Simply Money presented by Allworth Financial

Episode Transcript

Speaker 1 (00:06):
Tonight, our diamonds even a luxury anymore, how to avoid
some costly tax mistakes and more. You're listening to Simply Money,
presented by all Worth Financial on Bob Sponseller along with
Brian James. Brian, nothing like a couple of middle aged
men talking about whether to buy or not buy diamonds

(00:27):
to probably spark a little bit of fury out there
among the listening audience. But I thought this was a
fun topic to Beer CEO Al Cook wants to save
folks from what he calls a huge con when it
comes to buying diamonds, and by the way, rescue his
brand in the process. For decades, De Beer's has worked

(00:48):
extremely hard to persuade generations of consumers that love wasn't
genuine unless it was sealed with a real diamond, one
form naturally over a billion years deep in the earth
and extracted and exotic places, often by companies like the Beers.
But Brian, as you know, the emergence of synthetic diamond

(01:10):
or lab grown diamonds has really come on and it's
made the decision, the buying decision process much more challenging
for folks. I know, I've got kids that have gotten
married or engaged in the last three years, and I've
watched them go through this process. Perhaps you have seen
people do so as well. It's interested to get your
thoughts on this.

Speaker 2 (01:31):
Yeah, Bob, I'm no diamond experts. I was briefly in
the summer or the fall, I guess of nineteen ninety
seven when I proposed to my wife, and I did
the research and pretended I knew what the words meant
and all that kind of stuff, and really haven't. Unfortunately,
have not had to look at that again.

Speaker 1 (01:46):
But I bet you bought a real diamond, right, Brian.

Speaker 2 (01:50):
Oh, she drags her left hand on the floor behind her. Bob,
It's yeah, it's a big no, it's not. She'd have
killed me if I did that anyway. That's why I
fell in love with her. So but know so it's
interesting business story. I do recall, though, the synthetic diamonds
at that time, and again this is the late nineties.
Synthetic diamonds were kind of newly a thing, so it
was on the radar, but they had that they had

(02:12):
sort of a reputation, as you know, kind of being
cheap or whatever. Cubics or conia, lots of jokes about
that stuff, but it's not so much anymore. Now we're
making actual, real diamonds in labs that can mimic the
Earth's pressure and temperatures, and we're creating real diamonds just
using science and selling them for a fraction of the price.
So of course these have become more mainstream. This isn't
like I said, the old cubics or conia. These are

(02:34):
actual diamonds being created in labs, and so we can't
really argue that they're kind of, you know, not the
ones we dug out of the ground, So making a
bigger and bigger chunk up of the diamond market out there.
They currently account for about twenty percent of global jewelry sales.
That's up from one percent as recently as twenty sixteen,
So that's how quickly this has grown. And just here

(02:55):
in the United States, more than half of all engagement
rings used one of these lab created diamonds, forty percent
more than just twenty nineteen. So this is this kind
of a juggernaut, kind of on a roll. So I
kind of I get with the de Beers companies.

Speaker 1 (03:06):
After all, right, you have a daughter, right, Brian, I've
got three my wife and I have three sons. You
have a daughter. I want to get your thought on this.
What what does your what would your daughter think about
being presented with a quote unquote synthetic diamond rather than
a real diamond. And obviously there's price points on size
and all that, But I'm interested from the female point

(03:28):
of view, what are ladies thinking about out there in
regards to is this even acceptable? It appears like it is.
I mean, fort of folks are buying, you know, lab
grown diamonds now for engagement rings.

Speaker 2 (03:41):
Yeah, and I and I think you know. And and Bob,
you're putting me on the spot here by by by.

Speaker 1 (03:45):
Forcing me to seek Yeah, thank you very I do
that on purpose.

Speaker 2 (03:49):
I expect some text after this radio show airs, but
any caays, but I'll answer this way. I don't know
that it's And this might be why mister de Beers
is a little bit worried. I don't hear kids talking
about this really at all, period, end of story. It's
just not doesn't seem in my world anyway to be
the same level of importance as it once used to be.
That no, that doesn't mean nobody's talking about it. But

(04:09):
I don't really hear the jewelry is super important to
a couple of these younger generations the way it was
to older generations, let alone the synthetic versus real. So
and I think again, mister de Beers wouldn't be as
worried if that wasn't the case.

Speaker 1 (04:23):
You know, if there was a big debate.

Speaker 2 (04:24):
Between synthetic and real then among buyers, then he'd be
be an easier position. But I think he's just trying
to defend what his company does, which is to dig
him out of the ground, old school style and distribute
him that way versus some you can buy for a
lot cheaper that just happen to be created in a lab.

