September 3, 2025 • 41 mins
On today’s episode of Simply Money presented by Allworth Financial, Bob and Brian break down what the Fed’s preferred inflation gauge is signaling and why mortgage rates may stay stubbornly high despite potential rate cuts. They’ll also explain new tax rules coming in 2026 that could change how you give to charity, and highlight a new study showing many retirees may outlive their savings. Plus, they unpack the “action trap” that even smart investors fall into, compare retirement systems around the world, and tackle your questions on umbrella insurance, capital gains, risk tolerance in marriage, and managing tech-heavy portfolios.
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Episode Transcript
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Speaker 1 (00:00):
A things happen when you're president.
Speaker 2 (00:02):
Will be busy. What will yours look like?
Speaker 1 (00:04):
A new days coming?
Speaker 3 (00:06):
Ryan Thomas tomorrow morning at five on fifty five KRC.
Speaker 4 (00:15):
Tonight, What the Fed's preferred inflation rate says about where
we might be headed. Plus change is coming to charitable giving,
and we answer your money questions. You're listening to Simply Money,
presented by all Worth Financial on Bob Sponsller along with
Brian James. All Right, let's talk about the latest on inflation,
because yes, it is still a thing. It's hanging around
(00:36):
and what the Federal Reserve might do next could impact
everything from your mortgage to your investment portfolio.
Speaker 1 (00:42):
Let's get into it. Brian, Well, here's the headline, Bob.
Speaker 5 (00:45):
The Fed's favorite measure of inflation, the one they watch
closer than any other. It ticked up a little bit
in July. How a big jump though. This is the
PCE index. It's the Personal Consumption Expenditures Index, which we
know that's the most riveting title we can possibly slap
on things to start off a lovely evening here. So
but what matters is it's showing the prices are still
(01:05):
coming up. That the personal consumption the PCE index is
it excludes things like food and energy prices. The FED
believes that that's a way to get a clearer picture
of what's going on because those are particularly volatile. Although
ironically energy hasn't been a big concern from what I remember,
food certainly has lately. In any case, that core number
(01:26):
is up two point nine percent over the past year.
Fed's target is two percent, So we're still running a
little hot.
Speaker 1 (01:31):
But this is this is about the same.
Speaker 5 (01:33):
Range, is what that we've We've been running a little
hot for a while now, so I think it's just
a confirmation that we are still stuck in the mud here.
Speaker 4 (01:40):
Yeah. I was listening to a couple folks talk over
the weekend just I like to check in, I don't know,
between football games. And I think what's interesting here heading
into this FED announcement on September seventeenth, is even if
the FED cuts rates a quarter point, when you start
to look at the yield curve going out three, five, ten, fifteen,
twenty thirty years, the long end of the curve is
(02:03):
still it's steepening.
Speaker 1 (02:05):
It's not coming down. My point in saying that.
Speaker 4 (02:08):
Is and I think this is why the President and
Treasury Secretary Beston keep lobbing saying that interest rates should
be at you know, zero point five percent or one.
I think they know that mortgage rates are not going
to come down. The long end of this curve is
not going to come down. And let's remind everyone mortgage
rates are largely tied to the ten year. My point is,
(02:31):
even if we get a quarter point rate cut in September,
that's not going to move the longer end of the
curve at all. And if anything, we're starting to see
it steepen because growth is good. I mean, the S
and P earnings are thirteen percent higher than they were
a year ago. And so I think the Fed's in
a tough spot here with inflation. And we do see,
(02:52):
you know, job numbers coming down. It's getting a little
harder to find a job. So you know, the Fed
is trying to balance a few different things all at once,
which is all what they always try to do. It's
gonna be interesting to watch here, Brian.
Speaker 5 (03:05):
Yeah, and I want to break up another point you
mentioned mortgage rates. I want to be sure everybody's clear
out there. The FED is not sitting here, sitting here
saying a thirty year mortgage is going to be x percent.
Speaker 1 (03:15):
That's not what they do.
Speaker 5 (03:17):
We all get hung up on that because that's the
most commonplace where interest rates directly and immediately affect us.
So Federal Reserve does set the Federal funds rate, and
then that trickles through the economy. But in addition, as
you mentioned the ten year treasury yield, that's something that's
driven by supply and demand in the overall market for bonds.
Investors wanting to buy bonds or not, or wanting to
dump bonds will have an impact on mortgage rates. So
(03:40):
don't be looking to the Fed for the exact instruction
on what a fifteen year or thirty year is going
to be.
Speaker 1 (03:44):
It's a little bit a little bit different than that.
Speaker 4 (03:46):
But no, no, I think it's gonna be fun to
watch or interesting to watch because you know, the Senate
is back from their recess now that we're through Labor
Day and they've got to negotiate a budget here before
we have a quote unquote shutdown at the end end
of the month. You got the FED meeting on the seventeenth,
and more data flying in you know all the time.
Speaker 1 (04:06):
We've got some tariff news over the weekend.
Speaker 4 (04:09):
The courts have gotten involved here to potentially get in
the way of President Trump's tariff policy. Sounds like that's
heading all the way up to the Supreme Court possibly,
So a lot going on here in September.
Speaker 5 (04:21):
Brian, Yeah, let's trot out some other things we've drilled
into little more. The next thing you've talked about there
was the job of market here. So the average is
just about thirty five thousand jobs per month, and that's
about where we were. But after two thousand and seven,
two thousand and nine, in July we only saw about
seventy three thousand, while May and June were revised down
by about two hundred and fifty eight thousand jobs. So
(04:43):
job market is there's a Paul's doing okay, but a
little bit less robust than initially reported. Unemployment is a
little over four percent, that's usually where that's about where
we are in terms of full employment, and wage growth
is moderately strong. We're looking okay on that front, about
three point nine to four percent year over a year.
So I think there's some good things and there's some
(05:03):
things that are concerning out there. Again, no reason for panic,
but just things to pay attention to as you said.
Speaker 4 (05:08):
Yep, you're listening to Simply Money presented by all Worth
Financial on Bob Sponseller along with Brian James. All Right,
something else we want to draw your attention to. Here
are some new tax rules for charitable giving coming down
as part of the Big Beautiful Bill. There's some minor
changes here and it could affect how much you give
and how you give to charities moving into twenty twenty six.
(05:31):
Let's get into that a little bit, Brian, because I
find in client meetings still people are not taking full
advantage of how to do their charitable giving based on
current tax policy.
Speaker 1 (05:43):
Yep.
Speaker 5 (05:43):
The One Big Beautiful Bill did a lot of big things.
That was signed on July fourth of twenty five. And
that's one of the things we haven't talked about a lot,
is it's going to reshape a little bit about how
we benefit from charitable giving. This starts in twenty twenty six.
And so if you are if you are a non eyezer,
that means that you have enough deductions that you're going
to submit I'm sorry, you don't have enough deductions that
(06:06):
you're going to take the standard deduction right if you
can fog a meer you can deduct. A married couple
can deduct thirty thousand dollars, an individual can deduct fifteen
thousand dollars worth of income. If you are a non itemizer,
one of those standard deduction people, then you can take
up to one thousand bucks for a single or two
thousand dollars even if you don't itemize. If you do itemize,
now you're facing a new hurdle. Only donations that are
(06:28):
over a half percent of your adjusted gross income can
be deducted, and supporters in that top tax back that
are going to see the value drop from thirty seven
percent to about thirty five percent. So some changes come
into if you were still taking advantage of that little
bit that you could deduct while being an itemizer or
a non itemizer, be paying attention for how that's going
to change here in twenty twenty six qualified charitable distributions.
(06:51):
These are for those of you who are seventy and
a half years old. If you where you're forced to
take money out of your IRA. Now remember we always
get confused by this. The require fired minimum distribution age
if you weren't there yet, is now seventy three, but
they did not change the age for qualified Charitable distributions,
you are eligible to send money directly to charities from
your IRA, and if you are of that age, it
(07:12):
will qualify.
Speaker 1 (07:13):
For your RMD.
Speaker 5 (07:14):
But those are still things that you can do and
that's something you should look into if you have hit
that age.
Speaker 4 (07:21):
Yeah, just to summarize here, and this is not a
big deal, but just for the folks that are still
taking that standard deduction every year, nothing changes. But I
think for the people that do give that thousand to
two thousand dollars a year to charity and didn't think
they could take the deduction, you can starting in twenty
twenty six. So just something to look out for as
(07:41):
you begin your tax preparation or planning for twenty twenty six.
All Right, we also want to hit on a new
study that came out about people outliving their money.
Speaker 1 (07:50):
Brian.
Speaker 4 (07:51):
This is a new study from a firm called Seniorly,
a senior living marketplace, and they reveal that retirees in
forty one states, including Ohio and Kentucky are projected to
outlive their savings with an average shortfall of one hundred
and fifteen thousand dollars.
Speaker 1 (08:09):
Brian, This p you know This just means that folks
are going.
Speaker 4 (08:12):
To have to rely on kids, relatives, you know, grandkids potentially.
You know, there's a lot of retirees that are struggling
and at the risk of running out of their savings.
Speaker 5 (08:23):
Yeah, and this is I always like to know, you know,
it's good to know what what what Ohio Kentucky are
you know, kind of nominally, but how do we rank overall?
So obviously there are bigger problems elsewhere as you might guess.
Some of the states that with the biggest concerns there
are the more expensive ones. So the worst outlook is
New York, where there's a shortfall of about four hundred
(08:43):
and fifty thousand dollars, meaning most people, the average person
needs four hundred and fifty thousand dollars more to be okay,
Hawaii's a little over four hundred thousand DC at the
four oh seven, Alaska three forty two, California three thirty seven.
But here in Ohio are projected out nobody has enough
money is with this works out, But the projected shortfall
(09:04):
for an Ohio and or Kentucky in around one hundred
and fifteen thousand. So believe in this area because we
are a lower cost of living area. The gap isn't
quite so scary. What they're doing here is they combine
data on taking life expectancy at age sixty five, what's
the everage, social security.
Speaker 1 (09:18):
Income, household net worth, and so on and so forth.
Speaker 5 (09:21):
But just making sure that if we look at all
the different resources and figure out you know, and really
what matters here, Bob, is what are you going to
do about this?
