Episode Transcript
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Speaker 1 (00:00):
Number one preset for instant access. It's my go to
fifty five KRC the talk station.
Speaker 2 (00:13):
Tonight, How the Big Beautiful Bill might impact you. You're
listening to Simply Money, presented by all Worth Financial. I'm
Bob Sponseller along with Brian James. If you're following the
headlines at all, you're seeing that the President's Big Beautiful
Bill is everywhere. It's ubiquitous in the media, and it
looks like the thing might actually pass here within the
(00:34):
next I don't know, one to three days. Brian, we
want to give you some perspective on what's in the
bill and how it could impact you. Let's jump into
a few major points here, Brian, so quick disclaimer. As
we're speaking these words, this bill has not yet passed,
but by the time you hear them, it may have passed.
Speaker 1 (00:51):
So you're gonna hear the word could a lot. I think.
Speaker 3 (00:53):
We think whatever is going to pass is going to
look an awful lot like what's out there now. But
where we are right now, it'd have to go back
to the House to make sure the House is okay
with the changes that were made in the Senate, which
is mostly a bunch of pork for Alaska courtesy of
Lisa Murkowski. But so let's talk about the actual changes
that happened. So really one of the big focuses here
(01:13):
was a promise that Trump made during his campaign making
permanent the individual tax cuts that came into being via
the Tax Cuts Jobs Act of twenty seventeen. So one
of the things this is somewhat impactful. It's not going
to change things. But as I don't know about you, Bob,
but as I've had a lot of discussions with my
clients where we're in a tax planning type situation, perhaps
we're looking at ros conversions, that kind of thing. There's
(01:34):
always been felt like there's been a window, and the
window was the end of twenty twenty five. Whatever we're
gonna do that's going to incur taxes purposely for planning purposes,
we should get it done by the end of the
year because they're going to go away. That's not a
thing anymore.
Speaker 2 (01:45):
Yeah, I want to make a comment about that, because
what I've tried to stress to my clients, you know,
for the last year or so is what really matters
is putting a plan in place to help you avoid
jumping tax brackets where you see your margin rate go
up ten percent or eight percent, you know, from jumping
from the twelve percent marginal bracket to the twenty two
(02:07):
percent bracket, or from the twenty two percent bracket to
the thirty four percent bracket. Those are the things we
got to plan for. That's what really moves the needle.
Whether the twenty two percent bracket becomes the twenty three
point two percent bracket not a huge deal, right, And
if we get these if we get these you know,
rates permanent, these brackets permanent, which it sounds like, what's
(02:30):
going to happen. It takes all the urgency out of
doing any of this stuff by the end of the year.
And that's really been the case all along. In my opinion.
It's just back to the basic planning again. Worry about
jumping tax brackets, don't worry about whether the rates move
around one or two percent?
Speaker 1 (02:50):
What say you, Brad?
Speaker 2 (02:51):
I don't disagree with that in principle, However, what I
would say to that agree this makes for.
Speaker 1 (02:56):
Good radio exactly. Feel free to coming across the here, Bob,
do it. Keep your ass to yourself.
Speaker 3 (03:03):
Now I hurt my back left now I can't really
do it. I'll just slap at you anyway. No, in principle, no,
I think I think a rock conversion was a good idea,
you know, for in those situations before this.
Speaker 1 (03:12):
Became a topic. It's a good idea.
Speaker 3 (03:13):
After however, I would hate for somebody to have waited
until twenty six and not have had this happen and
have to endue a rock conversion anyway and pay taxes
at hire brackets. If you were if a rock conversion
was a good idea, it's a slightly better idea when
taxes are a little bit lower.
Speaker 2 (03:27):
That's my only concern. And I totally agree with that point. Absolutely,
we're on the same page. All right, let's pull it off.
Then I'm sitting back down. All right, Let's talk about
what's actually in this bill in terms of some of
these tax deductions. The bill in its present form, and
again that's if we don't get any eleventh hour changes,
it could offer a twenty five thousand dollars deduction on
(03:49):
tips and a deduction for overtime pay of up to
twelve five hundred dollars per individual or twenty five thousand
dollars per married couple. And you know, we go back
to what the President talked about no tax on tips.
Speaker 1 (04:04):
That's not totally true.
Speaker 2 (04:06):
There's just a deduction on tips as long as you're
a middle class working family, because the deduction on these
tips in overtime is going to phase out with the
bill in its current form for individuals making more than
one hundred and fifty thousand dollars a year or three
hundred thousand dollars a year for joint filers. I got
(04:26):
no problem with this, Brian. We're trying to help working families,
give them a little bit of a break here, and.
Speaker 1 (04:31):
I think this does that. Yeah. No, on its face, yes,
I totally agree with that.
Speaker 3 (04:35):
There's a lot of people out there are going to
benefit from this who generate a decent amount of income
on tips and overtime pay. They're getting raises right without
getting an actual salary increase. They're actually going to get
a raise in take home pay, which is a good thing.
What I'm fascinated to see, Bob, somebody out there right
now owns some restaurants or something, and they're going, Okay,
remember that whole movement where we were going to get
rid of tips. Tips were bad, and we're going to pay
(04:56):
everybody minimum wage and encourage people to move away from
the tipping society tells me that those people are gonna
suddenly think that taps tips are a good idea because
now I can pay my weight staff less and encourage
my customers to tip more.
Speaker 1 (05:10):
And that's attractive to everybody.
Speaker 3 (05:12):
So not that that's a bad thing, it's just these
are the interesting things to me, that what are people thinking,
What angles are we going to find, and what's this
all going to look like a year from now.
Speaker 2 (05:18):
Well, and the wonderful thing activity of the American people
in American business, and we talk about this all the time.
Speaker 1 (05:25):
We talked about it yesterday.
Speaker 2 (05:27):
The markets always adapt and the market's long term go
up because human beings adapt, companies adapt.
Speaker 1 (05:34):
People are very creative.
Speaker 2 (05:35):
And to your point, people are already scheming on how
to take advantage of this new.
Speaker 1 (05:39):
Tip rule before it even goes.
Speaker 3 (05:41):
You thought you saw a lot of tip jars before
Wait till this goes, Walmart's gonna have tip jars at
the executive office.
Speaker 1 (05:48):
Here's another thing.
Speaker 2 (05:49):
President Trump talked about no taxes on Social Security.
Speaker 1 (05:53):
That's partly true.
Speaker 2 (05:54):
What we're looking at here is a temporary deduction for
up to six thousand dollars for people age sixty five
and above, and that credit would face would begin to
phase out again for individuals making more than seventy five
thousand dollars or married.
Speaker 1 (06:10):
Couples making over one hundred and fifty thousand dollars.
Speaker 2 (06:13):
Again, it helps middle class taxpayers get a little break
on Social Security, but it does not make Social Security.
Speaker 1 (06:21):
Tax for everyone. That's the only part of this that
really frustrates me. I wish we could just get the
facts right into talking points.
Speaker 3 (06:26):
This is not despite the fact that he said it
about three times, this is not no taxation on Social Security.
Speaker 1 (06:30):
That's not the case.
Speaker 3 (06:31):
And again, this is a temporary deduction, just like the
so we may make it permanent, but not in this
go round.
Speaker 2 (06:38):
Yeah, another thing that might interest some people out there
is we're talking about a deduction for up to ten
thousand dollars on automobile loan interest through twenty twenty eight.
But you got to buy a vehicle that's assembled in
the United States, and you know that that's we're trying
to get stuff made here again, and we're trying to
(06:59):
incentivize people for buying American This is also going to
end a seventy five hundred dollars credit the drivers have
been able to claim when they purchase a new electric vehicle,
So you know this part I'm sure about. A tax
credit is way more valuable than a tax deduction. It is,
but a lot more people are buying regular, old gas
(07:21):
powered vehicles versus electric vehicles, so I don't know this
this will all wash out.
Speaker 3 (07:26):
Since these words are going to float around a lot,
I think we should define some terms here. A deduction, remember,
is simply just reducing your income so that you will
pay less taxes.
Speaker 1 (07:37):
A tax credit is like a gift card to pay
your taxes.
Speaker 3 (07:40):
So in other words, if you owed seventy five hundred
dollars and you and you bought an electric vehicle, then
your seventy five hundred dollars just went away. Versus the
ten thousand dollars deduction, it's a slightly higher amount, but
that's not a credit. That simply means that if you're
let's pretend you're in a twenty percent bracket, you get
a ten thousand dollar deduction that's going to bring you
two thousand dollars back. So it's not as much as
the electric vehicle was. But that's been a that's been
(08:00):
tenant of this administration since the beginning. They're trying to
not completely take away the tax benefits on a car purchases,
but it's going to look a little bit different.
Speaker 1 (08:07):
That's the difference between a credit and a deduction, all right.
Speaker 2 (08:10):
And then another thing I think we've all seen kicked
around in the media here for the last several weeks
and months is this whole thing called the salt deduction,
State and local tax deduction, and this really impacts people
in higher tax states like California and New York where
they got to super high taxes. And it looks like
the final version of this bill is going to put
(08:32):
a deduction cap at forty thousand dollars for five years.
And this is where we're going to make some tax
legislation temporary.
Speaker 1 (08:40):
Again.
Speaker 2 (08:40):
Forty thousand dollars for five years, that's where they were
able to compromise, and then it reverts back to ten
thousand dollars a year after twenty twenty nine. Doesn't really
impact a lot of people in the greater Cincinnati Northern
Kentucky area. But that's just part of the tax bill
we thought we'd mentioned.
Speaker 3 (08:56):
Yeah, and I think we are teeing up the Big
Beautiful Bill too, because we've already called out two things
that are just temporary. And again remember that the current
tax brackets from the TCJA in twenty seventeen are the
ones being made permanent now, So we're just teeing things
up for politicians to argue about a few years.
Speaker 2 (09:12):
You're listening to Simply Buddy, presented by all Worth Financial
Lob Bob Sponsorer along with Brian James. Brian list transitioned
into your favorite topic, how does this Big Beautiful Bill
impact the national debt of this country? Well, they good, Bob.
