September 16, 2025 • 41 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian break down what the Federal Reserve’s next move could mean for your money. Allworth Chief Investment Officer Andy Stout joins the show to preview this week’s Fed meeting, explain why inflation remains sticky, and share what the “dot plot” really tells us about future rate cuts. Then, Bob and Brian stress test portfolios against everything from a sudden market crash to geopolitical shocks. Later, they tackle whether AI is a reliable investment tool—or just another overhyped buzzword. Finally, they answer your real money questions on passing down vacation homes, selling a business, balancing charitable giving with future healthcare needs, and keeping streaming subscription creep under control.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Happening.
Speaker 2 (00:00):
The evil Newest have no idea that.
Speaker 3 (00:02):
They have done the biggest protest in British history.
Speaker 2 (00:06):
Listen today, Well the problem is on the left.
Speaker 3 (00:09):
Every today Fascist to his core fifty five KRC the
talk station.
Speaker 4 (00:20):
Tonight, it might cost less to borrow money by the
end of this week. You're listening to simply Money, presented
by all Worth Financial. I'm Bob sponseller along with Brian James. Well,
we've been talking about it for days, if not weeks,
and now it's here. This week the Federal Reserve will
decide whether the lowest lower interest rates for the first
time since December. And I guess at this point we're
(00:41):
just wondering, you know, by how much and what future
rate cuts look like in the next couple of months.
And to help us preview all this is all Worth
Chief investment Officer Andy Stout.
Speaker 5 (00:52):
Andy.
Speaker 4 (00:53):
Last week, Brian and I went through the latest producer
Price Index and consumer Price Index numbers. So unless you
really want to dive into that, no need to get
into the weeds on that. But how do you think
the Fed viewed the results? Is what we really want
to talk to you about this morning.
Speaker 6 (01:10):
Yeah, I don't I don't think we need to do
a deep dive on that, because I think you guys
covered it pretty good, and I must say it was
definitely one of the more riveting segments between you two.
Speaker 5 (01:20):
So thank you, thank you.
Speaker 6 (01:22):
You really lit the.
Speaker 4 (01:24):
So does that mean you you listen to that podcast
like three times on your way down to Knoxville for
the Tennessee game.
Speaker 5 (01:30):
Is that what you're telling us?
Speaker 6 (01:33):
No, I only listened to it once. I listened to
every episode. Mark here everyone too. Uh that said, we
don't need to talk about Tennessee losing a heartbreaker. Uh,
moving on to economics and the fat nice little segue there.
Speaker 5 (01:50):
Uh.
Speaker 6 (01:50):
So when you look at what happened to last week
with the inflation data, it was about as expected. So
I didn't really move the needle from what the FED
was thinking about and interpreting and inflation and thinking about
rate cuts. And you just look at what the market's
pricing in. You know, the market's pricing in a FED
move this week, and there's a lot of reasons for that.
(02:13):
But the inflation data that came in last week, Bob,
it's not changing anything. The takeaway as though it's still
too elevated and it doesn't it doesn't meet where the
FED wants or it's not out where the FED wants
it to be.
Speaker 5 (02:27):
I mean, the FED wants it.
Speaker 6 (02:28):
To be closer to two percent, and we're just not
there yet, and it doesn't seem like we're going to
get there anytime soon.
Speaker 7 (02:34):
So when when we're looking at these things, how we
had a point yet where the average investor, the average
person looking to do their financial plans and that kind
of stuff, should they be truly thinking differently about anything specific?
Speaker 5 (02:47):
Are we you know, are we still kind of steady.
Speaker 8 (02:49):
As she goes.
Speaker 5 (02:51):
Well?
Speaker 6 (02:51):
From an investment standpoint, I mean, I think you do
need to look at the bigger picture. There is a
confluence of indicators that really all come together, and this
is what the Feed's looking at. And when investors are
you know, parsing all of this information, there is a
lot of nuance involved in order to understand you know,
the job market and inflation, and that may seem relatively
(03:15):
simple on the surface, but there's all these you know,
secondary and and tertiary effects where one indicator affects another,
which affects another, and all of a sudden that can
change your whole economic view.
Speaker 5 (03:29):
But when we're looking at.
Speaker 6 (03:30):
It from a big picture of perspective. From an investor standpoint,
what you need to think about with your own money.
You need to be asking yourself, am I positioned at
a point where if the market were to go down abruptly?
Would I be losing sleep at night? Would I be
putting my financial future or jeopardy? If that's the case,
you might want to rethink how you're allocated. Because movements
(03:53):
like that happen out of the blue, and it can
happen relatively frequently. I mean, we see ten to fifteen
percent pullbacks very regularly, at least every year on average
on the ten percent pullbacks, So if you're not ready
to handle that, I mean, you might want to rethink things.
But from our perspective, when we're looking at the economy
and we're looking at whether or not we see some
risk out there, I mean, yeah, there's risk. There's always risk,
(04:15):
there's no question about it.
Speaker 2 (04:16):
Uh.
Speaker 6 (04:17):
In the near term, you know, the markets are certainly
price to perfection to a degree. UH, and any sort
of real uh you know, negative negative catalyst that comes
along the way could cause a pullback. But when you
look a little bit longer term, I'm saying longer term
six to nine months. I mean, we're about to enter
the period where the most one of the most market
(04:37):
friendly periods, uh, which is really uh you know, has
a climax of the Santa Claus rally. You know, this
seasonality period of you know, mid October through January is
one of the strongest periods. And recession risk is still
all call it medium, but we do see weakening data
out there, and that's what the FET's thing too, especially
the labor market.
Speaker 4 (04:57):
All Right, So Andy, I'm trying to parse together your
comments here just sitting out there as a regular investor.
We're heading into one of the most positive positive seasons
of the year historically from a market performance standpoint. Yet
I can also tell you're really not anticipating a half
point rate cut at all this week. Help help us
(05:19):
figure out what are you expecting between now and the
end of the year from a FED standpoint.
Speaker 5 (05:24):
How many rate cuts? How much?
Speaker 4 (05:26):
What's the market pricing in at this point? You know,
what are you seeing out there?
Speaker 6 (05:31):
Well, the market's pricing in three quarter point rate cuts
are just about and there's three meetings left, so they're
expecting a reduction of a zero point two five percent
at each of those meetings. There's there's only a very
very small chance that you get a half point cut
here this Wednesday, when the FED concludes its meeting. I
(05:51):
mean it's like a five percent chance. So more than
likely it's going to be a quarter point. But that's said,
there's probably going to be what's going to be really
interesting is going to be that descents. So not everyone.
It's not going to be a unanimous foe. I mean,
I would be shocked. I think you'll probably see at
least one person wanting a fifty basis point, where a
half percentage point cut. That's going to be the new
(06:14):
FED member who is likely to be confirmed by the
Senate this week or I'm sorry this evening, excuse me,
when when Congress gets together, Steven my Run is supposed
to be confirmed here this evening by the Senate, so
that he would probably come in with a half point
rate cut.
Speaker 5 (06:32):
So he's going to likely descent on a quarter And.
Speaker 6 (06:35):
Then if you look at the last meeting we had,
we had two FED members who wanted a quarter point
cut at that time, maybe in their mind's eye should
be it should have been a quarter then and a
quarter down. Maybe they want a half point too, So
you could see conceivably, you know, don't we'll see how
it plays out, but you could conceivably see three people
wanting a quarter point or i'm sorry, a half point
rate cut. And there's probably some others who may not
(06:57):
want to cut at all because they're worried about inflation
because the FED has de mandate, uh, full employment and
stable prices. We're not at stable prices. Granted we're not
at full employment either, so the fat's kind of in
that situation where, uh, you know, they're darned if they do,
and darned if they don't.
Speaker 5 (07:12):
Excuse my language there.
Speaker 7 (07:14):
So Andy, let's pivot a little bit to your your
one of your favorite topics. I know you you love
to go home and talk to your family about the
dot plot, uh, at family dinner? So what's the dot
plot looking right now? Like right now?
Speaker 5 (07:26):
And how does how does the what does the dot
plot mean?
Speaker 7 (07:28):
If we've got one of the major voters has never
voted before, so who knows what what they're thinking?
Speaker 5 (07:32):
How does that affect all this?
Speaker 6 (07:35):
I love how you think I go home and talk
about the dot plot with my family.
Speaker 5 (07:38):
You know, how your brain works.
Speaker 6 (07:42):
But what so, what the dot plot is that is
a it's a graph in each FED member voting and
non voting, and that's a key uh says where they
think interest rates should be at the end of upcoming
calendar years. And when you look at that, you might
be thinking, well, I kind of just want to know
where a FED schair palses because other than that, I
(08:03):
mean the non voters, I mean, do we really even care,
you know, all that much about what they're thinking. And
the answer is, you know, probably not. But what we
do instead is we look at what's called the median
dot for the Federal Reserve and we get these dot
plots every three months. So the last one we got
was in June, and we're going to obviously get another
(08:25):
one here in September. And what the dot plot showed
the last time was that median dot showing two quarter
point rate cuts this year. And to be clear, it
was very very close for that median dot to actually
be almost no cuts. So there is a very wide
divide within the FED because people are worried about inflation
(08:47):
and some are worried about the job market. So what
you know, we expect this time around. When it comes
to the dot plot, we expect it to be shifting lower.
And we also would not be surprised by that median
dot you know, maybe still being at two, but there's
a chance that comes in at three quarter point cuts
here this.
Speaker 5 (09:07):
At this meeting. So that's just for twenty twenty five.
Speaker 6 (09:10):
Then when we look into twenty twenty six, probably see
another two or three in total for that year. So
when we look at where the FED fund's rate right
this right now, we're it arrange a four and a
quarter to four and a half that by the end
of next year, what the market thinks that it'll be
around is three to three and a quarter percent in
that range.
