September 4, 2025 • 41 mins
On today’s episode of Simply Money presented by Allworth Financial, Bob and Brian tackle the country’s ballooning national debt, why it matters to investors, and what history can teach us about navigating deficits.
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Speaker 1 (00:00):
Us Epstein survivors.
Speaker 2 (00:01):
We will compile the names we all know Venezuela and
drug smugglers.
Speaker 1 (00:05):
They were hit. It won't be doing it again.
Speaker 3 (00:07):
Today's News Chicago, Well we're going in is a military
the talk station.
Speaker 1 (00:20):
Tonight.
Speaker 2 (00:21):
You have a financial plan, but does anyone in our
nation's capital. You're listening to Simple Money because by all
Worth Financial I Bob Sponsller along with Brian James, Well,
we preach it every day on this show, Save well invest,
have a plan, manage your debt responsibly, and for darn suures,
please try to try to stay within your budget. Apparently
(00:42):
they don't do that in Washington, d C. Brian, this
is no surprise, but it's just, you know, a topic
that rears its head now that the Senate is back
from its recess and they're all going to have to
try to get in a room and come up with
either a budget or just a continually continual resolution on
spending that just kicks this can down the road and
(01:04):
just keeps spending more money than we have.
Speaker 4 (01:06):
Well, why are we bringing this up tonight, Bob?
Speaker 3 (01:08):
Well, the start of this week global markets, we're a
little worried about surgeon government bond yields and where there's
worries about budget deficits. Frankly, these things are always there,
but they're hitting the highlights because as Congress comes back
to work, and that's a big headline, we've all kind
of forgotten about that Congress basically took most of the
summer off and are now coming back to argue with
each other again. So we got a little ways to
go in terms of in terms of what the next
(01:31):
steps are going to be.
Speaker 4 (01:32):
So let's talk.
Speaker 3 (01:32):
About what we are seeing here. One of the commonly
known things that we look at as something called the VIS.
That's the College Board of Options Exchange Index. What it
does is it looks at options activity to understand.
Speaker 4 (01:44):
What they call Wall Street's fear gauge.
Speaker 3 (01:46):
What options activity simply means, for those of you who
don't know what options are, you're basically betting that I
think this is going to go up in the short
term or down in the short term. And there are
ways to kind of measure, you know, if there's a
lot of people betting on things that are going to
go down in the short one, well that means obviously
they're there's a little bit of fear out there. So
the VIX is something that measures that. Now, why am
I bringing it up? I don't know, Bob, because it's
actually nowhere near freak out level. It's just something we
(02:08):
look at it. It's a good thing to pay attention to,
even when it's not doing anything interesting. There's a little
bit of a spike on Monday, but but that itself,
there doesn't seem to be a whole lot of fear
on the on the wall street side. Now, tell us
about the budget deficit though, Well.
Speaker 5 (02:22):
Let's let's let's camp out on this VIX thing.
Speaker 2 (02:24):
I'm going to give you an opinion on why why
think what what happened yesterday? I mean, I don't think
it's any surprise at this point. We had a we
had a federal you know, appeals court that struck down
President Trump's tariff policy, saying it's illegal.
Speaker 5 (02:39):
And this is going to get you know.
Speaker 2 (02:41):
Appealed probably to fast track to the Supreme Court here
fairly quickly. And you know, if you take away the
tariff revenues and you don't have that coming in, and
you pair that with the big beautiful bill that.
Speaker 5 (02:55):
You know, gave us all the permanent tax cuts.
Speaker 2 (02:58):
That will that will we eate growth and it will
create inflation, you know, and the bond market did not
like that, and that's why I think you saw the long.
Speaker 5 (03:08):
End of the curve spike up a little bit. It
was all pretty short lived.
Speaker 2 (03:12):
I mean, we start the market opened yesterday down quite
a bit and it all settled down by the end
of the day. We were down a little bit. But
I think that that's what was going on yesterday until
everybody could get their collective breath and say, well, this
too shall pass, and we're probably not going to see
the end of all these tariffs, you know, whether you
(03:33):
like them or not, at the end of the day,
because the conventional wisdom is the Supreme Court's going to
step in and say, you know, they're not going to
be able to get rid of all of them, and
life's going to go on. That's what I think happened yesterday.
But yeah, let's get into the debt. The debt, which
stood at thirty six point two trillion at the end
(03:55):
of the second quarter, is now one hundred over one
hundred and nineteen percent of GDP Brian.
Speaker 5 (04:01):
That's pretty high.
Speaker 2 (04:03):
Interest on the national debt exceeds annual spending on Medicare
as well as on national defense. For example, in fiscal
twenty twenty four, the government's net interest expense was almost
eight hundred and eighty billion dollars, or thirteen percent of
our government's expenditures was just interest.
Speaker 5 (04:23):
On the debt. And that's data from the Office of
Management and Budget.
Speaker 4 (04:28):
Yeah, so let's look at this in dollar terms a
little more.
Speaker 3 (04:30):
That's a little more than what we spent on Medicare,
which was eight hundred and seventy four billion dollars. This
billion with a B national defense eight hundred and seventy
three billion. That that's all from fiscal twenty four. So
here's the big deal though. Interest on that debt is
now the government's third biggest major spending area, really just
behind social security, healthcare services, and research and so forth.
A lot of this is behind at least this is
(04:53):
sort of the argument behind what DOSEE was intended to do,
kind of slashing and burning some of these things that
somebody thought was not very necessary. I'm not one hundred
percent certain that the savings on those decisions is going
to head back into paying this debt down if it's happening,
and I think there is not, Thank.
Speaker 2 (05:08):
You, it's not It's like the doze thing was like
spitting in the ocean in terms of the amount of
money that would have got cut relative to this debt.
Speaker 5 (05:17):
I didn't mean to interrupt, Brian.
Speaker 4 (05:19):
But yeah, now I'm frustrated too, Bob.
Speaker 3 (05:21):
I hear the tone and how many times can we
can we stub our own toes like this?
Speaker 4 (05:26):
Well, I think and the reason, but I think personally,
I think one of.
Speaker 3 (05:29):
The reasons that we are choosing to go down this
path as a society is because we are not willing,
or at least our politicians believe that we are not
willing to make sacrifices. Nobody comes and speaks to us
like an adult to say we cannot do we have
to sacrifice here and there.
Speaker 4 (05:43):
We have got to pull in this or that or.
Speaker 3 (05:45):
The other, because all that's gonna happen is somebody's going
to come from the other side of the aisle seeing
that they can win a seat or win more influence
by telling people you don't have to sacrifice. And this
is not choosing either side of the aisle, but both
Republicans and Democrats do this in terms of simply telling
people what they want to hear.
Speaker 4 (06:01):
So that they will win an election.
Speaker 5 (06:03):
I totally agree. All right, let's look at who owns
this debt.
Speaker 2 (06:06):
Private investors are the biggest holders of US debt. Investors
own about two thirds of our national debt, or a
little over twenty four trillion dollars as of March of
this year. The rest is held in various federal trust
funds and retirement programs, or by the Federal Reserve itself.
The Federal Reserve owns four point six trillion dollars of
(06:28):
our debt. So, in other words, Brian, they print money
to buy the country's own debt, and that number is
now twelve point six percent of the national debt. Japan
is the biggest foreign holder of US debt. As of
May of twenty twenty five, Japan held about three point
one percent of our debt, followed by the UK at
(06:48):
two point two percent and China at two point one percent.
So you know, I know, the narrative is that so
much of this debt is owned outside the United States,
and you know, you add up China, UK and Japan
and you're talking about less than seven percent of our
debt held by those three nations.
Speaker 6 (07:09):
Yeah.
Speaker 3 (07:10):
Now, the thing I do find at least the little
I don't know, the heartwarming is not the right term.
Speaker 4 (07:14):
But comforting. Let's put it that way.
Speaker 3 (07:16):
As long as as long as we owe these other
countries money, especially the ones that we're a little bit
more at odds with than others, then everybody's got an
incentive to kind of not upset the apple cart that
this is where, you know, the interconnection of all the
different entities on the face of the earth can actually
work for us, because we get we can hate each other,
but we all got to find a way to work
(07:37):
together because we've been borrowing money from each other. And
remember a lot of the reason that that this is
the case that these countries have come here to buy
our debt is because we are still the best deal going.
We're still the best place to put money that needs
to be there tomorrow and and generate a little bit
of return on it, but in a very safe manner
there and there really isn't a country that's coming along
directly behind us.
Speaker 2 (07:56):
You're listening to Simply Money, presented by all Worth Financial
on Bob spun Seller along with Brian James.
Speaker 5 (08:02):
Brian talk a little.
Speaker 2 (08:03):
Bit about how we got here, take us through a
couple of the major historical events and periods of time
that caused this debt to.
Speaker 5 (08:11):
Just balloon out of control.
Speaker 3 (08:13):
Yeah, so, as you're well aware, I do like going
through history to kind of see what is when we've
seen situations like this before, what was the different outcome
and what were the differences. So let's go back to
the big one, the Great Depression. Back in nineteen twenty nine,
national debt was seventeen billion dollars. Right, that's a fourth
of what we just said we spend or not even
that's not even ten percent of what we just spent
on other items we were just talking about. But anyway,
(08:36):
back then that was about sixteen percent of GDP. The
Great Depression caused deficits the government borrowed to fund new
deal programs. This was probably one of the larger governments
in terms of reaction to what was going on as
the government tried to fix things, and then that that
of course lasted a little over decade, got us into
World War Two.
Speaker 4 (08:53):
That was going to happen anyway.
Speaker 3 (08:54):
Obviously the rest of the world was carrying on fighting
with each other while we were cleaning up our fiscal house.
Over a ten year period and that pulled us out. Ironically,
nobody wants war, but the reality is war involves a
lot of spending as companies or as countries prepare for it.
So military spending exploded after that. By nineteen forty six,
it was two hundred and sixty nine billion dollars, was
(09:15):
about one hundred and nineteen percent of GDP. That's the
most we've ever spent on that relative the overall economy.
But I would point out too that the stock market,
believe it or not, during these years, was up about
seventy percent. It was down nineteen thirty nine forty forty
one while we were wondering whether we were going to
get pulled into a war, and then once the answer
came clear that we were, it ended up going up
because because at the end of the day, the government
(09:37):
spends money and people go to work and that drives
the economy, which is what pulled us out of World
War Two. And then we move in a long period
between nineteen forty seven and the seventies where debt didn't
really shrinking dollars, but it stayed pretty flat.
