Episode Transcript
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Speaker 1 (00:00):
Big things are happening.
Speaker 2 (00:02):
You check in for the latest Dotty run and Israel
Vice Riot, Big Beautiful Pill fifty five KRC.
Speaker 3 (00:12):
Tonight, some tariff updates, the current state of inflation, and
a closer look at the big Beautiful bill you're listening
to Simply Money, presented by all Worth Financial Umbob Sponsller
along with Brian Well Brian, President Trump decided to slap
a thirty percent tariff on.
Speaker 4 (00:28):
Mexico and the EU effect of August first, Like a
lot of the rest of these, you know, pending tariffs.
He had promised ninety trade deals in ninety days. So far,
we have a deal in place with the UK, the
Vietnam and a temporary ninety day troops with China. They're
expecting a deal with South Korea prior to President Trump's
(00:50):
self imposed August first deadline. But the saga continues, right Brian, Yeah,
I know, it was interesting to meet Bob.
Speaker 5 (00:58):
As so far, the market's going eh, which is really
different from back in April. If you remember that we
had we had the first go round of crazy tariffs,
where we were slapping tariffs on anything that wasn't nailed down,
and then we would pull them back down the next day,
and we were all learning about tariffs, tarf tariffs and
reading of every people started reading about the hawlly smooth
(01:18):
tariffs that are famous from Ferris Bueller and all that stuff,
and the market took a massive hit back then. So
we were down. I think at the worst point, the
Nasdaq was down close to twenty percent. SMP was down
something like fifteen percent. That was April, and things kind
of settled, the dust settle a little bit, and we're
having the same conversations again, right. You just rattled off
all the different things that are getting a slapped on
(01:39):
each country and when it's gonna happen. We're playing the
same game though, because we're not saying today, we're going
to say effective August first, because we want to kind
of rattle the saber and get people to react and
start behaving the way we want them to. The market, however,
doesn't care. As we're sitting here right now, the futures
are down just a little bit. Looks like it's gonna
be a down day, and it's raining outside. Why not
let's just be depressed all the way around. But it's
not massive down. It's just kind of like not a
(02:02):
great day. So, you know, I think at the very least,
we are used to this level of chaos. We've become
accustomed to it. I think what's really going to be interesting, though,
is some of the other numbers that are coming out, Bob.
We're seeing, we're seeing signs that inflation is kind of
behaving the way we wanted to, but we're also in
What that means is that President Trump probably wants attack
(02:25):
a rates lowered, because he's been chirping about that ever
since his first his first term in office. So we're
getting the results there, but we're also seeing a weakening
labor market. That's kind of what we want. Means economy
slowing down, and that's one of the drivers of inflation. However,
if we're if we're going to you know, the fed
chair fed chair Palell is kind of stuck between a
rock and a hard place in between the labor markets
(02:46):
movements and inflation rates, so in interest rates as well,
So he's gonna have to kind of choose which path
he wants. Fortunately that he's got a little bit of
time to think about it. Yeah, let's dive into that
a little bit.
Speaker 4 (02:55):
This whole inflation expectation thing, I mean, remember going back
to April. I mean, everybody in the media was screaming
and hollering saying this is gonna be tremendously inflationary, and
inflation's gonna spike and the markets are gonna get tanked.
And obviously the markets went down in the short term
back in April.
Speaker 6 (03:14):
But you know, as we look up going.
Speaker 4 (03:15):
Into the week starting this week, the S and P
five hundred is up just under seven percent for the year,
while the Nasdaq is up just under nine percent this year. Uh,
we've got earning season, you know, beginning in earnest this week,
with about forty S and P five hundred companies set
to report this week. But Brian, back to your point,
let's get into some of this inflation talk, because I'm
(03:38):
seeing I don't know what you're seeing. I'm seeing about
an eighty to ninety percent chance that the Fed's gonna
do nothing here in the July meeting. They don't meet
in August, so the next FED meeting is going to
be in September. What do you see out there as
far as the inflation print and what that's looking like
in terms of any FED moves, if any heading in
(04:00):
to the late third quarter early fourth quarter of twenty
twenty five.
Speaker 5 (04:03):
Yeah, I think the benefit that char Powell has is
that he doesn't have to do anything right now. Things
are you know, we're just seeing signs of things. We're
always seeing signs of things, right, green shoots or positive
you know, turbulence ahead, that kind of so we're always
looking for those little things. None of those little things
as we're speaking about this right now, none of those
little things are pointing to the need for immediate action
(04:24):
right now. And I think that's good in this particular
situation because unfortunately, when it comes to tariffs, obviously the
President has proven that he can do whatever he wants,
whenever he wants, He can even change his mind in
the twenty four hour period. The Federal Reserve is not
going to have that level of flexibility. They have to
meet they only meet once a month anyway, and they're
never gonna make quick pivots. So he really, really, really,
(04:44):
I'm sure, is hoping for the dust to kind of
settle on this stuff so that he can make a decision.
He'll make a decision now that's going to guide us
for the next several years, if not longer than that,
versus we have tariffs on, and tariff's off every other day,
so I don't think any decisions are anytime soon. Like
you mentioned, they're not even meeting here in August, and
there's not there's very little likelihood of anything happening now
(05:06):
because the need is just not there. However, September I
think is the next the next move we make. It
feels like we are leaning toward possibly possible rate cuts,
but again that's just a little green shoot kind of thing,
and it doesn't not necessarily mean anything. We might say
something entirely different tomorrow.
Speaker 4 (05:22):
Well, and as we all know, and this gets repeated
all the time, the FED loves to use that term
quote unquote data dependent. And if you look at inflation data,
inflation it's not, you know, coming way down. It's also
not spiking. It's just kind of hovering there, you know,
doing nothing in spite of all this ongoing tariff you
(05:42):
know news or non news.
Speaker 5 (05:44):
Uh.
Speaker 4 (05:45):
Meanwhile, the economy keeps chugging along. Employment, employment looks strong.
We'll see about corporate earnings, you know, you know Brian
as well as I do that the estimates. These companies
always lower estimates so they can come out and have
an Earning quote unquote beat when they report, but Earning's.
Speaker 6 (06:03):
Growth looks fairly healthy.
Speaker 4 (06:05):
I think it's just again a continued wait and see
approach based on what happens with tariffs. But at some point,
and this is where the arguments come in. You know,
certain economists thinks think that the tariffs are going to
be inflationary. Other economists think that any tariff news is
going to slow down the economy. Well, a gradually slowing
(06:28):
economy is actually good news for the stock and bond
market because that will eventually induce the FED to lower rates,
which lowers the cost of money, and we all know
the stock and bond market love cheaper money.
Speaker 6 (06:41):
Brian, Yeah, that's right, and.
Speaker 5 (06:42):
So let's put some actual numbers on this, Bob. So
where this is coming from is June's CPI consumer price
indexes forecasted to rise about a third of a percent
month over month for both headline and core. Remember where
there's two flavors of CPI that we like to look
at in terms of measuring inflation. Headline and core up
three tens of a percent month of a month. You
multiply that by twelve, you get an annual number. Now
(07:04):
you're looking at over three percent, so that's the This
is the first tangible impact that we've seen from these tariffs, right,
So we're just getting to the point where we might
be seeing how how the tariffs are gonna affect inflation.
Recall that the economy was pretty strong in Q four
and Q one because businesses were anticipating this run up
from the tariffs that stuff was gonna be more expensive,
(07:26):
so they just pre ordered a bunch of things, trying
to get it while it was on sale, knowing that
prices were gonna we're gonna rise eventually. So we're now
just now getting to the point where those supplies have
been depleted and now we're starting to buy things that
are made with raw materials that were that are priced
including the inflation. So probably going to see a little
bit of this continuing. At the same time with regard
(07:47):
to labor market, so private sector jobs have hit their
slowest growth rates since last fall. Unemployment plan of claims
have surged up to about a four year peak. Both
of these this is stuff that goes up and down,
so these are not alarming headlines other than the directions
that we're taking here. These trends would push policymakers to
cut brakes. So again, this is where the Fed is
(08:08):
caught between rising goods inflation and signs of a cooling
labor market. If inflation shows itself to be temporary and
jobs continue to soften, then the Fed could still consider
easing by September. But again, it's a heck of a
conundrum right now. And I'm glad that I am just
an armchair, you know, talking head on the radio that
just has to yack about it, not make the decisions.
Speaker 4 (08:26):
I don't know how you feel, No, you and me both. Hey,
let's pivot into this big beautiful bill. We finally had
a chance to kind of take a look at this thing.
And while some of these provisions are as advertised and
as expected, like the tax rates being permanent, there's some
other things that are a bit nuanced and not quite
as advertised. As a result, not as advertised based on
(08:48):
how some of these politicians talked about it. And I
guess that's to be expected when you have to negotiate
through both the House and the Senate. But Brian, let's
get into some of these key provisions of the big
beautiful Bill.
Speaker 5 (09:00):
It's about the main reason the big thing driving all
of this was to make permanent the Tax Cuts and
Jobs Act, the tax cuts that came from that. That
was twenty seventeen, and the only way we could get
that dragged across the finish line was to put an
expiration date on it. The expiration date was twelve thirty
one of this year, twenty twenty five. But now as
a part of the OBBBBBBBB or whatever we're calling it,
(09:22):
those are now permanent, So those tax rates are going
to be baked in. And there are some other features
as well. The big, big one this is interesting to
me because of the if you look at the political
lines that it kind of straddles, salt deduction. SALT stands
for state and local taxes. So in twenty seventeen, this
was a poke in the eye of all the blue
(09:43):
states because the President came in and, you know, kind
of wanted to put his stamp on things and basically said,
if you've chosen to be a high tax state, which
happens to be a lot of the Democratic leaning states,
then you can only deduct up to ten thousand dollars
of your state in local taxes. That's from twenty seventeen. Now,
as a result of this new act, they can now
(10:04):
deduct up to forty thousand dollars now state and local taxes.
