Simply Money

Episode Transcript

Speaker 1 (00:07):
Tonight, why those with plenty of money still feel stressed.
I'm Bob sponsorer along with Steve Ruby, Amy Wagner joins
us for the second half of our show tonight. Here's
a question we've heard a thousand different ways over the years.
Why am I still anxious about money when I'm financially fine.

(00:29):
The checking account looks good, the retirement accounts are healthy,
But inside there's still this tension, like you're waiting for
the other shoe to drop. We've saw a recent study
that came out from bank Rate that provides some real
good reasons why this stress is out there among a

(00:49):
lot of well healed investors. Steve, let's get into that
a little bit.

Speaker 2 (00:53):
Yeah, it's interesting when you look at the data from
this study because it shows that half of Americans say
money negatively affects their mental health. And this includes people
that are doing just fine financially, those with strong incomes,
even with growing portfolios. So that's what we're going to
get digging in today, because you know, money stress doesn't

(01:14):
disappear when the paycheck gets bigger. In some cases, it
can actually grow if you're not properly prepared to handle
this increase of cash and assets.

Speaker 1 (01:26):
The first source of this stress has to do with
what we'll call the guilt factor. It's amazing how many
people feel uncomfortable having money, having wealth, especially when others
around them are struggling. So we hear people say I
don't feel like I deserve this, or I'm embarrassed to
talk about what I have With our family. It's a

(01:47):
topic that actually comes up in conversation. Ste Oh, it
sure does. I mean parents, I've seen it situations where
they feel bad if they can afford to retire early
while their adult children are still kind of figuring things out,
finding their own way in the world, reaching their own
financial freedom. And this guilt can actually be kind of
an invisible weight that you carry around. It can lead

(02:12):
to paralysis with decision making, over correcting, giving too much,
spending emotionally. I mean there's a lid of leaving the
bank of mom and Dad open a little too long, yeah,
or of just avoiding financial reality all together. I mean
that there's a lot of issues that can come from
the guilt factor. Yep. The next one we want to

(02:32):
cover this is a big one. Treating money is our
personal identity.

Speaker 2 (02:37):
Yeah, if you think your net worth is your self worth.
That's kind of dangerous ground. If your confidence is tied
to your portfolio, you balance, or the valuation of the
business that you built, you'll never really feel secure even
when you're doing well, because the bar keeps moving. You know,
you reach a goal and then you invent a new one.
You know, now I need two million, now five, now ten.

(02:59):
There's always something that you're reaching towards that creates that
stress that will never go away. You know, you're in
a situation like this where money is your identity. You
kind of live for the future and not the present,
and financial planning I always tell folks I work with
is about finding a balance between maintaining a current lifestyle

(03:20):
that you've grown used to and enabling you to continue
to live that way in the future. So it's a
balance to make sure that you're enjoying yourself today, not
just when you're no longer working.

Speaker 1 (03:33):
Yeah, and we can see this not often, thankfully, but
it does come up. You know, this whole issue of
treating money as your personal self worth and personal identity
can spill over to some dangerous character qualities. I love
what one of our co founders at all Worth, Pat
McLain has said I've heard him say this more than once,

(03:53):
is like, hey, if you were a jerk when you
didn't have any money, you're probably a bigger jerk once
you a man a lot of money, and that speaks
to you. You know, money doesn't build character. It tends
to reveal it. Right.

Speaker 2 (04:06):
That's a funny guy, isn't he. He's got some good
stories and some good comparisons. I like that one. You know,
that's a good point because money, it can change you
or it can show people who you really are.

Speaker 1 (04:22):
Another thing that we run into amongst folks, you know,
again dealing with the psychology around money, is money tends
to be It causes stress because people want to be
in control of every aspect of their life and they
don't like uncertainty. And the financial markets obviously, as we've
seen already this year, can be very uncertain in the

(04:43):
short term.

