August 5, 2025 • 41 mins
Has the stock market finally hit choppy waters? Bob and Brian unpack what the latest jobs report tells us about the economy—and what it means for your portfolio. From resilient job numbers to a surprising rate pause by the Fed, there's a lot to navigate.
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Episode Transcript
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Speaker 1 (00:00):
This isn't dai here.
Speaker 2 (00:01):
This free off is a the American Authentic Voices.
Speaker 1 (00:08):
Fifty five krs. The talk station.
Speaker 3 (00:17):
Tonight has the stock market and our choppy waters.
Speaker 4 (00:21):
You're listening to Simply Money, presented by all Worth Financial
on Bob's sponsller along with Brian James. Well, for many weeks,
it's been smooth sailing for the markets. Then Friday happened
and we're seeing a few white caps. After months of
steady jobs data with a few minor cracks, the labor
market showed its first real signs of slowing July, we
(00:42):
added just seventy three thousand jobs, far below expectations.
Speaker 3 (00:46):
But what really moved the market on Friday was we
got adjustments.
Speaker 4 (00:50):
We got revisions down on the May and June jobs
report by a combine combined two hundred and fifty eight
thousand jobs, marking one of the sharpest two month payroll
downgrades outside of a recession that we've had in decades. Moreover,
without the addition of healthcare jobs, a relatively recession proof sector,
(01:12):
the July print would have been flat and the May
and June data would have been negative.
Speaker 3 (01:16):
So, Brian, you know, what do you make of this?
Speaker 4 (01:19):
Job's report and more importantly, these revisions for May and June.
It seems like we're having a hard time gathering you know,
accurate data in the first place, because these revisions are
coming out more and more frequently, and they're all over
the board and very volatile.
Speaker 5 (01:38):
Well yeah, I mean, we have a president Bob that
doesn't like bad news, and you know, there's the revisions.
I don't know that they're coming out more frequently. I mean,
this was a big one. This, this was a significant revision.
Let's go over a little bit about you know, why
does this happen in the first place. Why do they
ever revise things? Why can't they just get it right
on the you know, to begin with. So the Bureau
Labor Statistics, what they do is they send out surveys
(02:01):
to just asking companies how many people did you hire,
how many jobs did you create?
Speaker 6 (02:04):
That's where this information comes from.
Speaker 5 (02:06):
There is no you know, automated type of you know,
something that that watches all this stuff. So in any case,
just like any other surveys, sometimes they get answered right away,
more often than not, they sit so companies will respond,
you know, two and three months after the fact, you know,
to these surveys, and rather than ignore that data, because
this is extremely important information, the Bureau Labor Statistics will
(02:27):
use that data. So they will present what they have
because again, the sooner we get this information out there,
the better. This is what companies are saying about their
own activities, but we don't want to ignore the stuff
that comes in a bit a little bit later too. So, yeah,
the big headline was that we had to revise all
the way down down by two hundred and fifty eight
thousand jobs. That's one of the biggest two month payroll
downgrades that we've had outside of a recession. We're not
(02:49):
in a recession right now, and this is not necessarily
an indicator that it's becoming one. But at the same time,
we haven't seen these kind of numbers until other than
in recessions, but we do see them across the administration.
So in the first Trump administration, the average revision was
an increase of seventy three thousand jobs. Now that sounds
like a big number, but it's really not. In the
grand scheme of things, that's a fairly small revision. But
(03:11):
those revisions were mostly upward and under the Biden administration,
the average revision was about one hundred thousand jobs that
was mixed more. The most recent was on the downside,
and Obama had a little bit of everything, with an
average of about forty eight thousand jobs. So revisions themselves
are not new. It's the scale and the trajectory of
this one that really got the president's attention. And you know,
(03:32):
it didn't really have any evidence that it's wrong. He
simply didn't like the answer. So therefore, somebody is out
of a job, and we're going to have somebody appointed
who will find a way to spend things a little
more positively.
Speaker 6 (03:42):
So I'm not a huge fan of this, Bob. I'm
going to be blunt. I don't like this.
Speaker 5 (03:46):
This is for an administration that touts transparency, this is
the opposite.
Speaker 3 (03:50):
No, I have to agree.
Speaker 4 (03:51):
And I spent some time this morning listening to how
some of the you know, economists, people that are respected
in the business community react to the president's abrupt firing
of Bureau of Labor Statistics commissioner. He claimed that she
manipulated the numbers for political purposes, and I agree with you, Brian,
that's that's pretty ridiculous.
Speaker 3 (04:12):
What they did.
Speaker 4 (04:13):
Say is that the way the bls is collecting this
data is outdated, and you can blame whoever you want.
I think, you know, whether it's underfunding of this government
agency or.
Speaker 3 (04:24):
What have you.
Speaker 4 (04:25):
You know, what these folks were saying is they're still
collecting this data by phone and voicemail or even faxes.
And I think the point that a lot of these economists,
these are business economists we're trying to make is we
got to update the way we collect this data, make
it easier for companies to report this data. I mean,
there is something called the internet and email out there,
(04:47):
for example, that we might be using. But you got
to have systems in place to collect the data. I
think that's the big story here, not some lady you
know that should be getting fired for politically manipulating the
data because the president doesn't like the answer.
Speaker 3 (05:03):
I agree with you wholeheartedly.
Speaker 5 (05:06):
Brian, but I would My one thought on that is,
I bet we wouldn't be talking about missus mcintarver at
all if the job's report had gone up and was
positively spun. That's this one's got under my skin just
a little bit here. I don't like yetter did the
trend here?
Speaker 4 (05:19):
Yep, gotta agree all right, Well, the FED met last week,
but unfortunately policymakers did not have that Friday job report
when the meeting concluded on Wednesday, Otherwise the outcome might
have been different. The FED left rates unchanged in the
range of four point twenty five four point five percent. However,
two FED governors dissented in favor of a rate cut,
(05:43):
and that was the first time that happened since nineteen
ninety three. So there's a little bit of dissension inside
the Federal Reserve. In fact, FED Governor Andreana Kougler, who
you know was appointed by President Biden. I believe now
she will resign this Friday, and that opens up a
slot for President Trump to appoint a governor with that
(06:07):
I guess will align with his desire for rate cuts.
You know, the issue here the Feds. You know, we're
not gonna have a FED meeting in August. So the
first time the Fed's going to meet in September is
in September, and we all know a lot can happen
in two months time, with tariffs, with economic news, who
(06:28):
knows what else. It will be an interesting sixty days
here until we get the FED back in the room.
You know, again to decide on interest rate policy.
Speaker 5 (06:37):
Yeah, I think the you know, there is a bit
of a shake up happening there. Adriana Coogler did step down.
She did not share a lot of detail. It was
kind of your your typical you know, spend more time
with family, those kinds of things, and you know, not
not really weighing in on the clear decision that she made,
but just a little bit of history. And she was
nominated by President Biden in June of twenty three. It
(06:58):
was confirmed by the Senate and Tember later that year,
first Latina to serve in.
Speaker 6 (07:02):
The Federal Reserve.
Speaker 5 (07:03):
She is known kind of known for being douvish on
She really prefers rate stability and cautious moves. And that's
that's been the majority take of a lot of Fed governors.
Nobody likes to stomp on the brakes or stomp on
the gas. But anyways, but whatever it was within that body,
that that board of governors, there something made her feel
that she could not get the job done. And I
(07:25):
would also say that were last week there were two
Fed governors who came out and said no and completely
dissented with with charge your own pal saying no, we
need to be cutting rates now. Now it's of course
the Board of Governors, the majority rules. The majority still
says we want to stand pat Now. We will see
in September what the absolute, what the actual outcome of
all this is. But looking more and more, I look
(07:45):
at what the market's doing. The market is anticipating that
we'll start seeing ray cuts in September.
Speaker 4 (07:49):
You're listening to Simple Money presented by all Worth Financial
on Bob's sponsorller along with Brian James.
Speaker 3 (07:54):
Yeah, Brian, back to the Fed.
Speaker 4 (07:55):
Based on current data, you know, up to date data
and all this internal Fed turmoil, the market and that's
what we focus on here, has now priced in about
a ninety percent chance of at least a quarter point
rate cut when the Fed meets again on September sixteenth.
So you know that that's what's being priced in the
into the markets. You know right now, a ninety percent
(08:17):
chance of a quarter point rate cut, and we're seeing
economists across the board, you know, estimate maybe two or
even three rate cuts between now and the end the
end of the year, depending on what goes on with tariffs,
which is always a moving target, and what truly happens
here in the labor market. Bring us up to date
here a little bit on what's going on in tariff land, Brian.
Speaker 5 (08:40):
Yeah, so a couple of new reciprocal tariffs came out
last week. The average US levy is going to be
about fifteen point two percent. That's up from thirteen point three,
far above the two point three percent average this year ago.
Speaker 6 (08:51):
So this is going to come down. I remember how
this works.
Speaker 5 (08:54):
We throw numbers out and then we all start arguing
and yelling, and then eventually something a little lower comes out.
So we anticipate that's going to come down a bit
some of the some countries were given delays. Mexico's got
another ninety day delay going on, and some others had
reciprocal tariffs enforced on them. And that includes a thirty
five percent tariff on Canada, our friends to the north,
(09:15):
who may not be our friends much longer. But that
excludes stuff that's already covered under the US Mexico Canada agreement.
So thirty five percent tariff, that's a fat one. President
Trump has seems to want to take on Canada directly,
and so the look for more negotiations on that standpoint,
but probably a little icy relations between us for a
little while there.
Speaker 4 (09:36):
Yeah, And I think the icy relations is, you know,
the President has used these threats of teriff tariffs to
get people to come to the table and negotiate, and
it seems to me, at least Canada is just kind
of calling his bluff at this point.
Speaker 3 (09:50):
Saying no, we're not doing this.
Speaker 4 (09:52):
So yeah, yeah, we have a quote, you know, we
have a proverbial Mexican standoff here between Canada and the
United States.
Speaker 3 (10:00):
Tune for how that all gets resolved.
Speaker 4 (10:01):
Well, Brian, Yeah, Well, let's get back to corporate earnings,
because that's what really moves the stock market, and that's
what we all need to remember.
Speaker 3 (10:11):
What moves the markets aside from all this political.
Speaker 4 (10:14):
Turmoil and stuff and social media, is our companies making
more money, and in fact they are.