If you're paying forty thousand dollars, you're obviously a pretty
high earning person. This is not something that's going to
affect that many people in the in the immediate area
of our of our listeners here. But it's interesting how
the political wins have kind of shifted. So forty thousand
dollars deduction now, but it phases out if you're a
modified adjust a gross income above five hundred thousand, and
(10:26):
it goes away completely by six hundred thousand. So there's
a small sliver a window of people who are getting
that deduction back, but it's that one is not going
to help your average tax payer.
Speaker 6 (10:35):
Well, and just.
Speaker 4 (10:36):
As I watched some of the sauceage get made here,
I think a lot of this. You know, Congressman Lawler
from up in New York, he this is where he
drew a line in the sand here. He's like, you're
not gonna get my vote if we don't get this
salt deduction up to forty thousand. And to your point,
he was able to protect the forty thousand for folks
that are not you know, ultra millionaires and billionaires.
Speaker 6 (10:57):
And I think he was.
Speaker 4 (10:58):
Being you know, genuine and his attempt to get that
deduction up for more middle class property owners and not
get them hammered. But hey, let's get into some of
the more common deductions here. The senior deduction for you know,
making tips and Social Security tax free. What actually came
into effect with the bill, Brian so a.
Speaker 5 (11:19):
Six thousand dollars per senior, per individual senior person for
that's sixty five plus. That's going to phase out starting though,
at seventy five thousand for a single, one hundred and
fifty thousand for a joint.
Speaker 4 (11:29):
All right, we'll have to leave it there, and we'll
get back to this big, beautiful bill, you know, later
on this week, because there's a lot to talk about
here coming up next why clinging to old investments might
be the one thing holding your retirement plan back. You're
listening to Simply Money, presented by all Worth Financial on
fifty five KRC, the talk.
Speaker 2 (11:47):
Station, Yes at KRC Cincinnati, available everywhere with the iHeartRadio.
Speaker 1 (11:53):
App down number one for podcasting. Fifty five KRC an
iHeartRadio station.
Speaker 2 (12:00):
All Worth 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 4 (12:19):
You're listening to Simply Money, presented by all Worth Financial
am Bob Sponseller along with Brian James.
Speaker 7 (12:25):
Hey.
Speaker 4 (12:25):
If you can't listen to Simply Money every night, subscribe
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Just search Simply Money on the iHeart app or wherever
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Speaker 6 (12:41):
Straight Ahead at six forty three.
Speaker 4 (12:42):
The lessons you can learn from going into a retirement
time machine, Brian, that's gonna be that's gonna be kind
of fun.
Speaker 6 (12:50):
All right. We see it all the time.
Speaker 4 (12:51):
Someone walks into our office with a portfolio they built
over twenty or thirty years, and it's filled with all
kinds of stuff, Brian. The stocks they love, mutual funds
from their four when K days, maybe even some company
shares from a past employer. And when we sit across
the desk and ask them why they own these certain things.
Speaker 6 (13:12):
The answer is often, well.
Speaker 4 (13:14):
I've just always had it, or it's done well for me,
or even it's part of my story.
Speaker 6 (13:21):
What do you say to those people, Brian?
Speaker 5 (13:22):
You know, Bob, I'm going through this literally today, the
other day and through this weekend, just in a slightly
different area of life. And I'm referring to my garage.
I have a lot of unfinished little projects out there
that they're all sitting in the garage about maybe eighty
ninety percent state of completion. And I'm sure whatever they
are where it was important to me the day that
I was working on it, but I've completely forgotten about it,
(13:43):
and it's just they're just kind of there. And so
that's a lot of times that's what happens to people.
And frankly, that's what drives people in the door, because
eventually they step way back and finally look at the
forest instead of the individual trees, and they go, what
is all of this stuff? What does it mean to me?
And I've realized and they realized I'm not even that
interested really in maintaining this stuff anymore. And Bob, that
defines me. I can't remember the last time I changed
(14:04):
my oil in own my lawnmower, but it still starts
the day that it doesn't start. All probably high professional
but anyway, So, yeah, people come in and they've got
this grab bag of just stuff that they Some of
it they inherited, some of it they bought because they
were interested in investing a while ago or something like that.
But they've never figured out exactly what role does all
this money play when they're trying to knit it all
together into something that can help them retire or accomplish
(14:24):
their financial goal.
Speaker 6 (14:25):
Yeah.
Speaker 4 (14:26):
The point we're trying to make here is your investment portfolio.
It's not a scrapbook. It's not a half rebuilt Harley
Davidson in your garage with a bunch of tools laying around,
or a.
Speaker 5 (14:39):
Family photo album because dad, grandpa, mom used to work
at this company and that's why we all own the stock,
even though none of us pays attention to the company anymore.
Speaker 4 (14:45):
Yeah, and you do need to change the oil on
your lawnmower, but not yet, not yet. I don't it
started this weekend, Bob. You'll be surprised when that day comes.
Speaker 6 (14:53):
All right.
Speaker 4 (14:54):
The point with this whole collection of investments is it
is a tool.
Speaker 6 (14:58):
You know, it should be built to do a job.
Speaker 4 (15:01):
And if it's not doing that job anymore, meaning you're consolidated,
coordinated investment and tax strategy, it might be time to
let some of those things go. And letting some of
those components of your portfolio go it doesn't mean you
were wrong before. It just means you're evolving. And we
talk about all the time investment. This investment business and
(15:23):
that particularly the text benefits and tax opportunities around investing
has changed and evolved dramatically over the last ten to
fifteen years, and we find a lot of times people
aren't even aware that some of these strategies even exist.
Speaker 5 (15:40):
Right, So let's take an example here, and I think
you know having been in this industry both of us here, Bob,
for several decades now. One of the big stories in
the stock market over the last several decades has been
Apple throwing out as an example.
Speaker 6 (15:52):
Because Apple's great companies, strong company.
Speaker 5 (15:54):
They are not going away, but not quite the shining
beacon that they once were. Steve Jobs is gone. Everybody
has an iPhone. Things just don't seem to be innovating
the way they used to. But if you've owned Apple
for a few decades. Then you have a pretty good
chunk of stock. And also you probably have some notion
that if you were to sell it, if it's in
a taxable account, you were to sell it, you're gonna
(16:14):
pay taxes. Most people go, oh, I just can't sell it,
so I'm gonna have to pay taxes. I can't deal
with that, don't want to have to think about it.
Speaker 4 (16:20):
Well, and then that whole portfolio attachment things comes into play.
Speaker 6 (16:23):
And here's what I mean by that.
Speaker 4 (16:25):
We love I mean we love staring at a statement
or an online you know, portfolio summary, and we love
seeing that four hundred percent gain every day. It proves
to us emotionally that we were right. We bought a
stock and it went up and we made a bunch
of money. And used to sit there at that and
(16:46):
stare at that big percentage gain and say, this is
done great for me. Why would I ever sell it?
I you, but a lot of people don't look at
what the performance of that nice stock position is done,
maybe in the last three to five years, as opposed
to a diversified portfolio.
Speaker 6 (17:06):
Do you ever find that?
Speaker 5 (17:07):
I do, absolutely, And then I'll go back to my
garage full of projects sometimes you have a statement full
of projects that had a purpose at one point in
your past. So really I think that the goal here
is Okay, now you've got something, what are you going
to do with it? So what could people do? Let's
get into that, bob. So if this is all money, right,
these are all financial instruments and they should somehow be
supporting you. Otherwise what was the point? So something you
(17:28):
might think about if you've got these kind of assets
out there, if you are charitably inclined and you've got
appreciated stocks, then you should look into something called a
donor advice fund. You can donate those shares to a
donor advice fund. You will reap the benefits of a deduction,
which you may not have anymore. Right when we sit,
when the standard deduction became a lot larger, a lot
of people lost the benefit of deducting charitable contributions.
Speaker 6 (17:52):
But this is the way.
Speaker 5 (17:52):
A donor advice one would allow you to make a
contribution now, but not ultimately have the charity receive it
until time of your choosing. So you make an irrevocable deduction,
now give it to the charity. Over the same two
through four five years, you would have intended anyway.
Speaker 4 (18:07):
Especially if you're one of those folks that's still writing
checks or putting currency into the offering plate at church,
or writing a check to chosen charities, and you're not
even able to take advantage of the much larger standard
deduction for married couples.
Speaker 6 (18:22):
This is a myss that we find all the time.
Speaker 4 (18:24):
And it's great that people are giving money to charity,
but there's just better ways to do it. And to
your point, you can kind of scale out of that
large concentrated position and do it on a much more
tax efficient basis. Another thing that we've talked about recently
and it's worth mentioning here again is direct direct indexing.
There are strategies where you can exchange that low cost
(18:48):
basis stock for a fully diversified portfolio stocks and not
have to take the tax hit. It's a wonderful strategy.
Speaker 5 (18:57):
Yeah, and that's a way too again you're putting diverse
in your portfolio.
Speaker 6 (19:00):
So let's give a quick example here.
Speaker 5 (19:02):
We're here in Cincinnati, So let's say one of us
has a bunch of P and G stock, another one
of us has a bunch of GE, and other ones
has a bunch of Kroger and keep.
Speaker 6 (19:09):
Adding to the list.
Speaker 5 (19:10):
Well, if we sell those because we want to diversify,
then yeah, we're going to incur a capital gain because
we sold the stock and took the game. However, if
we all contribute in kind to those shares to another
fund and then we redistribute shares of that fund to ourselves,
now we have a more diversified portfolio, and no one
has actually executed a sale resulting in a capital gain.
So that's called an exchange fund, and it's another way
(19:32):
to deal with the risk of a position that's got
a little too big.
Speaker 4 (19:36):
Yeah, so it comes down to when to reevaluate. And
the way I look at this is we all have
to ask ourselves. Does this investment that I'm holding still
align with my current needs? Is it helping me hit
my long term plan? Or am I just holding it
because I'm afraid to let it go? Or I don't
want to walk out into that garage and clean up
(19:57):
all the stuff laying on the floor.
Speaker 6 (19:58):
Started to sound like my spouse. I got one of
those too.
Speaker 4 (20:02):
Hey, if you don't know the answer, that's the sign
it's time for a review. Whether it's an old mutual fund,
a legacy annuity or a chunk of employer stock. You
owe it to yourself to reassess and reassess that with
a good fiduciary advisor who can help you look at
your various options. Here's the all Worth advice. Your money
isn't your identity. It's a tool to build the life
(20:25):
you want today, tomorrow, and into retirement. Coming up next,
it's the most emotional and most overlooked retirement decision, and
we're going to get into it.
