Simply Money

Episode Transcript

Speaker 1 (00:06):
Tonight perspective on all of this tariff talk that you're
not going to hear anywhere else. You're listening to simply
money presented by all Worth Financial, I mean Wagner along
with Bob Sponseller, President Trump is calling this Liberation Day
right the day that the US is going to begin
imposing new taxes, new tariffs unimported goods. Now, we've talked

(00:28):
about this, you know, on the show Bob for weeks
now in preparation of what might be coming. And I
think it's important to note one thing we've said from
the beginning, and I'm going to give and Andy Stouts,
our chief investment officer, credit for this. He said, Listen,
if we move forward with tariffs, there would be three
reasons why President Trump would be looking at doing this.
Number one is to get countries to the negotiating table

(00:50):
that won't come to the table. We've seen that in
the case of Mexico and Canada. Number two is to
offset unfair trade practices that have been going on for
a long time. I think we have now moved from
the number one reason why we might have tariffs into
number two, which is, hey, we're going to go ahead

(01:11):
and impose these tariffs because there have been some unfair
trade practices going on historically, and we're going to address
them now.

Speaker 2 (01:20):
Yeah, I think that's spot on. I mean, I remember
back at the beginning when all this started, we were
talking about, you know, negating with Canada and Mexico. He
wanted the border controlled and he wanted fentanyl controlled, and
we thought this was just going to be a short
term negotiating tactic. The border seems to be pretty secure
right now. We aren't hearing a whole lot about fentanyl

(01:40):
right now. So yeah, I mean, we're going in April now,
and so we're we're firmly into a policy that is
trying to get some balance or rebalance on trade on
trade policy, and it's going to be real interesting how
all of this plays out.

Speaker 1 (01:57):
You know, I was joking on the show yesterday, There's
certain things that I've never had to talk about, even
though I've been doing this for ten years. One of them,
we've been talking a lot about eggs lately. Tariffs, though,
are not new to me. We have been talking about
tariffs on the show off and on for years. Think
back to twenty eighteen, the steal and aluminum tariffs, right,
companies and construction and automotive industries, right, they had to

(02:19):
pay more for materials. The goal was to bring that
production here to US shores. Or the China trade war
tariffs that raised costs on everything from electronics to farm equipment.

Speaker 3 (02:31):
Right.

Speaker 1 (02:31):
The goal there was that China had not only unfair
trade practices, they were trying to steal secrets of US
companies and how we produce the goods that we make.
And in President Trump at that time put his foot down.
But to the point, we do have short term memories
sometimes for these things, not saying that we have been

(02:54):
through this particular round of tariffs or maybe anything on
this level before. But this is certainly nothing new to
the American economy.

Speaker 2 (03:04):
No, it's nothing new. But what is new, you know,
taking it to a whole other level, you know than
the Trump policies back in twenty seven, twenty seventeen to
twenty eighteen, is he's trying to bring jobs permanently back
to the United States. And I think he's trying to
get somewhat of a permanent reset with with our trading

(03:25):
partners around the world. So the challenge and the needle
that the president has to try to thread here in
my opinion is in the short term, businesses have to
make adjustments for tariffs, and you got to make decisions
on where you're going to put your plants and facilities,

(03:45):
what the cost of shipping is, you know, all those
kind of things that in the short term can be inflationary.
And we've already heard, you know, a couple of trillion
dollars versus you know worth of capital investments coming back
in the United States, build new plants and all that.
It's going to take some.

Speaker 1 (04:03):
Time for those plants to get.

Speaker 2 (04:04):
Built, the jobs to get created. That takes some time.
And I think the President has very faintly acknowledged that
the keys going to be here. You know, are there
current Are there continued negotiations that are going on that
would list some of these tariffs. I don't know, but

(04:26):
I think the President is putting his feet in the
ground here saying, you know, whether it's value added taxes
or tariffs that have been placed on US goods over decades,
he wants to get rid of that stuff and ope
have a truly free trading market across the globe. And
it's going to be real interesting. You know, whether we
can pull that off without a sustained recession and without

(04:51):
sustained inflation. And I think that's why everybody, including the FED,
is just sitting out there and saying, well, let's see
what happens.