Speaker 4 (09:48):
The economy was booming.
Speaker 3 (09:49):
This is when everybody, this is when that management kind
of mentality came in. Every company became a bigger and
bigger organization. Middle management come up. People bought houses and
subdivisions and so on, and that lasted for decades. So
that meant that the debt to GDP ratio fell dramatically.
This was the United States truly taking its spot at
the top of the that we currently maintained at the
(10:09):
top of the pyramid.
Speaker 2 (10:10):
Here, well, it was the Industrial Revolution. We grew our
way out of it.
Speaker 5 (10:15):
We grew our.
Speaker 3 (10:16):
Way out of debt the way it's supposed to work.
But go ahead, exactly are we built things from the
ground up, and we built structures that weren't there before
to generate profit. Now nowadays you move on nineteen seventy
four to two thousand and one, not a whole lot
of activity there, and ending in two thousand and one,
we were about thirty one percent debt to GDP.
Speaker 4 (10:35):
Since then, that's when we.
Speaker 3 (10:36):
Realized, hey, if we borrow money from people, we can
build lots of cool stuff. So the last several decades
is where that ratio has really taken off. And in
there in the middle of that you squeeze in the
housing crash, which that had everything to do with borrowing,
the financial crisis, COVID which came out of left field, all.
Speaker 4 (10:52):
Those different things.
Speaker 3 (10:53):
So overall, World War two in the pandemic pushed debt
above one hundred percent of the economy post war growth.
In the nineteen nineties, Bo help bring it back down.
So you can see the cycle going back over the decades.
Speaker 4 (11:03):
Bob.
Speaker 5 (11:05):
Yeah.
Speaker 2 (11:05):
And the ironic thing that makes me and I think
a lot of other people angry, well that this government
is still spending money at almost exactly the same amount
or rate as it did during the pandemic. That makes
no sense to me whatsoever. And the little Doze experiment,
that's that makes for good politics whatever, But that's you know,
(11:25):
that's spitting in the ocean in terms of paying down
or bringing bringing the spending down, which leads us to today.
I mean, you got three big spending you know, areas,
you got the debt, you got Medicare, you got Social Security.
No one is interested in cutting any of those, or
we really don't have the means to do it. You
(11:46):
can either raise taxes, you can spend less, which nobody
wants to do, or you can grow your way out
of it. And I think that's what President Trump is
trying to do with this tariff and trade policy'ing in money.
It's a basically a sales tax for individuals and companies,
let's face it. But it is bringing in revenue about
(12:08):
three hundred billion dollars a year to date, and you're
trying to bring investments back into the US to try
to grow our way out of this with some tax cuts.
Is it going to work? I don't know, but this
is what the president in the current administration is trying
to do. Meanwhile, Congress continues to kick the can down
the road.
Speaker 3 (12:28):
Yeah, and I think it's important to note that that
nobody has, really I'm a little surprised the American public
hasn't called for that an answer to the question where
are these dollars actually going? The answer is they go
to the general fund and they get spent. However, they
get spent so in a roundabout way because they flow
in there and they're not directly directly assigned to anything,
they are helping us kind.
Speaker 4 (12:46):
Of sort of balance the budget.
Speaker 3 (12:47):
But obviously, when you're talking trillions in debt, hundreds of
billions isn't going to make that much of a difference. So,
but it would be interesting to see if we could
really get an accounting of exactly where those dollars are
coming from and where they're going.
Speaker 5 (12:58):
Here's the all Worth advice.
Speaker 2 (12:59):
We can't change Washington's borrowing habits, but we can diversify
our portfolios, keep a healthy cash reserve to ride out volatility,
and make sure to align your investments with your long
term plan, not the headline news. Coming up next, if
the markets were to crash, would that be your biggest
financial risk. We've got a new crop of myths to
(13:22):
dispel coming up next. You're listening to Simply Money, presented
by all Worth Financial on fifty five KRC, the talk.
Speaker 7 (13:29):
Station KRC Cincinnati, available everywhere with the iHeartRadio app now
number one for podcasting. Fifty five KRC an iHeartRadio station.
Speaker 8 (13:41):
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 2 (14:00):
You're listening to Simple Money presented by all Worth Financial
on Bob Sponseller along with Brian James straight Ahead of
six forty three, Jim's sitting on three million dollars in iras,
Michael's stuck with seven hundred thousand dollars in his company stock.
I'd like to have that problem. And Steve's eyeing buying
a retirement home in Florida. Big money, big decisions are
(14:22):
ask the advisor segment is coming up. All right, there's
still some new financial planning miss out there that we
wanted to share with you and hopefully debunk this evening, Brian, let's.
Speaker 5 (14:33):
Get started with myth number one. It's not okay to
do a big splurge.
Speaker 3 (14:38):
Many of us have Jimminy Cricket sitting on our shoulders saying, no,
that's your nest egg. You can't touch that nest egg.
That's not allowed. You have to stare at it and
talk about rainy days. That's not the case. What that
means many times is that people simply have no idea
what they've built and what it can do for him.
I'm dealing with situation right now where somebody's basically put
away five million dollars and is worried about how they're
going to cover seventy five thousand dollars worth of bills
(15:00):
they haven't noticed that their social Security and pension payments
are already themselves more than enough, and they have five
million dollars. I know that sounds like a fantastic situation
not a lot of people are in. But this is
how blind people can be to to what the mechanism
they could that they've built can use for them.
Speaker 4 (15:15):
So let's give an example.
Speaker 3 (15:16):
Let's pretend you save three million dollars and you're following
that four percent rule.
Speaker 4 (15:20):
That's one hundred twenty thousand dollars a year.
Speaker 3 (15:21):
By the way, the four percent rule is a rough
approximation of how much you can take out of your portfolio,
having been stress tested over many, many decades of ups
and downs. If you take out four percent and otherwise
leave it alone, that's a very very important key, then
you can get away with taking about four percent a year.
So that's about one hundred twenty thousand dollars a year
off of three million. So if you decide to take
that dream RV trip or buy that splashy boat for
(15:43):
fifty thousand dollars, that's a.
Speaker 4 (15:45):
Really low number.
Speaker 3 (15:45):
For splash for one hundred and fifty thousand dollars, your
portfolio shrinks just a little bit under three million dollars.
So remember, a one percent move in the market off
of three million dollars is itself an awful lot of money.
Understand the impact of what you've built in exactly.
Speaker 4 (16:03):
What you can get it to.
Speaker 3 (16:04):
In that particular example, your budgetoul dropped about one hundred
and eighteen thousand. That's only a two thousand dollars difference
versus years of enjoyment for you and your family of
something that's important to you. Tiny change for a once
in a lifetime experience. I think, all right, Bob, sir,
and Bob tell us about the myth about leaving money
to charity after death?
Speaker 4 (16:20):
Is that the best thing to do?
Speaker 1 (16:23):
Well?
Speaker 2 (16:24):
Like everything else in life, It depends, Brian, But I
think the myth here is people are you know, some
people are honed in on these estate tax deductions at death.
Speaker 5 (16:33):
As a perk.
Speaker 2 (16:33):
But look, the federal estate tax exemption is so high now,
you know, roughly fourteen million dollars fifteen million dollars per spouse.
Most people are never going to have to worry at
all about federal estate taxes.
Speaker 5 (16:47):
And we don't have an inheritance tax.
Speaker 2 (16:49):
In Ohio, so you can take the whole estate tax
thing off the table and focus in on what is
going to bring you the most meaning during your life.
Speaker 5 (16:59):
And potentially tax benefits during your life.
Speaker 2 (17:02):
So it's you know, when you start to look at
what should my charitable goals be, lead with your heart,
but also factor in you know, your wallet and your
overall financial plan, and it does make sense to part
ways with some of this money during life. You can
generate some nice tax deductions benefit charities now.
Speaker 5 (17:22):
And h and get some joy out of the whole process.
Speaker 2 (17:25):
So I just want to completely dispel that myth of
waiting until death to leave money to charity. You leave
a lot of positive opportunities on the table, all right,
Brian Myth Number three, A stock market crash is your
biggest financial risk.
Speaker 3 (17:41):
Yeah, this is one that comes up obviously all the time.
Matter of fact, we build this in. Maybe we even
kind of perpetuate this one, because when we do financial plans,
we always stress test them. And the thing I always
say is, here's the hunky dory outcome if nothing bad
ever happens. Again, Now, let's pretend that the market punches
us in the face on day one, and let's take
away twenty twenty five percent of your financial networth.
Speaker 4 (17:59):
The day we retire, can your plan still work? And
most of the time, if we've done it properly, it does.
Doesn't mean it's fun, but it's gonna happen.
Speaker 3 (18:06):
That's like saying That's like saying that if it's raining today,
I'm gonna go ahead and brick up all my windows
because think of the savings on the heat I'll have
in the winter. No, that's not the case. The sun
will come out again. The cycle repeats itself. So no,
stock market crash is not your biggest risk. What I'm
gonna say is the biggest risk is our shields going down.
The more we age, Bob, and I'm hearing of this
(18:26):
more and more among my clients that I've been friends
with for a very long time. At some point we
hit a point where the red flags just don't go
off like they used to. This is why seniors are
just very frequent victims of deceptive pitches, robocalls, identity breaches,
those different kinds of things. So vigilance is probably the
next thing you should add to your portfolio. Learn how
to protect it, but more importantly, don't be ashamed if
(18:47):
you feel like maybe you don't have the edge that
you used to in protecting yourself. We all get there,
find somebody. I'll keep a second eye out for you.
Speaker 2 (18:54):
I talked about that yesterday on the show, and unfortunately
I'm seeing this.
Speaker 5 (18:57):
More and more and more in the scale.
Speaker 2 (19:00):
Know how to get to our elderly friends here and
take full advantage of them. It's absolutely horrible. All right,
let's get into myth number four. It's best to spend less, Brian.
You know again, I've come full circle on this one
now having kids that are, you know, in their early
to mid to late twenties and trying to get started
(19:20):
in life again, within the construct of a of a
good financial plan, you can you can deliver tremendous benefits
to the next generation getting started with their home or
college education, for grandkids, things like that. It'll make much
a much bigger difference in their life today then having
(19:42):
them sit there and wait thirty years to inherit a
pile of money.