Speaker 3 (10:21):
So far.
Speaker 4 (10:22):
Of the three hundred and thirty s and p five
hundred companies that have reported earning so far this season,
eighty two percent have topped earnings estimates, delivering a year
over year earnings per share growth of nine point one percent,
and that's well ahead of the two point eight percent
growth rate that was forecast at the start of earning season. Meanwhile,
(10:44):
sales grows growth is running at a healthy five point
nine percent.
Speaker 3 (10:48):
So Brian, as.
Speaker 4 (10:49):
Long as we've got corporate earnings growing at nine percent
or better and we've got relatively team inflation, we've we've
got you know, interest rate policy steady, and nothing on
the congressional front. I mean, the Senate is in recess
for the next month. That boats pretty well for the
(11:11):
stock markets as long as things don't don't get out
over their seat their skis here from a valuation standpoint.
Speaker 6 (11:18):
Yeah, we're in good shape.
Speaker 5 (11:19):
And at the end of the day, like you said,
what matters is what falls out the bottom of the spreadsheet. Well,
how are we looking with regard to to productivity and profitability?
And so far right now things are actually looking really strong.
Now we will we're just at the beginning of the
era where we're starting to see the impact of these
tariffs come through clearly, because companies, you know, shot their
wide in the first quarter buying up inventory before the
tariffs hit, and now they're needing to reload and they'll
(11:42):
be doing that.
Speaker 6 (11:42):
Under our new tariff world. So we're going to see
the impact of that.
Speaker 5 (11:46):
We saw the jobs numbers from last week too, so uh,
things are never perfect and where should they ever be?
Speaker 6 (11:50):
But just be paying attention and stay flexible.
Speaker 3 (11:54):
Here's the all Worth advice.
Speaker 4 (11:55):
Volatility may pick up in the weeks ahead, but the
key thing stays the key fame, Stick to your long
term plan and ignore the noise. Coming up next, we've
got an update on when Social Security benefits could get
cut if Congress doesn't get their act together, and act
details are.
Speaker 3 (12:14):
Coming up next.
Speaker 4 (12:15):
You're listening to Simply Money, presented by Allworth Financial on
fifty five KRC.
Speaker 3 (12:19):
The talk Stations.
Speaker 1 (12:23):
Fifty five KRC.
Speaker 7 (12:24):
Allworth Financial a registered investment advisory firm. Any ideas presented
during this program are not intended to provide specific financial advice.
You should consult your own financial advisor, tax consultant, or
a state planning attorney to conduct your own due diligence.
Speaker 4 (12:43):
You're listening to Simply Money presented by Allworth Financial on
Bob's Sponsller along with Brian James. What's better for your portfolio?
Direct indexing or broad based ETFs. We're going to delve
into that topic straight ahead at six forty three. Social
securities Retirement trust fund not a new topic we're all
aware of this is on a path to insolvency in
(13:05):
less than a decade, which would leave retirees facing an
automatic twenty four percent cuts to their benefits if the
trust fund is completely depleted, according to a new analysis.
Speaker 3 (13:17):
So the problem persists like it has.
Speaker 4 (13:19):
For decades, Brian, We've just got some updated data that
amplifies the point that hopefully Congress will take notice, get
their act together, and get something done here.
Speaker 6 (13:31):
Yeah, so this isn't new news, right.
Speaker 5 (13:33):
So this has been a headline as long as I've
been in this industry, and that's been.
Speaker 6 (13:37):
Since late nineties or so.
Speaker 5 (13:38):
So it's always been sometime in the mid to early
twenty thirties where the quote unquote trust fund is going
to run out of money.
Speaker 6 (13:45):
Now, the thing.
Speaker 5 (13:46):
That the thing I always like to talk You've heard
me talk about this and I'll do it again later,
is making sure everybody is clear the headline is social
security is going bust. That's the sexy headline that we
tend to sink our teeth into, and I will hear
it from my clients and their kids and so on
and so forth. While I'm not counting on soci security,
it's just not going to be there. You've got to
remember that Social Security. The largest part of the Subsocial
(14:07):
Security payments that people are receiving that retired beneficiaries are
receiving are coming from paychecks from people who are working
right now. That includes me and Bob and anybody on
their way home from their jobs listening to this broadcast.
Your check on the top half of it has a
reference to FIKA. As long as there's a fight a
line on your paycheck, money will be flowing through the
Social Security system.
Speaker 6 (14:26):
What this refers to, though, is the.
Speaker 5 (14:27):
Fact that just demographically by twenty thirty, by the early
twenty thirties, we won't have enough workers to keep benefits
where they are.
Speaker 6 (14:36):
But that does not mean benefits are going to zero.
If we solely rely at.
Speaker 5 (14:40):
That time on and no changes are made, and we
rely on the income that's flowing through through those fight
attacks is on the top of your paste, then we
can only cover maybe seventy to seventy five percent of
the previously promised benefits.
Speaker 6 (14:51):
That ain't great, but it also ain't zero.
Speaker 5 (14:54):
So I always have to kind of make sure people
understand the details of it. It's not going away, it
just could be reduced unless we decide to either raise
benefit or raise taxes pay for it now, or lower
benefits or more.
Speaker 6 (15:05):
Likely some combination to the two.
Speaker 5 (15:07):
Now, there are thousands of ways we can actually do that,
but those are the leverage we.
Speaker 6 (15:10):
Have to pull to fix the problem.
Speaker 4 (15:11):
Yeah, and the concern here, Brian, with these updated numbers,
I mean I can remember, you know, and I don't
pay attention to every one of these revisions, but the
most recent one I can remember said, hey, the trust
fund's going to run out in twenty thirty five. Well,
now it's packed up to twenty thirty two. And to
the point you already made. You know, social Security benefits
are they're funded by a combination of payroll taxes and
(15:36):
disbursements from this so called trust fund. And if that
trust fund is completely depleted, federal law requires that benefits
be cut to match incoming revenues, which means it truly
becomes a one hundred percent pay as you go system. Well,
this this date keeps inching back by a year, two years,
(15:58):
what have you? And you know, you and I were
talking before the show today. I mean, shoot, we're now
within seven years of getting to this point. And these adjustments,
unless they're going to be draconian or drastic. These these
adjustments that need to be made impact people's lives.
Speaker 3 (16:15):
So the sooner you get after it and make some.
Speaker 4 (16:18):
Adjustments to how Social Security is funded, the less pain
this is going to enact on certain people. And let's
face it, the certain people we're talking about are the
folks that can't afford to have their Social Security benefits
cut by twenty two, twenty four to twenty five percent.
Speaker 5 (16:35):
Yeah, And the other thing I like to highlight to
you is just some of the history where this comes from.
Speaker 6 (16:39):
So this isn't a recent problem. This was set in
motion in the fifties, Bob.
Speaker 5 (16:43):
So you know the thing all people like to look
at and what we talk about all the time when
I'm debating on when I take my Social Security should
I take it soon, as soon as possible or later?
The pivot point that people are looking at is, well,
if I don't take it, and I never turn on
that spigott every year that I don't, I get an
eight percent increase. That eight percent increase is really what
has gotten us in this situation that's been there since
(17:04):
nineteen fifty or so when they made some amendments to
Social Security and how it's calculated. That was in response
to you know, people had we had had so security
for a few decades and got used to it, but
costs had increased to a point where people were feeling
like it wasn't doing its job and we needed to
kind of fund it a little more strongly. So at
that time, leadership that was in place put in put
(17:24):
in these eight percent fixed increases. They did that in
the face it was a fairly low interest rate time
interest rates where we didn't have the same measures to
watch interest rates that we do now, so it doesn't
compare exactly, but interest rates were really under three percent
in general, and so but that was fine because the
economy was so strong. Remember this era was when we
were coming out of World War Two. The United States
was basically establishing itself as a world leader. And if
(17:47):
you look, there's a lot of businesses that we now
know today as the big old blue chips came to
be in this, you know, as everybody returned from World
War Two and the United States took its place at
the top of the heap. So it was fine, we
got away with it for a long time. But now
fast forward to now and the math don't math anymore.
So this is why we have this problem. This is
not a new problem. It's been slowly building for a
long time, and I would love for a political leader
(18:11):
to step up and fix it. However, since it's all
gonna involve sacrifice, either somebody's gonna see their benefits cut
or somebody's gonna see their taxes increased, or more likely both,
nobody's gonna run in that campaign because they'd be a
sitting doctor to get thrown out office next time around.
Speaker 6 (18:24):
That's why we kick the bucket endlessly on it.
Speaker 4 (18:26):
You're listening to simply Money presented by all Worth Financial
on Bob Sponseller along with Brian James speaking of the
math don't math.
Speaker 3 (18:33):
To quote Brian James, data from.
Speaker 5 (18:35):
The Social Security pologies to English teacher, no I love
it hey.
Speaker 4 (18:39):
Data from the Social Security Administration shows the ratio of
covered workers paying taxes to the number of beneficiaries receiving
benefits was eight point six workers the worker to beneficiary
ratio back as you pointed out in the mid fifties
nineteen fifty five, that ratio has declined to just two
point eight eight workers per beneficiary as of twenty thirteen,
(19:04):
and I guess no one's wanted to I mean, this
is twenty twenty five.
Speaker 3 (19:07):
No one's wanted to update that ratio.
Speaker 4 (19:09):
It's depressed to twenty thirteen. So who knows what the
number is today?
Speaker 6 (19:14):
What happy news?
Speaker 5 (19:15):
Yeah that we don't want to put research into the
depressing news bumb Yeah.
Speaker 3 (19:19):
So hey, here's a question.
Speaker 4 (19:20):
Should should you even plan on having social security as
part of your financial plan?
Speaker 3 (19:25):
Brian? What are you talking to your clients about?
Speaker 5 (19:28):
And that's kind of the point I was making earlier, Yes,
you should plan for what I would do again, I would.
I would recommend this for you almost the emotional standpat
standpoint of it. Calculate what your your plan currently using
what your financial your social Security report says you're gonna get.
Then do all the numbers again and only change the
social Security figure to about seventy percent of what it
was before. That will help you see the guardrails. Here's
(19:49):
what here's what I could get if it's hunky dory
and nothing bad ever happens. Again, here's what the numbers
look like they're gonna be, and see what the impact
is going to be.
Speaker 6 (19:56):
Rather than just stressing out over the details.
