November 5, 2025 • 42 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian tackle one of the biggest fears for investors—putting money into the market when it’s at all-time highs. If you're sitting on cash from a business sale, inheritance, or disciplined saving, and waiting for a pullback, you may be doing more harm than good. They break down historical data showing why investing a lump sum typically beats dollar-cost averaging and why market highs are more normal than you think. Plus, a deep dive into the lawsuit against Pacific Life involving indexed universal life insurance, career plateau advice with Julie Bauke, and a cautionary tale about meme stocks. Finally, practical, simple year-end tax planning tips you can act on right now.
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Speaker 1 (00:00):
Our democracy itself is in the crosshairs.
Speaker 2 (00:03):
Didn't make it happen.
Speaker 1 (00:05):
You're holme down headquarters. We're about to lose the country.
Fifty five krs the talk station tonight.
Speaker 3 (00:18):
Should you be fearful when markets hit all time highs?
You're listening to Simply Money. Here'said by all Worth Financial
on Bob spond Seller along with Brian James. It seems
like every other day the markets are hitting all time highs.
And guess what, it doesn't just seem that way. It
pretty much has been that way. But if you're listening
today and sitting on a pile of cash, maybe from
(00:40):
a recent business sale, or a large inheritance, or just
years of discipline saving, you might be thinking, Wow, the
market's too high right here, I've missed it. I'll wait
for the pullback, Brian. We hear that sentiment often, and
we've got some data tonight to just demonstrate that might
not be the best approach here.
Speaker 4 (01:01):
Yeah. I'm a data guy, Bob, and you know this.
Speaker 5 (01:03):
I like looking at actual factual results of different periods
of time, and so, for whatever it's worth, we can
look at a period of time and say, okay, this
is how it worked in the past. It may not
repeat itself, but this is at least one way of
how it worked in the past and kind of follow
that backwards. So so, but statistically speaking, what we're really
talking about here is if you've got a pile of money,
you know, and you're trying to decide you want to
(01:24):
get it into the market, you want to invest for
a long term. But it's always scary, right because we
all think our toes are hanging over the cliff and
we're immediately going to go over, and that is possible. Yes,
that has happened to some people, but it doesn't happen
very often. Statistically, you're more likely to grow your wealth
by investing it all now, even when the headlines are
shouting new records.
Speaker 4 (01:41):
So let's look at the numbers behind this.
Speaker 5 (01:43):
So the market has been at or near an all
time high about one out of every three months, one
in three every third month, once a quarter, bob, the
market is at an all time high.
Speaker 4 (01:53):
It goes up, not down.
Speaker 5 (01:54):
So therefore, yes, we usually are at an all time high,
and that's pretty normal. If you're always waiting for that
better entry point, you're ignoring the fact that the market
is usually in record territory, and you could be waiting
forever if you were sitting on money, you know, after
say twenty twenty three, which is a really good year,
and you said.
Speaker 4 (02:09):
Nope, we're out a peak.
Speaker 5 (02:10):
Well you've you've now left two full, fantastic years of
double digits. Possibly we'll see what happens this year, but
possibly two twenty percenters on the table that was a
huge mistake will permanently cost you.
Speaker 3 (02:20):
All Right, Brian, I know you're loaded for bear with
data today and you feel that coming through Bob a
lot of energy, and I love it. Data plus energy
means a good radio show. I love it. But I
want to pause here just with a little bit of nuance.
I mean, what we're talking about here is longer term capital, correct,
money that you're planning on investing for five, seven, ten
(02:41):
years or longer. Not your emergency fund, the money you're
gonna need or want to remodel your bathroom next month
or next year or go on that cruise. So we're
not talking about putting every penny you have in the
stock market. We're talking about money allocated for long term
you know, capital growth. Am I not correct on that assumption? Absolutely? Yeah?
Speaker 6 (03:03):
No.
Speaker 5 (03:04):
So if you're if you're, and we have people all
the time that will say, you're not going to buy
a house in six months, So what which should we
invest this in?
Speaker 4 (03:09):
Seah have more money from my down payment, the entry
is nothing.
Speaker 3 (03:12):
Should I buy call options on Pal and teer stock?
Speaker 4 (03:15):
Yeah?
Speaker 5 (03:15):
Yeah, because I want to get out of PMI and
he just a little more down pay move but yeah,
So yeah, we are talking about longer term investments here.
And really, when you think about that, think about the
For those of you been around for a little bit,
think about those first dollars you threw in your four.
Speaker 4 (03:30):
Oh one K when you were poor and eating ramen
noodles or whatever.
Speaker 5 (03:33):
You don't you don't remember what happened to those, Nor
will you remember what happens to this particular lump sum
you're sitting on right now, ten fifteen years from now,
which is really the long term goal here.
Speaker 4 (03:42):
You're not gonna remember the entry point.
Speaker 5 (03:44):
And over time, of course, the market beats all as
long as we can put up with the with the
ups and down. So let's put some numbers to this, Bob.
So uh So, the S and P five hundred average
nine point six percent in the seventies, right, that is
a factual number. But a lot of people get hung
up on the idea that's that if you didn't reinvest
your dividends and we had stagflation and all these things,
(04:04):
the markets were technically flat. Yeah, you can argue, and
you can draw a chart that shows that. But if
you handled things the right way, you did not have
that experience.
Speaker 3 (04:11):
Well, and Brian, the nineteen seventies for those who have
forgotten or didn't live during those years, I mean, we
had super high inflation. So if you did not average
nine point six percent during that decade, your money truly
was moving backwards in terms of purchasing power.
Speaker 5 (04:27):
Yes, if you could go for protected yourself by leaving
that in the bank, Well, you left a bunch of
money on the table because you didn't get any of
the growth. You got the deflation of your own dollars.
But anyway, so continue on there, and then we had
over twenty percent averages in the eighties and really nothing
bad happened in the eighties, and I would assign that
to the nineties as well. Sometimes I feel like that's
the anomaly that a lot of our people with wealth,
(04:48):
now that's what they remember and they feel like the
twenty first century has been nothing but error and nothing
but craziness and mistakes and all that kind of stuff.
But really the last twenty five years have been more
normal when you compare them to the prior two hundred
eighties and nineties, Really nothing bad happened.
Speaker 3 (05:04):
I love the nineteen eighties, not only for the stock
market returns, but for the music, Brian, the music, the
rock and roll. It was the golden age.
Speaker 4 (05:12):
Admit it, Bob, you still have your mc hammer parachute pants.
Speaker 3 (05:15):
I have all of it. Yeah, all the above. I
love it. I'd go back here in a second.
Speaker 4 (05:19):
Are you wearing them right now?
Speaker 3 (05:20):
I'm not going to discuss what I'm wearing. Please, let's
talk about the nineties and two thousands.
Speaker 5 (05:25):
Bob spon seller wearing parachute pants this morning. So what
do we do about this? So we often talk about
dollar cost averaging. So this is the idea that you
should ease into the market by a little at a time. Right,
So if I got, you know, one hundred thousand dollars,
maybe I'll throw eight thousand in a month. This is
bad math for twelve months, and that'll get it to
ninety six thousand or whatever, but just breaking it into
chunks and putting it in. But if you do the math,
(05:48):
historically lump some wins. About seventy percent of the time,
putting all your money to work right away beats dollar
cost averaging. The reason for that is we are usually
not about to go over the cliff. Yes, you can
highlight situation like if I invested a bunch of money
on New Year's Even twenty twenty one, I went right
over the cliff. It does happen. That's why thirty percent
is also a figure. Two thirty percent of the time
(06:09):
that does happen. But you still got a seven hundred
batting average chance at putting it in at a time
where the market is going to continue in an upward trajectory.
Speaker 3 (06:18):
All right, this is where we've got to interject some
behavioral finance methodology to all this. I mean, because people
hear about dollar cost averaging all the time, why does
that make sense even though the math says it doesn't.
Because if you know you're someone who's gonna panic the
moment you put all that money into the market, and
(06:38):
we get a regular pullback or correction of let's say
four or five percent, and if you're gonna panic. If
that happens, then by all means, spread out your investments
over time to reduce that emotional pressure. Just be honest
though about why you're doing it. As Brian's calling out here,
it's not because the math works better. It's because we're
(06:59):
trying to manage our own behavior. But if you're someone
who can't handle that short term volatility, you need to
manage your own behavior because what you don't want to
do is go down that track of investing the money
and then the first time we do get a five
to seven, eight, ten percent pullback, the phone's ringing and
you're saying, get me out, I can't take it. If
(07:20):
you're somebody that's going to end up doing that, we
just you know, defeated the whole purpose of doing this
in the first place, and you really did move backwards.
Speaker 5 (07:28):
Yeah, that's exactly right, And so that's why we want
to make sure we're taking a breath and just make
sure you don't have to stomach all of the risk,
because remember, if you've done this correctly, then you're doing
it with dollars that you've guaranteed yourself you're not going
to need in the short run as Bob and I've
been saying all year long, we're looking at it. We
are at a market peak. So what that means is,
if you know you've got bills, come and do even
(07:48):
in next year, carve those dollars out, take them out now.
Will the market's at a peak, Walk out of the
casino with some chips in the bucket, stick it off
to the side, and a money market fund. If it
happens to be an IRA or something and you're looking
to wait until January new tax here to take that distribution,
you can keep it in the IRA, but remove it
from the market, move it to a money market type position,
or maybe a CD or something like that. But again,
(08:10):
that's really the only step you should be taking. If
these are all long term dollars and they don't really
have a job specifically yet, let them roll, Let them
roll and let them do their job.
Speaker 3 (08:19):
You're listening to Simply Money presented by all Worth Financial
I Bob Sponsller along with Brian James. Brian, let's get
into a couple of actual scenarios using real data. We're
going to use say Maggie and Tom, two completely different investors,
each of them just sold a business and each of
them are now sitting on two million dollars in cash,
(08:41):
wondering what to do with it. The S and P
five hundred hits a record high. And here's what each
of them decides to do. Maggie decides to listen to Brian.
She trusts the data. She puts her full two million
dollars into a globally diversified portfolio, immediately, all of it now,
knowing that he's not gonna think about it or touch
it for ten or fifteen years. Well, that two million
(09:05):
dollars grows to four million in just a two year span. Tom,
on the other hand, he sits in cash, all cash.