Speaker 1 (04:57):
Yeah, And I think it's important right to leave your
car or wherever you're listening to these shows tonight and
go into the boardrooms and the C suite conference rooms
of these large American companies and understand what kind of
conversations they are having at this point right They're trying
to figure out, Okay, how do we get these products cheaper?

(05:19):
You know, are there going to be supply chain disruptions?
Right if if tariffs are imposed on a key component
that you are buying from overseas, that can delay production,
it can raise costs even further. In what is what
is the margin? Maybe we have a slightly thinner margin
on what we're on what we're making in profits, but

(05:40):
also at some point we're going to pass this on
to consumers. These are the conversations that are going on
right now at the at the company level, right trying
to figure out, Okay, how do we digest this information
and do the best with it that we can? And
Bob I think you make an excellent point. There's going
to be stages of this. There's going to be the

(06:00):
long term maybe we do move production companies products right
back here to the US long term, but in the
short term, we have to continue to make these products now,
and we have to do it still for the cheapest
price that we possibly can. You're listening to simply Money
presented by all Worth Financial, I mean you Wagner, along
with Bob Sponseller, President Trump is calling this liberation day, right,

(06:23):
this is the day that tariffs are officially imposed at
the level we've been talking about here for several weeks.
We are not in freak out mode at all. We
are explaining, first of all, some historical perspective on these
and also oftentimes what we'd see with tariffs is more
short term pain, and I think it's really important as

(06:44):
a long term investor to understand what we might be
looking at short term here and also longer term.

Speaker 2 (06:53):
Yeah, and just to piggyback on my prior point, I
think a five percent decline in the S and P
five hundred and a ten percent to client in the Nasdaq,
that is a normal pullback, okay, And to me, and
I'm just sharing an opinion. That's a normal pullback that
demonstrates the financial markets do not expect a catastrophe here.

(07:13):
They don't.

Speaker 1 (07:14):
That's a fact. It's not even an opinion, right, a
normal pullback, normal entry year pullbacks on averager about fifteen percent.

Speaker 2 (07:22):
Yeah, and then I'll share another opinion. I think we're
all naive if we don't think President Trump and his
staff are in constant communication with the main global business
leaders around the world to try to talk about what
is and isn't going to go on here. So I
still think that there's gonna be some negotiation and some

(07:46):
stability come out of this. Five to ten percent is
not a big deal. But if we start to get
back and forth reciprocal tariffs and a trade war, that
can get ugly. And my personal opinion is I I
don't think the President is going to take us there.
But again that's an opinion. We're all in weight and

(08:07):
see mode right now.

Speaker 1 (08:08):
Yeah, yeah, I mean, you know Ed Fink, right, one
of our founders has always said if things escalate to
a trade war, that's a war. Nobody wins. Nobody wins
a trade war. We're not there. And I also want
to share some perspective that I can almost guarantee you
no one else is talking about, and this is there
can be some short term positives in this as well.

(08:31):
Certain domestic industries right like steel or agriculture might now
get a boost.

Speaker 3 (08:36):
Right.

Speaker 1 (08:37):
Maybe they weren't necessarily the cheapest price before. Maybe you
could have gotten soybeans cheaper out of China, and now
all of a sudden, we're going to focus on where
can we get soybean's cheaper here in the US? Right,
So this could be potentially a boon to certain industries here.
There's also some companies that can benefit from government subsidies
that are meant to offset the impact of these tariffs.

(08:59):
And also, hey, investors, we overlook this all the time.
We freak out when markets go down and we miss
the buying opportunity of getting our hands on stocks of
some great, great American companies at a discount they are
on sale.