That's I don't really argue with the business and the
fiscal decisions that are being made here. But what I
(09:34):
really don't like, what really rubs me the wrong way
is that suddenly deficit spending is cool and not a
big deal and it's what the cool kids are doing
versus during the campaign, it was the worst thing ever.
And you know that just drives me nuts a little bit.
Speaker 3 (09:46):
So depending on who you believe that the Congressional Budget
Office is determining that this is going to actually increase
the national debt by a few trillion dollars because we're
not really and this is a habit that both sides.
Speaker 1 (10:00):
This is not Republicans versus Democrats. Both sides have done this.
Speaker 3 (10:03):
Republicans have a way of focusing on reducing taxes without
taking care or without removing the expenses that those taxes
go to pay for. Democrats have a way of simply
increasing the spending that we do. So really nobody is
putting all the puzzle pieces together. This would if we
built financial plans this way, we wouldn't have a business,
right Bob. We would lose all of our clients because
(10:24):
we would simply be encouraging them to spend more and
worry about the problems later. That's unfortunately what we're doing.
But we don't have the ability right now to elect
people who would talk to us as adults. So this
is going to come home to roost at some point.
But Mass says, we've got it. We've got a decently
long time before we have.
Speaker 1 (10:37):
To worry about all that.
Speaker 2 (10:38):
The only thing I'll say about the Congressional Budget Office
is they are notorious for not counting in any economic
growth when they when they run their numbers. And that's
hard to quantify because you think you're going to get growth.
We usually do get growth when we get tax reductions,
but you can't quantify that upfront, but it usually always come.
Speaker 1 (11:00):
But to your point, Uh, and.
Speaker 2 (11:02):
Our politicians for decades and decades a debt. We got
to get to the point here where we got to
either spend less or pay more in taxes or a
combination of both to balance this thing out and quit
running up this huge national debt.
Speaker 1 (11:17):
And I agree with you, Brian.
Speaker 2 (11:19):
None of these politicians are willing to just level with
us and talk to us like adults. So it is
potentially the ticking time bomb continues to grow and the
can continues to get kicked down the road.
Speaker 3 (11:31):
If the CBO is giving us information that leaves out
part of it, then that should be an easy talking
point for a Republican to refute, why don't we hear it?
Speaker 1 (11:38):
That may be the case.
Speaker 2 (11:40):
Do not draw me into a discussion. I'll be gaslighting.
I'll be fired immediately.
Speaker 1 (11:45):
All right, here matches at a gas can. Right, here's
the all Worth advice.
Speaker 2 (11:49):
We can't control what the government does, but we can
make smart moves and response.
Speaker 1 (11:54):
And that's our point here.
Speaker 2 (11:56):
A good fiduciary advisor can help you turn changes and
tax laws or tax brackets into opportunities for your financial plan.
There's always opportunities out there. Coming up next, trading in
penny stocks is booming again and why that could be
more of a red flag.
Speaker 1 (12:13):
Than a money making opportunity.
Speaker 2 (12:16):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC, the Talk station.
Speaker 4 (12:23):
From fifty five KRC, Cincinnati, make us the number one
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Fifty five KRC, the Talk Station.
Speaker 5 (12:34):
Allworth Financial a registered investment advisory firm. Any ideas presented
during this program are not intended to provide specific financial advice.
You should consult your own financial advisor, tax consultant, or
a state planning attorney to conduct your own due diligence.
Speaker 2 (12:55):
Bob Sponsller along with Brian James. With markets near all
time high, is now a good time to shift some
of that portfolio into buffer ttfs or structured notes things
like that that will protect protect your gains. It's one
of the questions that you actually submitted to us, and
we'll answer that in more coming up at six forty three.
(13:16):
All right, Brian Robinhood Stock you know this online broker's
firm popped this week up nearly six percent thanks to
a move that might sound technical, but it's potentially got
some big implications. The company launched crypto based stock tokens.
These tokens mimic shares of popular popular US stocks like
(13:37):
Apple and Tesla, and that they can now be traded
twenty four to seven, Brian, what could possibly go wrong?
Speaker 1 (13:43):
Now, there's nothing wrong here.
Speaker 3 (13:46):
Well, what this is doing is is just circumventing the
rules and regulations that other countries have about their investors,
their residents being able to invest in the US stock markets.
That's always a complicated web of rules and regulations.
Speaker 1 (13:58):
US has them to so their country.
Speaker 3 (14:00):
So what they've done here is they're they're creating basically
like tracking and not tracking stocks.
Speaker 1 (14:05):
That's not the right term tracking tokens.
Speaker 3 (14:07):
And the one of the big innovations of any cryptocurrency
is the ability to track it on the blockchain structure,
which basically means there's a ledger on every computer and
every everywhere in the world that has U You know
that that's how they track who owns what, which is
just a different way of of kind of designing a broker.
So these tokens, we don't have a lot of details
on this, but these tokens are not going to have
(14:27):
voting rights. They're not going to have They just mimic
the movement of the stock. But you don't actually own
anything directly, so otherwise that would dilute the shares of
the firm. But you're just trading something that has assigned
the value whatever of whatever the underlying stock is. As
long as everybody agrees that, yeah, that's a legit way
to do it, and that's what the blockchain is, then
this this will be something to pay attention to. It
(14:48):
doesn't really affect anybody here in the United States, and
you're not you're not suddenly able to do things that
you weren't able to do before. But it's just interesting
that Robinhood seems to have found a new market for themselves.
Speaker 2 (14:57):
Yeah, and it's also interesting that we're now start to see,
you know, blockchain moved being used for things PEG two
stocks now, not just cryptocurrency.
Speaker 1 (15:08):
So again, just something to keep an eye on, all right.
Speaker 2 (15:10):
There's been also a surprising surge recently happening beneath the
surface of the stock market, and that's trading in penny
stocks has absolutely exploded in the last few months. We're
talking about a seventy five percent increase in average trading
daily trading volume over just the past year in penny stocks. Brian,
(15:31):
let's first talk about what they are. I mean penny stocks.
Let's you know, they're they're traded primarily on the pink sheets.
Now there's less regulation, and it's there's a reason for this.
Stocks that are trading at below a dollar a share
typically don't have very good fundamentals.
Speaker 3 (15:48):
Brian, Yeah, so they're they're trading underd dollars share. I
think of this, the stock market has never been anything
more than a gigantic auction. If nobody's bidding in your auction,
or very few people are bidding in your auction, then
the price isn't going to go very high. That's what
makes a penny stock a penny stock. There isn't that
There aren't that many investors out there that are moving
these things around. However, the attraction to them is. You
think of that if if suddenly, you know, if I'm
(16:09):
bidding on something at a couple cents, and then suddenly
nine to ten more people are interested in my auction. Well,
all of a sudden, that price is going to go
five cent, seven cents, eight cents. But don't think pennies.
Think in terms of you know, if something goes from
one cent to eight cents, that's an eight hundred percent increase,
and that happens in a very short amount of time,
and it goes away just as quickly. So that doesn't
happen all day, every day to every penny stock, but
(16:29):
it happens here and there, and that's what investors are
attracted to.
Speaker 2 (16:32):
Well, and the people that usually live in this world
are more day traders, not not investors. And there's lack
of information around these companies, you know, most of the time.
And the thing you got to also watch out for
if you treat one of these penny stocks like an investment,
reverse stock splits.
Speaker 1 (16:51):
They happen all the time.
Speaker 2 (16:53):
You just get your investment absolutely diluted, you know, by
a magnitude of ten, if not one hundred. These are
This is not a place to park retirement money. It's
a casino. This is the land of day traders. Now,
why are we even talking about this. The main point
we want to make is that it appears that speculative
(17:13):
appetite is back, and that tends to happen when people
perceive that there's no risk out there in the stock
market anymore, volatility has died down, people tend to say, well,
I can't lose money.
Speaker 1 (17:27):
I'm going to start to get.
Speaker 2 (17:28):
More speculative, speculative and take on more risk than I
might otherwise take And that can.
Speaker 1 (17:36):
Be a sign. It doesn't mean it is a sign,
but it can.
Speaker 2 (17:40):
Be a sign that people are getting allowed a little
bit over their skis here from a risk standpoint.
Speaker 3 (17:46):
Yeah, when we get to a point where the stock
market has done what it's done, and you can you
can find this part of the cycle in any of
the run ups we've had over the last several decades.
Speaker 1 (17:53):
Eventually, the stock market doing well just isn't good enough.
Speaker 3 (17:55):
For people because we all feel like we're bulletproof and
nothing bad can ever go wrong again, going to be
smooth sailing ahead. So I want a little more than
the stock marketing can give me. Therefore, I'm going to
go dabble in penny stock. So this doesn't mean that
we're gonna, as Bob said, that we're going to go
over the cliff. It just means that we might be
at a bit of a peek here for the market.
We might not be We could go up from here,
but you know, just don't be surprised if that happens.
Speaker 2 (18:15):
You're listening to Simply Money percented by all Worth Financial
on Bob's Sponsorer along with Brian James.
Speaker 1 (18:21):
What should people be doing, you know.
Speaker 2 (18:23):
Normal regular retirees and folks running a responsible portfolio. I
think stories like this just signal kind of what we
were talking about on yesterday's show. We're through half of
the year. The markets are up after a period of volatility.
Now it's time to just take an assessment of your
risk allocation and risk tolerance and just make sure things
(18:45):
are positioned correctly headed into the rest of twenty twenty
five your structure as part of a truly responsible, comprehensive
financial plan.
Speaker 1 (18:56):
Yeah, and I think I've said this a couple of
times this week.
Speaker 3 (18:58):
This is the time of now, Now that the market
is back to an all time high, this is the
time to It might be time to harvest if you
know you've got something coming up later this year, if
the money's gonna have to come out because you got
to pay for a wedding, you're going to do something
to the house, or buy a car or whatever the
thing is.
Speaker 1 (19:12):
If that money is sitting.
Speaker 3 (19:13):
In the stock market, first of all, slap yourself on
the hand because that should have been cash already if
the expense.