Why because that ten percent pullback he in his gut
thinks and knows is gonna happen, it never comes, or
when it did, he got scared and decided to wait
for another pullback. Then Tom completely misses the bulk of
(09:28):
all the games. Brian, we see people behave this way.
These are two polar opposite extremes. But this is not
unlike a lot of people you know sometimes behave when
big dollar amounts are are on the table.
Speaker 5 (09:43):
Sure, especially, and remember think about the situation here. Let's
a little context of what these decisions were driven by.
Maggie and Tom both built businesses. These are their babies.
They decided to sell their babies. That's a pretty big,
once in a lifetime decision. So it absolutely can be terrifying.
That doesn't change the met of the decision making process
that we're talking about here, but that adds an awful
(10:03):
lot of emotion. It is very very very very easy
for you know, somebody who is works for another company
and their investments consist of their four Oh okay, keep
throwing money and systematically, every you know, every couple of weeks,
that person will slowly get to that two million dollar figure.
Maggie and Tom took a very different road to get there.
They probably took a lot of personal risks. These are
situations where they can probably tell stories of in the past,
(10:25):
having to cover payroll with their credit cards and a
home equity line of credit. That's what business owners go through.
So I understand the terrifying decision that this is. I've
now got the biggest pile of money I'll ever have.
Speaker 4 (10:36):
I don't want to I don't want to be gambling it.
Speaker 5 (10:37):
That does not change what market history tells us, though,
So the answer is make sure that you've carved out
enough to cover whatever expenses you think you're going to
have in the short term. Maybe that's twelve twenty four months,
maybe a little longer, and then the rest of it.
Let it fly, because there's just no reason to question
the question the history we've had over decades and decades
and decades of greed driving the markets up. Smart people
(10:59):
creates mark publicly traded companies. They find new and creative
ways to make profits and increase those profit margins every
single day.
Speaker 4 (11:06):
Let's not question it.
Speaker 3 (11:08):
Yeah, and our last piece of data to share here
tonight in this this data really your data. Your day
never never changes. If you invested a million dollars in
the S and P five hundred twenty years ago, kept
it there, hibernated for twenty years, and ignored it, your
million dollars would be worth more than seven million dollars today.
(11:29):
If you pulled it out and then proceeded to miss
the ten best days during that twenty year period, it
would still be worth a lot of money, but it's
worth less than half of seven million. It's worth only
three million, and it gets worse from there. You missed
the best twenty days, your million dollars would only be
worth about two million dollars, which sounds good until you
factor in inflation. And let's face it, beating inflation is
(11:53):
the key to everything when it comes to really growing
net worth and growing purchasing power. So therefore, the oppera
tunity cost of staying out of the market is real
sitting in cash. Even at five percent, it does not
beat the long term returns of a global, globally diversified portfolio.
Speaker 5 (12:12):
Yeah, no, I want to re I want to hit
on because I think we bring up that point all
the time about the best days in the market. There's
seventy three hundred days in a twenty year period. We
are literally talking about missing ten of them because the
market mostly does a bunch of nothing, goes up today
and down tomorrow, and it cancels out. It's the ten days,
it's the big days that we get that really move
the needle forward. So if you're trying to time it
and tap dance in and out, you are highly likely
(12:34):
to miss it.
Speaker 3 (12:35):
And none of us are smart enough to know when
those ten great days are coming. Here's the all Worth advice.
Waiting for the perfect entry point often means missing the
point altogether. Time in the market almost always beats timing
the market. Coming up next, a famous NASCAR driver says
he fell for a financial trap that Brian, you and
(12:56):
I discuss on the show all the time. We'll talk
about that next. Listening to Simply Money presented by all
Worth Financial on fifty five KRC the Talk.
Speaker 1 (13:04):
Station if KRC.
Speaker 7 (13:07):
Allworth Financial a registered investment advisory firm. Any ideas presented
during this program are not intended to provide specific financial advice.
You should consult your own financial advisor, tax consultant, or
a state planning attorney to conduct your own due diligence
to this.
Speaker 3 (13:26):
To this, all right, Joe Strecker, I gotta tip my
hat tea. You listen to us talk about eighties music
and you cut right on queue. That is good stuff, brother.
All right? You're listening is Simply Money presented by Allworth
Financial and Bob Sponseller along with Brian James. If you
can't listen to Simply Money live every night, subscribe and
(13:47):
get our daily podcasts. Just search Simply Money on the
iHeart app or wherever you find your podcast. What happens
when one spouse is ready to retire and the other isn't.
Plus one listener grapples with managing money after the loss
of a parent. Your questions and our answers straight ahead
(14:08):
at six forty three. All right, Brian, you'll love this topic.
If you're a NASCAR fan, you probably already know who
Kyle Busch is. Bush and his wife Samantha have filed
a lawsuit alleging they were missold a series of indexed
universal life insurance policies by Pacific Life Insurance Company. And
(14:28):
I guess an unscrupulous, unscrupulous agent a lot to unpack here, Brian.
Speaker 5 (14:33):
Yeah, there's a lot, and this is going to I mean,
there's no way for this story not to come off
as a shot at the insurance industry, and I assure
you that's not what this is. However, just like any industry,
there are dark corners of it, and this is kind
of one of them.
Speaker 4 (14:44):
Insurance is a tool just like anything else.
Speaker 5 (14:46):
As I always say, if I have a hammer in
my hand, I can build a birthouse or I can
hit myself in the head with it.
Speaker 4 (14:50):
It depends on what I do. So anyway, here's the
gist of what happened to the Bushes.
Speaker 5 (14:54):
According to this complaint, they paid more than ten to
almost ten and a half million dollars, that's ten and
a half million in premiums for Index Universe life insurance
policies that were pitched as tax free retirement plans, meaning
they're safe, they're self funding, these are things you can
rely on a nice and secure but anyway, so they're
now claiming the claim in their complaint is that these
policies had hidden fees, unrealistic projections, rising costs, and now
(15:18):
their net loss exceeds over eight and a half million dollars.
And I know some people are out there going, you know,
crimea river, but this does happen. These are real dollars.
It happens to average people too, without eight digit figures.
So according to Kyle that he said, I never thought
something like this could happen to us. We trusted the
people who sold them in the name Pacific Life, big
old insurance company, but reality is very different. So anyway,
(15:39):
what they ran into is that these things are complicated, right,
There's a lot of moving parts to these. An index
universal life policy combines a life insurance death benefit and
cash value and ties it to an equity index. On paper,
you want to say, wow, that's three of my favorite things,
because it looks like you can get all these different
features all in one here, kind of like this army
(16:00):
knife of financial tools. But realistically, there are caps on
the upside, meaning whatever index you tie it to, you know,
you might get an eighty percent cap of that for
some reason. You know, So if the S and P
five hundred is up ten percent, then you get to
keep eight. There's a bottom for sure, there is a floor.
You're not gonna lose that much, you know, if when
the market goes down. My complaint on all of this
(16:20):
is if you if you're not a panicker, if you
weren't gonna panic anyway when the market came down and
you were just gonna let it ride, then you don't
need that floor.
Speaker 4 (16:27):
So don't restrict yourself with the cap. Most people don't
need these things.
Speaker 5 (16:31):
But anyway, Also, the cost of life insurance went up,
of course, and that's just statistical. That happens every year,
and there's risk to these if you stop paying the premiums.
In other words, if you're gonna do one of these,
you've got to die with it in place. You're not
moving into another insurance company.
Speaker 4 (16:45):
You just married yourself to it. It will have to
outlive you or you'll pay a lot of taxes.
Speaker 3 (16:50):
Yeah, that's the concern I have with these, and I've
seen these over the years. A couple things happen. I mean,
number one, life changes. You know, it sounds great when
you're in your thirties and you pile a bunch of
money into these things, and if everything goes according to
plan on how these things are pitched, you know, at
the beginning on the on the policy illustration, they can
(17:10):
work out pretty well. But you know, something like life happens.
You don't know how all your kids are going to
turn out. You don't know if you're gonna want to
pull money out to buy a vacation home or help
your kids with college education. And if you start to
mess with that plan and pull money out, you know,
either taking the money out or borrowing it, it changes
the whole calculus of that long term model. And I
(17:32):
think that's what a lot of people don't factor in
when they get sold these things. And I underline the
word sold because these are typically sold way more often
than they are bought, because, as you said, Brian, they
are very complex. I want to mention something about these
cap rates too, because I've seen this happen and most
people never read or understand the fine print of this.
(17:55):
You know, if you might go in with an eighty
percent upside participation rate, but the insurance comes and not
just specifical life, all these companies, or most of them,
they have the right contractually in the language to lower
that participation rate over time. So what can happen is,
you know, if they lower that upside, you've just bought
(18:16):
a very expensive what I'll call, you know, bond equivalent fund.
You give up a lot of your return, upside return
just to have that floor in place, and you paid
a ton in fees and expenses. And that's the other
thing that can change, and most people never see that coming.
Speaker 5 (18:33):
Yeah, And the thing that I think is worth making
sure we remember here is a lot of people just
get attracted to the idea that there are guarantees involved here,
and when we review these people will have bought them
in the past and will bring them in.
Speaker 4 (18:46):
How does this you know?
Speaker 5 (18:47):
And I'm not going to blow somebody out of this
and recommend that we pay all the taxes and undo
it. It is what it is that we're already in place,
and we'll work around whatever it is. But again, just
to make sure everybody knows that if you've purchased some
kind of insurance project that purports to be an investment
oriented type of a thing versus death benefit, then let's
use it for what it's what it's worth. So on
the other side of these is annuities with income writers.
(19:10):
A lot of times that they're they're they're these are expensive.
You're paying two, three, sometimes close to four percent for
the guarantee of a stream of income that that I
bet that insurance company has never ever ever had to
pay uh, because the market goes up, not down. So
if they're giving income guarantees against market based performance, well
then they've then the market whenever it's at an all
time high. That means they've never had to pay out
on those guarantees. But people like the word, and so
(19:31):
what we do is, let's make sure we do the math,
we understand how that guarantee works, and let's turn this
pigot on and use that income. Do not do not
do not think of it as a CD like a
lot of people do.
