Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
Tonight, we've got a new infliction report. I mean, for
you a dive into wall streets, your gauge and is
a time for you to move your cash. You're listening
to Simply Money, presented by all Worth Financial Imani Wagner
along with Steve Ruby. See if I know you're a parent,
too often my kids will come to me with h
can I do this right? And I'm like, well, there's
(00:29):
a few things I need to know before I can
determine that. I need to know some information from other parents.
We need to take a look at your grades. I
need to take a look at three or four other things,
and then I will let you know. In this situation,
the Federal Reserve is kind of like our parents. Yeah,
I mean, there's a lot of data that they're trying
to take in to make that next decision which everyone
(00:50):
is waiting for.
Speaker 2 (00:50):
So you're saying it's a hard job.
Speaker 1 (00:52):
It's a hard, hard job. Wouldn't want this one. But
the last piece of data that our nation central Bank
has been waiting for in order to determine whether they
will lower intrast rates next week keep them the same
is inflation numbers, and we got those this morning.
Speaker 2 (01:09):
We sure did so. Headline inflation rate, that's the amount
that everybody pays for everything, sits now at two point
seven percent. What that really means is a year ago,
we are now paying two point seven percent more for things, goods, services,
whatever that might be the same.
Speaker 1 (01:24):
Things that we were buying last year.
Speaker 2 (01:25):
Just close to three percent one exactly. So the rate
actually ticked up from October by one tenth of a percent.
This is basically flat month to month, and that is
what economists predicted.
Speaker 1 (01:36):
Yeah, nobody's hair is on fire based on these numbers.
Core inflation rate. So that's going to strip out food
and energy because those numbers are always all over the place.
Speaker 2 (01:45):
Quality.
Speaker 1 (01:45):
Yeah, since at three point three percent same time from
same time last year, So pretty much flat month to month. Now,
if you want to take an even deeper dive into
these numbers, you know, shelter use, cars and trucks, what
you're paying for, furniture, medical care, new vehicles, all of
those things more expensive. And you know it's like month
to month, some things are going to be more expensive
(02:07):
than others. And if you want to look at specifically
what you're really paying a lot more your car insurance?
Have you open that bill lately. That's not a pretty picture.
Speaker 2 (02:16):
Yeah, I don't like looking at that, although although I
do make the call maybe once a year to ask
questions about, Hey, what am I paying? Why am I
paying this watch? What else could I be paying? Insie
a little activity. It's like finding treasure at the end
of a rainbow. Almost.
Speaker 1 (02:29):
In Surreify, I told you about in Surify. We use
this for our family because we have eight million teenage drivers.
Actually we have three, and we were paying an exorbitant
amount every month. I mean, I get inflation, but this
was bonkers. And we talked about in Surify on the show.
I used that website. We saved four hundred dollars a month.
(02:50):
Now they're not paying me. You know this is not
a commensal.
Speaker 2 (02:54):
Yeah, you're not a paid spokesperson. Really, you talk about
it all the time.
Speaker 1 (02:57):
There are no kickbacks here, but listen, it begs a point. Hey,
shop around, right, I mean, that's the significant savings on
an annual base.
Speaker 2 (03:05):
Maybe that's my financial mistake. Maybe I finally have one
I haven't used in all right. Wow, Well, I find
joy in doing the work myself a little bit for
this one, I really do. It's like buying a car.
I have fun buying a car because I get to negotiate.
I like to negotiation.
Speaker 1 (03:18):
I like to negotiat as well.
Speaker 2 (03:19):
But maybe I'll just try and sureify and you can
get your little kickback or whatever.
Speaker 1 (03:23):
Yeah, let me know.
Speaker 2 (03:24):
Yeah, she says, yeah, you admitted it.
Speaker 1 (03:25):
No, I'm not getting kick back up. But I want
to know if you're saving money, right, So that's one
of the things that you're paying more for. Education. We've
got a kid's tuition do in a few weeks that
that always hurts. Also, health, health costs, right, and these
are just constantly inflating at a higher pace than normal inflation,
normal expenses.
Speaker 2 (03:43):
Eggs more volatile than ever.
Speaker 1 (03:45):
Back to the eggs.
Speaker 2 (03:46):
I know I ate eggs just about every morning. Index
that their indexer is an egg index. It rows by
eight point two percent on the month. Other notable increases
in food prices beef three point one percent. Better do
I chicken though? Chicken a little bit almost half a percent.
Speaker 1 (04:01):
Yeah, So if you do your grocery list based on inflation,
that's a nice little tip there. Well.
Speaker 2 (04:05):
Another good positive or shelter costs, which account for forty
percent of overall increases But the good news is that
the report showed the recent report that just came out
showed that it had the smallest monthly increase in rent
inflation since twenty twenty one.
Speaker 1 (04:19):
So small, so yeah, so still bad, but just not
as bad.
Speaker 2 (04:24):
I'm just trying to put a positive span.