Speaker 1 (09:29):
If you if this is a concern for you.
Speaker 5 (09:31):
And it always starts with knowing where you are right now,
understand what your resources are, and have at least a
basic idea on what you want to do with all
of these things.
Speaker 4 (09:41):
Yeah, and for the people that you know fall into
this category, and we run into those folks you know
from time to time. It's just like you said, a
lack of planning. And some people, let's face it, they're
in situations they can't control from a health standpoint, or
you know, a disability or something like that.
Speaker 1 (09:57):
I'm not talking about those folks.
Speaker 4 (10:00):
But the key point here is get out in front
of this, take a look and model out.
Speaker 1 (10:04):
I think a lot of.
Speaker 4 (10:05):
People forget that inflation eats away at your purchasing power.
You know, over time and then the whole longevity thing
that we talk about all the time, people are just
living longer. So you know, when you when you just
pull the trigger on retiring a lot of people or
some people just say hey, it's all gonna work out,
blah blah blah, but they forget they're likely gonna work
(10:25):
they're they're likely gonna live longer, and inflation eats away
at their savings. Some people are too conservatively invested. You
roll all that up together and you run into a real,
you know, potential problem here of running out of money
right now.
Speaker 5 (10:41):
It's not everybody, So the same study does list a
few states that actually have surplus, so people that are
doing okay or in Washington, Utah, Montana, Colorado, Iowa, Minnesota,
in a few other states. So not everyone is stuck
in this is stuck in the mud here. So that
kind of shows that it is possible to pull it together.
So again, like just make sure you know what your
resources are and what you're shooting at. If you haven't
(11:03):
had that discussion with your spouse, then it's really time
to do that.
Speaker 1 (11:08):
Here's the all Worth advice.
Speaker 4 (11:09):
Take the time now to stress test your income in
your savings. That's how you make sure you won't just retire,
you'll stay retired. Coming up next, we're going to discuss
something smart investors may fall into, something called the action trap.
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC the Talk station Org.
Speaker 2 (11:31):
It's one policy going to take our capital back. We're
taking it back after another.
Speaker 5 (11:36):
You burn a flag, you get one year in jail
and it goes on your record.
Speaker 3 (11:39):
Who knows what he'll check off next on fifty five
KARC de Talk Station.
Speaker 6 (11:45):
All Worth Financial a registered investment advisory firm. Any ideas
presented during this program are not intended to provide specific
financial advice. You should consult your own financial advisor, tax consultant,
or a state planning attorney to conduct your own due diligence.
Speaker 1 (12:05):
You're listening to Simply Money.
Speaker 4 (12:06):
You're presented by all Worth Financial on Bob Sponseller along
with Brian James. If you can't listen to Simply Money
every night, subscribe and get our daily podcast. You can
listen the following morning during your commute in the car,
or at the gym, or on your walk around the neighborhood.
And if you think your friends could use some financial advice,
tell them about us as well. Just search simply Money
(12:26):
on the iHeart app or wherever you find your podcast
straight Ahead at six forty three, we're answering your questions
about umbrella insurance, big tax bills, and what to do
with one point two million dollars in deferred com plan assets.
All right, if you listen to our show each night,
we know that many of you are already very smart
(12:49):
with your money. You've built wealth, you've saved consistently, and
you're in pretty darn good shape.
Speaker 1 (12:54):
And that doesn't happen by accident.
Speaker 4 (12:56):
But even the most seasoned investors and Brian we running
of these folks from time to time. We're talking about
folks who've been at this for decades. They can get
pulled into what we're calling the action trap. Let's let's
unpack this one, because this is a real thing that
happens from time to time with folks.
Speaker 5 (13:13):
Yeah, a lot of this comes from fomo, right, fear
of missing out. There's a feeling when when the markets
are volatile or the headlines are moving around that if
you're not doing something, then that must mean you're doing nothing.
Speaker 1 (13:22):
And therefore you're missing out.
Speaker 5 (13:24):
And over the decades that you and I have both
been doing this, there's there's always some sexy thing out
there that we're supposed to be chasing and is gonna
solve all of our problems. Most recently it's AI and
and crypto, but in the past it was internet stocks,
and you know, in real estate and way way back
there were oil partnerships and all that kind of stuff
that everybody had to be doing. So it feels like
(13:44):
standing still is losing ground. So we all kind of
convince ourselves that we have to do this. I have
to do these kinds of things, So let's pump the
brakes a little bit. So reason we're talking about this.
Bankrate dot Com just did a really good breakdown on
the difference between investing and trading, and it's a great
reminder of the difference. So this thing is truly long term.
You're basically saying, yeah, I get how the economy works.
I get that the United States is the strongest place
(14:05):
to We're fortunate to be here in the first place,
and it's the strongest place to make money on the
face of the earth, if not the entire universe. And Therefore,
I'm buying into these companies that are profit motivated and
I trust their decision making. I know they're going to
find ways to make profits in whatever environment, and I'm
going to trust them to do that. Trading is a
little bit different. It's much more short term. It's about
trying to time the market, reacting fast, finding information that
(14:29):
nobody else seems to have, and you know, trying to
outsmart that next step there, and that you can be
right nine times in a row, wrong the tenth time,
and you're going to go right back to the beginning.
Speaker 4 (14:40):
Yeah, And the key word here is trying. I meant,
study after study shows that it's very difficult to trade
successfully over the long haul, meaning you know, outpace the market,
outpace what you would have done with just a good, responsible,
diversified investment portfolio.
Speaker 1 (14:58):
And yes, there are.
Speaker 4 (14:59):
People who w in short spurts, kind of like betting
on college football, but to do that consistently and make money,
the data just isn't there. In fact, most traders, short
term traders underperform the market, and some underperform it by
a big margin. Brian, I want to backpedal a little
bit and get into why, because occasionally I have people
(15:22):
coming into my office and want to get involved with
this stuff, and I think, especially retired folks, the two things.
Speaker 1 (15:30):
That crop up to me are boredom. People.
Speaker 4 (15:32):
You know, they're not working anymore, they don't have enough
to do, and they're bored and they're consuming news all
day and they just want to get involved because they're bored.
And then second, a sense of control. You know, with
so much going on in the world that is seemingly
quote unquote out of our control, people think that by
getting involved in short term trading they can regain some
(15:55):
control over their life. And that boredom combined with that control,
with having a lot of money and all these online platforms,
you can do some real damage.
Speaker 1 (16:05):
To your portfolio in a hurry if you're not careful.
Speaker 5 (16:08):
Yeah, let's talk about that damage here. We like our
studies here. This actually has a homegrown one that I'm
looking at right now from our chief investment officer, Andy Stout.
Andy went back and he does this every now and
that update the numbers, but he has built a report
for us to help our clients understand the impact of this.
So he went back and said, what if you invested
a million dollars in the S and P five hundred
twenty years ago, and then completely ignored it. You went
(16:30):
all rip banwinkle, fell asleep, woke up twenty years. What happens, Well,
over the past twenty years, that million dollars would have
grown to over seven million dollars, and it would have
averaged about a ten point three percent return. Again, that's
if you completely ignore it. You don't goof around with it,
don't try to jump in and out and so forth. However,
let's pretend for a second that you do read the
headlines and you get spooked and sometimes you pull it
(16:51):
all out. If you accidentally missed the ten best days
of the market, right, so we're talking literally seventy two
hundred sum seventy three hundred days. You know, in that
twenty year period, if you accidentally missed the ten best days,
your ten percent average that you got, if you lift
it alone, would have dropped to about six percent. Now,
if you miss the fifty best days, believe it or not,
(17:12):
now you have a negative rate of return over this
twenty year period. So yes, the data screams, just leave
it alone, buy things that you trust, and don't try
to get in and out. Don't try to jump in
and out because you will get hit by the dring.
Speaker 4 (17:23):
You're listening to Simply Money presented by all Worth Financial.
I'm Bob Sponseller along with Brian James.
Speaker 1 (17:29):
Brian. Here's something I.
Speaker 4 (17:30):
Tell people that just can't keep their hands off the
lever here, you know, and I just say it like this,
Let's make sure we're separating your serious money from your
play money. In other words, if you're somebody that just
has to get involved in this stuff and feel like
you're you know, in the game and can beat the market,
and you just love doing this stuff, carve out I
(17:53):
don't know, two to five percent of your portfolio and
let's just call it a sandbox if you will, and
go for it, you know, go with your gut, you know,
try to outpace the market. Do all those things, but
also have an accountability partner, meaning do it for three, six, twelve,
twenty four months, and then be honest and sit down
(18:14):
and say.
Speaker 1 (18:14):
How did you do? You know, did you underperform? What
was the tax result?
Speaker 4 (18:20):
Did it take up a bunch of time and energy
away from your family and other things that you probably
should have been doing. You know, how did you do
does it make any sense? And a lot of people
just want to go have the activity and treat it
like a hobby, but they don't want to look in
the mirror and say, how did I actually do? And
was this worth all the time and the energy and
(18:42):
potentially the losses involved.
Speaker 5 (18:45):
Yeah, and I'm always reminded of other there is one
baseball player out there, Bob, one professional baseball player who
in his career got one at that and got a hit.
His batting average is literally infinity. There's only one guy
out there in this situation, but he never got another.
And so the point of all that is is e
the greatest hitter in history will know because you know,
nobody saw enough in him to allow him another atvat
(19:06):
let alone, you know, a long term, longer term contract
or something like that. So my point in this is
also don't get hung up on that one time where
that one stock was a ten bagger on you, which is,
you know, great, that's awesome, but nobody really. What I've
found is oftentimes people really get fixated on that and
decide that or worse, they'll hear from a friend who
has a guy or has a woman who had these
ideas and this, and the friend reminds them of this
(19:29):
one time with this awesome return, and this person must
be the next Warren Buffett. Meanwhile, nobody ever steps back
and says, cool, what's the three year, the five year,
the ten year average? Is? Is this all you know
GYP certified investment returns that we can really rely on?
Speaker 1 (19:42):
Or is this just a fun story to tell at
a cocktail party.
Speaker 7 (19:45):
Yeah?
Speaker 1 (19:45):
And let's face it, human nature.