Speaker 1 (19:19):
Was coming up. But go ahead and take that game.
Speaker 3 (19:21):
If this is money that's in your IRA, you don't
have to take it out of the IRA. Maybe you're
not going to do this until early next year or
something like that, which is only six months away. You
could sell off some assets, protect them from in any
kind of downturn we might see or we may not,
and stick it in the money market inside the IRA.
Then you can make the distribution whatever you want. But
at least when you have to actually incur that expense
that has nothing to do with the stock market, you
(19:44):
will be doing it with dollars that aren't exposed.
Speaker 1 (19:46):
Here's the all Worth advice.
Speaker 2 (19:48):
When junk starts flying, it's time to check your parachute,
so to speak. Penny stock booms can be a warning
that risk is being mispriced if not completely ignored across
the board.
Speaker 1 (20:00):
Coming up next is.
Speaker 2 (20:01):
The local housing market cooling off or just catching its breath.
What local buyers and sellers need to know next. You're
listening to Simply Money, presented by all Worth Financial on
fifty five KRC, the Talk Station for your information.
Speaker 6 (20:16):
Everything we do we keep you informed is FYI for
my traffic information, for my weather information, your.
Speaker 2 (20:23):
Information from the White House check in throughout the day,
we have information.
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Speaker 2 (20:39):
You're listening to Simply Money, presented by all Worth Financial.
I'm Bob Sponseller along with Brian James, joined tonight by
our real estate expert, the owner of Remax Time, Michelle Sloan. Michelle,
thank you for making time for us today and I
know we are right in the thick of this hot.
Speaker 1 (20:56):
Summer market in real estate. Give us an update on
how things are looking.
Speaker 7 (21:01):
You know what, it's really easy because or it's not
really easy, to be very honest, The.
Speaker 8 (21:06):
Heat has got us. All our brains are all mixed up.
Speaker 7 (21:10):
But as far as the Cincinnati market, it is moving
right along very nicely. But in some areas of the
city we are seeing a major slowdown, meaning that there
are fewer buyers and homes are sitting on the market
for two, three, four weeks at a time, and then
there are other pockets that are still selling like hotcakes.
(21:34):
So if you ask me the general question in Cincinnati,
Ohio and northern Kentucky, is it a buyer or a
seller's market, I'm going to say yes both because it
really depends on where you are, and that's normal, to
be honest. Real estate is very very local. And in Cincinnati,
(21:55):
we have so many different communities west side, east side,
north side, downtown, et cetera, et cetera, and so they're
all very very different, and then the needs are different,
the types of homes are different, so you can.
Speaker 8 (22:09):
Expect that it's real estate is very local.
Speaker 3 (22:14):
So, Michelle, I have a question. I had a new
You're going to be on the show today. So this
occurred to me while I was having this conversation with
a new client. So these folks used to live in Cincinnati,
so they know this market. They recently moved down to Charleston.
Were still working with them, of course because zoom is
a wonderful thing, and they were sharing a story. They
were talking about wanting to maybe sell their home and
buy some land and build something out a little further out,
(22:35):
And I said, Okay, what's the timing on this, and
they said, well, this is not a great time to
sell in our area.
Speaker 1 (22:40):
And I thought, well, wait a minute.
Speaker 3 (22:41):
You just told me that this is a booming area
wherever you live outside Charleston is one of the highest
or quickest growing environments. That should be a great time
to sell. And they said, well, the problem is there
are there are a lot of starter homes being built
and that's pulling down the price of everything. And they
said there are ten houses in their more upscale neighborhood
that have been on the market for a little while,
price a little too high for the market there, And
(23:02):
that just sounds so different than what I think of
here Here. It seems like we have the opposite problem.
Because we also had a caller a little bit ago
who was looking for advice on how to give their
kids a money for a down payment because there aren't
enough starter homes.
Speaker 1 (23:14):
So am I catching on to the right thing? Is there?
Is there that much of a difference between Cincinnati and
other markets?
Speaker 8 (23:19):
Absolutely? One hundred percent?
Speaker 7 (23:20):
You know, every day I get calls from buyers who
are in like the two hundred to two hundred and
fifty thousand dollars price range, and we don't have a
lot of starter homes that are livable.
Speaker 8 (23:32):
You may find a.
Speaker 7 (23:33):
Home in that price range, but it needs a lot
of updates and a lot of our new construction here
in the Cincinnati market is high end homes five hundred
six hundred million dollars, and so it is definitely there
is a gap, in my opinion, in the market where
(23:53):
those first time home buyers, especially or lower income buyers
are having a really hard time finding something to move
into that really fits their needs. You know, I have
a young couple just got married. They're in that that's
their price range two hundred and fifty thousand dollars they
need to be. They work in Blue Ash, they want
to be within twenty minutes of Blue Ash, but they
(24:17):
have to go possibly up to thirty minutes outside of
the city to find something that's really going to fit
their needs. A three bedroom, two and a half bath,
you know, the kind of standard typical home that we
think of. So the market in Cincinnati is very different,
and that's why I always say real estate is local.
Make sure that you are constantly talking to a local
(24:39):
real estate agent who is really, you know, in tune
with what's happening in the particular area that you're interested in.
Speaker 1 (24:47):
Oh, thanks for that, Michelle, that's great information.
Speaker 3 (24:49):
So can you give us some more specifics and I
know it would be helpful to me and probably Bob too,
because we have a lot of questions from our clients
who are just trying to help their kids put the
pieces together and get them started. So what specifically do
you tell us somebody who is who loves Cincinnati wants
to stay here but doesn't want to live an hour
and a half outside the city just to be able
to afford something, how can they put the pieces together
for you know, whatever there is of a starter home
(25:09):
in this area, Well.
Speaker 7 (25:11):
They have to be ready, number one, one hundred percent
of the time. Buyers, especially in the lower price ranges,
are going to be in competition with other like buyers.
So you want to make sure that you have your
down payment, you want to make sure that you have
your pre approval. You also have to be very, very patient,
and that's the hard part because when you're excited about
(25:32):
buying a home, it's not easy to be patient. And
so you just have to have the connection with an
agent who's going to move on something fairly quickly when
it comes online.
Speaker 8 (25:43):
It is definitely is a.
Speaker 7 (25:45):
Process, and each buyer has to have now what's known
as a buyer's broker agreement. So you have to be
connected with an agent if you want to see a property.
So that's the first step is be connected and be patient.
Speaker 2 (26:02):
All right, Michelle, you talked about this a little bit already.
I mean, you said more homes are on the market,
some are taking longer to sell, some are moving very quickly.
I think even I'm smart enough to know probably the
answer to this question. It all comes down to price, right,
But and you said every neighborhood's different. So in general,
what is causing houses to sit longer and what are
(26:26):
causing houses to move like hotcakes? What are some big
things people can know out there as they're planning to
either buy or sell.
Speaker 7 (26:35):
So I went back and I looked at the Cincinnati
Multiple Listing service, and we have eight hundred new homes
that hit the market in the Cincinnati market just in
the last seven days. Eight hundred homes. That seems like
a lot. It is a lot. We're definitely up from
where we were when we were only seeing a couple
of hundred homes hit the market. But the one tell
(26:55):
for me is there have been four hundred and twenty
eight price reductions, meaning that our sellers are going in
with expectations that are higher than what buyers are willing
to pay. So everybody thinks their house is worth a
million dollars. I think mine is. You probably do too so,
(27:18):
but you have to really listen to your agent and
make sure that you're priced properly. It may not be
just how you feel emotionally about your home. It is
about the market and the changes in the market. And
as we're in July now, July, things tend to slow
down just a little bit. And that slow down because
people have already made their decisions, they're going on vacation,
(27:41):
they're getting ready for school to start again. You can't
believe that, but honestly, it's true. People are thinking about
going back to school and just living their summer life.
So we often see a slow down in the July timeframe.
It doesn't mean that if you sell. If you put
your house on the market today, it's not going to sell.
But you really do have to be realistic and listen
(28:04):
to your agent. Don't just take that emotional aspect of
selling your home into account.
Speaker 1 (28:11):
All right, Michelle in about the minute we have left.
Speaker 2 (28:14):
I mean, no good discussion about the real estate market
is complete without at least a couple thoughts on interest rates.
How if we do get some fed cuts here later
on this year, I know it's going to be probably
after the busy summer market. But you've talked before several
times about the importance of getting these long term thirty
year rates under seven percent. What would a quarter point
(28:36):
drop in mortgage rates quarter and a half a point
drop in mortgage rates due to the real estate market
here in the greater Cincinnati area, in your opinion, it.
Speaker 7 (28:45):
Will give buyers more buying power. I mean, that is
the biggest thing. So the person who can only afford
a two hundred and fifty thousand dollars home may be
able to, you know, just go up just a little bit,
but their payment will be the same. That's it's the
calculation that people are going to be able to make
in their mind. So if maybe they were looking at
(29:05):
that two hundred and seventy five thousand dollars home and
they just can't afford it at a seven percent mortgage rate,
but at a six and a half, you know what,
they might be able to make that happen now. I
don't love the idea of people buyers, especially young buyers,
being house poor. I don't want them to get into
a situation where they can't afford their mortgage. But it
(29:26):
does open up more opportunities. So the lower that rate goes,
if we can get to six and a half on
a thirty year fixed, I think it's going to open
up the market for some people.
Speaker 1 (29:36):
Makes a lot of sense.
Speaker 2 (29:37):
All right, Thanks as always to Michelle Sloan, our real
estate expert. Michelle Sloane, owner of Remax Time. You're listening
to Simply Money, presented by all Worth Financial on fifty
five KRC, the Talk station, Mark Levin.
Speaker 6 (29:51):
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You're listening to Simply Money, presented by all Worth Financial
Lampbop spond seller along with Brian James.
Speaker 1 (30:59):
You have a financial there's a question you'd like for
us to answer.
Speaker 2 (31:01):
There's a red button you can click while you're listening
to the show right on the iHeart app. Simply record
your question and it will come straight to us. All right,
First up, we've got John and Madeira lay it on us.