Speaker 3 (19:45):
What say you now, I believe it's it's all about
understanding exactly where you are and what you can get
away with if you Because if we don't know that,
then you're gonna you're gonna risk a lot of time
during your retirement spent staring at your pile of money
and just worrying that it's not going to be enough.
To be enough, most people have no idea what enough is.
That's why you and I have jobs, So understand your situation.
One last quick one, do Bob, do you have to
(20:06):
pay off my house before I retire? Is that a requirement?
Speaker 5 (20:10):
It depends, Brian. Don't pay it off.
Speaker 2 (20:12):
If you've got a two point eight percent thirty year
fixed mortgage, absolutely not, don't pay it off.
Speaker 5 (20:18):
Here's the all Worth advice.
Speaker 2 (20:19):
The biggest retirement mistake isn't spending too much. It's letting
outdated myths stop you from living a fully meaningful life
and planning wisely. Coming up next, we've got a brand
new update on the local housing market, good information for
both buyers and sellers. You're listening to Simply Money, presented
by all Worth Financial on fifty five krs.
Speaker 5 (20:40):
See the talk station.
Speaker 1 (20:42):
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History fourteen ninety two and.
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Learning about the news.
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Speaker 2 (21:07):
You're listening to Simply Money Said about all Worth Financial
on Bob Sponseller along with Brian James, joined tonight by
our real estate expert, Michelle Sloan, owner of Remax Time. Michelle,
thanks as always for spending time with us tonight. And
I'm intrigued by this first little item that you wanted
to share. You've got some news about the highest priced
(21:29):
recent sale of a home in Cincinnati.
Speaker 5 (21:32):
I'm dying to know what that was. Tell us all
about it.
Speaker 4 (21:34):
Oh, it's a big one.
Speaker 9 (21:35):
And I still get excited about real estate every single
day when I wake up. But when I saw this posted,
it was, you know, a little unusual so private real
estate sale in Indian Hill. Beautiful home sold earlier this
month for approximately drum roll please.
Speaker 4 (21:59):
Six point four million.
Speaker 9 (22:01):
Dollars and the kicker, it was an all cash transaction.
So six and a half million dollars all cash.
Speaker 4 (22:12):
Right now, how big of a house? Are we talking?
Big a property? You know, all the whole deal. What
are we talking about that looks like it's a big deal.
Speaker 9 (22:22):
The mansion and I'm going to call that a mansion
is fourteen thousand square feet, six bedrooms, seven full bathrooms,
one oh, just one little half bath.
Speaker 4 (22:33):
You know, for good measure. Sure.
Speaker 9 (22:34):
Yeah, it's one of the priciest home sales in recent memory.
And so yeah, there she is six and a half
million dollars all cash in Indian Hill.
Speaker 4 (22:45):
That's a lot of dusting. I just heard Brian.
Speaker 2 (22:49):
Brian just admitted, I know you're trying to fly under
the radar here, but you finally got your quarterly bonus
for the third quarter and wanted to surprise the wife,
you know.
Speaker 4 (22:58):
Bob, Michelle doesn't know, and I got to buy the
giant boat to put on the roof.
Speaker 5 (23:02):
All right, let's get into the market update.
Speaker 2 (23:04):
Things have definitely slowed down in the number of sales
and activity over the last two weeks. I guess since
schools started. What's going on in the current real estate market?
Speaker 4 (23:14):
Michelle, Well, I'm going to back up just a little bit.
Speaker 9 (23:16):
Our statistics are always a little behind, you know, it
takes some time. So we are the beginning of September.
We don't have our stats yet, our official stats for August,
but I can feel it just every single day. I
have a few listings that are lingering that shouldn't be lingering.
I have very few buyers walking through my listings, and
(23:40):
this is a little bit of a trend. Again, I
think it's a short term blip on the radar. But
when you're living it and you're a seller and nobody's
coming to your house, and you know it's priced right,
and you know it's staged well and it's in great condition,
you just have to just scratch your head and go, oh,
(24:00):
my gosh, what's happening. Well, it is a seasonal lag,
in my opinion. We have mortgage rates that are actually
going down a little bit, and we do expect with
the FED going to have a little a little decrease, right,
we're expecting.
Speaker 3 (24:15):
Hey, thank Michelle, when that happens. When we get that
expectation out there, do you find people are people calling
you and saying, hey, slow the roll a little bit,
we want to give it a few more weeks. Or
do do people you know, just kind of keep rolling
if they're in house buying mode.
Speaker 9 (24:29):
Well, I found that the house buyers, I'm not sure
where they went because about a week before school started,
and remember school starts mid August, that's when everybody kind
of tightens up and it feels like nobody's out there
looking now. Usually after Labor Day people start to loosen
(24:52):
up again.
Speaker 4 (24:53):
Here's the thing.
Speaker 9 (24:54):
There are homes on the market that have been on
the market for thirty days. Those homes and those sellers
are ready to sell right now, this minute. So there
are some tremendous opportunities. And that's where I would say, buyers,
call your agent and say, listen, I want to get
back in. I want to take a look at the
(25:15):
mortgage rate, what has it done, how has it changed
in the last month.
Speaker 4 (25:21):
Is there more opportunity?
Speaker 9 (25:22):
Can we negotiate a little bit more on a listing
that has been listed for thirty days? And the answer
is absolutely yes. Now don't come in twenty or thirty
thousand dollars under list price, please, But if you want
to reasonable, make if you really want to make that
seller mad and not want to work with you, you
(25:43):
do want to be reasonable. But at the same time,
there are opportunities right now. So it's it's that time
of year where everybody's sort of taking a deep breath.
We're holding our breath and we're waiting to exhale, and
we're hoping that maybe a little fed cut is going
to help us lower rates and buyers.
Speaker 4 (26:02):
Get your butts back out there, all right.
Speaker 5 (26:05):
Hey, Michelle, just a question.
Speaker 2 (26:07):
I would think the people that have had their homes
out there for sale for thirty days, they want to
get this done before the weather turns and everything gets cold.
And I know you've said everything has slowed down. How
does the slow down after school starts compare to the
slowdown that happens between Christmas and say March, when the
weather's just miserable around here. Are we talking about a
(26:30):
mild slow down versus a huge slowdown or is there
not much of a difference.
Speaker 4 (26:34):
You know, it's interesting.
Speaker 9 (26:36):
I do think this is more of a of a temporary,
you know, thirty day slow down. We do see if
the weather's really bad. But you know what, a lot
of people make changes the first of the year. So
the end of December may be slow right around the
Christmas holidays, but January, February, March it starts to ramp
(26:58):
up like crazy. So again, there's always I feel, there's
always opportunities year round, depending if you don't want to
be in the mix of the busiest of busy seasons.
And frankly, will I have some stats. Real quick, let's see.
I think we got about two minutes a little bit
of statistics from the statistics that I can tell you.
(27:19):
Median sales price in Cincinnati during July of twenty twenty
five approximately seven percent higher year over year from last
year at two hundred and ninety four thousand dollars. That's
the median sales price in Cincinnati, two hundred and ninety
four thousand dollars. The volume is also up from June
of twenty twenty five as opposed to June of twenty
(27:43):
twenty four, we had a thirteen percent increase in home sales.
And so again we're seeing it was a really, really
busy summer. And now we're just taking a deep breath
and we're holding it. I know sellers who are on
the market right now are like, okay, Michelle, what can
(28:04):
I do other than lower the price?
Speaker 6 (28:08):
You can?
Speaker 4 (28:08):
You know?
Speaker 9 (28:08):
I had one seller who actually went ahead and they
had bright blue shutters that kind of looked like Easter
egg blue, and I said, maybe you change your curb appeal.
And you know what, that change of the curb appeal
and the taking retaking of photos caused a little bit
(28:29):
of activity. So there are things that you can always do.
You want to stay in communication with your real estate
agent because there are things you can do. Maybe staging
is something that you need to do at this point. Again,
there's just more open houses, and open houses are back.
Speaker 4 (28:48):
They were gone for a while, but they are back.
So yeah, yeah, well.
Speaker 2 (28:56):
Hey Michelle on the byside, correct me if I'm wrong.
I mean, even if you write a contract right now,
I mean, most of these lenders are work with you
and not lock in a rate you know, before or
until after this FED meeting on September seventeenth. Right, there's
a lot of flexibility on the lending side as well,
am I right.
Speaker 4 (29:14):
There should be.
Speaker 9 (29:14):
You definitely need to ask that question, and don't forget
you have to communicate and if the lender that you
choose or the real estate agent that you choose is
not communicating with you, you know, just say hey, listen,
we need to talk.
Speaker 5 (29:29):
Yep.
Speaker 2 (29:30):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC, the talk station who wants to.
Speaker 1 (29:36):
Be Rich We call them every day millionaire. Every day
listen to Dave Ramsey.
Speaker 10 (29:42):
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? Tonight had seven h start asking how much?
Speaker 3 (30:02):
On fifty five KRZ the talk station, Hi, It's Brian
Thomas with Steve from USA and Selection.
Speaker 2 (30:09):
News when it happens, Breaking news tonight, we are coming
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Speaker 1 (30:12):
Live news when you need it. You're gonna want to
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Speaker 6 (30:20):
Cheaping you up today on what's happening.
Speaker 1 (30:22):
This is going to be quite the event tonight. You're
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Speaker 6 (30:26):
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Speaker 2 (30:41):
You're listening to Simply Money, presented by all Worth Financial
on Bob spon Seller along with Brian James. Do you
have a financial question you'd like for us to answer.
There'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, leading
us off tonight is Jim in four or Thomas who
says we've accumulated around three million dollars in iras with
(31:05):
required minimum distributions coming up? Should we start orroth conversions
now or just take the rm ds as they come. Brian,
this one's right in your wheelhouse.
Speaker 3 (31:15):
Yeah, this one of my favorite topics to discuss. How
can we deal with this? So require minimum distributions? There's
a time out there, and it's it's when you're either
seventy three or seventy five, depending on when you were born,
that you're going to have to start paying taxes on
those pre tax dollars that have been languishing in your
four O one k's and iras for decades now. And
that's where Jim apparently is. That's sneaking up on the horizon.
