September 30, 2025 • 41 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian unpack why the Fed’s preferred inflation gauge (core PCE) near 3% and surprisingly strong GDP make additional rate cuts tricky. They challenge one-size-fits-all Roth conversions—“pay taxes when you’ll pay less”—and mark 50 years of index funds, noting both their low-cost power and today’s concentration risks. Plus: listener questions on backdoor Roths, consolidating old 401(k)s, mortgage payoff vs. investing, and family LLCs. And a PSA from Kevin Durant’s locked Coinbase account: safeguard your passwords.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
World awakeness. I am destroyed this.
Speaker 2 (00:04):
Now more than ever. Listen as often as possible. Fifty
five KRC the talk station.
Speaker 1 (00:15):
Tonight, a huge jump in home sales, the role that
index funds should play in a portfolio, and we answer
your questions. You're listening to Simply Money, presented by all
Worth Financial. I'm Bob sponseller along with Brian James. Like
a coach watching game film, the Federal Reserve is analyzing
data that is very important to them. I hope they're
(00:38):
watching this like game film and doing it accurately. All
Worth Chief Investment Officer Andy Stout is with us here tonight,
and Andy talk to us about the PCE rate. First
of all, explain what PCE is and updates on some
of the data.
Speaker 3 (00:55):
So PCE is the FEDS preferred inflation measure. I mean
when we think about inflation, we might be thinking about
what are the cost of eggs? You know, what's the
price of gas? I gotta go foot my car. You know,
it's a big pain point. But those data points are
just a fraction of the broader inflation area picture. So
(01:17):
we have PCE, which is slightly different than CPI hear
more about CPI, which is like consumers out of pocket spending.
PCE takes into consideration a few more things besides just
out of pocket spending. But more specifically, why we talk
about PCE, and I mean, alphabet soup is always fun
to talk about on a Monday, But core PCE more specifically,
(01:40):
is what the Federal Reserve looks at when they're setting
monetary policy. In other words, what they want to be
specific is, they want core PCE to be at two
percent on a year.
Speaker 1 (01:50):
Over year reading.
Speaker 3 (01:52):
And the core part means they're ignoring things like price
of gas, in the cost of eggs, so it excludes
food and energy. That only makes up about, you know,
roughly twenty percent of overall inflation uh inflationary products. So
we want core pcee two percent. We're not at two
percent now, you know, we're at almost three percent right
now based on the data we got from last week.
(02:13):
So it's not close to where the Fed wants it
to be, and we're probably not getting there anytime soon.
Speaker 1 (02:18):
All right, Andy, Uh, something else that we noticed late
last week was the second quarter GDP number was you know,
revised upward quite a bit. Estimates were three point three
percent correct, me if I'm wrong. It came in at
three point nine percent. That's quite an upside surprise. What's
going on with the GDP rate for the second quarter?
(02:39):
What surprised you? Because I know you look at a
ton of data, but when you.
Speaker 3 (02:42):
Look at just the big economic picture across you know,
pretty much everything that's out there, the you know the
GDB revisions. You know we're strong and certainly came in
much more robust than you know, what people were initially thinking.
But I want to take it a step back further.
It's not just GDP in the second quarter, its GDP
(03:03):
in the third quarter, which is also coming in. We're
appearing to come in at a pretty strong rate. And
that's in spite of all the stuff you hear about
the labor market starting to weaken. I mean, if you
look at where GDP in the third quarter, on top
of what we saw those revisions in the second quarter,
the third quarter is tracking at a three point nine
percent rate as well. So I mean we're talking about
(03:23):
some pretty robust growth. Now. I know what you're probably thinking, Well,
all these tariffs and trade and that's really made that
GDP number hard to understand and difficult to look through
and certainly has and that's why we look at a
maria of other different economic growth indicators. But when you
put it all together, you have this economic growth engine
(03:46):
that is the United States that is not slowing down
despite everything that's going on. But then you might be thinking, Okay,
that's really good. And then we think about what we
were talking about the very top of the show on
inflation and where inflation is. It's still higher than where
we did where the FED wants it to be. So
now take a take those two together. We have faster growth,
(04:10):
higher inflation. That kind of flies in the face of
what the FED was just talking about a couple of
weeks ago when it last met and the things that
it was worried about, because then they cut rates and
now they're looking to cut rates more. Those two things,
taken together, argue to not cut rates. They argue to
keep rates where they are. But where we're going is
probably another rate cut. Least that's where market see things.
Speaker 4 (04:32):
And where do you see which Which components do you
think are moving us in this direction the most? Would
you say it's on the consumption side of investment or
rebe government spending. Is there anything different along those lines
in terms of what's moving the needle here for us.
Speaker 3 (04:46):
Well, I mean, yeah, we can certainly look under the
hood when it comes to you know, where GDP is, uh,
you know, sitting at you know, we had the three
you mentioned, the strong second quarter revision UH to like
those to three point eight at three point eight percent,
and when you look at what's been driving it, you know,
it has been consumer spending that's been you know, that
(05:08):
was really the big driver. I mean, the government was
actually a bit of a drag last quarter.
Speaker 1 (05:14):
Now, one thing that you know, I.
Speaker 3 (05:16):
Like to look at is what I call basically it's
called core GDP, and more specifically what that is, it's
looking at just business spending excluding inventories and consumer spending.
Speaker 1 (05:30):
So let's forget government spending.
Speaker 3 (05:31):
Let's forget what happens with trade, the imports and exports,
because that's you know, definitely out of the control of
pretty much, you know, anybody right now, just because of
all the tarifs that are going on. And when you
look at this core GDP UH, more specifically, it's final
sales to private domestic purchasers. That's it's at two point
nine percent for the second quarter, and that's a decent number,
(05:56):
and that's the scene a revision higher from where we
had been in the past. So we're seeing growth where
we want that growth to be, and that's a good
sign for the broad US economy.
Speaker 1 (06:06):
Andy, let's switch gears and talk a little bit about
the housing market. I mean, I know some of there's
been two big arguments by this administration for lowering interest rates,
one to help juice the housing market a little bit,
and second, obviously dealing with the national debt. New home
sales popped in August when mortgage rates dipped even just
(06:27):
a little bit. What does that tell you about how
rate sensitive this housing market still is. And then as
you pair that with the labor market data, I mean,
it seems like the labor market is slowing, but as
we just talked about, the consumer is still resilient. What's
going on there? It seems like almost to disconnect between
(06:49):
consumer spending and the labor market. And then please talk
about housing.
Speaker 3 (06:54):
Okay, a lot too unpacked there. Let's I guess we'll
start with housing on that one. We get too of
the biggest housing reports last week with new home sales
and existing home sales, and they did tell different stories,
new home sales showed an unexpected surge of about twenty percent.
I mean, we're looking at a twenty percent gain last month,
which was just blew out any sort of expectations. And
(07:17):
when you look at where those new home sales were,
they were primarily in the South. You know that was
what was really driving. And to your point, mortgage rates
did see a nice pullback six point three three percent
is where the thirty year fixes that from a nationwide perspective,
that's the lowest by the way since January of twenty
twenty three. Now on the new home sales, very good,
(07:40):
very strong. I would also be remiss if I did
not mention that builders, you know, had a lot of
incentives out there to kind of keep homes moving, keep
things going. But the pullback in mortgage rates very positive.
From that perspective, saw very very good month. Now here's
the thing to remember of new home sales there, it's
(08:02):
a very small portion of the overall housing market. If
you break down existing home sales versus new home sales,
just in terms of like total sales activity, we're talking
about eighty five percent of sales activities existing home sales
and fifteen percent is new home sales. So let's not
get too excited about that new home sales data. And
when we look at the existing home sales, it definitely
paints a different picture. It actually declined only about point
(08:25):
two percent on a month over a month basis, but
certainly not a twenty percent increase like we saw on
the new home sales. And when you look at just
the analized pace of sales, they they remain near, you know,
near record lows. I mean when this index to track
existing home sales started in like late nineteen ninety nine
(08:46):
or in that area, and we're kind of near those
relatively low levels overall. So I'm not too excited about
the housing market. Uh, the you know, one data point
on new home sales that certainly does not make a trend.
Speaker 1 (09:00):
And you also need to consider that.
Speaker 3 (09:02):
Mortgage rates are still while they're the lowest since January
of twenty three, they're still pretty high from a historical standpoint,
especially when you consider that most of America that have
have mortgages have them, you know, below five percent. So
you know, put that all together, let's just take a
step back and say, Okay, home sales some improvement, but
(09:25):
we're not there yet, and I don't really think we're
going to get there anytime soon. So you know, that's
the that's the housing side of the world. You asked
about labor, and I know that was a couple of
minutes ago. Do you want to reask that again, just
kind of refresh it.
Speaker 1 (09:40):
No, I guess I'll pose it this way, And I
don't want you don't have to spend this whole time
talking about my questions, But I guess this data when
the data doesn't make sense, at least to me, Andy,
it seems like we are living more and more in
a world of the haves and the have nots. I
think the people at the bottom end of the economic
spectrum are continuing struggle, and people that have assets, have
(10:03):
stock portfolios, have good incomes, good jobs. Things are going
pretty well for those folks, and that, to me would
explain what the disconnect between some of these new home
sales and some of the weakness in the labor market.
Am I am I in the ballpark there?
Speaker 3 (10:20):
I mean, yeah, that's definitely a hole. That's a that's
a that's a thesis paper. If we want to get
into the socioeconomic backdrop and really going down that route,
what I would say is that a lot of it
is perception. And so when we think about consumer confidence
and who's feeling good about the economy, it is the
(10:43):
you know, there is a disconnect there. So typically the
higher income people tend to currently be a little bit
more optimistic. When you look at that income back down
and if you look at the spending breakdown, you know,
what moves it on the margin is going to be
more in the higher income because you know, said as
it is to say on the lower income side of
the world, they could be living, you know, paycheck to paycheck,
(11:06):
and so they're always going to be spending pretty much
everything they have.