Speaker 4 (19:41):
It isn't all right.
Speaker 3 (19:42):
Last week we told you about Brian's hottest new meme
stock called Beyond Meat, and the stock price shot up
after people on social media used word of mouth to
really boost it up. Well, here's a shocker. The stock
just dropped eleven percent after the company had to delay
report it's financial results. Brian, hopefully you didn't take too
(20:03):
big of a bath on this one.
Speaker 5 (20:05):
Well, this was after bob'spond seller was spotted with a
sack full of sliders from Whitecastle that are were fake
meat sliders and uh and that there are social media
people got a hold of that and it just went
wild from there. But unfortunately, just a meme Bob stuffing
his face is not a reason to invest.
Speaker 3 (20:21):
Here's the Allworth advice. Memestocks made trend online, but your
financial future should not be built on hype. Stick to
investments with real fundamentals, not fleeting fads. Success does not
always equal satisfaction. How to move past a career plateau?
Coming up next. You're listening to Simply Money presented by
(20:42):
all Worth Financial on fifty five KRC, the talk station.
Speaker 2 (20:47):
What's Happening the US and chin see an iHeartRadio station.
Speaker 3 (20:55):
You're listening to Simply Money presented by all worth financial
on Bob's spon Seller along with Brian Jane, joined tonight
by our career expert Julie Bouki and Julie, thanks as
always for taking some time with us tonight and interesting
topic we're going to cover tonight career plateaus. What to
do when we're feeling successful in our job or in
(21:15):
our career, but we're no longer feeling challenged. How do
you navigate people through that situation?
Speaker 2 (21:22):
Julie, You know, there are a lot of pivot points
in our careers, like decision points where we feel maybe
something is off. We want more, we want different, we
want less, and those are natural moments in our career.
The problem is that we've been taught to just sort
of swallow them down and continue on and make the
(21:45):
best of what we have. I think the most important
smartest thing to do when it comes to your career
is when you're starting to feel like my career is
at a plateau, the first thing you need to do
is figure out why. What is it specifically that has
classed if you are if it's things like income, if
it's a level of responsibility, if it's the depth of
(22:08):
the challenging projects or not that you get exposed to.
You have to really articulate what it is that it
is plateaued and before that, if you have to do
that before you can figure out what to do next.
Once you can identify the source of your discomfort, it's
much easier to identify and so pinpointing that, Okay, you
(22:30):
know I used to like this, This used to work
for me, it's not now, or I feel like something's changed.
The most important thing to do at that point is
to get into self discovery and investigative mode. What has changed.
It could be something at work. It could be a
new leader. It could be the company is changing customers
or targets and it's not fun for you anymore. But
(22:52):
it also could be just a yearning from a real
career standpoint to do something different. Maybe you've reached the
end of the rope the top of the ladder in
what you do and it's time to do a serious pivot.
So before we take on big moves like that, it's
really important to figure out what's not working for me
today and what am I willing.
Speaker 4 (23:13):
To do about it?
Speaker 5 (23:13):
Hey, Julie, do you find that people get stuck from
a standpoint of well, this has been a good company,
and so whatever I do, it's just out of the
question that I might go somewhere else. I mean, it
seems like, yeah, people hide behind it all the time,
and how do you get over that home?
Speaker 2 (23:27):
So I have four there's four pillars of career happiness.
One is you like what you do, second is you're
good at it. The third is you're getting paid in
a way that you can live. And the fourth is
you're you're doing it in the right place. And the
number one reason people leave their organizations is the fourth one,
which is it's either I don't like the culture anymore,
(23:49):
the mission, I don't like my leader. That's actually the
number one reason in that bucket. And so so when
you are in a situation when you look around and say,
I really like you here, you know, like what we do,
I like my colleagues, I'm aligned with mission, and it's
still great, then you owe it to yourself to figure
out to look around and say.
Speaker 1 (24:10):
What is it?
Speaker 2 (24:11):
What else is available in this organization? How am I
I contribute? How might I take what's on my plate?
And you know, showed it up a little bit, Maybe
that adds something. Maybe it's you know, get involved in
something that's maybe not typically something you're responsible for. Maybe
you get involved on a different team, maybe you just
sort of add something to your overall plate when you
(24:33):
like where you are. I always tell people, let's always
try to figure out if you can fix it where
you are before you change into a culture in an
organization that's completely unknown to you and find that you
might be in the same position or worse.
Speaker 3 (24:51):
Julie, I to me, I think, correct me if I'm wrong.
But it seems that this comes down to communication. You know,
in that scenario you just talked about, and I got
to call you yesterday from a young man who's just
getting started in his career. You know, I happened to
coach him in high school baseball, so we still have
maintained a connection. And he was in a place where
he's just like, hey, I don't know what to do here,
(25:12):
and he's afraid to go talk to anybody about it.
So walk us through the most effective ways to navigate
this from a communication standpoint, Because people sometimes are afraid
to approach their boss, you know, if they express any
displeasure at all, they're afraid of repercussions. How do you
coach people? How to broach the subject with folks in
(25:36):
the organization. If you're trying to stay at the same
company for all the reasons you just mentioned, but you
have to have a conversation and because things need to change,
how do you navigate that?
Speaker 2 (25:48):
And so I would touch it this way. I would
say something like, I'd like to talk to you about
the work I'm doing, what might be next, what things
I'm interested in doing beyond what I'm doing now? Can
we sit down and talk about that? And so you
want to open it up not as a I'm not happy,
what can you do for me? Anything that smacks of
(26:08):
that is when we start calling someone entitled. So it's
more about how can I have a mutually beneficial conversation
about my role in this organization than what I see
myself doing different different things or doing more of or
less of moving forward? And then go to that meeting,
go to that comp once you've set it up like that,
go to the conversation with ideas. Be ready to say
(26:31):
I really feel like I have You know, I spent
a lot of time over here on these kind of projects,
which has been great. I really feel like I know
it really really well. What I'd really love to do
moving forward if we can find an opportunity, I'd like
to do this, or what marketing is doing is really
interesting to me. So you want to go in with
a spirit of how can we work together to help
(26:54):
me direct my skills and abilities and my experience here
at something to continue helping this organization versus I'm not happy?
What should I do? Because that's where you are offloading
your career management onto somebody else, and that's not fair
to them and it's also not.
Speaker 5 (27:11):
Realistic, Julie, So I want to I want to go
slightly different direction here because I think a lot there's
a lot of drum beats out there over the last
couple decades about you know, pulling yourself up by your
own bootstraps and being your own boss and all that
kind of stuff. How often do you run across people
for whom they're there? There may be leaning toward I
want to break away and start my own thing. You know,
(27:31):
we're fortunate here in Cincinnati. We have a lot of
fortune five hundred companies around us, so we're all somebody's
employee and that's a wonderful structure that we have. But
do people often come to you and say, forget it,
I just want to bust out and do my own thing.
Speaker 4 (27:42):
And what is your advice for them? Because that can
be an exhilarating and terrifying step.
Speaker 2 (27:47):
It is so so picture. You've got two buckets and
one of them is everything in that bucket is your
career and your job right now, and the other bucket
is what you want to build. First of all, you've
got to get intempt. You've really got to get clarity
on what you want to do, what the market is
for it. All that due diligent stuff, and what we
counsel people on is once you've figured out that there
(28:08):
is a market and there is a need for it,
just know that it's going to take a lot longer
than you think to do it. Just because it's a
good just because there's demand, just because it's a good idea,
it doesn't mean people will pay for it. And a
lot of entrepreneurs come that out. And so, how can
you test while you're still keeping one eye on keeping
your job, How can you test your ideas? How can
you connect with people in a similar or adjacent space
(28:32):
to get their ideas, and so that you are slowly
filling the second bucket and at that point, you'll know
you will. If you get to the point where you
gather knowledge, information resources, you're testing your theory, you're starting
to get some real interest people who are willing to
pay you. Then at some point you've got to let go.
You've got to dump out that other bucket.
Speaker 3 (28:52):
Great advice is always Julie, Thanks again for spending time
with us. Tonight. You're listening to Simply Money, presented by
all Worth Financial on fifty five KARC the Talk Station.
Speaker 1 (29:01):
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Get your See.
Speaker 3 (29:36):
You're listening to Simply Money presented by all Work Financial
on Bob Sponsller along with Brian James. If you have
a financial question you'd like for us to answer, there's
a red button you can click while you're listening to
the show. If you're listening on the iHeart app, simply
record your question and it will come straight to us.
All right, Tom and Northside. Brian says, we hold stock
(29:56):
options in a pre IPO company. How do you headge
or diversified before those shares become liquid?
Speaker 5 (30:04):
Well, yeah, so this is uh what we're talking about here.
Pre i PO means before this company goes public. And
so obviously this is a great situation, hopefully because the
company wouldn't do this if it wasn't confident that it
wasn't wasn't gonna uh make it put a good put
itself in a good situation by going public. So, uh,
this creates paper wealth and there are liquidity lockups with
this kind of stuff. So uh, before that i p
(30:25):
O you you know, then the problem here is that
you can't sit, you can't sell or short that those
the stock at all.
Speaker 4 (30:30):
You really can't move around much at all.
Speaker 5 (30:32):
So you're gonna want to look at what else you
can control, and it's got nothing to do with that
actual position, uh you know, so you're basically going to
look to to offset your other parts of your portfolio.
I would say double check your four oh one k.
First of all, make sure there isn't a bunch of
company stock in there.
Speaker 4 (30:46):
Uh.
Speaker 5 (30:47):
The danger here, of course, is being overexposed. And don't remember,
don't forget, it's not just about your investments. This is
also where your job is. So heaven forbid, if something
goes south with this company, then you've lost your job
and your your your shares and your four one k
and these i PO the pre i PO shares were
never a factor, so just be super careful. There are
liquidity programs out there that will facilitate private sales or
(31:10):
loans against private chairs. If you've really got a lot
of these, they may be willing to kind.
Speaker 4 (31:14):
Of take a position against it.
Speaker 5 (31:16):
Steep discounts and guess what these fees fees and fees.