Speaker 4 (19:47):
I mean, everybody, if you're at the golf course or
a dinner party or whatever, you're always going to hear
about the winner, you know, but nobody's gonna come and say, hey,
let me tell you about these thousands of dollars that
I lost. How many times if we heard that from anybody,
virtually zero?
Speaker 5 (20:03):
And how many times did they lose it in an
IRA which means they don't even get the deduction on it,
or worst case scenario, they lost it in a roth IRA,
which means they didn't get a deduction on the front end.
Speaker 1 (20:13):
They don't get a deduction for the loss.
Speaker 5 (20:14):
And now there's a lot less money that's growing tax
free and compounding tax free forever. That's the worst place
to gamble with your dollars in a roth ira in
my opinion.
Speaker 4 (20:22):
Well, and even with us saying all this stuff, everybody,
there's a lot of people out there that just can't
help themselves. They're gonna have to scratch that itch. All
we're trying to call out here is do it responsibly.
Do it with a very small percentage of your portfolio,
and that sandbox account or play money account should be
mentally and logistically separate from your core portfolio. Different account,
(20:46):
different login, Keep it out of sight and out of
mind when you're thinking about your long term planning.
Speaker 1 (20:52):
Here's the all Worth advice.
Speaker 4 (20:53):
Even the smartest investors can be tempted to trade, but
long term wealth is built through discipline investing, not chasing
all the short term action that's out there. Coming up next,
we're breaking down how retirement works around the world and
what you could take from these global systems to strengthen
your own plan. You're listening to Simply Money, presented by
(21:15):
all Worth Financial on fifty five KRC the Talk station.
Speaker 2 (21:20):
Today.
Speaker 3 (21:21):
It's definitely it's a good day to be in Florida. Oh,
I'm having a good KQ fifty five KR the Talk Station.
Speaker 2 (21:31):
Are you drowning an irf C and iHeartRadio station.
Speaker 4 (21:41):
You're listening to Simply Money, presented by all Worth Financial
mot Bob Sponsorer along with Brian James. So, we came
across an article comparing retirement systems.
Speaker 1 (21:50):
From around the world.
Speaker 4 (21:51):
We're not here to say the US has it all
wrong or that other countries have it figured out.
Speaker 1 (21:57):
You know, I'm not planning on moving out of the
US anytime soon.
Speaker 4 (22:00):
I don't know about you, Brian, but the different models,
it's just interesting to study how governments and people in
general try to skin the cat here. You know, if
you look at places like Denmark, the Netherlands, even Canada,
it offers some interesting food for thought on how different
countries and people approach retirement, especially if you're trying to
(22:23):
make sure your money lasts that thirty plus years during
retirement that we always talk about and we always encourage
our clients to plan for.
Speaker 1 (22:31):
Brian. Yeah.
Speaker 5 (22:33):
So, so the United States here we have focused really
really again, you know, since the beginning, we have.
Speaker 1 (22:37):
Focused on the private enterprise.
Speaker 5 (22:39):
That is really what everything is about here, and we
have designed ways for people to benefit from private enterprise.
And then that has to do with our bankruptcy laws.
The depreciation rules that make it very friendly to invest
in real estate, and just the overall are focus now
on your you know, on the idea that we're going
to fund most of our own personal retirements with four
to one case which at the end of the you're
(23:00):
winding up investing in private enterprise. That is, of course,
not how it goes elsewhere. So let's dig into this.
Let's start with Denmark. Denmark has a public pension system
that is backed and supported by the government, but there's
also very widespread and negotiated workplace pensions in addition, so
this isn't forced stuff. It's just a culture in the structure.
Everybody just kind of assumes.
Speaker 1 (23:18):
This how that's how it is.
Speaker 5 (23:20):
We used to have a little bit of this forties
and fifties and sixties, you know, we had a similar
type of environment. But over time, again as we've decided
that private enterprise and growth of equity is more important
than anything else, we've kind of made it less attractive
to invest in pensions and more attractive to invest in
the kind of things that again continue to support that
crowd sourcing of private enterprise investment.
Speaker 1 (23:42):
Yeah, and I think this is.
Speaker 4 (23:43):
A good way to just call out, you know, leaving
the politics out of it.
Speaker 1 (23:48):
It's just a different philosophy of.
Speaker 4 (23:50):
The role of government versus the role of businesses and
individuals in terms of creating wealth for themselves. You know,
if you if you rely and take advantage of quite frankly,
the profit motives of US companies and lists. Face it,
the US stock market has done incredibly well over the
(24:10):
long term. It's great for people that have been able
to embrace that and participate in that. For the ones
that have not or cannot, they're left behind, you know,
because these pension plans, any kind of government pension plan.
I mean, let's look at Social Security, it's underfunded. You know,
people that cannot get on board with the idea that
(24:31):
you've got to take ownership of that and participate in
the stock market long term. It's just that's what we're
trying to call out here, the whole personal responsibility thing
and understanding where you live and how the game is
played so that you can stack the deck more and
more in your favor.
Speaker 1 (24:51):
Let's talk about the Netherlands.
Speaker 4 (24:53):
You know, they've created a multi layered model with very
strong regulatory foundation. They encourage savings through both employers and
personal investing, and they are pretty transparent about long term expectations.
Proponents of that system say it gives retirees some predictability.
And let's face it, Brian, a lot of people want that.
(25:13):
They just want they just want to know what they're
gonna get. What's my check gonna be, you know when
I stop working. And in the United States we get
some of that through Social Security, but let's face it,
most people can't and don't want to live on Social
Security alone.
Speaker 1 (25:27):
That's right.
Speaker 5 (25:28):
Yeah, So that leaves the question of in here in
the United States, a lot of people and this is
what drives a lot of the concern. Most people, of
course have four oh one case iras we've invested, because
that's literally what we do, that's what we talk about
on the radio all of these evenings. And so what
that means is that your pension quote unquote can kind
of go up and down a little bit versus the
more predictable locked in approach. However, that locked in approach
(25:51):
isn't going to result in as much money. There is
a cost to those guarantees. That does not make them bad,
but it does change the math. And so far, it's
easy to say, right when the market is at a
peace as it is right now, it's easy to say
this is the better way to go. But there will
be some temptation the next time we go through at
twenty twenty two or two thousand and eight. Those times
are coming and they're no fun. We'll see them again.
(26:11):
Let's look to our neighbors to the north. How about Canada.
So Canada has a base public pension for everybody, and
then on top of that there are private and workplace
options that that really give people room to grow their savings.
And proponents say that the Canada is really good at
providing the stability there of not the huge benefits, but
consistent benefits, which is basically what I was saying. The
United States has taken the opposite approach. We have bigger benefits,
(26:33):
if not huge benefits. You can really build your own
wealth come from nothing here. This country is really the
best place on the planet to do that. But you
got to do it, and you got to do it right.
That is at the expense of consistency. It gets scary
here when we go through those bumpy markets. We have
a lot of flexibility, a lot of choice. You want
to retire sixty two, start a consulting business. Knock yourself out.
Speaker 1 (26:52):
Go do it.
Speaker 5 (26:52):
If you want to convert a part of your investments
to a ross and never pay taxes again, cool, do
that too. That kind of control that we offer here
is not universal. Some don't value it. But I think
that's really because a lot of people just don't understand it.
Speaker 4 (27:05):
Yeah, I think the key point we're trying to point
out to folks here is, you know, regardless of whether
you have these public pension plans in other countries or
social security here, some people in the US try to
create their own kind of public guaranteed income plan through
things like fixed annuities and things like that, just that
lower but safer income stream. The point is, no matter
(27:28):
how you slice it, you got to figure out a plan,
you know, factoring in taxes, what you plan to spend
or want to spend or need to plan, and make
sure the asset base is there, whether it's a guaranteed
income stream, an investment portfolio, or a combination.
Speaker 1 (27:45):
Of all the above.
Speaker 4 (27:46):
And let's face it, fifty years ago, retirement might have
lasted ten to fifteen years. Now, if you retire at
sixty five, there's a good chance one spouse could live
to be ninety five or even one hundred years old.
And that's part of the struggle that all of these
countries are facing, including the United States, when you look
at building these public pension retirement options, fewer people in
(28:09):
the workforce, supporting more and more retirees that are living
longer and longer.
Speaker 1 (28:15):
The math just doesn't add up a lot of.
Speaker 5 (28:17):
Times, right, So what a countries do to manage that? Well,
some have been raising retirement ages. France and China did this.
Others increase payroll taxes. Right, Let's let's let's bring in
more income from the people who are working now to
assist those who are not working.
Speaker 1 (28:30):
And some will reduce the benefits.
Speaker 5 (28:32):
And here in the US there's and we talk about
this just about every meeting, it feels like anymore, there
is talk about changing how Social Security is taxed or
even means testing future benefits right now.
Speaker 1 (28:42):
Neither of those is new.
Speaker 5 (28:43):
By the way, So Security is taxed, you are paying
taxes on when you get your SOB scurity income back.
And I would argue we already means test a little bit.
The more income you make, the higher tax you pay
on your Social Security it's still among the most friendly
of taxes on income here in this country. But rest assured.
So security is taxed and there is a hole in
the bucket. So we do need to either figure out
whether we're going to tax more on workers, or reduce
(29:04):
benefits or change change ages.
Speaker 1 (29:07):
And all that kind of stuff. So lots lots more
to come on that. Here's the all Worth advice.
Speaker 4 (29:11):
You don't need a government mandated system to have a
strong retirement. Learn from what others do well, then use
your freedom to build something even stronger. Next it's another
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Simply Money, presented by all Worth Financial on fifty five
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Speaker 3 (30:12):
Talk about it here fifty five KRC the talk station.
Speaker 4 (30:20):
You're listening to Simply Money, presented by all Worth Financial
lumbob sponsller along with Brian James. Do you have a
financial question you'd like for us to tackle. There's a
red button you can click while you're listening to the
show right on the iHeart app. Simply record your question
and it will come straight to us.
Speaker 1 (30:37):
All right.
Speaker 4 (30:38):
Leading us off tonight, Brian is dan in Columbia Tusculum.
He says, how much umbrella insurance do you really need?
And can you provide a scenario where one would actually
need to use it?