Speaker 2 (09:19):
Now you make some excellent points, Amy, And just as
a reminder, all of these countries around the world have
many birds they can pull to influence their economy, from
value added taxes to tariffs, to currency manipulation to federal
reserve policy. That there's a lot of ways you can
move levers here to make adjustments to things that are

(09:41):
going on with global trade. And it always comes back
to your time horizon, to your point here, Amy, if
we look five, ten, fifteen years down the road, this
is all going to work out. Companies are going to
make money, profits are going to be fine, the market's
going to be up. It's how do you plan for
these potential short term disruptions like what we're experiencing right

(10:02):
now that can make a difference. And that goes back
to our point that we've been talking about at nauseum
now for months. This is when the benefit of having
a true financial plan comes to light. Do you have
your emergency fund? Do you have a bucket of short
term funds available to you where you don't have to
sell things that are in the stock market when the

(10:23):
market's temporarily down. Those are the kind of things that
we're talking about with our clients to help navigate them through,
you know, times like this.

Speaker 1 (10:32):
In part of the conversation that I'm also having with
my clients right now is there is so much focus
on these tariffs and the potential for trade war, and
it can be anxiety producing. What you have to understand
is that over time, companies will absolutely adapt to this.
They always do. If they need to find new suppliers,

(10:53):
if they need to automate more, if they need to
shift production to other countries, they absolutely will. The real
drivers of this stuffock market and this is where the
focus needs to be with these companies' earnings. How are
they going to innovate, How are they going to find
their ways around this and continue to grow? And what
you have to essentially understand it all boils down to

(11:13):
corporate greed. They will find a way to make money,
and as an investor in the stock market, that's what
you're betting on.

Speaker 2 (11:22):
Yeah, companies are always going to look for the way
to their cost of goods sold go low, whether that's labor, shipping,
you know, tariffs, you know, they're looking for ways to
reduce input costs so that their profits can be higher.
And that's you know, that's what's going on right now,

(11:42):
and that's why we're experiencing some of this uncertainty is
some company they don't they don't know what policy's going
to be. So it's very hard to put three, five,
ten year plans in place when we don't know what
these tariffs really are and aren't going to be in
the more intermediate to long term.

Speaker 1 (11:58):
Here's the all Worth advice. Yes, tariffs make headlines and
they also create some short term noise, but please don't
make or break your retirement plan here. Stay focused on
what really is going to build wealth for you. Consistent investing,
smart planning, and also sometimes just tuning out all the
noise or at least fully understanding it. Coming up next
to the pros and cons of getting a monthly check

(12:21):
for the rest of your life. We're not talking about
a pension here. We'll explain. You're listening to Simply Money
presented by all Worth Financial here on fifty five KRC,
the talk station. You're listening to Simply Money presented by
all Worth Financial. I'm Amy Wagner along with Bob Sponseller.
Coming up, We've got some great questions from you. Want

(12:42):
to tune into these because some of these could apply
to you as well. We are asking the advisor. We
talk on the show about a concept that for many
of us does not exist anymore when we're talking about retirement.
That is a three legged stool for retirement. Essentially, you
would have three different options to lean on in retirement,
you would have the governments in the form of Social Security,

(13:05):
you would have what your employer was doing for you
in the form of your pension, and then you would
only be on the hook for a third of that
in your own retirement savings. Well, Bob, what we see
now as more of reality as about a one and
a half leg it stole for people. Gone are the
days of pensions. Social security is a little bit shaky

(13:26):
right now, and I think there might be a lot
of workers out there who are trying to figure out okay,
but how can I make sure that I'm going to
be okay in retirement? And the thought of some kind
of guaranteed income can feel and be incredibly attractive.

Speaker 2 (13:41):
Absolutely, And what we're talking about here is we're seeing
more and more companies start to use what are called
hybrid target date funds in their four one K and
retirement plans. And Amy, I completely understand the rationale behind this,
and I think I've shared before as someone who used
to be someone who used to be in a advisor
to several you know, medium to fairly large size four

(14:04):
oh one K plans, I remember standing in front of
those employees every year and only being given thirty minutes
to kind of walk them through out a plan for
their retirement. It's a huge challenge. And I know that
a lot of people that don't care about the movement
of the markets every day and you know, tariff policies
and interest rates. They just want to go to work

(14:25):
for thirty to forty years and know that if they're
responsible and put their money away, they're going to have
a paycheck when they retire. And that's a very valid
way to look at things.