Speaker 3 (19:58):
I think that's great advice. Here's the all Worth advice.
Speaker 4 (20:00):
Make sure you're doing everything you can to ensure your
financial freedom so you're not just at the mercy of
the government. Coming up next, you've made your money. Now,
what how to build a personal brand that keeps you
relevant after all the success that you've built. You're listening
to Simply Money and presented by all Worth Financial on
(20:21):
fifty five KRC the Talk station.
Speaker 1 (20:25):
There's something happening. I don't know, I just feel something.
Speaker 3 (20:28):
Something's in the air.
Speaker 1 (20:29):
I have to agree with you as a color.
Speaker 6 (20:31):
There's just like a sense of optimism going on.
Speaker 2 (20:33):
I feel it with us right here on fifty five
KRC the Talk station.
Speaker 5 (20:39):
Men, summertime is here KARC an iHeartRadio station.
Speaker 4 (20:48):
You're listening to Simply Money, presented by Allworth Financial. I'm
Bob Sponseller along with Brian James, and we're joined right
now by our career expert and our good friend Julie Bouk,
who's going to talk to us today about building.
Speaker 3 (21:01):
A personal brand.
Speaker 4 (21:03):
As you start to wind down a very successful career,
but you're not quite yet ready yet to get completely
out of the workforce. Julie, I'm sure you are counseling
a lot of people in this area right now. Tell
us what that looks like out there.
Speaker 8 (21:20):
You know, when we start to get to that point
where we have to really think about what's next, we
see the end of the road workwise. The most important
thing to do is start building your post work life
while you're still working. Because I'm going eighty miles an
hour and then I'm going to throw the brakes on
(21:40):
fully is really jarring. It is not the healthiest way
I go about it. And it's why over the years,
many people who have poured everything into their careers died
through n after retirement because they've lost their sense of purpose.
And so you don't wait until the last day to
start thinking about your next stage. You think about it
(22:01):
before so that you're actually retiring to something instead of
just from something.
Speaker 4 (22:07):
You talked about high achievers, and we deal with a
lot of those here at all Worth. You know, you're
going eighty miles an hour to quote you know what
you just said, It's very hard to be going ninety
miles an hour and then hit stop and come up and.
Speaker 3 (22:21):
Say, well, now what do I do?
Speaker 4 (22:23):
What are some of the biggest challenges you face as
you counsel folks when they're trying to rewire.
Speaker 6 (22:30):
So to speak, instead of just retire.
Speaker 8 (22:34):
So the people that have the hardest time with this
transition are people who solely or mostly identify with their careers.
So we see this in Washington with politicians hanging on
on both sides way too long. And that happens in
the private sector as well. And so the more you
(22:55):
identify is Joe Blow from the Jones Company as your
primary source of your identity, the harder that the herder
that moving away is going to be. And so moving
into thinking about what do you want to be known
as after you retire, So it could be you could
be a thought leader on something, you could have an
(23:15):
area of expertise that served you well in your career.
So it's switching that mindset from I'm the person in
charge to I potentially I'm going to coach and mentor
and be an example for those in charge. And we
oversay are welcome because no one really recognizes. It's like
(23:37):
your parent never recognizes themselves when it's time to give
up driving, but everybody around it, everybody around you see
it way before you do. And so it's really you know,
it's really important to have those people around you that
help you think about, how can I take what I've
accomplished in the last forty years, take a piece of
(23:58):
that that really really like my fire, and then how
can I build around that so that I'm not necessarily
stopping all work after I retire. But maybe I'm drilling
down to the stuff I'm back at and I've foke
on growing that while I'm also doing other things I'm
interested in.
Speaker 3 (24:19):
See.
Speaker 5 (24:19):
One of the things we that we almost always come
up with and when helping someone figure out how to
retire is we discovered that they've spent almost no time
thinking about what life is going to be like, you know,
kind of what you were just hinting at, what will
life be like when I'm when I'm not the big,
the big, big person in the room anymore, And they
start to think, you know, a lot of people kind
of get distracted by the idea that I'm just exhausted,
I got nothing left to make the finish line, and
(24:40):
they start to think about, uh, you know, I just
want to be done, and then we point out there's
an awful lot of time you know that you're going
to have to spend doing nothing, and one of the
things that they'll start to think is that, well, I'll
just I can work on an arrangement. I'll work less
hours doing the same job that always seems to end
badly in my opinion. That's why i'd like to get
your opinion, because you know the people. Still you'll dump
the same amount of stuff on your desk because you
(25:02):
are determined to be that person. You are the person
who does the things, and nobody cares that you're only
working twenty hours a week nowadays. So my advice is
to go somewhere where you can use your skills but
still be the dumbest person in the room in terms
of not being that person.
Speaker 6 (25:14):
Does that make am I giving good advice there? Or
do you ever run across that situation.
Speaker 8 (25:19):
No, you absolutely are giving great advice. We absolutely do
not give enough attention to how to make that transition.
And everybody I know over sixty says, this is way
harder than I thought it was going to be, because
I really thought that I was just going to go
sit on the porch somewhere. Well, after a few weeks
(25:40):
of doing that at most, you realize that by seven
thirty eight o'clock, you've had your coffee, you've caught up
all the things you'd like to read in the morning.
Maybe you can play golf a couple of days a week,
but that's not probably going to be enough. And so
starting to imagine how you're going to spend your week
and start saying, you know, maybe I might like to work,
(26:02):
I might like to try something new, or I might
like to take a section of what I've done in
the past and really build maybe a practice around it
where I work, where I where I only say yes
to the things that I'm absolutely going to love and
look forward to. And I think at this stage of
life there's a really big question you have to understand
the difference between what you can do and what you
(26:26):
want to do, and that there's a real big difference
because we get really caught up and well, I could
do this or I could do this, So the truth
is you don't want to do all those things equally.
So getting really clear around if I could spend if
I'm only going to spend two days a week in
active work related to what I did in the past,
what would I do during those dates? What would I
(26:49):
do and what would I avoid? What would I yes to?
What would I say no to?
Speaker 9 (26:53):
Now?
Speaker 8 (26:53):
How am I going to fill the rest of that time?
If you don't actively plan how to fill your time,
then you will fall back into what no? And it
gets to I said earlier, if you don't have a
good relationship with your partner and home is not a
place where you want to spend more time, or you
don't have anything in the community you're involved in in
(27:14):
any way, if you've been one hundred percent work person,
retirement is going to be very, very painful for you.
And so instead of taking the can down the road
and waiting until the day when it's become obvious to
everyone maybe accept you that it's time for you to go,
you have to start thinking about your grateful exit and
(27:36):
then what do you most what do you most firmly
want to do in this last section of your life?
Because really that's what it is. I recommend a book,
Wisdom at Work. Wisdom at Work by Chip Conley is
the best book I've read to help you go through
that and figure that out. How do you transform yourself
into a wise mentor instead of a doer?
Speaker 4 (27:57):
You're listening to simply money presented by all Worth Financial
on fifty five KRC, the Talk station, Mark Levin.
Speaker 9 (28:05):
We Americans, we padrich, are irrational people. Irreasonable people, the
people who know good from either right from wrong. We
also know hustlers and Marxists and fascists in Islamis who
endanger our country every damn day. We're destroying our culture
into civil society, who are breeding a youth that hates
America and embraces the wrong thing.
Speaker 2 (28:24):
Mark Levin tonight at ten oh six on fifty five
KRS the talk station, Welcome to here.
Speaker 3 (28:31):
I do think he is too old to run.
Speaker 8 (28:33):
In twenty twenty.
Speaker 1 (28:34):
Four, fifty five KRC, the talk station.
Speaker 4 (28:42):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponseller along with Brian James.
Speaker 3 (28:47):
Do you have a financial question you'd like for us
to answer.
Speaker 4 (28:50):
There's 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.
Is August really the worst month for the stock market?
We're gonna talk about that here. Coming up straight ahead.
In the world of investing, the debate between direct indexing
and broad based exchange traded funds commonly known as ETFs.
(29:14):
It's kind of like arguing whether vinyl sounds better than
streaming music. Both have their strengths and neither is inherently wrong.
It just depends on your taste, your goals, and honestly,
your tax bracket.
Speaker 3 (29:26):
We're gonna jump into that topic next. Let's let's get
into it, Brian. Let's let's define first of.
Speaker 4 (29:32):
All what we're talking about here, talk about the differences
between broad based exchange traded funds and a more updated
strategy from a tax standpoint, direct indexing.
Speaker 5 (29:43):
Yeah, quick definitions here. So here, here's the building blocks
of what we're talking about. So you have exchange traded funds,
broad based ETFs, now exchange traded fund itself. This is
a little bit different than a mutual fund, but effectively
serves the same purpose. You know, a mutual fund is
one thing that owns a bunch of other things underneath it.
So is an exchange trade fund, but it does it
in a much more efficient manner, since we have the
(30:03):
technology to build these things a little more quickly. But anyway,
so these broad based ETFs are very efficient, very low cost.
It's really the cost that I think gets a hold
of a lot of people. We switched, you know, to
exchange traded funds away from mutual funds, probably two decades ago.
I'm guessing a little bit there, but it's been a
long time. But these are things like the S and
P five hundred ETF, also known as a spider. Sometimes
(30:24):
you'll hear people talking about spiders. They're referring to an
exchange traded fund that follows the S and P five hundred,
which itself is nothing more than the five hundred largest
companies in the United States. Some of them are good,
some of them are bad. It doesn't really matter. It's
just the five hundred largest companies. Any of them is
doing anything at any given time. Another one is the
Vanguard Total Market Intext. The one called VTI is the symbol.
There hundreds of thousands of stocks in one little place,
(30:47):
instant diversification. I like to think of it as the
Kellogg's Variety pack of stocks. You get one purchase, but
you get instantly. You're in a situation where one company's
gonna invent the next iPhone, and other company's about to
go bankrupt, and everybody else is all other four hundred
ninety eight are in between. So on the other hand,
so that's one nice tight package that owns those five
hundred companies. If you're talking about the S and P
(31:08):
five hundred, direct indexing is a little bit different, So
instead of the Kellogg's variety pack, you have every box.
Speaker 6 (31:15):
Of cereals sitting on your shelf at the same time.