Speaker 1 (30:50):
Oh?
Speaker 5 (30:51):
Sure, scenario. Well, there's lots of scenarios. That's why we
call them umbrella policies because they.
Speaker 1 (30:56):
Cover a lot of different things.
Speaker 5 (30:57):
So really the big thing here this is the umbrella
is the type of thing you tack onto your property
and casualty insurance policy, your homeowners insurance, and it's for
your dog bite somebody or somebody slips on the ice
in front of your sidewalk, or you have young drivers.
That's where it really hit home for me when we
started getting our kids license.
Speaker 1 (31:14):
So there's risk there. So you have to start with
what do you have at risk?
Speaker 5 (31:19):
You've got home equity, you've got retirement accounts, broker's accounts,
maybe business interest savings, those kinds of things. Income potential
of the next ten twenty years. You know, if you're
forty five, you're earning two hundred thousand dollars a year,
you could expect two to four million dollars of future
income to be at risk. Where are you exposed? Well,
if you're a homeowner, you've got a pool of trampoline,
dog we've talked about all that lifestyle. Maybe you like
to have large parties, you're volunteering on boards where there
(31:41):
can be liability, those kinds of things. Most carriers will
sell umbrella insurance and million dollar increments, so a good
starting point is one to two million. That sounds like
an enormous amount of insurance. However, don't forget that the
risks that are covered here are relatively rare in nature.
Therefore the coverage is cheap. The risks are rare, but
if they do come up in your world. If your
number comes up, they can be really, really expensive. So
(32:02):
I hope that helps kind of clarify that question a
little bit. Let's move on to Bob and Amberley Village.
Uh oh, I see one comment here, Bob that I
think we're gonna have a little Here's what you should
have done.
Speaker 1 (32:13):
My wife and I just sold.
Speaker 5 (32:15):
Past tense, sold a rental property, and the game pushed
us into a high bracket. How can we reinvest the
proceeds without creating another huge tax bill?
Speaker 1 (32:22):
What happened here, Bob?
Speaker 4 (32:25):
Well, I mean, obviously we don't know the whole situation,
and Bob, we're not piling on here, but I think
the proverbial water has flown under the bridge here, meaning
you already sold it, you got the tax bill.
Speaker 1 (32:36):
What could you have done?
Speaker 4 (32:37):
You could have looked into things like ten thirty one
exchanges if you want to take that rental property and
avoid the capital gains taxes by diversifying into a broadly
diversified portfolio of real estate. That's something that we often
talk to our clients about if they're faced with these
massive tax bills when they're going to sell a piece
(32:58):
of property.
Speaker 1 (32:59):
So that's what you could have done. What do you
do moving forward?
Speaker 4 (33:02):
And by the way, there's nothing wrong with making a
pile of money and paying taxes, so we should also
congratulate you on, you know, running a successful rental property business.
Let's face it, you only pay taxes when you make money,
so good for you moving forward. When you reinvest that money,
just use things like direct investing.
Speaker 1 (33:23):
Tax loss harvesting strategies.
Speaker 4 (33:25):
Have some things moving in the background with your newly
formed investment portfolio, so you don't get a surprise tax
bill hit, you know, moving down the road in case
you have a big winner in your overall stock portfolio.
All right, Kelly and Northside says, my husband and I
have a totally different risk tolerance.
Speaker 1 (33:47):
So how in the world are we supposed to.
Speaker 4 (33:49):
Achieve financial freedom if we have completely different ways of
wanting to go about it? Brian, this is a great
question and one that I run into from time to time.
Speaker 5 (33:59):
Yeah, go figure and wives tend to disagree on things.
Who knew, Yeah, so this is fairly common. People come
with different experiences in different just different things they have
been through, and that results in just totally different opinions
on how we should handle financial planning. It's not uncommon
that we'll have a married couple where one spouse is
super aggressive, high roller. I know the stock market is
the best place to be over the long term, so
(34:21):
that's where I just want to put the most money there.
And then somebody else will say, you know what, I'm
just not comfortable with that. I can't handle the ups
and downs. I get too upset when things start trying
to drop. Now, obviously, the very first thing we need
to be doing here is communicating. So the fact that
these two people are already in the same room and
have had this discussion good for them, because so many
people out there will just realize that there's a conflict
and simply shut down. And that's a terrible way to
(34:42):
run a marriage, let alone.
Speaker 1 (34:43):
A financial plan.
Speaker 5 (34:44):
So I'm glad that Kelly, you and your husband are communicating.
There another way to think about this. You can, of course,
you know, you each control your own investments. You've each
got four to one k's iras that make your decisions independently,
but understand how those puzzle pieces come together to form
a plan that fits the whole fan. Another thing might be,
you know, perhaps instead of worrying about different risk tolerances
(35:05):
for the different investments. Maybe this particular couple should look
at a larger emergency fund. Let's carve out more dollars.
You know, if the average person has six months worth
of expenses, let's make sure we have twelve months, or
maybe even twenty four months. Perhaps that can get Kelly
to a position where she can say, Okay, I get it.
The investments, the longer term stuff is going to be bumpy.
I understand that because I've got two years worth of
(35:28):
savings sitting in cash, two years worth of expenses rather
sitting in cash.
Speaker 1 (35:32):
So if the stuff.
Speaker 5 (35:33):
Hits the fan, then I'll know we could float for
two years without hitting those long term investments. So these
types of conflicts about risk tolerance don't necessarily have to
impact the investment portfolio. Find a different way to solve
the problem, and just be open minded to what the
solutions might be. Tony and Lebanon. Tony, speaking of aggressive investors,
our portfolio is heavy in tech stocks after that last
decade's run up. If we trim these back, Now, what's
(35:55):
the smartest way to rebalance this without getting absolutely hammered
by these capital gains?
Speaker 4 (36:00):
Well, Tony, here here's what I'd say, in terms of
how to start out here, get with a good fiduciary
financial plan or financial advisor, and let's just put the
proverbial car up on the rack, hook up the diagnostic tools,
and let's look at the current state of affairs.
Speaker 1 (36:17):
How much are the games, what is the tax exposure?
Speaker 4 (36:20):
How overly allocated to tech in general are you or
in any one company you.
Speaker 1 (36:26):
Know exposure are you.
Speaker 4 (36:28):
Let's let's find out what we're dealing with here and
then develop a strategy to gradually tackle the problem.
Speaker 1 (36:34):
If there is one.
Speaker 4 (36:36):
You don't have to make drastic changes right away, cause
that can tend to run up the tax bills significantly.
So there are strategies out there once we understand and
get our arms around what the situation is, you know,
things like direct indexing, putting collars around those large tech
positions to protect the downside risk, and gradually manage out
(36:59):
of that situation. Assuming you've got one staring you in
the face, get with a good advisor, develop a plan.
Don't make any rash decisions right now. There are ways
to gradually move yourself out of this situation and feel
better about the overall allocation of your portfolio moving forward.
All right, coming up next, I've got my two cents
(37:22):
on just helping our parents deal with latter life issues
involving cognitive impairment. You're listening to Simply Money, presented by
all Worth Financial on fifty five KRC, the talk station,
Mark Levin.
Speaker 7 (37:37):
Let me tell you, so, the Internet is breeding evil, breeding.
Speaker 1 (37:41):
Evil, and TikTok is the main culprit.
Speaker 7 (37:43):
And I don't know what's happening with TikTok, but that
damn thing needs to be sold now and it needs
to be cleaned up. And I don't want to hear
about free speech and everything else. It's a private company.
The company needs to clean it up because this is crazy,
which been the communist Chinese and all the crap that people.
Speaker 2 (37:59):
Put on this stuff.
Speaker 3 (38:00):
Our Glivin tonight at ten oh six on fifty five KRC,
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Speaker 4 (38:19):
You're listening to Simply Money, said by all Worth Financial
on Bob Sponsorer along with Brian James. All Right, Brian,
I want to relay a meeting, you know, just some
contents of a meeting I had just last week heading
into the holiday weekend, and it just brings up another
reminder of the importance of being proactive and communicating with
(38:40):
our parents and loved ones that are advanced in age.
You want to get out in front of some of
these cognitive impairment issues to prevent a potential you know,
disaster down the road. In this case, this is a
couple that I've worked with with for over thirty years.
Wonderful people. I love them dearly. The husband is very
(39:00):
independent minded person, very smart. They've been great clients, but
he's been diagnosed with Parkinson's and so you take this
guy who has pretty much run the whole show financially
for his family. Wife's been minimally involved, and now we're
having to deal with what happens when the husband is
getting to the point where he can no longer you know,
(39:23):
run the show and steer the ship, you know, by
himself anymore. And it was a very difficult conversation or
meeting to have. Thankfully, their son was there. Who's their poa.
You know, We've got some good things in place, but
it's just there's a lot of work to do here
with their attorney, with managing bank accounts, with preventing their
(39:45):
computers from getting hacked. You know, they're dealing with outdated computers.
They don't really log into their bank accounts very much,
and when they do, you know, I don't know how
dated the passwords are. We talk about identity, theft and
other things all the time. There's just a lot of
things to unpack here and good meeting, but again a reminder,
(40:05):
get out in front of this stuff early, at the
first signs of any cognitive impairment, to make sure that
the train doesn't run off the tracks here quickly.
Speaker 5 (40:14):
Yeah, and that's one of our our roles as a fiduciary,
and hopefully anybody acting as a fiduciary watches for this stuff.
So as an advisor, we get to, of course, have
some pretty intense conversations about money and things, and we
ask a lot of questions and we receive questions and
sometimes those questions start not making sense, or sometimes they
were just asked five minutes ago. We see the same
things as you do, as you do out there for
your loved ones. So we do have processes where we
(40:36):
identify that and flag it so our other employees know
that we need to think twice.
Speaker 4 (40:40):
Before we react to some of these things. Be on
the lookout, all right, thanks for listening tonight. You've been
listening to Simply Money, presented by all Worth Financial on
fifty five KARC, the talk station.
Speaker 2 (40:52):
Who wants to Be Rich? We call them every day millionaire.
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A new days coming?
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Ryan Thomas tomorrow morning at five on fifty five KRC.