Speaker 1 (04:28):
As I was talking about the fact that you know,
many times, as parents, right, we have a lot of
data to take in in order to make a decision.
When the FED is digesting these numbers, the question is
then what do they determine? Right? Do these inflation numbers
move the needle significantly one way or another? I think
the answer is no. You know, it looks like the
(04:50):
FED will likely lower interest rates by a quarter of
a point next week when they meet these numbers. Weren't
anything shocking.
Speaker 2 (04:58):
No, No, I don't think so either. You know, this
is what Andy Stout, chief investment officer of all Worth Financial,
has been saying about a almost guaranteed that we're going
to see one more decrease and interest rates by the
end of the year. And that's that's what it's looking
like here coming up.
Speaker 1 (05:12):
You're listening to simply money presented by all Worth Financial.
I mean Wagner along with Steve Ruby from the Federal
Reserve to fear how scared are you right now about
your four oh one K and what it's going to
do in the future. There is, of course a gauge
for that. It's Wall Street so called fear gauge. It's
called the VIX. If you are someone who spends a
(05:32):
lot of time looking at how markets are doing, you've
probably seen VIX up there on that list on the ticker.
Speaker 2 (05:39):
Yeah, the fear gauge is interesting. It when you look
at the dial the NASDAK, the S and P five hundred,
you'll see that VIX VIIx sitting right there, and it
stands for this Chicago Board of Options Exchange CBOE Volatility Index,
and it measures volatility in the S and P five
hundred for the next thirty days. Obviously not exact science here,
(06:02):
but it's it's investors sentiment about what kind of volatility
we may see on the horizon.
Speaker 1 (06:07):
Yeah, so when that number is lower, it means we
feel pretty good right now, Like I mean, it's it's
not you know, Andy comes on, our chief investment officer
comes on and talks about leading economic indicators, and these
are things that okay, when these move, you would expect
the broader economy to move maybe six months later. This
is how do you feel right now? How do you
feel the next thirty days. So it's an interesting thing
(06:30):
to keep an eye on. I don't think it's anything
that you should make a financial decision based on because
it's a really sort of short term indicator. But I
guess the good news is right now people are feeling
pretty good.
Speaker 2 (06:43):
Yeah. I actually have a buddy that he will use
leveraged options against the vics and I'll put a ton
of money in for like two minutes at a time
in the market when there's.
Speaker 1 (06:56):
I feel my head pressure going up as you're talking.
Speaker 2 (06:58):
He's literally putting everything he has risk in like a
minute or two, and then he pulls it back out
right away when he sees some kind of games. That
is a terrifying project. Well, the same guy, I think
he also has a gambling problem.
Speaker 1 (07:10):
You think, I mean that's that is gambling right now?
Speaker 2 (07:12):
There is literally gambling. What you can do off of this.
It's kind of interesting what investors can actually invest in.
And I wouldn't call that one an investment. Yeah, no,
it's not, because it is just a measure of volatility,
which you know, in my opinion, it's it's really not
something we should be acting on anyway.
Speaker 1 (07:28):
Yeah, we have a new administration right coming into office
in January, and with change always comes the potential for
new policy changes. What does that mean for the market.
You know, I've had people in my office on both
sides of the Aisle wanting to make investment decisions post
election based on who's there. I'm just going to remind
(07:48):
you it takes these leagues of attorneys that these major
companies have all of three seconds to compute this person
is in office, here's what their policy is. Here, there's
our way.
Speaker 2 (08:00):
Around it here, and when you say around it, here's
how we're still going to make money. Yes, right, And
when companies are making money, that's good for the stock
market because that drives the price of stock that we own. Yeah,
So it doesn't matter who's in office, who won, the
same thing is happening here. It's an interesting dynamic because
both sides of the aisle pre election knew that the
(08:20):
sky was falling if the other side won, and there
was nothing that they could do about it, it was
just going to be the end of the market says,
we know it. Post election, it's you know, things happen.
You're on one side of the aisle, Okay, the sky
is falling, everything's over, and then the other side is
put me on in. I'm ninety years old, I'm sixty forty.
Let's go ninety percent stock because I know that things
(08:44):
are going to continue to be wonderful like they have
been the last two years.
Speaker 1 (08:47):
When we talk about something like the vics, it's more
of sort of a g whiz financial thing, kind of
nice to know how everyone's checking in right now. But
rather than looking outward, I think it's far more important
to look inward. What is my plan? And also what
are the emotions you're feeling around your money right now?
I think being able to call them out oftentimes gives
(09:09):
you power over them. For instance, it's you know, the holidays,
and you're at a party and someone's talking about so
many dollars that they made in crypto, and all of
a sudden fear of missing out or greed kind of
the same two sides of the same coin start kicking in.
Well does crypto really make sense for you? Does it?
(09:30):
I don't know, But are you making decisions about your
money based on some kind of external thing. Probably not
the best way to go.
Speaker 2 (09:38):
And unfortunately, all too often does that happen. That's another
thing that folks have been asking me about for years
is crypto, and now that it's at the price point
that it's at, you know, I'm getting more of those
questions too. It's just to keep going up, right, you know,
eventually it's going to be ten millions. So should I
get in now?