Speaker 5 (31:17):
So this literally means if you're following an index again
such as the S and P five hundred, the most
common one that we do this with, then you literally
have shares of those five hundred stocks individually. The benefit
there is that you are able to treat those individual
positions on their own merits versus the versus what happens
inside an ETF or a mutual fund. That means tax
(31:40):
loss harvesting. Like like I said, any one of those
companies at any time might be having a good quarter
or a bad quarter or whatever. So you may have
positions or lots inside of those positions, commonly referred to
as tax lots, where there's a few shares that were
purchased at a certain price and the price since then
has come down.
Speaker 6 (31:56):
Therefore you have a loss.
Speaker 5 (31:57):
If this is a non taxable or if this is
a tax account rather meaning not an ira, not a
roth IRA four om okay, things like that. Then you
can harvest that tax loss, meaning sell it, eat the loss,
and then you get to deduct that against any gains
you might have that year, or if you if you don't,
if you have more losses than gains, then you get
to deduct straight up three thousand up to three thousand
dollars off of your income taxes. You cannot do that
(32:19):
with an index because you can't split out the individual
holdings if you're using an an ETF or a mutual fund.
Speaker 6 (32:24):
But that's what direct indexing does for you well.
Speaker 4 (32:27):
And to take the customization one step further, this is
where when we've got folks that have a concentrated position
in any one stock, maybe some stock they inherited or
some restricted stock that they have had for years with
big gains, we can inject that stock into this direct
indexing portfolio and over time use some of those harvested
(32:48):
losses to offset the capital gains in that concentrated position
and ease the person out of that concentrated stock position
over time without blowing up their whole you know, tax
consequences from selling the stock. It's a wonderful strategy and
it's just kind of the you know, twenty twenty five
approach here to being responsible and effective in terms of
(33:12):
managing taxes on you again, your non IRA non four
oh one k taxable stock portfolio.
Speaker 3 (33:19):
H Brian, what are the situations that.
Speaker 4 (33:21):
You're seeing in real life with your clients where this
is making sense transitioning to direct indexing as opposed to
just using you know, broad based exchange traded funds.
Speaker 5 (33:33):
Yeah, so again there's a lot of this is about technology,
so it can be tough to manage five hundred positions,
and somebody out there is thinking, wait, five hundred positions,
how fat are these statements you're going to be sending me?
And that's that's that is the case. You're really creating
that much activity in your account. But I would suggest
to that person switch to electronic statements and you won't
have that problem anymore anyway. But what I'm seeing where
we generally use these is in you need a decent
(33:56):
sized account for this to be beneficial. Right when you
when you've got you know, smaller accounts, you know, twenty
five thousand, fifty hundred thousand, you can't do as much
in a taxable situation as you could with a larger
dollar around. For those cases, ETFs absolutely make the most
sense to define the diversification and all that. But what
my favorite thing to do is when when somebody has
a brand new pile of cash, right, maybe they sold
(34:17):
a business, maybe they inherited something. But this is money
that is not inside a retirement plan, not an IRA,
not a four to one K, not an inherited IRA,
not an annuity, that kind of thing. If cash is
dropped out of the sky, then I would absolutely you know,
if it's if it's a significant amount, maybe two hundred
and fifty thousand and up, that's where I would be
looking direct indexing first, assuming that you're you're looking at
a growth portfolio or at least an income generating stock
(34:38):
portfolio or something like that. Absolutely would look at direct
indexing in that case. By no means, I want to
be clear, By no means are we saying ETFs are
pass they're yesterday's news, that kind of thing. I believe
ETFs are extremely beneficial, and sometimes they make more sense
than than than individual positions in an IRA, because there's
no sense in making it more complicated. There are no
tax benefits to direct indexing. A tax lost harvesting is
(35:00):
no such thing inside of an IRA retirement plan arrangementcause
that money is already sheltered anyhow. But outside dollars absolutely
should be looking at a more efficient tax structure now.
And there are things available now that didn't exist five
even ten years ago, So be open minded and look
for new solutions.
Speaker 4 (35:16):
Well, and we're not throwing ets under the bus. We're
also not throwing mutual funds under the bus. However, it
is a good time to point out that this industry
has evolved.
Speaker 3 (35:26):
Now to the point where if you're sitting.
Speaker 4 (35:28):
On a bunch of mutual funds, it's at least worth
sitting down with a good fiduciary advisor to look at
the tax you know, efficiency or lack thereof with your
current mutual fund portfolio, again if it's in a non
IRA account, and see if there's not a way to
make this thing more tax efficient moving forward.
Speaker 3 (35:47):
And we find with clients that do that, we could.
Speaker 4 (35:50):
Make a big difference, you know, in their in their
overall tax result. Here's the all worth advice, no matter
which direction you go, if you could pay Uncle Sam
a little bit less while you keep a little more,
that's what we call a win. Next, we're gonna explain
why historical averages don't equal smart investing. You're listening to
Simply Money, presented by all Worth Financial on fifty.
Speaker 2 (36:11):
Five KRC The Talk Station, Mark Levin, this is why
I feel you and I we have a special relationship.
Speaker 9 (36:18):
Really, I don't deal well with Washington. I don't deal
well with cliques, social circles, and I don't deal well
with the media. Just being honest with you. When I
come on this program and do my own research, we
talk about independent media. I am independent from independent media.
Speaker 3 (36:34):
In other words, I do as I wish to do.
Speaker 1 (36:36):
I do what I do.
Speaker 2 (36:38):
Tonight at ten oh six on fifty five KRZ The
Talk Station, Hey Brian, tell.
Speaker 6 (36:43):
Us to Steve information and of course not just one
sided view news.
Speaker 1 (36:47):
That affects you.
Speaker 2 (36:48):
At the top end to bottom of the hour, fifty
five KRZ the Talk Station, you're.
Speaker 4 (36:58):
Listening to Simply Money, presented by all Worth Financial and
Bob Sponsor along with Brian James. Let's talk about an
article that caught a lot of eyeballs this week from
market Watch. Quote the stock market's worst month is coming up,
meaning August. Should you sell in August Brian and move
all your money to cash.
Speaker 6 (37:17):
Yes, next question. Now, of course, I'm just kidding.
Speaker 5 (37:20):
This is this stuff drives me nuts, and it drives
all financial advisors nuts. But at the same time, it
also puts food on the table because these kinds of
headlines do drive people to make bad decisions.
Speaker 3 (37:29):
Right.
Speaker 5 (37:30):
We all want it to be mechanical, right, these are
numbers financial planning and money is all about dollars and
cents and plus minus multiplied divide.
Speaker 6 (37:38):
That's all I need to do.
Speaker 5 (37:39):
We want it to be mechanical, and there's got to
be a black box way to beat the market and
win every day, right.
Speaker 6 (37:45):
Exactly, that's the modern day alchemy.
Speaker 5 (37:47):
In the Middle Ages they tried to make gold out
of horsemen, or now we try to time the markets,
and you know, we look for solutions to do it,
and we will believe any darn person who says they
have the who says they have their finger on the button.
So what this does course, and again what I've learned
in my thirty years of doing this is financial planning, Bob,
is so much more art than science. It is much
more The numbers are what they are, right, The numbers
(38:08):
are going to be what they are. It is about
how we react and how we behave, and how we
make decisions in the face of stuff we can't control.
That's the art part, the science part. We can't control
it all. So but anyway, so this article is pointing
out that August is historically the worst month for the
S and P five hundred, and that is technically true.
Speaker 6 (38:24):
You can this is a science part. You can see
the numbers.
Speaker 5 (38:26):
Since nineteen forty five, it has average a small decline,
but not a big decline. So the article mentions that
August has had an average return of negative point six percent.
That's not six percent, that's point six six tenths of
a percent since nineteen forty five.
Speaker 6 (38:40):
And you're talking, we're gonna write a whole article about this,
and we're gonna overhaul portfolios.
Speaker 5 (38:43):
We're gonna get out of the market in August just
to avoid a point six percent decline.
Speaker 6 (38:47):
I'm not sure that's the right mode.
Speaker 4 (38:48):
Wait, think, Bob, Well, the problem with this and thankfully
I know our clients don't even pay attention to this
stuff because our phones aren't ringing saying get me to cash,
you know, because the calendar has struck August first, but
making a decision the point here, making a decision on
a historical negative point six percent average return since nineteen
(39:12):
forty five. Oftentimes, if people act on this advice, you're
gonna pay more in taxes, you know, paying Uncle Sam
capital gains taxes than that point six percent you're supposedly
avoiding by getting out of the market. And that's that's
why we're calling this kind of stuff out. You know,
this herd mentality based on news headlines is dangerous. And
(39:35):
this is why you know, it's I don't know, these
people got to sell ads and everything else.
Speaker 6 (39:40):
That's very exact point that I wanted to make.
Speaker 3 (39:43):
Make it.
Speaker 6 (39:43):
But no, I'm passionate about this because if you click
on this article you read it, you will your your
little window is going to be surrounded by ads. And
that is what this is all about.
Speaker 5 (39:52):
There is a reason that those goofy, stupid tabloids have
always been sold by the.
Speaker 6 (39:56):
Cash register at the grocery store.
Speaker 5 (39:58):
You are not gonna go to the magazines and pereriodical
section for garbage newspapers. However, when you're stuck there waiting
your turn at the cash register, you might buy one
of those stupid tabloids.
Speaker 6 (40:08):
That's why they're there. This is the same thing.
Speaker 5 (40:10):
We just need to grab your eyeballs for enough seconds
that we can get some clicks on these ads, and
we're hoping you have fat thumbs and you accidentally click
the ad. Anyway, we love that. We make lots of
money doing that. And I'm not meaning we This is
not a wee thing. I'm talking about the advertising universe
and financial publications in general.
Speaker 6 (40:24):
So anyway, I'm off myselfbox back to you.
Speaker 3 (40:26):
All right, thanks for listening. Tune in tomorrow.
Speaker 4 (40:28):
We're going to take a deep dive into paying for
healthcare later in life. You've been listening to Simply Money,
presented by all Worth Financial on fifty five KR see
the talk station.
Speaker 1 (40:39):
Who wants to Be Rich?
Speaker 10 (40:41):
We call them every day millionaires every day listen to
Dave Ramsey. They typically say one of the things that
turned their life around was when they started looking at
purchasing something rich. People ask how much broke people and
I've been both brother, okay broke. People ask how much
month down and how much a month?
Speaker 2 (41:02):
Tonight at seven oh six started asking how much on fifty.