Speaker 1 (04:41):
Well, and the answer to most of life's most perplexing
questions is always follow the money, and then the spirit
of following the money. The book value of de Beer's
parent company, Anglo American, have dropped by forty five percent,
hence the need to try to reinvigorate people to try
to buy real diamonds. Watch Indians exactly. All right, let's

(05:04):
switch gears here. We can all travel for less now
by buying someone else's vacation. Brian, I know you're a
very conscious shopper. Thanks to eBay like marketplaces for non
refundable trips, folks can swoop in to snag a great
trip that someone else is unable to use because they
bought a you know, non refundable trip and snag it

(05:27):
at a steep discount. There are companies out there like Sparefare,
rumor Plans, Change and Transfer Travel. They take about a
twelve percent you know, commission to help people unload their
non refundable trip. But we're seeing people pick up on
the flip side these all inclusive luxury trips for around
a twenty to thirty percent discount. It's a real thing

(05:50):
out there. Brian, Yeah, this is interesting.

Speaker 2 (05:52):
It's just yet another thing that the Internet makes possible
just by connecting everybody to everybody. So this is one
of those things you read it on you go, well,
of course we should be able to do that. Why
wouldn't you? And so one good example here there was
a forty six thousand dollars two week all inclusive trip
to Fiji that's sold for thirty three thousand dollars. So
in other words, whoever, and again this would be somebody

(06:13):
who for whatever reason, they can't make the trip that
is non refundable. So this this person was about to
eat forty six thousand dollars, but due to the presence
of these sites, was able to recover in two thirds
of that, which you know, obviously still taking a hit,
but that's a heck of a lot better than losing
one hundred percent of it. So the typical discount you
can get here is about twenty to thirty percent. Best
deals are available to those if you're willing to wait

(06:34):
until about two hour or two hours two days before
departure time, then you can get a fantastic deal. I
really love this stuff, Bob. These are these interesting ideas
that people are coming up with with kind of looking
around and saying, what resources do I have that I
don't really need right now, and how can I make
money off of it. There's another site out there, Bob,
called turo that does this with cars. You're just renting
somebody's car. We did this in Hawaii last year. We

(06:58):
signed up for it on the site. They put the
car in a parking spot at the airport at Kona
and send us a.

Speaker 1 (07:03):
Picture of where it was.

Speaker 2 (07:03):
We picked it up, drove it for three days, and
drove it back, left it and sent them a picture.
We were just renting their car as opposed to renting
from you know, one of the big big companies. You
can do the same thing with swimming pools. You can
rent somebody's house here in Cincinnati, have a pool party
for the afternoon, and then walk away. It's really cool
how this stuff's coming out.

Speaker 1 (07:19):
Don't you wish it was just as easy to unload
timeshares you no longer want, Brian, wouldn't that be wonderful?
Just click a button on the internet and get that done.

Speaker 2 (07:28):
Well, maybe the time share people are starting to get
as worried as mister Deviz is about his diamonds.

Speaker 1 (07:33):
All right, Well, back to this trip stuff. Industry experts
do call out that it's best to check with the
airline before buying a quote unquote secondhand flight, as asking
to change a name on a flight can trigger some
alerts from software that the airlines use that is designed
to flag things like money longer laundering and human trafficking.

(07:54):
So do check with the airlines before you pull the trigger,
especially on a thirty three thousand dollars trip from a
secondhand website. All right, Brian, I know you'll love this story.
There's a new sport out there that I can already
picture several people even in our own office, loving and
getting fired up about. And it's competitive birthday free loading.

(08:14):
It involves competing to see who can score the most
birthday freebies from various retips. We came across one thirty
eight year old aquatics manager who is attempting this year
to break his own record of thirty five freebies by
meticulously planning ahead on how to spend every waking hour
of his upcoming birthday. The dude even build a spreadsheet

(08:38):
to map out his travel route, what stores he's gonna
go to, so he can strategically plan to hit shopping
centers where he can score the most hits and the
most free stuff. Brian, is this how you'd like to
spend your birthday? You know?

Speaker 2 (08:52):
I do see the attraction to the answers note, but
I do kind of get it does seem to seem
like I knew.

Speaker 1 (08:57):
I knew I knew you would be at least my
intrigued by this.

Speaker 2 (09:01):
I mean, I'm not saying I'm not going to google
that that Later after we get off this call, maybe
I will bob that that's my business, not yours. But
you know, I like the idea of you know, you're
just it's just somebody just kind of being curious, how
can I hack the system and kind of lean things
in my direction. So and again, as you as you're
well aware, we're just just looking at the places offer
free stuff on your birthday. So this gentleman has just

(09:23):
put together a list of all the restaurants and stores
and whatever who do anything, and then he literally mapped
it out so he can make it to all of
them as many as he could possibly get to within
the span of his birthday. So he usually says, he
usually logs over ten thousand steps and drives thirty to
fifty miles in his car. Now, I hope this free
stuff is worth it, because it's costing him, you know,
at least two gallons of gas probably, So hopefully these

(09:47):
these things are actual beneficial. I do remember about in
my past when the kids were younger, paying attention to
which restaurants and I want I did. I did once
have a spreadsheet that did this Monday, this restaurant, Maale
Tuesday's kids are free here and all that kind of thing. So, yeah,
you caught me. I'm busted.