Not an easy thing to look into, but you could
potentially do that. You can also talk to to your
fiduciary financial advisor about hedging this with derivatives if you're
allowed to do it. Sometimes there are company rules that
say you can't bet against it, which is effectively what's
this what this would be? But there are potential ways
out there to do that. Talk to your advisor. Okay, hope,
(31:37):
that helps. That's a big question. So we're gonna move
on now to Gary and Blue Ash.
Speaker 3 (31:41):
Gary.
Speaker 5 (31:42):
Gary's got some concerns about investing sustainably, but he still
wants accountability. So how do you verify these ESG funds
are doing what they claim? Bob, we haven't heard the ESG.
I've not heard this as a topic in a while,
so I'll be interested to hear what you have to say.
Speaker 3 (31:54):
Well, feel free to disagree with what I'm about to say.
I don't like these things, and I never have. I
love the fact that Gary wants to get accountability from
these companies and understand what he owns and why and
make some decisions. Sounds like he wants to be actively
involved in a lot of these decisions, and I applaud that.
Let's first define what we're talking about here. ESG investing
(32:17):
means environmental, social and governance investing, so you're really looking at, hey,
how are these companies actually behaving in various areas and
does that align with my personal values. I think it's
very hard to just buy an ESG fund and just
assume that someone's out there checking all these boxes and
making sure these companies are doing everything you know, Gary
(32:40):
or I or Brian you want done with these companies.
Let me explain what I mean. If we look at
the environmental topic, we're talking about carbon emissions, energy use,
water usage, and pollutions. You know, how they handle their
waste management. Are they committed to climate initiatives. There's a
lot there to look at. I don't. I think it's
nearly impossible for everyone to be to agree on every
(33:04):
decision these companies make in all of those areas, and
we're just talking about environment. Next we get into social
labor practices, employee well being. How are we going to
know how the employees are feeling at a publicly traded company.
I don't think there's any way we can. Then you
get into hiring practices, diversity, equity and inclusion. Everybody has
a different definition of that human rights. And now the
(33:27):
supplyint the ethics of the supply chain suppliers to these companies.
There's a whole other layer of stuff you got to
dig into. And then from the governance standpoint board diversity
and structure, anti corruption and compliance policies, business ethics. In
other words, there's a lot to look at here.
Speaker 5 (33:46):
I do kind of like that last g one I
kind of like the governance one. That's the only one
I ever put any stock in with these three s. Okay,
So here's my practical advice. I would get very specific
on maybe five to ten companies that you know well
or want to know well, and just read the annual reports,
go to shareholder meetings, engage with shareholder services, and if
(34:08):
you've got specific questions, ask them and see if you
get the questions coming the answers coming back that align
with your personal values.
Speaker 3 (34:16):
Gary, And if the answers aligned, then I think you're
good to go. But I think people really oversimplify this
by just buying an ESG fund and then assuming everything's
hunky dory and we're investing in alignment with our values.
What say you, Brian?
Speaker 5 (34:32):
You know, I don't like any of these label type things.
I mean, and I applaud the intent. I don't think
these are bad things to try to figure out a
way that you can do it. But at the end
of the day, this is a capitalist society and most
of these quote unquote ESG funds are nothing more than
a label slap. And I would also attach that to
the anti ESG approach here, which to me that was
always silly because we were all anties. Anti ESG means
(34:55):
you're not paying attention to it at all. You're not
looking for companies that are purposely violating these norms.
Speaker 4 (35:00):
They're just not paying attention to it.
Speaker 5 (35:02):
So anti ESG basically is the S and P five
hundred index, meaning that those factors do not factor into
the decision that that stock should be in the index.
Speaker 4 (35:10):
So just labels. I don't think they have any impact.
Speaker 5 (35:12):
And they also introduce extra layers of expense for companies
pursuing these things that will compress their profit margins. You
will see these these portfolios underperform despite the the good
intentions of the ESG approach.
Speaker 3 (35:25):
All right, all right, we thoroughly beat that topic to death,
all right, Brian, Karen and Montgomery. She says, my husband
wants to retire next year, but I'm not ready to
stop working. How do you plan when one spouse is
emotionally done and the other isn't. And we're not talking
about done with the marriage, we're talking about done working. Yeah.
This comes up quite often, Brian.
Speaker 5 (35:46):
Oh, every day, and in our offices this is kind
of why we have jobs. I often say that.
Speaker 4 (35:50):
We are not financial advisors doing math all day long.
Speaker 5 (35:52):
We're unlicensed marriage counselors with math in the background.
Speaker 4 (35:56):
So yeah.
Speaker 5 (35:56):
So there are studies from Fidelity and Vanguard Bob to
show that more than half of couples disagree on when
to retire. One's burned out, the other likes the purpose
and the routine. Well, the most important thing to do
here is the same thing you've been doing your entire marriage.
Speaker 4 (36:09):
Talk.
Speaker 5 (36:09):
Look each other in the eye and say, this is
what is in my brain with regard to my career
and the rest of my life, what's in yours, and
how do we put these things together? So what you'll
need The big question, of course is usually healthcare insurance.
If somebody's going to retire before Medicare at sixty five,
then the other needs to either be able to provide
that or you're going to be looking on the exchanges.
Speaker 4 (36:27):
These are doable things.
Speaker 5 (36:28):
Nobody likes writing a check for healthcare insurance, but it
is doable. But then make sure you understand I might
want to get away from this job, but if I
sit at home doing nothing, I'm going to drive both
of us nuts.
Speaker 4 (36:38):
So be reasonable about how you're going to spend that time.
Speaker 5 (36:41):
These are very accomplishable, solvable problems, but they all start
with communication.
Speaker 3 (36:46):
Coming up next, I've got my two cents on what
I hope will be some simple, practical year end tax
planning ideas. You're listening to Simply Money, presented by all
Worth Financial on fifty five KRC the talk station Live in.
Speaker 6 (37:00):
Let me tell you, so, the Internet is breeding evil,
breeding evil.
Speaker 1 (37:04):
And TikTok is the main culprit.
Speaker 6 (37:06):
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 on this stuff.
Speaker 1 (37:23):
Mark Levin tonight at ten oh six on fifty five
krs the talkstation. Hey, Brian Thumas was cybel.
Speaker 2 (37:30):
I am so worried that next month I have to
choose between groceries for my kids or gas for my car.
Speaker 1 (37:35):
Talk about it here fifty five krs the talkstation.
Speaker 3 (37:43):
You're listening to Simply Money, said about all Worth Financial
on Bob's sponsorer along with Brian James. All Right, Brian,
let's tag tag team this one. Let's face it, it's
November fourth, we got less than two months less than
the year, and we're getting into holiday season, Thanksgiving, Christmas.
People are starting to get busy and the last thing
they want to think about is taxes. But now is
(38:03):
a great opportunity to do some year end tax planning.
So what I want to do tonight is just keep
it simple, talk about some things that don't require a
ton of analysis, a ton of trips to your CPA,
just some simple advice here. Let's start with a reminder
of long term capital gains rates. What I mean by
that for people married finally joined, if you have taxable
(38:25):
income of under ninety six seven hundred dollars, your long
term capital gain rate is zero. That's right. Zero. I
had this come up yesterday with a client. They're looking
to pull about ten grand out of their portfolio, and
this is one of these mutual funds that they've owned
for thirty years, low cost basis. We talk about lack
of tax control all the time, Well, I did happen
(38:48):
to have their twenty twenty four tax return pulled it
out and actually reviewed it and noticed that we had
a lost carry forward of over seventeen thousand dollars. So
we were able to pull that ten thousand dollars out
of that mutual fund and pay zero in capital gains
taxes even if they didn't have the loss carry forward.
If their income is low enough, we could have done it.
(39:10):
But you know that's one idea. Hey, I want to
throw in a thought on that. I knew you would
keep people clear on how that works.
Speaker 5 (39:18):
So in other words, that what we're not saying is
that you can take a million dollars worth of capital
gain if your quote unquote income happens to be under
ninety six, the gain itself will factor in. So that
example Bob gave there means that they had their income
was low enough that the gain itself didn't add on
top of it. So can't take ten million dollars worth
of gains and pay zero taxes on it even though
you've hidden your income. But if you're in that situation,
(39:39):
absolutely I learn to understand it more and talk to
your advisor in your accountant.
Speaker 3 (39:42):
That's a great disclaimer. Thanks for pointing that out, all right.
Another one is qualified charitable distributions. Let's face a lot
of folks out there probably getting letters they've gotten them
in the last thirty sixty ninety days about their qualify
or their requirementimum distribution from their IRA. What's so many
people don't understand is if you're over seventy and a
(40:02):
half years old, you can make charitable contributions directly from
your IRA, and it helps you know count toward that
required minimum distribution, and none of that money you give
away to charity even hits your tax return in the
way of taxable income. It's a vastly overlooked strategy that
I wish more people knew about and took advantage of.
(40:25):
So again, the default provision is just to write that
check or drop the fifty dollars bill and the offering
played at church. Be a little bit strategic about this,
and if you've got charities that you want to give
to heading into the last couple of months of the year,
coordinate that with your advisor and make sure you do
that in the most tax efficient way too.
Speaker 4 (40:45):
Absolutely, and these are really things to you.
Speaker 5 (40:47):
You've got some time left here, so we've got just
eight let's say you've got six weeks left.
Speaker 4 (40:52):
You want to get all this stuff done by mid December.
Speaker 5 (40:54):
These are generally not things you can do between Christmas
and New Year's so give your advisors, your partners, your
accounting some time to execute on them, all.
Speaker 3 (41:01):
Right, And a third one real quick here in a
few seconds we got left. Now's the time to have
your fiduciary advisor pull out your actual portfolio and look
for some ways to offset gains and losses. There might
be some things in your portfolio that, frankly, it's just
time to let go of and offset maybe some losses
with some a few shares of some things that have
(41:22):
done well, you know, rebalance your portfolio in a way
that minimizes your taxes heading into twenty twenty six. Thanks
for listening tonight. You've been listening to Simply Money, presented
by all Worth Financial on fifty five KRC the talk station.