Speaker 6 (20:37):
Coming up next.
Speaker 4 (20:37):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC, the Talk station.
Speaker 6 (20:43):
By texteen sixty four thousand.
Speaker 1 (20:45):
You agreed to RC an iHeartRadio station.
Speaker 4 (20:53):
You're listening to Simply Money presented by all Worth Financial
on Bob Sponseller along with Brian James. We talk a
lot about how to downsize your portfolio, but today we
want to talk about downsizing something far more emotional and Brian,
we run into this often with clients, the whole topic
(21:13):
of downsizing your home.
Speaker 5 (21:15):
Yeah, so this comes up in a lot of ways
during financial planning. It comes up in a form of
you know, people will realize that you know what we
don't do we want to be in this house anymore?
The kids are up and out and now it's just
a bunch of bedrooms. I gotta clean and that kind
of thing. But what I find, Bob, is frequently people
who have come to that conclusion will decide to move,
and then they move into a house that is the
(21:36):
same size. I think we get into our heads that, well,
I I've always lived in a five bedroom house. That's
just kind of what I need with just you know,
I don't want to it's too scary to go smaller.
But then inevitably we'll find people, you know, talking about
how they bought too much house in Heaven forbid. You know,
a lot of times there winds up being a mortgage
against it. Don't be one of those people who retires
and then puts a thirty year mortgage in place for
a bigger home that you you're just gonna fill with
(21:57):
stuff that someday you're going to have to drag a
good will.
Speaker 4 (22:00):
Well, we also talk with families that are struggling with Hey,
they deep down know that this big house that they
raise their kids in and where they've got a ton
of memories and it's been paid off for years and
they kind of swore to each other they'd never leave
the house. You know, they just feel like they can't
leave because of all these memories. They want to have
(22:21):
a place where their kids to come back, all good stuff,
but sometimes those maintenance costs, taxes, upkeep, it just becomes
a huge burden to them that prevents them from traveling
and doing some other things that they might otherwise like
to do if they didn't have this.
Speaker 6 (22:38):
Huge house to take care of it.
Speaker 5 (22:40):
And Bob, I think this is where some war stories
from our financial planning tables here at all Worth can
come in.
Speaker 6 (22:44):
So what I'm speaking about is when we've got, you know.
Speaker 5 (22:48):
The the heirs of their parents, my mom and dad
have passed away, it's time to settle the estate, and
it's time for everybody has received their distributions, and the
very first thing that they wind up talking about is
we're going to get rid of this house. Mom and
Dad were convinced that we wanted it. We just didn't know.
None of us, the siblings, nobody wanted this house. Because
we've all got our own houses and we're happy where
(23:08):
we are. I think people tend to convince themselves that
I have these warm wonderful memories. And this isn't to
take any of that away. That is important stuff. But
I have these warm, wonderful memories in this structure. Therefore
it must be maintained and passed down. And your kids
have those warm, wonderful memories too, and they know it's
important to you. They may not be being upfront with
you as to whether they really want this house. Most
(23:29):
of the time. One of the very first calls that
happens during the settlement of a state is a real
estate agent because we can't let that house sit empty.
Speaker 6 (23:34):
We got to deal with it.
Speaker 5 (23:36):
Something's going to go wrong with it if nobody's paying
attention to it, and we're going to eat property taxes
and expenses as long as we have it, so they're
going to sell it relatively quickly, so you know, we
make make decisions based on that knowledge as you move
forward on your own plan.
Speaker 4 (23:48):
Well, the other thing to keep in mind, Brian, is
the larger the house and the longer you've lived there.
And my wife and I went through this personally, you know,
about four years ago. The more accumulated crap you've got
in that house to use your garage and tool example,
I mean you stay in a house for seventeen eighteen
twenty years, you raise a few kids there, and all
(24:10):
you got a whole bunch of stuff laying around in
there that you don't need and nobody wants. And if
you end up dying with that big house and all
the crud that's in it, that can create a whole
other set of burdens for your kids. Like what are
we how are we going to get rid of all
this stuff?
Speaker 7 (24:27):
Yeah?
Speaker 5 (24:28):
I always think back to seventh grade chemistry over at
Sainty Nace's on there on the west side when I
think about this a gaseous element. One of the characteristics
of a gaseous element is that it expands to fill
the container it's in.
Speaker 6 (24:39):
And I got news for you about so do we.
Speaker 5 (24:41):
If I have a big house, I'm gonna fill it
with stuff I probably don't need, but I got the
room for it, so why not.
Speaker 4 (24:46):
You're listening to Simply Money presented by all Worth financial
lum Bob Sponseller along with Brian James. Let's get into
taxes and numbers a little bit. Brian, what are some
of the benefits in addition to unburdening yourself with the
huge house and all the stuff that's in it. Let's
talk about tax planning opportunities if you decide to make
a change.
Speaker 1 (25:05):
Yeah.
Speaker 5 (25:05):
So one of the things that most people are comfortable
is the concept of well, if I own something anything
a stock, a mutual fund, collectibles, crypto, whatever, if I'm
going to sell it at a gain, then the irs
is going to come sniffing around for some taxes.
Speaker 6 (25:18):
And that is true most of the time, but not
in this case.
Speaker 5 (25:21):
So if you're sitting on a house that has a
good chunk of equity built into it and you there's
some rules you got to follow, but basically, with the
moment you downsize that home to a smaller house, you
will have incurred a gain. You can always roll the
gain forward when you're buying a bigger house, that's never
a thing. But when you are buying a smaller house,
you get a one time, lifetime exemption where you can
(25:42):
take up to a two hundred and fifty thousand dollars
gain if you're an individual, a half million dollar gain
per couple, and you can avoid paying any capital tax
capital gain taxes on that at all. And again this
is specific to a house. You have to have lived
in it for two of the previous five years and
that right, so there's no flipping of property here in
the short has to be really be your house, and
so there's a hoops you got to jump through there.
(26:03):
But the point is you can get out from under
that home and avoid capital gain taxes.
Speaker 4 (26:07):
Yeah, one more thing to throw out there if you're thinking,
and we're not trying to sell people on you know,
liquidating their home, but a lot of times people I
think they want to make a change, they just don't
know how to go about it. You know, you talked
about the tax implications. One other thing, just from an
emotional and lifestyle standpoint.
Speaker 6 (26:26):
Is test it out.
Speaker 4 (26:28):
Go rent something that for three to six months or
a year that might be in your wheelhouse or where
you think you might want to live from a lifestyle
standpoint and home standpoint, and see how it works before
you pull the trigger and buy something else or sell
that home that you've been in, you know, for twenty years.
Test it out, make sure it's the right move, and
(26:50):
then you're not going to regret your decision down the road.
Here's the all Worth advice. Your home has served your family,
perhaps for decades now, it's time to ask, is it's
still serving you? Coming up next, how a retirement time
machine can keep you from making bad financial decisions. You're
listening to Simply Money, presented by all Worth Financial on
(27:11):
fifty five KRC, the talk station.
Speaker 1 (27:16):
The natural world develops slowly forming over the course of millennia.
In our world developments, we have a developing situation that
happened fast. The latest developments to developments. This is just
developing out of the Middle East.
Speaker 4 (27:32):
Their ability to develop a nuclear weapon.
Speaker 1 (27:34):
It's been neutralized, But for how long?
Speaker 4 (27:36):
For?
Speaker 1 (27:36):
What's developing?
Speaker 7 (27:38):
Quite a striking development now right now it's developing.
Speaker 1 (27:42):
Fifty five KRC the talk station.
Speaker 4 (27:46):
Government program fifty five KRC where it's still okay to
tell us what you think. You're listening to Simply Money,
presented by all Worth Financial Life Bob Sponseller along with
Brian James. You have a financial question you'd like for
us to answer, Well, there's a red button you can
(28:07):
click while you're listening to the show right there on
the iHeart app. Simply record your question and it will
come straight to us. We all want to know what
retirement will look like, but most of us are making
choices today without fully understanding the future impact at all.
What if you could climb into a time machine, Brian
(28:27):
and see the results of your decisions fifteen to twenty
years down the road. Wouldn't that be fun?
Speaker 6 (28:33):
Yeah? This is really an important part of financial planning.
Speaker 5 (28:35):
So I think a lot of people get hung up
on the idea that you know that I don't know.
Speaker 6 (28:40):
I can't predict the future. I don't know what's going
to happen.
Speaker 5 (28:42):
Therefore I shouldn't bother making any decisions right now, and
that impacts things from how much should I be saving
my four Oh? And okay, when do I turn on
my Social Security? Can we afford to take this big
vacation or you know, retire at a certain time or whatever.
It's never about right now. Most people are able to
make the decision that they want and do what they're
gout tells them they want to do right now. But
we can't pull the trigger because we cannot see fifteen
(29:04):
twenty years into the future. So let's go through some
mathematical examples here to kind of help people understand what
this is about. First, we'll take a Mike. Mike is
a young guy. He's established in his career Mary's got
a couple kids, brings in one hundred and fifty thousand
dollars a year. Mike's big question this is we get
this all the time. Am I putting enough away in
my four to oh one K? And the answer to
that is, well, what are you trying to accomplish with it?
(29:25):
Are you one of these fire people you know financial independence,
retire early? Well, then the answers, put as much as
you can possibly afford to not mess up your current bills.
Or are you somebody who wants to live a certain lifestyle.
You're just trying to make sure you're putting away a
minimum of enough. So Mike right now is putting ten
percent into his four oh one K. That's pretty average.
That's pretty pretty standard. We try to get everybody to
double digits and then you'll be in the ballpark of OK.
(29:46):
But he's wondering, well, what if we sacrifice some things
now and instead of ten, I put twenty percent in
and my pay drops, my take on pay drops now.
But at the same time I'm putting away more money.
So his original plan, Bob, if he's putting away ten
percent and we get a seven percent annual return, right,
that is that's kind of the Goldilock zone.
Speaker 6 (30:03):
That's not too high, not too low.
