August 15, 2025 • 40 mins
On today’s episode of Simply Money presented by Allworth Financial, Bob and Brian dig into the headlines shaping the rest of 2025 — from what could keep markets moving higher to how U.S.–China relations may quietly influence your portfolio. Plus, the guys tackle big-money listener questions on RMD strategies, falling municipal bond yields, and preparing for a future business sale.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
This isn't ai here.
Speaker 2 (00:02):
This three off is a the American people are smart,
authentic voices fifty five krs.
Speaker 3 (00:09):
He the talk station tonight a look.
Speaker 4 (00:19):
At what could impact the returns on your portfolio and
the overall stock market between now, let's say the end
of September. You're listening to Simply Money, presented by all
Worth Financial on Bob spun Seller along with Brian James.
Yesterday we touched on the correlation between the US China
trade situation and your money. We spend a little time
on that, but there are many other events coming down
(00:42):
the pike here between now and the end of September
that could impact the markets and maybe potentially cause a
little volatility. Brian, let's walk through what's coming up here
on the calendar.
Speaker 5 (00:52):
Sare so the big.
Speaker 6 (00:53):
Whopper in all of this is the US and China,
because we are the two largest economies in the world,
and we're kind of fighting a little bit right now.
Speaker 3 (01:00):
Now.
Speaker 6 (01:00):
Not everybody's getting along. Go figure that way. We're not
gonna beat that to death that We talked about that
earlier this week. But the US China tariff has been
extended to November tenth. We pushed it out and kicked
the can again. Now the deal doesn't happen, then there's
gonna be more volatility if we put tariffs back in place.
Speaker 5 (01:15):
I've been through it, seen it.
Speaker 6 (01:17):
I doubt we'll be as panicky as we were in
April and all this stuff you know first kicked in.
Speaker 4 (01:21):
Yeah, the only thing I'll add on this China thing.
And again we beat this thing to death, I think yesterday.
But you know, I think we're getting used to how
the President is handling things. It's it's always an ongoing negotiation,
a lot of moving parts, and I think when it
comes to China, there's a lot going on behind the
scenes that impacts what tariffs may or may not be.
(01:41):
Like what's China planning to do with Taiwan the Panama Canal.
We got issues with chip makers. You know I'm here
in this morning. You know, China is now saying they
don't want their tech companies to use Navidia's chips. Remember
three months ago we were hearing Deep Sea was gonna
put in the video out of business.
Speaker 3 (02:02):
You know, funny how that all worked out.
Speaker 4 (02:04):
So there's a lot of stuff going on here, and
it's not just gonna be one announcement on one day.
Speaker 3 (02:10):
It's an ongoing negotiation.
Speaker 2 (02:13):
And just you know, mono amano with China, and that's
not gonna end even in ninety days.
Speaker 3 (02:19):
It's gonna be an ongoing discussion.
Speaker 6 (02:20):
Yeah, this is always This is like the Yankees and
the Red Sox suddenly getting along together. That's never gonna happen.
It's a winner take all game, and it swings back
and forth. Yes, you're exactly right about the votes on
these types of decisions do not take place when we're
taking role call in Congress. The votes happen on the phone,
one at a time as we're trying to make sure
we have the votes we need to push things across.
(02:41):
That's the same thing that's happened between the US and China.
Just because we've kicked the can does not mean communications
are happening or not happening. That's all happening behind the scenes,
and it just it's a good time to exhale and
focus on something else for a little while.
Speaker 5 (02:52):
Speaking of something else, what should we focus on, Bob.
Speaker 4 (02:55):
Well, we've got the FED you know, meeting coming up
on September seventeenth. I think a lot of this is
already starting to get telegraphed and priced into the market.
I'm seeing as high as a ninety six percent probability
already being priced into the markets, already factored in, you know,
of at least a quarter point rate cut on September seventeenth,
So if and when that happens, it's really going to
(03:17):
be a non event.
Speaker 3 (03:18):
Now, if we do.
Speaker 4 (03:19):
Get a fifty basis point cut, which I'm starting to
hear whisperings about, that could push this market even higher.
But I think that you know, there's data that's coming out,
and the FED wants.
Speaker 3 (03:31):
To look at data.
Speaker 4 (03:32):
We got the August jobs report on September fifth, and
we've got a lot of other data coming out between
now in that FED meeting, and we've got a new
FED governor being appointed by the President on around at Kogler,
a FED governor you know, appointed in twenty twenty three,
resigned last week, just a reminder, so we're going to
(03:52):
have a President Trump appointed member of the Fed who
obviously will want a lower rates.
Speaker 3 (03:57):
So there's a lot of that stuff coming down.
Speaker 4 (03:59):
But the thing I think Brian no one is talking about,
and this always causes short term volatility as it happens
is Remember, the Senate doesn't come back to work really
until after Labor Day, so they're going to have about
three weeks to hammer out some kind of budget deal,
and it's going to get contentious between now and the
(04:20):
end of September, and we could have a short term
government shutdown. No one's talking about that right now. That
could rattle markets in the short term. I'm not saying,
you know, totally change your investment strategy or moved to cash.
Just be aware that that's on the horizon and it's
not being talked about very much.
Speaker 3 (04:38):
Yeah, don't yet.
Speaker 6 (04:39):
And I think Bob, your point is is, don't get
comfortable with how with how things have run. Right everybody
right now, If you stayed fully invested and you didn't
panic through any of the crazy in April, and hopefully
it didn't, then you've probably got more money you've ever
had in your entire life. And that's that's the cycle
we go through. That's not you know, a lot of
people will look at that and say, well, the market's
at a peak. The next step is obviously down. That's
not true. The market goes up, not down. We're in
(05:00):
that swing. So the thing to remember, though, is like
you just said stuff is going to happen. The next
stuff that's gonna spook. The headline is probably when we
decided to focus on it. Yeah, there's a government shutdown
looming and we're probably getting along even less well than
we did the last time we went through this.
Speaker 5 (05:17):
So just just a remind a little bit of history.
Speaker 6 (05:19):
So back in March we had we had the same debate,
and this was right around time that March and April
was pretty scary time frame because we were also talking
about this. This was the first time we had inklings
of how these tariff discussions are going to go and
how the market's going to impact going to be impacted,
and it wasn't good with the market took a pretty
big hit. But anyway, at that time, the resolution was
we're going to kick the can to September thirtieth. They
(05:39):
passed a law that basically put that into place, and
you know, they did the fancy things and pulled the
levers and pushed the buttons that make the problems go
away for a few months, as they do every single time,
and they usually come up with some weird word to
label it with. But ever since then, it's been completely
under the radar. In terms of the discussions, we really
haven't heard anything about it at all. Some of this
has to do with attention fatigue. People don't want to
(06:01):
hear about shutdowns anymore. There's nothing I can do about it.
Therefore it's not a good news story as well as
there's plenty out there, plenty of distractions of course, to
keep us from really paying attention to the things they count.
But rest assured those discussions are going to come in
again and they are going to have an impact on
the market, just like they did back in March. Yeah,
it always appears like everyone's getting along. That's because the
Senate is not working. They're at home. Yeah, they're literally
(06:24):
not in the same room together, so you can't hear
them fighting, and you can't hear the kids fighting.
Speaker 3 (06:28):
Yeah.
Speaker 4 (06:28):
So if we go back to the passage of the
Big Beautiful Bill, I mean, let's face it, Republicans, you know,
coming out of the whole Doze study, they wanted more
cuts in the federal budget. The Democrats balked at that.
They came up with a compromise. I mean, the people,
the conservative folks were kicking and screaming, saying there weren't
enough budget cuts and the Congress, you know, folks on
(06:50):
that side of the aisle saying just wait, they're coming. Well,
they're going to try to put them into this budget,
you know, at the end of September, and the Democrats
are saying that stuff's dead on arrival. So there's going
to be some contentious, you know, media driven, you know,
drama between now and the end of September. Let's see
what they they're going to be able to come up with.
(07:10):
You know, this always comes down to the wire and
usually gets passed at two o'clock in the morning when
everybody's asleep. But there's going to be some heated debates
on how to handle this budget between now and the
end of September, and we really haven't haven't seen that
start yet and won't see it start until after Labor Day.
(07:30):
You're listening to Simply Money presented by all Worth Financial.
I'm Bob Sponseller along with Brian James. Let's get back
to the fundamentals, Brian, Earnings. Earnings is what drives this market,
you know, irrespective of what goes on in Washington. Let's
let's remember when we invest in stocks, we invest in companies,
we invest in capitalism, We invest in growth, growth in profits,
(07:54):
and the earnings numbers have been really good. I saw
somebody this morning come out, you know, on a media
show saying, hey, it's looking like SMP earnings year over
year now that we're almost through earnings season or up
about thirteen percent year over year last year, and they're
starting to say, you know, projections for next year are
(08:16):
around thirteen percent earnings growth.
Speaker 3 (08:18):
Brian.
Speaker 4 (08:19):
If we get inflation under control, we get interest rates dropping,
and we continue to see earnings grow at thirteen percent,
this is going to be a good time to be
in the stock market.
Speaker 3 (08:29):
Absolutely.
Speaker 6 (08:30):
And the thing to remember is that the government or
I'm sorry, the investing public, does not care who is
in control of the government.
Speaker 5 (08:38):
We think we do, but we really don't.
Speaker 6 (08:39):
And the reason I say that is because big companies
have They don't. They don't only fund one side versus
the other. They don't really care. They just want to
know what's expected. They have a red playbook and a
blue playbook, and they just want to know what are
the rules of the game right now. If it's a
democratic establishment, we're going to do this. If it's republican,
we're going to do that. They do that in order
to be able to make a profit in any kind
of environment. That's exactly what's happening right now. So we
(09:02):
are in a very business friendly administration and all those
things that Bob just mentioned are going to drive profits.
So no matter what the headlines are you're seeing, just
bear in mind, the support for business is really never
higher than it is in a situation than we have
right now. So look for big earnings reports. Big tech companies.
AI chip makers are gonna be reporting here in October.
(09:22):
That's going to drive the S and P five hundred,
like Bob said, And at the end of the day,
you're invested in the stock market, it's all about the
performance of the underlying companies. We had yet to benefit
fully from this AI catalyst. I think it may be
one of the bigger catalysts we've ever seen in the
stock market.
Speaker 4 (09:37):
Yeah, but here's the point I think we're trying to
make with this segment. Brian, correct me if I'm wrong, And
you hit the nail on the head on this topic yesterday,
but it bears repeating today. You know, the coast looks
pretty clear right now. The market continues to slowly melt up.
The news has been good, But do not treat your
stock portfolio and cryptocurrency or any other speculative things that
(09:59):
you're in invested in as your ATM machine.
Speaker 3 (10:02):
Meaning if you need or.