Speaker 4 (09:31):
All right, Andy, I know you, you know you look
at that dot plot, which is regularly viewed by all
economists everywhere. But something that you do, you and your
team do, you know through your work at all Worth Financial,
and it's wonderful work that you prepare for all of
us as you do a recession scorecard. So let's just
assume that the Fed sticks with a quarter point cut
this week. We've already seen these labor numbers come in
(09:54):
that are pretty weak, the latest numbers. What does that
do to the Recession scorecard, how likely are we to
see a recession in the US economy over the next
three to six months.
Speaker 6 (10:06):
So our Recessions courtcard looks at what's called leading indicators,
which are data that moves before the broad economy moves,
and a lot of the labor market data that we
have been getting lately that has been grabbing the headlines.
Those are more what I'll call coincident or even lagging data,
meaning they're not really having a big impact on what
(10:26):
the future may hold. It just kind of tells you
where we were, you know, just to give you an example, Bot,
I mean, you saw the data last week where the
BLS went back and revised March twenty twenty four through
March twenty twenty five. You know, the total number of
jobs added by employers lower by a record nine hundred
and eleven one thousand. I mean, that's a massive it's
a big number, staggering drop in the number of jobs
(10:49):
that we're at it. But that was March twenty four
through March twenty five. I mean, it doesn't matter that much.
It does matter because it shows you that we're coming
from a weaker starting position, and that can help guide
the fat, but it doesn't really tell us too too
much about the future and work. It just kind of
shows you there might be a little bit less room
for air. But when we look at the leading economic
(11:12):
indicators that are out there right now, I'm calling it
medium risk. Basically, we're scoring it right around thirty percent
risk right now, and if you get above forty percent,
that's where it's high risk. And we're not there yet,
but we're certainly at a point where there is some
warning signals and red flags that you really need to
(11:34):
be watching very closely to make sure that you know
your position properly. And that's kind of what those are
some of the things that we take into consideration when
we're building portfolios.
Speaker 7 (11:45):
Hey Andy, why didn't it Why doesn't that have a
bigger impact? And what I'm getting at here is, if
let's say we got those numbers right to begin with,
in the economy appear to be slowing that much a
year ago, if we had gotten right out of the gate,
does that mean we would have lowered rate? I know
I'm asking you a guest, but would we have lowered
rates a year ago? Would we be in a different
mode now if we had better numbers. Then, assuming these
(12:06):
numbers are accurate.
Speaker 6 (12:09):
I would say maybe.
Speaker 5 (12:13):
I love the conviction.
Speaker 6 (12:14):
And here's why though, here's it's really important.
Speaker 5 (12:17):
We haven't eaten inflation.
Speaker 6 (12:20):
I mean, if we were just looking at the job market, yes,
one hundred percent, they would have cut rates, but inflation
has not gone down the way the FED was expected to.
This last mile of getting to that Fed's two percent
target has been just a brick wall and we're not
there yet. We're still trying to push against this brick wall.
So with the FED, I've wanted to cut rates, then
(12:41):
I don't know. I doubt it because the economy has
still been growing. The labor market would be a little
bit weaker, but we're still not recessionary, and we still
have inflation way too high. They made have put one
quarter point cut in there. Maybe I don't know, but
not much.
Speaker 5 (12:59):
All right?
Speaker 4 (12:59):
Could your nest egg handle a financial shock? We're going
to simulate what it's like to stress stress test a portfolio.
Coming up next, you're listening to Simply Money, presented by
all Worth Financial on fifty five KRC the talk station.
Speaker 9 (13:14):
Hey listen to Dave Ramsey Rich. People ask how much broke?
People ask how much down and how much a money?
With days at seven start asking about how much? On
fifty five KARC the talk station.
Speaker 1 (13:28):
Allworth Financial a registered investment advisory firm. Any ideas presented
during this program are not intended to provide specific financial advice.
You should consult your own financial advisor, tax consultant, or
a state planning attorney to conduct your own due diligence.
Speaker 4 (13:47):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponsller along with Brian James. If you can't
listen to Simply Money every night, subscribe and get our
daily podcasts. And if you think your friends could use
some financial advice, tell about us as well. Just search
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your podcast.
Speaker 5 (14:06):
Straight Ahead at six forty three.
Speaker 4 (14:07):
Real questions from Simply Money listeners about family, property, business sales,
charitable giving, and more. All Right, what if the market
dropped twenty percent tomorrow? What if we entered a deep
and long recession. It's all happened before, but many people
don't actually know what would happen to their own portfolio.
(14:28):
If some of these worst case scenarios show up, We're
gonna throw a few fake headlines at you and walk
through what they could mean for your money and how
to make sure your plan holds up under pressure. Brian,
we're talking tonight about just stress testing a portfolio, something
that all clients and responsible advisors should be doing.
Speaker 5 (14:51):
Walk us through some of these examples.
Speaker 7 (14:53):
Yeah, this is a great topic to talk about, especially
during times where the market is at an all time high,
because we tend to forget what reality really. So here's
our first fake scenario. We get blasted back in time
to twenty twenty two. The CPI is now seven and
a half percent, and the Fed is scrambling to raise
rates again. They can't raise them fast enough because inflation
is back, energy prices are up, supply chains or crunched
(15:15):
wage pressures a rising. We're back where we were three
years ago. So what happens in response to this? Well,
when this kind of situation occurs, the mechanical things you
can reasonably expect are long term bonds will tank. Growth
oriented stocks will get hit pretty hard because it's been
it becomes pretty expensive for them to continue their current
growth pass and consumer discretionary spending will drop as well.
(15:36):
So how do we if this is the case, what
are we looking for? Well, how do we stress test
the situation? Well, first off, you want to look at
your bond exposure, what percentages in long term bonds? How
much duration risk you have? Do you know what duration
risk is? Check that equity concentration and make sure that
you have a little bit. It's not all growth stocks, right.
This is where the people who have been chasing technology
for twenty years get exposed because this is the type
(15:59):
of a market in this particular stress test that doesn't
really hold up for those types of things.
Speaker 5 (16:02):
Overly tilted to our growth sectors.
Speaker 7 (16:04):
What would a twenty percent draw down in technology do
to derail your plan?
Speaker 4 (16:08):
Youah to think about that, yeah, And I mean like
the small cap sector, we get hammered in a situation
like this too. And this is where some good financial
software that you know, stuff like what we use it
all worth comes into play here because you can literally
stress test what how would a portfolio behave what based
on what has actually happened over the last five, ten, fifteen,
(16:31):
twenty thirty years. And you can move these various levers
and see how a client's existing portfolio would behave And
I think that's good to know for people, because at
the end of the day, Brian, what we're trying to
avoid is that outsized volatility, which from an emotional standpoint,
we want to make sure we avoid that incoming phone
(16:53):
call that says, Hey, get me out, I'm going to cash.
I can't take it anymore. And this is why we
stress test PORTFO to the extent that we allow that
kind of behavior to happen. I would argue that you
know your advisor hasn't done their job on the front end.
Speaker 5 (17:09):
Yep.
Speaker 7 (17:09):
So let's look at another scenario other crazy things happening.
What if China finally decides to stop tap dancing around
Taiwan and they actually invade, and that causes a global
market to overall plunge.
Speaker 5 (17:20):
So what's gonna happen here?
Speaker 7 (17:21):
First thing is going to happen if Taiwan is in
the mix is semiconductor stocks are going to drop through
the floor. US technology will decline due to chip shortages
because so much of that stuff comes out of Taiwan,
despite our efforts to bring it back on shore here,
emerging markets will likely fall. Gold, treasure and defense stocks
of course, will rally. Okay, so how do I look
at my portfolio in this particular case, well figure out
(17:42):
how much of it is exposed to international stocks, how
much is in Asia merging markets, and look at sector concentrations.
Are you heavily invested in technology or semiconductors. If again,
you're somebody who has kind of, you know, Chase the
hot investment over the past couple of years, you probably
are a little overweighted in some of those areas. Make
sure you're probably diversified to react to that. And make
sure you understand if you own any assets that tend
(18:03):
to rise during these geopolitical crises. This would be gold, defense,
and energy. And then run your whole plan again with
a market drop of twenty to thirty percent, and ask
the same question we've already identified once. Can my plan
still deliver my goals if these situations happen. If it can,
then you're in good shape. If it can't, then you
need to make sure you're prepared for some These aren't hypotheticals,
by the way, these are things. Some of these things
(18:25):
we're talking about of just repeats of things that have
actually happened.
Speaker 4 (18:29):
Well, and this is a good time to remind folks
of what our own chief investment Officer, Andy stout at
all were just said a few minutes ago in our
prior segment. You know, again, you made the point at
the open here. People forget that the average pullback in
the s and P five hundred every single year, even
in a great economy, is at least ten percent a year.
Speaker 5 (18:48):
That is normal.
Speaker 4 (18:50):
But when the markets at all time, his people tend
to forget that that stuff can and often does happen.
And this is why we are talking about the importance
of stress testing a portfolio. You want to make sure
your plan can get through this from an economic standpoint
and you can get through it emotionally. All right, let's
talk about you know, another scenario, regional bank failures or
(19:13):
credit markets seizing up.
Speaker 5 (19:14):
We've seen this happen from time to time over the years, yep,
So tell me this sounds familiar.
Speaker 7 (19:20):
Bank stocks crash, credit drives up, short term panic in
the markets, dogs and cats living together, massiveysteria.
Speaker 5 (19:26):
This is two thousand and eight, of course.
Speaker 7 (19:28):
But reviewer, your cash is held, are you over FDIC
insurance limits and know what those limits are? They did
change after two thousand and eight, so you might not
be And there are creative ways you can you can
spread that out to check your liquidity, understand your credit exposure.
