Episode Transcript
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Speaker 1 (00:06):
Tonight a fantastic piece of advice Warren Buffett gave the
world in the midst of all of this market volatility.
Were you paying attention? We were. You're listening to simply
Money presented by all Worth Financial. I mean you, Wagner
along with Bob Sponzeller. You know, lot's been going on
over the past several weeks, several months when it comes
(00:26):
to volatility in the markets, and of course a lot
coming from from tariffs and things like that, which I
think might have kind of taken a little bit of
attention away from the fact that Warren Buffett, legendary investor
Warren Buffett announced he's stepping away from the day to
day operations of Berkshire Hathaway. I think maybe many of
(00:50):
us did kind of get that point, but we might
have missed some of his parting words which actually came.
I'm saying parting words. We'll still hear from him, but
some mature really like some really good investor tidbits that
he kind of passed along right before he made his announcement.
Speaker 2 (01:07):
Well, I don't know if his speech is available like
on YouTube or something, but I honestly don't know, but
I'd love to be able to get a hold of
this because as I read, as I read some of
the excerpts from his speech, I mean, Amy, this is
just this is a virtual clinic, yes, for how to
be a good, responsible, non emotional, long term investor. So
(01:29):
let's walk through some of the things that he actually said,
because this is pure gold, Amy.
Speaker 3 (01:33):
Yeah.
Speaker 1 (01:33):
I mean, we could spend a couple of hours on
just one of these points. And the first one he
said was people have emotions, but you have to check
them at the door when you invest. I was meeting
with a new investor yesterday, someone who you know, may
just be deciding if she's going to partner with me
in the future, and she was. She was saying a
(01:56):
couple of things. One of them was that she is
good at giving objective advice to other people, but in
her own situation, she said, like, I just can't seem
to get out of my way. It can be clear
what I should be doing with my money, but I
miss it every time because I get really emotional about
things I want to help people. I don't think about
(02:16):
my own financial future. And she says, I really struggle
with getting out of my way. And she said, you know,
as everyone does these days. You can cyberstock someone before
you meet them, and she says, so, I was kind
of cyberstocking you a little bit, you know, and obviously
I know about your show, but she said, you know,
you've got a credential in behavioral finance. And she said
that really struck with me because I think I could
(02:38):
use that.
Speaker 2 (02:39):
And I thought, so you're her new psychologist. Amy.
Speaker 3 (02:43):
That's a lot of what we do, I know, and
it's actually probably most of the most important part of
what we do, helping you as an investor not make
a decision that you cannot recover from them.
Speaker 1 (02:56):
And let's face it, those decisions aren't made because of data.
They're made because of emotions about things. Right when you're
hearing all of the volatility and the headlines and the
announcements and the back and forth about tariffs, it's not
the app it's how you feel, right, And I've seen
far too many times investors pull their money out of
(03:19):
the market or go all in on something either way
fear or greed. But those emotions have driven really terrible
decisions when it comes to money.
Speaker 2 (03:28):
I find this often with folks, especially that are very skilled,
very successful in what they do for a living. I mean,
I've worked with a lot of engineers from GE over
the years. These people are brilliant, you know, at deciding
turbine blades or making sure an engine works, and they
can directly see the cause and effect of everything that
(03:48):
goes on. And the way the financial markets move in
the short term is one hundred and eighty degrees different
from that, and I think that's frustrating for people that
are used to I find a problem, let's hunt it,
let's kill it, let's move on, let's check the box.
The financial markets don't work that way for a multitude
(04:08):
of reasons, one of which is we can't control what
happens in the short term with headlines and how people
react and how other investors are moving their money around,
which impacts are There's a lot of things we can't
control and that's hard for people to stomach sometimes. Going
back to mister Buffett, you know, remember this is a
(04:28):
man that built his net worth prior to when the
internet was out there, there was no AI, there was
no twenty four to seven cable news. This is a
guy that just read annual reports, studied companies, knows what
he was buying or not buying and the reasons behind that.
(04:49):
And there's a lot of lessons to be learned from
a man who just patient, patiently studied economics and history.
And that's what too many folks don't do anymore, is
they don't look at history. Their idea of history is
what happened in the last forty eight hours, and that's
what can cause a lot of these short term emotional decisions.
Speaker 1 (05:10):
Yeah, another tidbit, another piece of gold coming out of
this was an individual investor kind of walked up to
him a young man and asked him about, like, you know,
how do you overcome setbacks? And I'm sure part of
this has to do with investing, right. I mean, he
didn't get to write one hundred percent at the time.
He just found some really good guidelines to live with
and to invest along. And he said, I would focus
(05:30):
on the things that have been good in your life
rather than the bad things that happened, because bad things
do happen. One of the reasons why I love doing
this show and why I'm so passionate about it is
that I have made my own mistakes with money. I
want you to learn from them. But I think you know, collectively,
if we were a lot more open about like, hey,
(05:51):
I did this and it didn't turn out great. Probably
a lot of others wouldn't make those same mistakes. And
if you're not speaking openly about finance and money in
your home with your children and your family, I think
you're missing something here.
Speaker 2 (06:05):
Yeah. It reminds me back to my days of coaching baseball.
You know, where you're trying to hit a baseball, the
failure rate is at least seventy percent. Seventy You know,
it's not the mistakes you make that matter, it's how
you process and recover from them. That's what makes the
difference between winners and losers. I think another thing, you know,
because there are bad things that happen to people that
(06:26):
are completely out of our control. So mister Buffett said, quote,
it can often be a wonderful life even with some
bad breaks.
Speaker 1 (06:35):
Yeah.
Speaker 2 (06:35):
So this is a ninety four year old gentleman that
if you go back, I mean, he was born, you know,
right during the Great Depression, talk about a bad break,
A lot of things I'm sure he could talk about
in his life where you know, he was dealt a
bad hand, But hey, it's how you recover and process
and go on from there that matters and again another
great lesson to learn.
Speaker 1 (06:56):
There you're listening to simply Money presented by all Worth Financial.
I meane me Wagner along with Bob spondseller some wisdom
from Warren Buffett. I'm a big fan. And you know,
back to the point that he was born in nineteen thirty.
You know, he actually kind of jokes about the fact
that little baby Buffett would have had an excellent buying
(07:16):
opportunity at that time. You know, not to say that, Listen,
the socio situation that people were in during that time
was not dire, it absolutely was. But from an investor's standpoint,
even though conditions were terrible to live in at that time,
it was a buying opportunity. And you know, part of
(07:38):
what I think he kind of jokes about regretting is
that he wasn't born maybe even earlier, and couldn't have
taken advantage of that. As an investor, who even thinks
about that, you.
Speaker 2 (07:48):
Know, Yeah, the guy that thinks about that is the
guy that walks around his house all day reading in
your reports and actually bumps into his own, you know,
furniture because he's got his note. Another quote he said,
we make our best deals when people are the most pestimistic.
I love that quote. Another one he said, over my lifetime,
(08:12):
I've had fabulous opportunities sometimes, and they happen because humans
are human. I'm fearful of all kinds of things, but
I don't get fearful of things that other people are
afraid of. Back to your points about you know psychology. Yeah, yeah,
here's a guy that's able. He knows enough, he's studied
(08:32):
enough history to kind of know when the blood's in
the water, so to speak. And that's when he pounces.
And that's where he's made, you know, a lot of
his money.
Speaker 1 (08:40):
And he's not saying I don't feel emotions, right, He's like,
I'm afraid of plenty of things, but when it comes
to investing, I have learned. I have studied all of
these companies in great depth. I have studied markets, market cycles, patterns,
and all of this. The man's mind is like a
human computer, and I have chosen not to be fearful
(09:04):
when it comes to investing. He's made money, he's lost money,
he's made money again. Those things could be driven by
fear and greed, but they're not. He just focused on.
He focuses on long term fundamentals.
Speaker 2 (09:17):
Well. One of the other things I've always admired about
mister Buffett is he is always optimistic. He is always positive,
always optimistic, always looking at positive tomorrow's And I like
this quote he said, if ber if Berkshire Hathaway went
down fifty percent next week, I would regard that as
a fantastic opportunity and it wouldn't bother me in the least.