Speaker 4 (10:04):
Want to have cash on the sidelines for anything, you know,
home repairs, an automobile purchase, a big vacation, anything that's
going to involve you writing a big check. Don't get
lulled to sleep here. Be responsible, trim off some of
these tremendous gains that we've had and get that into
cash equivalent low risk investments because most of the time
(10:27):
when we see volatility, no one sees it happen. And historically,
Brian and I know you know this, the market always
goes down a lot quicker and at a higher magnitude
that it goes up. So just do the responsible thing,
have your financial plan and investment allocation set, and then
you can enjoy what we hope to see is continued,
(10:50):
you know, success and growth in the economy.
Speaker 5 (10:52):
It's always three steps four, two steps back.
Speaker 6 (10:54):
But just like Bob said, the market tends to climb
a gentle hill and then fall off a cliff. Yep,
it doesn't. It never drops slowly, but at the same time,
we always panic, we always overreact. So let's talk about predictions, right,
So we occasionally we like to talk about what we
think is coming, and we're as guilty of that as anybody.
We kind of just did it here a little bit ago.
Always preface this with stay flexible, because nobody actually knows.
(11:16):
If anybody knew, we'd all be bazillionaires. But the best
thing we can do is look at our smart people
to see what they think what they think, and one
of our smart people is our chief investment officer, Andy Stout.
So we talked to him recently, we had him on
these airwaves, and his basic summary. He keeps a recession
scorecard that we share with our clients to kind of
let us know what are the different indicators, what do
they all look like? And currently we feel like the
(11:38):
economy is not leaning toward an imminent recession.
Speaker 5 (11:40):
It's possible, It's always possible. Andy, a smart guy, always
hedges his bets.
Speaker 6 (11:44):
But at the same time, all the data smushed together
right now does not show that we're about to go
over the cliff in some kind of recession. We'll see
how things play out, of course, but at this point,
you know, we're still in growth mode.
Speaker 5 (11:56):
Be on offense, good stuff.
Speaker 3 (11:58):
All right, here's the all Worth It advice.
Speaker 4 (12:00):
The next few months could bring a perfect storm of
Fed moves, political showdowns, global trade tensions and market hype.
Speaker 3 (12:08):
We always have market hype.
Speaker 4 (12:09):
So keep your portfolio balanced, your cash needs covered, and
your eyes on fundamentals not the headlines. Coming up next,
some big names are about to hit the market, and
we're talking about through IPOs. But jumping in could cost you,
and work will explain what we mean. You're listening to
Simply Money, presented by all Worth Financial on fifty five
KRC the Talk Station.
Speaker 7 (12:33):
Yes KRC, 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 (12:54):
You're listening to Simply Money presented by all Worth Financial
on Bob spun Seller along with Brian James. If you
can't listen to Simply Money every night, subscribe and get
our daily podcast. And if you think your friends could
use some financial advice or your family, tell them about
us as well. Just search simply money on the iHeart
app or wherever you find your podcast. Should you have
(13:15):
your money in a target date fund? If you've got
a net worth of two million dollars, we'll answer that
question another straight ahead of six forty three. Here's an
interesting little tidbit. If you had a Capital one three
sixty savings account between September of twenty nineteen and June
of twenty twenty five, you may be eligible to receive
(13:37):
a payment as part of a four hundred and twenty
five million dollars settlement that Capital One has agreed to.
Speaker 3 (13:44):
Brian, what's going on here?
Speaker 6 (13:45):
What's going on here is you're in charge of the
rest of the show because me and my sixty seven
cents are done.
Speaker 5 (13:50):
We are heading out for the day.
Speaker 6 (13:51):
Because I had one of these accounts somewhere, I'm gonna
have to take it up to what I'm going to
get out of it.
Speaker 3 (13:55):
So what's in your wallet?
Speaker 5 (13:57):
Sixty seven cents more than I had before the settlement?
Speaker 3 (14:00):
No wonder you showed up for work today and.
Speaker 5 (14:02):
I needed the seventy five cents. I just can't pull
the trigger anyway.
Speaker 6 (14:05):
Earlier this year, the CFPB, the ARTIST formerly known as
the Consumer Financial Protection Bureau, which may or may not
exist anymore, but whatever sued Capital One, alleging that the
company froze its rate at at a low level for years.
And I can vouch for this because they did open
one of these accounts and it paid a lot for
but it didn't react when interest rates went up.
Speaker 5 (14:26):
And yeah, so I mean I.
Speaker 6 (14:27):
Lived through this, so it basically the calculation is that
customers were cheated out of about two billion dollars and so.
Speaker 5 (14:32):
CFPB actually dropped throughout the lawsuit.
Speaker 6 (14:34):
In February, Capital One agreed to pay anyway, kind of
caught red handed. So even though the party that the
plaintiff that was suing them kind of went out of existence,
they were like, yeah, you kind of caught us there.
Speaker 4 (14:44):
So well, what did they actually do? Why did they
get sued and why they agreed to settle? I mean,
what was the malfeasance here?
Speaker 6 (14:51):
They basically didn't follow through in the commitment that they
made on how the interest rate was going to be
calculated and what it was going to be based on.
And so when interest rates, remember people had this is
a few years ago. People have been lulled to sleep
for decades that they even have the right to get
paid on their depository accounts and banks because rates were
on the floor. We were thrilled to death with our mortgages,
and we started to ignore our checking and savings accounts
because just what anything there. So they basically made a
(15:14):
commitment to say, hey, we're gonna calculate the interest rates
based on these various factors, and then because people were
not in tune with paying attention to that stuff, they
just didn't do it so anyway, So that's why it's
costing them four hundred twenty five million dollars sixty seven
cents in this pocket.
Speaker 4 (15:28):
All right, So if you had, if you had a
capital one three sixty savings account, the deadline to submit
a claim or right to the court objecting to the
settlement in this October second.
Speaker 3 (15:39):
You are hereby warn.
Speaker 5 (15:40):
I go, I gotta go submit a claim?
Speaker 3 (15:42):
All right.
Speaker 4 (15:42):
You're listening to simply Money presented by all Worth Financial
on Bob Sponseller along with Brian James. Some of the
biggest names in tech and retail are gearing up to
go public before the end of twenty twenty five, and
we're talking about IPOs here, the headlines are already buzzing, Brian,
valuations in the tens of billions, big underwriting firms and
promises of hyper growth. But before you reach for that
(16:05):
buy button, let's talk about what IPO hype really is
and why it often rhymes with cryptomania and meme stock frenzies.
And we won't get into some of these meme stock
We talked about them a couple of weeks ago, and
I've already looked at a few of these that are
down as much as seventy percent since we talked about
them on the air.
Speaker 3 (16:25):
I wish I had bought put options on him, Brian.
Speaker 5 (16:28):
Listen to you and your fancy talk.
Speaker 6 (16:29):
What he's saying is he should have bought because it
was going to go down and profit it that way. Anyway,
this takes me back, Bob, when I saw what we're
gonna be talking about today with these IPOs, I'm like,
is it two thousand and two all over again? Because
we haven't I feel like we haven't made a big
deal about IPOs. And I'm not talking about us here
on the radio waves, the clients, anybody, just people thinking
about investments. So an IPO stands for initial public offering.
It's basically when a company decides to no longer be
(16:52):
a private entity and to tap into the public markets
to give everybody a chance to invest. They bring in
all that capital and then they go do more of
whatever it is that they're doing to try to make money.
This really came to the forefront, of course, with the
original Internet craze. I'm talking when like Yahoo and AOL
worthy they'll dust those names off and kick them around
a little bit, the original companies that got our attention here.
(17:15):
And it's the same idea that this is all get
rich quick stuff. Right, So if I want to quote
unquote get in on an IPO, that means I somehow
know somebody at Morgan Stanley or whatever. The major financial
institution is, Goldman, SAX does a lot of them who
is underwriting the stuff. This isn't something where you could
just come in off the street and decide, you know what,
I've got two thousand bucks in my IRA, maybe I'll
buy an index fund. Maybe I'll jump in on this
(17:35):
next IPO that Morgan Stanley's thrown out there. It doesn't
work that way, But the whole purpose is you wanted
the goal is to try to get in on the
ground floor of something that could be huge.
Speaker 3 (17:45):
And we've heard.
Speaker 6 (17:46):
All these stories about Facebook. Rivian the electric truck maker,
of course, was a lot of hype over one hundred
and fifty billion dollars valuation basically on day one, and
it's now trading at a fraction of that. So if
I'm thinking about IPOs, I'm thinking about get rich quick
and quit quick schemes. And then put differently, I'm not
thinking about it because it's all the ways to energy, Bob.
Speaker 4 (18:05):
Yeah, here, here's the point we want to make about
IPOs in general. They're typically not priced for your benefit,
you know, the Stock coast public. But this whole, this
whole game is priced for the company and the executives
that got in on the ground floor dependings on the
dollars and the investment bankers. The higher this IPO price
that they can distribute this stuff out to the public,
(18:27):
the more fees the large investment banks get. Many of
these things launch at the high end of their price range,
leaving very little upside for early buyers. And then there's
also this dirty little thing out there called the lockup period,
and that's when company insiders These are the founders, the executives,
early investors, the people that really got in on the
(18:48):
ground floor and made all the money. They're prohibited from
selling their shares, usually for the first ninety to one
hundred and eighty days after an IPO. But here's the kicker.
Once that lock expires, a lot of these shares flood
the market and prices can drop and drop quickly.
Speaker 3 (19:05):
I mean, let's face it, these executives are human beings.
Speaker 4 (19:08):
You know, you make a boatload of money in one
of these companies, You're gonna want to pay off your house,
maybe buy a new car, diversify, and they're gonna take
a little off the off the top exactly at the
time when these new, unsuspecting IPO buyers are allowed to
get in.
Speaker 5 (19:23):
It's a recipe for disaster. They they they do trade
on height.
Speaker 6 (19:26):
Now, if you are legitimately interested in in the mission
of a company, something it does, and you want.
Speaker 5 (19:31):
To be a part of it, then yeah, do do it.
This is a this is a good way to be
a part of it. This is what capitalism is all about.
Speaker 6 (19:36):
However, if you're just trying to make a quick block,
remember that lock up period is gonna hit all the
all the smart money that was in well before you
ever heard of it is going to come screaming out
of it and then it's going to be left to
the general public who is going to handle it like
like they normally do, and they tend to move like
a flock of bird.
Speaker 5 (19:49):
So if you want to gamble, go to the casino.
Speaker 4 (19:52):
Here's the all Worth Advice treat IPOs like fireworks, very
fun to watch, risky to touch.
Speaker 3 (19:58):
All right, you've got a.