Speaker 3 (14:37):
You know.

Speaker 2 (14:37):
Unfortunately the world has gotten a little more complicated. So
what's coming out more and more now is this hybrid
approach where these four toh one k plans are using
target date mutual fund you know plans that we've talked
about before where you got your stocks and bonds portfolio,
building wealth over years and years and years, and then
flipping that over to some type of a guaranteed income

(15:01):
annuity at retirement to kind of recreate or replicate that
what used to be a pension paycheck. You know, we're
seeing that more and more, and unfortunately that just creates
more and more complexity for these employees because they don't
know how to evaluate these things.

Speaker 1 (15:20):
I am working with some clients right now who are
in their thirties, and we are working on Okay, what's
the smartest investment strategy for you right now? And I said, hey,
can you send me the options in your current four
oh one K and let me look at it and
see what's in there and see how we can, you know,
attempt to recreate what we're doing here at all worth
with your current investment options and your four one K.

(15:42):
They send over the options and I'm like, oh my goodness,
they were almost all target date annuities. Here's the problem
with that. So, say you're in your thirties or forties
and you are saving for retirement. I often come across
clients to have other sources of income in retirement. They

(16:03):
have other assets, maybe outside of retirement plans that they
can live off of, or they just tend to be
frugal and they don't necessarily need a stream of income
coming from coming from their retirement plan. So now they're
kind of forced into this corner. They've been saving in
this way all these years. And I do think there's
more flexibility in these than maybe just your average annuities

(16:24):
where you're locked into a contract and it is what
it is once you've put funding into it. But I
don't like the fact that we could be making choices
we were in our authorities that could then limit choices
further down the road.

Speaker 2 (16:41):
It's always great to have choices, and it's great to
have options, including these guaranteed income options. We're not saying
that that's not a good thing to have. The challenge
here is if you're evaluating something like this and you're
getting close to and I'm talking about within five years
of retirement, you really do need to sit down with
a good fiduciary advisor to help you navigate through what

(17:05):
your options are. Because the default choice that a lot
of people make when they look at these annuity options,
they're going to gravitate towards the thing that gives them
the highest monthly paycheck. That's just human nature. But what
you got to look at is, well, how long is
that paycheck going to last? You know, is it a
term of years, is it for just life? What's the

(17:26):
survivor benefit for your spouse. There's a lot of moving
parts in these things that you got to evaluate before
you pull the trigger on this, because sometimes amy once
you sign up for it, it cannot be changed. And
so again, please, if you're within four to five years
of retirement and you're evaluating these type of options, get

(17:46):
with somebody, a good fiduciary that can walk you through
these choices so that you're not regretting the decisions you
make at age sixty two when you're eighty two and
there's no do overs.

Speaker 1 (18:00):
Please hear me on this. More investors than not spend
a lot more time planning your summer vacation than you
ever do understanding the options in your four oh one K.
And the problem is, bob to the point about the
then all of a sudden you're sixty two years old
and you're looking at it and you're like, wait a second,

(18:20):
did this even make sense for me? Was this the
right choice? Maybe I'm going to go in a different
direction here, And so it is important now to know
what your options are in your four oh one K
and what makes the most sense for you. If you
can make heads or tails of that on your own, great,
spend the time doing the research right, and don't just

(18:41):
look at how that funded last year.

Speaker 3 (18:43):
Right.

Speaker 1 (18:43):
You have to be well diversified because last year's winners
or this year's losers and last year's losers can often
be this year's winners. So don't just look at last
year's return.

Speaker 2 (18:52):
Well, and we're seeing that in real time right now.
Any of the things that have been going gangbusters for
the last three years are really lagging this year. And
the stuff that nobody wanted to talk about for the
last three years are the things that are actually up
this year.