Speaker 4 (00:15):
Tonight, What the Fed's preferred inflation rate says about where
we might be headed. Plus change is coming to charitable giving,
and we answer your money questions. You're listening to Simply Money,
presented by all Worth Financial on Bob Sponsller along with
Brian James. All Right, let's talk about the latest on inflation,
because yes, it is still a thing. It's hanging around
(00:36):
and what the Federal Reserve might do next could impact
everything from your mortgage to your investment portfolio.
Speaker 1 (00:42):
Let's get into it. Brian, Well, here's the headline, Bob.
Speaker 5 (00:45):
The Fed's favorite measure of inflation, the one they watch
closer than any other. It ticked up a little bit
in July. How a big jump though. This is the
PCE index. It's the Personal Consumption Expenditures Index, which we
know that's the most riveting title we can possibly slap
on things to start off a lovely evening here. So
but what matters is it's showing the prices are still
(01:05):
coming up. That the personal consumption the PCE index is
it excludes things like food and energy prices. The FED
believes that that's a way to get a clearer picture
of what's going on because those are particularly volatile. Although
ironically energy hasn't been a big concern from what I remember,
food certainly has lately. In any case, that core number
(01:26):
is up two point nine percent over the past year.
Fed's target is two percent, So we're still running a
little hot.
Speaker 1 (01:31):
But this is this is about the same.
Speaker 5 (01:33):
Range, is what that we've We've been running a little
hot for a while now, so I think it's just
a confirmation that we are still stuck in the mud here.
Speaker 4 (01:40):
Yeah. I was listening to a couple folks talk over
the weekend just I like to check in, I don't know,
between football games. And I think what's interesting here heading
into this FED announcement on September seventeenth, is even if
the FED cuts rates a quarter point, when you start
to look at the yield curve going out three, five, ten, fifteen,
twenty thirty years, the long end of the curve is
(02:03):
still it's steepening.
Speaker 1 (02:05):
It's not coming down. My point in saying that.
Speaker 4 (02:08):
Is and I think this is why the President and
Treasury Secretary Beston keep lobbing saying that interest rates should
be at you know, zero point five percent or one.
I think they know that mortgage rates are not going
to come down. The long end of this curve is
not going to come down. And let's remind everyone mortgage
rates are largely tied to the ten year. My point is,
(02:31):
even if we get a quarter point rate cut in September,
that's not going to move the longer end of the
curve at all. And if anything, we're starting to see
it steepen because growth is good. I mean, the S
and P earnings are thirteen percent higher than they were
a year ago. And so I think the Fed's in
a tough spot here with inflation. And we do see,
(02:52):
you know, job numbers coming down. It's getting a little
harder to find a job. So you know, the Fed
is trying to balance a few different things all at once,
which is all what they always try to do. It's
gonna be interesting to watch here, Brian.
Speaker 5 (03:05):
Yeah, and I want to break up another point you
mentioned mortgage rates. I want to be sure everybody's clear
out there. The FED is not sitting here, sitting here
saying a thirty year mortgage is going to be x percent.
Speaker 1 (03:15):
That's not what they do.
Speaker 5 (03:17):
We all get hung up on that because that's the
most commonplace where interest rates directly and immediately affect us.
So Federal Reserve does set the Federal funds rate, and
then that trickles through the economy. But in addition, as
you mentioned the ten year treasury yield, that's something that's
driven by supply and demand in the overall market for bonds.
Investors wanting to buy bonds or not, or wanting to
dump bonds will have an impact on mortgage rates. So
(03:40):
don't be looking to the Fed for the exact instruction
on what a fifteen year or thirty year is going
to be.
Speaker 1 (03:44):
It's a little bit a little bit different than that.
Speaker 4 (03:46):
But no, no, I think it's gonna be fun to
watch or interesting to watch because you know, the Senate
is back from their recess now that we're through Labor
Day and they've got to negotiate a budget here before
we have a quote unquote shutdown at the end end
of the month. You got the FED meeting on the seventeenth,
and more data flying in you know all the time.
Speaker 1 (04:06):
We've got some tariff news over the weekend.
Speaker 4 (04:09):
The courts have gotten involved here to potentially get in
the way of President Trump's tariff policy. Sounds like that's
heading all the way up to the Supreme Court possibly,
So a lot going on here in September.
Speaker 5 (04:21):
Brian, Yeah, let's trot out some other things we've drilled
into little more. The next thing you've talked about there
was the job of market here. So the average is
just about thirty five thousand jobs per month, and that's
about where we were. But after two thousand and seven,
two thousand and nine, in July we only saw about
seventy three thousand, while May and June were revised down
by about two hundred and fifty eight thousand jobs. So
(04:43):
job market is there's a Paul's doing okay, but a
little bit less robust than initially reported. Unemployment is a
little over four percent, that's usually where that's about where
we are in terms of full employment, and wage growth
is moderately strong. We're looking okay on that front, about
three point nine to four percent year over a year.
So I think there's some good things and there's some
(05:03):
things that are concerning out there. Again, no reason for panic,
but just things to pay attention to as you said.
Speaker 4 (05:08):
Yep, you're listening to Simply Money presented by all Worth
Financial on Bob Sponseller along with Brian James. All Right,
something else we want to draw your attention to. Here
are some new tax rules for charitable giving coming down
as part of the Big Beautiful Bill. There's some minor
changes here and it could affect how much you give
and how you give to charities moving into twenty twenty six.
(05:31):
Let's get into that a little bit, Brian, because I
find in client meetings still people are not taking full
advantage of how to do their charitable giving based on
current tax policy.
Speaker 1 (05:43):
Yep.
Speaker 5 (05:43):
The One Big Beautiful Bill did a lot of big things.
That was signed on July fourth of twenty five. And
that's one of the things we haven't talked about a lot,
is it's going to reshape a little bit about how
we benefit from charitable giving. This starts in twenty twenty six.
And so if you are if you are a non eyezer,
that means that you have enough deductions that you're going
to submit I'm sorry, you don't have enough deductions that
(06:06):
you're going to take the standard deduction right if you
can fog a meer you can deduct. A married couple
can deduct thirty thousand dollars, an individual can deduct fifteen
thousand dollars worth of income. If you are a non itemizer,
one of those standard deduction people, then you can take
up to one thousand bucks for a single or two
thousand dollars even if you don't itemize. If you do itemize,
now you're facing a new hurdle. Only donations that are
(06:28):
over a half percent of your adjusted gross income can
be deducted, and supporters in that top tax back that
are going to see the value drop from thirty seven
percent to about thirty five percent. So some changes come
into if you were still taking advantage of that little
bit that you could deduct while being an itemizer or
a non itemizer, be paying attention for how that's going
to change here in twenty twenty six qualified charitable distributions.
(06:51):
These are for those of you who are seventy and
a half years old. If you where you're forced to
take money out of your IRA. Now remember we always
get confused by this. The require fired minimum distribution age
if you weren't there yet, is now seventy three, but
they did not change the age for qualified Charitable distributions,
you are eligible to send money directly to charities from
your IRA, and if you are of that age, it
(07:12):
will qualify.
Speaker 1 (07:13):
For your RMD.
Speaker 5 (07:14):
But those are still things that you can do and
that's something you should look into if you have hit
that age.
Speaker 4 (07:21):
Yeah, just to summarize here, and this is not a
big deal, but just for the folks that are still
taking that standard deduction every year, nothing changes. But I
think for the people that do give that thousand to
two thousand dollars a year to charity and didn't think
they could take the deduction, you can starting in twenty
twenty six. So just something to look out for as
(07:41):
you begin your tax preparation or planning for twenty twenty six.
All Right, we also want to hit on a new
study that came out about people outliving their money.
Speaker 1 (07:50):
Brian.
Speaker 4 (07:51):
This is a new study from a firm called Seniorly,
a senior living marketplace, and they reveal that retirees in
forty one states, including Ohio and Kentucky are projected to
outlive their savings with an average shortfall of one hundred
and fifteen thousand dollars.
Speaker 1 (08:09):
Brian, This p you know This just means that folks
are going.
Speaker 4 (08:12):
To have to rely on kids, relatives, you know, grandkids potentially.
You know, there's a lot of retirees that are struggling
and at the risk of running out of their savings.
Speaker 5 (08:23):
Yeah, and this is I always like to know, you know,
it's good to know what what what Ohio Kentucky are
you know, kind of nominally, but how do we rank overall?
So obviously there are bigger problems elsewhere as you might guess.
Some of the states that with the biggest concerns there
are the more expensive ones. So the worst outlook is
New York, where there's a shortfall of about four hundred
(08:43):
and fifty thousand dollars, meaning most people, the average person
needs four hundred and fifty thousand dollars more to be okay,
Hawaii's a little over four hundred thousand DC at the
four oh seven, Alaska three forty two, California three thirty seven.
But here in Ohio are projected out nobody has enough
money is with this works out, But the projected shortfall
(09:04):
for an Ohio and or Kentucky in around one hundred
and fifteen thousand. So believe in this area because we
are a lower cost of living area. The gap isn't
quite so scary. What they're doing here is they combine
data on taking life expectancy at age sixty five, what's
the everage, social security.
Speaker 1 (09:18):
Income, household net worth, and so on and so forth.
Speaker 5 (09:21):
But just making sure that if we look at all
the different resources and figure out you know, and really
what matters here, Bob, is what are you going to
do about this?
Speaker 1 (09:29):
If you if this is a concern for you.
Speaker 5 (09:31):
And it always starts with knowing where you are right now,
understand what your resources are, and have at least a
basic idea on what you want to do with all
of these things.
Speaker 4 (09:41):
Yeah, and for the people that you know fall into
this category, and we run into those folks you know
from time to time. It's just like you said, a
lack of planning. And some people, let's face it, they're
in situations they can't control from a health standpoint, or
you know, a disability or something like that.
Speaker 1 (09:57):
I'm not talking about those folks.
Speaker 4 (10:00):
But the key point here is get out in front
of this, take a look and model out.
Speaker 1 (10:04):
I think a lot of.
Speaker 4 (10:05):
People forget that inflation eats away at your purchasing power.