Speaker 2 (04:44):
Yeah, I mean, wealth creates complexity, you know, when you
have more money. It's interesting because some of the you know,
I work with a lot of Henry's high earners not
retired yet and and you know, as income increases significantly,
as they receive maybe equity compensation packages, maybe they have
RSUs coming do that just kick them in the teeth

(05:07):
with some additional income. You don't realize it, but you
know what you do when you're in it. But these
challenges that come with taxes can get very expensive when
not managed appropriately. You know, when you have more money
the investments. Obviously everybody pays attention to how their investments

(05:28):
are doing, but it can open the door up to
other strategies like alternative investments. Perhaps maybe there's a need
to unwind concentrated stock positions using by selling covered call options.
So there's a level of complexity that's added into the
financial plan. And then of course there's there's a state planning.
How do I get it right as far as passing

(05:50):
my money along when I'm gone. Are the people that
are going to receive my money going to make responsible
decisions with it? Do I even like my son in
law or daughter in law to the extent where I
think that they're, you know, not going to encourage my
children to make bad decisions that I've seen lots of
folks over the years that have major concerns about making

(06:12):
the right decision with their portfolio. As the complexity grows
related to that control and uncertainty, like you had mentioned.

Speaker 1 (06:22):
Well in control and uncertainty can be alleviated or you know,
the stress around it can be alleviated with a good plan.
It reminds me of a meeting I had earlier this week, Steve,
you know, with a very successful local orthopedic surgeon. I
mean he just cranks out surgeries joint replacements every day.
I mean he's killing it. He's made a lot of
money every year for a lot of years. He's getting

(06:44):
within two years of retirement now. And he came in
this week and yeah, this guy built a phenomenal you know,
net worth. But he looked right at me and he's like, Bob,
what I need you to do is develop the plan
on how we're going to take this money out retirement
when I stop working. So everybody gets to that point

(07:04):
at some point in their life where building wealth, you know,
there's this transition to how do I use this wealth
and maximize things from a tax standpoint, from an estate
planning standpoint, how do I get strategic about the wealth
that I've built rather than just worried about building and
building and building.

Speaker 2 (07:24):
Those are fun conversations, sure, they because we're financial planning dorks.
You know it's it's like solving a puzzle to alleviate.

Speaker 1 (07:31):
This is the third time this week you've called me
a dork. Steve, I've called you a dork more than that.
You just weren't there. You're listening to simply Money presented
my all Worth Financial I'm Bob sponseller along with Steve Ruby.
Another source of around money, a source of stress is
that whole legacy pressure, in the whole what if question,

(07:52):
what if I make a mistake with my money? What
if I leave a mess behind for my kids?

Speaker 2 (07:58):
Before we move on to that, I want to take
it back just a second, because you were talking about well,
I'm not going to call you a dork, offens what
you just did for a fifth time, for a fifth time? Sure,
So you know we can wrap our heads around certainty
to an extent, there's also uncertainty like inflation, interest rates, elections,
things that even if your number is good, the world

(08:19):
can make you feel like they're not. And that's another
benefit of having a plan and stress testing your plan
against some of these potential unknowns. But yes, legacy pressure
and what if I make a mistake with my money,
what if I leave a mess behind for my kids.
I'm sure you've known somebody who has gone through a

(08:40):
scenario where they have helped Maybe this is you too.
Maybe you've helped navigate in a state. You know somebody
that didn't have their proper estate planning documents in order
and then probate was involved. I've been there. It's not fun.
I'm working with somebody right now who is you know,
they have an attorney on their side, they're the executive
or the estate that they're closing, and they have two siblings,

(09:04):
and it's a lot of work. If they're planning, and
their parents even had an estate plan, it's just the
way they set it up was a little bit more complicated.
So you know the what if scenario? What if I
make a mistake with my money, What if I'd leave
a mess behind for my kids?

Speaker 1 (09:17):
It is something that.

Speaker 2 (09:18):
You get ahead of by appropriately working with a financial
planner and an estate planning attorney well.

Speaker 1 (09:24):
And it also just comes down to basic communication. And
by communication, I mean communicating and getting clarity around your values.
Why does this money exist in the first place, What
is it there for? What is it important to me
that I passed down to my kids and grandkids. Those
are the kinds of discussions that need to happen, because

(09:46):
if you just build a large net worth, and even
if you have a good estate plan that can minimize
the taxes on leaving it down to your kids and grandkids,
if you haven't prepared them to handle money or have
any value values around how they do it, dumping them
a huge chunk of money on them at once can
often be one of the worst things you could possibly do.