Speaker 1 (41:06):
Five PRZD talk station.
Speaker 3 (41:09):
All right, this is Kelsey
This isn't dai here.
Speaker 2 (00:01):
This free off is a the American Authentic Voices.
Speaker 1 (00:08):
Fifty five krs. The talk station.
Speaker 3 (00:17):
Tonight has the stock market and our choppy waters.
Speaker 4 (00:21):
You're listening to Simply Money, presented by all Worth Financial
on Bob's sponsller along with Brian James. Well, for many weeks,
it's been smooth sailing for the markets. Then Friday happened
and we're seeing a few white caps. After months of
steady jobs data with a few minor cracks, the labor
market showed its first real signs of slowing July, we
(00:42):
added just seventy three thousand jobs, far below expectations.
Speaker 3 (00:46):
But what really moved the market on Friday was we
got adjustments.
Speaker 4 (00:50):
We got revisions down on the May and June jobs
report by a combine combined two hundred and fifty eight
thousand jobs, marking one of the sharpest two month payroll
downgrades outside of a recession that we've had in decades. Moreover,
without the addition of healthcare jobs, a relatively recession proof sector,
(01:12):
the July print would have been flat and the May
and June data would have been negative.
Speaker 3 (01:16):
So, Brian, you know, what do you make of this?
Speaker 4 (01:19):
Job's report and more importantly, these revisions for May and June.
It seems like we're having a hard time gathering you know,
accurate data in the first place, because these revisions are
coming out more and more frequently, and they're all over
the board and very volatile.
Speaker 5 (01:38):
Well yeah, I mean, we have a president Bob that
doesn't like bad news, and you know, there's the revisions.
I don't know that they're coming out more frequently. I mean,
this was a big one. This, this was a significant revision.
Let's go over a little bit about you know, why
does this happen in the first place. Why do they
ever revise things? Why can't they just get it right
on the you know, to begin with. So the Bureau
Labor Statistics, what they do is they send out surveys
(02:01):
to just asking companies how many people did you hire,
how many jobs did you create?
Speaker 6 (02:04):
That's where this information comes from.
Speaker 5 (02:06):
There is no you know, automated type of you know,
something that that watches all this stuff. So in any case,
just like any other surveys, sometimes they get answered right away,
more often than not, they sit so companies will respond,
you know, two and three months after the fact, you know,
to these surveys, and rather than ignore that data, because
this is extremely important information, the Bureau Labor Statistics will
(02:27):
use that data. So they will present what they have
because again, the sooner we get this information out there,
the better. This is what companies are saying about their
own activities, but we don't want to ignore the stuff
that comes in a bit a little bit later too. So, yeah,
the big headline was that we had to revise all
the way down down by two hundred and fifty eight
thousand jobs. That's one of the biggest two month payroll
downgrades that we've had outside of a recession. We're not
(02:49):
in a recession right now, and this is not necessarily
an indicator that it's becoming one. But at the same time,
we haven't seen these kind of numbers until other than
in recessions, but we do see them across the administration.
So in the first Trump administration, the average revision was
an increase of seventy three thousand jobs. Now that sounds
like a big number, but it's really not. In the
grand scheme of things, that's a fairly small revision. But
(03:11):
those revisions were mostly upward and under the Biden administration,
the average revision was about one hundred thousand jobs that
was mixed more. The most recent was on the downside,
and Obama had a little bit of everything, with an
average of about forty eight thousand jobs. So revisions themselves
are not new. It's the scale and the trajectory of
this one that really got the president's attention. And you know,
(03:32):
it didn't really have any evidence that it's wrong. He
simply didn't like the answer. So therefore, somebody is out
of a job, and we're going to have somebody appointed
who will find a way to spend things a little
more positively.
Speaker 6 (03:42):
So I'm not a huge fan of this, Bob. I'm
going to be blunt. I don't like this.
Speaker 5 (03:46):
This is for an administration that touts transparency, this is
the opposite.
Speaker 3 (03:50):
No, I have to agree.
Speaker 4 (03:51):
And I spent some time this morning listening to how
some of the you know, economists, people that are respected
in the business community react to the president's abrupt firing
of Bureau of Labor Statistics commissioner. He claimed that she
manipulated the numbers for political purposes, and I agree with you, Brian,
that's that's pretty ridiculous.
Speaker 3 (04:12):
What they did.
Speaker 4 (04:13):
Say is that the way the bls is collecting this
data is outdated, and you can blame whoever you want.
I think, you know, whether it's underfunding of this government
agency or.
Speaker 3 (04:24):
What have you.
Speaker 4 (04:25):
You know, what these folks were saying is they're still
collecting this data by phone and voicemail or even faxes.
And I think the point that a lot of these economists,
these are business economists we're trying to make is we
got to update the way we collect this data, make
it easier for companies to report this data. I mean,
there is something called the internet and email out there,
(04:47):
for example, that we might be using. But you got
to have systems in place to collect the data. I
think that's the big story here, not some lady you
know that should be getting fired for politically manipulating the
data because the president doesn't like the answer.
Speaker 3 (05:03):
I agree with you wholeheartedly.
Speaker 5 (05:06):
Brian, but I would My one thought on that is,
I bet we wouldn't be talking about missus mcintarver at
all if the job's report had gone up and was
positively spun. That's this one's got under my skin just
a little bit here. I don't like yetter did the
trend here?
Speaker 4 (05:19):
Yep, gotta agree all right, Well, the FED met last week,
but unfortunately policymakers did not have that Friday job report
when the meeting concluded on Wednesday, Otherwise the outcome might
have been different. The FED left rates unchanged in the
range of four point twenty five four point five percent. However,
two FED governors dissented in favor of a rate cut,
(05:43):
and that was the first time that happened since nineteen
ninety three. So there's a little bit of dissension inside
the Federal Reserve. In fact, FED Governor Andreana Kougler, who
you know was appointed by President Biden. I believe now
she will resign this Friday, and that opens up a
slot for President Trump to appoint a governor with that
(06:07):
I guess will align with his desire for rate cuts.
You know, the issue here the Feds. You know, we're
not gonna have a FED meeting in August. So the
first time the Fed's going to meet in September is
in September, and we all know a lot can happen
in two months time, with tariffs, with economic news, who
(06:28):
knows what else. It will be an interesting sixty days
here until we get the FED back in the room.
You know, again to decide on interest rate policy.
Speaker 5 (06:37):
Yeah, I think the you know, there is a bit
of a shake up happening there. Adriana Coogler did step down.
She did not share a lot of detail. It was
kind of your your typical you know, spend more time
with family, those kinds of things, and you know, not
not really weighing in on the clear decision that she made,
but just a little bit of history. And she was
nominated by President Biden in June of twenty three. It
(06:58):
was confirmed by the Senate and Tember later that year,
first Latina to serve in.
Speaker 6 (07:02):
The Federal Reserve.
Speaker 5 (07:03):
She is known kind of known for being douvish on
She really prefers rate stability and cautious moves. And that's
that's been the majority take of a lot of Fed governors.
Nobody likes to stomp on the brakes or stomp on
the gas. But anyways, but whatever it was within that body,
that that board of governors, there something made her feel
that she could not get the job done. And I
(07:25):
would also say that were last week there were two
Fed governors who came out and said no and completely
dissented with with charge your own pal saying no, we
need to be cutting rates now. Now it's of course
the Board of Governors, the majority rules. The majority still
says we want to stand pat Now. We will see
in September what the absolute, what the actual outcome of
all this is. But looking more and more, I look
(07:45):
at what the market's doing. The market is anticipating that
we'll start seeing ray cuts in September.
Speaker 4 (07:49):
You're listening to Simple Money presented by all Worth Financial
on Bob's sponsorller along with Brian James.
Speaker 3 (07:54):
Yeah, Brian, back to the Fed.
Speaker 4 (07:55):
Based on current data, you know, up to date data
and all this internal Fed turmoil, the market and that's
what we focus on here, has now priced in about
a ninety percent chance of at least a quarter point
rate cut when the Fed meets again on September sixteenth.
So you know that that's what's being priced in the
into the markets. You know right now, a ninety percent
(08:17):
chance of a quarter point rate cut, and we're seeing
economists across the board, you know, estimate maybe two or
even three rate cuts between now and the end the
end of the year, depending on what goes on with tariffs,
which is always a moving target, and what truly happens
here in the labor market. Bring us up to date
here a little bit on what's going on in tariff land, Brian.
Speaker 5 (08:40):
Yeah, so a couple of new reciprocal tariffs came out
last week. The average US levy is going to be
about fifteen point two percent. That's up from thirteen point three,
far above the two point three percent average this year ago.
Speaker 6 (08:51):
So this is going to come down. I remember how
this works.
Speaker 5 (08:54):
We throw numbers out and then we all start arguing
and yelling, and then eventually something a little lower comes out.
So we anticipate that's going to come down a bit
some of the some countries were given delays. Mexico's got
another ninety day delay going on, and some others had
reciprocal tariffs enforced on them. And that includes a thirty
five percent tariff on Canada, our friends to the north,
(09:15):
who may not be our friends much longer. But that
excludes stuff that's already covered under the US Mexico Canada agreement.
So thirty five percent tariff, that's a fat one. President
Trump has seems to want to take on Canada directly,
and so the look for more negotiations on that standpoint,
but probably a little icy relations between us for a
little while there.
Speaker 4 (09:36):
Yeah, And I think the icy relations is, you know,
the President has used these threats of teriff tariffs to
get people to come to the table and negotiate, and
it seems to me, at least Canada is just kind
of calling his bluff at this point.
Speaker 3 (09:50):
Saying no, we're not doing this.
Speaker 4 (09:52):
So yeah, yeah, we have a quote, you know, we
have a proverbial Mexican standoff here between Canada and the
United States.
Speaker 3 (10:00):
Tune for how that all gets resolved.
Speaker 4 (10:01):
Well, Brian, Yeah, Well, let's get back to corporate earnings,
because that's what really moves the stock market, and that's
what we all need to remember.
Speaker 3 (10:11):
What moves the markets aside from all this political.
Speaker 4 (10:14):
Turmoil and stuff and social media, is our companies making
more money, and in fact they are.
Speaker 3 (10:21):
So far.