Speaker 4 (19:59):
Great fitinancial plan and you are soon to achieve financial freedom,
maybe retire.
Speaker 3 (20:05):
Is it time to downsize your home.
Speaker 4 (20:08):
We're going to explore that question next with Michelle Sloane,
our real estate expert. You're listening to Simply Money, presented
by all Worth Financial on fifty five KRC the Talk station.
Speaker 1 (20:19):
A win Streak, one big beautiful bill never before.
Speaker 7 (20:24):
Witness the United States will not allowed around to obtain
under your weapons.
Speaker 1 (20:29):
Fifty five KRC the talk station. Man, it's fifty five
KRC and iHeartRadio station.
Speaker 4 (20:41):
You're listening to Simply Money, presented by Allworth Financial. I
Bob Sponseller along with Brian James, joined tonight by our
real estate expert Michelle Sloane, owner of Remax Time And Michelle,
I know tonight you.
Speaker 3 (20:53):
Want to talk about the whole topic.
Speaker 4 (20:55):
Of downsizing, and I'm I'm really interested and fascinated here
your thoughts on this because it's a topic that comes
up all the time in our office with clients, you know,
heading into retirement. Should we downsize our home?
Speaker 2 (21:09):
And the important question is where do we go if
we downsize? And what is that quote unquote downsizing really cost.
At the end of the day, I've seen a few
interesting things come across my desk, but I want to
hear your thoughts on this topic.
Speaker 8 (21:24):
Okay, So downsizing, or as I like to call it,
right sizing. So I personally, so, I'm hitting a big
birthday this year in just a couple of weeks actually,
and so it was time for me.
Speaker 4 (21:40):
It's okay to be thirty years old, Michelle. You don't
have to be embarrassed by that.
Speaker 5 (21:45):
Oh stweet, I'm only forty two. But anyway, I'm kidding,
I'm really kidding.
Speaker 3 (21:52):
In business, that's not fair.
Speaker 8 (21:54):
I've been in business for twenty years, in real estate
twenty years, and before that, I was in radio and
television for twenty years.
Speaker 6 (22:04):
So the Big Six hosted in kindergarten real estate.
Speaker 5 (22:09):
Yeah right, so it's kind of crazy.
Speaker 8 (22:11):
But anyway, so Scott and I actually we just recently
this summer right size from a two story home where
we where our kids grew up, where we lived for
twenty years, and into a ranch style property.
Speaker 5 (22:27):
There are a lot of.
Speaker 8 (22:28):
People in the sixty to sixty five, sixty to sixty
seventy price range, our price range age range, gonna say
huh no.
Speaker 5 (22:40):
Sixty to se See, that's what happens to your brain
when you get old.
Speaker 8 (22:44):
Well, so anyway, so you know, we did, we made
a move. After twenty years, our kids grew up in
the two story home, it's time to move to something
that's a little bit smaller. But of course it didn't
end up being a little bit small. We wanted it
to be a little bit less expensive. It was a
little more expensive. I think this is what you're talking about,
(23:07):
because when we want to downsize, it doesn't mean that
you're going to be spending less.
Speaker 5 (23:12):
Yeah, no such thing as a financial day.
Speaker 3 (23:14):
And you took the words out of my mouth, Michelle.
I run into this all the time.
Speaker 4 (23:18):
But go ahead, you know, talk about the factors that
you and your husband, you know, looked at because I
know you're both you know, intelligent people, and you're obviously
a professional in this field.
Speaker 3 (23:29):
One of the things that you really started.
Speaker 2 (23:31):
To evaluate before pulling the trigger on this quote unquote
downsizing or right sizing.
Speaker 8 (23:37):
Well, we wanted to talk about the cash in equity
that we did have. The house that we lived in
was paid off, so we knew that by selling that
home we would have a large chunk of money. Did
we want to pay cash for that next property? Absolutely?
Speaker 5 (23:52):
Could we do that?
Speaker 8 (23:54):
No, I still had to get a small loan. I
don't love the idea of getting a loan at seven percent,
but you know what, it was time, and we you know,
sometimes you just know when it's time. Emotionally, it has
to hit all of those buttons. It has to hit
the emotional button, the financial button. You have to be
(24:15):
flexible in your location, and you do want to talk
about costs because as we are going into our the
years where we're considering retiring, then we have to think about, Okay,
am I going to be able to afford this home
moving forward? So there's a lot of questions that you
have to ask yourself and it just so happened that
(24:38):
a property came along, thankfully someone I knew so off market.
I was really I was able to sort of pull
some strings within my networks find a home that I
found off market. We purchased that home and was able
to sell our home simultaneously and it all worked out great.
But it takes a lot a lot of play. So
(25:01):
if if you're someone or you know someone who is
in the market right now to downsize or write size planning,
planning planning with your real estate agent, with your financial advisor,
to find out where you want to go.
Speaker 5 (25:17):
Do you want to be.
Speaker 8 (25:18):
Closer to your kids or do you want to move
far far away from your kids? Do you want to
spend more money? Can you spend more money or spend
less money? And that location of where you're going to
be moving to is that other aspect of how much
money are you going to spend? Do you want to
live on a golf course? Do you want to live
do you want to have a swimming pool? You know,
(25:39):
what is your lifestyle look like as you move into
the future.
Speaker 6 (25:44):
Yeah, Michelle, I really like the way you put that,
the way you went through that process for your own family,
because yes, the spreadsheet is important. It is important that
we can afford our lifestyles, and that of course includes
wherever that we live. But at the same time that
should not I don't ever want the spreadsheet to drive
a decision unless it's truly a dire financial plan. What
I mean by that is I don't want people going, well,
interest rates are high right now, so therefore we're going
(26:06):
to hold off on moving into our dream home, even
though we've always wanted to do that. If the math works,
do it, because you can always figure, you can always
refinance and that kind of thing later. So you know,
I wouldn't want anybody saying, well, now the interest rates
are finally where I want them to be, so now
I'm going to move into my beach home with the
tender age of eighty five.
Speaker 5 (26:22):
But we don't want to put it out.
Speaker 8 (26:23):
Well, and if you could be waiting a long time,
you know, we look into the crystal ball of what
mortgage rates are going to look like a month from now,
three months from now, they may fluctuate a little bit.
I personally don't ever think we're going to see three
percent as a mortgage rate. Ever, again, it put us
into a situation where it was great. It made the
(26:48):
whole market flourish for a while. But now so many
people that are holding onto those really low rates don't
want to make a move because they feel like they're stuck.
And that's a conversation, you're right, that I always have
with my clients is, Okay, if you feel stuck because
you have one hundred thousand dollars at three percent and
(27:09):
you would need to borrow maybe three hundred thousand dollars
at seven percent, Okay, it's part of the equation. And
so if you're ready and you can afford it, I
always say, don't wait to live your life. And that's
the same with real estate.
Speaker 6 (27:26):
That's the same with retirement planning too, right, it's the
same with you need to run down to Athens, Ohio
this weekend and get that little bungalow, your little party center.
Speaker 3 (27:37):
You help you.
Speaker 5 (27:37):
I can help you by that.
Speaker 4 (27:39):
See Michelle will have you under contract by Saturday night.
Speaker 6 (27:43):
This is all working out well for everybody. My Michelle
goes there more often than I do. We've got one
more week of an empty apartment until our daughter moves
back in, and we're both sad.
Speaker 4 (27:53):
All right, Hey, Michelle in the minute we got left,
walk us through if you could think of, you know,
maybe a horror story if somebody didn't do the planning,
didn't think ahead, made a rash decision and regretted it later.
You got any stories like that that you can share
where you know the thing kind of the watch out.
Speaker 8 (28:10):
Well, the one thing was I did have a client
who moved out of state, moved to Florida and hated
it and missed their family here. Now they had to
live that, live through that, but after six months they
wanted to move back. Well, financially, if you try to
sell a property within the first year or two, most
(28:34):
likely you're not going to make money on your investment.
You have to be able to be in a home
for a while. They just got to Florida and they're like, gosh,
it's really hot down here.
Speaker 5 (28:44):
This is unbearable if you didn't.
Speaker 3 (28:46):
Tell me that, and there's a lot of traffic.
Speaker 8 (28:49):
So if you're going to make a big move somewhere
you've never been before, I recommend going and spending a
month somewhere and see if you really like it before
you invest big dollars into buying a property.
Speaker 3 (29:02):
I think date before you get married right, Michelle, go
all right.
Speaker 4 (29:06):
Great stuff is always from Michelle Sloan, owner of Remax Time.
Speaker 3 (29:10):
Thank you so much Michelle for joining us tonight.
Speaker 4 (29:12):
You're listeningly Money, presented by all Worth Financial on fifty
five KRC, the Talk Station.
Speaker 8 (29:18):
I count on traffic reports to get me home to
my family and dinner in no time.
Speaker 6 (29:23):
Local weather is crucial for me for every day I
coach my daughter's softball team.
Speaker 3 (29:27):
I always tune in.
Speaker 1 (29:28):
To stay updated for every want and we need to
know if we're playing or not. I don't watch much TV.
I'm always driving.
Speaker 3 (29:35):
Listen.
Speaker 1 (29:36):
The radio is my news source for free. I love
talk radio on air and on the iHeartRadio. Ask my husband,
I love to talk.
Speaker 3 (29:44):
Fifty five KRC the Talk station, Welcome to your I
do think he is too old to run?
Speaker 1 (29:51):
In twenty twenty four, fifty five KRC the talk station.
Speaker 4 (30:00):
You're listening to Simply Money, presented by all Worth Financial
on Bob Spon Seller along with Brian James. Do you
have a financial question you'd like for us to answer.
There is a red button you can click while you're
listening to the show right there on the iHeart app.
Simply record your question and it will come straight to us.
All right, let's kick things off with Mike in Mainville.
Speaker 3 (30:20):
Brian.
Speaker 4 (30:21):
He says, my advisor has me in a target date fund,
but I now have over two million dollars save.
Speaker 3 (30:27):
Shouldn't I have something more customized?
Speaker 5 (30:30):
Hey, Mike, Yeah, that's an interesting one. So moving parts
to that.
Speaker 6 (30:33):
So target date funds are not by themselves evil, but
to me, they're they're a little bit maybe lazy is
not the right word, but they're just not as efficient
as they can be. So my first question is are
is this in an IRA? Is this in a retirement plant?
Speaker 3 (30:46):
Or is it?
Speaker 5 (30:46):
Is it tax shelter?
Speaker 6 (30:47):
That would if it's outside of a tax account, then
I would look to be looking at direct indexing those
kinds of things, because then you can take up the advantage
of tax loss harvesting. But the other thing, now that's
occurring to me, you have an advisor who has put
you in a target date fund. The target date fund
is is a set it and forget it? So I
bet I would look I would start a question of
relationship with the advisor. What do they bring to the
table if they're doing heavy duty financial planning and tax
(31:07):
planning those kinds of other things.