That means do you own high yield bonds or are
you heavy in bank or your funds heavy on the
banking industry. You might consider again a short term twenty
(19:49):
to twenty five market dip and that that's a good
number to stress test.
Speaker 5 (19:52):
Just just forget all the details of why, simply.
Speaker 7 (19:55):
Look at if your plan can survive a twenty five
percent decline in your overall assets. That's really what all
this stuff did. We're just attaching headlines to it. So
just owning the right stuff doesn't mean your portfolio passes
that test. It's about asking if this scenario plays out,
can I still get to my goals at the end
of the day.
Speaker 5 (20:09):
It's all that matters. Here's the all Worth advice.
Speaker 4 (20:12):
Stress testing isn't about guessing when the next crisis is coming.
It's about preparing your plan in advance to survive the
ones you never saw coming.
Speaker 5 (20:22):
All right.
Speaker 4 (20:22):
AI is reshaping everything, including how we invest. But is
there more danger than promise in going it alone. We'll
show you where AI could help and where it could
seriously hurt self directed investors. You're listening to Simply Money,
presented by all Worth Financial on fifty five KRC, the
talk station. She was sloatered Chicago murders every weekend, Democrats
(20:47):
talk humout, socialism, extraterrestrial technology, Know the facts.
Speaker 2 (20:51):
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Fifty five KRC and talk station five KRC and iart
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Speaker 4 (21:06):
You're listening to Simply Money present up by all Worth
Financial on Bob Sponsller along with Brian James. Well, it's
the buzzword of the decade at this point. AI artificial intelligence.
It's writing term papers, diagnosing diseases, and even composing music.
So naturally the question is can I just let AI
manage all my investments too? It like everything else, Brian,
(21:30):
it can absolutely enhance the investment process and in many
ways it already has and already does. I mean, I
know you and I use AI every day, But let's
get into let's get into how it's working today and
then maybe some of the watchouts.
Speaker 7 (21:44):
Yeah, and AI has become a term kind of like
the word Kleenex, where there's a bazillion different brands, but
we all call them Kleenex, so they're different definitions to everybody.
So for a long time there's been algorithms have been
involved in investing, and that's kind of sort of AI,
but it's a little little different branch of it. But
we use algorithms to help us do tax loss harvesting.
Scan portfolios every day all the way down to the
(22:04):
share lot level, so we can spot these opportunities to
harvest tax losses for clients and help them save come
April fifteenth. Also, direct indexing platforms also will mimic those
index funds while offering the same tax advantages alongside the
same diversification as a plain old index fund. And there's
risk analysis software. That's software that stress tests portfolios and
(22:25):
seconds across hundreds of scenarios. That's not exactly AI, but
that's more algorithmically oriented.
Speaker 5 (22:33):
But at the.
Speaker 7 (22:33):
Same time, what that can do alongside with AI is
it helps us strip out of motion. So an algorithm
doesn't panic when the markets drop, doesn't chase hot stocks,
it doesn't skip contributions because of bad headlines. That's what
we're here for when our job is to kind of
filter out people's emotions from their financial plans and make
sure that every decision we make is with the long
term in mind, not the shorter term. Algorithms and AI
(22:57):
don't really do that because they can't. Really, they can't
really in terms of here's how other people have handled
similar situations.
Speaker 5 (23:04):
Here's why it's important.
Speaker 7 (23:05):
We need to focus on the long term, and here
are historical situations that were somewhat similar, so we can
get an idea of what to expect. I haven't seen
an AI tool that gets us anywhere close to that,
despite the fact that we have, we are surrounded by
them and I do use them every day.
Speaker 5 (23:17):
Yeah.
Speaker 4 (23:18):
Again, the danger of AI, and it's a wonderful tool,
don't get me wrong. I mean it is changing every
industry out there and it will continue to do so.
But the danger of just using AI in a vacuum is, frankly,
it doesn't know you. It knows a bunch of data
if you can interpret data very quickly, and it does
no patterns to your prior point, Brian, but it doesn't
(23:40):
know your individual goals, your fears, in your life's priorities.
I look at it like Google Maps. It can show
you a route, sure, but it doesn't know that you're
almost out of gas, or that you hate going through tunnels,
or that your toddler in the back seat is about
to throw up if the road gets too bumpy.
Speaker 5 (23:59):
You know it.
Speaker 4 (24:00):
It can do a lot of things, interpret a lot
of data, but it still doesn't know how to interact
with real time, with real feelings, thoughts, and goals, with
human beings.
Speaker 7 (24:11):
Yeah, so let's use an example here. So let's say
you're going to retire in just a couple of years. Well,
AI says you should take more risks because your time
horizon is still long. You can get that out of
a questionnaire or any random questionnaire out of the internet
that completely ignores your emotional risk times. That's simply looking
at the math. Computers aren't emotional, they're simply mathematic A
plus B must equal CE. That doesn't account for what
(24:33):
happens when my spouse and I get to an argument
at the dinner table because the market has taken a
hit and maybe the two spouses weren't on the same.
Speaker 5 (24:41):
Page with regard to the risk levels to their portfolio.
Speaker 7 (24:43):
What happens if that twenty percent draw down that is rare,
but we still see them that twenty percent drawdown causes
me to bail out early. What are we going to
do if I'm a business owner selling a Companlet's say
I have a business and I'm going to sell that company.
Will a smart fiduciary advisor might walk through all kinds
of different strategies, gifting strategies and state planning ta ferrel.
AI is just going to look for a new number
and kind of recalculate. It's not going to point out
(25:04):
all the subtle intricacies of your own personal situation and
say here's ten strategies. Seven of them don't make sense
for these reasons. So we've narrowed down to these three.
Because this is how your family operates, and here's how
other your businesses all kind of work together.
Speaker 4 (25:18):
You're listening to Simply Money presented by all Worth Financial
on Bob Sponsller along with Brian James, and I think
the point you're driving home here really at the end
of the day, Brian, is we need to talk about
what good fiduciary advisors bring.
Speaker 5 (25:31):
To the table that AI doesn't.
Speaker 4 (25:34):
And this is where working with a good fiduciary really shines.
And let's just be real clear, not all advisors are fiduciaries.
Some are brokers, some are salespeople. Fiduciary advisors are legally
bound to know you and put your interests first.
Speaker 7 (25:52):
Yep, So fiduciary advisor is going to help you prioritize
the goals that matter to you, help you identify them
to begin with. Right, That's normally where a lot of
us hide behind the numbers. All I know is they
don't have enough money. I have no idea how much
I need. I just know there's not enough. So a
finucial advisor's gonna help you identify those things and put
numbers on them most importantly, and navigate those emotional decisions,
and then also coordinate tax a, state and investment planning.
Speaker 5 (26:13):
Some of this stuff is rather mechanical. It's black and white.
Speaker 7 (26:15):
There are steps to follow and process that's put in place,
but somebody with experience needs to help you understand which
processes you need and which you don't. For example, you
don't need a trust for everything. That's another segment we'll
do some other day. But that's a common question we got.
I only have a will, I don't have a trust.
That might be okay. Let's talk about your situation, you know,
and also adjust that plan when life throws your curveball.
(26:37):
Fiducial advisor is going to build a relationship with you
in terms of knowing the things that make you worry.
So I know when I see certain headlines, I know
the five or six phone calls I got to make
because somebody out there is panicking. I also know the
ones I don't have to, and they probably don't want
to hear from me because they're not worriers. So there's
there's a very significant interpersonal relationship that comes along with
working with fiduciary And.
Speaker 4 (26:58):
Let's face it, you know, good advisors ask the questions
that AI never will, For example, what do you want
retirement to feel like? How do you want to help
your kids without hurting their motivation and their drive? And
are you more afraid of running out of money or
more afraid of not enjoying it while you have it?
And good advisors can help you adjust when life changes,
(27:21):
when your job becomes unbearable, when your mom needs assistant
living help, when.
Speaker 5 (27:26):
Your kids get a full ride to college.
Speaker 4 (27:28):
So in a perfect world, here AI and advisors should
work together. Fiduciary advisors. The best fiduciary advisors already use it.
Like we've already said, it's a tool, and that's the
key word. It's a tool, not a replacement. Here's the
all Worth Advice AI is a very powerful tool, but
only a fiduciary advisor can build a plan around your life,
(27:52):
your values in your future. Next, we tackle your biggest
money questions, from selling a business or vacation home to
charitable giving, inheritance and even private credit funds. You're listening
to Simply Money, presented by all Worth Financial on fifty
five KRC the Talk Station.
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Have a little bad days that's not good.
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Today is definitely a good day.
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Oh day long, we learned a lot. Today starts your day.
Today is a good day.
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Day Looking good right now, getting a good look how
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Opinions are welcome to here.
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I do think he is too old to run.
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In twenty twenty.
Speaker 3 (28:49):
Four fifty five KRC the Talk Station, You're listening to
Simply Money, presented by or Worth Financial Lumbob Spon Seller
along with Brian James.
Speaker 4 (29:03):
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.
All right, Brian Robert and Montgomery says, we own a
family vacation property in Michigan.
Speaker 5 (29:19):
How do we pass it to the next.
Speaker 4 (29:21):
Generation fairly when only one of our three kids actually
wants it?
Speaker 7 (29:26):
Now, this can be a tough one because this is
a fairness versus equality decision, right, So we're obviously there's
a lot of debate in terms of keeping people happy.
I'm stammering because this is a tough one really. So
what you could do with well, simply give the property
to the interested child in balance with the other assets.
