All Episodes

July 16, 2025 41 mins
Mark as Played
Transcript

Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
A gay accident on the Parkway this morning.

Speaker 2 (00:02):
Another update coming up.

Speaker 3 (00:04):
Here we go again fifty five KRC the talk station tonight,
some initial bank earnings, the June inflation update, and a
little bit of tariff updates as well. You're listening to
Simply Money, presented by all Worth Financial. I'm Bob Sponseller

(00:26):
along with Brian James Brian. If you look hard enough,
you can always find some interesting news to talk about.
And here we are on a Tuesday, and we finally
got into earning season and City Group is kicking things
off in a good way. A nice, big fat earnings beat.

Speaker 1 (00:42):
To start off a Tuesday, according to Reuter's Happy News
this morning. For those of us who are fretting about
the economy and things like that, you know, so far,
so good. We've we've had some decent earnings reports and
that has continued today. So City Group, big bank based
out of New York City based, posted a five billion
dollar net income the second quarter of twenty twenty five.
That's a bluck ninety six a share for those of

(01:03):
you keeping score at home.

Speaker 3 (01:04):
The estimate.

Speaker 1 (01:05):
Remember, all we ever care is we don't really care
about what the numbers were. We care about what the
analyst said. We're the analyst, right or not. So the
analyst said, we're looking for a buck sixty and looking
for an increase of twenty five percent a year over year.
So that's basically outperforming the analyst gut feel, and so
that's a good sign. That basically means the analysts were
a little more in this case anyway, the analysts were

(01:27):
a little more pessimistic than what the actual results were.
So where that came from their trading revenue surge about
sixteen percent. That was up to six billion dollars. That's
the strongest quarter they've seen since the second quarter of
twenty twenty. And I don't know if you remember twenty twenty, Bob,
but there was some craziness going on there. So that
was so it's always good when we can look back
and see that, you know what, we've posted a you know,

(01:48):
kind of a good return over over history there.

Speaker 3 (01:51):
Yeah, And as I as I parsed through these numbers,
that the trading revenue numbers what really stood out to me,
and in a good way, because we've been here hearing
whispers and things throughout the first and second quarter of
the year that you know, the IPO market is kind
of slow. Deals are not happening, and I think folks
have been a little frozen here with some of this

(02:13):
tariff news starting off the year, just you know, not
enough deals and things are happening. This seems to indicate
with trading revenue surgeing that stuff is starting to happen,
and I think that potentially poortends well for the rest
of twenty twenty five here as far as people feeling

(02:33):
better about buying and selling companies and doing some normal
business transactions that you know, make the economy hum.

Speaker 1 (02:41):
Yeah, and so some of those stories you may have
may or may not have heard of these companies, but
some of the investment banking fees that they generated as
a company called Circle that was a high profile deal
for a little over a billion dollars and e Toro
with six hundred and fifty million dollar IPOs. Their wealth
management department was up about twenty percent, consumer banking up
six percent, all good things. In the CEO Jane Fraser

(03:04):
basically said that is just this is just normal business.
These are sustainable results, strategic overhauls and risk controls, in
other words, just doing what we do. These are all
good signs. Bob, there's lots of headlines out there that
are scary, and then when we're gonna be stuck in
that for a good long time, if not pretty much forever.
So it's always good when we do see these these
positive stories that we can kind of sink our teeth
into to focus on them so we know where the

(03:26):
real results are coming from. We've got some inflationary numbers too, Bob,
don't we.

Speaker 3 (03:31):
Yeah, and it looked like the core inflation number came
out a little better than expected, right, headline CPA came
out a little tick worse than expected. But really nothing
to talk about here, you know. I watched the futures
move up or down as this news was coming out
early this morning, and really nothing major to talk about here.

(03:53):
But since we do a radio show, we do need
to talk about it. So let's dive into what some
of the numbers here were for the June inflation report.

Speaker 1 (04:02):
So more good news. Two point seven percent year over year.
That's the headline CPI number that came out from June
from last month. That's up two point four percent in May.

Speaker 3 (04:11):
Now up is up?

Speaker 1 (04:12):
Right, we're talking about inflation now, we don't we don't
want inflation to spike, of course. So what we are
seeing though is that is that it's we're staying in
that range. However, we are seeing inflation kind of be
a little more of a headline than it.

Speaker 3 (04:26):
Has been before. Is it anything to be alarmed about? No,
not at all.

Speaker 1 (04:29):
But this is you know, and I think we've talked
about this earlier this week as well. This is something
for the Federal Reserve to be paying attention to, and
they're kind of stuck between a rock and a hard
place where the current administration really really super wants them
to lower interest rates. However, if we are seeing inflation
take up a little bit, that's a little bit less likely.
So you know, what's happening out there would indicate that

(04:49):
we possibly need to be considering raising rates. However, that's
not going to go over very well at all with
the current administration in the White House, so it's going.

Speaker 3 (04:59):
To be a challenge a bit of a challenge there.

Speaker 1 (05:00):
But the important thing is we are of course, we're
nowhere near the nine percent we were three four years ago,
so that's not something to lose sleepover, but it is
definitely something to pay attention to. This is mostly coming
from a little bit of increases in gas, food, and
shelter some of that. Remember we're in the travel season,
so it's not too shocking that gas would go up
at this time. Core CPI, which is basically everything except

(05:21):
for food and energy, that was up about two point
nine percent again year every year, So.