Speaker 1 (10:04):
All right. Speaking of restaurants, Denny's Restaurants did say they
saw a twenty eight percent increase in redemptions of its
birthday freebie in twenty twenty four compared to the previous year.
More than three hundred thousand customers received a free Grand
Slam breakfast in twenty twenty four. Brian, maybe some of
your kids as part of that three hundred thousand dollars.

(10:26):
I'll leave that one alone, all right. Coming up next,
the three most expensive tax missteps that even high net
worth investors often make. You're listening to Simply Money, presented
by all Worth Financial on fifty five KRC the talk
station Blom Bob sponseller along with Brian James. Is there

(10:49):
a right time to discuss the inheritance you plan to
leave your children or other family members. It's actually one
of the questions you asked us about. Well, answer all
of that coming up ahead at six forty three. All right,
When you've built significant wealth, it's easy to assume you've
got your financial house in order, but we see it

(11:09):
all the time. Wealthy families, even those with excellent accountants
and CPAs, still making tax mistakes that cost them tens
of thousands of dollars, sometimes even more, Brian, and we've
got three of those mistakes we want to walk through tonight.

Speaker 2 (11:26):
Yeah, these all come fresh off the presses of our
advisors here who have these stories, and ourselves because we
talked to our clients as well about these types of things.
So the first mistake people make miss deductions. So there
are a lot of people out there who maybe didn't
quite catch on that the Tax Cuts and Jobs Acts
of twenty seventeen eliminated the standard deduction, and they may
be making contributions in a way where they're missing out

(11:48):
on a tax benefit. For example, if if you always
gave your church or some charity ten thousand dollars of cash,
that's no longer enough to outpace the standard deduction, you're
getting that deduction for free. Ever really lost, but you're
you've been doing that for years because you just just
what you do a tax time. I right it, Jack,
I get a deduction.

Speaker 1 (12:05):
There you go, Brian, and I and not to interrupt,
but I see this all the time. And the other
one that I see and is not used at all,
is that qualified Charitable deduction for folks ages seventy and
a half in Older talk about some of the examples
of how that should be used.

Speaker 2 (12:21):
Something called the QCD Qualified Charitable Deduction. That is something
that you can use your when you hit the age
of being of a required minimum distribution, when you were
required to take ira dollars out and begin to pay
taxes on them. You can have that sent directly to
a charity. You need to work with the custodian of
their wrath, which is the financial institution that holds your account,
and that they'll have you fill out the proper paperwork

(12:42):
to get that done. But that and you'll need things
like the tax idea of the charity and an address,
and they'll need to know you know where to send
the dollars and all that. The charity, believe me, will
be more than happy to help you with this information.
They know exactly how it works.

Speaker 1 (12:54):
Another missed deduction or missed tax planning opportunity we see
often Brian is under utilizing that health save these account
A lot of times people don't max out the contributions
to those accounts, and then other times, even when they
do max amount, they're spending that money on medical expenses
as soon as it comes in. You know, when they're

(13:15):
in their fifties, rather than letting that money grow and
taking full advantage of that triple tax benefit of pre
tax contributions, tax free growth, and tax free withdrawals for
medical expenses once you get into your late sixty.

Speaker 2 (13:30):
Yeah, one of the things that people need to remember.
But an HSA account, remember this is not an FSA.
HSA is not to use it or lose it. So
you can stack up these expenses now and pay them
off later. So meaning you can put that money in now,
get your deduction, as Bob mentioned, and then invested in
something I've read the other day that only about ten
percent of hsas are actually invested in something beyond the
simple bank account. You can move that to a place

(13:51):
that will allow you to do mutual funds similar to
your four O one K. Let it grow for a decade,
decade and a half, and then you can come back
and you can pay for it with You can pay
for expenses that you had fifteen years ago. So you
can benefit from from that over a very very long
period of time. Make sure you understand how that works.

Speaker 1 (14:07):
All right, Let's get into mistake number two from a
tax standpoint, and that's poor timing. Brian what we mean
there is, you know, for example, selling a big stock
position in December and having this huge capital gains hit.
You know, you might you triggered that big capital gains
hit in December when a little patience and a little
planning could have shifted that liability into the next year

(14:29):
or split it up between one, two or three years.
And that's where it's important to run those numbers in
advance of just making a big wholesale decision, you know,
off cuff or off the top of your head.