Speaker 1 (09:54):
Yeah? Well, and back to gambling versus and vest and
there's a huge difference there, you know. I still think
in a lot of cases crypto is a little bit
on the gambling end of things. Now though you can
buy crypto exchange traded funds and things like that. We're
getting more toward an investment the place where it is
(10:17):
an investment. But one of the things I think that
we do really well here on the show is give
historical perspective on investments. I don't have historical perspective for
you on cryptocurrency because no one was really talking about
it more than a couple of years ago.
Speaker 2 (10:31):
Yeah, the same thing with you know, NFTs, for example,
that's the same thought, and that one has not done
as well as now.
Speaker 1 (10:38):
I think cryptos around to stay, you know, but just
in what way, shape or form, I don't know yet.
Speaker 2 (10:44):
Yeah, speaking of volatility, just look at the history of crypto.
Speaker 1 (10:48):
Yeah, there's someone that I run into from time to time,
and he's one of those He's always out there searching
for the next big thing. Right, ran into him at
a REDS game a few years ago. He was into
pot stocks at that time. Right, And I ran into
who I Am at a holiday party last week and
he said, I lost my shirt this year. And I
was like, you lost your shirt? How the S and
(11:09):
B five hundred is up a lot this year? And
it was windmning. Uh, yes, I know, I know. And
I was like, well, did.
Speaker 2 (11:17):
He buy like a rig and set up an I don't.
Speaker 1 (11:20):
Actually even know how it works. And so we said
I lost my shirt on that. So I pulled everything
out and then I went all in on Nvidia and
it was just like, oh, yes, so many things wrong
with these conversations.
Speaker 2 (11:32):
You should tell them about leverage options.
Speaker 1 (11:35):
I've got another great idea for you. Right, please stick
with your plan, and I'm hoping that for your sake,
your plan is also well diversified. Here's the all Worth
advice making major financial moves based on predictions, indicators, headlines,
and really lead you down the wrong path. Stick with
your long term financial plan. Coming up next, interest rates
(11:56):
dropping for high yield savings accounts. So what should you
do with your dollars? Maybe keep them where they are,
move them. We're going to get into that next. You're
listening to Simply Money, presented by all Worth Financial here
on fifty five KRC, the talk station let Me Me
Wagner along with Steve Ruby. If you can to our
(12:16):
show every night, you don't have to miss a thing
we talk about. We've got a daily podcast for you.
Just search Simply Money. It's right there on the iHeart
app or wherever you get your podcasts. Everyone knows the
line from the Wizard of Oz There's no place like home,
And I think for many of us as we start
to age, we really feel that way. Would I prefer
to age at my home or would I prefer to
(12:39):
go to a nursing goo. I feel like if you
ask a room full of people, you're going to pretty
much get a.
Speaker 2 (12:44):
Unanimous response, literally unanimous.
Speaker 1 (12:46):
Yes.
Speaker 2 (12:46):
It is almost hands down that people want to stay
in their homes where they've built lives and built comfort
and built the environment around them that they've worked so
hard to achieve. So you know, it's not a surprise
that you know. ARP actually you know, does a study
and they put out the results and it comes back
(13:06):
pretty clearly that three quarters of respondents want to stay
in their home or their community as long as possible
as they age.
Speaker 1 (13:14):
I wonder the other quarter what their plan is, Like,
I don't think that's it.
Speaker 2 (13:20):
In Walk Out into the Woods.
Speaker 1 (13:23):
A post pandemic, like you know, it was the worst
case scenarios. Loved ones couldn't get to you if you
were in those places, and I think a lot more
people started to think, Okay, what do I need to
do right now to stay where I am as long
as I possibly can. I was in college when my
parents called and said they're building a new house. I
was like, oh, great, but you know, whatever works for
(13:44):
you guys, And then they said it was a ranch
and I was like, well, that's weird. We've never never
in my whole life if we ever lived in a ranch.
And you know, they were in their early fifties at
the time, and they said, well, this is where we're
going to stay for the rest of our lives, and
so they made a lot of decisions on lay out
of that house, and based on that, I thought they
were so crazy at that time. Fast forward, now my
(14:06):
mom's no longer here, but my dad's seventy six remarried
in that same home and it works really well for them.
Speaker 2 (14:13):
It's a good idea. Yeah, I mean, I've seen that
across the span of my career. People that raise families
and now it's maybe time to downsize. Everybody's looking for
a ranch and if they don't. The same study looked
at what people thought they needed to do to their
homes in order to keep them there as long as possible,
from updating bathrooms to updating access to the home, to
(14:37):
moving a bedroom and a bathroom to the first floor
where it's easier to access, so ultimately you don't have
to do stairs as you age.