If you have investments here in your estate cash retirement accounts, well,
(29:48):
then the kid, the one kid gets the property, the
other couple kids get an equivalent value of whatever the
rest of it is worth. This will have tax different
tax outcomes for everybody. It's not gonna be a You're
not gonna be able to divide everything completely equally and
have everybody have the same experience. But that's just where
it's important to make sure everybody's communicating and understands what
your goals are. By the way, this is your decision,
(30:08):
not theirs anyway, So lay it out to them and
tell them why you did what you did, and you
know they shouldn't have too much objection. There could also
be a buyout provision. The estate plan could stipulate that
the child who wants that house can buy out their
siblings share every time. In other words, give everybody everything,
but give them a structure at which that if somebody
wants to sell out get rid of their shares, then
(30:29):
here's the value of it, and there's a way you
can set up a calculated value so they don't have
to argue about that because mom or dad already set
it up before they left. Also, LLC trust structures, those
are in place. Those exist to make sure that there's
another entity that owns it entirely, and maybe it spits
out income for all of eternity. In that way, nobody
actually owns it, but everybody gets a little stream and
income off of it.
Speaker 5 (30:47):
Something like that.
Speaker 7 (30:48):
But also you have the other thing to bear in
mind is tax considerations. There's lots of different ways that
can come out as well. So let's move on then
to David and terras Park. David owns a business and
he's thinking about getting now it. He's thinking about taking
a handing back some of the business responsibilities by selling
to a private equity firm, and he's wondering how to
know if that's the right fit and not just pay
attention to the highest check.
Speaker 4 (31:10):
Well, David, I'd say this way, you know, the first
couple of things that come to mind is you got
to look at the terms of any deal that you do.
You know, it's not to your point, not just the
highest check, it's how and when do I get my money?
And what are the goal posts that need to be met?
You know, is it an upfront check, is it an
(31:30):
installment sale? Is my equity or my cash going to
come to me over time? And what can change after
I signed the deal? So you want to look at
the you know, the covenants there that you're being offered
in terms of what this liquidity event really looks like,
so that you could make sure everything you've spent a
lifetime building is protected to your satisfaction. The other thing,
(31:52):
you know, let's face it, when you sell to a
private equity firm or anybody, they're probably in. One of
the reasons they're probably interested in buying your company is
they see some potential efficiencies there that they think they
can capture through that merger. And some of those efficiencies
might involve downsizing employees. So you know, if you've got
(32:12):
employees that you want to protect that have really helped
you build that business, and you want to make sure
that they just aren't laid off or shown the door
the minute you sell that business, those are other things
that you can try and negotiate into that deal as well.
Speaker 5 (32:26):
So these are very.
Speaker 4 (32:27):
Complex conversations to have, but I just pointed out two
of them. That you want to look at the financial
covenance and then how are your employees going to be
treated assuming you have some All right, let's move to
Lisa in Northside. She says, we're charitably inclined, but we
also want to protect our assets in case of future
healthcare needs. How do we strike that very important balance?
Speaker 7 (32:50):
Brian, Sure, So there's a lot of ways to do this,
and a lot of them involve acronyms, let's start with
a DAF donor advised fund. You can use these to
set aside money for future giving. Right that this is
not directly related to health care, but you're basically pre
funding your donations now, meaning you will not have to
you will not have to carve that money out later
because in the future, as you're anticipating, you may need
(33:11):
that those dollars for healthcare. So donor advice fund can
give you the benefit of making donations now, pretty pretty
cost effective way to do it. It's not like an
elaborate trust or a family limited partnership or a family
foundation that kind of thing. Another option of charitable remainder
trust a CRT. There's that acronym that's going to let
you gift appreciated assets to a trust but still receive
(33:31):
the income personally that you can use for anything you want,
including healthcare.
Speaker 5 (33:35):
The remainder then as you pass, goes to charity.
Speaker 7 (33:38):
You can also look, of course at long term care insurance,
which again this is just putting the risk somewhere else.
If I feel like I might not have the dollars
at that time in the future, then I'm going to
buy an insurance policy now to offset that risk and
then just standard planning ahead, keep some of your assets
liquid rather than tying too much. And you know, in
these irrevocable charitable structures, just make sure you've got a big,
fat emergency fund out there. That sometimes the simplest solution
(34:01):
is the is the right answer. To give you some
numbers to think about, Ohio, Indiana, Kentucky nursing homes are
ninety to one hundred and ten thousand dollars a year,
and Medicaid planning requires a five year look back, So
don't really plan on impoverishing yourself either. That's usually not
a great strategy for anybody with assets. So we'll move
on to Mark and Anderson Township. Mark's got two kids,
(34:22):
apparently done pretty well raising them, one who is financially dependent,
one who's not doing so well. How do we account
for that difference in their so far life outcomes to
create inheritance that's fair but doesn't cause resentment and keep
them from seeing each other at the holidays?
Speaker 5 (34:36):
Pop.
Speaker 4 (34:38):
Yeah, this is not an easy one, and I think
to the point Brian made in the first question we
covered tonight, Remember Mark, what's fair is what you and
assuming you're married, you and your wife determine is fair.
You don't have to follow anyone else's guidelines or theories
or opinions. It's what's going to work for your family.
And so the word that I like to use is communication.
(35:02):
Hopefully your kids are all getting along well, they love
one another, they're supportive of one another, and let's face it,
all of our kids. I mean, my wife and I
have three adult sons now, and we watch how they operate,
and depending on which career path they choose, different career
paths come from different come with different earnings, opportunities or capabilities,
(35:23):
and it's never gonna all be even. So I think
it's important to just sit down, make sure your kids
are all getting along, and if you do decide to
do something for that one child that is maybe struggling financially, communicate.
You don't have to share exact numbers, but I think
on the front end, if you explain to the other
(35:44):
kids that maybe aren't gonna get as much as that
one kid who is potentially struggling, by having those conversations
now before you and your wife pass away, that can
really help avoid some vast missis understanding and potential resentment
down the road. So think through it and then communicate, communicate,
(36:06):
communicate it, and try to keep harmony in the family
that way, that's my advice. All right, next wall, Well,
why we agonize over tipping a couple extra bucks on
a coffee, but we forget that we're perhaps paying for
twelve streaming services that we never use. You're listening to
Simply Money, presented by all Worth Financial on fifty five KRC,
(36:27):
the talk station in.
Speaker 2 (36:29):
The Age of Artificial Intelligence AI.
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Hello, nothing can compete with the age old staple.
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Speaker 4 (37:18):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponseller along with Brian James ever noticed how
people can stand at the counter mentally debating do I
tip fifteen percent or twenty percent? On this coffee or latte.
I mean, we stand there and stress over two bucks. Meanwhile,
back at home, half of us are paying for streaming subscriptions.
(37:39):
We don't even remember signing up for, Brian. It's the
old being penny wise and pound fool this year, and
you've actually got a survey that backs up how the
average household is behaving right now in this area.
Speaker 7 (37:52):
Well, tell me if this sounds like your household, Bob.
The latest survey say the average household has a dozen subscriptions.
That's twelve of them, video music apps, even those random.
Speaker 5 (38:01):
Fitness not too far off.
Speaker 7 (38:02):
Yeah, yeah, I think a lot of us now have
kind of gotten sucked. It's just so easy nowadays. And
the problem is a lot of them quietly auto renew
just month after month. So that's really the funny part. Well,
we'll agonize over these couple of dollars at the coffee shop, right,
Oh my gosh, you're spending four or five dollars and
a cup of coffee. Well, okay, but maybe somebody else
is spending two hundred dollars annually on a streaming service
(38:23):
that they haven't looked at in months. So it's just
because it's all it's all. It's all right here in
front of us. It's so easy to sign up for
these things. And maybe it's just that one show, that
one movie, or that one thing we wanted a part of,
and then we thought I'll get to it later.
Speaker 5 (38:36):
I just did this to myself.
Speaker 7 (38:37):
I just noticed something hitting my checking account that I
haven't needed in three months.
Speaker 5 (38:40):
So I had to squisch that that was just that
was just yesterday. So happens to the best of us.
Speaker 7 (38:44):
But this is definitely something can be a little tiny drain,
a little leak in your in your plumbing to make
sure you get short up.
Speaker 5 (38:52):
Yeah, we'll we'll call. We'll go ahead and just call
that subscription creep.
Speaker 4 (38:55):
And my wife and I actually sat down together, I
don't know, three four weeks ago, because I keep seeing
this Amazon bill showing up on my credit card and
they do a wonderful job of just piling everything together
into one charge that says Amazon dot Com.
Speaker 5 (39:12):
And I sat down with her, I'm like, what is
all this stuff?
Speaker 4 (39:15):
So we actually opened the app and we found two
subscriptions in there for you know, services that we don't use,
and we were able to agree on yep, we're not
using it, let's get rid of it. I don't know
that was like thirty bucks a month right there. So
this is just a call out to just do a
little audit of these automatic subscriptions and you might be
surprised at how much money it makes sense to just
(39:38):
save every month.
Speaker 7 (39:39):
Now, speaking of apps, this is kind of funny. So
I'm working with somebody where we're trying to help her
understand her budget. She has something called Rocket, and Rocket
is a service out there.
Speaker 5 (39:48):
Probably heard of it, but.
Speaker 7 (39:49):
Their whole point is to look at your financial data,
to look at all the transactions and you're checking account
your credit cards, and they'll tell you which our subscription
based so you can make a clean decision and will
they kind of bring it a little closer home in
terms of click this link and they will unsubscribe for you.
Speaker 5 (40:04):
So it's actually kind of a neat service.
Speaker 7 (40:06):
But ironically, this particular person doesn't have that issue and
she's still subscribing to Rocket. So one of the big
best advice I can give to her, I asked her,
does Rocket identify itself? Since you don't actually need it,
and but so, but it's good to take a look
at it. There are tools out there you can look
at and if you don't need those tools, unsubscribed to
them too.