(09:39):
How many people think that way today, Amy, And I
think it has to do with another key point that
he made. And I can't emphasize this enough because it
has served me well in my little humble career. He said,
the people that you choose to put in your inner
circle matter. And to quote mister Buffett, he said, who
you associate with is just enormously important. And he said,
(10:03):
don't expect you'll make every decision right on that you're
going to have your life progress in the general direction. However,
of the people that you work with, that you admire,
and who becomes your friends. The people you decide to
associate with matters. If you hang around with just glasses
half empty people, you're gonna have a pretty miserable and
(10:26):
probably not very lucrative life thankfully. Yeah, it's a great
lesson to learn.
Speaker 1 (10:34):
Yeah, fantastic advice, not only as a long term investor,
but also life advice, life advice. Apply it to your money,
apply it to your life. I just feel like when
it comes to Warren Buffett, you can't lose their Here's
the all Worth advice, stay calm, think long term, invest
in what you understand, because, as Warren Buffett reminds us,
emotional discipline and patients are really the keys to enduring
(10:57):
investment success in building wealth over the long term. Coming
up next, why hiking could lead you toward a potential
gold mine literally, Plus why some have a lower credit
score depending despite earning a high income. This could be
even you. You're listening to Simply Money presented by all
Worth Financial here on fifty five KRC the talk station.
(11:22):
You're listening to Simply Money presented by all Worth Financial.
I mean me Wagner along with Bob Sponseller. Coming up
at six forty three, we're taking a lot of great
questions from you about donor advised funds, the Trump tax cuts,
in a whole lot more. But first, how much money
were you expecting when you graduated from college? How much
money did you make? Because here's a little something. Apparently
(11:44):
times have changed.
Speaker 2 (11:46):
Well. A recent study that came across our desk this
week from zip Recruiter suggests that current graduates people graduating
from college right now are expecting a starting salary of
approximately one hundred thousand dollars a year. Amy, I don't
know what to say about that.
Speaker 1 (12:05):
If I was drinking water as you were saying that,
it would have come out my nose. Just a little
perspective here, and we all have these stories, right, I
made sixteen thousand dollars in my first year out of college,
so for some and I understand inflation, I understand that
times have changed, but not that much, right, not that much?
(12:25):
Are they actually getting one hundred thousand? No? Not, Actually
it's actually closer to an average salary coming out of
college of about seventy thousand dollars. Nothing to sneeze at.
But hey, if you've got a kiddo, a grandkid who
is in college, I think it's good to have some
(12:46):
realistic conversations about what maybe they can't expect. I don't
want them to be turning down job offers left and
right because they're not getting the six figures that they
were expecting.
Speaker 2 (12:55):
Yeah, I think people tie that salary expectation to you know,
they even sit down actually do a budget, you know,
try to look at, well, here's all the stuff I
want to do, here's all the concerts I want to
go to. When I was want to partners, what that
would cause? You know, twenty two year olds don't just
get handed all that stuff, and I think sometimes they
expect it's all gonna, you know, be laid in front
(13:15):
of them. So a little bit of reality check might
be in order here.
Speaker 1 (13:18):
In Yeah, and maybe some potential room for negotiations with
that first offer, although I would say, you know, when
you're coming fresh out of college and don't necessarily have
years of experience in the workforce, you know, your your
ability to negotiate maybe slightly less than when you're you know,
obviously a more experienced worker, but you know, important to
(13:39):
just have those conversations into set expectations realistically, you know.
And also just a reminder our simply money way of
looking at student loan debt, you shouldn't be taking out
more in total debt over the course of getting your
college education. Then you can reasonably expect to make in
your first year out. So if the averageuse is about
(14:00):
seventy thousand dollars, please don't be taking on one hundred
and twenty thousand dollars in debt, right, it's too much
of a hole to climb out of.
Speaker 2 (14:07):
Yeah, but Amy, how many? How many seventeen year olds
actually think about that before they sign up for the loans?
Speaker 1 (14:15):
Well, and that's why I think as parents, right, we
have to be having these conversations with our kids.
Speaker 2 (14:21):
I mean, we actually do have to parent.
Speaker 1 (14:24):
Just a suggestion, Bob. Luckily years have made it into
their twenties and thirties. So if you missed a couple
of things along the way, luckily they turned.
Speaker 2 (14:31):
Out just fine. Luckily I have a good wife, good.
Speaker 1 (14:35):
Thing for Carrie. All right. Well, depending on how you
were parented, I don't know, but you could have struggled
in another way, whether it was with that first paycheck
or not. And that's maybe if you're just in the
right place at the right time.
Speaker 2 (14:49):
Yeah. A story we had come across our desk. I
guess a couple people are out hiking in the Czech
Republic and found a little over three and forty thousand
dollars worth of hidden treasure, gold, coins, jewelry, what have
you in some kind of can you know, stuck in
a little crevice in a wall. I'm not recommending this
(15:11):
as a retirement strategy, Amy, but maybe we should all
take a trip to the Czech Republic and do some
hiking and see what happens.
Speaker 1 (15:19):
Well, or if anyone in northern Kentucky sees my fifteen
year old Trey walking around with metal detector, you know,
he actually listened to the show and is out looking
for gold right now, they think this is probably going
back to the Second World War. It's been turned over
to a museum.
Speaker 2 (15:34):
You know.
Speaker 1 (15:35):
Again, sometimes we come across kind of a g whiz
money story. I would put this in that column every Sunday.
You're going to find our all Worth Advice in the
Cincinnati Inquirer, but we love to give you a preview
on Friday show. First question a great one from Tim
in Springfield Township. I'm sixty one years old. I plan
on working as long as possible, so hopefully another ten
years or more. How much do I need for retirement?
Speaker 2 (15:58):
Well, Tim, obviously without knowing your entire situation, here's my
quick and dirty answer, and it's the same one I
give to everybody. You want to look at a couple
of different things. One, what are your sources of income
when you retire? You know, do you have a pension?
Do you have a social security you know, which everyone does,
most people do? And then any other sources of fixed income.
Then you want to factor in how much you plan
(16:20):
to spend every month after taxes. And then we want
to look at how much money you've put away in
investment accounts and so on, And you can, with some
reasonable assumptions on inflation and rate of return and investment risk,
you can usually come up with with a pretty good
estimate of what that number is going to be. So
it sounds like you probably should sit down with a
good fiduciary advisor who can walk you through all those
(16:42):
numbers and put together an actual financial plan for you.
Good thing that you've got ten years of a runway,
you know to do that planning, and that I think
that'll help Tim. I think that'll help you make some
good decisions here as you approach your desired retirement date.
Speaker 1 (16:57):
But don't take ten years granted, because here's what I
have seen play out time and time again. The plan
for retirement for some people is either not retiring or oh,
I'm going to work longer than other people are. Well.
We have said many many times on the show through
the years, you could get sick. Four different kinds of
(17:17):
sickness could happen to you. One is you get sick
and you can no longer work. Right, So does your
plan support if you got a diagnosis next year and
couldn't continue to work. What if someone you love gets
sick and now you're forced to take care of them.
This is happening with the client that I am working
with right now. His wife is going downhill quickly and
(17:39):
he's trying to figure out if I need to leave
the workforce to help take care of her full time?
Can I do it? Luckily, he has a plan, so
we can look at that. You could something could change
at work, a new system, a new boss, whatever, and
suddenly working for ten more years is the worst thing possible.
Or your boss could just get sick of you and
suddenly Monday you don't have a job. So I like
(18:01):
to make it where work is an option, not an obligation.
And the only way to know that, tim is for
you to run the numbers and build your own financial plan.
Next question from DP in Oakley. I make a good salary,
close to two hundred and thirty thousand, great salary. Why then,
is my credit score only seven hundred points?
Speaker 2 (18:20):
Well, DP, I think it might be a couple things.
And you can check your credit score on some of
these credit bureau you know, like an Equifax or something
like that, and you can dig deeper on why is
your credit score fluctuating? A couple things there. Your credit
score is going to fluctuate based on how much debt
you have, even revolving monthly credit debt like credit cards.