Speaker 1 (31:13):
John, the market's near all time highs.
Speaker 6 (31:15):
Is now a good time to shift some of my
portfolio to buffer ETFs or structured notes to protect gains?
Speaker 2 (31:23):
John, Here's how I'd answer this question. I think a
move into buffer ETFs or using structured notes is more
of an overall change in your asset allocation, not a rebalancing.
So what I mean by that is if you if
you're a traditional investor, Let's say that wants seventy five
percent of your portfolio in the stock market. When we've
(31:44):
had a nice little run in stocks, and that's seventy
five morphs into eighty or eighty two, what you should
be doing is just trim some of those gains and
move it back into the fixed income part of your portfolio.
That's just good sound rebalancing. Going into buffert ETFs is
just changing your overall allocation. That's a difference in strategy
(32:05):
to lower the overall risk exposure of your portfolio. That
may or may not make sense for you, giving your
retirement goals and time horizon and all that same thing
with structured notes. Structured notes is a pretty conservative way
to invest. So the way I would answer that is
it's good to look at some of these things, but
don't just jump into some of these new products and
(32:27):
strategies without recognizing what they actually do and don't do
for your overall portfolio. All right, Coming out next Steve
in Hebron.
Speaker 1 (32:38):
I'm helping my adult kids of a down payment. How
should I structure it so that I don't mess up
my own retirement plan? Yeah? Great, question, Steve, this comes
up more and more.
Speaker 2 (32:46):
It seems like, doesn't it Bob, where people are feeling
the need to help out their kids who might be
on a good path but just can't quite get over
the hump of where we are with interest rates and
real estate prices in this area, they're just not building
a lot of starter homes, so the price on these
homes a little higher than what previous generations have had
to deal with. So in any case, so to Steve
your question, yeah, so first off, to make sure it
(33:08):
doesn't affect your plan.
Speaker 1 (33:10):
Hopefully you have a plan, in other words, what course
were you on? First?
Speaker 3 (33:14):
Look, build a plan and stress test a plan of
cash flow and all those kinds of things. Hopefull you're
working with a fiduciary advisor or if you've got you know,
your your handle on all this stuff. Then figure out
what your plan looks like without this payment, and then
put it side by side with what if I part
with twenty thirty thousand dollars or perhaps you have a
bigger dollar amount in mine. So you got to understand
the path you were on first. Then you can look
(33:36):
at what's the impact if I give my kids some money?
Here that'll that'll kind of round about way never see again.
And you know that will also help you not only
determine whether it will sink your plan, but how much
can you get away with before you kind of run
to that danger zone. Okay, we're gonna move on to Carla.
Carl is looking at a second home purchase in sunny Florida.
Speaker 2 (33:54):
Well, husband and I are considering buying a second home
in Florida. Should we use cash of mortgage or look
at it as a part of our overall investment strategy. Well,
I would say, first, Carla, second homes are generally not
a part of an investment strategy. There you are an expense,
and I could tell you that from first hand, you
know experience, because you're adding a new utility bill, a
(34:16):
new internet.
Speaker 1 (34:17):
Bill, property taxes, all that. You know it.
Speaker 2 (34:20):
It tends to be a nice thing to own, and
you got to, but it's not. I would not consider
that part of an investment strategy. In terms of how
to pay for it. First of all, I'd make sure
your long term retirement and financial plan can sustain carving
out money to have a second home. Make sure you
can afford that second home and not throw your long
(34:40):
term retirement into risk in terms of paying it off
entirely or using a mortgage, all things being equal, I
don't like having mortgages in retirement, you know. I like
to have things paid off, especially at today's interest rates
of close to seven percent for a thirty year mortgage.
Just be careful there about how much money you borrow
(35:01):
at six and a half to seven percent interest. But
bottom line, take a look at your overall financial plan,
look at what assets you've got, what things you've got
available to use for this second home if it ends
up even making sense to buy, and then go from there,
work with a good fiduciary advisor to help you make
those decisions. All right, let's hear next from Tom in Mason.
Speaker 1 (35:24):
I've accumulated a lot of company stock over the years.
How do I unlined that without getting crushed by taxes?
Speaker 3 (35:30):
Yeah, this is an interesting point. This is kind of
a Cincinnati thing. I always use the phrasing we're a
Fortune five hundred city. We a lot of us work
for Fortune five hundred companies, or we work for companies
that support them, and that usually means corporate structures, and
that means company stock. First off, Tom, congratulations, for having
this problem in the first place. We don't have capital
gains taxes without capital gains, so that means you're in
(35:50):
a good spot just from having had that opportunity. In
any case, capital gains aren't as painful as income taxes.
Gains taxes are. For most people are going to be
in the fifteen percent range. If you're a high income
person might be twenty percent. But there's another piece. I
want to talk about it here real quick. People don't
know this. If you have if you can keep yourself
in a below ninety six thousand dollars worth income, you
(36:12):
might pay zero percent taxes. That's married filing jointly forty
eight thousand for a single person. Now, the gain itself
factors into those so it's not as easy to get
there as you might think. So first check there if
you can control your other sources of income.
Speaker 1 (36:25):
We don't know.
Speaker 3 (36:25):
We don't know if Tom is actually retired or if
he's got other income sources. But if you can stop
your or turn off your I'm sorry not file for
so security, live offf savings for a while, you know,
if you can't get in that situation, you can really
reduce those taxes. The other thing too, is if you're
not in that situation, and many people aren't, look specifically
at the tax lots, meaning each of all that company stock.
(36:45):
You probably reinvested, some dividends, did some different things. You
might have some that's low cost basis versus high cost basis.
You want to go ahead and take your your your
low cost basis ones with the biggest gains, liquidate those
specifically in low tax you and then do the high
cost basis ones when.
Speaker 1 (37:04):
You're in a higher income. Here we'll move on to
Jerry one more quick one and why fi I plan
to retire at different times? How do you coordinate incomplaining
when one person still has earnings?
Speaker 2 (37:15):
Well, Jerry, this is where it becomes important to look
at all your assets and whether they're in iras roth iras,
taxable accounts, look at social security, look at your streams
of income and sources from which you can draw income.
And this is where good tax, proactive tax planning and
tax strategy comes into play when you factor in how
(37:37):
to generate your cash flow. So it's you know, it
involves a lot of different things, and this is why
it's important to sit down.
Speaker 1 (37:46):
And look at the tax ramifications.
Speaker 2 (37:48):
Of where you take your money from, you know, depending
on when people want to retire. All right, Next, I've
got my two cents on managing some interest rate stuff
and mortgage debt and cash flow.
Speaker 1 (38:01):
You're with a real client story that I dealt with yesterday.
Speaker 2 (38:04):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC the talk station.
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They writings are happening.
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There's no bigger story right now. Fifty five KRC the
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Speaker 2 (38:43):
You're listening to Simply Money, presented by all Work Financial
on Bob sponsor and along with Brian James and Brian
I guess is a follow up to our last segment
to Ask the Advisor segments.
Speaker 1 (38:52):
Some good questions you know came in. I thought i'd share.
Speaker 2 (38:55):
A real life example eating I had yesterday with a
client they just retired at the end of last year,
and we're trying to manage their tax bracket to keep
them at the high end of that twelve percent marginal
tax bracket.
Speaker 1 (39:08):
They just sold one home, bought a condo.
Speaker 2 (39:11):
They got a mortgage, not a huge mortgage, but they
have a mortgage where they're paying six point seven percent interest.
And we started most of their moneys in iras, but
we got a little bit of money in different places
that we can draw on to draw down that mortgage.
Speaker 1 (39:25):
So the point here is we were able to.
Speaker 2 (39:28):
Do some good tax analysis to say we've got a
little bit. In this case, it was Kroger stock, low
cost basis stock. But the point you just made in
the last segment reared its head yesterday. Up to that
ninety six thousand dollars seven hundred and fifty dollars of
taxable income, the capital gains on that is zero. It
adds to total, you know, taxable income. But we're able
(39:51):
to use some of that stock, pay very little in taxes,
pay down that mortgage, flip them from a thirty year
mortgage to a fifteen year more mortgage, drop their interest
rate down by almost a full point, and that helps
them manage their cash flow because you know, they also
got some money sitting at two point twenty five percent
in a savings account.
Speaker 1 (40:12):
We use some of that money to pay down the mortgage.
Speaker 2 (40:14):
So the point is by doing some planning and really
looking at the impact of how we deploy different assets,
we were able to help this person, say thousands of
dollars at interest, stay within that low tax bracket we
need to stay in and do that all within the
context of a responsible cash flow planning strategy going into retirement.
(40:38):
The clients loved it. We saved them taxes, we saved
them interest. It was a very good meeting. Pays to
have a fiduciary advisor. And this isn't These aren't special
all Worth tricks. This is just knowing how the tax
code works and applying it to a specific situation.
Speaker 1 (40:50):
Yep, all right, thanks for listening.
Speaker 2 (40:51):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC the Talk station.
Speaker 1 (40:58):
Whatever you want to do, honey. You cannot say whatever
you want to do, honey, The Ramsey Show.
Speaker 2 (41:03):
I'm not taking the responsibility for this whole thing by myself.
More financial advice, I make better decisions with the other
half of my brain plugged in, called her, I don't
want to do everything I want to.
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Do, saving you cash and maybe your marriage. You're gonna
be with make weekdays at setup.
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Like fifty five KRC, it's the talk station.
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Number one preset for instant access. It's my go to
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Speaker 2 (00:13):
Tonight, How the Big Beautiful Bill might impact you. You're
listening to Simply Money, presented by all Worth Financial. I'm
Bob Sponseller along with Brian James. If you're following the
headlines at all, you're seeing that the President's Big Beautiful
Bill is everywhere. It's ubiquitous in the media, and it
looks like the thing might actually pass here within the
(00:34):
next I don't know, one to three days. Brian, we
want to give you some perspective on what's in the
bill and how it could impact you. Let's jump into
a few major points here, Brian, so quick disclaimer. As
we're speaking these words, this bill has not yet passed,
but by the time you hear them, it may have passed.