Speaker 3 (05:26):
Something to watch.

Speaker 1 (05:27):
There's always something wobbling a little bit that we want
to pay attention to, but nothing to truly panic about
or anything like that.

Speaker 3 (05:34):
Well, back to the FED, I mean, who knows how
they're going to interpret this data. You know, I don't
think anybody expects a FED decrease in interest rates in July,
and as we've talked about before, they don't even meet
in August. So this is just one of those other
data plots to put on their little spreadsheet whatever that means,
and it will help them, I guess, guide their decision

(05:56):
making heading into August. But I think this battle remains
among economists on this tariff stuff. Is it gonna be
inflationary or could it possibly be deflationary and slow the
economy down? And I guess that's yet to be seen,
but so far, Brian, if you just peel it back
and look at what's going on. You know, it's hard

(06:17):
to make an argument that these tariffs have been tremendously
inflationary and the economy keeps humming along as well. So
it's just kind of steady as you go here from
the standpoint of inflation and employment and economic data. And again,
I don't think we're going to see anything. You know,
we'll start to see the prognostication on interest rate movements,

(06:39):
if any, as we get through the end of July
and into early August. Yeah, Bob, Bob.

Speaker 1 (06:45):
I think the counterpoint to that, though, is, remember when
we had a booming economy in the first quarter, Remember
where that came from. A lot of that was companies
anticipating that these tariffs were gon We're gonna come into
effects somehow, because the newly elected president at the time
had been basically pushing that for a long time. So
what they did was, before the tariffs really started to

(07:05):
hit in April, they basically front loaded a lot of
their expenses. In other words, if I know I got
to buy X amount of resources, you know, to get
my business running, then I'm gonna go ahead and do
that here in January and February before this stuff goes
into effect, and that way, at least I'll be stocked
for part of twenty twenty five. Now, some of these
companies are starting to get to the point where they
need to reload. Right, We've had a healthy economy, so

(07:26):
they're doing normal business. They're selling the same amount of
products that they usually do. That means they're running out
of those natural resources or whatever it is that they
use to build stuff. So I don't think we've seen
the true impact of inflation. I think we're just getting
to that point. And who knows, maybe this recent uptick
we've just been discussing could be a direct result of that.

Speaker 3 (07:43):
But I want to pivot Bob here too.

Speaker 1 (07:45):
You know, the United States is not, of course, the
only functioning economy on the face of the earth. We're
by far the largest and healthiest, and we can take
the most craziness, we can handle the most you know,
kind of negative stuff. But that said, there's nothing that
forces all the other countries around the world to only
work with the United States. Some of them are starting
to realize that, hey, you know what, we used to

(08:06):
get this stuff in the United States, but they don't
want to play ball anymore. They're going to take their
ball and go home in some cases. So therefore they're
starting to work with each other a little bit. For example,
South Korea and the European Union are working together to
secure these individual trade deals, you know, kind of ahead
of this what we're trying to do here on August first,
but they're also working with ondirect ties with each other.

(08:28):
South Korea is deepening its work in the European supply chains.
EU leaders are looking towards Asia to just have a
different option than the United States.

Speaker 3 (08:38):
Japan is doing the same thing.

Speaker 1 (08:40):
They're seeing these twenty five percent on automotive tariffs and
they're looking to make sure that they have the best
options available to them, and that may be working with
other countries beyond the United States.

Speaker 3 (08:50):
What do you think about all that? Is that concern you? Well,
I think it's normal negotiating between companies, and I agree
totally with your point. This is why you cannot just
look at headline news when it comes to managing your
portfolio and making big decisions on just three or four word,
you know, headline news stories, because to your point, there

(09:14):
is a ton of stuff always going on between companies
in the background that we're never going to hear about
on the evening news. It's just part of doing business
in a global economy, you know. For example, you know today,
you know we heard, you know, President Trump just throw out, well,
if you if to the EU, if you're not gonna
come and work a deal with me, I'm gonna slap

(09:34):
a thirty percent tariff on you. That's his way of
just sending the shot across the bow of you do nothing,
Your terror is going to be thirty thirty percent. Well,
the EU comes out with a press release earlier this morning,
you know, saying we think that's that thinks blah blah blah.
But I heard the Italian Foreign Minister on an interview
this morning saying, hey, the negotiations are starting to happen.

(09:58):
You know what President Trump based did, and we've seen
him do this since he took office, You throw that
shot across the bow just to get everybody's attention, and
then eventually people do come to the table and start
working out a deal. I fully expect the EU to
get a deal done with the United States before August first.
I don't know where those tariffs will end up, but

(10:19):
I bet it'll be less than thirty percent, and the
President can declare a victory, and the EU can say,
we negotiate it, and you know, it's just how things work,
and we just have to sit back and watch. But
to your point, Brian, business is done all the time
across the globe between companies. Companies adjust, countries adjust, consumers adjust.

(10:41):
It's how it all works. Meanwhile, things keep humming along
pretty darn well so far in twenty twenty five. Coming
up next, our take on a headline that suggests that
we should actually embrace stock market bubbles. You're listening to
Simply Money, presented by all Worth Financial on fifty five
KRC the talk station.