Speaker 1 (19:07):
Yep. And so you you have to know what you're
choosing in that for a wing k if you are
twenty two or sixty two or anywhere in between, to
make sure that it truly makes the most sense for you.
I agree, I like more options. I like that you
have this option, but you have to evaluate whether it's

(19:28):
the best thing for you before you just start piling
dollars into that account out of your paycheck every month.
Here's the all Worth advice. This is a situation where
you definitely want to meet with a fiduciary financial pro
before you're making any decision right on the best investments
for you and for your retirement. Maybe it is a
hybrid hybrid target dat fund, but maybe it's not coming

(19:50):
up next. Check on the local housing market. Is it
time to sell or buy or stay put? We'll get
to that. You're listening to Simply Money presented by all
Worth Financial here in fifty five krz the talk station.
You're listening to Simply Money presented by all Worth Financial.
I mean you Wagner along with Bob sponseller. Maybe this
is the year for you. You're gonna sell your house and

(20:11):
buy another one. How is the real estate market looking
right now? Joining us, of course, with her brilliant perspective
on this is our real estate expert, owner of Remax Time,
Michelle Sloan. Michelle, this is typically right the time of
the year when things start to heat up.

Speaker 3 (20:27):
So are they They absolutely are. We are seeing the
last two to three weeks we have seen an influx
of appointments, people talking about listing their home, people wanting
to buy a home. A lot of activity going on,
which is extremely exciting because after the winter that we
have had and the January was so cold and so slow,

(20:50):
we are so excited to have a really busy spring.
And spring does usually start in March.

Speaker 2 (20:58):
We saw it.

Speaker 3 (20:58):
You know, we're just a hair delayed this year. But
the good news is we've had seven hundred new listings
on the market just in the last seven days in
the Cincinnati market, so we're definitely seeing the number of
listings tick up. We're also have great news. As of yesterday,
most mortgage interest rates decreased and our fixed strate for

(21:21):
a thirty year fixed rate is down to about six
point five percent, and so that is really good news
for our industry because when those mortgage rates hovered around
seven percent, we saw a real slowdown because people that
are holding those mortgages that are in the fours and lower,

(21:42):
they don't want to make a move. So with the
rates coming down to six and a half, I think
that's going to help hopefully stir up some action.

Speaker 1 (21:51):
Okay, so Michelle, you know I have felt really sorry
the past few years for first time home buyers. It
has just not been the kind of market that is
kind to them. Is this maybe a better time for
first time home buyers to jump in? And also what
mistakes have you seen that maybe they can learn from?

Speaker 3 (22:11):
Well, the biggest thing is you really need to do
your homework before you even start like attempting to look
at properties, because no more often than not, if you
have your mindset on a property and it's out of
your price range, you are always going to want what
you cannot have, so you know, it's really really smart

(22:32):
and right now with the mortgage rates at six and
a half, maybe you couldn't afford a home that you
really wanted last year, but now you can. It's going
to really make a difference in how much you can afford.
And so it's always smart to Okay, I looked a
year ago, nothing ever came of it. Maybe I wrote

(22:53):
a couple of offers, but now let's see what my
income and everything in my world. Maybe you've had a
chance to save a little money, so it's now is
the time to do that planning that getting that pre approval.
Never ever, ever, you can't skip a pre approval because
quite honestly, most real estate agents won't work with you unless.

Speaker 1 (23:15):
You have it.

Speaker 2 (23:17):
Michelle, it's first of all, it's great to see that
things are starting to move again and listings are up.
I'm assuming seasonality has somewhat to do with it, but
those those interest rates are certainly going to move the needle, right,
Is there any particular price point in the market that
you're seeing move right now, you know, any particular segment
that's standing out to you.