Speaker 3 (31:09):
That's great.
Speaker 6 (31:09):
But if he calls you once or she calls you
once a year and just says, hey, you still got
the same target day fund, I'd make sure you're getting
your money's worth. Let's move on to John, who lives downtown.
So my company stock has done extremely well. It's grown
about forty percent of my portfolio. How do I diversify
without taking a huge tax hit? What advice do you
have for job?
Speaker 3 (31:27):
Bob Well? John?
Speaker 4 (31:28):
First of all, good good job for recognizing that forty
percent might be a little high in terms of an
allocation to anyone stock. No, no, you know, regardless of
how great it is, so good for you. I'm also
going to assume here that that stock is not in
your IRA or four to one K plan, so it's
all taxable gains if you just blow out of it.
So to answer your question, how do you diversify? You
(31:50):
got a lot of options to do this slowly so
you don't take a huge tax kit or tax hit.
Number one, if you're charitably inclined at all, you can
use your stock to give some shares directly to your
charities or church or anything of choice. Five oh, one
C three charity and you avoid capital gains on those shares.
(32:12):
Beyond that, this is where direct indexing comes in. You
can throw this stock into a diversified portfolio where you've
got some active tax loss harvesting going on behind the scenes,
and you can gradually use short term losses on other
things in your portfolio to allow you to trim that
company stock exposure with no capital gains whatsoever. While you're
(32:35):
doing that, you can put some callers, which is an
option strategy on that stock where you maybe sell a
covered call on it and use the premiums on that
to buy some protective puts just to make sure that
the value of that stock doesn't completely fall out of
bed on you. So there's a lot of things to
do there. Get with a good fiduciary advisor that's got
these tools available to him or her, and they can
(32:57):
walk you through this and hopefully put together.
Speaker 3 (33:00):
They're a great strategy for you.
Speaker 4 (33:01):
All Right, Martin and Lovelin ask, it's almost time for
me to take my r m D, which is require
minimum distribution from your IRA.
Speaker 3 (33:10):
But I don't need the money right now.
Speaker 4 (33:12):
Is there some way I can avoid the income tax
hit when I do take the distribution Brian.
Speaker 6 (33:18):
Yeah, Martin, So the congratulations on reaching the tender age
of at least seventy three, because that's when requirementium distributions
kick in. The IRS basically has a gun to your
head and says the party is over. You got to
start paying taxes on these pre tax dollars. So in
any case, yeah, there's not a ton you can do
to reduce your income taxes just straight up, you know,
(33:39):
if I just want to pay less taxes like like
there used to be. But what you can do with
an R and B. There's something called if you're already
charitably inclined. This is very important because if you're already
giving money to charities, then you can send that money
directly from an IRA to the qualified charity. This literally
means that you're going to tell the custodian of your IRA,
you know, the financial institution behind it, I want you
to send these dollars to this organization, this tax id
(34:01):
and so on and so forth. You can't pull it
out and then write a check separately. In order to
do this that you can do up to one hundred
and five thousand dollars. Well that was twenty four one
hundred and eight thousand dollars is twenty twenty five. That
amount is excluded from your taxable income. Any amount up
to one hundred and eight thousand dollars gets completely excluded,
and then it goes straight to that charity. It does
cover your R and D. Here's one interesting weird thing
(34:22):
about this. You only have to be seventy and a
half right now. For whatever reason, they didn't update the
rules the age on a QCD qualified charitable distribution when
they change the age on the R and ds to
seventy three. So that's a weird one. I'll bet that'll
get fixed, but that sometimes trips people up.
Speaker 5 (34:37):
Anyway.
Speaker 6 (34:37):
If you're charitably inclined there, you go use your R
and D toward it. Speaking of taxes, Michael and Mason
own some municipal bonds which are known for being a
federal and state tax free if it's set up the
right way, and he's asking, my municipal bond ladder is
yielding a little less than my money market fund. Should
I hold onto this for the tax benefits or does
it make sense to rotate into higher yield fixed income
And he is dying to hear from Bob about.
Speaker 3 (35:00):
Michael. Great question, and here's how I like to approach this.
Speaker 4 (35:03):
I mean, I look at every bond portfolio that comes
across my desk, and we've got great tools where we
can just calculate, Hey, what's the yield to maturity if
I hold these bonds? Because bond prices move around all
the time based on the fluctuation of interest rates. So
you want to look at what's my yield to maturity
if I hold these things to maturity? And it's good
that you got a laddered you know, portfolio setup, so
(35:24):
you got you don't have all everything in one basket
on one data maturity, So that's good. But compare your
yield and then look at your tax situation. And you know,
a lot of times people love the idea of getting
tax free municipal bonds. But I think the point you're
raising here, Michael, is depending on my tax bracket and
how my income thing, my income strategy is structured, you
(35:48):
might be getting less on your tax free quote unquote
tax free you know, municipal bonds than just going ahead
and paying taxes on something that yields a higher rate.
So that's my answer. I would take a look at
the yield to maturity on these bonds, and then compare
the expected yield on an after tax basis to what
you could get in a taxable, higher yielding income fund.
(36:10):
All right, last week we've got Tony and Anderson. Hit
this one quick, Brian, my business is three to five
years from sale. How do I structure the proceeds now
to avoid a tax and investment scramble when the deal closes?
Speaker 6 (36:23):
Okay, Tony, we're gonna come back to your question because
I've got twenty seconds to barf up keywords you should google.
Speaker 5 (36:28):
So are there are things you can do?
Speaker 6 (36:31):
You're gonna want to look into qualified Opportunity zone rollovers.
If any of this is real estate, if you own
the building your businesses in, you might look at ten
thirty one exchanges. You can time it to installment sales,
spread it out over time.
Speaker 5 (36:42):
Another big one.
Speaker 6 (36:43):
A section twelve oh two Qualified small business doc. If
any of it is a C corp, then you can
do some really fun things there. I'm gonna throw it
back to Bob, but Jason, that's going to be a
whole section.
Speaker 5 (36:51):
At some point.
Speaker 4 (36:52):
You're listening to Simply Money presented by all Worth Financial
on fifty five krc the talk station.
Speaker 1 (36:58):
Think of a single mom taking the bus.
Speaker 8 (37:00):
Absolutely reliable information and of course not just one sided
view news.
Speaker 1 (37:05):
That affects you. At the top end to bottom of
the hour fifty five krz the talkstation.
Speaker 4 (37:15):
You're listening to some point money present up by all
Worth Financial on Bob Spon Seller along with Brian James.
All right, here's something you might not expect to impact
your portfolio, but it might actually do so.
Speaker 3 (37:26):
And that's used car prices.
Speaker 4 (37:28):
After years of skyrocketing values, something's finally happening.
Speaker 6 (37:33):
Out there in the car market and on used car lots. Brian, Well, yeah,
so this has gone on long time. Of course, the
pandemic screwed everything up with supply line. I remember we
did so many radio shows where we just talked about
the supply line problems, and I'm so glad that this.
Speaker 5 (37:46):
Is in the past.
Speaker 6 (37:47):
But anyway, when we're talking about all the trucks that
were sitting on the on the racetrack down there at
Sparta because they had nowhere else put them, because they
didn't have brains in them, because there were no tips
on it whatever. So but that seems to be swinging
the other way over the first half of twenty twenty five,
three year old used cars have average more than thirty
five hundred dollars.
Speaker 5 (38:02):
That was driven by the pandemic.
Speaker 6 (38:03):
But all of a sudden, the summer has sort of
frozen all of that, prices are finally dropping down. Those
same cars are now clocking in around twenty five thousand dollars.
Here's a fun one used Tesla prices. Teslas are known
for being a little on the spindy side, but actually
have it dropped below the general use car average. So
that's a brand with really strong resale value. The model
(38:23):
why itself is down about twelve percent, I believe Bob
and I just discussed this the other day, and the
cyber truck is down more than thirty percent. Now, those
two got some political stuff attached to them, so there's
more going on there than just supplying demand. But at
the same time, the point is, if you've been waiting
for prices to fall, this could be your chance.
Speaker 3 (38:40):
Well, this is the old supply and demand model, and
let's just leave the whole Tesla league alone, because you know,
let's face it, thirty percent of the country hates Elon Musk,
so they couldn't be caught dead in the Tesla.
Speaker 6 (38:52):
That was a terrible job of leaving it alone, by
the way, but that opens up opportunities for other people.
So anyway, a new car incentives, you know, things like
zero percent financing and stronger leasing deals are drawing some
buyers back to the showrooms away from the used car market,
and then that supply starts to dry up. High used
(39:14):
car loan rates, you know, Brian, I see this with clients.
Speaker 4 (39:18):
They come in, whether they want to buy a used
car or an RV or something like that. These these
interest rates are north to ten percent in a lot
of cases, and that's dampening demand on used car. You know,
last time I check, ten percent is way higher than zero.
So people run the math. They're not foolish, and they say, yeah,
I'll just buy a new car.
Speaker 6 (39:36):
So I'm gonna knit together a couple of things that
we've talked about just here today. So I had a
client come in the other day and we're just planning
on things they need to buy a car anyway, sometime
in the next six months. He also happens to be
just hitting that require minimum distribute distribution age. That magical
birthday of seventy three anyway, he's got to pull out
money in January. So what we're doing is we're hoping
that we'll get back to the old days of inventory
(39:58):
clearances so he can get a really good deal. Told
them to try to buy it between Christmas and New
Year's and try to get them to accept a payment
after January first, so we will knock out your RMD
and pay cash for a car and be pretty happy.
Speaker 5 (40:08):
Smart people.
Speaker 3 (40:09):
Thanks for listening.
Speaker 4 (40:10):
You've been listening to Simply Money, presented by all Worth
Financial on fifty five KRC, the Talk Station.
Speaker 1 (40:16):
Your news when it happens, breaking this tonight. We are
coming to you live news when you need it. You're
going to want to listen to this news when you
least expected.
Speaker 8 (40:26):
We've never quite seen anything.
Speaker 1 (40:28):
Like this, cheaping you up today on what's happening. This
is going to be quite the event tonight. You're going
to want to.
Speaker 5 (40:33):
Make sure you leave the house extra.
Speaker 1 (40:34):
Early, locally, nationally, everywhere in between. I don't know what
I would do about it. Fifty five KRC, The Talk Station,
This isn't ai here.
Speaker 2 (00:02):
This three off is a the American people are smart,
authentic voices fifty five krs.
Speaker 3 (00:09):
He the talk station tonight a look.
Speaker 4 (00:19):
At what could impact the returns on your portfolio and
the overall stock market between now, let's say the end
of September. You're listening to Simply Money, presented by all
Worth Financial on Bob spun Seller along with Brian James.