Speaker 4 (10:22):
Of the three hundred and thirty s and p five
hundred companies that have reported earning so far this season,
eighty two percent have topped earnings estimates, delivering a year
over year earnings per share growth of nine point one percent,
and that's well ahead of the two point eight percent
growth rate that was forecast at the start of earning season. Meanwhile,
(10:44):
sales grows growth is running at a healthy five point
nine percent.
Speaker 3 (10:48):
So Brian, as.
Speaker 4 (10:49):
Long as we've got corporate earnings growing at nine percent
or better and we've got relatively team inflation, we've we've
got you know, interest rate policy steady, and nothing on
the congressional front. I mean, the Senate is in recess
for the next month. That boats pretty well for the
(11:11):
stock markets as long as things don't don't get out
over their seat their skis here from a valuation standpoint.
Speaker 6 (11:18):
Yeah, we're in good shape.
Speaker 5 (11:19):
And at the end of the day, like you said,
what matters is what falls out the bottom of the spreadsheet. Well,
how are we looking with regard to to productivity and profitability?
And so far right now things are actually looking really strong.
Now we will we're just at the beginning of the
era where we're starting to see the impact of these
tariffs come through clearly, because companies, you know, shot their
wide in the first quarter buying up inventory before the
tariffs hit, and now they're needing to reload and they'll
(11:42):
be doing that.
Speaker 6 (11:42):
Under our new tariff world. So we're going to see
the impact of that.
Speaker 5 (11:46):
We saw the jobs numbers from last week too, so uh,
things are never perfect and where should they ever be?
Speaker 6 (11:50):
But just be paying attention and stay flexible.
Speaker 3 (11:54):
Here's the all Worth advice.
Speaker 4 (11:55):
Volatility may pick up in the weeks ahead, but the
key thing stays the key fame, Stick to your long
term plan and ignore the noise. Coming up next, we've
got an update on when Social Security benefits could get
cut if Congress doesn't get their act together, and act
details are.
Speaker 3 (12:14):
Coming up next.
Speaker 4 (12:15):
You're listening to Simply Money, presented by Allworth Financial on
fifty five KRC.
Speaker 3 (12:19):
The talk Stations.
Speaker 1 (12:23):
Fifty five KRC.
Speaker 7 (12:24):
Allworth Financial a registered investment advisory firm. Any ideas presented
during this program are not intended to provide specific financial advice.
You should consult your own financial advisor, tax consultant, or
a state planning attorney to conduct your own due diligence.
Speaker 4 (12:43):
You're listening to Simply Money presented by Allworth Financial on
Bob's Sponsller along with Brian James. What's better for your portfolio?
Direct indexing or broad based ETFs. We're going to delve
into that topic straight ahead at six forty three. Social
securities Retirement trust fund not a new topic we're all
aware of this is on a path to insolvency in
(13:05):
less than a decade, which would leave retirees facing an
automatic twenty four percent cuts to their benefits if the
trust fund is completely depleted, according to a new analysis.
Speaker 3 (13:17):
So the problem persists like it has.
Speaker 4 (13:19):
For decades, Brian, We've just got some updated data that
amplifies the point that hopefully Congress will take notice, get
their act together, and get something done here.
Speaker 6 (13:31):
Yeah, so this isn't new news, right.
Speaker 5 (13:33):
So this has been a headline as long as I've
been in this industry, and that's been.
Speaker 6 (13:37):
Since late nineties or so.
Speaker 5 (13:38):
So it's always been sometime in the mid to early
twenty thirties where the quote unquote trust fund is going
to run out of money.
Speaker 6 (13:45):
Now, the thing.
Speaker 5 (13:46):
That the thing I always like to talk You've heard
me talk about this and I'll do it again later,
is making sure everybody is clear the headline is social
security is going bust. That's the sexy headline that we
tend to sink our teeth into, and I will hear
it from my clients and their kids and so on
and so forth. While I'm not counting on soci security,
it's just not going to be there. You've got to
remember that Social Security. The largest part of the Subsocial
(14:07):
Security payments that people are receiving that retired beneficiaries are
receiving are coming from paychecks from people who are working
right now. That includes me and Bob and anybody on
their way home from their jobs listening to this broadcast.
Your check on the top half of it has a
reference to FIKA. As long as there's a fight a
line on your paycheck, money will be flowing through the
Social Security system.
Speaker 6 (14:26):
What this refers to, though, is the.
Speaker 5 (14:27):
Fact that just demographically by twenty thirty, by the early
twenty thirties, we won't have enough workers to keep benefits
where they are.
Speaker 6 (14:36):
But that does not mean benefits are going to zero.
If we solely rely at.
Speaker 5 (14:40):
That time on and no changes are made, and we
rely on the income that's flowing through through those fight
attacks is on the top of your paste, then we
can only cover maybe seventy to seventy five percent of
the previously promised benefits.
Speaker 6 (14:51):
That ain't great, but it also ain't zero.
Speaker 5 (14:54):
So I always have to kind of make sure people
understand the details of it. It's not going away, it
just could be reduced unless we decide to either raise
benefit or raise taxes pay for it now, or lower
benefits or more.
Speaker 6 (15:05):
Likely some combination to the two.
Speaker 5 (15:07):
Now, there are thousands of ways we can actually do that,
but those are the leverage we.
Speaker 6 (15:10):
Have to pull to fix the problem.
Speaker 4 (15:11):
Yeah, and the concern here, Brian, with these updated numbers,
I mean I can remember, you know, and I don't
pay attention to every one of these revisions, but the
most recent one I can remember said, hey, the trust
fund's going to run out in twenty thirty five. Well,
now it's packed up to twenty thirty two. And to
the point you already made. You know, social Security benefits
are they're funded by a combination of payroll taxes and
(15:36):
disbursements from this so called trust fund. And if that
trust fund is completely depleted, federal law requires that benefits
be cut to match incoming revenues, which means it truly
becomes a one hundred percent pay as you go system. Well,
this this date keeps inching back by a year, two years,
(15:58):
what have you? And you know, you and I were
talking before the show today. I mean, shoot, we're now
within seven years of getting to this point. And these adjustments,
unless they're going to be draconian or drastic. These these
adjustments that need to be made impact people's lives.
Speaker 3 (16:15):
So the sooner you get after it and make some.
Speaker 4 (16:18):
Adjustments to how Social Security is funded, the less pain
this is going to enact on certain people. And let's
face it, the certain people we're talking about are the
folks that can't afford to have their Social Security benefits
cut by twenty two, twenty four to twenty five percent.
Speaker 5 (16:35):
Yeah, And the other thing I like to highlight to
you is just some of the history where this comes from.
Speaker 6 (16:39):
So this isn't a recent problem. This was set in
motion in the fifties, Bob.
Speaker 5 (16:43):
So you know the thing all people like to look
at and what we talk about all the time when
I'm debating on when I take my Social Security should
I take it soon, as soon as possible or later?
The pivot point that people are looking at is, well,
if I don't take it, and I never turn on
that spigott every year that I don't, I get an
eight percent increase. That eight percent increase is really what
has gotten us in this situation that's been there since
(17:04):
nineteen fifty or so when they made some amendments to
Social Security and how it's calculated. That was in response
to you know, people had we had had so security
for a few decades and got used to it, but
costs had increased to a point where people were feeling
like it wasn't doing its job and we needed to
kind of fund it a little more strongly. So at
that time, leadership that was in place put in put
(17:24):
in these eight percent fixed increases. They did that in
the face it was a fairly low interest rate time
interest rates where we didn't have the same measures to
watch interest rates that we do now, so it doesn't
compare exactly, but interest rates were really under three percent
in general, and so but that was fine because the
economy was so strong. Remember this era was when we
were coming out of World War Two. The United States
was basically establishing itself as a world leader. And if
(17:47):
you look, there's a lot of businesses that we now
know today as the big old blue chips came to
be in this, you know, as everybody returned from World
War Two and the United States took its place at
the top of the heap. So it was fine, we
got away with it for a long time. But now
fast forward to now and the math don't math anymore.
So this is why we have this problem. This is
not a new problem. It's been slowly building for a
long time, and I would love for a political leader
(18:11):
to step up and fix it. However, since it's all
gonna involve sacrifice, either somebody's gonna see their benefits cut
or somebody's gonna see their taxes increased, or more likely both,
nobody's gonna run in that campaign because they'd be a
sitting doctor to get thrown out office next time around.
Speaker 6 (18:24):
That's why we kick the bucket endlessly on it.
Speaker 4 (18:26):
You're listening to simply Money presented by all Worth Financial
on Bob Sponseller along with Brian James speaking of the
math don't math.
Speaker 3 (18:33):
To quote Brian James, data from.
Speaker 5 (18:35):
The Social Security pologies to English teacher, no I love
it hey.
Speaker 4 (18:39):
Data from the Social Security Administration shows the ratio of
covered workers paying taxes to the number of beneficiaries receiving
benefits was eight point six workers the worker to beneficiary
ratio back as you pointed out in the mid fifties
nineteen fifty five, that ratio has declined to just two
point eight eight workers per beneficiary as of twenty thirteen,
(19:04):
and I guess no one's wanted to I mean, this
is twenty twenty five.
Speaker 3 (19:07):
No one's wanted to update that ratio.
Speaker 4 (19:09):
It's depressed to twenty thirteen. So who knows what the
number is today?
Speaker 6 (19:14):
What happy news?
Speaker 5 (19:15):
Yeah that we don't want to put research into the
depressing news bumb Yeah.
Speaker 3 (19:19):
So hey, here's a question.
Speaker 4 (19:20):
Should should you even plan on having social security as
part of your financial plan?
Speaker 3 (19:25):
Brian? What are you talking to your clients about?
Speaker 5 (19:28):
And that's kind of the point I was making earlier, Yes,
you should plan for what I would do again, I would.
I would recommend this for you almost the emotional standpat
standpoint of it. Calculate what your your plan currently using
what your financial your social Security report says you're gonna get.
Then do all the numbers again and only change the
social Security figure to about seventy percent of what it
was before. That will help you see the guardrails. Here's
(19:49):
what here's what I could get if it's hunky dory
and nothing bad ever happens. Again, here's what the numbers
look like they're gonna be, and see what the impact
is going to be.
Speaker 6 (19:56):
Rather than just stressing out over the details.
Speaker 3 (19:58):
I think that's great advice. Here's the all Worth advice.