Speaker 1 (00:51):
So you're gonna hear the word could a lot. I think.
Speaker 3 (00:53):
We think whatever is going to pass is going to
look an awful lot like what's out there now. But
where we are right now, it'd have to go back
to the House to make sure the House is okay
with the changes that were made in the Senate, which
is mostly a bunch of pork for Alaska courtesy of
Lisa Murkowski. But so let's talk about the actual changes
that happened. So really one of the big focuses here
(01:13):
was a promise that Trump made during his campaign making
permanent the individual tax cuts that came into being via
the Tax Cuts Jobs Act of twenty seventeen. So one
of the things this is somewhat impactful. It's not going
to change things. But as I don't know about you, Bob,
but as I've had a lot of discussions with my
clients where we're in a tax planning type situation, perhaps
we're looking at ros conversions, that kind of thing. There's
(01:34):
always been felt like there's been a window, and the
window was the end of twenty twenty five. Whatever we're
gonna do that's going to incur taxes purposely for planning purposes,
we should get it done by the end of the
year because they're going to go away. That's not a
thing anymore.
Speaker 2 (01:45):
Yeah, I want to make a comment about that, because
what I've tried to stress to my clients, you know,
for the last year or so is what really matters
is putting a plan in place to help you avoid
jumping tax brackets where you see your margin rate go
up ten percent or eight percent, you know, from jumping
from the twelve percent marginal bracket to the twenty two
(02:07):
percent bracket, or from the twenty two percent bracket to
the thirty four percent bracket. Those are the things we
got to plan for. That's what really moves the needle.
Whether the twenty two percent bracket becomes the twenty three
point two percent bracket not a huge deal, right, And
if we get these if we get these you know,
rates permanent, these brackets permanent, which it sounds like, what's
(02:30):
going to happen. It takes all the urgency out of
doing any of this stuff by the end of the year.
And that's really been the case all along. In my opinion.
It's just back to the basic planning again. Worry about
jumping tax brackets, don't worry about whether the rates move
around one or two percent?
Speaker 1 (02:50):
What say you, Brad?
Speaker 2 (02:51):
I don't disagree with that in principle, However, what I
would say to that agree this makes for.
Speaker 1 (02:56):
Good radio exactly. Feel free to coming across the here, Bob,
do it. Keep your ass to yourself.
Speaker 3 (03:03):
Now I hurt my back left now I can't really
do it. I'll just slap at you anyway. No, in principle, no,
I think I think a rock conversion was a good idea,
you know, for in those situations before this.
Speaker 1 (03:12):
Became a topic. It's a good idea.
Speaker 3 (03:13):
After however, I would hate for somebody to have waited
until twenty six and not have had this happen and
have to endue a rock conversion anyway and pay taxes
at hire brackets. If you were if a rock conversion
was a good idea, it's a slightly better idea when
taxes are a little bit lower.
Speaker 2 (03:27):
That's my only concern. And I totally agree with that point. Absolutely,
we're on the same page. All right, let's pull it off.
Then I'm sitting back down. All right, Let's talk about
what's actually in this bill in terms of some of
these tax deductions. The bill in its present form, and
again that's if we don't get any eleventh hour changes,
it could offer a twenty five thousand dollars deduction on
(03:49):
tips and a deduction for overtime pay of up to
twelve five hundred dollars per individual or twenty five thousand
dollars per married couple. And you know, we go back
to what the President talked about no tax on tips.
Speaker 1 (04:04):
That's not totally true.
Speaker 2 (04:06):
There's just a deduction on tips as long as you're
a middle class working family, because the deduction on these
tips in overtime is going to phase out with the
bill in its current form for individuals making more than
one hundred and fifty thousand dollars a year or three
hundred thousand dollars a year for joint filers. I got
(04:26):
no problem with this, Brian. We're trying to help working families,
give them a little bit of a break here, and.
Speaker 1 (04:31):
I think this does that. Yeah. No, on its face, yes,
I totally agree with that.
Speaker 3 (04:35):
There's a lot of people out there are going to
benefit from this who generate a decent amount of income
on tips and overtime pay. They're getting raises right without
getting an actual salary increase. They're actually going to get
a raise in take home pay, which is a good thing.
What I'm fascinated to see, Bob, somebody out there right
now owns some restaurants or something, and they're going, Okay,
remember that whole movement where we were going to get
rid of tips. Tips were bad, and we're going to pay
(04:56):
everybody minimum wage and encourage people to move away from
the tipping society tells me that those people are gonna
suddenly think that taps tips are a good idea because
now I can pay my weight staff less and encourage
my customers to tip more.
Speaker 1 (05:10):
And that's attractive to everybody.
Speaker 3 (05:12):
So not that that's a bad thing, it's just these
are the interesting things to me, that what are people thinking,
What angles are we going to find, and what's this
all going to look like a year from now.
Speaker 2 (05:18):
Well, and the wonderful thing activity of the American people
in American business, and we talk about this all the time.
Speaker 1 (05:25):
We talked about it yesterday.
Speaker 2 (05:27):
The markets always adapt and the market's long term go
up because human beings adapt, companies adapt.
Speaker 1 (05:34):
People are very creative.
Speaker 2 (05:35):
And to your point, people are already scheming on how
to take advantage of this new.
Speaker 1 (05:39):
Tip rule before it even goes.
Speaker 3 (05:41):
You thought you saw a lot of tip jars before
Wait till this goes, Walmart's gonna have tip jars at
the executive office.
Speaker 1 (05:48):
Here's another thing.
Speaker 2 (05:49):
President Trump talked about no taxes on Social Security.
Speaker 1 (05:53):
That's partly true.
Speaker 2 (05:54):
What we're looking at here is a temporary deduction for
up to six thousand dollars for people age sixty five
and above, and that credit would face would begin to
phase out again for individuals making more than seventy five
thousand dollars or married.
Speaker 1 (06:10):
Couples making over one hundred and fifty thousand dollars.
Speaker 2 (06:13):
Again, it helps middle class taxpayers get a little break
on Social Security, but it does not make Social Security.
Speaker 1 (06:21):
Tax for everyone. That's the only part of this that
really frustrates me. I wish we could just get the
facts right into talking points.
Speaker 3 (06:26):
This is not despite the fact that he said it
about three times, this is not no taxation on Social Security.
Speaker 1 (06:30):
That's not the case.
Speaker 3 (06:31):
And again, this is a temporary deduction, just like the
so we may make it permanent, but not in this
go round.
Speaker 2 (06:38):
Yeah, another thing that might interest some people out there
is we're talking about a deduction for up to ten
thousand dollars on automobile loan interest through twenty twenty eight.
But you got to buy a vehicle that's assembled in
the United States, and you know that that's we're trying
to get stuff made here again, and we're trying to
(06:59):
incentivize people for buying American This is also going to
end a seventy five hundred dollars credit the drivers have
been able to claim when they purchase a new electric vehicle,
So you know this part I'm sure about. A tax
credit is way more valuable than a tax deduction. It is,
but a lot more people are buying regular, old gas
(07:21):
powered vehicles versus electric vehicles, so I don't know this
this will all wash out.
Speaker 3 (07:26):
Since these words are going to float around a lot,
I think we should define some terms here. A deduction, remember,
is simply just reducing your income so that you will
pay less taxes.
Speaker 1 (07:37):
A tax credit is like a gift card to pay
your taxes.
Speaker 3 (07:40):
So in other words, if you owed seventy five hundred
dollars and you and you bought an electric vehicle, then
your seventy five hundred dollars just went away. Versus the
ten thousand dollars deduction, it's a slightly higher amount, but
that's not a credit. That simply means that if you're
let's pretend you're in a twenty percent bracket, you get
a ten thousand dollar deduction that's going to bring you
two thousand dollars back. So it's not as much as
the electric vehicle was. But that's been a that's been
(08:00):
tenant of this administration since the beginning. They're trying to
not completely take away the tax benefits on a car purchases,
but it's going to look a little bit different.
Speaker 1 (08:07):
That's the difference between a credit and a deduction, all right.
Speaker 2 (08:10):
And then another thing I think we've all seen kicked
around in the media here for the last several weeks
and months is this whole thing called the salt deduction,
State and local tax deduction, and this really impacts people
in higher tax states like California and New York where
they got to super high taxes. And it looks like
the final version of this bill is going to put
(08:32):
a deduction cap at forty thousand dollars for five years.
And this is where we're going to make some tax
legislation temporary.
Speaker 1 (08:40):
Again.
Speaker 2 (08:40):
Forty thousand dollars for five years, that's where they were
able to compromise, and then it reverts back to ten
thousand dollars a year after twenty twenty nine. Doesn't really
impact a lot of people in the greater Cincinnati Northern
Kentucky area. But that's just part of the tax bill
we thought we'd mentioned.
Speaker 3 (08:56):
Yeah, and I think we are teeing up the Big
Beautiful Bill too, because we've already called out two things
that are just temporary. And again remember that the current
tax brackets from the TCJA in twenty seventeen are the
ones being made permanent now, So we're just teeing things
up for politicians to argue about a few years.
Speaker 2 (09:12):
You're listening to Simply Buddy, presented by all Worth Financial
Lob Bob Sponsorer along with Brian James. Brian list transitioned
into your favorite topic, how does this Big Beautiful Bill
impact the national debt of this country? Well, they good, Bob.
That's I don't really argue with the business and the
fiscal decisions that are being made here. But what I
(09:34):
really don't like, what really rubs me the wrong way
is that suddenly deficit spending is cool and not a
big deal and it's what the cool kids are doing
versus during the campaign, it was the worst thing ever.
And you know that just drives me nuts a little bit.
Speaker 3 (09:46):
So depending on who you believe that the Congressional Budget
Office is determining that this is going to actually increase
the national debt by a few trillion dollars because we're
not really and this is a habit that both sides.
Speaker 1 (10:00):
This is not Republicans versus Democrats. Both sides have done this.