Speaker 1 (41:37):
Some people only hear what they want to hear these days,
you need to keep an open mind. We only deal
in what you need to hear. Everybody needs the truth
of the facts. You need the information that matters. We
need to know if there were warning signs. You need
it around the clock today, tomorrow, and for the rest
of life in the no twenty four hours a day,
you don't need to go anywhere else, And that's something
(41:59):
that you already know for certain. What fifty five jr
z Z talkstation, Hey, I am Brand
Our democracy itself is in the crosshairs.
Speaker 2 (00:03):
Didn't make it happen.
Speaker 1 (00:05):
You're holme down headquarters. We're about to lose the country.
Fifty five krs the talk station tonight.
Speaker 3 (00:18):
Should you be fearful when markets hit all time highs?
You're listening to Simply Money. Here'said by all Worth Financial
on Bob spond Seller along with Brian James. It seems
like every other day the markets are hitting all time highs.
And guess what, it doesn't just seem that way. It
pretty much has been that way. But if you're listening
today and sitting on a pile of cash, maybe from
(00:40):
a recent business sale, or a large inheritance, or just
years of discipline saving, you might be thinking, Wow, the
market's too high right here, I've missed it. I'll wait
for the pullback, Brian. We hear that sentiment often, and
we've got some data tonight to just demonstrate that might
not be the best approach here.
Speaker 4 (01:01):
Yeah. I'm a data guy, Bob, and you know this.
Speaker 5 (01:03):
I like looking at actual factual results of different periods
of time, and so, for whatever it's worth, we can
look at a period of time and say, okay, this
is how it worked in the past. It may not
repeat itself, but this is at least one way of
how it worked in the past and kind of follow
that backwards. So so, but statistically speaking, what we're really
talking about here is if you've got a pile of money,
you know, and you're trying to decide you want to
(01:24):
get it into the market, you want to invest for
a long term. But it's always scary, right because we
all think our toes are hanging over the cliff and
we're immediately going to go over, and that is possible. Yes,
that has happened to some people, but it doesn't happen
very often. Statistically, you're more likely to grow your wealth
by investing it all now, even when the headlines are
shouting new records.
Speaker 4 (01:41):
So let's look at the numbers behind this.
Speaker 5 (01:43):
So the market has been at or near an all
time high about one out of every three months, one
in three every third month, once a quarter, bob, the
market is at an all time high.
Speaker 4 (01:53):
It goes up, not down.
Speaker 5 (01:54):
So therefore, yes, we usually are at an all time high,
and that's pretty normal. If you're always waiting for that
better entry point, you're ignoring the fact that the market
is usually in record territory, and you could be waiting
forever if you were sitting on money, you know, after
say twenty twenty three, which is a really good year,
and you said.
Speaker 4 (02:09):
Nope, we're out a peak.
Speaker 5 (02:10):
Well you've you've now left two full, fantastic years of
double digits. Possibly we'll see what happens this year, but
possibly two twenty percenters on the table that was a
huge mistake will permanently cost you.
Speaker 3 (02:20):
All Right, Brian, I know you're loaded for bear with
data today and you feel that coming through Bob a
lot of energy, and I love it. Data plus energy
means a good radio show. I love it. But I
want to pause here just with a little bit of nuance.
I mean, what we're talking about here is longer term capital, correct,
money that you're planning on investing for five, seven, ten
(02:41):
years or longer. Not your emergency fund, the money you're
gonna need or want to remodel your bathroom next month
or next year or go on that cruise. So we're
not talking about putting every penny you have in the
stock market. We're talking about money allocated for long term
you know, capital growth. Am I not correct on that assumption? Absolutely? Yeah?
Speaker 6 (03:03):
No.
Speaker 5 (03:04):
So if you're if you're, and we have people all
the time that will say, you're not going to buy
a house in six months, So what which should we
invest this in?
Speaker 4 (03:09):
Seah have more money from my down payment, the entry
is nothing.
Speaker 3 (03:12):
Should I buy call options on Pal and teer stock?
Speaker 4 (03:15):
Yeah?
Speaker 5 (03:15):
Yeah, because I want to get out of PMI and
he just a little more down pay move but yeah,
So yeah, we are talking about longer term investments here.
And really, when you think about that, think about the
For those of you been around for a little bit,
think about those first dollars you threw in your four.
Speaker 4 (03:30):
Oh one K when you were poor and eating ramen
noodles or whatever.
Speaker 5 (03:33):
You don't you don't remember what happened to those, Nor
will you remember what happens to this particular lump sum
you're sitting on right now, ten fifteen years from now,
which is really the long term goal here.
Speaker 4 (03:42):
You're not gonna remember the entry point.
Speaker 5 (03:44):
And over time, of course, the market beats all as
long as we can put up with the with the
ups and down. So let's put some numbers to this, Bob.
So uh So, the S and P five hundred average
nine point six percent in the seventies, right, that is
a factual number. But a lot of people get hung
up on the idea that's that if you didn't reinvest
your dividends and we had stagflation and all these things,
(04:04):
the markets were technically flat. Yeah, you can argue, and
you can draw a chart that shows that. But if
you handled things the right way, you did not have
that experience.
Speaker 3 (04:11):
Well, and Brian, the nineteen seventies for those who have
forgotten or didn't live during those years, I mean, we
had super high inflation. So if you did not average
nine point six percent during that decade, your money truly
was moving backwards in terms of purchasing power.
Speaker 5 (04:27):
Yes, if you could go for protected yourself by leaving
that in the bank, Well, you left a bunch of
money on the table because you didn't get any of
the growth. You got the deflation of your own dollars.
But anyway, so continue on there, and then we had
over twenty percent averages in the eighties and really nothing
bad happened in the eighties, and I would assign that
to the nineties as well. Sometimes I feel like that's
the anomaly that a lot of our people with wealth,
(04:48):
now that's what they remember and they feel like the
twenty first century has been nothing but error and nothing
but craziness and mistakes and all that kind of stuff.
But really the last twenty five years have been more
normal when you compare them to the prior two hundred
eighties and nineties, Really nothing bad happened.
Speaker 3 (05:04):
I love the nineteen eighties, not only for the stock
market returns, but for the music, Brian, the music, the
rock and roll. It was the golden age.
Speaker 4 (05:12):
Admit it, Bob, you still have your mc hammer parachute pants.
Speaker 3 (05:15):
I have all of it. Yeah, all the above. I
love it. I'd go back here in a second.
Speaker 4 (05:19):
Are you wearing them right now?
Speaker 3 (05:20):
I'm not going to discuss what I'm wearing. Please, let's
talk about the nineties and two thousands.
Speaker 5 (05:25):
Bob spon seller wearing parachute pants this morning. So what
do we do about this? So we often talk about
dollar cost averaging. So this is the idea that you
should ease into the market by a little at a time. Right,
So if I got, you know, one hundred thousand dollars,
maybe I'll throw eight thousand in a month. This is
bad math for twelve months, and that'll get it to
ninety six thousand or whatever, but just breaking it into
chunks and putting it in. But if you do the math,
(05:48):
historically lump some wins. About seventy percent of the time,
putting all your money to work right away beats dollar
cost averaging. The reason for that is we are usually
not about to go over the cliff. Yes, you can
highlight situation like if I invested a bunch of money
on New Year's Even twenty twenty one, I went right
over the cliff. It does happen. That's why thirty percent
is also a figure. Two thirty percent of the time
(06:09):
that does happen. But you still got a seven hundred
batting average chance at putting it in at a time
where the market is going to continue in an upward trajectory.
Speaker 3 (06:18):
All right, this is where we've got to interject some
behavioral finance methodology to all this. I mean, because people
hear about dollar cost averaging all the time, why does
that make sense even though the math says it doesn't.
Because if you know you're someone who's gonna panic the
moment you put all that money into the market, and
(06:38):
we get a regular pullback or correction of let's say
four or five percent, and if you're gonna panic. If
that happens, then by all means, spread out your investments
over time to reduce that emotional pressure. Just be honest
though about why you're doing it. As Brian's calling out here,
it's not because the math works better. It's because we're
(06:59):
trying to manage our own behavior. But if you're someone
who can't handle that short term volatility, you need to
manage your own behavior because what you don't want to
do is go down that track of investing the money
and then the first time we do get a five
to seven, eight, ten percent pullback, the phone's ringing and
you're saying, get me out, I can't take it. If
(07:20):
you're somebody that's going to end up doing that, we
just you know, defeated the whole purpose of doing this
in the first place, and you really did move backwards.
Speaker 5 (07:28):
Yeah, that's exactly right, And so that's why we want
to make sure we're taking a breath and just make
sure you don't have to stomach all of the risk,
because remember, if you've done this correctly, then you're doing
it with dollars that you've guaranteed yourself you're not going
to need in the short run as Bob and I've
been saying all year long, we're looking at it. We
are at a market peak. So what that means is,
if you know you've got bills, come and do even
(07:48):
in next year, carve those dollars out, take them out now.
Will the market's at a peak, Walk out of the
casino with some chips in the bucket, stick it off
to the side, and a money market fund. If it
happens to be an IRA or something and you're looking
to wait until January new tax here to take that distribution,
you can keep it in the IRA, but remove it
from the market, move it to a money market type position,
or maybe a CD or something like that. But again,
(08:10):
that's really the only step you should be taking. If
these are all long term dollars and they don't really
have a job specifically yet, let them roll, Let them
roll and let them do their job.
Speaker 3 (08:19):
You're listening to Simply Money presented by all Worth Financial
I Bob Sponsller along with Brian James. Brian, let's get
into a couple of actual scenarios using real data. We're
going to use say Maggie and Tom, two completely different investors,
each of them just sold a business and each of
them are now sitting on two million dollars in cash,
(08:41):
wondering what to do with it. The S and P
five hundred hits a record high. And here's what each
of them decides to do. Maggie decides to listen to Brian.
She trusts the data. She puts her full two million
dollars into a globally diversified portfolio, immediately, all of it now,
knowing that he's not gonna think about it or touch
it for ten or fifteen years. Well, that two million
(09:05):
dollars grows to four million in just a two year span. Tom,
on the other hand, he sits in cash, all cash.
Why because that ten percent pullback he in his gut
thinks and knows is gonna happen, it never comes, or
when it did, he got scared and decided to wait
for another pullback. Then Tom completely misses the bulk of
(09:28):
all the games. Brian, we see people behave this way.