So what what can we do about it?
Speaker 4 (31:37):
Can we can?
Speaker 1 (31:37):
We?
Speaker 3 (31:38):
Can we avoid those taxes? No, there's no such thing
as tax avoidance. There is tax minimization and tax optimization.
So what Jim is thinking about doing, He's saying, basically, well,
the heck with it. Since I got to pay taxes
at least on a little bit of this anyway, why
don't I just start that now? Voluntarily before i'm rmd
ah and start looking at ROTH conversions. And I think
that's a fantastic idea as long as we do the math. Now,
(31:59):
the best best of proch to do to take here, Jim,
is hopefully whatever taxes you've you've decided you're comfortable paying. Right,
there's no recommended amount necessarily of how much you should convert.
It really is how much you comfortable with giving to
the irs, and you know, voluntarily in exchange for that
tax free growth. But the important thing is to make
sure you're paying those taxes with non IRA dollars. There's
(32:20):
not wrong with that if that's the only way you
can do it, but taking money out to pay taxes
on your taxes is going to be the less efficient
way to do it. So hopefully you've got some taxable
dollars with which to pay those amounts. Now, remember this
is also going to push up your income, which means
two years later it may play a role in your
Medicare premiums. Don't be surprised if you see a little
spike there. I think people worry too much about IRMA.
(32:41):
I think these that's short term pain for long term gain,
especially when we're talking about decades of tax free growth
that will benefit you and your kids. One last thought,
tax free growth counts for you for the rest of
your life. Your children will inherit it, and believe it
or not, they get ten years to continue letting most
of that money grow tax free because.
Speaker 4 (32:57):
Of the way the IRA rules are are handled.
Speaker 3 (33:00):
Lots of moving parts of their gym. But yes, you're
on the right track. Keep chopping away at it. Let's
move north. Michael, and Westchester says he's stuck with poor boy.
About seven hundred thousand dollars in company stock has done
really well. He recognizes the risk there, Bob. What can
he do about that to kind of protect himself?
Speaker 2 (33:16):
Well, I think two things, Michael. One, you can use
what's called a collar strategy. And I know that sounds
exotic and complicated, it's really not. You basically simultaneously buy
a put option on your stock. You're buying insurance against
the stock dramatically falling in value. And then you simultaneously
sell a call option, which is capping the upside. But
(33:37):
the premium you collect from that option will help pay
for your insurance.
Speaker 5 (33:41):
So now you've just kind of bracketed the.
Speaker 2 (33:44):
Short term you know, volatile movement up and down on
that stock, you know, to make sure that if we
have a crash in the stock or the overall stock market,
it doesn't ruin your overall financial plan. Aside with doing that,
or in addition to doing that, then you can start
to just chop away at this thing and responsibly take
some capital gains exposure and diversify that stock into other
(34:08):
things and do it within the context of a well
thought out financial.
Speaker 5 (34:12):
Plan and tax strategy.
Speaker 2 (34:14):
And that's a good way to just gradually protect that
company stocks value while getting this thing diversified as as
part of your long term plan. Hope that helps, all right,
Steve and Lovelin, we're considering a move to Florida beyond
the state income taxes. What other financial planning avenue should
we think through before making this move?
Speaker 3 (34:36):
Brian, You know, Steve, we have this conversation very frequently.
That's been, of course, just a long, long term assumption
of anybody here in the Midwest when when we finally retire,
we're going to get out of here.
Speaker 4 (34:46):
For February January February, We're going to go to Florida.
It's just where you go.
Speaker 3 (34:49):
No state income tax, lots of sun blah blah blah.
But what I'm hearing more and more is people expressing
so much frustration about Yeah, the no income tax savings
is nice, but the property and sure and the homeowners
association fees and all the other little fees. Remember, Florida
has the same obligations that every other state has. They
got to pay for stuff somehow, and they tend to
do it by taxing on properties, property type things as
(35:11):
well as tourism. So you're going to run across you know,
it's not just a pure savings on the no income tax.
If you're looking to buy inland in Florida, maybe not
such a big deal. But if you're assuming you're going
to be anywhere near the water, which go down there
in August and make sure you're sure you're happy with
where you're going, then you're gonna be dealing with property insurance,
homeowners and all those kinds of things that are going
to be a lot more. I've taken Bob more and
(35:33):
more often that to talking people through here's what you
were gonna spend on a home, as well as all
the up to keep on it, the HOA, the insurance
and all these other things. Maybe we figure out what
that dollar amount is and just be cool with the
idea that, you know what, we're gonna take better vacations.
We're just going to stay in nicer places. We're going
to go to more exotic places because we know we
can afford it. We've done the math, We've done our plan.
(35:55):
Because the last piece of this that has nothing to
do with finance, a single home and a single area
can become an anchor. You may find yourself not looking
forward to vacation because you cannot get yourself out of
the mindset that we got to go to Florida. We
got to go to that place again because we own it,
we threw money at it. We just got to go there,
and it becomes more work than anything else. Mark, in Montgomery,
we've got high value art and collectibles in addition to
(36:17):
our more mainstream traditional investments. What should they be doing, Bob,
to make sure these are properly insured and so they
don't create a state headaches later?
Speaker 2 (36:25):
Well, three things, Mark, I would say, find a good
person who knows how to value appropriately value these high
value art and collectibles. You got to get a valuation
done if you haven't already then find a good property
and casually insurance agent that actually has experience and expertise
in ensuring you know, these kind of collectibles and value
(36:46):
so that way you get your value set, you get
everything insured to protect your investment in the value.
Speaker 5 (36:52):
Then think about.
Speaker 2 (36:53):
Where should these where should this art in these collectibles
end up as part of your state plan. Who wants them?
You know, are they going to be able to manage
them after you're gone? Decide whether that's best handled by
family members or charities or.
Speaker 5 (37:09):
A combination of both.
Speaker 2 (37:11):
And you know what, you really got to think through
where you want these you know, this art and collectibles
to actually end up, and that should drive some of
your you know, decisions heading down the road. It's good
to get out in front of this. And I'm glad
you're asking the question now. It sounds like you're being proactive,
which is great, rather than just leaving this stuff when
(37:31):
you pass away and hoping it all works out all right.
Coming up next, Brian's got his bottom line a great
story of someone who was in deep financial trouble, dug
himself out and actually became a very successful financial advisor.
You're listening to simply money presented by all Worth Financial
on fifty five KRC the Talk.
Speaker 11 (37:52):
Station, Mark Levin, you know, America, we spent an awful
lot of time in this country responding to and unreality
created by the people who hate America, created by people
who get sucked into the narratives that are pushed out
there each and every day. And they're posting, and they're posting,
and they're posting, and then move on to the next
thing and the next thing, and then actually that's what
(38:14):
the media enemy do.
Speaker 6 (38:15):
Mark Levin tonight at ten oh six on fifty five
KRC the Talk Station.
Speaker 1 (38:20):
Men, today, it's definitely it's a good day to be
in Florida. What's good for us? A story to tell you?
Check in throughout the day day.
Speaker 6 (38:32):
I'm having a good JQ fifty five KRC D talk station.
Speaker 2 (38:41):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponsorller along with Brian James. And it's time
for Brian's bottom line. Brian, and then you have a
great story for us tonight.
Speaker 3 (38:51):
Yeah, like like to see these kind of stories like
this to kind of help people. You know, this is
a little bit of an extreme one, but it does
happen out there and we talk about two thousand and
eight all the time.
Speaker 4 (38:59):
Well that's what this was centered. So picture of this, bob.
Speaker 3 (39:02):
You've got a good business, lots of things going, thousands
of renters. All of a sudden, you know, we hit
two thousand and eight and a real estate collection turns
to dust. This was a woman named Amber Duncan and
her husband. They went from owning forty properties to declaring bankruptcy.
Speaker 4 (39:17):
So if you think about, you.
Speaker 3 (39:18):
Know that time, that matter of fact, that's the time
we always talk about stress testing portfolio.
Speaker 5 (39:21):
That's what we're doing.
Speaker 3 (39:22):
When we stress test somebody's financial plan, we're simulating two
thousand and eight.
Speaker 4 (39:25):
What happens.
Speaker 3 (39:26):
Well, we do that with the idea of owning stocks
and bonds and more traditional type investments. Here's what happened
if you own nothing but real estate. So Amber and
her husband had about forty rental properties. He had solid savings,
and it all fell apart when tenants stopped paying. Those
folks lost their jobs. Mortgage industry tanks, so they couldn't
those folks couldn't find another solution. They couldn't get more financing.
(39:46):
Amber and her husband were kind of stuck there. So
This was looking like a total complete loss and they
had to basically start over from scratch and reinvent themselves.
Speaker 4 (39:55):
They found a good way to do it.
Speaker 3 (39:56):
So what they did was they worked with their former
boss and launched a debt settlement company. Basically pivoted to
what the to what the root of the problem for
everybody was focused on helping clients reduce and manage debt
because they watched they watched their tenants all not be
able to pay their rent because no one was helping
through this. So within about two years they bounced back
to become millionaires again. Now fast forward that to today their
(40:17):
network stands around fifty million dollars. They live with modesty
purpose financial prudence. This simply works. Amber leads with intention.
She helps people track daily spending, avoids avoiding unnecessary debt,
paying cash whenever possible, and that this all came from
watching their their own net worth to go up and
smoke and watching that of their tenants who fell apart
(40:38):
as well.
Speaker 2 (40:39):
So Brian, these people went from bankruptcy to creating a
fifty million dollar net worth by basically doing debt counseling, by.
Speaker 3 (40:47):
Basically looking the monster in the eyes of two thousand
and eight and figuring out how to make that profitable.
Speaker 4 (40:52):
Here's how a lot of people got hurt.
Speaker 3 (40:54):
In two thousand and eight and because nobody was talking
to them. This is different than investment. It's a little
bit a little bit different than investment based financial planning.
This is simply talking to people about how to budget
and creating a way to reach the masses with these
types of ideas. So really kind of inspiring story between Okay,
two thousand and eight sucks, but we're not going to
roll over and play dead. What can we learn from
this and how can we build something that is good
(41:15):
for us and everybody else?
Speaker 4 (41:16):
So a great story for Amber and her husband.
Speaker 5 (41:18):
Absolutely thanks for listening.