I've seen in my own circumstance, even though I pay
(18:43):
my credit card bill every month, I'll get these emails
from a credit bureau saying, hey, your credit score is
it a record high? Well, it's because I didn't spend
as much money on my credit card that month, and
then it'll drop a little bit if we have a
heavy month. So you want to look at your debt structure,
and then along with that, you want to look if
there's any errors on your credit report. Sometimes you'll find
(19:06):
your credit score is getting dings, so to speak, for
reasons that shouldn't be there, and that's an opportunity to
clean up any errors in your credit report and that
might help that credit score go up.
Speaker 1 (19:18):
Yeah, dB, you could make a million dollars and you
could have a credit score of five hundred.
Speaker 2 (19:23):
Right.
Speaker 1 (19:24):
What you have to understand is what your credit score
is comprised of, and that is you've got a credit history.
The credit that's available to you. You're only using a
portion of that somewhere between maybe ten and thirty percent,
is going to keep you in a good place. And
you've got to pay your bills on time. If you're
not paying your bills on time, if you're missing stuff,
you could make all the money in the world and
it's not going to matter. Understand what truly impacts your
(19:46):
credit score. Coming up next, finding the best kind of
work once you've stopped working, we'll explain. Our career expert
is going to talk about one of the aspects of
living a rich and meaningful life. You're listening to Simply Money,
presented by all Worth Financial here on fifth KRC, the
Ox station. You're listening to Simply when you're presented by
all Words Financial, I Memi Wagner along with Bob Sponsor.
(20:08):
I'm telling you this is a conversation we have more
often than you'd think someone getting close to retirement and
maybe you have been an executive or don't actually matter
what position you had, but you are used to those
normal hours and that being a huge part of your day,
and all of a sudden you retire and what's next.
(20:28):
For some people, it feels like this black hole of
endless time and it's just not a good fit for them.
So maybe in retirement the best thing would be to
go back to work. Are we having this conversation, Yes,
we absolutely are, and we're doing it with our career expert,
Julie Bauki Julie on the Job, Julie. For a lot
of people, to go from one hundred miles an hour
(20:50):
like you were when you were working, down to zero
or ten is just not doable. And so I'm sure
you have this conversation with people, but what does the
second act potentially look like?
Speaker 4 (21:03):
You know, back in back when the workplace was very,
very different, there was a little issue because people would
work hard forty years and then retire. It's like going
from one hundred miles an hour to zero, and there
was a pretty high death rates or illness rate when
people would just stop and because they really lost their
sense of purpose. I think when you're working. So when
(21:26):
you're working, you we have this idea that retirement is
going to be this nirvana. And I've talked to so
many people about it who've gone through that, and they say, yeah,
I get up, I check my check online, see what's
going on, read the news, have my coffee, and at
seven point thirty, now what. And so it's that loss
(21:48):
of structure and lack of purpose that is what really
surprises people as they move into the retirement years. And
I don't think we talk about this enough because we
have this idea that it's all going to be amazing,
and I, you know, sayonara to Alia, and now I'm
going to be fine. But unless you have something that
(22:10):
you're retiring too, or at least working toward. Because certainly
if you retire and say, you know what, I am
just going to do nothing for the summer or a
few months and just it's great, but I think you're
going to find that you need to have some sense
of purpose. It can but it can be a different
purpose than you had in the past. You can abandon
everything you've done and develop a new side of you
(22:33):
based on obviously, or you could take what you've done
in the past and pivot it slightly so that you're
still using the same skills, but you're using it in
a way that's more enjoyable to you.
Speaker 2 (22:47):
Julie, as I listened to you talk about this, and
as somebody that's helped you know, dozens and dozens of
clients actually retire. You know, no one comes into the
office and you say, well, how's retirement. No one says
it stinks, right, They're all going to say, oh, it's wonderful,
I don't have to work, blah blah blah. But then
when you when you actually look under the hood and
(23:08):
get into a deeper conversation, there are a lot of
folks that are experiencing exactly what you talked about. There
are holes in their life that they need to fill.
My question to you is someone who counsels people professionally
about this topic, when's the right time to start to
plan and have these conversations about what you actually are
(23:30):
going to do when you, quote unquote retire, I would.
Speaker 4 (23:34):
Say, you know, a year or so in advance, you
should start just making some notes, maybe some thoughts around,
what are the things that here's my here's my favorite exercise. Okay,
and it's so it's so low back. But go to
your calendar, whatever calendar you use, and go to a
week sometime in the future that's completely blank, just blank,
(23:56):
and you haven't gotten there yet, maybe it's in twenty
twenty six, and fill it in as if you had
one hundred percent control over your time. And that's a
really scary concept of people, because we're not used to
having one hundred percent control. So would you are there
friends that you'd go on long walks with? Would you
start working out more? Would you volunteer here? Would you
(24:17):
look for a side consulting project, would you go travel
to see the grandkids?
Speaker 2 (24:20):
Would you?
Speaker 4 (24:21):
And so fill in this big, gaping blank calendar with
what you would do or what you'd want to do
if you had nobody else pulling on your time. I
tried that actually a few years ago, and it's really
quite it's quite an awakening because there's only so much
leisure that we can handle, and we're all different, and
(24:43):
so somebody there are some people that say, oh my gosh,
you know, this is ridiculous. When I retire, I'm going
to garden. I'm going to do all these five hobbies.
I'm going to volunteer here. Great, that's good. But what
you're going to discover is taking that change from how
you did spend your time and what you did to
something new. It is a transition, and we don't talk
(25:05):
about it enough that you're going to feel somewhat of
a loss of identity. The more that you identified with
your work, the harder that is, because then it's sort
of like, didn't you used to be? You know? And
you're like, look a minute, I still am. And so
the more you identify with your profession, your company, your industry,
(25:27):
whatever your work you was, when you have to give
that up, it's very hard, which is why if you
work in corporate environment, sometimes you see people who've retired,
they keep coming back like and walking the halls and
talking to people. That's because they haven't figured out what
their next identity is. And believe me, as someone who
does this for a living who's getting to that age,
(25:48):
it's hard. It's harder than you think it's going to be.
And so I always say, be easy on yourself. Try
some things, Try to form a new identity. What what
is it? What are you going to pursue and don't
be afraid to try some things and say, you know there,
I mean, there's if you want to volunteer, there's I
(26:09):
think the website of Cincinnati Cares, or you can go
on there and look for all these wonderful places that
you that that need volunteer work. You know, I'm sure
whatever community you're in there's one of those there as well.
And so just be curious, be a student of what
the next phase of your life is going to be like.
Speaker 2 (26:29):
So, if I'm hearing you correctly, Julie, what you're finding,
you know, with with folks is there can oftentimes be
a big difference between how you fill out that hypothetical
blank calendar, well I would do this, and I think
I'll do this and I plan to do that. There
there can oftentimes be at least initially a big difference
between how that hypothetical calendar got filled out and what
(26:53):
they actually enjoy and feel fulfilled actually doing when retirement hits.
Is that is that am I on the right track there?
Speaker 4 (27:02):
Yeah, it's an experiment and you have to look at
it that way. So you might think I'm really going
to enjoy doing this, I think I'm going to take
my skills and pivot them a different way. You might
try to do that and say this isn't This isn't
for me. What if I try over here? And so
follow pads, follow your little paths of interest. What are
(27:22):
the things that when you read about it or hear
about it, or talk to somebody who's doing it. And
another good idea is to talk to your friends who
are already tired, find out what they did and if
it's if it's something you're interested in, and try it.
Just take a bite. That's the beauty of retirement. You
can take a bite and see if you like it
or not. You won't and that's okay. You try something else, Julie.
Speaker 1 (27:46):
What I hear you saying too is just planning for this.
I had a conversation earlier this week with someone who
has had some super high powered positions, traveled the world
is part of them, and he took peach at the
end of his retirement. So he is like two more
weeks of a paycheck coming in and he's essentially done.
He was so wide eyed about this whole concept. Part
(28:09):
of it. Of course, the paycheck's no longer coming in,
but A bigger part of it was he has no
idea what he's going to do with his time, and
I let him know, Hey, you're not alone. This is normal.