Speaker 2 (14:41):
So I actually like when this comes up in the
fourth quarter of a year because it makes it makes
me look like I have a really, really huge brain.
But it's really simple stuff. So let's say somebody comes
up with an expense they need to buy a car,
or they're gonna buy that vacation home, or they're gonna
help the kids or whatever. They have a big expense
that's going to require them to liquidate something and therefore
incurse some taxes. Well, if this is happening the fourth
quarter of a year, then if you think about it,

(15:03):
if we're really talking about this in December, you can
actually get into three separate tax years over a thirteen
month span. Sell a third of it now in this December,
a third of it anytime in the following year, and
then a third of it in the following January. Now
you've spread that income tax hit over three separate years,
and it's okay to do something like maybe you cover
it with the home equity line of credit.

Speaker 1 (15:21):
Even with rates up.

Speaker 2 (15:22):
Now you're only paying eight percent or so at a max,
sometimes even lower than that, and so the math can
be very, very favorable as long as you have a
plan and you can stomach the idea that, yes, you
do have debt for thirteen months, but it's not that painful.

Speaker 1 (15:34):
And you're really talking about, Brian, just borrowing that money
for a month or two or three just to get
in that next tax year, gets you at a lower
tax rate, and then immediately pay it off.

Speaker 2 (15:44):
Just re arranging the financial furniture a little bit.

Speaker 1 (15:46):
Speaking of timing, the same logic applies to Wroth conversions,
and that's where it's important to run those numbers, because
a little timing and a little spacing out of the
amount and the timing of those Wroth conversions could mean
the difference between paying taxes at say a twenty two
percent you know, marginal rate or a thirty five percent
marginal tax rate. The differences can be often huge. Another

(16:08):
tax opportunity I want to make sure we really hit
on because we see this often, and I'll just say
it this way, for after tax non IRA non four
oh one K accounts, if you don't have a plan
and an advisor that is taking advantage of regular I'm
talking about daily, monthly, quarterly automatic tax loss harvesting your

(16:30):
investment portfolio, I'll just say is out of date because
there's so many good opportunities now to have this kind
of on autopilot running in the background that a lot
of good fiduciary advisors have available to them, you've got
to be taking advantage of that tax saving opportunity.

Speaker 2 (16:47):
Now, that's true. And if it's a pile of mutual
fund or something like that, it can be a little
more complicated, but you might consider switching to something that's
going to allow you to invest in individual securities. And
what Bob's referring to there with tax loss harvesting is
looking at a position where perhaps a of it and
reinvested last quarter, and then the market came down that
those particularly purchased piles of shares of that stock are
now sitting in a lost position. You could sell those

(17:08):
and stack it up toward up to a three thousand
dollars deduction for the current tax year.

Speaker 1 (17:12):
All right, and then tax planning mistake number three is
just simply outdated strategies. This one can sting because it
often involves things that used to be good advice. You
were doing all the right things that you were told
to do, but you were told to do them ten, fifteen,
twenty years ago, and things have changed and you got
to adjust along with current tax law and current planning opportunities.

Speaker 2 (17:35):
Yeah, that always happens where you know the best of intentions.
But if we ignore things, then it's not gonna I'm
not gonna have a good outcome there. So perhaps you
were told, you know about some kind of estate planning
structure you should have, maybe a family limited partnership. Those
were popular a very long time ago and still serve
a good purpose. I'm not saying they don't. However, families change, right,
People don't get along anymore. Relationships change, financial needs change

(17:58):
in situations. Maybe somebody needs exit that partnership because it's
causing more problems than it's solving. At this point. Sometimes
you can have a tax structure of a trust that
is out of date. So you know there's a sunset
coming for the Tax Cuts and Jobs Act that's coming
at the end of this year, and that could be
affecting your estate plan.

Speaker 1 (18:16):
Here, you need to make sure that you're on top
of that. Here's the all Worth advice. Don't waste money
on taxes. Make sure your strategies evolve as fast as
your portfolio does. How old is your Internet router? It's
a question you should definitely answer soon. We will explain
why next. You're listening to Simply Money presented by all
Worth Financial on fifty five KRC the talk station. You're

(18:46):
listening to Simply Money presented by Allworth Financial. I'm Bob
Sponsorer along with Brian James, joined tonight by our tech
and cybersecurity guru, mister Dave Hatter, and I know this
topic is something everyone out there there. This applies to everyone. Dave,
what are we going to cover tonight to help keep
our data and our money secure?