Speaker 4 (40:22):
In Declare Victory. Thanks for listening. You've been listening to
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Tonight, it might cost less to borrow money by the
end of this week. You're listening to simply Money, presented
by all Worth Financial. I'm Bob sponseller along with Brian James. Well,
we've been talking about it for days, if not weeks,
and now it's here. This week the Federal Reserve will
decide whether the lowest lower interest rates for the first
time since December. And I guess at this point we're
(00:41):
just wondering, you know, by how much and what future
rate cuts look like in the next couple of months.
And to help us preview all this is all Worth
Chief investment Officer Andy Stout.
Speaker 5 (00:52):
Andy.
Speaker 4 (00:53):
Last week, Brian and I went through the latest producer
Price Index and consumer Price Index numbers. So unless you
really want to dive into that, no need to get
into the weeds on that. But how do you think
the Fed viewed the results? Is what we really want
to talk to you about this morning.
Speaker 6 (01:10):
Yeah, I don't I don't think we need to do
a deep dive on that, because I think you guys
covered it pretty good, and I must say it was
definitely one of the more riveting segments between you two.
Speaker 5 (01:20):
So thank you, thank you.
Speaker 6 (01:22):
You really lit the.
Speaker 4 (01:24):
So does that mean you you listen to that podcast
like three times on your way down to Knoxville for
the Tennessee game.
Speaker 5 (01:30):
Is that what you're telling us?
Speaker 6 (01:33):
No, I only listened to it once. I listened to
every episode. Mark here everyone too. Uh that said, we
don't need to talk about Tennessee losing a heartbreaker. Uh,
moving on to economics and the fat nice little segue there.
Speaker 5 (01:50):
Uh.
Speaker 6 (01:50):
So when you look at what happened to last week
with the inflation data, it was about as expected. So
I didn't really move the needle from what the FED
was thinking about and interpreting and inflation and thinking about
rate cuts. And you just look at what the market's
pricing in. You know, the market's pricing in a FED
move this week, and there's a lot of reasons for that.
(02:13):
But the inflation data that came in last week, Bob,
it's not changing anything. The takeaway as though it's still
too elevated and it doesn't it doesn't meet where the
FED wants or it's not out where the FED wants
it to be.
Speaker 5 (02:27):
I mean, the FED wants it.
Speaker 6 (02:28):
To be closer to two percent, and we're just not
there yet, and it doesn't seem like we're going to
get there anytime soon.
Speaker 7 (02:34):
So when when we're looking at these things, how we
had a point yet where the average investor, the average
person looking to do their financial plans and that kind
of stuff, should they be truly thinking differently about anything specific?
Speaker 5 (02:47):
Are we you know, are we still kind of steady.
Speaker 8 (02:49):
As she goes.
Speaker 5 (02:51):
Well?
Speaker 6 (02:51):
From an investment standpoint, I mean, I think you do
need to look at the bigger picture. There is a
confluence of indicators that really all come together, and this
is what the Feed's looking at. And when investors are
you know, parsing all of this information, there is a
lot of nuance involved in order to understand you know,
the job market and inflation, and that may seem relatively
(03:15):
simple on the surface, but there's all these you know,
secondary and and tertiary effects where one indicator affects another,
which affects another, and all of a sudden that can
change your whole economic view.
Speaker 5 (03:29):
But when we're looking at.
Speaker 6 (03:30):
It from a big picture of perspective. From an investor standpoint,
what you need to think about with your own money.
You need to be asking yourself, am I positioned at
a point where if the market were to go down abruptly?
Would I be losing sleep at night? Would I be
putting my financial future or jeopardy? If that's the case,
you might want to rethink how you're allocated. Because movements
(03:53):
like that happen out of the blue, and it can
happen relatively frequently. I mean, we see ten to fifteen
percent pullbacks very regularly, at least every year on average
on the ten percent pullbacks, So if you're not ready
to handle that, I mean, you might want to rethink things.
But from our perspective, when we're looking at the economy
and we're looking at whether or not we see some
risk out there, I mean, yeah, there's risk. There's always risk,
(04:15):
there's no question about it.
Speaker 2 (04:16):
Uh.
Speaker 6 (04:17):
In the near term, you know, the markets are certainly
price to perfection to a degree. UH, and any sort
of real uh you know, negative negative catalyst that comes
along the way could cause a pullback. But when you
look a little bit longer term, I'm saying longer term
six to nine months. I mean, we're about to enter
the period where the most one of the most market
(04:37):
friendly periods, uh, which is really uh you know, has
a climax of the Santa Claus rally. You know, this
seasonality period of you know, mid October through January is
one of the strongest periods. And recession risk is still
all call it medium, but we do see weakening data
out there, and that's what the FET's thing too, especially
the labor market.
Speaker 4 (04:57):
All Right, So Andy, I'm trying to parse together your
comments here just sitting out there as a regular investor.
We're heading into one of the most positive positive seasons
of the year historically from a market performance standpoint. Yet
I can also tell you're really not anticipating a half
point rate cut at all this week. Help help us
(05:19):
figure out what are you expecting between now and the
end of the year from a FED standpoint.
Speaker 5 (05:24):
How many rate cuts? How much?
Speaker 4 (05:26):
What's the market pricing in at this point? You know,
what are you seeing out there?
Speaker 6 (05:31):
Well, the market's pricing in three quarter point rate cuts
are just about and there's three meetings left, so they're
expecting a reduction of a zero point two five percent
at each of those meetings. There's there's only a very
very small chance that you get a half point cut
here this Wednesday, when the FED concludes its meeting. I
(05:51):
mean it's like a five percent chance. So more than
likely it's going to be a quarter point. But that's said,
there's probably going to be what's going to be really
interesting is going to be that descents. So not everyone.
It's not going to be a unanimous foe. I mean,
I would be shocked. I think you'll probably see at
least one person wanting a fifty basis point, where a
half percentage point cut. That's going to be the new
(06:14):
FED member who is likely to be confirmed by the
Senate this week or I'm sorry this evening, excuse me,
when when Congress gets together, Steven my Run is supposed
to be confirmed here this evening by the Senate, so
that he would probably come in with a half point
rate cut.
Speaker 5 (06:32):
So he's going to likely descent on a quarter And.
Speaker 6 (06:35):
Then if you look at the last meeting we had,
we had two FED members who wanted a quarter point
cut at that time, maybe in their mind's eye should
be it should have been a quarter then and a
quarter down. Maybe they want a half point too, So
you could see conceivably, you know, don't we'll see how
it plays out, but you could conceivably see three people
wanting a quarter point or i'm sorry, a half point
rate cut. And there's probably some others who may not
(06:57):
want to cut at all because they're worried about inflation
because the FED has de mandate, uh, full employment and
stable prices. We're not at stable prices. Granted we're not
at full employment either, so the fat's kind of in
that situation where, uh, you know, they're darned if they do,
and darned if they don't.
Speaker 5 (07:12):
Excuse my language there.
Speaker 7 (07:14):
So Andy, let's pivot a little bit to your your
one of your favorite topics. I know you you love
to go home and talk to your family about the
dot plot, uh, at family dinner? So what's the dot
plot looking right now? Like right now?
Speaker 5 (07:26):
And how does how does the what does the dot
plot mean?
Speaker 7 (07:28):
If we've got one of the major voters has never
voted before, so who knows what what they're thinking?
Speaker 5 (07:32):
How does that affect all this?
Speaker 6 (07:35):
I love how you think I go home and talk
about the dot plot with my family.
Speaker 5 (07:38):
You know, how your brain works.
Speaker 6 (07:42):
But what so, what the dot plot is that is
a it's a graph in each FED member voting and
non voting, and that's a key uh says where they
think interest rates should be at the end of upcoming
calendar years. And when you look at that, you might
be thinking, well, I kind of just want to know
where a FED schair palses because other than that, I
(08:03):
mean the non voters, I mean, do we really even care,
you know, all that much about what they're thinking. And
the answer is, you know, probably not. But what we
do instead is we look at what's called the median
dot for the Federal Reserve and we get these dot
plots every three months. So the last one we got
was in June, and we're going to obviously get another
(08:25):
one here in September. And what the dot plot showed
the last time was that median dot showing two quarter
point rate cuts this year. And to be clear, it
was very very close for that median dot to actually
be almost no cuts. So there is a very wide
divide within the FED because people are worried about inflation
(08:47):
and some are worried about the job market. So what
you know, we expect this time around. When it comes
to the dot plot, we expect it to be shifting lower.
And we also would not be surprised by that median
dot you know, maybe still being at two, but there's
a chance that comes in at three quarter point cuts
here this.
Speaker 5 (09:07):
At this meeting. So that's just for twenty twenty five.
Speaker 6 (09:10):
Then when we look into twenty twenty six, probably see
another two or three in total for that year. So
when we look at where the FED fund's rate right
this right now, we're it arrange a four and a
quarter to four and a half that by the end
of next year, what the market thinks that it'll be
around is three to three and a quarter percent in
that range.
Speaker 4 (09:31):
All right, Andy, I know you, you know you look
at that dot plot, which is regularly viewed by all
economists everywhere. But something that you do, you and your
team do, you know through your work at all Worth Financial,
and it's wonderful work that you prepare for all of
us as you do a recession scorecard. So let's just
assume that the Fed sticks with a quarter point cut
this week. We've already seen these labor numbers come in
(09:54):
that are pretty weak, the latest numbers. What does that
do to the Recession scorecard, how likely are we to
see a recession in the US economy over the next
three to six months.
Speaker 6 (10:06):
So our Recessions courtcard looks at what's called leading indicators,
which are data that moves before the broad economy moves,
and a lot of the labor market data that we
have been getting lately that has been grabbing the headlines.