Speaker 2 (11:01):
Yes it's an addie available everywhere with the iHeartRadio app
now number one for podcasting. Sippy five KARC an iHeartRadio station.
Allworth Financial a registered investment advisory firm. Any ideas presented
during this program are not intended to provide specific financial advice.
You should consult your own financial advisor, tax consultant, or

(11:23):
a state planning attorney to conduct your own due diligence.

Speaker 3 (11:34):
They're listening to Simply Money presented by Allworth Financial. I'm
Bob Sponseller along with Brian James, trying not to laugh.
At that intro music from our buddy just Trekker. Hey,
if you can't listen to Simply Money every night, subscribe
to get our daily podcasts. And if you think your
friends could use some financial advice, tell them about us
as well. Search Simply Money on the iHeart app or

(11:57):
wherever you find your podcasts. Should you be doing roth
conversions even though you don't need the money yet? It's
one of the questions you asked us to tackle, and
we're going to answer that one straight ahead. At six
forty three, there's a provocative headline making its way around
the financial media right now, why we should welcome stock

(12:20):
market bubbles? Brian? Who is making this claim? And what's
going on here?

Speaker 1 (12:25):
Yet another provocative headlines thing. It seems like all the
headlines are provocative, But then again, I guess that's what
makes them headlines. We want to grab eyeballs and you know,
and sell advertisement. So anyway, this particular claim is coming
from Mark Hulbert, and he makes it. He does make
a fair point. Some of these the transformative technologies that
we've seen have happened during stock market bubbles. There's some
there's a catalyst that's causing you know, every bubble has

(12:47):
something inside of it. It's either the real estate bubble
from you know, from twenty years ago, that's when it began.
We had the tech bubble before that, when the Internet
first came on the scene. We also had there was
sort of another bubble when when mobile phones and smartphones
be came a thing, and nowadays we're talking about AI.
There's always a catalyst underneath these kinds of things. So
on one hand, that that's how we grow the market.

(13:08):
A new some kind of new environment, some kind of
new tool out there that can help people be more productive,
be more efficient, can help companies make more money. But
at the same time, just like anything, we overreact to
it as investors. We inflate it too much and then
we panic too much on the downside.

Speaker 3 (13:23):
Yeah, I think, I think the word momentum trade comes,
you know, comes to mind. And we can talk a
little bit about AI stocks here over the last few years.
I mean, we've talked about this many times. The S
and P five hundred. If you look at the index,
thirty to thirty five percent of the market cap of
the S and P is weighted in just seven companies,
the quote unquote magnificent seven they've had a great ride,

(13:45):
and then you know, we go back to eight, we
go back to you know earlier, and things the legs
can come out from under some of those stocks. You
have big market volatility in the short term. In other words,
people can ride a momentum trade longer than they need
to and not properly diversified, and that's where they can
get hurt by this quote unquote bubble and Brian, I

(14:07):
don't know about you. This is why I always like
to have a little dry powder. I like to have
a little cash on hand, because I agree with Mark Holbert,
when things start to tank and go down, that's usually
a tremendous buying opportunity to buy things that got oversold
on the downside. Yeah, and I think I think these
periods can be extremely educational, not only for people who

(14:29):
are just experiencing in the market for the first time,
but also for people who are sneaking up on retirement
or who have retired and then all of a sudden,
they're now having to navigate the ups and downs of
the market that have always been there, but they haven't
paid attention because they're too busy working, raising kids and
so forth. Now they've got the time to pay attention,
and they feel like they've got more to risk because
the nest egg is bigger, of course, and it's coming

(14:51):
closer and closer to the time where we need to
tap into it well and emotionally and financially, people don't
care as much about volatility when you're earning money and
putting money away because you got your paycheck supporting you
every month, and you know long term. People know long term,
if they buy and hold and let it go, it
eventually quote unquote comes back. But I think a lot

(15:13):
of people get over they get over comfortable with large
stock concentrations as well concentrated positions. And then when you
do retire and you've got to turn that portfolio into
a paycheck, that's where you can be left with more
potential volatility than you might think you have. And then
if one of these bubbles rear their ugly head and

(15:34):
you're not prepared for it, it can really derail.

Speaker 1 (15:37):
A good long term plan, right exactly. And that's the
bad side of the bubble. But where the bad decision
making comes in usually comes during the inflation period of
the bubble, so that can encourage some bad behavior just
from a behavioral finance standpoint, bubbles can be dangerous because
that means stuff is going up, and sometimes we own
that stuff and we're celebrating it, or other times we're

(15:57):
watching people other people that may we work with, our
family members, whatever, who are talking about these kinds of
things at the cocktail parties. That creates the fear of
missing out. So if you've got one to five million dollars,
you know that that's a really really big deal, because
that can if you get sucked into those kind of things,
that can be a massive loss when that bubble pops.

Speaker 3 (16:16):
Well, one of my favorite sayings is you only need
to get rich once. Brian. You know you don't want
to do all this work, do all this saving, do
all this responsible investing and saving and discipline for twenty thirty,
forty fifty years and then fall into that fear of
missing out trap, you know, overweighting the magnificent seven stocks
or thinking you're going to get cute with cryptocurrency in

(16:38):
the short term and then you completely ruin what you've
spent thirty to fifty years building. It's something we've got
to help people watch out for absolutely.