Speaker 3 (19:07):
Guys is always thanks for having me on and this
is an important topic. It's a recent warning from the
FBI about small businesses and people's homes. You know, generally
large corporations have nerds like me running around. They have
enterprise grade security solutions, they have firewalls from folks like
Palo Alto and Cisco and Fortinet. But at home, many

(19:28):
people just have whatever came from the internet service provider.
Same with small businesses, or maybe they've gone out the
best buyer Walmart or somewhere and bought an off the
shelf Wi Fi router because they need more capabilities than
what you can get out of the thing that was
delivered by your Internet service provider. And the FBI is
warning that in many cases, like so much of the
tech that's out there, so much of our so called

(19:50):
Internet of things aka smart devices, you know, these things
have to be updated regularly, they have to be configured correctly,
and as they get older and go into life where
they're not getting software or upgrades and more importantly, security
patches from the vendor, that creates a gigantic security hole.
This is the kind of thing tenfoix hat nuts like
me warn't about all the time. But I'm happy to

(20:11):
see that the FBI is now trying to get in
front of this and warning folks that if you have
these older end of life devices. You know, anything that's
more than five or six years old, you should question.
If it's ten years old or older. That's going to
be a significant concerned. You need to seriously take a
hard look at replacing these things. And the good news
is they're relatively inexpensive.

Speaker 1 (20:29):
All Right, Dave is somebody who grew up here in Cincinnati,
you know, using that old Green Hills mindset where I'm
gonna pinch every penny I can. You know a lot
of times I think to myself, and I know other
people think the same way. I do not want to
rent that router from Spectrum or you know, Ulti Fiber
or whatever. I'm just going to go buy my own
because it's gonna save me a few bucks. Are those

(20:52):
the people you're really talking to right now, Those people
that went out and bought that router twenty years ago
and said, yep, I got my own router. I feel
great about not having to pay rental payments to a
cable company. Are those the people most at risk, you know,
in situations like the one you're talking about right now.

Speaker 3 (21:09):
Most likely because if you're essentially renting it from your
internet service provider. Again, think you know, Spectrum, Ultifiber, whomever.
And I'd also point out, you know, there are so
many different ways to get online now. You know, in
the old days you typically have to work with some
sort of landline based internet service provider. Now you have
solutions like Starlink, ount there and so forth. But at
the end of the day, the Wi Fi router. And

(21:31):
this often gets confusing for people because a lot of
folks have two different devices. You have the cable modem,
if you have something like Spectrum, which is a physical
device that connects you to their network, and then sometimes
that will serve also as a Wi Fi router. Sometimes
you might have a separate device that is then throwing
up the Wi Fi signal in your facility, your home,

(21:54):
your small office or whatever. This is a constant battle
with my family, like the WiFi is down. I'm like, no,
the Wi Fi is not down. The internet connection is down.
These are two different things right now. Again, sometimes one
device can provide both. Most people have two. If you're
working with the internet service provider, you know they will
occasionally replace these things. Usually you're not going to have

(22:14):
a device that's real little. But if you went out
and bought your own because you don't want to have
that rental fee or you wanted extra capabilities. Yes, again,
if it's more than five or six years old, and
the FBI specifically says in their PSA anything produced in
twenty ten or earlier, so you're talking to fifteen year
old device. These things have notorious security flaws. They're not
getting updates from the vendors. They're also missing a lot

(22:37):
of more modern security features, and that's one of the
key things here. You can go out and buy a high,
relatively high end powerful Wi Fi router for three hundred
bucks or less that will add an enormous amount of
additional functionality and security capabilities versus something that's even a
couple of years old. You know, there are new encryption
standards for your Wi Fi network, a new Wi Fi

(23:00):
standards that provide better performance and better speed. So you know,
by upgrading, despite the fact that people don't want to
spend money and I get it, you also have to
remember every single thing you do online through that device
is you know, whether it's your banking, accessing your work networks,
whatever you're doing is going through that device, so ensuring
its security is very important for you, your business, your money,

(23:25):
et cetera. And you know, one quick piece of advice
before amount of time. Again, there's lots of new standards.
You can get much better performance, much better security, get
software updates, things like WPA three. That's that's the highest
level of encryption most home Wi Fi routers would support.
You know, you need to be turning on the highest
level of protection you can. And I would encourage folks.

(23:47):
You know, if you don't have an earty friend like me,
you can talk to check out magazines online like c net,
Charlie Net, or zd net, ZIF, Davis Net, Tom's Guide,
PC Magazine, Consumer Reports. They have editors and experts that
vet these things right. So you can go out and say, well,
what's the best home Wi Fi router for twenty twenty
five on one of these sites, and they'll give you recommendations.