Those are more what I'll call coincident or even lagging data,
meaning they're not really having a big impact on what
(10:26):
the future may hold. It just kind of tells you
where we were, you know, just to give you an example, Bot,
I mean, you saw the data last week where the
BLS went back and revised March twenty twenty four through
March twenty twenty five. You know, the total number of
jobs added by employers lower by a record nine hundred
and eleven one thousand. I mean, that's a massive it's
a big number, staggering drop in the number of jobs
(10:49):
that we're at it. But that was March twenty four
through March twenty five. I mean, it doesn't matter that much.
It does matter because it shows you that we're coming
from a weaker starting position, and that can help guide
the fat, but it doesn't really tell us too too
much about the future and work. It just kind of
shows you there might be a little bit less room
for air. But when we look at the leading economic
(11:12):
indicators that are out there right now, I'm calling it
medium risk. Basically, we're scoring it right around thirty percent
risk right now, and if you get above forty percent,
that's where it's high risk. And we're not there yet,
but we're certainly at a point where there is some
warning signals and red flags that you really need to
(11:34):
be watching very closely to make sure that you know
your position properly. And that's kind of what those are
some of the things that we take into consideration when
we're building portfolios.
Speaker 7 (11:45):
Hey Andy, why didn't it Why doesn't that have a
bigger impact? And what I'm getting at here is, if
let's say we got those numbers right to begin with,
in the economy appear to be slowing that much a
year ago, if we had gotten right out of the gate,
does that mean we would have lowered rate? I know
I'm asking you a guest, but would we have lowered
rates a year ago? Would we be in a different
mode now if we had better numbers. Then, assuming these
(12:06):
numbers are accurate.
Speaker 6 (12:09):
I would say maybe.
Speaker 5 (12:13):
I love the conviction.
Speaker 6 (12:14):
And here's why though, here's it's really important.
Speaker 5 (12:17):
We haven't eaten inflation.
Speaker 6 (12:20):
I mean, if we were just looking at the job market, yes,
one hundred percent, they would have cut rates, but inflation
has not gone down the way the FED was expected to.
This last mile of getting to that Fed's two percent
target has been just a brick wall and we're not
there yet. We're still trying to push against this brick wall.
So with the FED, I've wanted to cut rates, then
(12:41):
I don't know. I doubt it because the economy has
still been growing. The labor market would be a little
bit weaker, but we're still not recessionary, and we still
have inflation way too high. They made have put one
quarter point cut in there. Maybe I don't know, but
not much.
Speaker 5 (12:59):
All right?
Speaker 4 (12:59):
Could your nest egg handle a financial shock? We're going
to simulate what it's like to stress stress test a portfolio.
Coming up next, you're listening to Simply Money, presented by
all Worth Financial on fifty five KRC the talk station.
Speaker 9 (13:14):
Hey listen to Dave Ramsey Rich. People ask how much broke?
People ask how much down and how much a money?
With days at seven start asking about how much? On
fifty five KARC the talk station.
Speaker 1 (13:28):
Allworth Financial a registered investment advisory firm. Any ideas presented
during this program are not intended to provide specific financial advice.
You should consult your own financial advisor, tax consultant, or
a state planning attorney to conduct your own due diligence.
Speaker 4 (13:47):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponsller along with Brian James. If you can't
listen to Simply Money every night, subscribe and get our
daily podcasts. And if you think your friends could use
some financial advice, tell about us as well. Just search
Simply Money on the iHeart app or wherever you find
your podcast.
Speaker 5 (14:06):
Straight Ahead at six forty three.
Speaker 4 (14:07):
Real questions from Simply Money listeners about family, property, business sales,
charitable giving, and more. All Right, what if the market
dropped twenty percent tomorrow? What if we entered a deep
and long recession. It's all happened before, but many people
don't actually know what would happen to their own portfolio.
(14:28):
If some of these worst case scenarios show up, We're
gonna throw a few fake headlines at you and walk
through what they could mean for your money and how
to make sure your plan holds up under pressure. Brian,
we're talking tonight about just stress testing a portfolio, something
that all clients and responsible advisors should be doing.
Speaker 5 (14:51):
Walk us through some of these examples.
Speaker 7 (14:53):
Yeah, this is a great topic to talk about, especially
during times where the market is at an all time high,
because we tend to forget what reality really. So here's
our first fake scenario. We get blasted back in time
to twenty twenty two. The CPI is now seven and
a half percent, and the Fed is scrambling to raise
rates again. They can't raise them fast enough because inflation
is back, energy prices are up, supply chains or crunched
(15:15):
wage pressures a rising. We're back where we were three
years ago. So what happens in response to this? Well,
when this kind of situation occurs, the mechanical things you
can reasonably expect are long term bonds will tank. Growth
oriented stocks will get hit pretty hard because it's been
it becomes pretty expensive for them to continue their current
growth pass and consumer discretionary spending will drop as well.
(15:36):
So how do we if this is the case, what
are we looking for? Well, how do we stress test
the situation? Well, first off, you want to look at
your bond exposure, what percentages in long term bonds? How
much duration risk you have? Do you know what duration
risk is? Check that equity concentration and make sure that
you have a little bit. It's not all growth stocks, right.
This is where the people who have been chasing technology
for twenty years get exposed because this is the type
(15:59):
of a market in this particular stress test that doesn't
really hold up for those types of things.
Speaker 5 (16:02):
Overly tilted to our growth sectors.
Speaker 7 (16:04):
What would a twenty percent draw down in technology do
to derail your plan?
Speaker 4 (16:08):
Youah to think about that, yeah, And I mean like
the small cap sector, we get hammered in a situation
like this too. And this is where some good financial
software that you know, stuff like what we use it
all worth comes into play here because you can literally
stress test what how would a portfolio behave what based
on what has actually happened over the last five, ten, fifteen,
(16:31):
twenty thirty years. And you can move these various levers
and see how a client's existing portfolio would behave And
I think that's good to know for people, because at
the end of the day, Brian, what we're trying to
avoid is that outsized volatility, which from an emotional standpoint,
we want to make sure we avoid that incoming phone
(16:53):
call that says, Hey, get me out, I'm going to cash.
I can't take it anymore. And this is why we
stress test PORTFO to the extent that we allow that
kind of behavior to happen. I would argue that you
know your advisor hasn't done their job on the front end.
Speaker 5 (17:09):
Yep.
Speaker 7 (17:09):
So let's look at another scenario other crazy things happening.
What if China finally decides to stop tap dancing around
Taiwan and they actually invade, and that causes a global
market to overall plunge.
Speaker 5 (17:20):
So what's gonna happen here?
Speaker 7 (17:21):
First thing is going to happen if Taiwan is in
the mix is semiconductor stocks are going to drop through
the floor. US technology will decline due to chip shortages
because so much of that stuff comes out of Taiwan,
despite our efforts to bring it back on shore here,
emerging markets will likely fall. Gold, treasure and defense stocks
of course, will rally. Okay, so how do I look
at my portfolio in this particular case, well figure out
(17:42):
how much of it is exposed to international stocks, how
much is in Asia merging markets, and look at sector concentrations.
Are you heavily invested in technology or semiconductors. If again,
you're somebody who has kind of, you know, Chase the
hot investment over the past couple of years, you probably
are a little overweighted in some of those areas. Make
sure you're probably diversified to react to that. And make
sure you understand if you own any assets that tend
(18:03):
to rise during these geopolitical crises. This would be gold, defense,
and energy. And then run your whole plan again with
a market drop of twenty to thirty percent, and ask
the same question we've already identified once. Can my plan
still deliver my goals if these situations happen. If it can,
then you're in good shape. If it can't, then you
need to make sure you're prepared for some These aren't hypotheticals,
by the way, these are things. Some of these things
(18:25):
we're talking about of just repeats of things that have
actually happened.
Speaker 4 (18:29):
Well, and this is a good time to remind folks
of what our own chief investment Officer, Andy stout at
all were just said a few minutes ago in our
prior segment. You know, again, you made the point at
the open here. People forget that the average pullback in
the s and P five hundred every single year, even
in a great economy, is at least ten percent a year.
Speaker 5 (18:48):
That is normal.
Speaker 4 (18:50):
But when the markets at all time, his people tend
to forget that that stuff can and often does happen.
And this is why we are talking about the importance
of stress testing a portfolio. You want to make sure
your plan can get through this from an economic standpoint
and you can get through it emotionally. All right, let's
talk about you know, another scenario, regional bank failures or
(19:13):
credit markets seizing up.
Speaker 5 (19:14):
We've seen this happen from time to time over the years, yep,
So tell me this sounds familiar.
Speaker 7 (19:20):
Bank stocks crash, credit drives up, short term panic in
the markets, dogs and cats living together, massiveysteria.
Speaker 5 (19:26):
This is two thousand and eight, of course.
Speaker 7 (19:28):
But reviewer, your cash is held, are you over FDIC
insurance limits and know what those limits are? They did
change after two thousand and eight, so you might not
be And there are creative ways you can you can
spread that out to check your liquidity, understand your credit exposure.
That means do you own high yield bonds or are
you heavy in bank or your funds heavy on the
banking industry. You might consider again a short term twenty
(19:49):
to twenty five market dip and that that's a good
number to stress test.
Speaker 5 (19:52):
Just just forget all the details of why, simply.
Speaker 7 (19:55):
Look at if your plan can survive a twenty five
percent decline in your overall assets. That's really what all
this stuff did. We're just attaching headlines to it. So
just owning the right stuff doesn't mean your portfolio passes
that test. It's about asking if this scenario plays out,
can I still get to my goals at the end
of the day.
Speaker 5 (20:09):
It's all that matters. Here's the all Worth advice.
Speaker 4 (20:12):
Stress testing isn't about guessing when the next crisis is coming.