Yesterday we touched on the correlation between the US China
trade situation and your money. We spend a little time
on that, but there are many other events coming down
(00:42):
the pike here between now and the end of September
that could impact the markets and maybe potentially cause a
little volatility. Brian, let's walk through what's coming up here
on the calendar.
Speaker 5 (00:52):
Sare so the big.
Speaker 6 (00:53):
Whopper in all of this is the US and China,
because we are the two largest economies in the world,
and we're kind of fighting a little bit right now.
Speaker 3 (01:00):
Now.
Speaker 6 (01:00):
Not everybody's getting along. Go figure that way. We're not
gonna beat that to death that We talked about that
earlier this week. But the US China tariff has been
extended to November tenth. We pushed it out and kicked
the can again. Now the deal doesn't happen, then there's
gonna be more volatility if we put tariffs back in place.
Speaker 5 (01:15):
I've been through it, seen it.
Speaker 6 (01:17):
I doubt we'll be as panicky as we were in
April and all this stuff you know first kicked in.
Speaker 4 (01:21):
Yeah, the only thing I'll add on this China thing.
And again we beat this thing to death, I think yesterday.
But you know, I think we're getting used to how
the President is handling things. It's it's always an ongoing negotiation,
a lot of moving parts, and I think when it
comes to China, there's a lot going on behind the
scenes that impacts what tariffs may or may not be.
(01:41):
Like what's China planning to do with Taiwan the Panama Canal.
We got issues with chip makers. You know I'm here
in this morning. You know, China is now saying they
don't want their tech companies to use Navidia's chips. Remember
three months ago we were hearing Deep Sea was gonna
put in the video out of business.
Speaker 3 (02:02):
You know, funny how that all worked out.
Speaker 4 (02:04):
So there's a lot of stuff going on here, and
it's not just gonna be one announcement on one day.
Speaker 3 (02:10):
It's an ongoing negotiation.
Speaker 2 (02:13):
And just you know, mono amano with China, and that's
not gonna end even in ninety days.
Speaker 3 (02:19):
It's gonna be an ongoing discussion.
Speaker 6 (02:20):
Yeah, this is always This is like the Yankees and
the Red Sox suddenly getting along together. That's never gonna happen.
It's a winner take all game, and it swings back
and forth. Yes, you're exactly right about the votes on
these types of decisions do not take place when we're
taking role call in Congress. The votes happen on the phone,
one at a time as we're trying to make sure
we have the votes we need to push things across.
(02:41):
That's the same thing that's happened between the US and China.
Just because we've kicked the can does not mean communications
are happening or not happening. That's all happening behind the scenes,
and it just it's a good time to exhale and
focus on something else for a little while.
Speaker 5 (02:52):
Speaking of something else, what should we focus on, Bob.
Speaker 4 (02:55):
Well, we've got the FED you know, meeting coming up
on September seventeenth. I think a lot of this is
already starting to get telegraphed and priced into the market.
I'm seeing as high as a ninety six percent probability
already being priced into the markets, already factored in, you know,
of at least a quarter point rate cut on September seventeenth,
So if and when that happens, it's really going to
(03:17):
be a non event.
Speaker 3 (03:18):
Now, if we do.
Speaker 4 (03:19):
Get a fifty basis point cut, which I'm starting to
hear whisperings about, that could push this market even higher.
But I think that you know, there's data that's coming out,
and the FED wants.
Speaker 3 (03:31):
To look at data.
Speaker 4 (03:32):
We got the August jobs report on September fifth, and
we've got a lot of other data coming out between
now in that FED meeting, and we've got a new
FED governor being appointed by the President on around at Kogler,
a FED governor you know, appointed in twenty twenty three,
resigned last week, just a reminder, so we're going to
(03:52):
have a President Trump appointed member of the Fed who
obviously will want a lower rates.
Speaker 3 (03:57):
So there's a lot of that stuff coming down.
Speaker 4 (03:59):
But the thing I think Brian no one is talking about,
and this always causes short term volatility as it happens
is Remember, the Senate doesn't come back to work really
until after Labor Day, so they're going to have about
three weeks to hammer out some kind of budget deal,
and it's going to get contentious between now and the
(04:20):
end of September, and we could have a short term
government shutdown. No one's talking about that right now. That
could rattle markets in the short term. I'm not saying,
you know, totally change your investment strategy or moved to cash.
Just be aware that that's on the horizon and it's
not being talked about very much.
Speaker 3 (04:38):
Yeah, don't yet.
Speaker 6 (04:39):
And I think Bob, your point is is, don't get
comfortable with how with how things have run. Right everybody
right now, If you stayed fully invested and you didn't
panic through any of the crazy in April, and hopefully
it didn't, then you've probably got more money you've ever
had in your entire life. And that's that's the cycle
we go through. That's not you know, a lot of
people will look at that and say, well, the market's
at a peak. The next step is obviously down. That's
not true. The market goes up, not down. We're in
(05:00):
that swing. So the thing to remember, though, is like
you just said stuff is going to happen. The next
stuff that's gonna spook. The headline is probably when we
decided to focus on it. Yeah, there's a government shutdown
looming and we're probably getting along even less well than
we did the last time we went through this.
Speaker 5 (05:17):
So just just a remind a little bit of history.
Speaker 6 (05:19):
So back in March we had we had the same debate,
and this was right around time that March and April
was pretty scary time frame because we were also talking
about this. This was the first time we had inklings
of how these tariff discussions are going to go and
how the market's going to impact going to be impacted,
and it wasn't good with the market took a pretty
big hit. But anyway, at that time, the resolution was
we're going to kick the can to September thirtieth. They
(05:39):
passed a law that basically put that into place, and
you know, they did the fancy things and pulled the
levers and pushed the buttons that make the problems go
away for a few months, as they do every single time,
and they usually come up with some weird word to
label it with. But ever since then, it's been completely
under the radar. In terms of the discussions, we really
haven't heard anything about it at all. Some of this
has to do with attention fatigue. People don't want to
(06:01):
hear about shutdowns anymore. There's nothing I can do about it.
Therefore it's not a good news story as well as
there's plenty out there, plenty of distractions of course, to
keep us from really paying attention to the things they count.
But rest assured those discussions are going to come in
again and they are going to have an impact on
the market, just like they did back in March. Yeah,
it always appears like everyone's getting along. That's because the
Senate is not working. They're at home. Yeah, they're literally
(06:24):
not in the same room together, so you can't hear
them fighting, and you can't hear the kids fighting.
Speaker 3 (06:28):
Yeah.
Speaker 4 (06:28):
So if we go back to the passage of the
Big Beautiful Bill, I mean, let's face it, Republicans, you know,
coming out of the whole Doze study, they wanted more
cuts in the federal budget. The Democrats balked at that.
They came up with a compromise. I mean, the people,
the conservative folks were kicking and screaming, saying there weren't
enough budget cuts and the Congress, you know, folks on
(06:50):
that side of the aisle saying just wait, they're coming. Well,
they're going to try to put them into this budget,
you know, at the end of September, and the Democrats
are saying that stuff's dead on arrival. So there's going
to be some contentious, you know, media driven, you know,
drama between now and the end of September. Let's see
what they they're going to be able to come up with.
(07:10):
You know, this always comes down to the wire and
usually gets passed at two o'clock in the morning when
everybody's asleep. But there's going to be some heated debates
on how to handle this budget between now and the
end of September, and we really haven't haven't seen that
start yet and won't see it start until after Labor Day.
(07:30):
You're listening to Simply Money presented by all Worth Financial.
I'm Bob Sponseller along with Brian James. Let's get back
to the fundamentals, Brian, Earnings. Earnings is what drives this market,
you know, irrespective of what goes on in Washington. Let's
let's remember when we invest in stocks, we invest in companies,
we invest in capitalism, We invest in growth, growth in profits,
(07:54):
and the earnings numbers have been really good. I saw
somebody this morning come out, you know, on a media
show saying, hey, it's looking like SMP earnings year over
year now that we're almost through earnings season or up
about thirteen percent year over year last year, and they're
starting to say, you know, projections for next year are
(08:16):
around thirteen percent earnings growth.
Speaker 3 (08:18):
Brian.
Speaker 4 (08:19):
If we get inflation under control, we get interest rates dropping,
and we continue to see earnings grow at thirteen percent,
this is going to be a good time to be
in the stock market.
Speaker 3 (08:29):
Absolutely.
Speaker 6 (08:30):
And the thing to remember is that the government or
I'm sorry, the investing public, does not care who is
in control of the government.
Speaker 5 (08:38):
We think we do, but we really don't.
Speaker 6 (08:39):
And the reason I say that is because big companies
have They don't. They don't only fund one side versus
the other. They don't really care. They just want to
know what's expected. They have a red playbook and a
blue playbook, and they just want to know what are
the rules of the game right now. If it's a
democratic establishment, we're going to do this. If it's republican,
we're going to do that. They do that in order
to be able to make a profit in any kind
of environment. That's exactly what's happening right now. So we
(09:02):
are in a very business friendly administration and all those
things that Bob just mentioned are going to drive profits.
So no matter what the headlines are you're seeing, just
bear in mind, the support for business is really never
higher than it is in a situation than we have
right now. So look for big earnings reports. Big tech companies.
AI chip makers are gonna be reporting here in October.
(09:22):
That's going to drive the S and P five hundred,
like Bob said, And at the end of the day,
you're invested in the stock market, it's all about the
performance of the underlying companies. We had yet to benefit
fully from this AI catalyst. I think it may be
one of the bigger catalysts we've ever seen in the
stock market.
Speaker 4 (09:37):
Yeah, but here's the point I think we're trying to
make with this segment. Brian, correct me if I'm wrong, And
you hit the nail on the head on this topic yesterday,
but it bears repeating today. You know, the coast looks
pretty clear right now. The market continues to slowly melt up.
The news has been good, But do not treat your
stock portfolio and cryptocurrency or any other speculative things that
(09:59):
you're in invested in as your ATM machine.
Speaker 3 (10:02):
Meaning if you need or.
Speaker 4 (10:04):
Want to have cash on the sidelines for anything, you know,
home repairs, an automobile purchase, a big vacation, anything that's
going to involve you writing a big check. Don't get
lulled to sleep here. Be responsible, trim off some of
these tremendous gains that we've had and get that into
cash equivalent low risk investments because most of the time
(10:27):
when we see volatility, no one sees it happen. And historically,
Brian and I know you know this, the market always
goes down a lot quicker and at a higher magnitude
that it goes up. So just do the responsible thing,
have your financial plan and investment allocation set, and then
you can enjoy what we hope to see is continued,
(10:50):
you know, success and growth in the economy.