Speaker 3 (10:03):
Republicans have a way of focusing on reducing taxes without
taking care or without removing the expenses that those taxes
go to pay for. Democrats have a way of simply
increasing the spending that we do. So really nobody is
putting all the puzzle pieces together. This would if we
built financial plans this way, we wouldn't have a business,
right Bob. We would lose all of our clients because
(10:24):
we would simply be encouraging them to spend more and
worry about the problems later. That's unfortunately what we're doing.
But we don't have the ability right now to elect
people who would talk to us as adults. So this
is going to come home to roost at some point.
But Mass says, we've got it. We've got a decently
long time before we have.
Speaker 1 (10:37):
To worry about all that.
Speaker 2 (10:38):
The only thing I'll say about the Congressional Budget Office
is they are notorious for not counting in any economic
growth when they when they run their numbers. And that's
hard to quantify because you think you're going to get growth.
We usually do get growth when we get tax reductions,
but you can't quantify that upfront, but it usually always come.
Speaker 1 (11:00):
But to your point, Uh, and.
Speaker 2 (11:02):
Our politicians for decades and decades a debt. We got
to get to the point here where we got to
either spend less or pay more in taxes or a
combination of both to balance this thing out and quit
running up this huge national debt.
Speaker 1 (11:17):
And I agree with you, Brian.
Speaker 2 (11:19):
None of these politicians are willing to just level with
us and talk to us like adults. So it is
potentially the ticking time bomb continues to grow and the
can continues to get kicked down the road.
Speaker 3 (11:31):
If the CBO is giving us information that leaves out
part of it, then that should be an easy talking
point for a Republican to refute, why don't we hear it?
Speaker 1 (11:38):
That may be the case.
Speaker 2 (11:40):
Do not draw me into a discussion. I'll be gaslighting.
I'll be fired immediately.
Speaker 1 (11:45):
All right, here matches at a gas can. Right, here's
the all Worth advice.
Speaker 2 (11:49):
We can't control what the government does, but we can
make smart moves and response.
Speaker 1 (11:54):
And that's our point here.
Speaker 2 (11:56):
A good fiduciary advisor can help you turn changes and
tax laws or tax brackets into opportunities for your financial plan.
There's always opportunities out there. Coming up next, trading in
penny stocks is booming again and why that could be
more of a red flag.
Speaker 1 (12:13):
Than a money making opportunity.
Speaker 2 (12:16):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC, the Talk station.
Speaker 4 (12:23):
From fifty five KRC, Cincinnati, make us the number one
pre set on your car radio and on the free
new and improved iHeartRadio app. Free never sounded so good.
Fifty five KRC, the Talk Station.
Speaker 5 (12:34):
Allworth Financial a registered investment advisory firm. Any ideas presented
during this program are not intended to provide specific financial advice.
You should consult your own financial advisor, tax consultant, or
a state planning attorney to conduct your own due diligence.
Speaker 2 (12:55):
Bob Sponsller along with Brian James. With markets near all
time high, is now a good time to shift some
of that portfolio into buffer ttfs or structured notes things
like that that will protect protect your gains. It's one
of the questions that you actually submitted to us, and
we'll answer that in more coming up at six forty three.
(13:16):
All right, Brian Robinhood Stock you know this online broker's
firm popped this week up nearly six percent thanks to
a move that might sound technical, but it's potentially got
some big implications. The company launched crypto based stock tokens.
These tokens mimic shares of popular popular US stocks like
(13:37):
Apple and Tesla, and that they can now be traded
twenty four to seven, Brian, what could possibly go wrong?
Speaker 1 (13:43):
Now, there's nothing wrong here.
Speaker 3 (13:46):
Well, what this is doing is is just circumventing the
rules and regulations that other countries have about their investors,
their residents being able to invest in the US stock markets.
That's always a complicated web of rules and regulations.
Speaker 1 (13:58):
US has them to so their country.
Speaker 3 (14:00):
So what they've done here is they're they're creating basically
like tracking and not tracking stocks.
Speaker 1 (14:05):
That's not the right term tracking tokens.
Speaker 3 (14:07):
And the one of the big innovations of any cryptocurrency
is the ability to track it on the blockchain structure,
which basically means there's a ledger on every computer and
every everywhere in the world that has U You know
that that's how they track who owns what, which is
just a different way of of kind of designing a broker.
So these tokens, we don't have a lot of details
on this, but these tokens are not going to have
(14:27):
voting rights. They're not going to have They just mimic
the movement of the stock. But you don't actually own
anything directly, so otherwise that would dilute the shares of
the firm. But you're just trading something that has assigned
the value whatever of whatever the underlying stock is. As
long as everybody agrees that, yeah, that's a legit way
to do it, and that's what the blockchain is, then
this this will be something to pay attention to. It
(14:48):
doesn't really affect anybody here in the United States, and
you're not you're not suddenly able to do things that
you weren't able to do before. But it's just interesting
that Robinhood seems to have found a new market for themselves.
Speaker 2 (14:57):
Yeah, and it's also interesting that we're now start to see,
you know, blockchain moved being used for things PEG two
stocks now, not just cryptocurrency.
Speaker 1 (15:08):
So again, just something to keep an eye on, all right.
Speaker 2 (15:10):
There's been also a surprising surge recently happening beneath the
surface of the stock market, and that's trading in penny
stocks has absolutely exploded in the last few months. We're
talking about a seventy five percent increase in average trading
daily trading volume over just the past year in penny stocks. Brian,
(15:31):
let's first talk about what they are. I mean penny stocks.
Let's you know, they're they're traded primarily on the pink sheets.
Now there's less regulation, and it's there's a reason for this.
Stocks that are trading at below a dollar a share
typically don't have very good fundamentals.
Speaker 3 (15:48):
Brian, Yeah, so they're they're trading underd dollars share. I
think of this, the stock market has never been anything
more than a gigantic auction. If nobody's bidding in your auction,
or very few people are bidding in your auction, then
the price isn't going to go very high. That's what
makes a penny stock a penny stock. There isn't that
There aren't that many investors out there that are moving
these things around. However, the attraction to them is. You
think of that if if suddenly, you know, if I'm
(16:09):
bidding on something at a couple cents, and then suddenly
nine to ten more people are interested in my auction. Well,
all of a sudden, that price is going to go
five cent, seven cents, eight cents. But don't think pennies.
Think in terms of you know, if something goes from
one cent to eight cents, that's an eight hundred percent increase,
and that happens in a very short amount of time,
and it goes away just as quickly. So that doesn't
happen all day, every day to every penny stock, but
(16:29):
it happens here and there, and that's what investors are
attracted to.
Speaker 2 (16:32):
Well, and the people that usually live in this world
are more day traders, not not investors. And there's lack
of information around these companies, you know, most of the time.
And the thing you got to also watch out for
if you treat one of these penny stocks like an investment,
reverse stock splits.
Speaker 1 (16:51):
They happen all the time.
Speaker 2 (16:53):
You just get your investment absolutely diluted, you know, by
a magnitude of ten, if not one hundred. These are
This is not a place to park retirement money. It's
a casino. This is the land of day traders. Now,
why are we even talking about this. The main point
we want to make is that it appears that speculative
(17:13):
appetite is back, and that tends to happen when people
perceive that there's no risk out there in the stock
market anymore, volatility has died down, people tend to say, well,
I can't lose money.
Speaker 1 (17:27):
I'm going to start to get.
Speaker 2 (17:28):
More speculative, speculative and take on more risk than I
might otherwise take And that can.
Speaker 1 (17:36):
Be a sign. It doesn't mean it is a sign,
but it can.
Speaker 2 (17:40):
Be a sign that people are getting allowed a little
bit over their skis here from a risk standpoint.
Speaker 3 (17:46):
Yeah, when we get to a point where the stock
market has done what it's done, and you can you
can find this part of the cycle in any of
the run ups we've had over the last several decades.
Speaker 1 (17:53):
Eventually, the stock market doing well just isn't good enough.
Speaker 3 (17:55):
For people because we all feel like we're bulletproof and
nothing bad can ever go wrong again, going to be
smooth sailing ahead. So I want a little more than
the stock marketing can give me. Therefore, I'm going to
go dabble in penny stock. So this doesn't mean that
we're gonna, as Bob said, that we're going to go
over the cliff. It just means that we might be
at a bit of a peek here for the market.
We might not be We could go up from here,
but you know, just don't be surprised if that happens.
Speaker 2 (18:15):
You're listening to Simply Money percented by all Worth Financial
on Bob's Sponsorer along with Brian James.
Speaker 1 (18:21):
What should people be doing, you know.
Speaker 2 (18:23):
Normal regular retirees and folks running a responsible portfolio. I
think stories like this just signal kind of what we
were talking about on yesterday's show. We're through half of
the year. The markets are up after a period of volatility.
Now it's time to just take an assessment of your
risk allocation and risk tolerance and just make sure things
(18:45):
are positioned correctly headed into the rest of twenty twenty
five your structure as part of a truly responsible, comprehensive
financial plan.
Speaker 1 (18:56):
Yeah, and I think I've said this a couple of
times this week.
Speaker 3 (18:58):
This is the time of now, Now that the market
is back to an all time high, this is the
time to It might be time to harvest if you
know you've got something coming up later this year, if
the money's gonna have to come out because you got
to pay for a wedding, you're going to do something
to the house, or buy a car or whatever the
thing is.
Speaker 1 (19:12):
If that money is sitting.
Speaker 3 (19:13):
In the stock market, first of all, slap yourself on
the hand because that should have been cash already if
the expense.
Speaker 1 (19:19):
Was coming up. But go ahead and take that game.
Speaker 3 (19:21):
If this is money that's in your IRA, you don't
have to take it out of the IRA. Maybe you're
not going to do this until early next year or
something like that, which is only six months away. You
could sell off some assets, protect them from in any
kind of downturn we might see or we may not,
and stick it in the money market inside the IRA.
Then you can make the distribution whatever you want. But
at least when you have to actually incur that expense
that has nothing to do with the stock market, you
(19:44):
will be doing it with dollars that aren't exposed.
Speaker 1 (19:46):
Here's the all Worth advice.
