary financial advisor.
Speaker 3 (06:53):
Another part of that. Another person on that team is
a CPA.
Speaker 2 (06:56):
Also, though, I would say someone who's helping you make
smart decision and about your health. Be it your doctor
and you're going in once a year to have those
proactive conversations about your health. If it's a trainer or
a nutritionist, it's trying to, you know, keep you on track,
help you make healthier decision. Why are we talking about
this on a money show. Here's the stat you need
(07:18):
to know. The average retired couple is going to spend
three point fifty three hundred and sixty thousand dollars somewhere
around there over the course of your retirement on healthcare expenses.
If you go into that period of time healthy, right,
you're proactively.
Speaker 3 (07:33):
Taking care of maybe anything that could pop up.
Speaker 2 (07:36):
You're not going five six years in between doctor's visits,
you're having the test done, you're getting regular exercise, you're
eating well. All of those things can play a huge
role in keeping those medical expenses down.
Speaker 4 (07:49):
Yeah, you don't need to have like a fitness trainer necessarily.
Speaker 1 (07:52):
You know.
Speaker 4 (07:52):
I have a good buddy of mine that's ultra competitive
like I am, and we just play racquetball with each
other and we'll push each other's boundaries and push as
hard as we can to win. And that that's a
good way to get that workout. And it's just competitive sports, pickleball, tennis,
you know, something to get out there and stay active
to some capacity. Because again this does tie back to money.
Just like you said, if we're healthy, then we're spending
(08:13):
less on healthcare.
Speaker 2 (08:15):
Also part of this team is good friends, close friends.
Why are we talking about this again on the Money Show?
There is research out there that shows one of the
major things that can lead to health issues, especially later
in life, is the sense of loneliness. You feel isolated
from other people. You don't have anyone to talk to, to
spend time with, you know, So for those of you
(08:37):
especially and This is kind of a know yourself situation.
If a lot of your fulfillment in life now in
your working years comes from the actual work.
Speaker 1 (08:45):
Right.
Speaker 2 (08:46):
Your colleagues are your friends. They are the people that
you talk to. You may not have a lot of
people outside of that work circle. It becomes really important
then to start developing friendships away from work, so that
when you're no longer going there every day, you're not
trying to figure out what am I going to do
with my day? I don't have anyone to talk to anymore,
(09:06):
So it becomes really important to have a solid, strong
social network.
Speaker 4 (09:12):
And how about a handyman. Do you have a handyman?
Is it your husband?
Speaker 2 (09:15):
He is actually very handy, thank goodness. But I do
have a good friend who's always got a guy.
Speaker 3 (09:21):
Yeah, And so when you need painting, dyne, when you
need landscaping, when you whatever, they have a guy.
Speaker 2 (09:27):
And generally when you get multiple bids from people, their.
Speaker 3 (09:30):
Guy is always going to be the cheapest.
Speaker 4 (09:32):
Yeah, you know so, and.
Speaker 3 (09:33):
That will save you money.
Speaker 2 (09:35):
Right, Having a trusted person that you can go to
to help you make decisions and do these repairs and
things around your home can save you a lot of money.
Speaker 4 (09:43):
Find a guy, I have a guy, Get a guy. Yes,
it's very helpful to have somebody like that in your
corner exactly for those reasons. You're making updates, you're you know,
you're selling your home, you're buying a home. You have
somebody you can go to that can help you navigate,
you know, changes that you want to make in a
cost efficient manner.
Speaker 3 (09:58):
Also, I think having a person and it person.
Speaker 2 (10:02):
Now this does not have to be someone you hire,
but like I think about my parents, my nephew is
always helping them with devices, right, helping them program I
don't know, their TV, their phones, anytime they get a
new device, he's the person who goes over and helps
them get it figured out. I remember a time this
is really going to date myself, but like my mom
could never figure out how to use the VCR, and
(10:24):
I would just remember thinking like, I'm never going to
be that person. I will always know how to use technology.
Fast forward to now you know I'm forty seven and
I'm handing my phone to my fifteen year old, like,
help help me with this. I don't know how to
do this app or set this thing up. And so
you can see how it's really easy for technology just
(10:44):
to get past you. Having someone that can help you
understand how different things work so that you can communicate
with others, you can text people whatever that is, can
make a huge difference, especially later in life.
Speaker 4 (10:57):
Yeah, and I think that this kind of goes hand
in hand. But you know, word about family is keeping
those family bonds strong. Yeah, as you know, you are
there to support each other through changes in life.