But also figuring this out will become key to having
a long and fulfilling retirement. So great concepts, great insights
as always on how to plan for that. Julie Balki,
(28:30):
Julie on the job. You're listening to Simply Money presented
by all Worth Financial. Here in fifty five KRC the
talk station. You're listening to Simply Money presented by all
Worth Financial. I mean Wagner along with Bob sponseller. Do
you have a money question you can't just get to
the bottom of the right answer for you. There's a
(28:52):
red button you can click them while you're listening to
the show. You'll find it right there on the iHeart app.
Record your question. It's coming straight to us. We would
love to help you figure it out. Speaking of figuring
some things that, we've got some great questions. First one
from Jim in Bondhill.
Speaker 2 (29:07):
Hey, Amy and Bob, I have a donor advice fund.
Can you donate stock to it? You absolutely can, Jim,
And depending on your situation, it's an excellent option to
donate highly appreciated stock on which you want to get
your tax deduction for giving it to charity and completely
avoid all the capital gains on that stock. So it's
(29:28):
often a great option of an asset to use for
your donor advice fund. Just make sure you keep good records,
whether you're handling this transaction yourself or through a fiduciary advisor.
You want to keep track of the cost basis, you
know the date that you bought the stock, all those things,
and you know because you might have to put that
(29:49):
on your tax return at some point. But appreciated stocks
are a wonderful asset to donate to donor advice funds.
Speaker 1 (29:55):
We've been having this conversation a lot recently with clients
and people who are be interested in working with us
here at allworth about. There are strategies you can employ
and still have the same philanthropic impact right that you
have always had, or maybe even more of one, but
also be super tax efficient in doing that. And this
is a great one of those strategies. Let's get to
(30:17):
John's question. Now he's in Fort Mitchell.
Speaker 3 (30:20):
I have a friend who suggested I invest in something
called a real estate investment trust.
Speaker 2 (30:24):
What in the world is that?
Speaker 1 (30:25):
So this is called a rates right. You'll hear of them,
you know, from time to time. As an investor. A
lot of people like the concept of investing in real estate,
but for you to buy a property on your own
and deal with a maintenance and everything involved in it,
for many people it's like, well, I'm not going to
do that. So real estate investment trust is a way
(30:47):
to invest in multiple properties, and there's various flavors of these.
You can invest in different kinds of commercial properties and
things like that. There are ruts that are traded on
the stock exchange and non traded reas that are not
as liquid or as easy. So this is a way
to kind of have a diversified portfolio of real estate
(31:08):
without taking on the headaches the heartburn of owning individual
properties yourself, you know, as part of a well diversified portfolio.
I think a week can make sense for some people.
Speaker 2 (31:20):
Yeah, a couple watchouts though with this asset class. And
I've lived through this with these things for over twenty
years now. These non traded reats can be extremely non liquid,
and by extremely I mean your money might be tied
up for ten twelve fifteen years. The other thing. A
lot of times when John you mentioned a friends suggested
(31:42):
that you buy this watch, out that your friend is
not making a front end commission to sell this thing
to you, because the commissions are very high on these things,
which motivates folks to sell them rather than simply recommend
them as a fiduciary as part of a diverse survied portfolios. So,
you know, Amy brought up some of these are traded
(32:04):
and non traded. I there are plenty of real estate
investment trusts now that are completely liquid, no commissions. I'd
steer in that direction.
Speaker 1 (32:13):
Yeah, I agree. All right, let's get to Amy's question.
Now she's from Sycamore. If the Trump tax cuts get extended,
does it even make sense anymore to do Roth conversions. Yes,
let's talk about that, right, that's the Tax Cuts and
Jobs Act. Trump put this into effect his first term
in office, and essentially most of us are in historically
lower tax brackets than we've ever been before. So, you know, Bobby,
(32:36):
you and I've had lots of conversations about, Hey, if
these sunset as they're set to sunset at the end
of this year, you could end up in a higher
tax bracket. So does it make sense to do Roth
conversions now? Obviously with President Trump being re elected in
an office, I think there's a lot of people who
assume these will be extended. But could it make sense
then to continue to do Roth conversions? Absolutely? You know,
(32:58):
maybe you're in higher earning years now and you're going
to end up in lower earning years in the future,
so that's going to naturally take you into a lower
tax bracket. There's kind of a golden window of opportunity
that I always see kind of with my clients. If
you're retiring at sixty five, but you don't have to
take required minimum distributions until seventy three, so we can
do some Wroth conversions during that time to move more
(33:21):
money into that Wroth bucket, so that we're not fully
endowing Uncle Sam with, you know, the money that's that
Uncle Sam is then looking for if most of our
assets are tax deferred.
Speaker 2 (33:33):
Yeah, And just to piggyback on that point, I mean,
whether whether tax rates change a little bit, you know,
around the edges a couple percentage points. What we're talking
about here, and the strategy that Amy just outlined is
we're talking about saving ten, twelve, fifteen percent in terms
of marginal tax rates irrespective of what the rates are
(33:55):
by doing some of these conversions. So it absolutely makes
sense to examine it if you want to see it.
We can run it both ways. With the tax rates
sunsetting or tax rates becoming permanent. It certainly makes sense
to keep this potential strategy on our radar screen.
Speaker 1 (34:11):
Coming up next, I want to share some Wagner wisdom.
This is a conversation I've had a few times lately,
and I got to tell you it's something that's keeping
me up at night. 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
(34:32):
Worth Financial. I mean me Wagner along with Bob's bonseller.
It is time for some Wagner wisdom. I still giggle
about Wagner wisdom, but it is something that I want
to point out. I've had a few conversations with people
recently who are in their early to mid fifties and
have just made some assumptions on the fact that they're
(34:53):
going to be just fine in retirement. They can retire
now or whenever that they've saved pla that they're in
really good shape. And this is not a fun part
of our job, Bob, But this is a really tough
conversation to have, right, So we asked for a bunch
of numbers. What does your actual spending look like, What
are your investments, what is your social security looking like?
(35:16):
Is there any maybe pension and retirement? And we build
out a financial plan to say, does what you're currently
doing is it actually feasible for you to live in
retirement that way? And I gotta tell you, Bob, I've
had a few people recently who the numbers didn't work out.
In fact, if they were to retire at sixty five,
they would run out of money by seventy four. And
(35:38):
so the interesting thing about it is one of these
people was shocked by those numbers, and the other one said,
we kind of had a feeling a few years ago
that we weren't doing enough, but we just got busy
with other things and we didn't we didn't complete the
exercise of figuring it out. If you are someone who
(35:58):
has just this I don't know, seed of doubt in
your head, or you just wonder are we okay? Please
please do me a favor, get a second opinion, get
a set of eyes on this, Get a fiduciary to
run a financial plan for you and tell you whether
it's going to work or not. And even if the
answer is no, if you are young enough, there are
(36:19):
some things that we can do now, right, rolling up
our sleeves to make some changes so that you can
retire and retire well, you come to a six months
from retirement, not much we can do.
Speaker 2 (36:30):
Yeah, And while those conversations are never fun, like the
ones that you just relate, it's better to know that
information when you're forty four or fifty four rather than
seventy four or eighty four, because at that point, now
you know the sand is running through the proverbial hour
glass and the money is going away and there's nothing
(36:50):
much you can do about it. So yeah, great point.
The sooner you get an objective set of eyes on
your long term financial plan, the better and yep, excellent
wisdom today, Amy, And I think even.
Speaker 1 (37:04):
If you're someone who's running your own color coded, extensive
spreadsheets on your situation, you could be forgetting something right.
You're not going to be out anything by having someone
run a plan for you and I just think, man,
you know wisdom, acknowledges power and to know, hey, my
numbers were great.
Speaker 2 (37:24):
Great.
Speaker 1 (37:24):
I can sleep at night. But for those who maybe
they aren't going to work, well, the more time you
have to course correct, truly, the better off you're going
to be. Thanks for listening. You've been listening to Simply Money,
presented by all Worth Financial here on fifty five krs
the talk station
Tonight a fantastic piece of advice Warren Buffett gave the
world in the midst of all of this market volatility.