Speaker 1 (11:09):
So what's really.
Speaker 3 (11:10):
Going to be moving the market or moving the economy
from a consumer spending is going to be the people
who do have some excess savings to essentially keep the
economy growing. And when you look at the consumer spending
overall and where this money is coming from, because you know,
you do have incomes growing, but the spending has been
(11:31):
increasing at a quick rate, so they have to pull
from somewhere. We have been seeing continued increase in credit
card debt. We have been seeing people pull from their savings.
So when you put that together, that kind of helps
explain what's going on. But just from a big picture perspective,
when you think about that labor market weakness, you know,
people are going to be spending all they're going to
(11:52):
be spending if they're living paycheck to paycheck. If the
people who are on the higher income side, if the
market keeps going up, they're also going to be able
to have this wealth effect to essentially be pulling from
that as well.
Speaker 1 (12:04):
And real quick.
Speaker 4 (12:05):
In our last few seconds here, so let's talk about
the week ahead here and onto the market. So the
markets are having a really good year, the NASDAK, emerging markets,
international stocks are doing well.
Speaker 1 (12:14):
The Fed is still cautious. Why would you say.
Speaker 4 (12:17):
There's a disconnect between what investors are doing and what
the Fed things.
Speaker 3 (12:21):
Well, when you look at just the number of jobs
that employers are adding, you know what's expected this week
because we're going to get the monthly jobs for September
on Friday, economists expect only fifty thousand jobs being added Brian,
and that is below the level needed to keep pace
with population. That needs to really be about one hundred
thousand a month. So we're seeing some weakness there. So
(12:43):
they're not adding enough jobs to support just the natural
growth of you know, the labor force in general.
Speaker 1 (12:50):
And taking a.
Speaker 3 (12:51):
Step back, they've had massive revisions to the number of
jobs that employers added over the past year essentially, and
that's a lot. That's a concern right there. So if
they keep adding fewer and fewer and fewer jobs, people
aren't going to be able to spend as much because
they don't have a job. And now again that's going
to you know, go back and do who has a job,
who doesn't, and the income disparity as well, and who
(13:12):
is spending and who is not spending. But that is
certainly the Fed looking at things not from a position
of strength from the labor markets perspective, but from a
position of fragility.
Speaker 1 (13:23):
All right, Andy, thanks again for joining us tonight and
thanks as always, we always love having you on the show.
Coming up next, our reaction to two financial planners making
a case against rough conversions. You're listening to Simply Money
presented by all Worth Financial on fifty five KRC the
talk station.
Speaker 2 (13:41):
And he shows the election.
Speaker 5 (13:44):
Thanks for giving us Democrats voice.
Speaker 3 (13:46):
You guys are making me think twice about sing.
Speaker 2 (13:48):
This talk about it here I feel like that matter.
I can be heard on fifty five KARC, the talk station.
Speaker 6 (13:56):
All Worth Financial, a registered investment advisory firm, is presented
during this program. Are not intended to provide specific financial advice.
You should consult your own financial advisor, tax consultant, or
a state planning attorney to conduct your own due diligence.
Speaker 1 (14:14):
You're listening to Simply Money, presented by all Worth Financial
mom Bob Sponseller along with Brian James. If you can't
listen to Simply Money live every night, subscribe and get
our daily podcasts. And if you think your friends or
family or both could use some financial advice, tell them
about us as well. Just search Simply Money on the
iHeart app or wherever you find your podcast. Should you
(14:37):
consolidate those old four oh one ks? And his private
credit really worth the risk? We'll tackle those questions and
more straight ahead of six forty three. If you've ever
talked money with friends, someone may have said you gotta
do a Wroth conversion, pay the tax now, tax free
growth later. What's not the love? Well? Two financial planners
(15:00):
have come out with a new book that says, hold
on a second, and it's called Tax planning to and
through early retirement, and their main message is this, pay
taxes when you pay less tax What a great idea, Brian.
Speaker 4 (15:14):
That just doesn't sound too crazy, does it sounds obvious,
but that does flip the usual narrative. So the point
that they're making is that for a lot of early retirees,
especially those who haven't taken Social Security yet and then
they're not facing require minimum distributions, which that that's what
kicks in when you are either age seventy three or
seventy five, depending on when you were born. Anyway, before
(15:35):
that stuff kicks in, you're probably going to be the
lowest bracket that you've seen in decades and that you'll
ever see for the rest of your life. Once those
requirement of distributions kick in, you'll be at a minimal
level of income as you have to take distributions out
of those pre tax iras. So the whole point of
that is that during that time period, your tax rate,
your effective tax rate, is really low. And I want
to be really clear here, we're not talking about tax
(15:56):
the tax the marginal brackets. We're talking about the actual
percentage of actual taxes that you pay that you're paying
at the end of the year. That is simply your
total tax due line off your ten forty divided by
your adjusted gross income. That's your actual effective tax rate.
So what are we talking about here? So if you
convert to a wroth in your early your fifties early sixties,
(16:17):
you might be paying twenty two to twenty four percent
federal tax now just to avoid paying maybe ten or
twelve later. Well, essentially, you know what this looks like
is you might This is their point, You're paying a
big upfront tax bill and it might take decades to
come out ahead on that conversion. So if your lifespan
doesn't stress that longer, if you don't use the wroth
the way you plan, you might have prepaid those taxes
for nothing and not and not have gotten enough growth
(16:39):
out of it. I'm not sure I agree with this,
but let me bounce ato Bob real quick and just
see what do you.
Speaker 1 (16:43):
Think of this? Well what I what I think of it?
And I have not read the whole book, you know, which,
in fairness to the authors, I probably should do before commenting,
But we only have so much time, so I'm going
to comment. I think that if I'm guessing the point
that they're probably making, and they're probably good points, is
to sit down and do a thorough, comprehensive financial plan
(17:05):
before you just listen to this kind of one size
fits all advice that you might read about or hear
about in the media. And I mean, let's face it,
on this show we talk about Wroth conversions all the time.
Does that mean everybody should just run out and convert
all their iras immediately to Ross. No, You've got to
sit down, run the numbers, base everything on assumptions you know,
(17:27):
both currently and long term, and make sure you're making
decisions that make sense for your situation. If I had
to guess in giving credit to these two authors, that's
probably what they're saying, and I agree with them. Brian.
The other thing to call out is you got to
if you do a Wroth conversion, you got to look
at where you're going to come up with the money
(17:47):
to pay the taxes. If you're pulling this money out
of the IRA to pay the taxes, you're probably shooting
yourself in the foot. But go ahead.
Speaker 4 (17:55):
Paying taxes on dollars with which you're going to go
ahead and turn around and pay taxes. The most efficient
way to handle your dollars.
Speaker 6 (18:01):
No.
Speaker 4 (18:02):
Yeah, I'm a fan of roth conversions. I'm not a
fan of doing them. I'm a fan of learning about
them because everybody eventually will run across this idea and
some people march in and they'll say, hey, where's that
form where I sign it? And I check a box,
and all of a sudden, my IRA is a roth
and there are no other negative consequences than that.
Speaker 1 (18:19):
It's very much not that simple.
Speaker 4 (18:20):
Roth conversions are one thousand percent sacrifice now in exchange
for a gain later, but it can be a significant
gain depending on your depending on your situation. Well, if
your plan dictates that you are you yourself are okay,
then it can really be a question of efficiency for
the way your airs are going to inherit your assets.
So let's remember here, we've got whenever we talk iras,
(18:40):
and a lot of people are aware of this now. Ever,
since twenty twenty, the rules changed on iras where you
have to when your airs inherit, they've got ten years
to liquidate that IRA. Most of the time we're thinking
about the pre tax ira and Okay, my kids are
going to have to pay taxes for ten years after
I'm gone. But that also applies to the ROTH side.
But if you think about it, that actually it's actually
(19:01):
a benefit. You're still not paying taxes. The errors will
not pay any more taxes than you would have on
your ROTH. What that means is they get an additional
ten years beyond your death of tax free growth. So
if you find yourself in a situation where you might
have more more pre tax dollars in your IR, then
you're actually going to use which, again, as Bob says,
do a plan to figure out where you really stand.
Then a ROTH conversion can be enormously helpful down the
(19:23):
road to prevent your errors from being pushed into really
really high tax brackets. Because remember when you inherit that IRA,
that those dollars have to get distributed. They are on
top of whatever dollars you're already earning as part of
your salaries and all that. So, and this usually happens
when we ourselves are at our highest brackets. Ever, so again,
ross conversions definitely something to learn about should everybody pull
(19:43):
the trigger. Absolutely not very much a case by case situation. Yeah,
a couple just a couple other things to throw out here.
You know, you got to make assumptions about you know,
what's going to happen in the future. Unfortunately, when you
run the numbers and do these things, and sometimes, Brian,
we have people come in that say, well, I know
tax rates are going up in the future, so that's
why I want to convert my eye.
Speaker 1 (20:04):
You don't know tax rates are going up. People have
been predicting tax rates are going to go up for
the last three or four years, and so far they've
been wrong. So, you know, be cautious about all your
assumptions and predicting where the world's going to go. And
then again, some people like to plan the tax thing
around their situation. Other people like to plan around, you know,
(20:26):
kind of pre paying some of these taxes for their kids.
Those are two completely different objectives and how to be discussed,
you know, in that fashion. Here's the all Worth advice.