You know, over time and then the whole longevity thing
that we talk about all the time, people are just
living longer. So you know, when you when you just
pull the trigger on retiring a lot of people or
some people just say hey, it's all gonna work out,
blah blah blah, but they forget they're likely gonna work
(10:25):
they're they're likely gonna live longer, and inflation eats away
at their savings. Some people are too conservatively invested. You
roll all that up together and you run into a real,
you know, potential problem here of running out of money
right now.
Speaker 5 (10:41):
It's not everybody, So the same study does list a
few states that actually have surplus, so people that are
doing okay or in Washington, Utah, Montana, Colorado, Iowa, Minnesota,
in a few other states. So not everyone is stuck
in this is stuck in the mud here. So that
kind of shows that it is possible to pull it together.
So again, like just make sure you know what your
resources are and what you're shooting at. If you haven't
(11:03):
had that discussion with your spouse, then it's really time
to do that.
Speaker 1 (11:08):
Here's the all Worth advice.
Speaker 4 (11:09):
Take the time now to stress test your income in
your savings. That's how you make sure you won't just retire,
you'll stay retired. Coming up next, we're going to discuss
something smart investors may fall into, something called the action trap.
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC the Talk station Org.
Speaker 2 (11:31):
It's one policy going to take our capital back. We're
taking it back after another.
Speaker 5 (11:36):
You burn a flag, you get one year in jail
and it goes on your record.
Speaker 3 (11:39):
Who knows what he'll check off next on fifty five
KARC de Talk Station.
Speaker 6 (11:45):
All Worth Financial a registered investment advisory firm. Any ideas
presented during this program are not intended to provide specific
financial advice. You should consult your own financial advisor, tax consultant,
or a state planning attorney to conduct your own due diligence.
Speaker 1 (12:05):
You're listening to Simply Money.
Speaker 4 (12:06):
You're presented by all Worth Financial on Bob Sponseller along
with Brian James. If you can't listen to Simply Money
every night, subscribe and get our daily podcast. You can
listen the following morning during your commute in the car,
or at the gym, or on your walk around the neighborhood.
And if you think your friends could use some financial advice,
tell them about us as well. Just search simply Money
(12:26):
on the iHeart app or wherever you find your podcast
straight Ahead at six forty three, we're answering your questions
about umbrella insurance, big tax bills, and what to do
with one point two million dollars in deferred com plan assets.
All right, if you listen to our show each night,
we know that many of you are already very smart
(12:49):
with your money. You've built wealth, you've saved consistently, and
you're in pretty darn good shape.
Speaker 1 (12:54):
And that doesn't happen by accident.
Speaker 4 (12:56):
But even the most seasoned investors and Brian we running
of these folks from time to time. We're talking about
folks who've been at this for decades. They can get
pulled into what we're calling the action trap. Let's let's
unpack this one, because this is a real thing that
happens from time to time with folks.
Speaker 5 (13:13):
Yeah, a lot of this comes from fomo, right, fear
of missing out. There's a feeling when when the markets
are volatile or the headlines are moving around that if
you're not doing something, then that must mean you're doing nothing.
Speaker 1 (13:22):
And therefore you're missing out.
Speaker 5 (13:24):
And over the decades that you and I have both
been doing this, there's there's always some sexy thing out
there that we're supposed to be chasing and is gonna
solve all of our problems. Most recently it's AI and
and crypto, but in the past it was internet stocks,
and you know, in real estate and way way back
there were oil partnerships and all that kind of stuff
that everybody had to be doing. So it feels like
(13:44):
standing still is losing ground. So we all kind of
convince ourselves that we have to do this. I have
to do these kinds of things, So let's pump the
brakes a little bit. So reason we're talking about this.
Bankrate dot Com just did a really good breakdown on
the difference between investing and trading, and it's a great
reminder of the difference. So this thing is truly long term.
You're basically saying, yeah, I get how the economy works.
I get that the United States is the strongest place
(14:05):
to We're fortunate to be here in the first place,
and it's the strongest place to make money on the
face of the earth, if not the entire universe. And Therefore,
I'm buying into these companies that are profit motivated and
I trust their decision making. I know they're going to
find ways to make profits in whatever environment, and I'm
going to trust them to do that. Trading is a
little bit different. It's much more short term. It's about
trying to time the market, reacting fast, finding information that
(14:29):
nobody else seems to have, and you know, trying to
outsmart that next step there, and that you can be
right nine times in a row, wrong the tenth time,
and you're going to go right back to the beginning.
Speaker 4 (14:40):
Yeah, And the key word here is trying. I meant,
study after study shows that it's very difficult to trade
successfully over the long haul, meaning you know, outpace the market,
outpace what you would have done with just a good, responsible,
diversified investment portfolio.
Speaker 1 (14:58):
And yes, there are.
Speaker 4 (14:59):
People who w in short spurts, kind of like betting
on college football, but to do that consistently and make money,
the data just isn't there. In fact, most traders, short
term traders underperform the market, and some underperform it by
a big margin. Brian, I want to backpedal a little
bit and get into why, because occasionally I have people
(15:22):
coming into my office and want to get involved with
this stuff, and I think, especially retired folks, the two things.
Speaker 1 (15:30):
That crop up to me are boredom. People.
Speaker 4 (15:32):
You know, they're not working anymore, they don't have enough
to do, and they're bored and they're consuming news all
day and they just want to get involved because they're bored.
And then second, a sense of control. You know, with
so much going on in the world that is seemingly
quote unquote out of our control, people think that by
getting involved in short term trading they can regain some
(15:55):
control over their life. And that boredom combined with that control,
with having a lot of money and all these online platforms,
you can do some real damage.
Speaker 1 (16:05):
To your portfolio in a hurry if you're not careful.
Speaker 5 (16:08):
Yeah, let's talk about that damage here. We like our
studies here. This actually has a homegrown one that I'm
looking at right now from our chief investment officer, Andy Stout.
Andy went back and he does this every now and
that update the numbers, but he has built a report
for us to help our clients understand the impact of this.
So he went back and said, what if you invested
a million dollars in the S and P five hundred
twenty years ago, and then completely ignored it. You went
(16:30):
all rip banwinkle, fell asleep, woke up twenty years. What happens, Well,
over the past twenty years, that million dollars would have
grown to over seven million dollars, and it would have
averaged about a ten point three percent return. Again, that's
if you completely ignore it. You don't goof around with it,
don't try to jump in and out and so forth. However,
let's pretend for a second that you do read the
headlines and you get spooked and sometimes you pull it
(16:51):
all out. If you accidentally missed the ten best days
of the market, right, so we're talking literally seventy two
hundred sum seventy three hundred days. You know, in that
twenty year period, if you accidentally missed the ten best days,
your ten percent average that you got, if you lift
it alone, would have dropped to about six percent. Now,
if you miss the fifty best days, believe it or not,
(17:12):
now you have a negative rate of return over this
twenty year period. So yes, the data screams, just leave
it alone, buy things that you trust, and don't try
to get in and out. Don't try to jump in
and out because you will get hit by the dring.
Speaker 4 (17:23):
You're listening to Simply Money presented by all Worth Financial.
I'm Bob Sponseller along with Brian James.
Speaker 1 (17:29):
Brian. Here's something I.
Speaker 4 (17:30):
Tell people that just can't keep their hands off the
lever here, you know, and I just say it like this,
Let's make sure we're separating your serious money from your
play money. In other words, if you're somebody that just
has to get involved in this stuff and feel like
you're you know, in the game and can beat the market,
and you just love doing this stuff, carve out I
(17:53):
don't know, two to five percent of your portfolio and
let's just call it a sandbox if you will, and
go for it, you know, go with your gut, you know,
try to outpace the market. Do all those things, but
also have an accountability partner, meaning do it for three, six, twelve,
twenty four months, and then be honest and sit down
(18:14):
and say.
Speaker 1 (18:14):
How did you do? You know, did you underperform? What
was the tax result?
Speaker 4 (18:20):
Did it take up a bunch of time and energy
away from your family and other things that you probably
should have been doing. You know, how did you do
does it make any sense? And a lot of people
just want to go have the activity and treat it
like a hobby, but they don't want to look in
the mirror and say, how did I actually do? And
was this worth all the time and the energy and
(18:42):
potentially the losses involved.
Speaker 5 (18:45):
Yeah, and I'm always reminded of other there is one
baseball player out there, Bob, one professional baseball player who
in his career got one at that and got a hit.
His batting average is literally infinity. There's only one guy
out there in this situation, but he never got another.
And so the point of all that is is e
the greatest hitter in history will know because you know,
nobody saw enough in him to allow him another atvat
(19:06):
let alone, you know, a long term, longer term contract
or something like that. So my point in this is
also don't get hung up on that one time where
that one stock was a ten bagger on you, which is,
you know, great, that's awesome, but nobody really. What I've
found is oftentimes people really get fixated on that and
decide that or worse, they'll hear from a friend who
has a guy or has a woman who had these
ideas and this, and the friend reminds them of this
(19:29):
one time with this awesome return, and this person must
be the next Warren Buffett. Meanwhile, nobody ever steps back
and says, cool, what's the three year, the five year,
the ten year average? Is? Is this all you know
GYP certified investment returns that we can really rely on?
Speaker 1 (19:42):
Or is this just a fun story to tell at
a cocktail party.
Speaker 7 (19:45):
Yeah?
Speaker 1 (19:45):
And let's face it, human nature.
Speaker 4 (19:47):
I mean, everybody, if you're at the golf course or
a dinner party or whatever, you're always going to hear
about the winner, you know, but nobody's gonna come and say, hey,
let me tell you about these thousands of dollars that
I lost. How many times if we heard that from anybody,
virtually zero?
Speaker 5 (20:03):
And how many times did they lose it in an
IRA which means they don't even get the deduction on it,
or worst case scenario, they lost it in a roth IRA,
which means they didn't get a deduction on the front end.
Speaker 1 (20:13):
They don't get a deduction for the loss.
Speaker 5 (20:14):
And now there's a lot less money that's growing tax
free and compounding tax free forever. That's the worst place
to gamble with your dollars in a roth ira in
my opinion.
Speaker 4 (20:22):
Well, and even with us saying all this stuff, everybody,
there's a lot of people out there that just can't
help themselves. They're gonna have to scratch that itch. All
we're trying to call out here is do it responsibly.