Speaker 1 (14:46):
It just makes a lot of sense. And so, you know,
as people are starting to think about maybe what modifications
do I need to do, you know, thirty percent say
I'm going to relocate a bathroom or a bedroom to
the ground floor, you know, improving lighting ains. Someone actually
my office this week who built a home on a
lot of property and have just loved it, and now
(15:07):
they're like, it takes us forty five minutes to get
to the eye doctor, and you know the upkeep on that,
And so they're starting to look forward now at Okay,
let's build into the plan what a down payment looks
like for someplace different than where we are now, because
when we get into our eighties and nineties, this will
not be suitable for you.
Speaker 2 (15:27):
So some are also leaning into technology a little bit.
Two thirds of the respondents of this survey said that,
you know, they plan on implementing some kind of a
medical alert system. Forty four percent said smart security features
that will enable them to live safely and independently will
be invested in so that they can again stay in
this home as long as possible.
Speaker 1 (15:45):
I like that idea. I feel like technology has already
outpaced me. And if I'm relying on a smart something
feature when I'm in my seventies or eighties, it's probably
not going to go well. Or I'm going to have
my kids on speed dial, Like how do I log in?
And how does this work? I don't know. Do you
have a high yield savings account? As we've talked about
inflation a lot on the show. Over the last few years,
(16:08):
the silver lining in all of this has been you
can have really safe money in the sidelines, not in
the market, and make a pretty decent return upwards of
five percent on that money. Now we're in a place
where the Federal Reserve is lowering interest rates, and slowly,
or maybe not so slowly, what you're getting on those
high yield savings accounts is starting to add a little
(16:30):
bit self.
Speaker 2 (16:30):
Yeah, you can probably get emails at this point good news.
We're offering this interest rate and it's lower than the
one that you were getting before.
Speaker 1 (16:36):
Which they're not pointing out. This is half a percent
lower than you know. No one's saying that, they're just
updating you on the latest indust rate.
Speaker 2 (16:43):
It's good news. Congratulations, You'll still be getting four percent,
you know, something like that, and it doesn't matter at
the end of the day because we still need to
have an emergency fund.
Speaker 1 (16:53):
Yeah.
Speaker 2 (16:54):
This has already been short term to intermediate term money
that we've been barking at you for a couple of
years now to make sure that you're getting your cash
to work, not in the markets, not putting it at risk.
I'm talking about your short term money parked in a
place where it can at least attempt or keep up
with inflation.
Speaker 1 (17:13):
Emergency funding is the foundation of your financial plan. And
I've had people in my office who you look at
their accounts on paper and you're like, wow, yeah, you
guys have maxed out for one case. You guys have
done great, and you have three thousand dollars in checking
in savings. And what if something happens, where are you
going to pay for that?
Speaker 2 (17:33):
You know? Right?
Speaker 1 (17:34):
And so we say three to six months of critical
expenses when you're working. And then when someone gets closer
to retirement, one of my strategies is let's increase those
emergency reserves so that if if markets do go south,
we don't have to pull distributions out at a loss.
We can turn off that spicket, live off of that
emergency reserve until markets go back up, which historically inevitably
(17:58):
they do.
Speaker 2 (17:59):
Yeah. It's different during your accumulation phase of retirement because
in that period of time, you're still earning money, so
you're not needing or you shouldn't need to tap into
retirement money in that situation, and the emergency fund. The
three months is for a double income household, six months
is for a single income household, and then when you
make that transition in retirement, there's no income coming in
(18:19):
from work, which is why you need to kick that
emergency fund up a notch. And in that situation, this
is a perfect example of when you use high yield
savings accounts or maybe CDs or treasuries to keep that
money working for you a little bit. Now as interest
rates fall. I know there's folks I've been working with
that are saying, all right, well, maybe I should take
(18:40):
my emergency fund and put it into my brokerage account.
It's like, let's pump the brakes a little bit on
that one. You still need to have liquid cash to
buy yourself time in the event of emergency, or so
that you don't have to take on debt if you're
still working.
Speaker 1 (18:53):
But I do think there are people who kind of
had this false sense of security and these high yield
accounts over the past few years of I can pull
more money out of the markets, this account's likely still
going to outpace inflation. I'm going to make money on it.
Right You're making a lot more than point zero zero
zero zero six percent that you are making several years ago.
But I think what you have to do right now
(19:15):
is take a really critical look at the money that
you have on the sidelines. How much do you need
an emergency fund? And then beyond that it probably does
need some market exposure.
Speaker 2 (19:24):
Yeah. Absolutely, And the same thing happened when interest rates
went up. People are like, oh, should I take money
out of the markets and put them in the cash
so I can get guaranteed return?
Speaker 1 (19:34):
Yes.
Speaker 2 (19:34):
Those that did that missed out on large opportunity cars.