(10:07):
Oh absolutely, So what we're talking about now is what
can you do to kind of take control and remove
some of the stress around money? Like you said, first, communication,
it's a big deal. Second, define your enough. You know,
if you're still working and you know the surgeon that
that you work with, for example, what is enough? You
know from what they are earning and and you know,

(10:28):
do you feel like you have to strive towards the
next goal because you've tied your identity to your net worth?
Ideally know to fine your enough to make sure that
that's not happening. Yeah, And then again, just to drive
this point home, align your money with your values. What
are you actually trying to do with the money? Are
there charitable causes you want to support? How do you

(10:49):
want to be involved with your kids strategically to carry
on some of the values that you have down through
the generations. You know, do you want to travel more?
You just got to get clear around what this money
is there to do and then plan accordingly. Here's the
all Worth advice. Money is a tool. It's not a scorecard.

(11:09):
It's not a source of shame. It's not a burden.
It's there to give you choices so you can live
a rich and meaningful life. Coming up next, a warning
about becoming the bank of mom and Dad, and an
update on the man who just sold his business for
billions of dollars and he's a man with actually a

(11:29):
connection to this show. Steve, you're listening to Simply Money
on fifty five KRC, the talk station. You're listening to
Simply Money, presented by all Worth Financial. I'm Bob Sponseller
along with Steve Ruby and Amy Wagner joins us in

(11:51):
the second half hour of the show. Today. Coming up
straight ahead at six forty three, we are answering your
questions about divorce, structured notes and more, and we're referring
to our Ask the Advisor segment. All right, Steve, when
company executives sell stock, do they have an inkling of
where the stock price will go in the future, or

(12:14):
are they just cashing out when the stock is doing
well well.

Speaker 2 (12:18):
Why why we're asking this question is because our friend
Steve Watkins from the Cincinnati Business Courier reported that five
of Kroker Top execs have actually sold more than one
hundred thousand shares of their company stock totally more than
eleven million dollars over the past two weeks. Now, you
would think that sometimes this kind of activity could raise
red flags. In this case, the you know, the director

(12:40):
of research at New York based insider trading analysis firm
called insider Insights dot Com believes there's there's nothing fishy
going on in this situation.

Speaker 1 (12:51):
Yeah, let's talk about some of the regulation that that
company executives are under. They've got they've got to restrict
their trading of their own stocked of just four time
periods throughout the year in a twenty day window that
begins on the second trading day after the company releases
its quarterly earnings. So there is some structure and regulation

(13:15):
around this. Steve, I wish our members of Congress were
under the same kind of structure they really need to be.

Speaker 2 (13:21):
There's actually some some ETFs that exist out there to
try to track and mirror what members of Congress are doing.
Just kind of fascinating because this rule here. Keep in
mind what you just said was after earnings or release.
It's not before, So they're not using some kind of
insider information to make these decisions. It's done during normal
bullmarket selling, you know. And that's what this is in

(13:45):
the situation.

Speaker 1 (13:46):
Well, I mean company executives, CEOs or human beings too.
They have financial advisors. They want to have diversified portfolios,
so I want to buy yachts. They need their yachts too,
that too. Yeah, but yeah, so nothing is about these
normal you know, stock sales. All right, onto some news
about the founder of Jersey Mikes. And this is a

(14:07):
man that we've actually had on this show before, Peter Kinkrow.
Can Crow grew up with the former co host of
this show, our own Steve Sprovak.

Speaker 2 (14:18):
Yeah, so last year, Peter Cankrow, he agreed to sell
his company, Jersey Mikes to a private equity giant Blackstone
for a cool eight billion dollars. At this point, Can Crow,
he's finally stepping down a CEO. He's going to continue
to chair the chain's current six member board, you know,

(14:38):
work with franchises to kind of shape the company because
he will remain a ten percent shareholder.