Speaker 4 (20:00):
Make sure you're doing everything you can to ensure your
financial freedom so you're not just at the mercy of
the government. Coming up next, you've made your money. Now,
what how to build a personal brand that keeps you
relevant after all the success that you've built. You're listening
to Simply Money and presented by all Worth Financial on
(20:21):
fifty five KRC the Talk station.
Speaker 1 (20:25):
There's something happening. I don't know, I just feel something.
Speaker 3 (20:28):
Something's in the air.
Speaker 1 (20:29):
I have to agree with you as a color.
Speaker 6 (20:31):
There's just like a sense of optimism going on.
Speaker 2 (20:33):
I feel it with us right here on fifty five
KRC the Talk station.
Speaker 5 (20:39):
Men, summertime is here KARC an iHeartRadio station.
Speaker 4 (20:48):
You're listening to Simply Money, presented by Allworth Financial. I'm
Bob Sponseller along with Brian James, and we're joined right
now by our career expert and our good friend Julie Bouk,
who's going to talk to us today about building.
Speaker 3 (21:01):
A personal brand.
Speaker 4 (21:03):
As you start to wind down a very successful career,
but you're not quite yet ready yet to get completely
out of the workforce. Julie, I'm sure you are counseling
a lot of people in this area right now. Tell
us what that looks like out there.
Speaker 8 (21:20):
You know, when we start to get to that point
where we have to really think about what's next, we
see the end of the road workwise. The most important
thing to do is start building your post work life
while you're still working. Because I'm going eighty miles an
hour and then I'm going to throw the brakes on
(21:40):
fully is really jarring. It is not the healthiest way
I go about it. And it's why over the years,
many people who have poured everything into their careers died
through n after retirement because they've lost their sense of purpose.
And so you don't wait until the last day to
start thinking about your next stage. You think about it
(22:01):
before so that you're actually retiring to something instead of
just from something.
Speaker 4 (22:07):
You talked about high achievers, and we deal with a
lot of those here at all Worth. You know, you're
going eighty miles an hour to quote you know what
you just said, It's very hard to be going ninety
miles an hour and then hit stop and come up and.
Speaker 3 (22:21):
Say, well, now what do I do?
Speaker 4 (22:23):
What are some of the biggest challenges you face as
you counsel folks when they're trying to rewire.
Speaker 6 (22:30):
So to speak, instead of just retire.
Speaker 8 (22:34):
So the people that have the hardest time with this
transition are people who solely or mostly identify with their careers.
So we see this in Washington with politicians hanging on
on both sides way too long. And that happens in
the private sector as well. And so the more you
(22:55):
identify is Joe Blow from the Jones Company as your
primary source of your identity, the harder that the herder
that moving away is going to be. And so moving
into thinking about what do you want to be known
as after you retire, So it could be you could
be a thought leader on something, you could have an
(23:15):
area of expertise that served you well in your career.
So it's switching that mindset from I'm the person in
charge to I potentially I'm going to coach and mentor
and be an example for those in charge. And we
oversay are welcome because no one really recognizes. It's like
(23:37):
your parent never recognizes themselves when it's time to give
up driving, but everybody around it, everybody around you see
it way before you do. And so it's really you know,
it's really important to have those people around you that
help you think about, how can I take what I've
accomplished in the last forty years, take a piece of
(23:58):
that that really really like my fire, and then how
can I build around that so that I'm not necessarily
stopping all work after I retire. But maybe I'm drilling
down to the stuff I'm back at and I've foke
on growing that while I'm also doing other things I'm
interested in.
Speaker 3 (24:19):
See.
Speaker 5 (24:19):
One of the things we that we almost always come
up with and when helping someone figure out how to
retire is we discovered that they've spent almost no time
thinking about what life is going to be like, you know,
kind of what you were just hinting at, what will
life be like when I'm when I'm not the big,
the big, big person in the room anymore, And they
start to think, you know, a lot of people kind
of get distracted by the idea that I'm just exhausted,
I got nothing left to make the finish line, and
(24:40):
they start to think about, uh, you know, I just
want to be done, and then we point out there's
an awful lot of time you know that you're going
to have to spend doing nothing, and one of the
things that they'll start to think is that, well, I'll
just I can work on an arrangement. I'll work less
hours doing the same job that always seems to end
badly in my opinion. That's why i'd like to get
your opinion, because you know the people. Still you'll dump
the same amount of stuff on your desk because you
(25:02):
are determined to be that person. You are the person
who does the things, and nobody cares that you're only
working twenty hours a week nowadays. So my advice is
to go somewhere where you can use your skills but
still be the dumbest person in the room in terms
of not being that person.
Speaker 6 (25:14):
Does that make am I giving good advice there? Or
do you ever run across that situation.
Speaker 8 (25:19):
No, you absolutely are giving great advice. We absolutely do
not give enough attention to how to make that transition.
And everybody I know over sixty says, this is way
harder than I thought it was going to be, because
I really thought that I was just going to go
sit on the porch somewhere. Well, after a few weeks
(25:40):
of doing that at most, you realize that by seven
thirty eight o'clock, you've had your coffee, you've caught up
all the things you'd like to read in the morning.
Maybe you can play golf a couple of days a week,
but that's not probably going to be enough. And so
starting to imagine how you're going to spend your week
and start saying, you know, maybe I might like to work,
(26:02):
I might like to try something new, or I might
like to take a section of what I've done in
the past and really build maybe a practice around it
where I work, where I where I only say yes
to the things that I'm absolutely going to love and
look forward to. And I think at this stage of
life there's a really big question you have to understand
the difference between what you can do and what you
(26:26):
want to do, and that there's a real big difference
because we get really caught up and well, I could
do this or I could do this, So the truth
is you don't want to do all those things equally.
So getting really clear around if I could spend if
I'm only going to spend two days a week in
active work related to what I did in the past,
what would I do during those dates? What would I
(26:49):
do and what would I avoid? What would I yes to?
What would I say no to?
Speaker 9 (26:53):
Now?
Speaker 8 (26:53):
How am I going to fill the rest of that time?
If you don't actively plan how to fill your time,
then you will fall back into what no? And it
gets to I said earlier, if you don't have a
good relationship with your partner and home is not a
place where you want to spend more time, or you
don't have anything in the community you're involved in in
(27:14):
any way, if you've been one hundred percent work person,
retirement is going to be very, very painful for you.
And so instead of taking the can down the road
and waiting until the day when it's become obvious to
everyone maybe accept you that it's time for you to go,
you have to start thinking about your grateful exit and
(27:36):
then what do you most what do you most firmly
want to do in this last section of your life?
Because really that's what it is. I recommend a book,
Wisdom at Work. Wisdom at Work by Chip Conley is
the best book I've read to help you go through
that and figure that out. How do you transform yourself
into a wise mentor instead of a doer?
Speaker 4 (27:57):
You're listening to simply money presented by all Worth Financial
on fifty five KRC, the Talk station, Mark Levin.
Speaker 9 (28:05):
We Americans, we padrich, are irrational people. Irreasonable people, the
people who know good from either right from wrong. We
also know hustlers and Marxists and fascists in Islamis who
endanger our country every damn day. We're destroying our culture
into civil society, who are breeding a youth that hates
America and embraces the wrong thing.
Speaker 2 (28:24):
Mark Levin tonight at ten oh six on fifty five
KRS the talk station, Welcome to here.
Speaker 3 (28:31):
I do think he is too old to run.
Speaker 8 (28:33):
In twenty twenty.
Speaker 1 (28:34):
Four, fifty five KRC, the talk station.
Speaker 4 (28:42):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponseller along with Brian James.
Speaker 3 (28:47):
Do you have a financial question you'd like for us
to answer.
Speaker 4 (28:50):
There's 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.
Is August really the worst month for the stock market?
We're gonna talk about that here. Coming up straight ahead.
In the world of investing, the debate between direct indexing
and broad based exchange traded funds commonly known as ETFs.
(29:14):
It's kind of like arguing whether vinyl sounds better than
streaming music. Both have their strengths and neither is inherently wrong.
It just depends on your taste, your goals, and honestly,
your tax bracket.
Speaker 3 (29:26):
We're gonna jump into that topic next. Let's let's get
into it, Brian. Let's let's define first of.
Speaker 4 (29:32):
All what we're talking about here, talk about the differences
between broad based exchange traded funds and a more updated
strategy from a tax standpoint, direct indexing.
Speaker 5 (29:43):
Yeah, quick definitions here. So here, here's the building blocks
of what we're talking about. So you have exchange traded funds,
broad based ETFs, now exchange traded fund itself. This is
a little bit different than a mutual fund, but effectively
serves the same purpose. You know, a mutual fund is
one thing that owns a bunch of other things underneath it.
So is an exchange trade fund, but it does it
in a much more efficient manner, since we have the
(30:03):
technology to build these things a little more quickly. But anyway,
so these broad based ETFs are very efficient, very low cost.
It's really the cost that I think gets a hold
of a lot of people. We switched, you know, to
exchange traded funds away from mutual funds, probably two decades ago.
I'm guessing a little bit there, but it's been a
long time. But these are things like the S and
P five hundred ETF, also known as a spider. Sometimes
(30:24):
you'll hear people talking about spiders. They're referring to an
exchange traded fund that follows the S and P five hundred,
which itself is nothing more than the five hundred largest
companies in the United States. Some of them are good,
some of them are bad. It doesn't really matter. It's
just the five hundred largest companies. Any of them is
doing anything at any given time. Another one is the
Vanguard Total Market Intext. The one called VTI is the symbol.
There hundreds of thousands of stocks in one little place,
(30:47):
instant diversification. I like to think of it as the
Kellogg's Variety pack of stocks. You get one purchase, but
you get instantly. You're in a situation where one company's
gonna invent the next iPhone, and other company's about to
go bankrupt, and everybody else is all other four hundred
ninety eight are in between. So on the other hand,
so that's one nice tight package that owns those five
hundred companies. If you're talking about the S and P
(31:08):
five hundred, direct indexing is a little bit different, So
instead of the Kellogg's variety pack, you have every box.
Speaker 6 (31:15):
Of cereals sitting on your shelf at the same time.
Speaker 5 (31:17):
So this literally means if you're following an index again
such as the S and P five hundred, the most
common one that we do this with, then you literally
have shares of those five hundred stocks individually. The benefit
there is that you are able to treat those individual
positions on their own merits versus the versus what happens
inside an ETF or a mutual fund. That means tax
(31:40):
loss harvesting. Like like I said, any one of those
companies at any time might be having a good quarter
or a bad quarter or whatever. So you may have
positions or lots inside of those positions, commonly referred to
as tax lots, where there's a few shares that were
purchased at a certain price and the price since then
has come down.