Speaker 5 (10:52):
It's always three steps four, two steps back.
Speaker 6 (10:54):
But just like Bob said, the market tends to climb
a gentle hill and then fall off a cliff. Yep,
it doesn't. It never drops slowly, but at the same time,
we always panic, we always overreact. So let's talk about predictions, right,
So we occasionally we like to talk about what we
think is coming, and we're as guilty of that as anybody.
We kind of just did it here a little bit ago.
Always preface this with stay flexible, because nobody actually knows.
(11:16):
If anybody knew, we'd all be bazillionaires. But the best
thing we can do is look at our smart people
to see what they think what they think, and one
of our smart people is our chief investment officer, Andy Stout.
So we talked to him recently, we had him on
these airwaves, and his basic summary. He keeps a recession
scorecard that we share with our clients to kind of
let us know what are the different indicators, what do
they all look like? And currently we feel like the
(11:38):
economy is not leaning toward an imminent recession.
Speaker 5 (11:40):
It's possible, It's always possible. Andy, a smart guy, always
hedges his bets.
Speaker 6 (11:44):
But at the same time, all the data smushed together
right now does not show that we're about to go
over the cliff in some kind of recession. We'll see
how things play out, of course, but at this point,
you know, we're still in growth mode.
Speaker 5 (11:56):
Be on offense, good stuff.
Speaker 3 (11:58):
All right, here's the all Worth It advice.
Speaker 4 (12:00):
The next few months could bring a perfect storm of
Fed moves, political showdowns, global trade tensions and market hype.
Speaker 3 (12:08):
We always have market hype.
Speaker 4 (12:09):
So keep your portfolio balanced, your cash needs covered, and
your eyes on fundamentals not the headlines. Coming up next,
some big names are about to hit the market, and
we're talking about through IPOs. But jumping in could cost you,
and work will explain what we mean. You're listening to
Simply Money, presented by all Worth Financial on fifty five
KRC the Talk Station.
Speaker 7 (12:33):
Yes KRC, 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 (12:54):
You're listening to Simply Money presented by all Worth Financial
on Bob spun Seller along with Brian James. If you
can't listen to Simply Money every night, subscribe and get
our daily podcast. And if you think your friends could
use some financial advice or your family, tell them about
us as well. Just search simply money on the iHeart
app or wherever you find your podcast. Should you have
(13:15):
your money in a target date fund? If you've got
a net worth of two million dollars, we'll answer that
question another straight ahead of six forty three. Here's an
interesting little tidbit. If you had a Capital one three
sixty savings account between September of twenty nineteen and June
of twenty twenty five, you may be eligible to receive
(13:37):
a payment as part of a four hundred and twenty
five million dollars settlement that Capital One has agreed to.
Speaker 3 (13:44):
Brian, what's going on here?
Speaker 6 (13:45):
What's going on here is you're in charge of the
rest of the show because me and my sixty seven
cents are done.
Speaker 5 (13:50):
We are heading out for the day.
Speaker 6 (13:51):
Because I had one of these accounts somewhere, I'm gonna
have to take it up to what I'm going to
get out of it.
Speaker 3 (13:55):
So what's in your wallet?
Speaker 5 (13:57):
Sixty seven cents more than I had before the settlement?
Speaker 3 (14:00):
No wonder you showed up for work today and.
Speaker 5 (14:02):
I needed the seventy five cents. I just can't pull
the trigger anyway.
Speaker 6 (14:05):
Earlier this year, the CFPB, the ARTIST formerly known as
the Consumer Financial Protection Bureau, which may or may not
exist anymore, but whatever sued Capital One, alleging that the
company froze its rate at at a low level for years.
And I can vouch for this because they did open
one of these accounts and it paid a lot for
but it didn't react when interest rates went up.
Speaker 5 (14:26):
And yeah, so I mean I.
Speaker 6 (14:27):
Lived through this, so it basically the calculation is that
customers were cheated out of about two billion dollars and so.
Speaker 5 (14:32):
CFPB actually dropped throughout the lawsuit.
Speaker 6 (14:34):
In February, Capital One agreed to pay anyway, kind of
caught red handed. So even though the party that the
plaintiff that was suing them kind of went out of existence,
they were like, yeah, you kind of caught us there.
Speaker 4 (14:44):
So well, what did they actually do? Why did they
get sued and why they agreed to settle? I mean,
what was the malfeasance here?
Speaker 6 (14:51):
They basically didn't follow through in the commitment that they
made on how the interest rate was going to be
calculated and what it was going to be based on.
And so when interest rates, remember people had this is
a few years ago. People have been lulled to sleep
for decades that they even have the right to get
paid on their depository accounts and banks because rates were
on the floor. We were thrilled to death with our mortgages,
and we started to ignore our checking and savings accounts
because just what anything there. So they basically made a
(15:14):
commitment to say, hey, we're gonna calculate the interest rates
based on these various factors, and then because people were
not in tune with paying attention to that stuff, they
just didn't do it so anyway, So that's why it's
costing them four hundred twenty five million dollars sixty seven
cents in this pocket.
Speaker 4 (15:28):
All right, So if you had, if you had a
capital one three sixty savings account, the deadline to submit
a claim or right to the court objecting to the
settlement in this October second.
Speaker 3 (15:39):
You are hereby warn.
Speaker 5 (15:40):
I go, I gotta go submit a claim?
Speaker 3 (15:42):
All right.
Speaker 4 (15:42):
You're listening to simply Money presented by all Worth Financial
on Bob Sponseller along with Brian James. Some of the
biggest names in tech and retail are gearing up to
go public before the end of twenty twenty five, and
we're talking about IPOs here, the headlines are already buzzing, Brian,
valuations in the tens of billions, big underwriting firms and
promises of hyper growth. But before you reach for that
(16:05):
buy button, let's talk about what IPO hype really is
and why it often rhymes with cryptomania and meme stock frenzies.
And we won't get into some of these meme stock
We talked about them a couple of weeks ago, and
I've already looked at a few of these that are
down as much as seventy percent since we talked about
them on the air.
Speaker 3 (16:25):
I wish I had bought put options on him, Brian.
Speaker 5 (16:28):
Listen to you and your fancy talk.
Speaker 6 (16:29):
What he's saying is he should have bought because it
was going to go down and profit it that way. Anyway,
this takes me back, Bob, when I saw what we're
gonna be talking about today with these IPOs, I'm like,
is it two thousand and two all over again? Because
we haven't I feel like we haven't made a big
deal about IPOs. And I'm not talking about us here
on the radio waves, the clients, anybody, just people thinking
about investments. So an IPO stands for initial public offering.
It's basically when a company decides to no longer be
(16:52):
a private entity and to tap into the public markets
to give everybody a chance to invest. They bring in
all that capital and then they go do more of
whatever it is that they're doing to try to make money.
This really came to the forefront, of course, with the
original Internet craze. I'm talking when like Yahoo and AOL
worthy they'll dust those names off and kick them around
a little bit, the original companies that got our attention here.
(17:15):
And it's the same idea that this is all get
rich quick stuff. Right, So if I want to quote
unquote get in on an IPO, that means I somehow
know somebody at Morgan Stanley or whatever. The major financial
institution is, Goldman, SAX does a lot of them who
is underwriting the stuff. This isn't something where you could
just come in off the street and decide, you know what,
I've got two thousand bucks in my IRA, maybe I'll
buy an index fund. Maybe I'll jump in on this
(17:35):
next IPO that Morgan Stanley's thrown out there. It doesn't
work that way, But the whole purpose is you wanted
the goal is to try to get in on the
ground floor of something that could be huge.
Speaker 3 (17:45):
And we've heard.
Speaker 6 (17:46):
All these stories about Facebook. Rivian the electric truck maker,
of course, was a lot of hype over one hundred
and fifty billion dollars valuation basically on day one, and
it's now trading at a fraction of that. So if
I'm thinking about IPOs, I'm thinking about get rich quick
and quit quick schemes. And then put differently, I'm not
thinking about it because it's all the ways to energy, Bob.
Speaker 4 (18:05):
Yeah, here, here's the point we want to make about
IPOs in general. They're typically not priced for your benefit,
you know, the Stock coast public. But this whole, this
whole game is priced for the company and the executives
that got in on the ground floor dependings on the
dollars and the investment bankers. The higher this IPO price
that they can distribute this stuff out to the public,
(18:27):
the more fees the large investment banks get. Many of
these things launch at the high end of their price range,
leaving very little upside for early buyers. And then there's
also this dirty little thing out there called the lockup period,
and that's when company insiders These are the founders, the executives,
early investors, the people that really got in on the
(18:48):
ground floor and made all the money. They're prohibited from
selling their shares, usually for the first ninety to one
hundred and eighty days after an IPO. But here's the kicker.
Once that lock expires, a lot of these shares flood
the market and prices can drop and drop quickly.
Speaker 3 (19:05):
I mean, let's face it, these executives are human beings.
Speaker 4 (19:08):
You know, you make a boatload of money in one
of these companies, You're gonna want to pay off your house,
maybe buy a new car, diversify, and they're gonna take
a little off the off the top exactly at the
time when these new, unsuspecting IPO buyers are allowed to
get in.
Speaker 5 (19:23):
It's a recipe for disaster. They they they do trade
on height.
Speaker 6 (19:26):
Now, if you are legitimately interested in in the mission
of a company, something it does, and you want.
Speaker 5 (19:31):
To be a part of it, then yeah, do do it.
This is a this is a good way to be
a part of it. This is what capitalism is all about.
Speaker 6 (19:36):
However, if you're just trying to make a quick block,
remember that lock up period is gonna hit all the
all the smart money that was in well before you
ever heard of it is going to come screaming out
of it and then it's going to be left to
the general public who is going to handle it like
like they normally do, and they tend to move like
a flock of bird.
Speaker 5 (19:49):
So if you want to gamble, go to the casino.
Speaker 4 (19:52):
Here's the all Worth Advice treat IPOs like fireworks, very
fun to watch, risky to touch.
Speaker 3 (19:58):
All right, you've got a.
Speaker 4 (19:59):
Great fitinancial plan and you are soon to achieve financial freedom,
maybe retire.
Speaker 3 (20:05):
Is it time to downsize your home.
Speaker 4 (20:08):
We're going to explore that question next with Michelle Sloane,
our real estate expert. You're listening to Simply Money, presented
by all Worth Financial on fifty five KRC the Talk station.
Speaker 1 (20:19):
A win Streak, one big beautiful bill never before.
Speaker 7 (20:24):
Witness the United States will not allowed around to obtain
under your weapons.
Speaker 1 (20:29):
Fifty five KRC the talk station. Man, it's fifty five
KRC and iHeartRadio station.