Speaker 1 (19:38):
Stick with your plan. Here's the all Worth advice. Interest
rates might be a little lower now, solid investing principles
those remain the same. Thanks for listening tonight. Next we've
got NKU basketball Go North. You've been listening to Simply Money,
presented by all Worth Financial here on fifty five KRC,
the talk station
Tonight, we've got a new infliction report. I mean, for
you a dive into wall streets, your gauge and is
a time for you to move your cash. You're listening
to Simply Money, presented by all Worth Financial Imani Wagner
along with Steve Ruby. See if I know you're a parent,
too often my kids will come to me with h
can I do this right? And I'm like, well, there's
(00:29):
a few things I need to know before I can
determine that. I need to know some information from other parents.
We need to take a look at your grades. I
need to take a look at three or four other things,
and then I will let you know. In this situation,
the Federal Reserve is kind of like our parents. Yeah,
I mean, there's a lot of data that they're trying
to take in to make that next decision which everyone
(00:50):
is waiting for.
Speaker 2 (00:50):
So you're saying it's a hard job.
Speaker 1 (00:52):
It's a hard, hard job. Wouldn't want this one. But
the last piece of data that our nation central Bank
has been waiting for in order to determine whether they
will lower intrast rates next week keep them the same
is inflation numbers, and we got those this morning.
Speaker 2 (01:09):
We sure did so. Headline inflation rate, that's the amount
that everybody pays for everything, sits now at two point
seven percent. What that really means is a year ago,
we are now paying two point seven percent more for things, goods, services,
whatever that might be the same.
Speaker 1 (01:24):
Things that we were buying last year.
Speaker 2 (01:25):
Just close to three percent one exactly. So the rate
actually ticked up from October by one tenth of a percent.
This is basically flat month to month, and that is
what economists predicted.
Speaker 1 (01:36):
Yeah, nobody's hair is on fire based on these numbers.
Core inflation rate. So that's going to strip out food
and energy because those numbers are always all over the place.
Speaker 2 (01:45):
Quality.
Speaker 1 (01:45):
Yeah, since at three point three percent same time from
same time last year, So pretty much flat month to month. Now,
if you want to take an even deeper dive into
these numbers, you know, shelter use, cars and trucks, what
you're paying for, furniture, medical care, new vehicles, all of
those things more expensive. And you know it's like month
to month, some things are going to be more expensive
(02:07):
than others. And if you want to look at specifically
what you're really paying a lot more your car insurance?
Have you open that bill lately. That's not a pretty picture.
Speaker 2 (02:16):
Yeah, I don't like looking at that, although although I
do make the call maybe once a year to ask
questions about, Hey, what am I paying? Why am I
paying this watch? What else could I be paying? Insie
a little activity. It's like finding treasure at the end
of a rainbow. Almost.
Speaker 1 (02:29):
In Surreify, I told you about in Surify. We use
this for our family because we have eight million teenage drivers.
Actually we have three, and we were paying an exorbitant
amount every month. I mean, I get inflation, but this
was bonkers. And we talked about in Surify on the show.
I used that website. We saved four hundred dollars a month.
(02:50):
Now they're not paying me. You know this is not
a commensal.
Speaker 2 (02:54):
Yeah, you're not a paid spokesperson. Really, you talk about
it all the time.
Speaker 1 (02:57):
There are no kickbacks here, but listen, it begs a point. Hey,
shop around, right, I mean, that's the significant savings on
an annual base.
Speaker 2 (03:05):
Maybe that's my financial mistake. Maybe I finally have one
I haven't used in all right. Wow, Well, I find
joy in doing the work myself a little bit for
this one, I really do. It's like buying a car.
I have fun buying a car because I get to negotiate.
I like to negotiation.
Speaker 1 (03:18):
I like to negotiat as well.
Speaker 2 (03:19):
But maybe I'll just try and sureify and you can
get your little kickback or whatever.
Speaker 1 (03:23):
Yeah, let me know.
Speaker 2 (03:24):
Yeah, she says, yeah, you admitted it.
Speaker 1 (03:25):
No, I'm not getting kick back up. But I want
to know if you're saving money, right, So that's one
of the things that you're paying more for. Education. We've
got a kid's tuition do in a few weeks that
that always hurts. Also, health, health costs, right, and these
are just constantly inflating at a higher pace than normal inflation,
normal expenses.
Speaker 2 (03:43):
Eggs more volatile than ever.
Speaker 1 (03:45):
Back to the eggs.
Speaker 2 (03:46):
I know I ate eggs just about every morning. Index
that their indexer is an egg index. It rows by
eight point two percent on the month. Other notable increases
in food prices beef three point one percent. Better do
I chicken though? Chicken a little bit almost half a percent.
Speaker 1 (04:01):
Yeah, So if you do your grocery list based on inflation,
that's a nice little tip there. Well.
Speaker 2 (04:05):
Another good positive or shelter costs, which account for forty
percent of overall increases But the good news is that
the report showed the recent report that just came out
showed that it had the smallest monthly increase in rent
inflation since twenty twenty one.
Speaker 1 (04:19):
So small, so yeah, so still bad, but just not
as bad.
Speaker 2 (04:24):
I'm just trying to put a positive span.
Speaker 1 (04:28):
As I was talking about the fact that you know,
many times, as parents, right, we have a lot of
data to take in in order to make a decision.