Speaker 4 (30:04):
It's not unreasonable, good balance portfolio for a long term
not super responsible, responsible return of something.
Speaker 5 (30:11):
Yeah, now a forty year old guy could be more aggressive.
That's a little bit of a different story. So we're
just trying to keep the number simple. So if Mike
does that, he works for twenty five years and now
he's got roughly nine hundred thousand dollars in today's dollars,
that's a nice pile. He's doing sixty five and he's
sixty five, so he's forty. Now we did this for
twenty years. What's the difference. So he right now could
generate about maybe a reliable fifty thousand dollars a year
(30:32):
worth of income off of that. On top of his
he'll have so security and some other things as well,
and that's pretty good.
Speaker 6 (30:37):
But it might limit them.
Speaker 5 (30:38):
They may maybe back off on the travel, or maybe
there's not as much going to the grandkids as the
rest of the family. So let's look at it again. Mike,
who is again now forty, decides you know what, let's
let's forego some of the take home pay. I'm going
to bump to twenty percent. What does that result in
now putting twenty percent of his salary away for twenty
five years, now he's.
Speaker 6 (30:56):
Got one point eight million. This is just math.
Speaker 5 (30:58):
This is the snowball effect. The the you know, the
bigger the numbers, the larger the snowball gets. And this
really starts to change the game because now we're talking
ninety thousand dollars in sustainable retirement income. Again, that's in
addition to Social Security, all that stuff. Bob is back
on the table, retiring earlier, taking the bigger trips, helping
the grandkids.
Speaker 6 (31:15):
All of it's back.
Speaker 4 (31:16):
Well, and we need to talk about one thing, and
I'm going back in time, you know, reverse time machine.
Remember Mike's forty and he has two kids. Those two
kids cost money. So Mike's probably right in the middle
of travel, sports, music lessons, you know, ballet lessons, all
that stuff. He's probably saying, yeah, Bob and Brian, it'd
(31:38):
be great to put twenty percent of my income away,
but I got bills, you know, to cover today. So
it is a balancing act. It's easy for us to
pull out a calculator and say, yep, you could have
one point eight million dollars if you save all this money.
I think the point we're trying to make is at
least run some numbers and just don't hope all this
(31:59):
works out a day sixty five, seventy seventy five. Run
some numbers when you're early in your early forties, and
then you can make some informed decisions on hey, if
I sacrifice a little bit, now, here's the benefit that's
going to pay down there.
Speaker 5 (32:13):
And as a financial advisor, I would say, to my guess,
that's exactly correct. You've got stuff screaming for money now.
But I would say, Mike, do you know your own worth?
You've been at your job for a couple decades now,
and you're a loyal guy and so forth. Are you
sure you're being paid what your experience says your worth?
Do you have you looked at other opportunities out there?
Have you talked to your bosses about you?
Speaker 6 (32:31):
Know where you are?
Speaker 5 (32:31):
So sometimes you can simply increase what's coming in at
the top. Then you can find extra dollars. But again,
that comes back to knowing what your value is and
not wasting a bunch of time getting underpaid.
Speaker 4 (32:40):
You're listening to simple money presented by all Worth Financial
on Bob Sponseller along with Brian James. Brian introduced us
to Lisa. Let's look at another test case here. Okay,
so a little bit of a different situation.
Speaker 5 (32:51):
So Lisa's got she is a little bit nervous, and
so she's got a half million dollars that she has
put away. We don't know where it came from. Of course,
maybe she inherited it. She just let it build up
over time. This is not retirement money, but it's just
sitting in a money market fund earning about three percent.
So she's got about thirteen years until retirement, which means
at that three percent good safe rate, that's going to
(33:13):
grow to about seven hundred and twenty five thousand dollars.
And she's also in her retirement account, she's got an
extra two fifty so now she's got about nine to
seventy five total, and that's not terrible, but she's drawing
down that principal pretty quickly, and so mathematically Lisa will
be out of money by the time she's eighty or thereabouts.
So let's do this again. Let's say that she takes
that half million and doesn't buy into the notion that
(33:35):
the stock market could go poof tomorrow. I always love
that argument, Bob or people so well, the stock market
it goes down because so and so lost all his money.
I'm looking at the S and P five hundred right now.
It still exists. Kroger is still open, P and G
is still open. Stock market doesn't go away. So if
she puts it in a conservative balanced portfolio, that would
earn about six and a half percent by average on
by about age sixty five.
Speaker 6 (33:55):
Now, her half.
Speaker 5 (33:55):
Million is one point one million dollars at her existing
two fifty to that. Now she's retiring with a net
worth of a one and a half million dollars. That
is a big difference between scraping and by just paying
the bills and having a nice, comfortable life.
Speaker 6 (34:07):
Well, and it's a huge change.
Speaker 4 (34:09):
And the nice thing is it didn't require any sacrifice.
She didn't have to earn more money, she didn't have
to cut back on her current spending. All she had
to do was change her investment strategy and be open
to something that has worked for decades and decades and decades,
and just take advantage of what the markets give you
over a long period of time. And again she didn't
(34:30):
get an extra twenty years to save her money. She
didn't win the lottery. She just made smarter, more intentional
choices now in order to get those huge dividends down
the road with making no other changes in her lifestyle.
Here's the all Worth advice. The future isn't a mystery.
Oftentimes it's a math problem, and the earlier you solve it,
(34:52):
the better your retirement story will probably end. You're listening
to Simply Money, presented by all Worth Financial on fifty
five KARC the talk Station, Mark Levin.
Speaker 7 (35:03):
Let me tell you, so, the Internet is breeding evil,
breeding evil, and TikTok is the main culprit. And I
don't know what's happening with TikTok, but that damn thing
needs to be sold now and it needs to be
cleaned up. And I don't want to hear about free
speech and everything else. It's a private company. The company
needs to clean it up because this is crazy between
the communist Chinese and all the crap that people put.
Speaker 6 (35:25):
On this stuff.
Speaker 1 (35:26):
Mark Levin tonight at ten oh six on fifty five
KRC the Talk Station.
Speaker 6 (35:31):
It's Champion Windows Anniversary sale.
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Come to her the most terrifying words in the English language.
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Are I'm from the government and I'm here to help.
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Fifty five KRC the talk station.
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You're listening to, simply money.
Speaker 4 (35:46):
There's out of by all Worth Financial Ambobs one seller
along with Brian James and Brian on my two I'm
gonna give you my two cents here, just another story
on this whole Should I switch to a different house scenario?
Talked about a couple of them during the prior segment.
I'm gonna share one that I've run across more often
than not, and I want to spend a few minutes
(36:07):
on it, get your take on it, and it's story
time with Bob's bonsor story time. A lot of times
people say, hey, Bob, we want to downsize. We want
to sell our big house and we want to buy
a ranch with everything on the first floor in a
big great room. And so we're gonna sell our four
or five bedroom house. We're gonna pocket all that money
(36:28):
and we're gonna be able to go out and get
this beautiful ranch that has everything on the first floor,
and that'll solve all our problems going forward. What they find,
what I find oftentimes is they have not gone out
and looked at the cost of this ranch home. Factored
in the part that everybody wants a ranch home with
the main bedroom and bathroom on the first floor in
(36:50):
the big great room.
Speaker 6 (36:52):
And those houses cost a lot of money.
Speaker 4 (36:54):
And when people go out and start looking at it,
they find that they're really not gonna save any money.
And oftentimes by the time they fix up that ranch house,
they're looking at spending more money than what their current
house is worth. And they rationalized making a decisions quote
unquote downsizing, and they didn't really downsize at all.
Speaker 6 (37:17):
Have you ever seen that one come down though? Absolutely?
Speaker 5 (37:19):
And I think this is a big supply and demand
discussion because there's tons of You can drive anywhere around
Cincinnati and see new subdivisions going up.
Speaker 6 (37:25):
How many of them are full of ranch homes?
Speaker 5 (37:27):
Right, And I'm not referring to the ones where are
all patio homes retirement type communities. A lot of people
aren't quite ready to take that step yet. They want
a ranch home in a more traditional neighborhood. But those
don't exist anymore because the builders can't make as much
to build them.
Speaker 4 (37:38):
Yeah, and here's the point I'm trying to make here.
Count the cost and take your time before you delve
into this. Oftentimes, if you spend a little bit of
money on an architect and take your existing four bedroom
home with the master bedroom and bath on the second floor,
and convert your first floor to accommodate all that you
can find that you can spend less money staying put,
(38:00):
putting a little money into that is existing home, staying
in that neighborhood that you love and have been there forever,
and really win as opposed to just making a rational
short term decision that you might be surprised at how
much money and aggravation it costs you.
Speaker 5 (38:16):
Yeah, I've had some clients go through this where and
I joke with them, and there's more than one where
they almost financially speaking, built a house inside of a house.
They spent a significant amount of money improving their place
for this exact reason, but it prevented them from having
to buy a whole new place and incurring those expenses.
So even though it was significant to reconfigure their house
to something that would make them happy, it wasn't near
what a brand new house would cost.
Speaker 4 (38:36):
Well, and a lot of people like all that first
floor stuff, the master bath, the master bedroom, the great room,
and if you do take the time to reconfigure a
current home, if you stay in it and your heirs
do decide to sell it down the road, they sell
it a lot quicker because it's been fixed up the way,
you know, to meet that supply and demand that we
talk about all right, thanks for listening. You've been listening
(38:58):
to Simply Money, presented by all Worth Financial on fifty
five KRC, the Talk Station, The threat of Iran, the
end of the Twelve Day War, the cease file, the
latest news.
Speaker 1 (39:10):
I gotta get Israel to calm down. Now we're on
the verge of real peace in the Middle East. And
your latest oginians we should not be involved. We have
to be involved. I trust what President Trump is doing.
They don't want peace. It will never end.
Speaker 5 (39:21):
You're about it, the constantly changing narratives, more news.
Speaker 4 (39:24):
Out of the Middle East.
Speaker 1 (39:25):
Talk about it. I have thoughts and questions. There's a
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How our team is always here to answer your questions.
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Big things are happening.