Speaker 2 (41:20):
You've been listening to Simply Money, presented by all Worth
Financial on fifty five KRC the talk station.
Speaker 5 (41:26):
So my mother is think
Us Epstein survivors.
Speaker 2 (00:01):
We will compile the names we all know Venezuela and
drug smugglers.
Speaker 1 (00:05):
They were hit. It won't be doing it again.
Speaker 3 (00:07):
Today's News Chicago, Well we're going in is a military
the talk station.
Speaker 1 (00:20):
Tonight.
Speaker 2 (00:21):
You have a financial plan, but does anyone in our
nation's capital. You're listening to Simple Money because by all
Worth Financial I Bob Sponsller along with Brian James, Well,
we preach it every day on this show, Save well invest,
have a plan, manage your debt responsibly, and for darn suures,
please try to try to stay within your budget. Apparently
(00:42):
they don't do that in Washington, d C. Brian, this
is no surprise, but it's just, you know, a topic
that rears its head now that the Senate is back
from its recess and they're all going to have to
try to get in a room and come up with
either a budget or just a continually continual resolution on
spending that just kicks this can down the road and
(01:04):
just keeps spending more money than we have.
Speaker 4 (01:06):
Well, why are we bringing this up tonight, Bob?
Speaker 3 (01:08):
Well, the start of this week global markets, we're a
little worried about surgeon government bond yields and where there's
worries about budget deficits. Frankly, these things are always there,
but they're hitting the highlights because as Congress comes back
to work, and that's a big headline, we've all kind
of forgotten about that Congress basically took most of the
summer off and are now coming back to argue with
each other again. So we got a little ways to
go in terms of in terms of what the next
(01:31):
steps are going to be.
Speaker 4 (01:32):
So let's talk.
Speaker 3 (01:32):
About what we are seeing here. One of the commonly
known things that we look at as something called the VIS.
That's the College Board of Options Exchange Index. What it
does is it looks at options activity to understand.
Speaker 4 (01:44):
What they call Wall Street's fear gauge.
Speaker 3 (01:46):
What options activity simply means, for those of you who
don't know what options are, you're basically betting that I
think this is going to go up in the short
term or down in the short term. And there are
ways to kind of measure, you know, if there's a
lot of people betting on things that are going to
go down in the short one, well that means obviously
they're there's a little bit of fear out there. So
the VIX is something that measures that. Now, why am
I bringing it up? I don't know, Bob, because it's
actually nowhere near freak out level. It's just something we
(02:08):
look at it. It's a good thing to pay attention to,
even when it's not doing anything interesting. There's a little
bit of a spike on Monday, but but that itself,
there doesn't seem to be a whole lot of fear
on the on the wall street side. Now, tell us
about the budget deficit though, Well.
Speaker 5 (02:22):
Let's let's let's camp out on this VIX thing.
Speaker 2 (02:24):
I'm going to give you an opinion on why why
think what what happened yesterday? I mean, I don't think
it's any surprise at this point. We had a we
had a federal you know, appeals court that struck down
President Trump's tariff policy, saying it's illegal.
Speaker 5 (02:39):
And this is going to get you know.
Speaker 2 (02:41):
Appealed probably to fast track to the Supreme Court here
fairly quickly. And you know, if you take away the
tariff revenues and you don't have that coming in, and
you pair that with the big beautiful bill that.
Speaker 5 (02:55):
You know, gave us all the permanent tax cuts.
Speaker 2 (02:58):
That will that will we eate growth and it will
create inflation, you know, and the bond market did not
like that, and that's why I think you saw the long.
Speaker 5 (03:08):
End of the curve spike up a little bit. It
was all pretty short lived.
Speaker 2 (03:12):
I mean, we start the market opened yesterday down quite
a bit and it all settled down by the end
of the day. We were down a little bit. But
I think that that's what was going on yesterday until
everybody could get their collective breath and say, well, this
too shall pass, and we're probably not going to see
the end of all these tariffs, you know, whether you
(03:33):
like them or not, at the end of the day,
because the conventional wisdom is the Supreme Court's going to
step in and say, you know, they're not going to
be able to get rid of all of them, and
life's going to go on. That's what I think happened yesterday.
But yeah, let's get into the debt. The debt, which
stood at thirty six point two trillion at the end
(03:55):
of the second quarter, is now one hundred over one
hundred and nineteen percent of GDP Brian.
Speaker 5 (04:01):
That's pretty high.
Speaker 2 (04:03):
Interest on the national debt exceeds annual spending on Medicare
as well as on national defense. For example, in fiscal
twenty twenty four, the government's net interest expense was almost
eight hundred and eighty billion dollars, or thirteen percent of
our government's expenditures was just interest.
Speaker 5 (04:23):
On the debt. And that's data from the Office of
Management and Budget.
Speaker 4 (04:28):
Yeah, so let's look at this in dollar terms a
little more.
Speaker 3 (04:30):
That's a little more than what we spent on Medicare,
which was eight hundred and seventy four billion dollars. This
billion with a B national defense eight hundred and seventy
three billion. That that's all from fiscal twenty four. So
here's the big deal though. Interest on that debt is
now the government's third biggest major spending area, really just
behind social security, healthcare services, and research and so forth.
A lot of this is behind at least this is
(04:53):
sort of the argument behind what DOSEE was intended to do,
kind of slashing and burning some of these things that
somebody thought was not very necessary. I'm not one hundred
percent certain that the savings on those decisions is going
to head back into paying this debt down if it's happening,
and I think there is not, Thank.
Speaker 2 (05:08):
You, it's not It's like the doze thing was like
spitting in the ocean in terms of the amount of
money that would have got cut relative to this debt.
Speaker 5 (05:17):
I didn't mean to interrupt, Brian.
Speaker 4 (05:19):
But yeah, now I'm frustrated too, Bob.
Speaker 3 (05:21):
I hear the tone and how many times can we
can we stub our own toes like this?
Speaker 4 (05:26):
Well, I think and the reason, but I think personally,
I think one of.
Speaker 3 (05:29):
The reasons that we are choosing to go down this
path as a society is because we are not willing,
or at least our politicians believe that we are not
willing to make sacrifices. Nobody comes and speaks to us
like an adult to say we cannot do we have
to sacrifice here and there.
Speaker 4 (05:43):
We have got to pull in this or that or.
Speaker 3 (05:45):
The other, because all that's gonna happen is somebody's going
to come from the other side of the aisle seeing
that they can win a seat or win more influence
by telling people you don't have to sacrifice. And this
is not choosing either side of the aisle, but both
Republicans and Democrats do this in terms of simply telling
people what they want to hear.
Speaker 4 (06:01):
So that they will win an election.
Speaker 5 (06:03):
I totally agree. All right, let's look at who owns
this debt.
Speaker 2 (06:06):
Private investors are the biggest holders of US debt. Investors
own about two thirds of our national debt, or a
little over twenty four trillion dollars as of March of
this year. The rest is held in various federal trust
funds and retirement programs, or by the Federal Reserve itself.
The Federal Reserve owns four point six trillion dollars of
(06:28):
our debt. So, in other words, Brian, they print money
to buy the country's own debt, and that number is
now twelve point six percent of the national debt. Japan
is the biggest foreign holder of US debt. As of
May of twenty twenty five, Japan held about three point
one percent of our debt, followed by the UK at
(06:48):
two point two percent and China at two point one percent.
So you know, I know, the narrative is that so
much of this debt is owned outside the United States,
and you know, you add up China, UK and Japan
and you're talking about less than seven percent of our
debt held by those three nations.
Speaker 6 (07:09):
Yeah.
Speaker 3 (07:10):
Now, the thing I do find at least the little
I don't know, the heartwarming is not the right term.
Speaker 4 (07:14):
But comforting. Let's put it that way.
Speaker 3 (07:16):
As long as as long as we owe these other
countries money, especially the ones that we're a little bit
more at odds with than others, then everybody's got an
incentive to kind of not upset the apple cart that
this is where, you know, the interconnection of all the
different entities on the face of the earth can actually
work for us, because we get we can hate each other,
but we all got to find a way to work
(07:37):
together because we've been borrowing money from each other. And
remember a lot of the reason that that this is
the case that these countries have come here to buy
our debt is because we are still the best deal going.
We're still the best place to put money that needs
to be there tomorrow and and generate a little bit
of return on it, but in a very safe manner
there and there really isn't a country that's coming along
directly behind us.
Speaker 2 (07:56):
You're listening to Simply Money, presented by all Worth Financial
on Bob spun Seller along with Brian James.
Speaker 5 (08:02):
Brian talk a little.
Speaker 2 (08:03):
Bit about how we got here, take us through a
couple of the major historical events and periods of time
that caused this debt to.
Speaker 5 (08:11):
Just balloon out of control.
Speaker 3 (08:13):
Yeah, so, as you're well aware, I do like going
through history to kind of see what is when we've
seen situations like this before, what was the different outcome
and what were the differences. So let's go back to
the big one, the Great Depression. Back in nineteen twenty nine,
national debt was seventeen billion dollars. Right, that's a fourth
of what we just said we spend or not even
that's not even ten percent of what we just spent
on other items we were just talking about. But anyway,
(08:36):
back then that was about sixteen percent of GDP. The
Great Depression caused deficits the government borrowed to fund new
deal programs. This was probably one of the larger governments
in terms of reaction to what was going on as
the government tried to fix things, and then that that
of course lasted a little over decade, got us into
World War Two.
Speaker 4 (08:53):
That was going to happen anyway.
Speaker 3 (08:54):
Obviously the rest of the world was carrying on fighting
with each other while we were cleaning up our fiscal house.
Over a ten year period and that pulled us out. Ironically,
nobody wants war, but the reality is war involves a
lot of spending as companies or as countries prepare for it.
So military spending exploded after that. By nineteen forty six,
it was two hundred and sixty nine billion dollars, was
(09:15):
about one hundred and nineteen percent of GDP. That's the
most we've ever spent on that relative the overall economy.
But I would point out too that the stock market,
believe it or not, during these years, was up about
seventy percent. It was down nineteen thirty nine forty forty
one while we were wondering whether we were going to
get pulled into a war, and then once the answer
came clear that we were, it ended up going up
because because at the end of the day, the government
(09:37):
spends money and people go to work and that drives
the economy, which is what pulled us out of World
War Two. And then we move in a long period
between nineteen forty seven and the seventies where debt didn't
really shrinking dollars, but it stayed pretty flat.