Speaker 1 (14:44):
But man, good for him. I mean, Steve, Steve.

Speaker 2 (14:46):
Had stories about working at one of the original Jersey
Mike locations, so it was always interesting to pick his
brain a little bit about growing.

Speaker 1 (14:53):
Up with this guy. Yeah, back in nineteen seventy five,
as an entrepreneurial teenager, he somehow scraped together one hundred
and twenty five thousand dollars from people that just believed
in him and supported his vision to buy a single
Jersey Shore sub shop and he renamed it Jersey Mike's.

(15:13):
And he has run that New Jersey based company ever since.
And I remember a story Steve told me. Actually, Peter,
because they were friends, came to him and said, hey,
I'll give you an opportunity to buy one of these
sub shops, you know, for a certain amount of money,
and he would have got stocked. You know, it's Steve.
I think he always regrets not buying a couple sub

(15:34):
shops instead of coming and working here.

Speaker 2 (15:37):
Sure, I know, I mean, who'd have thought you know
that not many of us know somebody that bought a
store that turned into a multi billion dollar payout, A
very interesting situation.

Speaker 1 (15:47):
Only in America. It's a beautiful thing, sure, all right. Well,
every Sunday you will find our all worth advice in
the Cincinnati Choir and our own Steve Ruby, who's with
us today, you know, writes these articles for the Inquirer
every week. So Steve, let's give you give a little
preview of this Sunday's Inquirer.

Speaker 2 (16:06):
Well, to be clear, Amy helps to She's just not
here today to talk about it.

Speaker 1 (16:10):
I know, but you never like to give her credit
for anything, So I was trying to give you some all.

Speaker 2 (16:15):
Right, Amy doesn't help. It's just me her pictures just
in there, DS and NS and Kenwood. Our son moved
backed in with us last year because he didn't like
his roommate. We offered to let him stay for a
little while so we could find a new place. But
it's been eight months. We've been paying for some of
his expenses the whole time. We don't want to sound
like terrible parents, but what do you recommend that we do? Fortunately,

(16:41):
this is a shared experience with a lot of folks.
These days, children are boomeranging back home at levels that
are quite high. There was a Pew Research poll done
from last year where fifty seven percent, that's over half
of eighteen to thirty four year olds are actually currently
living with their parents.

Speaker 1 (17:01):
That's a big number.

Speaker 2 (17:03):
And it's understandable that people get frustrated about this because
you know, as you've discovered, this arrangement can be a
little bit costly.

Speaker 1 (17:12):
Well, you know, DS and NS ask what will we do?
I'll tell you what I would do. You know, is
someone my wife and I have three sons, you know,
in their early mid twenties. I'd put a finite date
on this thing, and I'd sit down. This is an
opportunity to sit down and help your son develop a plan.

(17:32):
But that plan starts with a finite date. You are
going to be moving out by such and such a date.
Let's help you navigate through this transition and develop a
plan and coach them through it a little bit.

Speaker 2 (17:45):
Yeah, And in doing so, I mean that there's really
needs to be an understanding of communicating expenses for what
you're footing the bill and what they should be footing
the bill for, so car payments, health insurance, student loans,
streaming services, groceries, cell phones. There's a lot that you
might be paying for that could be eliminated, lowered, consolidated.

(18:05):
Working through these expenses together and communicating that time frame
that you brought up, along with who will actually be
putting that bill is extremely important. Part of the issue
here is that if we're not having these open communications,
then my concern would be are you hampering your own

(18:25):
ability to save for your retirement, Because it's a lot
easier for you to save for your retirement today and
for your child to find their own way than it
is for them to completely foot the bill for you
if you run out of money when you're seventy five
years old.

Speaker 1 (18:41):
Yep, all right. In the minute we have left Jerry
from Boone County ass he says, my daughter has ten
thousand dollars left in student loan debt and ten thousand
dollars in credit card debt, which should she work harder
to pay off first?