These are two polar opposite extremes. But this is not
unlike a lot of people you know sometimes behave when
big dollar amounts are are on the table.
Speaker 5 (09:43):
Sure, especially, and remember think about the situation here. Let's
a little context of what these decisions were driven by.
Maggie and Tom both built businesses. These are their babies.
They decided to sell their babies. That's a pretty big,
once in a lifetime decision. So it absolutely can be terrifying.
That doesn't change the met of the decision making process
that we're talking about here, but that adds an awful
(10:03):
lot of emotion. It is very very very very easy
for you know, somebody who is works for another company
and their investments consist of their four Oh okay, keep
throwing money and systematically, every you know, every couple of weeks,
that person will slowly get to that two million dollar figure.
Maggie and Tom took a very different road to get there.
They probably took a lot of personal risks. These are
situations where they can probably tell stories of in the past,
(10:25):
having to cover payroll with their credit cards and a
home equity line of credit. That's what business owners go through.
So I understand the terrifying decision that this is. I've
now got the biggest pile of money I'll ever have.
Speaker 4 (10:36):
I don't want to I don't want to be gambling it.
Speaker 5 (10:37):
That does not change what market history tells us, though,
So the answer is make sure that you've carved out
enough to cover whatever expenses you think you're going to
have in the short term. Maybe that's twelve twenty four months,
maybe a little longer, and then the rest of it.
Let it fly, because there's just no reason to question
the question the history we've had over decades and decades
and decades of greed driving the markets up. Smart people
(10:59):
creates mark publicly traded companies. They find new and creative
ways to make profits and increase those profit margins every
single day.
Speaker 4 (11:06):
Let's not question it.
Speaker 3 (11:08):
Yeah, and our last piece of data to share here
tonight in this this data really your data. Your day
never never changes. If you invested a million dollars in
the S and P five hundred twenty years ago, kept
it there, hibernated for twenty years, and ignored it, your
million dollars would be worth more than seven million dollars today.
(11:29):
If you pulled it out and then proceeded to miss
the ten best days during that twenty year period, it
would still be worth a lot of money, but it's
worth less than half of seven million. It's worth only
three million, and it gets worse from there. You missed
the best twenty days, your million dollars would only be
worth about two million dollars, which sounds good until you
factor in inflation. And let's face it, beating inflation is
(11:53):
the key to everything when it comes to really growing
net worth and growing purchasing power. So therefore, the oppera
tunity cost of staying out of the market is real
sitting in cash. Even at five percent, it does not
beat the long term returns of a global, globally diversified portfolio.
Speaker 5 (12:12):
Yeah, no, I want to re I want to hit
on because I think we bring up that point all
the time about the best days in the market. There's
seventy three hundred days in a twenty year period. We
are literally talking about missing ten of them because the
market mostly does a bunch of nothing, goes up today
and down tomorrow, and it cancels out. It's the ten days,
it's the big days that we get that really move
the needle forward. So if you're trying to time it
and tap dance in and out, you are highly likely
(12:34):
to miss it.
Speaker 3 (12:35):
And none of us are smart enough to know when
those ten great days are coming. Here's the all Worth advice.
Waiting for the perfect entry point often means missing the
point altogether. Time in the market almost always beats timing
the market. Coming up next, a famous NASCAR driver says
he fell for a financial trap that Brian, you and
(12:56):
I discuss on the show all the time. We'll talk
about that next. Listening to Simply Money presented by all
Worth Financial on fifty five KRC the Talk.
Speaker 1 (13:04):
Station if KRC.
Speaker 7 (13:07):
Allworth Financial a registered investment advisory firm. Any ideas presented
during this program are not intended to provide specific financial advice.
You should consult your own financial advisor, tax consultant, or
a state planning attorney to conduct your own due diligence
to this.
Speaker 3 (13:26):
To this, all right, Joe Strecker, I gotta tip my
hat tea. You listen to us talk about eighties music
and you cut right on queue. That is good stuff, brother.
All right? You're listening is Simply Money presented by Allworth
Financial and Bob Sponseller along with Brian James. If you
can't listen to Simply Money live every night, subscribe and
(13:47):
get our daily podcasts. Just search Simply Money on the
iHeart app or wherever you find your podcast. What happens
when one spouse is ready to retire and the other isn't.
Plus one listener grapples with managing money after the loss
of a parent. Your questions and our answers straight ahead
(14:08):
at six forty three. All right, Brian, you'll love this topic.
If you're a NASCAR fan, you probably already know who
Kyle Busch is. Bush and his wife Samantha have filed
a lawsuit alleging they were missold a series of indexed
universal life insurance policies by Pacific Life Insurance Company. And
(14:28):
I guess an unscrupulous, unscrupulous agent a lot to unpack here, Brian.
Speaker 5 (14:33):
Yeah, there's a lot, and this is going to I mean,
there's no way for this story not to come off
as a shot at the insurance industry, and I assure
you that's not what this is. However, just like any industry,
there are dark corners of it, and this is kind
of one of them.
Speaker 4 (14:44):
Insurance is a tool just like anything else.
Speaker 5 (14:46):
As I always say, if I have a hammer in
my hand, I can build a birthouse or I can
hit myself in the head with it.
Speaker 4 (14:50):
It depends on what I do. So anyway, here's the
gist of what happened to the Bushes.
Speaker 5 (14:54):
According to this complaint, they paid more than ten to
almost ten and a half million dollars, that's ten and
a half million in premiums for Index Universe life insurance
policies that were pitched as tax free retirement plans, meaning
they're safe, they're self funding, these are things you can
rely on a nice and secure but anyway, so they're
now claiming the claim in their complaint is that these
policies had hidden fees, unrealistic projections, rising costs, and now
(15:18):
their net loss exceeds over eight and a half million dollars.
And I know some people are out there going, you know,
crimea river, but this does happen. These are real dollars.
It happens to average people too, without eight digit figures.
So according to Kyle that he said, I never thought
something like this could happen to us. We trusted the
people who sold them in the name Pacific Life, big
old insurance company, but reality is very different. So anyway,
(15:39):
what they ran into is that these things are complicated, right,
There's a lot of moving parts to these. An index
universal life policy combines a life insurance death benefit and
cash value and ties it to an equity index. On paper,
you want to say, wow, that's three of my favorite things,
because it looks like you can get all these different
features all in one here, kind of like this army
(16:00):
knife of financial tools. But realistically, there are caps on
the upside, meaning whatever index you tie it to, you know,
you might get an eighty percent cap of that for
some reason. You know, So if the S and P
five hundred is up ten percent, then you get to
keep eight. There's a bottom for sure, there is a floor.
You're not gonna lose that much, you know, if when
the market goes down. My complaint on all of this
(16:20):
is if you if you're not a panicker, if you
weren't gonna panic anyway when the market came down and
you were just gonna let it ride, then you don't
need that floor.
Speaker 4 (16:27):
So don't restrict yourself with the cap. Most people don't
need these things.
Speaker 5 (16:31):
But anyway, Also, the cost of life insurance went up,
of course, and that's just statistical. That happens every year,
and there's risk to these if you stop paying the premiums.
In other words, if you're gonna do one of these,
you've got to die with it in place. You're not
moving into another insurance company.
Speaker 4 (16:45):
You just married yourself to it. It will have to
outlive you or you'll pay a lot of taxes.
Speaker 3 (16:50):
Yeah, that's the concern I have with these, and I've
seen these over the years. A couple things happen. I mean,
number one, life changes. You know, it sounds great when
you're in your thirties and you pile a bunch of
money into these things, and if everything goes according to
plan on how these things are pitched, you know, at
the beginning on the on the policy illustration, they can
(17:10):
work out pretty well. But you know, something like life happens.
You don't know how all your kids are going to
turn out. You don't know if you're gonna want to
pull money out to buy a vacation home or help
your kids with college education. And if you start to
mess with that plan and pull money out, you know,
either taking the money out or borrowing it, it changes
the whole calculus of that long term model. And I
(17:32):
think that's what a lot of people don't factor in
when they get sold these things. And I underline the
word sold because these are typically sold way more often
than they are bought, because, as you said, Brian, they
are very complex. I want to mention something about these
cap rates too, because I've seen this happen and most
people never read or understand the fine print of this.
(17:55):
You know, if you might go in with an eighty
percent upside participation rate, but the insurance comes and not
just specifical life, all these companies, or most of them,
they have the right contractually in the language to lower
that participation rate over time. So what can happen is,
you know, if they lower that upside, you've just bought
(18:16):
a very expensive what I'll call, you know, bond equivalent fund.
You give up a lot of your return, upside return
just to have that floor in place, and you paid
a ton in fees and expenses. And that's the other
thing that can change, and most people never see that coming.
Speaker 5 (18:33):
Yeah, And the thing that I think is worth making
sure we remember here is a lot of people just
get attracted to the idea that there are guarantees involved here,
and when we review these people will have bought them
in the past and will bring them in.
Speaker 4 (18:46):
How does this you know?
Speaker 5 (18:47):
And I'm not going to blow somebody out of this
and recommend that we pay all the taxes and undo
it. It is what it is that we're already in place,
and we'll work around whatever it is. But again, just
to make sure everybody knows that if you've purchased some
kind of insurance project that purports to be an investment
oriented type of a thing versus death benefit, then let's
use it for what it's what it's worth. So on
the other side of these is annuities with income writers.
(19:10):
A lot of times that they're they're they're these are expensive.
You're paying two, three, sometimes close to four percent for
the guarantee of a stream of income that that I
bet that insurance company has never ever ever had to
pay uh, because the market goes up, not down. So
if they're giving income guarantees against market based performance, well
then they've then the market whenever it's at an all
time high. That means they've never had to pay out
on those guarantees. But people like the word, and so
(19:31):
what we do is, let's make sure we do the math,
we understand how that guarantee works, and let's turn this
pigot on and use that income. Do not do not
do not think of it as a CD like a
lot of people do.
Speaker 4 (19:41):
It isn't all right.