Do it with a very small percentage of your portfolio,
and that sandbox account or play money account should be
mentally and logistically separate from your core portfolio. Different account,
(20:46):
different login, Keep it out of sight and out of
mind when you're thinking about your long term planning.
Speaker 1 (20:52):
Here's the all Worth advice.
Speaker 4 (20:53):
Even the smartest investors can be tempted to trade, but
long term wealth is built through discipline investing, not chasing
all the short term action that's out there. Coming up next,
we're breaking down how retirement works around the world and
what you could take from these global systems to strengthen
your own plan. You're listening to Simply Money, presented by
(21:15):
all Worth Financial on fifty five KRC the Talk station.
Speaker 2 (21:20):
Today.
Speaker 3 (21:21):
It's definitely it's a good day to be in Florida. Oh,
I'm having a good KQ fifty five KR the Talk Station.
Speaker 2 (21:31):
Are you drowning an irf C and iHeartRadio station.
Speaker 4 (21:41):
You're listening to Simply Money, presented by all Worth Financial
mot Bob Sponsorer along with Brian James. So, we came
across an article comparing retirement systems.
Speaker 1 (21:50):
From around the world.
Speaker 4 (21:51):
We're not here to say the US has it all
wrong or that other countries have it figured out.
Speaker 1 (21:57):
You know, I'm not planning on moving out of the
US anytime soon.
Speaker 4 (22:00):
I don't know about you, Brian, but the different models,
it's just interesting to study how governments and people in
general try to skin the cat here. You know, if
you look at places like Denmark, the Netherlands, even Canada,
it offers some interesting food for thought on how different
countries and people approach retirement, especially if you're trying to
(22:23):
make sure your money lasts that thirty plus years during
retirement that we always talk about and we always encourage
our clients to plan for.
Speaker 1 (22:31):
Brian. Yeah.
Speaker 5 (22:33):
So, so the United States here we have focused really
really again, you know, since the beginning, we have.
Speaker 1 (22:37):
Focused on the private enterprise.
Speaker 5 (22:39):
That is really what everything is about here, and we
have designed ways for people to benefit from private enterprise.
And then that has to do with our bankruptcy laws.
The depreciation rules that make it very friendly to invest
in real estate, and just the overall are focus now
on your you know, on the idea that we're going
to fund most of our own personal retirements with four
to one case which at the end of the you're
(23:00):
winding up investing in private enterprise. That is, of course,
not how it goes elsewhere. So let's dig into this.
Let's start with Denmark. Denmark has a public pension system
that is backed and supported by the government, but there's
also very widespread and negotiated workplace pensions in addition, so
this isn't forced stuff. It's just a culture in the structure.
Everybody just kind of assumes.
Speaker 1 (23:18):
This how that's how it is.
Speaker 5 (23:20):
We used to have a little bit of this forties
and fifties and sixties, you know, we had a similar
type of environment. But over time, again as we've decided
that private enterprise and growth of equity is more important
than anything else, we've kind of made it less attractive
to invest in pensions and more attractive to invest in
the kind of things that again continue to support that
crowd sourcing of private enterprise investment.
Speaker 1 (23:42):
Yeah, and I think this is.
Speaker 4 (23:43):
A good way to just call out, you know, leaving
the politics out of it.
Speaker 1 (23:48):
It's just a different philosophy of.
Speaker 4 (23:50):
The role of government versus the role of businesses and
individuals in terms of creating wealth for themselves. You know,
if you if you rely and take advantage of quite frankly,
the profit motives of US companies and lists. Face it,
the US stock market has done incredibly well over the
(24:10):
long term. It's great for people that have been able
to embrace that and participate in that. For the ones
that have not or cannot, they're left behind, you know,
because these pension plans, any kind of government pension plan.
I mean, let's look at Social Security, it's underfunded. You know,
people that cannot get on board with the idea that
(24:31):
you've got to take ownership of that and participate in
the stock market long term. It's just that's what we're
trying to call out here, the whole personal responsibility thing
and understanding where you live and how the game is
played so that you can stack the deck more and
more in your favor.
Speaker 1 (24:51):
Let's talk about the Netherlands.
Speaker 4 (24:53):
You know, they've created a multi layered model with very
strong regulatory foundation. They encourage savings through both employers and
personal investing, and they are pretty transparent about long term expectations.
Proponents of that system say it gives retirees some predictability.
And let's face it, Brian, a lot of people want that.
(25:13):
They just want they just want to know what they're
gonna get. What's my check gonna be, you know when
I stop working. And in the United States we get
some of that through Social Security, but let's face it,
most people can't and don't want to live on Social
Security alone.
Speaker 1 (25:27):
That's right.
Speaker 5 (25:28):
Yeah, So that leaves the question of in here in
the United States, a lot of people and this is
what drives a lot of the concern. Most people, of
course have four oh one case iras we've invested, because
that's literally what we do, that's what we talk about
on the radio all of these evenings. And so what
that means is that your pension quote unquote can kind
of go up and down a little bit versus the
more predictable locked in approach. However, that locked in approach
(25:51):
isn't going to result in as much money. There is
a cost to those guarantees. That does not make them bad,
but it does change the math. And so far, it's
easy to say, right when the market is at a
peace as it is right now, it's easy to say
this is the better way to go. But there will
be some temptation the next time we go through at
twenty twenty two or two thousand and eight. Those times
are coming and they're no fun. We'll see them again.
(26:11):
Let's look to our neighbors to the north. How about Canada.
So Canada has a base public pension for everybody, and
then on top of that there are private and workplace
options that that really give people room to grow their savings.
And proponents say that the Canada is really good at
providing the stability there of not the huge benefits, but
consistent benefits, which is basically what I was saying. The
United States has taken the opposite approach. We have bigger benefits,
(26:33):
if not huge benefits. You can really build your own
wealth come from nothing here. This country is really the
best place on the planet to do that. But you
got to do it, and you got to do it right.
That is at the expense of consistency. It gets scary
here when we go through those bumpy markets. We have
a lot of flexibility, a lot of choice. You want
to retire sixty two, start a consulting business. Knock yourself out.
Speaker 1 (26:52):
Go do it.
Speaker 5 (26:52):
If you want to convert a part of your investments
to a ross and never pay taxes again, cool, do
that too. That kind of control that we offer here
is not universal. Some don't value it. But I think
that's really because a lot of people just don't understand it.
Speaker 4 (27:05):
Yeah, I think the key point we're trying to point
out to folks here is, you know, regardless of whether
you have these public pension plans in other countries or
social security here, some people in the US try to
create their own kind of public guaranteed income plan through
things like fixed annuities and things like that, just that
lower but safer income stream. The point is, no matter
(27:28):
how you slice it, you got to figure out a plan,
you know, factoring in taxes, what you plan to spend
or want to spend or need to plan, and make
sure the asset base is there, whether it's a guaranteed
income stream, an investment portfolio, or a combination.
Speaker 1 (27:45):
Of all the above.
Speaker 4 (27:46):
And let's face it, fifty years ago, retirement might have
lasted ten to fifteen years. Now, if you retire at
sixty five, there's a good chance one spouse could live
to be ninety five or even one hundred years old.
And that's part of the struggle that all of these
countries are facing, including the United States, when you look
at building these public pension retirement options, fewer people in
(28:09):
the workforce, supporting more and more retirees that are living
longer and longer.
Speaker 1 (28:15):
The math just doesn't add up a lot of.
Speaker 5 (28:17):
Times, right, So what a countries do to manage that? Well,
some have been raising retirement ages. France and China did this.
Others increase payroll taxes. Right, Let's let's let's bring in
more income from the people who are working now to
assist those who are not working.
Speaker 1 (28:30):
And some will reduce the benefits.
Speaker 5 (28:32):
And here in the US there's and we talk about
this just about every meeting, it feels like anymore, there
is talk about changing how Social Security is taxed or
even means testing future benefits right now.
Speaker 1 (28:42):
Neither of those is new.
Speaker 5 (28:43):
By the way, So Security is taxed, you are paying
taxes on when you get your SOB scurity income back.
And I would argue we already means test a little bit.
The more income you make, the higher tax you pay
on your Social Security it's still among the most friendly
of taxes on income here in this country. But rest assured.
So security is taxed and there is a hole in
the bucket. So we do need to either figure out
whether we're going to tax more on workers, or reduce
(29:04):
benefits or change change ages.
Speaker 1 (29:07):
And all that kind of stuff. So lots lots more
to come on that. Here's the all Worth advice.
Speaker 4 (29:11):
You don't need a government mandated system to have a
strong retirement. Learn from what others do well, then use
your freedom to build something even stronger. Next it's another
round of ask the Advisor, big portfolios, big decisions and
the strategies families want to know about. You're listening to
Simply Money, presented by all Worth Financial on fifty five
(29:33):
KRC the talk station.
Speaker 3 (29:36):
It's the main event for the importance events of today.
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Every day we discover something new and important.
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Control our capital city, direct federal control, check.
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Events in day to day, tracking our next weather event,
events affecting my money, events in the Middle.
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East, happens happening now, important at this moment. KRC the talkstation.
This is Jeff. Next month, I have to choose between
groceries for my kids or gas for my car.
Speaker 3 (30:12):
Talk about it here fifty five KRC the talk station.
Speaker 4 (30:20):
You're listening to Simply Money, presented by all Worth Financial
lumbob sponsller along with Brian James. Do you have a
financial question you'd like for us to tackle. There's a
red button you can click while you're listening to the
show right on the iHeart app. Simply record your question
and it will come straight to us.
Speaker 1 (30:37):
All right.
Speaker 4 (30:38):
Leading us off tonight, Brian is dan in Columbia Tusculum.
He says, how much umbrella insurance do you really need?
And can you provide a scenario where one would actually
need to use it?
Speaker 1 (30:50):
Oh?
Speaker 5 (30:51):
Sure, scenario. Well, there's lots of scenarios. That's why we
call them umbrella policies because they.
Speaker 1 (30:56):
Cover a lot of different things.
Speaker 5 (30:57):
So really the big thing here this is the umbrella
is the type of thing you tack onto your property
and casualty insurance policy, your homeowners insurance, and it's for
your dog bite somebody or somebody slips on the ice
in front of your sidewalk, or you have young drivers.