Speaker 3 (23:39):
Well, Actually, it's really interesting because the number of homes,
and you know, I do searches, and I have buyers
in all different price ranges. The ones that are really
the price ranges that are struggling, that will always struggle
is anything under three hundred thousand dollars in the Cincinnati market.
That's supposedly the average sale price, right. But at the

(24:02):
same time those homes, there are certainly a lot more
buyers for homes in that price point. So we are
seeing multiple offers, we are seeing again so many buyers
get frustrated, and so my advice is don't give up.
You know, make sure that you have all of your

(24:22):
ducks in a row, and you know, be ready to
fight if it is the one. But then one of
those things that is on my list of frequent mistakes
is don't let the emotion of the home search get
away from you, because honestly, it's very, very easy to

(24:42):
get emotionally attached. And if you're in a bidding situation,
there's a little bit of a frenzy going on, and
you are thinking, Okay, what do I do. Should I
bid another five thousand dollars so that I can have
this house? But can I really afford that? There's a
lot of questions, and hopefully your real estate agent is

(25:02):
going to make sure that you don't get yourself into
hot water when it comes to overbidding on a property.

Speaker 1 (25:09):
Michelle and listening to you, and I'm thinking about a
few This was several several years ago. Everyone was talking
about everything but the house, and I would get on
there and like, Oh, here's this whatever pottery barn rug
and you know it's it's a good price, and then
I would get into bidding war and end up getting
so emotional about it. If I had actually like pulled
the trigger on the purchase, I would have paid more

(25:29):
for it it's a used drug than if I had
just gotten a new one. Point being, it is really
easy to go into these things and get emotionally attached
to them, which is why I think it's really important
to be working with the professional so that you have
someone else's voice in your ear and in your head saying, hey,
I get that you love this one and maybe it's

(25:51):
the perfect kitchen for you, but let's talk about actually
how this would impact you financially and if you can
really make it work.

Speaker 3 (25:58):
Absolutely no question about it, and it is important. So
my philosophy has always been for the last twenty years
in real estate. Is let's tell the truth. Let's work together.
We can't sugarcoat things because it is a lot of money,
the biggest purchase you may ever make. So let's talk
about the facts. Of course, you're going to love it,

(26:20):
and you're going to you know, you can't wait to
put your furniture in and hang curtains and do all
of the fun stuff. But if you get in over
your head and you don't know what the finances are
going to look like, maybe you don't even factor in
the fact that you have to pay taxes. You have
if you're renting now, you don't know this. You have
to pay taxes, you have to pay for your utilities,

(26:41):
and there's a lot of extra expenses and upkeep that
when you buy a home you have to consider.

Speaker 2 (26:48):
Mischa back to that first time home buyer. And I'm
asking this from the perspective of a dad who's Two
of our three kids bought homes within the last six months.
And I watched this process go through, and one of
our kids got some good advice from a real estate
expert and one not so much. I know, you've got

(27:08):
proven strategies that you walk your clients through in this area,
and I'm talking about as part of the negotiation, the
whole inspection process and how thorough you need to be
on that. Talk about talk about how you help your
clients go through that process, because it, in my opinion,
it's critically important to know what you're buying on the
front end so that you don't get stuck with some

(27:31):
unexpected cost after the closing's done and everybody's moved into
the home.

Speaker 3 (27:37):
Absolutely, the inspection is very important now oftentimes because we
are seeing multiple offers again and over the course of
the last couple of years, we have seen a lot
of buyers waving inspections first time home buyers. That's something
that I don't necessarily want you to do completely waive

(27:58):
that inspection. Now there will be other buyers most likely
willing to do that. But that also leads to, like
you said, unexpected costs after the purchase and that's all
on you.

Speaker 1 (28:11):
Yeah, So that's why it's important right to work with
a professional who can help lead you through this process.
Great insights from a real estate expert, Michelle Sloane. You're
listening to simply Money presented by all Worth Financial here
on fifty five krs. The talk station you're listening to
Simply Money, presented by all Worth Financial, I mean E.

(28:32):
Wagner along with Bob spond Cellar. Do you have a
financial question You and your spouse not on the same page.
You think you're right, they think they're right. We'll help
you figure out who exactly is right here and the
best way forward. There's a red button you can click
them while you're listening to the show. It's right there
on the iHeart app. Record your question and it's coming
straight to us. Speaking of your questions, we've got some

(28:53):
really good ones for you right now. First one is
from Mike in Columbia Tusculum.

Speaker 2 (28:57):
I'll pass my assets to my children, of them with
estate taxes or creating dependency issues, you plan well, Mike
will just set aside the estate tax issue at this
point there is no inheritance tax in Ohio and the
federal estate tax you know, threshold is very very high.