Speaker 4 (09:48):
The economy was booming.
Speaker 3 (09:49):
This is when everybody, this is when that management kind
of mentality came in. Every company became a bigger and
bigger organization. Middle management come up. People bought houses and
subdivisions and so on, and that lasted for decades. So
that meant that the debt to GDP ratio fell dramatically.
This was the United States truly taking its spot at
the top of the that we currently maintained at the
(10:09):
top of the pyramid.
Speaker 2 (10:10):
Here, well, it was the Industrial Revolution. We grew our
way out of it.
Speaker 5 (10:15):
We grew our.
Speaker 3 (10:16):
Way out of debt the way it's supposed to work.
But go ahead, exactly are we built things from the
ground up, and we built structures that weren't there before
to generate profit. Now nowadays you move on nineteen seventy
four to two thousand and one, not a whole lot
of activity there, and ending in two thousand and one,
we were about thirty one percent debt to GDP.
Speaker 4 (10:35):
Since then, that's when we.
Speaker 3 (10:36):
Realized, hey, if we borrow money from people, we can
build lots of cool stuff. So the last several decades
is where that ratio has really taken off. And in
there in the middle of that you squeeze in the
housing crash, which that had everything to do with borrowing,
the financial crisis, COVID which came out of left field, all.
Speaker 4 (10:52):
Those different things.
Speaker 3 (10:53):
So overall, World War two in the pandemic pushed debt
above one hundred percent of the economy post war growth.
In the nineteen nineties, Bo help bring it back down.
So you can see the cycle going back over the decades.
Speaker 4 (11:03):
Bob.
Speaker 5 (11:05):
Yeah.
Speaker 2 (11:05):
And the ironic thing that makes me and I think
a lot of other people angry, well that this government
is still spending money at almost exactly the same amount
or rate as it did during the pandemic. That makes
no sense to me whatsoever. And the little Doze experiment,
that's that makes for good politics whatever, But that's you know,
(11:25):
that's spitting in the ocean in terms of paying down
or bringing bringing the spending down, which leads us to today.
I mean, you got three big spending you know, areas,
you got the debt, you got Medicare, you got Social Security.
No one is interested in cutting any of those, or
we really don't have the means to do it. You
(11:46):
can either raise taxes, you can spend less, which nobody
wants to do, or you can grow your way out
of it. And I think that's what President Trump is
trying to do with this tariff and trade policy'ing in money.
It's a basically a sales tax for individuals and companies,
let's face it. But it is bringing in revenue about
(12:08):
three hundred billion dollars a year to date, and you're
trying to bring investments back into the US to try
to grow our way out of this with some tax cuts.
Is it going to work? I don't know, but this
is what the president in the current administration is trying
to do. Meanwhile, Congress continues to kick the can down
the road.
Speaker 3 (12:28):
Yeah, and I think it's important to note that that
nobody has, really I'm a little surprised the American public
hasn't called for that an answer to the question where
are these dollars actually going? The answer is they go
to the general fund and they get spent. However, they
get spent so in a roundabout way because they flow
in there and they're not directly directly assigned to anything,
they are helping us kind.
Speaker 4 (12:46):
Of sort of balance the budget.
Speaker 3 (12:47):
But obviously, when you're talking trillions in debt, hundreds of
billions isn't going to make that much of a difference. So,
but it would be interesting to see if we could
really get an accounting of exactly where those dollars are
coming from and where they're going.
Speaker 5 (12:58):
Here's the all Worth advice.
Speaker 2 (12:59):
We can't change Washington's borrowing habits, but we can diversify
our portfolios, keep a healthy cash reserve to ride out volatility,
and make sure to align your investments with your long
term plan, not the headline news. Coming up next, if
the markets were to crash, would that be your biggest
financial risk. We've got a new crop of myths to
(13:22):
dispel coming up next. You're listening to Simply Money, presented
by all Worth Financial on fifty five KRC, the talk.
Speaker 7 (13:29):
Station KRC Cincinnati, available everywhere with the iHeartRadio app now
number one for podcasting. Fifty five KRC an iHeartRadio station.
Speaker 8 (13:41):
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 2 (14:00):
You're listening to Simple Money presented by all Worth Financial
on Bob Sponseller along with Brian James straight Ahead of
six forty three, Jim's sitting on three million dollars in iras,
Michael's stuck with seven hundred thousand dollars in his company stock.
I'd like to have that problem. And Steve's eyeing buying
a retirement home in Florida. Big money, big decisions are
(14:22):
ask the advisor segment is coming up. All right, there's
still some new financial planning miss out there that we
wanted to share with you and hopefully debunk this evening, Brian, let's.
Speaker 5 (14:33):
Get started with myth number one. It's not okay to
do a big splurge.
Speaker 3 (14:38):
Many of us have Jimminy Cricket sitting on our shoulders saying, no,
that's your nest egg. You can't touch that nest egg.
That's not allowed. You have to stare at it and
talk about rainy days. That's not the case. What that
means many times is that people simply have no idea
what they've built and what it can do for him.
I'm dealing with situation right now where somebody's basically put
away five million dollars and is worried about how they're
going to cover seventy five thousand dollars worth of bills
(15:00):
they haven't noticed that their social Security and pension payments
are already themselves more than enough, and they have five
million dollars. I know that sounds like a fantastic situation
not a lot of people are in. But this is
how blind people can be to to what the mechanism
they could that they've built can use for them.
Speaker 4 (15:15):
So let's give an example.
Speaker 3 (15:16):
Let's pretend you save three million dollars and you're following
that four percent rule.
Speaker 4 (15:20):
That's one hundred twenty thousand dollars a year.
Speaker 3 (15:21):
By the way, the four percent rule is a rough
approximation of how much you can take out of your portfolio,
having been stress tested over many, many decades of ups
and downs. If you take out four percent and otherwise
leave it alone, that's a very very important key, then
you can get away with taking about four percent a year.
So that's about one hundred twenty thousand dollars a year
off of three million. So if you decide to take
that dream RV trip or buy that splashy boat for
(15:43):
fifty thousand dollars, that's a.
Speaker 4 (15:45):
Really low number.
Speaker 3 (15:45):
For splash for one hundred and fifty thousand dollars, your
portfolio shrinks just a little bit under three million dollars.
So remember, a one percent move in the market off
of three million dollars is itself an awful lot of money.
Understand the impact of what you've built in exactly.
Speaker 4 (16:03):
What you can get it to.
Speaker 3 (16:04):
In that particular example, your budgetoul dropped about one hundred
and eighteen thousand. That's only a two thousand dollars difference
versus years of enjoyment for you and your family of
something that's important to you. Tiny change for a once
in a lifetime experience. I think, all right, Bob, sir,
and Bob tell us about the myth about leaving money
to charity after death?
Speaker 4 (16:20):
Is that the best thing to do?
Speaker 1 (16:23):
Well?
Speaker 2 (16:24):
Like everything else in life, It depends, Brian, But I
think the myth here is people are you know, some
people are honed in on these estate tax deductions at death.
Speaker 5 (16:33):
As a perk.
Speaker 2 (16:33):
But look, the federal estate tax exemption is so high now,
you know, roughly fourteen million dollars fifteen million dollars per spouse.
Most people are never going to have to worry at
all about federal estate taxes.
Speaker 5 (16:47):
And we don't have an inheritance tax.
Speaker 2 (16:49):
In Ohio, so you can take the whole estate tax
thing off the table and focus in on what is
going to bring you the most meaning during your life.
Speaker 5 (16:59):
And potentially tax benefits during your life.
Speaker 2 (17:02):
So it's you know, when you start to look at
what should my charitable goals be, lead with your heart,
but also factor in you know, your wallet and your
overall financial plan, and it does make sense to part
ways with some of this money during life. You can
generate some nice tax deductions benefit charities now.
Speaker 5 (17:22):
And h and get some joy out of the whole process.
Speaker 2 (17:25):
So I just want to completely dispel that myth of
waiting until death to leave money to charity. You leave
a lot of positive opportunities on the table, all right,
Brian Myth Number three, A stock market crash is your
biggest financial risk.
Speaker 3 (17:41):
Yeah, this is one that comes up obviously all the time.
Matter of fact, we build this in. Maybe we even
kind of perpetuate this one, because when we do financial plans,
we always stress test them. And the thing I always
say is, here's the hunky dory outcome if nothing bad
ever happens. Again, Now, let's pretend that the market punches
us in the face on day one, and let's take
away twenty twenty five percent of your financial networth.
Speaker 4 (17:59):
The day we retire, can your plan still work? And
most of the time, if we've done it properly, it does.
Doesn't mean it's fun, but it's gonna happen.
Speaker 3 (18:06):
That's like saying That's like saying that if it's raining today,
I'm gonna go ahead and brick up all my windows
because think of the savings on the heat I'll have
in the winter. No, that's not the case. The sun
will come out again. The cycle repeats itself. So no,
stock market crash is not your biggest risk. What I'm
gonna say is the biggest risk is our shields going down.
The more we age, Bob, and I'm hearing of this
(18:26):
more and more among my clients that I've been friends
with for a very long time. At some point we
hit a point where the red flags just don't go
off like they used to. This is why seniors are
just very frequent victims of deceptive pitches, robocalls, identity breaches,
those different kinds of things. So vigilance is probably the
next thing you should add to your portfolio. Learn how
to protect it, but more importantly, don't be ashamed if
(18:47):
you feel like maybe you don't have the edge that
you used to in protecting yourself. We all get there,
find somebody. I'll keep a second eye out for you.
Speaker 2 (18:54):
I talked about that yesterday on the show, and unfortunately
I'm seeing this.
Speaker 5 (18:57):
More and more and more in the scale.
Speaker 2 (19:00):
Know how to get to our elderly friends here and
take full advantage of them. It's absolutely horrible. All right,
let's get into myth number four. It's best to spend less, Brian.
You know again, I've come full circle on this one
now having kids that are, you know, in their early
to mid to late twenties and trying to get started
(19:20):
in life again, within the construct of a of a
good financial plan, you can you can deliver tremendous benefits
to the next generation getting started with their home or
college education, for grandkids, things like that. It'll make much
a much bigger difference in their life today then having
(19:42):
them sit there and wait thirty years to inherit a
pile of money.