Speaker 2 (18:57):
Well, it's certainly a good idea to prioritize one and
the easiest thing to look at his interest rate. The
higher interest rate means more expensive debt, so the credit
card debt is one one of the worst kinds of
debt for this exact reason. It's I can almost guarantee
it's going to be higher than the student loan debt
bank rate average shares that the average credit card at
this point is about twenty percent, or student rate or

(19:18):
student loan much lower. So attacking the credit card debt
on top of any kind of student loans would be
strongly recommended.

Speaker 1 (19:27):
Yeah, good stuff, all right. Amy joins the party next
to discuss the scenarios when you want to make sure
you have life insurance. You're listening to Simply Money presented
by all Worth Financial on fifty five KRC the talk station.

Speaker 3 (19:46):
You're listening to Simply Money presented by all Worth Financial.
I mean you, Wagner, along with Bob Sponseller. I have
had several people in my office recently, Bob that when
we were looking at their financial plan, they're in their
late sick, early seventies, and they have term life insurance
policies that they're paying pretty high premiums.

Speaker 4 (20:07):
For h and I start to say, hey, let's look
at whether we actually still need these policies and for
so much of our lives, you know, we're carrying life
insurance policies because they're protecting the paycheck that.

Speaker 3 (20:21):
We're bringing home in. You know, if something were to
happen to me or to you, Bob, you know how
much of an impact would that have on our families?
And so I think it's really important to understand why
we carry life insurance when we need to be paying
for it, and also maybe when we don't need to
be paying for it anymore.

Speaker 1 (20:41):
Yeah. I think the two big, you know, questions to
ask and have good answers to through a consolidated financial
plan are these. You know, if I were to pass away,
would the people I love and care about be hurt financially?

Speaker 3 (20:56):
Yeah?

Speaker 1 (20:56):
And if the answer to that question is yes, then
you need some life insurance. And then the the discussion
to be had is for how long do you need
the life insurance. If the answer to that question is no,
well then there's an opportunity, to your point, to maybe
free up some dollars to go to other places because
you've outlived your need for life insurance.

Speaker 3 (21:18):
Go ahead, when you're in your twenties, thirties, forties, fifties, Right,
it's you and your spouse bringing in an income, or
maybe just one of you. We've got kids that are
in college or not yet in college, and if your
paycheck was taken off the table, it would have a
devastating impact on your loved ones. That's when you need

(21:40):
a term life insurance policy, right, It's to cover your
life during that term when people are relying on your income.
I also, though just mentioned hey, if both of you
are working, I also want to stress this here. If
you have one person who's staying home taking care of
the kids, there is a huge value to that, especially

(22:02):
when kids are younger and not in school yet. That
person also needs a life insurance policy, not to necessarily
protect the income, but to protect Think about if if
that spouse wasn't there and you were still having to
work and pay for childcare, right, that can be a huge,
huge expense totally.

Speaker 1 (22:22):
And I remember living this personally. You know, when I
first got into this industry in nineteen ninety one, I
wasn't thinking about you know, because my wife, when we
had our first child, stayed at home with the kids
until the kids were grown and all that. And at
the time I was thinking, why do I need life
insurance on my wife? Yeah, you know she doesn't quote

(22:43):
unquote work. Well, you know what I quickly got a
lesson you know what my wife did every day? Yeah,
four years. She worked way harder than I did, created
way more value than I did, and the cost to
replace her all joking aside economically would have been huge

(23:03):
if something would have happened to her. So I bought
a bunch of life insurance term insurance on my wife,
and from that day forward, I encourage everyone else, you know,
with young children to do the same.

Speaker 3 (23:15):
A couple of other times I think that are worth
at least thinking through whether life insurance policy would apply
to This would be if you've co signed on a loan,
which is something that we normally say, hey, probably not
the best idea, because if something happens to that other person,
you're on the hook not for half of that loan,

(23:36):
but for all of it, so if they default, but
certainly if something happens to them, right, you can you know,
for a loved one, Yes, I'll co sign on that
student loan debt because I know you're going to pay
it off. So I think it could make sense sometimes
if you have co signed on a loan, particularly a
pretty you know, high loan, a life insurance policy on

(23:56):
that person if something happens to them to cover that
loan can also makes sense.