(29:18):
So I want to focus on the dependency issues. The
way to not create dependency issues for your kids should
be taken care of long before you pass away and
leave assets to them. It's now it's teaching them how
to handle money and to not be dependent on the
bank of mom and dad. Now you want to see

(29:39):
evidence that they can go out and handle their own
finances on their own so that they don't have dependency issues.
Because once you leave these assets to them when you
pass away, if they've got dependency issues and they don't
know how to handle money, that money tends to evaporate
very quickly, which defeats the whole point that I think

(29:59):
you're trying to acomplish here in being a good steward
of your assets for your kids.

Speaker 1 (30:04):
Yes, so many thoughts on this. First of all, like,
there are ways that you can set up a trust
that you can get you know, X dollars by you know,
when you turn thirty, and then this much way you
can do that all day long. But Bob makes the
better point here. Let's educate our children. Now, Let's teach
them what our morals and our values are when it

(30:24):
comes to money, so that we don't have this concern
and we're not having to sit down with a stranger
in the form of an estate planning attorney and say,
help me not let my kids take advantage of this
situation and be a hot mess after I'm after I'm
gone with the assets that I'm leaving them, so the
planning is now. I also want to say, whatever you

(30:45):
land on with your estate planning, communicate that to your
children so that they do know what to be expecting.
And I would say kind of another component that I
am talking about with my clients, and this is on
a daily basis, and it's not part of your question,
but it is where kind of just putting in the
back of your mind is how your kids might have
to pay taxes on what they inherit. And there are

(31:06):
some strategies that you can employ now where that inheritance
could be less of a tax burden. So if your
advisor that you're working with, or if you're doing this
on your own and you've never considered that before, I
also think that needs to be a large part of
the consideration when you're thinking about, Okay, what's going to
happen to my money when I'm no longer here. Let's

(31:27):
get to Brad's question. Now, Brad's and for Thomas, how.

Speaker 2 (31:30):
Can I set up a family foundation or donor advised
fund to give strategically, well, Brad without painting with too
broad of a brush here, I see very very few
family foundations being set up, and the ones that I've
seen set up over the years are for families that
have a tremendous amount of wealth where you know it

(31:51):
does make sense to you know, hire the attorneys and
pay the accountant fees and all that to run a
foundation year after it can get very complicated and very expensive.
What I see most people use, and what I use
personally is a donor advice fund and the flip side
of that family foundation. Donor advice funds are extremely simple

(32:14):
to set up, and they're extremely simple and easy to navigate.
So that's that's the direction I would I would go there.
And the strategic part is we talk about this a lot.
You can get all the tax benefits of making a
gift to your donor advice fund without actually having to
give away the money to charity. Now you can warehouse

(32:35):
that money, get all the tax benefits now, the tax deduction,
the capital gain, tax avoidance, and then decide over time
how you want to allocate and distribute those those funds
to charities that you know that you care about.

Speaker 1 (32:49):
Great example of this, Bobby and I were just at
a conference where there was a keynote speaker who was
a veteran, and he was a quadruple amputee and the
the coolest person you can ever come across. His story,
his courage, his outlook on life is just amazing. We're
all sitting here in the audience, not a dry eye.

(33:11):
You and I were sitting by each other. We're looking
at each other like, wow, Wow, this is this is
pretty amazing. Right, Someone who was sitting by us at
the end of the speech, after this guy finished his talking,
is like, I just gave money to his foundation from
my donor advice fund from right here in my phone.
Some money was sitting there. It's kind of in a
waiting room, you know, a charitable donation waiting room, and

(33:34):
in that second he made that transfer and the money
went to that organization. Really easy to use and can
be incredibly impactful. Let's quickly get to Rob and Madeira.

Speaker 2 (33:44):
What's your approach rebouncing my portfolio?

Speaker 1 (33:47):
How often and under what circumstances.