Speaker 1 (16:47):
And then another way that can sneak in is. Hey,
my brother in law wants to open a restaurant. I've
got a good chunk of money here saved. I'll throw
a little thing something at this, you know, because I
can afford to do it. Those kinds of things can
really sneak up again, it's that that fear of missing
out that can really catch up to us.

Speaker 3 (17:00):
Well, we've all read stories about professional athletes that do
just that, right, they get these huge signing bonuses, or
people that win the lottery, people that have a bunch
of money, you know, on hand and have you know,
they want to look it away to double or triple
that bunch of money, and they go and make risky
decisions and then have it have it there. Then they're

(17:20):
surprised and disappointed how quickly some of that money can
disappear on them. Yeah. So, now that we've beaten that
horse to death, what should we do about it? Right? So,
how do we bubble proof our financial plans? Really? The
first thing, and this isn't the most interesting of advice necessarily,
but stay diversified. Don't wander away from you know, the
dance with the one that brung you, of course, which

(17:41):
is a diversified portfolio.

Speaker 1 (17:42):
Is going to keep you stable. If you want to
dabble in things that you think that you're interested in
or that you think might have a you know, it
might might have a nice pop here, that's fine, go
ahead and do that with a small portion of your money.
But think about it this way. If you already have
a solid nest egg, then you certainly wouldn't take it
to the casino to gamble it. But some of these
more speculative things, that's literally what you're doing. But it's
okay to take a small portion. And if you take

(18:04):
one percent of your portfolio and you hit it right
and it becomes three percent, that's great, but it's not
a life changing event. On the other hand, if you
put fifty percent of your portfolio in and it drops
fifty seventy five percent, that is a life changing event.
So so way the risk of the way the risk
versus the return. Is this really going to move the
needle for me and change my life? Or am I
just doing this for fun? What we're talking.

Speaker 3 (18:25):
About here, Brian, in the midst of doing a responsible
and building a responsible retirement plan, is putting some guardrails
about your portfolio. Around your portfolio, what do I mean
we talk about this all the time. Stress test the thing,
look at your goals, look at your income sources, look
at what you've got, and then run various scenarios about
what can and likely will happen in the future. Interest

(18:48):
rates will go up, interest rates will go down, We'll
have low growth periods in the market, high growth periods
of the market. Kind of simulate that, kind of those
all those situations in advance. And the nice thing is
a lot of this good software that we use with clients.
I mean, it goes back and looks at historical volatility
going back seventy years. We're not going to be one
hundred percent accurate, but we could at least put enough

(19:10):
guardrails around a portfolio to keep the plan from going
off the rails and then really putting someone in a
dangerous spot.

Speaker 1 (19:19):
Yeah, and as advisors, we're we're subject to this stuff too.

Speaker 3 (19:22):
We're human as well. So I'll share a quick little
personal story.

Speaker 1 (19:25):
So, so my family decided recently to make a slightly
off the beaten path investment in a in a kind
of a private arrangement that is very different from the
from the ninety the other ninety eight percent of our portfolio,
which is, you know, a diversified like we normally would do.

Speaker 3 (19:39):
And frankly it's Andy Stouts problem.

Speaker 1 (19:41):
He's the one who manages all just along with the
rest of all worths twenty six billion or so. But
in any case, this I had a conversation with the
CPA about how does this work?

Speaker 3 (19:49):
What am I?

Speaker 1 (19:50):
You know what, I'm a financial advisor, I'm not a CPA,
so what are the things I'm not thinking of? And
I got the bright idea of, hey, we could do
a little more if we used our IRA dollars for
this and the ans I'll never forget. It's one of
those things that stuck in my brain. It wasn't that
long ago, just a few months. His answer to that
was because that's not a simple thing to do. You
can do those kinds of things, but there's a lot
of moving parts to investing iras in things that are

(20:11):
not publicly traded. The quick thing he said to me
was why do you want a complicated life? And Bob,
that knocked me back on my heels and I thought,
my god, what really what I am I doing? Is
it really worth jumping through all these hoops just to
get this done? You know for a very small portion
of my portfolio because of something my family is interested in.
And that yes, that made me take a breath and go, Okay,
let's think about what I'm really trying to accomplish here

(20:32):
and why do why do I want a complicated life?

Speaker 3 (20:34):
Well, and the good the big point here is you
were willing to swallow your pride and your excitement a
little bit and get a second set of eyes on
the whole situation, get an objective viewpoint on something you
and your family are considering in advance of pulling the
trigger and making the decision. And that enabled you, you know,
through getting that good advice and a second set of eyes.

(20:56):
It it enabled you to maybe avoid a huge mistake.

Speaker 1 (21:00):
We all need that financial Domini cricket. So find somebody
out there who thinks the same way as you do
and bounce your ideas off and see what they say.