Speaker 2 (19:48):
When junk starts flying, it's time to check your parachute,
so to speak. Penny stock booms can be a warning
that risk is being mispriced if not completely ignored across
the board.
Speaker 1 (20:00):
Coming up next is.
Speaker 2 (20:01):
The local housing market cooling off or just catching its breath.
What local buyers and sellers need to know next. You're
listening to Simply Money, presented by all Worth Financial on
fifty five KRC, the Talk Station for your information.
Speaker 6 (20:16):
Everything we do we keep you informed is FYI for
my traffic information, for my weather information, your.
Speaker 2 (20:23):
Information from the White House check in throughout the day,
we have information.
Speaker 5 (20:28):
Fifty five KRC the Talk Station, an iHeartRadio station.
Speaker 2 (20:39):
You're listening to Simply Money, presented by all Worth Financial.
I'm Bob Sponseller along with Brian James, joined tonight by
our real estate expert, the owner of Remax Time, Michelle Sloan. Michelle,
thank you for making time for us today and I
know we are right in the thick of this hot.
Speaker 1 (20:56):
Summer market in real estate. Give us an update on
how things are looking.
Speaker 7 (21:01):
You know what, it's really easy because or it's not
really easy, to be very honest, The.
Speaker 8 (21:06):
Heat has got us. All our brains are all mixed up.
Speaker 7 (21:10):
But as far as the Cincinnati market, it is moving
right along very nicely. But in some areas of the
city we are seeing a major slowdown, meaning that there
are fewer buyers and homes are sitting on the market
for two, three, four weeks at a time, and then
there are other pockets that are still selling like hotcakes.
(21:34):
So if you ask me the general question in Cincinnati,
Ohio and northern Kentucky, is it a buyer or a
seller's market, I'm going to say yes both because it
really depends on where you are, and that's normal, to
be honest. Real estate is very very local. And in Cincinnati,
(21:55):
we have so many different communities west side, east side,
north side, downtown, et cetera, et cetera, and so they're
all very very different, and then the needs are different,
the types of homes are different, so you can.
Speaker 8 (22:09):
Expect that it's real estate is very local.
Speaker 3 (22:14):
So, Michelle, I have a question. I had a new
You're going to be on the show today. So this
occurred to me while I was having this conversation with
a new client. So these folks used to live in Cincinnati,
so they know this market. They recently moved down to Charleston.
Were still working with them, of course because zoom is
a wonderful thing, and they were sharing a story. They
were talking about wanting to maybe sell their home and
buy some land and build something out a little further out,
(22:35):
And I said, Okay, what's the timing on this, and
they said, well, this is not a great time to
sell in our area.
Speaker 1 (22:40):
And I thought, well, wait a minute.
Speaker 3 (22:41):
You just told me that this is a booming area
wherever you live outside Charleston is one of the highest
or quickest growing environments. That should be a great time
to sell. And they said, well, the problem is there
are there are a lot of starter homes being built
and that's pulling down the price of everything. And they
said there are ten houses in their more upscale neighborhood
that have been on the market for a little while,
price a little too high for the market there, And
(23:02):
that just sounds so different than what I think of
here Here. It seems like we have the opposite problem.
Because we also had a caller a little bit ago
who was looking for advice on how to give their
kids a money for a down payment because there aren't
enough starter homes.
Speaker 1 (23:14):
So am I catching on to the right thing? Is there?
Is there that much of a difference between Cincinnati and
other markets?
Speaker 8 (23:19):
Absolutely? One hundred percent?
Speaker 7 (23:20):
You know, every day I get calls from buyers who
are in like the two hundred to two hundred and
fifty thousand dollars price range, and we don't have a
lot of starter homes that are livable.
Speaker 8 (23:32):
You may find a.
Speaker 7 (23:33):
Home in that price range, but it needs a lot
of updates and a lot of our new construction here
in the Cincinnati market is high end homes five hundred
six hundred million dollars, and so it is definitely there
is a gap, in my opinion, in the market where
(23:53):
those first time home buyers, especially or lower income buyers
are having a really hard time finding something to move
into that really fits their needs. You know, I have
a young couple just got married. They're in that that's
their price range two hundred and fifty thousand dollars they
need to be. They work in Blue Ash, they want
to be within twenty minutes of Blue Ash, but they
(24:17):
have to go possibly up to thirty minutes outside of
the city to find something that's really going to fit
their needs. A three bedroom, two and a half bath,
you know, the kind of standard typical home that we
think of. So the market in Cincinnati is very different,
and that's why I always say real estate is local.
Make sure that you are constantly talking to a local
(24:39):
real estate agent who is really, you know, in tune
with what's happening in the particular area that you're interested in.
Speaker 1 (24:47):
Oh, thanks for that, Michelle, that's great information.
Speaker 3 (24:49):
So can you give us some more specifics and I
know it would be helpful to me and probably Bob too,
because we have a lot of questions from our clients
who are just trying to help their kids put the
pieces together and get them started. So what specifically do
you tell us somebody who is who loves Cincinnati wants
to stay here but doesn't want to live an hour
and a half outside the city just to be able
to afford something, how can they put the pieces together
for you know, whatever there is of a starter home
(25:09):
in this area, Well.
Speaker 7 (25:11):
They have to be ready, number one, one hundred percent
of the time. Buyers, especially in the lower price ranges,
are going to be in competition with other like buyers.
So you want to make sure that you have your
down payment, you want to make sure that you have
your pre approval. You also have to be very, very patient,
and that's the hard part because when you're excited about
(25:32):
buying a home, it's not easy to be patient. And
so you just have to have the connection with an
agent who's going to move on something fairly quickly when
it comes online.
Speaker 8 (25:43):
It is definitely is a.
Speaker 7 (25:45):
Process, and each buyer has to have now what's known
as a buyer's broker agreement. So you have to be
connected with an agent if you want to see a property.
So that's the first step is be connected and be patient.
Speaker 2 (26:02):
All right, Michelle, you talked about this a little bit already.
I mean, you said more homes are on the market,
some are taking longer to sell, some are moving very quickly.
I think even I'm smart enough to know probably the
answer to this question. It all comes down to price, right,
But and you said every neighborhood's different. So in general,
what is causing houses to sit longer and what are
(26:26):
causing houses to move like hotcakes? What are some big
things people can know out there as they're planning to
either buy or sell.
Speaker 7 (26:35):
So I went back and I looked at the Cincinnati
Multiple Listing service, and we have eight hundred new homes
that hit the market in the Cincinnati market just in
the last seven days. Eight hundred homes. That seems like
a lot. It is a lot. We're definitely up from
where we were when we were only seeing a couple
of hundred homes hit the market. But the one tell
(26:55):
for me is there have been four hundred and twenty
eight price reductions, meaning that our sellers are going in
with expectations that are higher than what buyers are willing
to pay. So everybody thinks their house is worth a
million dollars. I think mine is. You probably do too so,
(27:18):
but you have to really listen to your agent and
make sure that you're priced properly. It may not be
just how you feel emotionally about your home. It is
about the market and the changes in the market. And
as we're in July now, July, things tend to slow
down just a little bit. And that slow down because
people have already made their decisions, they're going on vacation,
(27:41):
they're getting ready for school to start again. You can't
believe that, but honestly, it's true. People are thinking about
going back to school and just living their summer life.
So we often see a slow down in the July timeframe.
It doesn't mean that if you sell. If you put
your house on the market today, it's not going to sell.
But you really do have to be realistic and listen
(28:04):
to your agent. Don't just take that emotional aspect of
selling your home into account.
Speaker 1 (28:11):
All right, Michelle in about the minute we have left.
Speaker 2 (28:14):
I mean, no good discussion about the real estate market
is complete without at least a couple thoughts on interest rates.
How if we do get some fed cuts here later
on this year, I know it's going to be probably
after the busy summer market. But you've talked before several
times about the importance of getting these long term thirty
year rates under seven percent. What would a quarter point
(28:36):
drop in mortgage rates quarter and a half a point
drop in mortgage rates due to the real estate market
here in the greater Cincinnati area, in your opinion, it.
Speaker 7 (28:45):
Will give buyers more buying power. I mean, that is
the biggest thing. So the person who can only afford
a two hundred and fifty thousand dollars home may be
able to, you know, just go up just a little bit,
but their payment will be the same. That's it's the
calculation that people are going to be able to make
in their mind. So if maybe they were looking at
(29:05):
that two hundred and seventy five thousand dollars home and
they just can't afford it at a seven percent mortgage rate,
but at a six and a half, you know what,
they might be able to make that happen now. I
don't love the idea of people buyers, especially young buyers,
being house poor. I don't want them to get into
a situation where they can't afford their mortgage. But it
(29:26):
does open up more opportunities. So the lower that rate goes,
if we can get to six and a half on
a thirty year fixed, I think it's going to open
up the market for some people.
Speaker 1 (29:36):
Makes a lot of sense.
Speaker 2 (29:37):
All right, Thanks as always to Michelle Sloan, our real
estate expert. Michelle Sloane, owner of Remax Time. You're listening
to Simply Money, presented by all Worth Financial on fifty
five KRC, the Talk station, Mark Levin.
Speaker 6 (29:51):
What are the Democrat Party? What have they done to
fight these Venezuelan gangs? What have they done to fight
MS thirteen? What have they done to deport people who
shouldn't be here? They're the reason and all these people
are here America. Chris van Holland the Democrat Party with
their media flax covering for them, promoting them, celebrating them,
Mark Levin, They're the reason we're in this situation.
Speaker 2 (30:13):
Tonight at ten oh six on fifty five KRC, the
talk station for your information.
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Everything we do we keep you informed.
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Just FYI am fifty five KRC the talk station.
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You're listening to Simply Money, presented by all Worth Financial
Lampbop spond seller along with Brian James.
Speaker 1 (30:59):
You have a financial there's a question you'd like for
us to answer.
Speaker 2 (31:01):
There's a red button you can click while you're listening
to the show right on the iHeart app. Simply record
your question and it will come straight to us. All right,
First up, we've got John and Madeira lay it on us.
Speaker 1 (31:13):
John, the market's near all time highs.