Speaker 1 (24:01):
Yeah, and just a word to the wise here on
co signing again, I usually, well not usually always, if
a co signer is needed for a loan, it's because
the person that is taking out the loan can't afford
to take out the loan. So that's a whole different,
you know, conversation in and of itself. But yeah, it's uh, yeah,

(24:24):
that's one area where again you might need to take
out some insurance coverage on that person until that loan
is paid out. Another thing, and this is just a
big change that I've seen just over the course of
my career, Amy is people have bought life insurance to
pay their federal estate taxes, you know, and believe it
or not, When I got in this business in the

(24:45):
early nineties, the you know, the exemption amount was only
six hundred thousand dollars per spouse. Yeah, so there was
a lot of life insurance being sold to pay federal
estate taxes when both spouses die. Now the exemption amount, yeah,
it's almost fourteen million dollars. So that world has changed significantly.

(25:06):
And then I'm just going to give you, you know,
as someone who got started in this business working for
an insurance based broker dealer. I can tell you too
much life insurance. You know, too many life insurance and
annuity policies are sold rather than bought. Meaning anytime there's
somebody that's going to make a commission from getting you

(25:29):
to buy these things, watch out. And that's the that's
the reason why you want to work with a fiduciary,
non commission based advisor who can make a true recommendation
based on a thorough financial plan on whether you need
this coverage or not and what kind of coverage you need.

Speaker 3 (25:49):
Yeah, I think it's important to fully understand, work with
a fiduciary on what kind of life insurance you need,
so that you're going in buying what you need, not
necessarily being sold. And then you know, it almost becomes
like a security blanket for a lot of the people
that I've worked with through the years. You know, I
just need life insurance. And so then we start to
have the conversation as they turn out of that, and

(26:12):
you know, look at the new premiums if we, you know,
continued this life insurance policy, and I'm like, you've got
social Security, maybe a pension, You've got you know, some
significant investment assets. That's your insurance at this point. Is
something were to happen to you, we know that your
spouse would be just fine. That's part of the planning
process to figure out do we need to be paying

(26:33):
for these policies anymore or do we not.

Speaker 1 (26:35):
Yeah, Now on the flip side, for some of the
higher net worth folks that have plenty of money and
we can use their life insurance as an investment alternative.
And I had had a conversation with a client like
this the other day. They don't need life insurance anymore,
but there's been some health issues. The husband had a
heart attack. They have very good guaranteed interest rates on

(26:58):
their whole life policy and we review their plan and
he said to me, Bob, this is important to me
that we keep this policy. This is the money that
I want to make sure goes to my grandkids. So
just as a wealth creation tool and leaving a legacy
either for kids, grandchildren or charity, life insurance can be
a great tool to accomplish that. So in those cases,

(27:23):
and again it all boils down to have a plan,
talk through all the options, make sure you know why
you have the insurance that you have and how much
is appropriate for your situation.

Speaker 3 (27:33):
Here's the all Worth advice whether or not you need
life insurance. That's a question that should be answered not
by a salesperson, but by a full time fiduciary financial advisor.
Let them help you figure out exactly what you need.
Coming up next, you've got questions, We've got answers. We
are asking the advisor. You're listening to simply Money presented
by all Worth Financial. Here in fifty five KRC the toxation.

(28:01):
You're listening to simply money present by all Word Financial.
I me mean Wagner along with bob'sponsorl or. Do you
have a financial question you need help with. There's a
red button you can click on while you're listening to
the show. We'll find it right there on the iHeart app.
Record your question. It's coming straight to us and we
want to get straight to your questions for us tonight.
The first one is from Sandy in Westchester.

Speaker 1 (28:22):
I am getting divorced. Do I want the house or
the investment assets?