Were you paying attention? We were. You're listening to simply
Money presented by all Worth Financial. I mean you, Wagner
along with Bob Sponzeller. You know, lot's been going on
over the past several weeks, several months when it comes
(00:26):
to volatility in the markets, and of course a lot
coming from from tariffs and things like that, which I
think might have kind of taken a little bit of
attention away from the fact that Warren Buffett, legendary investor
Warren Buffett announced he's stepping away from the day to
day operations of Berkshire Hathaway. I think maybe many of
(00:50):
us did kind of get that point, but we might
have missed some of his parting words which actually came.
I'm saying parting words. We'll still hear from him, but
some mature really like some really good investor tidbits that
he kind of passed along right before he made his announcement.
Speaker 2 (01:07):
Well, I don't know if his speech is available like
on YouTube or something, but I honestly don't know, but
I'd love to be able to get a hold of
this because as I read, as I read some of
the excerpts from his speech, I mean, Amy, this is
just this is a virtual clinic, yes, for how to
be a good, responsible, non emotional, long term investor. So
(01:29):
let's walk through some of the things that he actually said,
because this is pure gold, Amy.
Speaker 3 (01:33):
Yeah.
Speaker 1 (01:33):
I mean, we could spend a couple of hours on
just one of these points. And the first one he
said was people have emotions, but you have to check
them at the door when you invest. I was meeting
with a new investor yesterday, someone who you know, may
just be deciding if she's going to partner with me
in the future, and she was. She was saying a
(01:56):
couple of things. One of them was that she is
good at giving objective advice to other people, but in
her own situation, she said, like, I just can't seem
to get out of my way. It can be clear
what I should be doing with my money, but I
miss it every time because I get really emotional about
things I want to help people. I don't think about
(02:16):
my own financial future. And she says, I really struggle
with getting out of my way. And she said, you know,
as everyone does these days. You can cyberstock someone before
you meet them, and she says, so, I was kind
of cyberstocking you a little bit, you know, and obviously
I know about your show, but she said, you know,
you've got a credential in behavioral finance. And she said
that really struck with me because I think I could
(02:38):
use that.
Speaker 2 (02:39):
And I thought, so you're her new psychologist. Amy.
Speaker 3 (02:43):
That's a lot of what we do, I know, and
it's actually probably most of the most important part of
what we do, helping you as an investor not make
a decision that you cannot recover from them.
Speaker 1 (02:56):
And let's face it, those decisions aren't made because of data.
They're made because of emotions about things. Right when you're
hearing all of the volatility and the headlines and the
announcements and the back and forth about tariffs, it's not
the app it's how you feel, right, And I've seen
far too many times investors pull their money out of
(03:19):
the market or go all in on something either way
fear or greed. But those emotions have driven really terrible
decisions when it comes to money.
Speaker 2 (03:28):
I find this often with folks, especially that are very skilled,
very successful in what they do for a living. I mean,
I've worked with a lot of engineers from GE over
the years. These people are brilliant, you know, at deciding
turbine blades or making sure an engine works, and they
can directly see the cause and effect of everything that
(03:48):
goes on. And the way the financial markets move in
the short term is one hundred and eighty degrees different
from that, and I think that's frustrating for people that
are used to I find a problem, let's hunt it,
let's kill it, let's move on, let's check the box.
The financial markets don't work that way for a multitude
(04:08):
of reasons, one of which is we can't control what
happens in the short term with headlines and how people
react and how other investors are moving their money around,
which impacts are There's a lot of things we can't
control and that's hard for people to stomach sometimes. Going
back to mister Buffett, you know, remember this is a
(04:28):
man that built his net worth prior to when the
internet was out there, there was no AI, there was
no twenty four to seven cable news. This is a
guy that just read annual reports, studied companies, knows what
he was buying or not buying and the reasons behind that.
(04:49):
And there's a lot of lessons to be learned from
a man who just patient, patiently studied economics and history.
And that's what too many folks don't do anymore, is
they don't look at history. Their idea of history is
what happened in the last forty eight hours, and that's
what can cause a lot of these short term emotional decisions.
Speaker 1 (05:10):
Yeah, another tidbit, another piece of gold coming out of
this was an individual investor kind of walked up to
him a young man and asked him about, like, you know,
how do you overcome setbacks? And I'm sure part of
this has to do with investing, right. I mean, he
didn't get to write one hundred percent at the time.
He just found some really good guidelines to live with
and to invest along. And he said, I would focus
(05:30):
on the things that have been good in your life
rather than the bad things that happened, because bad things
do happen. One of the reasons why I love doing
this show and why I'm so passionate about it is
that I have made my own mistakes with money. I
want you to learn from them. But I think you know, collectively,
if we were a lot more open about like, hey,
(05:51):
I did this and it didn't turn out great. Probably
a lot of others wouldn't make those same mistakes. And
if you're not speaking openly about finance and money in
your home with your children and your family, I think
you're missing something here.
Speaker 2 (06:05):
Yeah. It reminds me back to my days of coaching baseball.
You know, where you're trying to hit a baseball, the
failure rate is at least seventy percent. Seventy You know,
it's not the mistakes you make that matter, it's how
you process and recover from them. That's what makes the
difference between winners and losers. I think another thing, you know,
because there are bad things that happen to people that
(06:26):
are completely out of our control. So mister Buffett said, quote,
it can often be a wonderful life even with some
bad breaks.
Speaker 1 (06:35):
Yeah.
Speaker 2 (06:35):
So this is a ninety four year old gentleman that
if you go back, I mean, he was born, you know,
right during the Great Depression, talk about a bad break,
A lot of things I'm sure he could talk about
in his life where you know, he was dealt a
bad hand, But hey, it's how you recover and process
and go on from there that matters and again another
great lesson to learn.
Speaker 1 (06:56):
There you're listening to simply Money presented by all Worth Financial.
I meane me Wagner along with Bob spondseller some wisdom
from Warren Buffett. I'm a big fan. And you know,
back to the point that he was born in nineteen thirty.
You know, he actually kind of jokes about the fact
that little baby Buffett would have had an excellent buying
(07:16):
opportunity at that time. You know, not to say that, Listen,
the socio situation that people were in during that time
was not dire, it absolutely was. But from an investor's standpoint,
even though conditions were terrible to live in at that time,
it was a buying opportunity. And you know, part of
(07:38):
what I think he kind of jokes about regretting is
that he wasn't born maybe even earlier, and couldn't have
taken advantage of that. As an investor, who even thinks
about that, you.
Speaker 2 (07:48):
Know, Yeah, the guy that thinks about that is the
guy that walks around his house all day reading in
your reports and actually bumps into his own, you know,
furniture because he's got his note. Another quote he said,
we make our best deals when people are the most pestimistic.
I love that quote. Another one he said, over my lifetime,
(08:12):
I've had fabulous opportunities sometimes, and they happen because humans
are human. I'm fearful of all kinds of things, but
I don't get fearful of things that other people are
afraid of. Back to your points about you know psychology. Yeah, yeah,
here's a guy that's able. He knows enough, he's studied
(08:32):
enough history to kind of know when the blood's in
the water, so to speak. And that's when he pounces.
And that's where he's made, you know, a lot of
his money.
Speaker 1 (08:40):
And he's not saying I don't feel emotions, right, He's like,
I'm afraid of plenty of things, but when it comes
to investing, I have learned. I have studied all of
these companies in great depth. I have studied markets, market cycles, patterns,
and all of this. The man's mind is like a
human computer, and I have chosen not to be fearful
(09:04):
when it comes to investing. He's made money, he's lost money,
he's made money again. Those things could be driven by
fear and greed, but they're not. He just focused on.
He focuses on long term fundamentals.
Speaker 2 (09:17):
Well. One of the other things I've always admired about
mister Buffett is he is always optimistic. He is always positive,
always optimistic, always looking at positive tomorrow's And I like
this quote he said, if ber if Berkshire Hathaway went
down fifty percent next week, I would regard that as
a fantastic opportunity and it wouldn't bother me in the least.