Speaker 6 (31:15):
Is now a good time to shift some of my
portfolio to buffer ETFs or structured notes to protect gains?
Speaker 2 (31:23):
John, Here's how I'd answer this question. I think a
move into buffer ETFs or using structured notes is more
of an overall change in your asset allocation, not a rebalancing.
So what I mean by that is if you if
you're a traditional investor, Let's say that wants seventy five
percent of your portfolio in the stock market. When we've
(31:44):
had a nice little run in stocks, and that's seventy
five morphs into eighty or eighty two, what you should
be doing is just trim some of those gains and
move it back into the fixed income part of your portfolio.
That's just good sound rebalancing. Going into buffert ETFs is
just changing your overall allocation. That's a difference in strategy
(32:05):
to lower the overall risk exposure of your portfolio. That
may or may not make sense for you, giving your
retirement goals and time horizon and all that same thing
with structured notes. Structured notes is a pretty conservative way
to invest. So the way I would answer that is
it's good to look at some of these things, but
don't just jump into some of these new products and
(32:27):
strategies without recognizing what they actually do and don't do
for your overall portfolio. All right, Coming out next Steve
in Hebron.
Speaker 1 (32:38):
I'm helping my adult kids of a down payment. How
should I structure it so that I don't mess up
my own retirement plan? Yeah? Great, question, Steve, this comes
up more and more.
Speaker 2 (32:46):
It seems like, doesn't it Bob, where people are feeling
the need to help out their kids who might be
on a good path but just can't quite get over
the hump of where we are with interest rates and
real estate prices in this area, they're just not building
a lot of starter homes, so the price on these
homes a little higher than what previous generations have had
to deal with. So in any case, so to Steve
your question, yeah, so first off, to make sure it
(33:08):
doesn't affect your plan.
Speaker 1 (33:10):
Hopefully you have a plan, in other words, what course
were you on? First?
Speaker 3 (33:14):
Look, build a plan and stress test a plan of
cash flow and all those kinds of things. Hopefull you're
working with a fiduciary advisor or if you've got you know,
your your handle on all this stuff. Then figure out
what your plan looks like without this payment, and then
put it side by side with what if I part
with twenty thirty thousand dollars or perhaps you have a
bigger dollar amount in mine. So you got to understand
the path you were on first. Then you can look
(33:36):
at what's the impact if I give my kids some money?
Here that'll that'll kind of round about way never see again.
And you know that will also help you not only
determine whether it will sink your plan, but how much
can you get away with before you kind of run
to that danger zone. Okay, we're gonna move on to Carla.
Carl is looking at a second home purchase in sunny Florida.
Speaker 2 (33:54):
Well, husband and I are considering buying a second home
in Florida. Should we use cash of mortgage or look
at it as a part of our overall investment strategy. Well,
I would say, first, Carla, second homes are generally not
a part of an investment strategy. There you are an expense,
and I could tell you that from first hand, you
know experience, because you're adding a new utility bill, a
(34:16):
new internet.
Speaker 1 (34:17):
Bill, property taxes, all that. You know it.
Speaker 2 (34:20):
It tends to be a nice thing to own, and
you got to, but it's not. I would not consider
that part of an investment strategy. In terms of how
to pay for it. First of all, I'd make sure
your long term retirement and financial plan can sustain carving
out money to have a second home. Make sure you
can afford that second home and not throw your long
(34:40):
term retirement into risk in terms of paying it off
entirely or using a mortgage, all things being equal, I
don't like having mortgages in retirement, you know. I like
to have things paid off, especially at today's interest rates
of close to seven percent for a thirty year mortgage.
Just be careful there about how much money you borrow
(35:01):
at six and a half to seven percent interest. But
bottom line, take a look at your overall financial plan,
look at what assets you've got, what things you've got
available to use for this second home if it ends
up even making sense to buy, and then go from there,
work with a good fiduciary advisor to help you make
those decisions. All right, let's hear next from Tom in Mason.
Speaker 1 (35:24):
I've accumulated a lot of company stock over the years.
How do I unlined that without getting crushed by taxes?
Speaker 3 (35:30):
Yeah, this is an interesting point. This is kind of
a Cincinnati thing. I always use the phrasing we're a
Fortune five hundred city. We a lot of us work
for Fortune five hundred companies, or we work for companies
that support them, and that usually means corporate structures, and
that means company stock. First off, Tom, congratulations, for having
this problem in the first place. We don't have capital
gains taxes without capital gains, so that means you're in
(35:50):
a good spot just from having had that opportunity. In
any case, capital gains aren't as painful as income taxes.
Gains taxes are. For most people are going to be
in the fifteen percent range. If you're a high income
person might be twenty percent. But there's another piece. I
want to talk about it here real quick. People don't
know this. If you have if you can keep yourself
in a below ninety six thousand dollars worth income, you
(36:12):
might pay zero percent taxes. That's married filing jointly forty
eight thousand for a single person. Now, the gain itself
factors into those so it's not as easy to get
there as you might think. So first check there if
you can control your other sources of income.
Speaker 1 (36:25):
We don't know.
Speaker 3 (36:25):
We don't know if Tom is actually retired or if
he's got other income sources. But if you can stop
your or turn off your I'm sorry not file for
so security, live offf savings for a while, you know,
if you can't get in that situation, you can really
reduce those taxes. The other thing too, is if you're
not in that situation, and many people aren't, look specifically
at the tax lots, meaning each of all that company stock.
(36:45):
You probably reinvested, some dividends, did some different things. You
might have some that's low cost basis versus high cost basis.
You want to go ahead and take your your your
low cost basis ones with the biggest gains, liquidate those
specifically in low tax you and then do the high
cost basis ones when.
Speaker 1 (37:04):
You're in a higher income. Here we'll move on to
Jerry one more quick one and why fi I plan
to retire at different times? How do you coordinate incomplaining
when one person still has earnings?
Speaker 2 (37:15):
Well, Jerry, this is where it becomes important to look
at all your assets and whether they're in iras roth iras,
taxable accounts, look at social security, look at your streams
of income and sources from which you can draw income.
And this is where good tax, proactive tax planning and
tax strategy comes into play when you factor in how
(37:37):
to generate your cash flow. So it's you know, it
involves a lot of different things, and this is why
it's important to sit down.
Speaker 1 (37:46):
And look at the tax ramifications.
Speaker 2 (37:48):
Of where you take your money from, you know, depending
on when people want to retire. All right, Next, I've
got my two cents on managing some interest rate stuff
and mortgage debt and cash flow.
Speaker 1 (38:01):
You're with a real client story that I dealt with yesterday.
Speaker 2 (38:04):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC the talk station.
Speaker 1 (38:10):
They writings are happening.
Speaker 6 (38:13):
It is a big deal.
Speaker 1 (38:14):
What is going on, a big event, some might even
say is huge news.
Speaker 2 (38:18):
And to keep up with what's happening in the Middle East,
this is not World War three, you'll need massive amounts
of information, massive on the anti Ice riots, on trade deals,
and terrence on the one big beautiful bill.
Speaker 4 (38:30):
Check in for the latest on every big story in Israel.
Speaker 1 (38:34):
There's no bigger story right now. Fifty five KRC the
talk station.
Speaker 2 (38:43):
You're listening to Simply Money, presented by all Work Financial
on Bob sponsor and along with Brian James and Brian
I guess is a follow up to our last segment
to Ask the Advisor segments.
Speaker 1 (38:52):
Some good questions you know came in. I thought i'd share.
Speaker 2 (38:55):
A real life example eating I had yesterday with a
client they just retired at the end of last year,
and we're trying to manage their tax bracket to keep
them at the high end of that twelve percent marginal
tax bracket.
Speaker 1 (39:08):
They just sold one home, bought a condo.
Speaker 2 (39:11):
They got a mortgage, not a huge mortgage, but they
have a mortgage where they're paying six point seven percent interest.
And we started most of their moneys in iras, but
we got a little bit of money in different places
that we can draw on to draw down that mortgage.
Speaker 1 (39:25):
So the point here is we were able to.
Speaker 2 (39:28):
Do some good tax analysis to say we've got a
little bit. In this case, it was Kroger stock, low
cost basis stock. But the point you just made in
the last segment reared its head yesterday. Up to that
ninety six thousand dollars seven hundred and fifty dollars of
taxable income, the capital gains on that is zero. It
adds to total, you know, taxable income. But we're able
(39:51):
to use some of that stock, pay very little in taxes,
pay down that mortgage, flip them from a thirty year
mortgage to a fifteen year more mortgage, drop their interest
rate down by almost a full point, and that helps
them manage their cash flow because you know, they also
got some money sitting at two point twenty five percent
in a savings account.
Speaker 1 (40:12):
We use some of that money to pay down the mortgage.
Speaker 2 (40:14):
So the point is by doing some planning and really
looking at the impact of how we deploy different assets,
we were able to help this person, say thousands of
dollars at interest, stay within that low tax bracket we
need to stay in and do that all within the
context of a responsible cash flow planning strategy going into retirement.
(40:38):
The clients loved it. We saved them taxes, we saved
them interest. It was a very good meeting. Pays to
have a fiduciary advisor. And this isn't These aren't special
all Worth tricks. This is just knowing how the tax
code works and applying it to a specific situation.
Speaker 1 (40:50):
Yep, all right, thanks for listening.
Speaker 2 (40:51):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC the Talk station.
Speaker 1 (40:58):
Whatever you want to do, honey. You cannot say whatever
you want to do, honey, The Ramsey Show.
Speaker 2 (41:03):
I'm not taking the responsibility for this whole thing by myself.
More financial advice, I make better decisions with the other
half of my brain plugged in, called her, I don't
want to do everything I want to.
Speaker 1 (41:16):
Do, saving you cash and maybe your marriage. You're gonna
be with make weekdays at setup.
Speaker 6 (41:21):
I trust my virtuous wife, and I have had no
lack of gain.
Speaker 1 (41:25):
Like fifty five KRC, it's the talk station.
Speaker 5 (41:28):
I want to learn how to cook the
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