Speaker 3 (19:45):
What say you now, I believe it's it's all about
understanding exactly where you are and what you can get
away with if you Because if we don't know that,
then you're gonna you're gonna risk a lot of time
during your retirement spent staring at your pile of money
and just worrying that it's not going to be enough.
To be enough, most people have no idea what enough is.
That's why you and I have jobs, So understand your situation.
One last quick one, do Bob, do you have to
(20:06):
pay off my house before I retire? Is that a requirement?
Speaker 5 (20:10):
It depends, Brian. Don't pay it off.
Speaker 2 (20:12):
If you've got a two point eight percent thirty year
fixed mortgage, absolutely not, don't pay it off.
Speaker 5 (20:18):
Here's the all Worth advice.
Speaker 2 (20:19):
The biggest retirement mistake isn't spending too much. It's letting
outdated myths stop you from living a fully meaningful life
and planning wisely. Coming up next, we've got a brand
new update on the local housing market, good information for
both buyers and sellers. You're listening to Simply Money, presented
by all Worth Financial on fifty five krs.
Speaker 5 (20:40):
See the talk station.
Speaker 1 (20:42):
They're learning about.
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History fourteen ninety two and.
Speaker 6 (20:46):
Learning about the news.
Speaker 2 (20:48):
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to school fifty five krs. The talk station.
Speaker 7 (20:59):
This is fifty five KRC an iHeartRadio station.
Speaker 2 (21:07):
You're listening to Simply Money Said about all Worth Financial
on Bob Sponseller along with Brian James, joined tonight by
our real estate expert, Michelle Sloan, owner of Remax Time. Michelle,
thanks as always for spending time with us tonight. And
I'm intrigued by this first little item that you wanted
to share. You've got some news about the highest priced
(21:29):
recent sale of a home in Cincinnati.
Speaker 5 (21:32):
I'm dying to know what that was. Tell us all
about it.
Speaker 4 (21:34):
Oh, it's a big one.
Speaker 9 (21:35):
And I still get excited about real estate every single
day when I wake up. But when I saw this posted,
it was, you know, a little unusual so private real
estate sale in Indian Hill. Beautiful home sold earlier this
month for approximately drum roll please.
Speaker 4 (21:59):
Six point four million.
Speaker 9 (22:01):
Dollars and the kicker, it was an all cash transaction.
So six and a half million dollars all cash.
Speaker 4 (22:12):
Right now, how big of a house? Are we talking?
Big a property? You know, all the whole deal. What
are we talking about that looks like it's a big deal.
Speaker 9 (22:22):
The mansion and I'm going to call that a mansion
is fourteen thousand square feet, six bedrooms, seven full bathrooms,
one oh, just one little half bath.
Speaker 4 (22:33):
You know, for good measure. Sure.
Speaker 9 (22:34):
Yeah, it's one of the priciest home sales in recent memory.
And so yeah, there she is six and a half
million dollars all cash in Indian Hill.
Speaker 4 (22:45):
That's a lot of dusting. I just heard Brian.
Speaker 2 (22:49):
Brian just admitted, I know you're trying to fly under
the radar here, but you finally got your quarterly bonus
for the third quarter and wanted to surprise the wife,
you know.
Speaker 4 (22:58):
Bob, Michelle doesn't know, and I got to buy the
giant boat to put on the roof.
Speaker 5 (23:02):
All right, let's get into the market update.
Speaker 2 (23:04):
Things have definitely slowed down in the number of sales
and activity over the last two weeks. I guess since
schools started. What's going on in the current real estate market?
Speaker 4 (23:14):
Michelle, Well, I'm going to back up just a little bit.
Speaker 9 (23:16):
Our statistics are always a little behind, you know, it
takes some time. So we are the beginning of September.
We don't have our stats yet, our official stats for August,
but I can feel it just every single day. I
have a few listings that are lingering that shouldn't be lingering.
I have very few buyers walking through my listings, and
(23:40):
this is a little bit of a trend. Again, I
think it's a short term blip on the radar. But
when you're living it and you're a seller and nobody's
coming to your house, and you know it's priced right,
and you know it's staged well and it's in great condition,
you just have to just scratch your head and go, oh,
(24:00):
my gosh, what's happening. Well, it is a seasonal lag,
in my opinion. We have mortgage rates that are actually
going down a little bit, and we do expect with
the FED going to have a little a little decrease, right,
we're expecting.
Speaker 3 (24:15):
Hey, thank Michelle, when that happens. When we get that
expectation out there, do you find people are people calling
you and saying, hey, slow the roll a little bit,
we want to give it a few more weeks. Or
do do people you know, just kind of keep rolling
if they're in house buying mode.
Speaker 9 (24:29):
Well, I found that the house buyers, I'm not sure
where they went because about a week before school started,
and remember school starts mid August, that's when everybody kind
of tightens up and it feels like nobody's out there
looking now. Usually after Labor Day people start to loosen
(24:52):
up again.
Speaker 4 (24:53):
Here's the thing.
Speaker 9 (24:54):
There are homes on the market that have been on
the market for thirty days. Those homes and those sellers
are ready to sell right now, this minute. So there
are some tremendous opportunities. And that's where I would say, buyers,
call your agent and say, listen, I want to get
back in. I want to take a look at the
(25:15):
mortgage rate, what has it done, how has it changed
in the last month.
Speaker 4 (25:21):
Is there more opportunity?
Speaker 9 (25:22):
Can we negotiate a little bit more on a listing
that has been listed for thirty days? And the answer
is absolutely yes. Now don't come in twenty or thirty
thousand dollars under list price, please, But if you want
to reasonable, make if you really want to make that
seller mad and not want to work with you, you
(25:43):
do want to be reasonable. But at the same time,
there are opportunities right now. So it's it's that time
of year where everybody's sort of taking a deep breath.
We're holding our breath and we're waiting to exhale, and
we're hoping that maybe a little fed cut is going
to help us lower rates and buyers.
Speaker 4 (26:02):
Get your butts back out there, all right.
Speaker 5 (26:05):
Hey, Michelle, just a question.
Speaker 2 (26:07):
I would think the people that have had their homes
out there for sale for thirty days, they want to
get this done before the weather turns and everything gets cold.
And I know you've said everything has slowed down. How
does the slow down after school starts compare to the
slowdown that happens between Christmas and say March, when the
weather's just miserable around here. Are we talking about a
(26:30):
mild slow down versus a huge slowdown or is there
not much of a difference.
Speaker 4 (26:34):
You know, it's interesting.
Speaker 9 (26:36):
I do think this is more of a of a temporary,
you know, thirty day slow down. We do see if
the weather's really bad. But you know what, a lot
of people make changes the first of the year. So
the end of December may be slow right around the
Christmas holidays, but January, February, March it starts to ramp
(26:58):
up like crazy. So again, there's always I feel, there's
always opportunities year round, depending if you don't want to
be in the mix of the busiest of busy seasons.
And frankly, will I have some stats. Real quick, let's see.
I think we got about two minutes a little bit
of statistics from the statistics that I can tell you.
(27:19):
Median sales price in Cincinnati during July of twenty twenty
five approximately seven percent higher year over year from last
year at two hundred and ninety four thousand dollars. That's
the median sales price in Cincinnati, two hundred and ninety
four thousand dollars. The volume is also up from June
of twenty twenty five as opposed to June of twenty
(27:43):
twenty four, we had a thirteen percent increase in home sales.
And so again we're seeing it was a really, really
busy summer. And now we're just taking a deep breath
and we're holding it. I know sellers who are on
the market right now are like, okay, Michelle, what can
(28:04):
I do other than lower the price?
Speaker 6 (28:08):
You can?
Speaker 4 (28:08):
You know?
Speaker 9 (28:08):
I had one seller who actually went ahead and they
had bright blue shutters that kind of looked like Easter
egg blue, and I said, maybe you change your curb appeal.
And you know what, that change of the curb appeal
and the taking retaking of photos caused a little bit
(28:29):
of activity. So there are things that you can always do.
You want to stay in communication with your real estate
agent because there are things you can do. Maybe staging
is something that you need to do at this point. Again,
there's just more open houses, and open houses are back.
Speaker 4 (28:48):
They were gone for a while, but they are back.
So yeah, yeah, well.
Speaker 2 (28:56):
Hey Michelle on the byside, correct me if I'm wrong.
I mean, even if you write a contract right now,
I mean, most of these lenders are work with you
and not lock in a rate you know, before or
until after this FED meeting on September seventeenth. Right, there's
a lot of flexibility on the lending side as well,
am I right.
Speaker 4 (29:14):
There should be.
Speaker 9 (29:14):
You definitely need to ask that question, and don't forget
you have to communicate and if the lender that you
choose or the real estate agent that you choose is
not communicating with you, you know, just say hey, listen,
we need to talk.
Speaker 5 (29:29):
Yep.
Speaker 2 (29:30):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC, the talk station who wants to.
Speaker 1 (29:36):
Be Rich We call them every day millionaire. Every day
listen to Dave Ramsey.
Speaker 10 (29:42):
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? Tonight had seven h start asking how much?
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On fifty five KRZ the talk station, Hi, It's Brian
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News when it happens, Breaking news tonight, we are coming
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Speaker 2 (30:41):
You're listening to Simply Money, presented by all Worth Financial
on Bob spon Seller along with Brian James. Do you
have a financial question you'd like for us to answer.
There'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, leading
us off tonight is Jim in four or Thomas who
says we've accumulated around three million dollars in iras with
(31:05):
required minimum distributions coming up? Should we start orroth conversions
now or just take the rm ds as they come. Brian,
this one's right in your wheelhouse.
Speaker 3 (31:15):
Yeah, this one of my favorite topics to discuss. How
can we deal with this? So require minimum distributions? There's
a time out there, and it's it's when you're either
seventy three or seventy five, depending on when you were born,
that you're going to have to start paying taxes on
those pre tax dollars that have been languishing in your
four O one k's and iras for decades now. And
that's where Jim apparently is. That's sneaking up on the horizon.
So what what can we do about it?
Speaker 4 (31:37):
Can we can?
Speaker 1 (31:37):
We?