(09:39):
How many people think that way today, Amy, And I
think it has to do with another key point that
he made. And I can't emphasize this enough because it
has served me well in my little humble career. He said,
the people that you choose to put in your inner
circle matter. And to quote mister Buffett, he said, who
you associate with is just enormously important. And he said,
(10:03):
don't expect you'll make every decision right on that you're
going to have your life progress in the general direction. However,
of the people that you work with, that you admire,
and who becomes your friends. The people you decide to
associate with matters. If you hang around with just glasses
half empty people, you're gonna have a pretty miserable and
(10:26):
probably not very lucrative life thankfully. Yeah, it's a great
lesson to learn.
Speaker 1 (10:34):
Yeah, fantastic advice, not only as a long term investor,
but also life advice, life advice. Apply it to your money,
apply it to your life. I just feel like when
it comes to Warren Buffett, you can't lose their Here's
the all Worth advice, stay calm, think long term, invest
in what you understand, because, as Warren Buffett reminds us,
emotional discipline and patients are really the keys to enduring
(10:57):
investment success in building wealth over the long term. Coming
up next, why hiking could lead you toward a potential
gold mine literally, Plus why some have a lower credit
score depending despite earning a high income. This could be
even you. You're listening to Simply Money presented by all
Worth Financial here on fifty five KRC the talk station.
(11:22):
You're listening to Simply Money presented by all Worth Financial.
I mean me Wagner along with Bob Sponseller. Coming up
at six forty three, we're taking a lot of great
questions from you about donor advised funds, the Trump tax cuts,
in a whole lot more. But first, how much money
were you expecting when you graduated from college? How much
money did you make? Because here's a little something. Apparently
(11:44):
times have changed.
Speaker 2 (11:46):
Well. A recent study that came across our desk this
week from zip Recruiter suggests that current graduates people graduating
from college right now are expecting a starting salary of
approximately one hundred thousand dollars a year. Amy, I don't
know what to say about that.
Speaker 1 (12:05):
If I was drinking water as you were saying that,
it would have come out my nose. Just a little
perspective here, and we all have these stories, right, I
made sixteen thousand dollars in my first year out of college,
so for some and I understand inflation, I understand that
times have changed, but not that much, right, not that much?
(12:25):
Are they actually getting one hundred thousand? No? Not, Actually
it's actually closer to an average salary coming out of
college of about seventy thousand dollars. Nothing to sneeze at.
But hey, if you've got a kiddo, a grandkid who
is in college, I think it's good to have some
(12:46):
realistic conversations about what maybe they can't expect. I don't
want them to be turning down job offers left and
right because they're not getting the six figures that they
were expecting.
Speaker 2 (12:55):
Yeah, I think people tie that salary expectation to you know,
they even sit down actually do a budget, you know,
try to look at, well, here's all the stuff I
want to do, here's all the concerts I want to
go to. When I was want to partners, what that
would cause? You know, twenty two year olds don't just
get handed all that stuff, and I think sometimes they
expect it's all gonna, you know, be laid in front
(13:15):
of them. So a little bit of reality check might
be in order here.
Speaker 1 (13:18):
In Yeah, and maybe some potential room for negotiations with
that first offer, although I would say, you know, when
you're coming fresh out of college and don't necessarily have
years of experience in the workforce, you know, your your
ability to negotiate maybe slightly less than when you're you know,
obviously a more experienced worker, but you know, important to
(13:39):
just have those conversations into set expectations realistically, you know.
And also just a reminder our simply money way of
looking at student loan debt, you shouldn't be taking out
more in total debt over the course of getting your
college education. Then you can reasonably expect to make in
your first year out. So if the averageuse is about
(14:00):
seventy thousand dollars, please don't be taking on one hundred
and twenty thousand dollars in debt, right, it's too much
of a hole to climb out of.
Speaker 2 (14:07):
Yeah, but Amy, how many? How many seventeen year olds
actually think about that before they sign up for the loans?
Speaker 1 (14:15):
Well, and that's why I think as parents, right, we
have to be having these conversations with our kids.
Speaker 2 (14:21):
I mean, we actually do have to parent.
Speaker 1 (14:24):
Just a suggestion, Bob. Luckily years have made it into
their twenties and thirties. So if you missed a couple
of things along the way, luckily they turned.
Speaker 2 (14:31):
Out just fine. Luckily I have a good wife, good.
Speaker 1 (14:35):
Thing for Carrie. All right. Well, depending on how you
were parented, I don't know, but you could have struggled
in another way, whether it was with that first paycheck
or not. And that's maybe if you're just in the
right place at the right time.
Speaker 2 (14:49):
Yeah. A story we had come across our desk. I
guess a couple people are out hiking in the Czech
Republic and found a little over three and forty thousand
dollars worth of hidden treasure, gold, coins, jewelry, what have
you in some kind of can you know, stuck in
a little crevice in a wall. I'm not recommending this
(15:11):
as a retirement strategy, Amy, but maybe we should all
take a trip to the Czech Republic and do some
hiking and see what happens.
Speaker 1 (15:19):
Well, or if anyone in northern Kentucky sees my fifteen
year old Trey walking around with metal detector, you know,
he actually listened to the show and is out looking
for gold right now, they think this is probably going
back to the Second World War. It's been turned over
to a museum.
Speaker 2 (15:34):
You know.
Speaker 1 (15:35):
Again, sometimes we come across kind of a g whiz
money story. I would put this in that column every Sunday.
You're going to find our all Worth Advice in the
Cincinnati Inquirer, but we love to give you a preview
on Friday show. First question a great one from Tim
in Springfield Township. I'm sixty one years old. I plan
on working as long as possible, so hopefully another ten
years or more. How much do I need for retirement?
Speaker 2 (15:58):
Well, Tim, obviously without knowing your entire situation, here's my
quick and dirty answer, and it's the same one I
give to everybody. You want to look at a couple
of different things. One, what are your sources of income
when you retire? You know, do you have a pension?
Do you have a social security you know, which everyone does,
most people do? And then any other sources of fixed income.
Then you want to factor in how much you plan
(16:20):
to spend every month after taxes. And then we want
to look at how much money you've put away in
investment accounts and so on, And you can, with some
reasonable assumptions on inflation and rate of return and investment risk,
you can usually come up with with a pretty good
estimate of what that number is going to be. So
it sounds like you probably should sit down with a
good fiduciary advisor who can walk you through all those
(16:42):
numbers and put together an actual financial plan for you.
Good thing that you've got ten years of a runway,
you know to do that planning, and that I think
that'll help Tim. I think that'll help you make some
good decisions here as you approach your desired retirement date.
Speaker 1 (16:57):
But don't take ten years granted, because here's what I
have seen play out time and time again. The plan
for retirement for some people is either not retiring or oh,
I'm going to work longer than other people are. Well.
We have said many many times on the show through
the years, you could get sick. Four different kinds of
(17:17):
sickness could happen to you. One is you get sick
and you can no longer work. Right, So does your
plan support if you got a diagnosis next year and
couldn't continue to work. What if someone you love gets
sick and now you're forced to take care of them.
This is happening with the client that I am working
with right now. His wife is going downhill quickly and
(17:39):
he's trying to figure out if I need to leave
the workforce to help take care of her full time?
Can I do it? Luckily, he has a plan, so
we can look at that. You could something could change
at work, a new system, a new boss, whatever, and
suddenly working for ten more years is the worst thing possible.
Or your boss could just get sick of you and
suddenly Monday you don't have a job. So I like
(18:01):
to make it where work is an option, not an obligation.
And the only way to know that, tim is for
you to run the numbers and build your own financial plan.
Next question from DP in Oakley. I make a good salary,
close to two hundred and thirty thousand, great salary. Why then,
is my credit score only seven hundred points?
Speaker 2 (18:20):
Well, DP, I think it might be a couple things.
And you can check your credit score on some of
these credit bureau you know, like an Equifax or something
like that, and you can dig deeper on why is
your credit score fluctuating? A couple things there. Your credit
score is going to fluctuate based on how much debt
you have, even revolving monthly credit debt like credit cards.