Don't rule out roth conversions or don't go all in
on wroth conversions just because they're complicated or feel like
the right strategy based on what you've heard. They can
save you and your heirs big time in the long run.
(20:48):
But again, run the numbers, factoring into your personalized financial plan.
Coming up next, how a simple idea change the investing
world and where it should in, what role it should
play in your portfolio today, and why again, it's just
one tool in the toolbox. You're listening to Simply Money
presented by all Worth Financial on fifty five KRC, the
(21:09):
talk station, News when it happens, breaking news tonight. We
are coming to you live news when you need it.
Speaker 2 (21:17):
You're going to want to listen to this fifty five
KRZ the talk station.
Speaker 1 (21:25):
On five KRC and iHeartRadio station. You're listening to Simply Money,
presented by all Worth Financial. I'm Bob's unseller along with
Brian James. Fifty years ago, hardly anyone thought indexing would last.
It was considered quote unquote nonsense. And I remember this, Brian,
(21:47):
although I haven't been doing this fifty years. Your dating
is it was. It was thought of oftentimes as a
passive gimmick by our industry that would never work. And
it's because it's low cost and it doesn't serve the
brokerage industry very well. But I digress. Fast forward to today,
indexing dominates. It's not just a tool for retail investors, Institutions,
(22:10):
endowments and the ultra wealthy use it as a core
building block of their portfolios. In a world of active
managers touting out performance, this humble index fund concept quietly
reshaped investing forever.
Speaker 4 (22:25):
Brian, it was a good thing and a galaxy far away.
A long long time ago. In nineteen seventy five, John
Bogel founded Vanguard.
Speaker 1 (22:33):
Might have heard that name.
Speaker 4 (22:34):
There's a big website out there called Bogel Heads, and
it's a bunch of people who have followed him for
a long time. But nineteen seventy six, Vanguard launched what
was officially called the first index investment trust, which we
know today is the Vanguard five hundred index Fund. And
all it does is it mirrors the S and P
five hundred rather than try to beat it. Everybody's got
this now, these are belly buttons. Everybody has one. But
(22:55):
Vanguard was the first to put this together with just
with the intent of the the belief that you know what,
I don't need a human brain to tell me it's
a good idea to own the five hundred largest American companies.
We're the largest economy by far in the world, and
the five hundred largest smartest companies are probably going to.
Speaker 1 (23:11):
Be a good way to get access to that.
Speaker 4 (23:13):
So the whole point of this is that markets are efficient,
meaning all the information is out there, everybody knows everything,
so which this was true in the nineteen seventies. Now,
of course, with the Internet, there's not a whole lot
of information that's not already out there, and nobody consistently
beats the market. Therefore, it's better to just accept those
market returns and minimize costs as much as possible. But
(23:33):
at the time, though, most of these mutual funds, your
other options were all actively.
Speaker 1 (23:37):
Managed, meaning you were waiting on somebody to have the
hot hand.
Speaker 4 (23:39):
Whoever would pick the you know, whoever was picking the
hot stocks would rule the day that year, and then
it would shift over the next year. Indexing was considered
radical at the time. People said, if everybody owns the
same socks, who's doing this price discovery?
Speaker 1 (23:51):
What about bubbles? How do you deal with all that
kind of stuff? Yeah, I think this thing worked because
you know, the data really hasn't changed. Brian, correct if
from wrong. But I mean, over two thirds of all
actively managed funds in this large cap core space, and
that's really what we're talking about. Uh, Over two thirds
of these actively managed funds underperformed the index APHO. It's
(24:15):
more than that. It's probably getting closer to eighty percent, right, so,
and I think there's reasons for that as the size
of these funds grow. I mean, let's face it, the
only way to quote unquote outperform is you got to
take outside risks, risks in different sectors or different companies.
And these mutual fund companies are chicken, you know, to
(24:36):
do that because if they underperform for one or two years,
people are gonna liquidate out of their funds. So they
were fuse the star. You gotta have five stars these days.
So they were fat, dumb and happy sitting there taking
their one percent to basically mimic the index. And I
think Bogo was ahead of his time and said, hey,
you know, I'm calling you know what on that whole game.
Getting the index at you know, five basis points, let
(25:00):
this thing run and put close to that extra one
percent in the pockets of investors, which is where it
should be.
Speaker 4 (25:06):
Now, So let's dig into why this is the thing.
What has made this stick well? Low costs and expense ratios.
Expense ratio is a term that everybody listening to this
should know. What that is every investment that you're going
to consider for your portfolio is going to have some
kind of internal expenses, and there should very much be
a factor in your consideration of whether you're gonna invest
it or not if you're doing things on your own.
(25:26):
But because indexing is passive, right, it's just the five
hundred largest companies in the United States. You can figure out.
Anybody can go figure out which five hundred that is. Therefore,
you don't need a large research team. You're not doing
a whole lot of trading jumping in and out. That
drives down those internal costs. That means more of your
return stays in your pocket. So we're huge fans of
these we use primarily we use exchange traded funds when
(25:48):
we're building portfolios. Because of this very reason, we don't
need It's very rare that we feel like we need
a specialist to kind of tap dance through the markets.
We do on occasion we will hire one here and
there for very situations, but for the bulk of it,
we just want broad diversification. We want to spread the
risk over a lot of different holdings, not trying to
pick winners.
Speaker 1 (26:07):
Because that's the sucker's got that, Bob. Yeah, let's talk
about some of the potential negatives of having your entire
portfolio in one large cap index like the S and P.
And we've talked about this many, many times on this show,
and we'll continue to do so. You know, approximately a
third of the market cap of the S and P
five hundred now is concentrated in seven companies, these magnificent
(26:31):
seven companies. So you know, by sitting there earning, you know,
sitting in an index fund that's just over allocated to
tech stocks because eventually they do correct, some people are
going to get more volatility in their portfolio than they
might have bargained for. So that's where you want to enter,
you know, add some other asset classes into a truly
(26:51):
diversified portfolio. If you're concerned about managing volatility, you can
do things like an equal weight index fund. You can
do you know, in certain areas of the market, especially
small caps. Some of the international stocks bought active management
does pay the bills, it does add value, but that's
(27:13):
on a sector bisector or i'll say category basis, and
that's where when you mix and match all this stuff
into a truly diversified portfolio. You can add some value
through some active management.
Speaker 4 (27:27):
Yeah, And I would also say not to get hooked
on the idea that all you need is just one
S and P five hundred index fund and then.
Speaker 1 (27:33):
I'm good to go. I don't need to own anything. Ever.
Speaker 4 (27:34):
Again, we're living through a time right now where we've
seen some shifts in terms of investors are focusing less
on the US markets than they are elsewhere. Currently, developed
markets and emerging markets are doing about twice as well
as the S and P five hundred, So hopefully you
still got that in your portfolio. The market kind of
rocked us to sleep for a few years there, making
us believe that S and five hundred was all you needed.
(27:57):
But when the US changed politically, that started to shift
global business relationships around, and the market is recognizing opportunities
between countries that aren't the United States. All this is
a fantastic opportunity even for the United States. It's just
a catalyst, meaning things are changing around and there's going
to be new ways to chase profits. And we've got
some of the smartest leaders of these financial companies here
(28:18):
who will take advantage of it.
Speaker 1 (28:19):
But make sure you've got that exposure. Here's the all
Worth Advice. The beauty of the index fund is in
its simplicity, broad market exposure, low cost and fewer mistakes,
all working quietly in your favor, and it can serve
as a great foundation for a well constructed portfolio. Backdoor roths,
family LLCs and more. We answer your questions coming up next.
(28:42):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC, the Talk Station.
Speaker 2 (28:49):
It's the main event for the importance events of today.
Every day we discover something new and import so it's
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Something with putin there will be land swaps.
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Important at this moment.
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Fifty five KRC, the Talk Station. Who wants to be rich?
Speaker 7 (29:21):
We call them every day millionaires.
Speaker 1 (29:23):
Every day listen to Dave Ramsey.
Speaker 7 (29:26):
They typically say one of the things that turned their
life around was when they started looking at purchasing something rich.
People ask how much broke people and I've been both
brother okay broke. People ask how much down and how
much a month?
Speaker 2 (29:43):
Tonight at seven oh six, start asking me how much?
Speaker 1 (29:46):
On fifty five KRZ the talk station you're listening to
Simply Money, presented by all Worth Financial on Bob Spon
Seller along with Brian James. Do you have so 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
(30:08):
and it will come straight to us. All right, Brian
Kevin and Hamilton says we're worth one point five million
dollars and I've been reading about backdoor roth contributions. Can
those strategies actually make a meaningful difference? Well, that's great
that you've built that much of a nest egg. That's fantastic.
Speaker 4 (30:25):
Hopefully you've got a whole plan operating behind this to
kind of help you make these types of decisions, because
it sounds like where you might be is in that
space between where we know we're successful financially, we're not
worried about how the bills are going to get paid.
But that brings with it a whole bunch more questions,
because now it becomes about efficiency. I have a lot
of opportunities in front of me. Should I take advantage
(30:46):
of them? Which are the ones that move the needle?
And that's what you're asking about with regard to backdoor
WROTH contributions. So ROTH investing ROTH is equated with tax free.
You're not deducting anything on the front end. However, whatever
that grows to over time is going to grow completely
tax free for you and or your heirs depending.
Speaker 1 (31:02):
On when you earn when you pull the money out
of the IRA.
Speaker 4 (31:06):
So contribution limits right now twenty twenty five or seven
thousand dollars per person or eight thousand if you're over fifty.
The back door part of this simply means that there
is a way that you can get around the income limitation.
So right now you are prevented from contributing to a
ROS if you make too much money, and that could
be in the ballpark of say two hundred thousand dollars
for a married couple about half that for an individual couple.