Speaker 1 (11:08):
You know.
Speaker 2 (11:09):
I also, though, want to say friends can be family
that you choose for yourself. For some people, family can
almost be toxic. It can be draining, and sometimes the
healthiest thing you can do would be to maybe cut
yourself off. It can create so much stress that ultimately
the boundary of not being around them or whatever that
(11:31):
looks like. But having people who feel like family, whether
they are actually family or whether they are friends, where
you can spend holidays together, where you can cheer each
other on, where you can support each other during times
that are not great.
Speaker 1 (11:46):
You know.
Speaker 2 (11:46):
I know, again this feels weird to talk about on
a money show, but when you have all of these
kinds of people on your team, you are mentally healthier,
You are physically healthier, you are financially a healthier person.
And I don't think we can say it enough. We
can talk about all different kinds of strategies in different
things that you can employ in your financial life. But
(12:09):
having the right people surrounding you, Yeah, am your corner,
and I think you can actually put dollars and cents
to it over the course of your lifetime. Can actually
save you money by having the right people there. Here's
the all Worth advice, develop and cultivate your team that
can help you achieve your goals. Coming up next, why
some CD owners have to redeem their interests.
Speaker 3 (12:31):
Before the full maturity date. Have you heard about this?
We'll get into it next.
Speaker 2 (12:36):
You're listening to Simply Money, presented by all Worth Financial
here in fifty five KRC the talk station Money presented
by all Worth Financial. I mean mean, whag you're along
with Steve Ruby. If you can't listen to our show
every day, you don't happiness the thing.
Speaker 3 (12:53):
We have a daily podcast for you.
Speaker 2 (12:55):
Just search Simply Money on the iHeart app or wherever
you get your podcasts. Coming up in six three. The
group of people who need to step up their retirement game.
We're not talking about.
Speaker 3 (13:06):
Generationally here, we'll get into that in just a few minutes.
Speaker 2 (13:08):
All right, first it was gold, now it's platinum. When
you are making your Costco shopping list the next time
you've got gold bars, do you have platinum bars on there?
Speaker 3 (13:19):
Well, I guess you could have them.
Speaker 4 (13:21):
Are you on the platinum bandwagon? Are you gonna buy
a platinum bar for eleven hundred dollars?
Speaker 3 (13:25):
I'm not.
Speaker 2 (13:26):
I'm not gonna buy gold bars from Costco either, but
apparently lots of people are. This started back in August
of twenty twenty three. They started offering these gold bars,
and they were as soon as they restocked them, they
were selling back out. You know, it's like you can
get a dollar hot dog and an eleven hundred dollar
(13:47):
bar of gold, Like.
Speaker 4 (13:49):
I remember when this launched. Yeah yeah, and since then
they've paid. They sold two hundred million dollars worth of
gold bars in just a month.
Speaker 2 (13:58):
Yeah.
Speaker 4 (13:59):
It's really remarkable how what they've turned this into and
now they're jumping onto the platinum bandwagon.
Speaker 1 (14:05):
Yeah.
Speaker 4 (14:06):
Now remember that. You know, if you have some extra
money sitting around and you want to dip a toe
in the commodities market and it's not a big part
of your financial plant that's fine. Yeah, but as far
as you know how this stuff is taxed when you
go to sell it, if there's even liquidity in the
market at the time when you try to sell it,
it's taxed higher rates as a collectible, not an investment. Plus,
these are a little bit more volatile than I think
(14:27):
people realize.
Speaker 2 (14:28):
Yeah, So if you want to buy an ounce of
platinum from Costco, it is on sale right now from
about one thousand and ninety dollars. You can buy it
on their website. There's also, you know, silver coins available.
I think the attraction for a lot of people here
is it's something that you can touch. Right when you
own a stock or a bond, you're either owning part
(14:50):
of a company or you're loaning money to a company,
it's harder to see it, touch it, feel it. So
I think that's kind of the attraction, especially with these commodities,
these precious metals.
Speaker 3 (15:00):
I don't know.
Speaker 2 (15:00):
I don't know that I would want to have to
deal with storing them, keeping up with them selling them.
I think it's interesting that Costco is jumping into this market.
Speaker 4 (15:10):
But there's money to be made. That's it. Yeah, that's
all there is to it.