Speaker 2 (33:51):
Well, there's a few things that we consider, and by
we I mean our whole team here at all Worth
Andy Stout, our chief investment officer and his team. One
of the things that we look at all the time
is the tax impact of rebalancing, and that's why we
really talk about all the time, and we implement that
tax loss harvesting type of strategy, especially during volatile market

(34:13):
periods like we're having now. So one reason to be
rebalancing is just to take advantage of the tax situation.
Another is in periods like what we've had the last
couple of years, where you're maybe sixty forty seventy thirty
portfolio because of really healthy stock market growth morphed into

(34:34):
a eighty percent ninety percent allocation to stocks, and that's
the time to do what a lot of people hate
to do. Sell high rebalance, reallocate into some underperforming asset
classes like bonds which nobody wanted to own for the
last three years, and voila, you get into a situation
like we're in now and the rebalancing is working beautifully

(34:57):
from the standpoint of controlling market volatility and maximizing total return.

Speaker 1 (35:04):
Yeah, this is not a weekly or a monthly endeavor,
but yeah, once a year I at least pay attention
to right if there is portfolio drift, and then look
at rebalancing coming up next. How would it sound to
you if you could pay nothing in taxes on part
of your investments. Bob's gonna tell us about that. In

(35:25):
Bob's World of Wealth. You're listening to Simply Money presented
by all Worth Financial here on fifty five KRC the
talk station. You'll see too, simply Money presented by you
all Worth Financial, I mean you Wagner, along with Bob's Sponsorller.
It is time Bob's World of Wealth. This is a

(35:46):
great thing to talk about too. Today.

Speaker 2 (35:49):
Well, Amy, I'm gonna touch on a topic that you
and I have both been dealing with with some clients
in our office recently, and that's the whole concept of
how do we deal with a concentrated stock position like
that we'd like to diversify out of. But those pesky
capital gains taxes are keeping people from want to pull
wanting to pull the trigger, I think a lot.

Speaker 1 (36:11):
Pardon me, back into a corner.

Speaker 2 (36:13):
For sure, And what I want to do is help
people understand that it's not such a big corner if
you understand how the current tax laws work and navigat accordingly.
What I'm talking about here is for Mary, filing jointly
couples for taxable income in twenty twenty five of ninety
six seven hundred dollars or less, your long term capital

(36:35):
gains rate is zero zero. So you know, for folks
that have inherited that stock that they just felt like
they could never get rid of and what have you,
we are finding good opportunities right now to just take
chunks of that each year and gradually diversify out of
that concentrated stock position with zero tax impact to the

(36:59):
c And I think people are surprised and very pleased
when they see how we actually build a plan to
take advantage of that opportunity in the tax law.

Speaker 1 (37:10):
Yeah, this is very doable for a lot of investors
when you no longer have your regular paychecks coming in,
so this could be a great opportunity. You know, I
often refer to it as kind of the golden window
where you might want to look at roth conversions. But yeah,
to your point too, you've got a large concentrated position
and a taxable account and that's thrown off a lot
of gains. This is a great time to start moving

(37:32):
out of that position. And again, if done the correct
way right, you may not have to pay taxes on
that money.

Speaker 2 (37:40):
Well, in some of that some of that money can
be used for just biller household operating expenses as opposed
to having to take money out of an IRA or
four to one K plan where every penny of that
is taxes ordinary income. So there's multiple ways we can
take advantage of this. It's not a loophole. It's just
facts embedded in the tax code that I think a

(38:01):
lot of people aren't hearing about, and I'm finding people
are surprised when we're able to walk them through that.

Speaker 1 (38:08):
There's a shift right when you are making a paycheck
still from that accumulation phase, you're not worried about where
money's coming from. In retirement, you got a paycheck coming in.
It is a very different place to be on the
other side of things in using the correct strategy that
only can help you maximize what you've saved, but also
keep more of it in your pocket. So you need
to be thinking through these things. Great points. Thanks for listening.

(38:30):
Tune in tomorrow we're talking about how to manage by
the way those concentrated stock positions more options for you.
You've been listening to Simply Money presented by all Worth
Financial here in fifty five KRC. The talk station