(31:30):
But if you jump through some hoops and you route
that contribution through a non deductible traditional IRA and then
convert that there are no income limitations, so long winded
answer to say, absolutely, this is a great opportunity for
you to continue to put money away, Kevin, and it
gets you around those silly rules. And this isn't a loophole.
The irs is basically said, yeah, we know people do
this and it's fine.
Speaker 1 (31:50):
We don't really care, so.
Speaker 4 (31:51):
Yeah, dig into it and benefit from some tax free growth.
Moving on to Diane and Milford, who wants to ask
Bob about her old four oh one ks from her
past job. She's asking, is is it a better idea
to keep them separate? Maybe that's diversification, or should I
get them all in one place? Or should I continue
to just ignore them? She didn't say that last part.
Speaker 1 (32:07):
I did. All right, Well, Diane, I'll try to answer
your question. I mean, I can't tell from your question
whether you're a self directed investor or whether you're someone
who wants help from an advisor. But in either case,
in most cases, it does make sense to consolidate all
of these into one ira, these old four to one k's,
(32:29):
because just human nature is the more this stuff you
have to manage on your own and keep track of
and what have you, it tends to get forgotten and
left alone, not rebalanced, not reallocated, and that tends not
to be a good situation. Now, if you do work
with an advisor, you are going to pay some fees
to have an advisor involved. Those are fees over and
(32:49):
above you know what you're probably paying now, So you
have to evaluate. I would say, evaluate the value add
that you would get from an advisor who can actually
build a fineial plan for you, consolidate all of this
into a strategy and do all the ongoing work from
an investment management, tax management, cash flow management standpoint. I
(33:11):
would sit down and think about that, because in most cases,
not all, but in most cases it makes sense to
get all this stuff consolidated so someone is looking after
it on a regular basis. Hope that helps Diane. All right,
Mike and Mason says, I'm sixty one, I'm planning to
retire in a couple of years. What's the right balance
(33:31):
between paying off our mortgage and keeping the money invested?
Speaker 4 (33:35):
Brian, So, Mike, congratulations on being there at the threshold
of retirement. Now you're running into all these questions where
I can take option A, I can take option B,
and which is the best for me? So a lot
of people run into this where I've got a little
scrap of a mortgage left. And Mike, the fact that
you're kind of referring to this as I'm going to
assume you're within spitting distance anyway of paying it off.
(33:56):
Maybe there are assets where you could blow that up quickly,
and that's kind of a debate for you. So yeah,
And I'm going to assume that mortgage has been around
for a while the way you're talking about it, So
I'm going to guess it's probably three percent, maybe even
lower than that. I can show you in a very
easy spreadsheet how much it will benefit you financially to
ignore that mortgage and let it roll for the rest
(34:17):
of your life for a very long time, at least
until it goes through its natural course, and then keep
everything invested. That does not make that the answer. The
answer is what helps Mike sleep at night, and it
can sometimes be you know what, this mortgage is so low,
I just really don't want to think about it or
deal with it anymore, and I don't really care that
I could have a slightly bigger pile.
Speaker 1 (34:36):
Of money on the back end.
Speaker 4 (34:37):
That is an answer, That is a thoughtfully processed answer,
and it's definitely on the table. It is not always
about what falls out the bottom of the spreadsheet. So
I would say take a look at that and just
feel like where you think you want to be position wise.
If you do like the idea of maintaining it, Another
idea can be set up a monthly distribution out of
one of your longer term investment accounts and just build
(34:57):
a little money machine and watch it work the district.
You can come out of the IRA or the investment account,
it can hit your checking account and then the mortgage
company will the bank will come along three days later
and pull it right back out. You don't have to
do anything about it. The only difference is you're simply
relying on your investment accounts versus writing a check.
Speaker 1 (35:13):
For it out of your paycheck.
Speaker 4 (35:14):
So lots of different options there, and I would encourage
you to get to get with a fiduciary financial planner
to help you truly see the difference between all these things.
Speaker 1 (35:22):
Okay, we're going to go across the river now to
Fort Mitchell.
Speaker 4 (35:25):
Thank you for defending us from the Mongol hordes of
southern Kentucky, one of our three forts down there. So
Greg and Fort Mitchell met with an attorney and the
attorney recommended maybe a family LLC for their assets, and
they want to know, is this just a wealth transfer tool, Bob,
or does this really provide tax and liability benefits too?
Speaker 1 (35:42):
What say you? Well, Greg, my guess is that you
probably have some real estate as a big chunk of
your family assets. And this is where I see family
LLCs used most often. So my guess is, if I'm
right about the real estate stuff, I think you're probably
getting good advice from your attorney. Here's what the family
LLC can tend to do for you. It does provide
(36:04):
some liability benefits, but as a wealth transfer tool, it creates,
you know, for lack of a better term, and operating
agreement for how that piece of real estate is going
to be handled after you pass away. I see oftentimes
these are used for vacation homes and it says, hey,
here's what needs to happen after we pass away. Here's
(36:25):
the basis by which you know decisions are going to
be made for if it's sold, When it's sold, get
all those ducks in a row before you pass away,
so you don't leave everything to chance. So that's my
guess is we're talking about real estate here, and if so,
I think you're probably getting pretty good advice from your
attorney and should should probably follow it. Coming up next,
(36:45):
the multimillionaire who apparently can't access his crypto account. You're
listening to Simply Money, presented by all Worth Financial on
fifty five KRC the talk station, Mark Levin. Let me
tell you soon.
Speaker 5 (36:57):
The Internet is breeding evil, breeding evil, and TikTok is
the main culprit. And I don't know what's happening with TikTok,
but that damn thing needs to be sold now and
it needs to be cleaned up. And I don't want
to hear about free speech and everything else. It's a
private company. The company needs to clean it up because
this is crazy, between the communist Chinese and all the
crap that people put.
Speaker 1 (37:18):
On this stuff.
Speaker 2 (37:19):
Mark Levin tonight at ten oh six on fifty five
krs the talkstationally.
Speaker 5 (37:25):
Reliable information and of course not just one sided view.
Speaker 1 (37:29):
News that affects you.
Speaker 2 (37:30):
At the top end to bottom of the hour, fifty
five krs the talkstation.
Speaker 1 (37:39):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponsller along with Brian James, Well, did you
see this one NBA superstar, Kevin Durant. Yes, that Kevin Durant,
two time champion, MVP, future Hall of Famer. Well, mister
Durant can't log into his coinbase account, Brian, what's going
on here? And what we what can we learn from this?
(38:01):
Because this, you know, we can joke around about this
all we want, but this, this is real. This is
stuff we need to pay attention to tell Bob. It
happens to the best of us.
Speaker 4 (38:09):
Right when you put your millions of dollars into millions
of more dollars and you forget that password and you
just can't get your hands on that little yellow post
it note that was stuck to your monitor for that long.
So this Kevin Durant is obviously a very successful basketball player.
He's got a team of supporters around him, both financial
and otherwise. He and his entire team lost access to
his coinbase account, just meaning that they forgot the password
(38:30):
or their credentials or the unique key that you get
with those, and so they've been unable to move or
do anything with the bitcoin he has in there for years.
And this could it could be permanently lost this does
happen to people because they couldn't access it. Bit the
bitcoin sat untouched, and given how much bitcoin is appreciated, uh,
he's made a lot of money. He can't touch it,
but he knows exactly how much is in there. So
(38:51):
Coinbase is involved and they they're they're in contact with
Durant's team to help recover access. But you know, this
isn't necessarily a slam dunk, even though Coinbase says they
want to help out. One of the purported benefits of
all this is the lack of access to and that
is supposed to maintain privacy and to keep things secure
and so on and so forth.
Speaker 1 (39:08):
So it may not be that easy.
Speaker 4 (39:10):
As walking into your quote unquote Coinbase bank and saying, hey,
can I talk to customer service? Can you give me
my password? It don't work that way. Yeah, there's no
bank branks to walk into. I mean, Brian, I have
a Coinbase account, a small one, you know, just to
play around in this space a little bit, and I've
made a little money and bitcoin and all that. But
I can tell you that for good reason, you got
to be careful with any of these cryptocurrency wallets, because
(39:34):
the minute you transfer things to somebody else oude of
these wallet accounts that's gone.
Speaker 1 (39:39):
There's no bank to help you, there's no financial firm
to help you. She got to be really careful. And
that's why firms like Coinbase do have this multi you know,
double and triple authentication stuff built in. It's all for
the client protection. And I think the lesson here is
you got to keep real good track of not only
your Coinbase or crypto account passwords and all that, just everything.
(40:04):
You got to keep a good record of all your passwords,
Share it with your spouse, put it in writing, put
it in a safe place, share it with your power
of attorney or your kids, whoever's going to step in
and handle things on your behalf if something happens to
you from a cognitive standpoint or you pass away. I'm
sure you know Kevin Durant will get this situation figured out,
(40:28):
but it will not come without delays. And let's face it,
people don't like delays when they're trying to handle their money.
So I think that's the key message here is keep
good track, good records of all of your passwords and
make sure those are kept in a safe place and
communicated with others.
Speaker 4 (40:45):
Yeah, these are important things. It's really no different than
anything else. It's good for at least once a year,
sit down with your spouse and go over where the
accounts are and make sure that he or she knows
how to get access to all that stuff, including your
coin base accounts, because these are the least recoverable of
all the different things you might have floating around with her.
Speaker 1 (41:02):
Thanks for listening tonight. You've been listening to Simply Money,
presented by all Worth Financial on fifty five KRC, the
talk station. This is for your information. Everything we do
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World awakeness. I am destroyed this.