Speaker 2 (15:13):
People are interested by the way the value of platinum
up more than fifteen percent over the past twelve months,
though it has dropped more than eight percent since topping
eleven hundred dollars an ounce earlier in twenty twenty four.
Speaker 3 (15:27):
I like your point.
Speaker 2 (15:28):
If you've got money on the sidelines that you just
think you would like to buy this, that's one thing.
If it is money that you are planning on using
and needing later in life for retirement, I would caution
you there, Okay, those of you who have locked in
CD rates right you're probably patting yourself on the back
right now, like, oh, you know, we've got interest rates falling,
You've got the Federal Reserve, our nation Central Bank lowering
(15:50):
interest rates, and you maybe've got a CD that's locked
in six more months when we're year and you've got
five percent or something on that and you're thinking, like, gosh,
I'm I'm really winning at this investment game. Right now,
I would ask you, are you one hundred percent certain
that that CD is not callable?
Speaker 1 (16:09):
Yeah?
Speaker 4 (16:09):
So callible. This is something that a lot of people
don't realize is attached to the CDs that they buy,
and that essentially gives the institution that sold you the
CD the right to redeem it before it's maturity date.
And this is oftentimes going to be in the fine print.
These are the CDs that typically pay your higher yields.
They're more attractive because that higher yield. But in order
(16:33):
to have that higher yield a lot of times the
institutions make them callable.
Speaker 2 (16:37):
Yes, so our TFP people read the fine print. It's
okay if you buy one of these. You just want
to know that you've bought it. I mean, especially right
now right as a FED as lowering interest rates, you're
going to have a lot of banks, a lot of institutions,
financial institutions looking at these saying, or are we going
to lose money by continuing to pay this interest rate?
So what happens if they call it? Well, you get
(16:59):
them money back, right that you paid for that CD.
You get the interest that you've occurred like that you've
gotten over that time that you've owned that CD.
Speaker 3 (17:07):
But you don't you lose out on the future.
Speaker 2 (17:10):
Interest that you would have gotten if that CD wasn't
called back.
Speaker 4 (17:14):
You lose out on the suitet deal that you thought
you had. Yes, that's what it is.
Speaker 3 (17:18):
That's the tough pill this.
Speaker 4 (17:19):
Well, yeah, hey, I got five and a half percent
on the CD. What you're taking it away from me?
Because that's exactly what it is. They give you the
money back. There's no penalty or anything like that. It's
you're not penalized, but you're it's the opportunity cost. You
thought you had that that income stream, or that that
that money coming to term an X period of time,
and all of a sudden you don't. So if this
(17:40):
were to happen to you, what do you do? You know,
you don't need to panic. This is this is the
cost of investing in CDs, the potential for them being callable,
especially in an environment where interest rates are going down
and you have these longer term CDs, these institutions might
look and say, all right, we need to get these
off of our books. Let's look at these callable CDs. Boom,
(18:03):
there you are. You get your money back. But now
it's your responsibility to make good decisions with that money
that all of a sudden you have now that you
didn't expect.
Speaker 2 (18:09):
And a good decision doesn't have to be an immediate decision.
I mean shop around a little bit. You know, you
can probably still find a money market account out there
where you can get three and a half four and
a half percent, And then I think you also have
to ask yourself, Okay, what is this money actually earmarked for.
If it's money that you're not going to need for
you know, five years, ten years, maybe it might make
sense to invest it. Or if it's part of your
(18:30):
emergency fund and you are going to need that money soon,
then really how much interest you're making on it may.
Speaker 3 (18:35):
Not matter as much, you know.
Speaker 2 (18:37):
I think it's kind of that intermediate I'm going to
need this money in three years or five years.
Speaker 3 (18:41):
And by the way, these callible CDs.
Speaker 2 (18:43):
One of the reasons why I would say it's important
to read the fine print is there's usually a period
of time like the first year where they can't do
anything with it, and then there's also kind of windows
of time like maybe six months after that, then there's
kind of an open window where they can look at
calling that CD back understanding when those periods of time are.
(19:04):
Are you coming up on those if you currently own one?
And this is just a matter of educating yourself so
that you know exactly what you have so that nothing
is kind of surprising you. If you get that call
of hey, we're calling back this CD.
Speaker 4 (19:17):
Yeah, and emphasis is concerning for you that something like
this could happen. You can always look at treasuries, for example,
some are still paying between four and five percent depending
on the term. They are not callable, but they are
tradable on the open market, so that that is an
opportunity to buy or sell outside of the term that
you're buying that treasury for Here's the.