Speaker 3 (28:26):
This is a fantastic question. As someone who has been
through this before, Far too many people get this answer wrong,
and I think it is it depends on your financial situation.
But Sandy, the way that I want you to think
about this is you probably bought your home based on
two incomes, and so can you afford first of all,

(28:48):
to keep it up if it's just you and I
do not downplay the emotional impact of leaving the home
that you have raised your children in. Many times, financially
the best thing to do is to sell the house
and each of you to start fresh in a home
where that you can truly afford. But for many it

(29:11):
becomes this battle over this emotional thing right the home.
And often the person who wins, if you want to
look at that by the person who does better long term,
is they get the investment assets right, so they have
money set aside for the four to one k and
know their future and that money is going to grow.

(29:32):
The house is great, but when you get to retirement,
what are you going to live off of?

Speaker 1 (29:36):
Right?

Speaker 3 (29:36):
And so I think you have to not only think
about how you're feeling in the short term emotionally, but
how you're best going to take care of yourself long term.
And many times it's splitting up both of those things. Right,
If one of you has significantly more in retirement assets.
There's something called a quadro that a court can go
ahead in order to split up those assets. But really,

(29:59):
if you're fighting for that home, make sure first of
all that you can afford it now, and secondly that
you will still have enough retirement assets to get you
through retirement. Let's get to Jerry's question now he's in
Hyde Park.

Speaker 1 (30:11):
I had a friend suggest I talked to a financial
advisor about structured notes. I am not familiar with them. Well, Jerry,
first of all, I think you should talk to a
financial advisor about these because they can get a little
bit complicated. They have all different terms and bells and
whistles and all that. But let me try to boil
it down to you, you know, so you're at least
familiar with them. What we find structured notes are the

(30:33):
best fit for people who are pretty risk averse investors,
meaning they want a definite downside protection on their money
and also have the opportunity to have some growth. So
I'll give you an example of a very risk averse
client that I worked with a couple of weeks ago.
You know, they've been scared death of the market for

(30:54):
years now, and they've been sitting in cash, and so
what we did was we said, hey, let's take a
piece of your portfolio for a four year period of time,
and we could literally these are bank guaranteed notes with
FDIC protection and all the bells and whistles, we can
guarantee you that you're not going to lose any money
at all. You're going to get all your principle back

(31:15):
in four years, and if the market goes up, you're
going to have the upside of almost thirty percent of
your money over the next four years. So for that
particular investor, they were like, great, I'm not going to
have any downside with this portion of my portfolio. Again, portion,
not the whole thing. Yeah, because we are tying that
portion up for four years. But they get to have

(31:37):
the opportunity to have some upside, and for a lot
of folks that solves a lot of their emotional and
economic concerns.

Speaker 3 (31:46):
Yeah. I think this is a newer conversation that we're
able to have with our clients, and a really good one.
So if you are really risk averse, ask your advisor
if this might be a good option for you. Next
question is Frank in witten Woods.

Speaker 1 (32:02):
I have two hsas can I combine them. Yes, you can,
and you can do it on a tax free basis.
Think of it as just a very similar to an
IRA rollover. Yeah, you can combine these things. Make sure
the paperwork's done correctly, you know, if you're not really
well versed on how all that works, work with an advisor,
so you don't get into a tax you know trap here.

(32:25):
But yes, if done correctly, it can be done very easily,
very seamlessly, and with no tax consequences.

Speaker 3 (32:32):
I have some clients to have two separate HSA's. One
from an old job and it has, you know, a
few thousand dollars in it. They're keeping that separate because
they're just going to spend that down. But the other
HSA is fully invested for growth and they're not going
to touch it. They're going to leave it there for retirement.
So circumstances like that, maybe it makes sense to keep

(32:53):
them separate. But most of the time it's just another
account that you've got floating out there, and it makes
sense just to combine them. Let's get to Tony from
Dearborn County.

Speaker 1 (33:03):
How often do you recommend checking for a one K performance? Tony.
There's no hard and fast rule here, But you know,
just going you know, my gut feeling on this is
probably every six months. You know, you don't need to
check it every month, you know, every day, but i'd
look at it at least every six months, and certainly
look at it every year. And here's why you want

(33:26):
to be looking for major changes in your allocation. For example,
if you wanted to be somebody that's seventy percent in stock,
fifty percent in stocks and the market has moved tremendously
one way or the other, you know, you check it
every you know, four to six months. That's an opportunity
to reset the allocation and get rebalanced. And you know,

(33:49):
the proverbial buy low and sell high here applies. So
the other thing to look at is performance of the
individual funds relative to their benchmark, and also look at fees.
So that's a reason to just periodically check in here. Again,
I don't think you need to obsess over it, but
certainly be looking at it at least every six months.