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Speaker 1 (00:15):
Tonight, a huge jump in home sales, the role that
index funds should play in a portfolio, and we answer
your questions. You're listening to Simply Money, presented by all
Worth Financial. I'm Bob sponseller along with Brian James. Like
a coach watching game film, the Federal Reserve is analyzing
data that is very important to them. I hope they're
(00:38):
watching this like game film and doing it accurately. All
Worth Chief Investment Officer Andy Stout is with us here tonight,
and Andy talk to us about the PCE rate. First
of all, explain what PCE is and updates on some
of the data.
Speaker 3 (00:55):
So PCE is the FEDS preferred inflation measure. I mean
when we think about inflation, we might be thinking about
what are the cost of eggs? You know, what's the
price of gas? I gotta go foot my car. You know,
it's a big pain point. But those data points are
just a fraction of the broader inflation area picture. So
(01:17):
we have PCE, which is slightly different than CPI hear
more about CPI, which is like consumers out of pocket spending.
PCE takes into consideration a few more things besides just
out of pocket spending. But more specifically, why we talk
about PCE, and I mean, alphabet soup is always fun
to talk about on a Monday, But core PCE more specifically,
(01:40):
is what the Federal Reserve looks at when they're setting
monetary policy. In other words, what they want to be
specific is, they want core PCE to be at two
percent on a year.
Speaker 1 (01:50):
Over year reading.
Speaker 3 (01:52):
And the core part means they're ignoring things like price
of gas, in the cost of eggs, so it excludes
food and energy. That only makes up about, you know,
roughly twenty percent of overall inflation uh inflationary products. So
we want core pcee two percent. We're not at two
percent now, you know, we're at almost three percent right
now based on the data we got from last week.
(02:13):
So it's not close to where the Fed wants it
to be, and we're probably not getting there anytime soon.
Speaker 1 (02:18):
All right, Andy, Uh, something else that we noticed late
last week was the second quarter GDP number was you know,
revised upward quite a bit. Estimates were three point three
percent correct, me if I'm wrong. It came in at
three point nine percent. That's quite an upside surprise. What's
going on with the GDP rate for the second quarter?
(02:39):
What surprised you? Because I know you look at a
ton of data, but when you.
Speaker 3 (02:42):
Look at just the big economic picture across you know,
pretty much everything that's out there, the you know the
GDB revisions. You know we're strong and certainly came in
much more robust than you know, what people were initially thinking.
But I want to take it a step back further.
It's not just GDP in the second quarter, its GDP
(03:03):
in the third quarter, which is also coming in. We're
appearing to come in at a pretty strong rate. And
that's in spite of all the stuff you hear about
the labor market starting to weaken. I mean, if you
look at where GDP in the third quarter, on top
of what we saw those revisions in the second quarter,
the third quarter is tracking at a three point nine
percent rate as well. So I mean we're talking about
(03:23):
some pretty robust growth. Now. I know what you're probably thinking, Well,
all these tariffs and trade and that's really made that
GDP number hard to understand and difficult to look through
and certainly has and that's why we look at a
maria of other different economic growth indicators. But when you
put it all together, you have this economic growth engine
(03:46):
that is the United States that is not slowing down
despite everything that's going on. But then you might be thinking, Okay,
that's really good. And then we think about what we
were talking about the very top of the show on
inflation and where inflation is. It's still higher than where
we did where the FED wants it to be. So
now take a take those two together. We have faster growth,
(04:10):
higher inflation. That kind of flies in the face of
what the FED was just talking about a couple of
weeks ago when it last met and the things that
it was worried about, because then they cut rates and
now they're looking to cut rates more. Those two things,
taken together, argue to not cut rates. They argue to
keep rates where they are. But where we're going is
probably another rate cut. Least that's where market see things.
Speaker 4 (04:32):
And where do you see which Which components do you
think are moving us in this direction the most? Would
you say it's on the consumption side of investment or
rebe government spending. Is there anything different along those lines
in terms of what's moving the needle here for us.
Speaker 3 (04:46):
Well, I mean, yeah, we can certainly look under the
hood when it comes to you know, where GDP is, uh,
you know, sitting at you know, we had the three
you mentioned, the strong second quarter revision UH to like
those to three point eight at three point eight percent,
and when you look at what's been driving it, you know,
it has been consumer spending that's been you know, that
(05:08):
was really the big driver. I mean, the government was
actually a bit of a drag last quarter.
Speaker 1 (05:14):
Now, one thing that you know, I.
Speaker 3 (05:16):
Like to look at is what I call basically it's
called core GDP, and more specifically what that is, it's
looking at just business spending excluding inventories and consumer spending.
Speaker 1 (05:30):
So let's forget government spending.
Speaker 3 (05:31):
Let's forget what happens with trade, the imports and exports,
because that's you know, definitely out of the control of
pretty much, you know, anybody right now, just because of
all the tarifs that are going on. And when you
look at this core GDP UH, more specifically, it's final
sales to private domestic purchasers. That's it's at two point
nine percent for the second quarter, and that's a decent number,
(05:56):
and that's the scene a revision higher from where we
had been in the past. So we're seeing growth where
we want that growth to be, and that's a good
sign for the broad US economy.
Speaker 1 (06:06):
Andy, let's switch gears and talk a little bit about
the housing market. I mean, I know some of there's
been two big arguments by this administration for lowering interest rates,
one to help juice the housing market a little bit,
and second, obviously dealing with the national debt. New home
sales popped in August when mortgage rates dipped even just
(06:27):
a little bit. What does that tell you about how
rate sensitive this housing market still is. And then as
you pair that with the labor market data, I mean,
it seems like the labor market is slowing, but as
we just talked about, the consumer is still resilient. What's
going on there? It seems like almost to disconnect between
(06:49):
consumer spending and the labor market. And then please talk
about housing.
Speaker 3 (06:54):
Okay, a lot too unpacked there. Let's I guess we'll
start with housing on that one. We get too of
the biggest housing reports last week with new home sales
and existing home sales, and they did tell different stories,
new home sales showed an unexpected surge of about twenty percent.
I mean, we're looking at a twenty percent gain last month,
which was just blew out any sort of expectations. And
(07:17):
when you look at where those new home sales were,
they were primarily in the South. You know that was
what was really driving. And to your point, mortgage rates
did see a nice pullback six point three three percent
is where the thirty year fixes that from a nationwide perspective,
that's the lowest by the way since January of twenty
twenty three. Now on the new home sales, very good,
(07:40):
very strong. I would also be remiss if I did
not mention that builders, you know, had a lot of
incentives out there to kind of keep homes moving, keep
things going. But the pullback in mortgage rates very positive.
From that perspective, saw very very good month. Now here's
the thing to remember of new home sales there, it's
(08:02):
a very small portion of the overall housing market. If
you break down existing home sales versus new home sales,
just in terms of like total sales activity, we're talking
about eighty five percent of sales activities existing home sales
and fifteen percent is new home sales. So let's not
get too excited about that new home sales data. And
when we look at the existing home sales, it definitely
paints a different picture. It actually declined only about point
(08:25):
two percent on a month over a month basis, but
certainly not a twenty percent increase like we saw on
the new home sales. And when you look at just
the analized pace of sales, they they remain near, you know,
near record lows. I mean when this index to track
existing home sales started in like late nineteen ninety nine
(08:46):
or in that area, and we're kind of near those
relatively low levels overall. So I'm not too excited about
the housing market. Uh, the you know, one data point
on new home sales that certainly does not make a trend.
Speaker 1 (09:00):
And you also need to consider that.
Speaker 3 (09:02):
Mortgage rates are still while they're the lowest since January
of twenty three, they're still pretty high from a historical standpoint,
especially when you consider that most of America that have
have mortgages have them, you know, below five percent. So
you know, put that all together, let's just take a
step back and say, Okay, home sales some improvement, but
(09:25):
we're not there yet, and I don't really think we're
going to get there anytime soon. So you know, that's
the that's the housing side of the world. You asked
about labor, and I know that was a couple of
minutes ago. Do you want to reask that again, just
kind of refresh it.
Speaker 1 (09:40):
No, I guess I'll pose it this way, And I
don't want you don't have to spend this whole time
talking about my questions, But I guess this data when
the data doesn't make sense, at least to me, Andy,
it seems like we are living more and more in
a world of the haves and the have nots. I
think the people at the bottom end of the economic
spectrum are continuing struggle, and people that have assets, have
(10:03):
stock portfolios, have good incomes, good jobs. Things are going
pretty well for those folks, and that, to me would
explain what the disconnect between some of these new home
sales and some of the weakness in the labor market.
Am I am I in the ballpark there?
Speaker 3 (10:20):
I mean, yeah, that's definitely a hole. That's a that's
a that's a thesis paper. If we want to get
into the socioeconomic backdrop and really going down that route,
what I would say is that a lot of it
is perception. And so when we think about consumer confidence
and who's feeling good about the economy, it is the
(10:43):
you know, there is a disconnect there. So typically the
higher income people tend to currently be a little bit
more optimistic. When you look at that income back down
and if you look at the spending breakdown, you know,
what moves it on the margin is going to be
more in the higher income because you know, said as
it is to say on the lower income side of
the world, they could be living, you know, paycheck to paycheck,
(11:06):
and so they're always going to be spending pretty much
everything they have.
Speaker 1 (11:09):
So what's really.
Speaker 3 (11:10):
Going to be moving the market or moving the economy
from a consumer spending is going to be the people
who do have some excess savings to essentially keep the
economy growing. And when you look at the consumer spending
overall and where this money is coming from, because you know,
you do have incomes growing, but the spending has been
(11:31):
increasing at a quick rate, so they have to pull
from somewhere. We have been seeing continued increase in credit
card debt. We have been seeing people pull from their savings.