Speaker 3 (21:06):
They're in armslength the way they might make a different decision.
Here's the all worth advice. Bubbles may fund innovation, but
they often deflate retirements. Stick with the plan, not the hype.
From riches to rags. What the Vanderbilt family can teach
your family about preserving wealth across generations. You're listening to
Simply Money, presented by all Worth Financial on fifty five KRC,

(21:30):
the Talk States five KRC and iHeartRadio station. You're listening
to Simply Money, presented by all Worth Financial. I'm selling
along with Brian James. It's one of the most famous
stories of lost wealth in American history. The Vanderbilt family,

(21:53):
once among the richest dynasties in the world, built a
fortune that would be worth over two hundred billion dollars
in today's dollars, Brian, Yet within just two generations that
wealth was essentially gone evaporated. What happened?

Speaker 1 (22:09):
You know, this is kind of an American story on
the way up and on the way down. So Cornelius Vanderbilt,
you've heard of him, You've heard of the family. There's
a university named after him. Down to Tennessee, there's the
Biltmore Estate, which was a gigantic house that they all
lived in. Now, all that money came from railroads and shipping,
and at the peak, Cornelius Vanderbilt was the richest man
in America. His son carried on the reputation and doubled

(22:32):
that fortune. But by the nineteen seventies, when there was
one hundred and twenty Vanderbilt descendants all gathered at one reunion,
not a single seven digit millionaire in the room. Everybody
had kind of nobody had carried the torch forward from
that point.

Speaker 3 (22:47):
So what happened? Why did this happen?

Speaker 1 (22:48):
Well, a lot of poor planning, people just not thinking ahead.
And I can imagine, Bob, but this isn't necessarily this
isn't a difference between good and bad people.

Speaker 3 (22:56):
This is just people.

Speaker 1 (22:57):
Having been raised in an environment of the opposite of scarcity.
I don't have to worry about things. Therefore, I don't
worry about things, and I don't necessarily think about the
future because it's not really a problem.

Speaker 3 (23:07):
So lack of purpose around money.

Speaker 1 (23:09):
But really what it was, Bob, was the absence of
the financial education and discussions between generations. It just got
quieter and quieter until the the wealth.

Speaker 3 (23:19):
Just kind of went away. Yeah, and we could talk
about a potential two hundred billion dollar fortune going away,
and people might think, well, that's an extreme case. I mean,
let's bring this back to real life, because we do
deal with this with folks that come into our office
every once in a while, and you know, it comes
down to the adult children with no financial boundaries. You know,

(23:39):
maybe you're helping a thirty five year old quote unquote
get back on their feet for like the fourth time,
or you're covering all your grandkids' expenses because you want
to be a great grandma and grandpa even though their
parents are fully capable of doing it. We tend to
want to help make life super super easy for everyone,
and that leads to some you know, expensive you know,

(24:02):
doling out of money that can We think we're helping,
but sometimes we're just enabling bad behavior, or not even
bad behavior, but just not preparing the next generation to
be self sufficient and responsible from the money standpoint. Sometimes
not helping can be the best help you can give anyone,
you know the old Give me a fish and I'm
good for a day. Teach me to fish and I'm

(24:23):
good for a lifetime. This also can cause rifts between families,
and that's kind of the opposite, right. A family that
is financially stable and doesn't have to worry about money
so much really should be a happy place, right, That's
what we all strive for. But in a lot of cases,
it can cause strife between the generations because mom and
dad or grandma and grandpa, the ones who originally built
the wealth to provide all of that security for everyone

(24:45):
who comes after them, they view it very very differently.
They view it as their life's work, their blood, sweat
and tears and so forth. But the further down the
generations we go, the less impactful that can be. Now,
now there's ways to avoid that. It's basically telling the.

Speaker 1 (25:00):
Make sure everybody knows the story of this family and
how we got where we are, what sacrifices were made
along the way, What were the things that we really, really,
in a heartbroken manner, had to choose not to do
over time because we know we had to. We had
to make that sacrifice at the time. And then how
are the how are the new generations reacting to that?
Are they able to make those same types of decisions.

Speaker 3 (25:19):
You're listening to Simply Money presented by all Worth Financial
on Bob Sponsorer along with Brian James. Yeah, Brian. Sometimes
I run into folks who you know, who have worked
very hard. They came from very modest beginnings, They earned
every dime that they have and worked extremely hard. And
sometimes folks will say, I just I just want to

(25:40):
make things a little easier for my kids and my
grandkids and I and I understand the sentiment. I feel
that way sometimes too, but that's often not the best
way to go about it. I mean, you got we
got to allow people to earn it and go through
some of life's trials and tribulations, because that's that's what
builds character and it builds financial literacy.

Speaker 1 (26:01):
Okay, Bob, blocking and tackling. So how do we do this?
How do we avoid that that curse of the Vanderbilts. Well,
first off, focus on the values, not the dollars. If
you teach the right values, the dollars will follow. Help
people understand exactly what it means to work hard.

Speaker 4 (26:16):
Right.