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Speaker 3 (00:12):
Tonight, some tariff updates, the current state of inflation, and
a closer look at the big Beautiful bill you're listening
to Simply Money, presented by all Worth Financial Umbob Sponsller
along with Brian Well Brian, President Trump decided to slap
a thirty percent tariff on.
Speaker 4 (00:28):
Mexico and the EU effect of August first, Like a
lot of the rest of these, you know, pending tariffs.
He had promised ninety trade deals in ninety days. So far,
we have a deal in place with the UK, the
Vietnam and a temporary ninety day troops with China. They're
expecting a deal with South Korea prior to President Trump's
(00:50):
self imposed August first deadline. But the saga continues, right Brian, Yeah,
I know, it was interesting to meet Bob.
Speaker 5 (00:58):
As so far, the market's going eh, which is really
different from back in April. If you remember that we
had we had the first go round of crazy tariffs,
where we were slapping tariffs on anything that wasn't nailed down,
and then we would pull them back down the next day,
and we were all learning about tariffs, tarf tariffs and
reading of every people started reading about the hawlly smooth
(01:18):
tariffs that are famous from Ferris Bueller and all that stuff,
and the market took a massive hit back then. So
we were down. I think at the worst point, the
Nasdaq was down close to twenty percent. SMP was down
something like fifteen percent. That was April, and things kind
of settled, the dust settle a little bit, and we're
having the same conversations again, right. You just rattled off
all the different things that are getting a slapped on
(01:39):
each country and when it's gonna happen. We're playing the
same game though, because we're not saying today, we're going
to say effective August first, because we want to kind
of rattle the saber and get people to react and
start behaving the way we want them to. The market, however,
doesn't care. As we're sitting here right now, the futures
are down just a little bit. Looks like it's gonna
be a down day, and it's raining outside. Why not
let's just be depressed all the way around. But it's
not massive down. It's just kind of like not a
(02:02):
great day. So, you know, I think at the very least,
we are used to this level of chaos. We've become
accustomed to it. I think what's really going to be interesting, though,
is some of the other numbers that are coming out, Bob.
We're seeing, we're seeing signs that inflation is kind of
behaving the way we wanted to, but we're also in
What that means is that President Trump probably wants attack
(02:25):
a rates lowered, because he's been chirping about that ever
since his first his first term in office. So we're
getting the results there, but we're also seeing a weakening
labor market. That's kind of what we want. Means economy
slowing down, and that's one of the drivers of inflation. However,
if we're if we're going to you know, the fed
chair fed chair Palell is kind of stuck between a
rock and a hard place in between the labor markets
(02:46):
movements and inflation rates, so in interest rates as well,
So he's gonna have to kind of choose which path
he wants. Fortunately that he's got a little bit of
time to think about it. Yeah, let's dive into that
a little bit.
Speaker 4 (02:55):
This whole inflation expectation thing, I mean, remember going back
to April. I mean, everybody in the media was screaming
and hollering saying this is gonna be tremendously inflationary, and
inflation's gonna spike and the markets are gonna get tanked.
And obviously the markets went down in the short term
back in April.
Speaker 6 (03:14):
But you know, as we look up going.
Speaker 4 (03:15):
Into the week starting this week, the S and P
five hundred is up just under seven percent for the year,
while the Nasdaq is up just under nine percent this year. Uh,
we've got earning season, you know, beginning in earnest this week,
with about forty S and P five hundred companies set
to report this week. But Brian, back to your point,
let's get into some of this inflation talk, because I'm
(03:38):
seeing I don't know what you're seeing. I'm seeing about
an eighty to ninety percent chance that the Fed's gonna
do nothing here in the July meeting. They don't meet
in August, so the next FED meeting is going to
be in September. What do you see out there as
far as the inflation print and what that's looking like
in terms of any FED moves, if any heading in
(04:00):
to the late third quarter early fourth quarter of twenty
twenty five.
Speaker 5 (04:03):
Yeah, I think the benefit that char Powell has is
that he doesn't have to do anything right now. Things
are you know, we're just seeing signs of things. We're
always seeing signs of things, right, green shoots or positive
you know, turbulence ahead, that kind of so we're always
looking for those little things. None of those little things
as we're speaking about this right now, none of those
little things are pointing to the need for immediate action
(04:24):
right now. And I think that's good in this particular
situation because unfortunately, when it comes to tariffs, obviously the
President has proven that he can do whatever he wants,
whenever he wants, He can even change his mind in
the twenty four hour period. The Federal Reserve is not
going to have that level of flexibility. They have to
meet they only meet once a month anyway, and they're
never gonna make quick pivots. So he really, really, really,
(04:44):
I'm sure, is hoping for the dust to kind of
settle on this stuff so that he can make a decision.
He'll make a decision now that's going to guide us
for the next several years, if not longer than that,
versus we have tariffs on, and tariff's off every other day,
so I don't think any decisions are anytime soon. Like
you mentioned, they're not even meeting here in August, and
there's not there's very little likelihood of anything happening now
(05:06):
because the need is just not there. However, September I
think is the next the next move we make. It
feels like we are leaning toward possibly possible rate cuts,
but again that's just a little green shoot kind of thing,
and it doesn't not necessarily mean anything. We might say
something entirely different tomorrow.
Speaker 4 (05:22):
Well, and as we all know, and this gets repeated
all the time, the FED loves to use that term
quote unquote data dependent. And if you look at inflation data,
inflation it's not, you know, coming way down. It's also
not spiking. It's just kind of hovering there, you know,
doing nothing in spite of all this ongoing tariff you
(05:42):
know news or non news.
Speaker 5 (05:44):
Uh.
Speaker 4 (05:45):
Meanwhile, the economy keeps chugging along. Employment, employment looks strong.
We'll see about corporate earnings, you know, you know Brian
as well as I do that the estimates. These companies
always lower estimates so they can come out and have
an Earning quote unquote beat when they report, but Earning's.
Speaker 6 (06:03):
Growth looks fairly healthy.
Speaker 4 (06:05):
I think it's just again a continued wait and see
approach based on what happens with tariffs. But at some point,
and this is where the arguments come in. You know,
certain economists thinks think that the tariffs are going to
be inflationary. Other economists think that any tariff news is
going to slow down the economy. Well, a gradually slowing
(06:28):
economy is actually good news for the stock and bond
market because that will eventually induce the FED to lower rates,
which lowers the cost of money, and we all know
the stock and bond market love cheaper money.
Speaker 6 (06:41):
Brian, Yeah, that's right, and.
Speaker 5 (06:42):
So let's put some actual numbers on this, Bob. So
where this is coming from is June's CPI consumer price
indexes forecasted to rise about a third of a percent
month over month for both headline and core. Remember where
there's two flavors of CPI that we like to look
at in terms of measuring inflation. Headline and core up
three tens of a percent month of a month. You
multiply that by twelve, you get an annual number. Now
(07:04):
you're looking at over three percent, so that's the This
is the first tangible impact that we've seen from these tariffs, right,
So we're just getting to the point where we might
be seeing how how the tariffs are gonna affect inflation.
Recall that the economy was pretty strong in Q four
and Q one because businesses were anticipating this run up
from the tariffs that stuff was gonna be more expensive,
(07:26):
so they just pre ordered a bunch of things, trying
to get it while it was on sale, knowing that
prices were gonna we're gonna rise eventually. So we're now
just now getting to the point where those supplies have
been depleted and now we're starting to buy things that
are made with raw materials that were that are priced
including the inflation. So probably going to see a little
bit of this continuing. At the same time with regard
(07:47):
to labor market, so private sector jobs have hit their
slowest growth rates since last fall. Unemployment plan of claims
have surged up to about a four year peak. Both
of these this is stuff that goes up and down,
so these are not alarming headlines other than the directions
that we're taking here. These trends would push policymakers to
cut brakes. So again, this is where the Fed is
(08:08):
caught between rising goods inflation and signs of a cooling
labor market. If inflation shows itself to be temporary and
jobs continue to soften, then the Fed could still consider
easing by September. But again, it's a heck of a
conundrum right now. And I'm glad that I am just
an armchair, you know, talking head on the radio that
just has to yack about it, not make the decisions.
Speaker 4 (08:26):
I don't know how you feel, No, you and me both. Hey,
let's pivot into this big beautiful bill. We finally had
a chance to kind of take a look at this thing.
And while some of these provisions are as advertised and
as expected, like the tax rates being permanent, there's some
other things that are a bit nuanced and not quite
as advertised. As a result, not as advertised based on
(08:48):
how some of these politicians talked about it. And I
guess that's to be expected when you have to negotiate
through both the House and the Senate. But Brian, let's
get into some of these key provisions of the big
beautiful Bill.
Speaker 5 (09:00):
It's about the main reason the big thing driving all
of this was to make permanent the Tax Cuts and
Jobs Act, the tax cuts that came from that. That
was twenty seventeen, and the only way we could get
that dragged across the finish line was to put an
expiration date on it. The expiration date was twelve thirty
one of this year, twenty twenty five. But now as
a part of the OBBBBBBBB or whatever we're calling it,
(09:22):
those are now permanent, So those tax rates are going
to be baked in. And there are some other features
as well. The big, big one this is interesting to
me because of the if you look at the political
lines that it kind of straddles, salt deduction. SALT stands
for state and local taxes. So in twenty seventeen, this
was a poke in the eye of all the blue
(09:43):
states because the President came in and, you know, kind
of wanted to put his stamp on things and basically said,
if you've chosen to be a high tax state, which
happens to be a lot of the Democratic leaning states,
then you can only deduct up to ten thousand dollars
of your state in local taxes. That's from twenty seventeen. Now,
as a result of this new act, they can now
(10:04):
deduct up to forty thousand dollars now state and local taxes.
If you're paying forty thousand dollars, you're obviously a pretty
high earning person. This is not something that's going to
affect that many people in the in the immediate area
of our of our listeners here. But it's interesting how
the political wins have kind of shifted. So forty thousand
dollars deduction now, but it phases out if you're a
modified adjust a gross income above five hundred thousand, and
(10:26):
it goes away completely by six hundred thousand. So there's
a small sliver a window of people who are getting
that deduction back, but it's that one is not going
to help your average tax payer.
Speaker 6 (10:35):
Well, and just.