It's about preparing your plan in advance to survive the
ones you never saw coming.
Speaker 5 (20:22):
All right.
Speaker 4 (20:22):
AI is reshaping everything, including how we invest. But is
there more danger than promise in going it alone. We'll
show you where AI could help and where it could
seriously hurt self directed investors. You're listening to Simply Money,
presented by all Worth Financial on fifty five KRC, the
talk station. She was sloatered Chicago murders every weekend, Democrats
(20:47):
talk humout, socialism, extraterrestrial technology, Know the facts.
Speaker 2 (20:51):
Listen here everything, no, everything, you behind me to know.
Speaker 8 (20:54):
Fifty five KRC and talk station five KRC and iart
Heart Radio station.
Speaker 4 (21:06):
You're listening to Simply Money present up by all Worth
Financial on Bob Sponsller along with Brian James. Well, it's
the buzzword of the decade at this point. AI artificial intelligence.
It's writing term papers, diagnosing diseases, and even composing music.
So naturally the question is can I just let AI
manage all my investments too? It like everything else, Brian,
(21:30):
it can absolutely enhance the investment process and in many
ways it already has and already does. I mean, I
know you and I use AI every day, But let's
get into let's get into how it's working today and
then maybe some of the watchouts.
Speaker 7 (21:44):
Yeah, and AI has become a term kind of like
the word Kleenex, where there's a bazillion different brands, but
we all call them Kleenex, so they're different definitions to everybody.
So for a long time there's been algorithms have been
involved in investing, and that's kind of sort of AI,
but it's a little little different branch of it. But
we use algorithms to help us do tax loss harvesting.
Scan portfolios every day all the way down to the
(22:04):
share lot level, so we can spot these opportunities to
harvest tax losses for clients and help them save come
April fifteenth. Also, direct indexing platforms also will mimic those
index funds while offering the same tax advantages alongside the
same diversification as a plain old index fund. And there's
risk analysis software. That's software that stress tests portfolios and
(22:25):
seconds across hundreds of scenarios. That's not exactly AI, but
that's more algorithmically oriented.
Speaker 5 (22:33):
But at the.
Speaker 7 (22:33):
Same time, what that can do alongside with AI is
it helps us strip out of motion. So an algorithm
doesn't panic when the markets drop, doesn't chase hot stocks,
it doesn't skip contributions because of bad headlines. That's what
we're here for when our job is to kind of
filter out people's emotions from their financial plans and make
sure that every decision we make is with the long
term in mind, not the shorter term. Algorithms and AI
(22:57):
don't really do that because they can't. Really, they can't
really in terms of here's how other people have handled
similar situations.
Speaker 5 (23:04):
Here's why it's important.
Speaker 7 (23:05):
We need to focus on the long term, and here
are historical situations that were somewhat similar, so we can
get an idea of what to expect. I haven't seen
an AI tool that gets us anywhere close to that,
despite the fact that we have, we are surrounded by
them and I do use them every day.
Speaker 5 (23:17):
Yeah.
Speaker 4 (23:18):
Again, the danger of AI, and it's a wonderful tool,
don't get me wrong. I mean it is changing every
industry out there and it will continue to do so.
But the danger of just using AI in a vacuum is, frankly,
it doesn't know you. It knows a bunch of data
if you can interpret data very quickly, and it does
no patterns to your prior point, Brian, but it doesn't
(23:40):
know your individual goals, your fears, in your life's priorities.
I look at it like Google Maps. It can show
you a route, sure, but it doesn't know that you're
almost out of gas, or that you hate going through tunnels,
or that your toddler in the back seat is about
to throw up if the road gets too bumpy.
Speaker 5 (23:59):
You know it.
Speaker 4 (24:00):
It can do a lot of things, interpret a lot
of data, but it still doesn't know how to interact
with real time, with real feelings, thoughts, and goals, with
human beings.
Speaker 7 (24:11):
Yeah, so let's use an example here. So let's say
you're going to retire in just a couple of years. Well,
AI says you should take more risks because your time
horizon is still long. You can get that out of
a questionnaire or any random questionnaire out of the internet
that completely ignores your emotional risk times. That's simply looking
at the math. Computers aren't emotional, they're simply mathematic A
plus B must equal CE. That doesn't account for what
(24:33):
happens when my spouse and I get to an argument
at the dinner table because the market has taken a
hit and maybe the two spouses weren't on the same.
Speaker 5 (24:41):
Page with regard to the risk levels to their portfolio.
Speaker 7 (24:43):
What happens if that twenty percent draw down that is rare,
but we still see them that twenty percent drawdown causes
me to bail out early. What are we going to
do if I'm a business owner selling a Companlet's say
I have a business and I'm going to sell that company.
Will a smart fiduciary advisor might walk through all kinds
of different strategies, gifting strategies and state planning ta ferrel.
AI is just going to look for a new number
and kind of recalculate. It's not going to point out
(25:04):
all the subtle intricacies of your own personal situation and
say here's ten strategies. Seven of them don't make sense
for these reasons. So we've narrowed down to these three.
Because this is how your family operates, and here's how
other your businesses all kind of work together.
Speaker 4 (25:18):
You're listening to Simply Money presented by all Worth Financial
on Bob Sponsller along with Brian James, and I think
the point you're driving home here really at the end
of the day, Brian, is we need to talk about
what good fiduciary advisors bring.
Speaker 5 (25:31):
To the table that AI doesn't.
Speaker 4 (25:34):
And this is where working with a good fiduciary really shines.
And let's just be real clear, not all advisors are fiduciaries.
Some are brokers, some are salespeople. Fiduciary advisors are legally
bound to know you and put your interests first.
Speaker 7 (25:52):
Yep, So fiduciary advisor is going to help you prioritize
the goals that matter to you, help you identify them
to begin with. Right, That's normally where a lot of
us hide behind the numbers. All I know is they
don't have enough money. I have no idea how much
I need. I just know there's not enough. So a
finucial advisor's gonna help you identify those things and put
numbers on them most importantly, and navigate those emotional decisions,
and then also coordinate tax a, state and investment planning.
Speaker 5 (26:13):
Some of this stuff is rather mechanical. It's black and white.
Speaker 7 (26:15):
There are steps to follow and process that's put in place,
but somebody with experience needs to help you understand which
processes you need and which you don't. For example, you
don't need a trust for everything. That's another segment we'll
do some other day. But that's a common question we got.
I only have a will, I don't have a trust.
That might be okay. Let's talk about your situation, you know,
and also adjust that plan when life throws your curveball.
(26:37):
Fiducial advisor is going to build a relationship with you
in terms of knowing the things that make you worry.
So I know when I see certain headlines, I know
the five or six phone calls I got to make
because somebody out there is panicking. I also know the
ones I don't have to, and they probably don't want
to hear from me because they're not worriers. So there's
there's a very significant interpersonal relationship that comes along with
working with fiduciary And.
Speaker 4 (26:58):
Let's face it, you know, good advisors ask the questions
that AI never will, For example, what do you want
retirement to feel like? How do you want to help
your kids without hurting their motivation and their drive? And
are you more afraid of running out of money or
more afraid of not enjoying it while you have it?
And good advisors can help you adjust when life changes,
(27:21):
when your job becomes unbearable, when your mom needs assistant
living help, when.
Speaker 5 (27:26):
Your kids get a full ride to college.
Speaker 4 (27:28):
So in a perfect world, here AI and advisors should
work together. Fiduciary advisors. The best fiduciary advisors already use it.
Like we've already said, it's a tool, and that's the
key word. It's a tool, not a replacement. Here's the
all Worth Advice AI is a very powerful tool, but
only a fiduciary advisor can build a plan around your life,
(27:52):
your values in your future. Next, we tackle your biggest
money questions, from selling a business or vacation home to
charitable giving, inheritance and even private credit funds. You're listening
to Simply Money, presented by all Worth Financial on fifty
five KRC the Talk Station.
Speaker 5 (28:12):
Have a little bad days that's not good.
Speaker 2 (28:14):
Even if the news isn't always good, there will be
days of bad news. It's always a good day. This
is a good day to be informed.
Speaker 5 (28:22):
Today is definitely a good day.
Speaker 2 (28:24):
Oh day long, we learned a lot. Today starts your day.
Today is a good day.
Speaker 4 (28:29):
Day Looking good right now, getting a good look how
this weather will impact your day?
Speaker 2 (28:34):
And check in throughout the day. What's good for our city?
Speaker 5 (28:37):
A good story to tell, a good place to be.
Speaker 2 (28:39):
I'm having a good KQ fifty five KRS The Talk Station.
Opinions are welcome to here.
Speaker 5 (28:46):
I do think he is too old to run.
Speaker 6 (28:49):
In twenty twenty.
Speaker 3 (28:49):
Four fifty five KRC the Talk Station, You're listening to
Simply Money, presented by or Worth Financial Lumbob Spon Seller
along with Brian James.
Speaker 4 (29:03):
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.
All right, Brian Robert and Montgomery says, we own a
family vacation property in Michigan.
Speaker 5 (29:19):
How do we pass it to the next.
Speaker 4 (29:21):
Generation fairly when only one of our three kids actually
wants it?
Speaker 7 (29:26):
Now, this can be a tough one because this is
a fairness versus equality decision, right, So we're obviously there's
a lot of debate in terms of keeping people happy.
I'm stammering because this is a tough one really. So
what you could do with well, simply give the property
to the interested child in balance with the other assets.