Speaker 6 (31:56):
Therefore you have a loss.
Speaker 5 (31:57):
If this is a non taxable or if this is
a tax account rather meaning not an ira, not a
roth IRA four om okay, things like that. Then you
can harvest that tax loss, meaning sell it, eat the loss,
and then you get to deduct that against any gains
you might have that year, or if you if you don't,
if you have more losses than gains, then you get
to deduct straight up three thousand up to three thousand
dollars off of your income taxes. You cannot do that
(32:19):
with an index because you can't split out the individual
holdings if you're using an an ETF or a mutual fund.
Speaker 6 (32:24):
But that's what direct indexing does for you well.
Speaker 4 (32:27):
And to take the customization one step further, this is
where when we've got folks that have a concentrated position
in any one stock, maybe some stock they inherited or
some restricted stock that they have had for years with
big gains, we can inject that stock into this direct
indexing portfolio and over time use some of those harvested
(32:48):
losses to offset the capital gains in that concentrated position
and ease the person out of that concentrated stock position
over time without blowing up their whole you know, tax
consequences from selling the stock. It's a wonderful strategy and
it's just kind of the you know, twenty twenty five
approach here to being responsible and effective in terms of
(33:12):
managing taxes on you again, your non IRA non four
oh one k taxable stock portfolio.
Speaker 3 (33:19):
H Brian, what are the situations that.
Speaker 4 (33:21):
You're seeing in real life with your clients where this
is making sense transitioning to direct indexing as opposed to
just using you know, broad based exchange traded funds.
Speaker 5 (33:33):
Yeah, so again there's a lot of this is about technology,
so it can be tough to manage five hundred positions,
and somebody out there is thinking, wait, five hundred positions,
how fat are these statements you're going to be sending me?
And that's that's that is the case. You're really creating
that much activity in your account. But I would suggest
to that person switch to electronic statements and you won't
have that problem anymore anyway. But what I'm seeing where
we generally use these is in you need a decent
(33:56):
sized account for this to be beneficial. Right when you
when you've got you know, smaller accounts, you know, twenty
five thousand, fifty hundred thousand, you can't do as much
in a taxable situation as you could with a larger
dollar around. For those cases, ETFs absolutely make the most
sense to define the diversification and all that. But what
my favorite thing to do is when when somebody has
a brand new pile of cash, right, maybe they sold
(34:17):
a business, maybe they inherited something. But this is money
that is not inside a retirement plan, not an IRA,
not a four to one K, not an inherited IRA,
not an annuity, that kind of thing. If cash is
dropped out of the sky, then I would absolutely you know,
if it's if it's a significant amount, maybe two hundred
and fifty thousand and up, that's where I would be
looking direct indexing first, assuming that you're you're looking at
a growth portfolio or at least an income generating stock
(34:38):
portfolio or something like that. Absolutely would look at direct
indexing in that case. By no means, I want to
be clear, By no means are we saying ETFs are
pass they're yesterday's news, that kind of thing. I believe
ETFs are extremely beneficial, and sometimes they make more sense
than than than individual positions in an IRA, because there's
no sense in making it more complicated. There are no
tax benefits to direct indexing. A tax lost harvesting is
(35:00):
no such thing inside of an IRA retirement plan arrangementcause
that money is already sheltered anyhow. But outside dollars absolutely
should be looking at a more efficient tax structure now.
And there are things available now that didn't exist five
even ten years ago, So be open minded and look
for new solutions.
Speaker 4 (35:16):
Well, and we're not throwing ets under the bus. We're
also not throwing mutual funds under the bus. However, it
is a good time to point out that this industry
has evolved.
Speaker 3 (35:26):
Now to the point where if you're sitting.
Speaker 4 (35:28):
On a bunch of mutual funds, it's at least worth
sitting down with a good fiduciary advisor to look at
the tax you know, efficiency or lack thereof with your
current mutual fund portfolio, again if it's in a non
IRA account, and see if there's not a way to
make this thing more tax efficient moving forward.
Speaker 3 (35:47):
And we find with clients that do that, we could.
Speaker 4 (35:50):
Make a big difference, you know, in their in their
overall tax result. Here's the all worth advice, no matter
which direction you go, if you could pay Uncle Sam
a little bit less while you keep a little more,
that's what we call a win. Next, we're gonna explain
why historical averages don't equal smart investing. You're listening to
Simply Money, presented by all Worth Financial on fifty.
Speaker 2 (36:11):
Five KRC The Talk Station, Mark Levin, this is why
I feel you and I we have a special relationship.
Speaker 9 (36:18):
Really, I don't deal well with Washington. I don't deal
well with cliques, social circles, and I don't deal well
with the media. Just being honest with you. When I
come on this program and do my own research, we
talk about independent media. I am independent from independent media.
Speaker 3 (36:34):
In other words, I do as I wish to do.
Speaker 1 (36:36):
I do what I do.
Speaker 2 (36:38):
Tonight at ten oh six on fifty five KRZ The
Talk Station, Hey Brian, tell.
Speaker 6 (36:43):
Us to Steve information and of course not just one
sided view news.
Speaker 1 (36:47):
That affects you.
Speaker 2 (36:48):
At the top end to bottom of the hour, fifty
five KRZ the Talk Station, you're.
Speaker 4 (36:58):
Listening to Simply Money, presented by all Worth Financial and
Bob Sponsor along with Brian James. Let's talk about an
article that caught a lot of eyeballs this week from
market Watch. Quote the stock market's worst month is coming up,
meaning August. Should you sell in August Brian and move
all your money to cash.
Speaker 6 (37:17):
Yes, next question. Now, of course, I'm just kidding.
Speaker 5 (37:20):
This is this stuff drives me nuts, and it drives
all financial advisors nuts. But at the same time, it
also puts food on the table because these kinds of
headlines do drive people to make bad decisions.
Speaker 3 (37:29):
Right.
Speaker 5 (37:30):
We all want it to be mechanical, right, these are
numbers financial planning and money is all about dollars and
cents and plus minus multiplied divide.
Speaker 6 (37:38):
That's all I need to do.
Speaker 5 (37:39):
We want it to be mechanical, and there's got to
be a black box way to beat the market and
win every day, right.
Speaker 6 (37:45):
Exactly, that's the modern day alchemy.
Speaker 5 (37:47):
In the Middle Ages they tried to make gold out
of horsemen, or now we try to time the markets,
and you know, we look for solutions to do it,
and we will believe any darn person who says they
have the who says they have their finger on the button.
So what this does course, and again what I've learned
in my thirty years of doing this is financial planning, Bob,
is so much more art than science. It is much
more The numbers are what they are, right, The numbers
(38:08):
are going to be what they are. It is about
how we react and how we behave, and how we
make decisions in the face of stuff we can't control.
That's the art part, the science part. We can't control
it all. So but anyway, so this article is pointing
out that August is historically the worst month for the
S and P five hundred, and that is technically true.
Speaker 6 (38:24):
You can this is a science part. You can see
the numbers.
Speaker 5 (38:26):
Since nineteen forty five, it has average a small decline,
but not a big decline. So the article mentions that
August has had an average return of negative point six percent.
That's not six percent, that's point six six tenths of
a percent since nineteen forty five.
Speaker 6 (38:40):
And you're talking, we're gonna write a whole article about this,
and we're gonna overhaul portfolios.
Speaker 5 (38:43):
We're gonna get out of the market in August just
to avoid a point six percent decline.
Speaker 6 (38:47):
I'm not sure that's the right mode.
Speaker 4 (38:48):
Wait, think, Bob, Well, the problem with this and thankfully
I know our clients don't even pay attention to this
stuff because our phones aren't ringing saying get me to cash,
you know, because the calendar has struck August first, but
making a decision the point here, making a decision on
a historical negative point six percent average return since nineteen
(39:12):
forty five. Oftentimes, if people act on this advice, you're
gonna pay more in taxes, you know, paying Uncle Sam
capital gains taxes than that point six percent you're supposedly
avoiding by getting out of the market. And that's that's
why we're calling this kind of stuff out. You know,
this herd mentality based on news headlines is dangerous. And
(39:35):
this is why you know, it's I don't know, these
people got to sell ads and everything else.
Speaker 6 (39:40):
That's very exact point that I wanted to make.
Speaker 3 (39:43):
Make it.
Speaker 6 (39:43):
But no, I'm passionate about this because if you click
on this article you read it, you will your your
little window is going to be surrounded by ads. And
that is what this is all about.
Speaker 5 (39:52):
There is a reason that those goofy, stupid tabloids have
always been sold by the.
Speaker 6 (39:56):
Cash register at the grocery store.
Speaker 5 (39:58):
You are not gonna go to the magazines and pereriodical
section for garbage newspapers. However, when you're stuck there waiting
your turn at the cash register, you might buy one
of those stupid tabloids.
Speaker 6 (40:08):
That's why they're there. This is the same thing.
Speaker 5 (40:10):
We just need to grab your eyeballs for enough seconds
that we can get some clicks on these ads, and
we're hoping you have fat thumbs and you accidentally click
the ad. Anyway, we love that. We make lots of
money doing that. And I'm not meaning we This is
not a wee thing. I'm talking about the advertising universe
and financial publications in general.
Speaker 6 (40:24):
So anyway, I'm off myselfbox back to you.
Speaker 3 (40:26):
All right, thanks for listening. Tune in tomorrow.
Speaker 4 (40:28):
We're going to take a deep dive into paying for
healthcare later in life. You've been listening to Simply Money,
presented by all Worth Financial on fifty five KR see
the talk station.
Speaker 1 (40:39):
Who wants to Be Rich?
Speaker 10 (40:41):
We call them every day millionaires every day listen to
Dave Ramsey. They typically say one of the things that
turned their life around was when they started looking at
purchasing something rich. People ask how much broke people and
I've been both brother, okay broke. People ask how much
month down and how much a month?
Speaker 2 (41:02):
Tonight at seven oh six started asking how much on fifty.
Speaker 1 (41:06):
Five PRZD talk station.
Speaker 3 (41:09):
All right, this is Kelsey
Simply Money News
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