(24:11):
You know, do I want the cheapest one? Do I
want the most powerful one? Do I want the most
secure one? Do I care about gaming? There's all kinds
of great advice, and I also encourage people sign up.
Go to IC three dot gov Internet Crimecomplaint Center dot gov.
It's hosted by the FBI. They put out these public
service announcements there's all kinds of useful information there, so
there's ample resources to help you figure this out. But

(24:33):
if you have a really old device, take the FBI's
advice and replace this, because you're setting yourself up for
disaster if you don't.

Speaker 2 (24:40):
Hey, Dave, is there besides it being old? Are there
things that the thing that my router could do? Will
I know that if it's behaving a certain way that
I maybe I should be paying more attention? You know,
obviously you know there are model numbers and things we
can look at too, but just in general, should are
there things I should watch for just in terms of
his normal performance?

Speaker 3 (24:58):
Yeah, that's a good question.

Speaker 1 (24:59):
You know.

Speaker 3 (25:00):
One of the reasons why they've put out this PSA is,
you know, for these really old routers, it's not that
hard for hackers to find these. There's a search engine
called showdan specifically designed to find Internet connected devices, so
bad guys can go look up routers that have known defects.
They can infiltrate your router and then they'll use it

(25:20):
essentially as a proxy or for other nefarious purposes, so
they're they're routing they're bad activities through your router, which
also means you could get a visit from the FBI someday.
If you look into that, you'll find that has happened before.
But yeah, if you if you're if it used to
work fine and now it suddenly starts to lose its connectivity,
your speed goes to near zero, it seems to overheat,

(25:42):
or just suddenly starts acting weird. I mean, that could
just be a sign that that's getting old and tired,
or it could be a sign of some sort of
infestation from some hackers somewhere. And again, with these newer devices,
they're much harder to hack. They're getting the security patches
from their vendors, they're much easier secure. You know, all
the reasons why you should really think about replacing anything

(26:04):
that Again, I would say if it's five or six
years old, you should take a hard look at replacing it.

Speaker 2 (26:08):
Yeah, and I want to be clear too, this is
something I learned years ago about. We've hinted at a
couple times here, but just to say it a third time,
you do not have to rent devices from your internet
provider anymore than you have to rent a lawn sprinkler
from the water company. They can't control what you're connecting
to that connection, so you can be in full control
of this and save yourself a little money at the
same time. Dave, I'm going to ask you a little

(26:30):
bit of a loaded question. Have we heard from the
ulti fibers and the spectrums of the world from there?
Are they raising a flag on any of this? And
do you have any idea if they would bear any liability.
That's a lawyer question and none of us is one,
but I'm asking anyway.

Speaker 3 (26:44):
Yeah, I have not seen, like you know, I use
Spectrum at home. I have not seen any communication from
Spectrum in this regard. Now again, you know, they will
occasionally replace their equipment and so forth, and you know,
I would encourage people to your point to not rent
their equipment and go for some of the higher end
and relatively inexpensive. You know, if you spend three hundred
dollars on a fairly high end Wi Fi router and

(27:06):
you advertize that over five or six years, that's not
very much money to get a lot more security and
a lot better capability and probably a lot better performance
to boot.

Speaker 1 (27:15):
You know.

Speaker 3 (27:16):
All of that said, so, I haven't seen anything from
the internet service providers in this region comment on this
particular FBI warning. I think it probably is really geared
more towards the people like you mentioned that have gone
out and bought their own equipment, perhaps a long time ago.
And you know, as far as the internet service provider
bearing any responsibility, yeah, I'm not an attorney, and I'm

(27:37):
sure if you read through their terms of service there's
indignification in there for anything that goes wrong using their service.
So I kind of doubt it. But you know, I'm
not an attorney, and you know, could you get a
class action lawsuit together for people that have somehow been
hacked because they had old equipment and they weren't warned
and it wasn't replaced.

Speaker 1 (27:56):
Maybe. Yeah. So bottom line is spending that investing that
three hundred dollars, like you said, advertised over six, seven, eight,
ten years is way less expensive than going through a dramatic,
you know, identity theft or fraud situation that could cost
you hundreds, if not thousands of dollars. Great stuff, as
always from our tech expert, Dave Hatter. You're listening to

(28:19):
Simply Money, presented by all Worth Financial on fifty five
KARC the talk station. You're listening to Simply Money presented

(28:39):
by all Worth Financial. I'm Bob Sponsller along with Brian James.
Do you have a financial question for us? There is
a red button you can 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. All right,
let's roll here the Ask the Advisor segment. Well, first
we have Brian and Mace and what.