Speaker 3 (19:35):
All Worth advice.
Speaker 2 (19:36):
Just make sure you are reading the fine print when
you're making any moves, any investments with your money. Coming
up next, we're tackling the pros and cons of taking
out a home equity line of credit. You're listening to
simply Money presented by all Worth Financial here in fifty
five KRC the talk station. You're listening to simply money
(19:59):
presented by all Worth trying angel, I mean you Wagner,
along with Stee Ruby statistics to show us that many
of us are staying in our homes for longer. Right,
We're not moving every five years the way that we
once did, which means that often we build up more
equity in that home. Does it make sense to take
out a line of credit on the equity of that home.
Joining us tonight is our credit expert, Britt Scarce. Britt,
(20:21):
let's talk through this the pros and cons of making
a decision like this one.
Speaker 1 (20:25):
Well, right now, if you're sitting on a mortgage that
you were able to put in place back when rates
were two or three percent, you're probably not looking to
get rid of that first mortgage. But we have seen
a tremendous amount of appreciation on homes over the last
(20:47):
three or four years. So, as you said, we're sitting
on a lot of equity, and unfortunately, we've also seen
a lot of people struggling with all the inflation and
all the other more expensive you know, the life being
more expensive. So a lot of people have been racking
up credit card debt and other types of debt. And
with all that home equity sitting there, it could be
(21:10):
a good idea to be able to tap into some
of that equity and perhaps pay off or consolidate some
of that high interest rate credit card debt and save
yourself some money and potentially have some deductibility on the
interest where credit card interest is not, and it could
certainly give some relief. So the pros are definitely there.
(21:32):
As far as that's concerned. Now, the cons to getting
a home equity loan would be that you're using the
equity in your home and you're now taking unsecured debt
and putting it into a secured position where if you
don't make the payments, you could potentially lose your home.
Speaker 4 (21:50):
What are some of the fees associated with this, because
obviously there's plenty of us out there that could unlock
some of the equity in our homes to free up
cash for whatever need that might be. You brought up
credit card debt for example, you know, the lower interest
rate on a helock versus a higher interest rate on
a credit card. What kind of fees or costs are
associated with a helock?
Speaker 1 (22:09):
Well, ' let's talk about the two different ways you
can tap into that equity. And you know, on a second,
a home equity loan or a home equity line of
credit is typically going to be a second lean position
behind your first mortgage, unless you don't have a first mortgage,
and which case it would be in a first lean position.
But a home equity loan is typically a fixed rate
loan that is typically for maybe a ten or fifteen
(22:32):
or twenty or in some cases even a thirty year term,
which obviously affects the monthly payments depending on the term
and so forth. And typically a home equity loan would
carry a fixed rate, and as you said, they typically
are much better and more attractive than a credit card
at you know, eighteen to twenty five percent. You usually
can get home equity loans anywhere between you know, seven, eight, nine,
(22:53):
ten percent, depending on credit scores and what loan to
value or how much equity you have in your home
and so forth. So there's one way to do it
with a home equity loan, which is typically fixed like
that for some specified term, and it's usually amortized to
pay the entire balance off by the end of the
term of the loan. The home equity line of credit
that you're referencing there, Steve, A line of credit is
(23:14):
kind of like attaching a big credit card to your
home if basically you can you have a certain amount
of credit line using your homeless collateral, and you can
use it, pay it off, use it, pay it off
just like you do a credit card. Now, the cost
to obtain these are very similar, but a lot of
banks and lenders, a lot of credit unions especially have
(23:36):
some really good deals on home equity lines of credit.
They really don't charge a whole lot to put these
in place. In some cases, you may have to pay
for a pool appraisal, which could be four or five
hundred dollars, but a lot of the home equity lending
programs use what's called an automated valuation system like an AVM,
(23:56):
and they basically don't make you go through the whole
expense of a whole you know, full appraisal. They'll do
kind of a digital type analysis typeos are appraisal.
Speaker 4 (24:08):
Remember these companies they want you they want you to
borrow against it because then they're making money off you.
Speaker 1 (24:14):
That that's correct, So they'll eat a lot of the fees.
There may be a few title fees and so forth,
maybe a few hundred bucks or so. But you know,
home equity lines of credit you can you could put
in place very affordably. Some home equity loans, some of
them may require you know, full appraisal and full title
insurance and that sort of thing, so you know, it
(24:34):
could be a thousand or two thousand bucks. But most
of the time you can do these very affordably with
very few closing costs.