When the FED is digesting these numbers, the question is
then what do they determine? Right? Do these inflation numbers
move the needle significantly one way or another? I think
the answer is no. You know, it looks like the
(04:50):
FED will likely lower interest rates by a quarter of
a point next week when they meet these numbers. Weren't
anything shocking.
Speaker 2 (04:58):
No, No, I don't think so either. You know, this
is what Andy Stout, chief investment officer of all Worth Financial,
has been saying about a almost guaranteed that we're going
to see one more decrease and interest rates by the
end of the year. And that's that's what it's looking
like here coming up.
Speaker 1 (05:12):
You're listening to simply money presented by all Worth Financial.
I mean Wagner along with Steve Ruby from the Federal
Reserve to fear how scared are you right now about
your four oh one K and what it's going to
do in the future. There is, of course a gauge
for that. It's Wall Street so called fear gauge. It's
called the VIX. If you are someone who spends a
(05:32):
lot of time looking at how markets are doing, you've
probably seen VIX up there on that list on the ticker.
Speaker 2 (05:39):
Yeah, the fear gauge is interesting. It when you look
at the dial the NASDAK, the S and P five hundred,
you'll see that VIX VIIx sitting right there, and it
stands for this Chicago Board of Options Exchange CBOE Volatility Index,
and it measures volatility in the S and P five
hundred for the next thirty days. Obviously not exact science here,
(06:02):
but it's it's investors sentiment about what kind of volatility
we may see on the horizon.
Speaker 1 (06:07):
Yeah, so when that number is lower, it means we
feel pretty good right now, Like I mean, it's it's
not you know, Andy comes on, our chief investment officer
comes on and talks about leading economic indicators, and these
are things that okay, when these move, you would expect
the broader economy to move maybe six months later. This
is how do you feel right now? How do you
feel the next thirty days. So it's an interesting thing
(06:30):
to keep an eye on. I don't think it's anything
that you should make a financial decision based on because
it's a really sort of short term indicator. But I
guess the good news is right now people are feeling
pretty good.
Speaker 2 (06:43):
Yeah. I actually have a buddy that he will use
leveraged options against the vics and I'll put a ton
of money in for like two minutes at a time
in the market when there's.
Speaker 1 (06:56):
I feel my head pressure going up as you're talking.
Speaker 2 (06:58):
He's literally putting everything he has risk in like a
minute or two, and then he pulls it back out
right away when he sees some kind of games. That
is a terrifying project. Well, the same guy, I think
he also has a gambling problem.
Speaker 1 (07:10):
You think, I mean that's that is gambling right now?
Speaker 2 (07:12):
There is literally gambling. What you can do off of this.
It's kind of interesting what investors can actually invest in.
And I wouldn't call that one an investment. Yeah, no,
it's not, because it is just a measure of volatility,
which you know, in my opinion, it's it's really not
something we should be acting on anyway.
Speaker 1 (07:28):
Yeah, we have a new administration right coming into office
in January, and with change always comes the potential for
new policy changes. What does that mean for the market.
You know, I've had people in my office on both
sides of the Aisle wanting to make investment decisions post
election based on who's there. I'm just going to remind
(07:48):
you it takes these leagues of attorneys that these major
companies have all of three seconds to compute this person
is in office, here's what their policy is. Here, there's
our way.
Speaker 2 (08:00):
Around it here, and when you say around it, here's
how we're still going to make money. Yes, right, And
when companies are making money, that's good for the stock
market because that drives the price of stock that we own. Yeah,
So it doesn't matter who's in office, who won, the
same thing is happening here. It's an interesting dynamic because
both sides of the aisle pre election knew that the
(08:20):
sky was falling if the other side won, and there
was nothing that they could do about it, it was
just going to be the end of the market says,
we know it. Post election, it's you know, things happen.
You're on one side of the aisle, Okay, the sky
is falling, everything's over, and then the other side is
put me on in. I'm ninety years old, I'm sixty forty.
Let's go ninety percent stock because I know that things
(08:44):
are going to continue to be wonderful like they have
been the last two years.
Speaker 1 (08:47):
When we talk about something like the vics, it's more
of sort of a g whiz financial thing, kind of
nice to know how everyone's checking in right now. But
rather than looking outward, I think it's far more important
to look inward. What is my plan? And also what
are the emotions you're feeling around your money right now?
I think being able to call them out oftentimes gives
(09:09):
you power over them. For instance, it's you know, the holidays,
and you're at a party and someone's talking about so
many dollars that they made in crypto, and all of
a sudden fear of missing out or greed kind of
the same two sides of the same coin start kicking in.
Well does crypto really make sense for you? Does it?
(09:30):
I don't know, But are you making decisions about your
money based on some kind of external thing. Probably not
the best way to go.
Speaker 2 (09:38):
And unfortunately, all too often does that happen. That's another
thing that folks have been asking me about for years
is crypto, and now that it's at the price point
that it's at, you know, I'm getting more of those
questions too. It's just to keep going up, right, you know,
eventually it's going to be ten millions. So should I
get in now?