So when you put that together, that kind of helps
explain what's going on. But just from a big picture perspective,
when you think about that labor market weakness, you know,
people are going to be spending all they're going to
(11:52):
be spending if they're living paycheck to paycheck. If the
people who are on the higher income side, if the
market keeps going up, they're also going to be able
to have this wealth effect to essentially be pulling from
that as well.
Speaker 1 (12:04):
And real quick.
Speaker 4 (12:05):
In our last few seconds here, so let's talk about
the week ahead here and onto the market. So the
markets are having a really good year, the NASDAK, emerging markets,
international stocks are doing well.
Speaker 1 (12:14):
The Fed is still cautious. Why would you say.
Speaker 4 (12:17):
There's a disconnect between what investors are doing and what
the Fed things.
Speaker 3 (12:21):
Well, when you look at just the number of jobs
that employers are adding, you know what's expected this week
because we're going to get the monthly jobs for September
on Friday, economists expect only fifty thousand jobs being added Brian,
and that is below the level needed to keep pace
with population. That needs to really be about one hundred
thousand a month. So we're seeing some weakness there. So
(12:43):
they're not adding enough jobs to support just the natural
growth of you know, the labor force in general.
Speaker 1 (12:50):
And taking a.
Speaker 3 (12:51):
Step back, they've had massive revisions to the number of
jobs that employers added over the past year essentially, and
that's a lot. That's a concern right there. So if
they keep adding fewer and fewer and fewer jobs, people
aren't going to be able to spend as much because
they don't have a job. And now again that's going
to you know, go back and do who has a job,
who doesn't, and the income disparity as well, and who
(13:12):
is spending and who is not spending. But that is
certainly the Fed looking at things not from a position
of strength from the labor markets perspective, but from a
position of fragility.
Speaker 1 (13:23):
All right, Andy, thanks again for joining us tonight and
thanks as always, we always love having you on the show.
Coming up next, our reaction to two financial planners making
a case against rough conversions. You're listening to Simply Money
presented by all Worth Financial on fifty five KRC the
talk station.
Speaker 2 (13:41):
And he shows the election.
Speaker 5 (13:44):
Thanks for giving us Democrats voice.
Speaker 3 (13:46):
You guys are making me think twice about sing.
Speaker 2 (13:48):
This talk about it here I feel like that matter.
I can be heard on fifty five KARC, the talk station.
Speaker 6 (13:56):
All Worth Financial, a registered investment advisory firm, is presented
during this program. Are not intended to provide specific financial advice.
You should consult your own financial advisor, tax consultant, or
a state planning attorney to conduct your own due diligence.
Speaker 1 (14:14):
You're listening to Simply Money, presented by all Worth Financial
mom Bob Sponseller along with Brian James. If you can't
listen to Simply Money live every night, subscribe and get
our daily podcasts. And if you think your friends or
family or both could use some financial advice, tell them
about us as well. Just search Simply Money on the
iHeart app or wherever you find your podcast. Should you
(14:37):
consolidate those old four oh one ks? And his private
credit really worth the risk? We'll tackle those questions and
more straight ahead of six forty three. If you've ever
talked money with friends, someone may have said you gotta
do a Wroth conversion, pay the tax now, tax free
growth later. What's not the love? Well? Two financial planners
(15:00):
have come out with a new book that says, hold
on a second, and it's called Tax planning to and
through early retirement, and their main message is this, pay
taxes when you pay less tax What a great idea, Brian.
Speaker 4 (15:14):
That just doesn't sound too crazy, does it sounds obvious,
but that does flip the usual narrative. So the point
that they're making is that for a lot of early retirees,
especially those who haven't taken Social Security yet and then
they're not facing require minimum distributions, which that that's what
kicks in when you are either age seventy three or
seventy five, depending on when you were born. Anyway, before
(15:35):
that stuff kicks in, you're probably going to be the
lowest bracket that you've seen in decades and that you'll
ever see for the rest of your life. Once those
requirement of distributions kick in, you'll be at a minimal
level of income as you have to take distributions out
of those pre tax iras. So the whole point of
that is that during that time period, your tax rate,
your effective tax rate, is really low. And I want
to be really clear here, we're not talking about tax
(15:56):
the tax the marginal brackets. We're talking about the actual
percentage of actual taxes that you pay that you're paying
at the end of the year. That is simply your
total tax due line off your ten forty divided by
your adjusted gross income. That's your actual effective tax rate.
So what are we talking about here? So if you
convert to a wroth in your early your fifties early sixties,
(16:17):
you might be paying twenty two to twenty four percent
federal tax now just to avoid paying maybe ten or
twelve later. Well, essentially, you know what this looks like
is you might This is their point, You're paying a
big upfront tax bill and it might take decades to
come out ahead on that conversion. So if your lifespan
doesn't stress that longer, if you don't use the wroth
the way you plan, you might have prepaid those taxes
for nothing and not and not have gotten enough growth
(16:39):
out of it. I'm not sure I agree with this,
but let me bounce ato Bob real quick and just
see what do you.
Speaker 1 (16:43):
Think of this? Well what I what I think of it?
And I have not read the whole book, you know, which,
in fairness to the authors, I probably should do before commenting,
But we only have so much time, so I'm going
to comment. I think that if I'm guessing the point
that they're probably making, and they're probably good points, is
to sit down and do a thorough, comprehensive financial plan
(17:05):
before you just listen to this kind of one size
fits all advice that you might read about or hear
about in the media. And I mean, let's face it,
on this show we talk about Wroth conversions all the time.
Does that mean everybody should just run out and convert
all their iras immediately to Ross. No, You've got to
sit down, run the numbers, base everything on assumptions you know,
(17:27):
both currently and long term, and make sure you're making
decisions that make sense for your situation. If I had
to guess in giving credit to these two authors, that's
probably what they're saying, and I agree with them. Brian.
The other thing to call out is you got to
if you do a Wroth conversion, you got to look
at where you're going to come up with the money
(17:47):
to pay the taxes. If you're pulling this money out
of the IRA to pay the taxes, you're probably shooting
yourself in the foot. But go ahead.
Speaker 4 (17:55):
Paying taxes on dollars with which you're going to go
ahead and turn around and pay taxes. The most efficient
way to handle your dollars.
Speaker 6 (18:01):
No.
Speaker 4 (18:02):
Yeah, I'm a fan of roth conversions. I'm not a
fan of doing them. I'm a fan of learning about
them because everybody eventually will run across this idea and
some people march in and they'll say, hey, where's that
form where I sign it? And I check a box,
and all of a sudden, my IRA is a roth
and there are no other negative consequences than that.
Speaker 1 (18:19):
It's very much not that simple.
Speaker 4 (18:20):
Roth conversions are one thousand percent sacrifice now in exchange
for a gain later, but it can be a significant
gain depending on your depending on your situation. Well, if
your plan dictates that you are you yourself are okay,
then it can really be a question of efficiency for
the way your airs are going to inherit your assets.
So let's remember here, we've got whenever we talk iras,
(18:40):
and a lot of people are aware of this now. Ever,
since twenty twenty, the rules changed on iras where you
have to when your airs inherit, they've got ten years
to liquidate that IRA. Most of the time we're thinking
about the pre tax ira and Okay, my kids are
going to have to pay taxes for ten years after
I'm gone. But that also applies to the ROTH side.
But if you think about it, that actually it's actually
(19:01):
a benefit. You're still not paying taxes. The errors will
not pay any more taxes than you would have on
your ROTH. What that means is they get an additional
ten years beyond your death of tax free growth. So
if you find yourself in a situation where you might
have more more pre tax dollars in your IR, then
you're actually going to use which, again, as Bob says,
do a plan to figure out where you really stand.
Then a ROTH conversion can be enormously helpful down the
(19:23):
road to prevent your errors from being pushed into really
really high tax brackets. Because remember when you inherit that IRA,
that those dollars have to get distributed. They are on
top of whatever dollars you're already earning as part of
your salaries and all that. So, and this usually happens
when we ourselves are at our highest brackets. Ever, so again,
ross conversions definitely something to learn about should everybody pull
(19:43):
the trigger. Absolutely not very much a case by case situation. Yeah,
a couple just a couple other things to throw out here.
You know, you got to make assumptions about you know,
what's going to happen in the future. Unfortunately, when you
run the numbers and do these things, and sometimes, Brian,
we have people come in that say, well, I know
tax rates are going up in the future, so that's
why I want to convert my eye.
Speaker 1 (20:04):
You don't know tax rates are going up. People have
been predicting tax rates are going to go up for
the last three or four years, and so far they've
been wrong. So, you know, be cautious about all your
assumptions and predicting where the world's going to go. And
then again, some people like to plan the tax thing
around their situation. Other people like to plan around, you know,
(20:26):
kind of pre paying some of these taxes for their kids.
Those are two completely different objectives and how to be discussed,
you know, in that fashion. Here's the all Worth advice.
Don't rule out roth conversions or don't go all in
on wroth conversions just because they're complicated or feel like
the right strategy based on what you've heard. They can
save you and your heirs big time in the long run.
(20:48):
But again, run the numbers, factoring into your personalized financial plan.
Coming up next, how a simple idea change the investing
world and where it should in, what role it should
play in your portfolio today, and why again, it's just
one tool in the toolbox. You're listening to Simply Money
presented by all Worth Financial on fifty five KRC, the
(21:09):
talk station, News when it happens, breaking news tonight. We
are coming to you live news when you need it.
Speaker 2 (21:17):
You're going to want to listen to this fifty five
KRZ the talk station.