Speaker 2 (24:43):
Hey, Rett, let's talk through good reasons maybe to take
out a home equity loan or line of credit, and
also bad reasons.
Speaker 1 (24:51):
Well, a good reason would be is if you, you know,
do an analysis on your budget and find that you
have a lot of unsecured debt at high end rest
rates and you're struggling on a monthly basis, you know,
by consolidating and using some of that home equity there
allowing you to borrow money much more affordably, you know,
with much lower interest rates and have potential deductibility where
(25:14):
credit card interest is not. It could really be a
real lifeline to really give you some relief. Now here's
the danger. If you utilize your home equity to pay
off all those other debts and then you go and
run up those other debts again. Now you have the mortgage,
you know, the second mortgage payment, and all that new
debt again. So you know your home is yes, yes,
(25:38):
and you know and obviously you're using your home as
collateral for this. So you know, if you get yourself
in deeper into debt and not use it responsibly, you know,
it could actually put you in a worse situation.
Speaker 4 (25:49):
Yeah, this isn't necessarily a magic solution that's going to
just create cash out of thin air, because you're putting
your home up as collateral. If you don't pay that debt,
you can lose your home. So it is very important
to realize that this is, you know, it is an
option for tapping into the equity, but it comes with risks,
obviously it does.
Speaker 1 (26:11):
And I'm not a big fan of using like a
home equity line of credit necessarily for deck consolidation, because
the payment on a on a home equity line of credit,
they'll they'll allow you to make interest only payments for
the first you know, five to ten years on that
on that loan, and you know, if you're only making
the interest payments, you're not getting anywhere on the principle.
(26:31):
If you're getting a home equity loan, in many cases,
that is going to be you know, a set term,
like you know it's it's a loan for ten years
or fifteen years, and you know every payment that you
make is one less that you have to make, and
so that you know that that sometimes can be a
little bit better. But I do see a lot of
(26:52):
people utilize home equity lines of credit to kind of
fall back on for making a quick home repair or
something of that nature, where they're going to they're going
to are going to pay it back within five or
six months, and it's just there as a tool to use, uh,
you know, to kind of help them with their finances
when big things come up.
Speaker 2 (27:09):
Right for those who've never done this before, either taking
a homoquity loan or line of credit.
Speaker 3 (27:15):
What what are your steps? What are the first steps
and how to get get started here?
Speaker 1 (27:19):
Well, I would I would first talk to who you
do your checking and savings with, you know, your local
credit union hopefully you know, would have a lot of
great programs, a lot of your you know, large you
know banking institutions and savings and loans. They all have
these types of programs, and some will are more aggressive
(27:39):
than others. I mean, I know some credit unions that
will literally lend all the way up to one hundred
percent of the value of your home on a second one,
and there's others that limit it to only ninety percent
of the value of your home or eighty percent of
the value of your home. So it's just a matter
of starting a conversation with your I would start where
you currently do your banking and checking, and then from
(28:01):
there maybe get some references from some other friends that
might have gotten a home equity loan, and you know,
talk to two or three different lenders and see who
has the best rates and who has the best simplest process.
Speaker 2 (28:13):
Do your research, right, I mean this is a this
is a thing that starting where you usually bank can.
Speaker 3 (28:18):
Make a lot of sense.
Speaker 2 (28:19):
But also doing some research and even online right some
some I've seen credit unions putting some heelock rates online,
so even online searches can help you. There great insights
on the pros and cons of using home equity loans
from our credit expert brit Scares. You're listening to Simply
Money presented by all Worth Financial here on fifty five
KRC the talk station.
Speaker 4 (28:43):
Two whity far.
Speaker 2 (28:48):
You're listening to Simply Money presented by all Worth Financial.
Speaker 3 (28:51):
I mean Me Wagner along with Steve Ruby.
Speaker 2 (28:53):
You have a financial question you need a little help with, Well,
there's red button you can click on while you're listening
to the show. It's right there on the heart record
your question and it's coming straight to us. Sorry for
you and your partner to really be on the same
page when it comes to your money.
Speaker 3 (29:09):
Here's thin gee, you both.
Speaker 2 (29:11):
Have to be involved in the decision making process. What
I find pretty often is that the female in the
relationship is often making budgeting decisions, day to day spending decisions,
but for whatever reason, when it comes to long term
financial planning, investment decisions, planning for retirement, women, for whatever reason,
(29:33):
often leave those decisions to the men. And then what
happens is they're not necessarily involved, they're not educated, and
a lot can go wrong in those situations.