I've seen in my own circumstance, even though I pay
(18:43):
my credit card bill every month, I'll get these emails
from a credit bureau saying, hey, your credit score is
it a record high? Well, it's because I didn't spend
as much money on my credit card that month, and
then it'll drop a little bit if we have a
heavy month. So you want to look at your debt structure,
and then along with that, you want to look if
there's any errors on your credit report. Sometimes you'll find
(19:06):
your credit score is getting dings, so to speak, for
reasons that shouldn't be there, and that's an opportunity to
clean up any errors in your credit report and that
might help that credit score go up.
Speaker 1 (19:18):
Yeah, dB, you could make a million dollars and you
could have a credit score of five hundred.
Speaker 2 (19:23):
Right.
Speaker 1 (19:24):
What you have to understand is what your credit score
is comprised of, and that is you've got a credit history.
The credit that's available to you. You're only using a
portion of that somewhere between maybe ten and thirty percent,
is going to keep you in a good place. And
you've got to pay your bills on time. If you're
not paying your bills on time, if you're missing stuff,
you could make all the money in the world and
it's not going to matter. Understand what truly impacts your
(19:46):
credit score. Coming up next, finding the best kind of
work once you've stopped working, we'll explain. Our career expert
is going to talk about one of the aspects of
living a rich and meaningful life. You're listening to Simply Money,
presented by all Worth Financial here on fifth KRC, the
Ox station. You're listening to Simply when you're presented by
all Words Financial, I Memi Wagner along with Bob Sponsor.
(20:08):
I'm telling you this is a conversation we have more
often than you'd think someone getting close to retirement and
maybe you have been an executive or don't actually matter
what position you had, but you are used to those
normal hours and that being a huge part of your day,
and all of a sudden you retire and what's next.
(20:28):
For some people, it feels like this black hole of
endless time and it's just not a good fit for them.
So maybe in retirement the best thing would be to
go back to work. Are we having this conversation, Yes,
we absolutely are, and we're doing it with our career expert,
Julie Bauki Julie on the Job, Julie. For a lot
of people, to go from one hundred miles an hour
(20:50):
like you were when you were working, down to zero
or ten is just not doable. And so I'm sure
you have this conversation with people, but what does the
second act potentially look like?
Speaker 4 (21:03):
You know, back in back when the workplace was very,
very different, there was a little issue because people would
work hard forty years and then retire. It's like going
from one hundred miles an hour to zero, and there
was a pretty high death rates or illness rate when
people would just stop and because they really lost their
sense of purpose. I think when you're working. So when
(21:26):
you're working, you we have this idea that retirement is
going to be this nirvana. And I've talked to so
many people about it who've gone through that, and they say, yeah,
I get up, I check my check online, see what's
going on, read the news, have my coffee, and at
seven point thirty, now what. And so it's that loss
(21:48):
of structure and lack of purpose that is what really
surprises people as they move into the retirement years. And
I don't think we talk about this enough because we
have this idea that it's all going to be amazing,
and I, you know, sayonara to Alia, and now I'm
going to be fine. But unless you have something that
(22:10):
you're retiring too, or at least working toward. Because certainly
if you retire and say, you know what, I am
just going to do nothing for the summer or a
few months and just it's great, but I think you're
going to find that you need to have some sense
of purpose. It can but it can be a different
purpose than you had in the past. You can abandon
everything you've done and develop a new side of you
(22:33):
based on obviously, or you could take what you've done
in the past and pivot it slightly so that you're
still using the same skills, but you're using it in
a way that's more enjoyable to you.
Speaker 2 (22:47):
Julie, as I listened to you talk about this, and
as somebody that's helped you know, dozens and dozens of
clients actually retire. You know, no one comes into the
office and you say, well, how's retirement. No one says
it stinks, right, They're all going to say, oh, it's wonderful,
I don't have to work, blah blah blah. But then
when you when you actually look under the hood and
(23:08):
get into a deeper conversation, there are a lot of
folks that are experiencing exactly what you talked about. There
are holes in their life that they need to fill.
My question to you is someone who counsels people professionally
about this topic, when's the right time to start to
plan and have these conversations about what you actually are
(23:30):
going to do when you, quote unquote retire, I would.
Speaker 4 (23:34):
Say, you know, a year or so in advance, you
should start just making some notes, maybe some thoughts around,
what are the things that here's my here's my favorite exercise. Okay,
and it's so it's so low back. But go to
your calendar, whatever calendar you use, and go to a
week sometime in the future that's completely blank, just blank,
(23:56):
and you haven't gotten there yet, maybe it's in twenty
twenty six, and fill it in as if you had
one hundred percent control over your time. And that's a
really scary concept of people, because we're not used to
having one hundred percent control. So would you are there
friends that you'd go on long walks with? Would you
start working out more? Would you volunteer here? Would you
(24:17):
look for a side consulting project, would you go travel
to see the grandkids?
Speaker 2 (24:20):
Would you?
Speaker 4 (24:21):
And so fill in this big, gaping blank calendar with
what you would do or what you'd want to do
if you had nobody else pulling on your time. I
tried that actually a few years ago, and it's really
quite it's quite an awakening because there's only so much
leisure that we can handle, and we're all different, and
(24:43):
so somebody there are some people that say, oh my gosh,
you know, this is ridiculous. When I retire, I'm going
to garden. I'm going to do all these five hobbies.
I'm going to volunteer here. Great, that's good. But what
you're going to discover is taking that change from how
you did spend your time and what you did to
something new. It is a transition, and we don't talk
(25:05):
about it enough that you're going to feel somewhat of
a loss of identity. The more that you identified with
your work, the harder that is, because then it's sort
of like, didn't you used to be? You know? And
you're like, look a minute, I still am. And so
the more you identify with your profession, your company, your industry,
(25:27):
whatever your work you was, when you have to give
that up, it's very hard, which is why if you
work in corporate environment, sometimes you see people who've retired,
they keep coming back like and walking the halls and
talking to people. That's because they haven't figured out what
their next identity is. And believe me, as someone who
does this for a living who's getting to that age,
(25:48):
it's hard. It's harder than you think it's going to be.
And so I always say, be easy on yourself. Try
some things, Try to form a new identity. What what
is it? What are you going to pursue and don't
be afraid to try some things and say, you know there,
I mean, there's if you want to volunteer, there's I
(26:09):
think the website of Cincinnati Cares, or you can go
on there and look for all these wonderful places that
you that that need volunteer work. You know, I'm sure
whatever community you're in there's one of those there as well.
And so just be curious, be a student of what
the next phase of your life is going to be like.
Speaker 2 (26:29):
So, if I'm hearing you correctly, Julie, what you're finding,
you know, with with folks is there can oftentimes be
a big difference between how you fill out that hypothetical
blank calendar, well I would do this, and I think
I'll do this and I plan to do that. There
there can oftentimes be at least initially a big difference
between how that hypothetical calendar got filled out and what
(26:53):
they actually enjoy and feel fulfilled actually doing when retirement hits.
Is that is that am I on the right track there?
Speaker 4 (27:02):
Yeah, it's an experiment and you have to look at
it that way. So you might think I'm really going
to enjoy doing this, I think I'm going to take
my skills and pivot them a different way. You might
try to do that and say this isn't This isn't
for me. What if I try over here? And so
follow pads, follow your little paths of interest. What are
(27:22):
the things that when you read about it or hear
about it, or talk to somebody who's doing it. And
another good idea is to talk to your friends who
are already tired, find out what they did and if
it's if it's something you're interested in, and try it.
Just take a bite. That's the beauty of retirement. You
can take a bite and see if you like it
or not. You won't and that's okay. You try something else, Julie.
Speaker 1 (27:46):
What I hear you saying too is just planning for this.
I had a conversation earlier this week with someone who
has had some super high powered positions, traveled the world
is part of them, and he took peach at the
end of his retirement. So he is like two more
weeks of a paycheck coming in and he's essentially done.
He was so wide eyed about this whole concept. Part
(28:09):
of it. Of course, the paycheck's no longer coming in,
but A bigger part of it was he has no
idea what he's going to do with his time, and
I let him know, Hey, you're not alone. This is normal.