Speaker 3 (31:38):
Can we avoid those taxes? No, there's no such thing
as tax avoidance. There is tax minimization and tax optimization.
So what Jim is thinking about doing, He's saying, basically, well,
the heck with it. Since I got to pay taxes
at least on a little bit of this anyway, why
don't I just start that now? Voluntarily before i'm rmd
ah and start looking at ROTH conversions. And I think
that's a fantastic idea as long as we do the math. Now,
(31:59):
the best best of proch to do to take here, Jim,
is hopefully whatever taxes you've you've decided you're comfortable paying. Right,
there's no recommended amount necessarily of how much you should convert.
It really is how much you comfortable with giving to
the irs, and you know, voluntarily in exchange for that
tax free growth. But the important thing is to make
sure you're paying those taxes with non IRA dollars. There's
(32:20):
not wrong with that if that's the only way you
can do it, but taking money out to pay taxes
on your taxes is going to be the less efficient
way to do it. So hopefully you've got some taxable
dollars with which to pay those amounts. Now, remember this
is also going to push up your income, which means
two years later it may play a role in your
Medicare premiums. Don't be surprised if you see a little
spike there. I think people worry too much about IRMA.
(32:41):
I think these that's short term pain for long term gain,
especially when we're talking about decades of tax free growth
that will benefit you and your kids. One last thought,
tax free growth counts for you for the rest of
your life. Your children will inherit it, and believe it
or not, they get ten years to continue letting most
of that money grow tax free because.
Speaker 4 (32:57):
Of the way the IRA rules are are handled.
Speaker 3 (33:00):
Lots of moving parts of their gym. But yes, you're
on the right track. Keep chopping away at it. Let's
move north. Michael, and Westchester says he's stuck with poor boy.
About seven hundred thousand dollars in company stock has done
really well. He recognizes the risk there, Bob. What can
he do about that to kind of protect himself?
Speaker 2 (33:16):
Well, I think two things, Michael. One, you can use
what's called a collar strategy. And I know that sounds
exotic and complicated, it's really not. You basically simultaneously buy
a put option on your stock. You're buying insurance against
the stock dramatically falling in value. And then you simultaneously
sell a call option, which is capping the upside. But
(33:37):
the premium you collect from that option will help pay
for your insurance.
Speaker 5 (33:41):
So now you've just kind of bracketed the.
Speaker 2 (33:44):
Short term you know, volatile movement up and down on
that stock, you know, to make sure that if we
have a crash in the stock or the overall stock market,
it doesn't ruin your overall financial plan. Aside with doing that,
or in addition to doing that, then you can start
to just chop away at this thing and responsibly take
some capital gains exposure and diversify that stock into other
(34:08):
things and do it within the context of a well
thought out financial.
Speaker 5 (34:12):
Plan and tax strategy.
Speaker 2 (34:14):
And that's a good way to just gradually protect that
company stocks value while getting this thing diversified as as
part of your long term plan. Hope that helps, all right,
Steve and Lovelin, we're considering a move to Florida beyond
the state income taxes. What other financial planning avenue should
we think through before making this move?
Speaker 3 (34:36):
Brian, You know, Steve, we have this conversation very frequently.
That's been, of course, just a long, long term assumption
of anybody here in the Midwest when when we finally retire,
we're going to get out of here.
Speaker 4 (34:46):
For February January February, We're going to go to Florida.
It's just where you go.
Speaker 3 (34:49):
No state income tax, lots of sun blah blah blah.
But what I'm hearing more and more is people expressing
so much frustration about Yeah, the no income tax savings
is nice, but the property and sure and the homeowners
association fees and all the other little fees. Remember, Florida
has the same obligations that every other state has. They
got to pay for stuff somehow, and they tend to
do it by taxing on properties, property type things as
(35:11):
well as tourism. So you're going to run across you know,
it's not just a pure savings on the no income tax.
If you're looking to buy inland in Florida, maybe not
such a big deal. But if you're assuming you're going
to be anywhere near the water, which go down there
in August and make sure you're sure you're happy with
where you're going, then you're gonna be dealing with property insurance,
homeowners and all those kinds of things that are going
to be a lot more. I've taken Bob more and
(35:33):
more often that to talking people through here's what you
were gonna spend on a home, as well as all
the up to keep on it, the HOA, the insurance
and all these other things. Maybe we figure out what
that dollar amount is and just be cool with the
idea that, you know what, we're gonna take better vacations.
We're just going to stay in nicer places. We're going
to go to more exotic places because we know we
can afford it. We've done the math, We've done our plan.
(35:55):
Because the last piece of this that has nothing to
do with finance, a single home and a single area
can become an anchor. You may find yourself not looking
forward to vacation because you cannot get yourself out of
the mindset that we got to go to Florida. We
got to go to that place again because we own it,
we threw money at it. We just got to go there,
and it becomes more work than anything else. Mark, in Montgomery,
we've got high value art and collectibles in addition to
(36:17):
our more mainstream traditional investments. What should they be doing, Bob,
to make sure these are properly insured and so they
don't create a state headaches later?
Speaker 2 (36:25):
Well, three things, Mark, I would say, find a good
person who knows how to value appropriately value these high
value art and collectibles. You got to get a valuation
done if you haven't already then find a good property
and casually insurance agent that actually has experience and expertise
in ensuring you know, these kind of collectibles and value
(36:46):
so that way you get your value set, you get
everything insured to protect your investment in the value.
Speaker 5 (36:52):
Then think about.
Speaker 2 (36:53):
Where should these where should this art in these collectibles
end up as part of your state plan. Who wants them?
You know, are they going to be able to manage
them after you're gone? Decide whether that's best handled by
family members or charities or.
Speaker 5 (37:09):
A combination of both.
Speaker 2 (37:11):
And you know what, you really got to think through
where you want these you know, this art and collectibles
to actually end up, and that should drive some of
your you know, decisions heading down the road. It's good
to get out in front of this. And I'm glad
you're asking the question now. It sounds like you're being proactive,
which is great, rather than just leaving this stuff when
(37:31):
you pass away and hoping it all works out all right.
Coming up next, Brian's got his bottom line a great
story of someone who was in deep financial trouble, dug
himself out and actually became a very successful financial advisor.
You're listening to simply money presented by all Worth Financial
on fifty five KRC the Talk.
Speaker 11 (37:52):
Station, Mark Levin, you know, America, we spent an awful
lot of time in this country responding to and unreality
created by the people who hate America, created by people
who get sucked into the narratives that are pushed out
there each and every day. And they're posting, and they're posting,
and they're posting, and then move on to the next
thing and the next thing, and then actually that's what
(38:14):
the media enemy do.
Speaker 6 (38:15):
Mark Levin tonight at ten oh six on fifty five
KRC the Talk Station.
Speaker 1 (38:20):
Men, today, it's definitely it's a good day to be
in Florida. What's good for us? A story to tell you?
Check in throughout the day day.
Speaker 6 (38:32):
I'm having a good JQ fifty five KRC D talk station.
Speaker 2 (38:41):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponsorller along with Brian James. And it's time
for Brian's bottom line. Brian, and then you have a
great story for us tonight.
Speaker 3 (38:51):
Yeah, like like to see these kind of stories like
this to kind of help people. You know, this is
a little bit of an extreme one, but it does
happen out there and we talk about two thousand and
eight all the time.
Speaker 4 (38:59):
Well that's what this was centered. So picture of this, bob.
Speaker 3 (39:02):
You've got a good business, lots of things going, thousands
of renters. All of a sudden, you know, we hit
two thousand and eight and a real estate collection turns
to dust. This was a woman named Amber Duncan and
her husband. They went from owning forty properties to declaring bankruptcy.
Speaker 4 (39:17):
So if you think about, you.
Speaker 3 (39:18):
Know that time, that matter of fact, that's the time
we always talk about stress testing portfolio.
Speaker 5 (39:21):
That's what we're doing.
Speaker 3 (39:22):
When we stress test somebody's financial plan, we're simulating two
thousand and eight.
Speaker 4 (39:25):
What happens.
Speaker 3 (39:26):
Well, we do that with the idea of owning stocks
and bonds and more traditional type investments. Here's what happened
if you own nothing but real estate. So Amber and
her husband had about forty rental properties. He had solid savings,
and it all fell apart when tenants stopped paying. Those
folks lost their jobs. Mortgage industry tanks, so they couldn't
those folks couldn't find another solution. They couldn't get more financing.
(39:46):
Amber and her husband were kind of stuck there. So
This was looking like a total complete loss and they
had to basically start over from scratch and reinvent themselves.
Speaker 4 (39:55):
They found a good way to do it.
Speaker 3 (39:56):
So what they did was they worked with their former
boss and launched a debt settlement company. Basically pivoted to
what the to what the root of the problem for
everybody was focused on helping clients reduce and manage debt
because they watched they watched their tenants all not be
able to pay their rent because no one was helping
through this. So within about two years they bounced back
to become millionaires again. Now fast forward that to today their
(40:17):
network stands around fifty million dollars. They live with modesty
purpose financial prudence. This simply works. Amber leads with intention.
She helps people track daily spending, avoids avoiding unnecessary debt,
paying cash whenever possible, and that this all came from
watching their their own net worth to go up and
smoke and watching that of their tenants who fell apart
(40:38):
as well.
Speaker 2 (40:39):
So Brian, these people went from bankruptcy to creating a
fifty million dollar net worth by basically doing debt counseling, by.
Speaker 3 (40:47):
Basically looking the monster in the eyes of two thousand
and eight and figuring out how to make that profitable.
Speaker 4 (40:52):
Here's how a lot of people got hurt.
Speaker 3 (40:54):
In two thousand and eight and because nobody was talking
to them. This is different than investment. It's a little
bit a little bit different than investment based financial planning.
This is simply talking to people about how to budget
and creating a way to reach the masses with these
types of ideas. So really kind of inspiring story between Okay,
two thousand and eight sucks, but we're not going to
roll over and play dead. What can we learn from
this and how can we build something that is good
(41:15):
for us and everybody else?
Speaker 4 (41:16):
So a great story for Amber and her husband.
Speaker 5 (41:18):
Absolutely thanks for listening.
Speaker 2 (41:20):
You've been listening to Simply Money, presented by all Worth
Financial on fifty five KRC the talk station.
Speaker 5 (41:26):
So my mother is think
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