Speaker 1 (21:25):
On five KRC and iHeartRadio station. You're listening to Simply Money,
presented by all Worth Financial. I'm Bob's unseller along with
Brian James. Fifty years ago, hardly anyone thought indexing would last.
It was considered quote unquote nonsense. And I remember this, Brian,
(21:47):
although I haven't been doing this fifty years. Your dating
is it was. It was thought of oftentimes as a
passive gimmick by our industry that would never work. And
it's because it's low cost and it doesn't serve the
brokerage industry very well. But I digress. Fast forward to today,
indexing dominates. It's not just a tool for retail investors, Institutions,
(22:10):
endowments and the ultra wealthy use it as a core
building block of their portfolios. In a world of active
managers touting out performance, this humble index fund concept quietly
reshaped investing forever.
Speaker 4 (22:25):
Brian, it was a good thing and a galaxy far away.
A long long time ago. In nineteen seventy five, John
Bogel founded Vanguard.
Speaker 1 (22:33):
Might have heard that name.
Speaker 4 (22:34):
There's a big website out there called Bogel Heads, and
it's a bunch of people who have followed him for
a long time. But nineteen seventy six, Vanguard launched what
was officially called the first index investment trust, which we
know today is the Vanguard five hundred index Fund. And
all it does is it mirrors the S and P
five hundred rather than try to beat it. Everybody's got
this now, these are belly buttons. Everybody has one. But
(22:55):
Vanguard was the first to put this together with just
with the intent of the the belief that you know what,
I don't need a human brain to tell me it's
a good idea to own the five hundred largest American companies.
We're the largest economy by far in the world, and
the five hundred largest smartest companies are probably going to.
Speaker 1 (23:11):
Be a good way to get access to that.
Speaker 4 (23:13):
So the whole point of this is that markets are efficient,
meaning all the information is out there, everybody knows everything,
so which this was true in the nineteen seventies. Now,
of course, with the Internet, there's not a whole lot
of information that's not already out there, and nobody consistently
beats the market. Therefore, it's better to just accept those
market returns and minimize costs as much as possible. But
(23:33):
at the time, though, most of these mutual funds, your
other options were all actively.
Speaker 1 (23:37):
Managed, meaning you were waiting on somebody to have the
hot hand.
Speaker 4 (23:39):
Whoever would pick the you know, whoever was picking the
hot stocks would rule the day that year, and then
it would shift over the next year. Indexing was considered
radical at the time. People said, if everybody owns the
same socks, who's doing this price discovery?
Speaker 1 (23:51):
What about bubbles? How do you deal with all that
kind of stuff? Yeah, I think this thing worked because
you know, the data really hasn't changed. Brian, correct if
from wrong. But I mean, over two thirds of all
actively managed funds in this large cap core space, and
that's really what we're talking about. Uh, Over two thirds
of these actively managed funds underperformed the index APHO. It's
(24:15):
more than that. It's probably getting closer to eighty percent, right, so,
and I think there's reasons for that as the size
of these funds grow. I mean, let's face it, the
only way to quote unquote outperform is you got to
take outside risks, risks in different sectors or different companies.
And these mutual fund companies are chicken, you know, to
(24:36):
do that because if they underperform for one or two years,
people are gonna liquidate out of their funds. So they
were fuse the star. You gotta have five stars these days.
So they were fat, dumb and happy sitting there taking
their one percent to basically mimic the index. And I
think Bogo was ahead of his time and said, hey,
you know, I'm calling you know what on that whole game.
Getting the index at you know, five basis points, let
(25:00):
this thing run and put close to that extra one
percent in the pockets of investors, which is where it
should be.
Speaker 4 (25:06):
Now, So let's dig into why this is the thing.
What has made this stick well? Low costs and expense ratios.
Expense ratio is a term that everybody listening to this
should know. What that is every investment that you're going
to consider for your portfolio is going to have some
kind of internal expenses, and there should very much be
a factor in your consideration of whether you're gonna invest
it or not if you're doing things on your own.
(25:26):
But because indexing is passive, right, it's just the five
hundred largest companies in the United States. You can figure out.
Anybody can go figure out which five hundred that is. Therefore,
you don't need a large research team. You're not doing
a whole lot of trading jumping in and out. That
drives down those internal costs. That means more of your
return stays in your pocket. So we're huge fans of
these we use primarily we use exchange traded funds when
(25:48):
we're building portfolios. Because of this very reason, we don't
need It's very rare that we feel like we need
a specialist to kind of tap dance through the markets.
We do on occasion we will hire one here and
there for very situations, but for the bulk of it,
we just want broad diversification. We want to spread the
risk over a lot of different holdings, not trying to
pick winners.
Speaker 1 (26:07):
Because that's the sucker's got that, Bob. Yeah, let's talk
about some of the potential negatives of having your entire
portfolio in one large cap index like the S and P.
And we've talked about this many, many times on this show,
and we'll continue to do so. You know, approximately a
third of the market cap of the S and P
five hundred now is concentrated in seven companies, these magnificent
(26:31):
seven companies. So you know, by sitting there earning, you know,
sitting in an index fund that's just over allocated to
tech stocks because eventually they do correct, some people are
going to get more volatility in their portfolio than they
might have bargained for. So that's where you want to enter,
you know, add some other asset classes into a truly
(26:51):
diversified portfolio. If you're concerned about managing volatility, you can
do things like an equal weight index fund. You can
do you know, in certain areas of the market, especially
small caps. Some of the international stocks bought active management
does pay the bills, it does add value, but that's
(27:13):
on a sector bisector or i'll say category basis, and
that's where when you mix and match all this stuff
into a truly diversified portfolio. You can add some value
through some active management.
Speaker 4 (27:27):
Yeah, And I would also say not to get hooked
on the idea that all you need is just one
S and P five hundred index fund and then.
Speaker 1 (27:33):
I'm good to go. I don't need to own anything. Ever.
Speaker 4 (27:34):
Again, we're living through a time right now where we've
seen some shifts in terms of investors are focusing less
on the US markets than they are elsewhere. Currently, developed
markets and emerging markets are doing about twice as well
as the S and P five hundred, So hopefully you
still got that in your portfolio. The market kind of
rocked us to sleep for a few years there, making
us believe that S and five hundred was all you needed.
(27:57):
But when the US changed politically, that started to shift
global business relationships around, and the market is recognizing opportunities
between countries that aren't the United States. All this is
a fantastic opportunity even for the United States. It's just
a catalyst, meaning things are changing around and there's going
to be new ways to chase profits. And we've got
some of the smartest leaders of these financial companies here
(28:18):
who will take advantage of it.
Speaker 1 (28:19):
But make sure you've got that exposure. Here's the all
Worth Advice. The beauty of the index fund is in
its simplicity, broad market exposure, low cost and fewer mistakes,
all working quietly in your favor, and it can serve
as a great foundation for a well constructed portfolio. Backdoor roths,
family LLCs and more. We answer your questions coming up next.
(28:42):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC, the Talk Station.
Speaker 2 (28:49):
It's the main event for the importance events of today.
Every day we discover something new and import so it's
control our capital city, direct, federal control, check in through
route today.
Speaker 6 (29:00):
Something with putin there will be land swaps.
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We can make a deal. The everyday event, what is happening.
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The most important things, events in my day to day,
tracking our next weather, event, events affecting my money, events
in the Middle.
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East, happen, events happening now.
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Important at this moment.
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Fifty five KRC, the Talk Station. Who wants to be rich?
Speaker 7 (29:21):
We call them every day millionaires.
Speaker 1 (29:23):
Every day listen to Dave Ramsey.
Speaker 7 (29:26):
They typically say one of the things that turned their
life around was when they started looking at purchasing something rich.
People ask how much broke people and I've been both
brother okay broke. People ask how much down and how
much a month?
Speaker 2 (29:43):
Tonight at seven oh six, start asking me how much?
Speaker 1 (29:46):
On fifty five KRZ the talk station you're listening to
Simply Money, presented by all Worth Financial on Bob Spon
Seller along with Brian James. Do you have so 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
(30:08):
and it will come straight to us. All right, Brian
Kevin and Hamilton says we're worth one point five million
dollars and I've been reading about backdoor roth contributions. Can
those strategies actually make a meaningful difference? Well, that's great
that you've built that much of a nest egg. That's fantastic.
Speaker 4 (30:25):
Hopefully you've got a whole plan operating behind this to
kind of help you make these types of decisions, because
it sounds like where you might be is in that
space between where we know we're successful financially, we're not
worried about how the bills are going to get paid.
But that brings with it a whole bunch more questions,
because now it becomes about efficiency. I have a lot
of opportunities in front of me. Should I take advantage
(30:46):
of them? Which are the ones that move the needle?
And that's what you're asking about with regard to backdoor
WROTH contributions. So ROTH investing ROTH is equated with tax free.
You're not deducting anything on the front end. However, whatever
that grows to over time is going to grow completely
tax free for you and or your heirs depending.
Speaker 1 (31:02):
On when you earn when you pull the money out
of the IRA.
Speaker 4 (31:06):
So contribution limits right now twenty twenty five or seven
thousand dollars per person or eight thousand if you're over fifty.
The back door part of this simply means that there
is a way that you can get around the income limitation.
So right now you are prevented from contributing to a
ROS if you make too much money, and that could
be in the ballpark of say two hundred thousand dollars
for a married couple about half that for an individual couple.
(31:30):
But if you jump through some hoops and you route
that contribution through a non deductible traditional IRA and then
convert that there are no income limitations, so long winded
answer to say, absolutely, this is a great opportunity for
you to continue to put money away, Kevin, and it
gets you around those silly rules. And this isn't a loophole.
The irs is basically said, yeah, we know people do
this and it's fine.