Speaker 4 (10:36):
As I watched some of the sauceage get made here,
I think a lot of this. You know, Congressman Lawler
from up in New York, he this is where he
drew a line in the sand here. He's like, you're
not gonna get my vote if we don't get this
salt deduction up to forty thousand. And to your point,
he was able to protect the forty thousand for folks
that are not you know, ultra millionaires and billionaires.
Speaker 6 (10:57):
And I think he was.
Speaker 4 (10:58):
Being you know, genuine and his attempt to get that
deduction up for more middle class property owners and not
get them hammered. But hey, let's get into some of
the more common deductions here. The senior deduction for you know,
making tips and Social Security tax free. What actually came
into effect with the bill, Brian so a.
Speaker 5 (11:19):
Six thousand dollars per senior, per individual senior person for
that's sixty five plus. That's going to phase out starting though,
at seventy five thousand for a single, one hundred and
fifty thousand for a joint.
Speaker 4 (11:29):
All right, we'll have to leave it there, and we'll
get back to this big, beautiful bill, you know, later
on this week, because there's a lot to talk about
here coming up next why clinging to old investments might
be the one thing holding your retirement plan back. You're
listening to Simply Money, presented by all Worth Financial on
fifty five KRC, the talk.
Speaker 2 (11:47):
Station, Yes at KRC Cincinnati, available everywhere with the iHeartRadio.
Speaker 1 (11:53):
App down number one for podcasting. Fifty five KRC an
iHeartRadio station.
Speaker 2 (12:00):
All Worth 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 4 (12:19):
You're listening to Simply Money, presented by all Worth Financial
am Bob Sponseller along with Brian James.
Speaker 7 (12:25):
Hey.
Speaker 4 (12:25):
If you can't listen to Simply Money every night, subscribe
and get our daily podcast. You can listen the following
morning during your commute to work or at the gym.
Just search Simply Money on the iHeart app or wherever
you find your podcasts.
Speaker 6 (12:41):
Straight Ahead at six forty three.
Speaker 4 (12:42):
The lessons you can learn from going into a retirement
time machine, Brian, that's gonna be that's gonna be kind
of fun.
Speaker 6 (12:50):
All right. We see it all the time.
Speaker 4 (12:51):
Someone walks into our office with a portfolio they built
over twenty or thirty years, and it's filled with all
kinds of stuff, Brian. The stocks they love, mutual funds
from their four when K days, maybe even some company
shares from a past employer. And when we sit across
the desk and ask them why they own these certain things.
Speaker 6 (13:12):
The answer is often, well.
Speaker 4 (13:14):
I've just always had it, or it's done well for me,
or even it's part of my story.
Speaker 6 (13:21):
What do you say to those people, Brian?
Speaker 5 (13:22):
You know, Bob, I'm going through this literally today, the
other day and through this weekend, just in a slightly
different area of life. And I'm referring to my garage.
I have a lot of unfinished little projects out there
that they're all sitting in the garage about maybe eighty
ninety percent state of completion. And I'm sure whatever they
are where it was important to me the day that
I was working on it, but I've completely forgotten about it,
(13:43):
and it's just they're just kind of there. And so
that's a lot of times that's what happens to people.
And frankly, that's what drives people in the door, because
eventually they step way back and finally look at the
forest instead of the individual trees, and they go, what
is all of this stuff? What does it mean to me?
And I've realized and they realized I'm not even that
interested really in maintaining this stuff anymore. And Bob, that
defines me. I can't remember the last time I changed
(14:04):
my oil in own my lawnmower, but it still starts
the day that it doesn't start. All probably high professional
but anyway, So, yeah, people come in and they've got
this grab bag of just stuff that they Some of
it they inherited, some of it they bought because they
were interested in investing a while ago or something like that.
But they've never figured out exactly what role does all
this money play when they're trying to knit it all
together into something that can help them retire or accomplish
(14:24):
their financial goal.
Speaker 6 (14:25):
Yeah.
Speaker 4 (14:26):
The point we're trying to make here is your investment portfolio.
It's not a scrapbook. It's not a half rebuilt Harley
Davidson in your garage with a bunch of tools laying around,
or a.
Speaker 5 (14:39):
Family photo album because dad, grandpa, mom used to work
at this company and that's why we all own the stock,
even though none of us pays attention to the company anymore.
Speaker 4 (14:45):
Yeah, and you do need to change the oil on
your lawnmower, but not yet, not yet. I don't it
started this weekend, Bob. You'll be surprised when that day comes.
Speaker 6 (14:53):
All right.
Speaker 4 (14:54):
The point with this whole collection of investments is it
is a tool.
Speaker 6 (14:58):
You know, it should be built to do a job.
Speaker 4 (15:01):
And if it's not doing that job anymore, meaning you're consolidated,
coordinated investment and tax strategy, it might be time to
let some of those things go. And letting some of
those components of your portfolio go it doesn't mean you
were wrong before. It just means you're evolving. And we
talk about all the time investment. This investment business and
(15:23):
that particularly the text benefits and tax opportunities around investing
has changed and evolved dramatically over the last ten to
fifteen years, and we find a lot of times people
aren't even aware that some of these strategies even exist.
Speaker 5 (15:40):
Right, So let's take an example here, and I think
you know having been in this industry both of us here, Bob,
for several decades now. One of the big stories in
the stock market over the last several decades has been
Apple throwing out as an example.
Speaker 6 (15:52):
Because Apple's great companies, strong company.
Speaker 5 (15:54):
They are not going away, but not quite the shining
beacon that they once were. Steve Jobs is gone. Everybody
has an iPhone. Things just don't seem to be innovating
the way they used to. But if you've owned Apple
for a few decades. Then you have a pretty good
chunk of stock. And also you probably have some notion
that if you were to sell it, if it's in
a taxable account, you were to sell it, you're gonna
(16:14):
pay taxes. Most people go, oh, I just can't sell it,
so I'm gonna have to pay taxes. I can't deal
with that, don't want to have to think about it.
Speaker 4 (16:20):
Well, and then that whole portfolio attachment things comes into play.
Speaker 6 (16:23):
And here's what I mean by that.
Speaker 4 (16:25):
We love I mean we love staring at a statement
or an online you know, portfolio summary, and we love
seeing that four hundred percent gain every day. It proves
to us emotionally that we were right. We bought a
stock and it went up and we made a bunch
of money. And used to sit there at that and
(16:46):
stare at that big percentage gain and say, this is
done great for me. Why would I ever sell it?
I you, but a lot of people don't look at
what the performance of that nice stock position is done,
maybe in the last three to five years, as opposed
to a diversified portfolio.
Speaker 6 (17:06):
Do you ever find that?
Speaker 5 (17:07):
I do, absolutely, And then I'll go back to my
garage full of projects sometimes you have a statement full
of projects that had a purpose at one point in
your past. So really I think that the goal here
is Okay, now you've got something, what are you going
to do with it? So what could people do? Let's
get into that, bob. So if this is all money, right,
these are all financial instruments and they should somehow be
supporting you. Otherwise what was the point? So something you
(17:28):
might think about if you've got these kind of assets
out there, if you are charitably inclined and you've got
appreciated stocks, then you should look into something called a
donor advice fund. You can donate those shares to a
donor advice fund. You will reap the benefits of a deduction,
which you may not have anymore. Right when we sit,
when the standard deduction became a lot larger, a lot
of people lost the benefit of deducting charitable contributions.
Speaker 6 (17:52):
But this is the way.
Speaker 5 (17:52):
A donor advice one would allow you to make a
contribution now, but not ultimately have the charity receive it
until time of your choosing. So you make an irrevocable deduction,
now give it to the charity. Over the same two
through four five years, you would have intended anyway.
Speaker 4 (18:07):
Especially if you're one of those folks that's still writing
checks or putting currency into the offering plate at church,
or writing a check to chosen charities, and you're not
even able to take advantage of the much larger standard
deduction for married couples.
Speaker 6 (18:22):
This is a myss that we find all the time.
Speaker 4 (18:24):
And it's great that people are giving money to charity,
but there's just better ways to do it. And to
your point, you can kind of scale out of that
large concentrated position and do it on a much more
tax efficient basis. Another thing that we've talked about recently
and it's worth mentioning here again is direct direct indexing.
There are strategies where you can exchange that low cost
(18:48):
basis stock for a fully diversified portfolio stocks and not
have to take the tax hit. It's a wonderful strategy.
Speaker 5 (18:57):
Yeah, and that's a way too again you're putting diverse
in your portfolio.
Speaker 6 (19:00):
So let's give a quick example here.
Speaker 5 (19:02):
We're here in Cincinnati, So let's say one of us
has a bunch of P and G stock, another one
of us has a bunch of GE, and other ones
has a bunch of Kroger and keep.
Speaker 6 (19:09):
Adding to the list.
Speaker 5 (19:10):
Well, if we sell those because we want to diversify,
then yeah, we're going to incur a capital gain because
we sold the stock and took the game. However, if
we all contribute in kind to those shares to another
fund and then we redistribute shares of that fund to ourselves,
now we have a more diversified portfolio, and no one
has actually executed a sale resulting in a capital gain.
So that's called an exchange fund, and it's another way
(19:32):
to deal with the risk of a position that's got
a little too big.
Speaker 4 (19:36):
Yeah, so it comes down to when to reevaluate. And
the way I look at this is we all have
to ask ourselves. Does this investment that I'm holding still
align with my current needs? Is it helping me hit
my long term plan? Or am I just holding it
because I'm afraid to let it go? Or I don't
want to walk out into that garage and clean up
(19:57):
all the stuff laying on the floor.
Speaker 6 (19:58):
Started to sound like my spouse. I got one of
those too.
Speaker 4 (20:02):
Hey, if you don't know the answer, that's the sign
it's time for a review. Whether it's an old mutual fund,
a legacy annuity or a chunk of employer stock. You
owe it to yourself to reassess and reassess that with
a good fiduciary advisor who can help you look at
your various options. Here's the all Worth advice. Your money
isn't your identity. It's a tool to build the life
(20:25):
you want today, tomorrow, and into retirement. Coming up next,
it's the most emotional and most overlooked retirement decision, and
we're going to get into it.