Speaker 1 (26:16):
That's that kind of goes without saying we all know
the harder your work, the better off you'll be. But
at the same time, that sacrifice quote unquote can be
simply you know what you need to not spend one
hundred percent of your take home pay because you know
there are bigger things to worry about. That is a
sacrifice for a very young person who's just getting started
and now finally has money for their own for the
first time. You know, that can be the standard ten

(26:38):
percent of your four one k, or maybe make it
twenty percent. But that's a way Again you're focusing on
the values, not the dollars. Also use trust in a
smart manner, right, If you have a trust, it's not
intended only to protect those assets. It can also distribute
money based on what you want to happen. So that
might mean that whatever wealth you have at the day

(26:58):
of your passing, you know, without any else in place,
that might drop out of the sky on top of
someone's head, is that individual prepared to handle that sum
of money if not, or if you want them to
kind of earn it a little more, you know, Bob,
I've known of trust in my past that would pay
different amounts of money based on different things that that
a person had accomplished over time, different careers.

Speaker 3 (27:16):
They might choose.

Speaker 1 (27:17):
You choose become a teacher or some kind of public servant,
you might get a little more for that. If you
want to become a business person, there were restrictions on
you know, how you could how you could receive it,
those kinds of things. That's a moving target and things
can change and can get complicated. But again that's the
purpose of a trust. You're not just trying to protect
it from somebody who might want to sue you outside
the family. You're trying to protect the family itself.

Speaker 3 (27:38):
Yeah, I want to go back to maybe an example
of it, and I'm going back to you know, I'm old, Brian,
but going back to that first paper route at nine
years old, I remember my parents sitting down with me
and saying, Hey, you're going to go out and collect
this cash. Here's what you're going to do with it.
You're going to split it into thirds. A third of
it you're going to save, a third of it you
can spend now on whatever you want, and a third
of it you're going to give away. And I'm like,

(28:00):
what you know, give away? But fast forward to today,
and I think this is a full proof way to
go about it. Out of every dollar you earn, give
ten percent away to someone else, save twenty percent, pay
taxes on and spend the rest of it. If you
follow that plan for thirty or forty years, you're going
to live a great life and have plenty of money.

Speaker 4 (28:21):
Yeah.

Speaker 1 (28:21):
My parents got a hold of me when I was
probably ten years old, and I was the same age,
so I had a paper out walking up and down
Jesse Road. I would collect my money and I would
spend it immediately at Whistles Deli and Drug Palace and
Supreme Nut and Candy there up.

Speaker 3 (28:33):
On Cheviot Road. Uh, didn't bring home a dime.

Speaker 1 (28:35):
Did that for several months, and mom and Dad finally
noticed that I never had any money even though I
was delivering papers, you know, once a week. And we
had a little discussion about exactly what are we accomplishing here?

Speaker 3 (28:44):
But isn't it isn't it interesting? You know how as
both of us age and we work in this industry,
we both remember those stories formulately. We both had parents
that instilled those values, and it sticks with us, you know,
to this day. All Right, here's the all Worth Advice
the best this a state plan passes down not just money,
but meaning structure and values. All Right, you've got questions,

(29:08):
We've got answers, our ask The advisor segment is coming
up next. You're listening to Simply Money, presented by all
Worth Financial on fifty five KRC the talk station Mark Levin.

Speaker 4 (29:19):
I am so disgusted at what happened in Idaho that
this subhuman monster murdered these four beautiful young people. He
killed four people in a relatively short period of time.
He'd been stalking them, made sure they came to that house.
And this district attorney is a real piece of crap.
Apparently this is the first time he's he's entered into
a deal like this, and yet they keep re electing him.

Speaker 3 (29:40):
And I don't know what's wrong with people. I really don't.

Speaker 5 (29:43):
Mark Levin Tonight at ten o six on fifty five KRC,
the talk station.

Speaker 3 (29:48):
Hi, run tum us here with senions are welcome to here.
Why do we keep letting thousands of people come over
and do nothing about it? My family's safety is at risk.
Fifty five KRC, the talk station. You're listening to Simply Money,
presented by all Worth Financial. I'm Bob sponseller along with
Brian James. Do you have a financial question for us?

(30:12):
There is a red button you can click while you're
listening to the show right on the iHeart app. Simply
record your question and it will come straight to us.
All right, Brian, let's get into it. Let's hear from
Susan in Montgomery. My husband and I was sixty three.
I'm recently retired. Well a two point four million dollar portfolio.
Should we be using Roth conversions even though we don't

(30:33):
need the money yet. Yeah, that's great, that's a great questions.

Speaker 1 (30:36):
I'm glad you're thinking about this, because Roth conversions, a
lot of people will roll in and just say, you
know what, I'm retired, it's time to convert to Roth.
Let's just do the paperwork and be done with it. Well,
Roth conversions, Let's be clear, very very very much an
intelligently decided sacrifice in exchange for a benefit. Sometimes it's appropriate,
sometimes it's not. What I would be saying is it

(30:56):
doesn't have anything to do with you needing the money.
With that size of a portfolio. Susan doesn't give us
the detail how much of this is in pre tax dollars,
but we'll just assume you know, most of it is.

Speaker 3 (31:05):
That's that's a good thing, right, they worked hard.