Speaker 3 (34:10):
Check it so that you know it's properly working for you,
that you're maximizing it. But I'm telling you I know
some people who are checking it every day. I had
a conversation with one of them yesterday. It's just maddening.
You're just going to drive yourself crazy. There will be
daily market fluctuations and you know you can give yourself

(34:30):
heartburn over that. But you got to understand how the
market works. That's the price of admission. But there are
more updates than down days, and that's how we grow
our four one case.

Speaker 1 (34:40):
Yeah, and anytime that emotional quotient spikes, decisions often get
made that we regret later on.

Speaker 3 (34:48):
Yeah, decisions that you can't recover from. Great point coming
up next. An important nugget to take away as we
head into Bob's world of wealth. You're listening to Simply Money,
presented by all Worth Financial here on fifty f five
cars the talk station. You're listening to Simply Money because

(35:10):
anybody all Worth Financial, I mean you ignar along with Bob'spondseeller.
That music means it must be time to enter Bob's
world of wealth. Bob, what wisdom do you have for
us today? Lay it on us.

Speaker 1 (35:22):
Well, even though this is not a day trading show
or a stock picking show, we are going to talk
about how to handle individual stocks today, Amy, because I
know I have clients, and you have clients where and
we talk about the difference between serious money and play money.
You know, we all have clients that like to play
a little bit and participate in individual stocks. So I

(35:43):
just want to throw out a few guidelines here for
folks that can't help themselves and want to venture into
this world. You know, this is the world of individual stocks.

Speaker 3 (35:52):
This is good.

Speaker 1 (35:53):
Number one. Try to keep it to no more than
one to five percent of your total portfolio in any
one single stock. One is better than five. But once
you let that get above five, you're taking on because
of the volatility that's inherent in individual stocks. You're taking
on a little more risk than you might bargain for

(36:14):
based on short term events that can happen. Number two,
and this is what virtually nobody has. Have a defined
strategy going in. Know why you're buying that stock, know
why you're going to sell it, and have a defined
upside target and downside target. I find that men are
way worse than this at women because men hate to lose,

(36:38):
and our ego gets in the way, and we buy
this stock with all the best intention as it goes
down and down and down, and we can't take a loss,
we can't move on, and then we start averaging down
into a poorly performing position, and then you're just digging
yourself a hole. So you know, and this is easy
to do. You can enter limit order on the upside

(37:01):
stop loss orders on the downside so that the computer
will sell it for you so you don't have to
think and feel about.

Speaker 3 (37:08):
It and take the emotion out of it. Right.

Speaker 1 (37:10):
Yeah, yeah, so those are my thing. And again, things
do change, and you've got to have a plan going
in and it's okay to take a small loss on
a stock. Let it keep falling, and then if you
still believe in that thesis long term, get back in later,
you know, hopefully at a much lower price and make

(37:31):
even more money. But don't take these huge hits on
seven ten percent of your portfolio and just upset the old,
the whole apple cart. Amy, I know you got thoughts
on this as well. Well.

Speaker 3 (37:43):
I do you know, we were just talking about how
often should you check your flour and K balance and
we were saying, hey, maybe you know a couple of
times a year to make sure that you're fully maximizing that,
but your floural on and K should be very, very
well diversified so that when one company or one sector
is up or down, it's not killing you. And so
when you look at individual stocks and you start to

(38:06):
invest in individual stocks, most people who I know who've
done that, they're checking it multiple times a day, and
they're driving themselves crazy. So you have too much of
your portfolio on that, it's really really hard, first of all,
to sleep at night and to recover from bad things
that can inevitably happen when you're taking on that much risk.
Thanks for listening. You've been listening to Simply Money, presented

(38:27):
by all Worth Financial here on fifty five KRC, the
Talk station