Speaker 1 (31:50):
We don't really care, so.
Speaker 4 (31:51):
Yeah, dig into it and benefit from some tax free growth.
Moving on to Diane and Milford, who wants to ask
Bob about her old four oh one ks from her
past job. She's asking, is is it a better idea
to keep them separate? Maybe that's diversification, or should I
get them all in one place? Or should I continue
to just ignore them? She didn't say that last part.
Speaker 1 (32:07):
I did. All right, Well, Diane, I'll try to answer
your question. I mean, I can't tell from your question
whether you're a self directed investor or whether you're someone
who wants help from an advisor. But in either case,
in most cases, it does make sense to consolidate all
of these into one ira, these old four to one k's,
(32:29):
because just human nature is the more this stuff you
have to manage on your own and keep track of
and what have you, it tends to get forgotten and
left alone, not rebalanced, not reallocated, and that tends not
to be a good situation. Now, if you do work
with an advisor, you are going to pay some fees
to have an advisor involved. Those are fees over and
(32:49):
above you know what you're probably paying now, So you
have to evaluate. I would say, evaluate the value add
that you would get from an advisor who can actually
build a fineial plan for you, consolidate all of this
into a strategy and do all the ongoing work from
an investment management, tax management, cash flow management standpoint. I
(33:11):
would sit down and think about that, because in most cases,
not all, but in most cases it makes sense to
get all this stuff consolidated so someone is looking after
it on a regular basis. Hope that helps Diane. All right,
Mike and Mason says, I'm sixty one, I'm planning to
retire in a couple of years. What's the right balance
(33:31):
between paying off our mortgage and keeping the money invested?
Speaker 4 (33:35):
Brian, So, Mike, congratulations on being there at the threshold
of retirement. Now you're running into all these questions where
I can take option A, I can take option B,
and which is the best for me? So a lot
of people run into this where I've got a little
scrap of a mortgage left. And Mike, the fact that
you're kind of referring to this as I'm going to
assume you're within spitting distance anyway of paying it off.
(33:56):
Maybe there are assets where you could blow that up quickly,
and that's kind of a debate for you. So yeah,
And I'm going to assume that mortgage has been around
for a while the way you're talking about it, So
I'm going to guess it's probably three percent, maybe even
lower than that. I can show you in a very
easy spreadsheet how much it will benefit you financially to
ignore that mortgage and let it roll for the rest
(34:17):
of your life for a very long time, at least
until it goes through its natural course, and then keep
everything invested. That does not make that the answer. The
answer is what helps Mike sleep at night, and it
can sometimes be you know what, this mortgage is so low,
I just really don't want to think about it or
deal with it anymore, and I don't really care that
I could have a slightly bigger pile.
Speaker 1 (34:36):
Of money on the back end.
Speaker 4 (34:37):
That is an answer, That is a thoughtfully processed answer,
and it's definitely on the table. It is not always
about what falls out the bottom of the spreadsheet. So
I would say take a look at that and just
feel like where you think you want to be position wise.
If you do like the idea of maintaining it, Another
idea can be set up a monthly distribution out of
one of your longer term investment accounts and just build
(34:57):
a little money machine and watch it work the district.
You can come out of the IRA or the investment account,
it can hit your checking account and then the mortgage
company will the bank will come along three days later
and pull it right back out. You don't have to
do anything about it. The only difference is you're simply
relying on your investment accounts versus writing a check.
Speaker 1 (35:13):
For it out of your paycheck.
Speaker 4 (35:14):
So lots of different options there, and I would encourage
you to get to get with a fiduciary financial planner
to help you truly see the difference between all these things.
Speaker 1 (35:22):
Okay, we're going to go across the river now to
Fort Mitchell.
Speaker 4 (35:25):
Thank you for defending us from the Mongol hordes of
southern Kentucky, one of our three forts down there. So
Greg and Fort Mitchell met with an attorney and the
attorney recommended maybe a family LLC for their assets, and
they want to know, is this just a wealth transfer tool, Bob,
or does this really provide tax and liability benefits too?
Speaker 1 (35:42):
What say you? Well, Greg, my guess is that you
probably have some real estate as a big chunk of
your family assets. And this is where I see family
LLCs used most often. So my guess is, if I'm
right about the real estate stuff, I think you're probably
getting good advice from your attorney. Here's what the family
LLC can tend to do for you. It does provide
(36:04):
some liability benefits, but as a wealth transfer tool, it creates,
you know, for lack of a better term, and operating
agreement for how that piece of real estate is going
to be handled after you pass away. I see oftentimes
these are used for vacation homes and it says, hey,
here's what needs to happen after we pass away. Here's
(36:25):
the basis by which you know decisions are going to
be made for if it's sold, When it's sold, get
all those ducks in a row before you pass away,
so you don't leave everything to chance. So that's my
guess is we're talking about real estate here, and if so,
I think you're probably getting pretty good advice from your
attorney and should should probably follow it. Coming up next,
(36:45):
the multimillionaire who apparently can't access his crypto account. You're
listening to Simply Money, presented by all Worth Financial on
fifty five KRC the talk station, Mark Levin. Let me
tell you soon.
Speaker 5 (36:57):
The Internet is breeding evil, breeding evil, and TikTok is
the main culprit. And I don't know what's happening with TikTok,
but that damn thing needs to be sold now and
it needs to be cleaned up. And I don't want
to hear about free speech and everything else. It's a
private company. The company needs to clean it up because
this is crazy, between the communist Chinese and all the
crap that people put.
Speaker 1 (37:18):
On this stuff.
Speaker 2 (37:19):
Mark Levin tonight at ten oh six on fifty five
krs the talkstationally.
Speaker 5 (37:25):
Reliable information and of course not just one sided view.
Speaker 1 (37:29):
News that affects you.
Speaker 2 (37:30):
At the top end to bottom of the hour, fifty
five krs the talkstation.
Speaker 1 (37:39):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponsller along with Brian James, Well, did you
see this one NBA superstar, Kevin Durant. Yes, that Kevin Durant,
two time champion, MVP, future Hall of Famer. Well, mister
Durant can't log into his coinbase account, Brian, what's going
on here? And what we what can we learn from this?
(38:01):
Because this, you know, we can joke around about this
all we want, but this, this is real. This is
stuff we need to pay attention to tell Bob. It
happens to the best of us.
Speaker 4 (38:09):
Right when you put your millions of dollars into millions
of more dollars and you forget that password and you
just can't get your hands on that little yellow post
it note that was stuck to your monitor for that long.
So this Kevin Durant is obviously a very successful basketball player.
He's got a team of supporters around him, both financial
and otherwise. He and his entire team lost access to
his coinbase account, just meaning that they forgot the password
(38:30):
or their credentials or the unique key that you get
with those, and so they've been unable to move or
do anything with the bitcoin he has in there for years.
And this could it could be permanently lost this does
happen to people because they couldn't access it. Bit the
bitcoin sat untouched, and given how much bitcoin is appreciated, uh,
he's made a lot of money. He can't touch it,
but he knows exactly how much is in there. So
(38:51):
Coinbase is involved and they they're they're in contact with
Durant's team to help recover access. But you know, this
isn't necessarily a slam dunk, even though Coinbase says they
want to help out. One of the purported benefits of
all this is the lack of access to and that
is supposed to maintain privacy and to keep things secure
and so on and so forth.
Speaker 1 (39:08):
So it may not be that easy.
Speaker 4 (39:10):
As walking into your quote unquote Coinbase bank and saying, hey,
can I talk to customer service? Can you give me
my password? It don't work that way. Yeah, there's no
bank branks to walk into. I mean, Brian, I have
a Coinbase account, a small one, you know, just to
play around in this space a little bit, and I've
made a little money and bitcoin and all that. But
I can tell you that for good reason, you got
to be careful with any of these cryptocurrency wallets, because
(39:34):
the minute you transfer things to somebody else oude of
these wallet accounts that's gone.
Speaker 1 (39:39):
There's no bank to help you, there's no financial firm
to help you. She got to be really careful. And
that's why firms like Coinbase do have this multi you know,
double and triple authentication stuff built in. It's all for
the client protection. And I think the lesson here is
you got to keep real good track of not only
your Coinbase or crypto account passwords and all that, just everything.
(40:04):
You got to keep a good record of all your passwords,
Share it with your spouse, put it in writing, put
it in a safe place, share it with your power
of attorney or your kids, whoever's going to step in
and handle things on your behalf if something happens to
you from a cognitive standpoint or you pass away. I'm
sure you know Kevin Durant will get this situation figured out,
(40:28):
but it will not come without delays. And let's face it,
people don't like delays when they're trying to handle their money.
So I think that's the key message here is keep
good track, good records of all of your passwords and
make sure those are kept in a safe place and
communicated with others.
Speaker 4 (40:45):
Yeah, these are important things. It's really no different than
anything else. It's good for at least once a year,
sit down with your spouse and go over where the
accounts are and make sure that he or she knows
how to get access to all that stuff, including your
coin base accounts, because these are the least recoverable of
all the different things you might have floating around with her.
Speaker 1 (41:02):
Thanks for listening tonight. You've been listening to Simply Money,
presented by all Worth Financial on fifty five KRC, the
talk station. This is for your information. Everything we do
we keep you informed. Is FYI you information.
Speaker 2 (41:17):
We'll have the latest information on the whole situation in
guys released, the ousages eliminated.
Speaker 1 (41:22):
Come on info on the Russian summit. Who would like
to meet with me and check in throughout the day.
We have information for your information.
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My news, traffic and weather, information.
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About my money, on tariffs and trade.
Speaker 2 (41:33):
This is important information for are you listen just FYI
fifty five KRC, the talk station
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