That's where it really hit home for me when we
started getting our kids license.
Speaker 1 (31:14):
So there's risk there. So you have to start with
what do you have at risk?
Speaker 5 (31:19):
You've got home equity, you've got retirement accounts, broker's accounts,
maybe business interest savings, those kinds of things. Income potential
of the next ten twenty years. You know, if you're
forty five, you're earning two hundred thousand dollars a year,
you could expect two to four million dollars of future
income to be at risk. Where are you exposed? Well,
if you're a homeowner, you've got a pool of trampoline,
dog we've talked about all that lifestyle. Maybe you like
to have large parties, you're volunteering on boards where there
(31:41):
can be liability, those kinds of things. Most carriers will
sell umbrella insurance and million dollar increments, so a good
starting point is one to two million. That sounds like
an enormous amount of insurance. However, don't forget that the
risks that are covered here are relatively rare in nature.
Therefore the coverage is cheap. The risks are rare, but
if they do come up in your world. If your
number comes up, they can be really, really expensive. So
(32:02):
I hope that helps kind of clarify that question a
little bit. Let's move on to Bob and Amberley Village.
Uh oh, I see one comment here, Bob that I
think we're gonna have a little Here's what you should
have done.
Speaker 1 (32:13):
My wife and I just sold.
Speaker 5 (32:15):
Past tense, sold a rental property, and the game pushed
us into a high bracket. How can we reinvest the
proceeds without creating another huge tax bill?
Speaker 1 (32:22):
What happened here, Bob?
Speaker 4 (32:25):
Well, I mean, obviously we don't know the whole situation,
and Bob, we're not piling on here, but I think
the proverbial water has flown under the bridge here, meaning
you already sold it, you got the tax bill.
Speaker 1 (32:36):
What could you have done?
Speaker 4 (32:37):
You could have looked into things like ten thirty one
exchanges if you want to take that rental property and
avoid the capital gains taxes by diversifying into a broadly
diversified portfolio of real estate. That's something that we often
talk to our clients about if they're faced with these
massive tax bills when they're going to sell a piece
(32:58):
of property.
Speaker 1 (32:59):
So that's what you could have done. What do you
do moving forward?
Speaker 4 (33:02):
And by the way, there's nothing wrong with making a
pile of money and paying taxes, so we should also
congratulate you on, you know, running a successful rental property business.
Let's face it, you only pay taxes when you make money,
so good for you moving forward. When you reinvest that money,
just use things like direct investing.
Speaker 1 (33:23):
Tax loss harvesting strategies.
Speaker 4 (33:25):
Have some things moving in the background with your newly
formed investment portfolio, so you don't get a surprise tax
bill hit, you know, moving down the road in case
you have a big winner in your overall stock portfolio.
All right, Kelly and Northside says, my husband and I
have a totally different risk tolerance.
Speaker 1 (33:47):
So how in the world are we supposed to.
Speaker 4 (33:49):
Achieve financial freedom if we have completely different ways of
wanting to go about it? Brian, this is a great
question and one that I run into from time to time.
Speaker 5 (33:59):
Yeah, go figure and wives tend to disagree on things.
Who knew, Yeah, so this is fairly common. People come
with different experiences in different just different things they have
been through, and that results in just totally different opinions
on how we should handle financial planning. It's not uncommon
that we'll have a married couple where one spouse is
super aggressive, high roller. I know the stock market is
the best place to be over the long term, so
(34:21):
that's where I just want to put the most money there.
And then somebody else will say, you know what, I'm
just not comfortable with that. I can't handle the ups
and downs. I get too upset when things start trying
to drop. Now, obviously, the very first thing we need
to be doing here is communicating. So the fact that
these two people are already in the same room and
have had this discussion good for them, because so many
people out there will just realize that there's a conflict
and simply shut down. And that's a terrible way to
(34:42):
run a marriage, let alone.
Speaker 1 (34:43):
A financial plan.
Speaker 5 (34:44):
So I'm glad that Kelly, you and your husband are communicating.
There another way to think about this. You can, of course,
you know, you each control your own investments. You've each
got four to one k's iras that make your decisions independently,
but understand how those puzzle pieces come together to form
a plan that fits the whole fan. Another thing might be,
you know, perhaps instead of worrying about different risk tolerances
(35:05):
for the different investments. Maybe this particular couple should look
at a larger emergency fund. Let's carve out more dollars.
You know, if the average person has six months worth
of expenses, let's make sure we have twelve months, or
maybe even twenty four months. Perhaps that can get Kelly
to a position where she can say, Okay, I get it.
The investments, the longer term stuff is going to be bumpy.
I understand that because I've got two years worth of
(35:28):
savings sitting in cash, two years worth of expenses rather
sitting in cash.
Speaker 1 (35:32):
So if the stuff.
Speaker 5 (35:33):
Hits the fan, then I'll know we could float for
two years without hitting those long term investments. So these
types of conflicts about risk tolerance don't necessarily have to
impact the investment portfolio. Find a different way to solve
the problem, and just be open minded to what the
solutions might be. Tony and Lebanon. Tony, speaking of aggressive investors,
our portfolio is heavy in tech stocks after that last
decade's run up. If we trim these back, Now, what's
(35:55):
the smartest way to rebalance this without getting absolutely hammered
by these capital gains?
Speaker 4 (36:00):
Well, Tony, here here's what I'd say, in terms of
how to start out here, get with a good fiduciary
financial plan or financial advisor, and let's just put the
proverbial car up on the rack, hook up the diagnostic tools,
and let's look at the current state of affairs.
Speaker 1 (36:17):
How much are the games, what is the tax exposure?
Speaker 4 (36:20):
How overly allocated to tech in general are you or
in any one company you.
Speaker 1 (36:26):
Know exposure are you.
Speaker 4 (36:28):
Let's let's find out what we're dealing with here and
then develop a strategy to gradually tackle the problem.
Speaker 1 (36:34):
If there is one.
Speaker 4 (36:36):
You don't have to make drastic changes right away, cause
that can tend to run up the tax bills significantly.
So there are strategies out there once we understand and
get our arms around what the situation is, you know,
things like direct indexing, putting collars around those large tech
positions to protect the downside risk, and gradually manage out
(36:59):
of that situation. Assuming you've got one staring you in
the face, get with a good advisor, develop a plan.
Don't make any rash decisions right now. There are ways
to gradually move yourself out of this situation and feel
better about the overall allocation of your portfolio moving forward.
All right, coming up next, I've got my two cents
(37:22):
on just helping our parents deal with latter life issues
involving cognitive impairment. You're listening to Simply Money, presented by
all Worth Financial on fifty five KRC, the talk station,
Mark Levin.
Speaker 7 (37:37):
Let me tell you, so, the Internet is breeding evil, breeding.
Speaker 1 (37:41):
Evil, and TikTok is the main culprit.
Speaker 7 (37:43):
And I don't know what's happening with TikTok, but that
damn thing needs to be sold now and it needs
to be cleaned up. And I don't want to hear
about free speech and everything else. It's a private company.
The company needs to clean it up because this is crazy,
which been the communist Chinese and all the crap that people.
Speaker 2 (37:59):
Put on this stuff.
Speaker 3 (38:00):
Our Glivin tonight at ten oh six on fifty five KRC,
the talk station the Cincinnati available everywhere with the iHeartRadio.
Speaker 2 (38:09):
App now number one for podcasting. Fifty five KRC an
iHeartRadio station.
Speaker 4 (38:19):
You're listening to Simply Money, said by all Worth Financial
on Bob Sponsorer along with Brian James. All Right, Brian,
I want to relay a meeting, you know, just some
contents of a meeting I had just last week heading
into the holiday weekend, and it just brings up another
reminder of the importance of being proactive and communicating with
(38:40):
our parents and loved ones that are advanced in age.
You want to get out in front of some of
these cognitive impairment issues to prevent a potential you know,
disaster down the road. In this case, this is a
couple that I've worked with with for over thirty years.
Wonderful people. I love them dearly. The husband is very
(39:00):
independent minded person, very smart. They've been great clients, but
he's been diagnosed with Parkinson's and so you take this
guy who has pretty much run the whole show financially
for his family. Wife's been minimally involved, and now we're
having to deal with what happens when the husband is
getting to the point where he can no longer you know,
(39:23):
run the show and steer the ship, you know, by
himself anymore. And it was a very difficult conversation or
meeting to have. Thankfully, their son was there. Who's their poa.
You know, We've got some good things in place, but
it's just there's a lot of work to do here
with their attorney, with managing bank accounts, with preventing their
(39:45):
computers from getting hacked. You know, they're dealing with outdated computers.
They don't really log into their bank accounts very much,
and when they do, you know, I don't know how
dated the passwords are. We talk about identity, theft and
other things all the time. There's just a lot of
things to unpack here and good meeting, but again a reminder,
(40:05):
get out in front of this stuff early, at the
first signs of any cognitive impairment, to make sure that
the train doesn't run off the tracks here quickly.
Speaker 5 (40:14):
Yeah, and that's one of our our roles as a fiduciary,
and hopefully anybody acting as a fiduciary watches for this stuff.
So as an advisor, we get to, of course, have
some pretty intense conversations about money and things, and we
ask a lot of questions and we receive questions and
sometimes those questions start not making sense, or sometimes they
were just asked five minutes ago. We see the same
things as you do, as you do out there for
your loved ones. So we do have processes where we
(40:36):
identify that and flag it so our other employees know
that we need to think twice.
Speaker 4 (40:40):
Before we react to some of these things. Be on
the lookout, all right, thanks for listening tonight. You've been
listening to Simply Money, presented by all Worth Financial on
fifty five KARC, the talk station.
Speaker 2 (40:52):
Who wants to Be Rich? We call them every day millionaire.
Every day listen to Dave Ramsey.
Speaker 8 (40:58):
They typically say one of the things that turned their
life around was when they started looking at purchasing something rich.
People ask how much broke. People and I've been both
brother okay broke. People ask how much down and how
much a month?
Speaker 2 (41:15):
Tonight it's at seven oh six.
Speaker 3 (41:17):
Started asking how much on fifty five RZD talk station
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