Speaker 2 (29:01):
Does this smart withdrawal strategy look like for someone with
a three million dollars portfolio? Yeah, thanks for clicking that
red button there, Brian. So that's a great, great question,
and you know, I wish this is one of those
things honestly that is job security for me and Bob
because that is a very very complicated question, important question
everyone will face it. It depends on the tax structure.
So Brian, I would ask you, is this money you

(29:21):
said three million dollars? Is this in a four oh
one k is at ira? Or perhaps you inherited it,
maybe you sold a business and it's exposed to taxes,
which isn't a bad thing. Everything's exposed to taxes, but
there are differences between retirement taxes and capital gains taxes
of course, so it depends on what you need and
when you need it. So the ideal part of this
is what I would suggest is come up with with
the some as semblance of what do you need in

(29:44):
the next twelve to eighteen months that ought to be
placed in something that's pretty accessible and not going to
be affected by the headlines, and then that then you'll
be more confident in leaving the rest of it invested
over the longer haul. But maybe come up with three
buck it's a short term, medium term, and a long term,
and then you can look at how those different things
are taxed.

Speaker 1 (30:00):
All right, how about Robert and Florence, Is there a
right time or way to talk to my airs about
what inheritance they might receive? Well, Robert, this is a
loaded question, but a great one because we talk about
it all the time on this show. Communicating with your
family is of the utmost importance in terms of timing.
I'll just give my answer as someone my wife and
I we have three adult sons, and we have not

(30:24):
shared any of this information, you know, with them yet.
We're a little bit young, they're a little bit young.
But I'd say the first thing to focus on before
you talk about inheritance. Make sure your kids are equipped
to handle money well. Make sure that you're happy, not
that you micro manage their life, but make sure you're
at least comfortable that they have financial plans of their own.

(30:48):
They're following those plans, they're being responsible with money, they're
not racking up a lot of debt. And then when
you get down the road a little bit, you know,
I think then when you know they're going to be
responsible with anything, you might lead them. I think you
could throw out some round numbers because I think if
they have some just broad numbers to work with as
they're growing their family, it helps them sit down with

(31:11):
their advisor and do the same kind of planning that
you are doing. In terms of retirement. Hey, if I
know I got a little bit of money coming here,
well that might make some differences. And how I contribute
to ROTH versus regular four to one K, how I
fund kids college educations. So again, I would say, first
thing is make sure they're handling money correctly or know

(31:33):
how to do so, and then broach the subject not
with guarantees, but broadly speaking, give them a range of
dollars that they're likely going to inherit that's how I
plan to go about it with my own family.

Speaker 2 (31:46):
And now we'll move on. We'll dig a little deeper
into the voicemail bag we have, Bill and blue Ash.

Speaker 1 (31:50):
I have heard that people in my situation can be
over insured or under insured depending on their stage life.
How do I know if my insurance still make make sense?

Speaker 2 (32:01):
Yeah, another great question. These are all things that we
think of at three o'clock in the morning when we're
staring at the ceiling. So so, Bill, I think the
right way to approach this is to figure out if
something were to happen to you or your spouse, and
or your spouse you know here in the short run,
how much money would need to rain from the sky
so that you're, you're whoever you're responsible for can can
continue the lifestyle. A lot of times people, you know,

(32:22):
we'll buy a lot of insurance when the kids are young,
but then we hit a stage where where that's kind
of over with. So I always recommend term insurance for
term needs. You can calculate when the kids should be
out of college, assuming that's one of your goals, and
you you already have a piece of paper that shows
the exact date the mortgage goes away. So those are
finite dates. You can look at term insurance for those.
And then the rest of it is really what kind

(32:43):
of income replacement do my dependence need if I am
no longer out there able to earn a salary, And again,
you may have already built up a nest egg that
covers it. If that's the case, you don't really need
any more insurance. However, if there's a gap there, that's
where you might be looking at a more permanent insurance
type of a situation. If there if they're will always
be a need, or perhaps there's a person in your
life for whom you are somewhat responsible who will always

(33:05):
need some financial support. Perhaps there's some disabilities or something
like that that requires permanent insurance because you'll need You
will definitely need something to fall from the sky after
your death. But that's These are all things that make
a situation unique.

Speaker 1 (33:17):
All right, let's hear from Ed and Amberley Village. I'm retired,
but my spouse is still working.

Speaker 2 (33:22):
How do you coordinate a financial plan on one person
is earning and the other one is it, especially with
taxes and healthcare in themics.

Speaker 1 (33:30):
Well Ed, you hit on the two big factors taxes
and healthcare, and those are obviously extremely important things to
cover and we want to, you know, take care of
the first things. First. You got to make sure that
you've got healthcare coverage for both of you and hopefully
you're in a situation where your spouse is still working
and you're retired. Hopefully you can stay on her health
care plan until she retires and hopefully get that bridge

(33:52):
built between you know now and being able to go
on Medicare. So that's number one. You want to look
at that and make sure there's not any gaps apps there,
you know, being in a situation where you are potentially
without health care coverage, and then you brought up taxes,
and that's where you can sit down and run through
Social Security claiming strategies. How that impacts your Medicare premiums.