Speaker 1 (09:54):
Yeah? Well, and back to gambling versus and vest and
there's a huge difference there, you know. I still think
in a lot of cases crypto is a little bit
on the gambling end of things. Now though you can
buy crypto exchange traded funds and things like that. We're
getting more toward an investment the place where it is
(10:17):
an investment. But one of the things I think that
we do really well here on the show is give
historical perspective on investments. I don't have historical perspective for
you on cryptocurrency because no one was really talking about
it more than a couple of years ago.
Speaker 2 (10:31):
Yeah, the same thing with you know, NFTs, for example,
that's the same thought, and that one has not done
as well as now.
Speaker 1 (10:38):
I think cryptos around to stay, you know, but just
in what way, shape or form, I don't know yet.
Speaker 2 (10:44):
Yeah, speaking of volatility, just look at the history of crypto.
Speaker 1 (10:48):
Yeah, there's someone that I run into from time to time,
and he's one of those He's always out there searching
for the next big thing. Right, ran into him at
a REDS game a few years ago. He was into
pot stocks at that time. Right, And I ran into
who I Am at a holiday party last week and
he said, I lost my shirt this year. And I
was like, you lost your shirt? How the S and
(11:09):
B five hundred is up a lot this year? And
it was windmning. Uh, yes, I know, I know. And
I was like, well, did.
Speaker 2 (11:17):
He buy like a rig and set up an I don't.
Speaker 1 (11:20):
Actually even know how it works. And so we said
I lost my shirt on that. So I pulled everything
out and then I went all in on Nvidia and
it was just like, oh, yes, so many things wrong
with these conversations.
Speaker 2 (11:32):
You should tell them about leverage options.
Speaker 1 (11:35):
I've got another great idea for you. Right, please stick
with your plan, and I'm hoping that for your sake,
your plan is also well diversified. Here's the all Worth
advice making major financial moves based on predictions, indicators, headlines,
and really lead you down the wrong path. Stick with
your long term financial plan. Coming up next, interest rates
(11:56):
dropping for high yield savings accounts. So what should you
do with your dollars? Maybe keep them where they are,
move them. We're going to get into that next. You're
listening to Simply Money, presented by all Worth Financial here
on fifty five KRC, the talk station let Me Me
Wagner along with Steve Ruby. If you can to our
(12:16):
show every night, you don't have to miss a thing
we talk about. We've got a daily podcast for you.
Just search Simply Money. It's right there on the iHeart
app or wherever you get your podcasts. Everyone knows the
line from the Wizard of Oz There's no place like home,
And I think for many of us as we start
to age, we really feel that way. Would I prefer
to age at my home or would I prefer to
(12:39):
go to a nursing goo. I feel like if you
ask a room full of people, you're going to pretty
much get a.
Speaker 2 (12:44):
Unanimous response, literally unanimous.
Speaker 1 (12:46):
Yes.
Speaker 2 (12:46):
It is almost hands down that people want to stay
in their homes where they've built lives and built comfort
and built the environment around them that they've worked so
hard to achieve. So you know, it's not a surprise
that you know. ARP actually you know, does a study
and they put out the results and it comes back
(13:06):
pretty clearly that three quarters of respondents want to stay
in their home or their community as long as possible
as they age.
Speaker 1 (13:14):
I wonder the other quarter what their plan is, Like,
I don't think that's it.
Speaker 2 (13:20):
In Walk Out into the Woods.
Speaker 1 (13:23):
A post pandemic, like you know, it was the worst
case scenarios. Loved ones couldn't get to you if you
were in those places, and I think a lot more
people started to think, Okay, what do I need to
do right now to stay where I am as long
as I possibly can. I was in college when my
parents called and said they're building a new house. I
was like, oh, great, but you know, whatever works for
(13:44):
you guys, And then they said it was a ranch
and I was like, well, that's weird. We've never never
in my whole life if we ever lived in a ranch.
And you know, they were in their early fifties at
the time, and they said, well, this is where we're
going to stay for the rest of our lives, and
so they made a lot of decisions on lay out
of that house, and based on that, I thought they
were so crazy at that time. Fast forward, now my
(14:06):
mom's no longer here, but my dad's seventy six remarried
in that same home and it works really well for them.
Speaker 2 (14:13):
It's a good idea. Yeah, I mean, I've seen that
across the span of my career. People that raise families
and now it's maybe time to downsize. Everybody's looking for
a ranch and if they don't. The same study looked
at what people thought they needed to do to their
homes in order to keep them there as long as possible,
from updating bathrooms to updating access to the home, to
(14:37):
moving a bedroom and a bathroom to the first floor
where it's easier to access, so ultimately you don't have
to do stairs as you age.