Speaker 1 (31:07):
But at the same time, what they're looking at in
about twelve years, when they turn seventy five, they're gonna
have required minimum distributions that's going to put them they'll
have basically a solid six digit income, probably two hundred
thousand dollars at that time from then on, meaning they're
always they're never going to be in a low bracket again.
So what she's thinking about is, Okay, we're in a
low bracket now, we just retired, we have lower income

(31:29):
than we've had in a long time. And my answer
to that is unqualified. Yes, you should learn about it, right,
do it, not do it? That's different. It differs by situation.
You should definitely learn about it. And the important key
to all this for anybody considering it is that you
want to be able to ideally pay those taxes that
will come DOE the year you do the conversion. Pay
them out of non IRA money. You don't want to

(31:49):
pay taxes on money for the purpose of turning around
and paying taxes again. Use your non IRA money to
pay those taxes. Get that conversion done, all right, So
let's move on to James and Anderson Township, Who's got
another question for us.

Speaker 3 (32:02):
My wife and I want to give each of our
kids twenty thousand dollars this year to help for a
home down payment. Is that the best way to do
it or should we be looking at trusts or something? Well, James,
I like to keep things pretty simple, so I'm gonna
I don't think you need to get too complicated with
a trust or some exotic instrument like that. The one
number I want to point out is the twenty thousand.

(32:24):
The gift tax limit. The limit you can give to
any human being at any time, for any reason in
twenty twenty five is nineteen thousand dollars. If your kid
is married, you can double that if you're willing to
give nineteen thousand to his or her spouse as well,
so you can give up the thirty eight thousand. But
you can't give twenty thousand dollars to any one kid
without having to file a gift ex return, which you know,

(32:47):
we don't need to get into, you know, doing that
if we can avoid it. The other thing I would
point out is before you do all this, you got
to look at the timing of when your kids are
going to be looking at buying the house. So if
it's in the short term, here make sure that you're
coordinating all this with your kid's lender of choice, because
sometimes the lenders will have a little bit of a

(33:07):
look back period, you know, when they underwrite the loans
saying all right, how much of this down payment came
from mom and dad, And sometimes they don't like that.
They don't like twenty thousand dollars getting that bank account
the month before we pulled the trigger on a loan application.
So I'd keep it simple. I'd give them the money.
I don't think you need to put it in a trust,
but check to make sure that they're still going to

(33:30):
qualify for that loan that they need or want, you know,
factoring in the gifts that you and your wife are
giving to them. All right, let's hear from Rick in Westchester.
I have a one point seven million dollar IRA, and
I'm charitably inclined. I've heard about qualified charitable distributions. How
do those work? And what should I start easing them?

Speaker 1 (33:50):
Rick, I'm glad to hear that the not only are
you charitably inclient that's obviously honorable, but that you started
with that. A lot of people are looking for all
these different tax techniques that how can I get a
deduction right now now without sacrificing anything. Well, there's not
a heck of a lot you can do anymore. However,
if you are if you start from a standpoint of yes,
I give money to charity anyway, then there are definitely
many many steps and techniques you can look at that

(34:11):
can give you even more of a tax benefit than
just the plane deduction you might get for delivering a
load of stuff the good will, for example. So what
Rick's talking about is a qualified charitable distribution, that is
a distribution from an IRA. This is an actual, differently
coded thing that would appear on your ten ninety nine.
Are qualified charitble distributions are excluded from your taxable income.

Speaker 3 (34:32):
They do not count as income.

Speaker 1 (34:33):
So this means it doesn't it's not going to affect
your Medicare premium surcharge, it will not reduce taxation on
so security benefits, and it can keep you in that
lower tax bracket. It does count towards your required minimum distribution.
So if you are a seventy three or age seventy five,
if you were born after nineteen sixty, then that IRA
is going to be required to start to distribute money

(34:55):
to the tune of about four to five percent in
the year after starting the year after you turn those
respective ages. So the whole point of this is you
designate to your IRA custodian and that's the financial institution
who holds your money, that this official distribution is a
qualified charitable distribution. And here is the five oh one
C three charity to whom it is going. So that
means you have fulfilled your required minimum distribution requirements that

(35:17):
you'll have to do. Anyway, the money goes straight to
the charity. You don't pay any income taxes on it,
and of course neither does the charity, because that's the
whole point of being a five OHO one C three.
So again, if you start like Rick, is I guess
I already give money to the to these charities, then
this is a way you can do it without incurring
any taxes all at all to free up those dollars
to give to the charity.

Speaker 3 (35:36):
Great idea, Rick, all right, So now we're going to
move on one more question. Here.

Speaker 1 (35:40):
We're talking to Danielle in Blue Ash who's got a
question about rental properties.

Speaker 3 (35:44):
We just sold a rental property and are sitting on
four hundred and fifty thousand dollars in cash. We really
don't need the income right now. What's the smartest way
to invest this? Well, my honest answer, Danielle is I
have no idea. How's that for a qualified answer from
a field to take a job today, Bob, heck of
a job. But no, my real answer is don't let

(36:04):
that money burn a hole in your pocket. And what
I mean by that is put that four hundred and
fifty thousand dollars in cash in a safe you know,
savings account or cash equivalent, and then go sit down
with a good fiduciary financial advisor who can look at
both your short and long term goals and devise a
plan and a strategy on how to deploy that money

(36:25):
responsibly for the long term. All right, coming up next
Brian's bottom line, where Brian is going to attempt to
practice law without a law license and talk about estate planning.
You're listening to Simply Money presented by all Worth Financial
on fifty five KRC the Talk station. This is no
small matter. Big things are happening.

Speaker 4 (36:47):
It is a big deal. What is going on that.