(34:14):
What type of assets do you have that are going
to be able to replace one or both spouse's income.
There's a lot of moving parts there, and I think
a good fiduciary advisor can help you, you know, kind
of put the proverbial car up on the rack, so
to speak, and look at what those potential income sources are.
Dovetail that with your tax strategy and your health care needs.

(34:36):
And then I think you got a good plan heading
into retirement.

Speaker 2 (34:39):
And quickly Diana and Milford has some questions about healthcare.
I've saved well, but Medicare still confuses me.

Speaker 3 (34:46):
How do you plan for those costs so they don't
sneak up on you?

Speaker 2 (34:50):
Yeah, So this is where a financial plan comes in.
And I'll throw out a quick quick tip here. When
we build financial plans, we use data from the Medicare
organization themselves. For a single person, we asked them somewhere
around five to six thousand dollars per year in current dollars.
That will account for the Medicare premium, a supplemental policy premium,
and then an estimate of office visits and copays and

(35:10):
all those kinds of things. So about five thousand bucks
maybe ten to eleven for a married couple.

Speaker 1 (35:14):
Coming up next, we're going to hear Brian's bottom line
where he's going to talk to talk to us about Hey,
why you might be working longer than you might need to.
This will be great. You're listening to Simply Money, presented
by all Worth Financial on fifty five KRC the talk station.
Let's get this thing moment you're listening to Simply Money,

(35:37):
presented by all Worth Financial. I'm Bob Sponsller along with
Brian James, and it's time now for Brian's bottom line.

Speaker 2 (35:44):
Lay it on as Brian, Well, Bob, I had an
attention getter. Recently went to a funeral of a client
and it was kind of a sad situation, of course,
as it always is. But are some of my favorite
people just beyond the financial plan being an interesting thing
to put together, fun puzzle to work on, you know,
just professional speaking, just fun people to sit around the
table with and solve these problems. But the gentleman who

(36:05):
passed on, he had worked until he was in his
mid seventies, loved what he did, just was highly respected
and super enjoyed his job and really just kind of
wanted to get every last minute out of it. And
so he just finally decided to retire. And unfortunately his
wife came down with some health problems and she was
gone in six months, and very recently I went to
his funeral too. So sadly, these this wonderful couple who

(36:28):
have you know, their own children and grandchildren in the neighborhood,
didn't get to enjoy all of that, with all the
free time that they had, and it just really really
got me thinking about priorities.

Speaker 1 (36:39):
And I have.

Speaker 2 (36:40):
Another meeting coming up somebody I haven't met yet, but
who I can tell right away. They've got way more
money than they need from the basic facts that they
know about them, and they are still so worried about
running out of money.

Speaker 1 (36:51):
Well, Brian, let's go back to that first couple, because
I remember the day you were in the office. You know,
you had your suit on, ready to go to the funeral,
and I didn't know where you were headed, but I
you were headed someplace special, and I could tell from
talking to you that it was weighing heavy on your
heart and mind that day. What could that couple maybe
have done a little bit different, Sure, do the plan earlier,
figure out where you are, you know, And here's another

(37:14):
quick stort of a different couple, but the same idea.

Speaker 2 (37:16):
One of the saddest stories in my entire career was
a couple that came in here with They both had
old school pensions with inflation built in, and we did
the whole plan and they realized they could have retired
five or six years earlier, and there were tears, and
usually it's because you know, people cry over this stuff
because it's a relief. Oh, I finally made it. I
get to, you know, run my life the way I want.

(37:36):
But it took me a few seconds to realize that
this lady was legit sad because she was not thinking
of all the freedom in the future. She was thinking
of what she had missed in the past, because her
grandkids were now getting older and kind of doing their
own thing, and she could have easily taken the time
to spend with them, but never took a breath to
see what positions she had put herself in. She simply
hid behind the fact that I just don't the position

(37:59):
of scarcity. There's never enough, never enough, never enough. Well,
she had more than enough and missed out well.

Speaker 1 (38:03):
As I listened to you share those stories and they're
real stories in your life with your clients. I mean,
I think a lot of times people when they think
of coming to see their financial advisor, they're thinking, all right,
what are these people are going to tell me that
I can't do because I don't have enough money, When
in reality, a lot of times we're encouraging them about
all the things they can and should be doing to

(38:26):
really open up and give them that life of freedom
and joy in those latter years that they've worked so
hard to earn. Thanks for listening. You've been listening to
Simply Money, presented by all Worth Financial on fifty five KARC,
the talk station