Speaker 4 (29:45):
I think a trend that we've seen, and there's data
to back it up, shows that women oftentimes are the
chief financial officers in their households. They're responsible about ninety
percent of the time, is data that I've seen recently
for households spending decisions, but less than half of women
exercise soul responsibility for the investment decisions, the long term
(30:05):
investment decisions within the household. Only a quarter of women
share that responsibility overall with their spouses.
Speaker 2 (30:13):
Yeah, you're paying the bills, you're juggling maybe childcare, you're
making decisions about that next vacation. But when it comes
to meeting with a financial planner, I have even seen
many times where a man will just want to come
into the office himself. Now, let's talk about what can
go wrong here. I recently had a couple of people
become clients of mine who are widows, and in both
(30:35):
of those situations, the husband had taken care of all
of the investments, and so after they lost their husband
and their mourning right, it's such an emotional time. Both
of these women separately said, I think I kind of
put my head in the stand for about five years
when it came to our investments. I just felt overwhelmed.
(30:56):
I had never been part of the conversation. I didn't
really understand what he was trying to do, so I
don't fully comprehend it when we look back on those
five years, that was lost time that some decisions could
have been made that would have put them in much
better shape than they are now. And the interesting thing is, too,
they're incredibly smart people. They actually are very capable of
(31:17):
making these decisions. But at some point they just decided,
I'm not going to do it. I'm not going to
be involved in this. I'm going to let my husband
handle this. If this sounds like the dynamic of your relationship,
whether you are the husband or the wife, the man
or the woman in this I'm going to say, please
change that dynamic now. Will both of you will be
better for having two voices at the table and part
(31:39):
of this conversation.
Speaker 4 (31:40):
And if you're the man and you're listening and you're
the one that runs the finances, I think it's important
to remember that women tend to live longer than we yes,
So if you want to be there and you want
to make sure that that your spouse has cared for
when she survives you, if indeed that happens, then folding
her into the conversation now is beneficial.
Speaker 3 (32:02):
Yeah.
Speaker 2 (32:03):
I recently had a couple in my office and the
woman said, do you know why I'm here?
Speaker 3 (32:08):
And I said, what brought you in?
Speaker 2 (32:09):
And she said, I heard the stat that you guys
talked about on your show at one point where this
great wealth transfer, so women ending up, you know, taking
on the money. And I also heard the stat about
women firing the financial advisor that the husband had the
relationship with within a year or eighteen months. And she said,
I don't want that. I want to be part of
(32:30):
the conversation now, and I was so grateful for that.
And together we're making some great decisions, you know about
tax planning strategies and investment strategies, and if something were
to happen to her husband, she would be fully educated
on what the plan is and we can move forward
without missing a beat when it comes to the money.
Speaker 4 (32:52):
So this is often happening because there's a few reasons.
So if you ask why is this happening? You know,
for example, I've recently learned how much my wife really
does in the household because she had knee surgery. Yeah,
we're in a situation here where where she stays at
home and I'm the working parent, and I got to
(33:12):
experience full time work, full time caretaker, and stay at
home parent all the time. Time, lots of money on
door dash, dirty dishes, piles of laundry, bills stacking up,
so that there's just an incredible amount that you know,
the stay at home partner does in the household. So,
especially in this day and age, current generation you can
see them as the sandwich generation because not only are
(33:34):
they caring for children, but oftentimes aging parents as well.
So when that responsibility falls on the woman in the household,
that can create a lot of time that needs to
go towards those activities and less towards investment discussions. For example, if.
Speaker 2 (33:50):
You're not part of the conversation right now as a woman,
and it feels overwhelming to just jump in, I would
say start having quarterly meetings right, set those up you
and your husband, you know, and just start talking through
the decisions that have been.
Speaker 3 (34:03):
Made so far and why, so that you're aware.
Speaker 2 (34:06):
And the next time there's an appointment that pops up
with the financial advisor, go make it a priority to
go be part of it. Ask questions, understand things, you know,
don't just sit there. I remember when I first started
in this business looking at we were looking at photographs
to be used in some kind of collateral material that
we were sending out there every and this made me crazy.
Speaker 3 (34:28):
Every picture that was out there of.