Speaker 6 (20:37):
Coming up next.
Speaker 4 (20:37):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC, the Talk station.
Speaker 6 (20:43):
By texteen sixty four thousand.
Speaker 1 (20:45):
You agreed to RC an iHeartRadio station.
Speaker 4 (20:53):
You're listening to Simply Money presented by all Worth Financial
on Bob Sponseller along with Brian James. We talk a
lot about how to downsize your portfolio, but today we
want to talk about downsizing something far more emotional and Brian,
we run into this often with clients, the whole topic
(21:13):
of downsizing your home.
Speaker 5 (21:15):
Yeah, so this comes up in a lot of ways
during financial planning. It comes up in a form of
you know, people will realize that you know what we
don't do we want to be in this house anymore?
The kids are up and out and now it's just
a bunch of bedrooms. I gotta clean and that kind
of thing. But what I find, Bob, is frequently people
who have come to that conclusion will decide to move,
and then they move into a house that is the
(21:36):
same size. I think we get into our heads that, well,
I I've always lived in a five bedroom house. That's
just kind of what I need with just you know,
I don't want to it's too scary to go smaller.
But then inevitably we'll find people, you know, talking about
how they bought too much house in Heaven forbid. You know,
a lot of times there winds up being a mortgage
against it. Don't be one of those people who retires
and then puts a thirty year mortgage in place for
a bigger home that you you're just gonna fill with
(21:57):
stuff that someday you're going to have to drag a
good will.
Speaker 4 (22:00):
Well, we also talk with families that are struggling with Hey,
they deep down know that this big house that they
raise their kids in and where they've got a ton
of memories and it's been paid off for years and
they kind of swore to each other they'd never leave
the house. You know, they just feel like they can't
leave because of all these memories. They want to have
(22:21):
a place where their kids to come back, all good stuff,
but sometimes those maintenance costs, taxes, upkeep, it just becomes
a huge burden to them that prevents them from traveling
and doing some other things that they might otherwise like
to do if they didn't have this.
Speaker 6 (22:38):
Huge house to take care of it.
Speaker 5 (22:40):
And Bob, I think this is where some war stories
from our financial planning tables here at all Worth can
come in.
Speaker 6 (22:44):
So what I'm speaking about is when we've got, you know.
Speaker 5 (22:48):
The the heirs of their parents, my mom and dad
have passed away, it's time to settle the estate, and
it's time for everybody has received their distributions, and the
very first thing that they wind up talking about is
we're going to get rid of this house. Mom and
Dad were convinced that we wanted it. We just didn't know.
None of us, the siblings, nobody wanted this house. Because
we've all got our own houses and we're happy where
(23:08):
we are. I think people tend to convince themselves that
I have these warm wonderful memories. And this isn't to
take any of that away. That is important stuff. But
I have these warm, wonderful memories in this structure. Therefore
it must be maintained and passed down. And your kids
have those warm, wonderful memories too, and they know it's
important to you. They may not be being upfront with
you as to whether they really want this house. Most
(23:29):
of the time. One of the very first calls that
happens during the settlement of a state is a real
estate agent because we can't let that house sit empty.
Speaker 6 (23:34):
We got to deal with it.
Speaker 5 (23:36):
Something's going to go wrong with it if nobody's paying
attention to it, and we're going to eat property taxes
and expenses as long as we have it, so they're
going to sell it relatively quickly, so you know, we
make make decisions based on that knowledge as you move
forward on your own plan.
Speaker 4 (23:48):
Well, the other thing to keep in mind, Brian, is
the larger the house and the longer you've lived there.
And my wife and I went through this personally, you know,
about four years ago. The more accumulated crap you've got
in that house to use your garage and tool example,
I mean you stay in a house for seventeen eighteen
twenty years, you raise a few kids there, and all
(24:10):
you got a whole bunch of stuff laying around in
there that you don't need and nobody wants. And if
you end up dying with that big house and all
the crud that's in it, that can create a whole
other set of burdens for your kids. Like what are
we how are we going to get rid of all
this stuff?
Speaker 7 (24:27):
Yeah?
Speaker 5 (24:28):
I always think back to seventh grade chemistry over at
Sainty Nace's on there on the west side when I
think about this a gaseous element. One of the characteristics
of a gaseous element is that it expands to fill
the container it's in.
Speaker 6 (24:39):
And I got news for you about so do we.
Speaker 5 (24:41):
If I have a big house, I'm gonna fill it
with stuff I probably don't need, but I got the
room for it, so why not.
Speaker 4 (24:46):
You're listening to Simply Money presented by all Worth financial
lum Bob Sponseller along with Brian James. Let's get into
taxes and numbers a little bit. Brian, what are some
of the benefits in addition to unburdening yourself with the
huge house and all the stuff that's in it. Let's
talk about tax planning opportunities if you decide to make
a change.
Speaker 1 (25:05):
Yeah.
Speaker 5 (25:05):
So one of the things that most people are comfortable
is the concept of well, if I own something anything
a stock, a mutual fund, collectibles, crypto, whatever, if I'm
going to sell it at a gain, then the irs
is going to come sniffing around for some taxes.
Speaker 6 (25:18):
And that is true most of the time, but not
in this case.
Speaker 5 (25:21):
So if you're sitting on a house that has a
good chunk of equity built into it and you there's
some rules you got to follow, but basically, with the
moment you downsize that home to a smaller house, you
will have incurred a gain. You can always roll the
gain forward when you're buying a bigger house, that's never
a thing. But when you are buying a smaller house,
you get a one time, lifetime exemption where you can
(25:42):
take up to a two hundred and fifty thousand dollars
gain if you're an individual, a half million dollar gain
per couple, and you can avoid paying any capital tax
capital gain taxes on that at all. And again this
is specific to a house. You have to have lived
in it for two of the previous five years and
that right, so there's no flipping of property here in
the short has to be really be your house, and
so there's a hoops you got to jump through there.
(26:03):
But the point is you can get out from under
that home and avoid capital gain taxes.
Speaker 4 (26:07):
Yeah, one more thing to throw out there if you're thinking,
and we're not trying to sell people on you know,
liquidating their home, but a lot of times people I
think they want to make a change, they just don't
know how to go about it. You know, you talked
about the tax implications. One other thing, just from an
emotional and lifestyle standpoint.
Speaker 6 (26:26):
Is test it out.
Speaker 4 (26:28):
Go rent something that for three to six months or
a year that might be in your wheelhouse or where
you think you might want to live from a lifestyle
standpoint and home standpoint, and see how it works before
you pull the trigger and buy something else or sell
that home that you've been in, you know, for twenty years.
Test it out, make sure it's the right move, and
(26:50):
then you're not going to regret your decision down the road.
Here's the all Worth advice. Your home has served your family,
perhaps for decades now, it's time to ask, is it's
still serving you? Coming up next, how a retirement time
machine can keep you from making bad financial decisions. You're
listening to Simply Money, presented by all Worth Financial on
(27:11):
fifty five KRC, the talk station.
Speaker 1 (27:16):
The natural world develops slowly forming over the course of millennia.
In our world developments, we have a developing situation that
happened fast. The latest developments to developments. This is just
developing out of the Middle East.
Speaker 4 (27:32):
Their ability to develop a nuclear weapon.
Speaker 1 (27:34):
It's been neutralized, But for how long?
Speaker 4 (27:36):
For?
Speaker 1 (27:36):
What's developing?
Speaker 7 (27:38):
Quite a striking development now right now it's developing.
Speaker 1 (27:42):
Fifty five KRC the talk station.
Speaker 4 (27:46):
Government program fifty five KRC where it's still okay to
tell us what you think. You're listening to Simply Money,
presented by all Worth Financial Life Bob Sponseller along with
Brian James. You have a financial question you'd like for
us to answer, Well, there's a red button you can
(28:07):
click while you're listening to the show right there on
the iHeart app. Simply record your question and it will
come straight to us. We all want to know what
retirement will look like, but most of us are making
choices today without fully understanding the future impact at all.
What if you could climb into a time machine, Brian
(28:27):
and see the results of your decisions fifteen to twenty
years down the road. Wouldn't that be fun?
Speaker 6 (28:33):
Yeah? This is really an important part of financial planning.
Speaker 5 (28:35):
So I think a lot of people get hung up
on the idea that you know that I don't know.
Speaker 6 (28:40):
I can't predict the future. I don't know what's going
to happen.
Speaker 5 (28:42):
Therefore I shouldn't bother making any decisions right now, and
that impacts things from how much should I be saving
my four Oh? And okay, when do I turn on
my Social Security? Can we afford to take this big
vacation or you know, retire at a certain time or whatever.
It's never about right now. Most people are able to
make the decision that they want and do what they're
gout tells them they want to do right now. But
we can't pull the trigger because we cannot see fifteen
(29:04):
twenty years into the future. So let's go through some
mathematical examples here to kind of help people understand what
this is about. First, we'll take a Mike. Mike is
a young guy. He's established in his career Mary's got
a couple kids, brings in one hundred and fifty thousand
dollars a year. Mike's big question this is we get
this all the time. Am I putting enough away in
my four to oh one K? And the answer to
that is, well, what are you trying to accomplish with it?
(29:25):
Are you one of these fire people you know financial independence,
retire early? Well, then the answers, put as much as
you can possibly afford to not mess up your current bills.
Or are you somebody who wants to live a certain lifestyle.
You're just trying to make sure you're putting away a
minimum of enough. So Mike right now is putting ten
percent into his four oh one K. That's pretty average.
That's pretty pretty standard. We try to get everybody to
double digits and then you'll be in the ballpark of OK.
(29:46):
But he's wondering, well, what if we sacrifice some things
now and instead of ten, I put twenty percent in
and my pay drops, my take on pay drops now.
But at the same time I'm putting away more money.
So his original plan, Bob, if he's putting away ten
percent and we get a seven percent annual return, right,
that is that's kind of the Goldilock zone.
Speaker 6 (30:03):
That's not too high, not too low.
Speaker 4 (30:04):
It's not unreasonable, good balance portfolio for a long term
not super responsible, responsible return of something.
Speaker 5 (30:11):
Yeah, now a forty year old guy could be more aggressive.