Speaker 4 (20:41):
You're listening to Simply Money, presented by Allworth Financial. I
Bob Sponseller along with Brian James, joined tonight by our
real estate expert Michelle Sloane, owner of Remax Time And Michelle,
I know tonight you.
Speaker 3 (20:53):
Want to talk about the whole topic.
Speaker 4 (20:55):
Of downsizing, and I'm I'm really interested and fascinated here
your thoughts on this because it's a topic that comes
up all the time in our office with clients, you know,
heading into retirement. Should we downsize our home?
Speaker 2 (21:09):
And the important question is where do we go if
we downsize? And what is that quote unquote downsizing really cost.
At the end of the day, I've seen a few
interesting things come across my desk, but I want to
hear your thoughts on this topic.
Speaker 8 (21:24):
Okay, So downsizing, or as I like to call it,
right sizing. So I personally, so, I'm hitting a big
birthday this year in just a couple of weeks actually,
and so it was time for me.
Speaker 4 (21:40):
It's okay to be thirty years old, Michelle. You don't
have to be embarrassed by that.
Speaker 5 (21:45):
Oh stweet, I'm only forty two. But anyway, I'm kidding,
I'm really kidding.
Speaker 3 (21:52):
In business, that's not fair.
Speaker 8 (21:54):
I've been in business for twenty years, in real estate
twenty years, and before that, I was in radio and
television for twenty years.
Speaker 6 (22:04):
So the Big Six hosted in kindergarten real estate.
Speaker 5 (22:09):
Yeah right, so it's kind of crazy.
Speaker 8 (22:11):
But anyway, so Scott and I actually we just recently
this summer right size from a two story home where
we where our kids grew up, where we lived for
twenty years, and into a ranch style property.
Speaker 5 (22:27):
There are a lot of.
Speaker 8 (22:28):
People in the sixty to sixty five, sixty to sixty
seventy price range, our price range age range, gonna say
huh no.
Speaker 5 (22:40):
Sixty to se See, that's what happens to your brain
when you get old.
Speaker 8 (22:44):
Well, so anyway, so you know, we did, we made
a move. After twenty years, our kids grew up in
the two story home, it's time to move to something
that's a little bit smaller. But of course it didn't
end up being a little bit small. We wanted it
to be a little bit less expensive. It was a
little more expensive. I think this is what you're talking about,
(23:07):
because when we want to downsize, it doesn't mean that
you're going to be spending less.
Speaker 5 (23:12):
Yeah, no such thing as a financial day.
Speaker 3 (23:14):
And you took the words out of my mouth, Michelle.
I run into this all the time.
Speaker 4 (23:18):
But go ahead, you know, talk about the factors that
you and your husband, you know, looked at because I
know you're both you know, intelligent people, and you're obviously
a professional in this field.
Speaker 3 (23:29):
One of the things that you really started.
Speaker 2 (23:31):
To evaluate before pulling the trigger on this quote unquote
downsizing or right sizing.
Speaker 8 (23:37):
Well, we wanted to talk about the cash in equity
that we did have. The house that we lived in
was paid off, so we knew that by selling that
home we would have a large chunk of money. Did
we want to pay cash for that next property? Absolutely?
Speaker 5 (23:52):
Could we do that?
Speaker 8 (23:54):
No, I still had to get a small loan. I
don't love the idea of getting a loan at seven percent,
but you know what, it was time, and we you know,
sometimes you just know when it's time. Emotionally, it has
to hit all of those buttons. It has to hit
the emotional button, the financial button. You have to be
(24:15):
flexible in your location, and you do want to talk
about costs because as we are going into our the
years where we're considering retiring, then we have to think about, Okay,
am I going to be able to afford this home
moving forward? So there's a lot of questions that you
have to ask yourself and it just so happened that
(24:38):
a property came along, thankfully someone I knew so off market.
I was really I was able to sort of pull
some strings within my networks find a home that I
found off market. We purchased that home and was able
to sell our home simultaneously and it all worked out great.
But it takes a lot a lot of play. So
(25:01):
if if you're someone or you know someone who is
in the market right now to downsize or write size planning,
planning planning with your real estate agent, with your financial advisor,
to find out where you want to go.
Speaker 5 (25:17):
Do you want to be.
Speaker 8 (25:18):
Closer to your kids or do you want to move
far far away from your kids? Do you want to
spend more money? Can you spend more money or spend
less money? And that location of where you're going to
be moving to is that other aspect of how much
money are you going to spend? Do you want to
live on a golf course? Do you want to live
do you want to have a swimming pool? You know,
(25:39):
what is your lifestyle look like as you move into
the future.
Speaker 6 (25:44):
Yeah, Michelle, I really like the way you put that,
the way you went through that process for your own family,
because yes, the spreadsheet is important. It is important that
we can afford our lifestyles, and that of course includes
wherever that we live. But at the same time that
should not I don't ever want the spreadsheet to drive
a decision unless it's truly a dire financial plan. What
I mean by that is I don't want people going, well,
interest rates are high right now, so therefore we're going
(26:06):
to hold off on moving into our dream home, even
though we've always wanted to do that. If the math works,
do it, because you can always figure, you can always
refinance and that kind of thing later. So you know,
I wouldn't want anybody saying, well, now the interest rates
are finally where I want them to be, so now
I'm going to move into my beach home with the
tender age of eighty five.
Speaker 5 (26:22):
But we don't want to put it out.
Speaker 8 (26:23):
Well, and if you could be waiting a long time,
you know, we look into the crystal ball of what
mortgage rates are going to look like a month from now,
three months from now, they may fluctuate a little bit.
I personally don't ever think we're going to see three
percent as a mortgage rate. Ever, again, it put us
into a situation where it was great. It made the
(26:48):
whole market flourish for a while. But now so many
people that are holding onto those really low rates don't
want to make a move because they feel like they're stuck.
And that's a conversation, you're right, that I always have
with my clients is, Okay, if you feel stuck because
you have one hundred thousand dollars at three percent and
(27:09):
you would need to borrow maybe three hundred thousand dollars
at seven percent, Okay, it's part of the equation. And
so if you're ready and you can afford it, I
always say, don't wait to live your life. And that's
the same with real estate.
Speaker 6 (27:26):
That's the same with retirement planning too, right, it's the
same with you need to run down to Athens, Ohio
this weekend and get that little bungalow, your little party center.
Speaker 3 (27:37):
You help you.
Speaker 5 (27:37):
I can help you by that.
Speaker 4 (27:39):
See Michelle will have you under contract by Saturday night.
Speaker 6 (27:43):
This is all working out well for everybody. My Michelle
goes there more often than I do. We've got one
more week of an empty apartment until our daughter moves
back in, and we're both sad.
Speaker 4 (27:53):
All right, Hey, Michelle in the minute we got left,
walk us through if you could think of, you know,
maybe a horror story if somebody didn't do the planning,
didn't think ahead, made a rash decision and regretted it later.
You got any stories like that that you can share
where you know the thing kind of the watch out.
Speaker 8 (28:10):
Well, the one thing was I did have a client
who moved out of state, moved to Florida and hated
it and missed their family here. Now they had to
live that, live through that, but after six months they
wanted to move back. Well, financially, if you try to
sell a property within the first year or two, most
(28:34):
likely you're not going to make money on your investment.
You have to be able to be in a home
for a while. They just got to Florida and they're like, gosh,
it's really hot down here.
Speaker 5 (28:44):
This is unbearable if you didn't.
Speaker 3 (28:46):
Tell me that, and there's a lot of traffic.
Speaker 8 (28:49):
So if you're going to make a big move somewhere
you've never been before, I recommend going and spending a
month somewhere and see if you really like it before
you invest big dollars into buying a property.
Speaker 3 (29:02):
I think date before you get married right, Michelle, go
all right.
Speaker 4 (29:06):
Great stuff is always from Michelle Sloan, owner of Remax Time.
Speaker 3 (29:10):
Thank you so much Michelle for joining us tonight.
Speaker 4 (29:12):
You're listeningly Money, presented by all Worth Financial on fifty
five KRC, the Talk Station.
Speaker 8 (29:18):
I count on traffic reports to get me home to
my family and dinner in no time.
Speaker 6 (29:23):
Local weather is crucial for me for every day I
coach my daughter's softball team.
Speaker 3 (29:27):
I always tune in.
Speaker 1 (29:28):
To stay updated for every want and we need to
know if we're playing or not. I don't watch much TV.
I'm always driving.
Speaker 3 (29:35):
Listen.
Speaker 1 (29:36):
The radio is my news source for free. I love
talk radio on air and on the iHeartRadio. Ask my husband,
I love to talk.
Speaker 3 (29:44):
Fifty five KRC the Talk station, Welcome to your I
do think he is too old to run?
Speaker 1 (29:51):
In twenty twenty four, fifty five KRC the talk station.
Speaker 4 (30:00):
You're listening to Simply Money, presented by all Worth Financial
on Bob Spon Seller along with Brian James. Do you
have a financial question you'd like for us to answer.
There is a red button you can click while you're
listening to the show right there on the iHeart app.
Simply record your question and it will come straight to us.
All right, let's kick things off with Mike in Mainville.
Speaker 3 (30:20):
Brian.
Speaker 4 (30:21):
He says, my advisor has me in a target date fund,
but I now have over two million dollars save.
Speaker 3 (30:27):
Shouldn't I have something more customized?
Speaker 5 (30:30):
Hey, Mike, Yeah, that's an interesting one. So moving parts
to that.
Speaker 6 (30:33):
So target date funds are not by themselves evil, but
to me, they're they're a little bit maybe lazy is
not the right word, but they're just not as efficient
as they can be. So my first question is are
is this in an IRA? Is this in a retirement plant?
Speaker 3 (30:46):
Or is it?
Speaker 5 (30:46):
Is it tax shelter?
Speaker 6 (30:47):
That would if it's outside of a tax account, then
I would look to be looking at direct indexing those
kinds of things, because then you can take up the advantage
of tax loss harvesting. But the other thing, now that's
occurring to me, you have an advisor who has put
you in a target date fund. The target date fund
is is a set it and forget it? So I
bet I would look I would start a question of
relationship with the advisor. What do they bring to the
table if they're doing heavy duty financial planning and tax
(31:07):
planning those kinds of other things.
Speaker 3 (31:09):
That's great.
Speaker 6 (31:09):
But if he calls you once or she calls you
once a year and just says, hey, you still got
the same target day fund, I'd make sure you're getting
your money's worth. Let's move on to John, who lives downtown.
So my company stock has done extremely well. It's grown
about forty percent of my portfolio. How do I diversify
without taking a huge tax hit? What advice do you
have for job?
Speaker 3 (31:27):
Bob Well? John?