Speaker 2 (34:30):
Someone meeting with the financial advisor had the financial advisor
shaking the husband's hand, not even looking at the woman.
Speaker 3 (34:37):
You're like, what is happening?
Speaker 4 (34:39):
Absolutely not. That was our marketing material for hours.
Speaker 2 (34:43):
It was in like if you were looking for stock
photos of the industry.
Speaker 1 (34:48):
No.
Speaker 3 (34:48):
And I was quick to point out, this is not
where we're going here.
Speaker 2 (34:53):
But understand there's a reason why this dynamic exists, and
it's because it's the way that things meet. You were
in the past, but understand that it will likely not
serve you well in the future and you have to
be part of changing that cycle, that dynamic in your family,
in your marriage, in your relationship. Here's the all Worth advice.
Next time you meet with a financial advisor, just make
(35:15):
sure you and your spouse or partner are there together
and you're asking questions together. Coming up next, how to
act the next time someone comes to you asking for
a little money.
Speaker 3 (35:25):
You're listening to.
Speaker 2 (35:26):
Simply Money presented by all Worth Financial here on fifty
five KRC, the talk station.
Speaker 3 (35:35):
You're listening to Simply Money presented by all Worth Financial.
I Meani Wagner along with Speed Ruby.
Speaker 2 (35:40):
We never had someone come to you asking for money,
asking for a loan. Oftentimes did's someone that you're close to,
someone in your family. It's a difficult conversation, it's a
difficult decision, and I would warn you be careful with
this one.
Speaker 1 (35:58):
Yeah.
Speaker 4 (35:58):
A new survey from bank It points out that more
than half who have lent money or paid for a
group expenses of some kind have had a negative result happen. Yeah,
It's very unfortunate because sometimes you're just thinking, hey, I
can help here, but you could be hurting.
Speaker 2 (36:15):
Well, and by a negative result, it can be all
kinds of things, losing money, harming that relationship with the
person you initially lent the money to, damaged credit scores.
I know people who I mean, think about it. You're
loaning that money and then you're going to be at
Thanksgiving or Christmas or Easter or whatever with that family
member and all of a sudden you're looking at them
and maybe they've gone silent.
Speaker 3 (36:36):
You know, oh, this is just a loan, I'm going
to pay you back.
Speaker 2 (36:39):
And they never have, and it can completely change the
dynamic of that relationship. So I think one thing you
have to ask yourself if someone asks you for a loan,
is do I need this money paid back? Because most
of the time you have to look at it like
if you never see that money again, are you going
to be okay? Are you going to feel okay? Are
you going to be able to look that person in
the eye if.
Speaker 4 (36:59):
It's a family member. I think that it's important to
sit down and look at this more as a gift,
yes than alone, because if it is alone, then things
can go sideways pretty quickly or even over the long term,
over whatever the term of that loan is. If it's
a gift, then you just don't have to worry about
that part of it, because there can be plenty of
issues that follow by having that hanging over the relationship's head.
(37:21):
Here's this loan where I owe you money and I
need to get money from you. It's just a sticky
situation that you want to try to avoid if you can.
Speaker 2 (37:28):
Speaking of loans, you might also have someone coming to you,
not asking for money outright, but for you to co
sign a loan with them. Please also understand how this works.
If that person were to default on that loan, you
would be on the hook not for half of it,
but for one hundred percent of that loan. This could
impact your credit right, your ability to borrow money.
Speaker 3 (37:47):
It can have huge long term ramifications.
Speaker 2 (37:50):
I think many times the better thing to do is
to sit down and have that conversation and say, can
I help you in some other way?
Speaker 3 (37:57):
Can I help you set up a budget?
Speaker 2 (37:59):
Can I help you explore or other ways to find
this money where it won't potentially be damaging to our relationship.
Speaker 4 (38:05):
Yeah, I've had to do some of this in my
own family actually, which is uncomfortable, but that's the reality
of the situation because I was helping out a family
member financially that was then funneling money to another family
member boy and at their own detriment, so I was
essentially paying for this other family members, we'll say, bad habits,
and it's just an unfortunate situation where it's like, oh,
(38:26):
come on, yeah, And since then we've had the conversation
about how can we cut back? And you can use
your own money to help them if you want to,
but I'm not anymore.
Speaker 3 (38:34):
Thanks for listening.
Speaker 2 (38:35):
You've been listening to Simply Money, presented by all Worth
Financial here on fifty five KRC, the talk station
Simply Money News
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