But also figuring this out will become key to having
a long and fulfilling retirement. So great concepts, great insights
as always on how to plan for that. Julie Balki,
(28:30):
Julie on the job. You're listening to Simply Money presented
by all Worth Financial. Here in fifty five KRC the
talk station. You're listening to Simply Money presented by all
Worth Financial. I mean Wagner along with Bob sponseller. Do
you have a money question you can't just get to
the bottom of the right answer for you. There's a
(28:52):
red button you can click them while you're listening to
the show. You'll find it right there on the iHeart app.
Record your question. It's coming straight to us. We would
love to help you figure it out. Speaking of figuring
some things that, we've got some great questions. First one
from Jim in Bondhill.
Speaker 2 (29:07):
Hey, Amy and Bob, I have a donor advice fund.
Can you donate stock to it? You absolutely can, Jim,
And depending on your situation, it's an excellent option to
donate highly appreciated stock on which you want to get
your tax deduction for giving it to charity and completely
avoid all the capital gains on that stock. So it's
(29:28):
often a great option of an asset to use for
your donor advice fund. Just make sure you keep good records,
whether you're handling this transaction yourself or through a fiduciary advisor.
You want to keep track of the cost basis, you
know the date that you bought the stock, all those things,
and you know because you might have to put that
(29:49):
on your tax return at some point. But appreciated stocks
are a wonderful asset to donate to donor advice funds.
Speaker 1 (29:55):
We've been having this conversation a lot recently with clients
and people who are be interested in working with us
here at allworth about. There are strategies you can employ
and still have the same philanthropic impact right that you
have always had, or maybe even more of one, but
also be super tax efficient in doing that. And this
is a great one of those strategies. Let's get to
(30:17):
John's question. Now he's in Fort Mitchell.
Speaker 3 (30:20):
I have a friend who suggested I invest in something
called a real estate investment trust.
Speaker 2 (30:24):
What in the world is that?
Speaker 1 (30:25):
So this is called a rates right. You'll hear of them,
you know, from time to time. As an investor. A
lot of people like the concept of investing in real estate,
but for you to buy a property on your own
and deal with a maintenance and everything involved in it,
for many people it's like, well, I'm not going to
do that. So real estate investment trust is a way
(30:47):
to invest in multiple properties, and there's various flavors of these.
You can invest in different kinds of commercial properties and
things like that. There are ruts that are traded on
the stock exchange and non traded reas that are not
as liquid or as easy. So this is a way
to kind of have a diversified portfolio of real estate
(31:08):
without taking on the headaches the heartburn of owning individual
properties yourself, you know, as part of a well diversified portfolio.
I think a week can make sense for some people.
Speaker 2 (31:20):
Yeah, a couple watchouts though with this asset class. And
I've lived through this with these things for over twenty
years now. These non traded reats can be extremely non liquid,
and by extremely I mean your money might be tied
up for ten twelve fifteen years. The other thing. A
lot of times when John you mentioned a friends suggested
(31:42):
that you buy this watch, out that your friend is
not making a front end commission to sell this thing
to you, because the commissions are very high on these things,
which motivates folks to sell them rather than simply recommend
them as a fiduciary as part of a diverse survied portfolios. So,
you know, Amy brought up some of these are traded
(32:04):
and non traded. I there are plenty of real estate
investment trusts now that are completely liquid, no commissions. I'd
steer in that direction.
Speaker 1 (32:13):
Yeah, I agree. All right, let's get to Amy's question.
Now she's from Sycamore. If the Trump tax cuts get extended,
does it even make sense anymore to do Roth conversions. Yes,
let's talk about that, right, that's the Tax Cuts and
Jobs Act. Trump put this into effect his first term
in office, and essentially most of us are in historically
lower tax brackets than we've ever been before. So, you know, Bobby,
(32:36):
you and I've had lots of conversations about, Hey, if
these sunset as they're set to sunset at the end
of this year, you could end up in a higher
tax bracket. So does it make sense to do Roth
conversions now? Obviously with President Trump being re elected in
an office, I think there's a lot of people who
assume these will be extended. But could it make sense
then to continue to do Roth conversions? Absolutely? You know,
(32:58):
maybe you're in higher earning years now and you're going
to end up in lower earning years in the future,
so that's going to naturally take you into a lower
tax bracket. There's kind of a golden window of opportunity
that I always see kind of with my clients. If
you're retiring at sixty five, but you don't have to
take required minimum distributions until seventy three, so we can
do some Wroth conversions during that time to move more
(33:21):
money into that Wroth bucket, so that we're not fully
endowing Uncle Sam with, you know, the money that's that
Uncle Sam is then looking for if most of our
assets are tax deferred.
Speaker 2 (33:33):
Yeah, And just to piggyback on that point, I mean,
whether whether tax rates change a little bit, you know,
around the edges a couple percentage points. What we're talking
about here, and the strategy that Amy just outlined is
we're talking about saving ten, twelve, fifteen percent in terms
of marginal tax rates irrespective of what the rates are
(33:55):
by doing some of these conversions. So it absolutely makes
sense to examine it if you want to see it.
We can run it both ways. With the tax rates
sunsetting or tax rates becoming permanent. It certainly makes sense
to keep this potential strategy on our radar screen.
Speaker 1 (34:11):
Coming up next, I want to share some Wagner wisdom.
This is a conversation I've had a few times lately,
and I got to tell you it's something that's keeping
me up at night. 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
(34:32):
Worth Financial. I mean me Wagner along with Bob's bonseller.
It is time for some Wagner wisdom. I still giggle
about Wagner wisdom, but it is something that I want
to point out. I've had a few conversations with people
recently who are in their early to mid fifties and
have just made some assumptions on the fact that they're
(34:53):
going to be just fine in retirement. They can retire
now or whenever that they've saved pla that they're in
really good shape. And this is not a fun part
of our job, Bob, But this is a really tough
conversation to have, right, So we asked for a bunch
of numbers. What does your actual spending look like, What
are your investments, what is your social security looking like?
(35:16):
Is there any maybe pension and retirement? And we build
out a financial plan to say, does what you're currently
doing is it actually feasible for you to live in
retirement that way? And I gotta tell you, Bob, I've
had a few people recently who the numbers didn't work out.
In fact, if they were to retire at sixty five,
they would run out of money by seventy four. And
(35:38):
so the interesting thing about it is one of these
people was shocked by those numbers, and the other one said,
we kind of had a feeling a few years ago
that we weren't doing enough, but we just got busy
with other things and we didn't we didn't complete the
exercise of figuring it out. If you are someone who
(35:58):
has just this I don't know, seed of doubt in
your head, or you just wonder are we okay? Please
please do me a favor, get a second opinion, get
a set of eyes on this, Get a fiduciary to
run a financial plan for you and tell you whether
it's going to work or not. And even if the
answer is no, if you are young enough, there are
(36:19):
some things that we can do now, right, rolling up
our sleeves to make some changes so that you can
retire and retire well, you come to a six months
from retirement, not much we can do.
Speaker 2 (36:30):
Yeah, And while those conversations are never fun, like the
ones that you just relate, it's better to know that
information when you're forty four or fifty four rather than
seventy four or eighty four, because at that point, now
you know the sand is running through the proverbial hour
glass and the money is going away and there's nothing
(36:50):
much you can do about it. So yeah, great point.
The sooner you get an objective set of eyes on
your long term financial plan, the better and yep, excellent
wisdom today, Amy, And I think even.
Speaker 1 (37:04):
If you're someone who's running your own color coded, extensive
spreadsheets on your situation, you could be forgetting something right.
You're not going to be out anything by having someone
run a plan for you and I just think, man,
you know wisdom, acknowledges power and to know, hey, my
numbers were great.
Speaker 2 (37:24):
Great.
Speaker 1 (37:24):
I can sleep at night. But for those who maybe
they aren't going to work, well, the more time you
have to course correct, truly, the better off you're going
to be. Thanks for listening. You've been listening to Simply Money,
presented by all Worth Financial here on fifty five krs
the talk station
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