Speaker 3 (19:42):
Last week we told you about Brian's hottest new meme
stock called Beyond Meat, and the stock price shot up
after people on social media used word of mouth to
really boost it up. Well, here's a shocker. The stock
just dropped eleven percent after the company had to delay
report it's financial results. Brian, hopefully you didn't take too
(20:03):
big of a bath on this one.
Speaker 5 (20:05):
Well, this was after bob'spond seller was spotted with a
sack full of sliders from Whitecastle that are were fake
meat sliders and uh and that there are social media
people got a hold of that and it just went
wild from there. But unfortunately, just a meme Bob stuffing
his face is not a reason to invest.
Speaker 3 (20:21):
Here's the Allworth advice. Memestocks made trend online, but your
financial future should not be built on hype. Stick to
investments with real fundamentals, not fleeting fads. Success does not
always equal satisfaction. How to move past a career plateau?
Coming up next. You're listening to Simply Money presented by
(20:42):
all Worth Financial on fifty five KRC, the talk station.
Speaker 2 (20:47):
What's Happening the US and chin see an iHeartRadio station.
Speaker 3 (20:55):
You're listening to Simply Money presented by all worth financial
on Bob's spon Seller along with Brian Jane, joined tonight
by our career expert Julie Bouki and Julie, thanks as
always for taking some time with us tonight and interesting
topic we're going to cover tonight career plateaus. What to
do when we're feeling successful in our job or in
(21:15):
our career, but we're no longer feeling challenged. How do
you navigate people through that situation?
Speaker 2 (21:22):
Julie, You know, there are a lot of pivot points
in our careers, like decision points where we feel maybe
something is off. We want more, we want different, we
want less, and those are natural moments in our career.
The problem is that we've been taught to just sort
of swallow them down and continue on and make the
(21:45):
best of what we have. I think the most important
smartest thing to do when it comes to your career
is when you're starting to feel like my career is
at a plateau, the first thing you need to do
is figure out why. What is it specifically that has
classed if you are if it's things like income, if
it's a level of responsibility, if it's the depth of
(22:08):
the challenging projects or not that you get exposed to.
You have to really articulate what it is that it
is plateaued and before that, if you have to do
that before you can figure out what to do next.
Once you can identify the source of your discomfort, it's
much easier to identify and so pinpointing that, Okay, you
(22:30):
know I used to like this, This used to work
for me, it's not now, or I feel like something's changed.
The most important thing to do at that point is
to get into self discovery and investigative mode. What has changed.
It could be something at work. It could be a
new leader. It could be the company is changing customers
or targets and it's not fun for you anymore. But
(22:52):
it also could be just a yearning from a real
career standpoint to do something different. Maybe you've reached the
end of the rope the top of the ladder in
what you do and it's time to do a serious pivot.
So before we take on big moves like that, it's
really important to figure out what's not working for me
today and what am I willing.
Speaker 4 (23:13):
To do about it?
Speaker 5 (23:13):
Hey, Julie, do you find that people get stuck from
a standpoint of well, this has been a good company,
and so whatever I do, it's just out of the
question that I might go somewhere else. I mean, it
seems like, yeah, people hide behind it all the time,
and how do you get over that home?
Speaker 2 (23:27):
So I have four there's four pillars of career happiness.
One is you like what you do, second is you're
good at it. The third is you're getting paid in
a way that you can live. And the fourth is
you're you're doing it in the right place. And the
number one reason people leave their organizations is the fourth one,
which is it's either I don't like the culture anymore,
(23:49):
the mission, I don't like my leader. That's actually the
number one reason in that bucket. And so so when
you are in a situation when you look around and say,
I really like you here, you know, like what we do,
I like my colleagues, I'm aligned with mission, and it's
still great, then you owe it to yourself to figure
out to look around and say.
Speaker 1 (24:10):
What is it?
Speaker 2 (24:11):
What else is available in this organization? How am I
I contribute? How might I take what's on my plate?
And you know, showed it up a little bit, Maybe
that adds something. Maybe it's you know, get involved in
something that's maybe not typically something you're responsible for. Maybe
you get involved on a different team, maybe you just
sort of add something to your overall plate when you
(24:33):
like where you are. I always tell people, let's always
try to figure out if you can fix it where
you are before you change into a culture in an
organization that's completely unknown to you and find that you
might be in the same position or worse.
Speaker 3 (24:51):
Julie, I to me, I think, correct me if I'm wrong.
But it seems that this comes down to communication. You know,
in that scenario you just talked about, and I got
to call you yesterday from a young man who's just
getting started in his career. You know, I happened to
coach him in high school baseball, so we still have
maintained a connection. And he was in a place where
he's just like, hey, I don't know what to do here,
(25:12):
and he's afraid to go talk to anybody about it.
So walk us through the most effective ways to navigate
this from a communication standpoint, Because people sometimes are afraid
to approach their boss, you know, if they express any
displeasure at all, they're afraid of repercussions. How do you
coach people? How to broach the subject with folks in
(25:36):
the organization. If you're trying to stay at the same
company for all the reasons you just mentioned, but you
have to have a conversation and because things need to change,
how do you navigate that?
Speaker 2 (25:48):
And so I would touch it this way. I would
say something like, I'd like to talk to you about
the work I'm doing, what might be next, what things
I'm interested in doing beyond what I'm doing now? Can
we sit down and talk about that? And so you
want to open it up not as a I'm not happy,
what can you do for me? Anything that smacks of
(26:08):
that is when we start calling someone entitled. So it's
more about how can I have a mutually beneficial conversation
about my role in this organization than what I see
myself doing different different things or doing more of or
less of moving forward? And then go to that meeting,
go to that comp once you've set it up like that,
go to the conversation with ideas. Be ready to say
(26:31):
I really feel like I have You know, I spent
a lot of time over here on these kind of projects,
which has been great. I really feel like I know
it really really well. What I'd really love to do
moving forward if we can find an opportunity, I'd like
to do this, or what marketing is doing is really
interesting to me. So you want to go in with
a spirit of how can we work together to help
(26:54):
me direct my skills and abilities and my experience here
at something to continue helping this organization versus I'm not happy?
What should I do? Because that's where you are offloading
your career management onto somebody else, and that's not fair
to them and it's also not.
Speaker 5 (27:11):
Realistic, Julie, So I want to I want to go
slightly different direction here because I think a lot there's
a lot of drum beats out there over the last
couple decades about you know, pulling yourself up by your
own bootstraps and being your own boss and all that
kind of stuff. How often do you run across people
for whom they're there? There may be leaning toward I
want to break away and start my own thing. You know,
(27:31):
we're fortunate here in Cincinnati. We have a lot of
fortune five hundred companies around us, so we're all somebody's
employee and that's a wonderful structure that we have. But
do people often come to you and say, forget it,
I just want to bust out and do my own thing.
Speaker 4 (27:42):
And what is your advice for them? Because that can
be an exhilarating and terrifying step.
Speaker 2 (27:47):
It is so so picture. You've got two buckets and
one of them is everything in that bucket is your
career and your job right now, and the other bucket
is what you want to build. First of all, you've
got to get intempt. You've really got to get clarity
on what you want to do, what the market is
for it. All that due diligent stuff, and what we
counsel people on is once you've figured out that there
(28:08):
is a market and there is a need for it,
just know that it's going to take a lot longer
than you think to do it. Just because it's a
good just because there's demand, just because it's a good idea,
it doesn't mean people will pay for it. And a
lot of entrepreneurs come that out. And so, how can
you test while you're still keeping one eye on keeping
your job, How can you test your ideas? How can
you connect with people in a similar or adjacent space
(28:32):
to get their ideas, and so that you are slowly
filling the second bucket and at that point, you'll know
you will. If you get to the point where you
gather knowledge, information resources, you're testing your theory, you're starting
to get some real interest people who are willing to
pay you. Then at some point you've got to let go.
You've got to dump out that other bucket.
Speaker 3 (28:52):
Great advice is always Julie, Thanks again for spending time
with us. Tonight. You're listening to Simply Money, presented by
all Worth Financial on fifty five KARC the Talk Station.
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Speaker 3 (29:36):
You're listening to Simply Money presented by all Work Financial
on Bob Sponsller along with Brian James. If you have
a financial question you'd like for us to answer, there's
a red button you can click while you're listening to
the show. If you're listening on the iHeart app, simply
record your question and it will come straight to us.
All right, Tom and Northside. Brian says, we hold stock
(29:56):
options in a pre IPO company. How do you headge
or diversified before those shares become liquid?
Speaker 5 (30:04):
Well, yeah, so this is uh what we're talking about here.
Pre i PO means before this company goes public. And
so obviously this is a great situation, hopefully because the
company wouldn't do this if it wasn't confident that it
wasn't wasn't gonna uh make it put a good put
itself in a good situation by going public. So, uh,
this creates paper wealth and there are liquidity lockups with
this kind of stuff. So uh, before that i p
(30:25):
O you you know, then the problem here is that
you can't sit, you can't sell or short that those
the stock at all.
Speaker 4 (30:30):
You really can't move around much at all.
Speaker 5 (30:32):
So you're gonna want to look at what else you
can control, and it's got nothing to do with that
actual position, uh you know, so you're basically going to
look to to offset your other parts of your portfolio.
I would say double check your four oh one k.
First of all, make sure there isn't a bunch of
company stock in there.
Speaker 4 (30:46):
Uh.
Speaker 5 (30:47):
The danger here, of course, is being overexposed. And don't remember,
don't forget, it's not just about your investments. This is
also where your job is. So heaven forbid, if something
goes south with this company, then you've lost your job
and your your your shares and your four one k
and these i PO the pre i PO shares were
never a factor, so just be super careful. There are
liquidity programs out there that will facilitate private sales or
(31:10):
loans against private chairs. If you've really got a lot
of these, they may be willing to kind.
Speaker 4 (31:14):
Of take a position against it.
Speaker 5 (31:16):
Steep discounts and guess what these fees fees and fees.
Not an easy thing to look into, but you could
potentially do that. You can also talk to to your
fiduciary financial advisor about hedging this with derivatives if you're
allowed to do it. Sometimes there are company rules that
say you can't bet against it, which is effectively what's
this what this would be? But there are potential ways
out there to do that. Talk to your advisor. Okay, hope,
(31:37):
that helps. That's a big question. So we're gonna move
on now to Gary and Blue Ash.