Speaker 4 (31:28):
First of all, good good job for recognizing that forty
percent might be a little high in terms of an
allocation to anyone stock. No, no, you know, regardless of
how great it is, so good for you. I'm also
going to assume here that that stock is not in
your IRA or four to one K plan, so it's
all taxable gains if you just blow out of it.
So to answer your question, how do you diversify? You
(31:50):
got a lot of options to do this slowly so
you don't take a huge tax kit or tax hit.
Number one, if you're charitably inclined at all, you can
use your stock to give some shares directly to your
charities or church or anything of choice. Five oh, one
C three charity and you avoid capital gains on those shares.
(32:12):
Beyond that, this is where direct indexing comes in. You
can throw this stock into a diversified portfolio where you've
got some active tax loss harvesting going on behind the scenes,
and you can gradually use short term losses on other
things in your portfolio to allow you to trim that
company stock exposure with no capital gains whatsoever. While you're
(32:35):
doing that, you can put some callers, which is an
option strategy on that stock where you maybe sell a
covered call on it and use the premiums on that
to buy some protective puts just to make sure that
the value of that stock doesn't completely fall out of
bed on you. So there's a lot of things to
do there. Get with a good fiduciary advisor that's got
these tools available to him or her, and they can
(32:57):
walk you through this and hopefully put together.
Speaker 3 (33:00):
They're a great strategy for you.
Speaker 4 (33:01):
All Right, Martin and Lovelin ask, it's almost time for
me to take my r m D, which is require
minimum distribution from your IRA.
Speaker 3 (33:10):
But I don't need the money right now.
Speaker 4 (33:12):
Is there some way I can avoid the income tax
hit when I do take the distribution Brian.
Speaker 6 (33:18):
Yeah, Martin, So the congratulations on reaching the tender age
of at least seventy three, because that's when requirementium distributions
kick in. The IRS basically has a gun to your
head and says the party is over. You got to
start paying taxes on these pre tax dollars. So in
any case, yeah, there's not a ton you can do
to reduce your income taxes just straight up, you know,
(33:39):
if I just want to pay less taxes like like
there used to be. But what you can do with
an R and B. There's something called if you're already
charitably inclined. This is very important because if you're already
giving money to charities, then you can send that money
directly from an IRA to the qualified charity. This literally
means that you're going to tell the custodian of your IRA,
you know, the financial institution behind it, I want you
to send these dollars to this organization, this tax id
(34:01):
and so on and so forth. You can't pull it
out and then write a check separately. In order to
do this that you can do up to one hundred
and five thousand dollars. Well that was twenty four one
hundred and eight thousand dollars is twenty twenty five. That
amount is excluded from your taxable income. Any amount up
to one hundred and eight thousand dollars gets completely excluded,
and then it goes straight to that charity. It does
cover your R and D. Here's one interesting weird thing
(34:22):
about this. You only have to be seventy and a
half right now. For whatever reason, they didn't update the
rules the age on a QCD qualified charitable distribution when
they change the age on the R and ds to
seventy three. So that's a weird one. I'll bet that'll
get fixed, but that sometimes trips people up.
Speaker 5 (34:37):
Anyway.
Speaker 6 (34:37):
If you're charitably inclined there, you go use your R
and D toward it. Speaking of taxes, Michael and Mason
own some municipal bonds which are known for being a
federal and state tax free if it's set up the
right way, and he's asking, my municipal bond ladder is
yielding a little less than my money market fund. Should
I hold onto this for the tax benefits or does
it make sense to rotate into higher yield fixed income
And he is dying to hear from Bob about.
Speaker 3 (35:00):
Michael. Great question, and here's how I like to approach this.
Speaker 4 (35:03):
I mean, I look at every bond portfolio that comes
across my desk, and we've got great tools where we
can just calculate, Hey, what's the yield to maturity if
I hold these bonds? Because bond prices move around all
the time based on the fluctuation of interest rates. So
you want to look at what's my yield to maturity
if I hold these things to maturity? And it's good
that you got a laddered you know, portfolio setup, so
(35:24):
you got you don't have all everything in one basket
on one data maturity, So that's good. But compare your
yield and then look at your tax situation. And you know,
a lot of times people love the idea of getting
tax free municipal bonds. But I think the point you're
raising here, Michael, is depending on my tax bracket and
how my income thing, my income strategy is structured, you
(35:48):
might be getting less on your tax free quote unquote
tax free you know, municipal bonds than just going ahead
and paying taxes on something that yields a higher rate.
So that's my answer. I would take a look at
the yield to maturity on these bonds, and then compare
the expected yield on an after tax basis to what
you could get in a taxable, higher yielding income fund.
(36:10):
All right, last week we've got Tony and Anderson. Hit
this one quick, Brian, my business is three to five
years from sale. How do I structure the proceeds now
to avoid a tax and investment scramble when the deal closes?
Speaker 6 (36:23):
Okay, Tony, we're gonna come back to your question because
I've got twenty seconds to barf up keywords you should google.
Speaker 5 (36:28):
So are there are things you can do?
Speaker 6 (36:31):
You're gonna want to look into qualified Opportunity zone rollovers.
If any of this is real estate, if you own
the building your businesses in, you might look at ten
thirty one exchanges. You can time it to installment sales,
spread it out over time.
Speaker 5 (36:42):
Another big one.
Speaker 6 (36:43):
A section twelve oh two Qualified small business doc. If
any of it is a C corp, then you can
do some really fun things there. I'm gonna throw it
back to Bob, but Jason, that's going to be a
whole section.
Speaker 5 (36:51):
At some point.
Speaker 4 (36:52):
You're listening to Simply Money presented by all Worth Financial
on fifty five krc the talk station.
Speaker 1 (36:58):
Think of a single mom taking the bus.
Speaker 8 (37:00):
Absolutely reliable information and of course not just one sided
view news.
Speaker 1 (37:05):
That affects you. At the top end to bottom of
the hour fifty five krz the talkstation.
Speaker 4 (37:15):
You're listening to some point money present up by all
Worth Financial on Bob Spon Seller along with Brian James.
All right, here's something you might not expect to impact
your portfolio, but it might actually do so.
Speaker 3 (37:26):
And that's used car prices.
Speaker 4 (37:28):
After years of skyrocketing values, something's finally happening.
Speaker 6 (37:33):
Out there in the car market and on used car lots. Brian, Well, yeah,
so this has gone on long time. Of course, the
pandemic screwed everything up with supply line. I remember we
did so many radio shows where we just talked about
the supply line problems, and I'm so glad that this.
Speaker 5 (37:46):
Is in the past.
Speaker 6 (37:47):
But anyway, when we're talking about all the trucks that
were sitting on the on the racetrack down there at
Sparta because they had nowhere else put them, because they
didn't have brains in them, because there were no tips
on it whatever. So but that seems to be swinging
the other way over the first half of twenty twenty five,
three year old used cars have average more than thirty
five hundred dollars.
Speaker 5 (38:02):
That was driven by the pandemic.
Speaker 6 (38:03):
But all of a sudden, the summer has sort of
frozen all of that, prices are finally dropping down. Those
same cars are now clocking in around twenty five thousand dollars.
Here's a fun one used Tesla prices. Teslas are known
for being a little on the spindy side, but actually
have it dropped below the general use car average. So
that's a brand with really strong resale value. The model
(38:23):
why itself is down about twelve percent, I believe Bob
and I just discussed this the other day, and the
cyber truck is down more than thirty percent. Now, those
two got some political stuff attached to them, so there's
more going on there than just supplying demand. But at
the same time, the point is, if you've been waiting
for prices to fall, this could be your chance.
Speaker 3 (38:40):
Well, this is the old supply and demand model, and
let's just leave the whole Tesla league alone, because you know,
let's face it, thirty percent of the country hates Elon Musk,
so they couldn't be caught dead in the Tesla.
Speaker 6 (38:52):
That was a terrible job of leaving it alone, by
the way, but that opens up opportunities for other people.
So anyway, a new car incentives, you know, things like
zero percent financing and stronger leasing deals are drawing some
buyers back to the showrooms away from the used car market,
and then that supply starts to dry up. High used
(39:14):
car loan rates, you know, Brian, I see this with clients.
Speaker 4 (39:18):
They come in, whether they want to buy a used
car or an RV or something like that. These these
interest rates are north to ten percent in a lot
of cases, and that's dampening demand on used car. You know,
last time I check, ten percent is way higher than zero.
So people run the math. They're not foolish, and they say, yeah,
I'll just buy a new car.
Speaker 6 (39:36):
So I'm gonna knit together a couple of things that
we've talked about just here today. So I had a
client come in the other day and we're just planning
on things they need to buy a car anyway, sometime
in the next six months. He also happens to be
just hitting that require minimum distribute distribution age. That magical
birthday of seventy three anyway, he's got to pull out
money in January. So what we're doing is we're hoping
that we'll get back to the old days of inventory
(39:58):
clearances so he can get a really good deal. Told
them to try to buy it between Christmas and New
Year's and try to get them to accept a payment
after January first, so we will knock out your RMD
and pay cash for a car and be pretty happy.
Speaker 5 (40:08):
Smart people.
Speaker 3 (40:09):
Thanks for listening.
Speaker 4 (40:10):
You've been listening to Simply Money, presented by all Worth
Financial on fifty five KRC, the Talk Station.
Speaker 1 (40:16):
Your news when it happens, breaking this tonight. We are
coming to you live news when you need it. You're
going to want to listen to this news when you
least expected.
Speaker 8 (40:26):
We've never quite seen anything.
Speaker 1 (40:28):
Like this, cheaping you up today on what's happening. This
is going to be quite the event tonight. You're going
to want to.
Speaker 5 (40:33):
Make sure you leave the house extra.
Speaker 1 (40:34):
Early, locally, nationally, everywhere in between. I don't know what
I would do about it. Fifty five KRC, The Talk Station,
Simply Money News
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
My Favorite Murder with Karen Kilgariff and Georgia Hardstark
My Favorite Murder is a true crime comedy podcast hosted by Karen Kilgariff and Georgia Hardstark. Each week, Karen and Georgia share compelling true crimes and hometown stories from friends and listeners. Since MFM launched in January of 2016, Karen and Georgia have shared their lifelong interest in true crime and have covered stories of infamous serial killers like the Night Stalker, mysterious cold cases, captivating cults, incredible survivor stories and important events from history like the Tulsa race massacre of 1921. My Favorite Murder is part of the Exactly Right podcast network that provides a platform for bold, creative voices to bring to life provocative, entertaining and relatable stories for audiences everywhere. The Exactly Right roster of podcasts covers a variety of topics including historic true crime, comedic interviews and news, science, pop culture and more. Podcasts on the network include Buried Bones with Kate Winkler Dawson and Paul Holes, That's Messed Up: An SVU Podcast, This Podcast Will Kill You, Bananas and more.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.