Speaker 1 (14:46):
It just makes a lot of sense. And so, you know,
as people are starting to think about maybe what modifications
do I need to do, you know, thirty percent say
I'm going to relocate a bathroom or a bedroom to
the ground floor, you know, improving lighting ains. Someone actually
my office this week who built a home on a
lot of property and have just loved it, and now
(15:07):
they're like, it takes us forty five minutes to get
to the eye doctor, and you know the upkeep on that,
And so they're starting to look forward now at Okay,
let's build into the plan what a down payment looks
like for someplace different than where we are now, because
when we get into our eighties and nineties, this will
not be suitable for you.
Speaker 2 (15:27):
So some are also leaning into technology a little bit.
Two thirds of the respondents of this survey said that,
you know, they plan on implementing some kind of a
medical alert system. Forty four percent said smart security features
that will enable them to live safely and independently will
be invested in so that they can again stay in
this home as long as possible.
Speaker 1 (15:45):
I like that idea. I feel like technology has already
outpaced me. And if I'm relying on a smart something
feature when I'm in my seventies or eighties, it's probably
not going to go well. Or I'm going to have
my kids on speed dial, Like how do I log in?
And how does this work? I don't know. Do you
have a high yield savings account? As we've talked about
inflation a lot on the show. Over the last few years,
(16:08):
the silver lining in all of this has been you
can have really safe money in the sidelines, not in
the market, and make a pretty decent return upwards of
five percent on that money. Now we're in a place
where the Federal Reserve is lowering interest rates, and slowly,
or maybe not so slowly, what you're getting on those
high yield savings accounts is starting to add a little
(16:30):
bit self.
Speaker 2 (16:30):
Yeah, you can probably get emails at this point good news.
We're offering this interest rate and it's lower than the
one that you were getting before.
Speaker 1 (16:36):
Which they're not pointing out. This is half a percent
lower than you know. No one's saying that, they're just
updating you on the latest indust rate.
Speaker 2 (16:43):
It's good news. Congratulations, You'll still be getting four percent,
you know, something like that, and it doesn't matter at
the end of the day because we still need to
have an emergency fund.
Speaker 1 (16:53):
Yeah.
Speaker 2 (16:54):
This has already been short term to intermediate term money
that we've been barking at you for a couple of
years now to make sure that you're getting your cash
to work, not in the markets, not putting it at risk.
I'm talking about your short term money parked in a
place where it can at least attempt or keep up
with inflation.
Speaker 1 (17:13):
Emergency funding is the foundation of your financial plan. And
I've had people in my office who you look at
their accounts on paper and you're like, wow, yeah, you
guys have maxed out for one case. You guys have
done great, and you have three thousand dollars in checking
in savings. And what if something happens, where are you
going to pay for that?
Speaker 2 (17:33):
You know? Right?
Speaker 1 (17:34):
And so we say three to six months of critical
expenses when you're working. And then when someone gets closer
to retirement, one of my strategies is let's increase those
emergency reserves so that if if markets do go south,
we don't have to pull distributions out at a loss.
We can turn off that spicket, live off of that
emergency reserve until markets go back up, which historically inevitably
(17:58):
they do.
Speaker 2 (17:59):
Yeah. It's different during your accumulation phase of retirement because
in that period of time, you're still earning money, so
you're not needing or you shouldn't need to tap into
retirement money in that situation, and the emergency fund. The
three months is for a double income household, six months
is for a single income household, and then when you
make that transition in retirement, there's no income coming in
(18:19):
from work, which is why you need to kick that
emergency fund up a notch. And in that situation, this
is a perfect example of when you use high yield
savings accounts or maybe CDs or treasuries to keep that
money working for you a little bit. Now as interest
rates fall. I know there's folks I've been working with
that are saying, all right, well, maybe I should take
(18:40):
my emergency fund and put it into my brokerage account.
It's like, let's pump the brakes a little bit on
that one. You still need to have liquid cash to
buy yourself time in the event of emergency, or so
that you don't have to take on debt if you're
still working.
Speaker 1 (18:53):
But I do think there are people who kind of
had this false sense of security and these high yield
accounts over the past few years of I can pull
more money out of the markets, this account's likely still
going to outpace inflation. I'm going to make money on it.
Right You're making a lot more than point zero zero
zero zero six percent that you are making several years ago.
But I think what you have to do right now
(19:15):
is take a really critical look at the money that
you have on the sidelines. How much do you need
an emergency fund? And then beyond that it probably does
need some market exposure.
Speaker 2 (19:24):
Yeah. Absolutely, And the same thing happened when interest rates
went up. People are like, oh, should I take money
out of the markets and put them in the cash
so I can get guaranteed return?
Speaker 1 (19:34):
Yes.
Speaker 2 (19:34):
Those that did that missed out on large opportunity cars.
Speaker 1 (19:38):
Stick with your plan. Here's the all Worth advice. Interest
rates might be a little lower now, solid investing principles
those remain the same. Thanks for listening tonight. Next we've
got NKU basketball Go North. You've been listening to Simply Money,
presented by all Worth Financial here on fifty five KRC,
the talk station
Simply Money News
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!