Speaker 3 (31:41):
Gary.
Speaker 5 (31:42):
Gary's got some concerns about investing sustainably, but he still
wants accountability. So how do you verify these ESG funds
are doing what they claim? Bob, we haven't heard the ESG.
I've not heard this as a topic in a while,
so I'll be interested to hear what you have to say.
Speaker 3 (31:54):
Well, feel free to disagree with what I'm about to say.
I don't like these things, and I never have. I
love the fact that Gary wants to get accountability from
these companies and understand what he owns and why and
make some decisions. Sounds like he wants to be actively
involved in a lot of these decisions, and I applaud that.
Let's first define what we're talking about here. ESG investing
(32:17):
means environmental, social and governance investing, so you're really looking at, hey,
how are these companies actually behaving in various areas and
does that align with my personal values. I think it's
very hard to just buy an ESG fund and just
assume that someone's out there checking all these boxes and
making sure these companies are doing everything you know, Gary
(32:40):
or I or Brian you want done with these companies.
Let me explain what I mean. If we look at
the environmental topic, we're talking about carbon emissions, energy use,
water usage, and pollutions. You know, how they handle their
waste management. Are they committed to climate initiatives. There's a
lot there to look at. I don't. I think it's
nearly impossible for everyone to be to agree on every
(33:04):
decision these companies make in all of those areas, and
we're just talking about environment. Next we get into social
labor practices, employee well being. How are we going to
know how the employees are feeling at a publicly traded company.
I don't think there's any way we can. Then you
get into hiring practices, diversity, equity and inclusion. Everybody has
a different definition of that human rights. And now the
(33:27):
supplyint the ethics of the supply chain suppliers to these companies.
There's a whole other layer of stuff you got to
dig into. And then from the governance standpoint board diversity
and structure, anti corruption and compliance policies, business ethics. In
other words, there's a lot to look at here.
Speaker 5 (33:46):
I do kind of like that last g one I
kind of like the governance one. That's the only one
I ever put any stock in with these three s. Okay,
So here's my practical advice. I would get very specific
on maybe five to ten companies that you know well
or want to know well, and just read the annual reports,
go to shareholder meetings, engage with shareholder services, and if
(34:08):
you've got specific questions, ask them and see if you
get the questions coming the answers coming back that align
with your personal values.
Speaker 3 (34:16):
Gary, And if the answers aligned, then I think you're
good to go. But I think people really oversimplify this
by just buying an ESG fund and then assuming everything's
hunky dory and we're investing in alignment with our values.
What say you, Brian?
Speaker 5 (34:32):
You know, I don't like any of these label type things.
I mean, and I applaud the intent. I don't think
these are bad things to try to figure out a
way that you can do it. But at the end
of the day, this is a capitalist society and most
of these quote unquote ESG funds are nothing more than
a label slap. And I would also attach that to
the anti ESG approach here, which to me that was
always silly because we were all anties. Anti ESG means
(34:55):
you're not paying attention to it at all. You're not
looking for companies that are purposely violating these norms.
Speaker 4 (35:00):
They're just not paying attention to it.
Speaker 5 (35:02):
So anti ESG basically is the S and P five
hundred index, meaning that those factors do not factor into
the decision that that stock should be in the index.
Speaker 4 (35:10):
So just labels. I don't think they have any impact.
Speaker 5 (35:12):
And they also introduce extra layers of expense for companies
pursuing these things that will compress their profit margins. You
will see these these portfolios underperform despite the the good
intentions of the ESG approach.
Speaker 3 (35:25):
All right, all right, we thoroughly beat that topic to death,
all right, Brian, Karen and Montgomery. She says, my husband
wants to retire next year, but I'm not ready to
stop working. How do you plan when one spouse is
emotionally done and the other isn't. And we're not talking
about done with the marriage, we're talking about done working. Yeah.
This comes up quite often, Brian.
Speaker 5 (35:46):
Oh, every day, and in our offices this is kind
of why we have jobs. I often say that.
Speaker 4 (35:50):
We are not financial advisors doing math all day long.
Speaker 5 (35:52):
We're unlicensed marriage counselors with math in the background.
Speaker 4 (35:56):
So yeah.
Speaker 5 (35:56):
So there are studies from Fidelity and Vanguard Bob to
show that more than half of couples disagree on when
to retire. One's burned out, the other likes the purpose
and the routine. Well, the most important thing to do
here is the same thing you've been doing your entire marriage.
Speaker 4 (36:09):
Talk.
Speaker 5 (36:09):
Look each other in the eye and say, this is
what is in my brain with regard to my career
and the rest of my life, what's in yours, and
how do we put these things together? So what you'll
need The big question, of course is usually healthcare insurance.
If somebody's going to retire before Medicare at sixty five,
then the other needs to either be able to provide
that or you're going to be looking on the exchanges.
Speaker 4 (36:27):
These are doable things.
Speaker 5 (36:28):
Nobody likes writing a check for healthcare insurance, but it
is doable. But then make sure you understand I might
want to get away from this job, but if I
sit at home doing nothing, I'm going to drive both
of us nuts.
Speaker 4 (36:38):
So be reasonable about how you're going to spend that time.
Speaker 5 (36:41):
These are very accomplishable, solvable problems, but they all start
with communication.
Speaker 3 (36:46):
Coming up next, I've got my two cents on what
I hope will be some simple, practical year end tax
planning ideas. You're listening to Simply Money, presented by all
Worth Financial on fifty five KRC the talk station Live in.
Speaker 6 (37:00):
Let me tell you, so, the Internet is breeding evil,
breeding evil.
Speaker 1 (37:04):
And TikTok is the main culprit.
Speaker 6 (37:06):
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 on this stuff.
Speaker 1 (37:23):
Mark Levin tonight at ten oh six on fifty five
krs the talkstation. Hey, Brian Thumas was cybel.
Speaker 2 (37:30):
I am so worried that next month I have to
choose between groceries for my kids or gas for my car.
Speaker 1 (37:35):
Talk about it here fifty five krs the talkstation.
Speaker 3 (37:43):
You're listening to Simply Money, said about all Worth Financial
on Bob's sponsorer along with Brian James. All Right, Brian,
let's tag tag team this one. Let's face it, it's
November fourth, we got less than two months less than
the year, and we're getting into holiday season, Thanksgiving, Christmas.
People are starting to get busy and the last thing
they want to think about is taxes. But now is
(38:03):
a great opportunity to do some year end tax planning.
So what I want to do tonight is just keep
it simple, talk about some things that don't require a
ton of analysis, a ton of trips to your CPA,
just some simple advice here. Let's start with a reminder
of long term capital gains rates. What I mean by
that for people married finally joined, if you have taxable
(38:25):
income of under ninety six seven hundred dollars, your long
term capital gain rate is zero. That's right. Zero. I
had this come up yesterday with a client. They're looking
to pull about ten grand out of their portfolio, and
this is one of these mutual funds that they've owned
for thirty years, low cost basis. We talk about lack
of tax control all the time, Well, I did happen
(38:48):
to have their twenty twenty four tax return pulled it
out and actually reviewed it and noticed that we had
a lost carry forward of over seventeen thousand dollars. So
we were able to pull that ten thousand dollars out
of that mutual fund and pay zero in capital gains
taxes even if they didn't have the loss carry forward.
If their income is low enough, we could have done it.
(39:10):
But you know that's one idea. Hey, I want to
throw in a thought on that. I knew you would
keep people clear on how that works.
Speaker 5 (39:18):
So in other words, that what we're not saying is
that you can take a million dollars worth of capital
gain if your quote unquote income happens to be under
ninety six, the gain itself will factor in. So that
example Bob gave there means that they had their income
was low enough that the gain itself didn't add on
top of it. So can't take ten million dollars worth
of gains and pay zero taxes on it even though
you've hidden your income. But if you're in that situation,
(39:39):
absolutely I learn to understand it more and talk to
your advisor in your accountant.
Speaker 3 (39:42):
That's a great disclaimer. Thanks for pointing that out, all right.
Another one is qualified charitable distributions. Let's face a lot
of folks out there probably getting letters they've gotten them
in the last thirty sixty ninety days about their qualify
or their requirementimum distribution from their IRA. What's so many
people don't understand is if you're over seventy and a
(40:02):
half years old, you can make charitable contributions directly from
your IRA, and it helps you know count toward that
required minimum distribution, and none of that money you give
away to charity even hits your tax return in the
way of taxable income. It's a vastly overlooked strategy that
I wish more people knew about and took advantage of.
(40:25):
So again, the default provision is just to write that
check or drop the fifty dollars bill and the offering
played at church. Be a little bit strategic about this,
and if you've got charities that you want to give
to heading into the last couple of months of the year,
coordinate that with your advisor and make sure you do
that in the most tax efficient way too.
Speaker 4 (40:45):
Absolutely, and these are really things to you.
Speaker 5 (40:47):
You've got some time left here, so we've got just
eight let's say you've got six weeks left.
Speaker 4 (40:52):
You want to get all this stuff done by mid December.
Speaker 5 (40:54):
These are generally not things you can do between Christmas
and New Year's so give your advisors, your partners, your
accounting some time to execute on them, all.
Speaker 3 (41:01):
Right, And a third one real quick here in a
few seconds we got left. Now's the time to have
your fiduciary advisor pull out your actual portfolio and look
for some ways to offset gains and losses. There might
be some things in your portfolio that, frankly, it's just
time to let go of and offset maybe some losses
with some a few shares of some things that have
(41:22):
done well, you know, rebalance your portfolio in a way
that minimizes your taxes heading into twenty twenty six. Thanks
for listening tonight. You've been listening to Simply Money, presented
by all Worth Financial on fifty five KRC the talk station.
Speaker 1 (41:37):
Some people only hear what they want to hear these days,
you need to keep an open mind. We only deal
in what you need to hear. Everybody needs the truth
of the facts. You need the information that matters. We
need to know if there were warning signs. You need
it around the clock today, tomorrow, and for the rest
of life in the no twenty four hours a day,
you don't need to go anywhere else, And that's something
(41:59):
that you already know for certain. What fifty five jr
z Z talkstation, Hey, I am Brand
Simply Money News
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