That's a little bit of a different story. So we're
just trying to keep the number simple. So if Mike
does that, he works for twenty five years and now
he's got roughly nine hundred thousand dollars in today's dollars,
that's a nice pile. He's doing sixty five and he's
sixty five, so he's forty. Now we did this for
twenty years. What's the difference. So he right now could
generate about maybe a reliable fifty thousand dollars a year
(30:32):
worth of income off of that. On top of his
he'll have so security and some other things as well,
and that's pretty good.
Speaker 6 (30:37):
But it might limit them.
Speaker 5 (30:38):
They may maybe back off on the travel, or maybe
there's not as much going to the grandkids as the
rest of the family. So let's look at it again. Mike,
who is again now forty, decides you know what, let's
let's forego some of the take home pay. I'm going
to bump to twenty percent. What does that result in
now putting twenty percent of his salary away for twenty
five years, now he's.
Speaker 6 (30:56):
Got one point eight million. This is just math.
Speaker 5 (30:58):
This is the snowball effect. The the you know, the
bigger the numbers, the larger the snowball gets. And this
really starts to change the game because now we're talking
ninety thousand dollars in sustainable retirement income. Again, that's in
addition to Social Security, all that stuff. Bob is back
on the table, retiring earlier, taking the bigger trips, helping
the grandkids.
Speaker 6 (31:15):
All of it's back.
Speaker 4 (31:16):
Well, and we need to talk about one thing, and
I'm going back in time, you know, reverse time machine.
Remember Mike's forty and he has two kids. Those two
kids cost money. So Mike's probably right in the middle
of travel, sports, music lessons, you know, ballet lessons, all
that stuff. He's probably saying, yeah, Bob and Brian, it'd
(31:38):
be great to put twenty percent of my income away,
but I got bills, you know, to cover today. So
it is a balancing act. It's easy for us to
pull out a calculator and say, yep, you could have
one point eight million dollars if you save all this money.
I think the point we're trying to make is at
least run some numbers and just don't hope all this
(31:59):
works out a day sixty five, seventy seventy five. Run
some numbers when you're early in your early forties, and
then you can make some informed decisions on hey, if
I sacrifice a little bit, now, here's the benefit that's
going to pay down there.
Speaker 5 (32:13):
And as a financial advisor, I would say, to my guess,
that's exactly correct. You've got stuff screaming for money now.
But I would say, Mike, do you know your own worth?
You've been at your job for a couple decades now,
and you're a loyal guy and so forth. Are you
sure you're being paid what your experience says your worth?
Do you have you looked at other opportunities out there?
Have you talked to your bosses about you?
Speaker 6 (32:31):
Know where you are?
Speaker 5 (32:31):
So sometimes you can simply increase what's coming in at
the top. Then you can find extra dollars. But again,
that comes back to knowing what your value is and
not wasting a bunch of time getting underpaid.
Speaker 4 (32:40):
You're listening to simple money presented by all Worth Financial
on Bob Sponseller along with Brian James. Brian introduced us
to Lisa. Let's look at another test case here. Okay,
so a little bit of a different situation.
Speaker 5 (32:51):
So Lisa's got she is a little bit nervous, and
so she's got a half million dollars that she has
put away. We don't know where it came from. Of course,
maybe she inherited it. She just let it build up
over time. This is not retirement money, but it's just
sitting in a money market fund earning about three percent.
So she's got about thirteen years until retirement, which means
at that three percent good safe rate, that's going to
(33:13):
grow to about seven hundred and twenty five thousand dollars.
And she's also in her retirement account, she's got an
extra two fifty so now she's got about nine to
seventy five total, and that's not terrible, but she's drawing
down that principal pretty quickly, and so mathematically Lisa will
be out of money by the time she's eighty or thereabouts.
So let's do this again. Let's say that she takes
that half million and doesn't buy into the notion that
(33:35):
the stock market could go poof tomorrow. I always love
that argument, Bob or people so well, the stock market
it goes down because so and so lost all his money.
I'm looking at the S and P five hundred right now.
It still exists. Kroger is still open, P and G
is still open. Stock market doesn't go away. So if
she puts it in a conservative balanced portfolio, that would
earn about six and a half percent by average on
by about age sixty five.
Speaker 6 (33:55):
Now, her half.
Speaker 5 (33:55):
Million is one point one million dollars at her existing
two fifty to that. Now she's retiring with a net
worth of a one and a half million dollars. That
is a big difference between scraping and by just paying
the bills and having a nice, comfortable life.
Speaker 6 (34:07):
Well, and it's a huge change.
Speaker 4 (34:09):
And the nice thing is it didn't require any sacrifice.
She didn't have to earn more money, she didn't have
to cut back on her current spending. All she had
to do was change her investment strategy and be open
to something that has worked for decades and decades and decades,
and just take advantage of what the markets give you
over a long period of time. And again she didn't
(34:30):
get an extra twenty years to save her money. She
didn't win the lottery. She just made smarter, more intentional
choices now in order to get those huge dividends down
the road with making no other changes in her lifestyle.
Here's the all Worth advice. The future isn't a mystery.
Oftentimes it's a math problem, and the earlier you solve it,
(34:52):
the better your retirement story will probably end. You're listening
to Simply Money, presented by all Worth Financial on fifty
five KARC the talk Station, Mark Levin.
Speaker 7 (35:03):
Let me tell you, so, the Internet is breeding evil,
breeding evil, and TikTok is the main culprit. And I
don't know what's happening with TikTok, but that damn thing
needs to be sold now and it needs to be
cleaned up. And I don't want to hear about free
speech and everything else. It's a private company. The company
needs to clean it up because this is crazy between
the communist Chinese and all the crap that people put.
Speaker 6 (35:25):
On this stuff.
Speaker 1 (35:26):
Mark Levin tonight at ten oh six on fifty five
KRC the Talk Station.
Speaker 6 (35:31):
It's Champion Windows Anniversary sale.
Speaker 1 (35:34):
Come to her the most terrifying words in the English language.
Speaker 6 (35:36):
Are I'm from the government and I'm here to help.
Speaker 1 (35:39):
Fifty five KRC the talk station.
Speaker 6 (35:45):
You're listening to, simply money.
Speaker 4 (35:46):
There's out of by all Worth Financial Ambobs one seller
along with Brian James and Brian on my two I'm
gonna give you my two cents here, just another story
on this whole Should I switch to a different house scenario?
Talked about a couple of them during the prior segment.
I'm gonna share one that I've run across more often
than not, and I want to spend a few minutes
(36:07):
on it, get your take on it, and it's story
time with Bob's bonsor story time. A lot of times
people say, hey, Bob, we want to downsize. We want
to sell our big house and we want to buy
a ranch with everything on the first floor in a
big great room. And so we're gonna sell our four
or five bedroom house. We're gonna pocket all that money
(36:28):
and we're gonna be able to go out and get
this beautiful ranch that has everything on the first floor,
and that'll solve all our problems going forward. What they find,
what I find oftentimes is they have not gone out
and looked at the cost of this ranch home. Factored
in the part that everybody wants a ranch home with
the main bedroom and bathroom on the first floor in
(36:50):
the big great room.
Speaker 6 (36:52):
And those houses cost a lot of money.
Speaker 4 (36:54):
And when people go out and start looking at it,
they find that they're really not gonna save any money.
And oftentimes by the time they fix up that ranch house,
they're looking at spending more money than what their current
house is worth. And they rationalized making a decisions quote
unquote downsizing, and they didn't really downsize at all.
Speaker 6 (37:17):
Have you ever seen that one come down though? Absolutely?
Speaker 5 (37:19):
And I think this is a big supply and demand
discussion because there's tons of You can drive anywhere around
Cincinnati and see new subdivisions going up.
Speaker 6 (37:25):
How many of them are full of ranch homes?
Speaker 5 (37:27):
Right, And I'm not referring to the ones where are
all patio homes retirement type communities. A lot of people
aren't quite ready to take that step yet. They want
a ranch home in a more traditional neighborhood. But those
don't exist anymore because the builders can't make as much
to build them.
Speaker 4 (37:38):
Yeah, and here's the point I'm trying to make here.
Count the cost and take your time before you delve
into this. Oftentimes, if you spend a little bit of
money on an architect and take your existing four bedroom
home with the master bedroom and bath on the second floor,
and convert your first floor to accommodate all that you
can find that you can spend less money staying put,
(38:00):
putting a little money into that is existing home, staying
in that neighborhood that you love and have been there forever,
and really win as opposed to just making a rational
short term decision that you might be surprised at how
much money and aggravation it costs you.
Speaker 5 (38:16):
Yeah, I've had some clients go through this where and
I joke with them, and there's more than one where
they almost financially speaking, built a house inside of a house.
They spent a significant amount of money improving their place
for this exact reason, but it prevented them from having
to buy a whole new place and incurring those expenses.
So even though it was significant to reconfigure their house
to something that would make them happy, it wasn't near
what a brand new house would cost.
Speaker 4 (38:36):
Well, and a lot of people like all that first
floor stuff, the master bath, the master bedroom, the great room,
and if you do take the time to reconfigure a
current home, if you stay in it and your heirs
do decide to sell it down the road, they sell
it a lot quicker because it's been fixed up the way,
you know, to meet that supply and demand that we
talk about all right, thanks for listening. You've been listening
(38:58):
to Simply Money, presented by all Worth Financial on fifty
five KRC, the Talk Station, The threat of Iran, the
end of the Twelve Day War, the cease file, the
latest news.
Speaker 1 (39:10):
I gotta get Israel to calm down. Now we're on
the verge of real peace in the Middle East. And
your latest oginians we should not be involved. We have
to be involved. I trust what President Trump is doing.
They don't want peace. It will never end.
Speaker 5 (39:21):
You're about it, the constantly changing narratives, more news.
Speaker 4 (39:24):
Out of the Middle East.
Speaker 1 (39:25):
Talk about it. I have thoughts and questions. There's a
lot of news in the world right now.
Speaker 4 (39:29):
How our team is always here to answer your questions.
Speaker 1 (39:32):
Is fifty five KRC the Talk Station by texteen sixty four.
Speaker 6 (39:35):
Thusand you agree to receive regreen
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