Speaker 3 (36:50):
Some might even say this huge news. And to keep
up with what's happening in the Middle.

Speaker 5 (36:54):
East, this is not World War three.

Speaker 3 (36:56):
You'll need massive amounts of information. Massive on the anti
ice riots, on trade deals in tariff, on the one
big beautiful bill, check in for the latest on every
big story in Israel. There's no bigger story right now.
Fifty five KRC, the Talk Station. Hey, it's Mulegger with
my guy Joe, I am so worried that next month

(37:16):
I have to choose between groceries for my kids or
gas for my car.

Speaker 5 (37:20):
Talk about it here fifty five KRC the talk station.

Speaker 3 (37:28):
Moment. You're listening to Simply Money, presented by all Worth Financial.
I'm Bob Sponsorer along with Brian James, and it's time
for Brian's bottom Line, Brian's bucket of Battle.

Speaker 1 (37:38):
All right, I'm not a lawyer, but I'm playing one
on the radio today, So I want to talk about
some basic estate planning steps again, talking to clients during
the financial planning process, which involves a lot more than
just investments. Right, that's a tiny piece of everything that
a financial plan encompasses. Eventually, the conversation turns around to
what happens to all of this when when I or
we pass on, and there are some very basic steps

(37:59):
that everyone should take. Been a reason I'm bringing this up, Bob.
The reason this is important is because a lot of
people just assume, oh, my gosh, I got to bring
in the lawyer for this. I got to oh, that's
gonna be thousands of dollars and a lot of work,
and he's gonna use fancy words that I don't understand,
and I don't want to do it today. We'll worry
about it in a few months. That's the wrong approach
because anything can happen in those few months, and we've
all have those horror stories. Anyway, easy things you can do.
The easiest thing everyone can and should do is name

(38:22):
beneficiaries on everything that you can. Primarily in the easiest,
absolute easiest place to do it is all your financial accounts.
Here I raise your four oh one ks. That's relatively
obvious because it's shoved into your face. On those retirement accounts, right,
you kind of have to name a beneficiary to get
those open. So but always make sure they're up to date.
And when your company changes four A one K providers

(38:44):
or they change the hware HR software system, double check
that because I think I've seen at least five times
in my life where somebody changed the software package of
my beneficiaries.

Speaker 3 (38:52):
What's a big one. I've seen that as well.

Speaker 1 (38:54):
It happens very frequently, or sometimes our clients while we're
doing a financial plan, they'll log into their four oh
one K and the hey, you dope, before we get
the investments, click that beneficiary, Like, let's just see what
it says, make sure it makes sense anyway. That's the
easy side, cause it's kind of shoved in your face. However,
where you can also do it. It's very easy, but
you kind of have to ask for It is your
non retirement accounts, and I'm talking like a joint investment
account or an individual brokerage account, and we're talking non IRA,

(39:17):
non ROTH, that kind of thing. You can ask your
financial institution for what's called a transfer on death TOOD form,
which does the exact same thing. That does not change
the ownership, but it will establish beneficiaries on those taxicle
accounts banks different from investments banks called a POD payable
on death. But it's just a piece of paper where
you're naming beneficiaries. If you accomplish these steps on all

(39:40):
of your financial assets, then those instantly will bypass probate.
You don't need a fancy trust. Matter of fact, they
bypass the will too. The will might say my investment
account XYZ goes to my dog, but if the beneficiary
is listed on the account, the beneficiary that is listed
wins out.

Speaker 3 (39:56):
Doesn't matter what the will says. A will is still important.

Speaker 1 (39:58):
I'm not at all implying that, but at the same time,
the will exist to cover anything where you can't clearly
name a beneficiary. If you can name it on the
asset itself via the title or the account or the whatever,
or your house deed, then you should do so. All
that stuff bypasses probate and these are easy, simple steps
that everyone should take.

Speaker 3 (40:16):
Yeah, good stuff, Brian. I actually had this come up
yesterday in a meeting with a client. They had done
all the beneficiary work on their iras but completely ignored
their bank accounts. So we were able to walk through
how to get their six different beneficiary set up through
a pod, you know, just by going into the bank
and getting it done. Good stuff. Thanks for listening everyone,
you've been listening to Simply Money, presented by all Worth

(40:37):
Financial on fifty five KARC the talk station Mark Levin.

Speaker 4 (40:43):
This thing at Texas is so horrific. Now the media
jump right in who's to blame, and of course it's
Trump and it's the cuts quote unquote, it's climate change.
The left never gives up. They just don't abandon this stuff.
It doesn't matter how many die, it doesn't matter the circumstances.
It just boggles the mind to see this kind of tragedy,

(41:05):
and then to hear how some respond, it's like they
just don't give a damn.

Speaker 5 (41:09):
Mark Levin tonight at ten oh six on fifty five KRC,
the talk station

Simply Money News

Advertise With Us

Popular Podcasts

Crime Junkie

Crime Junkie

Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.

24/7 News: The Latest

24/7 News: The Latest

The latest news in 4 minutes updated every hour, every day.

Stuff You Should Know

Stuff You Should Know

If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.

Music, radio and podcasts, all free. Listen online or download the iHeart App.

Connect

© 2025 iHeartMedia, Inc.