If you have investments here in your estate cash retirement accounts, well,
(29:48):
then the kid, the one kid gets the property, the
other couple kids get an equivalent value of whatever the
rest of it is worth. This will have tax different
tax outcomes for everybody. It's not gonna be a You're
not gonna be able to divide everything completely equally and
have everybody have the same experience. But that's just where
it's important to make sure everybody's communicating and understands what
your goals are. By the way, this is your decision,
(30:08):
not theirs anyway, So lay it out to them and
tell them why you did what you did, and you
know they shouldn't have too much objection. There could also
be a buyout provision. The estate plan could stipulate that
the child who wants that house can buy out their
siblings share every time. In other words, give everybody everything,
but give them a structure at which that if somebody
wants to sell out get rid of their shares, then
(30:29):
here's the value of it, and there's a way you
can set up a calculated value so they don't have
to argue about that because mom or dad already set
it up before they left. Also, LLC trust structures, those
are in place. Those exist to make sure that there's
another entity that owns it entirely, and maybe it spits
out income for all of eternity. In that way, nobody
actually owns it, but everybody gets a little stream and
income off of it.
Speaker 5 (30:47):
Something like that.
Speaker 7 (30:48):
But also you have the other thing to bear in
mind is tax considerations. There's lots of different ways that
can come out as well. So let's move on then
to David and terras Park. David owns a business and
he's thinking about getting now it. He's thinking about taking
a handing back some of the business responsibilities by selling
to a private equity firm, and he's wondering how to
know if that's the right fit and not just pay
attention to the highest check.
Speaker 4 (31:10):
Well, David, I'd say this way, you know, the first
couple of things that come to mind is you got
to look at the terms of any deal that you do.
You know, it's not to your point, not just the
highest check, it's how and when do I get my money?
And what are the goal posts that need to be met?
You know, is it an upfront check, is it an
(31:30):
installment sale? Is my equity or my cash going to
come to me over time? And what can change after
I signed the deal? So you want to look at
the you know, the covenants there that you're being offered
in terms of what this liquidity event really looks like,
so that you could make sure everything you've spent a
lifetime building is protected to your satisfaction. The other thing,
(31:52):
you know, let's face it, when you sell to a
private equity firm or anybody, they're probably in. One of
the reasons they're probably interested in buying your company is
they see some potential efficiencies there that they think they
can capture through that merger. And some of those efficiencies
might involve downsizing employees. So you know, if you've got
(32:12):
employees that you want to protect that have really helped
you build that business, and you want to make sure
that they just aren't laid off or shown the door
the minute you sell that business, those are other things
that you can try and negotiate into that deal as well.
Speaker 5 (32:26):
So these are very.
Speaker 4 (32:27):
Complex conversations to have, but I just pointed out two
of them. That you want to look at the financial
covenance and then how are your employees going to be
treated assuming you have some All right, let's move to
Lisa in Northside. She says, we're charitably inclined, but we
also want to protect our assets in case of future
healthcare needs. How do we strike that very important balance?
Speaker 7 (32:50):
Brian, Sure, So there's a lot of ways to do this,
and a lot of them involve acronyms, let's start with
a DAF donor advised fund. You can use these to
set aside money for future giving. Right that this is
not directly related to health care, but you're basically pre
funding your donations now, meaning you will not have to
you will not have to carve that money out later
because in the future, as you're anticipating, you may need
(33:11):
that those dollars for healthcare. So donor advice fund can
give you the benefit of making donations now, pretty pretty
cost effective way to do it. It's not like an
elaborate trust or a family limited partnership or a family
foundation that kind of thing. Another option of charitable remainder
trust a CRT. There's that acronym that's going to let
you gift appreciated assets to a trust but still receive
(33:31):
the income personally that you can use for anything you want,
including healthcare.
Speaker 5 (33:35):
The remainder then as you pass, goes to charity.
Speaker 7 (33:38):
You can also look, of course at long term care insurance,
which again this is just putting the risk somewhere else.
If I feel like I might not have the dollars
at that time in the future, then I'm going to
buy an insurance policy now to offset that risk and
then just standard planning ahead, keep some of your assets
liquid rather than tying too much. And you know, in
these irrevocable charitable structures, just make sure you've got a big,
fat emergency fund out there. That sometimes the simplest solution
(34:01):
is the is the right answer. To give you some
numbers to think about, Ohio, Indiana, Kentucky nursing homes are
ninety to one hundred and ten thousand dollars a year,
and Medicaid planning requires a five year look back, So
don't really plan on impoverishing yourself either. That's usually not
a great strategy for anybody with assets. So we'll move
on to Mark and Anderson Township. Mark's got two kids,
(34:22):
apparently done pretty well raising them, one who is financially dependent,
one who's not doing so well. How do we account
for that difference in their so far life outcomes to
create inheritance that's fair but doesn't cause resentment and keep
them from seeing each other at the holidays?
Speaker 5 (34:36):
Pop.
Speaker 4 (34:38):
Yeah, this is not an easy one, and I think
to the point Brian made in the first question we
covered tonight, Remember Mark, what's fair is what you and
assuming you're married, you and your wife determine is fair.
You don't have to follow anyone else's guidelines or theories
or opinions. It's what's going to work for your family.
And so the word that I like to use is communication.
(35:02):
Hopefully your kids are all getting along well, they love
one another, they're supportive of one another, and let's face it,
all of our kids. I mean, my wife and I
have three adult sons now, and we watch how they operate,
and depending on which career path they choose, different career
paths come from different come with different earnings, opportunities or capabilities,
(35:23):
and it's never gonna all be even. So I think
it's important to just sit down, make sure your kids
are all getting along, and if you do decide to
do something for that one child that is maybe struggling financially, communicate.
You don't have to share exact numbers, but I think
on the front end, if you explain to the other
(35:44):
kids that maybe aren't gonna get as much as that
one kid who is potentially struggling, by having those conversations
now before you and your wife pass away, that can
really help avoid some vast missis understanding and potential resentment
down the road. So think through it and then communicate, communicate,
(36:06):
communicate it, and try to keep harmony in the family
that way, that's my advice. All right, next wall, Well,
why we agonize over tipping a couple extra bucks on
a coffee, but we forget that we're perhaps paying for
twelve streaming services that we never use. You're listening to
Simply Money, presented by all Worth Financial on fifty five KRC,
(36:27):
the talk station in.
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Help us with Steve from your.
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Speaker 4 (37:18):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponseller along with Brian James ever noticed how
people can stand at the counter mentally debating do I
tip fifteen percent or twenty percent? On this coffee or latte.
I mean, we stand there and stress over two bucks. Meanwhile,
back at home, half of us are paying for streaming subscriptions.
(37:39):
We don't even remember signing up for, Brian. It's the
old being penny wise and pound fool this year, and
you've actually got a survey that backs up how the
average household is behaving right now in this area.
Speaker 7 (37:52):
Well, tell me if this sounds like your household, Bob.
The latest survey say the average household has a dozen subscriptions.
That's twelve of them, video music apps, even those random.
Speaker 5 (38:01):
Fitness not too far off.
Speaker 7 (38:02):
Yeah, yeah, I think a lot of us now have
kind of gotten sucked. It's just so easy nowadays. And
the problem is a lot of them quietly auto renew
just month after month. So that's really the funny part. Well,
we'll agonize over these couple of dollars at the coffee shop, right,
Oh my gosh, you're spending four or five dollars and
a cup of coffee. Well, okay, but maybe somebody else
is spending two hundred dollars annually on a streaming service
(38:23):
that they haven't looked at in months. So it's just
because it's all it's all. It's all right here in
front of us. It's so easy to sign up for
these things. And maybe it's just that one show, that
one movie, or that one thing we wanted a part of,
and then we thought I'll get to it later.
Speaker 5 (38:36):
I just did this to myself.
Speaker 7 (38:37):
I just noticed something hitting my checking account that I
haven't needed in three months.
Speaker 5 (38:40):
So I had to squisch that that was just that
was just yesterday. So happens to the best of us.
Speaker 7 (38:44):
But this is definitely something can be a little tiny drain,
a little leak in your in your plumbing to make
sure you get short up.
Speaker 5 (38:52):
Yeah, we'll we'll call. We'll go ahead and just call
that subscription creep.
Speaker 4 (38:55):
And my wife and I actually sat down together, I
don't know, three four weeks ago, because I keep seeing
this Amazon bill showing up on my credit card and
they do a wonderful job of just piling everything together
into one charge that says Amazon dot Com.
Speaker 5 (39:12):
And I sat down with her, I'm like, what is
all this stuff?
Speaker 4 (39:15):
So we actually opened the app and we found two
subscriptions in there for you know, services that we don't use,
and we were able to agree on yep, we're not
using it, let's get rid of it. I don't know
that was like thirty bucks a month right there. So
this is just a call out to just do a
little audit of these automatic subscriptions and you might be
surprised at how much money it makes sense to just
(39:38):
save every month.
Speaker 7 (39:39):
Now, speaking of apps, this is kind of funny. So
I'm working with somebody where we're trying to help her
understand her budget. She has something called Rocket, and Rocket
is a service out there.
Speaker 5 (39:48):
Probably heard of it, but.
Speaker 7 (39:49):
Their whole point is to look at your financial data,
to look at all the transactions and you're checking account
your credit cards, and they'll tell you which our subscription
based so you can make a clean decision and will
they kind of bring it a little closer home in
terms of click this link and they will unsubscribe for you.
Speaker 5 (40:04):
So it's actually kind of a neat service.
Speaker 7 (40:06):
But ironically, this particular person doesn't have that issue and
she's still subscribing to Rocket. So one of the big
best advice I can give to her, I asked her,
does Rocket identify itself? Since you don't actually need it,
and but so, but it's good to take a look
at it. There are tools out there you can look
at and if you don't need those tools, unsubscribed to
them too.
Speaker 4 (40:22):
In Declare Victory. Thanks for listening. You've been listening to
Simply Money, presented by all Worth Financial on fifty five
KRC the Talk Station.
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are happening. Fifty five krs the Talk Stage
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